W H IT E PA P E R

Real estate investment for Everyone

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C O NT E NT S

Contents

01. Introduction ____________________________________________________________________________03

02. REALISTO brings the blockchain to project capitalization and investment ________________04

03. Blockchain and Smart Contracts – A Brief Overview _____________________________________07

04. The blockchain as the future of real estate ______________________________________________10

05. The REALISTO vision: creating access for investors and project owners of all kinds ________________________________14

06. The REALISTO platform – managing your investment and your property development project _____________________________________________________________________________________15

07. REALISTO – Benefits at a Glance ________________________________________________________16

08. REALISTO Real Estate expertise for own projects __________________________________________________________________18

09. REALISTO initial funding round and next funding rounds _________________________________20

10. How the REALISTO Platform Works _____________________________________________________22

11. Security Considerations _________________________________________________________________23

12. Regulatory ______________________________________________________________________________24

The REALISTO Real Estate Investment Strategy ____________________________________________28

The REALISTO ICO __________________________________________________________________________35

How the REALISTO Platform Works _____________________________________________________________________________39

The REALISTO Tech Stack __________________________________________________________________44

The REALISTO App – Managing Your Investment _________________________________________________________________45

Regulatory Terms ___________________________________________________________________________46

The REALISTO Team ________________________________________________________________________47

Sources ____________________________________________________________________________________50

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01. Introduction

What we do

REALISTO is a platform that uses the blockchain technology to bring efficiency, transparency and

cost-effectiveness to real estate investment and real estate crowd-funding. By providing the digital in-

frastructure and expertise for blockchain-based crowd-funding and crowd-investing, the REALISTO

platform offers high-yield opportunities to investors of any size, as well as a stable and reliable hub

for the tokenization of real estate projects. It does so, to create access for any kind of investor—large

or small, institutional or individual—to the hitherto closed-shop world of profitable real estate invest-

ment and real estate project capitalization. In a subsequent phase, REALISTO itself will also acquire

and tokenize real estate and make these projects available for investment for REA token holders.

REALISTO’s role is that of a one-stop-shop digital asset manager for the real estate industry, using

the blockchain technology and smart contracts to create a transparent marketplace for capitalization

and investments. REALISTO’s business model is that of a fee-based full-service provider for emitters

and investors alike, with own projects added into the mix eventually. REALISTO is a mid to long-term

business venture, seeking to build a sound infrastructure that may well serve as a model for the en-

tire industry.

This white paper provides an overview of the value proposition, economic viability, and technical

functionalities of the REALISTO platform. Because security and integrity are a priority for us, this pa-

per also aims at setting out how REALISTO proposes to guard against misappropriation or misuse of

funds. The REALISTO blockchain-based platform offers a new, accessible and highly efficient way of

investing in or capitalizing real estate ventures—with transparency, integrity, and industry expertise at

its core.

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Essentially, REALISTO is a platform that enables property developers to tokenize investment opportu-

nities, to present their projects, launch their own crowd-funding or crowd-investing campaign for

those projects, while also inviting virtually anybody to invest in carefully curated, high-yield projects.

This is, in effect, much like conventional crowd-funding and crowd-investing—with the distinct differ-

ence of the utilization of the blockchain for material gains in efficiency, transparency and accessibili-

ty.

Ready-made and ready-to-go tokenization infrastructure

The REALISTO platform provides a stable, reliable and sound infrastructure (managerial as well as

tech) that cuts out the middlemen and allows total control of capital flows. By tokenizing projects

and making shares in projects tradeable, REALISTO offers itself as a marketplace-cum-clearing

house, grounded in sound market expertise and geared to capitalize any-size project for property de-

velopers.

Using the blockchain, smart contracts and industry expertise, REALISTO also provides easy access to

profitable investments for investors of any size. It accommodates high-risk/high-yield strategies as

well as those of lower risk and more moderate returns. Investors, no matter how large or small their

stake, may freely choose the projects in which they would like to participate. REALISTO’s own REA to-

ken entitles token holders to a share in the profit made from platform fees, while—at a later date—will

also enable them to allocate tokens to REALISTO own-projects and share in the profits.

Real estate - a highly profitable, but closed shop

For entrepreneurs as well as investors around the world, the real estate industry has long been con-

sidered a source of significant, stable return. The popularity of real estate investment is undeniable,

given its annual worldwide transaction volume of approximately US$ 660 billion. A figure that is

steadily rising. All in all, the total wealth stored in real estate is estimated to run into the trillions of

dollars.

Unfortunately, vast amounts of capital are typically required to fund profitable real estate projects.

The same goes for investing in real estate with the objective of realizing above-average returns—so

much so that this asset class is out of reach for most individuals.

02. REALISTO brings the block-chain to project capitalization and investment

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Capitalization of real estate projects:

no control while paying the middlemen

As with investing in real estate, capitalization of projects in this asset class by securities emissions

(stocks, shares, etc.), only becomes profitable when extremely large amounts of capital are at hand

to leverage deals. Profit margins are greatly reduced by the fees and percentages taken by countless

middlemen: banks, brokers, traders and fund managers. High cost, low efficiency and severe time

lags are thus a given. For securities emitters and investors alike, the problems do not end here. They

are confronted with a system where they effectively cede control over their respective capital to mid-

dlemen and their oftentimes opaque fee structures. Cumbersome and time-consuming processes ad

to this lack of control, making short-term liquidity all but impossible.

REALISTO creates access for any-size Investors

What REALISTO does for token emitters (i.e. property developers), it also does for investors: deliver-

ing a secure way to diversify investment portfolios of any size, offering profitable access to an asset

class that until now has been largely unattainable for small-scale investors. In addition to dramatical-

ly lowering costs and simplifying cross-border transactions, the REALISTO platform also lowers risk

by realizing total transparency for the investor, while guaranteeing short-term liquidity with tradeable

tokens.

REALISTO addresses these issues by using the blockchain technology of Ethereum-based smart con-

tracts, and by applying expert industry savvy alongside specialized local knowledge. Investment op-

portunities presented on the REALISTO platform are carefully vetted, utilizing the experience and net-

work of an already existing highly successful real estate business.

REALISTO: proven expertise

REALISTO is the brainchild of two Berlin real estate businessmen and their network of experts. The

founders, Rouven Rosenbaum and Leonard Zobel, have been successfully operating in the Berlin real

estate market since 2011. The founders and their team have amassed an intricate knowledge of the

Berlin real estate market. They have created a local network comprised of key personnel in banks, in-

stitutions, and administration as well as large investors and on-the-ground real estate experts. At RE-

ALISTO, a successful real estate business infrastructure is already in place – and it has already prov-

en to be a source of exceptional returns.

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Research and industry knowledge for tailor-made invest-ment and capitalization

Local marketplace knowledge is essential to gain access to high-quality deal flow. Without knowl-

edge of a given locale’s specific conditions and constraints, the potential for return on investment is

severely limited, while risk skyrockets. REALISTO does not chase after prestige properties but instead

seeks a diverse array of projects that will realistically yield steady returns. To bring this about, REAL-

ISTO dedicates substantial time and effort to researching and analyzing each project’s potential for

tokenization. It is not uncommon for us to devote 100 man-hours worth of research work to an indi-

vidual property. The REALISTO goal is to offer a balanced catalog of tokenized projects that vary in

their yield-to risk ratio.

Knowing what to look for —and where!

Using their hard-won experience in the Berlin market, REALISTO will go to work in German, and, sub-

sequently, European, cities, notably those where funding is needed the most, but hardest to get. RE-

ALISTO looks not for prestige projects, but for those where profit expectations are highest and most

realistic. A host of middling-sized cities that have nothing of the glamour but all of the capitalization

needs of big-city projects awaits: here speed and efficiency of blockchain-based crowd-funding will

quickly catch on. As REALISTO has built a database of roughly 45,000 European industry contacts,

our experience and network allows swift and sure vetting of any development projects. The stan-

dards of research, due diligence and financial feasibility that REALISTO has established for Ber-

lin-based projects equally applies to projects in other marketplaces.

