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Author Topic: [GLBSE] House for sale: RFC  (Read 4147 times)
punningclan
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June 23, 2012, 12:14:28 AM
 #21

Its a  nice idea in theory but why not just sell the house and setup an investment fund on glbse with the proceeds ?

I know people in the housing industry and I can tell you a story or 3 about crappy tenants Smiley


I'm with you but all of a sudden I am tired of backing down! If I sell I'll have to rent again and that will reduce the investment potential of the idea.

Most importantly I can also start selling shares right away and those will immediately start producing dividends and I'll still have somewhere to stay with my own miners.

I understand. So essentially whatever funds you raise will be reinvested and used to generate dividends etc ?

Exactly!
Instead of paying interest into a failing economy run by the very people that are looking to make me homeless.

It was a cunning plan to have the funny man be the money fan of the punning clan.
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June 23, 2012, 12:19:12 AM
 #22

Why not use a home equity line of credit or take out a mortgage on the house? Rates are incredibly low these days, and if all you owe is back taxes, it seems reasonable to me to do this. More clarification is needed about why you're pursuing this option.

-bgc

I'm selling great Minion Games like The Manhattan Project, Kingdom of Solomon and Venture Forth at 4% off retail starting June 2012. PM me or go to my thread in the Marketplace if you're interested.

For Settlers/Dominion/Carcassone etc., I do email gift cards on Amazon for a 5% fee. PM if you're interested.
punningclan
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June 23, 2012, 12:19:17 AM
 #23

I like this idea if only because it's an extremely creative way to solve your problem. There are definitely some issues here, but if you've got the guts to try it out, I'll definitely throw in a little bit to help out. Good luck with this!

Perhaps I've been slightly lazy trying to get forum members to help with the design of the IPO that's going to save my behind but I think doing it this way will help me build a stronger fund quicker. It's actually likely that I will keep the fund going rather than immediately buy back the shares so that we can all continue to profit.

Thank you!

It was a cunning plan to have the funny man be the money fan of the punning clan.
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June 23, 2012, 12:25:00 AM
 #24

So, you're going to raise $300k worth of Bitcoins via GLBSE, use $10k-$15k of it to pay off the backtaxes, and then put the rest in a variety of investments?

What's to stop you from simply running away with the $300k?  Will you title the house in the name of all the investors?  Or in the name of a business that has the names of the investors?

If I, as an investor, invest $10,000 worth of Bitcoin into your house, how much of a share in your house does that buy me?  How much is the house worth?

Why not just raise a smaller amount of capital to pay off the backtaxes and sell it for a small share of the house?

What happens if the shareholders want to sell your house?  What happens if you don't want to sell, and never do sell?

If your house is worth $300k, but it is all paid off, and $300k is the amount of capital you are raising, then all shares together are immediately worth $285k + $300k = $585k?
punningclan
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June 23, 2012, 12:27:30 AM
 #25

Why not use a home equity line of credit or take out a mortgage on the house? Rates are incredibly low these days, and if all you owe is back taxes, it seems reasonable to me to do this. More clarification is needed about why you're pursuing this option.

-bgc

I find myself entirely reluctant to continue supporting the groups and organizations who've already taken almost all my wealth thus far.

I refuse to pay any more interest into an economy run by the very people who are trying to make me homeless and if I was a state with the power I'd take up arms against anyone determined to pry anymore wealth out of me.

It was a cunning plan to have the funny man be the money fan of the punning clan.
1J13NBTKiV8xrAo2dwaD4LhWs3zPobhh5S
punningclan
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June 23, 2012, 12:40:56 AM
 #26

So, you're going to raise $300k worth of Bitcoins via GLBSE, use $10k-$15k of it to pay off the backtaxes, and then put the rest in a variety of investments?

What's to stop you from simply running away with the $300k?  Will you title the house in the name of all the investors?  Or in the name of a business that has the names of the investors?

If I, as an investor, invest $10,000 worth of Bitcoin into your house, how much of a share in your house does that buy me?  How much is the house worth?

Why not just raise a smaller amount of capital to pay off the backtaxes and sell it for a small share of the house?

