From Cryptocurrency to Real Estate: Joe Pizzurro Shares His Vision of Fractionalization

00:00:14 - Mike Mills

Everybody. So I want you to try and imagine a world where the vast, seemingly inaccessible realm of commercial real estate is unlocked for everyday investors. Just like Robin Hood opened the world of stock trading to a new generation of investors there. What if you could be a part of a massive multifamily property with just a fraction of the traditional investment costs? How, you might ask? Well, stay tuned. By the end of this episode, we're going to explain to you how the revolutionary method that's reshaping the world of real estate investment is available to you now. Welcome back. This is Mike Mills Mortgage and Finance. And I'm your host, Mike Mills. And each week we offer a deep dive into the transformative world of real estate, providing unmatched insights, strategies, and expert perspectives that can help turn your ambitions into tangible assets. If you're passionate about understanding the ever involving dynamics of the property market, you're in the right place. So before we get into today's topic, a quick reminder for all of our listeners. If you find value in our discussions, don't forget to hit that subscribe button on your podcast platform or check out our YouTube channel at Mike Mills Mortgage and Finance for more content. Subscribing ensures you never miss out on the expert insights we bring you every single week. And today we have a special treat for all of you. Joining us is Joe Pizzurro. Joe is a trailblazing commercial real estate investor leading the charge in the world of real estate fractionalization. As we dive into this groundbreaking approach to property investment, you'll soon see why Joe is making waves in the industry. So let's get rolling here. Hello, Joe. How you doing, sir?

00:01:43 - Joe Pizzurro

Hey, Mike, thanks for having me.

00:01:45 - Mike Mills

You got it, buddy. I like clapping and cheering for you all the way around. Everybody's excited? Well, man, I appreciate you coming on today and kind of getting into this topic with me. A little know, blockchain technology, fractionalization, all this kind of stuff is personally, it's a very interesting topic for myself because I'm very bullish, I guess you could say, on where all of this technology is headed over the next five to ten years. And being in the real estate industry, I know that there are segments of this that are impacting us on a day to day basis that are going to become more and more prevalent as we kind of move forward. But before we get into all the fractionalization and how that works, I want you to kind of tell everybody a little bit about where you started, kind of how you got into multifamily investing and give a little bit of like you're talking to a six year old on how multifamily investing works. And then we'll kind of dive into the fractionalization part after that. So tell us a little bit about how you got to where you're at right now.

00:02:43 - Joe Pizzurro

Yeah, sure. So I had no experience in real estate, except for I had bought my house.

00:02:51 - Mike Mills

That was all, that was your total introduction to it?

00:02:54 - Joe Pizzurro

Yeah. I wanted to start investing in real estate, so I thought about single family rentals or things like that and I just went straight into multifamily. I think what got me there is the valuation for commercial real estate. Basically you're not dependent totally on the market.

00:03:15 - Mike Mills

Right.

00:03:16 - Joe Pizzurro

Houses are valued on comps, so you're totally dependent on the market for single family. But with multifamily you have some control. You can get in there, reduce expenses, increase revenue somehow. And if you manage it properly, you can really force the appreciation in a short amount of time. And so I started out just as an investor, limited partner, putting some money in deals, and then got to where now I'm a general partner actually managing assets. And so I've got about 40 million assets under management currently close to about 3000 units, multifamily and self storage.

00:04:01 - Mike Mills

So the commercial market then and this is something that a lot of individual investors that do residential real estate don't understand fully. I didn't understand until looking into it some. But the value of the property is based on the revenues. It's not based on the actual property value that would be compared to other similar properties in the area like it is with residential because it is a business revenue generating property. The value of that property is going to be determined by how much income it can generate. Right?

00:04:30 - Joe Pizzurro

Yeah. They'll usually take the trailing twelve month financial statement and the net operating income over the past twelve months and they'll divide that by the cap rate in the current market and that's usually where it trades out. So if you can increase that NOI, no matter if the cap rate stays the same or changes, you could actually increase value.

00:04:54 - Mike Mills

So I hear the term cap rate a lot. Can you help me understand what is a cap rate? What does that mean exactly?

