Quote:
Originally Posted by Spot
You mentioned that you own some buildings that the government leases. Do you make a profit on them? Of course you do.
Q: How is that possible?
A: Because the government pays you more in rent than it costs for you to own the building over time.
Translation: It's cheaper to own than to rent if you plan to hold onto the property long-term. The time-value of money argument is mute when you think of this as a property that they will be renting for as long as the state of Arizona exists. The $700 million they are asking for the building may be worth more today than the $70 million they will be paying in rent 10 years from now, but if it's over 100 years, or 1000 years... And yes, there is a buyback option. Do you think the property will be worth less 30 years from now if they decide to exercise that option? Of course not. So the state will waste money then too and investors will earn even more profit off the taxpayers. Oh joy...  |
The government also doesnt pay property taxes, which generates revenues for the taxpayers, I do.. And I can usually manage expenses better than the government, just like every other business that exists.. Why else do you think the government also contracts out their insurance, medical, prisons, even landscaping and often times security.. ITS CHEAPER.. I dont have to pay union wages, I dont have the costs of selling bonds, I dont have to worry about budget shortfalls, and I can hire people anywhere in the world to often work for me and can put managment and maintenance out for competitive bids much quicker and cheaper than the government can due to legal restrictions. lets not even discuss that often times some of the properties I invest in can have 40-50 owners and we can often time get better mortgage rates than the government can due to the shear assets and accounts receivables and better management of money..
Ooh, the contract does indeed have a buyback option, what is the price on that buyback? You cant make a fair computation on the profit/losses of a deal without knowing that price..
p.s. and you also forgot about the fact that I can manage and own these properties, do it cheaper than the state and the post office because I can write off my expenses, again, the government can not.. I can actually buy a property, lease it at a loss, and still have it turn into a profitable deal due to writeoffs, 1031's, LIHTC's etc..
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