The smell hit me first: damp brick, stagnant water, mold, and bleach. I was partway down a flight of wooden stairs that led to the basement of a 1920s duplex in east Detroit, Michigan. Leading the way was Cornell Dorris, a tenant in the building for nearly a decade. Dorris is in his early forties, has two daughters who visit on weekends, and makes a living smoking meat and cooking for events.
As my eyes adjusted, I made out rodent droppings and a black puddle that spread across the basement floor. “Anytime it rains, the water comes down,” Dorris said. The air was unnaturally heavy, and I felt a nagging urge to leave.
Dorris doesn’t have a typical landlord. Almost four years ago, his building was acquired by a startup called RealToken, or RealT. The company had a plan to “democratize access to real estate investment” using cryptocurrency technology. The idea was that a property could be represented by thousands of crypto tokens sold for around $50 each. Token owners would collect a portion of a property’s rent, possibly making an annual return as high as 12 percent. They also could profit from any growth in the property’s value.
Investors lapped up the idea, and RealT went big on Detroit, snapping up approximately 500 buildings. It also bought around 200 properties in more than 40 other cities across the Americas, bumping the combined value of its portfolio to roughly $150 million. US residents are not allowed to invest, for regulatory reasons, but at least 16,000 people from 150 countries have purchased RealT tokens. Though reliable figures are difficult to come by, RealT once called itself the “largest real estate tokenization platform in the world, by all metrics.”
The flooded basement at the duplex where Cornell Dorris lives.
Photograph: Joel KhaliliFor all its triumphs in the cryptosphere, though, RealT has run into plenty of real-world trouble. Last summer, the City of Detroit sued RealT and its founders, alleging “hundreds of blight violations.” Dorris’ property was one of many that city inspectors declared unfit for habitation. He told me that while his previous landlord wasn’t perfect, sometimes leaving Dorris to organize repairs, his building has deteriorated markedly since RealT entered the picture. The smoke detectors are missing, and the bathtub has no hot water, inspectors found. “The only way of washing is me standing over my sink,” says Dorris. “There are rats in the downstairs, there are squirrels in the upstairs.”
As a proportion of the US housing market, estimated by Zillow to be worth $55 trillion, tokenized real estate is a rounding error. But the concept of using crypto to buy fractions of an asset—whether art, gold, oil, or stocks—has grown in just a few years into a $30 billion industry, per Deutsche Bank. Yet in Detroit, the promise of spending a few bucks to become a landlord, often from the other side of the globe, has collided with the inconvenient physicality of homes and the humans who live in them.
At 8821 Prairie, windows are missing at the front and side of the house, the porch stairs have crumbled, and the panelling is bent out of shape.
Photograph: Sarah Rice
A tree grows up the right flank of the house, where more windows are missing.
Photograph: Sarah Rice
The stairs leading to the front door are splintered and broken.
Photograph: Sarah RiceA pair of Canadian brothers, Rémy and Jean-Marc Jacobson, founded RealT. They aren’t twins but look like they could be—both have glasses, slicked-back hair, salt-and-pepper mustaches. Both identify as staunchly libertarian, favoring free markets and minimizing the reach of government. When we met over Zoom, Jean-Marc was impassioned and occasionally prickly. I got a little wordy trying to frame a question in a tactful way, and he told me, “Just ask it.”
The Jacobsons grew up in Canada and Europe, part of a colorful family that has been embroiled in court proceedings that span the globe. A sister’s bitter divorce culminated in a fight over a multimillion-dollar fortune that had been sequestered in the Bahamas, which she won. Their brother-in-law received a suspended prison sentence after he was linked to a group that had been involved in the illegal sale of arms to Angola. When their father, a financier, was asked about the family's fortune in a 2003 article, the reporter was told, “Don't ask and I won't not tell you.”
Rémy and Jean-Marc have said that they carved out their real estate careers by turning over properties in Quebec and parts of the US. Then, in the early 2010s, they discovered bitcoin. Almost immediately, they launched their own bitcoin mining operation, followed by various other companies and a nonprofit. The brothers got entangled in bitcoin-related troubles too—they fell for a Ponzi scheme, and settled with a client that accused their firm of withholding a crypto payment now worth millions.
