WO2024102396A1 - Procédés et systèmes de transmission d'informations - Google Patents

Procédés et systèmes de transmission d'informations Download PDF

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Publication number
WO2024102396A1
WO2024102396A1 PCT/US2023/037006 US2023037006W WO2024102396A1 WO 2024102396 A1 WO2024102396 A1 WO 2024102396A1 US 2023037006 W US2023037006 W US 2023037006W WO 2024102396 A1 WO2024102396 A1 WO 2024102396A1
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WO
WIPO (PCT)
Prior art keywords
tokens
asset
hpi
quarter
house
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Application number
PCT/US2023/037006
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English (en)
Inventor
Michael Wayne DIESCH
Christopher Griffin DIESCH
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Quarter, Inc.
Priority date (The priority date is an assumption and is not a legal conclusion. Google has not performed a legal analysis and makes no representation as to the accuracy of the date listed.)
Filing date
Publication date
Priority claimed from US18/503,881 external-priority patent/US20240146678A1/en
Application filed by Quarter, Inc. filed Critical Quarter, Inc.
Publication of WO2024102396A1 publication Critical patent/WO2024102396A1/fr

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  • FIGS. 1-4 illustrate various structures that may be used in investing, according to aspects of the disclosure.
  • FIG. 5 illustrates an example computer system, according to aspects of the disclosure.
  • FIG. 6 illustrates an example method for using blockchain, according to aspects of the disclosure.
  • FIG. 7 illustrates an example of an MRE calculation flow, according to aspects of the disclosure.
  • FIG. 8 illustrates an example of using blockchain for investing, according to aspects of the disclosure.
  • FIG. 9 illustrates various equations that can be used for investing, according to aspects of the disclosure.
  • FIGS. 10-12 illustrate various parties, transactions and elements that can be used to board a home onto the platform.
  • FIG. 13 is an example screen shot, according to aspects of the disclosure.
  • FIGS. 14, 15A-15B, 16, 17. 18, 19, 20, 21A-21B. 22-31, 32A-32B, and 33 illustrate other example aspects of the disclosure.
  • Quarter is used herein to refer to a manager, for example, the manager of the Platform.
  • any other manager can be used instead of or in addition to Quarter.
  • An Asset Token which can be designated to show the link to a particular SPE (thus, a particular House) can be deemed to be Activated when the ‘'time lock” of such Asset Token is removed after the closing of the purchase of the House.
  • the Asset Tokens that are Activated may be still subject to the “transfer lock.”
  • ALTA' Can refer to the American Land Title Association.
  • Applicant'. Can comprise an individual who submits an application to utilize the Quarter Platform to fund their purchase of real estate interests in the House, fund the pay-off of the existing financing on, or sell equity in their existing House, or any combination thereof (but who has not become a Homeowner).
  • Appreciation Value' Can comprise the amount of appreciation which has occurred for a particular House (whether realized upon the sale of a particular House or unrealized appreciation prior to the sale of a particular House).
  • the Appreciation Value can be calculated by subtracting the House’s Current Valuation when the House is boarded on the Quarter Platform from the House’s Current Valuation at a given time following the initial boarding. If the Appreciation Value is a negative number, the Appreciation Value can be deemed to be zero.
  • Aggregate House Appreciation Rights' Can comprise the contractual rights to all or a portion of the Appreciation Value of all Houses boarded onto the Quarter Platform.
  • Aggregate Appreciation Value' Can comprise the aggregate Appreciation Value at a given point in time of all Houses boarded onto the Quarter Platform.
  • Asset Token Purchasers'. Can comprise investors who purchase the Bundle of the Asset Tokens and HPI Tokens pursuant to the terms of this Memorandum.
  • Base Rent'. Can comprise the amount which may need to be paid each month by the occupant excluding other items (e.g., taxes, insurance, HOA fees, other escrow impounds or pass through payments for third party obligations).
  • other items e.g., taxes, insurance, HOA fees, other escrow impounds or pass through payments for third party obligations.
  • Bundle Can comprise the Asset Tokens and HPI Tokens purchased by the Asset Token Purchasers pursuant to this Memorandum at a purchase price of $1.00001 per Bundle.
  • the Asset Token Purchaser can get 1 Asset Token with a par value of $1.0000 and 10 HPI Tokens with a par value of $0.000001 for each HPI Token.
  • Burning can refer to the permanent removal of existing tokens from circulation.
  • Capital Improvement Can comprise an improvement which may substantially add to the value of the real property, and/or appreciably prolong the useful life of the real property and/or become part of the real property and/or is permanently affixed to the real property such that removal would cause material damage to the property and is therefore intended to become a permanent installation.
  • Capital Improvement Value Can comprise the calculated value of capital improvements that may be made to a home by the occupant.
  • Cash Funding Pool'. Can comprise a cash escrow bank account held by the Fund to hold the purchase money paid by the Investors for the Asset Tokens sold. Each Investor can have a separate ledger.
  • AVM Automated Valuation Model
  • BPO broker price opinion
  • Quarter Full appraisal
  • Current Valuation Can comprise the purchase price of the House when the House is initially boarded (e.g., to the Quarter Platform, Current Valuation of Record, or Current Enhanced Valuation, or other platform, as applicable).
  • Current Valuation of Record'. Can comprise the valuation of record in the Quarter Platform which can be determined by an Automated Valuation Model (AVM) commonly used in the real estate market to determine the fair market value of residential properties.
  • AVM Automated Valuation Model
  • Other models may also be used instead of or in addition to the AVM model.
  • DTI Debt to Income
  • Digital Wallets' Can comprise a device or program that stores keys and allows access to Tokens.
  • a digital wallet can contain public keys, the form of which can be presented and recorded on a blockchain, and/or private keys which can be used to sign transactions.
  • Wallet addresses can be used to assign the ownership of Tokens on the Quarter Platform.
  • Enhanced Rent'. Can be the additional amount that can be paid by the Homeowner to the SPE, for the benefit of an Impact Investor only, which amount can be calculated as the fair market rent in the submarket of the jurisdiction where the House is located, as determined by Quarter, minus elements (e.g., as described in the Real Estate Agreement) such as, but not limited to, the Base Rent for a given House.
  • Enhanced TIC Fee (i.e., rent, a base fee, etc.) Can comprise the additional monthly payment made by the Homeowner to the SPE, for the benefit of an Impact Investor only, which amount can be determined by the Impact Investor but may not exceed an amount equal to (i) the fair market rent in the submarket of the jurisdiction where the House is located, as determined by Quarter, (ii) minus the TIC Fee for a given House and (iii) minus the Property Escrow Amounts (if any).
  • the Enhanced TIC Fee can be in addition to the TIC Fee and other Payments made by the Homeowner to which the Impact Investor is entitled.
  • Excess Equity (A) Can comprise the amount of unencumbered equity held by Homeowner (e.g., stated in US Dollars) in the House. Excess equity can be divided by the Current Valuation of the House at the determination time, expressed in a percentage form, minus (B) Homeowner’s then existing Minimum Retained Equity'.
  • Fiat Currency A national currency which can usually be issued by a country 's government or central bank, for example US dollars.
  • High Equity Boarding Event A High Equity Boarding Event can occur when TIC Interests held by the Homeowner at the time the House is boarded on the Quarter Platform are equal to or higher than the High Equity Boarding Threshold.
  • High Equity’ Boarding Threshold The High Equity Boarding Threshold can be stated as a percentage and can be initially set (e.g., at 10%) (e.g., may be adjusted from time to time by the Fund).
  • Homeowner. Can comprise an individual who is: admitted to use the Quarter Platform, initiates the acquisition of the House or seeks to fund the pay-off of existing financing and/or equity sale on a House they currently own, and as a result of such purchase, pay-off, or sale comes to hold a TIC Interest in the House, enters into a TIC Agreement with the SPE, and has the sole right to live in the House. A subset of these requirements, as well as additional requirements, may also be used to define a homeowner.
  • House Appreciation Right' Can comprise the contractual right to all or a portion of the Appreciation Value of a specific House on the Quarter Platform.
  • House Seller-. Can comprise an individual or entity who is selling a House which will be purchased by the Homeowner and SPE and boarded onto the Quarter Platform. House Seller may have no affiliation or ongoing relationship with the Fund, Quarter or any of the other parties to the Quarter Platform after the closing of the sale of the House.
  • HPI House Price Index
  • HPI Asset Pool Can comprise a pool of assets which can comprise: (A) the unrealized Aggregate Appreciation Value, and/or (B) any fiat currency sitting in the HPI Asset Pool Cash Account.
  • HPI Asset Pool Cash Account Can comprise a bank account in the name of the Fund to hold the realized Appreciation Value from proceeds paid to such account upon the sale of Houses or the House Appreciation Rights.
  • HPI Interval Can comprise a predetermined period of time, initially set to be annually (which may be changed by the Fund from time to time), when Quarter will update the Current Valuation for each House then-existing on the Quarter Platform for the purpose of calculating the change in the valuation of each House during that period.
  • HPI Token Can comprise a token issued by the platform which can be backed by the home price appreciation of all of the homes on the platform.
  • HPI Token Right Purchaser Can comprise an Investor who only purchases the rights to the Unlocked HPI Tokens pursuant to this Memorandum, rather than the Bundle.
  • HPI Realization Percentage Can comprise the amount, stated in a percentage form, which can be applied to the House appreciation for the current period in order to calculate the number of HPI Tokens to be Unlocked for Token holders.
  • the HPI Realization Percentage can be initially set (e.g., at 90%), which may be changed by the Fund from time to time.
  • HPI Token Escrow Pool'. Can comprise a Digital Wallet controlled by the Fund to hold the issued HPI Tokens that are not Unlocked and/or the HPI Tokens that were previously Unlocked but subsequently are transferred to the HPI Token Escrow Pool and are subject to the “time lock” and “transfer lock” again.
  • Liens'. Can comprise any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting the House or the TIC Interests held by the Homeowner or any portion thereof or interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, control agreement, and mechanic’s, materialmen’s, taxjudgment and other similar liens and encumbrances.
  • LTV Loan to Value
  • Impact Investor'. Can comprise an Investor that assists the Applicant in meeting the Minimum Retained Equity requirements to qualify to become a Homeowner or in paying a portion of the closing costs in connection yvith the purchase, sale, or pay-off of the existing financing on a House currently owned by the Homeowner.
  • the Impact Investor can be an Asset Token Purchaser who purchases (A) Asset Tokens from the Fund in not less than the amount which is equal to a positive difference of (i) the Homeoyvner’s Minimum Retained Equity minus (ii) the purchase money amount of the TIC Interests actually paid for by the Homeowner at the time the House initially boards on the Quarter Platform, and/or (B) HPI Tokens in connection with the Bundle.
  • Initial Holder Can comprise a person or entity who acquired tokens in an initial issuance directly from the platform oyvner/operator.
  • Minimum Retained Equity Can comprise the minimum equity (e.g., expressed in a percentage form), that a Homeoyvner may need to retain based on current underwriting criteria imposed by Quarter, as may be amended from time to time. This can be a dynamic number which changes based on the value of the House occupied by the Homeowner and Homeoyvner profiles at a given moment in time and can be used to manage default risks.
  • the amount of Minimum Retained Equity can be determined by a proprietary algorithm, which can use the Homeowner's credit score, front and back-end debt to income ratios, the Quarter Contingency Fund composition, and Homeowner or property specific data as inputs at a given moment in time.
  • the Minimum Retained Equity can also be used to calculate the minimum purchase price required to be paid by the Homeowner for their TIC Interests in the House when the House is initially boarded to the Quarter Platform.
  • Occupancy Token' Can be the token issued to a Homeowner by an SPE upon full execution of the Real Estate Agreement, which can evidence Homeowner’s sole right to occupy the House. Each House may only have one Occupancy Token. Occupancy Tokens may or may not be offered for sale by either the Fund or the SPE.
  • Occupant Can comprise the tenants in common owner who may be designated as the homeowner and may be in possession of the occupancy token.
  • Original Asset Token Nominal Value Can comprise the nominal value (e.g., stated in US Dollars), of an Asset Token upon issuance.
  • the Original Asset Token Nominal Value can be initially set (e.g., US$1.0000).
  • Payments Can comprise amounts paid by the Homeowner to the SPE, which amounts can include: (i) the TIC Fee, (ii) the TIC Servicing Fee, (iii) the Enhanced TIC Fee with respect to the Impact Investor only, (iv) the House Warranty premium and other insurance premiums as required to be paid by the Homeowner under the TIC Agreement, (v) all repayment of fees or charges advanced by the Quarter Contingency Fund pursuant to the TIC Agreement, or (vi) the Property Escrowed Amounts, if any, together with all accrued late fees for the foregoing (i)-(vi), or any combination of the foregoing.
  • Contingency Fund Can comprise an entity (e.g., Quarter Contingency Fund LLC, a Delaware limited liability company, which can be controlled by Quarter), which can enter into a contract with the SPE to advance funds in the event of a Homeowner’ s default pursuant to the TIC Agreement, to pay real estate commissions, and to fund the purchase and resale of Homeowner's TIC Interests pursuant to this Memorandum.
  • the Quarter Contingency Fund can issue a certain amount of the Asset Tokens and HPI Tokens by the Fund and can receive certain monthly distributions from Payments made by the Homeowner as described herein.
  • Platform Can comprise a virtual two-sided network and infrastructure (e.g., developed by Quarter), which can manage the interactions betw een all parties involved in the purchase, pay-off of existing financing, management and sale of residential real estate.
  • Platform Dashboards'. Can comprise user interfaces that are accessible by Homeowners, Investors, vendors or Quarter, or any combination thereof, and can comprise a part of the Platform.
  • Preferred Agent Provider Can comprise a real estate agent or brokerage firm with whom the Fund has negotiated a contract to provide House listing and sales service.
  • Qualified Institutional Buyer Can comprise a company that can manage a certain amount (e.g.. at least $100 million) of securities on a discretionary basis and/or is a registered broker-dealer investing a certain amount (e.g., at least $10 million) in non-affiliate securities.
  • a certain amount e.g.. at least $100 million
  • a registered broker-dealer investing a certain amount (e.g., at least $10 million) in non-affiliate securities.
  • Real Estate Agreement' Can be an Agreement signed by the Homeowner and/or SPE to memorialize their agreement as to the ownership and/or management of the House.
  • a Form Real Estate Agreement can be provided to Applicants for review and can be signed upon the closing of the purchase of the House.
  • Real Estate Commission Fund Can comprise a fund that can be established to pay future real estate sales commissions on behalf of the property owners. This can be funded monthly from the platform fees collected by the platform as the rent payments are made.
  • Redeemed Asset Token Nominal Value' Can comprise the nominal value of certain Asset Tokens transferred to the Contingency Fund as part of an Asset Token transfer to another Investor when the Current Valuation of the House has fallen below a certain HPI High- water Mark, and which nominal value can, in some embodiments, always be set to $0.00. Holders of the Asset Tokens with the Redeemed Asset Token Nominal Value may still be entitled to collect pro rata TIC Fee payments under circumstances described in this Memorandum and the TIC Agreement.
  • Rent Can comprise the total payment which may need to be paid each month by the holder of the occupant token which can include base rent, platform fees and when applicable, taxes, insurance and/or HOA escrows.
  • Retained Risk Pool Can comprise a pool of asset tokens which may be held by the network to form a risk-pool for the purpose of mitigating occupant default risk.
  • Tenants in Common Can comprise a legal framework in which more than one owner of a property can hold title.
  • a Tenants in Common interest can be a legally undivided interest in a property which can be held and may have no right of survivorship.
  • SPE Can comprise a special purpose entity wholly owned by the Fund, which can be set up to purchase the TIC Interests in a particular House. Both the Homeowner and the SPE can own undivided TIC Interests in a particular House as tenants-in-common. The rights and obligations of the SPE and the Homeowner can be documented via the TIC Agreement.
  • TIC Agreement Can comprise the Tenants-in-Common Agreement signed by the Homeowner and the SPE to memorialize their agreement as to the ownership and management of the House.
  • a Form TIC Agreement can be provided to Applicants and Investors for review.
  • the TIC Agreement can be signed by the SPE and the Homeowner upon the closing of the purchase of the House.
  • TIC Fee' Can comprise the amount paid by the Homeowner each month to the SPE in consideration of Homeowner's right to occupy the House, which amount can be determined (e.g., by Quarter).
  • TIC Servicing Fee- Can comprise the amount equal to a certain percentage (e.g., 1%) of the TIC Fee, payable (e.g., to Quarter).
  • TIC Interests' Can comprise Tenants-in-Common interests in the House, expressed in a percentage form.
  • Transferred Asset Token Nominal Value' Can comprise the value assigned to an Asset Token, which can be transferred between two parties when the Current Adjusted Asset Token Nominal Value has fallen below a certain amount (e.g., $1.0000).
  • Triple Net Lease Can comprise a lease agreement that can be held for a property, whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and/or maintenance.
  • Unencumbered Equity Can comprise the TIC Interests held by the Homeowner that are not subject to any Liens. Searches may be conducted (e.g., by Quarter) to determine whether Homeowner’s TIC Interests are subject to any Liens.
  • Unlocked or Unlock Can apply to the HPI Tokens only and can occur when both the “time lock” and the “transfer lock” of a particular HPI Token are removed and such HPI Tokens are released from the HPI Token Escrow ⁇ Pool by the Fund to Investors’ Digital Wallets.
  • investment capital can be segmented from the capital supplied by or on behalf of the homeowner in the amounts dictated by quarters MRE calculation.
  • a MRE of 14.25% can be calculated based on this borrower’s risk profile, meaning that the borrower can have a down payment of $28,500 or 14.25% of the $200,000 purchase price to purchase the home.
  • Investors can purchase the other 85.75% of the home for $171,500, with assurances that the investment is secure due to the MRE calculations and risk pool.
  • an alternative option may be used when the borrower does not have the required down payment and wishes to rent instead.
  • the capital to meet the MRE requirement can be provided by a combination of both the homeowner and a third-party impact investor.
  • One example of the impact of this type of residential home funding models can be the lower monthly payment obligation of the homeowner.
  • rent can be, for example, 25 - 35% lower than both the market rent and the mortgage.
  • This differential can provide an arbitrage opportunity allowing the homeowner to purchase the additional equity held by the impact investor to meet the MRE requirements.
  • the homeowner can purchase the equity from the impact investor over time by simply paying market rent until the minimum equity threshold is met, after which their monthly payment drops to just the amounted required to service the 85.75% holders. Meanwhile, as long as the MRE is continually met by either the homeowner, the impact investor or some combination of both, the investment can look exactly the same to holders of the 85.75% interest as any other investment on the platform.
  • a 10% equity purchase and resale by an impact investor to a homeowner calculated using market rent payments and a 5 year repurchase window 7 can generate an annualized return of more than 20% for the impact investor.
  • the impact investors along with the homeowner can take first losses in the event of a homeowner default.
  • a framework can be provided to enable impact investors to plug and play with the platform design.
  • An experience can be provided for impact investors that can allow them to easily design a program to their specific needs (e.g., within predetermined guidelines) and leverage the infrastructure with as little effort as possible.
  • this framework can be similar to an Amazon experience, except with impact investors instead of retailers leveraging the infrastructure.
  • a blockchain based smart contract can be used, although those of ordinary skill in the art will see that a nonblockchain based contract (and software to implement the same) can also be used.
  • FIG. 6 illustrates an example process for using blockchain, according to aspects of the disclosure.
  • Requests for performing such transactions can be received from entities (e.g. investors) that transact in these asset tokens.
  • the asset tokens can be backed by an asset (e g. real property ). While the present disclosure describes in detail transactions with respect to real property assets, the teachings can be implemented on other assets in a similar manner.
  • the asset tokens can be generated using a cryptographic hash of information that uniquely identifies the asset.
  • the tokens can have an owner that uses an additional public/private key pair.
  • the owner public key can be set as the token owner identity, and ownership proof can be established by providing a signature generated by the owner private key and validated against the public key listed as the owner of the token.
  • Asset tokens can digitize ownership interests in certain assets (e.g. real property) to enhance access to the assets, enable tracking of assets based on their characteristics, and create efficiencies in supply chain management and trade finance. These tokens may be used as a medium of exchange and as an alternative to fiat currencies in, for example, settlement, payments, international remittances, investments, financing, and other activities.
  • asset tokens may be issued and/or exchanged based on availability of inventory of the asset in accordance with established procedures and exchanges for the asset.
  • Transaction of asset tokens can include purchasing of asset tokens, redeeming of asset tokens, transferring of ownership of asset tokens, providing of assets that back the asset tokens, etc.
  • the asset tokens and associated transactions may be recorded in a blockchain based smart contract. Each asset token may be associated with a standardized smart contract that specifies transactions that can be performed on the asset.
  • Blockchain can be a public ledger of all transactions of a blockchain-based data storage.
  • One or more computing devices may comprise a blockchain network, which may be configured to process and record transactions as part of a block in the blockchain. Once a block is completed, the block is added to the blockchain and the transaction record is thereby updated.
  • the blockchain may be a ledger of transactions in chronological order or may be presented in any order that may be suitable for use by the blockchain network.
  • transactions recorded in the blockchain may include a destination address and an amount, such that the blockchain records the amount attributable to a specific address.
  • the transactions may be financial and/or include additional or different information such as source address, timestamp etc.
  • the blockchain may also include data as a form of transaction placed in a distributed database that maintains a continuously growing list of data records hardened against tampering that maintains a continuously growing list of data records hardened against tampering and revision, and may be confirmed and validated by the blockchain network through proof of work and/or any suitable verification techniques associated therewith.
  • data regarding a given transaction may further include additional data that is not directly part of the transaction appended to transaction data.
  • the inclusion of such data in a blockchain may constitute a transaction.
  • the inclusion of such data in a blockchain may constitute a transaction.
  • a smart contract can be a computer code that programmatically executes transactions that may be defined by a written contract or other pre-defined conditions.
  • the computer code may be executed in a secure platform (e g., an Ethereum platform, which provides a virtual machine) that supports recording transactions in a distributed ledger.
  • a secure platform e g., an Ethereum platform, which provides a virtual machine
  • the smart contract itself may be recorded as a transaction in the distributed ledger using an identity token that is a hash (i.e.. identity token) of the computer code so that the computer code that is executed can be authenticated.
  • identity token that is a hash (i.e.. identity token) of the computer code so that the computer code that is executed can be authenticated.
  • a constructor of the smart contract executes, initializing the smart contract and its state.
  • the state of a smart contract can be stored persistently in the distributed ledger.
  • a message can be sent to the smart contract, and the computer code of the smart contract can execute to implement the transaction (e.g., debit a certain amount of asset tokens from the balance of an account).
  • the computer code can ensure that all the pre-defined conditions are met before the transaction is recorded in the distributed ledger.
  • a smart contract may support the sale of an asset.
  • the inputs to a smart contract to sell a portion of an asset may be the identity tokens of the seller, the buyer, and the asset and the sale price.
  • the computer code ensures that the seller is the current owner of the asset and that the buyer has enough funds in their account.
  • the computer code then records a transaction that transfers the ownership of the asset to the buyer and a transaction that transfers the sale price from the buyer's account to the seller's account.
  • the asset token transactions can be related to the purchase and sale of a portion or an entirety’ of a real property between one or more property occupants (e.g., homeowners) who reside at the property and/or one or more investors in the property who have a financial interest in the property.
  • the proportion of oyvnership between the various occupants and investors can be based on a proportion of the tokens and TIC interest that are owned by the entity.
  • Such transactions can provide capital to homeowners who are not accredited investors to purchase their houses and have an undivided fractional ownership of the house with the investors. For example, if the homeowner funds 5% of the purchase price and investors fund 95% of the purchase price, the homeowner can need to pay rents to the investors for the 95% interests held by the investors per month. The recurring rent payments can be made to the investors via smart contracts. Thus, the investors can receive the cash flow from their investments and the homeow ner will have the right to live in the house, subject to the rent payments.
