WHITEPAPER Real Estate Investors since 2013

With a core concept - to disrupt the German Real Estate market.

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Introduction We bring the most secure and conservative asset to the blockchain - Real Estate, through the First Crypto Estate. It has a simple mission - connect the German Real Estate market with the crypto-based economy. We stand for any crypto-investor who wants to participate in secure investments based on a continuous cash flow model. To make the investment process almost effortless, we built the First Crypto Estate (FCE). Our investors can take part actively in choosing the properties through our innovative blockchain based polling system. Each set of new properties which meets our target requirements will be showcased to our investors. In every poll there will be three potential real estate options. By the growing portfolio and the steady cashflow our token’s value will grow rapidly. FCE has already concluded negotiations on successful cooperation with banks and housing companies. This means that as soon as ICO is executed, the first real estate packages will be acquired. The purchase is planned in packages of up to 50 apartments per quarter. This means that the portfolio would have risen to over 200 apartments by the end of the first four quarters. However, these apartments will be picked by the majority votes from the investors though the polling system beforehand. FCE is not solely a profit-making ICO. That is why the concept is also based on a social agenda. This means that FCE invests 1% of its profits in social projects in developing countries. The countries of Central and South America as well as Africa are particularly suitable for this. There are already explicit plans to build a school in Haiti. Further projects are already in the pipeline, such as kindergartens, medical care and clean drinking water supply. Concrete talks have already been held in Africa to this end. Thus, FCE is facing up to its global responsibility. The countries of Central and South America as well as Africa are particularly suitable for this. There are already concrete plans to build a school in Haiti. Further projects are already in the pipeline, such as kindergartens, medical care and clean drinking water supply. Concrete talks have already been held in Africa to this end. FCE is thus facing up to its global responsibility. In Europe, since the beginning of the 21st century, the volume of cross border investments has grown from the 34% of total investment volume in 2000 to 63% in 2007. Although the investments in the field of Real Estate are increasingly globally, they are still highly exclusive due to the requirement of large funding which is usually supplied by institutional investing. As a consequence, small and medium scale investors could not compete with this market. With First Crypto Estate we close the gap to institutional investors and open the market for any privateer.

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Target: German Real Estate Market With a population of 81.2 million people, Germany is the most highly populated country in Europe, with 41% of the total population in 25 to 54 age group. It’s GDP is the highest across the European continent, the fourth largest in the world, and has a forecasted annual growth ranging annual growth 2,5 percent for 2018. Employment numbers add positive colours to the national picture, with a record of 400.000 new jobs created in 2018 raising total employment figures to 42.8 million. Furthermore, Germany had an unemployment rate of 5,8 percent in 2018 – the lowest in Europe and far below the European average of 9.4 percent. Between 2010 and 2015, Germany attracted around half of the capital invested in European residential properties Germany is also the third-largest exporter in the world and has been named the most innovative nation in Europe by Bloomberg’s Innovation Index, with more than 20% of European patents being held by Germans. It is regarded as one of Europe’s most cost-effective production locations, with one of the highest productivity rates in the world. Because of these exceptional characteristics the German housing market attracts a large amount of international Capital. A total of €70bn ($78.7bn) was invested in the European residential properties between 2010 and 2015, with Germany attracting around half of the capital invested in this sector during this period. The year 2015 set a new record for transactions in the residential sector, with €25bn ($28.1bn) and almost 360,000 apartments transacted. Not only is Germany one of the most liquid residential markets in the world, but it also stands out for its attractive and stable conditions. Residential properties remain priced at extraordinarily appealing levels, averaging €1,300 ($1,460) per square meter in 2014 – well below levels in comparable markets in the rest of Europe. When the historically low bond yields are added to the equation of the extremely attractive fundamental data and favorable growth prospects, the German residential market remains a sensible cornerstone of portfolios, particularly for risk-averse investors.

Bullseye Market: German Secondary cities Due to growing competition, investors are now encountering difficulties in obtaining adequate yields in German ‘A-cities’. Furthermore, as a consequence of the lack of core properties and high prices, rents in prime locations do not increase at the same rate as invested capital. This has encouraged investors to look at secondary cities, which offer investment alternatives that combine the advantages of the stable German Real Estate market with affordable prices and attractive yields. One of Germany’s strengths is its decentralised structure, with a large number of centres classified as ‘B-cities’ and ‘C-cities’. The classification is not based on

