Cesar and Cuauhtémoc Hank launch cryptocurrency backed by real estate
Under the name LatAm OceanRE & MilCoin Network, Cesar and Cuauhtemoc Hank, grandsons of businessman Carlos Hank Gonzalez, seek to launch a cryptocurrency (MilCoin), the first second-generation cryptocurrency backed by real estate, according to its definition.
On February 21, 2019 the initial Coin Offering of MilCoin will be made, the resources obtained will be used to develop a portfolio consisting of 5,000 hectares of land located in Baja California, Baja California Sur (South), Quintana Roo, Campeche and Tabasco in which they seek to develop at least 10 tourist and entertainment centers residential villas as well as 28 hotels that are already in operation, of which their location was not specified.
9,000 million dollars is the total value of the portfolio, says Steven Schwartz, general director of marketing of LatAm.
And although the representatives of this company are proud to be the first to use cryptocurrency backed by real estate, Tomas Alvarez Melis, general director of Volabit, the first cryptocurrency exchange platform in Mexico, considers that “more than as currency, the token – in this case milcoins – they are representing the possession of a real estate” more similar to the participation acquired through a Fibra of crowdfunding.
“In the case of cryptocurrencies like Bitcoin, their value is not anchored to anything of the physical world; its worth what people think is worth. What this project is doing is anchoring the value of tokens (milcoins) to real estate assets.”
“This has several implications, for example the Bitcoin increased its value three percentage points in the last three years and that in real estate investment can not be” because the real estate process has longer time periods.
Another of the main concerns of the Volabit executive is that the real estate is not developed, with which investors will have to absorb the common risks associated with the construction of any project, that is, the time it takes to obtain construction permits, the development of the project and that once ready there is no certainty of its viability.
“It is not the same to invest in a real estate that is already developed and that already has a flow of income to make a real estate investment for development,” he says.
Steven Schwartz explains that the funds obtained with the initial offer will be directed to a trust which studies the viability of the properties of the portfolio and once approved “the funds are released to the sellers. When the first $2,000 is obtained, the first property will be paid.”
The available hectares that they plan to acquire are located in non-urbanized or remote areas, which they hope to acquire at competitive prices, explained in an interview Eli Seliceo, CEO of LatAm Save the World another of the companies involved in the launch of MilCoin and considers and advantage for your project that the value of the properties as the construction progresses will increase.
Another concern expressed Tomas Alvarez after analyzing the projects whitepaper is that it is not completely clear the type of participation or support that investors will have after buying MilCoins.
Since it considers that it is not made explicit if they will have a right over the property or over the rents that the projects (once developed and stabilized) generate.
In his experience, the projects that in other cities of the world have tried to use this investment scheme have not had the expected results, “they have failed and returned the money and in others they have failed without returning anything to the investors.”
Recommends that on this and other platforms the people who are considering investing should make sure that the company has the technical and financial capacity to carry out the projects, as well as having the certainty of an endorsement of their investment, that is, the title with which they can verify and legitimize the investment and thus avoid fraudulent platforms and transactions.