  • each home can have 95.000 non-divisible asset tokens minted for transactions.
  • a homeowner-to-be can purchase a 5% interest in the residential property and receive a 5% TIC interest in the home.
  • Investors can purchase a 95% interest in the residential property and receive 95,000 asset tokens.
  • An entity that facilitates this sale e g. a real estate website
  • An entity that facilitates this sale can receive a commission the net sales proceeds from the consideration paid by the homeowner and the investors.
  • a homeow ner who ow ns a fraction of the home has a positive money event, the homeowner may buy more fractions of the home owned by the community of investors.
  • the homeowner wants to pay an additional $25,000, the asset token ownership positions of all owners can be adjusted, and $25,000 worth of asset tokens can be redeemed and $25,000 worth of TIC ownership transferred to the homeowner.
  • the homeowner’s new monthly rent payments can also be reduced accordingly.
  • the homeowner can trade fractions of the home. In such a case, the homeowner’s monthly rent payments can be increased accordingly.
  • the homeowner can have the right to live in the house.
  • occupancy right can be evidenced by an occupant token that would be specific to each residential property. Holding an occupant token can require payment of rent to investors via smart contracts.
  • the occupant token may be involuntary redeemed by the investors if there were an event of default by the homeowner as set forth in the agreement between the homeowner and the investors.
  • homeowner desires to move out of the house, the homeowner can sell his or her asset tokens and the corresponding occupant token, which would then be transferred to a new homeowner.
  • the asset-backed token transactions can be structured in the following ways: (i) Tenant-in-Common (TIC) structure (e.g., see FIG. 1), (ii) Delaware Statutory Trust (DST) structure (e.g., see FIG. 2), and (iii) Limited Liability Company (LLC) structure (e.g., see FIG. 3).
  • FIG. 4 illustrates a hybrid structure.
  • the tokens Under the TIC structure, the tokens can be represented by direct Tenant-in-Common interests in the asset. Under the DST structure, the tokens can be represented by beneficial interests in a DST to be governed by a trust agreement. This structure can eliminate the need to record a deed to evidence the change of ownership every time a transfer of a TIC Interest is made.
  • the tokens can be represented by membership interests in an LLC and/or DST, which would be the co-tenant with the homeowner.
  • Homeowner may own an undivided fractional (e.g., 5%) TIC ownership interest in the house alongside the remaining (e.g. 95%) TIC ownership interest of the investors' LLC and/or DST.
  • the homeowner's TIC Interest and Investor LLC’s and/or DST TIC Interest can collectively constitute a ‘‘Co-Tenant TIC Interests” under such a structure.
  • both the homeowner and Investor LLC and/or DST can have voting and management rights, which can be documented via the TIC Agreement. Investors can be the holders of the LLC or DST Interests in Investor LLC and/or DST. If the homeowner wishes to purchase or sell its Co-Tenant TIC Interest from or to Investor LLC, then Investor LLC can facilitate such purchase or sale and adjust the rental payments accordingly relative. If the homeowner wishes to purchase its Co-Tenant TIC Interest from or to Investor DST, then Investor DST can facilitate such purchase and adjust the rental payments accordingly relative.
  • MRE Minimum Retained Equity
  • FIG. 7 illustrates an example MRE calculation flow, according to aspects of the disclosure.
  • LTVs don’t exist (e.g., as there may not be loans, and instead home ownership may be ’’fractionalized”). Instead, the LTV value can be roughly equivalent to the MRE and can be treated as such for the purposes of producing initial values to use for the model.
  • the data can be fit to a non-linear model to make determinations about how the scores between the ’’blocks” of credit scores/LTVs/DTIs behave.
  • a non-linear model can be chosen as the relationship being modeled may be inherently nonlinear as there is a threshold above and/or below which changes in either credit score or LTV no longer have an appreciable effect on default rates.
  • the function resulting from the fitting of available data blocks can be a multivariate equation we can represent as
  • C s can be the credit score of a consumer
  • E mm can be the minimum retained equity
  • Lean be the Debt-to-Income ratio (DTI)
  • D(C S , E mm , I r ) can be the expected default rate based on the real world data available.
  • D Me can be the maximum tolerable chance of default
  • C s can be the consumer’s credit score
  • Lean be the debt-to-income ratio
  • E(D m , G) can evaluate to the minimum retained equity the consumer may need to have to keep below- the maximum tolerable default change.
  • the platform can be designed to have a risk pool which can share the risks of every' property' of the network, the risk pool can hold 1 % of the value of each home on the network, which can entitle it to 1% of the rent and/or HPI accrual for each property'. Additionally, this risk pool can be evaluated with the MRE for each property assumed to be recoverable at some rate R.
  • the total assets can be held by the risk pool and can be computed as shown in EQUATION 1, where H/, can be the total number of HPI tokens held by the risk pool, H v can be the current value of HPI tokens, G can be the value of the home, Rh can be the rent rate of the home, and/or Ph can be the number of rent payments made by the occupant of the home [0119]
  • H/ can be the total number of HPI tokens held by the risk pool
  • H v can be the current value of HPI tokens
  • G can be the value of the home
  • Rh can be the rent rate of the home
  • Ph can be the number of rent payments made by the occupant of the home
  • R can be the normalized recovery rate
  • Eh can be the MRE for the property
  • D can be the function described in the analysis of credit scores.
  • Ch can be the credit score for the homeowner.
  • Eh can be the MRE for the homeowner, Ih can be the debt to income ratio for the homeowner, and Uh can be calculated as shown above.
  • Rheaith ⁇ 1 The pool will not have enough assets to cover the expected losses.
  • Rheaith can be a current risk pool health
  • Utot can be the total expected losses for the risk pool
  • V)(Ch, Eh.Ih) can be the expected default chance for the property
  • Uh can be the unrecoverable losses for the house if it were to default
  • Atot can be the current value of assets held by the risk pool
  • Vh can be the value of the home.
  • FIGURE 9 illustrates an example of how smart contracts and blockchain can be used for investing, according to aspects of the disclosure.
  • ownership of the home can be granted to both the occupant and the SPE as tenants in common via a warrant) 7 deed.
  • a smart contract can be created by the SPE which can issue asset tokens which can represent ownership in the SPE and can be sold to the investors to fund the purchase of the TIC interest pursuant to step 1 .
  • the Asset tokens can be distributed to the investors and also to the risk pool.
  • a smart contract can be created between the occupant and the SPE which can contain a tenants in common agreement and a lease.
  • a smart contract can be created by the SPE which can issue the occupancy token to the occupant.
  • a smart contract can be created which can contain an agreement to assign home appreciation to the HPI asset pool and in exchange can issue HPI tokens which can be included in the sale of asset tokens.
  • the HPI tokens can represent ownership in the appreciation rights and can be distributed to the investors with the asset tokens and also to the platform owner/manager.
  • all of the transactions can be recorded onto the blockchain.
  • FIGURE 29 illustrates an example overview of the use of smart contracts on the Platform in accordance with an embodiment. As reflected in the figure, the following is an example description of how smart contracts and blockchain can be used to board a House onto the Quarter platform.
  • a SPE can be set up by the Fund to purchase a House as tenants in common w ith the Homeowner.
  • the Fund can be the sole member of the SPE.
  • a smart contract can be created by the Fund which can issue Asset Tokens and rights to distributions from the specific House owned by the SPE.
  • the Asset Tokens can be distributed to the Asset Token Purchasers and also to the Quarter Contingency Fund pursuant to this Memorandum.
  • a smart contract can be created between the Homeowner and the SPE, which can automate certain provisions under the TIC Agreement, including the Payments.
  • a smart contract can be created by the Fund which can contain the assignment of the House Appreciation Right to the Fund and in exchange, the Fund can issue HPI Tokens which can be included in the sale of the Bundle.
  • the HPI Tokens can represent the exposure and entitlement to the assets held by the fund in the HPI Asset Pool and can be distributed to the Investors and also to Quarter as described in this Memorandum.
  • the Fund can allocate the Asset Tokens based on the total number of Asset Tokens to be issued and the Asset Token Purchaser’s total investment in proportion to the total investment to be made by all Asset Token Purchasers.
  • the Fund can initially issue a certain number (e.g., 10) of HPI Tokens per Asset Token in connection with the Bundle.
  • the Fund can reserve the right to change the number of HPI Tokens included in the sale of the Bundle from time to time.
  • the occupancy token can be a non-fungible token which can be issued to a homeowner by an SPE upon execution by the occupant and the SPE of the TIC agreement and/or triple net lease and closing of the purchase of a TIC equity interest in the subject home.
  • the occupancy token can confer certain rights and/or obligations upon the holder as described herein.
  • the occupant can have the right to occupy the home pursuant to a jurisdictionally specific tenants in common agreement and/or a triple net lease which can contain, for example, the following provisions: i) The term can be perpetual unless terminated pursuant to pre-defined terms. ii) Rent can be paid by the occupant via the platform to the SPE in an amount that can be calculated as the sum of the base rent, platform fee, accrued late fees, and/or repayments of advances.
  • the rent payment can also include an impound for taxes, insurance and/or HOA fees.
  • the determination of whether there will be an escrow account impound may be based on an algorithm using various consumer and/or property data points and/or local j urisdictional requirements.
  • any impounded escrow payments can be paid to a third-party escrow services provider.
  • the occupant may pay, separately from rent, property taxes, hazard insurance premiums and/or HOA fees (including fines) as they become due directly to the appropriate taxing, insurance, and/or HOA authorities/agent(s).
  • the occupant may need to timely pay any obligation which may become a lien on the property 7 , including but not limited to: water and/or other utility bills, code enforcement fines, special assessments, and/or contractors hired by occupant to perform work or services on the home.
  • the occupant may have an obligation to perform and/or pay for all routine maintenance of the property' not covered under a home warranty 7 , which may be provided under the terms of the TIC Agreement and/or the triple net lease agreement.
  • the occupant If the occupant is not in compliance with the maintenance requirements (e.g., section l(a)(v)) and/or does not cure non-compliance within a pre-defined number of days of notification of the non-compliance, then the occupant can be considered in breach and/or a third party contractor may be hired at the occupants sole expense to perform the necessary maintenance work to bring the home back into compliance. which costs can be due and payable by occupant and added to the amount of the next rent payment.
  • the maintenance requirements e.g., section l(a)(v)
  • a third party contractor may be hired at the occupants sole expense to perform the necessary maintenance work to bring the home back into compliance. which costs can be due and payable by occupant and added to the amount of the next rent payment.
  • Any payment for third party contractors hired e.g., under section l(a)(vi) which fall due prior to the next scheduled rent payment can be advanced from the retained risk pool and can be reimbursed by the occupant.
  • Deductibles incurred under the terms of any home warranty program can be paid by the occupant.
  • Rent payments can be paid in fiat currency.
  • Late payment terms (fees and/or timing) can be determined.
  • the occupant can be required on each annual anniversary of their acquisition of the occupancy token to take and submit interior and exterior photos of the property using any computer.
  • any element of the system can be managed by an administrator and/or accessed by a user using any computer or combination of computers (e.g., desktop computer, laptop computer, mobile computer).. xi) If the occupant does not comply with pre-set rules (e.g., section l(a)(x)) within a pre-determined amount of time, the occupant can be notified of their non- compliance. If the occupant is still in non-compliance within a pre-determined amount of time after notification of non-compliance, a third party 7 can be contracted to inspect the property and/or photographs and upload the photos. (Any extra costs associated with photos or any other issues related to the home or the system can be added to the amount of the next rent payment.)
  • pre-set rules e.g., section l(a)(x)
  • Any payment for a third-party contractor hired under pre-defined criteria which may fall due prior to the next scheduled rent payment can be advanced from the retained risk pool and can be reimbursed to the retained risk pool when paid by occupant.
  • Any obligations under pre-defined criteria e.g., sections 1 (a)(iii), l(a)(iv), l(a)(iv), l(a)(vi), l(a)(vii) and/or l(aO(xi)
  • sections 1 (a)(iii), l(a)(iv), l(a)(iv), l(a)(vi), l(a)(vii) and/or l(aO(xi) which are not paid within a pre-determined amount of time by the occupant can be paid on behalf of the occupant with funds advanced from the retained risk ool and may trigger an automated sale of an amount of excess equity sufficient to reimburse the network for advancing the defaulted payment(s).
  • xiii) In the event that there is not sufficient excess equity to fully reimburse the retained risk pool for advances pursuant to pre-defined rules (e.g., section l(a)(xii)), a lien may be placed on part of, or the entirety of the occupant’s minimum retained equity’ for the amount of the shortfall. xiv) Any payment obligations pursuant pre-defined rules (e.g., section l(a)(ii)) which are not paid within a pre-defined amount of days by occupant shall be paid on behalf of the occupant with funds advanced from the retained risk pool and may trigger an automated sale of an amount of excess equity sufficient to reimburse the network for advancing the defaulted payment(s).
  • pre-defined rules e.g., section l(a)(ii)
  • a lien can be placed on the entirety of the Occupant’s Minimum Retained Equity' for the amount of the shortfall.
  • Placement of a lien e.g., pursuant to l(a)(xiii) or l(a)(xv)
  • Placement of a lien can trigger an eviction proceeding, revocation of the occupancy token, sale of the home, or dissolution of the TIC agreement, or any combination thereof.
  • Local law can be used to determine the eviction proceedings, etc.
  • relevant valuation e.g., current or enhanced
  • fiat currency e.g., USD
  • the amount of equity to be transferred can be calculated by dividing the relevant valuation (e.g., current or enhanced) by the amount of fiat currency (e.g., USD) the homeow ner can wish to receive, plus any transfer taxes or fees, and the network transfer fee.
  • equity can be divisible to .001 and can be transferred by amending the TIC deed and can be recorded subject to an escrow agreement with a third-party title company or other provider of settlement services.
  • the amount of funds received by the occupant can be net of any transfer taxes or fees, and the network transfer fee and can be settled to occupant in fiat currency (e.g., USD).
  • the occupancy token can confer upon the occupant the right to sell the home in its entirety as follows: i) The occupant can give notice to the investor(s) of their intent to sell the home and the price at which the home shall be listed. ii) Upon receipt of the intent to sell and the initial listing price, the investor(s) can have a right of refusal to purchase the property at the initial listing price for a predetermined amount of time. iii) Upon expiration of the right of first refusal, the occupant may list the property with the realtor who is a network preferred provider. iv) Notwithstanding section 1 (c)(iii) herein, if the occupant is a licensed realtor, they may act as the listing agent provided they are in compliance with all pre-defined terms and conditions.
  • Occupant may use listing and purchase contract addendums provided by the platform, which may state that any liability incurred as a result of occupants breach of the listing and/or sales agreement (e.g., such as a specific performance claim, etc.) cannot attach to the home, and may release and/or otherwise indemnify the investor(s) from any claims related to the listing and/or sale.
  • the investor(s) can have a right of first refusal for a predetermined amount of time to match the offer.
  • the investor(s) may have a pre-determined amount of time to decide if they wish to retain their interest and/or include it in the sale.
  • a decision by investor(s) to retain their interest in the property may not guarantee that they will retain the same percentage interest as they held previously, as the precise amount of their holdings may be based on the amount that the new occupant purchases relative to what the original Occupant was holding at the time of sale.
  • Equity reallocation may be done pro-rata among all previous investors wishing to retain their interest.
  • the rent and base rent can be recalculated based upon the sale price of the home. This can be true even if the existing investor(s) choose to retain their ownership interest.
  • xi) In the event that the home may be sold to a buyer who may not use the network to fund their acquisition, the occupancy tokens (and/or asset tokens) can be redeemed and/or burned, and the TIC Agreement can be terminated and the SPE can be dissolved. xii) Settlement of the home sale can occur in US fiat currency. ) The occupancy token can confer rights upon the holder to make capital improvements to the home and to benefit from those improvements. a) Occupants can notify the platform as manager of the SPE not less than a pre-determined amount of time in advance of any plans to make capital improvements to the home. b) A current enhanced valuation can be ordered by the platform to determine the pre and post improvement valuation of the home in order to calculate the capital improvement value.
  • the post improvement valuation can require an onsite inspection to confirm the work has been completed.
  • Occupant can bear the costs for the valuations.
  • the capital improvement value can be calculated by subtracting the post improvement value from the pre improvement value.
  • the TIC agreement can be amended to allocate the capital improvement value to the net proceeds that the occupant can receive upon sale of the home.
  • the asset tokens can be a fungible token issued by the SPE which can confer certain rights and obligations on the holder described herein.
  • the asset tokens can represent ownership in the home for any combination of the following: i) A SPE can be the named entity on the TIC deed on behalf on the investor(s) and can hold the real estate interest. ii) The special purpose entity 7 can initially be a Limited Liability Company (LLC) but could also be a Delaware Statutory 7 Trust (DST), Series LLC. Land Trust or other entity legally entitled to hold real property in the jurisdiction in which the home is located. iii) There may be >1 SPE named on the TIC deed for a home, for example both an LLC and a DST. iv) Asset tokens can be allocated to investors on a pro-rata basis in the same proportion as their ownership in the SPE and can be issued in exchange for a fiat currency investment (USD) in the SPE.
  • USD fiat currency investment
  • the platform may decide to accept other payments, such as stable coins or other fiat currencies in the future.
  • the token holder may have pre-determined governance rights in the SPE.
  • the holders of asset tokens may have any combination of the following rights: i) Right to receive rent payments pursuant to their proportional ownership in the SPE as calculated using a formula which can multiply the sum of the base rent and, subject to section 3(b)(1), any late fees, by the proportional number of asset tokens owned.
  • Late fees paid to occupant can be distributed to the holders of asset tokens proportionally to their holdings unless the underlying payment which generated the late fees was advanced by the retained risk pool in which case the late fees can be distributed to the retained risk pool.
  • Payment can be settled in fiat currency (USD), or optionally in other crypto currencies such as USDC, as may be decided by the platform from time to time.
  • USD fiat currency
  • Payments of net proceeds from any sale of the home owned by the SPE, proportionally to their ownership of asset tokens.
  • a real estate commission free sale can be provided to the SPE in the event of voluntary or involuntary (e.g., occupant default) sale of the entire property except as provided in section 3(b)(iii)(l) below.
  • the commission credit shall be capped at a maximum of 4% of the sale price.
  • Asset token holders can receive uninterrupted rent payments in the event of an occupant default to the limit of the assets held in the retained risk pool.
  • Asset token holders can not be required to fund any out-of-pocket expenses related to occupant default to the limit of the assets held in the retained risk pool.
  • asset tokens there can be a right to encumber asset tokens for leverage purposes.
  • the occupant can have the right, subject underwriting guidelines, to sell a portion of their TIC holdings (e.g., known as excess equity).
  • the asset token holders can be notified of the sale and can have the right but not obligation to purchase additional asset tokens being sold by the SPE to raise the capital to purchase the TIC interest from the occupant. Should more than one asset token holder request to purchase additional asset tokens, then the amount of asset Tokens can be divided and/or sold proportionally between them based on the amount of asset tokens owned immediately prior to the proposed transaction.
  • the holders of asset tokens can have the following obligations: i) So long as they are in compliance with all obligations as the holder of the occupancy token, the occupant may request at any time to purchase any fractional TIC amounts of their home from the SPE which may need to be honored. ii) Any transaction conducted pursuant to Section 3(c)(i) can be transacted at the current valuation of the home if the pre-determined amount (e.g., $ or % (fractional amount) of the transaction is below a pre-determined amount, and/or at the current enhanced valuation if higher (also see section 1 (b)(ii) herein)).
  • the pre-determined amount e.g., $ or % (fractional amount) of the transaction is below a pre-determined amount, and/or at the current enhanced valuation if higher (also see section 1 (b)(ii) herein)
  • HPI tokens can be a fungible token issued by (a bankruptcy (BK) remote SPE which can exist for the purpose of holding the HPI equity pool assets and issuing the HPI tokens OR by the SPE which has contracts with the BK remote SPE such that each SPE can issue the HPI tokens independently).
  • HPI tokens can be backed by a pool of equity generated by appreciation of every’ home (or a subset of homes) on the platform. The ownership of this equity can be transferred to the HPI equity pool by the asset token holders in exchange for HPI tokens.
  • HPI tokens can be issued contemporaneously with asset tokens when a home can be initially boarded onto the platform.
  • HPI tokens issued with asset tokens can be locked when issued and/or can remain so unless they are unlocked pursuant to 4(d)(i)of this section.
  • Locked HPI tokens may not be separable from asset tokens and may transfer as part of any secondary transfers which occur subsequent to issuance.
  • a contract can be created with the SPE at the time a property' is boarded which can assign the value of the home appreciation to the HPI asset pool, which can be collected upon sale and exit of the home from the platform.
  • the platform can establish predetermined time periods, known as HPI Intervals, when it can update the valuation of each home on the platform for the purpose of calculating the change in the value of each home during that period.
  • HPI Intervals predetermined time periods, known as HPI Intervals
  • HP A home price appreciation
  • HPD home price depreciation
  • the calculation can be the difference betw een the valuation conducted at the end of the previous HPI Interval and the valuation conducted at the end of the current HPI Interval.
  • Pro-rata adjustments can be made if the first period is within a pre-determined amount of time. d) In the event that the valuation at the end of the current HPI Interval exceeds either the valuation at the end of any previous HPI Intervals, which have occurred during the tenure of ownership of the current asset token holder, and/or the value at boarding and/or transfer as described in section 4(c)(i), then this valuation can also be designated as the HPI high-water mark. e) In the event that the valuation for the current HPI interval does not exceed the HPI high- water mark, then no HPI tokens may be unlocked.
  • HPI can be unlocked based on the following formula: i) The number of HPI tokens unlocked for each asset token can be computed by dividing the lesser of either the total HPA (e.g., in USD) minus the HPI high-water mark (e.g., in USD) or the total HPA (e.g.. in USD), by the market price of the HPI tokens (e.g., also in USD) then multiplying the quotient by the HPI realization percentage (e.g., initially set at 90%) and then dividing the product by the total number of asset tokens held by investors.
  • the HPI realization percentage e.g., initially set at 90%
  • the current market value can be determined using a variety of possible methodologies. As defined in this document, there may be at least two tiers of valuations which may be utilized within the netw ork: current valuation and/or current enhanced valuation.
  • Current valuations can be the default valuation of record within the system and/or can be performed using a best in class pre-determined third-party AVM.
  • Enhanced valuations can be used in place of current valuations when certain trigger events occur.
  • An enhanced valuation may include any combination of AVMs, physical appraisals, brokers price opinions, sales contracts, asset token sales, or other pre-determined relevant inputs.
  • All valuations can be independent and provided to the network by non-affiliated third parties.
  • the physical condition of the property can be evaluated and documented. There can be a standard set of pre-determined inspections (e.g., wood destroying insects, radon testing, septic tank inspections, water quality, mold, private well inspection) supplemented by local practice which can be determined on a jurisdictional level. Any combination of inspections can be incorporated into a single home warranty inspection certificate and/or policy.
  • i) Physical condition can be determined using best in class products and services utilizing independent third-party providers.
  • Title to the property’ can be examined and a title insurance policy’ can be issued in order to ensure that both the occupant and/or SPE have an unencumbered interest after the closing occurs and can be protected by insurance in the event of a defect in the title. This can be true in both a new purchase and when an existing homeowner boards the home they currently own onto the platform.
  • an ALTA owner's title insurance policy may need to be purchased.
  • an existing homeowner boarding the home they currently own an ALTA owner's title insurance policy may also needs to be purchased (e.g., only to the extent that the SPE needs to be covered given that the occupant is already on title).
