RentalStarter - A Midwest Real Estate Investment Company

[Darkstone2]

I've brought some shares. The main thing pushing me over the line was the amount of information and discussion in this thread.

About the remaining IPO shares (it seems that currently about 1/4th is left), there where various options proposed in this thread:

• Create a new IPO for the remaining shares at an higher price.
• Put all remaining shares for sale at some price.
• Offer an IPO at an later date

I think that option #3 is clearly superior. The reason for that is is that you have a lot of bitcoins. That creates a risk: what is the bitcoin would fall to $100 next week?
To minimize this risk, i suggest that the remaining shares are not offered for purchase until you have converted most of your bitcoins into cash.

[XliptTit]

Now that there are only 1/4 of the IPO left, I think, too, that the wisest think would be to wait 1-3 month, and them sell them at market price.You are providing a good level of comunication and have a business plan, I dont see how this wont take off once people see the dividends flowing.

[Branny]

I just sent out an announcement via HaveLock that we will be closing the IPO funding round as planned on the website. The current plan is to end funding tomorrow around noon EST, at this time shares will be tradeable on the market.

The inspection of the duplex in Chillicothe went quite well, we will be submitting an offer to the sellers shortly.

Dividend is expected to rise decently on the march payment due to the addition of 2/3rds of March rent from the new 3plex property @ 2 occupied units. This then naturally will rise due to April rent not being pro-rated.

So, after saying this my hope is that share prices will rise decently along with dividends through March and part of April, then we can potentially look at doing a 2nd round of funding via havelock at the increased share price, giving investors access to some liquidity and proof-of-concept equity as well.

We also were in talks today with a potential franchisee which went VERY well in my mind. This of course is in a very early stage, but if it went through it would bring investors even more income and diversity through our company.

[bluebudgie]

Got the email update from Havelock. Good luck on the offer and thank you for the consistent updates!

[XliptTit]

very well done Branny

[msm595]

Any update on direct shares or the dividends to them?

[Branny]

I do not see any one at this time financing any type of investment refi's. I am not sure if anyone here is involved in REO, Fix and Flips, Wholesales or Rent to own <--- Rent to own is the real bread winners
But I am almost 100% sure the bank are doing very little refi's on investment property due to HUGE stock pile of REO's.  I can show you how bad the market it is, I live in a PRIME area for real estate investing an NOT a single person can get traditional lending everyone is doing private money, which is what I assume you are doing with bitcoin.
ARV 70k 90 day hold price 60 day hold price 65K 30 day hold price 60K                    
Purchase price would be around 10k with 30k in rehab to bring up to "Rent Standards" or "Rent to Own" not a good candidate for fix and flip
Property http://www.zillow.com/homedetails/220-Blue-Creek-School-Rd-Jacksonville-NC-28540/51553443_zpid/

ARV 50K all day any day 1k-4k rehab
Purchase price 26K or so
http://www.zillow.com/homedetails/605-Streamwood-Dr-Jacksonville-NC-28546/102133989_zpid/

*Note all closing costs are paid by sellers in my area as custom.

We have these deals all day long where I live for the fact NO ONE can get refi's or traditional lending. Our market is a very unique one as our city is actually growing not shrinking due to a very very large military base but the VA does like to back "fixer uppers".  But these are not the real deals at all the real deal lie in off market deals that are never listed.

So my questions for you are
Have you secured financing for refi's?
How are you find your properties? Please tell me you are not buying REO's...... If a REO is a good deal the listing agent will call there "go to investor" for a quick sale.
Are you using HML's to cover some of your funding?
Can I get the address to these purchased properties so I can run my own Comp's?
 And do you have before and after pictures for your files like all good real estate investors do?
What is your total ARV %  on purchase + Rehabs + Carrying costs?
what is your area's rental vacancy percentages? and owner to renter ratio's?

Sorry I just have a very close family member who I have helped with property investing, driving for dollars bandit signs and all that nonsense and I have been through real estate school.