A marketplace where investors and project owners meet

REALISTO is a platform where investors and project owners meet, balancing their respective interests

for the benefit of all concerned. REALISTO utilizes and operates within the Ethereum blockchain

eco-system, making the need to convert cryptocurrency assets into fiat currency for investment pur-

poses a thing of the past. REALISTO stands for efficiently closing the gap between real-world and dig-

ital economies, and handing back control to those who have an actual stake in respective projects:

owners/developers and investors.

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03. Blockchain and Smart Con-tracts – A Brief Overview

The blockchain - and what it does

Although cryptocurrency investors are typically familiar with the underlying blockchain technology, for

the sake of clarity, we include a brief review of blockchain and the smart contracts it enables.

A blockchain is a type of digital ledger that is not maintained in one central location but is instead

distributed among peers. The distributed records are kept on thousands, even millions, of individual

computers all over the world – in contrast to the traditional form of database administered by a sin-

gle, central body like a bank, fund or federal reserve. Due to the decentralized nature of the distributed

ledger, all recorded transactions are fully traceable and virtually impervious to tampering. This decen-

tralized ledger, or blockchain, is synchronized within a given network via the internet, making all trans-

actions visible to anyone within the network.

Blockchain networks can have restricted membership or be open to the public. Because there is no

centralized body with authority over blockchain networks, any individual with sufficient technological

knowledge and resources can set up a blockchain. Every time a digital transaction is carried out be-

tween members of the network in question, the specifics of the transaction are compiled into a

“block” that is protected by sophisticated cryptography. This block is bundled with other transactions

occurring within the same timeframe, and sent out to every participant in the network. Then a valida-

tion process sets in, where each transaction is turned into a complex cryptographic puzzle. Each vali-

dated block receives a timestamp and is appended to older blocks, creating a chain of blocks that

shows every single network transaction in chronological order. All blocks thus recorded are fully ac-

cessible to anyone who wishes to view them at any given time.

The entire blockchain is updated every few minutes so that each network member’s ledger contains

identical information. Because any member can prove what is owned by whom at any given time, the

blockchain is a completely transparent and tamper-proof record of transaction values and ownership.

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Smart Contracts

One particularly important application of blockchain technology comes in the form of “smart con-

tracts.” Smart contracts are self-fulfilling agreements between network members. Any information in-

serted into these contracts is automatically treated according to a previously agreed-upon protocol.

Since this protocol is the sole arbiter of the transaction, the transaction can be carried out transpar-

ently, free of conflict, and without expensive and time-consuming middlemen or other verification pro-

cesses. Traditionally, legally enforceable agreements have required the intervention of expensive law-

yers and notaries who draft and validate contracts. Also, capitalization of ventures or creation of

investment pools (e.g. securitization and emission of shares), as well as the mere acquisition and

trading of shares in any such investments, are subject to an elaborate, and oftentimes opaque, proce-

dure with many parties involved. The costs and delays associated with these lengthy processes be-

come even greater in cases where parties disagree about contractual obligations.

With smart contracts, agreement stipulations and enforcement functionality are already built in. This

functionality includes when, how, and where a given payment or return is to be made. In short, smart

contracts do both: define the terms of the agreement and automatically enforce applicable obliga-

tions. Once deployed to the blockchain, a smart contract is given an immutable address, and the de-

ployed contract cannot be altered. That makes smart contracts a direct, secure way of agreeing on

the exchange of money, property, shares, or practically anything of quantifiable value.

The Ethereum blockchain, used by REALISTO, is especially dedicated to the development and applica-

tion of smart contracts. Ethereum is an open blockchain that works as a decentralized computer, and

as such, its source code is nonproprietary and visible to all. Although Ethereum has its own crypto-

currency (Ether or ETH), it also accommodates other cryptocurrencies. REALISTO adheres to the

standards of the Ethereum blockchain (ERC20) and shares with Ethereum a philosophy of creating

access and transparency.

Cryptocurrency Volatility

While cryptocurrencies have seen a significant increase in value in recent years, the cryptocurrency

market has also experienced material volatility. Even more dramatically so in recent months. More-

over, with governments around the world beginning to focus on cryptocurrencies, volatility could be

amplified, as market participants react to impending increased regulation. However, such effects are

difficult to predict, and cryptocurrency holders are therefore well-advised to diversify their holdings.

Tokens (as for example the REALISTO REA token) are also considered cryptocurrencies, although so

far there is no lawfully binding definition of the term. Investors, as well as those who seek to capital-

ize their ventures in the cryptocurrency market, may very well escape the perils of volatility, simply by

researching to what kind of use issuers propose to put a given token: is it a mere means of exchang-

ing value (i.e. “money”), is it shares in a venture, does the currency have more and other functions

(e.g. voting rights), is it stakes in existing assets, or is it merely some kind of stock warrant (right-to-

entry at a certain price)? But the actual functionality of a given token is only one aspect of safely di-

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versifying cryptocurrency holdings. An actual look at the business models behind the issuance of a

token is even more telling: are they geared towards providing short-term liquidity for a given venture,

or are they a means to capitalize a strategically sound long-term business?

Until global and binding regulation is implemented, cryptocurrencies (e.g. Bitcoin) will remain a vola-

tile affair, where it is not always clear how peaks and troughs actually come to pass. But total loss

can be hedged against, by “betting” less on large money-like systems, but on those currencies (i.e. to-

ken) that seek to utilize the underlying technology (the blockchain) to disrupt existing business mod-

els, simply by driving efficiency. In short: the blockchain technology, oftentimes—and quite wrongly

so—is often perceived as synonymous with cryptocurrency. All the while it is just a powerful technolo-

gy able to efficiently and transparently organize new models of ownership and stake-holding and the

transferring of value. Where this technology is used transparently and with integrity, there the mid-to-

long-term investor will find little volatility and great profit.

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04. The blockchain as the future of real estate

The blockchain and real estate project capitalization: to-ken emission by property developers

Real-world real estate projects are a capital-intensive industry. Even more so in sought-after loca-

tions, e.g. large cities. Capitalizing and realizing such projects has more and more become a market-

place with almost insurmountable entry barriers. This leads to a quasi-monopolization of the market,

shutting out virtually anybody except huge corporations, banks, big investment funds and other such

entities. Medium and small real estate projects find it increasingly difficult to capitalize their ventures,

be they ever so promising in terms of expectable returns. This particularly goes for less prestigious

locales where small to middling projects in small to middling cities often suffer from undercapitaliza-

tion. This is mostly due to cost-intensive and inefficient processes that create large overhead for any-

one wanting to enter the market.

The blockchain and smart contracts will have a highly disruptive effect in this environment: they es-

tablish a direct relationship, a direct link between investors and project owners (property developers).

It is up to those parties, and those alone, how they inform their relationship. With this, the business of

investing, and the business of doing business with those investments, is subject to contracts be-

tween only these two partners. Outside meddling in the actual project, and accommodating the vest-

ed interests of third parties during realization is thus eliminated. This will prove to be a highly efficient

way to capitalize projects of any size and make, not least niche projects, and projects in less presti-

gious locales.

REALISTO’s business model is to offer a ready-to-go infrastructure to tokenize (and thus: capitalize)

real estate projects. REALISTO opens a channel that will create broad access to the market, and aid

diversification, helping to capitalize projects which would otherwise never have a chance of realiza-

tion or reasonable profit. Using the blockchain, it will bring clear-cut and incorruptible order to the

hitherto rather messy market of crowd-funding and crowd-investing. It will do so in a fully regulated

environment that has nothing to fear from global cryptocurrency legislation.

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REALISTO: three kinds of value for project owners

• Firstly, REALISTO provides a peerlessly cost-efficient way to capitalize any size and any type of real

estate venture. The fees and interest of traditionally funded projects by banks, lenders, brokers, trad-

ers, lawyers and notaries are simply non-existent when capitalizing a project through the REALISTO

platform.

• Secondly, the time lag created by the cumbersome process of raising capital the traditional way

through several third parties is a thing of the past. No more shopping around for capital and having

to meet with stifling stipulations and terms.

