RentalStarter - A Midwest Real Estate Investment Company

[Branny]

Really liking this investment. The properties they chose and the frequent updates by OP are great.

Let's just hope that it continues.

I believe it will, it's not like you can suddenly disappear with housing stock.

Not really, granted theoretically I could quit-claim the properties to myself and just say 'screw it they're mine' , but that obviously wouldn't hold up in court.


We've got 3 things we're going to implement hopefully by the end of this quarter to increase transparency/trust.

#1 - RentalstarterTV - The Rehab TV show that's mentioned on the last page of the business plan. We have almost all the video equipment together, I'm just trying to find a good format for it.

#2 - Monthly independent financial reports with quarterly audits. We have already chosen a firm that will be representing us, the job right now is tying it all together with online reporting of expenses to the bookkeeper/accountant then feeding that info back to investors.

#3 - We will develop a board a directors/advisers that will help steer the company and have access to confidential/secure documents. I really don't want some information to get out (Occupant lists, property addresses, copies of deeds, and so on) but do want to make them available in such a way that builds more trust. I think that developing a board of 5 trustworthy individuals would help reach this goal.

[Stego]

Hello Branny,

I was wondering, what will happen to the remaining unsold shares after the IPO ? (If there is some)

have a good day

[Swordsoffreedom]

Really liking this investment. The properties they chose and the frequent updates by OP are great.

Let's just hope that it continues.

I believe it will, it's not like you can suddenly disappear with housing stock.

Once the houses are bought should just be about renting but choosing the right location is important
Pretty hard to run away on a house unless its a mobile home or detachable dwelling (that one takes a bit more work though) Thinking the house that you can use a truck to move

[lemfuture]

Hello Branny,

I was wondering, what will happen to the remaining unsold shares after the IPO ? (If there is some)

have a good day

interested to know about this too

[Branny]

Hello Branny,

I was wondering, what will happen to the remaining unsold shares after the IPO ? (If there is some)

have a good day

We're not sure yet, Havelock has presented two options.

#1 - The remainder of unsold IPO shares will hit the market at .0055/share, and the share price will be allowed to float. Shareholders could undercut the IPO price if they need to liquidate, otherwise high price will be locked at .0055/share till they are all sold out.

#2 - We remove IPO shares from havelock and the price is allowed to float as if it was a normal stock.

I would prefer #1 as it would allow us to continue to raise funds. We have around 10 days to sell a little less than 40,000 shares. I don't know that this is possible considering all the crazyness with gox and such. The positive neobee news was fantastic for have lock which boosted our share sales, but was overshadowed by the demise/problems with gox.

We've raised enough funds right now to buy at least 3 properties (We're in contract for two), but our goal was to fund for around 30 properties.

Really liking this investment. The properties they chose and the frequent updates by OP are great.

Let's just hope that it continues.

I believe it will, it's not like you can suddenly disappear with housing stock.

Once the houses are bought should just be about renting but choosing the right location is important
Pretty hard to run away on a house unless its a mobile home or detachable dwelling (that one takes a bit more work though) Thinking the house that you can use a truck to move

To move a mobile home is much more involved than just hooking it up to a truck. Almost every park in our state requires you remove axels and attach it to the ground by some semi-permanent method. The cost to move a mobile home around here is about $1500 to $2000 if you're only moving it say 25mi.

It's also technically possible to move non-detached housing (Traditional houses) through the use of a company that moves houses. We've looked into it because once in a great while you find someone selling salvage rights to a house. This means you get the house but not the land. Typically it means that people go in and rip out anything valuable, then pay a company to tear the house down. Instead I have looked at hiring a company to split the house in sections, transport it to a new location and re-build it. The cost estimates I got were in the ~$20,000 range. It might sound like much, but you can buy salvage rights for less than $10,000 for a VERY nice house.

So, imagine this :

$10,000 salvage rights for a upscale house that is being turned into a parking lot.
$20,000 to move the house to a new location
$10,000 for utilities & foundation that matches your moved house
$10,000 for a nice house lot.

Total cost - $50,000

Now, if you could move a nice, well-built house that has history to a equally historical area, you could very well have a FMV of $150,000 to $200,000 which incurs a profit of $100,000-$150,000.

