Home General Help 🌐 Understanding Rent Distributions & Escrows

🌐 Understanding Rent Distributions & Escrows

Last updated on Aug 16, 2025

🌐 Understanding Rent Distributions & Escrows

⚡ Quick Summary (TL;DR)

💸 When do I get paid?

  • 📅 Monthly: Last day of each month @ 11:59 PM UTC

  • ✅ KYC approved? → 💵 Auto-paid to your wallet

  • ⏸️ Not KYC approved? → 💰 Held until you verify

📊 How much?
👉 Your share = % of tokens you own × Net rental income
Example: 1% ownership in $10,000 net income = $100 payout

🧮 What Gets Deducted First?

Before distributions, income flows through this waterfall:
1️⃣ Management fees (2–5%)
2️⃣ Operating expenses (utilities, taxes, insurance, maintenance)
3️⃣ Reserve replenishment (if needed)
4️⃣ 💵 Your distribution (what’s left)

🏦 Where Does My Investment Go?

  1. Escrow Account (initial)

    • 🔒 Holds your funds during the token sale

    • 💡 Released only after property purchase completes

  2. Operational/Rental Account (ongoing)

    • 📥 Collects tenant rent

    • 🧾 Pays expenses & reserves

    • 💸 Sends monthly distributions

📅 Key Dates to Remember

  • 📆 Weekly: Rent collected

  • 📊 Month-end: Distribution calculated

  • 🗓️ Record Date: Last day of month = who’s eligible

  • 💵 Payment Date: Within 24 hours after month-end

🪣 Reserve Management System

Each property maintains safety reserves:

  • 🛠️ Operating Reserve – 3 months of ops costs

  • 🏠 T&I Reserve – Taxes & insurance

  • 🔧 CapEx Reserve – Repairs & upgrades

  • 💳 DSRA – Mortgage buffer (if applicable)

**Replenishment Logic: **(more details...)

  • ⚠️ Minor (<75% full): 30% of income held back

  • 🚨 Major (<50% full): 70% held back

  • 🛑 Critical (<25% full): 100% held back

🌳 Merkle Root Distribution

Every payout is cryptographically verifiable:

  • 📑 Calculate each investor entitlement

  • 🌳 Generate tamper-proof Merkle Tree

  • 🔗 Publish Merkle Root (on-chain)

  • 💵 Push payments to wallets

  • 📜 Audit trail logged forever

🔐 KYC/AML Requirements

  • 👤 Why required? Investor protection, anti-fraud, tax compliance

  • 🛑 If not approved:

    • Your share is still calculated

    • Funds withheld (not lost)

    • 📌 Once verified → all withheld + current released

🏗️ Escrow Recapture Scenarios

Sometimes rent is redirected to escrow:

  • 🧾 Shortfall in initial funding

  • 🔥 Emergency capital needs

  • 🛠️ Major unplanned repairs

➡️ Rent diverted to rebuild escrow → distributions resume when back on target

💱 Payment Methods

  • Standard token: USDC (USD Coin)

  • 🔒 Stable, low-fee, widely supported

  • ⚙️ Flow: Rent → USDC → Smart Contract → Wallet

  • 📜 Tx hash provided for every payout

📑 Tax & Compliance

  • 📬 Monthly payout statements

  • 📊 Annual tax docs (1099-DIV equivalent)

  • ⚖️ Generally treated as ordinary income

  • 🌍 International: Possible withholding

🛡️ Smart Contract Security

  • 🔑 Multi-sig approvals for large transactions

  • ⏳ Time-locked withdrawals

  • ✅ Audited contracts

  • 🛡️ Insurance coverage

Transparency:

  • 📖 All payouts recorded on blockchain

  • 🔍 Merkle proofs = math-level verification

  • 📊 Live reserve dashboards

🤔 Common Scenarios

  1. 👋 First-time investor → Buy tokens → Verify KYC → Wait → 💸 First payout

  2. 🚫 Miss KYC → Payout withheld → Verify later → Receive current + withheld

  3. 🛠️ Major repair → Reserves topped up → Smaller distribution that month

  4. 🏚️ Property sold → Escrow pays expenses → Remaining funds distributed → Tokens burned

🧾 Example Calculation

Property Rent: $50,000

  • – Mgmt Fee (3%): –$1,500

  • – Expenses: –$8,000

  • – Reserves: –$5,000
    = Net Distributable: $35,500

👉 If you own 2.5% → $887.50

🙋 Frequently Asked Questions

❓ Buy mid-month?
➡️ Eligible from next month.

❓ Change wallet address?
➡️ Must update before 25th.

❓ Unclaimed payouts?
➡️ Never expire; always yours.

❓ Guaranteed?
➡️ ❌ No. Based on actual rent/expenses.

❓ Emergencies?
➡️ Reserves used first, distributions reduced if needed.

📬 Need Help?

🕒 Last Updated: 8/16/2025