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The Social Housing Enterprise, Inc. A Circular Economic Framework for Sustainable Affordable Housing Growth Utilizing Blockchain Technology, Crypto-assets, and Securitized REITs
Operational Overview Ver. 1.8 Published March 27, 2018
0 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Affordable Housing The largest underserved real estate market in the world….
Mortgage Interest Costs The highest fees charged for basic human needs….
Social Innovation Elimination of fees & owner profits to explode affordable housing growth….
Blockchain Technology Housing acquisitions via incentivized sponsor contributions….
Real Estate Equity Share Ownership Securitized REIT share rewards for SoHoCrypto miners….
1 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Contents
Executive Summary…………………………………………………………….…………………………… 3
The Problem…………………………………………………………………………………………..………… 4
SOHO SHREIT Solution………………………………………….…………………………..……………… 5
The Social Housing Enterprise, Inc.……………………………………………………….…………… 5
SoHo Social Network………………………………………………………………………………………… 6
SoHoCrypto Social Mining.…………………………………………….………………………………… 6
Network Member Mining Benefits.……….……………………………………………………..……… 8
SoHo Private Equity SREITs...………………...…………………………….…………….……………… 9
Portfolio Property Offerings……………………………………………………………………..…….… 10
Portfolio Property Acquisitions…………………………………………………………………..……… 11
Portfolio Growth Projections……………………………………………………………………..……… 11
Rental Revenues……………………………………………………………………………………………..… 12
Real Estate Assets………………………………………………………………………………..…….…… 13
REIT Property Management……………………………………………………………………..………. 13
Initial Coin Offering (ICO)..................................................................................................... 13
ROP Three Phase Strategy…………………………………………………………………….…….…… 13
Phase I: Funding………………………………………………………………………………………… 14
Phase II: Network Activities………………………………………………………………………… 14
Phase III: SREIT Operations…..…………..……………………………………………………….. 15
Sustainable For-Profit Social Network Sponsorship Model……………………….………. 17
Crypto-Asset Value…………………………...………………………………………………………….……17
Why SOHO Matters………..……………………………………………………………………………..…… 21
Next Steps…………………………………………………………………………………………………...……22
Glossary of Terms…………………………………………………………………………………………… 23
References……………………………………………………………………………………………………... 27
2 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Executive Summary The Social Housing Enterprise (SOHO) is a for-profit, social welfare corporation specializing in
creation and acquisition of affordable housing supplies for cost-burdened families. SOHO will
utilize a commercial blockchain network, with a permissioned side-chain social network
(SoHo), to incentivize sponsor contributions to allow SOHO to fund acquisition of residential
rental properties. Affordable housing rental rates will follow the Department of Housing and
Urban Development (HUD) established 30% of annual family income affordability threshold.
Housing supply for SOHO acquisitions will come from vacant residential properties within the
U.S.; consisting of 17,550,000 unoccupied single family homes identified in a second quarter
2017 housing survey by the St. Louis branch of the Federal Reserve Bank (FRED, 2017). Newly
constructed homes will also be added to the SOHO property portfolio through direct purchase
agreements with independent home builders in target markets. SOHO will own, operate, and
manage a private, social housing real estate investment trust (SHREIT) in which SHREIT
portfolio properties will be offered for rent to qualified cost-burdened families.
SOHO sponsors will be handsomely rewarded for contributing to SOHO’s social housing fund.
Those rewards will come in the form of SoHoCrypto (SoHoCrypto) mined in a 1:1 ratio with
each USD contributed to the SOHO SHREIT Fund. Participating sponsors will mine SoHoCrypto
for their personal accounts by engaging in social activities on the SoHo Social Network. The
SoHoCrypto mining process is integrated into normal social network activities such as posting
stories, music, videos, commenting, sharing, liking, and making new SoHo social network
friends.
Mined SoHoCrypto held in network member accounts will accurately reflect each miner’s
individual participation in SoHo social network activities. SoHo will offer SoHoCrypto holders
an opportunity to exchange their mined SoHoCrypto for equal numbers of equity shares in
securitized SREITs under Regulation A+, Type II of the 2012 American JOBS ACT (SEC, 2015).
Regulation A+, Type II offerings allow anyone in the world, rich or poor, to invest in private
securities up to a maximum annual amount of $50 million for each offering. SREIT
shareholders will receive monthly income from residential rental properties, as well as equity
share ownership in all properties added to each SREIT portfolio. SoHo will add new SREITs in
different geographical locations to keep pace with SoHo social network growth.
3 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
The SoHo Social Network Overview The Problem
The U.S. Department of Housing and Urban Development (HUD, 2017) estimates more than 12
million U.S. households, now pay more than 50 percent of their annual income for housing.
HUD further estimates 20.5 million cost burdened families pay more than 30% of their family
income for housing. HUD established 30% of family income as the cost burdened threshold
for housing affordability. That simply means more than 20,500,000 million American families
today can not find affordable housing in communities where they live and work.
Worldwide, the McKinsey Global Institute estimates that “330 million urban households live in
substandard housing or are financially stretched by housing cost” (McKinsey, 2014, p.4). The
United States, European Union, Japan, and Australia combined, account for 60 million
households that are financially stretched by housing costs (McKinsey, 2014, p.4). A study by
the Urban Institute found that in the whole of the U.S. not one single state county can meet
affordable housing demand by low-income families (Leopold et al., 2013).
