RentalStarter - A Midwest Real Estate Investment Company

[msm595]

I see there was a dividend, 1428 sat/share yesterday. Have we already started making income? I thought we were still working on getting the first house purchased?

He said that the IPO agreement stated that he had to pay a dividend, so he distributed 1btc out of pocket.

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[Branny]

I see there was a dividend, 1428 sat/share yesterday. Have we already started making income? I thought we were still working on getting the first house purchased?

He said that the IPO agreement stated that he had to pay a dividend, so he distributed 1btc out of pocket.

Yep

[bitcoinsucker1]

How long till we start renting by your estimates?

[Branny]

How long till we start renting by your estimates?

4-5 weeks after we close, hoping to close next week.

[Branny]

HUD has FINALLY set the file to close.

We will be closing on Mill St on the 5th of next month. Rehab/demo will start within a hour of us closing.

Railroad st is still pending contract, I will update if we get an accept/reject on that one.


Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

[mannybitcoins]

HUD has FINALLY set the file to close.

We will be closing on Mill St on the 5th of next month. Rehab/demo will start within a hour of us closing.

Railroad st is still pending contract, I will update if we get an accept/reject on that one.


Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Great news Branny.

[Peter Lambert]

Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?

[nebulus]

Awesome!

[Branny]

Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?

$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.

[thatbluedude]

traditional mortgage = fixed rate mortage?

[Peter Lambert]

Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?

$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.

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.

[Branny]

traditional mortgage = fixed rate mortage?

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

Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?

$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.

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.

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.

[stephwen]

traditional mortgage = fixed rate mortage?

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

Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?

$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.

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.

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.

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

[nebulus]

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

It's like selling back the property back to the bank.

[Peter Lambert]

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

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.

[lophie]

I tried to wrap my head around this security many times.... alot of friction against fiat...... not my taste.....

[ChronoX5]

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

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.

[forensick]

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

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.

logical, but probably too old school approach for bitcoin community 

[Branny]

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

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.

Yep, that's exactly how it works.

If we run out of houses or renters we just move to a different location, set up shop there and start doing it all over again. My county can support about 200 homes. Within all adjacent counties maybe 20,000 rental homes.

If the bank runs out of credit we just get to another bank. I personally know a guy who maxed out a bank's SEC/FDIC (Whoever commissions them) limit at $40m and went to a second bank and was able to secure a pretty large line of credit with them. If you loan out as much as you can with a bank you just keep getting more and more.

This type of method has worked for the past 100+ years and even worked quite well during the depression here in the 1930s.


Additionally, real estate is very cyclical in the US and the rest of the world for that matter. You have a neverending cycle of Crash>recovery>bubble>crash

We are right now in the middle of the crash-to-recovery phase where demand isn't strong enough to increase prices. So, for the next 2-3 years I estimate we can still buy properties at a great discount. Eventually this phase will end and we'll be in another bubble where people aren't thinking clearly and overbuying and over-leveraging properties. At this point we will shop around and sell the rentalstarter business for more than it's worth to some big VC firm or millionaire/billionare who is comfortable with a 6% or 8% yearly return. The end result should be plenty of money for investors and very well exceed the USD/BTC growth over the time period.

[Branny]

Mill street closed today, rehab also started today.