RentalStarter - A Midwest Real Estate Investment Company

[Branny]

Wish more of the Havelock-listed companies were this transparent.

If you had big plans like we do, everyone would at least try.

The endgame is to get bigger and bigger, getting to the size I want in the next 5 years ($15m-$25m) requires a framework that would allow for compliance with several governmental agencies. So, we can either try to be transparent up front which will make it easier, or deal with sticker shock down the road. It'd be better to pay the price now while we have ~$500k of assets and not $5m.

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[1713894712]

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[Chris_Sabian]

Wish more of the Havelock-listed companies were this transparent.

If you had big plans like we do, everyone would at least try.

The endgame is to get bigger and bigger, getting to the size I want in the next 5 years ($15m-$25m) requires a framework that would allow for compliance with several governmental agencies. So, we can either try to be transparent up front which will make it easier, or deal with sticker shock down the road. It'd be better to pay the price now while we have ~$500k of assets and not $5m.

That sounds like a very good way to conduct business.

[Branny]

Quick update.


Mill street is still in progress. Ended up having a water main break that we're having to attend to now. To this point we're under budget, even with the water main break we still expect to hit or be under budget. All material has been paid for on Mill, only big(ish) expense now will be getting a jackhammer & maybe backhoe to dig up the water lines.

Mulberry is just waiting on the rehab team to finish up at Mill. Some material has been purchased for this property.

Logan's renters still haven't paid yet,  i have been workign with them on this issue and do believe we'll be paid soon.

[pascal257]

Was the acquisition communicated and decided by the shareholders or on which paragraph of the contract is this based upon?
Also I was wondering how the IPO share price and count was determined.

[Branny]

Was the acquisition communicated and decided by the shareholders or on which paragraph of the contract is this based upon?
Also I was wondering how the IPO share price and count was determined.

We had originally filed a pseudo-PPM laying out the various rounds of financing on havelock. Page #16 of the business plan also outlines the funding goals and the like for the business overall..


Divs will be announced today as well.

[Branny]

Quick update(s).

Met with contractors on Mill (Actually helped out for part of a day doing drywall). Lots of progress but lots of problems have arisen from the original scope of work. Still under budget (Thankfully) and all the material is pretty much paid for already so hopefully we'll be a little under budget or right at budget. We did a GREAT deal of wiring work that wasn't originally planned.

Logan's renters contacted me last night and asked if they'd make rent payment + overage surcharge if we would let them stay. So, either Monday or Tuesday they're supposed to make rent payment to avoid eviction proceedings and whatnot.


2-3 properties are on the market that meet our criteria however I want to wait till Mill is done before we follow up on looking at more properties.

Also, as a general housekeeping note the deed transfers over to the LLC (Directly) will be done this week finally.

[Branny]

Deal review :


4br , 1bath
1600+sf
Built in 1900
Garage/Barn combo in back yard
Nice 0.22ac lot (890sqm for you non-freedom unit people)
$36,900 asking price
<$6,000 repair cost

$750-$850/mo in rent (We'll get $850 if we go section 8 since it's a 4br) 

I think we could negotiate it down a bit, but at full price & full rehab it would provide 20%-23.7% simple return.

[thehun]

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

[Branny]

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Some areas of the US are like that, however the area we are in has median rates of 10% , and that includes large, inefficient multi-family properties bought/sold for retail pricing.

[Swordsoffreedom]

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Some areas of the US are like that, however the area we are in has median rates of 10% , and that includes large, inefficient multi-family properties bought/sold for retail pricing.

I think it really just depends on how you optimize your land use and region, finding the most efficient return on equity requires thorough research and analysis of the area. The US housing market is a nice one to look at resource wealth going back a few pages and all the other factors that can make property values soar.

[Branny]

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Some areas of the US are like that, however the area we are in has median rates of 10% , and that includes large, inefficient multi-family properties bought/sold for retail pricing.

I think it really just depends on how you optimize your land use and region, finding the most efficient return on equity requires thorough research and analysis of the area. The US housing market is a nice one to look at resource wealth going back a few pages and all the other factors that can make property values soar.

