Frequently Asked Questions
What is real estate development investing?
Real estate development investments are quite different from buying a property and renting it out or reselling it.
With real estate development, you invest in projects before they’re built. These projects usually offer significantly higher projected IRR.
With real estate development investing, you have the opportunity to develop wealth in the same that property moguls have done for centuries. And now it’s easier than ever with Relex Development.
What is blockchain?
Blockchain is a digital, decentralized, publicly accessible ledger of cryptocurrency transactions.
In simple terms, it’s a massive computing system that leverages the power from global computer processors to operate, and it uses these same terminals to repeatedly check transactions’ legitimacy.
While this is an oversimplified definition, it’s possible to think of blockchain as a web of computers that each make sure the other ones are being honest.
What is cryptocurrency?
Cryptocurrency is a digitized asset, utility, or currency. It can be easily traded or moved from one account to another.
Cryptocurrency is not just a feature of blockchain, however. It’s integral to it. Cryptocurrency needs to be spread out all over the place in order for a network to be completely decentralized. If too much is in one spot, then the network is not decentralized.
What is Ethereum? What is an ERC-20 token?
Ethereum is a blockchain network. The cryptocurrency that makes Ethereum ‘work’ is called Ether (ETH).
Ethereum is both a cryptocurrency and a development platform (in the digital sense, not in the real estate one). Web developers can build new cryptocurrencies, games, and other applications on the Ethereum blockchain.
A cryptocurrency that is built on the Ethereum blockchain is called an ERC-20 token. An ERC-20 token uses the advantages of the Ethereum blockchain (it’s already decentralized, has high liquidity) to create a new product.
Is RLX an ERC-20 token?
What are the benefits of blockchain and cryptocurrency in regards to real estate development?
The benefits are numerous.
First, many of the offerings on the Relex Development investment platform are in emerging markets. While the best IRRs are in these places, many investors and companies are hesitant to invest there because of the low transparency scores these countries receive.
In fact, according to Jones Lang LaSalle’s real estate transparency research, the most transparent countries -- usually those like the United States or United Kingdom -- receive almost all of the investment capital for real estate development funding.
Blockchain technology has a solution to that. Blockchain transactions are publicly accessible, so when a developer accesses funds from these accounts, the public will immediately know.
In addition, smart contracts ensure that funds are not released all at once to a developer. By releasing funds more slowly, it helps safeguard investors’ funds instead of releasing them all at once.
Now more than ever is this increased transparency needed. Emerging markets are struggling to finish projects, and even established countries like China have had to shutter major projects because of a lack of funding.
Second, cryptocurrency also makes it significantly easier for individuals around the world to access and fund projects. In a world that is quickly modernizing and digitizing, it doesn’t make sense to have funds locked up in local currencies, unable to be invested in lucrative projects overseas.
Once the crowdfunding portion of our platform is approved, it will also make global crowdfunding simpler, neater, and more accessible than ever.
What are the costs for investors?
There are no investment costs borne by investors. In fact, Relex Development will redistribute a portion of broker commissions to return them to investors.
The costs borne by investors are only those involved in the purchase and transmission of the RLX token, including but not limited to exchange fees and the ETH used as gas for transactions.
What do you need to do before investing through one of Relex Development's platform?
First of all, it is essential to understand that these are high-risk investments which, as such, must be adequately related to their financial resources. Furthermore, it is important to have the ability to economically support the possible loss of the entire capital invested. It is essential to understand that it is important to also understand the importance of diversifying investments.
Once you understand the above, you should create an Ethereum Wallet. An Ethereum wallet will allow you to store and transfer the RLX token. If you need help at this point or would like hands-on guidance, please contact us.
Then, you should accumulate the necessary amount of RLX the trading exchanges. If you need help at this point or would like hands-on guidance, please contact us.
After you have accumulated the RLX in your Ethereum Wallet, you can then begin engaging with the desired contract listed on the Relex Development investment platform. If you need help at this point or would like hands-on guidance, please contact us.
What are the main risks involved in investing with the Relex Development portal?
Relex Development vets the offerings we list on our platform to only select those that meet our high standards. Additionally, the added transparency and accountability of traceable funds on the blockchain add another layer of security. Lastly, Relex Development’s proxy developer platform facilitates direct communication between RLX investors and developers.
Even with these added measures, no investment is entirely risk free. The main risks are represented by the risk of loss of capital and the risk of illiquidity.
Who can invest with equity crowdfunding?
Currently equity crowdfunding is not available on the platform. The Relex Development platform complies with the legal regulations for an equity crowdfunding platform, but it is currently awaiting approval from the United States’s Financial Industry Regulatory Authority (FINRA). As an American company, we will not open up crowdfunding to any investors before receiving that explicit approval.