00:05:01 - Joe Pizzurro

It's just the capitalization rate. So essentially the money you're making on your investment. So if you're buying something high, a high price, the cap rate is low at first and as you start increasing that, NOI, that cap rate will increase. So we're at around the DFW market right now for a C class asset. That's what I've been looking at. Kind of B and C older assets. We're trading around five and a half cap right now.

00:05:33 - Mike Mills

Okay. Would you say it's kind of like the opportunity of profit essentially, like how.

00:05:42 - Joe Pizzurro

Much you could make?

00:05:44 - Mike Mills

What's that?

00:05:44 - Joe Pizzurro

That's one way of saying it.

00:05:46 - Mike Mills

Okay, so it kind of gives you a little bit of an idea on how much could be made based off of the rest of the market on that particular property.

00:05:53 - Joe Pizzurro

Correct.

00:05:54 - Mike Mills

Okay, I understand that. Now. Why multifamily specifically? Because there's all kinds of commercial real estate out there. Obviously you have and I think you mentioned you have some storage, but you have office buildings, you have warehouses, you have storage, you have RV parks, like we talked about earlier, too. So why did you choose to mostly specify in multifamily?

00:06:13 - Joe Pizzurro

Well, it's multifamily specifically in DFW market, people are moving here. There's a lot of population growth. There's a lot of job growth. There's a lot of need for housing. And recently, housing is not affordable for a lot of folks.

00:06:32 - Mike Mills

Tell me about it, man. Tell me about it.

00:06:35 - Joe Pizzurro

As you know, right?

00:06:36 - Mike Mills

Yes. Very aware.

00:06:38 - Joe Pizzurro

Very aware. It's kind of creating the demand for apartments.

00:06:43 - Mike Mills

Yes.

00:06:46 - Joe Pizzurro

So they're trying to build more apartments, but what they're building are newer assets. So the C class, they're not increasing over time. They will, of course, but folks that can afford a C class, they're full right now.

00:07:07 - Mike Mills

Right.

00:07:08 - Joe Pizzurro

So it's kind of what drove me is DFW multifamily, I feel like, is a safe investment for real estate right now.

00:07:18 - Mike Mills

What did you do prior to getting into real estate?

00:07:21 - Joe Pizzurro

So I've been in project management, it consulting for my career. That's how I got into blockchain.

00:07:30 - Mike Mills

Okay.

00:07:32 - Joe Pizzurro

And that's how I kind of combined the two. I always like to learn new technologies, and I experimented a little. Got an online degree from MIT and Blockchain.

00:07:46 - Mike Mills

Oh, wow. Okay. I'm curious about that because I'm so fascinated by the subject. I actually have looked that up a couple of times and saw that. How was that what was that experience like?

00:07:59 - Joe Pizzurro

It was pretty cool. I think it was like a six to eight week course, and you kind of simulate the creation of your own cryptocurrency.

00:08:09 - Mike Mills

Okay.

00:08:10 - Joe Pizzurro

And so after doing that course, I went and actually did create my own cryptocurrency on polygon.

00:08:19 - Mike Mills

All right.

00:08:19 - Joe Pizzurro

And it's actually live on polygon, but we haven't rolled it out yet because what we're trying to do with it is have it become a real estate backed crypto backed by Tokenized real estate.

00:08:31 - Mike Mills

Right.

00:08:32 - Joe Pizzurro

And once we get that Tokenization feature, I think that gives it its legs, right.

00:08:38 - Mike Mills

That gives it its value and what it's held to. Yes.

00:08:42 - Joe Pizzurro

Because I think in this crypto market, you're not going to find much confidence in much of anything else right now.

00:08:52 - Mike Mills

No. These days, especially with all the litigation and all the people going under for being a little shady in their practices. Which, by the way, this is one of the things I talked with Lee about, and I actually had another couple of folks on a few weeks back about crypto. And the Blockchain world gets a bad rep right now because there has been a lot of bad actors, let's call them, that have been doing some not so righteous things. But if you look across the world of finance in general over the history of it, whether it's fiat currency or whether it's crypto, there's always bad actors, there's always people doing Ponzi schemes and the Bernie Madoffs of the world. So I mean, it happens in all walks of life. It's just unfortunate because this is still a relatively new technology as far as the general public is concerned. I know the blockchain has been around since 2008 is when Bitcoin was started, I think 2009 like that. So it's not brand new, but just the mainstream adoption of it is something that we're kind of in that phase of trying to get everybody to understand exactly how it all works. So since you brought up the fractionalization part, let's go ahead and go there. So for anybody that doesn't understand, explain to the listeners kind of what fractionalization is, how it works, and just kind of the nuts and bolts of when you take a property, how you can actually fractionalize it and then sell it to smaller level investors.