As early as 2013, as Jean-Marc tells it, the Jacobsons began to consider how to blend their expertise in real estate and crypto. In traditional finance, people could buy into real estate investment trusts (REITs), which let them earn a slice of rental income on a bundle of properties. But that generally meant investing at least a few thousand dollars. The brothers cast about for a way to use crypto to structure a roughly similar product but invest significantly smaller amounts. They didn’t crack it until five years later, when Rémy received a phone call from his lawyer.
Normally, it’s not possible to sell one house to a thousand people. But if the Jacobsons transferred a property’s title to a limited liability company (LLC), they could create and sell crypto tokens that represented shares in the LLC.
The Jacobsons went hunting for a location in which to test their tokenization concept. Detroit, known for its cheap housing stock and ambitions of urban renewal, was an obvious place to look. “Detroit was a city that had just come back from bankruptcy. It was already on the way back up,” says Jean-Marc. “It was a natural choice for potential increase in value. And, mostly, for beautifying and improving neighborhoods.”
They bought their first property—9943 Marlowe, a modest single-family home in West Detroit. In April 2019, they tokenized it, pricing 1,000 tokens at a markup to cover various fees and repairs and a 10 percent cut for the Jacobsons. They also planned to take a 2 percent cut of any future rental income. The rest of the rent would cover maintenance, taxes, and fees, and whatever remained would be distributed among token holders.
On the first day of trading, Jean-Marc tells me, RealT sold fewer than five tokens. The brothers asked their friends and family to buy in and tried to get the word out on X, Medium, and in press interviews. “People were at first suspicious,” says Jean-Marc. “We sold very, very, very little.” After about five months, the Jacobsons considered selling the house, refunding the people who had bought tokens, and walking away.
Slowly, however, the tokens for 9943 Marlowe began to sell. By December 13, they had sold out completely. At the time, the property belonged to 107 investors from 33 countries, who on average each owned a 0.93 percent stake and split among them $25.22 in daily rental income.
The Jacobsons started a chat group for French-language investors on Telegram, and demand for RealT’s tokens began to take off. In 2020, RealT went on a spree in Detroit: It tokenized an apartment building on Appoline, a quadruplex on Schaefer, then a single-family on Mansfield. That year, the Jacobsons tokenized nearly 50 properties.
As they eyed further expansion in Detroit, the brothers worked with real estate professional Shawn Reed, who, according to court documents, started to identify and sometimes help renovate properties for RealT to tokenize. Unbeknownst to the Jacobsons, Reed had a checkered past; he had previously served prison time for conspiracy to commit bank fraud and once agreed that he could be described as a “slumlord.” He teed up deals that helped RealT to keep pace with the now-soaring demand for its tokens.
I spoke with one investor, who posts on Telegram as TokNist, who said that when they first heard about RealT, they understood the proposition immediately. A French national living in Asia, TokNist (who asked to not be named out of fear of retaliation by other RealT investors) had wanted to buy real estate but couldn’t secure a loan. RealT offered a way to invest small sums without any bank involvement. “A lot of people are like me,” says TokNist. “They are not wealthy speculators. They are simple people who want a piece of real estate, and they want fixed income.”
In 2022, TokNist began to snap up RealT tokens. It wasn’t always straightforward. Whenever RealT was due to list a new property, they waited at their computer and watched as a timer ticked down. The website frequently failed, and their screen would go blank, or tokens would vanish from their cart. “The houses were sold instantly. You could have six or seven for sale the same day and, after a few minutes, every token was gone,” TokNist tells me. “It shows you, there is really a demand.”
Behind the scenes, the Jacobsons were beginning to run into problems with administering their swelling property portfolio. In 2023, a bank foreclosed on a commercial property the brothers owned as part of a separate business venture in Miami, Florida, after they defaulted on a loan and were ordered to pay $10.4 million. The City of Miami also happened to have classified the property as unsafe. (The Jacobsons describe this episode as a strategic decision in light of the Covid pandemic and an outlier in their track record in Florida.) That same year, the City of Chicago brought multiple fines against RealT LLCs over alleged blight violations, failures to adhere to building code, and debt delinquency. It was an early indicator of the troubles brewing in Detroit.
