Thoughts on Sprint stock ....

Buying stocks is not the same thing as going to Vegas.

Real estate for most people is highly-leveraged depreciating asset with huge transaction costs and carrying costs... to call it an investment is an insult to investors.

Let me pull out your P/L for that POS $250K jumbo studio....since 2001, 2002, 2004,2004,2005,2006,2007,2008,2009,....

Income: $0

Expenses: $30,00 (Mortgage, RE taxes and CC.... )

-$30K, -$30K, -$30K, -$30K, -$30, -$30K,-$30K, -$30K.......

Let me pull out the Leverage RATIO for most $2MM condos/Coops in Manhattan..... $200K in equity $1.8MM in debt. 9x more debt than equity.....

In dealturd's world let's compare buying Pets.com at peak of massive internet bubble and going to zero versus Sprint which was incorrectly priced at Bankruptcy prices even when it was able to access debt markets at will. W67 worked as a work out/distressed debt banker... SPRINT will double sooner than ANY POS NYC RE purchase since 2007-2012. BUT W67 has ALREADY proven that (SPRINT GOING FROM $2.40 to $5.40 in 4 months.) So the QUESTION IZ will it double again bf your pig of an COOP/CONDO doubles again....

Let's JUST say W67 is buying MORE SPRINT TODAY.

but your coop's Income will hit any day now... any day.... someday... somewhere over the rainbow... any day now....

What's the next hot neighborhood where I can buy Sprint shares?

> Real estate for most people is highly-leveraged depreciating asset

LOLZ. Tell that to the person who just retired, sold his brownstone for $4 million bucks, and paid $90k for it back in 1980.

4,000,000 > 90,000

Learn to do basic math!

The retiree sold you the POS studio for $350k when she bought it for $10k in 1977. Do the math fktard.

Yes in 30 yrs the $4mm purchaser will sell it for $$750mm for that nice townhouse in harlem. Flmaozzz. Yes only in RE is past history the ONLY criteria for buyIng for a retirement.

Owners hedge inflation with assets.
Renters just pay more each year.
Flmaozzz!

$90,000 -> $4,000,000 from 1980 through 2012 = IRR of 12.5% per year.

That is assuming:

a) No mortgage debt;
b) No tax debt;
c) No money invested in the property in 32 years.
d) No transaction costs.

None of which is a reasonable assumption. The real estate commission on $4 million = $240,000. The conveyance and stamp taxes are about $60,000. The long-term capital gains tax (federal) is about $500,000. New York state income tax is about $150,000.

That investment would be no better than investing in the S&P 500, which has an IRR of 8% excluding reinvested dividends.

And assets do not hedge inflation or deflation; debt hedges inflation, assuming that the real interest rate is below 0.;

Sorry to rain on your parade.

I looked at the sprint stock yesterday and that was one impressive spike! And still you buy W67??? Impressive! Funny that this is being compared to a 30 yr gain.

Sprint has taken a beating this week. What do you think, W67? Buying opportunity, or does the MetroPCS/T-Mobile merger mean the party is over?

I calculated equity IRR in this scenario to be 26% based on the following assumptions:

- 25% down at the time of payment
- Refinance at 75% 3 times over the 20-year period, pulling out a significant amount of cash
- Owner pulls out $200k in early 1990s (9x return on initial equity), $700k in 2003 and $1.6 million in 2010 and gets a final $835k when he sells in 2012 ($4 million minus $2.2 million mortgage at that point minus all the fees and taxes)
- Similar assumptions on broker's fees, cap gains as you.
- Assume that equivalent rent covers after-tax interest, common charges and maintenance over the period (a conservative assumption given his entry price).

Unless you can find a _safe_ way (e.g. in a way where you do not get margin called and wiped out in a bear market) to leverage the S&P 500 at b/w 50-75% , the right comparison is between S&P 500 (after tax) to the leveraged return on the property.

Investing in the S&P in 1980 was a very good investment. But it simply does not compare to buying a NYC townhouse in 1980 and it's not even close.

S currently at 5.12. Up .21 on the day. Not a bad move.

If you lever a building to the extant that Sprint is levered , the result will be the same

are you guys mathematically challenged?
90-4mil doesn't equate to 12.5%
Look at the monthly rental income on that. It will easily top 5mil.

oh. plus return on investment on 5mil
My guestimate is around 90k-> 11-13mil minus monthly expenses over 30years.

also properties in the 80's were 60k -> 4mil today.
90k property in the 70 -> 20mil.