• Thirdly, project owners establish a direct link with investors, thereby reducing project complexity to

the bare necessary minimum: contracts and obligations are laid down in smart contracts, and from

that point on administration of investor relations is largely automatic.

The blockchain and Real Estate Investment: token for access diversification

There is a dramatic scarcity of safe yet high-yielding investment opportunities, making diversification

within a cryptocurrency portfolio difficult. A potential solution are investments, where token emis-

sions are directly connected to a given project or property under development. However, many real

estate crowd-funding ventures—be they blockchain based or not—neglect to mention the consider-

able expertise required to realize material return on these investments. It is our belief that the only

way forward is expertly curated, tokenized real estate investments chosen for their return on invest-

ment (ROI) potential, as well as their value retention. If we are to establish a standard for the toke-

nized real estate industry, then we must look to projects informed by actual industry expertise and lo-

cal knowledge.

As discussed above, conventional real estate is a difficult asset class to gain access to. Those who

do manage to invest directly in conventional real estate face administrative burdens, the possibility of

defaulting lessees, and the risk of damaged property. In most cases, the return does not justify the ef-

fort and risk of such investments. In addition, real estate is a relatively illiquid asset class, meaning

that the capital invested is locked into the property with short-term liquidity difficult to achieve. The

process of liquidating real estate investment through conventional channels is cumbersome and al-

most always incurs considerable cost, especially in time-constrained scenarios.

To minimize these problems and free themselves of administrative burdens, individual investors have

in the past turned to real estate funds or real estate investment trusts (REITs). However, in doing so,

they give up control over the specific investments made, and they earn lower returns due to high man-

agement fees, among other things. Furthermore, REITs and real estate funds provide investors with

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little transparency on how these funds are managed. This seems to be to the detriment of the inves-

tor as, statistically, most real estate funds are likely to default after only a short time1. For these rea-

sons, we view the current real estate market as being spectacularly inefficient when catering to the

individual investor.

REALISTO’s business model makes a strong case for eliminating the barriers and problems men-

tioned above, by utilizing the blockchain and smart contracts to radically redesign—and thus simpli-

fy—the processes of investing in real estate projects. The blockchain provides ultimate transparency,

while corresponding smart contracts provide efficiency and control over investments. It also helps in-

vestors to place comparably small sums into a diverse array of investments, minimizing risk by port-

folio diversification and, at the same time, maintain comprehensive and easy overview over all their

projects.

Essentially, REALISTO functions as a digital asset manager for investors, taking on selection, vetting

and accounting for the investor, whose only chore is to choose from the projects presented to him/

her. Investors may freely choose the degree of management they desire from REALISTO. A clear-cut

and easy-to-use interface will enable investors to handle their REALISTO portfolio transparently and

error free.

REALISTO: three kinds of investor value

Firstly, REALISTO offers investors the acquisition of tokens in expertly curated real estate projects,

presented by property developers who seek to capitalize their ventures via tokenization. These tokens

are easily tradeable in the forthcoming intra-platform exchange, as well as in outside exchanges, pro-

viding ultimate liquidity.

Secondly, REALISTO also offers investors a stake in the platform itself in the form of the REA token:

participation in the success of a fee-based platform-as-a-service that provides blockchain for proper-

ty developers. The REA token is also fully tradeable.

Thirdly, REALISTO will—after the next funding round, or when sufficiently capitalized through partner-

ship agreements—start with the acquisition of own real estate projects. These choice and diverse

projects will provide a third income stream for the investor in REA tokens via development, rent or re-

sale. Starting out with a proof-of-concept acquisition, REALISTO will show how improvement, optimi-

zation and further development of real estate creates real value for REA token holders. Value, that will

be disbursed as ROI.

1 https://www.test.de/Geschlossene-Fonds-Die-schlimme-Bilanz-einer-Branche-4910691-0/)

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One last thing: ultimate control for property developers, ultimate protection for investors

The importance of decentralization in the blockchain ecosystem bears reiteration, especially when it

comes to the protection it provides for smaller scale investors. The value that these investors own is

stored on the blockchain and subject to smart contracts, thus eliminating any uncertainty around

ownership claims, contractual obligations and timely payment of returns that might previously have

been open to interpretation. As for property developers who use the REALISTO platform to fund their

real estate project, the blockchain-based business model will give them ultimate control over capital

flow and dramatically increased efficiency, while substantially minimizing cost. And what’s more: by

establishing a direct link between investor and project owner, meddling of third parties in a given proj-

ect is a thing of the past.

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05 • THE REALISTO VISION: CREATING ACCESS FOR INVESTORS AND PROJECT OWNERS OF ALL KINDS

05. The REALISTO vision: creating access for investors and project owners of all kinds

We at REALISTO believe in the power of great tech (I.e. the blockchain and smart contracts), but also

recognize that deep asset knowledge is required to help create opportunities for property developers

and realize profit for investors. For us, the blockchain is a means to an end, allowing to weed out the

inefficiencies of conventional real estate investing, and making this asset class accessible to every-

one. REALISTO believes in the societal value of blockchain-based crowd-funding and crowd-investing

as a means of democratizing the industry. We at REALISTO aim to bring investor and real estate ex-

perts together in the most efficient and profitable way. Our goal is to effect radical change in a so far

dysfunctional, closed and insular market.

The REALISTO platform infrastructure is designed for growth. It is ready and able to tokenize a di-

verse array of real estate projects, provided they are in line with the strict rules and requirements that

REALISTO seeks to establish. The market value and intrinsic value of REALISTO’s REA token will rise

as its networks, and its client and investor base broadens. It is a fully compliant new instrument of in-

vesting and capitalizing the real estate industry. There will be copycats, but REALISTO is first in dis-

rupting a placid and inefficient market. Transparency and hassle-free application will win the day: fi-

nally, accessible, efficient and easy-to-handle capitalization and investment. That, and nothing less, is

the REALISTO vision.

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06. The REALISTO platform – managing your investment and your property development project

Investors can manage their accounts and execute investment decisions through the REALISTO plat-

form. The REALISTO platform interface connects investors to the blockchain, using the applicable

smart contracts. The user wallets are thus blockchain wallets: all information pertaining to invest-

ments, tokens, and the value they carry is recorded in the immutable ledger of the blockchain.

REALISTO aims to provide user-friendly access to the investment opportunities presented on our

platform. It also seeks to provide clear and binding information for property developers (i.e. token

emitters) to manage their campaign—or have it managed by REALISTO. All platform interface func-

tions are designed to serve clearly defined purposes. Any background activity is only executed to

serve a specific and demonstrable purpose, necessary to conduct business on the agreed-upon

terms.

The REALISTO platform provides interfaces of the highest usability standards that provide up-to-date

access to all pertinent information, as well as allowing any action at any time covered under applica-

ble smart contracts.

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07. REALISTO – Benefits at a Glance

Real value for property developers (token emitters) Cost-effectiveness: The REALISTO platform provides a ready-made and ready-to-go infrastructure for

tokenization, creating direct access to investors’ funds. A chance to capitalize any size and any type

real estate venture, no more shopping around for funds. Control and transparency of capital flow, cut-

ting out middlemen.

Real value for investorsThe REALISTO tokens (ticker symbol REA) provide three kinds of value for the investor: participation

in platform profits, access to curated high-yield investments, and, with the launch of own acquisi-

tions, a share in high-yield properties.

Easy-to-use, easy-to-handleDigital asset management based on a clear-cut, easy-to-use and transparent interface for project

owners and investors. REALISTO as a one-stop-shop takes care of the details.

Industry savvy and focus Demonstrable expertise and experience in targeted real estate marketplaces (s.a.)

Above average returnsExpertly curated real estate tokenization projects ensure that only profitable ventures make their way

onto the REALISTO platform

Access No matter how big or small the stakes, REALISTO provides user-friendly access to above-average real

estate ROI for investors, as well as access to cost effective and blockchain-based crowd-funding for

property developers

Frequent ROI payout and hassle free project managementBoth, payouts and management, are governed by smart contracts

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Integrity All fiat funds will be handled through the independent payment service provider Secupay. All crypto-

currency funds will be handled bindingly and transparently through applicable smart contracts.