I know at least 4 guys locally who are refinancing SFD and multi-family rentals in our area. The thing they all have in common are using banks that don't broker mortgages and only keep them in house. Most of these banks only lend within an adjacent-county area, and will limit upward growth on how we can scale. Granted, they ARE financing, and do provide very reasonable rates for investment properties. They however do not lend on homes that need rehab, and only do ones that are cashflowing.

We offer all our properties as RTOs, however I haven't pushed it like maybe we should have. Right now the plan is to offer a type of purchase money mortgage to potential rent-to-owners that would require a decently sized down payment (5% to 10%) then a very useful interest rate to us. I know a few (But not that many) that are doing it right now locally. Like I've said before, there aren't too many people in my marketplace that are actively buying investment properties.

100% of our funding has either come from myself, or from bitcoin investors. I've talked to a few HML guys and their rates are signfiicantly high. There isn't enough room to profit from their rates and the COCR we'll be getting from the properties.

We are the 'go to investor' for several REO agents, all our properties right now have come from various sources, one has come from facebook, one a online auction.

I prefer to not give out direct addresses for the properties. Additionally it's going to be nearly impossible to run your own comps because all the major online comp searches don't integrate with our county's auditor's department. I however could run a standard MLS comp search and give you a few dozen to work with and provide you the subject details for the properties we own.

On the first properties we had ,we took some video and some pictures before and after rehab. On property #3 onward we're shooting 1080p video of the house and all rooms before, during and after. The goal is to create 10-20 minute webisodes of the process of finding, purchasing, rehabbing and renting each property and all that's involved in the process.

We're shooting for 50% to 60% after purchase, rehab + carrying costs are figured in. The goal is/has been to look for financing in the 60% to 70% ARV range so that we would recoup the entire investment + get a little extra on top. Additionally it gives us some buffer space in a market downturn or if we don't hit the numbers like we had planned.

Owner:tenant:vacancy ratio is about 60:34:6 including all defaults, occupancy and rentals that are vacant. Numbers are typically better for rental units as compared to owner-occupied properties that are in default and are vacant due to the foreclosure process or some type of distress. Including large multifamily properties the vacancy rate is about 4%, with SFR rentals dropping to just 2% or 3% overall.

[Branny]

Also is this you, it looks like you left the rentalstarter pages high and dry.
https://www.facebook.com/MidOhioRentals
http://www.midohiorentalhomes.com/future-rentals/


The phone numbers are the same,
Couple pointers to help you if it is
Flat black cupboards with polished nickel hinges will sell faster and is cheaper and takes less to maintain in a rental.
The wood panel is horrible it should always be ripped out and replaced rental or not.
Might want to buff the stains out of your hardwood
Most of your properties listed are functionally obsolete ie, no closet lack of bathroom faculties HUGE drawbacks

How are you comparing Residential vs Commercial properties that is a no go for comps or even rental evaluations.
Competitor #1 – RL Collins (Typical townhouse apartment)
 ~1000 Square Feet
 2 bed, 1 bath
 Uncovered Parking
 $750/month rental rate
 Well Maintained
 
 
Competitor #2 – R Isaacs (Typical multi-family housing)
 ~800 Square Feet
 2 bed, 1 bath
 Uncovered parking
 $600/month rental rate
 Poorly maintained
------------

1. – Property identification (Performed as a daily management task)
We use multiple sources to locate properties. These include, but are not limited to – For
sale by owners, local and regional MLS systems, word of mouth from business
associates and personal referrals, county foreclosure data, Governmental disposition
offices (HUD, VA), Sheriff sales records.

Your failing to find your best deals with this strategy, no free education in real estate so I will leave it at that.
-------

A repair list is taken along and a precursory rehab estimate is performed. Due to the
management’s background in real estate and foreclosure rehab, a repair estimate can
usually be generated within 30% accuracy. This then is estimated in a worst-case
scenario, and noted in the inspection report

30% that is way to far off, you need to be with in 10%. Every wholesale deal I have ever done I have gotten with in 5% of the repair cost worst case is always the case for me, when I tell a investor its going to take X amount to rehab it they know I am going to be pretty spot on. But I have a way I do that as well to make sure I am on point.

---------

Why are you registered in hong kong?

