RentalStarter - A Midwest Real Estate Investment Company

[joesmoe2012]

Yeah but if BTC/USD increases, it decreases the value of our investment....?

[bobboooiie]

Yeah but if BTC/USD increases, it decreases the value of our investment....?

What do you mean "OUR" ? Did you invest into this without realizing such a obvious thing? Also what if BTC/USD drops YOUR VALUE INCREASE (ZOMG) !
Not all securities needs to be same and I really love this one because it shows potential how can bitcoin improve and help startups like these.

[joesmoe2012]

I invested in the pump and dump aspect of it.

[joris]

I invested in the pump and dump aspect of it.

Time for you to dump then. Or do you need some more pump yet...

[Peter Lambert]

Branny, is annual indexation of the rent to the official CPI also a regular practice in the US?

Or do you have a lower / higher freedom in adjusting to the local rental market?

P.S. avoiding 'slum' is a very sane practice, imho

I've never seen annual indexing to anything in any of my rental agreements. It is all based on the market.

So then you're only at the mercy of your landlord?

And he is at the mercy of me moving to a different rental. I sign a lease for a year, then after that year we are free to renegotiate a new price for the next year. My current rental I am going into my third year at the same price. Back about 8 years ago I was in an apartment, they said they were going to raise the rent (I think it was going to be somewhere around 10%), so I looked around and found a different place to live.

[Benny1985]

Branny, is annual indexation of the rent to the official CPI also a regular practice in the US?

Or do you have a lower / higher freedom in adjusting to the local rental market?

P.S. avoiding 'slum' is a very sane practice, imho

If our properties get government subsidy , they are CPI indexed.

Otherwise if not, we are allowed to raise/lower rent based on market rates. There is no rent protection/caps in my market (They exist in the US, but not here).

Branny, is annual indexation of the rent to the official CPI also a regular practice in the US?

Or do you have a lower / higher freedom in adjusting to the local rental market?

P.S. avoiding 'slum' is a very sane practice, imho

I've never seen annual indexing to anything in any of my rental agreements. It is all based on the market.

I've seen CPI indexation , no regular rental increases and yearly increases of 1%-3% as part of the contract. All depends on the landlord.

Yeah but if BTC/USD increases, it decreases the value of our investment....?

Rentalstarter is tied to USD, if the BTC:USD rate increases, the value of bitcoins goes down. If bitcoins devalue then the rate increases significantly.

My goal was to develop this into a BTC:USD hedge if people are bearish on bitcoin.

[Peter Lambert]

Yeah but if BTC/USD increases, it decreases the value of our investment....?

No. The investment is one house (so far). So whatever the btc/usd price does we will still have one house.

By the way, did all the bitcoins get exchanged for USD, or is some of the invested money still bitcoins?

[ex-trader]

What has this got to do with Bitcoins?

The assets, income, expenses and returns are all USD. This is a USD investment unrelated to the Bitcoin economy.

No shit sherlock!

"IPO" funds were raised by bitcoins seems related to me.

Thats all it has to do with Bitcoins.

Basically there are enough people who will invest in just about anything that says Bitcoin without any proper research, so it's good for the guys that raised the money and by the way I'm not in any way saying they don't have a great business model - they do.

The issue that people haven't realised that what they've done is in effect sell their precious BTC and buy USD and then invested in a USD real-estate fund. The fact that the USD will be then turned into BTC at future rates for payment is just a side-show.

[bigbeninlondon]

What has this got to do with Bitcoins?

The assets, income, expenses and returns are all USD. This is a USD investment unrelated to the Bitcoin economy.

No shit sherlock!

"IPO" funds were raised by bitcoins seems related to me.

Thats all it has to do with Bitcoins.

Basically there are enough people who will invest in just about anything that says Bitcoin without any proper research, so it's good for the guys that raised the money and by the way I'm not in any way saying they don't have a great business model - they do.

The issue that people haven't realised that what they've done is in effect sell their precious BTC and buy USD and then invested in a USD real-estate fund. The fact that the USD will be then turned into BTC at future rates for payment is just a side-show.

Not quite a sideshow.  Anyone can buy in bitcoin (which lowers the barrier of entry for those who are out of the country) plus large investments via bitcoin don't have the same stringent requirements investments in dollars do.

