I own and manage apartment complexes - its what I have done for over 25 years at this point and I am pretty good at it... I am also a Bitcoiner and I am trying to build a better future on top of Bitcoin that provides value to as many people as possible (including myself).
I have posted on this previously here -> #472995
This is an update on how its going and what my mind is cooking up....
So I have 1/6 resident(s) that paid with Bitcoin back in Nov. received a $326.86 rent credit this month - that means their rent paid in Bitcoin increased in FIAT value by $653.72 from when they paid it to me. Obviously I also benefited by that amount as well...this seems to be a win/win use case for Bitcoin. On top of that I am able to save 100% of that Bitcoin (in cold storage of course).
As I am building this business model I have realized the following:
  1. I am in a unique position of not having a prohibitive amount of leverage on my properties which allows me to meet the FIAT needs while accepting about 60% of rent payments in Bitcoin if I ever get there.
  2. This business model is so "extreme" that almost no one I talk to about it - gets it. (I am starting to think that I am just not doing an adequate job of explaining how it can work?)
  3. My Bitcoin holdings value will likely exceed that of the FIAT debt on the property after less than 8 years (should Bitcoins value continue on its cycle of eating all the value of the current financial system).
  4. I need to refine this down to a more concise Business Plan and really start pushing some investors down this rabbit hole :)
  5. This is what I have so far... its going to be a non-profit - I am thinking of one of my buildings into it...
  6. Mission Statement: At FWBTCHI our mission is to provide high quality affordable housing to as many people as possible at as many different income levels as possible. We will do this through incorporating Bitcoin into our business model in order to decouple the properties from the current burdens imposed by the various FIAT systems under which they have been forced to operate. This decoupling allows us to maintain rents at 10% below FMR and ensures we always have the ability to maintain the properties in decent, safe, and sanitary conditions.
  7. Needs Assessment: The world has a shortage of high quality, well-maintained, affordable housing. This is clear by simply looking around your current neighborhood with very few exceptions. The FIAT systems we currently live in have proven to be beneficial to the few nearest the money printers and have led to a deepening divide between those who have affordable housing and those who don't. It truly is an ever-worsening problem though those at the top will attempt to tell you different. It doesn't matter where you live, what once was affordable for more is now affordable for fewer. We at FWBTCHI aim to truly change the past paradigms that we all have been stuck within and ensure the affordability crisis ends.
  8. Program Development: Our non-profit business model is really quite simple. We encourage our residents to learn about the current financial system and the system being built upon the Bitcoin (or sound money) Standard. We then allow them to make the decision as to whether they want to participate in our program simply by their decision to pay us their rent in Bitcoin or not. Of course, we provide educational support and examples to our residents to base their decisions upon but in the end, it is 100% up to them. Just living at our property ensures that their rent is 10% below the Fair Market Rent for the area in which they live. We ensure this is the case through an annual Rent Comparison Study (RCS) that we perform ourselves and through a RCS that we pay a 3rd party to perform every 5 years (this ensures we are staying in line). If we are out of compliance with this 10% lower rate there will be penalties, we pay as an agency directly back to the resident(s). The rate is also dictated by the term of the lease and the market. We may perform RCS's more frequently for those in shorter term leases but never less than annually. We also provide annual educational material via digital means to help insure all our residents are aware of this Bitcoin payment option and the benefits they may be foregoing by not participating. As an added incentive to entice residents to pay with Bitcoin those who do will automatically be eligible to split any future price appreciation over and above the paid bitcoin 50/50 with the property anytime for up to 180 calendar days after they originally paid. They may execute this option at anytime during that 6 months and they will receive either a return in bitcoin or a rent credit equivalent to the 50% USD value over and above the original paid bitcoin.
Next comes the funding model - partnerships and collaborations - management plan (inc. KPI's) to measure success
Thanks for reading :)
  1. Kudos on this new biz model. Previously I also speculated on something similar (ie. buy a laptop with bitcoin and in 5 years they send you a new model as a free upgrade). So, I do get what you're doing....I do think these new biz models will be crucial if we ever really do achieve hyperbitcoinization. Such models are going to be needed to induce spending a massively deflationary asset.
  2. Having said that, perhaps its just simpler to offer a discount for those paying in BTC? So rent is $1000 cash / $850 if paid in BTC. This directly benefits your tenants NOW and maybe gives you much more upside in years to come....
For sure - have given that idea some thought as well and it seems to me that giving a discount in FIAT terms for payment in Bitcoin (while admirable) still doesn't necessarily have the same benefit? I just feel like when I get a discount in FIAT world, I find myself thinking man....why didn't they just charge me less in the first place...vs. through giving people the opportunity to split possible future price appreciation gives them the opportunity to share in future Bitcoin success....which will have its ups and downs but overall should be super beneficial in the long term for both parties to the tx?