Granted this has nothing to do what you were talking about

[QuanSushi]

Do shareholder have a say what will happen to unsold shares?

[Branny]

Do shareholder have a say what will happen to unsold shares?

I'm open to all shareholder suggestions.

[XliptTit]

Why dont we do a mix of the 2 options?

Once the IPO is lifted you let , lets say, 10% of the shares at the IPO prices, so it doesnt becomes a HUGE sell wall and the prices can float once there is enough demand. After 1 month, or some other period, you drop another 10% at the  actual market price or at the the original IPO price(the highest between both), and so on.

I know that this system has its problems but it tries to conciliate both interests.But if we do have to chose one option I think the most helpfull one , at least in the long run, would be to have some shares to be sold to raise money. I dont necessary like this because I could need the money before the shares are sold but at least it brings a prospectus of growth .

I know that it would be better to have sold all the shares, but let's be honest, 50% of shares sold is a HUGE deal. PETA closed IPO with a HUGE HUGE amount of unsold shares, since its IPO closure it started mining and the shares more than doubled in price. I really belive, that the better options would be a escaleted growth: You raise some money, buy some properties investors, see the return, price rises, more share are issued, more properties are bought and so on... Normally this wouldnt , technically, raise the shares price but you said that once we hit a certain level there can be some leverage so share prices could rise.

I do appreciate the quartely audits and everything you said in the last thread and I personally belive that if this is done right and the reports are good it will raise visibility, transparency and trust and when the dividends start to appear(I know it takes some time) the price of the shares will go up and captialization will be easier

[Branny]

The goal of the new round of funding was to get us to a point we could get portfolio loans. I'm not sure the ease of obtaining them at the 40k sold mark, with  the 78k total sold I believe we have a good shot at it overall.

Once we obtain leverage, share issuance (IPO or otherwise) becomes moot because we can scale funding as much as we want.

Another option might be halving the remaining IPO shares, then co-listing the rest on Ciphertrade.

[XliptTit]

just leave the shares them, I belive once the dividends start flowing people will buy them

[Peter Lambert]

The goal of the new round of funding was to get us to a point we could get portfolio loans. I'm not sure the ease of obtaining them at the 40k sold mark, with  the 78k total sold I believe we have a good shot at it overall.

Once we obtain leverage, share issuance (IPO or otherwise) becomes moot because we can scale funding as much as we want.

Another option might be halving the remaining IPO shares, then co-listing the rest on Ciphertrade.

Have you considered listing a bond-type instrument along with the stock shares? So instead of getting leverage financing through traditional banks you could get financing from the bitcoin community?

[Branny]

The goal of the new round of funding was to get us to a point we could get portfolio loans. I'm not sure the ease of obtaining them at the 40k sold mark, with  the 78k total sold I believe we have a good shot at it overall.

Once we obtain leverage, share issuance (IPO or otherwise) becomes moot because we can scale funding as much as we want.

Another option might be halving the remaining IPO shares, then co-listing the rest on Ciphertrade.

Have you considered listing a bond-type instrument along with the stock shares? So instead of getting leverage financing through traditional banks you could get financing from the bitcoin community?

I would LOVE to issue bonds.

The problem so far has been the lack-luster response when i've mentioned them. For RentalStarter as a stock to be profitable, we can offer 6%/APY in fixed interest on the properties at a max of 70% LTV (To insure the least amount of liquidation risk to bondholders). It would be a secure return, based on USD, but like I said, the last time I mentioned offering them, I got very, very little response.

The only tweak I could think of would be fixed buybacks that prevent the issuer from buying them back in the case of a currency collapse.

If any of you would consider a bond, I'd issue them in a heartbeat right now if we could secure more than $50,000 in bonds.

[QuanSushi]

I too would suggest to split the remaining unsold shares. Set as many asks as you need for a good foundation to do business. Should the share prices increase thanks to more demand, then you can still sell the rest to raise additional funds (maybe for a higher price even).

[jrlichtman]

Don't worry about the IPO not selling out.

Based on watching previous IPOs on Havelock, there's a lot of last-moment purchases.

[Branny]

Don't worry about the IPO not selling out.

Based on watching previous IPOs on Havelock, there's a lot of last-moment purchases.

