IHT Founder & CEO Ricky Ng Speaks with Investors and Community Users
1: What is ATO?
We wanted to create a new way to finance for asset handlers, so we developed the Asset Tokenize Offering (ATO) product. This allows asset handlers to use tokens to invest in right-to-use investment products and to purchase memberships without having to go through the usual channels such as banks, funds or other traditional financing methods. Because financing is most often done before a building is put up or before the use of an asset changes, we have changed it into a membership system to conduct purchases.
Tokens are the right-to-use for a member, and it is not the same as the purchasing of shares or the increase in value of the property, rather it is an increase in the value of the right-to-use price. To protect investors, i-house.com does a trusteeship with shares. We hold onto a project’s partial shares to protect and ensure our investors. The simplest reason is, before a building is built or the use of an asset changes, one can do crowdfunding and be able to attain some high return real estate income due to an increase in value.
2. What are the benefits of ATO?
First off, it is different than the traditional securitized asset product. Because in this type of asset product, the purchase threshold is extremely high and there are some private equity funds that offer opportunities to buy in, but the lowest purchase threshold of this $158,000 or higher. Compliance for investor purchases are incredibly complex. On some Chinese domestic crowdfunding platforms, there are many corresponding legal restrictions that are borne out of compliance issues. When we utilize right-to-use to conduct this kind of ATO crowdfunding, it is like a membership because it uses tokens and what is bought and sold is the right-to-use. Later, when you make a purchase or sale, you can break down every little portion into smaller parts.
For example, the one we are entering now with the lowest threshold is probably Ethereum (ETH), which calls for around $400 to $500. For that dollar amount, a person can enter the initial token right-to-use sale. However, you are only investing in the right-to-use, not property rights.
3. What is core logic of the ATO product?
First, we can lower the threshold and take big real estate pieces and break them into smaller pieces. Secondly, we can make the entire asset management transparent and thirdly, we can quickly move assets.
We are very flexible in operation. This is one of the main reasons that we are doing the ATO product. We hope that ATO can supplant some ICOs in the future, because right now many people have participated in many ICOs. In fact, maybe our number of everyday projects aren’t all that many, yet we hope that we can use ATO methods to better protect and guarantee investors. Then we can guarantee everyone involved, where they can go invest in some real estate right-to-use projects.
For example, our appraisal is around $400 for the presale of the rights-to-use in a resort. This is the lowest market price we have set based on market conditions and this means we are selling them to users at a 40 percent discount. They can pay $240 for a share in the right-to-use. In the future, the increase in value might be 60 percent or higher because after three years, when the resort is completed, you can use $400 and sell it to a third party and i-house.com.
4. How is it different from traditional methods of purchasing? How do you ensure compliance?
Because it is not directly linked to shares, but is really a commodity, it is only this commodity that can circulate in the market. We can allow everyone to enter this type of real estate right-to-use investment at a very low price.
We have researched many Chinese and overseas real estate investments, and the size of such investments are big. But for some small-time investors, or for those investors who like to purchase products like ICOs, we believe you also need the option to invest a small amount.
We had many meetings with several lawyers regarding this topic. Our goal was to study how to take right-of-use and break it into smaller pieces to sell or transfer them faster. We also want to give investors a channel to enter real estate investments. This is a core ideal for the design of the product.
5. Talk about the Karuizawa project
Karuizawa is a very hot tourist destination in Japan. Its land is very limited, and developers have already taken it all up. This piece of land is the largest parcel that hasn’t been developed in Karuizawa.
After communicating with those involved in the project, we learned that they hoped the money also included the building of the resort and the income from selling the houses. They could go presell these houses to individuals or big investors, and at the same time, they could do time shares and ask these members to collect fees for time shares at the resort.