"$90,000 -> $4,000,000 from 1980 through 2012 = IRR of 12.5% per year.

That is assuming:

a) No mortgage debt"

of course we are assuming cash deal. Do you take out a loan investing in S&P?!>!?!?

What property went from $90,000 to $4 million? The Bromley was selling 2BR's for about $250,000 in the mid-80s. What are they today? 10x the price?

Noah should have some details on the return for someone in the Bromley.

Townhouses in BK (PS, BH, CG), Union Square, UWS, UES, etc were around 60-90k in 1980.

I know it's cherry picking but a lot of neighborhood in nyc were dirt cheap in the late 70s early 80s due to under-developed areas with drugs and prostitution.

I call BS.

Townhouses were selling for thousands in the '50s. Every old time resident has a story about a townhouse that was offered to them back them for $5-20,000. The only way these were $90,000 in 1980 when the west side was already starting to improve in 1980 (not prime, but by then lincoln center was already up and coming and things were starting their move uphill) the only way a townhouse could be bought for that was if it was full of rent controlled tenants.

And if you can find an example it would be akin to comparing the return on Apple in the last decade to the return on all stocks.

when I say BS, I meant regarding the UWS. There were ways to find that kind of return... If you were lucky enough to invest in Brooklyn 20 years before it gentrified. But again, that is picking Apple as a stock when Steve Jobs had just started NeXT computing.

But most NYC were not gentrified in the 80s, and there were lots to choose from. Pretty much any RE would've hit the jackpot.

Lincoln center was still full of drug addicts and prostitues in the late 80s-early 90's.

Sprint was a good buy at $2 because their assets were worth more than the stock value. Stock value of Sprint only had one direction to go, UP. At $5, it's a risky move. They are still bleeding money and their competition is getting fierce.

AvWS speaks truth--the only townhouses worth 4mm today, which traded 90k in 1980 were in rough neighborhoods which have since completely gentrified. and if my crystal ball could pick those special values, it could also pick the trifecta at the track, or any number of 30x stocks...without the hassle of real estate ownership.

S up .36 nearing its high for the year as citi upgrades it to their most preferred list. great call again and lots of folks around here checking charts wishing a crash, great call again. might be time to sell some though and lock in off the chart returns.

Yikes - I would add that to get $4 million out of the townhouse that was then $90,000 some major renovations would have had to be made during that time. Not to mention that many repairs would have had to be made while your rent rolls barely covered expenses.

I know several people who run buildings they have owned for decades (though all are much bigger pre-wars, some on the UWS and some in Washington Heights), and they didn't start making any money off those buildings until the rent laws changed so that apartments started getting de-controlled and/or vacated. Until then the only way to get your money out of the building was to sell it to the tenants. Where do you think all those co-ops came from?

I don't disagree with the idea that $90k->$4m example may not be representative, a special case etc. So if you want to debate about whether its representative or not, it is outside the scope of my post.

But let's get the math/logic right. You'd have been far far better off in hindsight in that scenario than re-investing your money in the S&P 500 over the same period.

S&P 500: $22.5k --> $440k in 2012 (a shade under 10% if you include dividends and taxes)

That RE scenario: $22.5k --> aggregate net cash of $3.4 million. This excludes reinvestment of cash taken out in the earlier years through mortgage re-caps, plus the likely scenario that your equivalent rent was much higher than the monthly cash costs over most if not all of that period (a function of the low cost base compared to the improvement over time in the city)

It's not even close.

for the last several days I've been sticking my pointer finger up my anus up to the 2nd knuckles. I pull it out and take a sniff and surely as the sun rises, it smells like shit.

Where was I? oh yes, West81 would like to know how to make money.

Ok. For you I would recommend checking on the health of your mother and she is sitting on a nice ripe pile of RE BUBBLE profits. Pssss. pssss... pssss.. don't tell her the RE market stinks bc given the Interest Rate drop from 7% to 3%, her classic 9 should be trading at $8MM or 50% more than the $4MM it currently sits at. Every day she lives longer the lower the price of that nice juicy pile of money which you and your wife so desperately struggle to make every day. So you've got two options:
1) wish her dead or 2) keep pumping RE.

Sprint is way over your head... I had a kid come up to me in my R8 and ask me what I did for a living to drive such a nice car? I said I'm a real estate broker. IF YOU GOTTA ASK SOMEONE HOW TO MAKE MONEY... your parents raised a financial imbecile and I always gotta wonder "who's gonna serve my kids their happy meals if everyone is rich?"