00:10:27 - Joe Pizzurro

Yeah, basically it's just taking and there's different ways. So I can talk a little bit about what we're actually going to start doing. But you can take actually a piece of land or real estate and tokenize it or fractionalize it, which is representing it on the blockchain. So there are companies out there already starting to do this, working with the counties, working with title companies to actually get things on the blockchain.

00:10:59 - Mike Mills

Because what already putting deeds on the blockchain?

00:11:01 - Joe Pizzurro

Putting deeds on the blockchain, really? That's not what I'm doing, but that's out there. There's lenders that are starting to use blockchain. Supposedly the time to close could be cut down potentially from 30 days to one day. Because things are automated, it cuts out the middleman. You wouldn't need like a loan processor. Everything is already on blockchain. It can be automatically pulled all the information via AI. So you're not having to go out there and do the verification process. It all happens in seconds.

00:11:40 - Mike Mills

Right.

00:11:41 - Joe Pizzurro

So that's a thing that I don't know how long it'll take to eventually start becoming mainstream, but what we're doing so one of my general partners in the multifamily space has a tokenization software. So what we do right now is we raise capital from investors through a syndicate to purchase assets. So we have limited partners that invest and become a shareholder in a company, so to speak. We create a company that's the syndicate.

00:12:12 - Mike Mills

Right?

00:12:13 - Joe Pizzurro

Right.

00:12:14 - Mike Mills

People hear syndicate, they're like, wait a minute.

00:12:19 - Joe Pizzurro

So what we're going to do is start tokenizing the equity of the syndicate. So that the difference is it's just more flexible, more liquid investors. They would receive their shares of ownership in tokens, digital tokens that they could actually trade. They could sell to different partners within the same syndicate or outside. They could actually take them to a security token exchange. There's a few of those out there. T zero is one. So there's options to really get in and out of deals more fluidly, whereas today it's very difficult to do that. You're mostly stuck during the hold period. There's ways, but they require legal maneuvers. So it just creates more liquidity. It's almost like, for example, right now things aren't going too well in the economy, so maybe some folks want out. It's easier to get out.

00:13:27 - Mike Mills

Yeah. Having it fractionalized and tokenized makes it to where the flexibility of getting in and out of your investment is easier. Right. Is that correct? I guess you could say you could also unload part of your investment without having to do the whole thing. Whereas before, if you put $100,000 into the syndicate on your investment side, if you were going to sell out, I mean, I'm sure you could sell a portion of it, but I would think that the tokenization of it would make it much easier. Let's say that that $100,000 represented 100,000 tokens. Then you can sell off 50,000 of those if you want to and keep your 50. Is that correct? Yeah.

00:14:06 - Joe Pizzurro

Another thing it does is it allows a lower barrier of entry. So we typically do like minimum investments because it gets very cumbersome, a lot of administrative work to have thousands of investors right, right. Thousands of K ones, and keeping track of all of the administrative part while everything on the blockchain is automated. So you could lower that barrier of entry to folks like 1000 minimum or 5000 minimum compared to 50,000.

00:14:39 - Mike Mills

Right. It brings the barrier of entry down much lower for individuals that want to get in that maybe only have 500 or $1,000 that they want to play with versus having 50,000 or $100,000.

00:14:49 - Joe Pizzurro

Correct.

00:14:51 - Mike Mills

Can you explain what the blockchain does in order to give the higher level of security? Why is it so much more beneficial in this setting just due to speed and efficiency and security?

00:15:06 - Joe Pizzurro

Well, it uses something called smart contracts and also it's basically an immutable ledger. So it can't be tampered with, it can't be corrupted. So it's basically safer and more secure as boil is more transparent. I think the blockchain technology itself is what I feel like is going to start becoming more mainstream. It's not separate bitcoin from blockchain.

00:15:41 - Mike Mills

Right.