-------

Question about who owns this property
Currently owned investment properties
 
Property #1 – Mill Street
 Status – In Rehab (Expected Completion 1/10/2014)
 Purchase Price - $26,500
 Estimated total rehab cost $60,500
 Current total cost - $59,500
 Expected Monthly Income - $1,050
 Total market value - $115,000
 Fixed monthly costs (Taxes, Insurance, Repair escrow, Vacancy) - $271
 Net yearly return – 15.45%
???where is your holding cost factored into this? electric water and so forth?



It shows that someone beside you or your company own this piece of property, this means it is safe from investor going after it if something was to happen.
Can you explain why?

http://pickaway.iviewauditor.com/Data.aspx?ParcelID=A0540820001000

searched the entire county records for any properties listed on mill street and could not find your company owning one of them. Same with union

In our area there's a severe lack of amenities on properties to rent. The vast majority are multi-family houses that are extraordinarily small (700-800sf two bedrooms mostly).

The hardwood stains are there after sanding 5-6 times plus two coats of polyurethane. The cost to have a professional come in and fix it was going to be in the thousands, instead we chose this option and did it for a few hundred bucks. I've shown homes in this area that have sold in the high 100s/low 200s and they've had similar stains. Most people realize that when a home is 135+ years old, with original hardwood floors there may be issues with them.

I'm comparing rental incomes - 2br apartments vs 2br apartments (of whatever variety we have), 3br freestanding houses to 3br freestanding houses. I could expound on the numbers pulling from larger comp pools & examples but so far no one other than yourself has asked for them.

I just named a few sources off the top of my head on how we procure properties. I could go into the 20-30 other ways I look for properties, but i've been told by around a dozen people so far that the 35pg business plan is too long, if I expounded more like you're asking to this point it would be more than 50 pages. I wouldn't mind doing this if I knew it would attract more, larger investors, but at this point I haven't seen the value. This isn't to say I won't do it.

If I state i'm hoping to be within 30% of a rehab estimate but end up being 3% consistently, then I've underpromised and overperformed. If i oveprromised and underperformed, stockholders would be the ones not to benefit.

We use the HK entity to feed the investment capital to the US based LLC that we hold. My hope behind this was to avoid issues that might occur from foreigners investing directly in US based properties. We consulted with legal council and they felt that this was the best corporate structure.

The property you linked to is not a property we currently own, it however is one that we are under contract on. At some point in the future it will show the US based LLC as the holding entity for it. All our properties carry a minimum of $500,000 dollars of insurance, we will be also adding a $2m+ blanket policy on the LLC itself to further prevent issues that might arise. If you search the auditor's website again for all properties on Mill street, you won't find my name on it unless you search for the exact parcel, then go into recent sales. They don't update the owner database (or search by owner's name) for anywhere from 6 months to 1 year after the sale has taken place. This further compounds the problem with using non MLS derived comp searches because they don't integrate well with our backwoods auditor systems.

The property we list on the website as union is actually a multi-home lot on one parcel. The auditor actually shows it on south Scioto. Once again if you would get the newsletter updates/emails they would state that these two properties are on their way to closing, we don't own them yet.

The holding cost was factored into the rehab cost, and not onto monthly maintenance. If there are holding costs I will personally cover them so we don't go over-budget.

[Branny]

Also is this you, it looks like you left the rentalstarter pages high and dry.
https://www.facebook.com/MidOhioRentals
http://www.midohiorentalhomes.com/future-rentals/


The phone numbers are the same,
Couple pointers to help you if it is
Flat black cupboards with polished nickel hinges will sell faster and is cheaper and takes less to maintain in a rental.
The wood panel is horrible it should always be ripped out and replaced rental or not.
Might want to buff the stains out of your hardwood
Most of your properties listed are functionally obsolete ie, no closet lack of bathroom faculties HUGE drawbacks

How are you comparing Residential vs Commercial properties that is a no go for comps or even rental evaluations.
Competitor #1 – RL Collins (Typical townhouse apartment)
 ~1000 Square Feet
 2 bed, 1 bath
 Uncovered Parking
 $750/month rental rate
 Well Maintained
 
 
Competitor #2 – R Isaacs (Typical multi-family housing)
 ~800 Square Feet
 2 bed, 1 bath
 Uncovered parking
 $600/month rental rate
 Poorly maintained
------------

1. – Property identification (Performed as a daily management task)
We use multiple sources to locate properties. These include, but are not limited to – For
sale by owners, local and regional MLS systems, word of mouth from business
associates and personal referrals, county foreclosure data, Governmental disposition
offices (HUD, VA), Sheriff sales records.

