SYSTEMS AND METHODS FOR TRADING REAL ESTATE SECURITIES
First Claim
Patent Images
1. A method of creating a publicly traded security, the method comprising:
- forming a real property holding company with a plurality of partial interest units;
transferring ownership of a real property to the real property holding company; and
complying with applicable requirements for making the partial interest units publicly traded;
wherein at least one of the partial interest units belongs to an occupant of the real property.
2 Assignments
0 Petitions
Accused Products
Abstract
Publicly traded securities and security derivatives are created based on underlying real properties, such as single family houses. An occupant of a house may be a majority holder of the public securities of a business entity owning the house. An exchange and a quotation system specializing in trading and quoting such securities may be implemented using computer systems. Various value metrics specific to real property may be used to screen the securities and to run a value fund of the securities.
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Citations
149 Claims
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1. A method of creating a publicly traded security, the method comprising:
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forming a real property holding company with a plurality of partial interest units; transferring ownership of a real property to the real property holding company; and complying with applicable requirements for making the partial interest units publicly traded; wherein at least one of the partial interest units belongs to an occupant of the real property. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36)
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37. A system comprising:
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a network; at least one server connected to the network; a plurality of electronic devices connected by the network to interact with the at least one server; a database storing information associated with publicly traded partial interest units in real properties, said database being implemented on said at least one server, said information comprising; addresses of the real properties associated with the fractional interest units, area information regarding the real properties, and number of shares of fractional interest in real property holding companies owning the real properties; and memory storing machine executable instructions for implementing a computerized quotation system for quoting prices of the fractional interest units, wherein the instructions, when executed by said at least one server, configure said at least one server to perform steps comprising; quoting an ask price, quoting a bid price, accepting sell offers, accepting buy offers, matching at least one of said sell offers with at least one of said buy offers; and executing a sale satisfying the at least one of said sell offers and the at least one of said buy offers. - View Dependent Claims (38, 39, 40, 41, 42, 43, 44, 45)
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46. A method of underwriting a public offering of units of a real property holding company, the method comprising:
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selecting a real property; performing a due diligence on said real property; reviewing a title report; reviewing an inspection report; reviewing an appraisal report; reviewing a registration statement; setting an initial price for the units; complying with requirements for public trading of the units; executing an underwriting commitment agreement; marketing said shares to prospective investors; and charging a commission on sales of the units.
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47. A method of transferring ownership of a real property owned by an owner to public through air initial public offering of shares, wherein said real property is encumbered by at least one mortgage, comprising the steps of:
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setting up an escrow account; collecting proceeds from sale of said shares of the real property from said initial public offering into said escrow account, wherein said proceeds are not less than said at least one mortgage; repaying said at least one mortgage from said proceeds held in said escrow account; and disbursing at least a portion of remaining funds in said escrow account to said owner of said real property.
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48. A method of transferring fractional ownership in a privately-owned real property from an owner of the property to public, the method comprising:
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forming a holding company; assigning a title and interest in said real property to said holding company; selling shares in said holding company to public; paying rent to said holding company; charging repairs and maintenance to said holding company; and distributing profits as dividends to shareholders of said holding company. - View Dependent Claims (49)
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50. A method of trading fractional ownership interests in a real property, the method comprising:
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forming a corporation; assigning said real property to said corporation as said corporation'"'"'s only investment asset; and listing said corporation on a stock exchange. - View Dependent Claims (51, 52)
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- 53. A method of trading derivative securities associated with fractional ownership in a real property traded on a securities exchange, the method comprising the step of pricing said derivative securities based on price of underlying fractional ownership in said real property and time to expiration of said derivative securities.
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58. A method of selling interest in a real property, the method comprising the steps of:
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selecting an appraiser from a predetermined set of appraisers; securing an appraisal of said property by the selected appraiser; selecting a property inspector from a predetermined set of property inspectors; securing an inspection of said real property specifying at least one physical condition of said property by the selected property inspector; dividing said real property into equal transferable fractional units of undivided non-possessory interest in said real property; and selling said equal transferable fractional units of undivided non-possessory interest in said real property to a plurality of buyers. - View Dependent Claims (59, 60)
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61. A method of publicly trading fractional interests in a real property, the method comprising:
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dividing said real property into a plurality of equal units of fractional undivided non-possessory interest in said property; issuing a plurality of shares, each share of said plurality of shares corresponding to one unit of fractional undivided non-possessory interest in said property, said each share entitling its owner to a corresponding unit of fractional undivided non-possessory interest in said property; listing said shares on a public exchange adapted to trade fractional interests in real properties; and selling said shares to a plurality of buyers on said exchange.