By 2025, approximately 440 million urban households around the world are expected to
occupy crowded, inadequate, and unsafe housing; or will be financially stretched by high
housing costs (McKinsey, 2014). From a standpoint of societal instability, we are facing a near
term crisis as year after year, less and less affordable housing is made available to growing
numbers of needy families.
Governments around the world are struggling to provide affordable housing to low income
citizen populations. Tax credits granted to housing developers is the most common
government support method to help lower cost of new housing projects. Housing subsidies,
provided by governments to needy families is a second method, but subsidies are greatly
limited due to the growing financial burden taxpayers are forced to carry. Additionally, large
numbers of private and public organizations are actively involved in attracting charitable
contributions to lower affordable housing development costs.
All active methods to increase available supplies of affordable housing are undoubtedly noble
and worth continued pursuit. Unfortunately, current methods to reduce costs and subsidize
housing for needy families, are failing to keep pace with rising affordable housing demand.
4 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Simply stated, no combination of current practices, can be cited to effectively meet the rising
housing needs of low income families worldwide.
SOHO SHREIT Solution
SoHo designed a revolutionary blockchain based social enterprise application, to dynamically
increase affordable housing supplies. In conjunction with established blockchain technology
partners, SoHo will develop an organizational support structure to fuel growth of the SOHO
Social Housing Real Estate Investment Trust (SHREIT). SHREIT properties will be offered for
rent to qualified cost burdened applicant families at the HUD 30% affordability threshold.
Applicant income will be programmably matched to property value following a formulated
protocol that puts each family in a quality home befitting family size, financial budgets, and
geographical locations.
The Social Housing Enterprise, Inc. (SOHO)
SOHO is structured as a for-profit corporate enterprise with an overriding social welfare
mission. SOHO’s board of directors, are committed under articles of incorporation and
corporate bylaws, to acquire quality residential properties to grow the SHREIT portfolio as its
sole social welfare cause. Appropriately, SOHO’s social enterprise mission statement reflects
that sentiment: “A socially responsible entrepreneurial effort, to dynamically increase,
operate, and manage affordable housing supplies worldwide” . Application of revolutionary
blockchain technology is the key operational component that makes SOHO’s corporate social
welfare mission possible.
SOHO was incorporated as a for-profit social enterprise; much the same as Google.Org was
created as a for-profit philanthropic charity in 2006. Google.Org was the first “ for-profit
charitable corporation” in the U.S. (Lim, 2007). A similar for-profit, philanthropic model was
chosen for the SOHO social enterprise, for many of the same reasons Google elected to forgo
the traditional non-profit model for their philanthropic efforts.
Traditional benefits of tax exempt non-profit status, were found to be of insufficient value for
SOHO’s social enterprise mission. As with Google.Org, the constraining burden of IRS federal
regulations for non-profit operating entities are actually counterproductive in the broad scope
of SOHO’s innovative affordable housing model. Allowing government bureaucrats to pick and
choose who qualifies to rent affordable SOHO portfolio homes, under non-profit regulations,
would exclude the greater majority of cost burdened families who SOHO supports.
5 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
The nature of a for-profit social enterprise, with a dedicated socially responsible purpose, is
operationally no different than a non-profit operating charity with the same dedicated social
cause. Both entities exist to provide support for targeted markets where operating income is
applied to cover cost of operations, and excess income (profits) are 100% reinvested to
sustain growth and expansion of the social enterprise.
The most obvious difference between the SOHO for-profit enterprise, and nonprofit charities,
is taxable income. SOHO will pay tax on property and profits, where non-profit entities
operate tax free. But those same non-profit corporate entities are burdened with regulatory
strings attached that are not favorable to the majority of current cost burdened families.
Restrictions on how non-profit entities must conduct their business, and who gets excluded
from charitable efforts, pose a greater threat to success of the SOHO Social Enterprise than
federal and state taxes the enterprise is agreeable to pay. SOHO is designed to serve much
greater numbers of cost burdened families than IRS nonprofit regulations allow.
The SoHo Social Network (SoHo)
SOHO needs capital to fund growth of it’s SHREIT residential rental portfolio...more
specifically, SOHO needs a continuous supply of capital to accomplish its corporate mission.
That’s where the SoHo Social Network enters the picture. SoHo is and incentive rewards
service provider for SOHO’s contributing sponsors.
SoHo members will socially interact with SoHo friends and family, through web browsers just
as they do today on other internet social networks like Facebook™, Twitter™, and LinkedIn™.
However, that’s where similarities with other social networks end, and unleashed potential of
an incentivized social network begins. Below we describe how millions of SoHo social network
members will join together to perfect the art of incentivizing socially responsible acts.
SoHoCrypto Social Mining
What makes our proposal stand out in the face of uninformed disbelievers, is the application
of blockchain technology, and SoHoCrypto to reward what we believe will be millions of global
SOHO contributing sponsors. Socially responsible acts, such as contributing to SOHO’s social
housing fund, will not happen in sufficient numbers unless we can offer a rock-solid payoff for
SOHO contributors. Not only must our reward offering provide reason to contribute, it must
also override all other reasons that vie for a portion of your disposable income.
6 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHo will offer free SoHoCrypto mining to all network members. The SoHoCrypto mining
process is built into SoHo network member activities. For example:
● If you post a comment on SoHo’s social network, or like a friend’s post, or share a post
etc... you will mine SoHoCrypto for each specific social act.
