Topic: RentalStarter - A Midwest Real Estate Investment Company - page 30. (Read 120494 times)

Tax is going to be paid out of the issuer's cut for the foreseeable future.


Would it be better on rentalstarter's site, or on the havelock page?


Also, we closed on our 3rd property today, the seller's transferred the remaining 20 days of rent to us along with deposits. Still close on two more properties this month, demo is set to start on this studio unit tomorrow.

does this mean were gonna get taxed at every dividend?

Hi Branny,

Can you give a dividend forecast or put up a page on the fund's website where investors can see that.

Finally sat down and met with the accountant today to work on moving us to having monthly audited financial reports prepared by a 3rd party. I do believe they will start reporting by the end of April.

The hope here is to move towards a GAAP standard for the accounting of our business. This will help us should we ever decide to move forward with something like a reverse merger with a company already listed on a public stock exchange. At any rate though, it's a good idea to add another layer of transparency to the company.

Member-managed LLCs require substantial effort on the part of each member in order to ensure the Howey test for non-dependence on the efforts of others is satisfied.  Merely asking for votes here and there would not satisfy the test, see e.g. Reeves v. Ernst & Young, 494 U.S. 56 (1990) and SEC v. Edwards, 540 U.S. 389 (2004).

As for using promissory notes or other debt-based investment, these would create three problems in a situation like RentalStarter.  First, investors here are likely looking for more than simply a fixed or pegged-floating variable return on their assets, which is what you would be limited to if you wanted to ensure the investment never qualified as a security within the meaning of the 33 Act.  Second, a note would give substantial power to any investor that wanted to exit the investment early during poor performance, as they would have the ability to force either Chapter 11 reorganization or Chapter 7 liquidation on the enterprise.  Third, if not done properly, debt-based investments could qualify as securities anyway, imposing all of the same regulatory burdens as equity capital-raising efforts do.

Best way to go about it is to create a member managed LLC.

Because registering an offering can be a prolonged and expensive process, many sponsors seek measures to avoid creation of a Security altogether. For example, a Security may not created if all investors participate unanimously in decisions involving the investment, such as in a “Member-managed LLC,” or in a Tenant in Common (TIC) ownership.
Another example of an exempt transaction is where a private lender loans money to an investor to purchase real estate using a promissory note and mortgage or deed of trust secured by the real estate. As long as investor funds have not been pooled or the note has not been fractionalized by combining investor funds to make up the total loan amount, this may qualify as an exempt transaction.

Some more reading
http://camaplan.com/articles/the-legal-aspects-of-raising-money-from-private-investors/

Given that you've stated you're currently the sole possessor of the records of investment interest for several members, and that you're based in the US, are you currently registered as a transfer agent with the SEC, as required by 17A(c) of the Securities Exchange Act of 1934?  Exclusion of US investors would not satisfy compliance with this requirement, the mere fact that you personally are based in the US and maintain these records as a service imposes this obligation.  And that's just one small part of the myriad of legal problems with your investment scheme.

I understand, as of right now, it's impossible for someone of your size to have an offering and not have all of the proceeds eaten up by expenses, in reality, you probably can't even make an offering that would ever cover your expenses unless you made it only to Sophisticated Investors within the meaning of current SEC regulations.  I strongly implore you to watch the development of the regulations promulgated under Title III of the JOBS act, which allow for "crowdfunded" offerings without the investor wealth and income requirements currently imposed by US Securities law.  You would probably be able to do this priced in bitcoin, but unfortunately, your investors would have to be identified.  The truth is, nearly every country in the world (including Panama) requires investors to be positively identified by at least some counter-party to the transaction.  The current structure is likely illegal under Panamanian law, and your operation is clearly unlawful under current US law, regardless of whether you make offerings to US citizens or not.  You're free to read the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended and confirm that it does not have a requirement that investors must be US based in order to fall under the provisions.  All that is required is that the transaction in some way touch the US (that would be you being the ultimate beneficiary) and involve interstate or international commerce (using your internet connection from within the US satisfies both, though you'd only need one). 

Look into Title III of the JOBS act, try to make this legitimate when those regulations are finalized.  I'd hate to see you shut down and bring more bad press to bitcoin. 

Rescinded. Really enjoying the plan so far for RentalStarter though!

Just got a call from the listing agent on the duplex (Not duplex + SFD) saying our contract was accepted.


So, to sum things up.


Property #3 - Two homes on one lot, one of which is a duplex which results in 3 units total. Property is producing $1050/mo in income already from 2 of the 3 units. We can garner an additional $350/mo in rent, increasing this to $1400 per month. We are to take ownership on this MONDAY. Price is $67,000 with an estimated $3,000 in rehab costs. Simple ROI is 24% APY

Property #4 (Determined by contract entry date) is a freestanding house about 4 blocks away from property #2 and 6 blocks from #3. It is a free-standing house with 2 bedrooms, we will be rehabbing this and converting it to a 3 bedroom home. I expect $750 per month in income. Total purchase price is $27,500 with an estimated $10,000 in rehab expenses. Simple ROI is 24% APY . We are set to take ownership the 24th of this month.

Property #5 is the duplex we JUST entered contract on. The property has two, 3 bedroom homes and is in a pretty good location overall. I expect $1300 per month in income from this property. Purchase price of $36,500 with an estimated cost of $20,000. Simple ROI is 27.6% APY. We are set to take posession on this property the 21st of this month.

Told ya you'd sell out. Congratulations, and awesome work!

Looks like we've sold out 100% of the IPO, so trading has now started. Looks like it's locked on havelock till 1pm today even though we sold out of our IPO.

Very excited, about the future, thanks to all the investors!

I'm just a small time shareholder and not very familiar with the US real estate market, but I do like the way you maintain communication in here. nice work so far!

Here's one of the test videos for the format we are CONSIDERING on future properties. Not sure yet so I'd like feedback.

Yea he satisfied all my question, seems like a pretty nice dude as well

constructive criticism. nice read 

That was all sales in 43113 zip code since 7/7/2013 - A total of 133 properties sold, not 3.

I still don't understand.

Me personally, as a licensed agent or what?

If you're talking about me personally, I do own property in other counties.

If we register as a 100% holding company investors get hit with 35% withholding taxes + a very high likelyhood of another 35% top tier corporate tax rate. If it would make sense to pay 35%-70% in taxes for investors to have the assurance of the US LLC as a holding company we can take a vote. The current AOI/OA is structured in a way that the HK entity has ownership in the US based LLC, and is not subject to witholding. This is one of the documents that would be made available to the board of advisers when we get it set up.

We're going to file W Mill with the LLC when we do E mill at the same time to save on filing fees with the county and title company.

I don't understand your comment about 3 houses selling in 8 months.

I stand by my CMA of $115k for W mill street and $75k for E Mill. When I get time tomorrow I'll comp out E mill and W mill street.