UPDATES.md

# Property Updates

## 2026-07-14

- **Property Update (07/14/2026):**
    - Hi everyone,

    - This month's update includes the current reviewed financial summary from the guarded monthly workflow.

    - Financial summary from FINANCIALS.md:

    - Financial data is shown as of 2026-06.

    - Cash Flow Snapshot (2026-06):

    - Revenue: $827.05
    - Operating Expenses: -$3,263.57
    - NOI: -$2,436.52
    - Net Operating Cashflow: -$2,436.52

    - Monthly Cash Position (2026-06):

    - Revenue and operating expenses are scoped to the reporting month. ECO Operating Cash is the current complete DAO-attributed total of Column E across every row in the property-split ECO Systems GL, including accruals.

    - Lofty Operating Cash: $1,336.42 (Lofty curr_maintenance_reserve)
    - ECO Operating Cash: -$2,680.66 (ECO Systems General Ledger Column E (116 rows))

## 2026-06-09

- **Property Update (06/09/2026):**
    - Governance Results for 25 Circle Dr:
    - The Governance Voting results are back for the owner proposed vote.
    - The winning vote is:
    - Yes [take out a $90,000 cash-out, interest-only DSCR refinance loan on this property]
    - This voting option received 758 / 998 votes, which is equal to 75.95% of the total votes.
    - The voting results can be found on chain [here](https://allo.info/application/3593760189) or by searching the application ID: 3593760189

## 2026-06-01

- **Property Update (06/01/2026):**
    - Owner-Proposed Governance Vote for 25 Circle Dr:
    - An owner with the following [wallet address](https://allo.info/account/Q7UOTUHR5WBGLAWTDBIIQN7A7Q37S7CCIH3M4KJFF4KXYQY4DZZWZSVMSA) is proposing a governance vote.
    - This owner holds 390 shares in this property.
    - The owner's reasoning is below, word-for-word:
    - Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.
    - 25 CIRCLE DRIVE DSCR CASH-OUT REFINANCE PROPOSAL
    - The Lofty marketplace is clearly undervaluing the property that we own at 25 Circle Dr, Dixmoor, IL 60426, and I would like to make a proposal that will help the current owners unlock the value inherent in the tokens of this property and provide token price stability with a positive rental yield. Around $9,000 of property taxes are currently owed on the property and the operating reserve is currently negative, both of which are preventing this property from cash flowing (and will prevent this for many months/years into the future) and the token price from moving closer to its true value.
    - I am proposing that we take out a $90,000 cash-out, interest-only DSCR refinance loan on this property. The proceeds from this loan after closing costs will be used to:
    - First: pay all outstanding property taxes and DAO/operating reserve debts
    - Second: create a new $10,000 operating reserve to put the property on solid financial footing
    - Third: buy back up to 1,500 tokens over a two-week buyback period at a limit order price of $30 per token (the buyback could be anywhere from zero to 1,500 tokens, depending on how many people sell back their tokens at the $30 price point), and, finally,
    - Fourth: distribute any remaining proceeds in a special dividend proportionally to the remaining tokenholders after the tax payoff, $10,000 O.R. creation, and token buyback are completed. If more people sell back their tokens for the $30 buyback, then there will be less money left for the special dividend for the remaining tokenholders but also fewer remaining tokens, so each remaining owner will own a larger percentage share of the property and the value per remaining token will be higher. Vice versa if fewer people sell their tokens back (there will be more proceeds for the special dividend but more tokens remaining so each token will constitute a smaller percentage of ownership).
    - The approximate breakdown of the proceeds available for token buyback and special dividend is as follows:
    - Inline image
    - This proposal gives current tokenholders flexibility with two viable options: they can either take the $30 per token buyback offer if they want liquidity for their tokens and/or they don’t want debt placed on the property, or they can keep their tokens and take the special dividend (whatever it ends up being per token) and retain ownership in the newly cash flowing property.
    - The reason I am specifically proposing a $90,000 loan amount, which is a 60% loan-to-value borrowing at a $150,000 valuation on the property, is that it provides a happy medium balancing risk, economics and interest rate. Borrowing too little will make the loan less economical as the closing costs would then be a larger percentage of the gross loan amount, but borrowing too much (we could go up to 75-80% LTV) is riskier for investors and would carry a higher interest rate. Also, I am proposing an interest-only loan to avoid the complication of making a principal portion of a payment each month (like on an amortized loan) and then having to figure out how to allocate these tiny monthly principal payments among all the tokenholders as new equity.
    - Options are limited for this type of loan, but I have a good quote from a lender for an interest rate of 6.625%, which would create a monthly interest-only payment of about $497, and leave the other roughly $500 of NOI for distributions. My current estimate of the monthly NOI is about $977, or $11,724 annually. With a current Lofty market value of equity at $67,000, and around $14,000 in taxes/negative OR owed for a total asset value of roughly $81,000, this property has a cap rate over 14%. At a $30 per token price, the total asset value rises to about $100,000, for a cap rate of around 12%. This is the main reason why I do not support issuing any dilutive equity at $30 per token, since this is akin to borrowing at a 12% rate, which is almost twice as much as the rate offered to me on the loan. The numbers work much better mathematically by taking on the loan for a bit less than max loan-to-value instead of issuing dilutive equity at $30 per token, and I also don’t believe that people will be quick to buy any new equity in this property at a price equal to or higher than $30 per token currently anyway.
    - Thank you!
    - The results will be determined by a 60% Supermajority and sent to all owners on Tuesday, June 9th once the voting period ends.

