This is not directly scanner or emergency related. It is a look at real estate financing and the USA economic system.
http://www.boston.com/businessupdates/2013/07/08/masshousing-closes-loans-preserve-affordability-georgetowne-homes-hyde-park/KYv1rMiYYbTUsOysX3A9AL/story.html This is a large apartment complex in the West Roxbury section of Boston. Lets see if we can figure out the finances. " Mass Housing " (a state agency) is apparently guaranteeing $170 million in loans for the complex. The complex will be rehabbed. Someone will buy the complex from someone. [$171M is equivalent to $200,000 per apartment] Note - 'Section 8' is a federal housing assistance program. Qualified renters pay 30% of their income as rent. The remainder of the rent is paid by the federal government. Typical market rate for apts in that area might be $1200 per month. If 80% of the apts are rented by Section 8 renters, then the landlord basically has an endless source of rent. With full bld occupancy. The landlord just has to provide mtnce and maybe security. 1,000 apts at $1,200 per month is $1.2M in the landlords pocket every month - approx $14 M per year. Bottom line - the banks are lending money (which they get from the middle class) to rich people to buy and renovate the blds. The rich people will then collect $14 M per year in rent. If the purchase price of the bld is $140 M, then the bld will be paid off in approx 10 years. [The rent comes mostly from the middle class apparently (one way or the other).] Bottom bottom line - this seems to be an complicated enterprise that will move wealth from the middle class to the rich class. Unless I have got it all wrong. Alternative scenario - bank lends $200,000 to each apt. Each apt invests the money and earns $20K per year. $10K goes to rent - $10K goes to paying off loan. ("Rent" pays for mtnce - "loan" pays for original construction costs) Maybe 5 mtnce guys and 5 office workers are needed to run the complex. That could be $1M in expenses every year. (I am not sure who would be paying for utilities). The only other big expense is probably insurance. -- You received this message because you are subscribed to the Google Groups "massfire" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/massfire. For more options, visit https://groups.google.com/groups/opt_out.
