The current economic situation is precarious, as the Fed is forced to increase the pace of monetary tightening to contain high inflation – a difficult measure that could lead to recession. In times like this, investors should get exposure to reliable assets, and real estate has proven to be one of the best investments. It can deliver high returns in the long run, offering predictable cash flow.
United States Property Coin (USP) combines the unique features of blockchain with the attributes of regulated securities.
Here are the most important things you should know about USP before investing in it:
1. USP Is A Security Token
In finance, a security is a tradable financial asset. It is a fungible financial instrument that represents some form of financial value. Company shares, bonds, exchange-traded funds (ETFs), and options are all examples of securities.
While pure bricks and mortar are not treated as securities, many forms of financial instruments giving exposure to the real estate market are securities and thus regulated accordingly.
USP is a security token that provides investors with fractional ownership of a real estate portfolio owned by United States Property Inc. (dba. USP).
2. USP Must Comply With Federal Securities Laws & Regulations
USP is a new security token project based in the U.S. and as such, all offerings of USP must comply with federal securities laws and regulations.
In the US, securities must be registered and regulated based on the Securities Act of 1933, which has two main objectives:
- Require issuers to provide investors with financial or other meaningful information regarding the securities offered to the public;
- Ban any form of misinformation, deceit, and any fraud in the sale of securities.
The securities act was drafted and passed into law as a response to the stock market crash in 1929 and has ever since prevented countless fraudulent operations and scams.
Investors can have peace of mind knowing that, as a security, offerings of USP must comply with those same laws and regulations.
3. USP Is Not A REIT
At first glance, USP shares similarities with a real estate investment trust (REIT), and it might well do so. However, USP is different.
REITs are publicly traded companies that own or finance income-producing properties, including office buildings, apartments, hotels, shopping malls, resorts, warehouses, as well as mortgages or loans. It’s worth noting that a REIT doesn’t develop properties to resell them. It only buys and develops real estate properties as part of its own investment portfolio. In this way, individual investors have the opportunity to earn a share of the income while owning part of the portfolio without actually buying the properties.
While USP is also backed by an income-producing portfolio of properties, REITs are not regarded as competitors, as USP is a blockchain-based security token that comes with additional privileges, such as increased liquidity due to global access to U.S. real estate and the peer-to-peer nature of blockchain technology, compound returns by reinvesting earnings, and unmatched security thanks to decentralized ledger technology.
4. USP Is An Ethereum-Based Token
What makes USP distinct from regular securities is that it resides on a blockchain. Specifically, the token is hosted on Ethereum, a decentralized public network that supports so-called smart contracts and has no single point of failure. Smart contracts are self-executing programs that settle when certain predetermined conditions are met, which enable the creation of independent tokens and other applications on a blockchain.
USP leverages the ERC 1400 standard, which is a token standard on Ethereum that was created by Polymath to meet the specific needs of security tokens, which relate to compliance, documentation, controls and permissions, etc.
5. USP Has Inherent Value
Unlike regular cryptocurrencies and utility tokens, which have a volatile price and whose value derives from demand that can fluctuate significantly by the minute, USP has inherent value as it’s backed by a real estate portfolio. Even though USP is similar to other tokens from a technical perspective, it acts as a security in legal terms. Therefore, it has value in itself as it provides holders with ownership rights over its property portfolio.
USP’s status and approach enable it to reduce potential volatility to a minimum while simultaneously generating passive income in the form of additional USP tokens for qualified investors.
6. USP Is Backed By A Real Estate Portfolio
USP is a type of security token referred to as an asset-backed token, and it is backed by an income-producing real estate portfolio. It focuses on core and core-plus multifamily properties in key growth markets. The seed asset is a $10 million multifamily home located in Venice Beach, California.
USP is sticking to a strict acquisition strategy. Specifically, it buys Core and Core+ properties that can generate income and increase in value over time. The team focuses on stability rather than speculative growth. In this way, token holders can rest assured that their investments are being put to work in the most effective way.
Token holders become fractional owners of USP’s real-world, income-producing real estate portfolio.
7. USP Could Provide Yield And Act As A Hedge Against Inflation
Inflation in most developed economies is getting out of control, and there are few assets that can both provide stability and act as a hedge against accelerated money devaluation. The unprecedented stimulus measures implemented by central banks, including the US Federal Reserve, have supported economic growth amid the pandemic but also triggered massive inflation. With the US consumer prices index (CPI) at over 8% in annual terms as of October 2022, the Fed is forced to tighten its monetary policy, but that might still not be enough to contain the inflationary pressure.
While economists and politicians are debating the best way to bring down prices while avoiding recession, investors need exposure to reliable assets, and USP is positioned to become one of those assets as it leverages the blockchain features while being backed by a well-balanced, income-producing real estate portfolio that can hedge against inflation due to the underlying real estate portfolio it represents.
8. USP Represents A Passive Income Opportunity
USP’s foundation in distributed ledger technology allows investors to receive the financial gains of being a landlord, without the stress of managing the property themselves.
Investing in USP means you are a fractional share holder of a corporation (United States Property Inc.) that owns and manages an income-producing real estate portfolio. All rental income + property value appreciation (to the extent realized) would be reflected by the net asset value of the company’s real estate portfolio, which represents the book value of USP tokens.
USP is about to revolutionize the real estate industry by enabling investors to get exposure to an income-producing property portfolio on the blockchain. Token holders can become owners of a piece of a well-diversified portfolio of commercial real estate assets including multifamily housing complexes, healthcare facilities, and hospitality properties.
By leveraging blockchain features, including security, transparency, liquidity, and fractional ownership, USP merges innovation with a proven successful business model.