Vaycaychella ($WSGF): The Future of P2P Rental Property Investing
Fellow Sapiens, I am pleased to introduce you to Vaycaychella ($WSGF). Before embarking on this journey, I must say that this is a long-term play and short-term investors should close this article. Now that we have separated the wheat from the chaff, let’s begin.
The sharing economy has been gaining traction and weaved itself into our daily lives, spurred by companies such as AirBnB, WeWork, and Uber. Vaycaychella, a subsidiary of World Series of Golf, is also taking a stab by disrupting the short-term rental property space. It is perfecting its peer-to-peer app that connects short-term rental property owners with retail investors. A beta version of the app was recently launched, with a production release planned before June 2021. The company is also planning to introduce a cryptocurrency-based function to facilitate cross-border fractional financing of the properties.
By now, we all are familiar with the gist of the business. The app has great potential to address an untapped market need by bridging the financing gap of short-term rental properties with retail investors’ need for a steady income stream. The fractional financing model also helps de-risk investors’ exposure to any one rental property. With all that said, I would now like to point out some overlooked factors.
A lot of people has been using AirBnB as a comparable. Whilst it is okay to use short-term rental and vacation related stocks, we need to recognize that the initial business model of the app lies in loan servicing. More appropriate short-term comps will be in the lines of LendingClub. Vaycaychella and AirBnB both play in the short-term rental space but operate in different ends. AirBnB generates revenues by taking a cut of the rental income whilst Vaycaychella gets a cut of the financing fees. It would be more appropriate to view Vaycaychella as operating in the short-term rental space with a business model based on peer-to-peer transaction financing.
Executing on this business model is not as easy as everyone thinks. Legal contracts for each transaction will need to be put in place. Since the sale and purchase transactions involve properties, checks on property titles need to be done to assure that the collateral is truly on the borrower’s name. Existing loans on the collateral also need to be checked to see how much equity buffer is present in case things take a turn for the worse.
In the future, Vaycaychella will also need to tighten their credit assessment metrics to protect investor capital. Like any peer-to-peer lending apps, default risk of borrowers cannot be ignored. Whilst default risk cannot be removed in its entirety, some minimum form of credit checks would need to be in place.
The reason I specified that it is a long-term investment is because developing a fully functional app takes time, resources, and money. To give you some context, AirBnB has raised over 6 billion dollars over 20 rounds before going public. I am in no way implying that Vaycaychella will need to raise that much money, or even a fraction of it, to have a minimum viable product. I am shedding light on the misconception that any company can create an app overnight to command a valuation to the tune of many billions. Investors should adjust their expectations and recognize that Vaycaychella is a long-term play.
Now, with all that in mind, I would like to remind you that this is my personal opinion. It should not be construed as financial advice. Please conduct your own due diligence before undertaking any investments. With that said, do you believe in Vaycaychella’s value proposition? Will you be buying their shares? And if not, why?
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