Real estate rent service (monthly payout)

[doctr]

Hi guys,

I don't know if this is a viable idea, but i've been thinking about this for a while:

What if we could do a fundraiser, kind of like an IPO, in order to buy a piece of real estate.

This real estate would then be rented out, and the rent would monthly be converted into DRK and paid according to your initial stake in the project.

Just to put it in numbers :

I live in belgium, and i see numerous opportunities in real estate appartments starting from 150.000€ (about 190.000$)

Depending on the location of the appartment, a monthly rent of 700-800€ is very common (1000$-1135$)
This means that every month, with 1 appartment in the projects portfolio, 700-800€ worth of DRK will be purchased.

Now i hear you saying : yeah bro, we already got masternodes who will earn us ROI
however, the key difference is : Masternodes earn you DRK, which you can either hold, or convert to fiat when needed. In this case there is fiat money flowing in every month, providing a steady buy pressure.

There are even cases in which you can buy an entire appartment block for about 300-400K, and have like 3K worth of rent income every month (if there is enough intrest in this idea, i will provide exact location and numbers and calculations)

Now your next concern may be : how do i know that if i send you 10K$ worth of DRK, that you wont just mix your coins, cash them out and vanish ? This is a good concern, but even though i can assure you that i'm not looking to scam anyone, i recognize that this is probably not enough to convince you of this. That's why i would be more than willing to use an escrow of someone in the community who we've established as trustworthy (again, this is only applicable if the general idea would get enough traction).

of course when this project would be terminated, all the people who had invested will get their share of the selling price according to their investment.

Now your final question might be : what's in it for you? (being myself)

First of all i want to make this coin succeed more than anything else. Getting into real estate might give us the opportunity to do some advertising as well. (for example if i would create an investment fund called : the darkcoin investment fund, then we could have every piece of real estate we acquire have a little sticker on it saying : funded with darkcoin, and then the official page of darkcoin on it)

Also, for doing all the backend managing of things, finding renters, dealing with the usual renter issues (small repairs etc) i would be asking for a 5% fee (of the total rent price) (and on termination a 5% fee on the extra money that was made on top on what we paid for initially.
example : we buy an appartment for 150K, we rent it out for 3 years and also do some repairs and innovations, and are afterwards able to sell it for 180K, then i would be charging 5% of the 30K.

I know the explanation turned out longer that in initially thought they would be, so for the people with not a lot of time on their hands :
cliffnotes : possible fundraising to acquire real estate to rent out and get steady fiat income that will be turned in to DRK --> buy pressure

 

[thelonecrouton]

IAAPD (I Am A Property Developer) and some things you need to take into account:

Tax on rental income
Legal costs in acquiring/selling property
Accountant fees unless you're submitting all your tax returns etc. yourself
Bad / non-paying tenants
Insurance costs
Other taxes you are liable for - local council tax etc.
Energy and other utility charges, depending on whether you are renting inclusive of some/all bills
Initial refurbishment costs
Building maintenance costs, repairs etc.
Advertising costs
How much time sorting all of the above out is going to cost you

In short, if you are left with 60% of your gross monthly rental income, you are doing extremely well...

 

[raganius]

I guess that would be a lot of trouble.

You would have to find a (small ?) group of people (trustworthy to each other), hire an attorney and create a company to own the real estate to be acquired. To choose what the jurisdiction of the company, of the real estate, etc will be.

The group should organise itself to vote and decide, what real estate(s) to buy, how to administrate it, maintenance, etc.

It would have to hire workers (at least the attorney, a cleanings person, etc)

Would the real estate be rented for the season? for the year? etc. Who would take care of receiving the rents? checking if everything is in order? etc. Maybe you would need a real estate broker to take care of it for you.

And no assurance that you will find a tenant (or at least a good tenant)... "shit will happen" many times... you can count on it when dealing with real estate :wink:

I believe it would demand really hard work. maybe too hard for an online only group. It might be less difficult if the group is from the same city, region, country... (or maybe a high investment for all the structure, but no guarantees of success in short term)

I know, because I work in this business... and it's tough work.