  • Occupant Diligence The following diligence can be performed for each future occupant (and/or current applicant(s)) as part of the application process before they are approved to board onto the network and are issued an occupant token: a) An applicant credit review can be conducted by running a third party, tri-bureau credit report which can be used to determine: i) The FICO (any version of FICO can be used). The minimum can be a predetermined amount (e.g., 620) to qualify. Credit scores can be retained and accessible to pre-determined parties. A vendor can be requireed to store this information on the platform’s behalf for a pre-determined amount of time.
  • FICO any version of FICO can be used
  • b) Income for the applicant(s) can be determined by: i) In the case of a TrueConnect applicant, the payroll census file to the extent that that is the only source of income needed for qualification. ii) By utilizing an independent, third-party income verification service. c) A back-end debt to income ratio can be determined for each applicant/application by any combination of: i) Gathering data from the apphcation(s). ii) Gathering data from the credit reports. iii) Discrepancies in liabilities between the application and/or credit reports can be reconciled by using an independent third-party verification service.
  • the amount of minimum retained equity can be determined by an algorithm which can use the applicants credit score, back-end DTI, risk pool composition, or property specific data as inputs, or any combination thereof.
  • the minimum retained equity can be used to calculate the minimum down payment required by the applicant to close the transaction.
  • the applicant can have the ability to transfer the amount of fiat currency (e.g., USD) equal to the value of the minimum retained equity to (e.g., the settlement agent or another party) in order to proceed with the approval.
  • the applicant may need to actually transfer the money, show the funds in an account, or verify with a third party (e.g., Finlocker, or a third-party asset verification service).
  • the platform can have an infrastructure which can allow impact investors to leverage the platform to assist those applicants.
  • Any requirement that the occupant must fund the minimum retained equity as described in section 6(e)(i) can be modified to allow the impact investor to assist with funding the minimum retained equity.
  • the minimum credit score requirement described in section 6(a)(i) can be waived in order to allow the impact investor to set their own minimum qualification criteria.
  • the impact investor may purchase asset tokens in an amount computed as the minimum retained equity less the amount of equity purchased by the occupant, provided that occupant must purchase not less than a pre-determined amount (e.g.. % of the equity at closing) from their own funds.
  • Asset tokens purchased by an impact investor can be locked and may only be unlocked when any combination of the following occurs:
  • asset tokens can be (a) unlocked, redeemed and/or burned after distribution of the proceeds of the sale of the property in the event that the home leaves the network (e.g., the new purchaser chooses not to use the platform) or, (b) unlocked, redeemed and/or transferred to treasury after distribution of net proceeds from the sale; or
  • asset tokens can be (a) unlocked, redeemed and/or burned after distribution of the proceeds of the sale of the property in the event that the home leaves the netw ork (e.g., the new' purchaser chooses not to use the platform), and/or (b) unlocked, redeemed and/or transferred to treasury' after distribution of net proceeds from the sale.
  • Impact investors asset tokens can be entitled to pro-rata distribution of net proceeds in the event of sale of the home pursuant to sections 6(b)(i)(2) and 6(b)(i)(3) subject to the following formula:
  • FIG. 1 1 is an illustration of the parties and transactions that can be required to board a home onto the platform.
  • Seller can be the individual or entity who is selling a home which may be purchased by the occupant and the SPE and boarded onto the platform.
  • the seller can receive fiat currency (e.g., USD) from the occupant pursuant to a real estate closing and can issue a warranty deed to the occupant as one of two Tenants in Common.
  • fiat currency e.g., USD
  • the seller can receive fiat currency (e.g., USD) from the SPE pursuant to a real estate closing and/or can issue a warranty deed to the SPE as one of two tenants in common.
  • Occupant can be the consumer who initiates the acquisition of the property and/or becomes the holder of the occupant token.
  • the occupant can pay fiat currency (e.g. USD) to the seller pursuant to the real estate purchase transaction and/or in return can receive a warranty deed granting occupant a tenants in common interest in the home.
  • fiat currency e.g. USD
  • the company that owns the platform that connects and/or manages the relationships and transactions between all of the parties can set up the SPE and/or manage the ongoing administrative functions on behalf of the other SPE owners and in return, can be allocated HPI tokens by the SPE.
  • SPE can be the providers of capital to the SPE, which can enable the SPE to purchase an interest in the home alongside the occupant.
  • the investors can purchase asset and HPI Tokens from the SPE. which can be paid for in fiat currency (USD).
  • USD fiat currency
  • SPE can be the entity which can own the real estate interest on behalf of the investors.
  • USD fiat currency
  • the SPE can sell asset tokens to investors who can purchase them in fiat currency (USD) hi)
  • USD fiat currency
  • the SPE can purchase an interest in the home from the seller in fiat currency, and in return can receive a warranty deed granting the SPE a tenants in common interest in the home.
  • the SPE can execute a tenants in common agreement and/or a triple net lease with the occupant, and in consideration, can issue the occupancy token.
  • the SPE can enter into a contract granting the rights to a proportional share of all future appreciation to the HPI pool and in consideration can be issued HPI Tokens by the HPI pool.
  • the HPI pool can be a BK remote SPE which can receive all of the future HPI gains from the SPE in exchange for issuing HPI tokens to the SPE.
  • the Risk Pool can be a BK remote SPE which can enter into a contract to advance rent and default costs to the SPE, and in consideration can be issued asset tokens by the SPE.
  • FIG. 12 is an illustration of example parties and/ or transactions that can be required to board a home onto the platform in the impact investor program.
  • Seller can be the individual or entity who is selling a home which may be purchased by the Occupant and the SPE and boarded onto the Quarter Platform.
  • the seller can receive fiat currency (e.g., USD) from the occupant pursuant to a real estate closing and/or can issue a warrant ⁇ ' deed to the occupant as one of two tenants in common.
  • the seller can receives fiat currency (e.g., USD) from the SPE pursuant to a real estate closing and/or can issue a warranty deed to the SPE as one of two tenants in common.
  • Occupant can be the consumer who can initiate the acquisition of the property and/or can become the holder of the occupant token.
  • the occupant can pay fiat currency (e.g., USD) to the seller pursuant to the real estate purchase transaction and in return can receive a warranty deed granting occupant a tenants in common interest in the home.
  • fiat currency e.g., USD
  • the occupant can enter into an agreement with the impact investors and/or the SPE to:
  • the investors can purchase asset and/or HPI tokens from the SPE w hich can be paid for in fiat currency (e.g., USD).
  • fiat currency e.g., USD
  • Impact investor can be a capital provider to the SPE and/or benefactor of the occupant who can purchases asset tokens from the SPE in, for example, not less than the amount which is equal to the occupant’s MRE less the amount of TIC interests the occupant purchases.
  • the impact investor can enter into an agreement with the SPE and/or the Occupant with the following terms:
  • the impact investor can guarantee the performance of the occupant and/or pledge the asset tokens it owns to the SPE.
  • the impact investor can sell to the SPE a portion of their asset tokens equal to the amount of TIC interest purchased each month by the Occupant.
  • SPE can be the entity which owns the real estate interest on behalf of the Investors.
  • the SPE can sell asset tokens to investors who can purchase them in fiat currency (e.g., USD).
  • the SPE can also sell asset tokens to impact investors who can purchase them in fiat currency (e.g., USD).
  • fiat currency e.g., USD
  • the SPE can purchase an interest in the home from the seller in fiat currency and/or in return receives a warranty 7 deed granting a tenants in common interest in the home.
  • the SPE can execute a tenants in common agreement and/or a triple net lease with the occupant and in consideration, issues the occupancy token.
  • the SPE can enter into a contract granting the rights to a proportional share of all future appreciation to the HPI Pool and in exchange ca be issued HPI tokens by the HPI pool.
  • the SPE can enter into an agreement with the impact investors and the occupant which can have any combination of the follow ing provisions:
  • the SPE can receive an additional payment amount each month from the occupant, paid in fiat currency (e.g., USD), a portion of which can be designated as the purchase additional TIC interests and/or the remainder can be paid to the impact investor as additional rent which can be supplemental to the proportional amount they are entitled to based on ownership of asset tokens.
  • fiat currency e.g., USD
  • Fiat currency received from occupant pursuant to section 9(f)(vi)(l) can be used to redeem asset tokens owned by the impact Investor proportionally to the TIC interests purchased by the occupant.
  • Asset tokens owned by the Impact Investor may not need to be entitled to HPI tokens
  • HPI pool can be a BK remote SPE w hich can receive all of the future HPI gains from the SPE in exchange for issuing HPI tokens to the SPE.
  • Risk Pool can be a BK remote SPE which can enter into a contract to advance rent and/or default costs to the SPE and in consideration is issued asset tokens by the SPE.
  • the following services can be provided in order to board a property and occupant onto the network: a) Consumer diligence (e.g., third party underwriter such as Evolve) i) Credit analysis (e.g., credit report and scores) ii) Capacity to repay analysis (e.g., income verification/assets if asset depletion) iii) Asset verification (e.g.. down payment) iv) Know' your customer (KYC)/ anti-money laundering (AML)/etc.
  • Consumer diligence e.g., third party underwriter such as Evolve
  • Credit analysis e.g., credit report and scores
  • Capacity to repay analysis e.g., income verification/assets if asset depletion
  • Asset verification e.g.. down payment
  • Know' your customer Know' your customer (KYC)/ anti-money laundering (AML)/etc.
  • c) Settlement agent can provide one or more of the following services: i) Doc prep and review' (e.g., TIC deed, closing statements, etc.) ii) Lien payoff calculations iii) Tax and other proration calculations iv) Notary services v) Funds escrow accounts and make disbursements vi) Document recording vii) Trailing docs d) Title Insurance Company i) Title exam and commitment issuance ii) Policy issuance e) Home warranty i) Policy or contract issuance f) Hazard Insurance i) Policy issuance g) Escrow impound account i) Setup and funding ii) Ongoing management and reporting h) Servicing i) Via Quarter Platform if not in default ii) Special servicing company if in default i) SPE Setup and governance i) Quarter can perform the necessary tasks to setup
  • Methods and systems can be provided for performing a transaction via asset tokens and a blockchain based smart contract.
  • the methods and systems can comprise creating a fractionalized risk pool for a single family home, the fractionalized risk pool comprising at least two token types issued using blockchain, each token type purchasable by investors; selling the at least two tokens to the investors using blockchain; and distributing payments to the investors using blockchain.
  • Multiple single-family homes can be combined together for investment purposes.
  • the single-family home(s) can be an occupied single-family home(s).
  • the tokens can be blockchain based smart contracts.
  • the tokens can entitle token holders to certain financial rights in a home.
  • the token types can comprise: an asset token, an HPI token or an occupancy token, or any combination thereof.
  • the asset token(s) can be issued to an investor(s).
  • the HPI token(s) can be issued to an investor(s) and sit in an HPI pool, and HPI tokens can be unlocked and transferred to the asset token holder (e.g., inventor(s) when certain conditions are met.
  • the occupancy token can be provided to the occupant of the single-family home. Some or all of the tokens can be resold or retraded.
  • the methods and systems provided herein can have many benefits, depending on the embodiment used. For example, home buyers who do not have the required down payment can now purchase a home and use investors to fund the down payment. Homeowners who don’t have the equity and/or MRE to refinance can use investors to help facilitate refinancing. Investors who purchase the tokens can invest in the single-family home market in a way that may not have been previously available. New asset classes can be made available to investors that were not previously available. Rent control issues may be avoided and/or mitigated. Many types of risk mitigation can be made available (e.g., because of the fractionalization, risk assessment can also be fractionalized). Homeowners can also use the system to access equity in their home (e g., in incremental amounts).
  • the methods and systems can also comprise receiving a transaction request for an asset token; checking inventory of an asset associated with the asset token; performing a transaction associated with the transaction request when enough inventory is available, wherein the transaction includes transfer of asset tokens between entities; and recording the transaction in a blockchain based smart contract.
  • This can allow automation of matching requests for those who wish are or obligated to sell with those who wish or are obligated to acquire the asset token.
  • This can also allow automated and/or enforceable compliance with contractual obligations.
  • This can create a secure and/or immutable record of each of the transactions, thus creating a chain of title which is difficult to contest.
  • This can enable use of an algorithm to determine which tokens are included in the transaction requisition and which ones to exclude. For example, FIFO (first in first out), pro-rata, etc.
  • Transfer of asset tokens can be done by an entity to change a proportion of the asset owned by the entity. This can allow for automation of legacy transfer processes by removing many of the manual, labor-intensive, and offline steps, and therefore can do at least one of: lower costs as a result of simplifying the transfer processes, speed up the time to consummate a transfer; simplify any post-transfer accounting and audit requirements for a transfer, and enable rapid reallocation of benefits derived from ow nership.
  • the asset tokens can be based on real property. This can enable creation of a dynamic marketplace for real estate which can do at least one of: create liquidity' in previously illiquid assets; reduce transaction costs associated with real estate transfers; provide the opportunity' to democratize investment in real estate assets by low ering the minimum investment threshold, thus allowing many more investors to participate; and opens the opportunity’ to a global audience. This can also help create opportunities for financial engineering constructs which may be unavailable with standard real estate transactions, thereby lowering to or reallocating the costs of capital to the participants.
  • the transaction can be performed between an occupant of the real property and an investor of real property. This can occur indirectly by using fiat currency paid by the occupant to the issuing entity' (SPE) in exchange for TIC interests.
  • SPE issuing entity'
  • the SPE can then uses the fiat currency to purchase (e.g., redeem) asset tokens from the investors, deactivates them and then transfer them to treasury. This can allow for transfer of TIC interests between an unaccredited Occupant and holders of the Asset Token who will initially be accredited investors (if US based).
  • the transaction can include rent payment by the occupant to the investor by transferring the asset tokens such that the rent payment is based on a proportion of asset tokens owned by the investor.
  • Each investor can be entitled to a pro-rata amount of the rent paid by the occupant based on the proportion of the asset tokens they own.
  • This can enable periodic payments or the proportional rent to the owner of asset tokens which could occur in fiat currency or other cryptocurrencies such as a stablecoin, Bitcion, etc.
  • This can also facilitate payments by tracking ownership of asset tokens and recording such payments on an immutable blockchain ledger.
  • This can also enable creation of multiple cash flow waterfalls based on ownership of asset token ownership.
  • This can also enable creation of risk mitigation strategies by allocating asset tokens to funds and/or pools specifically designed for risk mitigation purposes.
  • the rent payment can change based on a change in the proportion of TIC owned by the occupant. This can help enable a dynamic rent calculation to occur. Unlike traditional real estate financing methods where payments tend to be fixed regardless of prepayments or current balance of the obligation, basing the rent payment on the proportional amount of the TIC interests owned by the occupant can help enable real time payment changes to occur. For example, a homeowner paying rent at a 4.39% annualized rate to the investors could purchase $1,000 of additional equity' in their home, immediately changing the proportion of their TIC interest, and see their monthly payment instantly fall by $3.66 per month. From the Occupants perspective, this can provide an immediate return on their investment as their rent payments are reduced in real time as they increase the proportion of the TIC they own.
  • the transaction can include a change in TIC between the occupant and the investor. This can help enable investors to hold positions in owner occupied single family residential real estate for the first time ever.
  • This asset class may not currently exist as a current method for an investor to gain access to the single family residential real estate market is to hold positions directly or indirectly in rental properties which can require property management and other operational overhead to manage the non-owner occupied tenancies. This can enable the occupant to access equity in their home above the minimum required equity threshold in real time and at an exceptionally low cost. This can eliminate the need for refinancing a home by converting home ownership into cash.
  • the owner/manager can use a server and/or a mobile application.
  • a server and/or a mobile application For example, for the mobile application in FIG. 13. an Occupant can use this or a similar system on a desktop computer, etc. to check their ownership position, sell equity on demand and transfer the fiat current (USD) into their account within seconds.
  • USD fiat current
  • the transaction can also include transfer of asset tokens between multiple investors.
  • This can enable the development of a secondary market for fractional real estate ownership. This can create the opportunity for price discovery in ways which has not been available before.
  • Current legacy fractional ownership constructs such as commercial real estate syndicates or REITs, may have typically traded at a substantial discount to the value of the assets they own due to their illiquidity and lack of a robust secondary' market.
  • This can allow for the democratization of real estate investing by enabling transactions between accredited investors who initially purchased the Asset Tokens from the issuer and nonaccredited investors, who can later purchase the Asset Tokens after SEC mandated holding periods toll.
  • the Asset Token can have a static nominal (e g., face) value and may not change in value to the upside (downside can be a different story as prices can fall).
  • the appreciation component can be stripped from the Asset Token such that any value derived from appreciation of the home can be contractually transferred to the HPI Asset Pool (e.g., some form of BK remote entity) which can be the issuer of the HPI Tokens. For example, a $ 10 investment in an Asset Token can return $10 to the holder from the proceeds of sale at the time the underlying home is sold.
  • the HPI asset pool can represent the appreciation of all the homes in the group of homes.
  • the HPI Asset Pool can aggregate the appreciation of all of the appreciation for all homes on the network into one location which can enable issuance of HPI Tokens which can be used in various financial engineering constructs.
  • HPI asset token can be issued that can be guaranteed by the appreciation of all the homes in the group of homes.
  • the act of issuing HPI Tokens can unlock unrealized gains which may otherwise only be accessible upon either sale of the home or by obtaining a cash out refinance mortgage. This can provide a floor to the value of the HPI tokens based on the value of the underlying home appreciation rights transferred to the pool.
  • HPA or HPD There can also be a compounding effect whereas there may be future HPA or HPD which can occur on the value of the assets already within the pool. Given that there has never been a true HPI index backed by actual homes, this can create a unique opportunity to use HPI tokens to speculate on the future movement of the housing market and to further create additional financial instruments and/or derivatives based on the HPI token.
  • a minimum retained equity can be determined comprising a minimum amount of equity a home occupant must retain based on pre-defined underwriting criteria.
  • Computing the minimum retained equity can provide the basis to manage risk through the use of asset token holdings (by the occupant, the risk pool, and/or the impact investor) and can be a departure to the way a traditional mortgage has operated which can be more inclined to increase cashflow through the use of higher interest rates.
  • Having ‘"skin in the game”’ can be a predictor of future consumer performance and the platform has designed the MRE model to reflect that. It further serves as one of the core components from which the occupant’s ability to transfer ownership is built upon.
  • the minimum retained equity can be a dynamic number which changes based on a current property profile and a current occupant profile and is used to manage default risks.
  • MRE as a risk mitigation tool can be helpful in that when combined with a fractional ownership structure, the need to subsidize defaulting consumers by creating extra cash flow via higher interest rates from the entire cohort of similarly situated consumer can be eliminated and can be replaced with by use of a combination of a risk pool of asset tokens contributed by every home on the platform and requiring each homeowner to retain a minimum amount of TIC equity in the property, both of which can be draw n from in the even to occupant nonperformance.
  • each homeowner can bear the risk of their own default as they will lose their equity (just like a mortgage) but aren’t required to pay monies in the form of higher payments which they will not get back if they do not default.
  • This can enable a much more dynamic risk mitigation strategy on both an individual consumer basis but also within the entire risk pool.
  • This can also enable dynamic adj ustments in underwriting criteria base on the overall health of the risk pool such that new applications can be reviewed and MRE calculated on the basis of the risk pool as w ell as individual consumer stats.
  • the ability to buy or sell equity in real time can be managed, as the risk profile of the consumer can change the amount of excess equity available to transfer and/or convey to cash (defined as occupant ow ned equity in excess of MRE) can also change.
  • Ownership of an HPI asset for a property can be transferred to an HPI asset pool by the asset holder in exchange for an HPI asset token.
  • the ability to separate the HPI from the underlying asset can allow' for unrealized gains to be carried forward and made liquid in real time.
  • HPI tokens can be issued contemporaneously with asset tokens when a home is initially boarded onto a platform for a group of homes. This can enable the holding periods required by US (and potentially other jurisdictions) securities laws to run in parallel with the periods during which home price appreciation can be measured (e.g., HPI Intervals) such that when the tokens are unlocked at the end of the period the restrictions on transfer can be removed and the tokens can be freely transferred on a token exchange to both accredited and non-accredited investors.
  • the tolling of the holding period can democratize the investments as it enables nonaccredited investors to acquire and hold the HPI Tokens. This can also reduce risk for asset token holders in that they are able to immediately transfer (e.g., sell) HPI tokens in order to reduce their exposure to home price fluctuations. Without the tolling of the holding period, they could be exposed to a 12 month holding period.
  • HPI tokens issued with asset tokens can be locked when issued and remain locked unless they are unlocked under pre-defined conditions. This can reduce or eliminate the need to conduct subsequent token offerings to the extent that HPI Tokens can be issued in sufficient quantities to fulfill the obligations to pay the asset token holder for future HPA gains.
  • Locked HPI Tokens may not be separable from asset tokens that transfer after issuance. This can enable transfer of asset tokens along with HPI Tokens which may be the rights to future HPA gains in a single transaction. This can also help toll the holding period by eliminating the need to issue new HPI tokens each time the asset token is transferred.
  • An updated valuation can be done for each home in a group of homes on the platform in order to calculate the change in value of each home during a current period. This can enable the calculation of the value of the underlying appreciation assets transferred to the HPI pool. This can also enable the immediate pricing and transfer of TIC interests between the occupant and the investors. This can also enable creation of a secondary market for asset tokens where frequent valuations may assist with price discovery.
  • the home price appreciation (HPA) or home price depreciation (HPD) can be calculated for the current period, wherein the HPA or HPD can be the difference between the valuation determined at the end of a previous period and the valuation determined at the end of the current period.
  • HPA home price appreciation
  • HPD home price depreciation
  • This can provide a basis on which to calculate the number of HPI tokens to be unlocked for each asset token. This can enable the HPI token to act as a true home price index using the homes on the platform.
  • a boarding value and/or transfer value can be substituted for a previous period difference: when a home was boarded onto the platform during the current period or within a pre-defined amount of time preceding the current period; or when an occupancy token was transferred to a new occupant during the current period or within the pre-defined amount of time preceding the current period.
  • This can enable methods to avoid double counting appreciation when issuing HPI tokens or when asset tokens are transferred.
  • This can also enable automated tracking of investor basis and nominal value of the asset tokens and adjustments in nominal values of asset tokens in times of falling home prices. This can allow for investors who hold asset tokens to have their HPI token allocation tracked and/or calculated differently based on when they were purchased and how home prices have moved since doing the above.
  • Pro-rata adjustments can be made, for example, if the first period is short (e.g., a predetermined time).
  • a reset can be done when secondary 7 transfers occur after a value decline.
  • the nominal value of the asset token may be reset so that the holder of the asset token does not receive a double payout for HPA.
  • An example would be a home in which investor holdings are valued at 100K when the asset tokens are issued and subsequently rises to 150K.
  • HPI tokens can be unlocked periodically based on the 50K rise in value.
  • the asset token ow ner who did not sell his or her asset tokens during this period may not be entitled to unlock additional HPI tokens based on the rise in value from 120K to MOK.
  • a high-water mark can be established such that no HPI tokens can be unlocked until the valuation surpasses the high- water mark of 150K.
  • an asset token holder decides to sell their tokens prior to the high-water mark being reached after a decline (e.g., let’s assume they sell at 100K), they may have the nominal value of the asset token reset such that they only receive net proceeds equal to the lower valuation of in this case 100K.
  • the new owner of the Asset Tokens may begin at 100K and therefore may be entitled to unlock HPI tokens for any increase above 100K.
  • the HPI can be unlocked when the HPA for the current period is >0 and satisfies the following conditions: the number of HPI tokens unlocked for each asset token is computed by dividing the total HPA by the market price of the HPI tokens; and/or a computed number of HPI tokens unlocked for each asset token is multiplied by a predetermined amount (e.g., .9) and divided by the total number of asset tokens held by investors.
  • a predetermined amount e.g., .9
  • Minimum retained equity can be determined using: an applicant’s credit score, back-end DTI, risk pool composition, or property 7 specific data as inputs, or any combination thereof.
