How it works

How your money and your property will be handled

BaseLots isn't open for investment yet. Here's how it will work. BaseLots is a technology company, not a bank. During an offering, your money will be held at a bank. Your BLOCK tokens will sit in your own digital wallet. A public blockchain will be the official record of who owns what, and BaseLots will keep that record.

Your BLOCK tokens, your wallet

Your BLOCK tokens will live in your own digital wallet. In limited cases, such as a lost wallet or a court order, BaseLots can freeze your tokens or move them to a new wallet for you. Every time this happens, it's recorded publicly.

Rent sent to you automatically

Each month, a smart contract (a program that runs on the blockchain) will send your share of the rent to your wallet. You won't need to do anything.

Everything is public

Who owns what, every rent payment, and every BLOCK transfer will be visible on the Arbitrum blockchain, the official record of ownership. Anyone can check it.

How your rent money will flow

Tenant pays rent

The tenant will pay rent in US dollars through a standard payment portal. Nothing unusual for them.

Taxes and insurance come out first

When rent is paid, money for property taxes and insurance will be set aside first. Next, the property manager will be paid a planned fee, and a planned share will go into a repair reserve. The first property may keep its current manager's fee and repair setup.

BaseLots' fee, then your share

Next, the property's company (its LLC) will pay BaseLots' fee: 0.5% a year of the value of the investor-owned share, updated with the FHFA house price index. It will then turn the rest into digital dollars and send it to the BaseLots smart contract on Arbitrum. BaseLots also plans to charge a one-time fee when each property purchase closes, and to hold an ownership share in each property's company. The exact share will be listed in each offering. Each offering will also list all fees.

Your share goes directly to your wallet

What's left will be split based on how many BLOCK tokens you own and sent to your digital wallet automatically. You can move it to your bank. Moving it may be free or cost a small fee, depending on the method.

Sent automatically

BaseLots will never

Hold your investment money
Hold your BLOCK tokens for you
Mix money from different properties

What you'll have

Your BLOCK tokens in your own wallet
Public proof of what you own
Monthly rent sent to your own wallet
A full list of fees in each offering

Built to follow U.S. securities law

BaseLots plans to raise money under Regulation Crowdfunding (Reg CF), a federal law for small investments in private companies. Each offering will run through a regulated investment platform registered with the SEC. Before each offering, BaseLots will file a public disclosure document called a Form C with the SEC. None has been filed yet. BLOCK tokens will be legally recognized securities (regulated investments), not unregistered tokens.

What if BaseLots shuts down?

Your BLOCK tokens still exist on the Arbitrum blockchain. They don’t depend on BaseLots’ computers.
Each property will be owned by its own company (an LLC), legally separate from BaseLots.
That company and your ownership continue. Its operating agreement (its rulebook) will provide for a new manager to take over.
Your ownership stays recorded on the blockchain, so a new manager can keep running the property and paying out rent.

Common questions

Nobody at BaseLots. During an offering, your money will be held in escrow, a locked bank account set up by the SEC-registered investment platform running the offering. BaseLots won't have access to it.

In your own digital wallet, not on BaseLots' computers. The Arbitrum blockchain will be the official record of ownership, and BaseLots will be the recordkeeper, the company that keeps that record accurate. In limited cases, such as a lost wallet or a court order, BaseLots can freeze your tokens or move them to a new wallet for you. Every time this happens, it's recorded publicly.

Each month, a smart contract will work out your share based on how many BLOCK tokens you own and send it to your digital wallet. That happens after property taxes and insurance, the property manager's fee, the planned repair reserve (maintenance reserve), and BaseLots' yearly fee. You can move it to your bank. Moving it may be free or cost a small fee, depending on the method.

Each offering will list every fee before you invest. Property taxes and insurance will be paid first. The property manager is planned to be paid a fee when rent comes in, and a planned share will go into a repair reserve (maintenance reserve). BaseLots plans to charge a fee of 0.5% a year of the value of the investor-owned share, updated with the FHFA house price index, paid by the property's company (its LLC). BaseLots also plans to charge a one-time fee when each property purchase closes, and to hold an ownership share in each property's company. The exact share will be listed in each offering.

In limited cases, such as a lost wallet or a court order, BaseLots can freeze your tokens or move them to a new wallet for you. Every time this happens, it's recorded publicly. Regulated investments require someone to have this power. BaseLots will have it as the token's designated agent, the party allowed to act on the tokens for these legal reasons. The public record is kept on the Arbitrum blockchain.

Reg CF is a U.S. law that lets everyday people, not just wealthy accredited investors (people with $200,000+ income or $1 million+ net worth), invest in private companies and real estate. BaseLots plans to file a Form C, a public disclosure document, with the SEC for each offering. Each offering will run through an SEC-registered investment platform. No Form C has been filed yet.

No. Real estate investments aren't FDIC insured, and neither are digital wallets. FDIC insurance is a government guarantee on money in bank accounts, and it covers only bank deposits. Each property would be held in its own company, ownership would be recorded on a public blockchain, and Reg CF rules would apply, including your right to cancel up to 48 hours before the deadline. You could still lose some or all of your money.

If a home is empty, there's no rent to pay out for that time. Your BLOCK tokens would still represent your share of the property. Each property is planned to keep a repair reserve (maintenance reserve).