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any standardised criteria, though the general consensus is that the biggest cities in Germany – Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Cologne and Stuttgart – are the A-cities. An additional 73 cities are classified as B-cities and C-cities. The latter has more than 100,000 inhabitants each and is collectively home to around 16 million people – roughly one fifth of the national population. Although residential property prices in the 127 largest German cities have risen sharply in recent years, there are still no signs of a nationwide housing bubble. It’s a fact that the prices of condos have changed compared to the year 2009 by about 55 percent more expensive. The cost of housing properties increased between 38 and 45 percent from 2009- 2016 and the plot prices are even increased by about 63 percent. The present analysis shows that there aren’t any price bubbles in the overall market. There are neither any signs of blisters at the local level, primarily in the relatively small segment of new apartment buildings, nor in the vacant lands. Hence the prices of the German housing market are steadily increasing. Since 2010, prices of condominiums in major cities have risen around 55 percent. Also, the prices of one and two-family houses and the vacant lands have risen sharply. A key driver should be the low interest rate policy of the European Central Bank. On one hand the financing of Real Estate investments are available through discounted price and on the other it returns as reduced alternative investments. In addition to that, the financing of the Real Estate investments are at a historically low price point. From the mid-1990s to 2010 stagnated the property prices in Germany - measured by the general inflation rates even dropped the price of housing properties. In the cities of Germany prices are for residential Real Estate and plots are still rising strongly. The demand for Accommodation continues to rise in large Cities. The strongest driver is the market development in A-cities. The price of Housing Properties have significantly increased and are now over 50 percent. A main issue is that the rents during this time are not increasing that sharply. That lowers the revenue per asset in the A-Cites. As a result the price speculation in Real Estate will finally end. In the luxury apartments segment new projects have to wait more than a year to get sold.

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Conclusion Real Estate prices in main cities of Germany have been increasing considerably in recent years. A major reason for these steadily rising prices is that the Real Estate market in Germany was still cheap when comparing to other European countries. And for a long period of time there was a rapid increase in rents every year. That means that the investments have been covered by the raising rents. The overall view of the results is to record the speculative investor behavior, for example, a serious global economic crisis, like the one which took place in the US, could not be observed in Germany. The financing of Real Estate transactions in general is solid and the credit volume is very stable. A look at the regional submarkets shows that the probability of a bubble at the A Locations, i.e. the major cities of international importance have increased, because the purchase prices are rising significantly than the rents. Nevertheless, the demand is still high and the development of new properties is low due to the the bureaucratic process. This new Crypto-Cashflow-Model, is focusing on mid-sized cities with promising growth prospects, like Essen, Dortmund, Gießen, Bochum, Koblenz, Wuppertal, Münster, Tübingen, Bremen, Braunschweig and Bonn. Medium-sized-cities have strong Demographics and Economic Growth Indicators, although they are smaller, with less liquidity and less data availability than A-cities. These characteristics often prevent large investment firms with extensive borrowing histories driving up prices during periods of cheap credit, and therefore offer opportunities for experienced investors with local knowledge. Furthermore, smaller cities are exposed to significantly fewer price fluctuations than large cities. B-cities and C-cities have better risk-return ratios than A-cities, as they either generate higher returns on comparable risks or deliver lower risks for similar returns. However, they require an intensive research effort and detailed analyses. In this respect, knowledge of regional markets and the local peer to potential partners are indispensable.

1. Blockchain – Quick Check

The underlying Blockchain of the First Crypto Estate will be Proof of Stake –guaranteeing steady returns for investors in the First Crypto Token (FCT). It’s value will be backed by assets under the management of First Crypto Estate. Due to the nature of Blockchain your investments will come without the expenditure of third party clearing and will be secure and immutable. With an investment in First Crypto Estate your stake will be backed by conservative real-world assets while staying on the blockchain – therefore reducing the volatility of your portfolio.

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2. How the Blockchain is set to revolutionise the Real Estate Market?

In the past 10 years the investment infrastructure of the reals estate funds was clearly dominated by the wealthy people – taking the assets on the blockchain we drastically reduce costs including any willing investor into the market. In addition the blockchain will be used for our secure real estate selector.

3. The Real Estate Crypto Vision – Clean Underlying

Operating in the German Real Estate market since 2013 we envision secure and steady investment return offered to our customers, investing only in Real Estate that we know and understand.

Focused on existing properties which meet our specific criteria (i.e. reaching the city within 20 minutes, balcony, 40-80 qm², fair living environment etc.) We guarantee minimised vacancies and steady cash flow. Asset-backing, management fees and total cash-flow returns will be transparently displayed to our investors. Having elementary knowledge of the market challenges, we access your money to best investments and certified notaries in our trusted network and enable you to diversify your crypto-portfolio with a real estate investment trust.

Thanks to the token economy there’s now an efficient way for individuals to gain access to this highly profitable and stable asset class. By creating a token backed by expertly chosen Real Estate assets, we could address all of the above-mentioned challenges about investing in Real Estate meanwhile, maintaining a healthy risk-return tradeoff and minimizing the expenditure. We predict that the blockchain technology will play a significant role in the future of the entire real estate industry.