I think about it like this....
Rent = $1000.00 - FIAT discount for paying in BTC 200.00 = $800.00 vs Rent = $1000.00 paid in BTC and within 6 months BTC triples in FIAT terms...splitting 2000.00 with me means $1000.00 for them?
Sure I lose out on the a lot of upside - but my customer is way happier with me than if I took all that upside myself....I feel like they have much more skin in the bitcoin game this way and we both benefit and the network stays stronger as it has a user for life who probably is going to move somewhere else sometime and push their landlord to do the same....or they will seek out landlords offering this deal or even better ones which again grows and strengthens the network? I think anyway :)
why didn't they just charge me less in the first place...
yeh, good point, there is the implication that you are "gouging" them by offering a discount. Having said that my local liquor store offers a 4% discount for paying cash as opposed to card, and it doesn't seem like buyers are fussed one way or the other....
152 sats \ 1 reply \ @davidw 17 May
Great work. Really interesting model & generous of you with the shared 50/50 bonus too.
Given property management is more than just about renting… if anyone is considering building a complex or upgrading a set of city homes using the standard… I’d love to see them documenting how they got each place hooked up to miners and have the excess heat used for water boilers, underfloor heating, pool heating etc. I know many are doing it for their individual homes but doing so with scale in a condo or apartment block, would be quite the business model. Especially if all tenants were to pay you directly for their energy usage in bitcoin.
Just so happens this tweet popped-up in my feed after posting. Great to see people incorporating mining into their builds.
This is very interesting.
I'm curious what your thoughts are on actually pricing your rental agreements in BTC: i.e. 0.01 BTC per month. Obviously, you'd have to then lower rent every so often, rather than raising it as is done on fiat.
Eventually, we want to get away from pricing things in fiat and start actually using BTC as our unit of account.
I think pricing in Bitcoin right now is a bit tough...given its volatility at the moment in FIAT value terms. Once things start to level out a bit on that front it will make it much easier to price in Sats vs. FIAT
Though I suppose you could do a month to month lease and set the price for the following month at some pre-agreed to Sat price?
I guess this depends mostly on how much downside risk you're willing to take on, since you could always offer your tenant discounts to protect them against volatility in the other direction.
I don't see it as any downside risk.... I believe 100% in Bitcoin and its value increasing over time when measured against FIAT - if that believe proves accurate then no matter what else happens - we are both in a better position than if we were 100% FIAT.
This is why I mentioned the part of not being over-leveraged - having long-term, stable debt locked in on the property ensures that I know what my future FIAT payments will be...outside of maintenance and upkeep and taxes/insurance the property should operate indefinitely...(I guess war or natural disasters as well)
I really believe this is how everyone needs to be looking at running their businesses going forward...those who can provide the best incentives and value to their customers will be the businesses that succeed and those who are over-leveraged and can't afford to provide incentives to their customers are going to crash and burn hard....
Even those current businesses that are leveraged to the gills right now are going to find it really hard to compete against companies that are going to built on top of Bitcoin...especially once people start automating this process through a software and smart contracts....this is going to drive a whole new wave of adoption :)
I just wish someone would run with this idea and build the app -
I am working on one with a buddy of mine...but it a long, hard road as I have zero developer skills and his....well....they are way better than mine but still not great :)
I just wish someone would run with this idea and build the app
Sent you a PM
what type of app? mobile app, web app or both?
I think the more the merrier :)
If you aren't concerned about the downward volatility, which I didn't think you were from the post, then it seems like you could price in bitcoin and offer your tenants guarantees against upside volatility.
Let's say the fiat rent is about $1400 per month. You could price that at a slight discount of 0.020 BTC, with a stipulation that if BTC appreciates to $75k they only owe 0.019 BTC that month and rent will reset to reflect the new bitcoin exchange rate.
You probably see my point and there are lots of different ways to go about that. One of the nice things about doing something like that is the tenants would have an incentive to accumulate some bitcoin at the current price and then potentially get a nice discount later.
It seems like there are many win-win strategies you could pursue that also encourage more people to get into bitcoin. It's all very exciting.
As an added incentive to entice residents to pay with Bitcoin those who do will automatically be eligible to split any future price appreciation over and above the paid bitcoin 50/50 with the property anytime for up to 180 calendar days after they originally paid.
THAT is a pretty sweet orange pill move right there. I presume that if Bitcoin depreciates relative to fiat you will not punish them, in which case, this makes a whole lot of sense sats.
You absolutely nailed it....all the downside risk is on me...but I really try to focus on the positive and while I definitely manage for the downside risk....if something catastrophic happens - I think that we all will have bigger worries
With only upside potential and no downside risk, this can really take off. Rent becomes an investment opportunity. Love it.