In the summer of 2024, Aaron Mondry was casting about for a fresh lead. A reporter at nonprofit local news organization Outlier Media, Mondry had been writing a series of articles, “The Speculators of Detroit,” about the city’s housing market. Then a contact pointed him to a curious pattern in the deed register for Wayne County, Michigan.
Scanning the register, Mondry saw that a large number of Detroit properties were owned by LLCs whose names were variations of “RealToken.” By that time, through these many LLC subsidiaries, RealT had bought and tokenized hundreds of properties across Detroit and become one of the city’s largest landlords. Many of the properties were single-family homes that RealT acquired in batches by striking deals with other landlords, sometimes without visiting the units in person. The RealT properties are concentrated in low-income, predominantly Black neighborhoods in the east and west of Detroit.
Mondry pulled together a list of RealT properties and set about knocking on doors. Soon, he noticed an alarming pattern: Many of the homes he visited were in terrible condition, a large number appeared to be vacant, and looking at various databases, in numerous cases the property taxes hadn’t been paid.
In February 2025, Mondry published the first of several stories about RealT, drawing from public records and conversations with the tenants. The stories alleged widespread mismanagement, corner-cutting, and neglect of tenants, some of whom told Mondry they were living in squalor. Around that time, city building inspectors warned RealT that an apartment complex on Cadieux Road had inoperable smoke detectors, emergency lighting, and fire doors. In March, a fire tore through the building.
An apartment building tokenized by RealT at 10410 Cadieux, its units boarded up.
Photograph: Sarah Rice
A fire broke out at 10410 Cadieux in March 2025, burning a hole in the roof.
Photograph: Sarah Rice
Since 10410 Cadieux caught fire in March 2025, the apartment building has remained empty, its scorched remains boarded up.
Photograph: Sarah RiceI heard similar accounts when I went door-to-door in early September 2025. I drove my rental car past basketball hoops weighed down with cinderblocks and caught the scent of barbeque and strains of music wafting over fences—cheerful fragments of everyday life that cut against the otherwise wretched condition of the RealT properties I saw scattered across the neighborhoods.
I pulled up at the apartment building on Cadieux to find its scorched remains now boarded up. In the neighborhood of Grand River-St. Marys, in the northwest, a purported gang said they had seized control of 14881 Greenfield, a two-story brick apartment building with a distinctive red awning. In a YouTube video, the group claims to be acting as the landlord, renting the dilapidated units. “For a drug addict, this is like five stars,” says one of the people interviewed. Two other RealT houses I visited were peppered with bullet holes. Multiple tenants told me they are withholding rent in the hope of forcing repairs.
At a Tim Hortons in Redford, West Detroit, I met Maya, a RealT tenant who lives nearby in a boxy redbrick house. When Maya—who asked to be identified only by her first name—gets home, she parks her car in the driveway and sits there, sometimes for up to an hour, before she goes inside. In one bedroom, a leak has created a yawning hole in the ceiling, exposing the wooden roof supports. The paint is peeling, and shreds of fiber insulation, sodden and brown, dangle into the bedroom. Maya sticks to the bathroom, kitchen, and living room, where she sleeps. “I probably shouldn’t be living in it, to be honest with you, but I’m trying to find somewhere I can go,” says Maya. “It’s a slumlord city.”
A few blocks away from Maya’s place, I knocked on the door of Monica, who has lived in a house south of the famous Eight Mile Road for six years, lately with her two grandchildren. The home’s tokens are owned by 331 people, who have made a 9.3 percent average annual return on their investment, funded by Monica’s rent. Monica tells me that her heating is broken and the water supply is temperamental—and I can see that some of the windows are smashed and the roof is damaged. A long-dead tree hulks over the front yard. At night, Monica can’t sleep for fear an intruder might enter through one of the broken windows. She says she has repeatedly applied to move into an emergency shelter, but they’re always full. “Go home, honey. Go home,” Monica told me. “It’s terrible here.”
