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Author Topic: Rental properties  (Read 2446 times)
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BadBitcoin (James Sutton)
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July 04, 2013, 10:19:50 PM
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I live in a university town (Halifax, Nova Scotia) and there are a ton of rental properties for sale locally. A very good friend of mine  (I trust him with my life) has his real estate license, and runs 4 of some of the local rental properties and sublets them out to local university students for the property owners.

A major shipbuilding contract from the government is just starting to go into pre-production, and when that goes into full production ramp the housing local to the shipyard ( in the downtown core) should skyrocket from the new money moving in, so when the shareholders finally decide to sell the house, we should be able to sell for more than we purchased.

all rent would be automatically split up based on share ownership, turned into Bitcoins and paid out as monthly dividends, besides the 5% for maintenance and paying the superintendent (my buddy) for his services of maintaining the building and keeping all the rooms rented.

As you can imagine this security would be a hedge against the Bitcoin price rising dramatically as the sale of the home would be in dollars,
however unlike other investments with bitcoins it would be as low risk as I think is possible in the current bitcoin climate.


Counterparty risk is a problem, however I think I might have figured out a solution once the home is purchased.
The deed to the house would be placed in a vault which can only be accessed from the written consent of 50% or more shareholders, I believe this can be accomplished through securing the deed with a third party, or digitally encrypting it if at all possible, however that part is the trickiest and would appreciate some input in further securing the investment for shareholders.

I don't really trust any of the current bitcoin exchanges, however I'm not adverse to PTs, I would run it similar to ASICminer in how shares are traded/recorded.


for all watchers, the interest post has ended, the main page
https://bitcointalk.org/index.php?topic=252474.0

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July 04, 2013, 10:37:08 PM
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I saw a thread similar to this one a few days ago, and thought it was an interesting idea.

A prerequisite for me would be regular updates as to the condition of the properties, short/long-term repairs required, criteria for selecting tenants, etc. While there's money to be made in real estate, I've got no interest in owning shares in slums.

No longer buying/selling Casascius coins. Beware scammers.
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BadBitcoin (James Sutton)
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July 04, 2013, 10:45:04 PM
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I saw a thread similar to this one a few days ago, and thought it was an interesting idea.

A prerequisite for me would be regular updates as to the condition of the properties, short/long-term repairs required, criteria for selecting tenants, etc. While there's money to be made in real estate, I've got no interest in owning shares in slums.

of course, all purchases, changes in contract would be put to a vote, all information regarding every single change in the current situation/climate would be recorded and sent to all shareholders in a weekly newsletter, as well as all financials organized in a cash flow diagram in google docs.

Even better, every few months I would also take a look at the local housing market and both estimate what the property could sell for, and how much we could make purchasing another
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July 05, 2013, 12:22:34 AM
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This is pretty damn cool. I may not participate, but the crowd-funded investing that Bitcoin is enabling is just so liberating.

It's gonna get the shit legislated out of it, but for now it's just amazing to watch.

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July 05, 2013, 02:20:18 AM
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What timeframe are we talking about? As in - when is the shipbuilding contract supposed to go into full production and when do you expect the properties to increase in value? 1 year? 3 years? 10 years? Not taking anything as guaranteed here, just curious about a raw estimate.

BadBitcoin (James Sutton)
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July 05, 2013, 11:48:43 AM
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What timeframe are we talking about? As in - when is the shipbuilding contract supposed to go into full production and when do you expect the properties to increase in value? 1 year? 3 years? 10 years? Not taking anything as guaranteed here, just curious about a raw estimate.


the exact date of starting is a little foggy however news sources have said the first vessels "the first vessels could be christened as soon as 2015."




source is http://www.ctvnews.ca/halifax-wins-25-billion-shipbuilding-contract-1.713515


A significant advantage has been discovered on our contract design, allowing for a completely distributed and anonymous shareholder system, more will be released on the weekend, this should come into full swing next week.

I think we might have just figured out bitcoins KILLER APP  Cool
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July 05, 2013, 01:20:03 PM
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Sounds risky on many levels, but still interesting.

So you're plan would be:

1) Sell Shares for BTC
2) Convert BTC to Fiat
3) Buy Property using Fiat
4) Convert rent back from Fiat to BTC and pay divs
5) In case of sale in say 3-5 years time: Get Fiat, convert to BTC buy shares back / pay divs / whatever

Amirite?

So currency conversion would result in better divs if BTC drops / stays flat and lower divs if BTC rises in the given timeframe?

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July 05, 2013, 02:05:04 PM
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Sounds risky on many levels, but still interesting.

Even more interesting: rent the properties for BTC, not $. Bitcoin needs more of an economy than just investors shuffling funds around. Charge rent in BTC, peel off dividends, then convert remaining BTC to $ for the mortgage payment.

Mid-month mortgage payments would give you two weeks to do this conversion, so there's no worry of tight deadlines being missed due to problems with exchanges.

If you can hire contractors to do repairs/maintenance for BTC, even better. You'd make national news doing this (remember the guy selling his house for BTC in Alberta?), and you'd have your pick of both tenants and workers.

No longer buying/selling Casascius coins. Beware scammers.
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BadBitcoin (James Sutton)
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July 05, 2013, 02:17:14 PM
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Sounds risky on many levels, but still interesting.

So you're plan would be:

1) Sell Shares for BTC
2) Convert BTC to Fiat
3) Buy Property using Fiat
4) Convert rent back from Fiat to BTC and pay divs
5) In case of sale in say 3-5 years time: Get Fiat, convert to BTC buy shares back / pay divs / whatever

Amirite?