Some open source system for this could be developed & published online so everybody can copy it in their country / region / city maybe even stacking together and then pooling it to build simple detached houses etc to rent out to tenants with right prices - aka a solution to have decent quality houses to rent for people who dont have more money than market average or above to pay. Could be “social houses” with laundry area and common areas to keep the private ares minimum. There is many development examples like this around the world.
Absolutely - This is a very different business model than the historical FIAT based ones for sure, and it is likely to be fought by those who currently operate businesses and certainly the super-sized corporations and REIT's as it threatens the way they do business.
I have also spoked to a few legislative aids for lawmakers in Wisconsin - USA - and they were very open to it...(its hard to argue against anything that could make housing more affordable - so I am hoping to use it as a catalyst to get some legislation passed as well...I reached out to SatoshiActionFund as well and hope to work with them here in WI through the next legislative cycle.... even my State Senator (Tammy Baldwin) seemed interested....I keep wondering what Elizabeth Warren's office would think about this and how they would spin it as a bad thing....But this is where getting the business plan and getting something running ASAP that is 100% based on this model will be important - its hard to argue against something that is working :)
Sorry - that was a bit of a tangent but its how I am thinking about this...
I really like the rent credit idea. Share in the gains with your tenants who pay in Bitcoin.
Yea - this is working really well for them right now...in about 3 months...their cost basis is a bit higher and they won't realize such a large gain (unless Bitcoin FIAT value see some significant movement?)
I think over longer time frames this will work out better for both of us vs. my simply giving a simple % off for paying in Bitcoin....Which hopefully helps incentivize them to continue paying in Bitcoin and proves a "use case" that can be expanded into other industries as we continue moving to demonetization in FIAT terms everywhere...
This really could drive a more stable and orderly transition over the next "x" amount of years as the FIAT bubble starts to shrink!
Yupp! A very good model. Renting property for Bitcoin is definitely a win win. Keep updating. I will most likely follow your strategy. I'm here in India and government has imposed 32% tax on Bitcoin profits. So just have to adjust that but else your model is fine. One of my commercial property is currently, of course, they are paying me in Fiat as now, but I will deliberate with them to pay me in Bitcoin. Definitely, first I need to orange pill them somehow.
Thanks - I will definitely keep updating here as I go...so far so good :)
I sat down with one of my other renters and they were on board but ran into some issues with whatever wallet they were trying to use and then I think one of the two of them kind of freaked out a little....
I haven't sat down with the rest of them though...if they are buying btc and turning around and sending it, they wouldn't really have much of a tax to pay depending on the time they are sitting on the bitcoin... so the cost to them is the initial purchase % and some time filling out an extra tax form...but the benefits to the upside should outweigh them...
It might be worthwhile to sit down with them and have a good chat :) so many people are so worried about getting in trouble or something with the IRS or government and its just so not like that if you are playing by the rules....I think more people just need to hear that type of messaging....
I mean I have been pretty straight-forward with my one tenant and he understands what our profit is on the building....he also understands why we need that profit and what the downside risk is to them...they also understand that they are not likely to find a better deal anywhere right now so it works for them for now...as I collect more sats and continue paying down the FIAT loan they know their rent will eventually be able to go even lower in Bitcoin terms... I just hope they keep stacking as we go...cuz I sure am
I'm a tech for a nation wide property management company. Probably the best gig I've ever had. Can I come work for you, instead?
That's a very nice offer - If I was hiring I would certainly take a look at your "proof of work" as it were... :) It might be a few years before I have anything significant up and running at scale on my own.
31 sats \ 1 reply \ @nout 17 May
This is amazing! Have you thought about writing a "blog" about this or writing tutorials for other property managers?
Also this sounds like a great usecase for https://bitcoinops.org/en/topics/silent-payments/
I will check them out... I did a webinar explaining this a little with IREM - but they require people to pay for the content so I have no idea how many people viewed it...there were only 4 people listening to it live and I had zero questions at the end.... I also talked about it a little on Robin Seyr a few weeks ago that a few people watched and jumped in the chat afterwards a little....so hopefully it will make its way out there slowly over time.
I have thought about a blog but am not sure where to really do that so I was thinking I would just keep posting updates here :) at least for the time being...
I like the orangepilling at work. I wonder how it is recieved at the tenants side. The splitting of Bitcoin appreaciation surely is a nice incentive but I fear that it might come off as sketchy. I hope not.
I can obviously only speak to my one tenant - and he isn't as far down the rabbit hole as I am - so far though he seems to be on board and he completely understands how it makes more sense for him to pay in Sats vs. FIAT as I would just use his FIAT to buy Sats myself - and this way he has an opportunity to benefit from Bitcoin simply by using it than not.