Unique transparencyREALISTO aims to set up a data room, accessible for review by investors and token emitters, showing

up-to-date status of projects, all movement of platform funds, all real-world contracts, and all smart

contracts

Sound business model Stable balance of interests between two types of users—investors, and property developers seeking

to raise capital—makes for a realistic and profitable long-term business model

Diversity of assets Carefully vetted real estate experts bring their individual projects to the REALISTO platform to raise

capital for many different types of real estate ventures; diversity ensures freedom-of-choice as well

as safety for investors

Geared for growth REALISTO offers an infrastructure that is flexible and highly scalable, as well as industry networks,

and blockchain-expertise to property developers. With its REA token REALISTO offers a share in a re-

alistic and sound business model that will drive token value. REALISTO is thus positioned for long-

term growth

Investor opportunityInvestors get in on the ground floor of what might well be the future model for the entire industry, ef-

fectively creating a whole new category of real estate investment

Security All real estate business is conducted in the legally secure environment of the German Civil Code

(BGB); all platform business is compliant with BAFIN regulation

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08. REALISTO Real Estate expertise for own projects

After full operational functionality of the REALISTO platform has been achieved, REALISTO will start

with the acquisition of own projects, independent of those presented on the platform by property de-

velopers. REA token holders will directly participate in returns of these own projects, thereby enjoying

intrinsic value of the REA, as well as their stakes in the fees generated by the platform-as-a-service

business.

REALISTO own-projects investment strategy

Germany in general, and particularly Berlin, show strong and stable overall growth. Real estate prices

in Berlin still lag behind prices in other German regions (and Europe as a whole), indicating that there

is significant potential for growth. As it stands, Berlin is well on its way to reaching the price level of

Munich or Hamburg. Several other German cities are also currently in this state of significant under-

valuation.

As a first step in building a profitable own portfolio, REALISTO will acquire or invest in one or more

carefully researched Berlin real estate projects as a proof-of-concept project. With this project REAL-

ISTO will demonstrate how carefully curated assets will offer high-yield returns otherwise unattain-

able to individual investors with limited capital. Capitalization of this project will come from addition-

al funding rounds, as well as outside capital. REA token holders will, of course, participate in the

proceeds from this and following projects.

Size of Targeted Market

One might understandably ask how market expertise in a single town, Berlin, could support the incep-

tion of a token investment strategy? The answer is surprisingly simple. The Berlin real estate market

boasted an annual transaction volume of more than US$24 billion for 2016. That means this “local”

market could absorb one seventh of the entire market capitalization of all cryptocurrencies in exis-

tence, which amounts to about US$180 billion. Ether, the Ethereum cryptocurrency, has a market cap

totaling roughly US$28 billion at the time of writing. These figures demonstrate that there is plenty of

capacity for holders of cryptocurrency to gain exposure to the Berlin real estate market.

19

0 8 • R E A L I S TO R E A L E S TAT E E X P E RT I S E F O R O W N P R O J E CT S

Market Fluidity Equals Opportunity

Berlin is an advantageous real estate market, because it benefits from fluid urban development and

ongoing re-zoning, yet suffers from a relative scarcity of building plots. The city of Berlin is currently

one of the most attractive European capitals, with population steadily on the rise. As a result, the

housing market is under constant pressure, leading to a steady increase in prices. The current envi-

ronment is particularly rewarding for investment strategies that rely on the discovery of opportunities

that do not appear on the official market. The demand in the Berlin property market currently exceeds

existing supply, for both private homes and condominiums. For condominiums, the market situation

is strained in the districts of Friedrichshain- Kreuzberg, Neukölln, Tempelhof-Schöneberg, and Char-

lottenburg-Wilmersdorf. This has led to an increase in purchasing prices of at least 8.3% in recent

years. The rental segment is experiencing an equally strained situation, particularly in the above-men-

tioned districts. As for mortgages, current interest rates for real estate financing in Berlin are at a his-

toric low, resulting in an ever-increasing Influx of capital into the market.

A Balanced Catalog of Assets

The REALISTO own-project strategy is to compile a portfolio of several properties with a view to flip,

to lease, to develop, or to manage and resell them. Investments will never be placed into a single,

make-or-break project. After the proof-of-concept phase, REALISTO will curate and present more

own-projects for tokenization, and token holders can allocate their tokens according to their individu-

al investment needs and risk appetite, therefore effectively vote on the realization of such projects.

20

0 9 • R E A L I S TO I N IT I A L F U N D I N G R O U N D A N D N E X T F U N D I N G R O U N D S

09. REALISTO initial funding round and next funding rounds

What happened so far?

The first round of raising seeding capital for the REALISTO venture took place in November and De-

cember 2017. During this initial funding round, 1.4 Mio REA token have been sold, which amounted to

1.2 Mio US $ at the time. 95% of these funds are still in cryptocurrency. 5% have immediately been ex-

changed into fiat to initiate platform development. The remaining funds will be—according to our new

and widely publicized strategy of putting platform development before acquisition of own real es-

tate—used for full development of the platform. The REA token is fully listed (and therefore: trade-

able) on idex.market and yobit.net exchanges.

How Does the REALISTO Team Make Their Profit?

The REALISTO team will take 30% of the fees generated by offering the platform to real estate ex-

perts to tokenize their projects. This is to remunerate the team for managing and administrating the

platform, maintaining the infrastructure, conducting emitter due diligence, managing issuances and

crowd-funding campaigns, developing projects, marketing, and acquiring new projects. 70% of the

fees accrued from platform services will be disbursed to REA token holders.

10% of the REA tokens minted in the 2017 ICO will go to the REALISTO team. The tokens will be

locked in for 12 months, and then only gradually released, thereby incentivizing the team to develop

the platform to its fullest potential.

After the platform is fully operational und fully funded, REALISTO will start with the acquisition of

own projects, initially with one or more proof-of-concept projects of limited scope. These will be capi-

talized by portions of additional funding rounds, and/or by the injection of capital by business part-

ners (see below). The REALISTO team will take 2.5% of the returns realized by this pool of own real

estate projects. This is to remunerate the team for curating, administrating, managing, and develop-

ing the real estate assets inquestion. REA token holders will participate in the returns of these own

acquisitions according to the structure that will be set forth in a timely fashion.

21

0 9 • R E A L I S TO I N IT I A L F U N D I N G R O U N D A N D N E X T F U N D I N G R O U N D S

Further funding rounds

The second funding round will consist of the selling-off of the stored tokens not burned after the ini-

tial funding round. However, that does not mean the stakes sold in the initial funding round will in any

way be diluted. Other, outside funding that directly capitalizes the REALISTO holding company may or

may not occur at any point in the future. This kind of capitalization would be entirely independent of

token emissions. Also, and according to capitalization needs, more token-based funding rounds may

or may not occur in the future.

Primarily, the capital raised in further funding rounds will be used for the further development of the

platform, notably to cover the considerable legal and organizational cost of meeting compliance re-

quirements. It will to a large part also be used for marketing expenditures, to create maximum expo-

sure for the REALISTO platform, and to attract projects. For the REA token holder this means, the

more projects the platform attracts, the more profit will be made from fees, and the higher the value

of the REA token. As already mentioned above, a portion of further (token-based) funding rounds will

also go to the capitalization of own real estate projects.

22

1 0 • H O W T H E R E A L I S TO P L AT F O R M W O R K S

10. How the REALISTO Platform Works

Two Kinds of Users: Investors and Emitters

The REALISTO platform is designed to service two different kinds of users. Firstly, there are property

developers who use the REALISTO platform to issue their own tokens to crowd-fund their projects

(emitters). Secondly, there are the investors who wish to invest their cryptocurrency capital into to-

kens that enable them to participate in the platform’s real estate projects. REALISTO aims to bring

the interests of investors and emitters together in the most efficient and reliable way. We expect

many crowd-funding campaigns to be launched through our platform by carefully vetted property de-

velopers. Every one of the future token emissions by developers through the REALISTO platform will

be fully compliant with applicable laws.

