RentalStarter - A Midwest Real Estate Investment Company

[Branny]

Put up a loan request on BTCJam, I would put a little bit your way 

I'll look into it, however they want verification from coinbase, and part of that is access to the coinbase wallet to buy/sell/transfer/change settings on the CB account which I absolutely don't want to allow.

[1713850201]

1713850201

[Branny]

Looking at ICbit, it might be best to buy some 3-6/mo futures contracts to hedge against price increase.

The problem here is that we're already hedged against BTC decrease due to the investment being in USD and repay in USD. I'm willing to buy contracts to prevent BTC loss against a upswing, however it's one of those things where the risk differal costs me more money, so I'd hope for potentially lower loan pricing IF we hedge against increases. I'll run more numbers and figure out what kind of scenario I can offer.

[pummle]

Put up a loan request on BTCJam, I would put a little bit your way 

I'll look into it, however they want verification from coinbase, and part of that is access to the coinbase wallet to buy/sell/transfer/change settings on the CB account which I absolutely don't want to allow.

Could you set up a second coinbase account to use with BTCJam, so they wouldn't be able to affect your main account?

[AcoinL.L.C]

Just keep us updated 

[Branny]

TBH i'd like to avoid btcjam, but we could split up the loan over say 10 investors if we could come up with the full amount.

I'm trying to figure out pricing to protect the loan, but I *think* It isn't too terribly expensive, so from what I'm seeing now I could buy enough futures to protect price rise to further secure the loan.

Additionally there would need to be a trustee elected to handle the contract on the collateral we'd be offering up in case of default.

[NotLambchop]

@Branny:  Why are you seeking a loan, and at 14% monthly interest?  Wasn't your SPO [Second Public Offering] and the consequent bitcoin price increase sufficient?  I realize that attractive deals present themselves, but taking out a loan at 14% monthly interest is not how a real business handles such things.
Why not explore a less extreme approach, such as... a loan from a bank?

[pummle]

@Branny:  Why are you seeking a loan, and at 14% monthly interest?  Wasn't your SPO [Second Public Offering] and the consequent bitcoin price increase sufficient?  I realize that attractive deals present themselves, but taking out a loan at 14% monthly interest is not how a real business handles such things.
Why not explore a less extreme approach, such as... a loan from a bank?

I think he said 14% yearly interest paid monthly, not 14% monthly interest. That is still higher than one should be willing to pay, but not as astronomical as you make it sound. Branny: Before jumping to 14% interest, why not see if you could get any investors at a much more reasonable rate, like 5% or 3%?

And it should be "subsequent bitcoin price increase", not "consequent bitcoin price increase", the SPO did not cause the price increase (as far as I can tell).

[NotLambchop]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

[pummle]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

[Branny]

@Branny:  Why are you seeking a loan, and at 14% monthly interest?  Wasn't your SPO [Second Public Offering] and the consequent bitcoin price increase sufficient?  I realize that attractive deals present themselves, but taking out a loan at 14% monthly interest is not how a real business handles such things.
Why not explore a less extreme approach, such as... a loan from a bank?

Most banks want 2yrs of operating financials before they'll consider a loan to the business. One bank we've talked to will let us get by with about a year's worth of financials if the cashflow looks good. We won't hit 1 year for a few more months.

Hard money finance is one of the largest methods out there for real estate finance in the US for flips. 14% interest is quite common, most HMLs also want 3%-5% in points paid either up front or at the end of the loan pushing the APY yield to over 30%. At 14% APR we're still looking at making a significant amount of money off this specific piece of property.

@Branny:  Why are you seeking a loan, and at 14% monthly interest?  Wasn't your SPO [Second Public Offering] and the consequent bitcoin price increase sufficient?  I realize that attractive deals present themselves, but taking out a loan at 14% monthly interest is not how a real business handles such things.
Why not explore a less extreme approach, such as... a loan from a bank?

I think he said 14% yearly interest paid monthly, not 14% monthly interest. That is still higher than one should be willing to pay, but not as astronomical as you make it sound. Branny: Before jumping to 14% interest, why not see if you could get any investors at a much more reasonable rate, like 5% or 3%?

And it should be "subsequent bitcoin price increase", not "consequent bitcoin price increase", the SPO did not cause the price increase (as far as I can tell).

