$50 a Share Real Estate Dream: RealT's Detroit Collapse Path

Written by: Joel Khalili

Translated by: Luffy, Foresight News

In 2019, two Canadian brothers used cryptocurrency to split real estate into “tokens worth only $50 each,” creating a real estate empire in Detroit with hundreds of properties that attracted tens of thousands of investors worldwide. They claimed blockchain would “democratize real estate investing,” promising extremely high returns. The tokens were once snapped up in a frenzy. But behind the glamorous crypto narrative was the collapse of the real world: houses leaking, mold, fires, collapses, tenants struggling in dangerous environments, city violations piling up, and blame-shifting among parties. Ultimately, lawsuits and broken trust turned this seemingly innovative financial experiment into a disaster.

Wire magazine journalist Joel Khalili conducted on-the-ground investigations to reconstruct the rise and fall of the RealT crypto myth, revealing the brutal reality of tokenized real estate: no matter how perfect the blockchain, it can’t hide the rot offline.

Below is the Chinese translation of Joel Khalili’s report:

$50 to Become a Landlord: The Utopian Lies of Crypto Real Estate

I am walking up a wooden staircase into the basement of a duplex built in the 1920s in eastern Detroit, Michigan. A smell hits me—wet brick walls, standing water, mold, and bleach. In front of me is Cornell Dorris, who has lived here for nearly ten years. Dorris, in his early 40s, has two daughters who visit on weekends. He makes a living from smoked meats and event catering.

As my eyes adjust to the darkness, I see rat droppings on the floor and a black puddle of water spreading across the basement. “When it rains, water just comes in,” Dorris says. The air is unusually heavy, and I feel a strong urge to leave immediately.

Dorris’s landlord is not an ordinary person. About four years ago, this building was acquired by a startup called RealToken, or RealT for short. The company had an ambitious plan: to use cryptocurrency technology to “democratize real estate investment.” The idea was to split a property into thousands of crypto tokens, each costing about $50. Token holders could receive a share of the rent, with annual returns up to 12%, and profit from property appreciation.

Investors flocked to this concept, and RealT expanded rapidly in Detroit, buying around 500 buildings at once. They also purchased about 200 properties in over 40 other cities across the Americas, with a total asset value of about $150 million. Due to regulations, U.S. residents could not participate, but at least 16,000 people from 150 countries had bought RealT tokens. Despite the lack of reliable data, RealT claimed to be “the largest real estate tokenization platform in the world” based on various metrics.

The duplex where Dorris lives has a flooded basement.

However, despite RealT’s success in crypto circles, it faced constant trouble in the real world. Last summer, Detroit’s city government sued RealT and its founders, accusing them of “hundreds of violations of health and environmental regulations.” Dorris’s residence was among many properties deemed uninhabitable by city inspectors. He told me that, although previous landlords sometimes let him handle repairs himself, the condition of the building worsened significantly after RealT took over. Inspectors found missing smoke detectors and no hot water in the bathtub. “Now I can only shower at the sink,” Dorris says. “There are rats downstairs, squirrels upstairs.”

According to Zillow, the total U.S. real estate market is worth $55 trillion, with tokenized real estate making up a tiny fraction. But Deutsche Bank data shows that within a few years, the concept of buying property fragments with crypto has grown into a $30 billion industry. Yet in Detroit, the vision of becoming a landlord with little capital conflicts with the actual inconveniences faced by the properties and their residents.

The house at 8821 Prairie Street has no front or side windows, the porch steps have collapsed, and the paneling is deformed.

Rémy and Jean-Marc Jacobson, the Canadian brothers who founded RealT, are not twins but look alike—both wear glasses, have shiny hair, and sport white beards. They describe themselves as staunch libertarians, supporting free markets and minimal government intervention. When I met them on Zoom, Jean-Marc was enthusiastic but sometimes sharp. I tried to ask a delicate question indirectly, but he told me, “Just ask directly.”

The brothers grew up in Canada and Europe, from a family with a colorful and litigious history. One sister’s divorce became a high-profile battle over millions in assets, which had been seized in the Bahamas; she ultimately won. Their brother-in-law was sentenced to probation for ties to an illegal arms dealer in Angola. Their father was a financier; when asked about the family wealth in a 2003 interview, he replied, “Don’t ask, I won’t hide it.”