He is a smart cookie as well - he has spread sheets, tracking his cost basis of the Sats he sends for rent so he can report it on his taxes - he understands it is a little more work on his end filing those as he just went through it this year for last year...
It certainly has him thinking more about Bitcoin as just a couple days ago he sent me another text about wanting me to give him the credit in "cash" (his term) rather than a rent credit - but after I talked him through the implications of that he decided the rent credit was still good for now...though he is very interested in the "return of Sats" idea as well...
I did have one other unit that I think is halfway on board but one half of them is worried about Bitcoin being sketchy or something.... I just haven't had the time to sit down with them and discuss it more in detail and I also figure that as I have more "experience" with the resident that is paying in Sats I will be better able to speak with the other residents about how it works and what they are "leaving on the table" so to speak by not using Bitcoin :)
I appreciate the intentions here. As a smaller property owner, my thought is that this is a lot of management and hand-holding that I don't have time for - but if it's your fulltime gig and you're getting positive results & you're enjoying it, keep going.
(for what it's worth, you could put that 60% profits into bitcoin and keep it for yourself ...)
It is both for me...
I know I could come out way ahead myself if I just took their FIAT and bought Bitcoin with it...but my thoughts are that we need as many people as possible to benefit from using the network as quickly as possible to ensure its decentralization and security....the more people we can get reaping the rewards of using this network the better off we all are.
Accepting bitcoin as payment is cool.
Giving tenants money back after their payment appreciates in USD terms over time, that is nice of you and offers an incentive for tenants to start paying in bitcoin.
I personally wouldn't do that part, as it seems like one more thing everyone has to track. If every tenant paid in fiat, but I converted it right away into bitcoin after receiving the payments, the idea I would sell any portion of that bitcoin and give USD back to tenants isn't something that would cross my mind later.
If I were to do something like this with my tenants (I have five apartments), I would probably just offer a small discount if they pay in bitcoin. I would intepret it as saving me time and fees, since I wouldn't be converting funds to bitcoin myself. But with on-chain fees the tenant would pay, this probably would be a wash for them, because the discount probably wouldn't be much. Rent here is near a grand a month too, so paying by lightning may be more difficult.
If you didn't do the 50/50 share thing, would your tenants still pay in bitcoin? I would imagine their fiat payment is cheaper for them, unless you are doing payments via a layer 2. But then your payments aren't straight to cold storage with that (which I don't personally mind - I stack a while and then do large UTXOs to cold anyways).
You are right that it is "one" more thing to track - hence why I believe an app that handles this automatically is needed in order for this "model" to really gain some footing...
One of the key points with this idea - is that I am not converting their FIAT dollars into bitcoin and then offering them something back in return - they have to pay in bitcoin to be eligible for the deal in the first place - if they could do it through an app with smart contracts integrated into it - this should "in theory" all be able to be handled through the app.
I am really glad you brought this up though....as I sit here typing this I remembered another extremely important point about accepting bitcoin and utilizing it in this way...
The business owner does not need to "make" any additional FIAT value on the collected bitcoin in order for this model to be beneficial - I am going to work on another post later today about this and get into a little more detail as it is extremely important...
More to come....
Wow, this is a good business ideas. A win win situation should be created for both of us. by giving a discount to the tenant. this we can attract people towards Bitcoin and also build our local community. What do you think??
So to me - that idea of giving a discount...is a FIAT model that has a place for sure but just not in Bitcoin over the long run....I mean if Bitcoin is truly replacing the base layer of money and helping to ensure that value is communicated honestly and openly, then the incentives need to be based on that layer...using FIAT models may work in some circumstances but in the end, that will lead to a race to the bottom...what happens when you can't give a large enough FIAT discount and get rekt....??? I just think this incentivizes both the business owner and customer to have some skin in the Bitcoin ecosystem and I really want to provide it in a way that is open and my residents (customers) don't have to "trust" me to be able to "return" the agreed upon appreciated split amount...
So to really blow your mind on this... Imagine the app allows you to enter into a smart contract for every transaction....the split % can vary as well as the length of time the contract is open for is variable....larger purchase price items (in FIAT value) are locked up for longer periods (think cars, boats, houses) and smaller (in FIAT value) items are locked up for shorter periods...think a case of beer or your groceries...yes...the supermarket could offer you a smart contract that your bitcoin payment could be locked up for 24 or 72 hours and if the FIAT value of your sats double you could get 50-60 hell 90 % of that purchase price back?
This definitely doesn't just have to make rent more affordable....this helps makes the world more affordable...and tell me that if you have the choice of going to a FIAT grocery store or a Bitcoiners grocery store....you aren't going to the Bitcoiners?
Eh....its probably nothing...but if its not - hold on to your hats boys and girls - this business model may be coming to a store near you sooner than you think....Now LETS FUCKING GO!!!!
You are absolutely right.
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