But I would participate, if good solutions arise :smile:

 

[Propulsion]

IAAPD (I Am A Property Developer) and some things you need to take into account:

Tax on rental income
Legal costs in acquiring/selling property
Accountant fees unless you're submitting all your tax returns etc. yourself
Bad / non-paying tenants
Insurance costs
Other taxes you are liable for - local council tax etc.
Energy and other utility charges, depending on whether you are renting inclusive of some/all bills
Initial refurbishment costs
Building maintenance costs, repairs etc.
Advertising costs
How much time sorting all of the above out is going to cost you

In short, if you are left with 60% of your gross monthly rental income, you are doing extremely well...

Bad / non-paying tenants is the main one.

Also damage sustained to the property as well.

 

[doctr]

Thanks for the replies guys!

in response to TheLoneCrouton:
1. Tax on rental income is indeed an extra cost. However, I've already done some research on this, and unless the funds to acquire real estate with is larger than 650K €, it's not wise to actually create a company for this. It would just be simpler to report this and pay the taxes on the rental income.

2. Bad / non-paying tenants : this is always a possible risk when dealing with real estate and especially when renting out. However, a thorough due diligence would be done prior to letting people have the privilege to rent the property. I know from my own experience that even pay checks are often asked by the owners to see if the renting candidates are actually credit worthy. However, I live in Antwerp, have so for all my life, and I know all the upcoming neighbourhoods where if you put down a for rent sign, it will be put down again in a week because of the popularity. So i guess a good tenant wouldn't be that hard to find. Although this can't be ruled out

3. Insurance cost : this is partly paid by the tenant

4. Energy and other utility charges : this is in full paid by the tenant. The rent prices i've stated would be the net income (excluding insurance and tax)

5. How long the property would be rented out would be agreed with the tenants themselves, but usually yearcontracts are used. If they decide to terminate the contract sooner, they would have to pay 3 months rent

6. Who would take care of receiving rents : I would do this, and i would transfer this money into DRK and distribute to the 'shareholders'
If I'm not found trustworthy enough, a trusted third party can be used, for the purchase of the property, and for the distribution. (but since i'm asking a management fee, i would like to manage something though )

7. damage sustained to the property : this is covered through a deposit in advance paid by the tenant (usually 2 month rent) . Before and after they move in, there will be an inspection of the premises. When damage is done, this will be subtracted from this deposit payment.

8. hiring cleaning people : most big appartment buildings have a sindicus, and have a regular cleaning service. But this is not even necessary to do. Since this is usually the tenants responsibility to keep everything clean. Also paying for a cleaner is paid by the tenants themselves here, not by the owner.

9. Advertising costs : there are a lot of free options to get your property promoted here in Belgium, so this is not a problem at all. Also we could get a professional broker bureau involved for this. I believe that when they get the place rented out for you, they charge 1 month rent. (if they don't rent it for you, they cost nothing)

10. Initial refurbishment costs: I have good connections in the construction business, so we would be able to get a good price here, if any refurbishment is needed. (this would ofcourse be interesting when we eventually want to sell the place)

11. time it will cost to sort everything out : this is why i would charge the 5% mgmt fee, so you don't have to worry about all this

In short : I really think this can be done, if we can get enough funds together.

It would be one of the first real world usages of darkcoin, and would provide the participants with a constant averaging of their position in darkcoins itself, since it would be a steady fiat income every month, no matter the price of darkcoin.

 

[doctr]

I'll do some more research and then i'll be writing down a concrete suggestion on what i got in mind property wise, what the potential return is monthly, and how I would handle things.

 

[pbleak]

It's going to be tricky to pull this off. When it comes to crypto always wiser to go with online projects.

 

[stonehedge]

As a resident of London I'm still in shock at the idea that it is possible to rent somewhere for 700 to 800 Euros!

 

[doctr]

You even have a fancy place for that money

prices start as low as 300€ for a studio.

I guess its all in perspective though... i'm guessing an appartment in london will be a little more costly than 200K as well

 

[stonehedge]

You can still buy studio flats and one bedroom flats for less than £250k in London if you don't mind heading out quite a way and compromising on size.