Before construction, we can calculate every house’s sale price and allow users to buy in beforehand. When the building and purchases are done, we can help you transfer them into the market. Then, we can help you attain that rise in value in the right-to-use. So why would we have this kind of project as our first one in Kuraizawa? Because the investment amount can begin from the smallest portion and then we can buy them one by one. Every parcel is $400, and this represents right-of-use for one night. Our pricing is $240 right now, so we are giving a 40 percent discount.
If after three years, you use the market price of $400 to sell it, you can then get a 60 percent increase in price. At the same time, we will ask those involved in the project to purchase IHT tokens, which can be airdropped to investors. So, you can get the equivalent of 10 percent of your IHT investment price to serve as an airdrop.
There are two parts to the earnings. One is the increase in value of the right-to-use, and the other is the increase in value of IHT. If everyone thinks that IHT will increase in value, for example by 100 percent, then your return will possibly reach around 70–80 percent in three years. So, this is the direction and motivation of our product design. We hope that everyone can understand our product design and join in on these types of investments. We also hope that people will be able to participate in this project.
6. Where is IHT used?
First off, we will release some ATO projects on our platform. Basically, every real estate project will have the tokens produced by our ATO, then the project and asset parties will need to purchase IHT to serve as our tech and service fee, this will also be how airdrops are given to users.
After we completed the first project, we found out that when we use an IHT airdrop, around 10 percent goes to the users and about five percent is the project party’s expenses, so these all will be bought in IHT.
The second use is when users who hold IHT can take part in ATO investment projects, just like when you invest in ICOs and use ETH It is the same logic as IHT can serve as one of the investment tokens.
The third is our product called IHTPay, which can be used to make payments. We have already had a buyer from Hong Kong who was buying Japanese real estate while in Hong Kong. She first bought IHT to take the money and send it over to Japan, then we took out that money in Japan and gave it to the homeowner. We did it that way because we were able to shorten the entire monetary transfer process to within an hour and be done with it. Before, when people wanted to purchase Japanese real estate from abroad, the transfer process needed at least two or three days. And if it was during a vacation it might take four or five days. If a house is easy to sell, it would already be gone by then. Our IHTPay is, we hope, for transnational real estate transactions.
7. Can IHT be used to pay for resort room fees?
If they accept IHT as payment, then one can use it for payment of room fees. In the future, assets that are connected to IHT can be used to pay for rooms, rent or all types of investments.
8. Will future fluctuations in IHT prices affect housing prices?
We are locked in on a price. We negotiate a daily price with the homeowner, so it won’t affect housing prices. Of course, there might be some service fees, but when the client changes money it produces about the same service fees. Our method is much faster, so we think there really is a market for it.
9. Does you have any plans for a main network?
We now are using ERC20 and to add more convenience, we are winding up and will release tokens with every project to everyone that they can freely convert. In the second half of the year we will begin thinking about our main network. Our thinking is to first have projects and then a main network, because otherwise it really doesn’t mean much. In the initial stage we will first place a bunch projects on the platform to help them to get financing.
10. Will homeowners be affected when they monetize, how about the IHT market?
We can talk about homeowners monetizing this way; our exchange will also hold some tokens and we will park capital on the receiving side that can be used to send money over to the homeowner. So, the homeowner will not exchange money that day and they will not have a big effect on the IHT tokens.
11. What is the significance of tokens?
First off, they can be used for shops and airdrops. Secondly, tokens can be used to invest in some projects. As the tokens are globalized, we have users from other countries and they all can quickly attain information and go make a purchase. Thirdly, because this is an extralegal currency system, there is no need for the tokens to be fully linked up with some financial regulations. We can take apart purchases and make them much smaller, which gives small-time investors the ability to participate.
12. Apart from Tokyo, do Japanese homes have lots of investment value?
Our properties now are all centered in Tokyo, but we are not just investing in homes, we are also getting into hotel development. For example, our second project will most likely take a commercial building and remake it into a hotel.
There will be some increase in value due to a change in asset use probably within the next one or two years. We truly feel that Japanese properties have solid investment value.
