Tyler Vinson on Tokenizing Real Estate for Global Investors

Tyler Vinson (00:00)
Yeah, most focused on making real estate a liquid asset so it can trade like stocks and crypto. And so the average person can invest in high quality real estate deals kind of back to that, you know, two sides of ⁓ the equation or two sides of the token pun intended. One of them being the ability for general partners and limited partners in these deals to have pathways to liquidity.

to be able to access their equity, unlock their equity on their terms, in their timeframes, in the amount that they want to add velocity to that capital that’s traditionally been locked up. And then for the average person to be able to invest in these resources.

Leo Wehdeking (00:38)
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Hey everyone, welcome to the Investor Fuel Podcast. I’m your host, Leo Wehdeking and today I am joined by someone I’ve been looking forward to chatting with, Tyler, who’s been making serious moves in the real estate industry. Tyler, glad to have you here, man.

Tyler Vinson (02:36)
Hey, I appreciate you having me. I’m looking forward to the conversation.

Leo Wehdeking (02:40)
Very good, very good man. Tyler, I think our listeners are really going to take something away from how you’ve been approaching your real estate business and your investing business. ⁓ let’s dive in. All right. So first of all, for people who may not be familiar with your role, with what you do, ⁓ can you give us a short version on what’s your main focus these days?

Tyler Vinson (03:05)
Yeah, I think it helps to give a little bit of background where I came from. I’ve got about 25 years of real estate investment experience being a professional real estate investor. ⁓ Started out with duplexes, houses, moved to apartments, storage facilities, commercial, specialized in creative finance, ⁓ private investment, seller finance, deal structure, owned a brokerage and management company.

a massive real estate investment background for me. And that’s led me into today of real estate tokenization and making the ownership of real estate digital. That’s what we’re doing when we tokenize. And when we do that, it allows real estate to participate in the new digital era. So it can enjoy the same type of benefits that stocks and crypto enjoy today.

Leo Wehdeking (03:58)
Alright, and in what markets are you operating in?

Tyler Vinson (04:02)
We’re a global company. We primarily focused on the United States right now. That’s ⁓ where our broker dealer, REtokens Capital, they are a FINRE member and an SEC registered platform. So those are obviously United States federal ⁓ entities. We wanted to make sure that we had United States federal compliance ⁓ under our belt before we grew globally, because that’s kind of the highest bar that’s out there.

⁓ We are a global company though, and also work with folks outside of the United States.

Leo Wehdeking (04:38)
Alright, alright. Love it, Now, Tyler, something that actually caught my attention, ⁓ it’s the way that you’ve been able to build your own company and you were talking about tokenization. Am I right? Alright, can we dive a little bit more into that? The way that you have integrated all that into the digital world and real estate.

Tyler Vinson (04:53)
Yes.

Yeah, I mean, first, let’s just real quickly talk about what tokenization is, because for a lot of folks, it’s a new concept. Tokenization is simply making the ownership of the asset digital. ⁓ most of our clientele would be like real estate syndicators or general partners. And when they put together a real estate syndication and they raise capital, what they’re doing is they’re selling

⁓ LLC membership units or maybe you call them shares. Well, when we make that ownership digital, that’s what tokenizing it is. And we record that on the blockchain. And that allows what is traditionally an illiquid asset like real estate to participate in the new digital world. And for me, there’s there’s kind of two sides of the coin that led me from

just my traditional real estate investment world to tokenization. One of them was kind of selfishly wanting to solve challenges for me. So as a professional real estate investor, I would have millions of dollars of equity on paper or locked up in the real estate. And I wanted the ability to tap into that equity without having to sell the asset in total.

or without having to go to a bank and do a cash out refi and go through all that process. Plus everybody has to be on board, meaning whatever I do, everybody else had to do. And I know that my investors always were interested in having a pathway to liquidity as well. So that’s one side of it. The other side was there was always folks that were interested in investing with me.