According to the data I have just seen (I don't really believe it), the average rent for a 1 bed flat in my area is £2000pm and the average purchase price is £550,000. As I said though, that sounds suspiciously high...possibly skewed by some of the higher end developments dotted about. A 1 bed flat near me sold for £1m recently (!!!) Almost no property in London is owned by the English any more.

Anyway...back on topic. I love the idea of the OP but as TheLoneCrouton points out, its not straighforward to be a landlord...especially not a committee of landlords. The financial return could be minimal for a lot of work.

 

[doctr]

The thing is that you should view it as a steady buy pressure on DRK, and an averaging into your DRK position.

Like if you were one of the early people invested in DRK (camosoul?) you could easily put up 3-4-5K DRK without breaking a sweat, and have a steady income off of it. On top of that you would also have your initial buy in back (+ extra value if sold for more). And since fiat is still less volatile as DRK, it would be kind of a safe fiat investment, linked to crypto.

I'm busy working on something in specific regarding this to present to you all, so give me until after the weekend to do some research

 

[stonehedge]

The principle appeals to me. The mechanics of how it will work in reality isn't clear yet. Good idea...looking forward to reading what you come up with.

 

[doctr]

Hi guys,

I've come up with a couple of possible properties:

1. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAD33378)
225K € --> 250K€ including all costs like notary and administrative costs etc. (less if after negotiation this goes for less)
5 Appartments are already rented out --> at least 1850€/month revenue
There is room for improvement seeing that it's a pretty old building. (should go for a lot higher price if after the renting is done, we would opt for immediate selling)

2. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAD27738)
199K € --> would need at least 50-75K extra investing since it's stripped and ready for renovation. This would be a better option if we would go for a flipping project, where we buy a property, renovate it, and then immediately sell.
We could also first renovate it and then sell it. But I guess this is a little far fetched since in that case there won't be a revenue until after at least 6-8 months
Could be rented out as 3 seperate appartments after renovation

3. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAD12876)
129K --> 150K all in
1 bedroom appartment that is currently rented

4. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAC92631)
198K --> 220K
Needs some freshening up, but is nevertheless currently rented out for a total of 1700€/month

5. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAC36570)
95K --> 110K
Needs some renovation, but is also currently rented out at 650€/month

6. http://immo.vlan.be/nl/Detail/Opbrengsteigendom/te-koop/2018/Antwerpen/(RAC36569)
120K --> 135K
Same building as 5. needs some renovation (maybe an idea to buy them both and rent out)
--> 5 and 6 combined would cost 245K and would generate 1320€/month)

So far the what, now about the how:

- I would suggest some kind of share system according to which you'd get paid (in DRK)
if you own 2% of the shares of the property, you get 2% of the net rent (vertoe's way of payment, but with real estate)
- I would put the property on my name, since creating a company would demand for at least a portfolio worth 650K€ to be profitable.
- We would be using a voting system to make some critical choices. for example the choice of how long to rent it out before to resell it again. Perhaps the majority would want to sell right away after renovation has been done. Or perhaps to store the revenue in a seperate funds (Escrow account for example) to reinvest in a new property.
- your shares would be transferrable to a third party.

This system offers a more stable investment into the real estate world (which offers a steady rise) versus a very volatile world of crypto.

This requires a lot of trust from both parties, that's why i'm willing to use a 3rd party escrow to do the actual fund raising/holding until we have enough to go ahead with the purchase.

As far as trust towards me is concerned, I'm willing to give all my personal details to all the participants in this project.

I realise this project will be a lot less profitable than possibly masternodes, however, what i'm offering is a steady income. (you'll always get the same amount worth of fiat money no matter what the current price of the current price of DRK is). This could turn out to be a bad investment (all things considered) if DRK goes to the moon, and you basically gave 3 appartments worth of DRK in hindsight. The thing is that nobody knows what will happen with DRK. So the oposite situation might very well happen: that before DRK gets world wide adoption, it gets another crash first, goes to an all time low. And then this project gives you the opportunity to average your position in DRK. --> we don't know

I don't know if I covered all the angles to this that you wanted me to cover, but i guess you have the basic picture.