RentalStarter - A Midwest Real Estate Investment Company

[pascal257]

So the roughly $85k raised during this IPO will be used to acquire more property?

[Branny]

So the roughly $85k raised during this IPO will be used to acquire more property?

Correct.

[Aireun]

Could someone tell me the time zone for Rental Starter/Havelock. I'm trying to figure out when the IPO price will changes to Public and all it says on havelock is 2014-04-30 12:00:00. Not sure if this is AM/PM or when.

[havelock]

12:00 Noon EST

[Aireun]

12:00 Noon EST

Thank you!

[Branny]

A few minutes left, buy while you can!

[Branny]

Quick update/outlook on the company since we've wrapped up the last round of funding.

The 2nd HL round of funding has completed with a total of 23,100 shares sold @ .0075btc/ea or ~164.59btc in realized proceeds.

We are still negotiating on the property on Walnut street. It would be a good fit for our portfolio and generally quick rehab (Mostly limited to flooring & painting work). Total rehab + purchase would be under $41k with an expected ARV of $75k + $750/mo in income.

Financially we're in great shape with good BTC reserves, cash reserves and of course tons of equity in our properties since nothing is leveraged at this point.

Right now we have two major goals for the next 3 month period :

#1 - Flip a house
#2 - Get leveraged

The reason for this process is that by flipping just 1 house, we insure a fantastic balance sheet to show to the bank (And investors) which then will seal the deal on #2 coming to fruition. As stated, the purpose of subsequent funding rounds has been to get to the point we have enough cashflow to approach a lending partner to help us leverage. Our book value is around $475k which at 70% LTV would allow up to $336k worth of funding. Of course, funding this amount will severely eat into free monthly cashflow, but would allow us to buy a nearly identical portfolio of further investments. If this took place, we should expect roughly $10,000 of FREE net cashflow monthly from all properties (Including properties we will be buying with our current cash/btc reserves).

Obtaining leverage is crucial to rapidly growing the business, but not critical to our well being. We have ample cashflow and reserves to weather most storms that could become problems in the foreseeable future. Flipping or developing several properties a year would help boost up our bottom lines which the banks tend to look at. Just 4 flips per year would grow our balance sheet up to 300% of where it is expected to be at complete occupancy.

Our 6 month goal right now looks to be developing a few properties. By this I mean acquiring building lots, building a spec home or two then either flipping it or renting it out. I have had several valuable talks with developers and working on a pricing strategy that works for our business model. The reason that this could be advantageous over utilizing our current structure is that it accesses a workforce outside of our own and allows us to continue to work on our projects. By outsourcing we free up management & workloads by a great deal.

If you have any questions or comments please let me know.

[Swordsoffreedom]

Quick update/outlook on the company since we've wrapped up the last round of funding.

The 2nd HL round of funding has completed with a total of 23,100 shares sold @ .0075btc/ea or ~164.59btc in realized proceeds.

We are still negotiating on the property on Walnut street. It would be a good fit for our portfolio and generally quick rehab (Mostly limited to flooring & painting work). Total rehab + purchase would be under $41k with an expected ARV of $75k + $750/mo in income.

Financially we're in great shape with good BTC reserves, cash reserves and of course tons of equity in our properties since nothing is leveraged at this point.

Right now we have two major goals for the next 3 month period :

#1 - Flip a house
#2 - Get leveraged

The reason for this process is that by flipping just 1 house, we insure a fantastic balance sheet to show to the bank (And investors) which then will seal the deal on #2 coming to fruition. As stated, the purpose of subsequent funding rounds has been to get to the point we have enough cashflow to approach a lending partner to help us leverage. Our book value is around $475k which at 70% LTV would allow up to $336k worth of funding. Of course, funding this amount will severely eat into free monthly cashflow, but would allow us to buy a nearly identical portfolio of further investments. If this took place, we should expect roughly $10,000 of FREE net cashflow monthly from all properties (Including properties we will be buying with our current cash/btc reserves).

Obtaining leverage is crucial to rapidly growing the business, but not critical to our well being. We have ample cashflow and reserves to weather most storms that could become problems in the foreseeable future. Flipping or developing several properties a year would help boost up our bottom lines which the banks tend to look at. Just 4 flips per year would grow our balance sheet up to 300% of where it is expected to be at complete occupancy.

Our 6 month goal right now looks to be developing a few properties. By this I mean acquiring building lots, building a spec home or two then either flipping it or renting it out. I have had several valuable talks with developers and working on a pricing strategy that works for our business model. The reason that this could be advantageous over utilizing our current structure is that it accesses a workforce outside of our own and allows us to continue to work on our projects. By outsourcing we free up management & workloads by a great deal.

If you have any questions or comments please let me know.

Congrats on your IPO looking forward to house developments

[Branny]

It appears our offer for walnut was accepted.


$35,000 purchase price.

[Chris_Sabian]

It appears our offer for walnut was accepted.


$35,000 purchase price.

