Mississippi Gulf Coast
“GO Zone” Opportunity
Invest in the 6th fastest appreciating market in the country.
15.7% one year growth
Receive a 50% accelerated depreciation on rental property!
Pay thousands $$ less in taxes!
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A Thousand Words...
(239)292-2499
(239)823-7704
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24 Hour Information
www.TheMoneyTrein.com
The demand for affordable rental properties is unprecedented!
Toxic FEMA housing is forcing over 10,000 families
to relocate before the end of Summer 2008.
“I got nowhere else to go.” ...
In Louisiana, there are 25,162 occupied FEMA trailers. In Mississippi, there are
10,362, according to FEMA figures. Other states also have hundreds of trailers. At one
time, FEMA had placed victims of the 2005 hurricanes in more than 144,000 trailers
and mobile homes.
Posted on Fri, Mar. 21, 2008
FEMA questioned about plans to padlock trailers
THE ASSOCIATED PRESS
JACKSON -- U.S. House Homeland Security Committee Chairman Bennie Thomp-
son said he’s concerned families displaced by hurricanes could end up homeless
under a plan to padlock FEMA trailers that have high formaldehyde levels.
Thompson, D-Miss., said FEMA’s goal is to move families out of the trailers by June,
but there is a continuing shortage of affordable housing in areas slammed by Hurri-
cane Katrina in August 2005.
“What factors are used by FEMA to determine relocation priority? What does FEMA
do if a family cannot relocate due to a lack of housing alternatives or employment
concerns?” Thompson asked FEMA Administrator David Paulison in a letter.
Government tests on hundreds of FEMA trailers and mobile homes in Mississippi
and Louisiana found formaldehyde levels that averaged five times higher than peo-
ple are exposed to in most modern homes.
“Although FEMA has said it will relocate people by June, there are nearly 10,000
displaced residents currently living in temporary trailer units in Mississippi alone,”
Thompson told Paulison. “FEMA has identified only 800 available rental units to
house them.”
What is the GO Zone?
Hurricanes Katrina and Rita that hit the U.S. in the summer of 2005 were con-
sidered the most devastating natural disasters our country has ever seen. These
catastrophes had an enormous impact on the affected states’ economy. Due to
this, the Congress approved the house bill number HR 4440 on December 16,
2005 which was signed by President Bush five days later.
HR 4440, otherwise known as
the Gulf Opportunity Zone Act
of 2005, or the GO Zone Act of-
fers several federal tax benefits for
properties built and placed into
service in regions affected by the
hurricanes. These tax incentives
are being offered by the federal
government to help restore normal
life to the affected states. The GO
Zone Act applies to certain specific
cities, counties, and states, includ-
ing Mississippi.
Reasons To Invest In The Mississippi GO Zone
The federal and state governments have implemented some very aggres-
sive incentives for those who want to invest in Mississippi. An investor
can claim a federal 50% BONUS DEPRECIATION on a new property
that is put into rental service prior to the December 31, 2010 deadline.
For a full copy of this IRS section see
http://www.irs.gov/pub/irs-pdf/p4492.pdf
For example, let’s say a buyer purchases a $218,000 Duplex from us and
then rents it out. The buyer could claim a bonus depreciation deduction
of $102,000 for tax purposes. If the buyer is in the 35% tax bracket, that
could equate to a tax savings of $35,700.
If you bought 2, 3 or more properties, you would receive similar bonus
depreciation and it may be possible to offset all of your taxable income!
Of course the ability to use all the bonus depreciation depends on each
buyer’s circumstances, and it may be possible to carry any unused de-
preciation backward and forward for use in other years.
(Please consult your tax advisor)
Why Mississippi?
Although New Orleans has received the lion’s share of news coverage in the aftermath of hurricane Katrina,
other areas of the Gulf Coast were hit just as hard. After the hurricane, the governor of Mississippi described
Biloxi as an American version of the atomic bombing in Hiroshima. Casino barges were literally lifted out of
the water, and the Biloxi-Ocean Springs Bridge was almost entirely destroyed. However the city is staging a
dramatic, well-planned comeback. Due to the destruction of 90% of the ocean front buildings, there is plenty
of room for opportunity.