● Every social act conducted on the SoHo social network will release SoHoCrypto for
participating members.
● The quantity and rate of SoHoCrypto mined is determined by the number of
SoHoCrypto loaded into a member’s mining permit.
● For example: Contribute $100 to the SOHO SHREIT fund, and your mining permit will
be automatically loaded with 100 SCs.
● Visit for a while with your friends and family on SoHo’s social network, and your
mining permit will soon be empty, but your mined SoHoCrypto account will be 100
SoHoCrypto richer.
Sounds easy...it is. We offer numerous activities where members can mine for SoHoCrypto.
● Permit mining.
○ Posting text, photos, videos.
○ Commenting on posts of friends and family.
○ Liking posts.
○ Sharing posts.
○ Making network friends.
○ Participating in network interest groups.
○ And a host of other interactive social activities
● Property offerings.
○ Residential properties offered by network members to the SOHO property
acquisitions team.
Participating in network activities produces Return On Participation (ROP) SoHoCrypto results.
We recognize that not every network member will want to mine SoHoCrypto, and that’s OK;
social mining is not required. But for those who do we offer three differ member status levels
that provide opportunity to mine SoHoCrypto at whatever pace members sets for themselves.
Every new SoHo social network member will sign up for the free T1 status level. Once they
get a feel for the network, they can begin mining at the T1 level, or move up to T2 or T3 status
to receive enhanced social mining benefits that await them at both levels.
7 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Network Member Mining Benefits
● T1 Benefits: ○ Free access to SoHo Social Network.
■ Sign up for a free personal network account. ■ SoHoCrypto mining not required for social network participation.
○ No membership mining fee. ○ Grubstake SoHoCrypto mining.
■ T3s & T2s pay to load T1 mining permits.
■ T3s receive ⅔ of staked T1 personal mining production.
■ T1s retain ⅓ of their personal mining production. ● T2 Benefits:
○ Free access to SoHo Social Network. ■ Sign up for free personal network account ■ SoHoCrypto mining not required for social network participation.
○ T2 annual membership fee. ■ Mining permit loaded with SoHoCrypto equal to T2 member fee.
○ Personal SoHoCrypto mining. ■ Mining permit loaded equal to SOHO fund contributions.
■ ⅓ of T2 mining production goes to random grubstake accounts. ● T3 Benefits:
○ Free access to SoHo Social Network. ■ Sign up for free personal network account. ■ SoHoCrypto mining not required for social network participation.
○ T3 annual membership fee. ■ Mining permit loaded with SoHoCrypto equal to T3 member fee.
○ Personal SoHoCrypto mining. ■ Mining permit loaded equal to SOHO fund contributions.
○ Grubstaking T1 SoHoCrypto miners. ■ T3s may elect to grubstake T1 mining permits. ■ T1s split SoHoCrypto production with grubstaking T3s.
■ T3s receive ⅔ of grubstaked T1 personal mining production.
■ T1s retain ⅓ of personal mining production ■ T1s receive grubstake via random auto-selection.
○ Personal Invitees SoHoCrypto Bonus. ■ T3s receive 50 bonus SoHoCrypto added to T1 staking permits for
each personal invitee who upgrades to T3 status. ● Upgrading Status:
○ SoHo network members may upgrade status levels at any time. ○ Upgrade by paying annual new status level membership fee. ○ Mining permits loaded equal to annual upgrade membership fee.
8 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHo Private Equity SREITs
SREITs (plural) will be funded by SoHo network members who wish to turn some, or all of
their mined SoHoCrypto into income producing real estate assets. SREITs will be offered for
private investment under Title IV, Regulation A+, Type II of the 2012 American JOBS Act (SEC,
2015) . Regulation A+, Type II securities offerings allow anyone in the world, rich or poor, to
invest in private offerings of U.S. securities up to a maximum annual amount of $50 million for
each offering. SREIT shareholders will receive income from SREIT market rate rental
properties, as well as equity share ownership in all properties added to each SREIT portfolio.
SoHo will add new SREITs in different geographical locations to keep pace with projected
SoHo social network growth.
SoHoCrypto will be the only transactional instrument accepted for SREIT share ownership.
SREIT equity shareholders will receive monthly rental income from all SREIT properties.
SREIT shares will be valued at a 1:1 SoHoCrypto ratio. SoHoCrypto external market value may
vary based on market forces.
The resulting future value (FV) for each newly generated SoHoCrypto, will be present day
SREIT market share value, expressed as market value of total SoHoCrypto plus total real
estate value generation produced by SREIT operations. As market value of SoHoCrypto and/or
real estate rise and fall, so too will market value of SREIT shares rise and fall. A process no
different than any other equity REIT venture, with one major exception:
SREIT share value will be a function of SoHoCrypto market value + total
real estate value generation (net asset value + funds from operations);
rather than total real estate value generation alone, which underpins share
value of every other equity REIT venture both public and privately operated.
SREITs will begin purchase of residential real estate properties from the existing pool of
17,550,000 million vacant U.S. homes. Additionally, real estate developers and independent
home builder/manufactures who agree to accept SoHoCrypto as the transactional currency,
will sell new homes to help grow SREIT portfolios.
9 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHo Property Management and SoHo Acquisitions will provide professional management
services to both the SOHO SHREIT and SoHo SREITs. Cost saving advantages of blockchain
technology, which underpins all SOHO enterprise operations, allow reduced fee structures
that conventional REIT management services are unwilling to provide.
