From the Jersey Journal:
Jersey City sees building boom
Jersey City is about to get a lot more crowded.
The city is expecting nearly 3,000 residential units to come online before the end of the year, while developers are expected to break ground on another 3,000 in the next 10 months.
The new additions will include a 950-foot condominium tower on Hudson Street that will be the tallest building in New Jersey, a 50-story high-rise outside the Grove Street PATH station and a 448-unit tower in Liberty Harbor North that will rise 44 stories.
And the changes aren’t only in the Downtown, where most of the new large-scale development has taken place for the last three decades. Hundreds of units are set to go online by the end of the year on Senate Place, just south of Canco Lofts, and at the Beacon.
Developers Eric and Paul Silverman have been building in Jersey City for over 30 years — before it was cool. The brothers’ new building, Charles and Co., a 99-unit Grove Street building with office and retail space, is opening this summer. Eric Silverman told The Jersey Journal the city’s newest boom is part of a global trend of more people choosing city living over suburbia.
More than that, he said, Jersey City is special.
“People have finally recognized that Jersey City has a lot of natural assets: good architecture, a good grid pattern, the multiple modes of transportation,” he said. “It has everything.”
…
The list of buildings opening or breaking ground in Jersey City this year changes so rapidly it’s hard to keep track.
…
All told, the city expects the new developments opening this year to contribute to an expected 8,000 increase in the city’s population. By next year, Mayor Steve Fulop says, the city will be the largest in the state.Jersey City has seen building booms before, but Fulop said this one is different because it is “benefiting every neighborhood.”
Less lucrative tax abatements for Downtown residential buildings are allowing the city to grow its rateable base, he said, leading to more residents sharing the tax burden. And more lucrative tax deals for developers outside of Downtown, which was home to the city’s last building boom, are helping lure developers to build elsewhere in the city, he said.
Good Morning New Jersey
From the Fed:
Beige Book – April 15, 2015 – Second District — New YorkGrowth in the Second District’s economy has slowed to a modest pace since the last report. Businesses report that selling prices remain mostly stable, while input costs rose moderately. Labor market conditions have improved slightly, on balance, in recent weeks, with scattered reports of increased wage pressures. Consumer spending has been a bit weaker, on balance, since the last report: both general merchandise retailers and auto dealers note that sales slumped in February, due largely to weather, but bounced back in March. Tourism activity has been mixed but a bit softer, on balance, while consumer confidence has slipped somewhat. Housing markets showed some signs on slowing; office markets have slackened, while the market for industrial space has continued to strengthen. Finally, banks report steady to stronger loan demand, continued narrowing in loan spreads, and lower delinquency rates across the board.
Construction and Real Estate
The District’s housing markets have been a bit softer, on balance, since the last report. New York City’s apartment rental market has been steady to slightly stronger in recent weeks: rents have continued to edge higher in Manhattan and Queens and are up moderately from a year earlier, while rents in Brooklyn have been flat. One Brooklyn real estate authority notes that, while rents have stabilized in more established areas, they continue to rise in the more peripheral neighborhoods. New York City’s co-op and condo market was mixed in the first quarter: in Manhattan, prices declined modestly from the elevated levels of early 2014; but in Brooklyn and Queens, prices registered sturdy gains, driven by low and declining inventories. Sales activity was down from a year ago citywide but still fairly high. Once contact attributes some of the weakness at the high end of the market–especially new development in Manhattan–to the stronger dollar.
Housing markets in areas around New York City have been generally flat. Selling prices were flat to up slightly; one New Jersey contact partly attributes the sluggish recovery in housing to a persistently high backlog of foreclosed homes. Sales activity rose modestly in Westchester and Fairfield counties but remained sluggish in northern New Jersey, reportedly hampered by weather. Harsh weather was also blamed for weakness in the Buffalo-area housing market in the first quarter.
Commercial real estate markets across the District have been mixed, with some slackening in office markets but continued tightening in industrial markets. During the first quarter of the year, office availability rates rose in the Manhattan, Long Island, and Westchester-Fairfield markets; however, rates edged down across upstate New York and were unchanged (at a high level) in northern New Jersey. Office rents are flat to up modestly. New office construction has been robust in New York City but moribund across the rest of the District. Industrial availability rates, in contrast, have continued to trend down across most of the District, and rents have risen moderately; Long Island availability rate stabilized at a low level, with rents up 8 percent from a year ago.
I knew that the two locations were close; I just never realized how close. Apparently, the maximum-security prison in Walpole, Massachusetts, is only a little over a mile from Gillette Stadium. Aaron Hernandez will be able to hear the roar of the crowd at Patriots games from the prison yard Fate, as they say, is not without a sense of irony.