00:15:42 - Joe Pizzurro

They started together, but having a digital currency might be further away, but having blockchain technology in our lives may be very close to happening.

00:15:56 - Mike Mills

No, I think it's happening in a lot of sectors already. Well, I mean, you see Chase Bank recently, or I'm sorry, Citigroup and Chase is following suit shortly. Citigroup just announced that they have created their own basically internal digital currency to where when you transfer money back and forth between different countries and whatnot. So they've created their own private blockchain and they've made the transactions basically instantaneous with less cost. So they're already doing it on the large scale with large investment banks moving this because like you said, it offers immutability, it offers security and it offers speed with lower cost. They don't have so many different wire transfers and these things that are going back and forth between banks, they can move that stuff pretty much instantaneous. And so you see a lot of the big players already kind of putting their toe into the ring, so to speak, more on the internal side than external yet because I think they're still kind of testing how it works internally. And then the Federal Reserve is know they have their Fed now, which isn't quite blockchain necessarily, but it is a faster transaction between bigger banks and so we're we're already there really. It's just a matter of how quickly it impacts everything else that we do on a day to day basis. Yeah.

00:17:15 - Joe Pizzurro

No, and even just simply the removal of the middleman itself. It can be applied to any industry. Even I've heard of the music industries doing it. You can purchase content straight from the artist without going through a middleman. You can actually order a ride. I could say, hey, I need a ride. I'm going to get it from Mike Mills instead of going through Uber and they take part of the profit. It's just really going direct to do business one on one.

00:17:49 - Mike Mills

Yeah, that's the big disruption. That's where when people talk about it being a disruptive technology, that's why is because the elimination of the guy in the middle who's facilitating the transaction. The music thing is a great example. I don't know if anybody's done it yet. I think there was some smaller artists that have done it, but essentially they're using NFTs like this to some extent where you're selling your album as an NFT and maybe they make 100,000 of them or 150,000 or whatever. But if that individual then turns around and wants to sell the NFT or the album to somebody else, the original artist who sold it initially also gets paid again. They have it set up to where every time the transaction occurs with the NFT that's obviously built on the blockchain, that's where it's held that the original creator of that NFT can still earn a percentage every single time that it's sold. So it's like they're their own record label and they keep getting royalties into perpetuity as their art gets sold.

00:18:53 - Joe Pizzurro

Yeah, see you know about it.

00:18:55 - Mike Mills

Yeah. Like I said, this is a little side hobby for me that I kind of pay attention to quite a bit.

00:19:01 - Joe Pizzurro

Well, even in your industry, the closing statement, all those fees in there, so hopefully some of those get removed.

00:19:09 - Mike Mills

Well, the place that I think it will be the most disruptive but will probably take a longer time to do it, but is the title industry. Because when you look at title insurance, for example, what title insurance is, is you are ensuring that future or that the current owner, future owner is not going to have claims against the title going forward. So it's an insurance policy. So if someone says, my great grandparent father owned this and they didn't do it right and whatever, then the title insurance will pay out to that person for whatever claim they have on your land. Well, the problem with that is a couple of things. Number one is the insurance itself. The default, or I should say the claims that happen on title premiums is relatively low as it is. And I say relatively because I don't have exact numbers. And I'm sure one of my title budies will be like, that's not right. But there is a certain amount of claims. It doesn't have much to do with past. It's more about encroachments typically and things of that nature. But the premiums are set by the state of Texas. So in Texas, the state sets what the premium is. So as a buyer or seller there isn't like I can pick a different title company that may charge a $250 fee versus a $300 fee or something like that, but I can't pick a different insurance carrier because it's set by the state. Well, the state gets their premiums or sets the premiums based off of what the big four title providers tell them that it costs to run their business. Okay? So they're basically setting the premium based off the industry that's collecting the premium, not because of the claims. Right? They're not creating the insurance policy based on claims. They're creating it based off of what it costs to run a title company which is OD in and of itself. So then imagine a world where, say like a builder, say a Dr. Horton, they go in and every house that they build from here into perpetuity, they put on the blockchain. They put who built it, who the plumber was, how much they paid for wood, how much they paid for the plumbing material, whatever. It's all recorded on the blockchain. Well then they sell that house to the first know they still have to make a title policy, which again is strange because it's the first house. But either way you have the first house. Well then the next buyer comes along, they purchase the house. Well, if it's recorded on the blockchain, then there is no doubt the chain of title because the old school, which is even better now, you have to go through and sift through every county record and go through all the old papers that they filed in 1812 and make sure it's right. Even these days it's way more digital than that. But if everything's recorded on the blockchain and if every single transaction that occurs on that property has been recorded and has not been changed and is easily accessible through transparency of that chain, then why do you need insurance for it?

