Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Brad Davies who wrote (1168)	1/22/1998 8:33:00 AM
From: DLS	Read Replies (2) of 18691

Junk bonds maybe. There probably are better shorts for the near term but not much better long term shorts. 1. New apartments typically don't have laundry rooms. In a renovation, the first thing considered is adding w/d connections to the units. Laundry rooms are a thing of the past, like mansard roofs. 2. Laundry contracts are perceived as major liabilities by sophisticated buyers of apartments (because the previous owner got paid for the buyer's revenue stream) who typically break them first chance they get. 3. Only cash strapped owners will sign these deals but otherwise they will forgoe the upfront payment and purchase the machines and keep the income because the additional "other income" adds more to the value of the property. 4. Increasing "other income" has recently become one of the top priorities among large apartment owner's (ie management companies and REITS) and this would necessitate keeping the laundry income rather than selling it. 5. I believe the number is more like $5-$10 per month per unit. IMO This business may look good on the surface but I believe trends are against it. IMO DLS

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