That was the case with SFI but not PETA. Hopefully interest will drum up later on.

On a side note, I got word that a local *big* multifamily project is complete. I was hired by a large lender to do contract work for valuation and was proven pretty darn right.

16 two-family 2 bed townhouses (Total of 32 units)
Purchase price - $250,000
Total rehab needed - $480,000 ($15,000 per unit).

Total cost - $730,000

Monthly income per unit $699 (Up from $450-$500 in their old, dilapidated state)
Total yearly complex income - $268,416

36.8% basic return per year.

[XliptTit]

Don't worry about the IPO not selling out.

Based on watching previous IPOs on Havelock, there's a lot of last-moment purchases.

That was the case with SFI but not PETA. Hopefully interest will drum up later on.

On a side note, I got word that a local *big* multifamily project is complete. I was hired by a large lender to do contract work for valuation and was proven pretty darn right.

16 two-family 2 bed townhouses (Total of 32 units)
Purchase price - $250,000
Total rehab needed - $480,000 ($15,000 per unit).

Total cost - $730,000

Monthly income per unit $699 (Up from $450-$500 in their old, dilapidated state)
Total yearly complex income - $268,416

36.8% basic return per year.

let's throw out some money, everyone empty your pockets 

[XliptTit]

That is close to 1 million, I dont think we have that yet.

[Branny]

That is close to 1 million, I dont think we have that yet.

The example was to show what bigger money can buy. I'd need at least 10 guys on a rehab team to tackle something like that in a reasonable time span.

BUT , for almost 36% APY un-levered it'd be absolutely worth it.

[Branny]

Also a great example of the kind of things Branny is in the know about.

I've got a few things going for me which benefits the investors.


I'm young.
Median landlord age in the area is well above 60. I'm more than half of that, and talking to some of the bigger landlords, many have indicated to me they plan in the next 10 years to liquidate their entire portfolios. Some guys have just one or two properties, one guy I know has 25 or 26. There are few guys getting into the game because of the work and capital involved. Acquiring capital to buy properties is next to impossible unless you come from a wealthy family (And then, if you're from a wealthy family, who the heck cares about dirty rentals?)

I know the market
I've been assessing properties for banks since 2006 and have done well over 1400 propertes between all the banks I work with. I am typically within 5% or 10% of market value on a 30m value estimate + inspection. It helps when we have to make a snap decision on a property, instead of spending 1-2 weeks on inspections, a formal appraisal and the like.

Our market is fantastic
Low vacancy, high rental increases and a stable market all benefit central Ohio. We don't appreciate like California or Florida, but when we crash we don't go down too bad. Cost of living is low so it means access to very cheap labor.

[Swordsoffreedom]

To move a mobile home is much more involved than just hooking it up to a truck. Almost every park in our state requires you remove axels and attach it to the ground by some semi-permanent method. The cost to move a mobile home around here is about $1500 to $2000 if you're only moving it say 25mi.

It's also technically possible to move non-detached housing (Traditional houses) through the use of a company that moves houses. We've looked into it because once in a great while you find someone selling salvage rights to a house. This means you get the house but not the land. Typically it means that people go in and rip out anything valuable, then pay a company to tear the house down. Instead I have looked at hiring a company to split the house in sections, transport it to a new location and re-build it. The cost estimates I got were in the ~$20,000 range. It might sound like much, but you can buy salvage rights for less than $10,000 for a VERY nice house.

So, imagine this :

$10,000 salvage rights for a upscale house that is being turned into a parking lot.
$20,000 to move the house to a new location
$10,000 for utilities & foundation that matches your moved house
$10,000 for a nice house lot.

Total cost - $50,000

Now, if you could move a nice, well-built house that has history to a equally historical area, you could very well have a FMV of $150,000 to $200,000 which incurs a profit of $100,000-$150,000.

Granted this has nothing to do what you were talking about

Touche Branny I tip my hat to you that was well played sir.

Your right it is possible to move a house split it into four and be able to make a significant profit if you move it to the right location
Salvage rights do come in handy
Example Shale Gas is found in X
You then buy a cheap upscale house and buy a lot and move the house there and make a large profit as more people look for houses in that area, I explained a resource play but it works with housing as well.