Financial Model - Demonstration
While it is impossible to foretell the future, this document aims to show an example of what may be achieved. It makes use of current and past financial data to show an example of what the future may hold. This document should not be taken as investment or legal advice and you should always do your own research.
The figures shown below demonstrate what can be achieved in the real world and do not take into account the huge rises that are seen in some cryptocurrencies / tokens. We do hope that our project is successful and that the rise of the Kexcoin token hits Unicorn status.
We have included a future figure for Bitcoin that in all honesty is pure speculation and should be treat as a bit of fun!
At the end of the full document its reads "....this would give you a total fiat value of over 3.5 million in return for your 4000 or 1 bitcoin." Should this not bee 400 instead of 4000? I think it's just a typo and the math is still correct.
You may want to read another point of view (mine) before investing:
https://steemit.com/kexcoin/@ograf/kexcoin-ico-why-i-won-t-invest-should-you
Just keep in mind that according to the simulation Kexcoin will pay about $99 for each kexcoin over the 30 years of the project. In today's bitcoin price you will pay roughly $10 for each kexcoin at the ICO. Kexcoin will take 15 years to pay that back, so without even accounting for inflation the real value of your coins will be less that your purchase price for the next 15 years.
Of course you could still make money selling your coins on the market before then if you find someone willing to pay even more.
Ultimately (and this is according to Kexcoin ), under favorable market conditions and if they raise their $85M target, the total payout to coin holders will be around $991M over 30 years. Anytime you see the total market cap higher than that, it means the project is just another way to separate dumb investors from their money.
You have some very good arguments against this project. and it is weird we pay for the buildings but will only get half when they will be sold.
It is simply astonishing to me that you could honestly offer such a scheme. The norm in a capitalist society is that owners of capital lend it or entrust it with people that will make it fructify. The capital owners get a yield, usually take zero to moderate or even substantial risk on the capital itself. The people managing the money get salaries, or commission, often bonuses according to performance, a cut of the profit, or a mix of the above.
The fact that Kexcoin will take all your capital and only give you back half of the profits is just mind boggling. This is more like extortion than anything...
I've been working in the finance industry for 18 years, professionals find it more and more unacceptable that hedge fund managers can charge 2% of your capital per year and 20% of the returns. This is child's pocket change compared to Kexcoin's model. They take 100% of the capital and 50% of the profits!!
In this case the scam is hidden behind the genuinely innovative blockchain technology. Le it be clear to investors, the blockchain aspect of this deal is not bringing them ANY value, it's only allowing Kexcoin to exploit the recent frenzy on the cryptocurrency market to raise a ton of money without any serious regulatory scrutiny. How much cash do you think they would get from professional investors if they had gone through the usual financial market avenues?
@ograf +1. I like the novelty of using a crypto token to facilitate real estate investments. I just wish the deal offered equal (or better) terms of what is commonly found in traditional markets.
Thanks for providing the illustration. I follow your analysis up until the speculation fun part. I don't understand how the future price of BTC figures into the return for a long term KEX holder. Can you please elaborate?
Because when we buy back Kexcoin we will be paying in BTC.
Also when we distribute the share of increased property value this will also be paid in BTC.
Ok. Understood. Using the same assumptions in the illustration, if an ICO participant were to purchase 1 BTC worth of KEX at the .0025 BTC price they would end up with 400 KEX. Per the illustration 991.76M will be distributed over the life of the project. This translates into 116.678 / KEX (991.76M/8.5M KEX) or 46,671. If BTC is at 300,000 wouldn't the ICO participant receive .15557 BTC if all held until the end?
No. If you buy 400 Kexcoins during the ICO and don't sell any, why would the number of Kexcoins change to 116.678?
It wouldn't, your balance would remain at 400 Kexcoins but the value of those coins would change.
Assuming your yield and property values assumptions are correct, you actually need to divide the total fiat returned to investors by the total number of coins (keep in mind that 10M totally are issued, including the 1M for founders' compensation and 0.5M for contingencies).
So you get a total return of USD 99.176 over 30 years per coin for an investment (at USD4000 assumed BTC value) of 10 USD.
Of course this number is an average and only applies to people eligible to half of the capital gains, meaning people selling before 30 years will get less, people not eligible to the capital gains will get only USD 44.43 per coin.
Chris, can you confirm this calculation?
Agreed. I should have divided by 10M coins instead of 8.5M. Your calculations illustrate what I was trying to communicate. Thanks!
Please re-read. That's not what I'm saying. By dividing the total profit by the number of coins it comes to 116.678 per KEX (not 116.678 KEX). Since the participant originally purchased 400 KEX then one could expect them to receive 46,671 in return from their original investment of 4000 based on the numbers in your illustration. If BTC appreciates to 300,000 then, if the participant would have just held on to the 1 BTC they would have 300,000 instead of just 46,671.
I'll run this by Michelle, our financial analyst and see if I can get a better answer for you.
One more thing about your simulation, you say you are using a 3% estimate rent increase per year, but your formulas are actually using 9% per year.
That’s because from year N to year N+1 you consider that your tenants will pay rent worth 12% of the property value after inflation (+6% from previous year) and will on top will pay a 3% rent increase (you also add the 12% return on the additional 2.89 properties you will purchase).
Gross income on year 2 : 11.47 = 12% x (85 + 5.1 + 2.89) + 0.31
I don’t know the UK student accommodation market, but a 9% increase per year for the next 30 years seems a bit bullish. Even if this is likely to happen (most likely in a higher general inflation environment), you should just say you are using 9% instead of 3%.
Can you confirm that assumption?
Thanks!
It's been 2 days since these questions were asked, will there be any answer before the ICO starts?
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STOPGetting myself ready for the ICO launch. Can't wait! Should I leave the tokens on the BTS exchange after having bought them or is there a specific wallet I could use?
The BitShares wallet is their native environment so you can store them there.
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