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Ok - so where are we....funding model/financials I guess
Here is where things will vary greatly for each of us...but how I think things play out -
It is so hard to try and keep a level head about this - when I really want to scream it to everyone :)
I am being honest here...I think starting a not-for-profit might be the easiest as one of the "goals" as I see it - is to remove FIAT from the equation...and since most people that "invest" in a business are expecting to make a "return" on their investment - running it as a non-profit should eliminate the expectation of a return....
I am just going to stick with my properties and what I would like to do....You all can give me the thumb's up or down.....
(and when I say "I" - my wife is included in this as she is the better half of the equation)
Our building is worth 9 or 10 (maybe 11) Bitcoin right now.... We have .15 Bitcoin saved from rent payments to date (just under but close enough) - We have about 3.3 bitcoin in FIAT debt on the building right now....I would like to sell the property to a non-profit for the 9-10 bitcoin and have the property operate on a bitcoin standard.... Rolling the property into a non-profit would allow me to nearly completely remove FIAT from the equation....other than for property taxes/utility bills....the property could operate completely on bitcoin for rent from all 4 tenants - it could provide the "sharing" of price appreciation through actual "refunds" of BTC paid - which should not be a taxable event but if so it could still then provide the "share" as a "rent credit in FIAT terms" which it would still have to record as income but since it would nearly operate 100% on bitcoin and would be a non-profit - it would simply be a record keeping expense and not "taxable" as its a non-profit. Hell - in wisconsin non-profits can even get a tax exemption for property that is "affordable" and under 40 acres....
So - if you want to do this yourself....this is the way to do it....
Start a non-profit Fundraise BTC to purchase a property and FIAT for "operations" to minimize taxable events in selling BTC to pay FIAT bills Get your tax exemption Set rents at 10-20% below Market Accept the rent in BTC equivalent and have the lease include the split/appreciation as a variable add-on that is dependent on the expenses of maintaining the unit....so if you have a resident that is damaging the unit - the split may be less or the costs may be incurred by the resident vs. landlord.... either way you run it...you ensure the resident is incentivized to maintain the unit instead of trashing the place.... Save all btc for property expenses in future and use excess to purchase future properties
This takes all "government" rules on affordable housing out of the picture....allows you to rent to anyone that qualifies - benefits all residents paying in BTC with even greater discounts on future rents....benefits residents who don't damage the property...benefits owners who maintain their property and provides incentives to users of btc....
Ok - so that kind of explains what i am thinking about how someone could start a whole new business model using BTC....
back to what it looks like for a current business (my current business)
I encourage my residents to pay in Bitcoin - but I haven't really pushed it hard - though I can see a time when that happens (as the FIAT value of the BTC I hold as reserves rises) -
So we bought this building to "make money" or as I now see it - to attempt to keep the inflated value of our current savings hold its purchasing power for as long as possible. This is accomplished in FIAT terms through the expectation that we will be able to raise our rents into the future and keep our expenses flat or at least keep expenses from rising faster than the rate we can increase rents and/or the value of the building increases (again in FIAT terms).
That being said....and hopefully you find yourself in that position - if you do than hopefully you are able to take some of the "surplus cash flow" from your building and exchange it for BTC or better - have some % of your residents pay you in btc and incentivize them by offering the before mentioned %split over time of FIAT appreciation value of that btc.
Then you simply hold that BTC - you should be able to operate your business and manage your BTC/FIAT cash flow in a manner that allows you to pay your FIAT bills with FIAT and then hold your "reserves" in BTC or a combo of FIAT/BTC -
As the FIAT value of your BTC reserves goes up you can likely hold less and less FIAT until eventually you find your self in a position of needing only the smallest portion of your income to be in FIAT terms....just enough to cover bills that you cannot pay in BTC.
Now the crazy thing here....for the tax-man especially - is that you could incorporate into your business model some type of Fedimint or Chaumian E-cash organization - (which could allow you to operate nearly completely independently or outside the current systems in place) and likely as those two layers/protocols continue building out over the coming years/decades this will become even easier....
