Oil Markets Update 11 Oct 2015

October 12, 2015July 21, 2018 dajkgroup asset management, Business Consultant, business owner, export_Import, investment, Oil Market asset management, Business Consultant, business incomes, business owner, entrepreneur, investor, oil market

Lower costs have brought about oil organizations to strongly cut spending

Prices for West Texas Intermediate crude oil (WTI)

Over the last 18 months, prices for West Texas Intermediate crude oil (WTI) have tumbled from a June 20, 2014 high of $107.26 to an August 24, 2015 low of $38.24. During this same period, prices for Brent crude (Brent) have ranged from a June 19, 2014 peak of $115.06 to an August 24, 2015 low of $42.69. The sharp drop in oil prices is largely attributable to increased supply rather than growing demand

Lower costs have brought about oil organizations to strongly cut spending – OPEC gauges worldwide oil ventures will be sliced by $130 billion this year – and the U.S. Vitality Information Administration (EIA) expects generation will be moderate level in 2016. Expanded proficiency and more noteworthy exertion with respect to oil organizations to penetrate wells in those parts of their oil handle that yield the best measure of raw petroleum will permit oil makers to build generation this year, despite the fact that spending is falling. Note that oil generation decreases after some time, as oil is a draining asset. Over the long haul, the measure of oil created from a given area drops. Lower spending today ought to at last make supply decrease. Less supply ought to result in higher prices.

In the price chart that follows, readers should note that Brent trades at a premium to WTI. This reversal from the historical trend (i.e., WTI used to trade at a premium to Brent) began in late 2010. This change is attributable to meaningful U.S. production growth as well as U.S. law, which generally prohibits U.S. producers from exporting crude outside the U.S. On the other hand, a finished product such as gasoline and jet fuel can be exported. This has benefited the operations of those companies that refine oil.

On Friday 10/9/15, the House voted to lift the 40-year-old ban on oil exports. This ban was first instituted after the 1970s oil embargo that sent domestic gasoline prices skyrocketing. Many oil companies have been pressing the issue with Congress for more than a year. It is too soon to know whether this vote will lead to a law change, as President Obama has opposed oil exports. The passage may also be more contentious in the Senate.

Over the long haul, permitting export could have a positive effect. It would make oil showcases more worldwide. In addition, fuel prices depend on the price of Brent. The spread in the middle of Brent and WTI would hypothetically limit if WTI could be traded. This could bring about gas prices to fall. Actually, in September 2015, the EIA found that sending out oil could help lower gas prices.

The industry dynamics described above are important factors in DAJK GROUP’s decision to continue to hold investments in oil and gas companies even as prices have fallen.

Our focus is on what we perceive to be well-managed companies with strong balance sheets and efficiently run operations. These companies also pay generous dividends, which we believe to be safe as long as market fundamentals do not deteriorate markedly.

These dividends, in essence, allow investors to be paid to wait. This means their investments provide current income during a period when industry conditions are less than ideal. While such a posture can hamper short-term results, we believe it will serve investors well over the long term.

If you would like to inquire about our Concierge Services, please sign-in our free consultation

Decade of Peace sculpture: “The Sporting Chances for Peace”

This limited edition #1 is no longer available for sale. However, the remaining of Edition 1799 sculptures is available for pre-order. Please note we are also seeking for:

Art Collectors/Investors
Sponsors
Long-term Lease

We are processing and engaging with our investor regarding Limited Edition #1. When it’s finalized in 4Q 2015, the press conference will be announced the owner of this Edition #1. Our investor has committed to the purchase price of $US 25 million.

[Learn more…]

Partnership

We are proud to be a partner of HEAG Medical Community of Ghana. [Learn more…]

DAJK GROUP is the place where investors, business owners, and entrepreneurs can research and find useful information, insight, resources, advice, guidance, and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy. Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

The relationship of a Commercial Real Estate’s Cap Rate and a Federal Reserve’s 10-Year Treasury Rate

September 18, 2015July 21, 2018 dajkgroup art collector, asset management, Business Consultant, business entity, business finance, business owner, Entrepreneur, finance, interior designer, investment, investor, net lease, NNN CRE, real estate Art Collector, Art loan, Asset based finance, Business Consultant, business entities, business incomes, business owner, commercial real estate acquisition, creative finance

Commercial Real Estate’s Cap Rate is average 436 bps over 20 years reference to Federal Reserve’s 10-Year Treasury Rate. In fact, its average from 1990 to 2000 is 450 bps and its average from 2002 to 2015 is 425 bps.