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62. A method of operating a real property exchange for trading units of fractional undivided non-possessory interest in real properties, the method comprising the steps of:
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maintaining a list of approved appraisers; obtaining an appraisal by at least one of said approved appraisers in respect of each real property sought to be listed on said real property exchange; creating a set of criteria for listing a real property on said real property exchange; accepting for listing on said real property exchange a real property that meets said set of criteria; and listing said units of fractional undivided non-possessory interest in said real property on said real property exchange, thereby making said units available for purchase by public. - View Dependent Claims (63, 64, 65, 66)
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67. A combination comprising:
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a real property; a title insurance for said real property; a homeowner'"'"'s insurance for said real property; an inspection report for said real property; an appraisal of for said real property; and a plurality of transferable shares corresponding to equal fractional units of undivided non-possessory interests in said real property for public trading of said shares on an exchange. - View Dependent Claims (68, 69)
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70. Financial instruments for trading fractional undivided non-possessory interests in real properties created by the process comprising the steps of:
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selecting a real property; subdividing said real property into a plurality of equal shares of fractional undivided non-possessory interest in said real property; and issuing said shares for public trading on an exchange. - View Dependent Claims (71, 72, 73, 74, 75, 76)
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77. A method of selling a real property, said real property being owned by a corporation having a plurality of shareholders, wherein the property was bought at a first price, wherein shares of said corporation are publicly traded, the method comprising the steps of:
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selling said property to a second owner at a second price; computing capital gain as the difference between the second price and the first price; paying applicable capital gain tax on the sale of said property; computing a net profit as the capital gain less said capital gain tax less legal fees and disbursements associated with closing of sale of said real property to the second owner; computing a pro rata share of said net profit of the first owner of said property; distributing the remaining net profits to said plurality of shareholders; and cancelling the shares of said corporation. - View Dependent Claims (78, 79)
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80. A computer-based method of operating an online real property exchange for trading shares of real properties comprising the steps of:
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establishing a secure network for operating said exchange over said network; establishing a first website for listing a plurality of fractional shares of undivided non-possessory interest in at least one real property; establishing a second website for hosting information about said at least one real property; establishing an account for the owner of said at least one real property; establishing accounts for traders of said shares of said at least one real property; providing secure login to said owner of said at least one real property for login into said account for the owner of said at least one real property; providing secure logins to said traders for logging into said accounts for traders of said shares of said at least one real property; listing the fractional shares of real property on said real property exchange; and providing for trading of said shares in said at least one real property listed on said real property exchange. - View Dependent Claims (81, 82)
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83. A system for operating a real property exchange for trading shares of real properties, the system comprising at least one server connected to a secure network for hosting:
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information about at least one real property listed on said real property exchange said information further comprising information about an area of said at least one real property, information about inspection of said at least one real property, an appraisal report of said at least one real property and at least one picture of said at least one real property; account information about the owner of said at least one real property listed on said real property exchange; and account information about buyers and sellers of said shares of said at least one real property listed on said real property exchange; said system further comprising a central processing unit, non-volatile storage and computer memory with loaded software program to match shares offered for sale by said sellers with offers to buy shares by said buyers.
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- 84. A method of creating units of a real property owned by an occupant, the method comprising subdividing the real property into a plurality of indivisible units, wherein each of said units is an equal fractional share of non-possessory undivided interest in the real property.