3. …$40 million…. Reasons to not lose your sh-t.
So, when can we expect to send less state aid to their schools? Can it the money finally go to suburban and exurban districts now?
[4] SX
He probably thought he was OJ. But Norfolk County, MA isn’t Los Angeles. Conservative juries there, and a populace that won’t give you the star treatment if you fcuk up.
If he were only tried in RI, it might have been different.
When the last tree has been cut down,
the last fish caught,
the last river poisoned;
only then we will realize that one cannot eat money.
The Great Pumpkin says:
April 15, 2015 at 2:33 pm
I don’t worry about money.
#5
“So, when can we expect to send less state aid to their schools?”.
When the Moon is in the seventh house and Jupiter aligns with Mars…
The end is nigh…..
http://nypost.com/2015/04/15/parents-are-paying-150000-to-tour-colleges-in-private-jets/
Jersey City is desirable because it has “a good grid pattern”?
Funny, but really true for only about 20% of us . . .
“A visitor from Holland was chatting with his American friend and was jokingly explaining about the red, white and blue in the Netherlands flag.
“Our flag symbolizes our taxes,” he said. “We get red when we talk about them, white when we get our tax bill, and blue after we pay them.”
“That’s the same with us,” the American said, “Only we see stars, too.”
@business:
BREAKING:
Jobless claims in U.S. hold below 300,000 for 6th week
http://www.pressofatlanticcity.com/news/breaking/bass-pro-shops-prepares-to-open-in-atlantic-city-in/article_0c6318d6-b880-11e4-b2b1-0b56d82c5b9d.html
ATLANTIC CITY — It is an outdoor wonderland — indoors.
The Bass Pro Shops store opening April 15 at the foot of the Atlantic City Expressway promises to be a visual treat as well as a retail hub for aficionados of the great outdoors.
Giant, hand-painted murals splashed across the store walls intricately depict the woodlands, waterways and wildlife of New Jersey. Muralists visited the Pine Barrens, the Delaware Water Gap and other locales to help them recreate panoramic vistas in artistic splendor.
“As people come into the store, we want to invite them to the outdoors,” one muralist, Denny Burkhart, of Wrightsville, Pa., said Thursday while he was painting scenes of birds and fish.
Bass Pro Shops is said to be the first retailer in Atlantic City to sell firearms, including handguns, rifles and shotguns. It will also have an indoor pistol range, which is sealed off from the rest of the store. Clements said there will be strict security procedures for all firearms, including locks and mechanical bars to safely store them away.
Firearms being carried through the store en route to the pistol range will have to be equipped with trigger locks. Only people who possess a New Jersey firearms permit will be able to use the pistol range, which will be managed by two retired police officers, Clements said.
http://www.pressofatlanticcity.com/news/breaking/bass-pro-shops-prepares-to-open-in-atlantic-city-in/article_0c6318d6-b880-11e4-b2b1-0b56d82c5b9d.html
@TLANTIC C1TY — It is an outdoor wonderland — indoors.
The Bass Pro Shops store opening April 15 at the foot of the @tlantic C1ty Expressway promises to be a visual treat as well as a retail hub for aficionados of the great outdoors.
Giant, hand-painted murals splashed across the store walls intricately depict the woodlands, waterways and wildlife of New Jersey. Muralists visited the Pine Barrens, the Delaware Water Gap and other locales to help them recreate panoramic vistas in artistic splendor.
“As people come into the store, we want to invite them to the outdoors,” one muralist, Denny Burkhart, of Wrightsville, Pa., said Thursday while he was painting scenes of birds and fish.
Bass Pro Shops is said to be the first retailer in @tlantic C1ty to sell firearms, including handguns, rifles and shotguns. It will also have an indoor pistol range, which is sealed off from the rest of the store. Clements said there will be strict security procedures for all firearms, including locks and mechanical bars to safely store them away.
Firearms being carried through the store en route to the pistol range will have to be equipped with trigger locks. Only people who possess a New Jersey firearms permit will be able to use the pistol range, which will be managed by two retired police officers, Clements said.
housing developmentWikimedia Commons
We didn’t get the March rebound in housing starts we were hoping for.
The pace of starts climbed just 2.0% to an annualized rate of 926,000 units. This was well below the 1.04 million units expected.
The pace of building permits dropped 5.7%. to 1.039 million units, missing expectations for 1.081 million units.
“All told, the weak housing starts report adds to the current narrative of weak domestic growth momentum in Q1 as the recovery continues to navigate against the trifectra of headwinds (harsh winter, strong dollar and port disruptions),” TD Securities Millan Mulraine said.
