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Property Updates ## 2026-07-16 - Property Update (07/16/2026): ECO Systems is providing the following clarification for owners reviewing the current owner-proposed governance vote. ECO's current property-management compensation is 6% of collected rent in the current management year, with no markup on rehabilitation or repair costs. The current owner-proposed management alternative lists a 12.5% fee until stabilization, then 10% after stabilization, plus a 5% markup on maintenance coordination.

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# Property Updates

## 2026-07-16

- Property Update (07/16/2026):
ECO Systems is providing the following clarification for owners reviewing the current owner-proposed governance vote.

ECO's current property-management compensation is 6% of collected rent in the current management year, with no markup on rehabilitation or repair costs. The current owner-proposed management alternative lists a 12.5% fee until stabilization, then 10% after stabilization, plus a 5% markup on maintenance coordination.

Earl/ECO is also continuing to carry the seller-side mortgage principal and interest obligation. The latest mortgage statement dated 06/18/2026, for the 07/01/2026 payment, shows $148.24 principal and $272.48 interest, or $420.72 of monthly principal and interest. That amount is separate from the $640.21 escrow component and the $1,060.93 total monthly mortgage payment.

The 6% management fee was intended to partially offset the ongoing management and rehabilitation workload, as well as the seller-side principal and interest carrying cost, while ECO regrows its economic position in the property. It should not be evaluated as a repair markup or separate rehabilitation surcharge.

ECO supports protecting reserves, improving occupancy, and reducing high-cost obligations. Owners should evaluate the current proposal based on total cost, continuity during rehabilitation, work already performed, and the long-term interests of the property and investors.

## 2026-07-14

- Property Update (07/14/2026):
- Owner-Proposed Governance Vote for 724 3rd Ave:
    - The owner of S&P Property Management LLC, with the following [wallet address](https://allo.info/account/QLHXVHCNIZMCESQ4XNWXQCNXRVAB7GWQZNXCYQSSU7LDAEOLYPG4AHERPQ), is proposing a governance vote.
    - This owner holds 107 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.
    - Governance Vote: Proposed Sale of 724 3rd Ave, Watervliet, NY
    - Proposal #1: 724 3rd Ave Change of Property Management
    - The property is a triplex with two of three units leased. One tenant is currently on-time on rental payments, while the other is on a payment plan to catch up on arrears. The third unit is vacant, however after renovations, Earl along with S&P has sourced a few applicants to approve. The property carries two outstanding loans (one to ULD and one to discord member: Gottfather) and has a critically low maintenance reserve. Last month, operations were running negatively.
    - This proposal seeks to transition full property management to S&P Property Management LLC under the following terms:
    - Key Management Terms:
    - Management Fee: 12.5% of gross rents until the property is stabilized, then reduced to 10%, once all units are filled and loans are repaid
    - Maintenance Coordination: 5% markup on all maintenance work
    - S&P will utilize Earl's existing local maintenance team led by Evan.
    - Earl will continue paying his portion of the mortgage (P+I) and provide S&P full access to the mortgage payment portal.
    - S&P will aim to reconcile all financials within 90–120 days of transition.
    - S&P will serve as the authorized representative and signer of the property when it is sold or purchased.
    - NOI Allocation & Strategy:
    - Approving this proposal authorizes S&P to allocate available Net Operating Income (NOI) toward:
    - Replenishment of operating reserves
    - Loan(s) principal paydown (priority on ULD loan)
    - Refinancing loans at lower rates
    - Token buybacks and burns when pricing indicates
    - Proposal #2: Dilutive Equity Raise Proposal: Authorize a dilutive equity raise via Dutch Auction raise for approximately $7,500 (ranked choice voting: $0 / $7,500 / $10,000). Where tokens will be sold by the Authorized Representative, (250) tokens will be sent to the ULD token wallet the sale of tokens will continue Dutch Auction fashion until $X have been surpassed as determined by voting below. From the sale proceeds, a $5,000.00 operating reserve will be established and the remaining proceeds will contribute towards principal paydown on the ULD loan. The remainder of tokens will be sent back to the burn wallet and not factored into supply. 
    - Objective: This transition will deliver stronger long-term tokenholder value by reducing interest expense, shortening loan terms, improving property stability, and implementing disciplined capital allocation.
    - Voting Options:
    - Proposal #1:
    - For – Approve transition to S&P Property Management LLC under the outlined property management terms, including NOI allocation authority and the dilutive equity raise.
    - Against – Reject the proposal and maintain current management.
    - Proposal #2: Ranked Choice Voting
    - For - $10,000 Capital Raise to offset high interest, build reserves, and protect property
    - For - $7,500 Capital Raise to offset high interest, build reserves, and protect property
    - Against - Decline to raise, $0, maintain current operations
    - The winning vote will be determined by a Supermajority of 60%+ and the results will be sent to owners on Tuesday, July 21st, once the voting period ends.

This month's reviewed financial summary from FINANCIALS.md is below.

Financial data is shown as of 2026-06.

### Cash Flow Snapshot (2026-06)

- Revenue: $997.50
- Operating Expenses: -$823.42
- NOI: $174.08
- Net Operating Cashflow: -$170.68

### 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: $11.92 (Lofty curr_maintenance_reserve)
- ECO Operating Cash: -$2,397.46 (ECO Systems General Ledger Column E, 527 rows)

### Accrual Funding Reconciliation (2026-07-15)

The ECO GL begins 2024-03-01, the first day of the month before the first token sale on 2024-04-24. Earlier rows are excluded from this DAO's GL.

