Topic: RentalStarter - A Midwest Real Estate Investment Company - page 42. (Read 120426 times)

Awesome.

Why not just say "equity estimate is now $90k to 120k"?

Rehab is going smoothly.

As noted in #bitfunder, I made the decision on Friday last week to go the extra mile and order windows to be installed and siding done.

This will take the house to complete rehab status (And even higher equity).

Equity estimate is now $90,000-$100,000 to $100,000-$120,000

Rent should now be a extra $100/mo from the added rehab value, if not more.

Rehab is going smoothly.

Equity estimate is now $90,000-$100,000 to $100,000-$120,000

Rent should now be a extra $100/mo from the added rehab value, if not more.

noticed shares issued is 70000 and total shares is 100000, are those shares going to released in a secondary offering? Happy to see a 'real' everyday business in bitcoin community.  After a few successful purchase / rehab / lease, the valuation should be a lot higher (barring a massive rise in BTC/USD prices) and a secondary offering would be helpful in acquiring more accretive properties. 

How long is rehab?  How are we planning to convert the USD to BTC for dividends?  Whats the estimated dividend per home per share?

Mill street closed today, rehab also started today.

Many people have always wanted to be a landlord or own some type of real estate. Unfortunately many people live in areas where it is nearly impossible to own property due to extremely high acquisition costs and very low rates of returns. On the other hand, some locations in the United States offer a wide variety of property that offers a very high return at extremely low entry prices.

Because of this, over the past few years we have purchased a few rental properties and rented them out, yielding great returns for ourselves.

Unfortunately, since 2008, it has become increasingly difficult for rehabbers and prospective landlords to gain financing for investment properties. Virtually all banks and mortgage companies require that properties be occupied and fully rehabbed before they will consider loaning on them.

This leaves one viable choice to purchase a property - Pay cash for it.

Purchasing real estate utilizing cash has several advantages over mortgages -

Sellers discount cash purchases by 10%-25% over mortgaged loans
Properties can close very quickly after an accepted contract
Financing costs are typically half versus a conventional loan

The primary drawback with this method is the large capital requirement for purchasing & rehabbing the property prior to renting it.
Our goal is to utilize a hybrid approach to purchasing real estate to use as rentals.

Locate property in acceptable price range ($15,000 to $35,000)
Purchase property without bank involvement (Cash Closing)
Rehab property for cash (repairs will run from $500 to $15,000)
Rent property
Cash-out the property via a 20 year low interest loan for 70%-80% ARV
Roll cash into new property acquisitions

With this method we can regularly re-invest in new properties and achieve a broad base of rental units without the need for second and third rounds of financing.
After mortgages, insurance, repair escrows and other management fees are paid, we expect to pay out a reasonable interest rate to stockholders. We believe that this amount will be high enough to keep the business financially viable and provide favorable returns to investors.
Our management team

We currently manage 2 properties consisting a total of 6 rental units. Check out our rental page for financial breakdowns on these properties. We have maintained an average simple return of about 24% per year over the course of 6 years. Our cash-on-cash return has been significantly higher.
Financial information

RentalStarter’s goal is to raise ฿1,000 through bitcoin funding. This would enable us to procure and rehab, for cash, approximately 3 rental properties. These properties then could be refinanced and more purchased.

70% of income after expenses will be passed through to shareholders. Income is determined by subtraction net rental income by mortgage (if applicable), insurance and property taxes and 15% off the top for management.

Of the 30% internally retained, 20% will go towards a repair escrow and 10% towards early loan payoff (This is on top of normal interest fees to build equity). (See management and retention escrows here)

There will be a 15% ‘management’ fee taken for each property will cover normal management associated to maintain the business operations of the company and income collection & distribution.

Income from the sale of any property will also be passed-through to shareholders with a similar method.

Please review our rental section for properties that we personally own and manage.
This asset is being offered with the following goals :

To provide diversification of investment for those holding BTC
Provide reasonable dividends and investment growth over several years
To allow investment in a USD denominated company with some risk mitigation concerning inflation or economic downturn

Shares

We will be issuing a total of 100,000 shares with a approximate value of $1/ea (Or .01btc) – (Total of $100,000 of investment). We plan on issuing the first 50,000 shares to purchase the first property. After we assess the time frame of additional rentals we look to issue the second round of 40,000 shares. Un-issued shares provide no dividend payments or voting rights. Issuer reserves the right to buy back any un-issued shares at IPO price.