Transactions in 2015 are on course to exceed pre-recession peak levels, and most property sectors continue to see inflows of equity and disciplined underwriting by debt providers. With positive economic trends lifting gauges of property performance, commercial real estate remains a favored asset class on a risk-adjusted basis.

Another words, the sophisticate and savvy CRE’s investor are studying and analyzing carefully its Federal Reserve’s 10-Year Treasury Rate in order to make an informed decision on his next acquisition. It would help reduce his risk significantly.

Commercial property sectors continue to perform well amid this extended period of low interest rates and the Federal Reserve’s decision will not disrupt property performance

The Federal Reserve opted Thursday 9/17/15 to maintain its benchmark lending rate at or near zero percent. While acknowledging that the U.S. labor market continues to improve, the central bank also heeded softer conditions in foreign economies in reaching its decision to defer the first hike in the Federal Funds rate in approximately nine years. Fed Chair Janet Yellen and voting members of the policy committee will proceed cautiously, monitoring for contagion risks from other countries that could adversely affect U.S. economic performance.

The Fed’s next opportunity to take up the rate hike question comes at its meeting next month, but it may wait until December to act. Until the next meeting, the Fed will scrutinize incoming data on economic momentum, inflation trends, and international volatility. Mortgage spreads widened during the summer in anticipation of a rate increase, and little appreciable effect on spreads is likely to occur in the near term.

The central bank’s decision to hold will likely spark a new round of questions about the strength of the U.S. economy in spite of relatively strong underlying fundamentals. Through August, the labor market had added an average of 212,000 jobs per month, an amount less than the pace set in 2014 but sufficient to support a forecast of 2.7 million positions this year. Factors weighing on the U.S. economy, however, include soft exports stemming from the strong U.S. dollar and anemic inflation principally related to low gas prices. Core inflation, which strips out volatile food and energy, rose only 1.8 percent year over year, below the Fed’s target threshold of 2.0 percent.

Commercial property sectors continue to perform well amid this extended period of low interest rates and the Federal Reserve’s decision will not disrupt property performance. With job growth generating new commercial space demand that dramatically outpaces construction levels, vacancy in the primary property segments remains on track to decline this year and support additional rent gains. Apartment construction has ramped up, but favorable demographic trends and challenging conditions for first-time homebuyers will continue to sustain extremely low vacancy in the multifamily sector.

Low-interest rates, steady performance gains, and competitive yields are supporting investment in a wide array of commercial properties. Transactions in 2015 are on course to exceed pre-recession peak levels, and most property sectors continue to see inflows of equity and disciplined underwriting by debt providers. With positive economic trends lifting gauges of property performance, commercial real estate remains a favored asset class on a risk-adjusted basis.

Learn more of investment in Net lease CRE

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Decade of Peace sculpture: “The Sporting Chances for Peace”

This limited edition #1 is no longer available for sale. However, the remaining of Edition 1799 sculptures is available for pre-order. Please note we are also seeking for:

Art Collectors/Investors
Sponsors
Long-term Lease

Once this public announcement is scheduled, our remaining editions’ price will be raised at a minimum of $US 500,000.

[Learn more…]

Partnership

We are proud to be a partner of HEAG Medical Community of Ghana. [Learn more…]

Growing, Evolving and Pushing Forward!

Net Lease’s Sale leaseback and Built-to-Suit Strategy

September 9, 2015July 21, 2018 dajkgroup asset management, Business Consultant, business entity, business finance, business owner, Entrepreneur, finance, investment, investor, net lease, NNN CRE, real estate Asset based finance, Business Consultant, business entities, business incomes, business owner, case study, commercial real estate acquisition, creative finance, entrepreneur

Net Lease’s Sale-leaseback and Built-to-Suit Strategy

The growing business who owns real estate can raise an inexpensive working capital and/or debt reduction with Net Lease’s Sale-leaseback and Built-to-Suit Strategy.

Sale-Leaseback Strategy

Sale-leaseback strategy is a form of financing in which a company sells its real estate for cash and simultaneously signs a long-term lease with the buyer. Sale-leaseback transactions provide the lessee company with a source of capital that is an alternative to other financing sources such as corporate borrowing, mortgaging real property or selling shares of common stock.