SREITs will charge no entry, exit, or transaction fees to SREIT shareholders. Shareholders
wishing to exit their positions may sell or trade those positions at any time of their choosing.
No broker fees or other bundled costs common to private REITs will exist for SREIT
shareholders. SoHo will retain the first right of refusal for all SREIT shareholder sales.
All activities pertaining to SHREIT, SoHo Social Network, and SREIT operations will be
conducted on the common SOHO blockchain enterprise application. Smart contract programs
will be used to automate virtually all operational functions of the greater SOHO Social
Enterprise. SoHo social network activities will sustain growth of the SOHO SHREIT fund. The
SoHo social network is designed as an innovative tool to incentivize social sponsorship to
create and sustain growth of affordable housing supplies for global markets.
Portfolio Property Offerings
The St. Louis branch of the Federal Reserve Bank (FRED) (2017) reported that as of 2nd
quarter 2017, vacant residential housing in the U.S. stands at 17,550,000 empty properties. The
FED’s findings indicate there is no shortage of eligible residential properties that can be
offered for purchase to the SoHo acquisitions team.
Properties added to the SHREIT portfolio will be purchased by the SoHo acquisitions team
using sponsor contributed funds. Prospective portfolio properties can be offered by SoHo
network members who personally own a property for sale, know of someone who does, or
arranges a purchase discussion between a seller and the SoHo acquisitions team. Property
seller’s will acknowledge the offering SoHo member in the purchase agreement. Property
sellers can also offer properties directly to the SoHo acquisitions team if the seller is an
active SoHo network member.
If properties offered to SoHo’s acquisition team result in a finalized purchase, the offering
SoHo member will have successfully mined SoHoCrypto equal to 5% of the property purchase
price. Example: $200,000 * 5% = 10,000 SoHoCrypto.
10 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
However, In all cases SoHoCrypto mined from a property offering may not exceed total
SoHoCrypto contained within the offering member’s mining permit. Whenever a situation
occurs where more SoHoCrypto are mined from a property offering than exists in a member’s
mining permit, the excess number of SoHoCrypto will be auto-distributed to all T1 member
mining permits in equal numbers.
Portfolio Property Acquisitions
Portfolio properties will be purchased by the SOHO acquisitions team using SHREIT reserve
funds. A fee simple deed for each newly purchased portfolio property will be owned by the
SHREIT. Upon settlement of property purchases, and completion of any needed repairs or
renovations, portfolio properties will be placed into rental service managed by the SoHo
property management team.
Portfolio Growth Projections
The growth model for the SHREIT portfolio, projects an initial acquisitions milestone of
100,000 housing units annually. The majority of properties purchased, will be existing homes
and apartments in established communities. Newly constructed housing, that fall within
range of the sq.ft./cost protocol of qualified applicant incomes, will also be added to the
portfolio mix. Housing priced above or below the sq.ft./cost protocol range will be ineligible
for network offerings.
Theoretical limits of residential properties purchased by SOHO rest on four primary factors:
1. Availability of properties
2. Availability of funds
3. Availability of transaction representatives
4. Network throughput
Availability of Properties: Knowledge of 17,550,000 vacant residential properties
identified in the 2017 FED report, gives reason to believe there is adequate vacant housing
available to sustain SHREIT growth projections for decades to come. Secondly, SoHo
network members eager grow their SoHoCrypto mining accounts, will be highly motivated
to find and offer housing to the SoHo Acquisitions team.
11 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Availability of Funds: Adequate funding is directly connected to the number of active
contributing sponsors. In order to grow the social network in proportion to growth
projections, a marketing strategy is being developed to involve celebrity influencers who
have large fan followings. Those influencers will publicly support SOHO’s affordable
housing social welfare cause, and challenge their followers to join SoHo’s crowdfunding
movement. Expectations are high that those followers will become active SoHoCrypto
miners. Influencers would receive residual compensation from the network, tied to the
success of their efforts to deliver motivated followers, and associated SoHoCrypto mining
production.
Availability of Transaction Representatives: Trained personnel consisting largely of
licensed realtors in target markets will be needed to represent SOHO at property
closings. Service providers will be compensated by SOHO at rates befitting the scope
and frequency in which services are rendered. Such services will in time, be replaced by
controlling smart contract operations. Future change to a smart contract model will
occur when real estate related blockchain vendor services reach a state of market
readiness.
Network Throughput: A commercial blockchain network provider will be selected for
SOHO Enterprise operations based on technological design, and transactional throughput
that conforms to a multiple of projected need of the SOHO network at maximally
envisioned operational loads. The bulk of network throughput for SOHO Enterprise daily
operations, will occur on the side-chained enterprise application, developed in
conjunction with a blockchain development team selected for the SOHO social enterprise
project.
Rental Revenues
All property related transactions, will be added to the blockchain distributed ledger for
historical tracking of financial accounting, property management, property maintenance,
taxes, insurance, and rental income revenues. Rental clients will be added to respective
property records where monthly payments will be billed and received under agreed terms of a
controlling smart contract program. Rental revenues from all portfolio properties, will accrue
to the SOHO enterprise general operations fund to pay for budgeted activities. All rental
revenue collected in excess of budgeted activities will be returned to the SHREIT fund.
12 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Real Estate Assets
Ownership and control of SHREIT operations and assets, will be singularly held by the Social
Housing Enterprise, Inc., and its shareholders. SHREIT asset value will accrue to the long
term benefit and interest of the SOHO affordable housing social welfare cause. SREIT
operations will be internally managed by SOHO officers and assignees.
