Tuesday, September 4, 2007
Lets get back to the land.
You always know when a realtor is pushing a PoS by the photo. If realtor sent out the blind guy with the camera, then you know they are trying to hide something. Here we have $54 million horse farm in California. However, it is not clear whether we are looking at the stables or the house.
The owner is offering 452 acres, of which around 200 is flat, usable land. The financing costs alone would take up $4.1 million a year (assuming a 6.5 percent interest rate). That means that this farm needs to generate at least $20,000 per acre just to cover the payments to the bank. So it is hard to see how you can make any sense out of this investment. Unless, that is, you buy it because it puts you deep into the red ink. A $4.1 million loss is one hell of a tax deduction.
Ultimately, I suspect that this PoS is joke played on ordinary Americans. While we are coughing up to the Fed, some rich guy is using this farm to avoid his taxes. Nevertheless, I would be happy to hear from any tax specialists. Perhaps, you can make sense of it.
Thanks Robert for this one. The MLS number is 109614 and it can be found on www.realty.com.
Posted by Best at 11:27 AM