Rémy and Jean-Marc say their real estate careers began with flipping houses in Quebec and parts of the U.S. In the early 2010s, they encountered Bitcoin. Almost immediately, they started their own Bitcoin mining operation, then founded several other companies and a nonprofit. They also got involved in crypto troubles, including a Ponzi scheme and settling with a client who accused them of withholding millions of dollars in crypto.

According to Jean-Marc, as early as 2013, the Jacobson brothers began thinking about combining their expertise in real estate and crypto. In traditional finance, people can invest in REITs to earn rental income from a basket of properties, but usually with minimum investments of thousands of dollars. They sought a way to create similar products with crypto, allowing much smaller investments. It wasn’t until five years later that Rémy received a call from a lawyer, leading to a breakthrough.

Typically, it’s impossible to sell a house to a thousand people. But if the Jacobson brothers transfer ownership to an LLC, they can create and sell crypto tokens representing shares in that LLC.

They began testing their tokenization idea in Detroit, known for its low property prices and ambitious urban renewal plans, making it an ideal choice. “Detroit is a city recovering from bankruptcy, on the path to revival,” Jean-Marc said. “It naturally became a potential growth point. Most importantly, it’s also suitable for beautification and community improvement.”

They bought their first property—a modest single-family home at 9943 Marlowe Street in west Detroit. In April 2019, they tokenized it, issuing 1,000 tokens, with proceeds used for expenses, repairs, and a 10% cut for the brothers. They also planned to take 2% of future rental income, with the rest covering maintenance, taxes, and other costs, and the remaining distributed to token holders.

Jean-Marc told me that on the first day, RealT sold fewer than five tokens. The brothers asked friends and family to buy in and promoted the project on X, Medium, and media interviews. “At first, people were very skeptical,” Jean-Marc said. “We sold very, very, very little.” About five months later, the brothers considered selling the house and refunding the token buyers, then stopping.

But the tokens for 9943 Marlowe Street gradually started selling out. By December 13, they were all gone. At that time, 107 investors from 33 countries each held an average of 0.93% of the shares, sharing $25.22 in daily rent income.

The Jacobson brothers created a chat group on Telegram for French-speaking investors, and demand for RealT tokens surged. In 2020, RealT expanded rapidly in Detroit: tokenizing an apartment on Appoline Street, a four-plex on Schaefer Street, and a single-family home on Mansfield Street. That year, nearly 50 properties were tokenized.

As they planned further expansion in Detroit, the brothers partnered with real estate professional Shawn Reed. According to court documents, Reed began sourcing properties for RealT, sometimes assisting with renovations for tokenization. The brothers were unaware of Reed’s shady past: he had served time for bank fraud and was called a “slum landlord.” His deals helped RealT meet the soaring demand for tokens at the time.

I interviewed a Telegram investor named TokNist, who said he immediately understood the model when he first heard of RealT. A French citizen living in Asia, he wanted to buy real estate but couldn’t get a loan. RealT offered a way to invest small amounts without banks. “Many people like me,” TokNist said. “They’re not rich speculators. They’re ordinary people wanting a piece of real estate, seeking steady income.”

In 2022, TokNist began buying large amounts of RealT tokens. The process was difficult. Whenever RealT listed a new property, he would watch the countdown on his computer. The website often crashed, went blank, or tokens disappeared from the cart. “Properties sell out instantly. Sometimes six or seven properties go live in a day, and within minutes, all tokens are gone,” TokNist told me. “That shows demand is really high.”

Behind the scenes, the Jacobson brothers faced issues managing their expanding property portfolio. In 2023, a bank canceled their redemption rights on a commercial property in Miami, citing missed loan payments and a $10.4 million judgment. Miami city officials also declared the property unsafe. (The brothers described this as a strategic decision related to COVID-19, an exception in their Florida operations.) That same year, Chicago issued fines to several LLCs under RealT for dilapidated buildings, violations, and unpaid debts. These were early signs of Detroit troubles looming.

Decay, fires, and abandoned tenants: the empire begins to collapse

In summer 2024, Aaron Mondry, a reporter for the nonprofit local news outlet Outlier Media, was looking for new leads. He was writing a series called “Detroit Speculators,” focusing on the city’s real estate market. Then an informant pointed him to a strange pattern in property records in Wayne County, Michigan.

Reviewing the records, Mondry found many Detroit properties owned by LLCs with “RealToken” in their names. By then, RealT had purchased and tokenized hundreds of properties in Detroit through these LLCs, becoming one of the city’s largest landlords. Many were single-family homes bought in bulk, sometimes without inspecting the properties. The properties were concentrated in low-income, predominantly Black neighborhoods on Detroit’s east and west sides.

