“These kinds of transactions may lend themselves well to investment clubs, in my opinion.”  Says Katherine Duncan, Historic Preservation Commissoner for the City of Las Vegas. 

“If a property has a following of sympathetic people, those people may become small investors.  They are sympathetic because they feel a connection to the property.  A small investment can formalize that connection.  Lots of those connections can come together to create a financial partner for the buyer, perhaps even finalizing the entire transaction without any debt at all.”

Katherine Duncan knows the fight.  As the President of the Las Vegas Ward 5 Chamber of Commerce, and owner of the famous Ms. Harrison’s Boarding House where African American stars used to stay in Las Vegas during segregation, she fought hard for years to bring together the necessary components to revitalize the historic Uptown area of West Las Vegas, the very first streets ever mapped in Sin City back in 1904.

“Las Vegas is blessed with some of the greatest visionaries and designers in the world.  Putting that talet together with the right investment structure and public appeal, and you have a winning combination.”

 The number of rooms in the three 18 story towers would likely have appeal in a fractional ownership scenario provided by an investment club.  Similar structures are being created to facilitate renovation of European Castles.  Investors are alotted certain portions of the building for certain timeframes.  Investment clubs can provide much needed flexiblity for such an arrangement, and an easy method of alotting a stake to contractors involved in the project.

In order to be formed properly and to ensure adequate funding, a detailed business plan is required in each case.    Business plan assistance can be had from multiple sources, but each will require a detailed interview from the principals forming the club.

Before seeking a consultant to write your business plan, you may do well to see how much of it you can assemble yourself.  

Free templates for business plans are available from the Service Corps of Retired Executives, at http://www.score.org/template_gallery.html

Exotic car enthusiasts are copying models of companies like Curvy Road, an exotic car fractional ownership firm.  Members in such clubs share a stable of dream machines and split the costs.  The grouping also allows for the best possible maintenance and great exposure when selling a vehicle, not to mention cash buying power when hunting for that rare beauty.

The investment club structure is probably the best structure for such endeavors.  A well-organized investment club can best provide for the financial functionality required, as well as the book keeping, governance of members, succession of member ownership interests, and more.

A major draw of such a club its ability to also allow members to build credit by purchasing the shares on a contract of sale.  The investor actually builds credit while amassing investment in the club.

Although  those clubs with members whose businesses can best benefit from use of a yacht in a prime location may be the primary takers, even passive investors can get involved when the price is right.

With current economic woes, a glut of luxury yachts have hit the market, driving down the prices.  At the same time, the real estate needed to park your yacht is still in short supply in prime locations, and has proven to hold its value well through the recession.

The combination of a depreciating, income producing yacht and stable real estate creates a potentially attractive tax combination for the entity in ownership.

The Parisian Palace, known as the refuge of high profile types seeking more privacy and security than offered at other Las Vegas venues, has defied the otherwise abysmal Southern Nevada real estate market.  The Palace has performed extraordinarily well as a private event and vacation venue for an elite clientele. 

Owner Nico Santucci has enjoyed the success brought to the Palace by his Hollywood, sports, music and Las Vegas celebrity connections.  But it is also likely that his reputation for keeping prying eyes away from his guests, as well as the renowned security of the property, are what motivated investors to contract Santucci’s firm to continue to manage the property for years to come. 

A self-gated compound with dozens of security cameras, no neighbors and untold numbers of guards, this palace is also quite the fortress.  Just this week, diplomatic license plates, seen on cars pulling in to the Palace during daytime closed-door meetings there, fueled press speculation as to Santucci’s next project.  A famous professional golfer celebrated a birthday with a hundred of his closest friends the next night.  His party was attended by the producer of the “Ocean’s” films shot in Las Vegas, who relaxed behind the iron gates, enjoying the luxurious safe-house protection from well-published death threats by a crazed ex-employee back in Hollywood. 

True to form, no information of the transaction has been published, and a national law firm retained by The Palace Club is shielding investor identities from public disclosure.  Santucci preferred not to comment.  It seems a palace still has its intrigues.

