Investments

Bank Of America Investment Not that you would ... but imagine the giddy thrill youd experience if you could sell bootleg copies of Microsofts best-selling software and turn a 10 cent blank CD into $200. If you could get away with it, youd do it all day long. What if you could open your own McDonalds look-alike, complete with golden arches, and never have to pay a franchise fee? Or maybe sell imitation Rolexes at the entrance to the mall, and never have to pay rent. If you could, wouldnt you? Suburban sprawl is just the same, except its legal.

So, how does an investor accomplish this feat Simple. Become an asset to the developer when they NEED you! Last week, we introduced the concept of working in a real estate investment club (or group) and the power of Get 'er done. Quite simply, if a developer or broker knows that your real estate investment club can HELP them, then they frequently will think of you first. To understand the importance of a real estate investment club, relative to an individual investor, let's consider 3 scenarios for a developer.

Investment Opportunity Take any town in New Jersey where the community has made a concerted effort to preserve the rural quality of the town while providing a high-quality education and services, and Ill show you a Mount Laurel lawsuit just waiting to happen. Developers arent fighting to get into abandoned factory sites and former mining towns; they want solid, pastoral communities where people have bought and paid for all the services they need by passing school budgets and bond proposals; evidenced by hard work and personal sacrifice.

In the fourth quarter, Choice will record charges related to its investment in Friendly Hotels, PLC, of approximately $21 million after tax or a negative $0.48 per share in addition to a previously announced restructuring charge of $5. tax or negative $0.09 per share. cash charge related to the company's investment in Friendly is necessary to adjust the investment to its estimated fair value. The impact of these charges will serve to reduce fourth quarter net income by $24.5 million and reported diluted earnings per share by $0.57. As a result, the company will report a net loss for the fourth quarter of $11.9 million or $0.28 per diluted share. For the year ended December 31, 2001, after including the impact of the charges described above and other previously recorded charges, the company will report net income of $21.6 million or $0.48 per diluted share.

Banc Of America Investment Its an accomplishment that townspeople take pride in, almost like building a brand name. Because when you say youre from this Mayberry-esque town, people will say, I hear its nice there.

New homes for sale direct from the developer with no sales commission and fees. Great property investment opportunities.

Banking Investment When a developer imposes itself on a town, proposing hundreds of homes and the burden of traffic and schoolchildren that come with them, that developer is stealing that towns brand name. Its not that developers dont have the right to build, its that they havent paid their fair share; call it dues if you like. Each house they sell has that towns good name attached to it, but the developer never pays for the additional community services and classrooms that all those new residents are going to demand. And the people who paid for the first set of schools, etc., are going to have to pay twice.

"Most Off Plan Property websites act as an intermediary between the developer and potential buyer with commission being paid for referrals.

Investment Solution Strategic Its time to level the playing field. Communities are entitled to impact fees.

Assume you write an XYZ July 50 call at a premium of 4 covered by 100 shares of xyz stock which you bought at $50 per share. additional income from your investments. In this example, a $4 per share premium represents an 8% yield on your $50 per share stock investment.

Investment Banking Services When Joe Developer sells you a new house in some charming, formerly under-populated town, he never mentions that hes just set off a demographic time bomb that will result in higher taxes for schools, fire houses, police, and other services. Whether the cost of the impact fees means smaller profits for developers or higher prices for new residents is irrelevant; classrooms and fire trucks and police stations have real costs that must be paid.

Bank Investment Heres a workable plan.

Alternative Investment When farmland becomes housing, New Jersey law allows the municipal tax collector to reassess the formerly agricultural land at the higher residential rate going back two years, and collect that differential as a lump sum. This is called a rollback of the tax assessment and it produces at best a couple of thousand dollars. That pittance is inadequate and the state Legislature has known this for a very long time. Unfortunately for the victims of sprawl, the builders lobby is both well-funded and influential. What is desperately needed is a lump sum payment, going back two years, of the new property tax assessment for both the land and the new house.

Online Investment Services What happens to the money? This goes right to the heart of Mount Laurels call for affordable housing. The rollback money would be held in trust, maybe by the League of Municipalities, for the eventual benefit as needed of the towns that paid in the money for the construction of schools and other facilities. However, most towns wont need to spend the money right away. While its held in trust, the interest earned on those millions of dollars in impact fees would be dedicated specifically to affordable housing.

Accompany Essential Investment The various Supreme Court Mount Laurel decisions set the stage for this wretched explosion in housing by allowing developers to extort enormous concessions of high density development from towns while wrapping themselves in the affordable housing banner. It hasnt worked, except to benefit the developers and their attorneys. There are precious few new affordable homes resulting from Mount Laurel cases compared to the staggering number of townhouses and McMansions carpeting the state. Communities may not be able to erect barriers to stop the sprawl, but until the resulting burden is equitably shared, nobody should be entitled to your towns good name.

Investment Company Hal A. Ennis
Fredon, NJ

Investment Management Solution NJ Herald - 10/8/2002

Topic: Sprawl

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