13. Is legal currency used to calculate an exchange amount in the end?
Yes, because property growth is reflected in legal currency growth. So, we use legal currency rates and display this to users.
14. IHT’s team structure?
At present our team has 50 people. We have around half in China, and the other half are dispersed between the US, Hong Kong and Japan.
We will quicken our pace of expansion abroad. We are currently hiring in Hong Kong, Japan and the US. Our Hong Kong market director will join us in May, while our Japanese partners have already joined the team. We will make an announcement soon.
15. China doesn’t allow the use of virtual currencies to purchase property, right?
Correct. Everyone knows that virtual currency in China is sensitive, so for the time being we are not going to push for this.
We will first start off in countries where Bitcoin is legal, such as Japan and the US. The US has always accepted Bitcoin, just not ICOs. We will also begin doing promotion in the US and Southeast Asian markets.
16. How do you use IHT to buy Japanese properties?
If you get in touch with our office, we can assist you in going to Japan to purchase property. There are some Japanese real estate brokers who have added our IHTPay logo on their door or window, so that buyers can see that said branches accept IHTPay.
17. The Tokyo press release event at the end of April will have what things that are marketed towards for buyers?
We are focusing on inviting more media to attend the press conference right now, yet there will surely be some individual investors who also attend. Apart from being a press conference for the Japanese Karuizawa project, we hope that it can also be the first ATO press conference. We hope that more media will come and report on this second conference, and we have invited some Chinese media members to attend as well in hopes that Chinese users can also be aware of what is happening.
18. Apart from IHT’s value itself, what other uses are there?
We hope that IHT will be able to participate in more asset construction and investment on projects where an assets purpose or use has changed. In the future, there will be more assets that can be introduced with IHT serving as the payment token.
This is our goal and we hope in three years that we can complete around 100 projects. Another goal we have set for this year is to complete 15 to 20 projects.
19. When will IHT move on to Europe and the US?
We have already spoke with some cooperative partners in the US and in the second half of this year, we will begin. As for Europe, we really need time to expand over there, so we expect that in the first half of 2019 we will be able to begin development in the European market.
20. How many cooperative partners and funds are you working with?
We have already met with five or six funds and cooperative partners. Now we will slowly begin to move into further meetings and communications with them. I think that many funds are quite interested in this sector. They are very interested in Japanese real estate and blockchain investments. South Korea is also a possibility, although Japanese real estate will be more popular with everyone.
21. Are there competitors in this real estate field?
In the Asia-Pacific region there is just us and there are some in the US. But there are strict regulations in the US, so we feel that their development will be slower than ours.
We have an early bird gets the worm advantage regarding our development in the real estate industry. Because our speed is very fast, we were able to release our first ATO just two months after getting listed on the exchange.
22. What is the roadmap like for the project?
The second quarter is Japan, and in the third quarter we will start on the US while we will also begin making headway with the Southeast Asian and Chinese markets.
23. You are going to develop the Chinese market this year?
The way we go about things in China might be a little different, as we will first stress the technology and monitoring platform. We will not directly get into situations with tokens as a financing channel. In the second half of the year we will develop this type of platform.
For now, we will focus on the Japanese, Southeast Asian and US markets. I also want to say some things about my views on the Japanese real estate industry. I have had around three to four months of frequent contact and I can say that Japanese real estate will be trending upwards in the next three years.
I think right now is a very good opportunity to use a similar method to enter into the Japanese market, because real estate in Japan is still low, so I think everyone can slowly move into some projects.
We would like to thank our many investors and users for their continued support and affirmation of i-house.com (IHT). No matter if it is on the exchange, the innovation to release the world’s first ATO project or expand into global markets, our team has from day one been keeping their eye on the ball.
We look forward to creating with everyone, and further on, we will routinely hold similar live broadcast events so that we can share and connect with everyone regarding project progress at the first moment. We welcome everyone to actively participate!