A Seller/Tenant is able to convert the value of real estate assets into working capital it can use to:

Pay-down debt
Fund acquisitions
Reinvest in the core competencies of its business

Build-to-Suit Strategy

Through build-to-suit strategy, Investor/Lender (“Investor”) provides a growing company with the funding for the expansion of an existing facility or the construction of a new facility in a different location. Investor can source, facilitate, arrange, structure and close the build-to-suit transaction.

The build-to-suit provides innovative financing for:

Expanding existing facilities/constructing new facilities
Debt reductions
Mergers & acquisitions
Leveraged/management buyouts
Corporate restructuring/exit financing
Acquiring addition facilities, technology, and equipment to grow business
Transition out of a synthetic lease, mortgage or other binding debt instruments
Matching long-term assets with long-term liabilities

Case Study: WPC’s Key Facts of Net Lease’s Sale-leaseback and Built-to-Suit Strategy

W. P. Carey Inc. announces that it has acquired a portfolio of three truck and bus servicing facilities for approximately $42.9 million. The facilities, two in Germany and one in Austria, were purchased from the developer and are net leased to wholly-owned subsidiaries of MAN SE for a period of 15 years. (PRNewsFoto/W. P. Carey Inc.)

Well-established, industry-leading tenant: The MAN Group is one of Europe’s leading producers of commercial vehicles, engines and mechanical engineering equipment. It is a publicly traded company with a market capitalization of approximately $15 billion and is 75% owned by German automotive group Volkswagen AG.
Critical, well-located facilities: The three facilities, originally built to tenant specifications, are among the largest service stations operated by the MAN Group and serve as an important sales driver for its 24/7 fleet repair and maintenance servicing operations. Located on arterial routes, the facilities benefit from the high commercial traffic flow that connects several major German and Austrian cities and links Europe’s eastern and western markets.
Long-term net leases with built-in rent growth: All three facilities are net leased, with a remaining term of approximately 15 years and CPI-based rent escalations.

Reference: NEW YORK, Sept. 9, 2015 /PRNewswire/ — (NYSE: WPC), a real estate investment trust specializing in corporate sale-leaseback and build-to-suit financing, and the acquisition of single-tenant net lease properties, announced today that it has acquired a portfolio of three modern truck and bus servicing facilities for approximately $42.9 million (€38.9 million). The facilities — two in Germany and one in Austria — were purchased from the developer, Wohnungsunternehmen Semmelhaack, and are net leased to wholly-owned subsidiaries of MAN SE (The MAN Group).

[Learn more…]

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Net Lease Case Study: Checkers Restaurant [**ABS SLB (15)]

August 16, 2015July 21, 2018 dajkgroup Business Consultant, business finance, Entrepreneur, investment, investor, net lease, NNN CRE, real estate Business Consultant, business incomes, business owner, case study, commercial real estate acquisition, creative finance, entrepreneur

**Absolute: ABS

**Sale leaseback: SLB

Checkers – Part of Rare Portfolio of 9 [ABS SLB (15)]

Address: 3150 East Bay Drive | Clearwater, FL 33771

Purchase Price: USD 868,400

Fixed Annual Income: 4.50%

Offer Summary:

Price: $868,400	Cap Rate: 4.50%	Property Type: Retail
Building Size: +/-738 SF	Land Area: +/-0.42 Acres	Property Use: Restaurant
Current NOI: $580,342 (Portfolio)	Lease Term: NNN	Location: Clearwater, FL

Location Description

Clearwater, FL is a year round vacation destination, with a strong population of over 110,000 within a 3-mile radius of the subject property. The property is on a desirable hard corner along a dense retail corridor with close proximity to Publix, LA Fitness, Winn-Dixie, Wal-Mart, PTEC Clearwater campus, Southeast College, and The Belcher Soccer Complex. The St. Petersburg-Clearwater International Airport is +/- 4.3 miles away.
Portfolio Locations: AL, FL, GA, and MI.

Highlights

Clearwater, Florida Hard Corner Location | Vacation Destination – Clearwater is a year-round vacation destination, with a strong population of over 110,000 within a 3-mile radius of the subject property. The property is on a desirable hard corner along a dense retail corridor with close proximity to Publix, LA Fitness, Winn-Dixie, Wal-Mart, PTEC Clearwater campus, Southeast College, and The Belcher Soccer Complex. The St. Petersburg-Clearwater International Airport is +/- 4.3 miles away.