REIT Property Management
The property management role within the SOHO social enterprise, is a critical function to
ensure smooth and effective client relations, and lasting protection of fixed asset value.
Administrative duties relating to setting and collecting rents, finding and screening tenants,
executing rental agreements, budgetary and records management, accounting, taxes,
insurance, and common legal issues will all be relegated to blockchain smart contract control.
Property inspections, maintenance and repairs, market readiness, and ancillary issues related
to given localities, will be assigned to trained SOHO property management agents; many of
whom will also be SoHo network users, and SOHO rental clients living in neighboring
communities. Transactionally monetizing SoHoCrypto value for independent contractor service
fees will become a useful tool that helps to improve lives and foster financial growth for cost
burdened families.
Initial Coin Offering (ICO)
ICOs have become a popular, if somewhat legally controversial, method for startup blockchain
ventures to raise development funds. SOHO will forego that practice in favor of a more
organic, grassroots fundraising methodology. SoHo blockchain enterprise application
development will be funded from SoHo social network operational revenues consisting of
upgrade member fees, advertisement revenue, and SOHO sponsor contributions delivered to
SoHo in the form of an interest bearing program related investment loan.
ROP Three Phase Strategy
The SoHo network rests at the heart of SOHO’s affordable housing social welfare cause. The
permissioned social network will rely on state of the art blockchain technology to accomplish
SOHO organizational goals. As user participation in SoHo activities reaches critical mass,
availability of quality SHREIT affordable housing will dramatically increase in U.S. markets.
13 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Key to the SOHO 30% Solution is active SOHO sponsor participation in SoHo network
activities. Without a network of active SOHO sponsors, there will be no SHREIT portfolio
growth. SOHO sponsors will become the life’s blood of SoHo network operations, and as
such, they must be protected and served in keeping with value they represent to SOHO’s
social enterprise goals. The three phased ROP strategy will ensure that value long term.
Phase I: Funding Residential property acquisitions by SOHO will require large cash reserves to purchase
multiple properties daily. The SoHo acquisitions team will settle property purchase
transactions in cash using zero mortgage financing. Ongoing SOHO sponsorship will generate
necessary capital to fuel growth of the SOHO SHREIT, and expand operations of the SoHo
social network.
Phase II: Network Activities
The SoHo social network offers opportunity to SOHO sponsors to participate in network
activities for the principal benefit of the SOHO affordable housing social welfare cause.
Network member participation involves SoHoCrypto mining where SOHO contributions
determine numbers of SoHoCrypto permitted to be mine. Permit reloading involves continued
SOHO contributions, all at the personal discretion of each SoHo network miner.
14 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHoCrypto production is entirely dependent on each network member’s individual return on
participation goals. There will be no benefit to SoHo network members other than how
members choose to participate in network activities. However, for network users who do
participate, accumulation of mined SoHoCrypto could prove significant over time.
Phase III: SREIT Operations
Public demand to participate and benefit from SoHo network activities, will fuel network
growth, and subsequently portfolio growth, through sponsor contributions to the SOHO
SHREIT fund. Network members holding SoHoCrypto will seek to capitalize on accumulated
asset value relative to total SoHoCrypto owned.
Within the SoHo network, all SoHoCrypto will have zero monetary value by design. Outside the
confines and control of SoHo network use, SoHoCrypto may have monetary value for
SoHoCrypto owners based on open market supply and demand economic forces. Speculation
of market value is common to all instruments of transactional value (including fiat
currencies) . Mined SoHoCrypto can offer tangible value for SoHo network members in the
form of fixed asset real estate acquired with SoHoCrypto in external markets.
15 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
To realize open market asset potential for SoHoCrypto owners, all that’s needed are willing
sellers who ascribe monetary value to SoHoCrypto, and agree to an exchange of property in
which SoHoCrypto are traded at fair market value for fee simple ownership of select real
estate properties.
Purchases of real estate property using Bitcoins as the transaction currency, is a new market
phenomenon gaining notable financial attention around the world. Successful Bitcoin real
estate transactions are widely reported in blockchain industry news media. Facilitating large
numbers of real estate purchases using SoHoCrypto rather than Bitcoin, can be easily
accomplished by pooling SoHoCrypto in SREITs specifically created to reward SoHoCrypto
owners.
16 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHoCrypto Value
Within the SoHo network SoHoCrypto will hold a representative value equal to one (1) U.S.
dollar. For every USD contributed to the SOHO SHREIT fund, one SoHoCrypto will be mined by
a participating SoHo network member. Outside the confines and control of the SoHo network,
market forces may determine SoHoCrypto value to be something quite different.
Mined SoHoCrypto pooled in SREIT share ownership is believed to be a sustainable method to
produce ongoing income and equity share value for SREIT shareholders.
17 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
When we look at any instrument of transactional value we commonly check for underlying
fixed assets that supports fair market value. In the case of major fiat currency (money) such
as USD, EUR, CAD, AUD, JPY, CHF.....etc, and SoHoCrypto like Bitcoin, Ether, and others, we find
there are zero underlying assets.
In general terms, the true value of currencies lie in the good intentions of overspending
governments; hands in our pocket politicians; and private individuals who believe that perhaps
one day Bitcoin will rule the financial world. Perhaps one day it will, but for today, naysayers
find little true value in unbacked financial instruments.
