Its not an unregistered security, just a private company. You are correct the return is likely on the low side, but it does give a steady stream of valid taxable income from a bitcoin investment. Something that is not extremely easy to do.
Topic: Bitcoins to real property (Read 503 times)
Huge amount of risk for likely very little profit (or potentially a loss).
Say the return on the asset is 10% a year. Lets ignore the exchange fees, bank fees, wire fee, lawyer fees, etc. Lets also ignore the tax implications on the holding company, the potential for ebezzlement, gross mismanagement, etc.
In USD terms the asset produces a 10% return, however (hypothetically) the BTC/USD exchange rate rises 20%. In BTC terms the value of the shares will decline 20% and the dividend paid out over the year will only be 10%, resulting in a net loss for investors compared to simply holding BTC.
Add to it the illegaility of issuing unregistered securities (in the US and most other "first world" nations), the risk of the operating disappearing, and the normal business failure risk and it starts looking like a lot of risk for not much return.
Say the return on the asset is 10% a year. Lets ignore the exchange fees, bank fees, wire fee, lawyer fees, etc. Lets also ignore the tax implications on the holding company, the potential for ebezzlement, gross mismanagement, etc.
In USD terms the asset produces a 10% return, however (hypothetically) the BTC/USD exchange rate rises 20%. In BTC terms the value of the shares will decline 20% and the dividend paid out over the year will only be 10%, resulting in a net loss for investors compared to simply holding BTC.
Add to it the illegaility of issuing unregistered securities (in the US and most other "first world" nations), the risk of the operating disappearing, and the normal business failure risk and it starts looking like a lot of risk for not much return.
I notice that there are numerous funds traded on various bitcoin exchanges, but the VAST majority of them all seem to offer an investment in their mining. Has anyone ever, or would it be possible to do something much bigger and offer a fund that deals in real world income like a condo in a rental pool.
Just looking for comments on the logistics. Of course the biggest hurdle is the trust factor, so let's not concentrate too hard on that and hopefully find a lawyer that will hold bitcoins in trust.
It could be tricky if you are trying to stay anonymous because the income is coming in fiat, so paying it back in bitcoin could be problematic for the company that holds the property and the reporting they have to do. (unless it is based overseas but thats a whole new topic)
An advantage would be that for your bitcoins, you would get a share certificate in the mail of the percentage you own along with a nice monthly or quarterly dividend cheque. Not a bad option.
Thoughts?
Just looking for comments on the logistics. Of course the biggest hurdle is the trust factor, so let's not concentrate too hard on that and hopefully find a lawyer that will hold bitcoins in trust.
It could be tricky if you are trying to stay anonymous because the income is coming in fiat, so paying it back in bitcoin could be problematic for the company that holds the property and the reporting they have to do. (unless it is based overseas but thats a whole new topic)
An advantage would be that for your bitcoins, you would get a share certificate in the mail of the percentage you own along with a nice monthly or quarterly dividend cheque. Not a bad option.
Thoughts?
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