- ECO GL Column E accounting position: -$1,220.97.
- Open accrual requirement: $1,955.24 (legal dao payable $750.00, pm payable $1,205.24).
- Other accounts payable / receivable: $5,173.42 AP and $108.00 AR.
- Live unrestricted DAO bank cash: $337.55.
- Restricted cash excluded from ordinary funding: $1,062.67.
- Bank funding gap after net AR/AP: $6,683.11 underfunded; surplus $0.00.
- 2026 retained-capital model: retained $14.71; ECO principal/interest debt $0.00.

Column E is the accounting/CF-close position, not current bank cash. Month-end reset and capital-close rows remain in Column E but are non-cash and are excluded from every inter-DAO transfer and bank-underfunding calculation. A positive Column E balance therefore does not by itself mean the bank has enough cash to pay open accruals.

Current net cash schedule affecting this DAO:

- Pay ECO Systems LLC: $7,128.66 (funding required before full transfer)
- Receive from Heron LFTY0314 DAO LLC: $108.00

Taxes, insurance, and escrow accruals are reserve requirements rather than immediate external payment instructions. Transfers marked funding required should not be executed in full until incoming reimbursements, reserve top-up, or approved financing is available.

## 2026-05-05

- Property Update (05/05/2026):
- Governance Vote for 724 3rd Ave:
    - The governance results are back for the owner-proposed vote.
    - The winning vote is:
    - NO: Retain ownership of 724 3rd Ave within Grape LFTY403 DAO LLC, maintaining exposure to current debt levels, partner foreclosure risks, and the ongoing $30/token valuation.
    - This voting option received 47 votes and was voted on by 30 out of 47 shares, totaling 78.27% of the voting power. This is a co-ownership property, which means the governance mechanism used the scaled governance calculations as opposed to the default of 1 token equals 1 vote.
    - The voting results can be found on chain [here](https://allo.info/application/3545532158) or by searching the application ID: 3545532158

## 2026-05-01

- Property Update (05/01/2026):
- Hello fellow co-owners,

    - With this surprise vote, which was not meaningfully workshopped with DAO owners beforehand, I wanted to lay out why I believe owners should vote NO on Alec’s proposal.

    - The biggest issue is not simply whether a sale should ever be considered. The issue is that this proposal appears to give Alec broad authority to control the sale process through closing, without requiring a final owner vote on the actual sale terms. That removes an important check from the DAO and risks accepting a deal that may not maximize value for all co-owners.

    - There are also conflict-of-interest concerns. Alec has separate financial pressures and obligations outside this DAO, including commitments related to repurchasing co-ownerships and ongoing exposure connected to 5604 Brownfield. Those issues should not determine the timing or terms of a sale for 724 3rd Ave.

    - Owners should also consider recent concerns raised around prior property wind-downs, including delays between sale completion and funds reaching Lofty for redemption. If this DAO is going to sell, owners deserve a transparent, accountable process with clear timelines, not open-ended discretion.

    - Bottom line: this DAO should not be rushed into a sale structure that removes owner oversight or prioritizes one co-owner’s unrelated liquidity needs over a value-maximizing outcome.

    - Please stand with your fellow co-owners and vote NO on this proposal as written. The asset is nearing repair completion, and higher revenue may be achievable in the coming months. If a sale is later appropriate, it should come back to owners with actual terms, clear accountability, and a final vote.

    - Thank you!

## 2026-04-29

- Property Update (04/29/2026):
- Owner-Proposed Governance Vote for 724 3rd Ave:
    - An owner with the following [wallet address](https://allo.info/account/6GRLZ5EIUWKYPMJ7PYSPMR5DG2ZMZAWAK6TLQAJR7G2BTXEPFVXFKNVWHQ) is proposing a governance vote.
    - This owner holds 701 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.
    - Governance Vote: Proposed Sale of 724 3rd Ave, Watervliet, NY
    - Asset: 724 3rd Ave, Watervliet, NY 12189
    - Entity: Grape LFTY403 DAO LLC
    - Authorized Representative: Alec VanBeek / Whalec Property Management LLC
    - Executive Summary
    - This governance vote proposes the immediate listing and sale of the property located at 724 3rd Ave, Watervliet, NY, held within Grape LFTY403 DAO LLC. This action is a strategic necessity to protect token holders from mounting financial contagion and to exit a high-risk position that has seen significant secondary market decline.
    - Rationale for Sale
    - Contagion & Foreclosure Risk: The property is currently burdened by a heavy debt load. Furthermore, partner Earl is facing foreclosure proceedings on other portfolio assets (such as Coolwood), putting the stability of this entity at immediate risk. Selling now is essential to distance the DAO from these external legal and financial pressures.
    - Market Indicators: The asset has been trading in the $30 token range for several months. This sustained low valuation reflects a high level of perceived risk and a lack of market confidence in the property’s current trajectory.
    - Legacy Issues: It has been identified that the property was listed with undisclosed issues, the costs of which have been disproportionately footed by early investors. Exiting the asset stops this ongoing capital drain.
    - Strategic Exit: Liquidation is the most viable path to preserve remaining equity and allow investors to ex