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QuoteThank you for the clarification. One more.. If half the profit is being used to buy more property should the 19% tax be calculated on the full amount? Apologies if this is a naive question.Yes that's correct. As you can see from the table, the Net profit has tax taken from the full sum. The remaining profit after tax is then split 50% for the buy back / burn and 50% for reinvestment in property which increases the portfolio size and the size of the buy back for the following quarter / year.
Thank you for the clarification. One more.. If half the profit is being used to buy more property should the 19% tax be calculated on the full amount? Apologies if this is a naive question.
Yes this was intentional. Obviously rents and property inflation are not a straight or linear line and tend to go up in "steps and stairs". We have used a low level for property price inflation as mentioned in the documents and rents generally outstrip property price inflation. For example, there are restrictions on student property in a number of towns (look up Article 4) which means while the value of the property could be seen to increase in line with national and local price inflation, rents can go up considerably more depending on supply and demand. Again our 3% airs on the cautious side.
I notice in the financial model document that you have calculated the rent increase based on the previous years gross return which in turn is calculated from the property value including property inflation.As far as I can see this would give a rent increase of 3% over the rate of property inflation (6%) giving 9+%. Was this intentional?
Hello Kexcoin! Did I read somewhere that you were going to post a model analysis here on bitsharestalk.org? I quickly read through the thread and didn't see it. Please excuse if I missed it.
Thanks for your quick response. You've been so very patient!Yes I see my mistake. You said that the yield increases over time because rents go up but of course the yield is calculated on the original purchase price not the current market value of the property. Would you say that rent prices are pretty much following the property value increase over time? IE rents go up by the same % as the property value or do they outstrip even that?
While it is impossible to tell the future, your figures are certainly possible. Some research into property price inflation over the past 30 years may show that this is on the low side. Also researching some of the properties that Kexgill have owned for more than 30 years and sold recently would project figures far in excess of your figure.
Thanks for your assistance so far. I am trying to estimate what the total property portfolio could be after 30 years.With the current price of bitcoin of around £3300, if all kexcoins sell in the ICO at the minimum price that gives a portfolio of around £70mGiven a gross yield of 11%, costs at 27.5% of yield and rent increases of 4% p/a I've calculated a total portfolio value after 30 years of just over £600mI just wanted to check, am I way off or is this in line with your forecasts?
WOW. That makes things really interesting.I'm trying to figure out what the formula is for what you have described above. As far as I can tell it is....Myshare = ((myICOKexQty + myKexQtyPostBB) / (TotalICOKex + TotalPostBBKex)) X (PropertyIncrease / 2)Is that right?
Important updateAfter listening to the community we have great news to announce!In addition to the buy back and burn policy we are now also offering a profit share to anyone who takes part in the ICO or that holds Kexcoin at the end of the buy back / burn period. If you do both, you benefit twice!So how will it work? When the ICO ends, we will take a snap shot (within 48hrs of ending) of all of the accounts that hold Kexcoins on the bitshares network making note of the account and the sum of Kexcoin held. The ICO will be deemed to have ended either by selling out of Kexcoin or reaching the end date (14.59 UTC 14th October 2017).In order to qualify you must hold Kexcoin on account at the time of this snapshot.ORYou hold Kexcoin at the end of the buy back / burn period (again a snap shot will be taken).If you hold Kexcoin at the point of both snapshots you will benefit twice.What is the profit share?The profit share will be calculated as 50% of the increase in property value from the initial purchase price.Simple example - if £50m of property is initially purchased and by the end of the buy back period the said property is valued at £110m the sum paid back to ICO participants and Kexcoin holders at the end of the buy back period would be £30m (£110m - 50m = £60m x 50% = £30m) Please note taxes and costs of sale would be deducted.How will this be distributed?The number of Kexcoin sold at the ICO and the number held at the end of the buy back period will be added together and the profit share will be divided equally by this number. It will then be paid to the accounts noted on the snapshots.This is our thanks to all that support us and participate in the project.
QuoteThank you for the clarification. Would you be able to give a rough estimate of that setup cost either as % of the ICO receipts or a £ figure? A rough estimate would be around 3% for Legals, valuations, finders fee (if property comes through an agent), small improvements etc.In addition to this there is then SDLT (stamp duty / land tax) that is 4%, so 7% in total as an estimate. These costs would vary depending on the size of the property purchased. These figures are also taken into account / included when calculating the gross return.