Biloxi is being rebuilt from the ground up, basically creating an entirely new waterfront city. An estimated
55,000 new homes will need to be built in the next few years, and less than 10,000 of these homes have already
been built. The creation of an almost entirely new oceanfront city is unprecedented in modern American his-
tory, as most oceanfront real estate was developed years ago. This rare chance to create a brand new commu-
nity, with none of the problems and disadvantages of real estate that was developed for 19th and 20th century
standards.
It’s not much of a secret that more and more people will be visiting Biloxi in the near future. The Biloxi-Ocean
Springs Bridge is being rebuilt now, and once again provides easy highway access to Biloxi when it re-opens
this winter. Gulfport-Biloxi International Airport is already seeing 20% more passengers than it saw 2 years
ago. The airport is also undergoing a major $51 Million expansion - to be finished this year - which will increase
terminal square footage by 80%, as well as allow access to two more airlines. These are proven catalysts for
economic growth and real estate appreciation. Why are so many people coming to Biloxi?
Biloxi is well known for its numerous casinos, many of which were temporarily shut down following Katrina.
Seven of the nine casinos have already re-opened, and there are plans to add ten more in the near future. A
change in Mississippi state law allowing the formerly barge restricted casinos to build on land has resulted in an
influx of billions of dollars from the casino industry. Just for example of the new casino resorts is the Harrah’s
Entertainment-Jimmy Buffet joint project, Margaritaville. this oceanfront casino resort’s first phase is budget-
ed at $700 million, and may eventually cost $1.3 billion. In fact. casino companies have purchased 175 acres of
real estate for expansion purposes since Katrina, and experts are predicting that the number of casino workers
will double to 30,000 within the next few years. Even with the wide-ranging construction and re-construction,
casinos have had record revenues in nine of the last eleven months.
Unfortunately, even with the broad economic success of the casinos, many casino workers are still living in
FEMA provided trailers and other substandard housing. There is simply not enough housing to provide space
to all of the workers. The The combination of more and more casino workers and more tourists visiting Biloxi
results in one thing; an increase in demand for housing, and the supply of housing is not growing nearly as fast
as the demand. Economics 101 tells us that when demand exceeds supply prices go up. This is exactly what is
happening to rental prices today. Approximately 60% of casino workers rent, and rental properties are now be-
ing leased for 10 to 20% over market value only a few days after they are put on the market.
This appears to be a “perfect storm” of favorable factors for Biloxi; casino-fueled economic growth, low sup-
ply coupled with high demand for housing, transportation system upgrades, and the “smart money” purchasing
real estate and developing more casinos. It could also be the “perfect investment”.
Reasons To Build In Mississippi
A SOLID GROWTH AREA IN TODAY’S
VOLATILE REAL ESTATE MARKET
In 2006 Mississippi held one of the top three best-performing
markets in the United States, with an increase of 15.7% in the
price of an average house over a one year period. A recent article
on CNN Money lists several of the metropolitan areas as
not being affected by the nationwide real estate downturn. Office
of Federal Housing Enterprise Oversight projects the gulf coast
region to appreciate 53.4% over the next five years.
http://www.ofheo.gov/media/hpi/2q07hpi.pdf
A CRITICAL SHORTAGE AND URGENT
DEMAND FOR HOUSING IN THE REGION
Hurricane Katrina destroyed more than 65,000 homes and
47,000 rental properties. Altogether 101,000 Mississippians are
living in FEMA trailers, with approximately 80,000 of these be-
ing on the Gulf Coast. However, business has continued, and
employees need to live somewhere. As FEMA programs come to
an end, over 30,000 families will soon be evicted from govern-
ment housing and will require affordable housing.
(CONTINUED ON NEXT PAGE)
Reasons To Build In Mississippi
(continued)
MISSISSIPPI’S ECONOMY IN GENERAL
IS RAPIDLY EXPANDING
Mississippi has recovered and is stronger economically, as measured by gross state
product and employment figures, than before Katrina. Aside from casinos, de-
tailed below, other industries are growing rapidly. Local employers, including the
Northrop Grumman Ingalls Shipyard, Dupont, Triton Systems, Chevron, and
GE Plastics are constantly searching for new employees. There is a significant mili-
tary presence in the region as well, including Keasler Air Force Base, which provides
$1.2 billion in economic impact annually via 86,000 military and civilian employees
and families.