and investing in projects that I had, ⁓ but perhaps they weren’t accredited or didn’t have the $50,000 minimum that I required to get into these real estate investments. And so it’s been a challenge of the industry. It’s not just my challenge, it’s an industry challenge that I’ve been looking to solve for a long time. And so when I was introduced to tokenization,

meaning making that ownership digital and being able to put it in the blockchain, I knew the future was digital. And I knew that these fractions of real estate, again, traditionally you’d call them LLC membership shares or LLC membership units, but now they’re real estate tokens. I guess real quick, one way to kind of give you an analogy is if you say a piece of real estate is like a really large gold brick, right?

⁓ very large gold brick and it’s kind of hard to get in and out and sell and everybody has to do the same thing together. Now imagine taking that really large gold brick and making it 10,000 gold coins that each investor actually holds their own gold coins and now they have all sorts of flexibility to buy, sell and trade those gold coins. And so that’s just a huge difference.

Leo Wehdeking (08:34)
Carton.

Tyler Vinson (09:01)
and a feature that real estate hasn’t had in the past.

Leo Wehdeking (09:05)
Wow, that’s actually very, very interesting, And ⁓ now, can you tell us how you’ve been able to handle, you know, that transition because obviously it’s not easy to do that and do it in a smoothly way.

Tyler Vinson (09:22)
Yeah, where we’re at today is actually a massive lift. So if you bear with me, I’ll give you a little bit of context on the history here. So I knew I wanted to tokenize properties of my own. There was a lot of, at the time, false promises out there of marketplaces and liquidity. so as mentioned, that personal challenge, I wanted to solve that. So I was moving forward and tokenized one of my storage facilities that I own.

But when our token started, we were just about getting real estate assets on chain. In fact, our slogan was secondary market ready.

We just wanted to educate people and help people get their real estate assets on chain, or you could think of it as online so it can participate in this digital world. But as time went, we realized that there was no great adequate marketplace.

that was designed exclusively for real estate. And so that’s when we made the decision to ⁓ start a subsidiary company called RE Token’s Capital. And RE Token’s Capital has recently been awarded a FinRAM member digital broker dealer ATS license. ⁓ That’s a license for a broker dealer to operate an ATS or a secondary trading market.

where now these shares or these tokens that we talked about can actually trade secondarily. And through some different securities exemptions, you can open up access for qualified deals to non-accredited investors, for example, who didn’t have access to these things before. So for syndicators, it’s a phenomenal way to scale their brand and really monetize the communities that they’re working with.

because as mentioned, this can be done on a global level. And then on the other side for investors, there’s still great opportunities for accredited investors, multi, or I’m sorry, family office, et cetera. But also now non-accredited investors can actually get involved and that gives ⁓ limited partners, the folks that originally invested in the deal, pathways to liquidity. And again, it takes a ⁓ traditionally illiquid asset

like real estate where all the equity and investors are all locked up in there and breaks it into these pieces, just like, ⁓ you know, stock shares or like crypto and allows it to participate in this digital world in a way that it hasn’t ⁓ been done before. So those licensing, federal licenses that I talked about are extremely difficult to get and take a very long time. In fact, I think there’s less than 10

companies that are operating in the United States that have digital broker dealer ATS licenses.

Leo Wehdeking (12:53)
All right, man. That’s cool. That’s cool. Now Tyler, changing the subject a little bit. I know that every operator has a moment where things got real. All right, maybe a deal that went sideways, or a time that you had to pivot real fast. Okay. Do you mind sharing one of those moments?

Tyler Vinson (13:11)
Yeah, do you want me to go back into my real estate career or do you want me to talk about something in the last couple of years through the tokenization journey?

Leo Wehdeking (13:19)
⁓ If it’s something regarding tokenization, know, because we can keep it, you know, with the same flow of the conversation. Hopefully very good.

Tyler Vinson (13:26)
Yeah, sure.