  • the minimum retained equity can be used to calculate a minimum down payment required by an applicant who wishes to be an occupant in order to close on the home.
  • Today’s financial markets e g., the real estate financing market
  • interest rates as a first line tool for risk management.
  • the net result can be that those who can least afford it typically pay the most.
  • MRE minimum retained equity
  • Asset tokens purchased by an impact investor can be locked until: the occupant purchases equity from the Impact Investor, in which case a corresponding number of asset tokens shall be unlocked, redeemed and transferred to treasury; and/or the occupant chooses to exercises their right to sell the property, in which case the asset tokens shall be: unlocked, redeemed and burned after distribution of the proceeds of the sale of the property in the event that the home leaves the network; or unlocked, redeemed and transferred to treasury after distribution of net proceeds from the sale; and/or the occupant is in default and the home is sold in which case the asset tokens shall be: unlocked, redeemed and burned after distribution of the proceeds of the sale of the property in the event that the home leaves the network; or unlocked, redeemed and transferred to treasury after distribution of net proceeds from the sale.
  • the entire impact investor program can be plug and play, meaning that it fits within the overall design of the platform and comports with the management of asset tokens.
  • the impact investor can provide the required capital to supplement the capital the occupant can provide to meet the MRE requirements to become a homeowner.
  • asset investment opportunities with and without an impact investor can be homogenized sufficiently that from the perspective of the non-impact investors perspective so they can be treated exactly the same from a risk perspective.
  • They can be governed by smart contracts which can enable everything described above to be automated. Further, smart contracts can be customized to meet the specific needs of impact investors allowing them to better focus on serving their clients.
  • the owner/manager can provide the turnkey infrastructure for socially conscious capital to plug into.
  • Impact investor’s asset tokens can be entitled to pro-rata distribution of net proceeds in the event of sale of the home under at least one of the following circumstances: a) asset tokens held by impact investors are entitled to their pro-rata share of the rent plus 100% of the enhanced rent paid by the occupant; b) a portion of the enhanced rent payment shall be used to purchase additional TIC interests in the home from the impact investor’s holdings in the SPE; c) upon purchase of TIC interests equal to the entirety of the impact investors holdings in the SPE, enhanced rent payment obligations of the occupant shall terminate; d) impact investors asset tokens are entitled to pro-rata distribution of net proceeds in the event of sale of the home; e) asset tokens held by impact investors are entitled to their pro-rata share of the rent plus 100% of the enhanced rent paid by the occupant; f) a portion of the enhanced rent payment shall be used to purchase additional TIC interests in the home from the impact investor’s holdings in the SPE; and g) upon purchase of TIC interests equal to the entirety of the
  • enhanced rent payment obligations of the occupant shall terminate. This can be helpful in that it can provide an arbitrage opportunity created by the delta between the typical monthly cost of rent to an occupant and typical market rent in a given zip code. This can allow impact investors to enjoy significant yields which can attract both philanthropic entities as well as socially conscious capital in search of superior yields.
  • the ability to manage asset tokens can provide the ability to merge occupant and impact investor holdings which can be the cornerstone to homogenizing the overall investment opportunity' sufficient to keep additional risk-based pricing at bay. Further, the ability to reduce costs through smart contract automation can help provide a benefit to the occupant.
  • an income interruption buffer can help take advantage of the concept of minimum retained equity in order to safeguard residents in turbulent times. Having a savings buffer (e.g., several months’ worth of housing costs in a period of significant interruptions to one’s income) can cut homeowner default rates in half.
  • the income interruption buffer of rental payments can be built into occupants' minimum retained equity requirement and can allow them to apply and draw down those funds to make rental payments in the case of a qualifying life event (e g., job loss, divorce, illness). This income interruption buffer can help empower homeowners.
  • homeowners assistance programs can be used to help existing homeowners who do not meet MRE requirements to board their existing home on the Quarter Platform.
  • a homeowner assistance program can operate in a similar manner to a down payment assistance program, with an investor(s) purchasing equity in an amount necessary' to bring the sum of their holdings and the homeowner’s equity up to the MRE.
  • the arbitrage between the market rent and lower Quarter rent can be used to enable the homeowner to purchase portions of their home with each monthly payment until they have purchased the entirety of the equity from the Impact Investor.
  • the consumer can change the inputs for the homeowner assistance program by modifying their credit score ranges, home profile, or other variables, or any combination thereof, to create and view various scenarios with different homeowner assistance amounts required.
  • methods and systems can comprise creating, using a platform, a fractionalized risk pool and a fractionalized Home Pricing Index (HPI) pool for a real estate property, the fractionalized risk pool and the fractionalized HPI pool can comprise asset tokens, HPI tokens, and an occupancy token, the asset tokens, the HPI tokens, and the occupancy token issued using blockchain; transmitting, by a first computing device of a first computing system, a first network function request comprising a sale of an asset token to an asset token holder, wherein the asset token can comprise a blockchain based smart contract to a decentralized network; and transmitting, by a second computing device of a second computing system, a second network function request to the decentralized network, the second network function request can comprise a sale of an HPI token to an HPI token holder, wherein the HPI token can comprise a blockchain based smart contract distributing payments to the asset token holder and the HPI token holder using blockchain; wherein the occupancy token can entitle an occupant
  • Occupant to occupant transfer can be supported using the occupancy token.
  • An HPI asset pool can be held in an account held by a fund controlled by the platform.
  • a display can be used to display information comprising payment information, MRE information, cash out information, or any combination thereof.
  • a display can be used to display properties for sale which occupants can afford. Displayed information can be based on information comprising self-reported data, data looked up with third party data sources using property address information, or both.
  • An occupant applicant can view properties which they are qualified to purchase.
  • the properties can comprise MLS properties.
  • the properties can comprise non-MLS properties.
  • the non-MLS properties can comprise partners of the platform.
  • the non-MLS properties comprise properties entered by the occupant applicant.
  • HPI tokens can be managed.
  • HPI token management can comprise tracking property price appreciation, or managing HPI token distributions, or both.
  • HPI token management can comprise updating valuations for all boarded properties.
  • Suspect data can be deleted.
  • Suspect data can comprise data that is outside of a predetermined amount of expected ranges.
  • HPI gains and/or HPI Token allocations can be determined at HPI Intervals.
  • FIGURES 23 and 27 illustrate example structures of the platform. Parties to the structure can include the following:
  • the Fund or the Holding Company Can be the entity to issue both Asset Tokens and HPI Tokens to raise capital from Investors in accordance with the offering.
  • Quarter Can be an entity that owns the Quarter Platform and can be the manager (and in some embodiments the sole manager) of the Fund, which can connect and/or manages the relationships and/or transactions among all of the parties to the Quarter Platform.
  • Quarter can set up the SPE and can manage the ongoing administrative functions of the SPE on behalf of the Fund and, in return, can issue HPI Tokens by the Fund.
  • Quarter Risk Pool Can be an entity 7 that can be partially or wholly owned by the Fund, which can enter into a Real Estate Agreement with the SPE to advance funds to cure a Homeowner's default pursuant to the Real Estate Agreement and in consideration can be issued Asset Tokens by the Fund.
  • the Asset Tokens to be issued to Quarter Risk Pool consist of a predefined percentage (e g., 1%) of the total Asset Tokens linked to each SPE (thus each House) on the Quarter Platform.
  • SPE Can be a special purpose entity wholly owned by the Fund, which can be set up to purchase the Real Estate Interests in a particular House. Both Homeowner and/or SPE can own divided and/or undivided Real Estate Interests in a particular House. The rights and/or obligations of the SPE and/or Homeowner can be documented via the Real Estate Agreement.
  • Home Seller Can be an individual or entity 7 who can be selling a House which can be purchased by the Homeowner and/or SPE and/or boarded onto the Quarter Platform. Home Seller may have no affiliation or ongoing relationship with Quarter and/or any of the other parties to the Quarter Platform after the closing of the sale of the House.
  • Homeowner and/or Homebuyer Can be an individual who can be admitted to use the Quarter Platform, can initiate the acquisition or refinance of the House, can purchase the Real Estate Interests in the House, or can become the holder of the Occupancy Token, or any combination thereof.
  • HPI Tokens can be issued to the Asset Token holders at the time the Asset Tokens are issued to the Asset Token holders in connection with the offering when the holders pay the purchase price in full for the Asset Tokens in accordance with the Token purchase agreement, except that a certain amount of HPI Tokens (e.g., 5% of the total HPI Tokens issued by the Fund to the Investors) can be issued to Quarter in consideration of Quarter’s management services.
  • Asset Tokens and/or HPI Tokens can represent Investors’ economic interests in the Fund.
  • the Fund can issue HPI Tokens which can be included in the sale of Asset Tokens.
  • HPI Tokens can be fungible tokens issued by the Fund.
  • HPI Tokens can be backed by a pool of equity generated by appreciation of every House boarded to the Quarter Platform.
  • HPI Tokens can provide their holders the right to receive an interest in the home appreciation from all Houses on the Quarter Platform, which value may not be linked to any specific SPE or House.
  • Asset Tokens can provide their holders the right to receive certain distributions from the Fund, which distributions may be linked to the SPEs (thus, specific Houses) designated by the Manager and/or include pro-rata payment from the Homeowners and/or the sales proceeds up to an amount of the original valuation of the House when the House is boarded to Quarter Platform (but may not include the Appreciation Value, which is assigned to the Fund by the SPE and may be linked to the HPI Tokens).
  • the Fund issues the HPI tokens to the Asset Token holders, and when the Asset Token holders transfer the HPI Tokens, they can be simply transferring the Home Appreciation Right. The amount of the HPI Tokens a particular Investor can receive and transfer upon the Unlock of HPI Tokens.
  • an Agreement may include different distribution waterfall schedules per each Investor and tax allocation provisions per Investor that can be tied to each SPE and the Asset Tokens associated with such SPE.
  • Quarter as the manager for the Fund, can create smart contracts to reconcile and track such distributions to help the cash flow generated by the SPE be distributed properly to each Investor.
  • FIGURE 24 shows an example overview of Quarter's use of smart contracts (with the Homeowner being the Occupant reflected in the Figure).
  • a SPE can be set up by the Fund to purchase a House with the Occupant.
  • the Fund can be the sole member of the SPE.
  • Ownership of the House can be granted to both the Occupant and the SPE via a deed.
  • a smart contract can be created by the Fund which can issue Asset Tokens and/or rights to distributions from the specific House owned by the SPE.
  • the Asset Tokens can be distributed to the Investors and also to the Quarter Risk Pool.
  • a smart contract can be created between the Homeowner and the SPE, which can automate certain provisions under the Real Estate Agreement, including, but not limited to the Payments.
  • a smart contract can be created by the SPE which can issue the Occupancy Token to the Homeowner.
  • the Occupancy Token can evidence the Homeowner’s right to occupy the House.
  • a smart contract can be created by the Fund, which can contain an agreement to assign the Home Appreciation Right to the Fund and in exchange, the Fund can issue HPI Tokens which can be included in the sale of Asset Tokens.
  • the HPI Tokens can represent the Home Appreciation Right and can be distributed to the Investors and/or also to Quarter and/or Quarter Risk Pool.
  • Digital Wallets for Investors can be maintained and/or adjusted in accordance with applicable regulations and/or taxable income and/or loss can be apportioned appropriately. As each SPE could potentially have different Investors, Investors can be paid different returns and/or cash flows through the Fund. Accordingly, proceeds can be tracked on an SPE by SPE basis per the Investor's proportionate share in a particular SPE, while flowing through one entity - the Fund.
  • the Fund can allocate the Asset Tokens based on the total number of Asset Tokens to be issued and/or the Investor’s total investment in proportion to the total investment to be made by all Investors.
  • the Fund can issue a predetermined amount of HPI Tokens per Asset Token.
  • FIGURE 25 shows an example structure of the issuance of HPI Tokens and Asset Tokens.
  • FIGURE 28 illustrates an example transaction structure in the Platform in accordance with an embodiment.
  • Both Asset Tokens and HPI Tokens can represent Investors’ economic interests in the Fund, meaning Investors may not have any voting or management rights in the Fund; but can have the rights to receive distributions from the Fund as described herein and in the LLC Agreement. Only Quarter may have voting and management rights in the Fund.
  • Asset Tokens can provide their holders the right to receive certain distributions from the Fund, which distributions can be linked to the SPEs (thus, specific Houses) designated by Quarter and can include pro rata payments of the TIC Fee and/or Enhanced TIC Fee from the Homeowners and the sales proceeds up to the amount of the Current Valuations of the House at the time the SPE purchased TIC Interests in the House during, and subsequent to, being boarded onto Quarter Platform (but do not include the Appreciation Value, which is linked to the HPI Tokens).
  • the Fund issues and subsequently Unlocks the HPI Tokens for Asset Token holders, they can realize a pro rata share of the House Price Appreciation for the specific House the Asset Tokens are linked to.
  • the LLC Agreement can include different distribution waterfall schedules for each Investor and tax allocation provisions for each Investor that can be tied to each SPE, and the Asset Tokens associated with such SPE.
  • Quarter as the manager for the Fund, can create smart contracts to reconcile and track such distributions to make sure the cash flow generated by the SPE will be distributed properly to each Investor.
  • the Fund can issue HPI Tokens which may be included in the sale of Asset Tokens for purposes of providing Asset Token holders the right to receive the House Appreciation Right, and HPI Tokens only without the purchase of any Asset Token for purposes of raising working capital and other general corporate purposes for the Fund, including, without limitation, to the development of Tokens, paying the manager and other consultants, and supporting the Quarter Platform ecosystem.
  • the operating agreement of the SPE can provide that the SPE can assign the rights to Appreciation Value to the Fund, which can be realized upon redemption or sale of the House Appreciation Rights or sale and exit of the House from the Quarter Platform.
  • HPI Tokens can be fungible tokens issued by the Fund.
  • HPI Tokens can be backed by a pool of equity and cash generated by appreciation of every House boarded to the Quarter Platform. HPI Tokens can provide their holders the right to receive an interest in the appreciation from all Houses on the Quarter Platform, which value may not be limited to any specific SPE or House.
  • Asset Tokens can be issued to an Investor and/or can be delivered to the Investor’s Digital Wallet when the Investor pays the purchase price in full for the Asset Tokens. Investors' purchase money for the Asset Tokens can be sitting in the Cash Funding Pool. This can be because at the time of the purchase, the Asset Tokens may not be linked to any specific SPEs (e.g., thus specific homes) (and accordingly the Asset Tokens and/or HPI Tokens may need to be locked initially).
  • the Asset Tokens can be initially subject to a “transfer lock” and/or a “time lock.”
  • the Asset Tokens can be subject to a “transfer lock.”
  • a “transfer lock” can be a temporary restriction that prevents the Asset Tokens from being transferred by Investors for one (1) year after the date when the Asset Tokens are delivered to Investors’ Digital Wallets.
  • a “time lock” can be a temporary general restriction that prevents an Asset Token from being used for any purpose on the Quarter Platform, including but not limited to the right to receive the distributions from the Fund. This time lock can delay the full release of the Asset Tokens that are issued and until released from this time lock, the Asset Tokens may not be able to be Burned and/or transferred and/or otherwise used on the Quarter Platform.
  • the Asset Tokens can be released from the “time lock” upon the closing of the purchase of the House, at which time certain amounts of the Asset Tokens can be linked to the SPE and/or specific House contained therein and can be released from the “time lock” once all or a portion of Investors’ Asset Tokens are linked to that specific SPE and that specific House.
  • the Asset Tokens that are released from the “time lock” may be still subject to the “transfer lock.”
  • an SPE When a House is boarded to the Quarter Platform, an SPE can be set up with the Homeowner to purchase the House. When Investors' Asset Tokens are linked to a particular SPE. Quarter can release cash from the Cash Funding Pool to the Fund for the Fund to provide funds to the SPE to purchase the TIC Interests, and in return, Investor’s Asset Tokens (e.g., in proportion to the invested amount in the House) can be colored to show the link to the particular SPE and/or the “time lock” for the colored Asset Tokens can be removed after the closing of the purchase of the House.
  • Asset Tokens e.g., in proportion to the invested amount in the House
  • the number of the Asset Tokens to be released from the “time lock” can be based on the purchase price to be paid by the SPE for its TIC Interests in a specific House and Investor’s investment, for example in proportion to the total purchase price paid by the SPE, as well as the price per Asset Token, after deduction of the Boarding Fee.
  • Asset Tokens After the closing of the purchase of House #1, 50,000 of Investor #l’s and Investor #2’s Asset Tokens will be activated (released from the “time lock”); provided, however, 1% of such colored and activated Asset Tokens held by Investor #1 and Investor #2, respectively, shall be redeemed by the Fund and transferred to Quarter Risk Pool such that Investor #1 and Investor #2 has 49,500 colored and activated Asset Tokens in their respective Digital Wallet and Quarter Risk Pool receives 1,000 colored and activated Asset Tokens as a result of the purchase. Each of Investor #1, Investor #2, and the Quarter Risk Pool will receive the distributions from the proceeds generated by House # 1 in proportion to the amount of the colored and activated Asset Tokens they have.
  • Quarter Platform’s smart contract will track the payments received from SPE #1 and make the distributions to Quarter Risk Pool’s cash account, and to Investor # l’s and Investor #2’s respective cash escrow accounts with the Cash Funding Pool.
  • the Quarter Risk Pool will advance payments and expenses to the SPE from its cash account (as described in the section captioned “Major Terms and Conditions of the Real Estate Agreement”) and in consideration, the Quarter Risk Pool will be issued certain amounts of Asset Tokens by the Fund in order to provide cash flow and capital for servicer advances.
  • the Quarter Risk Pool is for the benefit of the Investors who are not Impact Investors.
  • the Asset Tokens to be issued to the Quarter Contingency Fund can comprise Asset Tokens linked to each SPE (thus each House) boarded on the Quarter Platform.
  • the Quarter Contingency Fund can reserve the right to open different accounts to serve these purposes.
  • the Quarter Contingency Fund can have the right to set up sub-accounts, e.g., a Risk Pool account to advance funds in the event of a Homeowner’s default pursuant to the TIC Agreement and a Real Estate Marketing Fund account to pay the real estate commissions, and to fund the purchase and resale of Homeowner’s TIC Interests pursuant to this Memorandum.
  • the Quarter Contingency Fund can reserve the right to relocate funds in one sub-account to another sub-account.
  • the Quarter Contingency Fund can have the right to distribute to Quarter any cash sitting in the accounts under the name of the Quarter Contingency Fund; provided, however, the accounts under the name of the Quarter Contingency Fund can, at all times, have a balance to cure the Homeowners’ defaults under the TIC Agreements, to pay the real estate commissions, and to fund the purchase and resale of Homeowners’ TIC Interests pursuant to this Memorandum, in an amount determined by Quarter from time to time, as the manager and sole member of the Quarter Contingency Fund.
  • Asset Tokens can be issued to an Asset Token Purchaser and can be delivered to a custodial (omnibus) wallet or Asset Token Purchasers’ Digital Wallets (as determined by Quarter) when the Asset Token Purchaser can pay the purchase price in full for the Bundle.
  • An Asset Token Purchasers’ purchase money can be paid for the Asset Tokens in a Bundle that can be sitting in the Cash Funding Pool. This is because at the time of the purchase, the Asset Tokens may not be linked to any specific SPEs (thus specific Houses) and accordingly the Asset Tokens and HPI Tokens can be locked initially.
  • the Asset Tokens can initially be subject to a "transfer lock” and a “time lock.”
  • the Asset Tokens can be “restricted securities” as the term is defined under applicable securities laws, and can be subject to a “transfer lock.”
  • a “transfer lock” can be a restriction that prevents the Asset Tokens from being transferred by Investors unless in compliance with applicable securities laws, including for the required holding period after the date when the Asset Tokens are delivered to a custodial (omnibus) wallet or Asset Token holders’ Digital Wallets (as determined by Quarter).
  • a “time lock” can be a temporary general restriction that can prevent an Asset Token from being used for any purpose on the Quarter Platform, including the right to receive the distributions from the Fund.
  • the Asset Tokens cannot be transferred or otherwise used by the holders of the Asset Tokens.
  • the Asset Tokens can be locked until the closing of the purchase of the House, at which time certain amounts of the Asset Tokens can be linked to the SPE and specific House contained therein and can be released from the “time lock.”’
  • the Asset Tokens can then be delivered to the Asset Token Purchaser’s Digital Wallet.
  • the Asset Tokens that are released from the “time lock” may be still subject to the “transfer lock.”
  • an SPE When a House is boarded on the Quarter Platform, an SPE can be set up to be the co-tenant-in-common with the Homeowner to purchase the House.
  • the Fund can release cash from the Cash Funding Pool for the SPE to purchase the TIC Interests and can make any required Fractionalization Fee (can also be referred to as board fee) payments.
  • the corresponding amounts of the Asset Token Purchasers’ Asset Tokens can be colored to show the link to the particular SPE and the “time lock” for the colored Asset Tokens can be removed after the closing of the purchase of the House.
  • the number of the Asset Tokens to be colored and released from the “time lock” can be based on the purchase price to be paid by the SPE for its TIC Interests in a specific House and Asset Token Purchaser’s investment in proportion to the total purchase price paid by the SPE, as well as the price per Asset Token, after deduction of the Fractionalization Fee.
  • Quarter can transfer the issued but not Activated Asset Tokens in the custodial (omnibus) wallet or Asset Token Purchasers’ Digital Wallets (as applicable) in an amount equal to the Fractionalization Fee divided by the Original Asset Token Nominal Value to the Treasury Pool to account for the cash allocated to the Fractionalization Fee.
  • a certain amount of the Activated Asset Tokens can be transferred to the Quarter Contingency Fund as the Quarter Contingency Fund contributions; in addition.
  • Activated Asset Tokens can be transferred to the Asset Token Purchaser’s Digital Wallet.
  • the Fund can first deliver the HPI Tokens to HPI Token Escrow Pool in escrow for the benefit of Investors and Quarter (see FIGURE 23).
  • the HPI Token Escrow Pool can serve as an escrow account for the purposes of escrowing HPI Tokens issued by the Fund to the Investors and/or Quarter.
  • the HPI Tokens can initially be subject to a “transfer lock” and a “time lock” when sitting in the HPI Token Escrow Pool.
  • a “transfer lock” can be placed on the HPI Tokens to restrict the transfer of the HPI Tokens, for purposes of compliance with the I -year holding period because HPI Tokens can be “restricted securities” as the term is defined under the Securities Act. Similar to the “time lock” added to the Asset Tokens, the “time lock” added to the HPI Tokens can be a temporary general restriction that prevents an HPI Token from being used for any purpose on the Quarter Platform, such that the HPI Token may not be able to be Burned and/or transferred and/or have any right to receive the distributions from the Fund.
  • This “time lock” can delay the full release of the HPI Tokens that are issued and until released from this “time lock,” the HPI Tokens may not be able to be Burned, or transferred and/or otherwise used on the Quarter Platform.
  • HPI Tokens issued to the Asset Token holders can be Unlocked and/or delivered to Investors’ and/or Quarter’s Digital Wallets, and/or the number of HPI Tokens Unlocked for each Asset Token for a particular SPE can be based on future appreciation of the specific house invested in by the SPE to which the Asset Tokens can be linked.
  • HPI Tokens can be fungible tokens and may not be linked to any particular SPE. Instead, the value of the HPI Tokens can depend on the Home Appreciation Rights.
  • the section captioned '"Overview of HPI Tokens” sets forth more details about the valuation and unlocking mechanism of HPI Tokens.
  • Quarter may have the right to conduct and provide due diligence services prior to the boarding of the House on the Quarter Platform and can manage the Fund and SPE after the boarding.
  • a list of the possible services are set forth in the section captioned “Quarter Platform’s Services.”
