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The different risks associated with an investment in a property of the Blockapital

The risk of scam

Blockchain is a recent industry on which there are many scams. We must therefore be particularly careful. However, with the Blockapital, there is no longer any risk, you buy a part of a company that holds a property.

Do the properties exist?

At present, the first tokenized property will be the Pelerin Palace at Mont-Pèlerin in Switzerland. Switzerland has a land register to view real estate transactions.

You can find all the properties of BLOCKAPITAL in Switzerland on the registry.

The risk of losing your tokens

Equisafe can advise you on this.

Regulatory risk

Blockchain is a recent industry that is still poorly regulated. It is quite possible that future laws will have a more positive impact on token investments.

The risk related to the underlying

The underlying is the real good behind your tokens.

In the case of BLOCKAPITAL. the underlying is real estate, only subject to the risk of real estate.

BLOCKAPITAL invests to date only in properties recently completed or at the end of work, so there are no surprises due to seniority.

With this model there is no distortion of interest between BLOCKAPITAL and token owners.

The economic interest of BLOCKAPITAL is to operate a property with its hotel business, having a maximum yield. BLOCKAPITAL is therefore very attentive to the quality of the properties, the negotiation of the price or the seriousness of its customers. The highest levels of services must be present, this is the brand image of the BLOCKAPITAL. group.

Its founder has the ambition to make the group the future of luxury hotels. Its long-term vision, its development policy and its exceptional property acquisition strategy are also major quality criteria.

Liquidity risk

Market liquidity is the ease of buying and selling an asset, in the case of BLOCKAPITAL to sell a property.

When buying real estate in the traditional way, it is not very liquid: the resale can take weeks or even months before finding a buyer, who will have to ask for a loan from his bank and then go to the notary.

The bet of real estate tokenization is to streamline the process and allow you to buy and sell very quickly.

For the purchase process it is won: it takes only a few minutes.

For resale, it’s also fast: you can resell the tokens on the buying platform. In the future, some platforms may also allow you to quickly resell your tokens once listed.

BLOCKAPITAL also undertakes to buy back your tokens within 10 days without sale (with a commission of 2% and up to 25 tokens per week maximum).

An investment in one of the properties of the Blockapital can be envisaged in the short term but we advise it rather on the medium and long term.

The risk of bankruptcy

There are two companies mixed up per property:

  2. The company that owns the Palace

BLOCKAPITAL has been a profitable company since day one. The company generates a turnover with several sources of income and each property (via the tokenized company) is financially autonomous.

With the increase in the number of properties, the situation will continue to evolve positively.

In the event of bankruptcy of BLOCKAPITAL. it would be enough to find another manager.

Tokenized companies would not be bankrupt since they own real estate, they are secure.

In the event of bankruptcy of BLOCKAPITAL, the capital and tokens would not be lost. The only risk is to no longer have a rent distribution until you have found an alternative.

The risk of transaction fees

With the Tezos blockchain the transaction fees are quite low, which is important because the transaction fees can become prohibitive.

Thus, BLOCKAPITAL, which aims to pay the daily rents, decided to do it monthly to begin with.

The advantage of the blockchain is the visibility of pending transactions, wallets are searchable.

The golden rules of the good investor

Ensure the distribution of your wealth

An investor can only expose a small proportion of his wealth to unlisted securities. He is advised to allocate his investments on EQUISAFE INVEST only after already having less risky media in his portfolio. An investor must keep cash available in order to compensate for the risk of illiquidity that may arise in operations and ensure that he does not invest more than 10% of the total amount of his wealth.

Determine the acceptable risk

An investor must determine an investment strategy because risks and returns are closely linked when it comes to investing. It is necessary to manage your investments according to the different levels of risk in order to obtain an acceptable risk-return ratio that corresponds to your objectives and your investment strategy.

Anticipate your capital flows

An investor must take into account the timing of the operations in which he invests in order to take into account the duration of capital mobilization during which he will not be able to dispose of the funds.

The importance of diversification

Diversification is one, if not the main rule of investment. An investor must spread his investments in different asset classes, preferring investments in companies at different stages of development and from different sectors. The objective is, given your needs, your family situation and your appetite for risk, to reduce the overall risk weighing on your wealth by keeping a balance between secure investments and risky investments.