So w81, you get rich by selling Real Estate and stocks are too risky and volatile.. .what with it going up and down 5% a day.. sometimes 15%..... heck I've even had a 20% up days... followed by 5% down days.. .then 15% up days followed by 3% down days... and somewhere over the course of the last 6 months I am up 120%.... you mentioned a beating? did i miss something while I kept sticking my fingers up my anus the last few days?

Where was I? Oh yes, does my finger smell like shit experiment.

columbiacounty, you worship w67thstreet, why don't you shake his hand?

worship?

appreciate....yes

enjoy....yes.

agree...yes

you are the worshipper.

Why split hairs columbiacounty?, you know your hand is aching to shake w67's.

is that funny?

I wasn't try to be. Did you find it funny?

you started this, you motherfucker.

go fuck yourself.

Wow, your meltdown came faster than I ever thought was possible.

meltdown?

what does that mean?

you provoke and then you get off on it.

enjoy.

you don't know what it means?

nope.

but i'm sure you'll be happy to explain.

its such a shame that you don't have any friends to share this with.

oh well.

I can always count on you to be here for me and to share with.

don't be so sure.

So you might be leaving?

S not looking too bad today. Looks like the Japanese took w67th's advice.

bazang

Yawn....

My short put options are expiring worthless in 45 days. $400k more.

NYC RE is scary at these levels. Sprint not so much.

My only regret. Sprint won't 'technically' trade above $10 with the takeover. Oh well. W67 better go off and start looking for the next sprint. C u guys in 5 yrs. And yes buy more nyc re. It makes my wealth relative to yours that much more skewed.

Well played, sir. Well played.

While W67th is off looking for the next Sprint, I think me might also enjoy hanging out by the Yankees dugout for hours on end taunting Jeter and ARod that if they were real athletes, they'd play basketball.

NYCNovice: I think there will be enough people taunting Alex Rodriguez after Girardi finally gave up on him last night.

Arod's mentor to becoming a real athlete
seatle circa 1995
http://img.spokeo.com/public/900-600/alex_rodriguez_1995_01_29.jpg

:)

I think that would only add to his enjoyment; ARod benched and Jeter injured I think would make the taunting all the more delightfuly for him.

Why would I make fun of actual athletes?

Now RE borkers and wanna be millionaires. Bring it.

Obtw. If SoftBank pays $13b for controlling interest of sprint. Say 51%. Sprint is 'worth' $26b or 2x the current price. I can only take the dumb azzed donkeys to the luscious clear water only so many times. The dumb ones die of thirst standing over the reflection of themselves in a clear pool of water. Mistrusting and admiring their 'looks and accomplishments.'

NYCNovice is a b-ball fan!

I gave my friend's daughter a big zip-lock bag of gold rings, bracelets, chains and earrings that I haven't worn in years.

Told her to keep what she wanted and sell the rest.

She kept half of the items and sold the rest: she made $14,500. (last week).
She's only 18 years-old.

Truth, will there be a gift tax paid based on this?

It looks like w67th got a nice bump with the buyout at $7+.
Good trade. Time to find the next one.

Where are you going to invest your $30,000 portfolio next??

Dealturd. I bet your finger still smells like shit.

$30k. Yeah. 400k shares at $2.40 to $5.7 plus upside option with a put by masa son-san. M'okay. Keep humping RE. It'll come soon enough.

>400k shares at $2.40

You bought all 400K shares at $2.40?

>with the buyout at $7+.

The buyout is at about 6 3/8

He's full of shit with the 400k shares b/c we can go back and see the prints.

How much did the stock move when you put in that market order for 400k shares?

Average daily volume is 100M shares.

Hehehehheheheheeee. Huntersburg is correct.... If 164 million daily shares traded is 100 million... You see why w67 thinks 9.999999/10 ppl on SE are financially retarded? Ya think 400k share purchase would move a 164mm daily traded stock?

Go on buy more real estate. And you might wanna juice up some more returns by buying a lotto ticket.

>If 164 million daily shares traded is 100 million...

Yahoo puts the 3 month average at 86 million, and Google lists the average volume at 103 million. Where do you get 164 million? Guess you are out of the 1%.

>You see why w67 thinks 9.999999/10 ppl on SE are financially retarded?

The stock closed at $5.70 on 9/24, and $5.65 today. Guess the Asians don't always pay up.

Yes, huntersburg: all taxes due will be paid.