What happens if the shareholders want to sell your house?  What happens if you don't want to sell, and never do sell?

If your house is worth $300k, but it is all paid off, and $300k is the amount of capital you are raising, then all shares together are immediately worth $285k + $300k = $585k?

You make very good points however I believe the IPO can be balanced to allow me control of the property while also making us all profit (51/49% split?). I would pay the taxes and expenses from my share of the dividends.
It may be prudent to sell off batches or even as you say just an amount that would cover the back taxes and a little for fees etc. according to how successful this offering is while allowing us all to get our feet wet. The idea is exactly the same as a home owner looking for a home equity line of credit but it suddenly occurred to me that I could do the same with out all the ridiculous interest being paid to the banks. Instead of wasted interest a fairly large investment would now appear and support the exact people I want to support against the banks.

Trust of course is an issue, I can say for my part I will try hard to mitigate that with pictures of the house and deeds etc.  But suffice it to say I also want some of those dividends and I don't want them to stop.

It was a cunning plan to have the funny man be the money fan of the punning clan.
1J13NBTKiV8xrAo2dwaD4LhWs3zPobhh5S
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June 23, 2012, 12:45:50 AM
 #27

So, you're going to raise $300k worth of Bitcoins via GLBSE, use $10k-$15k of it to pay off the backtaxes, and then put the rest in a variety of investments?

What's to stop you from simply running away with the $300k?  Will you title the house in the name of all the investors?  Or in the name of a business that has the names of the investors?

If I, as an investor, invest $10,000 worth of Bitcoin into your house, how much of a share in your house does that buy me?  How much is the house worth?

Why not just raise a smaller amount of capital to pay off the backtaxes and sell it for a small share of the house?

What happens if the shareholders want to sell your house?  What happens if you don't want to sell, and never do sell?

If your house is worth $300k, but it is all paid off, and $300k is the amount of capital you are raising, then all shares together are immediately worth $285k + $300k = $585k?

You make very good points however I believe the IPO can be balanced to allow me control of the property while also making us all profit (51/49% split?). I would pay the taxes and expense from my share of the dividends.
It may be prudent to sell off batches or even as you say just an amount that would cover the back taxes and a little for fees etc. according to how successful this offering is while allowing us all to get our feet wet. The idea is exactly the same as a home owner looking for a home equity line of credit but it suddenly occurred to me that I could do the same with out all the ridiculous interest being paid to the banks. Instead of wasted interest a fairly large investment would now appear and support the exact people I want to support against the banks.

Trust of course is an issue, I can say for my part I will try hard to mitigate that with pictures of the house and deeds etc.  But suffice it to say I also want some of those dividends and I don't want them to stop.
So you will retain control of the property and the investments.  Assuming the house is worth $300k, then raising $300k of capital and paying off $15k of back taxes (and giving yourself a 51% equivalent of 300,000 * 51 / 49 = 312,245 shares) would make each dollar of shares immediately worth $0.9555.  The shares would, in this case, effectively devalue by 4.5% as soon as they are purchased.

Of course, if the house is worth more or less than $300k, then it changes said calculation.  That's why current house value is important to know...

Again, how much is the property worth?  What is the street address?
punningclan
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June 23, 2012, 12:57:15 AM
 #28

So, you're going to raise $300k worth of Bitcoins via GLBSE, use $10k-$15k of it to pay off the backtaxes, and then put the rest in a variety of investments?

What's to stop you from simply running away with the $300k?  Will you title the house in the name of all the investors?  Or in the name of a business that has the names of the investors?

If I, as an investor, invest $10,000 worth of Bitcoin into your house, how much of a share in your house does that buy me?  How much is the house worth?

Why not just raise a smaller amount of capital to pay off the backtaxes and sell it for a small share of the house?

What happens if the shareholders want to sell your house?  What happens if you don't want to sell, and never do sell?

If your house is worth $300k, but it is all paid off, and $300k is the amount of capital you are raising, then all shares together are immediately worth $285k + $300k = $585k?

