CIP-134: Purchase an income generating property

CityDAO is a home for experiments, and what better experiment to run that being the first DAO to collectively own a rental property?

Why buy a rental property?

Some reasons:

A large number of CityDAO citizens voiced support for it

The number one most agreed with statement on the 2023 Goals Polis feedback was buying properties that can generate revenue for the DAO.

Good time to buy

We are seeing a bit of a market correction in real estate. Since interest rates are high, it makes it hard to finance properties so prices are coming down. This gives us an advantage if we buy a property with all cash.

Treasury revenue

This will be an asset that continually funds the treasury, ideally in perpetuity. Right now, the DAO is basically losing money every month. This could change that!

Diversification

Real estate helps diversify us out of crypto, especially in these turbulent times where faith in cryptocurrency and stablecoins is shaky. Plus, real estate can be converted back to cash if needed, it’s not like the DAO is losing this money.

Quick win

This is a straightforward project that can be executed in less than a month. It requires no dev work or extensive project planning. It can be a quick win, great to build some momentum (and prove we are out here building during the bear market).

Full Proposal

TLDR

Use up to $325,000 to acquire an income generating property under CityDAO LLC or a wholly-owned subsidiary.

Project Team

Scott will lead the effort and may recruit DAO members to help find properties and research different options and engage citizens along the way with temperature check snapshot votes for different properties.

Budget and Financing

Upon passage of this proposal, the funds will be sent to CityDAO’s Coinbase offramp as USDC and transferred the the CityDAO bank account so that the property can be acquired quickly without waiting for currency conversions.

If the property that is successfully acquired is less than $325,000, the remaining funds will be returned to the DAO, except for $1,000, which will be sent to Scott as payment for leading the project.

Property Selection

Potential properties will be posted to Snapshot and shared widely in Discourse for a temperature check vote (no forum period). Each Snapshot will be single property with a YES or NO vote with the property description and reasoning.

If after 5 properties are shown to the DAO and none have a majority YES temp check vote, funds will be returned to the DAO treasury.

Doorvest or a similar platform will likely be used to facilitate acquisition and property management more easily.

Disclaimers and Risks

Real estate has its risks and may go down in value. This should not be seen as an investment, Citizens will never be able to receive dividends or profits from the DAO.

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what about considering CIP27?

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If done well, and it seems like it will be based on the proposal, it is a good idea.

Sort of a tangent, but in t0wn we are tossing around the idea of a hotel. At face value has many upsides, usually close to airports or downtown cores. Easy to convert to and from office space as needed, and, the big upside, you could just rent out unused rooms. A move to building a city of some sort, well a network city node, and make money at the same time. That doesn’t really fit here per se, well not sure, just they are really expensive as it turns out. But, just to say no reason a property can’t both be a move towards a city and also bring in some revenue in the process.

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We at Trips Community come from the Vacation rental space.
I personally have been in vacation rentals since 2001, having pre-dated even Airbnb with my own booking platform.
If you need us, we’re here!

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Is this property meant to be used, or how would it generate income? Is it going to be rented out like an Airbnb? I wonder if there could be overlap with the t0wn project.

Actually some merit to that idea, although I suspect $325k is not nearly enough for the type of space that t0wn desires.

But CityDAO could own the property and then rent it on arms-length contract terms to the t0wn entity to use and operate the space for t0wn projects. Howevet, super important to note that in Scott’s view - the revenue component to CityDAO’s treasury cant be affected (or altered) due to relationships to t0wn or its team members. There would have to be true separation and arms length relationship.

Still probably need more money. But I see potential synergy between this and t0wn, as well.

If this was a reply to my comment. Ya, 100%. You’re going to get a motel off the side of an abandoned hiway for that price lol.

Still probably need more money. But I see potential synergy between this and t0wn, as well.

And yes, honestly, I saw the synergy right away. Which of course would love to discuss. Huge reasons they could complement each other! A revenue-generating property gives t0wn something to sell to DAOs as it would make it a more secure investment. t0wn would give this project a much bigger runway if of course DAOs then see it as a fruitful investment. A flywheel is there!!