Part of Rare Portfolio of 9 Assets with Geographic Diversity – The subject property is part of a portfolio of Checkers’ last corporate-owned stores, offering investors immediate geographic diversity across four states in the portfolio at a discounted total portfolio price. All stores have been in operation for over twenty years and a majority of the stores have been upgraded recently.

Corporate Sale-Leaseback | 15-Year Term – Long-term sale-leaseback opportunity backed by a highly secure restaurant chain. Each lease will include two (2), five (5) year renewal options.

Absolute NNN Lease – No landlord responsibilities.

Strong Rent Escalation – The Checkers leases include 10% rental increases every 5 years, providing a hedge against inflation.

Low Rent-to-Sales Ratio – All locations have a low 6% store rent-to-sales ratio, allowing sufficient operating cushion for each restaurant.

Growing QSR Chain – Checkers opened 35 new locations in 2014 and has plans to continue to grow in 2015 with 80 locations approved.

Established Chain with High Average Sales – Checkers is the nation’s largest chain of double drive-thru restaurants with over 800 locations. In Nation’s Restaurant News’ Top 100 census, the company is ranked No. 89 in U.S. sales. The average corporate Checkers reported +/- $1 million in net sales.

[Learn more…]

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Rent to Own or Lease Option Strategy (“R2O”): Case Study Wall Street Firms

August 4, 2015July 22, 2018 dajkgroup asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, investment, investor, real estate Asset based finance, Business Consultant, business entities, business owner, creative finance, entrepreneur

Home Partners of America has received $US 500 million equity investment for R2O.

Home Partners’ Acquisition’s requirements:

Suburban location with a strong school system
Home price: from $100,000 to $725,000
Term: within 5 years
Purchase Price: increase annually; a markup 28% from initial list price or 5.6% per annum.
Lease: increase annually or 16% from initial lease rate or 3.2% per annum
Metropolitan Areas: 15 states, including California, Florida, and Texas.
Target Tenant/optionee: middle-class and affluent clients who have steady jobs and an overall financial history.

Other Wall Street Firms: New York City-based HomeLPC and Premium Point Investments.

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For tenant/optionee, they are paying a premium over renting and buying a typical home. These homes are in better neighborhoods with better school districts than most single family rental properties.

Alternative for saving more money: Tenant/Optionee can seek for:

For sale by owner with cosmetic fixer property.
Negotiate a fixed lease and lock in the purchase price within 5 years.
For sale from HUD home

For small operator/beginner in rental investor: Emulate Home Partner’s acquisition requirements. You can begin with one property at the average home price in your area.

For further discussion, please sign-up our free 30-min confidential consultation.

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Reference: rent-to-own-homes-make-a-comeback

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To optimize your success as a small business owner, create a blueprint for financing—before you need it to drive growth.

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Saatchi Art – A Sporting Chance for Peace

July 16, 2015July 22, 2018 dajkgroup art collector, asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, interior designer, investment, investor Art Collector, Art loan, Asset based finance, Business Consultant, business owner, creative finance, entrepreneur

We have successfully arranged for our partner/client Mr. Brown with Saatchi Art, London. His sculpture can be viewed at http://www.saatchiart.com/art/Sculpture-A-Sporting-Chance-for-Peace/800455/2546001/view

His artwork sculpture titled “A Sporting Chance for Peace”. The sculptures promote peace and positive principles for life, such as respect, discipline, patience, humility, forgiveness, and healing. The sculpture tells a very deep story for the inspiration of all people.

Sculpture: Bronze on Bronze.

Size: 50 H x 84 W x 10 in

The Global Gallery and Saatchi Art are proud to present three exceptional offers. Individuals who pre-order the A Sporting Chance for Peace bronze sculpture, by Award Winning British artist Donald Brown, would receive the following:

1. A 85% discount from $200,000 to $30,000 (Price will be raised accordingly once the Edition #1 is scheduled its press conference. It will be scheduled at 4Q 2015).

2. Global recognition as Founding Patrons for purchasing at this time and thereby helping to fund the launch of the Global Peace Initiative and worldwide sale of the official prints of the said sculpture

3. A 50% THANK YOU refund of $15,000 after the initial 100,000 lithographic prints of the sculpture have been sold worldwide

After three and a half years of intense design and creativity, the A Sporting Chance for Peace sculpture is completed. It will be the universal image for the Global Peace Initiative.