00:22:06 - Joe Pizzurro

Touche.

00:22:08 - Mike Mills

Now that's easy for me to say. It's a whole other thing for the regulatory bodies that be to allow that type of stuff. But these are the kind of things that impact real estate that will have because real estate is very transactional. I mean, as you know, it's all contracts and lending and money changing hands. Well, that's the area that blockchain has the biggest impact right now. And so to say that it isn't going to bleed over and have a significant change in our industry over the next ten to 15 years is kind of naive. I think it will be significant. It's just the hurdles that we run into, just like you do, I'm sure, to some degree in multifamily investing just all comes with regulation.

00:22:52 - Joe Pizzurro

Yeah. And I think Texas is going to be leading that.

00:22:55 - Mike Mills

Yes. Yeah. Lee over at the blockchain council is he's he's driving the ship on, you know? Great to have know, kind of making Texas at the forefront of actually so if I was an investor and I wanted to actually purchase a token, let's call it, or a set of tokens or whatever, what does that process look like right now?

00:23:16 - Joe Pizzurro

So really it would be very similar to what it is now. So if they're interested, they would subscribe in a portal and then sign a subscription document, and then they would receive their shares, which is just in the form of a piece of paper currently. And then the only difference is they would get a wallet and they would get their shares in the form of tokens into the wallet. And then they would have the option to buy or sell those within the syndicate or within other syndicates that are in that same portal. Or they could go outside to a third party exchange. Now, that probably wouldn't be a phase one, the third party exchange, because you'd have to register those on the exchange. And I think right now those exchanges aren't very heavily. There's not a lot of traffic.

00:24:18 - Mike Mills

Right.

00:24:18 - Joe Pizzurro

It may take a few years for that aspect, but just the fact of being able to sell to other investors would be the initial ability.

00:24:33 - Mike Mills

Are you familiar with lofty? Do you know what Lofty is?

00:24:35 - Joe Pizzurro

I am not.

00:24:36 - Mike Mills

Okay, so I guess you would call it an exchange or a marketplace for now. I don't know because it's been a minute since I've been on the site. But they have tokenized real estate there. Primarily it's residential, and you can buy tokens or sell tokens there. And the last time I looked, there was probably 200, 250 properties that they had listed. Now there's multiple sites. Lofty is not the only one. There's a couple of other ones that I've seen, but they are exchanges that have multiple properties listed that you can go in and purchase and buy a token or sell it or whatever. Now it's just within their own little market sphere there. But have you looked at getting your tokens on other exchanges like that to where someone that doesn't know about your particular project could have access to it?

00:25:25 - Joe Pizzurro

That's what we would focus on as a next step. I think the first step would be just getting it out there just so we can start it. Otherwise it would take longer for the initial launch. To factor all that in. And this is my partner's venture, so I think he would want to pilot it first next year and then maybe add that feature in the following year.

00:25:54 - Mike Mills

Do you see a lot of other or are you experiencing here in Texas a lot of other entities or groups or syndicates or whatever getting into the fractalization, or are you one of the only ones that you're aware of? Do you guys get together and be like, how are we going to figure this out?

00:26:09 - Joe Pizzurro

Well, it's the two of us so far that it's not very mainstream yet in the multifamily space, so we're one of the two that are focused on that.

00:26:25 - Mike Mills

There's not a whole lot of buddies out there that are dealing with the same.

00:26:29 - Joe Pizzurro

And now you can be the third. Yeah.

00:26:32 - Mike Mills

Have you talked to any of your other multifamily syndicate? Because I know you guys all network to some extent and around each other. Are you trying to get them involved in this a little bit more, or your partner, for that matter?

00:26:44 - Joe Pizzurro

Of course, I think it might take a little longer, but I planted the seeds. What are you running into?