ArrowArrowOn the fifth floor of the Coleman A. Young Municipal Center, in the middle of a labyrinth of cream tile and threadbare carpet, I found Conrad Mallett, who oversees all of the city’s civil litigation. The walls of his office are lined with portraits of Muhammad Ali and prominent figures of the Black Civil Rights movement. Formerly deputy mayor of Detroit and chief justice of the Michigan Supreme Court, Mallet became aware of Outlier Media’s reporting on RealT last spring. He launched an investigation. Building inspectors assessed the properties and cataloged code violations. “It turns out, there were thousands,” Mallett told me. “We concluded, in the vast majority of cases, people were living in substandard housing.”
Mallet's deputy, Tamara York Cook, dispatched building inspectors to go house to house and affix her business card to the front doors. Soon, her phone started to ring. “Most people are fairly anxious to tell their story,” she says.
In July, the city government filed a civil lawsuit against RealT, its founders, and 165 of the associated LLCs, whom it accused of committing hundreds of public nuisance and regulatory violations and failing to pay hundreds of thousands of dollars in blight fines and property taxes. The lawsuit alleged that 408 properties lacked the city’s “certificate of compliance” that deems them safe for habitation. (The Jacobsons told WIRED that “RealT’s tokenized portfolio was no better or worse than any other property in the zip codes concerned when it came to CoCs.”)
Soon after, a judge imposed a temporary restraining order barring RealT from collecting rent or evicting tenants at any of those Detroit properties until they are brought up to code. The order was later extended, but relaxed to allow RealT to evict nonpaying tenants.
On Telegram, a few investors had caught wind of the lawsuit, and Rémy Jacobson jumped in with reassurances. RealT investors have barely any insight into what’s happening in Detroit, beyond what they are told by the Jacobsons. “We are committed to addressing every issue,” Rémy said. Twenty-one investors reacted with a love heart emoji. Jean-Marc chimed in, talking up the bumper growth in the Detroit property market.
Around that time, the Jacobsons told investors that a prospective buyer had expressed interest in the building where Cornell Dorris was living—the one with the flooded basement. If investors agreed to the sale, they stood to make a whopping gross return of 75.61 percent. In Telegram posts, Jean-Marc presented the sale as an indicator of the vitality of the Detroit real estate market and RealT’s dealmaking savvy. During a call with RealT investors in late July, Jean-Marc announced that the property sale was “done.”
The buyer, East Coast Servicing LLC, is registered to the same Michigan address used in the documents by RealT. The documents are signed on behalf of the buyer by Rémy Jacobson. The Jacobsons appear to have effectively closed a deal with another company they controlled.
After I followed up about the deal—in February 2026—the Jacobsons sent an email to investors saying that the buyer had pulled out, despite having said in July that the property had “closed.” The brothers then told WIRED that East Coast Servicing LLC is just a vehicle they use to help administer the sale of properties to foreign buyers.
The Detroit city government’s running theory, it claims in its lawsuit against RealT, is that property neglect is built into the company’s model. “The way they’re able to generate the [annual return] is by not maintaining the houses in a quality manner,” Mallett alleges.
Tamara York Cook, the City of Detroit attorney in charge of the lawsuit against RealT.
Photograph: Sarah RiceJean-Marc Jacobson rejects that allegation. He claims that the intention was always to help beautify Detroit neighborhoods by allowing a wider range of people to invest in them. When RealT tokenizes a property, he says, a fund is set aside to cover maintenance. For investors to make handsome returns, properties must be consistently occupied and command decent rental income, the Jacobsons point out, and deliberate neglect would make that impossible.
It’s the management companies and other real estate professionals, Jean-Marc claims, who neglected properties or otherwise cheated RealT. The company has sued a few of those accused—including Shawn Reed.
On the morning of September 3, I met Reed in the lobby of The Henry, a gaudy hotel a few miles west of Detroit. I found him sitting in a brown leather armchair beneath a glass chandelier, an electric fire flickering behind him. With his shaved head, long black beard, and cowboy boots, he’s difficult to miss. Reed ran his fingers through his beard as we talked.
Reed’s relationship with the Jacobsons had soured by then. By 2024, according to court documents, they had started to squabble over the particulars of certain property deals. Then they clashed over property renovations. Eventually, they stopped working together. Then the Jacobsons sued Reed, accusing him of fraudulent misrepresentation.