CASINOS ARE PROVIDING A POWERFUL
CATALYST FOR REAL ESTATE PRICES
After the devastation of Hurricane Katrina, the Mississippi government passed a
law allowing the formerly barge-based casinos to build on dry land. This has fu-
eled massive growth in the casino industry of Biloxi. Two years after Katrina, eight
casinos are already open and twelve more have been proposed, with some under
construction. The Gulfport-Biloxi region is estimated to be the third largest casino
district in the United States. Each casino employees an average of 2200 people, of
which approximately 60% will rent their homes. This coming surge in demand will
be meeting a limited supply in the housing market, which should increase the value
of real estate.
Recent Media Information
Growth this year in the Gulfport-Biloxi metro area should “easily outpace”
the national economy, says a new report by Moody’s Economy.com.
The analysis of the area’s strengths and weaknesses, prepared at the end
of last year, said the economy in Harrison, Hancock and Stone counties
“took a turn for the better, reversing course at the midway point” of 2007.
The area’s employment growth ranked first in the nation and projected
third through 2011.
“Growth (in the metro area) will easily outpace the nation in the near term,
as favorable demographic trends from individuals returning to the area
drive the economic recovery,” wrote Nathan Topper, the report’s author.
The Katrina effect is still being felt, most obviously in the lack of housing
and, on the upside, in the potential from government incentives such as
the Gulf Opportunity Act. “With only about 25 percent of the funding des-
ignated for Mississippi being disbursed so far, the benefits of this plan will
continue to be realized,” the report said of the GO Zone.
Sun Herald January 14, 2008
“The rebuilding of Mississippi’s Gulf Coast has received far less media attention
than New Orleans’ reconstruction. Recovery has been hard, and although there
has been progress, much remains to be done. But Mississippi appears to have
done more things right than wrong.”
Source: Los Angeles Times
“Gulfport-Biloxi International Airport officials and tenants are excited over a new
cargo facility and the completion of the construction on the terminal expansion that
should be finished by month’s end. Even with all of the improvements at the airport,
officials are already anticipating further expansions of the airport that will be needed
for future traffic.”
Source: GulfCoastNews.com
“Construction could begin in January on two hotels in Biloxi, …..Developer
Mike Boudreaux said a 145-room Hilton would be built in tandem with a
Crowne Plaza hotel,……. Linda Hornsby, executive director of the Mississippi
Hotel & Lodging Association, told commission members the Coast had 17,400
hotel rooms before Hurricane Katrina and only 11,000 now.”
Source: SunHerald.com
“The city issued more than $977 million in construction permits in the 26
months after Hurricane Katrina, of the $977 million, more than $532 million is
non-casino and non-condo construction. Mayor Holloway noted, however, that
only $49.7 million in permits have been issued for new homes, which translates
into 331 new homes permitted since Katrina.”
Source: GulfCoastNews.com
Construction workers rebuilding the Mississippi Gulf Coast toil hard all day at physically
arduous jobs. And some spend the night sleeping in tents or in houses that have been
flooded.
“They sleep wherever they possibly can,” said Buddy Edens, president of Mississippi
Associated Builders and Contractors. “It is a tough issue.
We have some guys who have brought camper trailers in, and some have bought land and
put regular trailers on them. Others arrange for hotel rooms in Mobile and Pensacola.”
Source: Mississippi Business Journal
The overlapping crises in housing and labor are symbolized by the two hallmarks of
the region raked by Katrina. The first are the “Help Wanted” signs sprouting from
highway medians, hung in store windows and posted on marquees. It will take
years to solve the housing shortage in the region, so many large companies have re-
sorted to temporary housing. But those results understate the problem. Small and
mid-sized businesses — the heart of the region’s economy — are faced with over-
whelming demands for housing they are the least-equipped to solve. “The problem
is all the other folks who can’t afford to make that investment” in housing, says
Loren Scott, a former professor of economics at Louisiana State University whose
consulting firm tracks the state’s business climate.