“These weak-looking data come just as homebuilder sentiment has revived, amid rising mortgage applications and strong new home sales numbers, so we are inclined to view the lingering softness as a continued weather hit,” Pantheon Macroeconomics’ Ian Shepherdson said. “That view will be much harder to sustain if the April numbers aren’t a good deal better, but we are optimistic.”
Chif, hey thinking of selling my Lucent bonds what do you think? They hit 112 yesterday and I paid 70 back in Jan 2010.
I think if I recall five years back you called it an ill advised purchase. At 70 me liked but at 112 me nervous. Seems a lot of smoke and mirrors doing cost savings with European companies
LUCENT TECHNOLOGIES INC 6.50000% 01/15/2028 GLBL DEB
LUCENT TECHNOLOGIES INC 6.45000% 03/15/2029 SR GLBL DEB
Anon borrowed a pseudo-profound thing today. I suggest you try eating a “capitalist and money- free” diet for a year, and stop living off the benefactors you curse daily. Eat only food produced by yourself and non-profit communes, sustainable and organic of course. This includes liquids.
Hai Ragnar.
http://www.auction.com/new-jersey/residential-auction-asset/1919530-18012-7-tompkins-court-vernon-nj-07462-o_554?utm_source=Marketo&utm_medium=Email&utm_campaign=NECOMBO_REO&utm_content=REO&utm_term=REO/B-REGIONAL-NE-EB-Combo2015-04-16&mkt_tok=3RkMMJWWfF9wsRoksqjOcu%2FhmjTEU5z17%2BkrW6e%2FhYkz2EFye%2BLIHETpodcMTcRmML3YDBceEJhqyQJxPr3AJdYN1dRoRhbrCQ%3D%3D
really nice NJ home for 50K
If you are an investor or utilize “hard money” for financing your deals, they are a welcome option.
Mortgage Marketplace LendingHome Reels In $70 Million From China’s Renren
“We’re rethinking the entirety of the mortgage process–how we find borrowers with the experience originating online,” said CEO Humphrey. ”[We’re] closing in days not months and applications are taking minutes, not days. We’re rethinking that to frankly what we think a customer expects in 2015 for an industry that has traditionally been trapped many years in the past.”
While the trope of the internet streamlining an antiquated industry can be a common story for any fledgling startup, companies like Lending Club, which deals with personal loans, and OnDeck OnDeck, which handles small business loans, have shown that simply being the web connector between borrowers and lenders can be a lucrative business in a vast market. There were $8.6 billion-worth of loans originated by marketplaces in 2014 and for mortgages alone, LendingHome’s cofounders said their current addressable market could be at around $600 billion a year. Currently, the San Francisco-based startup only services borrowers with investment properties, like single-family residential rental buildings, an underserved market where owners can’t find backers.
“We think it’s crazy that if you’re a small landlord and you own a couple rental properties–the income from the rental would be enough to pay your mortgage alone–yet there is no financing for that,” said Humphrey. “There are some 14 million homes in that camp.”
http://www.forbes.com/sites/ryanmac/2015/04/13/mortgage-marketplace-lendinghome-reels-in-70-million-from-chinas-renren/
We’re back at the high sixes- low sevens -hmmmm is everyone still putting 20 percent down?
JJ’s what’s your take on what increasingly looks like a global bond bubble?
http://davidstockmanscontracorner.com/none-dare-call-it-fraud/
Fore!!!! I would be pissed if I expected to see beautiful greens and now I see homes.
Now Playing on America’s Golf Courses: Meth Cooks and Rattlesnakes
How can you tell when they want to get rid of your golf course?
They invite the rattlesnakes to play.
Real estate developers bet big on golf course communities in the 1990s and the 2000s, sparking a building boom that cratered in the recession. Now, amid a strong housing market that creates demand where the courses are located, they are working against zoning laws and deed restrictions across the country to shut down unprofitable courses and develop the land for new homes.
Ben Holt says he has watched it all play out first-hand since he plunked down $365,000 for a four-bedroom ranch-style house on a golf course in Ahwatukee, a master-planned community about 10 miles south of downtown Phoenix. Holt thought he’d be getting patio views of the 12th tee. Instead, he said, the course owner, Wilson Gee, turned the land into an eyesore in a bid to seal a development deal.
Gee, chief executive officer of Pasadena (Calif.)-based RMJ Property, was already talking about redeveloping the Ahwatukee Lakes Golf Course when Holt bought his home there in 2008. After neighborhood residents blocked that plan, Gee switched gears. He closed the Lakes, as the course is known, in the spring of 2013 and then erected barbed-wire fences and drained artificial lakes that caught runoff from nearby South Mountain.
http://www.bloomberg.com/news/articles/2015-02-11/now-playing-on-america-s-golf-courses-meth-cooks-and-rattlesnakes
Essex,
We’re back at the high sixes- low sevens -hmmmm is everyone still putting 20 percent down?