Your failing to find your best deals with this strategy, no free education in real estate so I will leave it at that.
-------

A repair list is taken along and a precursory rehab estimate is performed. Due to the
management’s background in real estate and foreclosure rehab, a repair estimate can
usually be generated within 30% accuracy. This then is estimated in a worst-case
scenario, and noted in the inspection report

30% that is way to far off, you need to be with in 10%. Every wholesale deal I have ever done I have gotten with in 5% of the repair cost worst case is always the case for me, when I tell a investor its going to take X amount to rehab it they know I am going to be pretty spot on. But I have a way I do that as well to make sure I am on point.

---------

Why are you registered in hong kong?

-------

Question about who owns this property
Currently owned investment properties
 
Property #1 – Mill Street
 Status – In Rehab (Expected Completion 1/10/2014)
 Purchase Price - $26,500
 Estimated total rehab cost $60,500
 Current total cost - $59,500
 Expected Monthly Income - $1,050
 Total market value - $115,000
 Fixed monthly costs (Taxes, Insurance, Repair escrow, Vacancy) - $271
 Net yearly return – 15.45%
???where is your holding cost factored into this? electric water and so forth?



It shows that someone beside you or your company own this piece of property, this means it is safe from investor going after it if something was to happen.
Can you explain why?

http://pickaway.iviewauditor.com/Data.aspx?ParcelID=A0540820001000

searched the entire county records for any properties listed on mill street and could not find your company owning one of them. Same with union

Now how about answering these questions and a couple more

It says chase bank has a lien on your property at
All the info on this property match your website and the property records.
So I am going to go ahead and guess 1 of 2 things is going on here
1) You do not own this property
2) You have taken this property on as a (subject to)
In either case its not good for the investors.

arcel:    A0540820001000
Owner:    DADE NAOMI
Address:    216 E MILL ST

• Map this property.   

Mailing Address
Mailing Name:    JPMORGAN CHASE BANK NATIONAL ASSOCIATION
Address:    8333 RIDGEPOINT DR
City State Zip:    IRVING TX 75063
Geographic                                         This means you have a bank lien on this property aka mortgage
City:    CITY OF CIRCLEVILLE
Township:    YAMARICK TOWNSHIP
School District:    CIRCLEVILLE CSD
Legal
Neighborhood:    00250000   Legal Acres:    0
Legal Description:    LT-625 E 1/2   Land Use:    (510) R - SINGLE FAMILY DWELLING, PLATTED LOT
        Property Class:    RESIDENTIAL
Map Number:    0-0-0-0   Range Township Section:    0-0-0
Valuation
    Appraised   Assessed (35%)
Land Value:    $13,690.00    $4,790.00
Building Value:    $47,530.00    $16,640.00
Total Value:    $61,220.00    $21,430.00
CAUV Value:    $0.00
Taxable Value:    $21,430.00
Tax Credits
2.5% Homesite Rollback:   YES
Homestead Reduction:   YES

This is a property we do not own yet. It is only placed on the facebook page/rental website to attract new tenants on the 'coming soon' section. All investors on our email list realize that the property is under contract and set to close on the 24th of this month. As per the title company and contract we have, it will be sold free and clear of all liens, back taxes and further encumbrances. We are also receiving a title policy at closing for the property to further warrant the property. JMPC just like HUD have extraordinarily onerous requirements for sales to US based LLCs (One being is a freshly notarized copy of our LLC's AOI. The problem with this for E mill street was the fact that it went into contract on a Saturday around 4pm and JMPC required all documents to be faxed/emailed to them by 6PM EST. So, it was either get the property as a sole proprietor or not get it at all. I made  the decision then to have it transferred to me personally and not to the LLC due to this. This of course is an easy fix with just a quit claim deed over to the LLC.)

