How contributing works

Who holds contributed property

A contribution is made to a company, not to the co-op's members. Contributed property is held by Clear Properties, a company under Clear Capital Holdings, and the contributor receives shares in Clear Properties.

The companies, their boards, and the five reserved matters that need the co-op's agreement are set out in The co-op's structure. That structure is a draft until the co-op adopts its bylaws.

The four steps

A contribution is four steps, and none of them is a sale.

• 1.
  The property goes in. The deed goes into a nominee trust, with Clear Properties as its beneficiary, instead of to a buyer.
• 2.
  The contributor receives shares. One share for each dollar of the property's appraised value. Nothing is settled in cash. See What shares are.
• 3.
  The property's income is handled at the property. Rent is earned at the property, which pays its own costs first; what remains is distributed to every holder pro rata. See What contributors receive.
• 4.
  Everyone holds on the same terms. Clear Capital's own position is in the same pool, with no priority and no preferred return.

The steps are the same at any size, from one property to a portfolio. What changes with size is the diligence, not the structure.

What kinds of property

Rental property, ideally paid off, and raw land. A backyard is handled differently, as a ground lease rather than a contribution.

A contribution is meant to be held

A contribution is designed to be held, not traded. If you plan to move property in and out every couple of years, this structure is not for you. See Tax basics.

How it starts

With a private conversation. Clear publishes no terms, rate or projected return. Anything further is discussed privately, with documents sent to the contributor's own advisers.

On the chain

No step of a contribution happens on the chain.

• The nominee trust, the appraisal and the issue of shares all happen off the chain.
• Recording a contributed property as a T-Deed, the protocol's on-chain title record: Not available yet. What a T-Deed is: Deeds and real-world assets.
• The Deed track's subdividing and fractionalizing are not used for contributions. See What shares are.