Tokenize Real Estate Assets - LABS Group (LABS) w. Mahesh Harilela

So hey guys, welcome back to Voxmine. Today we have a very special episode and it really relates and the take home for you is it relates a lot to the traditional financial scene and also in blockchain as well. So today we're with Mahesh Harry Lillo and he's a second generation family here in Hong Kong. They've been doing a huge property play for a long, long time and also you've been taking a lot of interest into blockchain and how it performs. So today the take home will really be to just kind of make that bridge because obviously in blockchain we've seen you know kind of millions of dollars, billions of dollars but now we're reaching that trillions of dollar mark, leading the bridge, bridge that with traditional finance as well and there's a lot of take home messages and kind of like experience that we have here that we can share to us guys. So starting with Mahesh, I mean can you give a little introduction? I guess a lot of people are familiar with you guys. Yeah, happy to and thanks for having me here today. My family's been in Hong Kong for the last 80 years. So in Hong Kong when we started from in the business, we started from a rags, a literal rags to riches story. Coming in as custom tailors and from making suits and uniforms of people, we branch into the property business. Now that's not like any other family in Hong Kong but we have been establishing ourselves in the property play since 1950s. Now in property in Hong Kong has been a very dynamic market. It's a dynamic play. It's all about the investments that one would put in, the capital that you can leverage with the banks in order to secure, provide you with the security to mortgage for the next 30, 50 years and land leases being that it is 99 years. So looking at Hong Kong as our base availability, we had as a melting pot, the British and the Americans, in coming to Hong Kong as part of the armed forces during the Korean War and the Vietnam War, that we had the association and Hong Kong being a British colony. We always had that affiliation and association with the Western world. Got it. So it was a good position. So playing that property scene, right? So that's been going on. And now I think the fun fact is that you're the biggest purchaser of like what black label there? There's a plethora of stories I can share with you. So let's not, let me embarrass myself. Got it. So, so, so, so let me take that. So it's, it's a lot of money. It's a lot of money movements. And now you're looking at these new opportunities as well right now. So you've been talking a little bit about, you know, you've been personally looking at blockchain and you're running Hirela, Hirela Global Investments. So kind of like, what's your philosophy? What's your take on that? Why do you want to be here? Okay. So, I mean, these, these are very good questions that for me, it's, it's always looking at alternatives. It's alternatives, which actually drive the future, right? We look at traditional asset class. If we don't adapt or adopt technology, how do we move to the next level? Because in property, you can buy an asset, you can buy a building, you can buy a thing, but the building has to be upgraded, has to be managed. So how do you get the young people? How do you get people engaged with your property is by providing them with a utility, which today is social media. And I think the future of business and activity is blockchain. Blockchain is going to play a critical part in all businesses and every traditional asset class you can find. Well, why so? Like, from your perspective, I mean, I guess like the audience, I mean, you guys probably heard my side of the story, but from your perspective, what makes it interesting for you? What makes you, why are you pushing, making that push? You know, you've been in traditional software for a while. Why make that push? What's exciting here? Transparency, availability of transparency, control of that data by the individuals that can look at what they own and what they have and monitor it without anyone invading or taking it away from them or having corporations or countries take that information away. That to me is absolute power in the hands of the investor, not power in the hands of the banks or in the financial institutes or governments. To me, it's a power in controlling their power within your hands, literally. And this is something that, you know, we've been talking about for a while, but I think there's been always like in the traditional sector, right? It's, there's a lot of apprehension, right? You talk about blockchain. I think maybe, you know, if you talk to blockchain about people like five years ago, I think they would just be like, go away, go away. But now I think they're starting to listen. But why do you think there has always been that barrier to understanding? I mean, if this is so powerful, this is so good, why isn't everyone jumping on board? It's understanding the system, understanding how valid and real that technology can be sustained. So, so my core of my business is all about environmental, social sustainability. The key element that surrounds that, it's proper governance. I think governance is where blockchain presents that validation. So cryptos came in because they looked at it as there wasn't a product behind it. It was just a pure coin play, so to speak, a speculation on the validity of something that was finite, not infinite. You don't have currencies which are printed by governments or by banks. You have a finite set. And the value of that finite set goes into the decimal places behind it that create that value. So when I