Newton's In Search Of The Perfect Investment. Technology Investor.
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8:30 AM Friday, November 19, 2004: In
Yiddish, the word haimisch means warm and comfortable. Haimisch was the word
a lady broker friend used to describe why she invested $100,000 in a real estate
development in Brooklyn. She found the developer and the deal, which forecast
69.4% returns, "haimisch." For me I had concerns:
+ The developer was taking 5% as his "developer" fee -- $1.2 million
of $30.9 million net sales. Much of that money would be paid before any returns
would paid to the investors.
+ The developer was investing only $300,000 of his own money -- less than ten
percent of the $3.2 million he was raising from his equity investors. To me
that seemed skimpy. I like more developer skin in the mix.
+ The investors would receive a 9% preferred return, have their $3.2 million
invested monies returned and then split the remaining monies 50-50 with the
developer. If all the numbers panned out, the investors would receive profits
and interest of $2.2 million on their monies. The developer (excluding his $300,000
investment) would receive $1.6 million plus $1.2 million, for a total of $2.8
million. Is that inequitable? Clearly a judgment call.
+ The developer was borrowing $17.1 million on a construction loan and another
$5.5 million in mezzanine financing. That meant a high loan to value ratio of
76%.
+ The developer was aggressive about his sales assumptions -- from $550 to $700
per square foot. (Remember this is Brooklyn, not Manhattan.) So a 10% drop in
property values would basically wipe out all the profits.
+ Finally the developer was new. He hadn't completed any development projects
like this. He's been in another area of real estate.
Will the project succeed? Probably. Will the investors do well? Probably. Why
am I being hesitant? I don't quite know. I guess it doesn't feel as haimisch
to me as it does to her. I bet I would have done this deal ten years ago.
Big increase in federal debt limit: According
to today's Wall Street Journal, "Congress approved a whopping jump in
the federal debt limit. The $800 billion increase, passed by the House 208-204,
sets a ceiling of $8.184 trillion, a 37% rise since Bush took office."
Do deficits and federal debt mean anything? Politically, probably no. Economically,
YES. It means more of our taxes will be used to pay interest.
Please
teach your children how to respond to a Want Ad: Last
Friday I put this ad on the New York City board of www.Craigslist.com.
" I write the Newton's Telecom Dictionary and am
writing others. I need help organizing, resarching, editing, processing new
entries, etc. "
I've been overwhelmed with responses. As of this morning I've received an incredible
233 emails. I've filed 229 in a folder called "Useless Resumes." Somehow
I expected the candidates to google me and "Newton's Telecom Dictionary"
and find out a little more of what I might want. No way! Responses included.
(I didn't make this up):
+ What do you mean by a resume?
+ My current
job doesn't pay well, but I really enjoy what I do.
+ I am not
bothered at all by any aspect of the creative process.
+ I am in love with words.
+ I have no idea what the Newton's Telecom Dictionary is but I will find out.
... I am a stay at home mom. If you are interested, please send additional information.
+ Hi,
My name is Daniel. I would like to assist you with your writings. I have a BA
in English from a well established university. I can't wait to hear back from
you,
+ My name is
Courtney and I came across your ad for this position on wahm.com. I am currently
unemployed and am seeking employment that I can do from my home.
+ I am a professional
ballet dancer in NYC with a degree in accounting and MFA candidacy in Poetry.
I currently work as a freelance artist.
+ My past
employment and education have allowed me to gain valuable experience in many
areas...
+ I'd love to help you. I'll send a resume if you would like.
+ have previously
been a writer/editor for everything from Penthouse to Earle Palmer Brown PR.
The material in Newton's Telecom Dictionary is very much in the vein of what
I am doing now.
Beer
for the Baby Jesus
ADELAIDE, Australia -- An Australian brewing company is offering
six cases of beer to anyone who returns a statue of the baby Jesus stolen from
a nativity scene earlier this week, brewery officials said Thursday. The South
Australian Brewing Company offered the reward after thieves swiped the statue
from the company's traditional nativity display earlier this week.
WARNING
- New Car Jacking Technique
You walk across the parking lot, unlock your car and get inside.
Then you lock all your doors, start the engine and shift into REVERSE, and you
look into the rearview mirror to back out of your parking space and you notice
a piece of paper stuck to the middle of the rear window. So, you shift into
PARK, unlock your doors and jump out of your car to remove that paper. When
you reach the back of your car, the carjackers appear out of nowhere, jump into
your car and take off!
Don't remove the
paper. Just drive away. Remove the paper later.
The
camel, the desert and the War
The new Marine Captain was assigned to a recon company in a remote
post in the desert. During his first inspection, he noticed a camel hitched
up behind the mess tent. He asks the First Sergeant why the camel is kept there.
"Well, sir,"
is the nervous reply, "as you know, there are 250 men here and no women.
And sir, sometimes the men have ...m-m-m....urges. That's why we have the camel,
sir."
The Captain says,
"I can't say that I condone this, but I understand about urges, so the
camel can stay."
About a month
later, the Captain starts having a real problem with his own urges. Crazy with
passion, he asks the First Sergeant to bring the camel to his tent. Putting
a stool behind the camel, the Captain stands on it, pulls down his pants, and
has wild, insane sex with the camel.
When he is done,
he asks the First Sergeant, "Is that how the men do it?"
"Uh, no sir,"
the First Sergeant replies. "They usually just ride the camel into town
where the girls are."
For your weekend's amusement
SOCIAL SECURITY SEX
Two men were talking. "So, how's your sex life?" "Oh, nothing
special. I'm having Social Security sex." "Social Security sex?"
"Yeah, you know: I get a little each month, but not enough to live on!"
LOUD SEX
A wife went in to see a therapist and said, "I've got a big problem,
doctor. Every time we're in bed and my husband climaxes, he lets out this ear
splitting yell." "My dear," the shrink said, "that's completely
natural. I don't see what the problem is." "The problem is,"
she complained, "It wakes her up!"
QUIET SEX
Tired of a listless sex life, the man came right out and asked his wife during
a recent lovemaking session, "How come you never tell me when you have
an orgasm?" She glanced at him casually and replied, "You're never
home!"
Harry Newton
This column is about my personal search for the perfect investment. I don't
give investment advice. For that you have to be registered with regulatory authorities,
which I am not. I am a reporter and an investor. I make my daily column -- Monday
through Friday -- freely available for three reasons:
First, writing is good for sorting things out in my brain.
Second, the column is research for a book I'm writing called "In Search
of the Perfect Investment."
Third, I encourage my readers to send me their ideas, concerns and experiences.
My email address is  .
You can't click on my email address. You have to re-type it . This protects
me from software spiders scanning the Internet for email addresses to spam.
I have no role in choosing the Google ads. Thus I cannot endorse any, though
some look mighty interesting. If you click on a a link, Google may send me money.
That money will help pay my kid's tuition bills. Read more about Google
AdSense, click
here and here.
Go back.
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