00:26:54 - Mike Mills

What are the challenges that you're running into in dealing with them? On the acceptance of it?

00:26:57 - Joe Pizzurro

I think just like anything, you want to see that it's working first before you jump in. Unless you're a pioneer or a trailblazer.

00:27:11 - Mike Mills

Right.

00:27:13 - Joe Pizzurro

You want to see someone else do it first. Yes.

00:27:16 - Mike Mills

It's hard being the only one out there doing it. Sometimes it's not an easy thing to do. If someone were to ask you, okay, what is my risk in something like this? How would you answer that question? And I'm sure it's related directly to what all risks are in multifamily, which you can of course, expound on, but specifically with the fractionalization part of it, what would you say the risks are involved?

00:27:38 - Joe Pizzurro

I mean, I wouldn't think the risk is any different than the way you invest now. It's just a different way of handling it. So I think the risk stays the same.

00:27:53 - Mike Mills

So what's a typical risk? When you're looking at doing any multifamily investing?

00:27:58 - Joe Pizzurro

Just like any investment, the risk is you may not recover all your investment or a portion of it. Right. So that's why I think real estate is a safer place than some of the stock exchange. Right? Yes, all over the place. But if you can find a market that's got current growth and projected growth, and you're in assets that are stable in good neighborhoods, it's less risk.

00:28:35 - Mike Mills

Do you think you run into a little bit of the stigma that comes with anything related to if you call it a coin or crypto or anything? Because I don't know. This is something I run into when I talk to people about this topic. Not fractionalization per se, but blockchain and cryptos in general know more often than not when you're talking about a cryptocurrency, the vast majority of them. You're kind of talking about like a stock in a company, essentially, because a company has created a white paper, they've created a coin for some sort of platform that whether it be Smart Contracts or Oracles. I mean, obviously there are some out there that are trying to be currencies, but for the most part, it's some sort of application that applies to the Web Three World in one way or another. So you're kind of buying a stock in that company that's creating this particular technology. The issue with that a lot of times is that they're not backed by anything, they're backed by ideas, they're backed by a little bit of private investment on whatever software they're developing that's going to sit on top of the Ethereum network or whatever you want to call it. They're creating something. But the thing that's backing it isn't anything other than an idea, I guess you would say, in a lot of ways. Now, we're not talking about stable coins necessarily, but even Bitcoin, I mean, Bitcoin is not backed by anything. It's backed by the people in the network. It's basically because it's secure and because there's a lot of people on the network. That's where the value comes from. Even the fiat currency of the dollar that we use, the dollar isn't backed by anything either. It's backed by what's the way that they say it the full power and American people and government, I don't know where it is. There's like a statement. It's backed by the full power of the US government. So in other words, our military. So if you don't like the dollar, then we'll come get you. But when you're talking about fractionalization of the type of thing that you're doing, those tokens are actually backed by something. They're backed by a real asset and a real thing that has value versus just an idea or a concept.

00:30:44 - Joe Pizzurro

Right, right. And that's the whole idea. We've seen it many times where these things, they go all the way up and then they drop to zero. Right. So we're trying to come up. How do you prevent that? How do you increase confidence? Because to your point, investing in these things yeah, it's like buying stock in a company, but it's not really backed by anything.

00:31:12 - Mike Mills

Right.

00:31:12 - Joe Pizzurro

To me, it reminds me of if you invested in the.com boom back in the 90s, all those search engines and browsers that kind of fell off, but some of them made it, right.

00:31:25 - Mike Mills

Yes.

00:31:26 - Joe Pizzurro

You got to pick the right one.

00:31:28 - Mike Mills

Yeah. You got to pick the right horse and try to stick with them till they get to the end. But in this case, with the real estate, again, don't get me wrong, real estate can go down in value, of course, and there can be some loss or whatever, but there's still a tangible thing that holds value that's backing this coin that you're buying. When you're buying into something that's fractionalized, because whenever you're purchasing the coin on your chain, if something happens, at the end of the day, you're going to sell the property at some point, even if it tanks. Right. Let's say the market goes, then you still have the ability, because anything's for sale at the right price. Right. So the joke in real estate is if your house isn't selling it's because it's not priced right. There's nothing else. It's the price we need to put up these redo the flooring, none of that your price is wrong. Now, if you want to do all that stuff to make it seem like it matches the price that you're set on, fine. But either way, you're pricing it incorrectly. So there's always inherent risks in anything that we do, but with real estate specifically, even if things go poorly, that property can still be sold, even if it's less than what was acquired for, which is rare, but you still can. So that tangible asset, that token that you have because it's tied to your asset, it's much, much safer than anything else that you would consider or generally consider to be some type of a cryptocurrency. Correct? Right.