looked at this, and someone presented to me and said, look, look at blockchain. I said, what is that? And this came from US from Silicon Valley. Right, right. It came to me and said, look, look at blockchain. I said, hmm, what is a blockchain? I don't understand this. If you're talking about big data, I understand big data. Right, right. And big data was a big, big investment. There were many companies that plowed in tons, billions and trillions of dollars into big data. But what did that mean? It meant that companies were accessing information or countries being able to access information, but no one owned it. Who owned it? The corporations owned it. So when it came to blockchain and finally trying to understand blockchain, the validity and value of blockchain, that got me excited. Got it. So it was really from that angle that you came from. Yeah. So you came from looking into big data investments and it clicked for you there where it's like, okay, look, here's what we can do on blockchain. Here's kind of the innovations that we brought, being able to put data decentralized. And now with all the privacy features there, it's actually even more insane. So that's kind of like a driving force. It's a foundation, fundamental to any aspect of business that needs to continue in the future. Got it. Got it. So next up is kind of combining that, right? So you're creating the project Labs, your chairman of Labs. And in Labs, it's always about bridging kind of the traditional side, right? Securities with property and bringing that onto the blockchain. So kind of, kind of, tell me how this works and tell me where you're at with this. So in traditional asset class of buying a property, if you were to buy a shop, an office, a flat, a house, a security that you want to have yourself, you're going to have to come up with cash. And the cash is quite significant, right? Depends on the value, especially here in Hong Kong. The cost of entry to own a flat is 500,000 US, right? And do you know what size you're getting for 500,000 US? A little shoe box. It's smaller than the size of a car park space, all right? Size, 153 square feet. You're paying 500,000 US for 153 square feet. But you still have to come up with 30% deposit. 30% of that is $1.2 million. Now, 1.2, and I'm talking Hong Kong dollars, right? Sorry, excuse me. So you're talking about 150,000 US as your cost to enter into buying yourself a shoe box. Yep. This is the Hong Kong life, guys. Well, yes, right. So, and then you have the government in Hong Kong that says to us that the property transactions and property asset class is a protected asset class based on the scarcity of land that we have. So they're actively trying to build this, right? They're actually trying to build this as an property. Four years ago, five years ago, 53% of our GDP income was predicated over property-related transactions. Income. So we had a $100 billion income surplus of which, how much? $53 billion came in from property transactional taxes. They're saying it's a business for the government. Oh, it's a rubber stamp to make money, right? Correct. But your cost to entry is still for the young player, the person who's come out of university, to come in and enter this world to buy themselves a security as one or an investment class as another. An investment class is sure to grow, but you still have to come up with $150,000 when you're earning $1,500 if you're lucky. Yeah. Okay. So it's always about lowering the barrier, right? That's right. That's right. So before, it's like a giant barrier. Like even for me sometimes when I just take a look at it, I'm like, okay, this is just such a joke, right? I don't even want to consider it. And that's not what a lot of millennials are thinking at this current point, right? They just think like, oh, yeah, it's just not even on the table right now. But for you, you're trying to bring that back onto the table. How is that process? Like what's the procedure of that like? Okay. So first and foremost is understanding where young people's money is tied up. It's tied up in student loans. It's tied up in debts, whether it's material debts by credit cards or shopping or expenses or burdens of activity. And the ability for the young people today to be vocal through social media gives them a precedent to understand how they can enter into the investment world. Now, no universities or schools actually teach you about investment. No. They teach you about math. They teach you about, you know, widgets and what a widget stands for. I don't even know what a widget is. But how do you manage your money? You know how to buy a stock in the stock market. You talk about liquidity. So you buy the stock market in corporations and their performance of that corporation. You're buying into an asset that you don't know much about, but you think will have a feeling based on last interim report or last quarter's report. Well, now people just watch TikTok and say, let's buy Tesla, right? I love Tesla, by the way. Let's talk about Tesla later. But how do we teach the youth about investments? And we know that the basic foundation of security is having some cash, liquidity. Is there a get rich quick scheme? There is no get rich quick scheme unless you actually have a foresight in the validation of a technology. Right. Right. In the blockchain, when Bitcoin came out, everyone talked about Bitcoin saying, what the hell is this? Excuse my language, but what the hell is Bitcoin? Right. Right. It's a coin based on zeros and ones. Right. That goes back at how many decimal places, but it's zeros and ones. And I can buy one for a dollar. So my cost of entry at a dollar, if you talk about 