Ask HN: What do you think of my startup idea?

Thanks for your feedback so far, guys. Let me answer some of your questions.<p>This is an early stage idea and I haven&#x27;t got all of the details ironed out yet but;<p>1) The only way I see this working is me being the sole owner of the property and some sort of contract between me and the 90 other people ensuring that I pay them<p>2) Insurance&#x2F;Liability this would be covered by the rental agents (the £600 figure is after their cut)<p>3) I have no real-estate experience<p>4) R.E unforeseen expenses, that&#x27;s a very good point and not one I&#x27;ve thought of.<p>5) The income is really split 100 ways, I will get no more than everyone else involved, other than the contracted right to buy them out for property value&#x2F;100 at any time<p>6) I wouldn&#x27;t let anyone own 51%<p>Like I say, this really is just an idea and possibly not one that will work, but thanks for all of your feedback so far!

Dangerous.<p>The &quot;investors&quot; buying their share expect it to be a safe investment. – Spread damage one could say. But especially in the housing industry the risks are really high that you could actually have to pay on top.<p>Just a few examples: - Unforeseeable maintenance - Legislative changes that require major changes to your building substance - The risk that tenants mistreat the rented space (think of moisture and fungus due to wrong ventilations habits)<p>And the worst for you: You have to communicate and deal with the 100 of your &quot;micro-investors&quot;. Let&#x27;s say something really bad happens that requires all of them to pay on top just to avoid a major loss in the futurs...just imagine the number of them trying to get out of that. Maybe even with legal actions.<p>I have a strong feeling that you didn&#x27;t think that through and got stoked by the potential to milk a cash cow after you did some basic calculations. :&#x2F;

Maybe there is something I am missing, but the math is wrong.<p>&gt;The cost of the flat will be £100,000 and will rent out for approx. £600 per calendar month (outside of london) each member will pay £1,000 upfront and receive approx. £72 twice a year. Assuming NO house price increase, you&#x27;ll have all of your money back in 7 years.<p>At £600&#x2F;month you will generate £7200 annually.<p>With 100 shares, each share would generate £72 each year.<p>Over 7 years, one share would generate £504.<p>You state the £72 will be paid TWICE each year, which would make the statement, &quot;you&#x27;ll have all of your money back in 7 years&quot; true. Though I don&#x27;t see where this money is coming from.

It is an interesting idea. My first few thoughts are:<p>1) Do you have any real-estate experience? It is not obvious from the site.<p>2) Will everyone have to chip in extra when there is a major expense? Is there a fund tied to this that covers things like the water heater going out?<p>3) Is the income really just split 100 ways? It seems like you should collect some management fee also.

What are the obligations of the person managing the property and interacting with renters? Do they have a fiduciary duty to maximize profit? Do they have any to the wellbeing of the renter so long as they don&#x27;t run afoul of the law?<p>I realize that an individual absentee landlord is also free to act like a jerk, but I suspect this puts actual pressure on them to do so.

What about maintenance and general upkeep of the property? Does this come out of revenue generated by the property, if so who sets the amount?<p>It also seems like anyone who owns a 51% share in any property essentially has control over it, without the need to put up the full value.

Interesting concept, what are your thoughts on ownership of the house? Does every that invest in the house gets owns a small part of it?<p>Insurance&#x2F;liability is another topic for a rental property.

I think your selling a security. and because they&#x27;re not on the property as lien holder or on title. you could go get a mortgage spend all the money file bankruptcy and they&#x27;re screwed.

I don&#x27;t know about anyone else, but my first thought was &quot;What about unforeseen expenses?&quot;. Who pays that? How? What about differed opinions? Who mediates everything?

Isn&#x27;t this what REIT funds suppose to do?