Mondry compiled a list of RealT properties and went door-to-door. He quickly noticed a shocking pattern: many homes were in terrible condition, many appeared vacant, and database checks showed long unpaid property taxes on several.

In February 2025, Mondry published his first series of reports based on public records and tenant interviews. The articles accused RealT of widespread mismanagement, corner-cutting, and neglect. Some tenants told Mondry they lived in dirty, hazardous conditions. Around the same time, city inspectors warned RealT that a building on Cadieux Road lacked working smoke alarms, emergency lighting, and fire doors. In March, a fire engulfed the building.

Since the fire at 10410 Cadieux Street in March 2025, the building has been vacant, its charred remains boarded up.

In early September 2025, I visited door-to-door and heard similar stories. Driving past basketball hoops covered in ash, smelling barbecue and hearing music from fences, I saw a stark contrast to the terrible condition of the RealT properties I encountered.

I parked in front of the burned-out apartment building on Cadieux Road, now sealed with plywood. In the northwest, in the Grand River-St. Marys neighborhood, a group claiming to be a gang said they had taken control of 14881 Greenfield Street, a two-story brick apartment with a bright red awning. In a YouTube video, they claimed to rent out these dilapidated units as landlords. “For a junkie, this is like a five-star hotel,” one interviewee said. Two other RealT houses I visited were riddled with bullet holes. Several tenants told me they were refusing to pay rent, hoping to force repairs.

At a Tim Hortons in Detroit’s west side, I met Maya, a tenant of RealT living in a nearby red brick house. When she returns home, she parks her car and sometimes sits in it for an hour before going inside. One bedroom has a water leak with a big hole exposing the wooden roof supports. Paint is peeling, and damp, yellow insulation hangs into the room. Maya only dares to stay in the bathroom, kitchen, and living room, where she sleeps. “Honestly, I probably shouldn’t live here, but I’m trying to find somewhere else,” Maya said. “This place is like a slum.”

A few blocks away, I knocked on Monica’s door. She’s lived in a house south of the famous Eight Mile Road for six years, recently living with two grandchildren. The tokens for her house are held by 331 people, who earn an average annual return of 9.3% from her rent. Monica told me the heating was broken, water supply unstable—I saw broken windows, a damaged roof. An old, dead tree stood in the front yard. At night, she couldn’t sleep, worried someone might break in through the broken windows. She said she had repeatedly applied for emergency shelter but was always turned away. “Come home, dear. Come home,” Monica told me. “It’s too terrible here.”

Ceiling collapse at 18415 Fielding Street, hallway filled with plaster and damp insulation

Lawsuits, blame-shifting, and trust collapse: the tokenization experiment spirals out of control

On the fifth floor of the Coleman A. Young Municipal Center, amid a maze of beige tiles and worn carpets, I found Conrad Mallett, who oversees all civil litigation in the city. His office walls are decorated with portraits of Muhammad Ali and key figures of the Black civil rights movement. Mallett, a former Detroit vice mayor and Michigan Supreme Court chief justice, noticed Outlier Media’s reports on RealT last spring and launched an investigation. Building inspectors assessed properties and documented violations. “The result was thousands of non-compliant houses,” Mallett told me. “We concluded that, in most cases, people were living in unfit housing.”

Mallett’s deputy, Tamara York Cook, dispatched inspectors to knock on doors and posted her business card on front doors. Soon, her phone was ringing nonstop. “Most people are eager to share their experiences,” she said.

In July, the city filed a civil lawsuit against RealT, its founders, and 165 LLCs, accusing them of hundreds of public nuisance and regulatory violations, and unpaid fines and property taxes totaling hundreds of thousands of dollars. The suit states that 408 properties lack the city’s “certificate of occupancy.” The brothers told Wired, “In terms of compliance certificates, RealT’s portfolio is no different from other properties in the same zip codes.”

Soon after, a judge issued a temporary restraining order preventing RealT from collecting rent or evicting tenants until the properties meet standards. The order was later extended but relaxed to allow eviction of non-paying tenants.

On Telegram, some investors heard about the lawsuit, and Rémy Jacobson quickly tried to reassure them. Besides information from the brothers, RealT investors have little insight into Detroit’s true situation. “We are committed to resolving all issues,” Rémy said. Twenty-one investors responded with heart emojis. Jean-Marc also chimed in, promoting Detroit’s booming real estate market.