Good to hear!

[AcoinL.L.C]

Will be buying shares soon.

Keep it up

[Branny]

Here's a short demo video of property #7 - https://www.youtube.com/watch?v=U70UGIPvIeE


Right now we're looking at a frontend for the consumer/DIY portal. The vote was "Property Emperor" in the chat, so we're using that for the time being as the front-end name for consumers for the videos.

[Swordsoffreedom]

Looks like a fix me up from the outside but from the inside looks nice
Just a bit of paint and maybe change the bathroom tiles stove sidings 2nd bedroom 3 and fence (wood for front porch) little touches to raise the house value.
Still a nice prospective house some of those rooms look great assuming no asbestos

[Branny]

Looks like a fix me up from the outside but from the inside looks nice
Just a bit of paint and maybe change the bathroom tiles stove sidings 2nd bedroom 3 and fence (wood for front porch) little touches to raise the house value.
Still a nice prospective house some of those rooms look great assuming no asbestos

It isn't a bad house at all, will look tons better when we get it done. The best part is that it was re-wired no less than the late 1970s. This is very good because they cut out (And it's obvious) the old wiring from the 1920s-30s and replaced it with new stuff. Old KnT wiring always scares me due to how often fires happen with the stuff. KnT wiring eventually dries out and then you're left with bare wires running around your house. You're just 1 short away from a fire.

[Branny]

Walnut inspection was completed today, a few leaks in the house, gonna ask for $750 off list price due to the issues (Nothing overly major thankfully). Otherwise property is as it seems to be, not a ton of work needed.

[Branny]

Walnut inspection was completed today, a few leaks in the house, gonna ask for $750 off list price due to the issues (Nothing overly major thankfully). Otherwise property is as it seems to be, not a ton of work needed.

Sounds like a good place to make some nice gains on! Any word on the renters that hadn't paid yet?

They paid up

[Branny]

Dividend distribution & financial performance for April 15th-May 10th.

Here are the totals from our properties.


W. Mill - $700
Logan - $800 (Two months of rent, tenants paid up)
Scioto/Union - $900
Scioto - $900 (There is a slight delay in payment to us from MHA because of some really stupid section 8 rules, we will pay out on it anyways).

$3,300 net income for May * 46% (All properties are at 46% currently)  = $1518.00

E. Mill is almost done in terms of rehab, we expect $500+ in income (net) from the property.

Mulberry is still waiting rehab, significantly less work than E. Mill so it should be quick (Expecting $900 net income from this one)

Walnut closes supposedly on the 15th, very short rehab time estimated as well, $550-$600 in net monthly income expected from this property.

$437/BTC price currently / $1518 = 3.474btc dividend payout

151,537 shares / 3.474btc = 0.00002293 payout, a 39% increase from last payout.

3.474btc * 12 / 940btc (Current RENT mkt cap) = 4.4% APY

We expect another $2,000 of net income once the other properties are rented which would increase our div yield by about 60%. This includes no extra income from flipping, rent-to-own deals or other income which is what we are working towards.

Total portfolio value (once 100% occupancy & rehab) is estimated to breakdown this way :

W. Union - $115,000
Logan - $60,000 (A increase from $55,000 on last reports due to good market increases)
Scioto/Union - $85,000 (Based on a very recent, very close sale @ 20% simple ROI)
E. Mill - $80,000 (Revalued due to recent comps)
Mulberry - $75,000
Scioto - $65,000
Walnut - $75,000

Total NAV = $555,000 or 1,270btc based on current values or .0083btc/share. This does not account for cash or BTC in the bank but only assets.

Additionally we still expect a little over 100btc in the bank after all repairs are expected to be completed. This can be used on an additional property purchase should we so choose.

[VJain]

Great job Branny!

Maybe we'll make it back to the price you were at 1 year ago(?) in a few years time.

[tempestb]

Branny, when do you see getting leverage/loan?  A year from now?  Less or More?  Just curious in the planning on that...

[Branny]

Branny, when do you see getting leverage/loan?  A year from now?  Less or More?  Just curious in the planning on that...

I've been talking to a local lender about a 70% LTV @ 6%-7% interest, they are quite positive on it.

I believe if I can show 2-3 months at 100% occupancy (After renting properties out) we'll be able to get it. This would put us at 4-6mo from now. If we get levered, then we'd have another $300k+ to work with.


Leverage WILL decrease the dividend amount, however IMO it is quite worth it. All together we will have less than $350k spent for monthly net income of a little shy of $60k/yr and $200k+ in extra equity.

Loan costs on $300k will be around $3k a month, of which $1.75k goes to interest, the rest is principal reduction. This of course would half the effective dividend, but we'd be able to roughly double our portfolio size, which then would result in another approximate $5,000 of effective income pre-leverage which we then can redo over and over again.  


Additionally , our estimated equity/year gain is $20k-$28k/yr right now. This essentially offsets the loan interest when we leverage our purchases.