## 2026-04-06

- **Property Update (04/06/2026):**
    - Yhome Transition Reconciliation (as of 2026-04-06 via Lofty PM/Yhome Transition Reconciliation.xlsx):
    - Yhome Net Due TO DAO: $869.30
    - Lofty Operating Cash: $1,970.54
    - ECO Operating Cash: $2,081.96
    - Outstanding Liabilities (Unpaid Bills): $0.00
    - DAO Net Cash (Capital Call): $-3,280.31
    - Estimated Owners' Equity: $131,950.00
    - DAO Estimated NAV Per Token: $44.03
    - DAO Tokens: 2922
    - Current PM: ECO

## 2026-03-26

- **Property Update (03/26/2026):**
    - Governance Results for 25 Circle Dr:
    - The Governance Voting results are back for the owner proposed votes.
    - The winning vote is:
    - Approve sale of 70 shares @ $30/share to DAO member.
    - This voting option received 841 / 1,004 token votes, which is equal to 84% of the total votes.
    - The voting results can be found on chain [here](https://allo.info/application/3494397934) or by searching the application ID: 3494397934
    - The leading vote is:
    - Approve Lofty listing up to 292 shares (10% dilution from current total supply of 2922 shares) at $30 to raise all funds needed without assuming Yhome funds are released.
    - This voting option received 587 / 1,004 token votes, which is equal to 58% of the total votes.
    - This vote will not pass because it didn't reach a 60% Supermajority.
    - The voting results can be found on chain [here](https://allo.info/application/3494397934) or by searching the application ID: 3494397934
    - The winning vote is:
    - Decline furnace bridge loan
    - This voting option received 476 / 732 token votes, which is equal to 65% of the total votes.
    - The voting results can be found on chain [here](https://allo.info/application/3494399241) or by searching the application ID: 3494399241

## 2026-03-23

- **Property Update (03/23/2026):**
    - Owner-Proposed Governance Vote for 25 Circle Dr:
    - An owner with the following [wallet address](https://allo.info/account/N5YLYNWUVUUBY4MMO2YREBLGCNSNFW4EOUE2MRSMT2FDGUMMPAPCOTWVOM) is proposing a governance vote.
    - This owner holds 44 tokens in this property.
    - The owner's reasoning is below, word-for-word:
    - Because this is an owner proposed vote, Lofty cannot change the content. It's up to owners to verify the accuracy of the claims below.
    - Owner-Proposed Governance Vote: Furnace Bridge Loan
    - Fellow owners,
    - Given the urgent need to replace the furnace and maintain habitability for the tenant, I propose funding the furnace replacement via a short-term loan to the DAO. This approach resolves the immediate issue while avoiding dilution at current market prices.
    - Loan Terms
    - Principal: $4,500
    - Interest: 10% APR
    - Term: 6 months
    - Minimum Interest: $300
    - Use of Funds
    - Funds will be used solely for the furnace replacement.
    - Repayment Structure
    - Phase 1:
    - 50% of monthly cash flow allocated to loan repayment and 50% to Operating Reserve until the Operating Reserve reaches 50% of its target level.
    - Phase 2:
    - Once the Operating Reserve reaches 50% of target, 100% of monthly cash flow will be allocated to loan repayment until the loan is fully repaid.
    - Priority
    - Loan repayment will take priority over any distributions to token holders until fully repaid.
    - Operating Reserve & Taxes
    - Property taxes are expected to be funded through a separate capital raise.
    - Lofty Operating Reserve funds should not be used to pay property taxes while this loan remains outstanding.
    - Additional Notes
    - This loan is intended specifically to address the furnace replacement and is separate from any future capital raises required to address property taxes or other liabilities.
    - The loan is expected to be fully repaid within the 6-month term through the repayment structure outlined above.
    - Vote Options
    - Vote:
    - a) Approve furnace bridge loan under the terms outlined above
    - b) Decline furnace bridge loan
    - The results will be determined by a 60% Supermajority and sent to all owners on Thursday, March 26th once the voting period ends.

## 2026-03-22

- **Property Update (03/22/2026):**
    - Owner-Proposed Governance Vote for 25 Circle Dr:
    - The property manager, ECO Systems LLC with the following [wallet address](https://allo.info/account/YILY2YPFH2HODAZSMVJ6C2URUTBJSEPB3377SIKHFCFMGQEEFAJ3E5TYDM), is proposing a governance vote.
    - The owner's reasoning is below, word-for-word:
    - Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.
    - Fellow owners,
    - We are in need of a new furnace as the current one is 24 years old and has already failed twice in the past month. Here is the invoice for the replacement totaling $4,465 which includes 10-year parts and labor warranty.
    - Cash Balance Sheet:
    - ECO Systems Operating Cash: $3,811.32
    - Yhome-held Cash: $4,769.30
    - Lofty Operating Reserve: $1,970.54
    - Total Cash: $10,551.16
    - Liabilities:
    - New Furnace: ($4,465)
    - Taxes Due (2023-2025) as of 4/1/26: ($13,233.27)
    - Total: ($17,698.27)
    - Net Asset Value: ~$132k ($44.03/share)
    - A DAO member has offered to buy 70 dilutive equity shares of 25 Circle Dr at $30/share for a total of $2100 (2.4% dilution, no trading fees).
    - Assuming we are able to recover the funds due from Yhome, we will still be short $5,047.11 after this dilution and need a capital call.