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« on: January 24, 2015, 03:28:11 pm »
Below my initial plan for utilizing bitshares in real estate. Please poke it apart!!
The Company
The focus will be on residential real estate. Each deal will be analyzed to determine the best exit strategies. The company will own rental properties. I will be accompanied by a father & son team to help me find and analyze deals. The father has been a real estate agent for over 30 years. The son has done everything related to real estate. (everything is no exaggeration) More detailed credentials will be given during the official announcement. The company will be a LLC.
The Partnership
I will be a managing partner. A "founding" UIA will be created to allow white listed investors to purchase ownership interest in the company. If an investors wishes to be a managing partner then additional credentials will be required. The funds acquired in this stage will go to a bitshares escrow account. The funds will only be released if all founding investors agree to the cause. Partners will get share dropped interest in "deal" UIAs.
The First Deal
The very first deal will be funded by the founding investors. I will work with the father & son team to locate and analyze deals. Once a good deal is found I will create a workbook on it. The workbook will be reviewed by the founding investors. If the investors agree then the required funds from the escrow account will be released to purchase the property. Profit will be split proportional to ownership interest. A percentage of the deal will be held for future deals, unforeseen costs, and/or administrative requirements. If everything works as planned then we will continue with "deal" UIAs.
The Deal UIA
Same as before, each deal will be located and analyzed by the father & son team. I will create a workbook once we find a good deal. This time, I will post it in the bitshares forum for potential investors to review. Interested investors will need to meet certain qualifications to be whitelisted to purchase shares in the deal. Founding investors will have a percentage of the deal share dropped. They will also have the opportunity to purchase additional shares in each "deal" UIA. All funds will go to a bitshares escrow account. Fund lost due to currency conversion, closings costs, and unforeseen costs will be factored into each "deal" UIA. Target fund goals will be set accordingly. Once the target funding is met the bitshares will be released to purchase the property. Profit will be split proportional to ownership interest in the "deal" UIA. No percentage of the profit will be held for future deals, unforeseen costs, and/or administrative requirements. If the property is a rental then the UIA will live until the rental property is sold. If it is not a rental then the UIA will die once the profit funds are dispersed.
The Jobs
Below are a list of jobs that I would like fulfilled by founding partners.
Fund Manager: This person will be responsible for hedging funds to prevent loss due to negative volatility. Profits realized by the fund manager will be dispersed based on ownership interest in the founding UIA.
Lawyer(s): Needs to be well versed in real estate.
Software Developer: This person will need to be well versed in crypto technology. The goal of this position will be to help our company fully utilize all possible crypto technologies to further decentralize our efforts as well as improve efficiency and success.
The Deal Breaker
The hardest part of this entire idea is the management of personal information. To file as a partner in a LLC a partner has to have an employee identification number. This requires a lot of personal information that has to be given to the IRS for tax and law purposes. I am still investigating possible third party solutions that will allow me to issue identification numbers without having to handle the personal information myself.
The Wesphily Questions
1) Exact numbers and percentages will be determined once the founding investors are determined and the LLC is created. Negotiations will need to happen to determine things like: my ownership interest, how much funds to use for the first deal, ect...
2) I'm doing everything I can to make this trustless. Until the rest of the world agrees, there will be some trust required due to taxes and laws. I can only promise that I'll do everything I can lower the amount of required trust.
3) There are two ways I have thought about handling deals that fall through. I like the second option because if gives us more possibilities on future deals. Either way, funds are held in escrow so it is not like I'll be on a yacht somewhere drinking it up.
a) Return all funds
b) Hold funds and share drop accordingly on the next deal found.
4) Name of the company has not been decided
5) The LLC will be held in the state of Missouri. More exact details will be given to founding investors.
6) Currently, the father and son team will not be partners in the LLC. They are semi-retired. I am extremely luck to have them on my side.
I understand the risks of posting this on the forum. I'm doing this because there are a lot of smart people on this forum. Also, trying to explain this to industry experts in real estate/law/business is extremely difficult since most have no idea what crypto technology is! If this idea turns out to be a bust then I'll be doing it all the old fashioned way. Thank you all for your time!
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