Ahh! Perplexing, isn’t it? Nobody understands until they start diving into it. There’s a lot of stuff to chew on here and 99% of the muppets really don’t have a clue. It’s a very risky game and remember, this is with interest rates at dead rock bottom! A rise in rates, a bit more inventory, ever-higher taxes all mean sideways to decreasing price movement. That’s page one of the story. Muppets will always let emotion drive their decision; logical folks will consider otherwise.
SX [19];
The trade-ups can put 20 percent down, if they got their balance sheet in order and paid off the HELOC that financed their ’07 Escalade. Unfortunately, I suspect those types are as rare as Skittle-sh!tting unicorns. At the very least, that’s not they type who were camping out at open houses to put down deposits sight-unseen, nor are they as prevalent.
I’m seeing properties move in my neighborhood, at marginally higher prices than when I bought 3 years ago. Still not back to ’06 bubble levels, however.
Here’s the thing, if we believe in the 7-year cycle, then we can’t say that the market will stay paralyzed forever.
EAST LONGPORT, NY – It all began when a local man found some bedbugs in his rental car. He figured the best way to get rid of them was to douse the car with rubbing alcohol, Newsday reports. It all seemed to work well, until he lit a cigarette, setting the car ablaze Tuesday and burning himself. The car was so burned up that the heat damaged other cars in a supermarket parking lot, and license plates were left unreadable.
our comm unist president
@pdacosta:
A record 54 S&P 500 firms partially exempt from U.S. corporate income tax, more than twice the number four years ago
“The biggest factor is the recent wave of companies, such as Medtronic Plc and Mylan NV, that have completed what’s known as an inversion, in which they move their tax address overseas.
Other companies have declared themselves to be real estate investment trusts, or REITs, which the Internal Revenue Service doesn’t treat as corporations.
Just this year, Equinix Inc., a California company that operates data centers, became a REIT to lower its effective tax rate to as little as 10 percent.”
[19] Essex
I would venture to say that this crisis took a lot of wind ($) out of people’s ability to put down 20%. Unless they purchased years ago, selling and trading up. I don’t think that majority of people pre-2005 was putting down 20% but could be wrong there.
My crystal ball sees mortgage rates raising and property taxes staying the same for the next few years….only variable is home prices.
Who is going to blink first? Sellers or buyers?
So Bernake took a job at a hedge fund. Guess they are planning for the next downturn as we speak.
Chifi [24];
The stupid… it burns!
Darwin award candidate. In what universe does “found some bedbugs in his rental car” not end with an immediate trip to return said car for refund or replacement?
Tool [26];
So what you’re saying is that the corporations are too smart for your dear leader’s attempt to hold them up for what is the highest corporate tax rate in the developed world. And you’re proud of that?
“We’re back at the high sixes- low sevens -hmmmm is everyone still putting 20 percent down?”
It’s a tough decision, isn’t it? You can look at the governments handling of the housing crisis and those who put the least down were the most rewarded. Put down 20% and you can’t really walk away. But if you put down too little, you pay mortgage insurance and potentially a higher interest rates. Then there is calculating the interest rate deduction on your taxes. I personally believe that interest rates are pretty much as low as they are going to go, so you are better off putting the least down without paying insurance leaving the jingle mail option open.
I think Germany, Japan or France long term bonds will be a bloodbath to hold long term.
But some international corporate bonds will do well. They actually can benefit from ZIRP to clean up their balance sheet and avoid bond defaults.
Ragnar says:
April 16, 2015 at 10:32 am
JJ’s what’s your take on what increasingly looks like a global bond bubble?
http://davidstockmanscontracorner.com/none-dare-call-it-fraud/
Con’t [30]
Now I understand why you’re happy as a pig in sh!t that your guy got rolled by the mullahs.
Moose (23)-
You and I may believe in 7-year cycles, but the gubmint and FedCo do not. That’s why they’ve mortgaged unborn generations into oblivion in order to keep housing markets levitated until they either leave office or die. Natch, the effect of wringing normal cyclicality out of housing means that the next downturn will be a cataclysm of epic proportions, in which case it won’t matter whether you’re a buyer or seller, as we’ll all be truly and epically fuct.
“Here’s the thing, if we believe in the 7-year cycle, then we can’t say that the market will stay paralyzed forever.”
