Learn more about purchasing a transportable condo hotel (tiny home unit) for FREE. That is, to buy the unit with dollars that would have otherwise been paid in taxes.
Exclusively offered by Bonaparte Industries, Inc. and its independently associated firms.
Several factors have aligned to allow for the creation of an investment that can only be described as extraordinary:
The creation, and then the expansion, of Section 179 of the IRS Tax Code that now allows the immediate deduction of the full purchase price of non real estate investment property that is placed in service in that tax year, up to a current limit of $1 million per year.
Commercial construction quality housing rental units can now be constructed and placed on trailers so that they are transportable, registered as recreational vehicles, and qualify as Section 179 property.
Such units have the longevity of commercial buildings, and when placed in service as resort style rental cabins, qualify for long term, low interest rate, no or minimal recourse financing.
The fact that these units can be rented on a nightly, weekly, or monthly basis to create significant income.
Third party consulting companies will enter into contracts with owners of these units at very significant minimum guaranteed and preferred annual income in exchange for a 50% share of the profits earned above these guaranteed and preferred investment returns.
Owners of these units can get additional economic return to themselves, family, friends, or business associated through personal use.
Units are transportable allows them to be seasonally relocated to maximize income generation, or to move permanently from an underperforming location.
Units are purchased and owned directly by the taxpayer or his corporate entity. These are not a security. These are not a partnership offering. These are not a tax shelter, in that there are no IRS or other government registration requirements.
What does this all add up to? Basically, the opportunity to purchase a transportable condo hotel unit for FREE. That is, to buy the unit with dollars that would have otherwise been paid in taxes.
It means the opportunity to enter into a consulting contract that generates a guaranteed minimum return sufficient to pay the loan payments on the unit, as well as a preferred annual 6% return, as well as 50% of the profits earned above these levels.
It means the opportunity to have this return grow to 10-20% annually based upon cash invested funds, as rental income grows over time with inflation, better unit location placement, and more opportunities to maximize seasonal revenue. It means the opportunity to enjoy personal use, or gift such use to others. It means the opportunity to walk away in the future if the investment does not meet the investor’s needs or expectations.
Let’s take a real example of a current opportunity.
Initial Purchase and Placement of a Transportable Hotel Unit at the Wildwood Luxury RV Park, I 75 Exit 329, and near Florida Turnpike Exit 304, just 5 miles from The Villages, Florida.
Bonaparte is currently offering multiple size and style units for sell to be initially placed at the Wildwood Luxury RV Park for rental. The units will be place in a resort cabin cluster format in their own dedicated multi-acre area at the entrance of the park. There will be a separate lobby, recreational, and hospitality area for the resort cabins. It is anticipated that a total of about 100 individual rental rooms will be located at this location, with units have 1-3 rental units each depending upon size and floorplan.
An investor purchases a two hotel unit transportable condo hotel structure. The purchase price is $180,000. The down payment is $60,000. The balance of $120,000 is financed at a 30 year amortization, 4% interest, with either no recourse, or with the option to terminate recourse at any time after 24 months for a fee of $1,000, leaving the property as the only collateral for the remaining loan balance. The annual payment on this loan is $6,875.
The investor chooses enters into a contract with the consulting company, which is an affiliate of Bonaparte Industries, Inc.As the controlling manager of the investment unit, the investor, in consultation with the consulting company, will make decisions about the actual unit selected, interior furniture and finishes, selection of bookkeeping, and other services, and selection of the housekeeping and maintenance company options. These decisions, and others, establish the trade and business purpose of the rental units. After the first year, with the utilization of all the Section 179 tax deductions, the investor no longer needs to be as involved in decisions, but can certainly elect to continue to do so.
The agreement with the consulting company calls for the consulting company to pay the investor a annual guaranteed income amount of $6,875, the same amount as the annual loan payment. In addition, the investor will receive as a preferred return the next $3,600 of income available for distribution after payment of land rent, operating expenses, and the $6,875 guaranteed return. As consideration for the guaranteed and preferred income, the consulting company will receive 50% of the net income in excess of the $10,475 total of guaranteed and preferred return. The investor will receive the other equal 50%.
