Topic: RentalStarter - A Midwest Real Estate Investment Company - page 23. (Read 120408 times)

Just located a monster deal.


2br (Can be increased to 3br), 1ba. All mechanicals are newer, updated furnace, AC (central), electrical. Kitchen is in good shape but a bit out of date. Property is ready to go.

$700/mo in income (expected).

They're asking $27k, I think I can get it for $20k-$23k. Simple ROI of 45%!

You need to hedge the position with futures.

I haven't cashed any BTC out recently, we still have ~130btc in reserve unassigned to any properties (Although I likely will need to take 10btc more out to cover the final repairs of Walnut & Mulberry as they weren't in the original scope of work, and due to the drop from 600>450 earlier that also wasn't included.

My hope right now is to flip a property in the next 3 months. That would provide a large dividend to investors along with good cashflow to the business.

I just imagined that it sounded really unpleasant to say the least.
Thanks for always keeping us up to date and keep up the good work
(And bring goggles and a facemask for stuff...)

With the rise in BTC have you started looking at other properties, or are you holding off until all current units are fixed up and/or rented out?

Few quick updates.


W. Mill - There have been some somewhat major issues with the heating/cooling and plumbing. Tenants are weeding out the issues, all due to it being a 134 year old home, there was a sewage backup and our guys got sprayed with.....stuff. Cost us a few hundred bucks to fix all the problems. Nothing hugely major, our monthly repair escrows covered all the expenses as estimated. Only additional expense has been buying a 30lb tank of freon. It's pretty expensive stuff, but one tank will last us about 8 complete AC recharges, if we were to get someone else, a recharge would run $100-$150 per unit, the tank is costing us $300.

Logan - Nothing to report, tenants are happy and paid up.

Scioto #1 - Tenant moved out of the $350/mo unit, i'm quite glad they did. Problems were arising with the long-term tenants that were there. We returned a small portion of the deposit back to them, hopefully will have it rented out before next div date.

Scioto #2 - A fun story on this one - The last landlord was still collecting checks from the government. We were *supposed* to be getting them (As noted in an email last month) but we never got them. I ended up meeting with the Chilli metro housing authority on it and they forced him to give back what he took. Today I deposited last months & this month's rent from Hud/Sec8/CMHA. I also found out that the rent rate is HALF of what CMHA will allow on it, so when the lease is up (next year) We should be able to increase the rate dramatically on this rental (Currently 625/unit average, if we went to 100% of CMHA rates we'd be bringing in around 900/unit).

E. Mill - Finally tons of progress, hopefully will have photos up in the near future of what all has been done. They're FINALLY setting up the new kitchen. I'm pretty excited about it because *I designed it*. All oak cabinets, tile backsplash, looks fantastic from the layouts I'm seeing.

Mulberry - Nothing much to report outside of waiting for work.

Walnut - Lots of progress, you'd be shocked at how fast we're going through things. Plumbing is almost done, just left with a clogged toilet drain. Painting is all done for the most part, drywall work is done. What's left now is carpet , exterior painting then we'll be ready for tenants. I already have 3 highly qualified tenants in line dying to rent it out. We NEED more 4br.

thanks for the updates, really apprecciated

Will get update photos mid week of Mill & walnut. Tons of progress to both, they're setting up the kitchen cabinets the first part of the week.

Walnut is mostly repainted, next things to do will be the plumbing and the little bit of roof work then we'll be ready. TONS of applications and requests on both properties, both likely will be rented out before they're ever done.

Lots of good progress on Walnut this week, finishing up painting on 5 of the 7 rooms that needed painted. Once we get all the painting done then we'll move on to exterior painting/concrete work, interior flooring (Replacing carpet in a few rooms), plumbing (Upgrading to CPVC), ridge caps and some other minor work. Have several good tenants already in line for the property.


Also leaning towards holding off on another purchase till I can find a suitable flip. I've located 5-6 properties that have been flipped (All were on our radar, however were being sold during periods where we couldn't proof funds) and they provided the investor a median profit of $40,000 on a $50,000 investment with a rehab & market period of less than 4 months.

If you were certain that BTC was going to take a huge increase in price, there's no sense in investing in virtually ANY stock that has to do with bitcoin, it'd be far better just to hold your coins.

Our purpose is to build/grow a business that's denominated in USD and to provide good returns on it and hopefully outpace the rise in BTC's price through leverage. If BTC goes down to $0 Then we'll figure out some other way to pay. However I don't imagine that we'll ever see it go down to $0 (Even from day #1 it wasn't $0, it had SOME value, although quite small).