  • Quarter can support the Homeowner in their purchase of the House by providing the applicable local addendum for the purchase agreement.
  • Quarter may not be directly involved in the negotiation of the purchase agreement between the Homeowner and the Home Seller.
  • Some details related to the material terms and conditions of the form Purchase and Sale Agreement Addendum are set forth in the section captioned ""Major Terms and Conditions of the Purchase and Sale Agreement Addendum”.
  • the Homeow ner and the SPE can enter into a TIC Agreement, and some of the material terms and conditions of this are set forth in the section captioned "'Major Terms and Conditions of the TIC Agreement .”
  • Each Investor’s Proportionate Share can be based on such Investor’s indirect proportional investment in a particular SPE, after setting aside an amount (e.g., 1%) of the total investment for the benefit of Quarter Risk Pool pursuant to the following formula:
  • the SPE requires $100,000 to purchase the Real Estate Interests in the House and thus requires 100,000 Asset Tokens ($1 per Asset Token). If Investor #l’s contribution to SPE #1 is 50,000 Asset Tokens and Investor #2’s contribution to SPE #1 is also 50,000 Asset Tokens (after deduction ofthe Boarding Fee) and no other Investor contributes Asset Tokens to SPE #1, then the Proportionate Share for each of Investor #1 and Investor #2 is 49.5% [(50, 000/100, 000)x(l-l%)]. The proportionate Share for the Quarter Risk Pool is 1%.
  • (b) Can be Base Rent and/or the late fees for the Base Rent received from the SPE paid by the Homeowner unless the underlying payment that generated the late fees was advanced by the Quarter Risk Pool, in which case the late fees can be distributed to the Quarter Risk Pool.
  • Holders of Asset Tokens can have the right to receive the sales proceeds upon the sale of the House owned by the SPE, up to an amount of the Current Valuation of the House when the House is boarded to Quarter Platform (but, in some embodiments, not including the right to receive the Appreciation Value).
  • Asset Token holders (other than the Impact Investors) can receive uninterrupted Base Rent in the event of a Homeowner’s default pursuant to the terms of the Real Estate Agreement, to the extent that the assets held in the Quarter Risk Pool are sufficient to address the Homeowner’s default.
  • the Quarter Platform can notify some or all Investors (not just the holders of the Asset Tokens that are linked to the SPE) of the pending transaction, notify them of the amount of Asset Tokens that can be included in the transaction and provide them with a time period (e.g., five (5) business days) to state if they intend to purchase those Asset Tokens linked to the SPE that are subject to purchase and the amount of the Asset Tokens they intend to purchase.
  • a time period e.g., five (5) business days
  • the Quarter Platform can determine which Investor’s request shall be satisfied, on a first come, first served basis and/or on a rolling basis, up to the total amount of Asset Tokens subject to the purchase. Quarter can then remove the “time lock’” from such subscribed Asset Tokens sitting in the subscribed Investors' Digital Wallet, and/or can release the respective purchase money from the respective subscribed Investor’s account sitting in the Cash Funding Pool to the Homeowner.
  • the Quarter Platform can notify all holders of the Asset Tokens that may be linked to the SPE of the pending transaction, and/or can notify them of the pro-rata amount of their holdings that shall be included in the transaction. Investors w hose Asset Tokens are linked to the SPE can have the obligation to sell their Asset Tokens in proportion to their existing percentages of the total Asset Tokens linked to the SPE. The Asset Tokens sold by the Investors can then be redeemed by the Fund and Burned.
  • Asset Tokens can be non-fungible tokens which can entitle the holder thereof to receive certain distributions from the Fund, which distributions can be linked to specific SPEs (thus, specific Houses) and can include pro rata payments of the TIC Fee and/or Enhanced TIC Fee from the Homeowner and/or pro rata entitlement to certain sales proceeds as described herein, or any combination thereof.
  • Asset Token holders can be entitled to Unlock HPI Tokens based on future appreciation of the specific House held by the specific SPE which the Asset Tokens are linked to.
  • Quarter can track the nominal value of each Asset Token issued on the Quarter Platform. There can be many fixed nominal values which may be assigned by Quarter to each Asset Token at various points in time, including but not limited to: the Original Asset Token Nominal Value; the Transferred Asset Token Nominal Value; or the Redeemed Asset Token Nominal Value, or any combination thereof.
  • the Original Asset Token Nominal Value can be assigned to each Asset Token at the time of issuance and can be set at a certain amount (e.g., $1.0000).
  • the Transferred Asset Token Nominal Value can be assigned when Asset Tokens are transferred during or after one or more periods of time when a House owned by the SPE linked to the Asset Tokens has depreciated in value and is also assigned a fixed value (e.g., $1.0000).
  • the Redeemed Asset Token Nominal Value can be assigned when certain Asset Tokens are transferred to the Quarter Contingency Fund as part of an Asset Token transfer to another Investor when the Current Valuation of the House has fallen below a certain HPI High- water Mark, and is assigned a fixed value (e.g., $0.00).
  • holders of the Asset Tokens with the Redeemed Asset Token Nominal Value can still be entitled to collect pro rata TIC Fee payments under circumstances described in this Memorandum.
  • the fixed nominal value, which can be assigned by Quarter to a given Asset Token can also be known as the “Applicable Asset Token Nominal Value”.
  • Asset Tokens can be issued to the Asset Token Purchasers in connection with the Bundle and can be delivered to the Asset Token Purchaser’s Digital Wallet when the Asset Token Purchaser pays the purchase price in full for the Bundle.
  • Asset Token Purchaser’s purchase money for the Asset Tokens can be paid into the Cash Funding Pool.
  • the purchased Asset Tokens can be locked until the closing of the purchase of the House.
  • an SPE can be set up to be the co-tenant-in-common with the Homeowner to purchase the House.
  • the Fund can release cash from the Cash Funding Pool for the SPE to purchase the TIC Interests and make any required Fractionalization Fee payment.
  • Asset Token Purchaser’s Asset Tokens can be Activated after the closing of the purchase of the House by the SPE and the Homeowner.
  • the total number of Activated Asset Tokens initially linked to the SPE can be calculated as the quotient of (i) the total purchase price paid by the SPE to purchase the SPE’s currently held TIC Interests in the House, divided by (ii) the Original Asset Token Nominal Value which is set at $1.0000 USD, of which an amount of Activated Asset Tokens equal to the Quarter Contingency Fund Contribution (as defined below) can be transferred to Quarter Contingency Fund’s Digital Wallet. Fractionalization Fee
  • Fractionalization Fee to be paid by the Asset Token Purchasers to Quarter can be calculated using the following formulas. Other formulas or versions of these formulas may also be used in some embodiments:
  • a Quarter Contingency Fund Contribution can be the number of the Activated Asset Tokens that can be transferred to the Quarter Contingency Fund after the purchase of a particular House and can be calculated using the following formulas:
  • Applicable Asset Token Nominal Value can be the Original Asset Token Nominal Value.
  • the Quarter Contingency Fund can advance payments and expenses to the SPE from its cash account (some details are described in the section captioned “Major Terms and Conditions of the TIC Agreement’’) and in consideration, the Quarter Contingency Fund can receive the Activated Asset Tokens.
  • the Quarter Contingency Fund can be for the benefit of the Investors who are not Impact Investors.
  • the holders of Asset Tokens can have the right to receive any combination of: (i) a Proportionate Share (as defined below) of the TIC Fee received from the SPE to which the Asset Token Purchaser’s Asset Tokens may be linked, (ii) the Enhanced TIC Fee (Impact Investors only), and (iii) a pro-rata share of the sales proceeds upon the sale of the House owned by the SPE equal to the sum of the Current Adjusted Asset Token Nominal Value of all of the Asset Tokens they hold, up to the amount of the Current Valuation of the House at the time the SPE purchased TIC Interests in the House during, and subsequent to the House being boarded onto Quarter Platform (but not including the Appreciation Value).
  • An Asset Token Purchaser’s Proportionate Share may be equal to the number of Activated Asset Tokens linked to an SPE and held by the Asset Token Purchaser, divided by the total number of Activated Asset Tokens linked to the SPE.
  • Quarter Platform’s smart contract may track the payments received by SPE and may make the distributions to the Quarter Contingency Fund’s cash account, and to Asset Token Purchasers’ respective accounts with the Cash Funding Pool, subject to applicable laws and regulations.
  • Asset Token Purchasers may have the right to direct the distributions to be made from their respective cash escrow accounts to their designated bank accounts or keep such distributions in the cash escrow accounts sitting with the Cash Funding Pool so they can reinvest their distributions into additional Houses.
  • Asset Token holders may receive uninterrupted TIC Fee distributions in the event of a Homeowner’s default in the payment of the TIC Fee pursuant to the terms of the TIC Agreement, to the extent that the funds held in the Quarter Contingency Fund can cure the Homeowner's such default, in whole or in part.
  • Asset Token holders may not be required to fund any out-of-pocket expenses related to the Homeowner’s monetary default to the extent the funds held in the Quarter Contingency Fund are sufficient to cure such Homeowner’s default that is curable by the payment of money.
  • the Quarter Contingency Fund may continue paying the monthly TIC Fee to the Asset Token holders whose Asset Tokens may be linked to the SPE, other than the Impact Investors, to the extent the funds held in the Quarter Contingency Fund are sufficient to do so.
  • the total purchase price for a House can be $120,000
  • the Homeowner can purchase their TIC Interests for $20,000
  • the SPE can purchase the remaining TIC Interests for $100,000.
  • Asset Token Purchasers Investor #1 and Investor #2
  • the SPE can purchase the TIC Interests in the House.
  • Using this example transaction we can calculate the Investors’ contribution to the Quarter Contingency fund, the Fractionalization Fee contribution to be paid by the Investors and determine each Investor’s Proportionate Share of future distributions.
  • the total purchase price for a House can be $120,000
  • the Homeowner can purchase their TIC Interests for $20,000
  • the SPE can purchase the remaining TIC Interests for $100,000.
  • Asset Token Purchasers Investor #1 and Investor #2
  • the SPE can purchase the TIC Interests in the House.
  • this example transaction we can calculate the Investors’ contribution to the Quarter Contingency fund, the Fractionalization Fee contribution to be paid by the Investors and determine each Investor’s Proportionate Share of future distributions.
  • Quarter can then Activates 50,000 ($50,000 / $1.0000) Asset Tokens held by Investor #1 and Investor #2, respectively, so that they can be linked to SPE.
  • Quarter can then transfer 500 issued but not Activated Asset Tokens held by Investor #1 and 500 issued but not Activated Asset Tokens held by Investor #2 to the Treasury Pool to account for the cash allocated to the Fractionalization Fee.
  • $50,500 can be released from Investor #l’s account with the Cash Funding Pool and $50,500 can be released from Investor #2’s account with the Cash Funding Pool (for a total of $101,000).
  • the Fund can deliver $100,000 to the SPE for the SPE to purchase the SPE's TIC Interests in the House and can deliver the $1,000 Fractionalization Fee to Quarter.
  • 100,000 Asset Tokens can be Activated, calculated based on the total purchase price paid by the SPE ($100,000) divided by the Original Asset Token Nominal Value. Of these 100,000 Activated Asset Tokens, 1,200 Activated Asset Tokens (600 Activated Asset Tokens from Investor #l’s Digital Wallet and 600 Activated Asset Tokens from Investor #2’s Digital Wallet) can be transferred to Quarter Contingency Fund’s Digital Wallet as the Quarter Contingency Fund Contribution.
  • Each of Investor #1, Investor #2, and the Quarter Contingency Fund can receive the distributions from the proceeds generated by the House in proportion to both the number and total nominal value of the Activated Asset Tokens they hold in their respective Digital Wallet.
  • TIC Interests [0211] During Homeowner’s occupancy of the House, Homeowner may have the right to request the SPE to purchase a portion (and not all) of the TIC Interests owned by the Homeowner pursuant to the TIC Agreement. If the SPE agrees to purchase such TIC Interests, Quarter can allocate the Asset Tokens subject to the purchase among Asset Token Purchasers who can hold the Asset Tokens linked to the SPE (the “Existing Investors”) and who have funds sitting in the Cash Funding Pool. If the funds sitting in the Cash Funding Pool held by the Existing Investors are not sufficient for the SPE to purchase the TIC Interests offered by the Homeowner.
  • Quarter can allocate the remaining Asset Tokens subject to the purchase among other Asset Token Purchasers (excluding, for example, the Existing Investors) who can have cash sitting in the Cash Funding Pool, up to the total amount of Asset Tokens subject to the purchase. Quarter can then remove the “time lock” from such subscribed Asset Tokens sitting in the subscribed Asset Token Purchaser’s Digital Wallet and can release the respective purchase money from the respective subscribed Asset Token Purchaser’s account sitting in the Cash Funding Pool to the Homeowner.
  • Quarter can notify the Existing Investors of the pending transaction, and/or notify 7 them of the pro rata amount of their holdings that can be included in the transaction, which pro rata amount can be determined by Quarter.
  • the Existing Investors can have the obligation to sell their Asset Tokens in an amount to be determined by Quarter, up to the total Current Adjusted Asset Token Nominal Value of all the Asset Tokens they hold which are linked to the SPE.
  • the Asset Tokens sold by the Existing Investors can then be transferred to the Treasury Pool and the net proceeds from the sale can be distributed to the Existing Investors’ Cash Funding Pool accounts, in proportion to the number of Asset Tokens sold by the Existing Investors and transferred to the Treasury Pool.
  • Asset Tokens transferred between Asset Token Purchasers while the Current Valuation can be at or above the HPI High-water Mark for such Asset Tokens can be processed by (i) calculating the number of Asset Tokens to be transferred by dividing the total purchase price (net of any applicable fees) by the Applicable Asset Token Nominal Value of the Asset Tokens to be transferred, and (ii) transferring the calculated number of Asset Tokens to the new Asset Token Purchaser.
  • Asset Tokens transferred when the Current Valuation is below the HPI High- water Mark for the subject Asset Tokens can proceed, for example, as described in the “Example Overview of HPI Tokens” section below.
  • HPI Tokens can represent a pool of equity generated by appreciation of some or all Houses boarded to the Quarter Platform and/or can provide their holders the Home Appreciation Right from some or all Houses on the Quarter Platform.
  • the amount of HPI Tokens attributable to holders of Asset Tokens can be determined by the number of purchased Asset Tokens and the link to a specific home. It can be a predetermined amount of HPI Tokens per 1 Asset Token.
  • HPI Intervals which HPI Interval is initially set to be annually
  • HP A Home Price Appreciation
  • HPD Home Price Depreciation
  • the calculation date can be referred to as the “HPA/HPD Determination Date”).
  • the first HPA/HPD Determination Date may not occur prior to the removal of the “transfer lock” of the HPI Tokens.
  • the calculation can be the difference between (i) the Current Valuation of a particular House then-existing on the Quarter Platform conducted at the end of the current HPI Interval and (ii) the Current Valuation of a particular House conducted at the end of the immediately preceding HPI Interval. If the difference is a positive number, the difference can be deemed to be the Home Price Appreciation (HP A). If the difference is a negative number, the difference can be deemed to be the Home Price Depreciation (HPD). If the difference is zero, then there may be no HPA or HPD.
  • the High-water Mark can be removed.
  • the new Asset Token holder's future right to Unlocked HPI Tokens can be based on the Current Valuation for such particular House at the time of transfer and/or from the end of the immediately preceding HPI Interval prior to the transfer to the new Investor.
  • the Original Asset Token Nominal Value can be replaced with the Current Adjusted Asset Token Nominal Value for the transferred tokens which can be calculated as the proportional value of Asset Tokens based on the lesser of (i) the Current Valuation at time of transfer and/or (ii) the Current Valuation at the end of the immediately preceding HPI Interval.
  • HPI Tokens held by holders of Asset Tokens linked to such particular SPE for such particular House can be Unlocked based on the following example formula. (Note that many variations of this formula may also be used. For example, in some embodiment, some variables may not be used and/or some variables may be added):
  • V p Previous HPI Interval Current Valuation
  • N p Current Adjusted Asset Token Nominal Value
  • the number of HPI Tokens Unlocked for each Asset Token for a particular SPE can be computed as follows:
  • Step 1 multiplying (A) the lesser of (i) Current Valuation (in USD) of a particular House at the time of the valuation minus the Current Valuation (in USD) at the end of the immediately preceding HPI Interval (the '‘Previous HPI Interval Current Valuation”), the result of which shall then be divided by the Previous HPI Interval Current Valuation (in USD) for a particular House, or (ii) Current Valuation (in USD) of a particular House at the time of the valuation minus the HPI High-water Mark (in USD), the result of which shall then be divided by the HPI High-water Mark (in USD), by (B) the HPI Realization Percentage (initially set at 90%).
  • Step 2 The result of Step 1 can then be multiplied by (a) the Original Asset Token Nominal Value and/or (b) the Current Adjusted Asset Token Nominal Value.
  • Step 3 The result of Step 2 can then be divided by (D) the then-existing market price of the HPI Tokens (‘'HPI Token Market Value”).
  • Step 3 If the result of Step 3 is a negative number, then no HPI Tokens may be Unlocked.
  • HPI Tokens issued to Quarter pursuant to this paragraph can be Unlocked in the amount calculated pursuant to the following example formula. (Note that many variations of this formula may also be used. For example, in some embodiment, some variables may not be used and/or some variables may be added.):
  • T u MIN(V C - V p , V c - H Titan) * Si * Q h / T v
  • V p Previous HPI Interval Current Valuation
  • Si Real Estate Interests of a particular SPE
  • T v HPI Token Market Value
  • Step 1 multiplying (A) the lesser of (i) Current Valuation (in USD) of a particular House at the time of the valuation minus the Previous HPI Interval Current Valuation, or (ii) Current Valuation (in USD) of a particular House at the time of the valuation minus the HPI High-water Mark, by (B) Real estate Interests of a particular SPE.
  • Step 2 the result of Step 1 can then be multiplied by (C) the amount of the HPI Tokens Quarter is entitled to receive pursuant to this offering (i.e. 5%) (the “Quarter Pro-Rata HPT’).
  • Step 3 the result of Step 2 can then be divided by (D) HPI Token Market Value.
  • HPI Tokens can be fungible tokens which can represent a pool of assets generated by appreciation of every House (or a subset of Houses) boarded to the Quarter Platform and can entitle their holders to the assets held by the HPI Asset Pool, which can include both the Aggregate Appreciation Value and any cash in the HPI Asset Pool Cash Account.
  • the number of HPI Tokens attributable to holders of Asset Tokens can be determined by the number of Asset Tokens issued and the link to a specific House. It can initially be set to a certain value (e.g., at 10 HPI Tokens per 1 Asset Token).
  • the Fund can reserve the right to change the number of HPI Tokens included in the sale of the Bundle from time to time.
  • the Fund can sell rights to HPI Tokens only, without the purchase of any Asset Token, to HPI Token Rights Purchasers for purposes of raising w orking capital and other general corporate purposes for the Fund, including, without limitation, to the development of Tokens, paying manager and other consultants, and supporting the Quarter Platform ecosystem.
  • the number of HPI Tokens Unlocked to the HPI Token Rights Purchasers can be based on whether the HPI Tokens are purchased as part of the Bundle or separate from the purchase of Asset Tokens, and the total price paid for Bundles or rights to HPI Tokens pursuant to this Memorandum.
  • HPI Tokens can be Unlocked periodically based on the appreciation of Houses on the Quarter Platform.
  • Quarter can establish predetermined time periods, which can be known as HPI Intervals (which HPI Interval can be initially set to be annually) when it can update the Current Valuation for each House then-existing on the Quarter Platform for the purpose of calculating the change in the valuation of each House during that period.
  • HPI Intervals which HPI Interval can be initially set to be annually
  • HP A House Price Appreciation
  • HPD House Price Depreciation
  • the calculation date can be referred to as the “HPA/HPD Determination Date”).
  • the first HPA/HPD Determination Date may not occur prior to the removal of the “transfer lock” of the HPI Tokens.
  • the calculation can be the difference between (i) the Current Valuation of a particular House then-existing on the Quarter Platform conducted at the end of the current HPI Interval (the “End Current Valuation”) and (ii) the Current Valuation of a particular House conducted at the end of the immediately preceding HPI Interval (the “Start Current Valuation”). If the difference is a positive number, the difference can be deemed to be the House Price Appreciation (HP A). If the difference is a negative number, the difference can be deemed to be the House Price Depreciation (HPD). If the difference is zero, then there may be no HPA or HPD.
  • HP A House Price Appreciation
  • HPD House Price Depreciation
  • HPI High-water Marks which can be the highest valuation which the House has reached in a given period of time. If the Current Valuation for a particular House at the end of a certain HPI Interval exceeds the Current Valuation for such particular House at the end of all previous HPI Intervals, then such Current Valuation can be deemed as the HPI High-water Mark for such particular House for the HPI Interval immediately following such HPI Interval for holders of all Asset Tokens linked to such House. When a House is boarded onto the Quarter Platform, the initial HPI High-water Mark can be the Current Valuation when the House is boarded to the Quarter Platform.
  • Va MIN(Nv + ((Ve - VHW) / VHW) X N v , N v )
  • V a The Current Adjusted Asset Token Nominal Value
  • N v The Applicable Asset Token Nominal Value
  • V e End Current Valuation
  • VHW High-water Mark
  • the Current Adjusted Asset Token Nominal Value can be calculated as the lesser of (A) the sum of (i) the Applicable Asset Token Nominal Value plus
  • the HPI High-w ater Mark can be updated to the Current Valuation for the House at the time of the transfer for the Asset Tokens to the new Investor.
  • the new Investor’s future right to Unlocked HPI Tokens for the transferred Asset Tokens can be based on the HPI High-w ater Mark which can be updated to the Current Valuation for such House at the time of the transfer to the new Investor.
  • the total number of Asset Tokens transferred from the transferor of the Asset Tokens can be higher than the total number of Asset Tokens transferred to the new Investors given the difference between the Current Adjusted Asset Token Nominal Value and $1.0000.
  • the remaining Asset Tokens which were not transferred to the new Investor (the "Excess Asset Tokens”), if any, can have the Applicable Asset Token Nominal Value replaced or updated with the Redeemed Asset Token Nominal Value, which can be set (e.g., to $0.0000), and can be transferred to the Quarter Contingency Fund. However, such Asset Tokens transferred to the Quarter Contingency Fund can still be eligible to receive the pro rata share of the TIC Fee distributed from the Fund.
  • HPI Tokens held by the current Asset Token holder of that Asset Token which is linked to the SPE for such particular House may be Unlocked based on the following example formula:
  • T u MIN((Ve - Vs) / Vs, (Ve - H w ) I H w ) x R x N v / MAX(T b , T v )
  • T u Number of HPI Tokens Unlocked for each Asset Token
  • N v The Applicable Asset Token Nominal Value
  • HPI Token Market Value may not exist until a secondary market for the trading of HPI Tokens has been established. Prior to such secondary market, HPI Token Book Value may be used. ** The HPI Token Book Value can be the quotient of the sum of the Aggregate Appreciation Value and cash balance in the HPI Asset Pool Cash Account divided by the then existing total number of Unlocked HPI Tokens.
  • the number of HPI Tokens Unlocked for each Asset Token for a particular SPE can be computed with any combination or all of the following:
  • Step 1 multiplying (A) the lesser of (i) End Current Valuation (in US Dollars) of a particular House at the time of the valuation minus the Start Current Valuation (in US Dollars), the result of which can then be divided by the Start Current Valuation (in US Dollars), or (ii) End Current Valuation (in US Dollars) of a particular House at the time of the valuation minus the then existing HPI High-water Mark (in US Dollars), the result of which can then be divided by the HPI High-water Mark (in US Dollars), by (B) the HPI Realization Percentage.
  • Step 2 The result of Step 1 can then be multiplied by the Applicable Asset Token Nominal Value.