Anyway - for now you just do what you can - operate at a profit that you then funnel out of the FIAT system and into the BTC protocol and voila... over time you have reduced or eliminated the value of your real estate from FIAT and transferred it to BTC....which helps you, helps the network, helps your residents, helps any vendors you now pay in BTC or E-cash or whatever....
This is why I believe this is inevitable....BTC will continue becoming the only monetary network people around the world interact with because it is the BEST.
While many Bitcoin users prefer to hold onto their BTC as a long-term investment, others choose to realize the distinct advantages that Bitcoin payments offer over fiat ones.
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I really like this comment...as it is representive of reality as it is at this particular point along the timechain in that Bitcoin is many things to many people....
I think I am going to write a longer post about this .... as it has my brain in a yet another layer of the proverbial rabbit hole :)
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42 sats \ 6 replies \ @OT 8 Jul
"Accept the rent in BTC equivalent and have the lease include the split/appreciation as a variable add-on that is dependent on the expenses of maintaining the unit"
Could you explain this a bit more? You mean if BTC goes up in its fiat value the tenant will get some back?
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Absolutely - for me it is a matter of "when" not "if" the FIAT value goes up....Bitcoin is going to continue repricing itself against FIAT values for as long as FIAT values exist...
I am currently working with an attorney on lease language that will more clearly address some of this model for protection for both parties of this type of agreement - though I really hope to have an "app" developed that automates this process and handles all the legal language through its use for each and every transaction... Yes I see this incentive structure being useful for virtually all transactions....
Anyway - back to answering your specific question a little more clearly....
When the tenant sends me say (using more round numbers for ease of math) 0.02 bitcoin valued in FIAT terms at $1000.00 and 6 months later that value is now $2000.00 the resident is able to recognize a 50% share of the $1000.00 of increased value....(right now I just reduce their rent due by $500.00 but with the "app" I have in mind they would simply be refunded or returned 0.005 btc which would be equal to $500.00
Eventually I think given the "return" or "refund" would be the easiest as it is in bitcoin but right now due to it possibly being a taxable event - I am hesitant to do it.... though this could be done in a federation (Fedi) or something similar which would make the tax thing a lot more questionable as to how it would be calculated which well...if this app had a large enough "mint" attached to it could eliminate the tax concerns from a user standpoint but from a government perspective well....that is TBD....I think it is likely governments come around and begin seeing bitcoin use much more favorably and remove some of the current tax issues....but that is my optimistic view :)
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42 sats \ 4 replies \ @OT 8 Jul
I don't know if thats a good idea. Having the discount to start with is a good enough incentive to get someone to pay rent with bitcoin. No need to make it too complicated.
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What part isn't a good idea....the lawyer and the lease language? If so - I agree :)
We may not institute the language and keep it verbal for now.... I just worry a bit about ending up in a tough spot without having it written down.
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42 sats \ 2 replies \ @OT 9 Jul
The giving bitcoin back part. There's a good enough incentive paying a lower rent with bitcoin. The savings they earned are what they keep in bitcoin.
Usually we have a boom then a long drawdown in a typical cycle. If you have the boom then start giving back Bitcoin during a 2 year bear market its going to be trouble.
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Thats kind of the beauty of the incentive being dependent on the future "price appreciation" of the bitcoin paid....if the network is doing well then the residents benefits and it could be significcantly and if it isn't...then the share is less or nothing at all....this way they have skin in the game of helping to see the network succeed and my risk is ensuring I haven't overleveraged my business and that I can weather those downturns.
For me its a win-win all around and for the resident/customer its a win-win or at worst break even as without the incentive they are just paying their rent in FIAT and I am immediately buying bitcoin with it.... they have at least a chance of seeing a savings... In the last three months they have saved a total of $1,013.57....
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42 sats \ 0 replies \ @OT 9 Jul
Well... If I ever make it over to the US I'd be happy to rent under this kind of system as I think this highly favors the renter.
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Offering more quality (amnesties etc) than other similar offers instead of 10-20% below market?
Use btc mining as heating for air/water?
Use earnings to constantly upgrade instead of cheaper rents?
I am sure there is more than can be done but good start!
Non profit little bitcoin church every property? Ahaha