Additionally , the zillow comp report is terrible. If you feed those properties into google maps you'll see that the locations range from one end of town to another. There are neighborhoods with median values of $250k and areas of $30k median values, and zillow has pulled from all of them. When I get the chance I'll upload a comp report using a real service rather than zillow to show comps. Mill street is listed by the auditor as a 2br/1.5ba but we are redoing a room so that it will end up as a 3br 1.5ba.

[Branny]

So to clarify you company only owns 1 property?

The LLC holds in its name 1 property, i hold one property in my name that will be quit-claimed over to the LLC shortly. I have made investors aware of this several times via our IRC channel on freenode at #rentalstarter.

We are under contract for 2 more properties and negotiating on a third. Of those properties, one will be in my name which will be quit-claimed over to the LLC at the same time larger house on Mill street will be (to save on fees for transfer), the two others will go directly to the LLC since they didn't have  the weird AOI requirements.

[Branny]

You have one heck of a cluster chunk here,
The other property at 129 mill street is in your name the other one is in a LLC
No where in your filings does it give state you are owned by a holding company
http://www2.sos.state.oh.us/pls/bsqry/f?p=100:7:0::NO:7:P7_CHARTER_NUM:1383929

So investment in you company the HK one does no good if you go "bankrupt" for one you hold a property, YOUR NEW HOME LLC. has one, an no mention in charter of being owned by a parent company or stakes. The fact that it was a paint ball company is kinda weird...

I think for investors sake you need to
1) Turn over 100% of your company to the HK one, this protects investors funds. As far as it stand you go bankrupt in hong kong investors have 0 claim to any of your real property.
2) Title and file the 129 Mill Street real property with you LLC

Your also still high on your price
I see 129 mill only being worth around 90k
3 houses sold in the last 8 months..... jeesh I would hate to be a Realtor in your area. Not even worth paying the Realtor fee's for MLS at that rate...  75% of that agents in my area are in the Million Dollar sales club.
The Realtor that my family has worked with sold 27.8 million in real estate avg home price is around 125k here 3/2

If we register as a 100% holding company investors get hit with 35% withholding taxes + a very high likelyhood of another 35% top tier corporate tax rate. If it would make sense to pay 35%-70% in taxes for investors to have the assurance of the US LLC as a holding company we can take a vote. The current AOI/OA is structured in a way that the HK entity has ownership in the US based LLC, and is not subject to witholding. This is one of the documents that would be made available to the board of advisers when we get it set up.

We're going to file W Mill with the LLC when we do E mill at the same time to save on filing fees with the county and title company.

I don't understand your comment about 3 houses selling in 8 months.

I stand by my CMA of $115k for W mill street and $75k for E Mill. When I get time tomorrow I'll comp out E mill and W mill street.

[Branny]

Only have 3 houses on public record as being sold, this of course does not include courthouse or cash sales for the most part.

Me personally, as a licensed agent or what?

If you're talking about me personally, I do own property in other counties.

[Branny]

Nah in circleville they only had 3 houses being sold in the last 8 months.

I still don't understand.

[Branny]

Yea I can get access to the MLS there I was going of zillow and trulia reports

That was all sales in 43113 zip code since 7/7/2013 - A total of 133 properties sold, not 3.

[lemfuture]

constructive criticism. nice read 

[BitcoinINV]

Yea he satisfied all my question, seems like a pretty nice dude as well

[Branny]

Here's one of the test videos for the format we are CONSIDERING on future properties. Not sure yet so I'd like feedback.

[shitaifan2013]

I'm just a small time shareholder and not very familiar with the US real estate market, but I do like the way you maintain communication in here. nice work so far!

[Branny]

Looks like we've sold out 100% of the IPO, so trading has now started. Looks like it's locked on havelock till 1pm today even though we sold out of our IPO.

Very excited, about the future, thanks to all the investors!

[jrlichtman]

Looks like we've sold out 100% of the IPO, so trading has now started. Looks like it's locked on havelock till 1pm today even though we sold out of our IPO.

Very excited, about the future, thanks to all the investors!

Told ya you'd sell out. Congratulations, and awesome work!