By 2016, up to 207 countries of the United Nations would have received a 4ft x 6ft lithographic print of this sculpture. On the 21st September 2016, all of the countries would be invited to unveil their print on the same day and precise time to complete the largest, simultaneous, print unveiling ceremony in history. The event would promote peace and positive principles such as respect, discipline, patience, humility and forgiveness to all people.

In recognition of 2019 there will be 2,016 bronze replicas of the sculpture in the limited edition. The three promotional offers outlined above will only apply to edition numbers 1,809 to 1,709. They may be pre-ordered at this time.

A percentage of revenue from the sale of the 100 sculptures, would go towards funding the launch of the Global Peace Initiative in 207 countries and marketing the worldwide sale of the official lithographic prints of the sculpture.

Another percentage of revenue from the sale of the 100 sculptures would fund Project AIRWAVES. This is a division of the Global Peace Initiative that would employ artists around the world to conduct residencies in schools to promote peace and positive principles. They would work with students to create works of art that deal with overcoming violence in order to elevate society.

AIRWAVES is the acronym for – Artists In Residence Working Against Violence Elevates Society.

The 50% refund of $15,000 to the buyers of the 100 sculptures would be The Global Gallery’s way of saying THANK YOU for purchasing the sculpture at this time and helping them to fund and launch the Global Peace Initiative, market the prints worldwide and expand Project AIRWAVES internationally.

After the sale of the 100 sculptures, the 85% discount might no longer apply and there would be no 50% refunds to buyers thereafter.

CLICK OR CUT & PASTE THIS LINK FOR VIDEO OF THE SCULPTURE. http://youtu.be/xUi0FLskRBc (A MUST SEE)

Timeline: The bronze casting process should be completed by November and shipping to buyers would begin shortly thereafter. Projected time for the 50% ($15,000) refund would be approximately 12 months.

We welcome all questions regarding any of the above information.

Art Collectors/Investors (“Buyer”)

Limited Edition #1: $US 50 million (RESERVED)

50 Million Reserved for Sporting Chance for Peace

Please note this Limited Edition 1 is no longer available for sale. However, the remaining of Edition 1699 sculptures is available. Please note we are seeking for:

Art Collectors/Investors
Sponsors
Long-term Lease

Once this public announcement is scheduled, our remaining editions’ price will be raised at a minimum of $US 500,000.

If you are interested, please contact us.

Global Brand Recognition’s Benefit

Historic Unveiling Ceremony 2019

By 2019, up to 207 countries of the United Nations would have received a bronze replica of the A Sporting Chance for Peace sculpture lithographic print featuring this sculpture. All 207 countries would be invited to unveil their sculpture on the same day and precise time to complete the largest, simultaneous, sculpture unveiling ceremony in history. Both unveiling ceremonies would take place on September 21st, recognized by the United Nations as International Day of Peace.Worldwide Merchandise

The global marketing campaign will include the release of the official 33 x 23 inch lithographic print of this sculpture for members of the public in 207 countries to purchase. The price of the prints will be $US 65. Our initial and conservative target will be the sale of 1 million prints worldwide, an average of just 4,830 print sales per country.Time is of an essence. Our offer will accept a buyer on a first comes first gets basis. Please contact us

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Fine Artwork Can Leverage for Additional Liquidity – Creative Finance

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Net Lease Case Study: Kevin OLeary’s O’Shares ETF versus Net Lease Strategy

July 14, 2015July 22, 2018 dajkgroup asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, investment, investor, net lease, NNN CRE, real estate Business Consultant, business owner, commercial real estate acquisition, creative finance, Dollar General, entrepreneur, Net lease Buyer, NNN Investor

Exchange Traded Fund Definition

An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated once at the end of every day like a mutual fund does.

Kevin O’Leary’ OShares

After she died I became the executor of her estate and for the first time saw the results of 50 years of investing in only dividend paying stocks. Her returns were stunning. She was not a financial advisor but she believed in the principle that you should get paid while you wait. To her a stock that did not pay a dividend was simply a speculation not an investment because you could only make money if the stock went up. Dividends assured her of income and she would only spend that.

Seeing the results of her philosophy changed my mind about investing forever. I did some research. Did you know that over the last 40 years over 70% of the markets return came from dividends, not capital appreciation? That settled it for me, today I never invest in stocks that don’t pay dividends.