Green Talk Radio with Katherine Duncan

11:00 a.m. to Noon on Thursday, October 8th.

Las Vegas KLAV 1230 am or listen on web at

www.investmentclubbing.net

Minimum investment of $25. per month discussed

If you don’t know, you don’t know.  That’s the attitude one might find when investigating Uptown Las Vegas, the updated name describing historic West Las Vegas, the oldest – and arguably blackest – part of Sin City. 

Custom Choppers Line Jackson at Soul Brothers MC

 Relatively Clean and safe after many years of tough interaction and reclamation by the City of Las Vegas, and a concerted effort by faith, civic and motorcycle clubs, Uptown houses mega churches of the southern flavor, and still a few businesses from the old days.

Many years a political football, the neighborhood has suffered such predictable antics as the indefinite delay in business licenses and unobtainalbe building permits.  The City even dared an unannounced closure of the area’s primary access underpass, in an apparent attempt to please big-bucks projects on the opposite side of the freeway (the reversal which later had to be legislated by the State when the City failed to act).  Uptown nontheless has some serious equity players, and they don’t appear to be tolerant of more games.

CITY LIFE:  They Won’t Hurt You / Easy Riders, Rough Road

FEDERALLY RECOGNIZED “PIONEERS TRAIL”:  Official Brochure

A national lawfirm has been retained to form and administer the investment club, while protecting the identities of its members, at least some of whom are high profile individuals.   A large Las Vegas tour company has mapped out a business plan which advertises Uptown in Strip hotels, and picks up tourists on the Strip, much like the Manhattan/Harlem model.  Word has it a legacy Motown star is planning to brand a piece of the project too.

The real beauty of the investment club model is the lack of debt – there would be none.  Although the initial contributions would amount to millions of dollars, stake holders are discussing a plan to allow a minimum investment of only $25. per month.  A classic democratic investment club model would allow each member equal say in the management of the money and the club’s assets, which could include commercial real estate and businesses.  It appears the stakeholders of Uptown Las Vegas may finally take back Jackson Avenue.

A little-known feature of investment clubs formed by the investmentclubbing.com organization provides FDIC pass-through insurance directly to each club member, in amounts up to $50 Million each. 

Because club members may be corporations, trusts, businesses, pensions or other organizations – even governments – this brings about tremendous competetion to investing in US Treasuries.  With the one-year treasury yield well under half of one percent, certificate of deposit yields of around 2% are very attractive.   

FDIC insurance provides the same government guarantee as Treasuries, but has always been limited by the maximum insurance amount for each depositor, presently $250,000. per depositor per bank.  The ability to go to $50 Million per member investor is of course the key.  This incraesed capability is brought about by a combination of an organization called the Certificate of Deposit Registration Service (CDRS) and a cocktail of InvestmentClubbing.com add-ons. 

The result is that an investment club can be formed by a group of companies, individuals and organizations, with one FDIC-insured bank account which sub-divides the deposits to other FDIC-insured bank accounts around the country, never exceeding the $250,000. maximum balance in any one bank.  The club has only one account number and one bank statement to deal with for each $50 million block.  This also gives the club a single point of access to bank credit against the deposits, the underwriting for which is also spread across the multiple institutions.

The system begain to gain popularity as the economy declined and institutions failed:

But perhaps the most powerful attribute of the Super Clubs is that they are each organized to vote and move funds.  In a maximized situation, one club could move up to $5 Billion with a single vote.  That power to move funds speaks very loudly to banks and their holding companies.  As the clubs are not securities, are private and the members each considered customers of the banks, a sort of billionaires credit union emerges as a possibility.

The negotiating power could influence rates paid, terms granted, credit offered, even to special bank favors for club members. 

Governments which place treasury in US banks are beginning to realize the increase in return.  Rather than invest in US Treasuries at a near zero return, they may move more funds to CD’s, getting about 4 times the return.