In a lawsuit filed in Michigan state court in February 2025, RealT alleges that Reed billed for repairs and renovations that were never carried out. Reed denies those allegations. He also claims his role was to help renovate only a handful of RealT properties, not to maintain the entire portfolio on a day-to-day basis. In June, he filed a countersuit alleging that RealT has tried to use him as a scapegoat by falsely casting him as responsible for the mess in Detroit. “I was never a property manager. That was never my schtick,” he told me. The lawsuit is ongoing.
At 19154 Sherwood, the porch railings are hanging loose and the stairs have been beaten to rubble by the weather.
Photograph: Sarah Rice
Around the back, the garage door is missing.
Photograph: Sarah RiceWhen we spoke, Jean-Marc declined to discuss Reed specifically, but told me, “Sometimes, when you walk into a new city, you meet all the wrong people at first … Nobody can claim that they are immune to con men and fraudsters.”
By the time the dispute with Reed had spilled into court, the Jacobsons had set up New Detroit Property Management. The brothers handed responsibility for RealT’s Detroit portfolio to the new company and appointed Salvatore Palazzolo, an experienced property manager, as vice president. On my final day in the city, Palazzolo picked me up outside my hotel in a black SUV, a small crucifix hanging from the rearview mirror. He was eager to show me the RealT properties his team had recently renovated.
As he drove, Palazzolo explained how he’d been tasked with identifying empty properties that needed only minor renovation, so they could be rented out quickly and start generating income. All the while, the city continued to issue blight tickets, which Palazzolo said meant diverting his crew away from renovation work. “You have to understand the amount of units we have,” says Palazzolo. “With the city turbo-ticketing us, it’s a lot. It really is.”
The problems continued even after New Detroit had completed renovations. In at least one instance, a person posing as the landlord allegedly installed someone in a renovated RealT property in exchange for a one-time payment. The imposter attempted to abuse the halt on evictions put in place by the court, the Jacobsons claim, advising the would-be tenant that they couldn’t be evicted if they paid a nominal sum into the city’s escrow account.
Palazzolo and I pull up to the first property, a small redbrick house with a gabled roof and white trim. A black clipboard folded under one arm, Palazzolo walks me through the house and points out the fixes he has orchestrated. The windows are intact, the bathroom and kitchen have been refitted, the walls have been painted, a collapsed awning has been bent back into shape, and the floors have been either buffed or recarpeted.
14574 Strathmoor, one of the RealToken properties that New Detroit Property Management has renovated.
Photograph: Joel Khalili
The bathroom and kitchen have been refitted, a collapsed awning has been bent back into shape, and the floors buffed.
Photograph: Joel KhaliliHe takes me through five more houses in similar condition. They’re unspectacular but look clean and habitable.
Palazzolo estimated that New Detroit had by then renovated around 40 houses for RealT. According to a recent court filing, the company has earned compliance certificates for 28 of the properties identified in the city’s lawsuit. “I don’t think people realize how bad some of these properties are. To get them up to par takes a lot,” says Palazzolo. “We’re really trying to make it safe and affordable.”
At 13045 Wade, ivy has grown across the front facade, covering the doorway and a window.
Photograph: Sarah Rice
A broken window has been boarded up.
Photograph: Sarah RiceJean-Marc Jacobson acknowledges that the situation with the Detroit properties is “catastrophical,” but he has also criticized the parties that have publicized RealT’s failures. Over the summer, he messaged with French-language investors on Telegram almost every week and took to repeatedly disparaging Mondry, the local reporter. “Obviously, this journalist doesn’t like us. We’ve known that for months. Obviously, he only writes what he chooses to write and ignores all evidence to the contrary,” Jean-Marc told investors on Telegram in early July. A few weeks later, he added, “He’s never had so many clicks in his career. He portrays us as the evil crypto-capitalist who raises rents and makes the underprivileged suffer.” The Jacobsons reserve similar criticism for WIRED, which they claim engaged in “surface level analysis” for this story and pursued a “targeted narrative.” In September, Jean-Marc told investors that he believed the city’s lawsuit was a product of “administrative corruption, political agenda, hidden games, and abuse of power.”