00:32:51 - Joe Pizzurro

And that's the idea, and that's why we're waiting on that to be ready, especially in this market. Now, if this were 2021, maybe we would have tried to launch it without that ready yet, but I don't think that would fly right now.

00:33:09 - Mike Mills

No, it's a little bumpy. But I do think that what you're offering to people is the ability to get into real estate at a low price point. And that's the thing that has always been a big hindrance for folks. Now, granted, this isn't be clear. This isn't a primary reason you can't live yourself. This is for investment purposes. But even like I said in the very beginning, one of the things that Robinhood did was they took stock investing or investing in the market, and they made it and brought it more to a greater mass because they have individuals that maybe want to invest $25 or $5 or $100 or whatever the case may be. But the cost of one stock in Apple is $350 or whatever it was. Right. So if I don't have or want to invest $350 and I want to invest 100, but I want to invest in three different things well, the fractionalization of those stocks, essentially, because that's what they did, made it to. Where the average investor who didn't or the street investor who wasn't a part of Wall Street and didn't have really deep pockets could still get involved. And what I think fractionalization of real estate assets does is it creates an entry point for someone who doesn't have $100,000 to invest in a syndicate.

00:34:32 - Joe Pizzurro

Right, exactly. And I think if it works, maybe the same way as how Trump raises money, if everyone pushes in $1 that's right. You reach millions of more people millions of dollars.

00:34:47 - Mike Mills

What's your entry point right now? Because I know you guys are starting this out and this isn't like I said, you're the first ones to do this kind of in the area. What is kind of the entry point that you have right now on the tokens?

00:34:58 - Joe Pizzurro

So we haven't decided yet, but the current one without the tokens is about 50,000.

00:35:04 - Mike Mills

Okay. Have you come up with an idea of where you would like to target the fractionalized piece of it?

00:35:10 - Joe Pizzurro

I think maybe 1000.

00:35:12 - Mike Mills

Okay. And when you've gone to the different groups, your investors, because you normally hold to talk to the other multi, what's kind of been the feedback from those guys? Because I know they're used to investing at a certain level and you're trying to change the game a little bit. So what has the response to the feedback been from them?

00:35:30 - Joe Pizzurro

Well, the theme is you want to start higher and squeeze what you can and then lower it as you go.

00:35:38 - Mike Mills

Right.

00:35:40 - Joe Pizzurro

If you start low, you're going to get just lower.

00:35:44 - Mike Mills

Right. You want to be able to well, I would sure. The lower the investment amount comes with its own set of headaches too. Right. Because they want to know if you have someone putting 50 or 100,000. They've probably played the game a little bit before, and this isn't their first rodeo, so it comes with a little bit more seasoned investor.

00:36:04 - Joe Pizzurro

Right, right.

00:36:07 - Mike Mills

And I've talked to a couple of people about this before, but there's a what's the word? It's certified investor or credited. Credited. Okay, so explain that.

00:36:18 - Joe Pizzurro

So I think that the SEC definition is currently something like if your net worth is over a million, not including your residence and or your annual income is two to 300 a year, something like that, you can be certified as an accredited investor. So I think it's there to protect folks who can market, like, on social media and publicly. And for sophisticated investors, it's more like you need to have a preexisting relationship. Got you. Right.

00:37:03 - Mike Mills

You get taken advantage of.

00:37:04 - Joe Pizzurro

Right?

00:37:05 - Mike Mills

Yeah. It's a little bit of protection for the investors, but also protection for the ones that are being invested in, I guess.

00:37:12 - Joe Pizzurro

Right?