Full article at https://www.linkedin.com/pulse/my-love-dividend-paying-stocks-made-me-create-own-etf-kevin-o-leary

Our Net Lease Strategy has 4 similar characteristics and 4 distinct and unique advantages over dividend paying stocks

Our comments on 7/14/15 14:15 PST

Mr. O’Leary,

Thank you for sharing your story regarding your mother’s investment philosophy.

Investor only requires to master few investment principles/strategies so that he can invest money on his own without a financial advisor. Of course, he needs to a) search and select right dividend paying stocks; 2) strategize for a long term objective is 40 to 50 years.

A similarity with your mother’s investment philosophy, our Net Lease Strategy has 4 similar characteristics and 4 distinct and unique advantages over dividend-paying stocks.

The investor in Net Lease property (“Net Lease” or ”NNN”) also requires to master top six (6) net lease terms.
The investor also requires to research, analyze, due diligence and review his acquisition. Since lease agreement is guaranteed by a tenant, therefore, tenant’s net worth must be at $US 100+ million in last 12 months. For example, it describes in details in Case Study Family Dollar.
The investor in Net Lease also receives his monthly fixed income, called capitalization rate or short for CAP rate or just CAP. In fact, if net lease properties cannot pay CAP (positive cash flow at closing), it just a speculation.
The investor in Net Lease property understands and seeks for long-term investment objective. It is a minimum of 5 years for Net Lease.
Investor’s monthly income is a passive income, which taxed at lower tax rate than the earn income.
The investor in NNN can leverage using mortgages or OPM if he wants to. This is a great option.
The investor in Net Lease can purchase insurance against his underlined net lease property. This is a requirement for protecting his funds. In contrast, you cannot buy insurance against dividend-paying stocks.
The investor in NNN has full control of his investment. He can re-fi with cash out, cross collateral, sell and lease back or SLB, sell with seller finance or wrap-mortgage.

Additional of the net lease can be found at http://www.dajkgroup.com/net-lease-investment.html. It is including case studies and our monthly selections.

Your Shark Tank’s episodes are always enjoyable, entertaining and packed of valuable investment strategy and creative structured finance.

Thank you for your time, Kind regards

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Net Lease Case Study: Family Dollar

July 3, 2015July 4, 2015 dajkgroup asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, investment, investor, net lease, NNN CRE Business Consultant, business owner, commercial real estate acquisition, creative finance, entrepreneur, net lease, Triple Net Lease

If the middle-class investor “saves” money by investing in mutual funds or 401K, then the wealthy and strategic investor “save” money by investing in net lease or triple net lease.

Highlights:

How much monthly fixed income will investor receive if he invest $US 713,800?
What other benefits when USA-investor invest in net lease?
How much risk when USA-investor invest in this net lease, Family Dollars?
Would you commit to saving and increasing your asset in next 12 months?
Would you commit to learning the Net Lease Strategy you’ve always wanted?
Would you commit to preparing both of those aforementioned objectives?

Please review our previous blogs:

What are the key data from net lease listing?

Who is your tenant? Family Dollar
How much is asking price: $US 713,800
Where is the location: 1060 South Fayette Street, Beckley, West Virginia 25801
What is the rate of return on your investment (Cap Rate): $US 64,599 (Annually)

You want to reduce your risk by select strong credit tenant with strong net worth $US 100+ million. Also, you make sure the Family Dollars will be a guarantee for your lease payment.

How much monthly fixed income will investor receive if he invests $US 713,800?

The annual return of investment, before mortgage and tax, is $US 64,600. If you invest all cash in this Family Dollar, you will receive $US 5,383 a month. Please note your payment is directly from Family Dollar.

Please note this is a passive income (NOT earning income) which is taxed at lower tax rate. The exact tax rate depends on individual entire financial structure. Please consult with your Certified Public Accountant.

Your potential passive income is $64,600 X 15 years = $US 968,984

What other benefits when USA-investor invests in net lease?

Depreciation & Appreciation: For USA-based investor, you may receive additional benefits such as depreciation and appreciation.

Scalability: Also, you are NOT involved in daily operations of the Family Dollar neither repair & maintenance. This means you can invest simultaneously in multiple net lease properties and different locations. Therefore, your scalability is limitless. It’s only limit by how much capital you can access.