The REA token

The REA token, as emitted in the first round of funding in November/December 2017, has as its only

function that of a system of revenue share. Later functions of the REA token will include voting on

specific real estate projects, voting on governance issues, as well as, possibly, creator functions to

generate access tokens. At the time of writing (March 2018) the REA token designates a share in the

profits made from the services provided by the REALISTO platform, as well as a share in future

own-projects.

Integrity: The REALISTO Digital Trust Fund

To keep investor money safe and diligently manage emitter capital, the REALISTO platform holds all

working funds in a digital trust fund.

23

1 1 • S E C U R IT Y C O N S I D E R AT I O N S

11. Security Considerations

The REALISTO security system rest on two pillars:

• Tech security

• Fiduciary security of capital flows

To ensure tech security, we have our smart contracts audited by CoinFabrik and tested extensively on

Testnet. REALISTO platform data is stored on a dedicated server and secured according to state-of-

the-art protocols. User accounts and wallets will be secured by two-factor authentication. All funds

are stored in air-gapped cold storage.

Regarding fiduciary duties, access to the REALISTO platform funds is multi-signature, meaning that

several parties must approve of each transaction by signature.

Necessary Limits of Full Tech Disclosure

Because we do not wish to provide ready-made gateways for hackers, we must limit the disclosure of

the tech involved in running the REALISTO platform. Therefore, the specifics of our system architec-

ture will remain confidential to provide protection for our platform and our users. On the other hand,

the smart contracts that we use for business with our investors and emitters are open source and

can be viewed and audited by anyone.

24

1 2 • R E G U L ATO RY

12. Regulatory

Current regulation pertaining to REALISTO

According to prevailing legal opinion, and the notes recently published by BAFIN (German securities

and banking Regulator), ventures of the nature of REALISTO are subject to supervision and subject to

permission under German law. BAFIN notes state that there is no blanket regulation in effect at this

point, individual hearing and regulation applies. However, REALISTO is aiming to become fully compli-

ant with existing and future regulation, so that business may be conducted freely and without hin-

drance. At this point in time and with definite regulation still pending, the REALISTO first funding

round (ICO) would have been subject to prospectus requirements under German law, and the laws of

several other countries. As this involves lengthy procedures that would take at least one year to com-

plete, REALISTO has, at the time of the first round of funding, opted to forgo said procedures at this

stage.

This means that citizens and residents of Germany, the United States of America, the People’s Repub-

lic of China, and the Republic of Singapore were not eligible to participate in the first funding round

(ICO) of REALISTO.

At some point REALISTO will be compelled by regulation to set up and run an own-exchange function.

As REALISTO aims for maximum liquidity of our investors, we are already working on implementing

such a function.

The REALISTO Platform and business is, and will be, compliant with applicable regulation

Should regulation become manifest or change in the foreseeable future, REALISTO will immediately

comply with all applicable regulation. Furthermore, REALISTO will make investors and token emitters

fully aware of any consequences stemming from new regulation and subsequent compliance in a

timely fashion.

25

1 2 • R E G U L ATO RY

Investment Strategy

The real estate market offers exceptionally high returns to investors who are diligent and have in-depth

market knowledge. Germany in general, and Berlin in particular, have demonstrated strong and stable

overall growth. Real estate prices in Berlin still lag behind prices in other German regions as well as

Europe as a whole, indicating that there is significant potential for growth. Berlin real estate prices

have steadily been rising over the past 4 years, having now reached the same level as the European

banking capital of Frankfurt. As it stands, Berlin is well on its way to reaching the price level of Munich

or Hamburg. Several other German cities are also currently in this state of significant undervaluation.

The objective of our REA token ICO is to raise funds to set up the platform infrastructure and establish

a core portfolio, which will serve as a model for the subsequent crowdfunding campaigns launched

through the platform. With these subsequent launches, third-party emitters will issue their own asset-

backed tokens. REALISTO will be a platform for carefully researched real estate projects, chosen by

experts who have a commanding knowledge of their target markets. These projects will offer high-

yield returns that are otherwise unattainable to individual investors with limited capital. REALISTO’s

name is derived from the following philosophy: Be realistic about your industry and market expertise,

as well as the financial reach you have.

REALISTO is the brainchild of two Berlin real estate businessmen and their network of experts. The

founders, Rouven Rosenbaum and Leonard Zobel, have been successfully operating in the Berlin real

estate market since 2011. REALISTO is financially independent and has no outside stakeholders that

could influence policy or seek insider advantages. With this ICO, REALISTO seeks to build a broad

portfolio that yields above-average return for its investors, while at the same time establishing a plat-

form for the future launch of many other real estate-backed tokens.

The founders and their team have amassed an intricate knowledge of the Berlin real estate market. They

have created a local network comprised of key personnel in banks, institutions, and administration as

well as large investors and on-the-ground real estate experts. A network like this is indispensable

when seeking to operate profitably in such a complex and excessively regulated marketplace. At

REALISTO, a successful real estate business infrastructure is already in place – and it has proven to

be a source of exceptional returns.

26

1 2 • R E G U L ATO RY

Size of Targeted Market

One might understandably ask how market expertise in a single town, Berlin, could support an entire

token investment strategy? The answer is surprisingly simple. The Berlin real estate market boasted

an annual transaction volume in excess of US$24 billion for 2016. That means this “local” market

could absorb one seventh of the entire market capitalization of all cryptocurrencies in existence,

which amounts to about US$180 billion. Ether, the Ethereum cryptocurrency, has a market cap totaling

roughly US$28 billion at the time of writing. These figures demonstrate that there is plenty of capacity

for holders of cryptocurrency to gain exposure to the Berlin real estate market.

BERLIN REAL-ESTATE SALES VS. ETHEREUM MARKET CAPITALIZATION

27

1 2 • R E G U L ATO RY

Market Fluidity Equals Opportunity

Berlin is an advantageous real estate market because it benefits from fluid urban development and

zoning yet suffers from a relative scarcity of building plots. The city of Berlin is currently one of the

most attractive European capitals, with a population steadily on the rise. As a result, the housing

market is under constant pressure, leading to a steady increase in prices. The current environment

is particularly rewarding for investment strategies that rely on the discovery of opportunities that do

not appear on the official market.

The demand in the Berlin property market currently exceeds existing supply, for both private homes

and condominiums. For condominiums, the market situation is strained in the districts of Friedrichs-

hain-Kreuzberg, Neukölln, Tempelhof-Schöneberg, and Charlottenburg-Wilmersdorf. This has led to

an increase in purchasing prices of at least 8.3% in recent years. The rental segment is experiencing

an equally strained situation, particularly in the above-mentioned districts. As for mortgages, current

interest rates for real estate financing in Berlin are at a historic low, resulting in an ever-increasing

influx of capital into the market.

All of this taken together suggests one thing: in terms of real estate, Berlin is a veritable Boom Town.

It also means that REALISTO is operating in the right market to realize exceptional ROI for its inves-

tors over a long investment horizon. We expect the Berlin real estate market to retain its fluidity and

manifold opportunities in the long term thanks to continued urban development.

80.000

60.000

40.000

20.000

0

200.000

150.000

100.000

50.000

0Needed NeededNeed to be built/

YearAre built/

YearPossible to build*

* If you take into account every available empty plot in Berlin.