SoHoCrypto have more to offer than unbacked financial instruments? Future value (FV) home
builders, real estate developers, and home sellers receive when they trade real estate
properties for SoHoCrypto of equal present value, can be substantially more than if they
traded for USD.
Let’s examine purchase scenario of a $200,000 new home where SoHoCrypto market value is
$1.00. The SoHo acquisition team trades the home seller 200,000 SoHoCrypto for a new
$200,000 house. The SREIT now owns a $200,000 market valued rental property, and the
seller owns 200,000 SoHoCrypto of equal current market value. Four options sellers can
choose are presented below with accompany details:
Option #1: The seller can exchange SoHoCrypto for USD at market value through any
crypto-exchange where SoHoCrypto are traded. There are many such crypto exchanges doing
business today, with more to come as around the world new crypto assets come to market.
The SoHo acquisitions team could exchange SoHoCrypto for USD, and pay the seller in dollars.
However, the FV of SoHoCrypto may have significant impact on the seller’s decision that
options 2, 3, and 4 will clarify.
Option #2: Home sellers can invest some or all of their SoHoCrypto in exchange for SREIT
shares, and become equity shareholders with SOHO sponsors who are investing SoHoCrypto
in SREITs to grow a revenue generating portfolio.
As with other high value crypto-assets, there is a valid expectation that over time SoHoCrypto
will increase in market value. If for no other reason than SoHoCrypto are used to purchase
the entirety of SREIT portfolio properties.
18 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
As each new property enters a SREIT portfolio, the value of underlying real estate assets will
grow in size supporting higher market valuation of SREIT shares, and SoHoCrypto held by the
SREIT for new real estate purchases. SoHoCrypto held by private owners outside the SREIT
environment will also benefit from increased market valuation.
The SoHo acquisitions team will assist home builders to recognize that contracting with a
SREIT to purchase all the homes they can produce, offers a much greater financial
opportunity when looking at FV of real estate backed SoHoCrypto.
Option #3: Sellers may choose to become SOHO sponsors and contribute some or all of their
SoHoCrypto to the SHREIT portfolio fund.
The SoHo acquisitions team will advise sellers on the merits of SoHoCrypto mining, so that
over time they can increase total SoHoCrypto they hold at much faster rates if market value
rises from the 1 USD initial baseline price.
Let’s talk about SoHoCrypto current market value. What was Bitcoin current market value the
last time you looked? At the time of this writing Bitcoins are worth approximately $8,000
each. There is no fundamental difference between a SoHoCrypto and a Bitcoin, other than the
extremely high cost of mining Bitcoins, and underlying fixed asset real estate value
SoHoCrypto holds.
Bitcoins have zero underlying value; they are only worth what the market says they’re worth.
In open markets SoHoCrypto will have underlying real estate asset value that grows as greater
numbers of real estate properties are added to SREIT portfolios.
Option #4: The best option for sellers may be to combine options 1, 2, and 3 and profit from
SoHoCrypto FV as a miner, an investor, and home builders getting top dollar for as many new
homes they can construct.
We recognize that SoHoCrypto are not cash, and developers need cash to pay for the high
cost of new home construction. We can address that by looking at what may happen to the
price of SoHoCrypto over time, and how SoHoCrypto FV changes the valuation dynamic of the
entire SOHO Social Enterprise.
19 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Due to underlying fixed asset value of real estate, SoHoCrypto will hold market value equal or
greater than the associated real estate assets. The greater the number and market value of
real estate properties SREITs purchase, the higher market value of SoHoCrypto will rise.
Principally because free market value of SoHoCrypto is not directly tied to the market value of
the underlying real estate. Real estate assets act as a floor for SoHoCrypto market
value….not the ceiling.
Market value of transactional instruments vary based on marketplace bid and ask prices.
Fundamentals aside, why do stocks rise and fall? Why do world currencies (Forex) spike and
fall 24 hours a day. The answer is that people speculate on FV of transactional instruments.
The brighter FV is for any instrument, the more likely current market value will rise.
Let’s go back to the source of SoHoCrypto generation as mentioned above. SoHoCrypto are
mined in numbers equal to USD contributed to purchase real estate property. If a property
sells for $200,000 there will be 200,000 SoHoCrypto mined in a 1:1 ratio. That ratio between
purchase price and SoHoCrypto mined will remain fixed within the SoHo network, regardless
of what SoHoCrypto market value is at any given moment external to the SoHo social
network.
Beneficiaries of that fact are people that mine SoHoCrypto , SREIT shareholders, SOHO, and
SOHO contributing sponsors.
Example:
If a SoHoCrypto is worth a dollar on the open market, it will buy $1 dollar worth of real estate.
If SoHoCrypto value doubles to $2.00, one (1) SoHoCrypto will buy $2 worth of real estate.
Buying a $200,000 house with $1 SoHoCrypto cost 200,000 SoHoCrypto. Buy that same
$200,000 house with $2 SoHoCrypto and it only cost you 100,000 SoHoCrypto. You can
purchase two (2) houses for the price of one at $2 SoHoCrypto valuation.
For every increase in SoHoCrypto market value, more houses can be bought with fewer
SoHoCrypto. That doesn’t happen with fiat currencies like USD. The market value of the
house is tied to USD, not SoHoCrypto. If one transactional instrument can buy twice as much
as a different instrument can buy, people will pay more to hold the higher valued instrument.