You make very good points however I believe the IPO can be balanced to allow me control of the property while also making us all profit (51/49% split?). I would pay the taxes and expense from my share of the dividends.
It may be prudent to sell off batches or even as you say just an amount that would cover the back taxes and a little for fees etc. according to how successful this offering is while allowing us all to get our feet wet. The idea is exactly the same as a home owner looking for a home equity line of credit but it suddenly occurred to me that I could do the same with out all the ridiculous interest being paid to the banks. Instead of wasted interest a fairly large investment would now appear and support the exact people I want to support against the banks.

Trust of course is an issue, I can say for my part I will try hard to mitigate that with pictures of the house and deeds etc.  But suffice it to say I also want some of those dividends and I don't want them to stop.
So you will retain control of the property and the investments.  Assuming the house is worth $300k, then raising $300k of capital and paying off $15k of back taxes (and giving yourself a 51% equivalent of 300,000 * 51 / 49 = 312,245 shares) would make each dollar of shares immediately worth $0.9555.  The shares would, in this case, effectively devalue by 4.5% as soon as they are purchased.

Of course, if the house is worth more or less than $300k, then it changes said calculation.  That's why current house value is important to know...

Again, how much is the property worth?  What is the street address?

That ratio is not fixed in stone but represents some ratio that would be agreed on such that I have the right to keep the property and control the fund at least unless there is some sort of issue.

Now we face my risk, I may have to make quite a large part of my life visible unlike many of the investments on GLBSE where there's not even an email address. In order to do this properly I will have have the property valued and make the valuation public in such a way that proves this is my house however I'm not sure I like the idea of imperial involvement and so this aspect of the IPO will have to be up for discussion.

The rough price quote is in dollars so it's 300,000/Current BTC price to get to BTCs. Also that price was when it was purchased at the height of the market 250k is probably a closer estimate.

I want to structure the IPO so there are really healthy dividends and with such a large amount this should be possible?

It was a cunning plan to have the funny man be the money fan of the punning clan.
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June 23, 2012, 01:04:55 AM
 #29

What do you intend to invest the capital in ? A huge ass mining farm ?

 Cheesy

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June 23, 2012, 01:05:12 AM
 #30

Some of your questions have been answered in the edited first post.

You may have answered some of my questions. I'm not even sure I would say that, though.

To me, the biggest red flag is that you seem to be conflating (a) selling shares of your house and (b) selling shares in a GLBSE fund that pays dividends. I could understand doing one or the other to try to pay your back taxes (although not necessarily condone it), but not both.

You're basically selling shares in your house and then giving away dividends. Doesn't make sense.

Alternate perspective: You're basically starting a GLBSE fund, where you keep some of the initial shares (and thus get some of the dividends) without putting any initial investment in, unlike the other shareholders. The whole house thing makes it look like you're putting in an investment.

Also, I don't have sympathy for the "screw the banks" rhetoric. It's just distracting from addressing the actual flaws.

Best of luck to you but unless all the issues people are raising are addressed, this does not look like something people would want to put money into.
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June 23, 2012, 01:06:04 AM
 #31

What do you intend to invest the capital in ? A huge ass mining farm ?

 Cheesy

He said he was going to buy GLBSE assets that pay dividends.
punningclan
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June 23, 2012, 05:18:56 AM
 #32

Some of your questions have been answered in the edited first post.

You may have answered some of my questions. I'm not even sure I would say that, though.

To me, the biggest red flag is that you seem to be conflating (a) selling shares of your house and (b) selling shares in a GLBSE fund that pays dividends. I could understand doing one or the other to try to pay your back taxes (although not necessarily condone it), but not both.

You're basically selling shares in your house and then giving away dividends. Doesn't make sense.

Alternate perspective: You're basically starting a GLBSE fund, where you keep some of the initial shares (and thus get some of the dividends) without putting any initial investment in, unlike the other shareholders. The whole house thing makes it look like you're putting in an investment.

Also, I don't have sympathy for the "screw the banks" rhetoric. It's just distracting from addressing the actual flaws.

Best of luck to you but unless all the issues people are raising are addressed, this does not look like something people would want to put money into.