FLAT

S

FLAT

S

BERLIN SALES PRICE INCREASE OVER PAST 11 YEARS€ per m2, 1st quarter 2007 to 1st quarter 2017

5000

4125

3250

2375

1500

2007 2008 2009 20172014 201620132011 201520122010

+124%4.187 EUR/m2

QUARTERLY INCREASE 2017

Q1 4.187 EUR/m2 +4%

QUARTERLY INCREASE 2016

Q1 3.608 EUR/m2

Q2 3.747 EUR/m2

Q3 3.896 EUR/m2

Q4 4.042 EUR/m2

+3%

+4%

+4%

+4%

HOUSING SHORTAGE IN BERLIN

BUILDING PLOT SHORTAGE IN BERLIN UNTIL 2030

80.000

70.000

60.000

50.000

40.000

30.000

20.000

10.000

02001 2002 2003 2017201420112008 20162013201020072005 20152012200920062004

YEAR

GR

OW

TH

GROWTH OF POPULATION IN BERLIN 2001 – 2017

initial evaluation research

due diligence is completed

indepent appraiser signs of on valuation

business plan is developed

actual aquisition of the project via notarized sales

contract

project is developed

according to the initial plan

project opportunity is

discovered

with dept. of buildings

researchon site

researchfor issues

A Balanced Catalog of Assets

The REALISTO strategy is to compile a portfolio of several properties with a view to flip, to lease, to

develop, or to manage and resell them. Investments will never be placed into a single, make-or-break

project. REALISTO does not chase after prestige properties but instead seeks a diverse array of projects

that will realistically yield steady returns. To bring this about, REALISTO dedicates substantial time

and effort to researching and analyzing each project’s potential for tokenization. It is not uncommon

for us to devote 100 man-hours worth of research work to an individual property. The Berlin market-

place, and real estate in general, is an insider market that cannot be understood by leafing through

the classifieds. The REALISTO goal is to build a balanced catalog of assets that vary in their yield-to-

risk ratio. That way, token holders can allocate their tokens according to their individual investment

needs and risk appetite.

ASSET ACQUISITION FLOW

15

10

5

0Berlin Potsdam

population growth real estate price increase related to population growth

Hamburg Wiesbaden Bonn Stuttgart Mannheim Nürnberg Düsseldorf Aachen

PER

CEN

T

Securing the Future: Growth and Expansion

The REALISTO platform infrastructure is designed for growth. It is ready and able to accommodate

a diverse array of real estate projects, provided they are in line with the strict rules and requirements

that REALISTO has established. Berlin market activities will grow as the REA token grows. In the future,

REALISTO will also expand to other German, and possibly even European, cities. As REALISTO has

built a database of roughly 45,000 European industry contacts, expansion is not a matter of “if” but

of “when”. However, any expansion to another marketplace is dependent upon the quality of the local

experts proposing to work through the REALISTO platform. The standards of research, local networks

and financial feasibility that REALISTO has established for its Berlin-based projects will equally apply

to projects in new marketplaces.

POPULATION GROWTH VS. REAL ESTATE PRICES

ROI101.58%

+99.780€

PURCHASE PRICE

TOTAL COST

SALES PRICE

TOTAL PROFIT FLAT AF TERREFURBISHMENT

61.600€

98.220€

198.000€

+ 6% transfer tax3696€

+ 1.5% other correlated costs924€

Full refurbishment costs32.000€, 2 months of labor

Total cost including purchase price98.220€ 1.753€/m²

Estimated sales prices in the areaapprox. 3.600/m²

Sale via real estate agent198.000€ (3.535€/m²)

Exemplary Investment Projects

ROI PROJECTION – PURCHASE AND REFURBISHMENT OF A FLAT IN CENTRAL BERLIN

LIVING SPACE

56 m² bought for 1.100€/m²

ROI74%

+5.316.150€

PURCHASE PRICE

SALES PRICE RENTED FLATS

SALES PRICE VACANT FLATS

SALES PRICE

PROJECTED PROFIT

7.142.250€

5.783.400€

6.630.000€

12.458.400€

Purchase price per m2

2.675€/ m2

(6.675.000€ plus 7% tax and fees)

Flats rented27

Retail price per m²4.200€

Approximate sales price5.783.400,00€

Flats vacant25

Retail price per m²5.200€ per m²

Approximate sales price6.630.000,00€

ROI PROJECTION – PURCHASE OF A PRE-WAR RESIDEN-TIAL BUILDING TO SELL THE 52 INDI-VIDUAL FLATS

LIVING SPACE

purchase price 2.675 / m²

PROJECTED PROFIT

Purchase Price495€/m²

+ 6% transfer tax180.000€

+ 1.5% other correlated costs45.000€

Income per year381.465,00€

Expenses per year80.000,00€ due to outdated pipes etc.

70% rented7,50€/m²/month31.788,75€ monthly income

30% vacancy1.816,5 m²

Full refurbishment costs1.500.000€Refurbishment of the façade, floorplan improvements to enable use as co-working spaces with short term lease contracts

Increase in rent after refurbishments15%, 438.684,75€ Income

Letting vacant spaceCo-working spaces for 12€/m², 261.576,75€ Income

Income per year526.4217,00€

Expenses per year after refurbishment30.000€

property sold to commercial fund5.800.000€

ROI in 18 month just from the sale22.75%

Not included is the rental Income generated during the 18 months which will be at least 686.637,00€ thus rasinig total ROI to 37.26%.

ROI37.26%

ROI PROJECTION – COMMERCIAL BUILDING

COMMERCIAL SPACE

6.055m²

PURCHASE PRICE

TOTAL COST

SALES PRICE

3.000.000€

4.725.000€

5.800.000€

+1.075.000€

* Hume Valuate is a web-based service that takes property condition, projected profits and investment risk, as well as other essential data, and creates a reliable rating for the ob-ject/asset.

© 21st Real Estate GmbH

initial on-site survey by REALISTO team

research at building authorities

research as to con-tamination/ hazard-ous waste at land office

deployment of Hume Valuate* platform to cre-ate and check ROI projections and develop-ment potential.

independent, state- certified appraiser checks information, conducts own research, signs off on valuation

reliable online entry, comprising all pertinent information/projections at a glance

REAL ESTATE PURCHASING DUE DILIGENCE

The REALISTO ICO

REA: The REALISTO Token

A capped pre-sale of the REA token will start on November 7, 2017 and end on November 14, 2017 –

with a minimum contribution of 5 ETH at a 30% discount rate. The REA token sale will be conducted

via smart contract, fully audited by Coinfabrik.

The uncapped, public ICO of REA tokens will start on November 15, 2017 and end on December 15,

2017 – with an initial discount of 15%. The discount rate will be lowered in increments of 5% percent

over the duration of the 30-day sale, with the latest stage of the sale offering no discount. In any case,

we expect that tokens acquired during the ICO will be heavily discounted against subsequent trading

values of REA tokens in secondary markets. Minimal contribution in the public ICO is set at 0.01 ETH.

We explain our rationale for an uncapped ICO further below.

The proceeds from the ICO will be split via smart contract in the following manner: 90% of the funds

will be used to fund acquisition of assets and 10% will go to the operational fund that covers all oper-

ational costs.

Why No Hard Cap?

REALISTO has opted for a “no hard cap” ICO format because we see no reason to limit the opportunity

for our investors to acquire high-yield real estate. In the real estate business, the more capital one

can deploy, the more diverse and stable the portfolio will be. We are fully aware of the reputation that

some “no hard cap” ICOs have garnered. However, REALISTO will use only 10% of the capital raised to

remunerate the team, develop the platform, conduct sales and marketing initiatives, and cover legal

and auditing costs. That means 90% of the capital will be used to fund Core Pool and Opportunity

Pool portfolios. Therefore, we are confident that our integrity is not compromised by opting for a to-

ken sale with no hard cap. Furthermore, a hard cap could potentially lead to “race conditions” that un-

duly privilege those with deeper pockets.

87%sold during ICO

10%reserved for team

3%reserved for bounty campaign

TOKEN DISTRIBUTION

For our pre-sale, on the other hand, we have decided to apply a hard cap. This is due to the fact that

our tokens are asset-backed; the more REA tokens we hand out for free as a pre-sale bonus, the less

funds – in relation to tokens generated – we will have to buy assets. Our pre-sale is meant for investors

who are convinced of the feasibility of the REALISTO concept and are willing to commit substantial

amounts to the project right off the bat, for a 30% discount. Everyone else will still be rewarded with a

15% bonus in the first week of the ICO.