Re-financeable & Transferable: You can borrow against it if you need additional cash. You can structure this net lease be transferred to your foundation or business entity at your death event.

How much risk when USA-investor invest in this net lease, Family Dollars?

Political Risk: Select country wisely; preferable is located anywhere in USA or United Kingdom
Mother Nature Risk: Make sure your property insurance cover these events
Tenant Risk: Make sure your lease is guarantee by Family Dollar

Conclusion:

If the middle-class investor “saves” money by investing in mutual funds or 401K, then the wealthy and strategic investor “save” money by investing in net lease or triple net lease.

For further discussion, please contact us for our free 30-min confidential consultation.

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Referenced Net Lease Listing: Case Study_Family Dollar NN

Diagram for illustrating of How using a Triple Net Lease To Create a High Taxable Revenue to a Low Taxable Revenue Legally

Typical Scenario: The Digital Online Business (“DOB”) generates average $US 40 million in last 3 years. Since this DOB has very little on overhead and management’s expenses, it is most likely DOB’s revenue will be taxed at the highest tax rate. Its total taxes’ bill most likely is Fifty Percent (50%) or $US 20,000,000.

How can this DOB minimize his taxes’ bill legally and simultaneously increase his asset?

First, the owner of DOB just allocates $US 18 million for investment in the Net Lease or Triple Net Lease commercial real estate (“NNN CRE”).

Step #1: DOB purchases all cash of the 1^s^t NNN CRE for $US 18 million.

Step #2: Refinance after 3 to 6 months of closing of the 1^st NNN CRE. The loan amount is approximately 70% Loan-to-value or $US 12,600,000. Please note this is a debt finance, the DOB would not pay tax on this $US 12.6 million.

Step #3: DOB purchases all cash of the 2^nd NNN CRE for $US 12 million from his debt finance.

Please note DOB can repeat step #2 and #3 again if he wants to.

After approximately 12 months, DOB creates at least 3 favorable and strategic objectives?

Create a passive residual income approximately $US 1.1 million annually
Create an asset’s value is approximately $US 30 million
His total taxes’ bill is reduced at least Fifty (50%) percent to $US 10 million from $US 20 million.

Please note this NNN CRE strategy can work with lower initial investment. We recommend the minimum is $US 1 million for the time and efforts involving and executing these steps. There is no maximum amount; however it will be fewer selections of NNN CRE once its purchase price begins from more than $US 100 million. Therefore, this investor should anticipate a little bit longer. We would say about 24 months it is more realistic time frame.

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Fine Artwork Can Leverage for Additional Liquidity – Creative Finance

June 24, 2015July 2, 2015 dajkgroup art collector, asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, insurance, investment, investor AIG, Allianz, Art Collector, Business Consultant, business owner, creative finance, entrepreneur, Euler Hermes, financial instrument, insurance, insurer, investment, investor, Lloyd

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Our recent study showing creative investors especially net lease commercial real estate have increased using their art collections as collateral loan. The question is WHY?

The value of their art collection has increased significantly for last several years now. However many art collectors do not want to sell their arts because of too expensive when they sell as mentioned in our previous blog, “The Best Way Creating Liquidity Value of Your Art Collection – Borrow”

There are more willingness banks and smaller art lenders are aggressively offering loan secured by art collector.

For art collector (borrower), it depends on what type of loan, the loan-to-value (LTV), annual interest rate and terms.

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There are two types of secured art-loans

Recourse
Non-recourse.

Recourse loan where art is required as collateral for the loan but the borrower also has to provide a personal guarantee of payment. That means if the borrower defaults and the bank can’t recover the full amount of the loan by selling the art, it can make a claim on the borrower’s other assets.

Non-recourse loan where it does not require borrower’s personal guarantee. The artwork is the only asset that is the security for the loan.

Because of the low risk associates with the recourse loan, lender offer much lower rates. It’s also a part of an overall relationship with a wealthy client. Borrowers may be able to get rates as low as prime plus 2% or 3%. Conversely, the non-recourse loan, annual interest rates vary largely but typically range from prime plus 6% to 13%.

The minimum loan is $US 5 million for an art-secured loan. Since loans typically are around 50% of the appraised value of the art, the borrower’s collection would need to be worth around $10 million or more. Also the minimum value of each piece is $200,000.

These are typical requirements for these art-loans.

