Philly says Boy Scouts have to accept gays

[loinburger]

BK, you've said that you've had renters make improvements to the property, and you haven't charged them rent for a few months as recompense. When they vacated, did you first pay them for the fair market value of the improvements they'd made to the property? Did you take out a loan against the improved value of the property, invest the money, and pay them the interest?

If a renter knocked down the house and built a much more valuable house in its place, would you have to pay them to get your property back?

[giblets]

If I have ten thousand dollars in savings, I can borrow ten thousand dollars from the bank, then repay it using the ten thousand dollars from my savings, and I then have an extra ten thousand dollars that I didn't have before!

[Ben Kenobi]

Why would fair market rent for use of the building (which I'm assuming is what the 200k figure is) not include fair market rent for the land?

I'm not sure how the council arrived at that figure, or the true land valuation. I'm not a philly realtor.

I'm assuming that the fair market valuation is around 200k, and that the Philly council isn't gouging them. If that's the case, then the building itself is worth around 4 million dollars, and the year over year investment return would be about twice what they are charging the scouts.

I didn't know it was possible to ensure a rate of return on investments that is higher than the interest rate for mortgages. Makes me wonder why the bank doesn't invest the money somewhere else instead of giving someone a mortgage

There are lots of gimmicks that the city can do. Bottom line, the Philly Council could have turned a 4 million dollar asset into an income stream far higher than they were paying out. They've come out on top, and like all good deals, so have the scouts.

So it's not a subsidy of any sort, but a reimbursement, like with charitable donations.

[giblets]

I'm not sure how the council arrived at that figure, or the true land valuation. I'm not a philly realtor.

I'm assuming that the fair market valuation is around 200k, and that the Philly council isn't gouging them. If that's the case, then the building itself is worth around 4 million dollars, and the year over year investment return would be about twice what they are charging the scouts.

Why make those assumptions? Why would the city council want fair market rent for the value of the building itself but not the value of the land?

There are lots of gimmicks that the city can do. Bottom line, the Philly Council could have turned a 4 million dollar asset into an income stream far higher than they were paying out. They've come out on top, and like all good deals, so have the scouts.

So it's not a subsidy of any sort, but a reimbursement, like with charitable donations.

Ohhh right, you can make money appear out of thin air by borrowing from a bank and then immediately repaying it.

[Ben Kenobi]

BK, you've said that you've had renters make improvements to the property, and you haven't charged them rent for a few months as recompense.

8 months rent in exchange for finishing a room in the basement.

When they vacated, did you first pay them for the fair market value of the improvements they'd made to the property?

No, they were compensated by the rent that we wrote off. The value of the improvement was less than the value of the rent.

Did you take out a loan against the improved value of the property, invest the money, and pay them the interest?

No, we didn't do a mortgage adjustment. Their improvement is considered to be an 'unrealised gain', until at whatever point we choose to sell the property.

[loinburger]

No, they were compensated by the rent that we wrote off. The value of the improvement was less than the value of the rent.

How much rent haven't the boy scouts paid in the past several decades?

[Ben Kenobi]

Ohhh right, you can make money appear out of thin air by borrowing from a bank and then immediately repaying it.

Where did I say immediately repaying it? You take out the mortgage and repay it over time, over the 10 years, from general funds.

Then, when the mortgage is paid off, you have the building, and 4 million dollars in the bank sitting there making money.

But this is Philly council. So they probably didn't have the brains to do this.

[Ben Kenobi]

How much rent haven't the boy scouts paid in the past several decades?

In todays dollars? Without going back, and taking a stab, around 16 million dollars or so.

[loinburger]

How much rent haven't the boy scouts paid in the past several decades?

In todays dollars? Without going back, and taking a stab, around 16 million dollars or so.

I guess the thread's over then

[Ben Kenobi]

If I have ten thousand dollars in savings, I can borrow ten thousand dollars from the bank, then repay it using the ten thousand dollars from my savings, and I then have an extra ten thousand dollars that I didn't have before!

It's called investment. Maybe I can spell it out to you again.

You have 10k in the bank.

You borrow 10k using that 10k in the bank as collateral. Say you borrow at 5 percent.

Then you take the money that you make over time, to pay the bank back, and you invest your 20k and make a 10 percent return on the money.

Yearly return, about 2k in interest, minus 500 bucks in interest payments. So your profit is 1.5k a year.

[giblets]

Where did I say immediately repaying it? You take out the mortgage and repay it over time, over the 10 years, from general funds.

Then, when the mortgage is paid off, you have the building, and 4 million dollars in the bank sitting there making money.

But this is Philly council. So they probably didn't have the brains to do this.

Then what you're suggesting is that they find an investment whose rate of return exceeds the interest rate of such a loan. You're asserting that the existence of the building somehow enhances the city of Philadelphia's ability to borrow money and that the city should have better judgment concerning investments than private citizens, which is the only possible explanation for the city being able to recognize a high value investment that the banks overlooked.

Another big government Republican.

[Ben Kenobi]

I guess the thread's over then

Loinburger, how much money do you make in interest off a 4 million dollar investment at 10 percent a year for 80 years?

I get 3.7 billion dollars, even with paying the scouts 200k a year.

[Ben Kenobi]

Then what your suggesting is that they find an investment whose rate of return exceeds the interest rate of the loan.

Yes.

You're asserting that the existence of the building somehow enhances the city of Philadelphia's ability to borrow money

That's the definition of an "asset".

and that the city should have better judgment concerning investments than private citizens, which is the only possible explanation for the city being able to recognize a high value investment that the banks overlooked.

This is Philly council. I'm pretty sure they spent the windfall they received from the building payment from the scouts in the depression.

It's no different then the guy who wins the lottery going bust several years later. Some people know how to manage money. Other folks don't.

Another big government Republican

As opposed to blowing all that money on a junket for the politicians to Hong Kong, and then wondering where all that money went?

I wish the city government here would make smarter investments and they would run a profit year over year rather than jacking up taxes and running deficits.

[loinburger]

So now the building has always been worth 4 million?

1. You say the building is now worth 4 million
2. You say the scouts haven't paid 16 million in rent
3. Thread is over

[giblets]

Loinburger, how much money do you make in interest off a 4 million dollar investment at 10 percent a year for 80 years?

If it's so easy to find 10% a year investments then why are banks offering mortgages for less than 10% instead of making the 10% investments themselves?