10 years ago, was very interesting. Right. No one had the foresight 10 years later that it's sitting at $35,000, $41,000. Wow. I wish I bought at a dollar. Yeah. Or for less than that. I wish. Exactly. Now, I lived in San Diego until 2007. And when I left San Diego, I read about a company called Tesla. They're launching electric car. Right. And it was before my days of being environmental and socially competent, I guess, to a degree. But understanding Tesla, I said, wow, that's a good looking car. And I love Lotus. I love the Lotus chassis. And this guy is doing something with electric car. Came back to Hong Kong. Five years later, I bought the car. The roadster. I bought the car. Oh, nice. You bought the original one. I bought the original version 2.5. And I bought the very last one in Asia. They shipped it from Japan to Hong Kong. Nice. At that same time, I told my friend about this. And she went in and bought the stock. I'm the idiot who bought the depreciating asset. She's the one who bought the stock. So with that, she bought the stock and it went up to $53 in six months. Right? Yeah. I'm sitting with my car and I'm watching my asset class going down. It was a good car. It was a great car. It was orange color. It was my Indian mango of a car. Right? But now maybe it's a collectible. But I think that's a core, right? Now it's about assets and getting people to understand these assets. Correct. Correct. So how do we invest in things that are not depreciating but that will appreciate? So we know property appreciates. We know that crypto asset class is now being taken seriously. Because it was first us that delved into that and we speculated because what's a dollar? What's $5? What's $1,000? Okay? Yeah. Yeah. So we can try and get involved in these things. And we started to experiment to understand what this coin could do. And then where was the business? What was the business? Then came Ethereum. And Ethereum taught us now you can build a token on top of our platform. Yes. Right? You have a token now on top of that. Now you had a business validation on your crypto side of it. Correct. Correct. Right? So 2017, the big bubble, the big boost. 2017, that's when I got it. I was invited to enter a company. Got it. Here in Hong Kong. It was interesting. So coming to this stage right now. So what is Labs doing right now? So can you take any property in Hong Kong and just tokenize that? Or can you take any property anywhere in the world? Where's the focus? Where's your imagination taken? You could take a hotel. Look, I'll give you an example. There was a hotel by one of Hong Kong's wealthiest families that they launched in an outskirt area that they tried to fractionalize the rooms, to sell a room to an individual. This was out in Tung Moon's side of it. Right? Then the government came down and said, no, you're not allowed. You cannot sell the individual room. He said, but what do we did as a timeshare? Why is timeshare permitted? But why can't we sell the room on that basis? Right? Because that individual can then rent it out. Right. Why not? But we were cut down, or sorry, not we, but it was cut down by legislation that didn't allow for that to happen. Right. Because no one understood fractional investing. Right? You want to buy property, you call up a consortium of friends. Right. Hey, everybody joined together. Let's put in 10% so we can get to $1.5 million, $150,000, and we become a collective. But what if you don't get along with that consortium of friends after five months? How do you make decisions you want to sell after five months when you have 10 people that have to make that decision together? You can't do that. Nope. So labs. That's what we can do with labs. You can come in and buy a property at a fraction, and you make the decision to sell. You make the decision on how you want to vest that interest in growing that investment based on that individual. Today we have social media. We talk about things individually. Instagram. We have all forms of social media that we communicate as an individual. Right? Why can't we put that as an individual in an investment factor? Definitely. And I think that's the kind of bridge, right? Because we've seen that growing, that culture of individual investing, rationalization that's very, very present in crypto in its current form. Correct. But the thing is, as the crypto community grows, right, now diversification becomes a big issue. Sure. Getting exposure to property is important. Sure. And also, of course, from the non-crypto side, anyone in Hong Kong who wants to own property, they want that exposure, but they don't want to join a collective investment scheme. This is where it goes. Which you can't. Right? Technically, you can't. Correct. So what's a lot of this have happened, though? I mean, obviously, there's been talk about securities in the past. Sure. You know, why push for it now? And, you know, kind of how do you open this market up? How do you get this? I think there are a few things that are happening, right? First, it's the individuals that came into bank into a system. The system being cryptocurrency. And understanding it, playing with it, toying with it, getting a grasp of it. Then all of a sudden, you have the traditional institutions that came and said, look, this stuff is bad. It's illegal. It's not permitted. Then you have governments of countries saying, no, actually, it's quite smart. Digital currency is important. It does validate. Then you have the institutions come and say, hmm, the asset class has grown 30,000 times in the last 10 years. Which asset has done that? That's inflationary proof. Right? Inflationary proof. Now, we have