Around the same time, the brothers told investors that a potential buyer was interested in the building where Dorris lives—the flooded basement one—and that if they agreed to sell, they could get up to 75.61% total return. In a Telegram post, Jean-Marc called this a testament to Detroit’s real estate vitality and RealT’s deal-making skills. In a call with investors at the end of July, Jean-Marc announced the deal “was completed.”

The buyer, East Coast Servicing LLC, shares the same Michigan address as RealT’s documents, and the filing was signed by Rémy Jacobson on behalf of the buyer. It appears the brothers completed the transaction with another company they control.

After following up on this deal, in February 2026, the brothers sent an email to investors saying the buyer had backed out, despite their earlier claim in July that the property “was sold.” They later told Wired that East Coast Servicing LLC was just a tool to help sell properties to foreign buyers.

The core of the Detroit lawsuit is that the company’s business model inherently involves neglecting property maintenance. “Their way of generating annual returns is by not maintaining the houses to high standards,” Mallett accused.

Jean-Marc Jacobson denied this. He said their original intention was to help beautify Detroit by enabling more people to invest. He explained that when RealT tokenizes a property, it sets up a fund for maintenance. The brothers pointed out that for investors to earn substantial returns, the properties must be continuously rented and generate good rental income. Willful neglect would make that impossible.

He claimed that property management companies and other real estate professionals had mismanaged or defrauded RealT. The company has sued several defendants, including Shawn Reed.

On the morning of September 3, I met Reed at The Henry, a fancy hotel just miles west of Detroit. He was sitting in a brown leather armchair beneath a crystal chandelier, with a flickering electric fireplace behind him. Bald, with a long black beard, wearing cowboy boots, he was striking. During our conversation, he stroked his beard with his finger.

By then, Reed’s relationship with the Jacobson brothers had soured. According to court documents, by 2024, they had begun arguing over details of certain property deals and conflicts over renovation issues. Eventually, they stopped working together. Jacobson brothers sued Reed, accusing him of fraudulent statements.

In a lawsuit filed in February 2025 in Michigan, RealT accused Reed of billing for repairs and renovations that were never performed. Reed denied the allegations. He also claimed his role was only to help renovate a few properties, not to manage the entire portfolio. In June, he countersued, accusing RealT of trying to scapegoat him and falsely blaming him for Detroit’s chaos. “I’ve never been a property manager. That’s never been my job,” he told me. The case is ongoing.

In interviews, Jean-Marc refused to discuss Reed specifically but told me, “Sometimes, when you move to a new city, you meet all the wrong people… No one can say they won’t encounter scammers.”

By the time the dispute went to court, the Jacobson brothers had established New Detroit Property Management. They handed over the management of the Detroit assets to this new company and appointed experienced property manager Salvatore Palazzolo as vice president. On my last day in the city, Palazzolo picked me up in a black SUV outside the hotel, with a small cross hanging from the rearview mirror. He was eager to show me his team’s recent renovations of RealT properties.

Driving, Palazzolo explained his task: to identify vacant properties that could be quickly rented out with minimal renovations. Meanwhile, the city continued issuing violations for dilapidated buildings, which meant pulling construction crews off renovation jobs. “You have to understand how many properties we have,” Palazzolo said. “The city is crazy with fines, the workload is huge, really huge.”

Even after renovations, problems persisted. In at least one case, someone impersonated the landlord, collected a one-time fee, and arranged for someone to move into a renovated RealT property. Jacobson brothers said the impersonator tried to exploit court-ordered eviction pauses, suggesting that the prospective tenant could avoid eviction by paying a small amount into a city escrow account.

Palazzolo and I stopped in front of the first property: a small red brick house with a gable roof and white trim. Palazzolo, holding a black folder, showed me the repairs he arranged. The windows were intact, the bathroom and kitchen had been renovated, walls painted, the collapsed awning restored, and the floors either polished or re-carpeted.

14574 Strathmoor Street, one of the RealToken properties renovated by New Detroit Property Management.

The bathroom and kitchen had been renovated, the collapsed awning restored, and the floors polished.

He then showed me five more similar houses. They weren’t luxurious, but looked clean and livable.