What's the difference between taking out a home equity loan from a bank and doing a similar thing with Bitcoin? For one thing I won't have huge interest payments and this will benefit all the shareholders? The shares represent ownership in the house and the house is collateral against the shares, if something goes wrong the share holders may reposes my house or some small part of it by calling in the shares value.

But where do the funds that I receive go? Instead of a new car or renovation they go directly to an investment fund that then pays dividends to the share holders.

The shares themselves being pinned against the value of the house represent an investment opportunity however the shares value plus dividends represent a better investment and return for the money.

Why is this conflation or illegal in any way, I should have the right to invest any funds I receive in any way the shareholders see fit and I along with all the other share holders are probably going to want to see dividends. What law would you site to prevent me from paying my shareholders this way?

Please elobarare on this ideas flaws.

It's your prerogative to not invest however thank you for the good wishes.

It was a cunning plan to have the funny man be the money fan of the punning clan.
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punningclan
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June 23, 2012, 05:31:50 AM
 #33

What do you intend to invest the capital in ? A huge ass mining farm ?

 Cheesy

Effectively yes, however that's also a good idea!

It was a cunning plan to have the funny man be the money fan of the punning clan.
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mollison
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June 23, 2012, 05:52:43 AM
 #34

What's the difference between taking out a home equity loan from a bank and doing a similar thing with Bitcoin? For one thing I won't have huge interest payments and this will benefit all the shareholders? The shares represent ownership in the house and the house is collateral against the shares, if something goes wrong the share holders may reposes my house or some small part of it by calling in the shares value.
If that is what you actually want to do (imitate a home equity loan), I think it's an interesting idea (and possibly even a really good idea). That's not really how you represented the investment, though. I did not realize the house was supposed to be collateral. (After all, you said you were "selling" the house.) Your proposal was confusing.

I would be more comfortable as an investor if this were structured as follows. Each share represents a proportion of the house, with a guaranteed date for buyback (by you) and a certain fixed dividend payed out on some schedule (i.e., interest).

For one thing, this is simpler to understand and straightforward, and for another thing, it sheilds the investor from the whole "re-investing money in GLBSE" business. Yes, you can do that if you want as a means to try to generate the money to pay the dividend to your creditors (I say "try" because I'm rather bearish on much of the GLBSE).

Of course, doing it the other way exposes the investor to more GLBSE risk and sheilds you from it. That's also an option.

The shares themselves being pinned against the value of the house represent an investment opportunity however the shares value plus dividends represent a better investment and return for the money.
The shares being pinned to the value of the house only matters if you are unable to make good on the debt you are issuing, if I understand your proposal. Shouldn't you not plan on that happening and not use that as a selling point? I am sure nobody is going to be comforted by that train of thought.

Why is this conflation or illegal in any way, I should have the right to invest any funds I receive in any way the shareholder see fit and I along with all the other share holders are probably going to want to see dividends. What law would you site to prevent me from paying my shareholders this way?
My legality concerns were not from the "conflation" issue, but from your statement at the beginning of the original post (which is still there as of now) that a town in NH plans to take the house. You later state that there are no plans to seize the property, which is a contraditcion. Assuming there are indeed no plans to seize the property, I'm not sure I see anything legally questionable here.

Also, talking about losing assets to a divorce just made things more confusing. That does help explain the backstory, so it's good to know (and you have my condolences), but it just wasn't clear at first to me whether the house could be seized as part of those proceedings.

tl;dr: you may be onto something but you need to hire a PR firm or something.  Grin

It's your prerogative to not invest however thank you for the good wishes.

Tip o' the hat for not being aggressive in response to the criticism.
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June 23, 2012, 06:01:52 AM
 #35

A relevant question is also, what steps will you take to give your investors legal recourse in the event of a default? You would essentially be blazing a new trail legally-speaking, so laying a solid legal groundwork is important. If it's an issuance of debt, who holds the note? Who will hold the deed to the house if you get your investors?

-bgc

I'm selling great Minion Games like The Manhattan Project, Kingdom of Solomon and Venture Forth at 4% off retail starting June 2012. PM me or go to my thread in the Marketplace if you're interested.