4. The Real Estate Crypto Strategy and Real Estate Selector

The main advantage of the strategy of crypto first estate is that we are not only focusing on the growing property prices in Germany. Our mission is to generate steady return for investors through well rented apartments. In addition, our investors profit from every year rising Real Estate prices with a growing underlying. The value of the token will grow rapidly with the portfolio size.

The Real Estate Selector will be based on the blockchain. Our investors can participate democratically in the voting process of the properties. The properties would be filtered by a thorough background check before it is displayed to the investors.

In the next page, you’ll find some examples of the suitable properties which would be displayed to the users for the selecting process.

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The next example highlights the profitable cash flow model:

Apartment City of Essen:

- No. of rooms: 3 - Price: 100.000€ - Total Size: 71qm - Rent per month: 639€ - Costs that are not apportionable to tenants: 50€ (e.g. facility service,

bank fee) - Cost that are apportionable to tenants: 150€ - Parking space - 3. Level - Balcony - Bathroom with window - Good general condition

Details Apartment

- Year of Construction: 1920 - Apartment building - Solid and dry basis - Maintenance reserves: 55.000€ - No heritage protection

Environment:

- B City - Good infrastructure - Public transport available - More than 600.000 citizens - University and several DAX companies based

Property data:

- Net cold rent: 639€/month - Not apportionable cost: 50€/month

Basic calculation: Cold rent per month

639€-50€= 589€ (per year 7.068€)

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Overall return:

- Purchase price: 100.000€ - Net cold rent/year: 7.068€ - Notary: 2% - Real Estate Agent:3,5% - Tax: 6,5% - Incidental expenses: 12%

1. Purchase price incl. incidental costs:

100.000€ *12%= 12.000€ = 112.000€

2. cold rent/purchasing price *100 = return on investment

7.068€/112.000€ * 100 = 6,31 %

Return on equity:

- Purchase price 100.000€ - Equity capital 12.000€ - Net cold rent/year: 7.068€ - Loan interest 2,05%

Purchasing price – Equity capital= loan amount

112.000€ - 12.000€ = 100.000 €

Loan cost

100.000€ / 100*2,05 = 2.050€

Costing of repair and maintenance: 12,06€ per month

(6.924€ - 2.050€) / 12.000€ * 100 = 40,66 % Return on Equity

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The example concludes that we create a yearly return of 40 % with initial investment of €12k equity capital. With a growing Real Estate market in Germany this approach carries maximum scalability enabling first crypto estate to maximize client profits.

Staying with this example it’s possible to acquire a portfolio of 10 Apartments by an initial investment of 120.000€ with and underlying total Real Estate value about 1 Mio EUR. Further scaling the portfolio to 100 Apartments we reach equity capital of 1.2 MIO EUR operating with only 10 MIO EUR.

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First Crypto Estate is not participating in the A City price bubble but seeking alternatives in a secure market.

Focusing on growing Cities with an excellent future perspective:

Matching criteria:

- low vacancy rate - rising price forecast - dynamics of the location - rental return - no exaggeration risk

(If all these criteria meets, it shows a 100% match)

- Dortmund, Bremen, Hannover, Essen, Bochum, Braunschweig, Münster, Bielefeld, Wuppertal, Krefeld, Duisburg, Lübeck, Mönchengladbach, Dresden, Düsseldorf, Gießen

5. The Real Estate Crypto ICO

Investors can participate with BTC funding. The FCE ICO will take place in a fixed time container and will release a fixed supply of tokens. The total amount of BTC funded will determine the amount of FCE Tokens released to each investor. Platform on which FCE Token will be released is to be announced. Voting properties come with each token.

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Token Name CHX

Hard Cap 150.000 ETH

Pre-Sale Hard Cap No private presale

Total Token Supply 225,000,000

Tokens available for sale

191.250.000

CHX / ETH": 1 ETH = 1275 CHX

Minimum Individual Contribution

0.1 ETH

Accepted Funds ETH

KYC Due to our commitment for transparency we implemented the KYC standards for all ICO participants

IF Hardcap is not reached the remaining tokens will be burnt (permanently destroyed) but the initial investors-team-ratio (85%/15%) will be held

Protocol Ethereum ERC20

ICO Start of ICO Duration of ICO 2019 – 20th October to 30th November

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6. Road Map

7. The First Crypto App – Managing your Investment and Cash Flow

The First Crypto Estate offers a mobile application which enables more transparence between the Investors and First Crypto Team. The following features will be integrated along with the app:

• Timeline: A Roadmap of the future plans and upcoming projects will be listed

• Support: Chat with our Team members for any queries or further information directly from the app / Discord Plugin to keep in touch with the community

• Polling System: Users can actively participate in a built-in voting system with detailed description and photo gallery of the offered properties

• New and Alerts: Stay updated with the latest news with notifications on latest News, Pre-Sale and Crowd-Sale offers etc. directly form the team

• Wallet Integration: Your own crypto wallet can be integrated with the app

• Security: A 64-bit encryption protects the app data from theft and spyware

Oct 2019• FCE Whitepaper Release & Countdown

Nov 31st 2020

• FCE Launch

Jan 2020• Purschase of first assets

Feb 2020

• App release• Operations Reports #1

April 2020 • Purchase of further assets

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8. Regulatory Terms

The First Crypto Estate has been initiated by the First Crypto Estate GmbH based in Germany. Address: Falkstr.14, 44809 Bochum / In the center of Metropolitan Ruhr Area. The company operates as a limited liability company, largely similar to the Anglo-Saxon LLC model. Its share capital amounts to €25,000 and its registry court is the Bochum district court. The First Crypto Estate business venture is entirely legal and compliant with existing German law. The First Crypto business model Is, and Will Be, Compliant with Existing Regulation. Should pertinent regulations change in the foreseeable future, we will immediately comply with regulations. REAL CRYPTO ESTATE will also inform all investors about changes in regulation terms in Germany.

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9. The Team

Jakub Jan Czyz Born in 1984 in Poland. Studied Management and Economics in Bochum, Cracow and Sydney. Jakub worked for several DAX Companies in Germany and United States. He is successfully active in the German Real Estate market since 2013.

Till Kölbel Born in 1987 in Germany. Studied Economics and Law in Erfurt and Gießen. Till worked for several businesses in the financial industry and successfully runs a crypto mining business since 2015.

Jishnukanth Subburaj

Born in India in 1994, studied Engineering in Germany. Jishnukanth worked for several international companies. He is the managing partner of an Indian IT Firm since 2014 and an entrepreneur in Germany since 2016.

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10. References

Alberto Matta (2016): Opportunities in the German property market. Hg. v. The voice of the market / Worldfinance. Luxembourg, zuletzt aktualisiert am 20.03.2018. Arnold, Daniel; Rottke, Nico; Winter, Ralph (Hg.) (2017): Wohnimmobilien. Lebenszyklus, Strategie, Transaktion. Wiesbaden: Springer Gabler. Online verfügbar unter http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&AN=1331350. Crosby, Michael; Nachiappan (2016): BlockChain Technology. Beyond Bitcoin. Hg. v. Sutardia Center for Entrepreneurschip & Technology. Berkeley, zuletzt geprüft am 20.03.2018. Eugenio Cerutti (2017): Housing finance and real-estate booms: A cross-country perspective. In: Journal of Housing Economics, zuletzt geprüft am 20.03.2018. Isabel Ucha (2016): REAL ESTATE INVESTMENT TRUSTS. Hg. v. Euronext. Frankfurt, zuletzt geprüft am 20.03.2018. Kholodilin, Konstantin; Michelsen, Claus (2017): Keine Immobilienpreisblase in Deutschland. aber regional begrenzte Übertreibungen in Teilmärkten. Berlin, zuletzt geprüft am 20.03.2018. Rottke, Nico B.; Voigtländer, Michael (2017): Immobilienwirtschaftslehre - Ökonomie. Wiesbaden: Springer Fachmedien Wiesbaden. Online verfügbar unter https://ebookcentral.proquest.com/lib/gbv/detail.action?docID=5064660. Roski, Florian, (2016): Das 1x1 des Immobilien Millionärs. Nürnberg. Spielman, Avi (2016): Blockchain. digitally rebuilding the Real Estate industry. Hg. v. Massachusetts Institute of Technology. Massachusetts, zuletzt geprüft am 20.03.2018. Thilo Hanemann and Mikko Huotari (2016): A New Record Year for Chinese Outbound Investment in Europe. Berlin, zuletzt geprüft am 20.03.2018. Westermeier, Christian; Grabka, Markus M. (2017): Real Estate price polarization projected to increase until 2030 in Germany. Berlin, zuletzt geprüft am 20.03.2018.

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11. Corporate and Contact Information

First Crypto Estate GmbH is a limited liability company.

First Crypto Estate GmbH Registered at Bochum

Managing Directors: Jakub Jan Czyz, Till Kölbel, Jishnukanth Subburaj Registered address: Falkstr.14 / 44809 Bochum Phone +49 178 3136800 Website www.firstcryptoestate.com Contact info@firstcryptoestate.com

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