Three Kinds of Value

The REALISTO ICO will serve to crowdfund our new platform and launch the first asset-backed token

issued from that platform. With the first half of the 90% of capital raised, REALISTO will set up a Core

Pool of expertly selected, high-quality residential and commercial real estate assets. These assets

will generate steady returns for users who plan to hold their tokens and watch the intrinsic value

grow. The second half of the 90% of capital raised will be used for an Opportunity Pool, where more

active investors can vote for the acquisition of real estate projects of different risk-to-yield ratios.

Investors will vote by allocating their tokens according to their investment strategies.

A third source of profit for REA token holders comes from REALISTO’s platform-as-a-service, which

helps emitters to set up their crowdfunding campaigns for a fee. REA token holders will be given a

70% share of the profits made from these fees. At the same time, real estate crowd-investing is be-

coming more and more attractive to investors. As tokenized real estate investment via blockchain be-

comes more popular, we expect real estate experts to increasingly turn to platforms, like REALISTO,

that provide a stable infrastructure for capitalizing their projects. This increased activity suggests

healthy prospects for our third source of value.

claim fees from Platform

claim ROI

invest in curated projects

ERC-20 compliant

tradable

access to the REALISTO Platform

BAC

KED

BY ASSETS - ASSETS BACKED BY

EXP

ERTI

SE

USE OF PROCEEDS FROM THE ICO

OPERATIONAL FUND BREAK DOWN

90%only for aquisition of real estate

10%operational fund

35%sales andmarketing

5%auditing

10%legal & regulatory

15%administrative costs (offices, tax, consultants, IT, server hosting, etc.)

30%fixed compensation for team

5%unforseen expenses

How Does the REALISTO Team Make Their Profit?

The REALISTO team will take 2.5% of the returns realized by the Core Pool and the Opportunity Pool.

This is to remunerate the team for curating, administrating, managing, and developing the real estate

assets.

The REALISTO team will take 30% of the fees generated by offering the platform to real estate experts

for their own individual ICOs. This is to remunerate the team for managing and administrating the

platform, maintaining the infrastructure, conducting emitter due diligence, managing issuances and

crowdfunding campaigns, developing projects, marketing, and acquiring new projects.

10% of the REA tokens minted in the ICO will go to the REALISTO team. The tokens will be locked in

for 12 months, thereby incentivizing the team to develop the platform to its fullest potential.

* locked for 1 year in smart contract

How the REALISTO Platform Works

Two Kinds of Users: Investors and Emitters

The REALISTO platform is designed to service two different kinds of users. First, there are the inves-

tors who wish to invest their cryptocurrency capital into tokens that enable them to participate in the

platform’s real estate projects. Second, there are the emitters who use the REALISTO platform to

issue their own asset-backed tokens. REALISTO will use half of the capital raised in the November

2017 ICO (minus 10% for the operational fund) to establish a core portfolio of real estate, acquired

at the team’s own expert discretion. This will be called the REALISTO Core Pool. The other half of the

capital raised will be used to set up the REALISTO Opportunity Pool, where real estate investment

projects will be presented to investors so that they may vote on acquisition via token allocation.

Therefore, the REALISTO Core Pool and the REALISTO Opportunity Pool will be the first two projects

on the platform – built with 90% of the capital raised in the November REA token sale.

REALISTO aims to bring the interests of investors and emitters together in the most efficient and reliable

way. We expect many crowdfunding campaigns to be launched through our platform by carefully vetted

real estate experts. Every one of the future token emissions launched by other real estate experts

through the REALISTO platform will adhere to the same exacting standards and business principles laid

down in this paper. This means that REA investors will benefit from the profits made by the Core Pool

and Opportunity Pool as well as the profits that come from the REALISTO platform-as-a-service.

REAL ESTATE CROWD INVESTING MARKET GROWTH

Real estate crowd funding grew by 156% in 2014, valued at US $ 1 bln. In 2016, it grew to $4.0 billion, making it one of the fastest growing branches of the crowdfunding sector. Based on 1st quarter projections real estate crowd funding will reach US $ 5.5bln by the end of 2017. According to World Bank predictions, the entire crowd-funding industry will value at US $ 93 bln by 2025.

2014

2016

2017

2025

2

100.000$ 25.000.000$

+156%

+250%

+57%

+1590.9%

4 6 708 8010 90

VALUE IN BILLION $

OPTIONS FOR ALL-SIZE PROJECTS, BUDGETS AND TYPES OF INVESTMENT

REALISTO PLATFORM FLOW FOR INVESTORS AND EMITTERS

*Disbursement directly to seller of real estate. REALISTO has no

access to platform funds.

The REALISTO Contract Structure

The smart contracts used by REALISTO are distributed applications on the Ethereum network. These

smart contracts are written in the Solidity programming language and are compiled to byte code for

the Ethereum VM.

The system of smart contracts created and employed by REALISTO is run via a Controller App, which

is a front end for contract administration. Its main tasks are to provide a way to deploy tokens to the

Ethereum network and to trigger contract functions such as “start,” “pause,” “finalize,” and “transfer.”

REALISTO USES FIVE DIFFERENT SMART CONTRACTS

RealistoToken.sol Our token, the REA, is based well tested MiniMe implementation of the ERC20 standard. As such, it allows for the standard operations of querying balance, transferring, and setting spending allowance. Additionally, it implements the function “generate_tokens_for,” which may be called only by the Campaign Controller (see below).

MiniMeToken.sol Auxiliary contract, part of the MiniMe implementation. It is used to implement the cloning of the tokens. Not specific to our case.

TokenCampaign.sol

The Campaign Controller is the contract that accepts ETH from an address and triggers token generation via "generate_tokens_for" function of the Token contract. Additionally CampaignController allows generation of Tokens with-out incoming ETH for BTC contributors. This function is controlled by our BTC payment processing backend which also logs all activities related to token generation. The function “finalize” computes the team share and generates team tokens. This function may only be called upon when the crowd sale is over. It is possible to pause the crowd sale at any time in case of emergency.

LinearToken-Vault.sol

TeamVault holds the team tokens. It is programmed to lock the tokens for a year to prevent the team from dumping tokens and only allows for controlled spending of tokens.

ROI Disbursement Contract

PayDividend is a smart contract that is not part of the ICO stage but will be deployed later when returns are to be disbursed from the trustee wallet to token holders.

The REALISTO Platform Escrow System

To keep investor money safe and diligently manage emitter capital, the REALISTO platform holds all

working funds in an escrow wallet. This means that the platform funds are kept in escrow until the

real estate experts of a given ICO show valid proof of purchase for the real estate project in question.

ROI is disbursed only if the applicable smart contracts are triggered.

In addition to transparently controlling the platform’s flow of capital, the REALISTO system also of-

fers another important feature: the Data Room. The Data Room will be administered independently

from the REALISTO platform, set up by a notary public. This Data Room may be visited by investors

and emitters at any time. It will provide access to bank statements, real-world contracts pertaining to

the purchase and sale of real estate, protocols exchanging tokens and cryptocurrency for fiat money

(to purchase assets), and other pertinent financial statements. The Data Room thus provides an ac-

curate and ongoing report of all activities, maintaining the full transparency that is essential to the

REALISTO proposition.

OPERATIONAL FUND

35%sales andmarketing

5%auditing

10%legal & regulatory

15%administrative costs (offices, tax, consultants, IT, server hosting, etc.)

30%fixed compensation for team

5%unforseen expenses

Security Considerations

THE REALISTO SECURITY SYSTEM RESTS ON THREE PILLARS

• Real-world security pertaining to assets (real estate properties and projects)

• Fiduciary security of capital flows

• Tech security

With regard to real-world security, REALISTO is working with some of the largest and most well-

known insurers to acquire comprehensive insurance on all real estate assets in the portfolio. In

Germany, we are legally required to insure buildings and structures against any liabilities that may

originate from ownership. In addition, REALISTO will also acquire comprehensive insurance against

damage by natural disaster and acts of god, a term that refers to freak accidents with no discernible

party at fault.

Regarding fiduciary duties, access to the REALISTO platform funds is multi-signature, meaning that

several parties must approve of each transaction by signature. Any transferal of monies can only be

initiated upon presentation of proof of purchase, thereby preventing misappropriation of funds.