Palazzolo estimated that by then, New Detroit had renovated about 40 properties for RealT. According to recent court documents, the company had obtained compliance certificates for 28 of the properties involved in the lawsuit. “I think people don’t realize how bad some of these properties are,” Palazzolo said. “Restoring them to standard requires a lot of work.” He added, “We’re really trying to make them safe and affordable.”

Jean-Marc Jacobson acknowledged that Detroit properties are “bad,” but also criticized those exposing RealT’s problems. Throughout the summer, he communicated weekly with French-speaking investors on Telegram, repeatedly dismissing local journalist Mondry. “Obviously, this reporter doesn’t like us. We knew that months ago. Clearly, he only writes what he chooses, ignoring all contrary evidence,” Jean-Marc told investors in early July on Telegram. Weeks later, he added, “He’s never had this many clicks in his career. He portrays us as evil crypto capitalists, raising rents and hurting vulnerable communities.” The brothers also criticized Wired, claiming the magazine’s coverage was “superficial” and aimed at “targeted narratives.” In September last year, Jean-Marc told investors he believed the city’s lawsuit was a product of “administrative corruption, political agendas, backroom deals, and abuse of power.”

On Telegram, token investors occasionally questioned whether the city’s case or Outlier Media’s reports were justified. Recently, someone suggested RealT should conduct background checks on property management companies. Jean-Marc responded, “It seems you just like to vent your hatred.” In another message, he mocked a tenant: “Emergency!!! My faucet is broken!!! Emergency!!! 🆘” All three investors I spoke with said the Telegram community was hostile. The brothers deny that the group is antagonistic; they say that internal tensions during tough times are normal.

Nevertheless, investors have increasingly questioned Jacobson brothers. In September, they discovered documents from 2023 suggesting RealT had taken out a $950,000 mortgage on two Chicago properties months after tokenizing them. One investor called this “very suspicious,” as it could risk token holders losing their investment if the mortgage defaulted. Jean-Marc claimed the mortgage was to help the seller, who would benefit in some unspecified way. He said the mortgage had been paid off. “Sometimes, you have to do some corporate maneuvers,” Jean-Marc told investors. “If we want to close a deal, sometimes we need to show some flexibility.” Tomasz Piskorski, a real estate professor at Columbia Business School, said this arrangement was unusual. “I don’t see a reasonable explanation. Maybe there is, but I don’t know it.”

In late November, investors began questioning a Detroit RealT property: a building that had been declared dangerous and scheduled for demolition months earlier but was still generating rent income, meaning someone was living there. “I really don’t know what to think anymore,” one investor said on Telegram. I encountered similar situations in Detroit. Last September, I visited 13 properties that appeared vacant but were listed as “fully rented” on the website. The suspected gang-occupied apartment was also listed as occupied. Jacobson brothers said the city’s escrow system prevented them from verifying occupancy.

Some RealT investors feel betrayed by the Jacobson brothers. One told me he had stopped buying RealT tokens until Detroit disputes are resolved. An Asian-based investor named TokNist expressed doubts about their management. Another investor on a Q&A platform, “Demetrius Flenory,” wrote to the brothers: “Our tokens were supposed to support innovation and democratize real estate investment, but they’re linked to unsanitary, dangerous properties, worsening social issues in these vulnerable communities… We can’t ignore the scandals that erupt weekly.”

Shawn Reed, who claims not to be a property manager, also publicly criticized the project last year. He posted a video on X visiting a dilapidated building he said belonged to RealT. Inside, a dirty mattress was on the floor; in another room, trash and food containers piled up. “If I held the tokens for this building, I’d be furious,” Reed said behind the camera. By then, he had joined another tokenized real estate company.

In February, the Jacobson brothers told investors they planned to sell many properties in the RealT portfolio to “optimize overall investor returns.” But to free up funds for repairs, they would stop paying rent to investors regardless of location. Some defended this decision, but others were furious, questioning on Telegram why the brothers could unilaterally stop paying rent on properties they owned. The brothers said this was allowed under the terms of RealT, and as directors, they had the right to decide whether to distribute rent. Some investors called it “theft.”

Detroit’s trial is set to begin in May. Other legal disputes involving RealT continue. While trying to sell properties, the company appears to be pursuing new strategies in different countries. RealT is now offering tokens for “under construction” properties in Colombia and Panama, effectively crowdfunding construction projects with the hope of high future returns. “Under-construction projects greatly utilize the tokenization concept,” Jean-Marc told me. “It has very bright potential.” But investors seem skeptical; these tokens were listed months ago, yet thousands remain unsold.