inflation from 0.5% to 2% to 5% to runaway inflation at certain third world countries. Undeveloped countries, excuse me. Not third world. But you have that. So how do you deal with that prospect of saying this asset class can actually become institutionalized? You need securities. You need governance. Now, all of a sudden, you've got all the lawmakers coming in and saying, hmm, let's go take action against this company. Maybe we should try and create a platform of understanding. Then you have Singapore. You had Singapore DBS Bank come and say, we're going to do an exchange on crypto. Shake up to the world to say, guys, we as Singapore, leaders in future of understanding where the market's going to be, come into this play. That sent a bell to the world to say, let's take it seriously. JP Morgan last year, two years ago, I think JP, Jamie Dimon said, crypto is a very important class. Right? And he did predict. He kind of waffled on both sides. Was he the rat poison or the best class in the world? Because of regulatory requirements. You couldn't say that you're involved because no financial institute would bank you or do trade with you because government said they couldn't trade with you. Right. You can see the evolution, right? So that's kind of the story of Bitcoin from rat poison to now, wow. Wow. Hey, can I buy more? So you definitely see that change coming. So it's a change from before where everyone was shunning it. Correct. And then now everyone's looking at it as an opportunity. So both the corporate side, the banking side, and also the finance guys, and also the government guys are all saying, okay, now this is an opportunity this year. And we've seen that as well, right? With the CBDC launches, with more validation that this is happening. True. So that's where you're pushing labs now, right? So you're pushing labs now. Usage case. An actual usage case. An asset class, which is one of the biggest asset classes in the world. It's $200 trillion value of asset investments in assets in the property sector. Right? So if you look at that, how do you now become more transparent rather than saying a government has to have it in their government registry and you have to go up there and read the line items to look for that property. Now it's on blockchain. It's part of technology. It becomes yours. It becomes part of your life. You can actually look at the data, real-time data, of fluctuation of property prices based on transactions real-time. That's a leapfrog, right? Because you can build everything around. It's another world. It's another world taking the biggest asset class of investments now into digitalization and management. Got it. And where are you now? So what's the status of labs at this current point? Raising for our initial... No, let me be clear about what we're saying. We're launching an investment round for friends and family at first. Right? Investment round to come in where we're trying to put a cap on that investment at $12 million. It's a cap. Because we don't want to over-invest in the transaction. But what we're saying is that we already have the assets allocated in our platform that will be identified and plowed into for that investment to be positioned into that asset. Okay, so what kind of assets are there, Sal? We have residential and we have hotel resort. We have one in Phuket in particular, which is fantastic. You know, everyone knows Phuket. Who doesn't love Thailand, right? The friendly people, wonderful people, great food, and great beaches. Probably a great time to invest now because tourism is like this right now. Tourism is like this right now. Tourism is like this right now. But there are things that are coming back. There are things that I hear in technology-wise that are coming in that's going to create a comfort in travel. As when travel comes in, what happens in that asset class? It's going to boom. We fortunately have identified one asset, a luxury hotel resort on the beach ready to be invested into. Nice. Nice. And the partner, the brand owner, the company, the entity that owns it has agreed to allocate certain assets into this investment. Excellent. So there's a lot going on. There's a lot. So you're doing friends and family right now. You've got the properties all lined up. Yeah. So if you guys want to find out a little bit more about Labs, definitely check out Medium. I'll put all the links up. So, you know, what's the best place? I'll ask you. What's the best place to check out? Well, where do you find Mahesh? Mahesh will personally come to you. Call this number. Yeah, 1-800-don't-call-me. No, look, I'm on LinkedIn, so you can look at my profile on LinkedIn. Other than that, you know, I tend to come to interviews or questions, Q&As, very happy to do so. I've spoken at certain Financial Institute conferences, keynote speakers, but it's stuff everybody knows. This is the stuff that excites me. Get involved in crypto, get involved in technology, get involved in asset classes that have a real business that sits on this paradigm of change. So this is really where I'm all about. Awesome. Awesome. So guys, I'll put the links down below for Labs and everything else. If you want to find Mahesh, also just check that link. I'll put the LinkedIn link down below. Sure. And Mahesh, thank you so much. Thank you. Thank you very much for having me. Lots of insights and lots of shares. So guys, I hope you guys enjoyed the content today and also just a different viewpoint. Definitely, I hope you guys enjoy. If you guys do, leave a comment down below. Click the like button and subscribe. See you guys in the next video. Thank you. Thank you. Thank you. Thank you. Thank you.