  • Step 3 The result of Step 2 can then be divided by (C) the greater of the HPI Token Book Value or the then-existing market price of the HPI Tokens (“HPI Token Market Value”).
  • Step 3 If the result of Step 3 is zero or a negative number, then no HPI Tokens can be Unlocked.
  • the number of HPI Tokens Unlocked to Quarter and the HPI Token Rights Purchasers pursuant to this paragraph can be an amount calculated pursuant to the following example formula:
  • Tu (Ve - H w ) / H w X Atot X R q I MIN(Tb , T v )
  • the number of HPI Tokens Unlocked for the benefit of Quarter and the HPI Token Rights Purchasers for a particular SPE can be computed using any combination or all of the following:
  • Step 1 dividing (A) End Current Valuation (in US Dollars) of a particular House at the time of the valuation minus the HPI High-water Mark, by (B) the HPI High-water Mark of the House.
  • Step 2 the result of Step 1 can then be multiplied by the Total Current Asset Token Nominal Value. To calculated this, following example formula can be used:
  • V a Current Adjusted Asset Token Nominal Value
  • Step 3 the result of Step 2 can then be multiplied by the Quarter HPI Realization.
  • Step 4 the result of Step 3 can then be divided by (C) the lesser of the then- existing HPI Token Market Value or HPI Token Book Value.
  • the Fund can use the sales proceeds received by the HPI Asset Pool (as calculated below) to buy back the Unlocked HPI Tokens associated with the Asset Tokens sold by the Investors and transferred to the Treasury Pool as part of the sale, which HPI Tokens can then be transferred to the HPI Token Escrow Pool.
  • H a HPI Asset Pool Sale Proceeds Allocation
  • Step 1 One can determine the Total Current Asset Token Nominal Value for all the Asset Tokens linked to the SPE.
  • Step 2 Once can calculate the HPI Asset Pool Sale Proceeds allocation, which can be the amount equal to the sale proceeds from the sale of the TIC Interests held by the SPE minus the Total Current Asset Token Nominal Value and can be paid to the HPI Asset Pool at the time of the closing of the sale.
  • the Fund can then use the sales proceeds received by the HPI Asset Pool to buy back Unlocked HPI Tokens equal to the amount of the sales proceeds received in the HPI Asset Pool, which Unlocked HPI Tokens can then be transferred to the HPI Token Escrow Pool.
  • the closing date of such sale can be substituted for the start date of the HPI Interval for the next immediately scheduled HPA/HPD Determination Date, and the number of HPI Tokens Unlocked for each Asset Token for such SPE linked to the House can be computed and released to the Asset Token holder’s Digital Wallet on a certain date (e.g., the next immediately scheduled HPA/HPD Determination Date which occurs); and accordingly, the closing date of such sale can be used to determine the Start Current Valuation of the House.
  • FIGURE 31 illustrates an example scenario with no transfer of the Asset Tokens during any of the HPI Intervals.
  • the Homeowner purchases TIC Interests of 20% and the SPE purchases TIC Interests of 80%.
  • Tu MIN((Ve - Vs) I Vs, (Ve - Hw) / H w ) x R x Nv / MAX(T b , T v )
  • HPI Tokens Unlocked to Quarter and HPI Token Rights Purchasers shall be calculated as follows:
  • Tu (Ve - H w ) / H w X Atot X R q I MIN(Tb , T v )
  • the new HPI High-water Mark is set to $312,500, which will be used in HPI Interval #2 because the End Current Valuation of HPI Interval #1 is greater than the then-current HPI High-water Mark ($250,000).
  • HPI Interval #2 the same formulas used in HPI Interval #1 will be used. Because the End Current Valuation ($375,000) is greater than the then-current HPI High-water Mark ($312,500), 27,580.65 HPI Tokens will be Unlocked for Asset Token holders (27,235.89 for the Asset Token Purchasers and 344.76 for the Quarter Contingency Fund) and 1,532.26 HPI Tokens will be Unlocked for Quarter and HPI Token Rights Purchasers. A Total of 29, 112.90 HPI Tokens will be Unlocked during HPI Interval #2.
  • the new HPI High-water Mark is set to $375,000 which will be used in HPI Interval #3 because the End Current Valuation of HPI Interval #2 is greater than the then-current HPI High-water Mark ($312,500).
  • HPI Interval #4, and HPI Interval #5 Because of the deprecation of the House' s value, the End Cunent V aluation is not greater than the then cunent HPI High-water Mark ($375,000), no HPI Tokens will be Unlocked for Asset Token holders or Quarter.
  • FIGURES 32A and 32B illustrate an example scenario with the transfer of Asset Tokens during the HPI Intervals.
  • a House is boarded to the Quarter Platform at the Current Valuation of $250,000. Accordingly, the HPI High-water Mark is initially $250,000. The HPI Realization Percentage is 90%.
  • HPI Intervals # 1 and #2 The Current V aluation of the House rises in HPI Intervals # 1 and #2, and certain amounts of Investor A’s and Investor B’s HPI Tokens are released from the “time lock” at the end of HPI Intervals #1 and #2, respectively, as follows:
  • Va MIN(N V + ((Ve - VHW) / VHW) X N v , N v )
  • V a The Current Adjusted Asset Token Nominal Value
  • N v The Applicable Asset Token Nominal Value
  • V e End Current Valuation
  • HPI Asset Pool is also entitled to a share of the proceeds from the sale of the SPE’s TIC Interests which is calculated as follows:
  • H a HPI Asset Pool Sale Proceeds Allocation
  • Atot Total Current Asset Token Nominal Value
  • V a Current Adjusted Asset Token Nominal Value
  • H a HPI Asset Pool Sales Proceeds Allocation
  • Investor A will receive $98,750 from the sale of the House at the end of HPI Interval #6, Investor C will receive $79,000 from the sale of the House at the end of HPI Interval #6, The Quarter Contingency Fund will receive $2,500 ($2,500 for the Asset Tokens held since boarding and $0.0000 from the Asset Tokens transferred from Investor B) from the sale of the House at the end of HPI Interval #6, and The HPI Asset Pool will receive $179,750 from the sale of the House at the end of HPI Interval #6.
  • Homeowner can make the Payments through the Quarter Platform Homeowner Dashboard. For example, Occupancy Tokens may not be offered for sale.
  • the real estate sales commission can be paid by the Quarter Real Estate Commission Fund, up to the amounts linked to the House sitting with the Quarter Real Estate Commission Fund.
  • the Homeowner can pay the deficiency at closing. If the amounts linked to the House sitting with the Quarter Real Estate Commission Fund exceed the actual real estate sales commission, the excess can be paid to Quarter.
  • the Payments received from the Homeowner can be distributed as shown in FIGURE 26, with the Homeowner being the Occupant.
  • the Quarter Platform can decide whether an escrow ⁇ is required for real estate taxes, insurance, and HOA fees (the “Property Escrow Account’’).
  • the determination of whether there will be a Property Escrow Account can be based on an algorithm using various consumer and property data points as well as local jurisdictional requirements and can be determined by Quarter from time to time.
  • Any escrow payments (the “Property Escrow Amounts”) can be paid by Homeowner as a part of the Payments and can be distributed to Property Escrow Account maintained by a third-party escrow services provider.
  • the Homeowner can have the right to sell a portion of the Real Estate Interests held by the Homeowner to the SPE. Some or all Investors can have the right to purchase the Homeowner’s Real Estate Interests at a price determined via a pre-determined formula in proportion to total Asset Tokens linked to the SPE. As a result of the sale, the Homeowner can receive the sales proceeds and the Base Rent paid by the Homeowner can be increased pursuant to a pre-determined formula set forth below.
  • the Homeowner can also have the right to purchase a portion of Real Estate Interests held by the SPE at a pre-determined price and/or Investors whose Asset Tokens are linked to the SPE can have the obligation to sell their Asset Tokens in proportion to their existing percentages of the total Asset Tokens linked to the SPE.
  • the Homeowner’s Base Rent can thereby be reduced pursuant, such as according to the example pre-determined formula set forth below; (Note that many variations of this formula may also be used. For example, in some embodiment, some variables may not be used and/or some variables may be added).
  • Homeowner can pay the recordation or transfer taxes on the sale of Real Estate Interests or the House, if any.
  • Homeowner can have the right to purchase and/or sell Real Estate Interests as follows:
  • the purchase price payable by Homeowner can, for example, be equal to (A) (i) the Current Valuation of such Interests subject to Purchase determined by Quarter at the time of purchase if the transaction amount is no more than a predetermined amount, and if the Interests subj ect to Purchase is no more than a predetermined amount and/or percentage of the total interests in the property or (ii) the Current Enhanced Valuation of such Interests subject to Purchase determined by Quarter at the time of purchase if the transaction amount exceeds a predetermined amount or if the Interests subject to Purchase exceeds a predetermined amount and/or percentage of the total interests in the House, plus (B) all of the transfer and recordation taxes and other fees that become due as a result of the purchase of such Real Estate Interests, and the applicable Platform Transaction Fee.
  • the purchase price payable by Homeow ner can be equal to (A) (i) the Current Valuation of such Interests subject to Sale determined by Quarter at the time of sale if the amount of Excess Equity is no more than a predetermined amount, and if the Interests subject to Sale is no more than a predetermined amount or percentage of the total Real Estate Interests in the House or (ii) the Current Enhanced Valuation of such Interests subject to Sale determined by Quarter at the time of sale if the amount of Excess Equity exceeds a predetermined amount or if the Interests subject to Sale exceeds a predetermined amount or percentage of the total Real Estate Interests in the House, plus (B) all of the transfer and recordation taxes and other fees that become due as a result of the sale of such Real Estate Interests, and the applicable Platform Transaction Fee.
  • the Quarter Platform could make changes of respective Real Estate Interests held by Homeow ner and SPE in the House via amendment(s) to the Real Estate deed.
  • An escrow mechanism can be used (e.g., to avoid possible frequent deed recordation and/or for other reasons) whereby the deeds to be recorded to evidence the change of respective Real Estate Interests held by the Homeowner and/or SPE in the House can be delivered to a third-party escrow agent retained by Quarter. Homeowner.
  • the SPE and the escrow' agent can enter into a tri-party escrow agreement such that the escrow agent can record the then existing deeds between the Homeowner and SPE at a designated time by Quarter (e.g. annually, quarterly, or otherwise).
  • the new- amended deed can replace the preceding deed in the escrow agent’s possession and/or the preceding deed can be destroyed such that the escrow agent may be able to hold the most recent deed to reflect the then-current respective Real Estate Interests held by the Homeowner and the SPE.
  • the Homeowner can have the right to sell the House in its entirety to a third- party purchaser as follows: (i) The Homeowner can give notice to Quarter through the Quarter Platform Homeowner Dashboard of Homeowner’s intent to sell the House.
  • the Homeowner can be barred from requesting to sell the House in its entirety within a pre-determined amount of days of buying or selling Homeowner’s Real Estate Interests without first receiving a waiver from Quarter.
  • the Quarter Platform can notify the Investors whose Asset Tokens are linked to the House of the Homeowner’s intent to sell the House, and any further trading of such Asset Tokens that are linked to the SPE by the Investors can be barred unless a waiver is obtained from Quarter.
  • the Quarter Platform can refer the House to a Quarter Preferred Agent Provider who can recommend a listing price.
  • the Homeowner can list the House for sale on the Quarter Platform, or any other platform or website.
  • the listing price can be set at the greater of the suggested listing price or the Current Enhanced Valuation amount.
  • (v) Homeowner can reimburse the Quarter Platform for the costs incurred by the Quarter Platform in connection with the sale of the House, including the fees incurred by Quarter Platform in connection with the determination of the Cunent Valuation and the Current Enhanced Valuation.
  • the amounts available in the Quarter Real Estate Commission Fund with respect to the House can be calculated using (A) a credit for a predetermined amount and/or percentage of the gross sale price (valuation at the time of the boarding of the property on the Quarter Platform of the House for each month Homeowner has held its Occupancy Token, up to a maximum of a predetermined amount of time (e.g., 96 months) (the “Commission Credit”) and/or (B) the actual amounts linked to the House sitting with the Quarter Real Estate Commission Fund.
  • Capital to fund such Commission Credit will come from the Quarter Real Estate Commission Fund. If the amounts (including the Commission Credit) linked to the House sitting with the Quarter Real Estate Commission Fund exceed the actual real estate sales commission payable at the Sales Closing, the excess can be paid to Quarter for use as general funds without further obligation.
  • the Homeowner can be assessed an exit fee in the amount of a predetermined amount and/or percentage of the gross sale price of the House (the “Exit Fee”), which Exit Fee can be paid to Quarter on the Sales Closing unless the Homeowner uses the sales proceeds to purchase another House on the Quarter Platform, in which case the Exit Fee can be a predetermined amount and/or percentage of the gross sale price of the House (the “Reduced Exit Fee”) and provided some or all of the following conditions are met:
  • the Homeowner can sign a letter to indicate their intent to use Quarter Platform to purchase a new House prior to the closing of the sale of their existing House (the “Closing”).
  • the Homeowner can identify a replacement House within 90 days after the Closing, and can close the purchase transaction of a new House through the Quarter Platform within 180 days after the Closing.
  • the proceeds can first be used to pay SPE in proportion to SPE’s Real Estate Interests (for illustration purposes, if the proceeds are $300,000 and SPE’s Real Estate Interests are 80%, then $240,000 can be paid to SPE).
  • SPE can then distribute the proceeds received to the Fund, and the Fund can then distribute the proceeds received (i) first, to the Asset Token holders other than the Impact Investors, (ii) second, to the HPI Token holders, and (iii) third, to the Impact Investors, all in proportion to the amount of the activated Asset Tokens and the Unlocked HPI Tokens they have with respect to the House.
  • the proceeds can then be used to pay any accrued and unpaid Payments (other than the Payments to the Quarter Risk Pool). (4) The proceeds can then be used to pay the Exit Fee or the Reduced Exit Fee, as applicable.
  • the proceeds can then be used to pay Quarter Platform for the costs incurred by the Quarter Platform in connection with the sale of the House, including the fees incurred by Quarter Platform in connection with the determination of the Current Valuation and the Cunent Enhanced Valuation, as applicable.
  • the proceeds can then be used to pay the recordation and transfer tax in connection with the Closing and title policy premiums and other fees charged by the Title Company, as well as the other seller charge shown on the settlement statement in connection with the Closing; except, however, Homeowner has the right to use the balance of the Property Escrowed Amounts held in the Property Escrow Account to pay the seller’s pro-rata share of the real estate taxes and HOA dues. After Homeowner’s application of the Property' Escrowed Amounts linked to the House sitting with the Property Escrow Account, any remaining balance of the Escrowed Amounts can be refunded to the Homeowner.
  • Homeowner’s defaults can include the failure to make the Payments, imposition of liens on the House, failure to repair and maintain the property in good condition, and/or other events set forth in the Real Estate Agreements.
  • Homeowner’s defaults can include the failure to make the Payments, imposition of liens on the House, failure to repair and maintain the property, and other events set forth in the TIC Agreement.
  • the Homeow ner is not in compliance with the maintenance requirements and does not cure non-compliance within a certain time (e.g., thirty(30) days of notification of the non-complianceO, then the Homeowner can be considered in breach and a third-party contractor may be hired at the Homeowner’s sole expense to perform the necessary maintenance work to bring the House back into compliance, which costs can be due and pay able by the Homeowner and added to the amount of the next Payment, to be distributed to the Quarter Contingency Fund.
  • a certain time e.g., thirty(30) days of notification of the non-complianceO
  • the Homeowner If the Homeowner does not submit interior and exterior photos of the House within a certain time (e g., fifteen (15) days following their due date), the Homeowner can be notified of their non-compliance. If the Homeowner is still in non-compliance fifteen (15) days after notification of non-compliance, a third-party can be contracted to inspect the House and photograph and upload the photos at the sole cost of the Homeowner, which costs can be added to the amount of the next scheduled Payment, to be distributed to the Quarter Contingency Fund.
  • a certain time e g., fifteen (15) days following their due date
  • the SPE can have the right, but not the obligation to cause the Quarter Contingency Fund to advance the funds required to pay the delinquent amounts, to the extent that such funds are available to do so.
  • Deed Escrow Agent can have the right to record the quit claim deed among the land records in the jurisdiction where the House is located if the Homeowner fails to sell its TIC Interests pursuant to a final arbitration award that is entered and confirmed by any federal or state court with jurisdiction (the “Judgment Default”) as a result of SPE’s exercise of its remedies under the TIC Agreement as a result of the Homeow ner's default under the TIC Agreement, beyond any applicable notice and cure period.
  • the Homeowner can transfer to SPE for zero consideration, a portion (but not its entire TIC Interests in the House, in some embodiments) of its TIC Interests to SPE in an amount equal to (A) (i) repayment amounts owed to Quarter Contingency Fund, and/or (ii) the Unpaid Delinquent Amounts or Cure Amounts,
  • the Homeowner can have the right to (i) sell all (but not less than all) of the TIC Interests held by Homeowner to SPE pursuant to the Put Option mechanism under Section 3(iv) of the section entitled “Major Terms and Conditions of the TIC Agreement” of this Memorandum; provided, however, the Put Price payable by SPE can be reduced by the unpaid advances made by Quarter Contingency Fund and/or the Unpaid Delinquent Amounts or Cure Amounts, and the Closing Costs, as applicable, or (ii) sell the Interests subject to Sale under a Qualifying Life Event if the Homeowner
  • the TIC Agreement can automatically terminate and the Homeowner's right to residency in the House can automatically terminate accordingly. Upon such termination, the Homeowner can surrender the possession of the House to SPE in the Surrender Conditions.
  • the SPE can have the right, in addition to any other remedies that may be available to it, to seek specific performance of the Homeowner's obligations to sell its TIC Interests.
  • the SPE can have the right to bring an unlawful detainer or trespass action against the Homeowner and enter the House and remove the Homeowner or any other occupants to take possession of the House.
  • the other party can have the right to buy all of the bankrupt party's TIC Interests in the House for the fair market value to be determined pursuant to the procedures determined under the TIC Agreement. If, under federal bankruptcy law, similar debtor relief laws, or other laws affecting the House, the foregoing option to purchase is voided or declared unenforceable, the non-bankrupt party can have a right of first refusal to buy the TIC Interests of a bankrupt party in the event of any proposed transfer by a trustee, receiver, conservator, liquidator, guardian, or other custodian.
  • Such right of first refusal can provide that the non-bankrupt party may buy the bankrupt party’s TIC Interests in the House at the same price and on the same terms as such TIC Interests is proposed to be sold by such trustee, receiver, conservator, liquidator, guardian or other custodian. If, under federal bankruptcy law, similar debtor relief laws, or other laws affecting the House, such right of first refusal requires an order from a judge of the bankruptcy court having jurisdiction permitting such sale of the bankrupt party's TIC Interests in the House, the Homeowner and the SPE can cooperate to obtain such order.
  • the demand for arbitration can be made within a reasonable time after the claim, dispute or other matter in question has arisen, and in some embodiments, in no event can it be made after a certain time (e.g., one (1) year from when the aggrieved party' knew or should have known of the controversy, claim, dispute or breach).
  • the parties can maintain the confidential nature of the arbitration proceeding and the arbitration award, including the arbitration hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary' remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision.
  • the decision of the arbitrator may not be appealed.
  • the decision of the arbitrator may be submitted to any court of competent jurisdiction by the party designated in the decision.
  • the Homeowner and the SPE agree that a court designated in the TIC Agreement have jurisdiction over any dispute arising out of or relating to the TIC Agreement; provided, however, under no circumstances in some embodiments, can any proceeding before such court be a jury proceeding and the parties can avail themselves of any available accelerated trial options available under applicable law or court procedure.
  • a Current Enhanced Valuation can be ordered by Quarter to determine the pre- and post-improvement value of the House in order to calculate the Capital Improvement Value.
  • the post-improvement valuation can require an onsite inspection to confirm the work has been completed.
  • Homeowner can bear all the costs for valuations and inspections.
  • the Capital Improvement Value can be calculated by subtracting the pre-improv ement value from the postimprovement value. Upon the sale of the House, Homeowner can be entitled to receive a credit equal to the Capital Improvement Value.
  • the Homeowner can have the right to make capital improvements to the House.
  • the Homeowner can notify Quarter via the Quarter Platform Dashboards not less than a certain time (e.g., 30 days in advance of any plans to make capital improvements to the House), the total cost of which exceed an amount specified in the TIC Agreement (the “Major Capital Improvements”).
  • a Current Enhanced Valuation can be ordered by Quarter to determine the pre- and post-improvement value of the House in order to calculate the Capital Improvement Value (as defined below).
  • the Homeowner can provide Quarter’s designee the right to inspect the House prior to the commencement of the Major Capital Improvements, and upon the completion of such Major Capital Improvements, to determine the pre- and post- improvement value of the House to calculate the capital improvement value, which can be calculated by subtracting the post-improvement value from the preimprovement value (the “Capital Improvement Value”).
  • the Homeowner can bear all the costs for valuations and inspections.
  • the Homeowner can be entitled to receive a credit equal to the Capital Improvement Value (the “Capital Improvement Value Credit”), subject to adjustments based on the changes in the fair market value of such Major Capital Improvements and the depreciation over the useful life of such Major Capital Improvements, after taking into considerations of any rebates or incentives in connection with the Major Capital Improvements.
  • the Capital Improvement Value the “Capital Improvement Value Credit”
  • the portion of Homeowner’s monthly Payments allocable to the Quarter Contingency Fund can be calculated by amortizing 4% of the Current Valuation of the House at the time of boarding, into the Payment each month over the estimated average term of occupancy of a Homeowner. To prevent this from becoming too large a component of the overall Payment, the monthly contribution can be calculated as follows:
  • the amount of contribution to the Quarter Contingency Fund from each monthly Payment can be calculated by dividing the product of the Quarter Contingency Fund Contribution (e.g., 4%) multiplied by the Current Valuation at the time of boarding onto the Quarter Platform by the anticipated tenure of the Homeow ner in the House boarded onto the Quarter Platform (in months), which initially can be assumed to be 8 years (but is subject to future adjustment).
  • the amount of contribution to the Quarter Contingency Fund from each monthly Payment can be calculated by dividing the product of the Quarter Contingency Fund Contribution multiplied by the Current Valuation at the time of boarding onto the Quarter Platform by the anticipated tenure of the Homeowner in the House boarded on the Quarter Platform (e.g., in months), the result of which can decline linearly until it reaches a certain amount (e.g., 100%) of the calculated amount when the TIC Interests are calculated to reach a certain amount (e.g., 90%).
  • a certain amount e.g. 50%
  • the Fractionalization Fee can be a certain amount (e.g., 100%) funded by amortizing it into the Payment based on the estimated average tenure of a Homeowner in a House.
  • the Fractionalization Fee amount to be amortized in the TIC Fee can decline linearly starting when the Homeowner’s equity position is estimated to exceed, for example, 10% declining until it reaches zero at, for example, a 50% equity position.
  • the Asset Token Purchasers’ contribution to the Quarter Contingency Fund can be calculated as follows:
  • the amount of the Quarter Contingency Fund Contribution w hich is funded in Asset Tokens by the Asset Token Purchasers can decrease linearly based on the amount of equity 7 the Homeowner is estimated to initially hold post-closing, beginning at a certain amount (e.g., 1%) of the Current Valuation of the House at the time of boarding onto the Quarter Platform when the Homeowner’s initial equity position is estimated at a certain amount (e.g., 50%) and decreasing linearly until it is reduced to a certain amount (e.g., 0.25%) when the Homeowner’s initial equity is estimated to reach a certain amount (e.g., 90%).
  • the MRE calculation can be modified by adding an amount of equity proportional, but not necessarily equal to, the amount of decrease in the contribution to the Quarter Contingency Fund.