Lemme guess, he smacked up the rental car and didn’t have any supplementary coverage? Decided to torch it and claim it stolen, only he got caught?
Box (28)-
Could be as simple as those dirtbags thinking they owe him one. Or, they want a heads-up from someone in the know when it comes time to head for the hills.
“So Bernake took a job at a hedge fund. Guess they are planning for the next downturn as we speak.”
Honestly, the whore rental car/torch thing sounds like something any pellet-brained politician could do.
…whole, not whore…goddam iPad
Overriding strategy in purchasing housing should be based on the principle that only idiots pay their mortgages.
Luge [37];
And speaking of automotive difficulties, I know just the pol who would try it… http://hoh.rollcall.com/congresswoman-demonstrates-worst-parking-job-ever-video/
BTW, electric powered VW bus. Perfectly aimed at the Brooklyn hipster market segment.
Essex,
With the inevitable wage growth just around the corner, you would want to borrow as much as you can. Get a Heloc on top of it. It all won’t matter soon. Didn’t you see? Walmart increased their minimum wage and some idiot small business owner in California bumped up everyone’s salary to 70K from 50K. There’s your proof.
https://au.news.yahoo.com/a/27136947/jealous-man-fattens-up-girlfriend-to-ward-off-other-men/
Chinese Man mad GF get Fat so he could marry her without worrying about other men trying to steal her way.
The Chinese girl is now a Chunk
It’s coming!! Yes, borrow as much as you can right now and buy yourself an income property. Might not make sense, but it will in time. Remember, if you are wrong on this bet, it won’t even matter, everyone will be swimming in shi!. Mine as well take advantage of the current conditions, you will regret it if you don’t. You literally have nothing to lose. If the real estate market tanks, what will be left of the economy? Safe bet, imo. Why not?
Libturd (channeling Blumpkin) says:
April 16, 2015 at 1:32 pm
Essex,
With the inevitable wage growth just around the corner, you would want to borrow as much as you can. Get a Heloc on top of it. It all won’t matter soon. Didn’t you see? Walmart increased their minimum wage and some idiot small business owner in California bumped up everyone’s salary to 70K from 50K. There’s your proof.
lol…yup. Otherwise, he must have an iq around 75. The only way you can make sense of someone setting a rental car on fire due to bed bugs.
grim says:
April 16, 2015 at 12:59 pm
Lemme guess, he smacked up the rental car and didn’t have any supplementary coverage? Decided to torch it and claim it stolen, only he got caught?
It’s good to be the king and have a big swinging….
Blackstone CEO: We’re an ‘earnings machine’
Blackstone reported much better-than-expected quarterly results on Thursday, prompting Chairman and CEO Steve Schwarzman to declare his private equity firm an “earnings machine.”
He said about 30 percent of his business is in real estate.
http://www.cnbc.com/id/102592247
Sanders Statement on House Passage of Tax Break For Super Rich
Thursday, April 16, 2015
WASHINGTON, April 16 – Sen. Bernie Sanders (I-Vt.) issued the following statement today after the House voted 240-179 to provide $269 billion in tax breaks for the families of the wealthiest 0.2 percent of Americans.
“At a time of increasing inequality, it is beyond belief that Congress would provide hundreds of billions of dollars in tax breaks to a handful of millionaire and billionaire families.
“Incredibly, not only are the Republicans giving huge tax breaks to people who need it the least, they are simultaneously raising taxes on working families by ending earned-income and children’s tax credits that benefit 13 million Americans.”
@SenSanders: Sanders Statement on House Passage of Tax Break For Super Rich
Notice how when you leave office, the doors to make more money just spring open? And most people keep arguing about Left vs Right. smh
[28] Juice
Deval Patrick takes investing role at Bain Capital
Deval Patrick is joining the Boston investment giant Bain Capital, where the former governor will start a new line of business, directing investments in companies that produce profits but also have a positive impact on social problems.
Patrick, a Democrat who led the state of Massachusetts for eight years, joins a firm founded by his Republican predecessor in the State House, Mitt Romney.
Among those wooing Patrick were Bain Capital’s Jonathan Lavine and Steve Pagliuca, co-owner of the Boston Celtics and a leader in the Boston 2024 effort to bring the Olympics to Boston.