[xaviarlol]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%. If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

[bigbeninlondon]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%.

Average yield is taken over a LARGE swath of statistics.  Some houses lie dormant, yielding 0%.  It has to be offset SOMEWHERE by higher yields.

And the US is fucking BIG.  So one house will not necessarily conform to statistics.

If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

A lot of people DID buy houses in the US, which contributed to the enormous collapse in 2007.  The market is beginning to rebound, but even so, the glut in the housing market has made obtaining houses cheaper and demand for rentals higher.  It's not only plausible, but probable that a low income neighborhood can sustain those types of returns if the price is depressed enough.

[Branny]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%. If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

Yields vary by type, region, state, prices and so on.

I could do 200% a year in real estate just by buying singlewide mobile homes. High risk, high reward.

Or I could buy decent single-family homes in average neighborhoods, fix them up and rent them out.

Remember - The US is about the size of europe in terms of population & size. It would be like saying that European rates are only 5%. Sure, you might average 4% in the UK but you could get 40% in Bulgaria or Romania (Just an example). The difference in the US is that you can cherry pick what area you want to go to and still get decent legal protection.


I know a agent in Columbus (Ohio) that is the exclusive rep for a large firm in Israel. They have 500 or so units right in this area and are running 20%+ ROI on all their units.

[xaviarlol]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%. If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

Yields vary by type, region, state, prices and so on.

I could do 200% a year in real estate just by buying singlewide mobile homes. High risk, high reward.

Or I could buy decent single-family homes in average neighborhoods, fix them up and rent them out.

Remember - The US is about the size of europe in terms of population & size. It would be like saying that European rates are only 5%. Sure, you might average 4% in the UK but you could get 40% in Bulgaria or Romania (Just an example). The difference in the US is that you can cherry pick what area you want to go to and still get decent legal protection.


I know a agent in Columbus (Ohio) that is the exclusive rep for a large firm in Israel. They have 500 or so units right in this area and are running 20%+ ROI on all their units.

I am a firm believer in common sense.

If there is an investment that yields 20-30% yield, and has long-term capital growth on top of that (as all property typically does), that absolutely trumps all other investment options out there, such as shares, bonds and cash investment.

You could paint the narrative that it's 20-30% yield because it's risky. Well, real-estate in general is not risky (particularly rent yield). Capital growth might have some volatility, but at 20-30% rent income, who gives a crap - capital growth volatility for property is very low, compared to say stocks. It is a really big deal if property prices fall by 10% in a year, but for stocks it's a very real scenario.

So please again explain to me why every single person on earth would choose any other investment option than "midwest" real-estate, if the returns are several times better than shares? Do you believe you stumbled on some unknown secret that no other investors know about?

Or is it that the risk is so great, that a lot of investors don't want to touch it even for 20-30% cash yield (excluding growth)? If so, then the risk is so great that it is a very real chance of significant loss.

For disclosure, I own and manage 6 investment properties in Sydney, Australia, and would sell my left testicle for 10+%, let alone 20-30% rent yield (as would every other property investor here).

I'm not saying that you or your figures are wrong, I'm just trying to figure out how this could be true.

[Branny]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%. If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

Yields vary by type, region, state, prices and so on.

I could do 200% a year in real estate just by buying singlewide mobile homes. High risk, high reward.

Or I could buy decent single-family homes in average neighborhoods, fix them up and rent them out.

Remember - The US is about the size of europe in terms of population & size. It would be like saying that European rates are only 5%. Sure, you might average 4% in the UK but you could get 40% in Bulgaria or Romania (Just an example). The difference in the US is that you can cherry pick what area you want to go to and still get decent legal protection.


I know a agent in Columbus (Ohio) that is the exclusive rep for a large firm in Israel. They have 500 or so units right in this area and are running 20%+ ROI on all their units.

I am a firm believer in common sense.

If there is an investment that yields 20-30% yield, and has long-term capital growth on top of that (as all property typically does), that absolutely trumps all other investment options out there, such as shares, bonds and cash investment.

You could paint the narrative that it's 20-30% yield because it's risky. Well, real-estate in general is not risky (particularly rent yield). Capital growth might have some volatility, but at 20-30% rent income, who gives a crap - capital growth volatility for property is very low, compared to say stocks. It is a really big deal if property prices fall by 10% in a year, but for stocks it's a very real scenario.