Thank you for the clarification. Would you be able to give a rough estimate of that setup cost either as % of the ICO receipts or a £ figure?
QuoteAre these costs included in the 25-30% of gross figure you gave me earlier? I think you have some confusion as to the day to day running costs against the actual set up.In order to begin the project we need to purchase the properties. There are a number of costs to doing this such as legals ect. We would regard these as set up costs and should be seen as one off costs.Once the properties are purchased they then start to generate a profit and require management / costs which we referred to earlier. These costs are ongoing as you would expect.The percentage return that we generate on a certain property will depend upon both of these costs (set up costs and ongoing costs). Gross profits would take into account the one off costs and net profit would take into account the management / reoccurring costs.
Are these costs included in the 25-30% of gross figure you gave me earlier?
2. No, that's unrealistic / impossible. There will be other costs such as legal fees, searches, property improvement and other business expenses that will need to be covered before profit is generated. This being said, these costs would be regarded as small / minor compared to the bigger picture.
A few more questions..1. The buyback ends after 30 years but 30 years from when?.. the ICO, the first buy back etc. Will there be 120 buybacks in total?2. Is ALL the money from the ICO put into property purchase or will there be other expenses that come from it?3. 50% of profit is put back into buying property, but how long on average does it take for that profit to start generating revenue?Thanks in advance.
QuoteCan you elaborate on this?Over the 30 year buy back period we expect all/most of the property to appreciate substantially in value with inflation etc. What if we split this property price inflation 50/50. It would be one huge payout. Makes the token sale more appealing?
Can you elaborate on this?
We're looking at the idea of offering a bounty at the end of the 30 year buyback. Is this something that the community would approve of? I would assume so but I'd love to hear your feedback?
How will you prevent conflict of interests? E.g. when you find a good property that you would like to buy... how can we be sure that you will buy it for Kexcoin and not Kexgill?
1A) Kexcoin will own the properties from the ICO. Kexgill will have no ownership of the funds raised, they will be providing management services.B) Kexgill will charge a management fee to Kexcoin (as it already does with a small portion of managed properties). These fees will be published on the website for transparency and will be the general market rate so could not be inflated.C) As above, everything will be published to keep things transparent.D) Yes - they will be held in a bank account in Kexcoins name. Kexcoin and Kexgill will be ran as two separate businesses except for management services.
How big is an average deal?
It's not a bad thing per se, just investors should be very cautions when investing to such a project. Basically you have nothing at stake (except of you time/effort). In the worst case scenario the company bankrupts, you sell all properties and split the money among kexcoin holders. Investors loose and you get either nothing (if you had sold all your 10m kexcoin) or some small amount (if you still own kexcoin). This is very unbalanced. You should understand it after doing business for 39 years
15) Are you keeping BTC until the very last moment or will you exchange it to fiat immediately after ICO? Will you use DEX and OpenLedger fiat gateway for this exchange?
1.) How will the interaction of these two work in regards to property ownership and finances? A) Will Kexgill or Kexcoin own the properties purchased from the ICO?B) Kexgill will be managing the properties, so how will the profits from the Kexcoin properties be distinguished from Kexgill's properties' profit?C) Are there checks in place to ensure that the costs towards managing Kexcoin properties are not inflated? i.e. unreasonable employee salary boosts, which would decrease the amount of profit generated from the Kexcoin properties, decreasing the amount of Kexcoins bought back from the community? (While still benefiting Kexgill)D) Where are the profits that are not burned held? (until they can be reinvested) In a bank account in Kexcoin's name?
2.) Anymore details available than what is in that 2016 Financial Brochure thing?I'd love to see a company breakdown of expenses, liabilities, and revenue. I also understand that you guys are a private company and may not provide that information (if that's the case just tell me I'm SOL )
3.) Say the ICO does really well; you guys acquire a healthy $80+ million in real estate. The money starts coming in, and things look stable. Would you guys consider doing another coin offering and starting the process anew? If you did that, you would have to do a new, different coin correct? Otherwise the Kexcoin market would get flooded with new coins, defeating the purpose of burning.
4.) Follow up to 3: if it really takes off, are there plans to expand outside the UK?
Quote13) Are you able to use these 70m GBP to buy properties in reasonable time (1-2 years?)Richard Stott, Kexgill Group managing directory is always researching new deals and will waste no time after the ICO in putting the money to work.