That’s why Forex is traded around the clock, traders are betting on currency FV.
Let’s look at how SoHoCrypto FV affects SOHO. The same scenario occurs once again. If
SOHO sponsors or property sellers contribute $2.00 SoHoCrypto to SOHO, the social
20 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
enterprise can buy twice as many houses with higher market value SoHoCrypto. The SoHo
acquisitions team may need to convert SoHoCrypto to cash before individual home sellers
agree to the deal, but that may not always be the case.
The SoHo acquisitions team will also be educating private home sellers on the value of mining
SoHoCrypto, instead of demanding all cash for their home. Some will trade for SoHoCrypto
...some will accept a cash/crypto mix,...and some will demand cash only.
Consider SOHO sponsors who contribute SoHoCrypto to the SOHO social enterprise. A
sponsor’s mining permit will allow 2X as many utility tokens to be mined for a $2.00
SoHoCrypto than a $1.00 crypto asset. Higher SoHoCrypto market value rises outside the
network, the more SoHoCrypto network users can mine 1:1 inside the network.
In this scenario, where SoHoCrypto market value is on the rise, a better strategy might be to
buy SREIT shares with half the SoHoCrypto mined to lock in equity ownership of real estate
assets, then, reinvest the remaining higher valued SoHoCrypto back into mining new
SoHoCrypto at whatever price multiple those same SoHoCrypto have in external markets.
Why SOHO Ma�ers
The failure of world governments to provide access to decent affordable housing for low
income citizen populations foretells deeply troubled times ahead. Economic disparities
between social classes today, threaten our ability to provide even the most basic human
needs to deserving populations. We don’t need handouts or government subsidies, we need
free market opportunity to matches our individual ability to provide for our families.
Spending the majority of what most earn to keep a simple roof over their heads is not
opportunity, it’s a virtual prison that limits our ability to make a better life possible for
ourselves and those who follow in our footsteps. If we want positive outcomes in life,
financial or otherwise, we must look within ourselves and ask the question...what can I do to
make a difference for my family, myself, and my community. Find a social cause and make it
your mission to effect positive outcomes.
The affordable housing crisis is SOHO’s social welfare cause, and with your help we can make
a better life for families in need of positive outcomes. SOHO offers a social welfare solution
that can make socially responsible efforts beneficial to others, and profitable to those of us
who actively participate in SoHoCrypto mining activities.
21 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Next Steps
SoHo is engaged in development of a blockchain based social network to economically reward
SOHO contributing sponsors. The web based social network interface between SoHo
members, and the underlying distributed network application that will connect all SOHO
enterprise activities to an existing global blockchain network, will go live on July 1st, 2018. On
that date SoHoCrypto social mining will commence so that SoHo network miners can begin to
grow their personally mined SoHoCrypto accounts in advance of blockchain implementation.
Preregistration for free membership to the SoHo Social Network begins on April 1st 2018. We
invite you to visit www.sohosocial.network and learn more about how easy social mining
SoHoCrypto can be. Between April 1st and July 1st we are offering SoHoCrypto bonuses for
each new friend or family member you invite that joins you as free SoHo social network
members. This is a great opportunity to load your SoHoCrypto mining permit in advance of
commencement of social mining activities on July 1st. See you there….!!
God bless…
Terry L. Peterson Social Entrepreneur Social Housing Enterprise, Inc.
Mr. Peterson’s career background spans 35 years in the fields of construction
management and real estate development. He is an honored alumni of Colorado State University Global Campus, and holds dual Master of Science degrees in Organizational Leadership and Management, with specializations in Strategic Product Innovation, and Managing Dynamic Environments. Terry is also designer, and intellectual property holder for an ultra high performance concrete (UHPC) precast modular building system for manufacture and construction of affordable housing for global markets.
22 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Glossary
Affordable Housing
Residential housing that cost an occupant family no more than 30%
of total family annual income. Annual income * 30% / 12 months,
equals monthly housing costs for an individual or family unit.
Blockchain A distributed digital ledger on a decentralized computer network in
which transactions are recorded chronologically and publicly
observable.
Cryptocurrency A decentralized digital currency in which encryption techniques are
used to regulate the generation of units of currency, and verify the
transfer of funds that operate independently of a central bank.
Cryptocurrencies provide an outlet for personal wealth that is
beyond restriction and confiscation.
Social Innovation Social innovation is the process of developing and deploying effectiv
solutions to challenging and often systemic social issues in support
of societal progress.
Social Welfare The well-being of the entire society. Social welfare is not the same
as a standard of living, but is more concerned with the quality of lif
that includes factors such as affordable housing costs.
Individual Social Responsibility (ISR)
ISR includes the engagement of each person towards local or globa
communities, which can be expressed as an interest in actively
participating to solve critical social welfare problems.
Social Entrepreneurial
Social entrepreneur is a leader or pragmatic visionary who achieves
large scale, systemic and sustainable social change through a new
invention, technologies, or strategic planning of organization affairs.
For-Profit, Philanthropy
Non-profit philanthropy is quest to do good things for society that
stems from a personal desire to give back for the greater good.
For-profit philanthropy is simply a means to accomplish that same
goal, without the heavy hand of governmental authority controlling
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who may, and who may not benefit from those philanthropic efforts
SOHO The Social Housing Enterprise, Inc.
SOHO Sponsorship
Compassionate individuals in the public at large who contribute
funds to SOHO for growth of affordable housing supplies for cost
burdened families. SoHo network activities for SOHO sponsors can
provide generous personal benefits to all SoHo users.