Borrower requires proof of authenticity such as purchase document, exhibition history, sale history and inclusion in a catalog.

Borrowers also need to prove that they own the art outright, with no possibility of anyone else claiming it in situations like divorce or a disputed inheritance.

In addition, certain lender prefer a certain type of art collections. They make better collateral than other. For instance, some lender prefers artworks from ancient civilization; other lender prefers artworks between 19th century impressionist painting and postwar or contemporary art.

Where the money goes are stated in our previous blog: ““The Best Way Creating Liquidity Value of Your Art Collection – Borrow”

CONTACT US… Collectors interested in arranging financing should contact us for free consultation. We will assist to identify the borrowing need, determine what type of financing makes the most sense, and facilitate the appropriate lender. Please note minimum appraisal report is at $US 5 million. There is no maximum amount.

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The Best Way Creating Liquidity Value of Your Art Collection – Borrow

June 20, 2015June 28, 2015 dajkgroup art collector, asset management, Business Consultant, business finance, business owner, Entrepreneur, finance, insurance, investment, investor AIG, Allianz, Art Collector, Business Consultant, business entities, business owner, Contract Review, entrepreneur, Euler Hermes, financial instrument, insurance, insurer, investment, investor, Lloyd, Loan to financial instrument

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Unlocking the Value of Your Art Collection

Art collectors have high value inaccessible in their art collections. If they need to access of this value, they do not have to sell their art to create liquidity – Borrow. They can borrow funds and retain possession for their art.

There are big advantages to borrowing – avoiding selling cost, capital gain and taxes. It could be up to 65+ percent. These combination can make it VERY expensive to sell.

What is the alternative to access its liquidity? Borrow.

For example: A collector sells his art for $US 10 million. Assuming selling costs of 20 percent (20 percent of $US 10 million = $2 million) and an original cost of $US 1,000,000 for the art.

Funds realizes a before-tax profit: $US 7 million.
Net to collector: $US 4.2 million (this profit is subject to capital gains tax. Assuming a rate of 40 percent (28 percent federal plus 12 percent state), the collector pays $2.8 million in capital gains tax, and nets $4.2 million.
Net to heirs: $US 2.1 million (these net proceeds are subject to estate taxes at the collector’s death. Assuming a 50 percent rate, the heirs receive only $2.1 million — on art sold for $US 10 million! This represents a loss of 79 percent across a single generation, and underscores the cost of selling art.)

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By selling during his lifetime, the collector pays 2 levels of tax: capital gains and estate. By borrowing to create liquidity, the collector can keep the art during his lifetime and have his estate benefit from a step-up in tax basis. This enables collectors to pay just one level (estate tax) rather than two. In this example, the collector could borrow as much as $US 5 million (up to half the art’s value) and keep his art. Art collector would be responsible for debt service on the loan, but he would also benefit from any appreciation on his art.

What art collectors do with the proceeds? These are few:

Entrepreneurs frequently borrow against their art to invest in their existing businesses or new ventures
People also borrow against their art to make charitable contributions, pay medical expenses, and fund divorce settlements.
An art-based loan is a low-cost option for art collectors in need of cash flow who can enjoy their art while making scheduled payments.
In these uncertain economic times, art collectors also borrow to avoid the risk of having their art “bought in” (or “burned”) at auction, which makes it difficult to sell for years to come.
Faced with estate taxes that must be paid within a short time frame, executors frequently liquidate art collections quickly. But borrowing funds to pay estate taxes and administration costs makes it possible for executors to maximize the value of the estate’s assets by selling the art over time, thus avoiding a “fire sale.”
Many arrange lines of credit and term loans to invest more art.
Some whose wealth is concentrated in art borrow funds to invest in other asset classes, such as stocks, bonds, real estate, oil, gas, private equity, and hedge funds, thereby diversifying their holdings.

Consult your financial adviser, accountant, attorney, or estate planner while making these decisions.

Does art collector want the flexibility of a line of credit or a term loan of 3-10 years?
Does art collector want a six-month loan to fund short-term liquidity needs?
Or an advance against art that art collector plans to sell later this year?

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If you would like to inquire about our Concierge Services, please sign-in our free consultation

Building a Finance Plan Geared to Growth *** 30% OFF for our subscribers!
To optimize your success as a small business owner, create a blueprint for financing—before you need it to drive growth.

Growing, Evolving and Pushing Forward!