I've had virtually no interest at 5% and 6%. I have started to get interest in this avenue at 7% and am working with some groups who are showing said interest. Unfortunately these kinds of things take time (months) before you get the deals hammered out, and this specific property will be sold in 2 weeks or less.

[pummle]

Unfortunately these kinds of things take time (months) before you get the deals hammered out, and this specific property will be sold in 2 weeks or less.

So maybe we will have to pass up this property. There is no need to rush through things.

[NotLambchop]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe. 

[pummle]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe. 

It is a relic of the old money system. They just do not expect something like rentalstarter to appear.

Perhaps you could talk to the guys in #bitcoin-assets to see if there would be interest in funding a loan for an opportunity like this?

[Branny]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe.  

Ever apply for a loan as an LLC or corporation?  

Unfortunately these kinds of things take time (months) before you get the deals hammered out, and this specific property will be sold in 2 weeks or less.

So maybe we will have to pass up this property. There is no need to rush through things.

We've already missed 5 properties this year that resulted in net ROIs of over 100%. I just hate the idea of missing another one.

[NotLambchop]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe. 

It is a relic of the old money system. They just do not expect something like rentalstarter to appear.

Perhaps you could talk to the guys in #bitcoin-assets to see if there would be interest in funding a loan for an opportunity like this?

It's not a relic at all.  I own my house lien-free.  I could use it to collateralize a bank loan.  Trust me, banks have seen this sort of thing before.  let's not play us vs. them here.

[NotLambchop]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe.  

Ever apply for a loan as an LLC or corporation?  

Unfortunately these kinds of things take time (months) before you get the deals hammered out, and this specific property will be sold in 2 weeks or less.

So maybe we will have to pass up this property. There is no need to rush through things.

We've already missed 5 properties this year that resulted in net ROIs of over 100%. I just hate the idea of missing another one.

1.  Yes.
2.  Running a business implies understanding that you do not have unlimited finances.  I see nice things that I like all the time without buying each and every one. 

[pummle]

@pummle re. "14% monthly":  Sorry, reading fail on my part (and a typo).
The point still stands, though--a loan for purchasing real estate is something that banks are quite familiar with, since most people don't buy houses with a suitcase full of cash.

I believe Branny has addressed this previously, that all the banks he talked to said he needs a longer history as a landlord before they will consider giving him a loan to buy more properties.

With all the properties this company owns lien free, I find this almost impossible to believe. 

It is a relic of the old money system. They just do not expect something like rentalstarter to appear.

Perhaps you could talk to the guys in #bitcoin-assets to see if there would be interest in funding a loan for an opportunity like this?

It's not a relic at all.  I own my house lien-free.  I could use it to collateralize a bank loan.  Trust me, banks have seen this sort of thing before.  let's not play us vs. them here.

There is a difference between you taking out a mortgage backed by your house and a business getting a loan. But I see your point, if the houses are owned free and clear, then the bank should be willing to issue debt with the house as collateral.

Branny, when you talk to the bank, do you just talk to the first person they point you at or do you insist on talking to a loan officer who has authority to actually make their own decisions?

[Branny]

My goal with this potential purchase is to bump up the average dividend yield to make the stock more attractive to investors and banks so that we can obtain financing easier.

Rental financing right now is terrible, I talk to many landlords who just can't get financing due to them being new to the game. Established ones are doing phenomenally well with the high amount of inventory that returns 15%-25%. Banks hate taking risks, especially with low interest rates, and see new investors/landlords as high risk.

Right now I've talked to about 3 banks, two have said no, one has been a partial yes. What my goal is right now is to put a package of information together so we can shop the business around to banks. Additionally I really want to hit $7k/mo gross income before I start to seriously shop it to additional banks. This is a time thing as we need to finish walnut/mulberry/mill (Two of these three will be done quite soon).

[Branny]

For better or worse, Lincoln (the flip) Is now under contract (Not by us mind you).

I am continuing to negotiate on scioto #3. With the fall of BTC/USD it has made me even more apprehensive about cashing any out for purchases.

[jjdub7]

Branny.  I like what you're doing here.  Understanding that its largely controlled by the USD rate, I still see the share price as a bargain right now - keep up the good work man.