On Telegram, token investors have occasionally wondered whether the city’s case or Outlier Media’s reporting have merit. One person recently suggested that RealT should have performed background checks on its property management companies. Jean-Marc responded, “All you seem to enjoy doing is spewing your hatred.” In another Telegram message, Jean-Marc appeared to mock a tenant. “Attention!!!! My faucet isn’t working properly!!! Emergency alert!!!🆘,” he wrote. Three RealT token holders I spoke to described the Telegram community as hostile. (The Jacobsons deny that the Telegram group is a hostile environment; they claim that tension within an investor group is natural during periods of strife.)
Undeterred, investors have asked increasingly probing questions of the Jacobsons. In September, investors unearthed documents from 2023 that they believed showed RealT had taken out mortgages worth a combined $950,000 on two properties in Chicago, months after tokenizing them. That was “extremely questionable,” one investor alleged, because they believed it exposed token holders to the risk that a lender might repossess the properties in the event of a mortgage default. Jean-Marc claimed RealT had taken out the mortgages as a favor to the sellers, who stood to benefit in some unspecified fashion. He claimed those mortgages have since been paid off. “From time to time, there are corporate gymnastics to do,” Jean-Marc told investors. “If we’re going to have a deal, sometimes we have to show a bit of flexibility.” The arrangement Jean-Marc described is irregular, says Tomasz Piskorski, a professor of real estate at Columbia Business School. “I don’t see a good argument. Maybe there is one, but I’m not aware of it.”
In late November, investors started to ask questions about a RealT property in Chicago that had been classified as dangerous and marked for demolition by the city several months earlier yet continued to generate rental income for token holders, implying it was occupied. “I’m starting to not really know what to think anymore,” said one RealT investor on Telegram. I encountered something similar in Detroit. Of the 13 properties that appeared to be vacant when I visited last September, all were listed on the website as “fully rented.” The same went for the apartment building commandeered by the purported gang. The Jacobsons claim that the escrow system put in place by the City of Detroit disrupted their ability to verify occupancy.
Some RealT investors say they feel betrayed by the Jacobsons. One told me that they’d stopped buying RealT tokens until the Detroit battle resolves. TokNist, the Asia-based investor, expressed doubts about the Jacobsons’ management. Another, posting as “Demetrius Flenory” on a Q&A platform, wrote to the Jacobsons, “Our tokens, which are supposed to finance innovation and the democratization of real estate investment, find themselves connected to unsanitary, dangerous properties that exacerbate the social distress of these disadvantaged neighborhoods … We cannot look the other way as a new scandal erupts every week.”
Shawn Reed, the not-a-property-manager, threw in his own public critique last year when he posted a video tour on X of a dilapidated building he claimed was owned by RealT. In one room, a soiled mattress is splayed on the floor; in the next, food containers and other garbage have accumulated into a pile. “I would be so fucking pissed if I owned tokens on this building,” says Reed from behind the camera. By then, however, Reed was affiliated with another tokenized real estate venture.
In February, the Jacobsons told investors that they intend to sell a large number of properties across the RealT portfolio with the aim of “optimizing overall investor returns.” To free up the funds necessary to bring the homes into a saleable condition, however, investors would no longer receive any rental income, no matter where their property was located. Some investors defended the decision, but others were furious; why should the Jacobsons get to unilaterally decide that they would no longer receive the rent for a property they owned, they asked on Telegram. The Jacobsons claim the maneuver is allowed under RealT’s terms—as directors, they get to decide whether to distribute rental income—but some investors equated it to “theft.”
The trial in Detroit is set to begin in May. RealT’s other legal conflicts drag on. As it tries to bring its properties to market, the company appears to be pursuing a new strategy, in new countries. RealT is now selling tokens for “preconstruction” properties in Colombia and Panama, whereby investors effectively crowdfund construction projects in the hope of large future returns. “Preconstruction takes huge advantage of the concept of tokenization,” Jean-Marc told me when we spoke. “It has a very bright potential.” Investors seem less convinced; listed months ago, thousands of the tokens remain unsold.
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