  • Quarter Prior to the boarding of a House to the Quarter Platform, Quarter can have the right to retain third parties to conduct any combination or all of the following due diligence services: (i) inspect the property condition of the House or use other technology to evaluate the condition of the House, (ii) determine the valuation of the House, or (iii) conduct other customary due diligence services in the purchase of residential properties, as determined by Quarter in its sole discretion. 2.
  • Quarter Prior to accepting an Applicant to be a Homeowner onto the Quarter Platform, Quarter can retain third parties to conduct any combination or all of the following Applicant due diligence: (i) prepare credit analysis such as credit reports, (ii) prepare capacity-to-pay analysis such as income verification, (iii) conduct asset verification, and (iv) conduct KY C and AML checks, and other customary 7 due diligence services, as determined by Quarter in its sole discretion.
  • Applicant due diligence (i) prepare credit analysis such as credit reports, (ii) prepare capacity-to-pay analysis such as income verification, (iii) conduct asset verification, and (iv) conduct KY C and AML checks, and other customary 7 due diligence services, as determined by Quarter in its sole discretion.
  • Quarter Prior to the purchase of a House or release of the funding to pay-off the existing financing on and/or fund the sale of equity in a House presently owned by the Applicant, Quarter can determine the Minimum Retained Equity, which amount can become the minimum purchase price required to be paid by the Applicant to purchase the TIC Interests in the House, or the minimum value of the TIC Interests required to be held by the Applicant after the payoff of existing financing and/or completion of an equity sale in a House presently ow ned by the Applicant.
  • the Applicant Prior to the closing of the purchase of the House, the Applicant can transfer the amount of US Dollars equal to the value of the Minimum Retained Equity 7 plus all closing costs in connection with the purchase of the House to the third-party settlement agent retained by the Quarter.
  • Minimum Retained Equity can be applied to the purchase price of Homeowner’s TIC Interests on the closing of the purchase of the House.
  • a portion of the Homeowner’s Minimum Retained Equity 7 may be provided in part by an Impact Investor.
  • the section captioned “Impact Investing on the Quarter Platform ” sets forth additional details about the rights and obligations of an Impact Investor.
  • the Applicant Prior to the closing of the funding to pay-off the existing financing on and/or fund the sale of equity in a House presently owned by the Applicant, the Applicant can (i) be required to demonstrate sufficient equity 7 ownership in the House to retain post transaction TIC Interests equal to the value of the Minimum Retained Equity, and (ii) transfer the amount of US Dollars equal to all closing costs in connection with the closing of the House to the third-party settlement agent retained by Quarter.
  • Quarter can retain a third-party settlement agent to conduct the closing of the transaction.
  • Settlement agent’s services can include, without limitation, any combination or all of the following: (i) prepare closing statement and other title documents, (ii) fund escrowaccounts and make disbursements, (iii) record the deeds, and (iv) issue an owner’s title policy. 5. If Quarter determines it is necessary to set up any real estate tax, HO A, insurance, and other escrow accounts in connection with the House, Quarter can set up such escrow accounts and can service or retain a third party to service such escrow accounts after the closing of the purchase of House.
  • Quarter can monitor Homeowner's occupancy of the House. In the event of a Homeowner’s default under the TIC Agreement, Quarter can have the right to retain a third-party servicing company to service such defaults.
  • the Purchase and Sale Agreement used in connection with the purchase of a particular House by the Homeowner and a SPE can be supplemented by the local law addendum provided by Quarter (the “‘Purchase and Sale Agreement Addendum”).
  • the Purchase and Sale Agreement Addendum can include, any combination or all of the follow ing terms and conditions:
  • Provisions which permit the Homeowner to partially assign the Purchase and Sale Agreement to the SPE at closing as the co-purchasers and provides for the specific allocation of the TIC Interests to be determined on or prior to the Closing.
  • An inspection contingency which provides a contingency for inspection pursuant to Quarter’s approved procedure and vendors. This contingency may be in conjunction with the acceptance into a home warranty program. 5. A contingency for acceptance of title, survey, zoning, environmental, and other property matters by Quarter.
  • the TIC Agreement can address and can include the following key terms and provisions.
  • the form TIC Agreement can have the state specific addendum for properties in different states and counties to meet certain local requirements.
  • the Quarter Platform can decide whether an escrow is required for real estate taxes, insurance, and/or HOA fees (the “Property Escrow 7 Account”).
  • the determination of whether there will be a Property Escrow 7 Account can be based on an algorithm using various consumer and property data points as well as local jurisdictional requirements and can be determined by Quarter from time to time. Any escrow payments (the “Property Escrow Amounts”) can be paid by Homeowner as a part of the Payments and can be distributed to Property Escrow Account maintained by an escrow services provider, as may be changed by Quarter from time to time with prior notice to the Homeowner.
  • the Payments can be made in US Dollars. Payments that are not made within a certain period when due can result in a late fee set forth in the TIC Agreement (the “Late Fees”), subject to the applicable state law s. The Late Fees can be distributed to the Quarter Contingency Fund.
  • the Homeowner can timely pay any obligation that may become a hen on the House, including any combination or all of the following: w ater or other utility 7 bills, code enforcement fines, special assessments, and maintenance or service fees incurred by the contractors hired by the Homeowner to perform work or services on the House. Deductibles incurred under the terms of any home warranty and hazard insurance can be paid by the Homeowner.
  • the Homeowner can have an obligation to perform and/or pay for all routine maintenance of the House that are not covered under a House warranty and that may be required under the terms of the TIC Agreement.
  • the Homeowner can be required on each annual anniversary' of the closing date of the purchase of the House to take and submit interior and exterior photos of the House through Quarter Platform Dashboards.
  • the Homeowner can have the right to sell a portion (but not all in some embodiments) of the TIC Interests held by the Homeowner to the SPE, in which case, all Asset Token Purchasers can have the right to purchase the Homeowner's TIC Interests at a price established by a pre-determined formula in proportion to total Asset Tokens linked to the SPE, except for those Interest subject to Sale under a Qualifying Life Event as defined below which can be purchased by the Quarter Contingency Fund.
  • the Homeowner can receive the sales proceeds and the TIC Fee paid by the Homeowner can be increased pursuant to a pre-determined formula as set forth below.
  • the Homeowner can have the right to sell all of the TIC Interests held by the Homeowner pursuant a put option described below.
  • the Homeowner can also have the right to purchase a portion or all of TIC Interests held by the SPE at a pre-determined price and Asset Token Purchasers whose Asset Tokens are linked to the SPE can have the obligation to sell their Asset Tokens in proportion to their Proportionate Share of the total Asset Tokens linked to the SPE or on a first-in, first out basis, or as otherwise determined by Quarter at Quarter’s sole discretion.
  • the Homeowner’s TIC Fee can thereby be reduced pursuant to a predetermined formula, an example of which is set forth below.
  • the Quarter Platform can make changes to the respective TIC Interests held by the Homeowner and SPE in the House via amendment(s) to the deed.
  • an escrow mechanism can be used whereby the deeds to be recorded to evidence the change of respective TIC Interests held by the Homeowner and SPE in the House can be delivered to an escrow agent selected by Quarter.
  • the Homeowner. SPE and the escrow agent can enter into a triparty escrow agreement such that the escrow agent can record the then existing deed between the Homeowner and SPE at a designated time by Quarter (e.g. annually, quarterly, or otherwise).
  • a new amended deed can replace the preceding deed in the escrow agent’s possession and the preceding deed can be destroyed such that the escrow agent can hold the most recent deed which can reflect the then-current respective TIC Interests held by the Homeowner and the SPE.
  • Quarter’s blockchain digital ledger can serve as the system of record for tracking transfers which can occur between deed recordation’s.
  • the purchase price payable by the SPE can be equal to (i) the Current Valuation of Record of such Interests subject to Sale up to Excess Equity as determined by Quarter at the time of sale if the Interests subject to Sale up to Excess Equity are no more than 15% of the total TIC Interests in the House or (ii) the Current Enhanced Valuation of such Interests subject to Sale up to Excess Equity as determined by Quarter at the time of sale if the Interests subject to Sale up to Excess Equity exceed 15% of the total TIC Interests in the House.
  • the Homeowner can have the right to sell its TIC Interests to SPE comprising a portion of their Minimum Retained Equity, up to a certain amount (e.g., (A) four (4) times of the monthly Payments during the month immediately preceding to the closing of the sale, divided by (B) the Current Valuation of Record of the House prior to the closing of the sale (the “Interests subject to Sale under a Qualifying Life Event”, together with Interests subject to Sale up to Excess Equity, “Interests subject to Sale”)); provided, for example, (i) there is no uncured event of default by Homeowner or (ii) there is a default by Homeowner but after the sale of the Interests subject to Sale under a Qualifying Life Event, the Quarter Contingency Fund can be fully reimbursed for its advances and/or be fully paid the Unpaid Delinquent Amounts or Cure Amounts (A) four (4) times of the monthly Payments during the month immediately preceding to the closing of the sale, divided by (B) the Current Valuation of Record of
  • the purchase price payable by SPE can be equal to the Current Valuation of Record of such Interests subject to Sale under a Qualifying Life Event; provided, however, if there is a default by Homeowner under the TIC Agreement, the purchase price payable by SPE can be reduced by the unpaid advances made by the Quarter Contingency Fund and/or the Unpaid Delinquent Amounts or Cure Amounts, as applicable.
  • Homeowner’s obligation to pay the Transaction Closing Costs (as defined below) can be waived if Homeowner sells Interests subject to Sale under a Qualifying Life Event pursuant to this paragraph.
  • a Qualify ing Life Event can mean, for example, (i) loss of a job or income, (ii) health emergency of Homeowner or Homeowner’s immediate family member, (iii) divorce, and (iv) other events as determined by Quarter from time to time.
  • the Homeow ner can be responsible for the Closing Costs as a result of the sale of such Homeowner’s TIC Interests pursuant to this section, except that the Homeowner may not be responsible for the Transaction Closing Costs in connection with the Homeowner’s sale of Interests subject to Sale under a Qualifying Life Event.
  • the closing of the purchase and sale can occur within 15 days after the determination of the Current Valuation of Record or the Current Enhanced Valuation of such Interests subject to Sale, as applicable.
  • the monthly Payments by the Homeowner can be recalculated to reflect the change in the Homeowner’s TIC Interests in the House.
  • the Homeowner can have the right to purchase any and all portions of the TIC Interests held by SPE at any time (the “Interests subject to Purchase”).
  • the purchase price payable by the Homeowner can be equal to (A) (i) the Current Valuation of Record of such Interests subject to Purchase determined by Quarter at the time of purchase if the Interests subject to Purchase is no more than a certain amount (e.g., 15% of the total TIC Interests in the House) or (ii) the Current Enhanced Valuation of such Interests subject to Purchase determined by Quarter at the time of purchase if the Interests subject to Purchase exceeds a certain amount (e.g., 15% of the total TIC Interests in the House), plus (B) the Closing Costs.
  • the Homeowner can have the right, but not the obligation to repurchase any and all portion of Interests subject to Sale under a Qualify ing Life Event (the “Interests subject to Repurchase’').
  • the purchase price payable by the Homeowner can be equal to the sum of (A) the purchase price paid by SPE in connection with the closing of the Interests subject to Sale under a Qualifying Life Event, plus (B) the Third Party Closing Costs.
  • the Homeowner can be eligible to participate in the Homeowner Hardship Program again at a later time if a Qualify ing Life Event occurs.
  • the Homeowner can be responsible for all of the transfer and recordation taxes and other fees assessed by a party other than the SPE or Quarter (the “Third Party Closing Costs”) and the fees assessed by Quarter (the “Transaction Closing Costs”) that become due as a result of any sale or purchase of the TIC Interests pursuant to the TIC Agreement. Third Party Closing Costs and Transaction Closing Costs can be collectively referred to as the “Closing Costs”.
  • the Homeowner can have the right or obligation, as applicable, to sell e.g., all (but not less than all) of the TIC Interests held by the Homeowner (“TIC Interests Subject to Put Option”), as follows (the “Put Option”):
  • the Homeowner can give not less than ninety (90) days’ prior notice (the “Put Notice”) to Quarter through the Quarter Platform Dashboards of Homeowner’s intent to exercise the Put Option. This requirement may not be applicable under the Put Obligation.
  • Quarter can determine the purchase price for the TIC Interests Subject to the Put Option.
  • the Quarter Contingency Fund can purchase the TIC Interests Subject to Put Option and can become a tenant-in-common with the SPE.
  • the purchase price payable by the Quarter Contingency Fund can be equal to the Current Enhanced Valuation of the TIC Interests Subject to the Put Option at the time when Quarter receives the Homeowner’s intent to exercise the Put Option (the “Put Price”).
  • Quarter can notify the Homeowner of the Put Price determined by an appraiser retained by Quarter (the “Quarter’s Appraiser”), and can provide a copy of the appraisal to the Homeowner together with the supporting valuation documents.
  • the Homeowner can have the right to retain their own appraiser to determine the Put Price within a certain time (e.g., ten (10) days after receipt of Quarter's Put Price); provided such appraiser can be a residential real estate broker or appraiser licensed in the jurisdiction where the House is located, e.g., having no less than a certain amount (e.g., ten (10) years') experience in such field, and recognized as ethical and reputable within the field (the “Homeowner’s Appraiser”).
  • the Homeowner’s Appraiser can determine, within a certain time (e.g., ten (10) days) after his or her appointment, such Put Price.
  • the two individuals can appoint a third similarly qualified individual within a certain amount (e.g.. ten (10) days) after such disagreement.
  • the third individual can, within a certain time (e.g., ten (10) days after his or her appointment), select either Quarter’s Appraiser’s determination or the Homeowner’s Appraiser’s determination (this being, e.g., the third appraiser’s sole function) as being closest to the applicable fair market Put Price, and can notify the parties of such selection.
  • the Homeowner fails to timely object to the Put Price or deliver its determination of the Homeowner’ s Appraiser or a third individual, as applicable, then Quarter’s determination of the Put Price can be final and conclusive.
  • the third appraiser’s decision can be final and conclusive, and binding on both the Homeowner and Quarter, acting on behalf of the Quarter Contingency Fund.
  • the Homeowner and the Quarter Contingency Fund can each bear the cost of its appraiser and can share equally the cost of the third appraiser.
  • the Quarter Platform can notify the Investors whose Asset Tokens are linked to the SPE (thus, the House) of the Homeowner's intent or obligation to exercise the Put Option, and any further trading of such Asset Tokens that are linked to the SPE by the Investors can be barred unless a waiver is obtained from Quarter.
  • the Quarter Contingency Fund can use funds sitting in the Quarter Contingency Fund to purchase the TIC Interests Subject to Put Option and can enter into a new TIC Agreement as tenants in common with the SPE. When any or all TIC Interests Subject to Put Option are resold, the net proceeds can be distributed to the Quarter Contingency Fund.
  • the Homeowner can be responsible for the payment of any or all the transfer and recordation taxes and other fees that become due as a result of the sale of the TIC Interests Subject to Put Option.
  • the Payments and the Direct Property' Costs Payments (if any) can be prorated on the closing of the purchase of the TIC Interests Subject to Put Option (the "Put Closing Date”).
  • the Homeowner can pay any unpaid amounts advanced by the Quarter Contingency Fund and pay any accrued and unpaid Payments (other than, e.g., the Payments to the Quarter Contingency Fund), and
  • the Homeowner can receive a credit in an amount of the Capital Improvement Value Credit (as defined below).
  • the Homeowner can do any combination or all of the following: (i) remove all of the Homeowner's unattached and movable equipment or furniture, or other personal property’ brought into the House by the Homeowner (“Homeowner’s Personal Properties”), (ii) repair damages to the House caused by the Homeowner or Homeowner’s agents as a result of such removal, (iii) quit and surrender the House to SPE, free and clear of occupants and tenants, broom clean, and in good order, condition and repair, ordinary wear and tear excepted, and (iv) return all keys to the House to SPE (collectively, the “Surrender Conditions”).
  • the Homeowner can be required to repair any damage and perform such other work as is reasonably necessary to restore the House to the Surrender Conditions. Prior to the Put Closing Date, Quarter’s designee can have the right to enter in and upon the House or any part thereof to inspect the condition of the House.
  • the Homeow ner can be required to perform required repairs and restoration work to restore the House in broom clean and in good order, condition and repair to the reasonable satisfaction of Quarter (the “Repair Work”) within a certain time (e.g., fifteen (15) days following the Homeowner’s receipt of a written notice from Quarter). Notwithstanding anything to the contrary contained in the TIC Agreement, it can be a condition precedent to the Put Closing Date that the Homeowner completes the Repair Work and surrenders the House in Surrender Conditions.
  • the Quarter Contingency Fund may not be obligated to pay the Put Price until the Homeowner completes the Repair Work and surrenders the House in Surrender Conditions. If the Homeowner fails to remove any of Homeowner’s Personal Properties from the House prior to the Put Closing Date, SPE, at its option, may deem all or any part of such Homeowner's Personal Property to have been abandoned by the Homeowner and title thereof can immediately pass to SPE.
  • Quarter may have the right to sell TIC Interests as follows: (i) Quarter can list any or all of the TIC Interests Subject to Put Option for sale on the Quarter Platform, or any other platform or website. During the pendency of the sale to a new homeowner, any further trading of such Asset Tokens that are linked to the SPE by the Investors can be barred unless a waiver is obtained from Quarter.
  • Quarter Prior to accepting a new Applicant to be a Homeowner on the Quarter Platform, Quarter can retain third parties to conduct any combination or all of the following Applicants’ due diligence: (i) prepare credit analysis such as credit reports, (ii) prepare capacity-to-pay analysis such as income verification, (iii) conduct asset verification, and (iv) conduct KYC and AML checks, and other customary' due diligence services, as determined by Quarter (e.g., in its sole discretion).
  • due diligence (i) prepare credit analysis such as credit reports, (ii) prepare capacity-to-pay analysis such as income verification, (iii) conduct asset verification, and (iv) conduct KYC and AML checks, and other customary' due diligence services, as determined by Quarter (e.g., in its sole discretion).
  • the Fund can cause the SPE to enter into anew TIC Agreement with the new' Homeowner and the then current Payments prior to the Put Closing Date can be recalculated based upon the sale price, the amount of TIC Interests purchased by the new' Homeow ner, and the post-sale value of the TIC Interests held by the SPE as follows:
  • the first step can be to determine how many Asset Tokens either need to be issued or redeemed based on the post-sale value of the TIC Interests held by the SPE.
  • determine whether Asset Tokens are to be issued or redeemed we can first look at the pre-sale value of the TIC Interests held by the SPE and compare it against the post-sale value of the TIC Interests held by the SPE.
  • Vpre Pre-sale value of the House (ii) To determine the post-sale value of the TIC Interests held by the SPE, we can use the following example formula:
  • V spe-post > Vspe-pre- then issuance of new Asset Tokens may be necessary.
  • V spe-post ⁇ Vspe-pre
  • redemption of Asset Tokens may be necessary.
  • V spe-post > Vspe-pre If V spe-post > Vspe-pre, then an issuance of new Asset Tokens may be needed.
  • the next step in determining if new Asset Tokens need to be issued can be to determine if the SPE’s TIC Interest percentage has gone up or down. If the SPE TIC Interest percentage has increased (Ispe-post > Ispe-pre), and if V S pe-post > V sp e-pre, then new Asset Tokens may need to be issued. If on the other hand the SPE’s TIC Interest percentage has either decreased or stayed the same (Ispe-post ⁇ Ispe-pre), then no new Asset Tokens may need to be issued.
  • Asset Tokens can be distributed to the existing Asset Token Purchasers whose Asset Tokens are linked to the House (the “Existing Investor”), pro rata based on the current SPE ownership. If the funds sitting in the Cash Funding Pool held by the Existing Investors are not sufficient for the new issuance of Asset Tokens, Quarter can allocate the remaining newly issued Asset Tokens among other Asset Token Purchasers (excluding, in some embodiments, the Existing Investors) who have cash sitting in the Cash Funding Pool, up to the total amount of newly issued Asset Tokens.
  • Vspe-post ⁇ Vspe-pre
  • redemption of Asset Tokens may be necessary. Quarter can redeem Asset Tokens pro-rata from Asset Token holders until they hold a minimum of Asset Tokens representing 1% of the SPE’s TIC Interests in the House at its post-sale value.
  • N a Total number of Activated Asset Tokens
  • Asset Tokens can be redeemed from current Asset Tokens holders, pro rata based on the current SPE ownership.
  • V spe-pre V spe-post — Ared-tot ⁇ V spe-post * 1 %
  • Ared-tot Total Current Asset Token Nominal Value for redeemed asset tokens
  • V a Current Adjusted Asset Token Nominal Value
  • HPI tokens can be redeemed pro rata based on the current SPE ownership. If there are not enough HPI Tokens amongst the current SPE owners, Quarter can have the ability to determine which HPI Token Holders they will redeem HPI Tokens from, for a fair book value.
  • the Quarter Contingency Fund can receive the sales proceeds from the sale of the TIC Interests Subject to Put Option to the new Homeowner. Upon the consummation of the sale of the TIC Interests to a new Homeowner, the Quarter Contingency Fund can transfer the residual TIC Interests and the then-existing TIC Agreement by and between the Quarter Contingency Fund and the SPE can automatically terminate.
  • Quarter In the event Quarter is unable to resell the TIC Interests subject to Put Option or enter into the new TIC Agreement with a new Homeowner within a certain time (e.g.. 90 days after Put Closing Date), Quarter can have the right to sell the House in its entirety to a third-party purchaser as follows:
  • Quarter can refer the House to a Quarter Preferred Agent Provider who can recommend a listing price.
  • Quarter may list the House for sale on the Quarter Platform, or any other platform or website.
  • the listing price can be set (e.g., at the greater of the suggested listing price or the Current Enhanced Valuation amount).
  • Quarter In the event that there is no offer or no offer that is acceptable to the Quarter within a certain time (e.g., 120 days after Quarter’s notice to the Asset Token holders of Quarter’s intent to sell the House), Quarter can have the right to lower the Final Listing Price or the Listing Price Floor, as applicable, in Quarter’s sole discretion.
  • a certain time e.g. 120 days after Quarter’s notice to the Asset Token holders of Quarter’s intent to sell the House
  • Sales proceeds from a sale of the entire House can be distributed on the closing date of such sale (the “Sales Closing”) as set forth in the example below' (the “Distributions Waterfall ”):
  • the proceeds can first be used to pay Quarter and the Quarter Contingency Fund for the costs incurred by Quarter and the Quarter Contingency Fund in connection with the sale of the House, including the fees incurred by Quarter in connection with the determination of the Current Valuation.
  • the proceeds can then be used to pay the recordation and transfer tax in connection with the Sales Closing and title policy premiums and other fees charged by the title company, as well as the other seller charge shown on the settlement statement in connection with the Sales Closing.
  • the proceeds can then be distributed to SPE, in any combination or all of the following:
  • the SPE can then distribute the proceeds received to the Fund, and the Fund can then distribute the proceeds received (i) first, to the Asset Token holders, (ii) second, to the HPI Asset Pool, and (iii) third, to the Impact Investors, all in proportion to the amount of the Activated Asset Tokens and Appreciation Value accrued to the HPI Asset Pool with respect to the House.
  • the Homeowner and the SPE can have the right to have the House partitioned, and to file a complaint or institute any proceeding at law or in equity to have the House partitioned in accordance with and to the extent provided by applicable law (‘'Partition Action”).
  • the Partition Action may result in a forced sale by the Homeowner and the SPE.