For Settlers/Dominion/Carcassone etc., I do email gift cards on Amazon for a 5% fee. PM if you're interested.
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June 23, 2012, 06:37:24 AM
 #36

nonsense; BTC exchange rate movement will make this a bad investment for both investors and issuer; and I pretty much doubt that there's enough high quality assets on GLBSE to invest such high sums into for long term
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June 23, 2012, 06:51:31 AM
 #37

BTC exchange rate movement will make this a bad investment for both investors and issuer
Care to explain?

and I pretty much doubt that there's enough high quality assets on GLBSE to invest such high sums into for long term
+1 to that.
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June 23, 2012, 09:48:41 AM
 #38

I think I read a similar thread quite some time ago (like ~1 year ago) with the same characteristics - someone wanted to offer a house or so as security for huge loans, "everyone" starting from the government, the wife, big corporations and whatnot were out to get him and there was a strong emotional appeal to raise money from libertarians.

Also again, with so many other investments on GLBSE:
This investment is denominated in fiat currency and sold in BTC - a bad investment for anyone believing BTC <--> fiat exchange rates will grow faster than the return rates of your investment fund (which is backed by a house).

I agree with mollison: If you want to have a loan on your house, present it like this and also pay dividends/interest accordingly. How you make back this money is completely irrelevant to me as your lender in most cases, if you want to earn it on GLBSE that's fine for me (and probably a lot of others too).

Goat for example suggested a scheme where he pays 1% of interest + 1% of capital back each week, which amounts to a fully paid back loan + 100% interest after 100 weeks. Yes, it sounds like a lot, but with current earning potential on GLBSE you might still have quite a few gains (if you invest smartly that is). The biggest problem is that your collateral is denominated in USD, so either you price everything in USD (and BTC bullish investors risk gaining fewer BTC back than they initially bought in for) or you price it in BTC (paying back 2 BTC for 1 BTC over 100 weeks), risking that your house drops from 60000 BTC @ 5 USD to something far lower, not covering your debt any more.

My advice would be (from an investor's perspective):
Don't raise more than you need, your emotional appeal etc. already caused me to not trust you at all for 300k USD but put up the whole house as collateral. If you need 20k USD, raise 20k USD in BTC at current value, offer some nice returns and earn them back in whatever way you want. This would also make sure even if BTC rises to 10 USD or more, that you still could fully cover the debt in BTC if you sold the house.

Alternatively:
Make sure to make clear your debt is USD denominated and for example issue 20k shares for 20k USD debt. Then integrate a bot that always keeps the ask price up-to-date with MtGox and make clear rules for dividends and which USD <--> BTC rate will be used there. This means BTC bullish people might be driven away, but they still might at least appreciate the straightforwardness and still invest a bit, unlike the recent mining bond crash that cought quite a few people by surprise.

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June 23, 2012, 11:46:30 AM
 #39

So now it is GLBSE Loan & Pawn? What's next, someone going to IPO their car or their gun collection? If I buy enough shares can I move into a room? How many shares for the garage? There are other mechanisms in place for situations like this (i.e. private lenders and Bitcoin banks). Crowdfunding the mortgaging of your home via GLBSE is just silly and takes away from the credibility of the exchange. Any real world investors looking at Bitcoin for the 1st time and seeing a 'security' like this listed on one of the main exchanges will probably take their money elsewhere, and for good reason.
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June 23, 2012, 01:27:29 PM
 #40

So now it is GLBSE Loan & Pawn? What's next, someone going to IPO their car or their gun collection? If I buy enough shares can I move into a room? How many shares for the garage? There are other mechanisms in place for situations like this (i.e. private lenders and Bitcoin banks). Crowdfunding the mortgaging of your home via GLBSE is just silly and takes away from the credibility of the exchange. Any real world investors looking at Bitcoin for the 1st time and seeing a 'security' like this listed on one of the main exchanges will probably take their money elsewhere, and for good reason.

Sorry but this is true.

I think this project should go elsewhere. What about Patrick's new baking services?

But I guess it's up to nefario to accept or not this listing on his exchange.

Anyway whish you best of luck  Punningchan

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