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One thing we should consider about a small house for income generation IMHO: there is currently a trend of “corporatization” or private property ownership across the US and this is one factor that is artificially driving up home values (by decreasing supply). People need homes as places to reside, not as investments. Its only in our current “get rich me me me” environment that properties are being treated like sources of income rather than simple residences.

What if houses are just supposed to be places where people live, not passive income for the upper class or businesses?

What if CityDAO just got back to a public goods focus - instead of trying to be yet another corporation seeking profit off the backs of hard working families who just need a place to stay?

or if this is intended to be an airbnb, has anyone run the numbers on what would need to be charged per night, taking into account management of the property, and factors such as its proximity to some tourist-draw? These things are fairly easy to put together and without them how can anyone really evaluate if such an idea makes business sense?

@scottfits you said it on your AMA this morning - the ETH white paper contemplated both on-chain organizations AND corporations. This feels like an idea better left to corporations… not DAOs. DAOs only have an advantage over corporations in public goods arena - not business operations. Maybe you should start an on chain corporation and run the project that way?

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Im not sure how an Airbnb solves the problem of investment properties. Most Airbnbs are still single family houses and contributes to the lack of affordable housing in areas. I think a property to bring people to t0wn would make t0wn a more interesting proposition to other DAOs as it allows them to know that an audience of like minded individuals will be cycling through which could help them grow businesses on site.

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For sure. It’s a fascinating idea. I mean, once you go down the path of buying a piece of land that already has buildings. Why not use those buildings to generate revenue? The goal is a Web3 hub, but no reason it can’t make money while getting there.

What about trying to use part of parcel blanca or another small property to rent out campsites or something similar. It seems like there is a lot of management and maintenance that would be required to do a full hotel like solution currently. Would it not be better to start small (think cryptoKOA) that could be used as a way to get some of the big hurdles (how to allow the DAO to find appropriate employees, mange reservations, deal with problem customers, etc) out of the way without having large capital invested in something that if mismanaged could be a losing venture from the start?

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With t0wn were focused on a workspace. Unless you can get tons of work done at a campsite :thinking: probably isn’t the cross-over we’re thinking of.

Sorry Im new here so maybe I used the wrong name I thought Parcel Blanca was the baby parcel not t0wn. I was proposing as an intermediary step to use some of Parcel Blanca (assuming the DAO will retain some plots for themselves) and if not setup a smart contract that pays a small tax to CityDAO for Baby Parcel owners to commit there NFTs too which would allow for some of the task I mentioned to be completed and show that a process exists and functions.

I agree t0wn should be a hotel Im just thinking of stepping stones and using things already in the pipeline.

No worries, and Welcome!! Good to have you.

Hard to keep all the projects straight. Ya, for t0wn I am really liking the hotel idea. We will see, but I think it has some real potential.

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Parcel Blanca = Baby Parcel. You had that correct.

t0wn was formerly the “Big Parcel”

Yes! This is the way.

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Hey builders! If someone want to add his opinion/quote to the article fee free to PM me

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“Work-work-work work-work”
Where are people going to sleep?

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YES! So well said.

I feel torn about this. It was the number one agreed with statement on the Polis, and we as a DAO are all about democracy. Nonetheless, it does not align with the CityDAO mission. Even though that is still up in the air, “building a Web3 city of the future” is stated on the website. Copying the current model - people with enough money for a down payment having their mortgage paid for and profiting from people who don’t have enough money for a down payment while not sharing equity - is (hopefully) not the future.

Replenishing the treasury is essential if we want to keep the lights on here at CityDAO and this would be a straightforward way of achieving that, but doing it this way feels to me like selling the soul of CityDAO. Additionally, this wouldn’t contribute to our key metric of citizen time unless perhaps it is connected to t0wn as discussed above. (I am not familiar with the details of t0wn though)

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As the results of the 2023 CityDAO priorities indicate pol.is report it was advised that CityDAO should purchase investment properties like houses or condos that the DAO collectively owns.
This then should be a priority.

In any case property can be residential, commercial, industrial, land…

In my opinion the DAO must generate revenue if it wants to survive long term.

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