Last month, Patrick signed on to be an ambassador for the Olympics bid and triggered an outcry when it was revealed he would earn $7,500 a day when traveling to stump for Boston. He subsequently said he would help the effort without a fee.
http://www.bostonglobe.com/business/2015/04/13/former-gov-deval-patrick-join-bain-capital/QEgS648qXMm2KIq1AUySRO/story.html
Amateur video of small helicopter landing on Capitol lawn in Washington, DC
https://www.youtube.com/watch?v=giv8wy-9lEI
BlackRock, BlackStone, Apollo and KKR are earnings machines
Disney is going to be rolling in cash after Age of Ultron, Ant Man and Star Wars this year.
https://www.youtube.com/watch?v=ngElkyQ6Rhs
FKA [48];
As I recall there was only one party last presidential election alleging that working for Bain was eeee-vil. Now that one of their own has done so, nary a peep — particularly from the media, who are already getting busy preparing to drag Hillary over the finish line.
SouthShore Long Island Public School Educated CEO of Walt Disney has some street smarts.
Juice Box says:
April 16, 2015 at 3:03 pm
Disney is going to be rolling in cash after Age of Ultron, Ant Man and Star Wars this year.
[52] Anon
Its only an issue going into an election. Afterwards it doesn’t matter anymore.
I don’t think it was working for Bain is evil, they are a great company. It was more about the presentation that I am one of you and know your struggles. Which really didn’t connect with the masses and Bain simply symbolized that disconnection. If you work in the NE part of the US, private equity firms like Bain, Blackstone, hedge funds, etc are normal companies and you are likely to either work at one of them or know someone who does. Unfortunately the rest of the US only knows what the media spoon feeds them. I am actually giving people in the NE too much credit because I often see the lack of understanding here.
FKA [54];
Working for Bain (or any well-paid line of work) is never an issue for me; its only an issue for the leftists and those who swallow their… tripe. Therefore the problem of being an hypocrite about money and how it is made is not a problem for me either; though it never seems to bother those on the left.
“people who run America’s private-equity funds must be ruing the day Mitt Romney decided to run for President. His fellow Republican candidates, of all people, have painted a vivid picture of private-equity firms—including Bain Capital, where he worked for fifteen years—as job-destroying vultures, who scavenge the meat from American companies and leave their carcasses by the side of the road.
Not since the days of “Wall Street” and “Barbarians at the Gate” have the masters of leveraged buyouts looked quite so bad.”
Hey, grim or other experts…can you please explain to me what the exit tax would be under the following scenario:
I am planning to relocate to North Carolina. I plan to buy a house there first, then list my house here in Bergen County and hopefully sell it. I will not be working at the time I do this; I will be collecting SS survivor benefits (widowed status) and living off my investments. Here’s my question: If I do not establish “official” residency in NC until my NJ house sells (i.e. I keep my NJ car registrations and do not register to vote till then or whatever), am I still subject to the exit tax because I also own a home in another state? What if I filed an NJ resident return for the year in which the house sells (assuming it is this year) and then do not file for 2016 when I am a permanent NC resident?
Also…I understand that the exit tax is 2% of the amount of the sale. I have put about $105,000 in improvements into my house. Can those be deducted before taking the 2%?
“We should be concerned about private equity’s expanding power lies in the way these firms have become increasingly adept at using financial gimmicks to line their pockets, deriving enormous wealth not from management or investing skills but, rather, from the way the U.S. tax system works.
Indeed, for an industry that’s often held up as an exemplar of free-market capitalism, private equity is surprisingly dependent on government subsidies for its profits. Financial engineering has always been central to leveraged buyouts. In a typical deal, a private-equity firm buys a company, using some of its own money and some borrowed money. It then tries to improve the performance of the acquired company, with an eye toward cashing out by selling it or taking it public.
The key to this strategy is debt: the model encourages firms to borrow as much as possible, since, just as with a mortgage, the less money you put down, the bigger your potential return on investment. The rewards can be extraordinary: when Romney was at Bain, it supposedly earned eighty-eight per cent a year for its investors. But piles of debt also increase the risk that companies will go bust.”
55. I think firms like that need to be judged on their merit/contribution to the economy rather than their ability to generate income.
44. I want to sell my property and not rent it. Ideally. As much as I adore them house itself and the areas that it is in. But then I am talking trees and hills here.
I have been up to both KKR and Apollo. They both are in the same big black building in a high floor overlooking central park.
They have chefs on staff and lunch is served on glass plates with silverware and they will set it up at your desk if you want. I dined overlooking central park it was lovely.
And folks are very smart there and very good looking to boot. It was nice to be around my own kind for the day.
I also have been to Black Rock they wanted to hire me. But I felt something was up the guy who got job I was mad cause it would have been a huge raise, a friend of a friend got it, but like when 2008 hit he was out of work for two years. That very high salary and being let go around 12 months later took him a long time to recover but at the time I was like dang.