After approval, equity crowdfunding is open to both professional investors and small savers. It is therefore a very democratic and open instrument. Obviously anyone who intends to invest is invited to carry out an in-depth analysis of the real estate development opportunities.
What is Relex?
Relex is an investment platform that uses cryptocurrency to provide transparency, accountability, and immutability to real estate development investment opportunities that could otherwise be considered too risky or opaque. The Relex team makes investing easy and safe by thoroughly scrutinizing the partnerships it takes on, only adding to its portfolio those that meet detailed requirements. As an additional layer of safety and transparency, the RLX cryptocurrency token is then used as the medium to invest in development opportunities that have already met the rigorous standards set forth by the Relex team. By placing these transactions on the blockchain, the investment process is enhanced to fit the complexities of the modern, global economy: funds are easily traceable while retaining investor privacy, paperwork hassles are reduced by upgrading them to immutable smart contracts, and investor capital is secured through contractual agreements on the blockchain. Relex provides simple, safe, and secure investments in an ever-expanding world.
What problem does Relex solve?
In the past, real estate developers searching for international investors would have to look for investors within a very narrow pool of institutional investors who generally have already invested in that market before. First-time conversions of investors to new markets proved to be a very difficult task, as there was no framework of unified international law and standards to adhere to. Hence, real estate developers had to spend 6-12 months in order to secure funding for the real estate project they wished to build, or alternatively submit to bank loans which could be in excess of 10 percent interest along with collateral requirements. In short, developers were stuck with a slow, ineffective process recycling the same pool of investors over and over. Real estate development profits went into the early-stage investor pockets, and bid up the real estate units to prices as high as the market would bear to real estate purchasers of the new real estate units. This made the institutional investors have the undisputed advantage in negotiations, and institutional investors became a new affluent class as they were the “gateway” of investment funds into a country or project’s real estate opportunities.
How does Relex benefit from being a blockchain cryptocurrency?
Although there are real estate development opportunities in the developed world, many of the best, most lucrative opportunities are in the developing world. However, these development opportunities are seen as too risky for much investor capital to invest in.
On the blockchain, Relex will increase transparency in investment opportunities that could otherwise be too risky/opaque. This gives a great understanding as to why transparency (via blockchain) is important: http://www.jll.com/Research/Global-Real-Estate-Transparency-Index-2016.pdf.
Regular fiat funds are also illiquid due to regulatory lockup periods, as well, whereas cryptocurrency creates greater liquidity for access to funds. This benefits real estate developers in being able to optimize their management and operating costs regarding many resources freed up by utilizing the Relex blockchain funding platform, which allows more rapid deployment of funds to be better able to execute real estate development construction in less time and at lower cost.
Additionally, there is the digitization of our existing paper contracts. The plan is to create a variable smart contract system, which is automatically triggered by external events. Smart contracts are deterministic exchange mechanisms controlled by digital means that can carry out the direct transaction of value between untrusted agents.
Lastly, consider this vignette:
Advisory Guy A says to Project Owner A, “Hey, let's make a contract. If you pay me a fee, say, 3% on a 100 million USD multipurpose office/apartment building with a shopping mall component, I will source the investment for you by connecting you with my contact, and when I introduce my contact, if my investor invests, you pay me the $3 million.”
The problem with this, and what has gone on for over 100 years, is this: How can you be sure that when you introduce your investor, that the investor and the project owner will 'play ball'? In other terms, how can you be certain that Advisory Guy A does not get the run-around and the deal is done without Advisory Guy A's knowledge?
This is why private equity investing turns from an initially super simple concept into a battle of wits to somehow lock in the deal so the investor and project owner does not go astray.
However, there has finally been a change to this dynamic by way of the introduction of the blockchain ledger. No more is there a need to structure a finely worded agreement to serve as oversight when the blockchain does that and more. That is one problem that the Relex blockchain solves.
Additionally, it completely disrupts the 100 year old Advisory model of Project Owner A, Advisory Guy A, and Investor A, because when you have a blockchain-based model, not only do you have bulletproof accountability that the developer and investors act as intended, but also that it disrupts the advisory commission model.
Because now the incentive is shifting to redistributing these commissions to the investor where it rightfully belongs. This gives the investor a further cushion on their investment.
This also completely overturns thousands of advisory businesses and the old Chinese merchant referral model for real estate development investment advisory because now the fees they charge render their business uncompetitive, as there is officially no reason to charge 2%, 5%, or 10% commission.
With Relex, the 'good ol boy' financial network is crumbling before our very eyes.