And thankfully we have that ability in Ohio. Relatively low regulations in terms of real estate and pricing (We do not have price controls, nor extreme building codes). In some places you are severely limited to profit potential due to legalities. In these area, flips make much more sense than rentals or development, which is the case here.

[Branny]

A semi-suitable house has been located for a flip.

Asking price - $45,000
Rent price as-is - $700-$750
3br , 1 ba
1050sf (Could be based on first floor only, will have to inspect personally).

Cost to rehab - ~$10,000 depending on what we want to do.

Expected resale value - $75,000

Profit expectation - $15,000 (Assuming $5k for closing costs which is pretty high overall).

[Chris_Sabian]

A semi-suitable house has been located for a flip.

Asking price - $45,000
Rent price as-is - $700-$750
3br , 1 ba
1050sf (Could be based on first floor only, will have to inspect personally).

Cost to rehab - ~$10,000 depending on what we want to do.

Expected resale value - $75,000

Profit expectation - $15,000 (Assuming $5k for closing costs which is pretty high overall).

What does semi-suitable mean?

[Branny]

A semi-suitable house has been located for a flip.

Asking price - $45,000
Rent price as-is - $700-$750
3br , 1 ba
1050sf (Could be based on first floor only, will have to inspect personally).

Cost to rehab - ~$10,000 depending on what we want to do.

Expected resale value - $75,000

Profit expectation - $15,000 (Assuming $5k for closing costs which is pretty high overall).

What does semi-suitable mean?

Purchase is higher than I'd like due to the fact the seller partially rehabbed it rather than doing no rehab and selling it for less. Additionally the location isn't prime for my taste. It'd make a decent flip or a great rental.

[Branny]

Got a counter back on the 4br 1ba house we're looking at. Pretty favorable overall, they came off asking a decent bit with similar terms as to what we offered. I responded with a slightly higher offer with more EMD trying to coax them into a lower price.

[Branny]

Inspected the property next to me, it's actually in really good shape.

We are still negotiating on Walnut, I however have made an offer on this additional property (Ohio) for $35k. It needs a new roof and new bathroom flooring to be rentable. It could use a new roof, however at a minimum we'd need to install some new fascia. We're looking at $6k with a new roof and <$1k without a roof on repairs. Rent should be $700 or more for this property.

After pulling a significant number of comps I don't feel confident about flipping it, however as a rental it's absolutely perfect. The same comp report & research also has led me to believe that the Walnut property, if done right would be a much better flip. In both cases I'd like to try for a land contract on either property, or outright flip.


Between both properties we'd have a grand total of $82k into them, expected gross monthly rents of $17,400/yr or 21% simple interest. ARV on Ohio would be $65k, ARV on Walnut would be ~$75k.

[tempestb]

Branny, you are the king of informative updates.  Please continue doing it.  It's a breath of fresh air compared to other investments I'm in.

[cesmak]

Branny, you are the king of informative updates.  Please continue doing it.  It's a breath of fresh air compared to other investments I'm in.

+1 

[Justgot_here]

Branny, would you mind elaborating on the failed acquisition of CREI? Given that the current round of funding was largely justified for this purpose, personally I was surprised and a bit confused by the update this morning. It was not entirely clear to me if you've decided to give up on the acquisition entirely or if it just hasn't happened yet. Could you clarify this? Thanks!

[Branny]

Branny, would you mind elaborating on the failed acquisition of CREI? Given that the current round of funding was largely justified for this purpose, personally I was surprised and a bit confused by the update this morning. It was not entirely clear to me if you've decided to give up on the acquisition entirely or if it just hasn't happened yet. Could you clarify this? Thanks!

There was a deadline of funding of something like April the 15th to fund their first property. In order to fund it, Havelock & I wanted me to be able to meet with the CREI owner/manager personally by flying out to NC and inspecting his operation/properties/ect. I tried several times to get out there, and at no fault of CREI (Or myself for that matter) I couldn't make it out. Flights kept being delayed/pushed off and/or cancelled.

This isn't to say we can't or will not fund CREI properties in the future, however the first go-around has not come to fruition.

I'll have to check the numbers, but the CREI purchase accounted for 1/3rd of this current round of IPO's funding, the rest was for additional properties.  As it stands now I expect to be able to leverage our current properties which will do away with the need for additional funding rounds and help us to scale greatly.