  • the party filing such action can first make a written offer to the other party (the “Recipient Owner”) that can: (i) specify the price at which the Initiating Party would be willing to transfer the House (such price, the “Offer Price”), (ii) specify the amount (as reasonably calculated by the Initiating Party) that would be distributed to the Recipient Owner (its “Distribution Amount”) if the House was sold for the Offer Price and the net proceeds (assuming typical transaction costs such as repayment of debt, transfer taxes, a five percent (5%) brokerage fee, and legal fees not to exceed $5,000) after paying or providing for all liabilities of the House were distributed to the tenants in common in accordance with the TIC Agreement, and/or (iii) state that the Initiating Owner desires to either (A) sell its TIC Interests to the Recipient Owner for the In
  • the failure to timely elect any such option by the Recipient Owner can be deemed an election by such Recipient Owner of the Third Party Sale Option. If the Recipient Owner fails to close under the Recipient Sale Option on or prior to a deadline set forth in the TIC Agreement, the Third Party Sale Option can be deemed to have been elected. If the Initiating Owner fails or refuses to close, the exercising Recipient Owner may sue for specific performance and enforcement costs. If the Third Party 7 Sale Option is duly elected (or deemed elected, as applicable), the Recipient Owner can execute all documents and instruments necessary in the ordinary course of consummating such sale.
  • the Initiating Owner can proceed to file the Partition Action, and if no Partition Action has been filed within certain period as specified in the TIC Agreement, the related buy-sell notice can be null and void and no such transactions may occur without the Initiating Owner first sending a new buy-sell notice subject to the process set forth above.
  • a Homeowner can have the right, subject to Quarter’s underwriting approval, to exchange their current House with a new House via the Quarter Platform (“Home Swap Option”) by providing notice to Quarter via the Quarter Platform Dashboards of their intention to exercise the Home Swap Option (the “Home Swap Option Notice”).
  • Quarter can notify the Homeowner whether or not Quarter approves such Home Swap Option within a certain time (e.g., five (5) business days after Quarter receives the Home Swap Option Notice).
  • the Homeowner can transfer all of the TIC Interests held by the Homeowner in the current House to the SPE pursuant to the mechanism descried under Section 3(iv) of the section entitled “Major Terms and Conditions of the TIC Agreement” of this Memorandum; except that, rather than having the SPE disburse the sales proceeds payable to the Homeowner in connection with the Put Option (the “Homeowner’s Equity”) to the Homeowner, the Homeowner can authorize the Quarter Contingency Fund to disburse funds from the sale of the Homeowner’s Equity 7 to purchase the Homeowner’s TIC Interests in the new 7 House.
  • the Fund can set up a new SPE to purchase the TIC Interests in the new House, together with the Homeowner. Accordingly, new Asset Token Purchasers’ purchase moneycan be released from the Cash Funding Pool by the Fund for the purchase of the new SPE’s TIC Interests in the new House, in an amount equal to the Applied Asset Token Holder Equity (for example, as defined below) and in return, the new holder’s Asset Tokens (for example, in proportion to the invested amount in the new House) can be colored to show the link to the new SPE and be Activated, pursuant to the same mechanism the Asset Tokens are Activated described in this Memorandum.
  • the funds to purchase the new' House can come from the following sources in connection with the current House, the sum of which can be referred to as the “Allocable Purchase Price”: i.
  • the Homeowner’s Equity ii. the Total Current Asset Token Nominal Value for the Asset Tokens linked to the current House (the “Asset Token Holder Equity”), and iii. the Appreciation Value of the current House that has been transferred to the HPI Asset Pool (the “HPI Asset Pool Equity”).
  • the new House’s purchase price is greater than the Allocable Purchase Price
  • the entire Allocable Purchase Price can be applied in the purchase of the new' House, and in addition, additional Asset Tokens from new Asset Token Purchasers can be colored to link to the new SPE and Activated in an amount equal to the difference between the purchase price of the new House and the Allocable Purchase Price.
  • Quarter can calculate Homeowner's Payments in connection with the new House based on (i) the Asset Token Holder Equity 7 actually spent by the new SPE, plus (ii) the product of the number of the additional Activated Asset Tokens linked to the new SPE to purchase the new' SPE’s TIC Interests in the new' House, if any, multiplied by (e.g., $1.0000) (the “Applied Asset Token Holder Equity”). To the extent the amount of the Asset Token Holder Equity actually spent by the new SPE is less than the total allocable Asset Token Holder Equity, Quarter can calculate the Homeowner’s Payments in connection with the new House based on the applied amount of the Asset Token Holder Equity.
  • the Applied Asset Token Holder Equity be less than a certain amount (e.g., 1% of the purchase price of the new House) because the minimum TIC Interests held by the new SPE can be required to be a certain amount (e.g., at least 1%).
  • the Quarter Contingency Fund can disburse the Homeowner’s Equity on behalf of the Homeowner to purchase Homeowner’s TIC Interests in the new House.
  • the Fund can reserve the right to charge the Closing Costs with the purchase of the new' House, and the Minimum Retained Equity can be recalculated, as can the Payments to incorporate new real estate taxes, insurance, and/or HOA fees in connection with the new House.
  • a House was boarded onto the Quarter Platform with a Current Valuation of $1,000,000, and the Current Valuation has subsequently increased to $2,000,000 over several years.
  • the original purchase price paid by the SPE at the time when the House was boarded onto the Quarter Platform was $900,000 and the Total Current Asset Token Nominal Value is $900,000.
  • the Homeowner decides to exchange the current House with a new House. Homeowner’s Equity is $200,000. At the time of the purchase, the Appreciation Value of the current House is $900,000.
  • Asset Token Holder Equity is $900,000
  • HPI Asset Pool Equity is $900,000
  • the Homeowner decides to purchase a new House for $2,000,000. Quarter Contingency Fund will disburse the $200,000 of Homeowner’s Equity on behalf of the Homeowner to purchase Homeowner’s TIC Interests in the new' House. A new' SPE set up to purchase the new' House will disburse $900,000 from funds raised from the sale of new Asset Tokens linked to that new SPE. The Fund will disburse $900,000 HPI Asset Pool Equity from the HPI Asset Pool in the purchase of the new SPE’s TIC Interests in the new House. Of the $2,000,000, Homeowner’s Payments for the new House shall be calculated based on $900,000 Asset Token Holder Equity'. New House purchase scenario #2 (higher value)
  • the Homeowner decides to downsize and to purchase a new House for $1,500,000.
  • Quarter Contingency Fund will disburse the $200,000 of Homeowner’s Equity on behalf of the Homeowner to purchase Homeowner’s TIC Interests in the new' House.
  • the Homeowner’s Payments for the new House shall be calculated based on $400,000 of Applied Asset Token Holder Equity.
  • New House purchase scenario #4 (much low er value)
  • the Homeowner decides to downsize and to purchase a new House for $1,100,000.
  • Impact Investor can have the right to assist with funding the Minimum Retained Equity and/or a portion of the Closing Cost by purchasing Asset Tokens linked to the SPE (thus the specific House) in an amount equal to the difference between the Minimum Retained Equity and/or the purchase money to be paid by the Applicant for the purchase of the House; provided, how ever, Applicant may pay not less than a predetermined amount and/or percentage of the entire purchase money for the purchase of the House from their own funds without the assistance of the Impact Investor.
  • Asset Tokens held by Impact Investors can be entitled to their pro-rata share of the Base Rent plus the Enhanced Rent paid by the Homeowner. Impact Investors Asset Tokens can be entitled to pro-rata distribution of net proceeds in the event of sale of the entire House, as further described in the ‘'Distributions Waterfall” provisions in the section captioned '‘Major terms and conditions of the Real Estate Agreement.”
  • the section captioned '"Overview of Asset Tokens” sets forth more details about the Impact Investors’ rights associated with the Asset Tokens.
  • the Impact Investor can guarantee the performance of the Homeow ner and can pledge the Asset Tokens it owns as collateral to the Fund, as the secured party.
  • the SPE can redeem a portion of the Asset Tokens held by the Impact Investor equal to the amount of Real Estate Interests purchased each month by the Homeowner from the SPE.
  • Fiat Currency paid by Impact Investors to purchase Asset Tokens may be held in the Cash Funding Pool and/or can be released to the SPE upon acquisition of the House.
  • Asset Tokens held by Impact Investors can be entitled to their pro rata share of the TIC Fee plus the Enhanced TIC Fee paid by the Homeowner. Impact Investors’ Asset Tokens can be entitled to pro rata distribution of net proceeds in the event of sale of the entire House, as further described in the “Distributions Waterfall” provisions in the section captioned “Major terms and conditions of the TIC Agreement.”
  • the section captioned ‘ Overview of Asset Tokens” sets forth more example details about the Impact Investors’ rights associated with the Asset Tokens.
  • the Impact Investor can guarantee the performance of the Homeowner and can pledge the Asset Tokens and HPI Tokens it owns as collateral to the Quarter Contingency Fund, as the secured party. If the Homeowner defaults under the TIC Agreement and the entire TIC Interests held by the Homeowner are transferred to the SPE, the Fund can have the right to redeem all of the Asset Tokens linked to the SPE held by the Impact Investor for zero consideration and the HPI Tokens in an amount equal to such Impact Investor’s pro rata share of the Appreciation Value of the House, after Impact Investor receives the distributions as a result of the sale of the Homeowner’s TIC Interests.
  • the Fund can have the right to redeem a portion of the Asset Tokens linked to the SPE held by the Impact Investor for zero consideration and the HPI Tokens in an amount equal to such Impact Investor's pro rata share of the Appreciation Value of the House, after Impact Investor receives the distributions as a result of the sale of the Homeowner’s TIC Interests.
  • Landing Pages e.g., deploy marketing to convert leads to actions, measure the results and adjust the campaigns
  • Ability to independently create and maintain separate landing pages for a number of user types such as consumers and investors (e.g., home investors, home angels), vendors, realtors, settlement agents, etc.
  • Page one can be (i) email, password and/or (ii) third-party OAuth.
  • the user id can be different from the email address.
  • the user id composition can follow best practices.
  • Passwords composition can follow best practices.
  • Passwords can display a weak, medium and strong message to users as they create them.
  • ii. Passwords which do not meet minimum security requirements may not be accepted.
  • iii. Passwords can be double entered when created or changed.
  • Can be two factor authentication e g., email and/or text and/or physical authentication devices like USB
  • iv. Can support typical self-help functions (user id/password reset, other)
  • v. Can support typical customer service functions such as live chat.
  • c. User account maintenance. (Job - user maintains and updates Quarter account preferences, and can request support) i.
  • ii. Can enable a user to request customer or tech support.
  • iii. Can allow a user to close their account.
  • Consumer pre application Job - determine if the consumer is a good candidate for Quarter before expending resources on due diligence
  • i. Can gather initial applicant data (user entered via online forms which is used as a pre-screening).
  • Data can include: self-reported income and credit data, ability to make down payment, info on home equity, zip code from home purchases, address for refinance, etc., or any combination thereof. ii. Can split applicant paths into refinance or purchase based on user supplied info.
  • This data can include the address, value and their estimated equity which may be computed by collecting their mortgage balances and subtracting from the estimated value.
  • Value estimates can be provided by using address data to lookup on third party' sites (such as Zillow).
  • i. Can allow the user to edit any third-party valuations supplied.
  • iii. Can run the MRE engine using the unverified consumer supplied data as inputs (this can be an estimated MRE for use in making the initial go/no-go decision).
  • iv. Can make an initial go/no-go determination based on the user selfreported data including an initial determination of need for down payment assistance for purchase or homeowner assistance for a refinance.
  • a match can occur when there is at least 1 assistance program the applicant qualifies for based on the user reported data. vi. Can make a go/no-go determination using the MRE calculations and downpayment assistance determinations (if applicable) and notify the applicant of the decision.
  • This calculator can show how the monthly payment changes as the cash out amount is moved higher and lower.
  • Consumer application e.g., collect information from consumer to determine if the consumer is qualified for Quarter
  • Joint applications may use different fees. 2. Can be the same payment options allowed for rent, equity purchases and other payments and should integrate into the same payment system. v. Down payment or homeowner assistance application can be completed based on applicant data inputs.
  • API can securely transfer data. iii. Can receive credit and income underwriting information back from underwriting.
  • This option can be selected at the time they set up their assistance program. ii. If they don’t use Quarter’s algorithm, then they can either enter that data on a case by case basis or create parameters which can be automatically applied. 1. Can allow the assistance program provider to edit the parameters for each program they are operating. vi. Can notify the applicant of go/no-go decision, the amount of MRE and, if no assistance program is needed, the decision about escrow accounts (if applicable).
  • ii. Can enable the ability to select and add homes to a shopping cart.
  • iii. Can enable the applicant to directly connect with a Quarter, partner supplied or consumer sourced realtor to schedule showings of homes they have placed into the cart.
  • the platform may need the ability to set up and maintain data collection requirements based on discrete jurisdictional needs. vi. Can make initial go/no-go decisions based on user entered data (are they accredited, what jurisdiction are they in, etc.)
  • Network investor application e.g., Collect information from network investor to be used to conduct diligence to determine if they are qualified to be a Quarter network investor
  • ii. Can enable A/B testing for next step messaging.
  • iii. Can collect application fees (if any).
  • ii. Can enable messaging to network investors.
  • iii. Can enable downloading/uploading of additional documents as required.
  • iv. Can track and archive all communications which occur.
  • Network investor diligence e.g., determine if applicant is qualified to become a Quarter network investor
  • i. Can share information about network investor applicants with third- party compliance vendors so they can conduct appropriate checks.
  • HPI Tokens can mint HPI Tokens and move to the wallet for the HPI Token Escrow Pool.
  • the HPI tokens can also be subject to both a Time Lock and a Transfer Lock.
  • Different tokens can be minted at the same time or at different times.
  • Home Angel pre application i. Can present pre-application messaging as next steps to the impact investor after successful completion of account registration process. ii. Can enable A/B testing of next steps messaging. iii. Can track unique applications by lead source for invoicing/payment of lead providers (if allowed).
  • the platform can have the ability to set up and maintain data collection requirements based on discrete jurisdictional needs. vi. Can make initial go/no-go decisions based on user entered data (are they accredited, what jurisdiction are they in, etc.)
  • Impact investor application e. g. , collect information from impact investor to be used to conduct diligence to determine if they are qualified to be a Quarter impact investor
  • i. Can present the full application as the next step for the impact investor after successfully passing pre application screening.
  • ii. Can enable A/B testing for next step messaging.
  • iii. Can collect application fees (if any).
  • iv. Can collect impact investor information sufficient to conduct diligence for KYC/AML/Accreditation/Other
  • Manage assistance program(s) e.g., the impact investor sets up criteria which define the assistance programs it will offer and deploy capital for
  • Choices can be selected from a set of pre- established fields which Quarter alone will approve and maintain.
  • Choices can be selected from a set of pre- established fields which Quarter alone will approve and maintain.
  • ii. Can establish a review process to determine legality’ and suitability of any program which an impact investor desires to offer.
  • the property characteristics can be selected from a set of pre-established fields which Quarter can approve and maintain.
  • Impact investors can have the abi 1 i ty to add, edit and delete these programs as they wish.
  • Collect consumer assistance application data e g., to gather the data needed for the impact investor to underwrite an assistance application
  • i. Can flow information gathered during the consumer application process into the assistance application and prefill fields to avoid redundant data entry.
  • ii. Can create dynamic application forms for each consumer based on the specific assistance programs they have matched with.
  • iii. Can filter the superset of data provided by the consumer to the specific subset needed for each unique assistance program application.
  • Underwrite assistance applications e.g., decide which assistance applications are approved or denied
  • Human intervention may be enabled.
  • Underwriting can happen within an online impact investor portal and no PII should leave our servers.
  • the applicant data shared can be pulled from the superset of information collected during the assistance application process and then filtered to the subset required for each of the specific programs being underwritten.
  • iii There can be a workflow queue for pending applications to assist each impact investor to manage their application flow (or to create the submission order for an automated underwriting engine).
  • This workflow and queue can include the following functionality:
  • System can generate an invite and email. ii. Can allow the applicant's realtor to create a user account (if applicable).
  • Realtor’s can be able to manage multiple clients on the system at the same time via one account. iii. Can enable communication between the applicant and the Realtor. iv. Can allow a consumer to terminate a realtor relationship.
  • x Can allow approved users to upload executed contracts with addendums and possibly enable the seller to DocuSign on our system.
  • xi Can review and approve executed contract w/ addendums. 1. Can have a work queue for this to notify the appropriate parties of the need for review and approval.
  • xii Can enter contract details into the Quarter platform.
  • Vendors can be Quarter approved.
  • MRE amount and Excess equity can be recalculated in and displayed to occupant in real-time, so they know what they have available to sell.
  • HPI token management e.g., track home price appreciation and manage HPI token distributions
  • API Via, e.g., API.
  • Occupancy Token Management i. Occupancy tokens can be locked and shall remain in an escrow 7 and/or wallet ii. Occupancy tokens can be redeemed and burned in the event the home they are attached to is sold and leaves the networks. iii. An occupancy token may be transferred to another occupant in the future.
  • xxii. Can track HPI pool assets. xxiii. Can track all sales costs and expenses when home leaves the network. xxiv. Can track all real estate related items (depreciation, taxes paid, etc.). xxv. Can generate periodic tax reporting documents and reports for all platform users including occupants/network investors/impact investors/vendors and Quarter entities. xxvi. Can make entries into the blockchain ledger for required transactions xxvii. Can search/ download transactions written to the blockchain. xxviii. Can have CRMStore contact information for all platform users including consumers, investors, third-party vendors, realtors, etc. xxix. Can collect consumer and investor registration data by status including leads, full and partial (abandons) registrations. xxx. Can enable data collection/uploads to generate marketing lead lists which are external to the platform user base. xxxi. Can store sufficient info to support marketing campaigns. üd Components a. In house technology i. Web Applications that can be used:
  • Token creation / tracking a. Asset tokens b. HPI tokens c. Occupancy tokens 2. Transaction tracking (writing to the ledger)
  • Lien monitoring service (Corel ogic/FirstAm)
  • a specific example of this is the use case where a supply of Asset Tokens which are minted for a specific house which is boarded onto the platform, which represent the value of the fiat investment made in the house.
  • the supply of such Asset Tokens is not fixed and may change from time to time based on various actions taken by the homeowner or the investors who hold the tokens.
  • An NFT which has at least one updatable metadata field supported in the tier 1 platform, can solve the data storage problem as the supply of fungible tokens can be linked to a specific NFT when the supply is created. This link will provide a link to the metadata field (e.g., a valuation field for the underlying home).
  • the metadata field e.g., a valuation field for the underlying home.
  • a time stamp for initial minting and any subsequent updates is recorded in the digital ledger. By comparing the time stamp on the minting or updates of the NFT with the time stamps for the fungible token transactions, each specific fungible token can be identified and linked to the metadata field from the NFT.
  • the changing value of a home as immutably recorded in a metadata field in an NFT can be linked to specific fungible tokens in order to track the underlying value of a home at the time that specific transactions occurred, essentially enabling fungible tokens to take on non-fungible token properties as it relates to storage of token specific metadata.
  • the similar outcome can be achieved using an NFT which does not have an updatable metadata field by utilizing a decentralized, auditable log of immutable and timestamped events, such as the Hedera Consensus Service (HCS), where a message containing an update to an NFT's metadata field would be written to the ledger without updating the NFT itself.
  • HCS Hedera Consensus Service
  • a first example use case is as follows:
  • an NFT an Occupancy Token
  • w hich will contain an updateable metadata field which is used to record the valuation of the home at the time of boarding (i.e. $400,000).
  • the minting of this NFT shall be recorded on a digital ledger with a time stamp for the time of minting.
  • a supply of fungible tokens shall be “colored” by linking the tokens in this supply to a specific NFT which contains information about the home (including the valuation data) via a metadata field contained within each fungible token in that supply.
  • the investors who provided capital to the SPE in order to purchase its tenants in common interest shall be issued 350,000 Asset Tokens at a nominal value of $1.00.
  • each of these tokens shall be assigned a high water mark which is equal to the valuation at the time of boarding, or $400,000.
  • the HPI Interval the value of the home is assessed and determined to now be $440,000 which is a gain of 10%.
  • the Occupancy Token NFT shall have its valuation metadata field updated from the previous value of $400,000 to the current value of $440,000 and that update will be recorded in the digital ledger with a time stamp.
  • Each token within the supply will have its highwater mark updated, which shall be equal to the new valuation of $440,000.
  • the value of the home is again assessed and is determined to be $418,000, a loss of 10%.
  • the valuation metadata field in the Occupancy Token NFT shall be update and that update will be recorded and timestamped in the digital ledger. Since the valuation is still below the previous highwater mark of $440,000 for all of the Asset Tokens, the highwater mark shall remain unchanged for all Asset Tokens within the supply. Assume that immediately after the valuation update to $418,000 and prior to the expiration of the current HPI Interval, 10,000 Asset Tokens from the original investor to a new investor. The transfer of these 10,000 Asset Tokens is recorded on the digital ledger and timestamped.
  • the highwater mark for these 10,000 Asset Tokens is now $418,000 since they were transferred while the valuation was below the previous highwater mark. None of the other 340,000 Asset Tokens are transferred. Assume at the end of the next HPI Interval, the value of the homes is assessed to be $434,720, a 4% gain.
  • the valuation metadata field in the Occupancy Token NFT shall be update and that update will be recorded and timestamped in the digital ledger.
  • the 10,000 Asset Tokens which were previously transferred should have their highwater mark updated to $434,720 while the remaining 340,000 Asset Tokens would retain their previous highwater mark of $440,000 since that value remains higher than the current valuation of $434,720.
  • a second example use case is as follows:
  • an NFT an Occupancy Token
  • an NFT an Occupancy Token
  • the minting of this NFT shall be recorded on a digital ledger with a time stamp for the time of minting.
  • a supply of fungible tokens shall be “colored’ 7 by linking the tokens in this supply to a specific NFT which contains information about the home (including the valuation data) via the decentralized, auditable log referenced within each fungible token in that supply.
  • the investors who provided capital to the SPE in order to purchase its tenants in common interest shall be issued 350,000 Asset Tokens at a nominal value of $1.00. At the time of issuance, each of these tokens shall be assigned a highw ater mark which is equal to the valuation at the time of boarding, or $400,000.
  • the value of the home is assessed and determined to now be $440,000 which is a gain of 10%.
  • the decentralized, auditable log shall have included a new message with the new valuation updated from the previous value of $400,000 to the current value of $440,000 and that update will be recorded in the digital ledger with a time stamp.
  • Each token within the supply will have its highwater mark updated, which shall be equal to the new valuation of $440,000.
  • the value of the home is again assessed and is determined to be $418,000, a loss of 10%.
  • the valuation metadata field in the Occupancy Token NFT shall be update and that update will be recorded and timestamped in the digital ledger.

Landscapes

  • Financial Or Insurance-Related Operations Such As Payment And Settlement (AREA)

Abstract

L'invention concerne des procédés et des systèmes de transfert d'informations, consistant à : transmettre, au moyen d'un premier dispositif informatique du premier système informatique, une première demande de fonction de réseau à un réseau décentralisé, la première demande de fonction de réseau comprenant des premières informations ; et transmettre, au moyen d'un second dispositif informatique du second système informatique, une seconde demande de fonction de réseau au réseau décentralisé, la seconde demande de fonction de réseau comprenant des secondes informations.
PCT/US2023/037006 2022-11-09 2023-11-08 Procédés et systèmes de transmission d'informations WO2024102396A1 (fr)

Applications Claiming Priority (6)

Application Number Priority Date Filing Date Title
US202263382995P 2022-11-09 2022-11-09
US63/382,995 2022-11-09
US202363578514P 2023-08-24 2023-08-24
US63/578,514 2023-08-24
US18/503,881 2023-11-07
US18/503,881 US20240146678A1 (en) 2019-12-13 2023-11-07 Methods and systems for transmitting information

Publications (1)

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WO2024102396A1 true WO2024102396A1 (fr) 2024-05-16

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