Bain Capital
@mtaibbi:
This “fee waiver” scam is a big story and may yet rock the Private Equity world. Massive tax abuses
“As Warren Buffet famously observed, “…while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.” He was referring to the fact that capital gains earned by wealthy investors are taxed at a much lower rate than wages earned by workers. And while commissions paid to shoe salesmen and bonuses paid to bankers are taxed as ordinary income, the performance pay earned by private equity firm partners for managing an investment fund — so-called carried interest — is also taxed at the lower capital gains rate. This may be outrageous, but at least it’s legal.
The same cannot be said for the tax dodge used by private equity firm partners to convert the ordinary income they receive from their fixed management fees into additional capital gains. The partners at Bain Capital famously waived over $1 billion of management fees over a 10-year period, saving these partners, at a single firm, over $250 million of taxes on what was, essentially, their salary income.”
This company is a Apollo owned PE company leveraged to the eyeballs. Here is a sample press release from a 2014 bond issue. Fun stuff if you have an MBA and trade bonds to read
Affinion Group is back in the private-debt-swap space with an offer to receive equity warrants in exchange for the 13.75% secured PIK toggle notes due 2018 that were put in place just six months ago as part of a prior partially uptiering bond exchange. The exchange agent is D.F. King, according to corporate filings.
The offer for holders of the $292.8 million outstanding in the toggle notes calls for a swap of warrants to purchase 341.4322 of class B common shares for each bond, and participation is due by end of day on June 4, filings show.
The 13.75% notes were pegged around 101 earlier this week, according to sources. The par-for-par placement in November took out 11.625% unsecured notes due 2015, and bondholders were also given an initial slug of equity warrants at that time. See “Affinion bonds extend gains in wake of exchange results, amendment,” LCD News, Nov. 27, 2013).
At the same time, holders of 11.5% subordinated notes due 2015 were offered a swap on a per-note basis into $1,020 of new 13.5% subordinated notes due 2018 at Affinion Investments. This paper, with $360 million outstanding after the swap, is wrapped around 105, according to S&P Capital IQ.
Affinion Group also has a $475 million issue of 7.875% notes due 2018 outstanding. This paper, rated CCC-/Caa2, has been steady this week trading around 93.25, yielding about 9.75%, trade data show.
[6] Nom – I’m pretty sure it was in Bristol County, but don’t take my word for it. I think I might still be able to get my marriage annulled because I wrote the wrong MA county on our marriage license application in Bloomfield, NJ in 2000. I even used my cell phone to call my office in Quincy, which is where I worked and lived at the time, and they gave me the wrong information saying that Quincy was Suffolk, when in fact it is Norfolk. Since we live in Boston now, I ultimately do live in Suffolk.
He probably thought he was OJ. But Norfolk County, MA isn’t Los Angeles. Conservative juries there, and a populace that won’t give you the star treatment if you fcuk up.
If he were only tried in RI, it might have been different.
Those funds are filled with guys born on third base patting themselves on the fannies for getting to home plate.
[57] Jill – Maybe a rental in NJ as your residence for 2 years following your home sale, if the math works out?
^^^^ I imagine someone you know might rent you a room(with lease) for $100/month? Maybe they could even take all your mail and put it in a big manilla envelope and send it to you once a week?
Bain Capital hiring a Democrat is a perfect example of why Bain Capital is so wealthy.
Democrats attacking you? Just hire a notable democrat, with a sweetheart salary that can’t be turned down, and put him in a sham executive position. Now, the democrats can’t attack you on partisan lines, otherwise they look like idiots Problem solved, and quite inexpensively too.
Hey, grim or other experts…can you please explain to me what the exit tax would be under the following scenario
Talk to your accountant, but the way I understand it, you would have a similar tax liability either way. The exit tax is nothing more than non-resident income tax on a house sale. Either you pay the income tax as a resident, or you pay the non-resident income tax (aka exit tax).
You can’t game it unless you 1031 – but I have no idea about that.
Should be non-resident income tax on NJ pensions.
You’re lucky to have a lot of brothers and sisters.
The Great Pumpkin says:
April 15, 2015 at 2:33 pm
57- My family income is in the 200,000 to 300,000 range and I don’t worry about money.
[69] Yep, I remember now. Grim is right. NJ is getting your money either way.
[70] If you did it just on teachers, police, and firemen that would be a hell of a money train coming up from Florida.
Should be non-resident income tax on NJ pensions.
Tool [62];
For just one minute compare your “that’s where the money is” approach to taxation with the country’s founding tax principle of apportioned direct taxes (that is, one man, one tax dollar) before you talk about “tax breaks for the 0.2%”. You know why the rich get tax cuts? Because you can’t cut taxes on people who don’t pay.
This has been a PSA in case anyone who first dropped in in the last 2 minutes doesn’t yet know that the Tool is a dishonest political hack.