Source: MSNBC.com
“FEMA trailer parks are still called home. FEMA may not be entirely to blame for the parks’
continued, often miserable and open-ended existence, because affordable housing is nearly
impossible to find. “We’re using every innovative thing we can within our toolbox to assist
to get them out,” said Sid Melton, director of the FEMA Mississippi Transitional Recovery
Office. “If they want to get out right now and if there are things available right now, we’ll get
them out.”
Source: SunHerald.com
FEMA officials said Tuesday they want to close as many emergency trailer parks as possible by
the end of the year, and place the families into the new rental assistance program, which will be
administered by the Department of Housing and Urban Development (HUD) beginning Nov.1.
Thousands are still trapped in FEMA trailers, crammed into less than 300-square-feet with
their children, pets and all their worldly belongings. “We are trying everything possible, but it’s
hard to move families to rentals when there are no rentals available,” Gordon said.
Source: Bay St. Louis Newspapers, Inc.
BILOXI — “Harrah’s Entertainment Inc., along with singer and songwriter Jimmy Buf-
fett, has made public plans for a new Gulf Coast destination to be called Margaritaville
Casino & Resort. The Margaritaville project is expected to cost more than $700 million,
representing the single largest investment in Mississippi since Hurricane Katrina. The
company expects this to be the first phase of a development that may cost more than
$1billion. Margaritaville Casino & Resort will be developed on 46 acres of land south of
U.S. 90 in Biloxi on the site formerly occupied by Grand Casino and Casino Magic. With
a projected development start date of summer 2007, the Margaritaville Casino & Resort
project features include: approximately 100,000 square feet of casino floor; 250,000
square feet of retail space; approximately 66,000 square feet of meeting space; 420 new
hotel rooms; 378 renovated hotel rooms; pool deck area with cabanas, bar and tropical
landscaping; and, full-service spa.”
Source: Mississippi Business Journal
Gulf Coast of Mississippi Is An Emerging Growth Area
Affordable Houses Address Gulf Needs
Rental Market
- Katrina destroyed over 65,000 homes and 47,000 rental properties
- 80,000 people are still living in 23,000 FEMA trailers on the Mississippi Gulf Coast
- 30% of Mississippi residents are renters
- Current rental rates for single family homes range from $1,000 to $1300 per month
- Current rental rates for multi-family homes range from $900 to $1200 per month
Mississippi Economy
- Economy is finally starting to recover after Katrina
- Gross state product and employment have surpassed pre-Katrina levels
- Reconstruction boom is expected for the next 5 years
CASINOS DRIVING ECONOMIC ACTIVITY
Currently 8 casinos are open in Biloxi,
with 4 under construction and 8 more
are proposed. Casinos are also open
and operating in Hancock County, Bay
St. Louis, and Gulfport. The casinos
employ thousands of people, on aver-
age 2200 per casino. These people will
need affordable housing.
CASINOS ARE AS FOLLOWS
IMPERIAL PALACE CASINO
BOOMTOWN CASINO
THE PALACE CASINO RESORT
ISLAND VIEW CASINO RESORT
GRAND CASINO BILOXI
CASINO MAGIC BILOXI (Possible acquisition by Harrah’s)
BEAU RIVAGE CASINO
TREASURE BAY CASINO
ROYAL D’IBERVILLE CASINO AND HOTEL (Approved For Construction)
HARDROCK CASINO AND RESORT
BILOXI GRAND CASINO
BACARAN BAY CASINO RESORT (500 Million Casino/Resort Projected Spring 09
SILVER SLIPPER
HOLLYWOOD CASINO
THE BROADWATER ($1 Billion Casino With 1900 Hotel Rooms, 3300 Condos, and Golf)
Click the link below for the latest update on Casinos in the Mississippi Gulf Coast area.
http://www.gulfcoastnews.com/GCNnewsCasinoOpenings.html
Margaritaville Casino Hotel Resort
Casino industry expected to
require 40,000 employees.
Twelve casinos within 30 miles.