Yeah, I think it’s that moment that I mentioned earlier where we started, you know, talking about ⁓ potential liquidity for real estate. And we talked about the future for real estate. And there was a lot of excitement out there. But then nothing was actually trading. Nobody brought this marketplace ⁓ to life. And so we realized that

that needed to be solved and we looked around and nobody else was solving it. And so we went out and we tried to work with different broker dealers that had that type of license. Then we tried to buy one or two of them. And at the end of the day, we realized that nobody was going to be able to deliver a digital marketplace that was exclusive for real estate tokens, for tokenized real estate. And we’re real estate investors. We’re real estate people.

And that’s what we believed in because Main Street is different than Wall Street, right? If you want to invest in real estate, that’s a very particular asset class. So we had to make the very difficult decision to bite the bullet and actually become a marketplace instead of just being a technology platform. So the parent company, Aritoken USA, they tokenize real estate. We have the technology platform.

But the time, effort, money, and everything that went in to the marketplace is a challenge. And we’re still in that challenge as we go to ⁓ launch this marketplace, because we need to have enough assets to ⁓ appease the investors that come to the marketplace and really get it off the ground. So we do have fantastic traction and have some excellent meetings. We should have 100 million of assets on platform here.

within the next four to six weeks. So that’s kind of a start, but it really needs to get into the billions. And so those are the meetings and conversations we’re having. And that pivot alone was a major challenge in undertaking because you need a whole different level of capital to go from just tokenizing real estate and having a capital management or software platform to actually being an SEC registered exchange is a totally different.

Leo Wehdeking (15:48)
Thank you.

Tyler Vinson (15:50)
world for the amount of ⁓ money and resources, ⁓ regulation and all of those things. So it has been a serious lift and a major pivot.

Leo Wehdeking (16:43)
Alright man, you know, actually that’s… ⁓

don’t like to talk about that stuff you know too much but honestly I believe you know that’s what kind of separates you know the the people who just dabble from the ones who actually stay in the game long term you know so ⁓ with that being said Tyler can I ask you another question now what are you most focused on solving or scaling next?

Tyler Vinson (17:12)
Yeah, most focused on making real estate a liquid asset so it can trade like stocks and crypto. And so the average person can invest in high quality real estate deals kind of back to that, you know, two sides of ⁓ the equation or two sides of the token pun intended. One of them being the ability for general partners and limited partners in these deals to have pathways to liquidity.

to be able to access their equity, unlock their equity on their terms, in their timeframes, in the amount that they want to add velocity to that capital that’s traditionally been locked up. And then for the average person to be able to invest in these resources.

Leo Wehdeking (17:51)
you

Tyler Vinson (18:02)
I’ll just give you a quick story example. So let’s say you’ve got, whether this is a, you know, a single mom or a baby boomer.

whatever the case, you’ve got somebody that lives in an apartment, let’s say. And we as real estate investors, typically every 12 months, what happens? We raise the rent. That’s part of the business model. We have to, taxes, insurance, everything else, right? So how does that tenant feel at each of those rent raises? Not very good, right? Moreover, when we have an inflationary environment like we’ve had in the past and is likely to be part of our future,

Leo Wehdeking (18:32)
Obviously.

Tyler Vinson (18:39)
Those of us with assets have benefited greatly, right? Those of us that have owned a lot of real estate over the last seven, eight, nine years have done really, really well with that. But those that don’t own assets get pushed down to the other end of the spectrum, right? And that’s just not sustainable for the long-term. Don’t get me wrong, I like making the money. That’s all in good. But people still need to pay rent and buy groceries and you know,

If we get into the haves and have nots, you don’t want that gap to get too big because the have nots might visit the haves. It’s much better to have things on a ⁓ more level playing field if you can. And so by giving access to these real estate investments, let’s go back to the story here. Let’s say this baby boomer or this single mom is saving up a thousand here, couple thousand there throughout their year, and they want to invest that.