[55] Anon
“fear what they don’t understand, hate what they can’t conquer”…..Nas
Plenty of people don’t understand how people make more in a week than what they make in a year. Athletes, actors, celebrities; they are ok with not understanding. Businessperson making that same amount, it must be magic or through some nefarious way.
Taxes: someone (or some entity) making more money than you, most people expect they will be paying the same or more in taxes on a percentage basis. They have no clue! The less money you make, the more likely you are taking standard deductions. If you make a decent amount of money, you are more than likely itemizing on your taxes. And if you are a corporation, you are setting up an entity off-shore that has all of the taxable income to avoid taxes. Again, seeing someone (or some entity) paying less, it must be magic or through some nefarious way but it’s all legal.
If you make money and have experience with a good accountant and have had several thoughtful conversations on the topic, regardless of political inclination, you have to laugh at this rather stupid talking point.
Got some basic questions for the pros here.
Looking at a place where you walk up 3-4 steps to a door of house from street level, and then once you enter the front door, there the you walk up for 4 more steps to the kitchen, living/dining room and 3 bed rooms. There are also 4 more steps leading down on the left when you enter the front door. That level has a bed room and a family type room both of which has vinyl and half a bath and a washer/dryer. The backside of the house from that level has a walkout and is at ground level, but the front side is probably a feet below. There is a garage at street level. The 2 bedrooms on the main level are on top of the garage.
Is this considered a split or a raised ranch? Also, would the loan processing guys count the 4th bed room at the ground level as a true 4th bed room. Also, any concerns for resale down the line because of the garages below the 2 bed rooms?
Can’t believe people still watch baseball.
76 – If the kitchen is on the second level, and the same level as the bathroom and bedrooms – it would be classified as a bi-level. It’s typical to walk at a foyer midway between the levels (or thereabouts, it doesn’t need to be perfectly midway).
Split levels generally have 3 distinct levels, which are offset left to right (looking at the house). They sometimes have a 4th level, which is a partial basement. You can have split levels that are staggered front to back (instead of side to side), but they are much less common in NJ.
Raised ranch and bi-level are many times the same exact thing. Sometimes raised ranch indicates a full flight of stairs up to the main level. Also called a raised ranch if the bottom floor is partially below grade.
In a bi-level with the ground floor above ground, if finished, the level is not considered a basement for tax or occupancy reasons.
Garages over bedrooms is typical in any configuration. PLenty of center hall colonials have either the master or two bedrooms over the garage, unless the garage is off-set.
Bi-Level
http://images.trulia.com/blogimg/4/3/4/b/947321_1373750417803_b.jpg
Raised Ranch
http://npic-hmit2009.org/wp-content/uploads/2014/06/front-and-brick-kneewall-make-this-classic-american-raised-ranch-42460.jpg
Split Level
http://f.tqn.com/y/architecture/1/S/r/n/SplitLevelRanchiStock000003438758.jpg
Thanks grim. For tax purposes, yes as the town would like to take every ounce out of me, but when the bank asseses for the loans would they consider it as a valid floor space for occupancy.
..and the garage under bed room thing, I presume we dont have a significant class of buyers who would outrightly reject it for that?
If the grade at the front of the house is for esthetic reasons, it’s not a basement. Given that you can access the driveway and walk out the back, it’s not a basement.
The bedroom on that level is valid for occupancy as a bedroom, it likely has heat, a closet, and at least 2 methods of egress (up the stairs or out the back – through the garage doesn’t count).
For appraisal reasons, if it’s finished, it’s living space (square footage) – it’s at or above grade.
If it were below grade and finished, it wouldn’t be added as square footage, but if finished would still impact the value of the property. Many times finished basements are appraised with a multiplier below 1 to indicate that they are overall less valuable.
For example, a 4 bedroom with 1 legal bedroom in a basement wouldn’t appraise the same as a nearly identical house with 4 bedrooms above grade.
That said, the style of house comes into play. A 4 bedroom split level with the 4th bedroom on the ground floor is not going to appraise for the same amount of money as a center hall colonial with all 4 bedrooms upstairs (more valuable).
Got it, although in this case the street has grade of 5 degrees down left to right. So, the garage on the right half of the house is level, but the left front half of the house because of the incline up makes the floor at the garage level sink below street level from the front , although in the back it tapers at ground level with a walkout room. Don’t think it is anything to do with aesthetic and is more of what the street forces on the house design.
75
FKA 2010 Buyer
Legal and Nefarious are not mutually exclusive.
I kind of like the front to back raised ranch (bungalow) style.
grim says:
April 16, 2015 at 6:37 pm
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