RentalStarter - A Midwest Real Estate Investment Company

[thehun]

Don't know if this has been answered before, but my main concern are the legal problems that other US-based companies who have listed BTC-based securities have had to face. I like the plan and the market, but I'm a bit worried that one day the SEC will slap down on the company for issueing unregistered securities.

We're in the process of meeting US's SEC requirements with our company which is a hong kong based LTD. We're in the final stages of PPM formation and hopefully will have something out relatively soon. A stock we work with has already received tentative approval from the SEC for their bitcoin-funded business and they are registered in the US.

Additionally, from what I can tell , investors aren't actually investing in 'rental starter'. They're really investing in the havelock's exchange, which then funds our HK corporation from those proceeds acting as a proxy for investment to our company. If we could somehow get certification for havelock's role in this, we then would meet SEC approval without issuance of a PPM.

I see, thanks for clearing this.

I have another question: how does this IPO relate to the first IPO you did on Bitfunder? Are we going to share profits with the first investors (in other words, are their shares being diluted with this new IPO?) What will happen in case there are more IPOs in the future in this respect?

[mainline]

...What will happen in case there are more IPOs in the future in this respect?

[Branny]

Don't know if this has been answered before, but my main concern are the legal problems that other US-based companies who have listed BTC-based securities have had to face. I like the plan and the market, but I'm a bit worried that one day the SEC will slap down on the company for issueing unregistered securities.

We're in the process of meeting US's SEC requirements with our company which is a hong kong based LTD. We're in the final stages of PPM formation and hopefully will have something out relatively soon. A stock we work with has already received tentative approval from the SEC for their bitcoin-funded business and they are registered in the US.

Additionally, from what I can tell , investors aren't actually investing in 'rental starter'. They're really investing in the havelock's exchange, which then funds our HK corporation from those proceeds acting as a proxy for investment to our company. If we could somehow get certification for havelock's role in this, we then would meet SEC approval without issuance of a PPM.

I see, thanks for clearing this.

I have another question: how does this IPO relate to the first IPO you did on Bitfunder? Are we going to share profits with the first investors (in other words, are their shares being diluted with this new IPO?) What will happen in case there are more IPOs in the future in this respect?

They get diluted in the sense that they own a smaller % of the total income of the company.

However as it stands, the  company uses the vast majority of funds (90%+) to buy more properties, so while the percentage of ownership, or shares of stock is less, their income doesn't change significantly since the new capital buys new properties.

For instance - With the ~$92,500 raised on bitfunder we bought two properties that produce a gross income of $1,600/month.

With the $1.125m we hope to raise on Havelock, we expect to buy 30 more properties which we expect ~$20,000/month in gross income from.

We want to retain the option of raising up to a total of $2m in funds via shares/IPOs, however this isn't set in stone (Absolutely no further than this, but very possible to do the $1.125m and no more).

Once we reach around $1m of total funds raised, or $15,000 in gross income a month, whichever comes first, we want to start approaching banks. This has been the goal since the start, since we can obtain loans at or around 5% interest. When we can obtain quality financing, there's no reason to ever issue any more shares because the benefit to everyone (including myself) is much greater than just issuing more shares. The $1m-$2m fundraising goal I have set has to do with this. I feel that the closer we get to $2m (Which would be around $40k in gross income per month) would give us a much better position than $1m, and potentially better access to better loan programs.

With the loaned money, we essentially arbitrage the difference between the 5% bank's loan rate, and the ~14% ROI we get on rentals, about 9% interest. What's significant about this is that we keep rolling the same capital over and over again without fresh investor capital. We can do this because on every property we buy, we add value.

[Branny]

Just announced the div on havelock for Saturday.

0.00001310 per share, total of about 1btc in dividends at current price. Slight increase from last estimate.

Actual yield on utilized capital is around 8%, the 2.86% figure on havelock accounts for only utilized capital, which accounts for only around 40% of total invested into RentalStarter.

If you have any questions, let me know

[XliptTit]

which means that once the money starts beeing deployed in real state the yeld will grow, right?

[Chris_Sabian]

Just announced the div on havelock for Saturday.

0.00001310 per share, total of about 1btc in dividends at current price. Slight increase from last estimate.

Actual yield on utilized capital is around 8%, the 2.86% figure on havelock accounts for only utilized capital, which accounts for only around 40% of total invested into RentalStarter.

If you have any questions, let me know

By raising funds with bitcoin via Havelock, you are essentially hedging that the price of bitcoin will fall or remain the same.  If the price of bitcoin increases, then the dividends paid to investors will be lower due to a fixed amount of monthly income in USD.

Likewise, in order for the price per share to increase, there should to be a drop in bitcoin price.

I'm having trouble seeing how this IPO is viable long term if bitcoin becomes mainstream.

[mainline]

...
By raising funds with bitcoin via Havelock, you are essentially hedging that the price of bitcoin will fall or remain the same.  If the price of bitcoin increases, then the dividends paid to investors will be lower due to a fixed amount of monthly income in USD.
...

Yep.  Maybe if OP made his tenants sign long leases with rent set in Bitcoin...