Well, what are their options to invest today? Well, the stock market, guess, crypto now, maybe some treasuries, but not really real estate, not for a few thousand here, a few thousand there, right? But now they’ll be able to go onto a marketplace. They see their apartment building is available and they can actually invest in the apartment building that they’re living in. And then what happens at the 12 month mark? What’s that?

Leo Wehdeking (19:44)
No.

Good boy.

Right with

with tokenization with servicing

Tyler Vinson (20:03)
That’s right. That’s right.

Yeah. So they’re just going to buy some of the real estate tokens, which is real ownership of this real asset that provides them real cashflow, real appreciation and real tax benefit. So now at 12 months when the landlord raises the rent, maybe they’re, you know, not super happy about it, but guess what? They catch a piece of that for the whole building, right? It’s part of the ownership. So

they actually catch a piece of that. And now when the rents go up, you know, ideally the net operating income went up and that’s how we value these apartment buildings, which means the value of their token went up. Or if it’s an inflationary environment and asset prices are going up, guess what? They’re now riding that wave. And that is an absolute game changer and ultimately closes that socioeconomic gap. So it’s really a win-win across the board.

Leo Wehdeking (20:58)
Alright, alright. I understand it. It’s very interesting what what you’re saying It took me a little bit to understand it, you know, but while I was listening to you I I got the whole picture and I actually like it very much, you know ⁓ well now you need to See how you play it, you know or or or or how the marketplace because depending

on how you play it, okay, then you can either compound things or create chaos Because of what it is, you know, it’s a digital market market But but I love it man. I love it. I love it. Nice nice idea. Okay now Tyler I know that a lot of people that are listening they’re either ⁓

earlier in their journey we might say, or looking to level up and I think they will benefit from hearing this. Now when it comes about building relationships and growing your network, what’s made the biggest difference for you?

Tyler Vinson (22:06)
⁓ probably going to different events across the country, ⁓ educational events, you know, seminars, if you will, we were just at limitless and Dallas, which we think is a great event. And not only do you gain education there, but these are really about the people that you meet. You’re meeting like-minded individuals. you typically find people in your space. We’ve found a lot of, ⁓ clients at those particular events, but.

you have to get around the people that are doing what you want to do. You have to get around the people. Like if you want to get into investment real estate, you want to do that. You know, maybe it starts with your local real estate investment club. And, you know, I used to go to our local events and then I spoke at those events and then I would go to national events and then I spoke at national events. Now we sponsor national events, right? And so it’s just a continuation of

Leo Wehdeking (22:40)
Correct.

Tyler Vinson (23:03)
⁓ You know, there’s cliches out there like your network is your net worth, right? So there’s a lot of truth to those types of things. You have to put yourself out there and you have to put yourself in the environment to get going. It’s motivating, it’s resourceful, and it’s how the small players become big players.

Leo Wehdeking (23:24)
All right, very good, very good, ma’am. All right, before we wrap up, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach out to you?

Tyler Vinson (23:38)
Yeah, so ⁓ a couple of ways are retokens.com is our website and there’s a free tokenization guide, quick start to real estate tokenization. So if what we talked about sounds interesting, I would go download that free guide. That’s something they can check out right away. We also share a lot of thought leadership on LinkedIn. So I’m personally on LinkedIn, but our company already tokens is on ⁓ LinkedIn.

And finally, we’ve got a great YouTube channel with some educational videos on there. It’s just at RE tokens.

Leo Wehdeking (24:11)
Alright, alright. ⁓ Perfect. Well, listen, Tyler, I really appreciate your time, your story and your perspective. ⁓ We need more people like you, alright, in this space who are actually doing it the right way. Thanks again for being on this show, Alright. And for those of you, and for those of you just tuning in, alright, make sure you’re subscribed. Alright, we got more conversations with operators just like Taylor ⁓ who are out there building real businesses. Alright.

Tyler Vinson (24:25)
I appreciate that. Yeah, thank you.

Leo Wehdeking (24:40)
So we’ll see you on the next episode.