SHREIT Property Portfolio
Residential housing purchased by SOHO that is owned, operated, an
managed as a affordable rental properties. SOHO properties will be
made available to qualified families at rental rates consistent with
the HUD 30% threshold for housing affordability.
SHREIT Property Portfolio Fund
A cryptographically secured, digital monetary fund establish for
purchase of residential housing to grow the SHREIT portfolio of
affordable housing properties.
SOHO Economy A circular economy in which SoHoCrypto are the value proposition
for all SOHO activities. Crypto-assets mined on the SoHo network
can be exchanged for SREIT share ownership. SREITs will purchase
real estate properties with SoHoCrypto at respective market value.
Crypto-assets held outside the SoHo social network may be
contributed to SOHO as reinvestments to help grow the affordable
housing portfolio. Crypto-assets contributed to SOHO will increase
mining permit quantities. That cycle repeats in a closed loop
constituting a circular economy.
SoHo The SoHo Social Network, Inc.
SoHo Social Network
A true social network that allows SoHo network members to
communicate with other members through posts, comments,
pictures, and private messaging as currently found on Facebook™
and other commercial social networks. Users participation in SoHo
network activities unfold as multiple processes for SoHoCrypto
mining.
24 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
SoHo Members SOHO sponsors who join the SoHo social network to participate in
socially beneficial network activities. SoHo members individually
mine SoHoCrypto for personal benefit.
SoHo Mining Permit
A digitally secured user account that contains record of a SOHO
sponsor’s social contribution to the SOHO SHREIT fund. SoHo minin
permits authorizes network members to mine SoHoCrypto equal to
their SOHO contribution amount. Mining permits may be reloaded b
making new contribution to the SOHO SHREIT fund..
Crypto Assets Digital elements that network miners accumulate through
SoHoCrypto social mining. Minet SoHoCrypto become the personal
property of SoHo network miners. Crypto-assets have no monetary
value within the SoHo social network. Mined SoHoCrypto can be
downloaded into a digital wallet and removed from the SoHo
network.
Bonus Crypto Assets
Bonus SoHoCrypto will be added to network member mining permit
for each personal T3 invitee who upgrades to T3 member status.
Property Offerings
Properties offered to SOHO by network members for purchase by th
SoHo property acquisitions team. Property offerings are a lucrative
way to mine SoHo crypto-assets.
Return on Participation (ROP)
The net results of network user participation in SoHo network
activities. Crypto-assets are the net ROP benefit of SoHo network
participation.
Mortgage Interest Fees
The price paid to mortgage lenders for award of a home purchase
loan. Total mortgage interest fees are a product of purchase price,
generally a fixed interest rate, and term for repayment.
Rental Revenues The sum of money received monthly by SOHO from rental clients
who occupy SHREIT rental properties. SOHO operation costs are
paid from rental revenues. Rental revenues in excess of budgeted
operating cost will be transferred into the SOHO SHREIT portfolio
fund.
25 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
Real Estate Assets
SOHO portfolio properties are owned by SOHO under fee simple dee
conveyances. The SOHO SHREIT portfolio fund is the single source
of funds for all property purchases.
PRI Loan Program Related Investment loan. SOHO will issue a interest bearin
PRI development loan to SoHo for budgeted development costs of
the SoHo blockchain enterprise application. The PRI loan will be
repaid with interest to SOHO by SoHo..
SREITs Private real estate investment trusts (SREITs). SREIT(s) will offer
shares to SoHoCrypto owners in exchange for SoHo crypto-assets.
SREITs will purchase and manage residential properties for rental
revenue generation shared by SREIT shareholders.
Title IV Regulation A+ Type II of the 2012 JOBS Act
Title IV allows startups and later stage pre IPO companies to use
equity crowdfunding platforms to raise investment capital from bot
accredited and non-accredited investors. SoHo will offer shares in
SREITs to SoHoCrypto holders.
26 © 2018 Social Housing Enterprise, Inc. Contact: [email protected]
References: FRED, (2017). Housing inventory estimate: Vacant housing units for the United States. Federal Reserve Bank of St. Louis . Retrieved from https://fred.stlouisfed.org/series/EVACANTUSQ176N HUD. (2017). Affordable Housing. US Department of Housing and Urban Development. Retrieved from HUD Affordable Housing Leopold, J., Getsinger, L., Blumenthal, P., Abazanjian, K., and Jordan, R. (2013). The housing affordability gap for extremely low-income renters is 2013. Urban Institute. Retrieved from https://www.urban.org/research/publication/housing-affordability-gap-extremely-low-income-renters-2013 . Lewandowski, M. (2016). Designing the business models for circular economy—Towards the conceptual framework. Sustainability 8, no. 1: 43. Retrieved from http://www.mdpi.com/2071-1050/8/1/43 Lim, C. (2007). Google. org, For-Profit Charitable Entity: Another Smart Decision by Google. Kan. JL & Pub. Pol'y , 17 , 28. MGI. (2014). A blueprint for addressing the global housing challenge. McKinsey Global Institute. Retrieved from McKinsey.com Tackling the World's Affordable Housing Challenge . SEC. (2015). SEC adopts rules to facilitate smaller companies’ access to capital. U.S. Securities and Exchange Commission. Retrieved from https://www.sec.gov/news/pressrelease/2015-49.html
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