[XliptTit]

The thing is not to think in Btc terms, but in USD. You should not buy this thinking that btc will go up.Basicaly the op is using a better funding alternative than any other avaliable to him. Mining is the only thing I can think of now that strongly benefits itself of increasing btc prices.

If bitcoin becomes mainstream we should receive the same USD amount but this will translate in lower bitcoin amount.THe way I see this is just a business that happens to pay in BTC, if you intend to be on a buy position on bitcoin this isn't the best way. What we are seeing here is bitcoin enabeling financing that otherwise would be too proibitive.

[Branny]

which means that once the money starts beeing deployed in real state the yeld will grow, right?

Yes, this div payment factors in 0% of havelock funds + an additional $20,000 in capital we haven't utilized from the Bitfunder round of funding.

The thing is not to think in Btc terms, but in USD. You should not buy this thinking that btc will go up.Basicaly the op is using a better funding alternative than any other avaliable to him. Mining is the only thing I can think of now that strongly benefits itself of increasing btc prices.

If bitcoin becomes mainstream we should receive the same USD amount but this will translate in lower bitcoin amount.THe way I see this is just a business that happens to pay in BTC, if you intend to be on a buy position on bitcoin this isn't the best way. What we are seeing here is bitcoin enabeling financing that otherwise would be too proibitive.

If you look at the 5 year plan, after full implementation we can keep pace with BTC increasing by more than 50% per year by using leverage on the properties. This is the only way to keep pace, but it is our believe that by doing so we can continue to increase BTC & USD relative yields to investors even as BTC grows.

Additionally ,we are hedging against BTC growth by not cashing out all BTC funding immediately, instead we're trying to blend withdrawls in a way where we only access BTC as we need it.

[XliptTit]

Good plan Branny, just dont use too much leverage

[Elvis Trout]

Would you accept non-btc investment? I would be willing throw a big chunk of money your way but not tied to btc prices for a business that operates primarly in flat currency.

[XliptTit]

Would you accept non-btc investment? I would be willing throw a big chunk of money your way but not tied to btc prices for a business that operates primarly in flat currency.

I dont see how this can be an issue, just convert the money at the exact time you will buy the securitie and convert every dividend in the same fashion.The only thing that I can agree with you is the stock of bitcoins that will remain in the company prior to the acquisitions, but I , personally, dont think bitcoin will suffer absurd volatility from now on, but it is a honest concern.

[Branny]

Would you accept non-btc investment? I would be willing throw a big chunk of money your way but not tied to btc prices for a business that operates primarly in flat currency.

PM Sent

[Branny]

We have located a candidate for purchase.

Asking price - $42,900
Repair estimate - <$5,000

Rental income - $9,000/yr

County appraisal of $87,270
Estimated after rehab market value - $65,000

APY Range  - 13.14%-15.78%

All investors have received further information & photos via havelock.

[lemfuture]

wish i have more time to invest

[Branny]

Another candidate property has been located, cashflow looks good but it's going to tie up more capital than our average property.

We have located another additional candidate for purchase.

3 units total - $1400/mo in income ($1050/mo in current income from two occupied units).

$74,900 Asking price
$65,000-$72,000 offer price

Taxes are <$100/mo
Insurance will be around $100/mo
Repair allowance of $200/mo

Would result in 16% APY as-is at full occupancy. 10.4% APY based on only current occupancy.

Our current financial status is :

$26,800 in USD
~65btc held in company wallet ($40,950usd as of current rate).
111.74btc held inside havelock ($70,396usd as of current rate).

Total fiat reserves of $138,146usd with $42,500 reserved for yesterday's single home offer.

$95,646usd in potential free usable capital.

[Chris_Sabian]

Good to hear.  Thanks for the updates.

[hitcher]

I bought bitcoins 5 february for 800 dollars and bought rentan starter shares 7 february. Then problems with mtgox began and now bitcoin costs 620 dollars on bitstamp. For what price you intend to cell them? In my opinion now is bad time to cell them, it is worth to wait when mtgox will recover withdrawals and price will return to 800 dollars.

[Branny]

I bought bitcoins 5 february for 800 dollars and bought rentan starter shares 7 february. Then problems with mtgox began and now bitcoin costs 620 dollars on bitstamp. For what price you intend to cell them? In my opinion now is bad time to cell them, it is worth to wait when mtgox will recover withdrawals and price will return to 800 dollars.

No one pays on Gox pricing.

The only two exchanges that we deal with on purchase/liquidation of coins are Coinbase and Bitstamp.

When we released the IPO on the 7th, CB pricing was in the area of $725 per bitcoin while Gox was in the area of $800/btc.

Since that time, CB pricing has gone down to $600-$700 and Gox pricing from $800 to $200-$300.

We have liquidated a few coins during this time, approximately 8-10btc with a median sales price of about $675usd per bitcoin. It's our goal to hold off, however CB pricing has taken a beating as gox values have been nearly obliterated.

So , we have the option of either waiting out values to see if they go up or down, or we can sell in the near future and recoup value by investment properties.

[Branny]

Inspection went well on the duplex + house. We have submitted a bid, APY looks very good IMO.

S Church offer came back at $500 below asking......Not too happy about that. However in the mean time we located another good candidate which we will be bidding on in the near future after I can get some contractor rehabs. It will be in the ~13% APY range, but appreciation will be fantastic.