The unit is place in the rental pool located at the Wildwood RV park. Assume that each of the two hotel rooms in this unit will generate revenue per available night of just $70.00. It should be noted that these units will have a small functional kitchen, full bathroom, and a great bed. They will also have a desirable cabin style resort layout. Assume that operating expenses, that is, utilities, cleaning, check in services, advertising, etc, will average 35% of rental income collected. Additionally, Bonaparte has arranged the land use rental at $3,360 per rentable hotel room per year. Again, if the rentals underperform, or there is an opportunity to capture higher seasonal rentals by moving the units to, for example, the New Jersey shore, in the summer, that is easily feasible as they are readily transportable.
Based upon the assumptions above, annual revenue for the two rental room unit will be 365 days per year x $70 average nightly rental income per room x 2 rental rooms per investment unit = $51,100
Operating expenses = 35% x $51,100 = $17,885
Land rental expenses = $3,360 per room x 2 rooms = $6,720
Net Operating Profit = $51,100 - $17,885 - $6,875 = $26,340
Guaranteed Minimum Investor Return = $6,875
Preferred 6% Investor Return = $3,600
Excess Profit 50% to the Investor = $26,340 - $6,875 - $3,600 = $15,865 x 50% = $7,932.50
Excess Profit 50% to the consultant company = $7,932.50
Total Return to the Investor = $18,407.50
Cash Distributable Return to the Investor after the loan payment on the financing = $11,532.50
A review of the economics of this investment:
Assume the Investor is in the 25% combined state, federal, and Obamacare tax bracket:
Initial Purchase Price: $180,000
Immediate Tax Deduction: $180,000
Immediate Tax Savings= 25% x $180,000 = $45,000
Cash Downpayment = $60,000
Net After Tax Investment = $15,000
Projected Annual Cash Distribution to the Investor= $11,532.50
Projected Annual Percentage Return on Investment= $11,532.50 / $15,000 = 76.9%
An investor with a 37% combined marginal tax rate saves 37% x $180,000 Purchase Price Tax Deduction = $66,600
His/her tax savings exceed his cash investment, so he has a less than zero cost to purchase the unit
Even for an investor with not tax savings, an $11,532.50 annual cash distribution = 19.2% return on the $60,000 cash investment.
Thus, one can earn about 20% per year on money that would have otherwise been paid in taxes.
Over time, as an investor annually buys additional units to tax advantage of Section 179 tax savings, his overall income from ownership of income generating hotel rental units can become quite significant. Assume with inflation and better rental management from experience that average unit income grows to $20,000 per year. Assume the investor over the years accumulates 50 such units.
This would create a $1 million annual income that could be passed to future generations.
This is a Truly Extraordinary Investment Opportunity. It has Fantastic Tax Benefits, a Real Substantial Transportable Hotel Cabin Directly Owned by the Investor, with Superb Underlying Economic Substance.
And you will find attached a very detailed analysis in a tax opinion letter from a Board Certified Tax Attorney, who his also a C.P.A., and C.F.A. He literally spent months analyzing and correcting any wrong assumptions in the model. He is an extremely individual, and is available for you or your tax professional to discuss any issues, at Bonaparte’s expense.
The investment units sold in this program are limited by the number that can be produced. As the profit to Bonaparte is realized through the successful long term rental of the units, it is essential for Bonaparte to produce a high quality product that will last for decades. That takes time and quality labor, including great design professionals and engineers. These are all limited resources in today’s world. Once the annual allocation of units is committed by investors, the sales will stop until those commitments are filled. America is a big country, there are a lot of people who would benefit both tax and income wise from this program, and unfortunately are production volumes are small relative to that potential demand. I say all this as a call to action on any potential investor’s part. Also, once an investor purchases a unit, they will be given priority in future years should they wish to continue purchasing more units. Again, a call to action, as this program is now just starting.