Voting

Public voting rights will be decided by issuer at time of own discretion.


Dissolution of asset


In the event of un-foreseeable circumstance, the issuer may elect to dissolve the company with the following methods.

Shares may be bought back from shareholders at market price (110% of 7 day median market value)


Transparency

To insure complete transparency with shareholders, we will regularly upload financial statements, bank statements along with weekly investor-only videos and live chat sessions to provide updates and information on our progress.
There will be legal contract in place to insure continuation of company should the issuer meet a untimely demise.

PROFITS:

Profits will be determined after subtracting the following from income:
15% - Management Fees (This includes any and all salary/office expenses)
Any taxes, mortgage, insurance or other costs are subtracted
After that, 20% of the remaining amount will be put into a maintenance & repairs fund
The remaining amount will be considered shareholder earnings ("Dividends").

DIVIDENDS:

Dividends will be paid out every 15th of the month within a 72 hour grace period.
Dividend funds will be distributed equally amongst all shares.

Reserved Rights of Issuer

To change schedule of dividends to be in line with any changes in schedule the underlying asset may enact.
To correct and clarify any gross errors or details herein that may prove to be open to misinterpretation.

Issuer may exchange at his discretion a exchange of the 15% management fee for 35% equity in the asset. This clause is only available when the business surpasses $250,000 in assets.

To comply with SEC regulations, we currently do not allow investment from US entities.

Correct me if I am wrong, but it goes like this:

Investors give 40k USD to Branny. Branny buys a house, fixes it up, rents it to a renter. Now Branny has 0 USD but does have a house and a monthly income of (rent). So he goes to the bank and gets a mortgage on the house. Now he has a house, 40k USD and a monthly income of (rent-mortgage payment).

So he starts the cycle over again, Branny buys a second house, fixes it up, rents it to a renter. Now Branny has 0 USD, but does have two houses and a monthly income of ((rent) + (rent - mortgage payment)). He goes to bank for another mortgage, now he has two houses, 40k USD and a monthly income of (2 x (rent - mortgage payment)).

And the cycle can continue until you run out of houses, renters, or credit at the bank.

That's how I understood it too.

Correct me if I am wrong, but it goes like this:

Investors give 40k USD to Branny. Branny buys a house, fixes it up, rents it to a renter. Now Branny has 0 USD but does have a house and a monthly income of (rent). So he goes to the bank and gets a mortgage on the house. Now he has a house, 40k USD and a monthly income of (rent-mortgage payment).

So he starts the cycle over again, Branny buys a second house, fixes it up, rents it to a renter. Now Branny has 0 USD, but does have two houses and a monthly income of ((rent) + (rent - mortgage payment)). He goes to bank for another mortgage, now he has two houses, 40k USD and a monthly income of (2 x (rent - mortgage payment)).

And the cycle can continue until you run out of houses, renters, or credit at the bank.

I still don't get it.
What do you mean by re-financing the property?

I still don't get it.
What do you mean by re-financing the property?

Traditional, fixed rate mortgage from a small local bank that keeps all the loans inside their bank.


That would be right too, however so far I haven't been able to get most people to grasp the concept that all the money that goes in to a house comes back out 2 months later.

That money is then re-invested in a brand new property and continues to repeat the process.

A $45k investment *Should* be able to be rolled over 3 or 4 times in the course of a year, each time bringing back through re-finance the original $45k + a little extra. So after 1 year there's a real potential for that $45k buying $400k+ in real estate.

traditional mortgage = fixed rate mortage?

I would rather say you get a 100-150% single time ROI after refinancing the property and then a continued 0.67% ROI per month continued after that. You just add more ROI on top of that when you repeat the process.

$45,000 buys property #1 (Purchase + Rehab).

We then refinance the property with a local bank using a traditional mortgage. Bank then gives us back $45,000-$70,000 on the mortgage. Property income pays for mortgage indefinitely + dividends to investors.

So within 3 months the property has returned 100%-155% of the purchase price. So then, there is no investment in the property at this point yet it still brings in several hundred dollars free and clear per month.

So, what is $300 a month in income on a investment of $0 (Since it has been paid back in full)? This is why I state it's infinite, the original investment is paid back plus extra.