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105. A method of creating units of real estate investment instrument for investment in a real property, the method comprising:
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obtaining an appraisal of the real property to determine initial market value of said real property; and offering for sale to at least one investor at least one unit of property appreciation in the real property from a plurality of units of property appreciation in the real property; wherein; property appreciation is a difference between (1) a future sale price of the real property, and (2) sum of the initial market value of the real properly as indicated by the appraisal and closing costs associated with the future sale; the property appreciation is set to zero if the difference is negative; and each of the units is obtained by dividing the property appreciation into equal parts. - View Dependent Claims (106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116)
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117. A method of creating a real-estate-backed derivative security, the method comprising the steps of:
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selecting a real property; obtaining an appraisal of said real property to determine the market value of said real property; setting a strike price; setting an expiration date; complying with legal requirements for public trading of options on said real property; and selling an option on said real property wherein an exercise price of the option is the strike price and an exercise date of the option is the expiration date. - View Dependent Claims (118, 119, 120)
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121. A method of creating real-estate options, the method comprising the steps of:
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identifying a real property; subdividing said real property into a number of equal units of fractional non-possessory undivided interest in said real property; obtaining an appraisal of said real property to determine the market value of said real property; setting a strike price; setting an expiration date; complying with legal requirements for public trading of options on said real property; and selling an option on at least one of said units of fractional non-possessory undivided interest in said real property, wherein an exercise price of said option is the strike price and an exercise date of said option is on or before the expiration date. - View Dependent Claims (122, 123, 124, 125)
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126. A method of direct public offering of a real property comprising the steps of:
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selecting a real property occupied by an occupant; forming a corporation, wherein said occupant is a president of the corporation; transferring said real property to said corporation; registering shares of said corporation under Small Corporate Offering Registration to obtain registered shares; and offering the registered shares to investors; wherein the amount of money raised from said investors through said offering does not exceed one million dollars in any one year.
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127. A method of providing for public investing in real property holding companies, the method comprising:
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setting criteria for initial listing on an exchange for public trading of a real property holding company, wherein the real property holding company has a plurality of fractional interest units, the real property holding company owns a real property occupied by an occupant, the occupant owns at least one of the fractional interest units, applicable legal requirements for public trading in the fractional interest units have been satisfied, and the real property is the sole investment asset of the real property holding company; qualifying the fractional interest units for listing on the exchange based on the criteria; listing the fractional interest units on the exchange; providing for trading of the fractional interest units on the exchange; monitoring compliance of the fractional interest units with criteria for continuing listing on the exchange; and delisting the fractional interest units from the exchange in response to the fractional interest units failing to meet the criteria for continuing listing. - View Dependent Claims (128, 129, 130, 131, 132)
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133. A method of facilitating trading, the method comprising:
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listing units on an exchange; providing for trading in the units on the exchange; and making market in units by maintaining a bid and an ask price on the units; wherein the units are fractional interest units of a real property holding company, the real property holding company owns a real property, the real property is the sole investment asset of the real property holding company, and applicable requirements for making the fractional interest units available for public trading have been complied with. - View Dependent Claims (134)
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135. An apparatus comprising:
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a local area network connected through a firewall to a wide area network; at least one server connected to said local area network; a portal for a plurality of electronic devices to connect through the wide area network to the at least one server; a database for storing information associated with publicly traded shares of real properties, wherein said shares are equal indivisible transferable fractional units of non-possessory undivided interest in said real properties, the database being implemented on the at least one server, the information comprising addresses of the real properties associated with the shares of real properties, area data associated with the real properties, property type data associated with the real properties, market value data associated with the real properties, and number of said shares of real properties; and memory storing machine executable instructions for implementing a computerized quotation system for quoting prices of the shares of real properties, wherein the instructions, when executed by the at least one server, configure the at least one server to perform steps comprising; quoting an ask price; quoting a bid price; accepting sell offers; accepting buy offers; matching at least one of the sell offers with at least one of the buy offers; and executing a sale satisfying the at least one of the sell offers and the at least one of the buy offers. - View Dependent Claims (136, 137)
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138. A method of transferring fractional ownership in a privately-owned real property from an owner of said real property to public, the method comprising:
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forming a real estate holding company; assigning title to and interest in said real property to said real estate holding company; recording deed for said real property in the name of said real estate holding company; listing said real estate holding company on an exchange; offering shares in said real estate holding company for sale to public on said exchange; and receiving money from sale of said shares in said real estate holding company. - View Dependent Claims (139, 140, 141, 142, 143, 144, 145)
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146. A method of assisting in a transfer of interest in a real property, the method comprising:
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soliciting a person owning the real property to form a real property holding company with a plurality of partial interest units, transfer ownership of the real property to the real property holding company, comply with applicable requirements for making the partial interest units publicly traded, retain at least one of the partial interest units, and sell at least one of the remaining partial interest units to public; and charging real estate brokerage commission to the person; wherein formation documents of the real property holding company grant occupancy rights to the person. - View Dependent Claims (147, 148, 149)
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Specification