So currency conversion would result in better divs if BTC drops / stays flat and lower divs if BTC rises in the given timeframe?

correct, this could be considered a hedge investment, as the house valuation is in USD and the rent is in USD, however if you store the btc from divs over the lifetime of the investment you would be in a reasonable position as you are both still heavily invested in bitcoin, and safe against a total loss if bitcoin confidence goes down the tubes for whatever reason.

And since theres a good shot of local land value increasing over the lifetime of the investment, you will most likely make a solid return in both fiat and btc.

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July 05, 2013, 05:25:05 PM
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Sounds risky on many levels, but still interesting.

Even more interesting: rent the properties for BTC, not $. Bitcoin needs more of an economy than just investors shuffling funds around. Charge rent in BTC, peel off dividends, then convert remaining BTC to $ for the mortgage payment.

Mid-month mortgage payments would give you two weeks to do this conversion, so there's no worry of tight deadlines being missed due to problems with exchanges.

If you can hire contractors to do repairs/maintenance for BTC, even better. You'd make national news doing this (remember the guy selling his house for BTC in Alberta?), and you'd have your pick of both tenants and workers.

The single largest expense for the RE market are the financing costs. So long as those costs are denominated in USD it would be a bad idea to charge BTC rents. Such a setup would only be feasible if there was no mortgage and the entirety of the property is equity-financed.
BadBitcoin (James Sutton)
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July 05, 2013, 05:32:02 PM
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Sounds risky on many levels, but still interesting.

Even more interesting: rent the properties for BTC, not $. Bitcoin needs more of an economy than just investors shuffling funds around. Charge rent in BTC, peel off dividends, then convert remaining BTC to $ for the mortgage payment.

Mid-month mortgage payments would give you two weeks to do this conversion, so there's no worry of tight deadlines being missed due to problems with exchanges.

If you can hire contractors to do repairs/maintenance for BTC, even better. You'd make national news doing this (remember the guy selling his house for BTC in Alberta?), and you'd have your pick of both tenants and workers.

The single largest expense for the RE market are the financing costs. So long as those costs are denominated in USD it would be a bad idea to charge BTC rents. Such a setup would only be feasible if there was no mortgage and the entirety of the property is equity-financed.

agreed, we don't need the added hassle of forcing tenants to pay in btc and forcing local contractors to work in btc, we'd rather provide financial reliability for our investors rather than making undue waves.

HOWEVER: As I said previously, we have a distributed, anonymous investor friendly, trust free* company stock system in place that should allow us to be the safest investment in bitcoin history, I will make a new topic and organize the structure of this investment and make a new thread sometime Sunday to outline exactly what we plan to do.

Also we have enough for the down-payment on a mortgage and the funds necessary to create a corporation to handle the property management, however the remainder is what we will be looking to raise.
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July 05, 2013, 05:57:31 PM
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Why didn't you do this during the bubble:P Right now sure is a risky time to be converting a lot of funds to btc.
BadBitcoin (James Sutton)
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July 05, 2013, 06:05:58 PM
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Why didn't you do this during the bubble:P Right now sure is a risky time to be converting a lot of funds to btc.

I've been around, bitcoin goes through busts and booms faster and harder than any economic instrument I've ever seen. Part of the point of this project is to (as I said above Tongue) hedge your bet against a dramatic change in the bitcoin price, while still being exposed to bitcoins if you want to be/b], while still getting all of the benefits of a quasi-anonymous investment vehicle that bitcoin is. It separates the technology from the currency, the currency is fine and dandy but the technology itself is revolutionary beyond any measure, and is only just starting to get exploited.
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July 05, 2013, 06:14:33 PM
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Well what I mean is

a) my bitcoin holdings are far less then they were so I & others have less to invest (which is fine, just sucks lol)

the main problem being:
b) the time period between buying more coins, sending them to you and then you cashing them out there could be an even further significant drop in their value. Is there a plan for this?
BadBitcoin (James Sutton)
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July 05, 2013, 06:27:13 PM
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Well what I mean is

a) my bitcoin holdings are far less then they were so I & others have less to invest (which is fine, just sucks lol)

the main problem being:
b) the time period between buying more coins, sending them to you and then you cashing them out there could be an even further significant drop in their value. Is there a plan for this?

This is not a short term IPO, we will be getting a mortgage on the house and shares will purchase more and more equity of the building. The valuation of bitcoin presently doesn't matter all that much (however I'm buying $5K worth this evening through a local exchange).

The people who have bitcoins now might not find their coins to be worth as much as they'd like, however if they are holding onto considerable fiat reserves still due to the volatile nature of bitcoins, then this is easily a the "safest" bitcoin investment they could potentially fund, more so then purely holding bitcoins and hoarding.
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July 05, 2013, 08:21:24 PM
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How many years have you been in real estate investment for?
BadBitcoin (James Sutton)
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July 05, 2013, 08:38:21 PM
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How many years have you been in real estate investment for?


I've been trained by my father who was in real estate house flipping for 30 years in Toronto, Canada, as you can imagine this doesn't give me a title or anything.

However my friend Devin Podgorski (who I will give a full dox of as well once we finalize our proposal) is fully qualified to manage, purchase, and organise the sale of all properties we would potentially invest in.

Any investments that are not made without our current expertise in any future enterprise will be done with either our own reciept of required licenses, or we would hire the expertise of another, however that is not an immediate concern.

does that answer your question well? I'm not sure what you were looking for.
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July 06, 2013, 08:06:15 PM
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I would be interested in buying some shares if you get this going. Send me a pm message with more information. I.e est. price per share and so on.
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July 06, 2013, 08:55:20 PM
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I would be interested in buying some shares if you get this going. Send me a pm message with more information. I.e est. price per share and so on.

a full announcement thread will replace this one on monday sir, we appreciate the interest.
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July 06, 2013, 10:37:26 PM
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Sure I look forward to the announcement Smiley
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