Beau Rivage Resort & Casino
Hard Rock Hotel & Casino
Many more are in progress
including the $700 Million
Margaritaville Hotel and Casino
Resort. Mississippi will be the 3rd
largest casino industry in the U.S.
HOW TO GET STARTED
ON YOUR MISSISSIPPI INVESTMENT
1. Your agent will give you the fundamentals on the Mississippi gulf coast eco-
nomics, demographics, and the future market expections. You will also receive
a presentation about the construction of your home, including information
about floorplans, building specifications, lot locations, etc.
2. You will be put in touch with a lender who will do all the necessary prequal-
ification screening. They will perform a credit worthiness report and verify
your financials. Assets include checking/savings accounts, IRA, 401K, and
stock portfolios.
3. When the builder receives your loan application and you are pre-approved,
you will enter into a purchase contract for the home style and lot of your
choice.
4. You will be required to deposit $500 to the builder to reserve a home. The
check must be returned along with your signed purchase contract. After the
contract is executed, it is your responsibility to provide the lender with all the
necessary information to close the loan. The closing process typically takes 30
days.
5. A builder representative will update you periodically on the status of your
home’s construction.
6. On completion of construction, you have the option of visiting your home to
personally conduct a quality control walk through, or you may assign an agent
to do so on your behalf.
7. Once a certificate of occupancy has been issued, the property manager will
oversee the moving in process with your tenants. You will then begin reaping
the benefits of this exciting investment opportunity.
Location Close To Casinos And Beaches
“Officials have approved ambitious plans for
a live-work complex along the Jourdan
River, signaling continued recovery
from Hurricane Katrina and the
largest multi-story residential
development in city history.”
- Bay St. Louis SunHerald
Our gulf coast target area: Bayside Park in Hancock County
Bayside park is a ready-for-development area which meets all of our carefully researched
standards for growth and future value.
A 30 Minute drive from the main casino area of Biloxi, makes this a perfect area for service
personnel working in the tourist / casino industry. I-10 creates an easy commute.
Excellent housing opportunities for families who don’t want to live in the center of the ca-
sino activities.
The River Walk project was approved in April 2007 for nearby Bay St. Louis. 1650 River-
front residential units and a commercial shopping area. These developments show that
investor confidence is high.
Casinos and the nearby military base form a strong economic base for growth and expan-
sion.
In the works is a casino - hotel - marina complex on the west side of St. Louis Bay, a short
distance from Bayside Park.
THE SYCAMORE $130,000
THE ELM $205,000
THE HICKORY $218,000
THE WILLOW $218,000
THE WILLOW
FIRST YEAR CASH FLOW ANALYSIS
Purchase Price $218,000 / Appraised Value $252,000
Equity Position : 13.5% ($34,000)
GO Zone Incentive *$35,700.00
*Based on a 35% Tax Bracket
Monthly Rent $2000
Mortgage *(1145)
Insurance (225)
Property Tax (218)
Management (10%) (200)
Monthly Total Cash Flow $212
*Based on 90% LTV and a 7% interest only mortgage
**This is without adding any projected appreciation.
The Office of Federal Housing Enterprise Oversight projects the
gulf coast region to appreciate 10.05% for the first year.
http://www.ofheo.gov/media/hpi/2q07hpi.pdf
Additional Information
A ll prices, floor plans and dimensions in this document are
subject to change without notice. Use of GO Zone bonus
depreciation will vary depending on each buyer’s individual
circumstances. Consult with your tax advisor. Nothing in this
document may be relied upon as tax advice and no statements
herein are made for the purpose of tax avoidance. All incen-
tive programs and loan programs are subject to restrictions and
change without notice. All information in this document regard-
ing government programs, market demographics, market eco-
nomics, and future expectations is from third party sources and
has not been independently verified. Buyers are responsible for
conducting their own due diligence and may not rely solely on
the information herein. This document contains forward look-
ing statements, any forward looking statements are based on
assumptions and are speculative. Forward looking statements
by their nature involve substantial risks and uncertainties, and
actual results may differ materially, depending on a variety of
factors. Appraisals and property values may change significant-
ly over time.