So please again explain to me why every single person on earth would choose any other investment option than "midwest" real-estate, if the returns are several times better than shares? Do you believe you stumbled on some unknown secret that no other investors know about?

Or is it that the risk is so great, that a lot of investors don't want to touch it even for 20-30% cash yield (excluding growth)? If so, then the risk is so great that it is a very real chance of significant loss.

For disclosure, I own and manage 6 investment properties in Sydney, Australia, and would sell my left testicle for 10+%, let alone 20-30% rent yield (as would every other property investor here).

I'm not saying that you or your figures are wrong, I'm just trying to figure out how this could be true.

Most people are incapable of doing it.

I know many multi-millionaires who made their life in rentals locally.

If you want to read up on rental realestate in the midwest by a guy that lives about 10 miles from me, check out : http://www.amazon.com/1-Minute-Rental-Property-Riches/dp/1430308060

The real problem is management. Unless you develop a great system you will lose your shirt very, very quickly. So, the question is - Who do you trust to manage your rentals? You can hire a outside company, but they typically want 15% to 25% of your income (there goes a nice chunk of your return), or you manage it yourself. The second option is what *most* profitable landlords do.

However there's a 3rd option, and it's what all big funds do - Develop your own management team.

That way, you own your own management team, you don't pay exorbitant management fees, and can develop systems to manage many rentals. The thing with this strategy is, once you've developed a good team, you're going to be cash flowing so much that you don't need to manage anyone else's properties, just do your own. So, unless you've got capital to buy a house + rehab + develop a management team, you're SOL.

Additionally, here in my part of the US (And most of the US for that matter) you HAVE to go into investment property with 100% cash. At $35k-$60k per property, there aren't many people who are willing to risk the capital on it.


Additionally, I've talked to quite a few property investors in Australia. The market there is different than where I'm at. your market is very similar to say most metro areas in California. It's nearly impossible to cashflow, the only money that's made is in flipping or appreciation.

Additionally, a friend of mine has been looking at developing properties outside of Perth. His cost on developing a 150sqm home would be around $200,000AUD, my cost for a near-identical home would be around $75,000. Both figures exclude land, however from what I understand, building a home in the US is just cheap to do. Right now I'm talking to a few builders to see if they can do 1200sf 3br/1.5ba duplexes/triplexes for under $45,000 per unit. A good friend of mine last year built a row of houses here in town. His total walkaway cost was $40,000 per house INCLUDING land.

[Peter Lambert]

Can someone please explain to me how on earth you can get 20-30% rental yield in the united states? According to stats, the average yield is 3-7%. If anyone could get 20-30% yield than everyone on earth would buy houses in the US. I won't believe this until I see a tenant in the house, paying the rent that the OP claims for the expense incurred.

It makes perfect sense if you throw in some rough example numbers. If you get a good deal like on a foreclosure or an auction, you can buy a house around here for 35000 and then put 10000 of repairs in it so it doesn't look like a dump, then rent it for 800 dollars a month, that is (800 * 12) / (35000 + 10000) * 100% = 21.3%. Of course, actual prices you will pay for the house and repairs and what you get for rent will vary, and you have to add in the taxes and insurance and repairs etc., but the ballpark of 20% sounds reasonable to me for the current conditions in many midwest cities.

As for why that is possible, there was such a huge correction in housing prices that people are still wary of investing in houses; now we know that housing prices do not always go up, so putting such a large amount of capital into a house seems scary when you could divide that money up into a more diversified portfolio.

[xaviarlol]

Ok, thanks for the explanation. I guess Australian housing and US housing are worlds apart. I knew they were different, but didn't know it was that big of a gap.

I've always been interested in buying up houses in the US, but it is quite difficult to do so from another country.

[Benny1985]

News :

We are currently negotiating/working on property #2.

If it lands as I think it will , we will close Monday on the second property, rehab will take a little less than a week. We already have a tenant that is qualified for this property which will produce on the September dividend.

[Branny]

Closing was moved to tomorrow at 11am unless something happens. Will have video later in the day.

[VJain]

Price is going up! Looks like it's sitting at an all time high of 0.033BTC!

[stereotype]

Price is going up! Looks like it's sitting at an all time high of 0.033BTC!

A couple of option plays are available as well.