00:37:13 - Mike Mills

Yeah. It offers a little bit of both protection on both sides. I know you got to get out of here in just a second. So before we go, though, what are a couple of do you have any resources that you would recommend people go look at to see to find out more about kind of how this all works and get a little bit more educated? Because, again, this isn't something that is incredibly mainstream, really, at all in our world, yet there are a few places that are piloting this. You've seen some in residential. You're seeing it more and more in commercial. Is there any places that you feel like that people could go to kind of find out more yeah, well, and.

00:37:50 - Joe Pizzurro

I didn't have it ready, but I can send it here shortly. But I'd link to my website and I'll actually be at the we mentioned Texas Blockchain Council. There's the North American Blockchain summit in November. I'll be exhibiting there. Do you want to swing by and chat? Yes, I'll be there.

00:38:10 - Mike Mills

Yeah, I'm trying to make it I'm trying to get my ticket and get over there. I got children and things. I got to make sure I can get it in the schedule. But yes, it's definitely something I plan on being at. No, this whole thing is again, the mainstream level of adoption is low right now, but it is slowly moving in that direction. And I really do feel like that the more people understand it and that's what I'm trying to do is I'm just trying to bring awareness and attention to it. Because I do think that it's something that is headed in the right direction and it has a lot of great benefits that once people get more educated on it and understand it a little bit better, then I think you'll start to see more and more adoption of it. And having people like you that are out there talking to investors on a day to day basis and saying, hey, look, here's what we're trying to put together, here's what we're creating and trying to create a buzz around that really kind of brings more and more people into the fold. And the more people that you have familiar with how it works and the more people that are kind of advocates for the technology, I think you're going to see a greater level of adoption that comes. It's just a slow moving process. It's not something that happens overnight, especially when it's something that people aren't familiar with and they don't necessarily have all the warm fuzzies about because it doesn't make sense or like, what do you know? It's like the NFT thing. Well, I can take a picture of the Mona Lisa with my phone. It's like, okay, it's not the same thing, but there's a certain level of understanding that comes with it. And you guys out there trying to you and your partner, educating investors so they can be a little bit more well versed in all the opportunities that are available, I think is a big help for just the blockchain world as a whole. The web, three crypto, whatever you want to call it, however you want to describe it, but what you're doing is certainly something that nobody else is doing and I think is a big benefit to kind of help drive the technology forward. Yeah.

00:39:58 - Joe Pizzurro

And one comment on the NFTs that reminds me of baseball cards. Remember those? Yes. You pay a lot of money for that one rookie card, right? It's kind of similar.

00:40:08 - Mike Mills

Yeah. Well, the thing that people lose on NFTs is just and I've had these conversations before, too, as well, but it's an ownership, it's a deed of some sort of it's the deed of that car, the deed of this thing. It's ownership of something and it's one of one because when it's recorded that way you can't duplicate it or fabricate it or know even with art, right? It happens in art all the time, real art, not NFT art where Picasso paints his painting and it's there, but then someone comes along and fakes it and forges it. And so now how do you tell the difference between what's the real Picasso and which one is the forged Picasso? Because there's no way to tell unless you can identify the style. But when you talk about blockchain and NFTs, well, now you have a way to tell. Now you can tell what the original was because it was recorded that way and there's no faking it.

00:41:04 - Joe Pizzurro

Yes.

00:41:05 - Mike Mills

So it's a whole new world and I really do hope that more and more people get on the bandwagon, but it's going to take time and it's going to take more conversations like this for people to realize what the opportunities are. And it's really a benefit for the small guy whether people realize it or not. We're talking about 5100 thousand dollars investments. But really and truly when you get to the end game, it's so the everyday investor can have the opportunity to put money into something that can grow for them over time, which otherwise was a barrier before because they didn't have $100,000. And you guys are leading the way, so I really appreciate it, Joe.

00:41:38 - Joe Pizzurro

Yeah, and you're helping, so keep doing these.

00:41:42 - Mike Mills

I'm trying as much as I can, so got to keep pushing in that direction. I think my industry is going to be affected by it too one day, so hopefully I'll be at the front of that one. I don't know, we'll see. All right guys, well, thanks for sticking around with us, Joe's. Got to get to an appointment, so I appreciate everybody that hung in and we will see you back next week. Thanks Joe.

00:42:01 - Joe Pizzurro

Thanks one.