GOLD GATE is an online global real estate marketplace where high net worth individuals, family offices, and foreign investors can acquire fractional ownership in the most irreplaceable real estate properties throughout the world for the purpose of tax benefits, property appreciation, and personal use. A new luxury platform for multi-generational families and individuals who want to live in several locations throughout the year. A fractional use model where one month equals one share.
The newest version of our platform will be live in the first week of November. Over the past two weeks, we had three huge breakthroughs with regard to our competition, marketing strategy, and a soft commitment from a well-known VC in the blockchain industry.
In November, we have an email campaign being sent out to 100k+ private investors throughout the world as well as thousands of custom proposals being sent out to brokers, developers, and property owners in the United States. My team and I have been in close contact with ultra-luxury brokers in the United States and strongly feel we will have at least one property commitment by the end of November.
If we are able to secure a property commitment before the end of this Seed Round, our valuation is expected to increase noticeably.
Our initial target customers are high net worth individuals, family offices, foreign investors, corporations, professional athletes, CEO's, celebrities, brokers, property owners, and developers. Coming in NOV 2020, we will include case studies for each customer on our platform that outlines the challenges that each customer currently faces, the solution with the GOLD GATE platform, and the results.
This is one of the most scalable businesses in the world. Any piece of real estate in the world can be digitized and offered on the GOLD GATE platform. The market size is in the trillions of dollars. This investment opportunity is perfect for those that believe that every piece of real estate in the future will be digitized and held on the blockchain.
If you are interested in learning more about the opportunities to substantially grow this market over time, please feel free to reach out so we can discuss further.
Problem or Opportunity
There are 30 million homes in the United States and in Europe that are only lived in for 4-6 weeks out of the year. The owners of these second, third, and fourth homes are not only wasting money but they are also wasting time and energy when they are not using these properties.
This platform is originally designed for high net worth individuals, family offices, and foreign investors. Rather than buy one $10M property that you only spend one month in a year, you can buy four $10M properties throughout the world for the same total price of $10M? By doing so, you get the same tax benefits as you would previously but you are now able to diversify your portfolio as it relates to property appreciation and you are able to give yourself flexibility in where you live. You buy and sell the properties just like you would a stock or a bond and we handle everything else!
Companies like NetJets and Pacaso have proven that there is a need for this type of service. What makes this business model work is by using blockchain technology to tokenize each asset, we are able to offer liquidity to our clients that has never been available before.
When selling a home, you typically hire a broker, wait 6-24 months, and pay them 3-6% in commission once they have sold your home. With GOLD GATE, you can sell your shares to tens of thousands of people throughout the world with the click of a button. Total transaction cost = 1%!
Solution (product or service)
How GOLD GATE works is:
1) We obtain property listings on our platform (similar to how AirBnb did so)
2) We raise money from people throughout the world to buy specific months/shares in the property (12 shares total)
3) Once we have sold all of the shares over the 90 day period, we acquire the property and issue the investors their digital shares
4) The investors are now able to go use the property during their specific months. We take care of everything else (property taxes, insurance, furniture, repairs, maintenance, etc.)
It is similar to a mix between James Edition and Vanguard. Rather than spend $2M on a house that you are only in for two months a year, why not purchase two shares/months in a $12M house for the same price and annual maintenance cost?
Our direct competitor in the real estate fractional ownership industry is Pacaso. They were founded in 2020 by the ex-Zillow CEO and received funding from Howard Schultz, the current Amazon CEO of Consumer Worldwide, and multiple VC's throughout the world.
Our main competitor in the real estate sales industry is Concierge Auctions. Like Concierge Auctions, we will feature properties on our website to investors throughout the world as well as in top-tier publications such as Forbes, James Edition, Mansion Global, Elite Traveler, and Robb Report.
Advantages or differentiators
With regard to Pacaso, we have drafted a competitive analysis that details how we outperform them in EVERY category. I am more than happy to share upon request. One of the main categories that we outperform Pacaso is the total cost to consumer. Pacaso charges 10%. We charge 1%. Other categories that we outperform Pacaso include liquidity, accepted currencies, target markets, and property usage.
With regard to Concierge Auctions, one of the main differentiators between us is the cost to consumer. Concierge Auctions charges buyers a 12% fee and charges sellers a 2.5%+ fee. Gold Gate charges buyers a 1% fee and charges sellers NOTHING. For a $10M home, sellers need to pay $250k+ and buyers need to pay $1.2M+. With GOLD GATE, sellers pay $0 and buyers split the $100k buyer fee proportionally. That is $1.35M less in transaction costs!
Our main sources of revenue are our acquisition fees (1% of the property purchase price) and our annual property management fee (0.25 - 0.5% of the property purchase price).
By the end of 1Q 2021, we expect to feature four properties every month on our platform with an average value of $10M. That would equate to roughly $400k/mo in revenue.
Similar to AirBnb, our cost structure consists of building out the technology/platform ($), obtaining property listings to feature on our site, and then marketing as much as possible to our customer base in order to get people to use our platform ($). Once we have attracted a large number of users to our platform, we will not need to spend as much on marketing costs.
In addition, like Netflix, we will be able to 20x our revenues in the future by producing the products for the platform ourselves.
Money will be spent on
Of the $600k being raised, $300k will be spent on improving the platform and building out the team needed in order to execute. The other $300k will be collected once we have properties committed to be featured on our platform. That $300k will mostly be spent on legal and marketing costs. More details available in our investor deck!
Offer for investor
The total raise is $600k. Of that $600k, $300k is being raised in equity at a valuation of $6M (5%). The other $300k is being raised as a line of credit that will be paid back within six months at a 20% interest rate.
The two main risks to the GOLD GATE business model are:
1) Consumer adoption
2) Being able to execute
With regard to consumer adoption, we do believe that other companies have proven this model in the fractional ownership industry and sharing economy such as NetJets, Pacaso, Inspirato, Cuvee, Turo, AirBnb, and Uber. GOLD GATE properties, however, are more liquid than the products offered by NetJets, Pacaso, Inspirato, and Cuvee and our addressable target market is larger than all of these companies COMBINED.
With regard to being able to execute, we believe that we will be able to raise the necessary funds in the allotted period of time due to a few reasons. The first reason is that we will be surveying our clients once they have created an account on our platform. One of the questions is: "What are the top five places where you would like to live?". Another question is: "What is your expected Net Worth?". By having the answers to these questions, we will be able to let demand drive our decisions for which properties we feature on our platform each month. Second, by using blockchain technology, we have made it so people from all over the world can pay using their local currency and they do not have to pay any foreign transaction fees. An investor in Australia will be able to buy shares in a mansion in Beverly Hills with the click of a button. Third, we will be spending tens/hundreds of thousands of dollars featuring our property listings in top-tier magazines throughout the world. Fourth, we will be hiring a full-time sales team to attract customers to the platform and answer any questions that people may have. We make this process as simple as buying a Tesla stock.
Incubation/Acceleration programs accomplishment
Currently, our CEO, Dalton Skach, is participating in the Entrepreneurship program at Draper University.