13) Are you able to use these 70m GBP to buy properties in reasonable time (1-2 years?)
Quote14) Since you already have a successful company, why didn't you bring also some fund to Kexcoin?Kexgill have put up all the working capital. That's how we have financed this whole thing so far.QuoteWhen this ICO is successful, Kexcoin will have debt to assets ratio 100%.Could you expand on that i.e. how do you see this as a problem?
14) Since you already have a successful company, why didn't you bring also some fund to Kexcoin?
When this ICO is successful, Kexcoin will have debt to assets ratio 100%.
Quote10) Is Kexcoin company 100% decoupled from Kexgill? What guarantee do we have that you won't be buying properties from Kexgill?They are separate legal entities yes. They are each their own private limited companies.
10) Is Kexcoin company 100% decoupled from Kexgill? What guarantee do we have that you won't be buying properties from Kexgill?
Quote11) You mentioned that Kexgill has 120m GBP in assets, you forgot to tell use how much it has in liabilities. I would expect it to be highly leveraged.Kexgill post their financials on http://kexgillgroup.com/
11) You mentioned that Kexgill has 120m GBP in assets, you forgot to tell use how much it has in liabilities. I would expect it to be highly leveraged.
Hey CryptoBrit,1) Gross Yield - we have purposely been very conservative on this figure in order not to mislead. Gross yields are generally from 8% to 15% depending on the type of property purchase (PBSA or HMO) and can be higher in certain circumstances. As we are not using bank funding you could expect the net profit to be around 25-30% less than the gross. Please also note that this is now. Over time and as rents increase, both the gross and net figure will increase substantially.2) We are unlikely to dispose of property however, if we did sell property (say for strategic reasons) the funds would be used to purchase more property - so yes!
9) What costs are associated with your business? How big are they?
12) It tool you 39 years to build a company with 120m GBP in assets, now you want to build similar company with about 70m GBP in assets in couple of months. Isn't it too ambitious?
8 ) Core team receives 10% of tokens, what will be other 5% used for? Contractors? What if you need to hire a new full-time employee?
1) We are based in the UK and governed by UK law
2) We have been successfully providing student accommodation for almost 40 years (winning multiple awards) why would we need a business plan now?
3) Why would we leave the company after 1 year? The idea it to build up the company to generate more profits and increase the size of the portfolio? The company is the value not the Kexcoin that we receive in payment for many, many, years of work?
4) The core team get 10% (prorata) of the funds raised not 15% and nothing else. No salaries for the full time. If anything it's too little.
5) We aim to be as transparent as possible and everything will be accounted for and audited for public viewing. We will be using a well known international firm for this.
6) We expect the first buyback to be performed in 3-6 months.
7) I'm unsure why it's a flawed buy back or why the price would go down? As we buy back and destroy the Kexcoin they become more finite? With regular buybacks from regular profits we expect the price to increase. As you know you can set your sell orders on the exchange at higher prices and wait for them to be filled.
Quote from: pc on August 16, 2017, 05:05:54 amThis announcement is lacking so much essential information that I can only advise everybody to take extra care in applying their due diligence.? it's an ANN, there are links to website and whitepaper. what's up with the hostility here?
This announcement is lacking so much essential information that I can only advise everybody to take extra care in applying their due diligence.
Quote from: paliboy on August 16, 2017, 11:21:47 amIt's in shareholder's best interest if a company buys back cheap. No, it is not. If they buy cheap, this means that you will sell cheap. How is it in your interest?QuoteIt depends on whether you are a short-term or long-term shareholder (some call them speculator vs investor).
It's in shareholder's best interest if a company buys back cheap.
It depends on whether you are a short-term or long-term shareholder (some call them speculator vs investor).
The real problem is the later point you mentioned... they will own some tokens so they can buy back from themselves.
The problem is that they set it up such a way, that they are able to buy their tokens back cheaper than they sold them during ICO, which means that you will not be able to sell them at higher price than you bought. Same as OBITS. And there is no way to control how much will they buy back from themselves, driving the price down.
yup nothing wrong with buyback and burn
The way to guarantee a profit is to hold until the price is above the price you paid.
Cool Project, I think this is an excellent use case for bitshares tech. Also I personally prefer the buyback mechanism as it is more favorable for taxes here in the US.