The stock price doesn't really revolve on fundamentals, more than anything it just depends on how many updates I put out. The more the updates, the higher the stock price, the fewer the updates the lower the stock price seems to go. The fundamentals just keep getting better which *should* increase share price, which isn't exactly what we're seeing with pricing on HL.

As for share transfer - We've sent out a half dozen or emails concerning share migration. As Havelock said, email them and they should be able to assist.

As for BTC/USD reserves - We take a 'draw' from our HL wallet when we buy new properties/rehab them. It would have been far better to keep EVERYTHING in USD in the bank, but unfortunately we have quite a few investors that believe that USD per BTC will increase greatly so they do want us to keep some in our BTC wallets. As it stands now there's something like $555,000+ between our USD & House equity accounts and a little over 100btc in our wallets.

I'm also buying more shares while the price is low. I guess it'll stay like this until all properties are rented and people start realizing the long-term potential (which is unusual in the short-term oriented BTC world).

Email [email protected] with the email you have an account with us. We will take a look at it.

When can we expect our shares from Bitfunder to be available on Havelock? This has been brought up before, months ago. Also, can I assume accumulated dividends will be paid then?

Given this I am very surprised that the price has not stayed up at .75. Makes me think I should grab more haha.

As we have discussed several times before, in this venture BTC is an investment vehicle, not an investment in itself. If you believe there will be another BTC rally, your best bet would be to just buy and hodl as many BTCs as you can. If BTC value goes up, the logical thing to happen is a decrease in the value of the shares (in BTC terms, not USD), and the opposite if it goes up. If BTC collapses (disappears), we still have the company assets and we would have to find a new way of distributing profits. 

As we are investing in real estate here (not speculating in cryptocurrencies) we should hope Branny keeps most of the reserves in USD, not in BTC.

I am just wondering what Branny and the other investors feel the price of btc rising quickly again would have on the price of this security? I feel like since all these houses are measured in USD, if we were to have another large bitcoin bubble then the value of these shares would drop substantially in price. This is currently stopping me from investing anything more then a very small amount (an amount that I normally would have kept in fiat). Do we also hold a large balance in btc? Does the company take it's rent proceeds and keep them in btc as to gain from an appreciating price, allowing us to purchase more housing?
Also wondering how would this security continue to operate if the price of btc was to hit $0? Would it start paying out dividends in another coin? Would it collapse?

There are just a lot of difficult to measure variables when buying into a fiat security using your btc.

I am not sure about Detroit, but are there any colleges around the Ohio area you would considering buying next to?  I am sure you are more knowledgeable on this than I am, but it never hurts to throw in a quick opinion/some advice.  My brother rented a place right next to campus in college.  Little house, with a main floor and a downstairs, that the owner was able to lease out to 6 people at a time (every available room was converted to a bedroom and 4 shared 1 bathroom).  They each paid $365 a month on a $70 to $80 thousand dollar house, which over 6 of them, would be about $2000 a month in rent.

These tenants are at least tied in for 6 months (one semester) and probably 90% of the time, will sign for a year, and you will always have new tenants available and waiting.  The main problem is upkeep, they are college students and have a knack for destroying things, but it is fairly easy enough to bill them for repairs and whatnot/take it out of their initial deposit.

Just a thought as I started buying into your company and continue to grow my number of shares.  Sounds like your doing really well and have a clear goal of where you would like to go.  Keep it up!

I'd have to find someone i really trust. median vacancy rate is something like 50% for the whole of Detroit. Management fees can also be killer when you're in a high turnover area due to the fact that *most* management companies make MORE money the higher the turnover is (Many charge 1/2 of first month's rent as a tenant finder fee) so if you have two tenants a year per property, that's 1/12th of a year's rent PLUS the management & exorbitant contractor fees. Scaling is something that is always on my mind, since there's only so many rentals we can have in Central Ohio. However the best option at this time IMO is to grow highly and then franchise the method of find-flip-rent AND running a pseudo-contractor/management company in house, as management and repairs/rehab are two killers for rental properties.

Branny, this might be out of your league right now, but have you thought about purchasing homes in Detroit? There's a severe rental crunch going on now, and it might be worth looking into renting some houses out to fix them up. For example, http://www.buildingdetroit.org/Listing/Details/381969/4722-Avery is right by Wayne State, and wouldn't require a huge amount of fixing up. Since it's right by Wayne State it could be rented out to students and/or people who want to live near an up and coming area.

Congratulations on another successful purchase.