To ensure tech security, we have our smart contracts audited by CoinFabrik and tested extensively on

Testnet and Livenet. REALISTO platform data is stored on a dedicated server and secured according

to state-of-the-art protocols. User accounts and wallets will be secured by two- factor authentication.

All funds are stored in air-gapped cold storage.

The REALISTO Tech Stack

Necessary Limits of Full Tech Disclosure

Because we do not wish to provide ready-made gateways for hackers, we must limit the disclosure of

the tech involved in running the REALISTO platform. Therefore, the specifics of our system architecture

will remain confidential in order to provide protection for our platform and our users. On the other

hand, the smart contracts that we use for business with our investors and emitters are open source

and can be viewed and audited by anyone.

solidity, truffle,javascript

Smart contracts

PHP, Javascript,React.js. web3.js

Web frontend

Clojure, Java,Swift, ReactNative

Mobile

Clojure, Python,Electrum, Web3j,geth (own node)

Backend

PostgreSQLMongoDB

Data storage

The REALISTO App – Managing Your Investment

Investors can manage their accounts and execute investment decisions through the REALISTO

platform app. The REALISTO app connects investors to the blockchain, using the applicable smart

contracts. The user wallets are thus blockchain wallets: all information pertaining to investments,

tokens, and the value they carry is recorded in the immutable ledger of the blockchain.

The platform works as a mobile app and as a web application accessed through your browser.

REALISTO aims to provide user-friendly access to the investment opportunities presented on our

platform.

All platform interface functions are designed to serve clearly defined purposes. Any background

activity is only executed to serve a specific purpose. REALISTO does not collect data about or from

their users beyond the data necessary for execution of investments and disbursement. Data will

never be passed on to third parties for commercial reasons. Any technical changes or development

phases will always be explained in full at the earliest possible time. Therefore, you can use the

REALISTO platform confident in the knowledge that your privacy is being protected.

Regulatory Terms

The REALISTO ICO has been initiated by the Realisto GmbH based in Germany (Fritz-Jäger-Allee 16 in

15086 Zossen, just outside Berlin). The company’s office address is Pariser Strasse 61, 10719 Berlin.

The company operates as a limited liability company, largely similar to the Anglo-Saxon LLC model.

Its share capital amounts to €25,000. The company’s commercial register number is HRB 28456 P,

and its registry court is the Potsdam district court.

According to prevailing legal opinion, ICOs of the nature planned by REALISTO are not subject to

supervision or subject to permission under German law. In terms of existing German law, the ICO

is not considered to be a deposit business, nor will there be any own-account trading. No laws

pertaining to legal tender or legal currency are applicable in this case, nor does German law consider

tokens of the REALISTO kind a “security.”

The REALISTO business venture is entirely legal and compliant with existing German law. However, a

REALISTO ICO would be subject to prospectus requirements under German law and the laws of several

other countries. As this involves lengthy procedures that would take at least one year to complete,

REALISTO has opted to forgo said procedures at this stage. This means that citizens and residents of

Germany, the United States of America, the People’s Republic of China, and the Republic of Singapore

are not eligible to participate in the REALISTO ICO.

The REALISTO Platform Is, and Will Be, Compliant with Existing Regulation

Should pertinent regulations change in the foreseeable future, REALISTO will immediately comply

with said regulations. Furthermore, REALISTO will make investors and emitters fully aware of any

consequences stemming from new regulations and subsequent compliance.

The REALISTO Team

REALISTO uses blockchain technology to democratize access to the real estate investment market.

Such an ambitious project requires a high level of technical expertise as well as significant knowledge

of real estate investing, local markets and the laws that govern the industry. Below we describe the

REALISTO team, which brings together all of these capabilities.

Rouven RosenbaumFounder, Co-CEO

Born in 1985 in Berlin. Studied law and business

administration. He went on to launch a number of real

estate companies, turning each of them into a highly

successful business venture. His current venture, Rouven

Rosenbaum Immobilien GmbH (LLC), is to serve as the

springboard for REALISTO.

Leonard ZobelFounder, Co-CEO

Born 1989 in Berlin. Co-Founder of REALISTO, alongside

Rouven Rosenbaum. An avid photographer and vintage

car buff, he studied law and has been fully invested in

his career in Berlin real estate since 2013. His success

in this highly complex marketplace has enabled him to

claim an equal share in the initial founding of REALISTO.

Pavel MetelitsynCTO, Software Developer

Born in 1984 in St. Petersburg, Russia. Holds a degree in

mathematics from the Johannes-Guttenberg University

in Mainz, Germany, specializing in algebraic geometry

and high-performance computing. His knowledge and

experience as a freelance coder and systems architect

make him an invaluable asset to the REALISTO enterprise.

Manfred LoellReal Estate Expert (Marketing and Development; Real Estate Database)

Born in 1976 in Berlin. A veteran Berlin real estate profes-

sional who has been responsible for hundreds of residential,

commercial, and development projects. He is the architect

of a large real estate database comprised of more than

45,000 professionals in the field. His marketing and develop-

ment skill set is part of REALISTO’s core value.

Maxim OlschsanskijReal Estate Expert (Residential)

Born in 1987 in Minsk, Belarus. Immigrated to Oldenburg,

Germany in 1992. Studied fine arts at the Academie Minerva

in the Netherlands while making a living in the Oldenburg

real estate business. After moving to Berlin in 2013, he

joined Rouven Rosenbaum’s real estate business. His area

of expertise is the development and sale of residential

property to investors.

Rafael RosenbaumReal Estate Expert (Acquisition and Development)

Born in 1989 in Berlin. A state-certified medical professional,

he joined his brother Rouven in the REALISTO parent

company in 2015. He has since become a knowledgeable

real estate professional, specializing in the acquisition and

conversion of investment projects.

Christoph WillumeitMarketing and Communication

Born in 1963 in Hamburg, Germany. Studied literature,

philosophy, and art history at the University of Hamburg.

Along with his strong background in the humanities, he

brings decades of experience in marketing and communi-

cation to the REALISTO project.

Carlo WandeltReal Estate Expert (Development and Project Management)

Born in 1989 in Berlin. Studied law at the University of

Potsdam and undertook vocational training in real estate

business administration. He has since worked as a free-

lance real estate dealer and as a project manager for several

large projects. His Berlin real estate savvy is of great value

to the REALISTO project.

The REALISTO Advisory Board

Legal, fiduciary, business administration, and organizational concerns all need to be taken into

account when embarking on a complex venture like the REALISTO platform. Because of this, the

REALISTO team relies on the knowledge and advice of several experts in their respective fields. Our

advisory board provides essential guidance on the development and the management of the platform.

Vinny PatelDeveloper at CIM GroupRE Advisor

Vinny Patel was educated at The College of Charleston

where he studied business administration. He went

on to work for a major hotel chain, chalking up valuable

experiences in the real estate field. He went on to become

a development associate at CIM Group, a full service RE

fund-managing firm.

Kyle WangSenior Consultant at IBMBlockchain Advisor

Kyle Wang was educated at Penn State, and earned a BS

in finance. Before he became a senior consultant at IBM,

specializing in Blockchain Strategy, he gathered valuable

experience at several fintech companies. He is involved

in several projects that concern cryptocurrency and ICOs.

Dr. Peter DiedrichLawyer & Notary public

Dr. iur. Istvan SzabadosLawyer & Notary public

R E A L I S T O W H I T E P A P E R — V 1 . 2

REALISTO GmbH is a limited liability company,

largely similar to the Anglo-Saxon LLC model.

REALISTO GMBH

Registered at Amtsgericht (local court) Potsdam HRB 28456 P

Managing directors Rouven Rosenbaum and Leonard Zobel

Registered address Fritz-Jaeger-Allee 16 | 15806 Zossen OT Waldstadt, Germany

Business address Pariser Str. 61 | 10719 Berlin, Germany

Phone +49 30 9599819 11

Website www.realisto.io

General Contact hello@realisto.io

Investor Relations investors@realisto.io

Bounty Campaign bounty@realisto.io

Press Inquiries press@realisto.io

Corporate and Contact Information