Corporate Equity Trading
Trading shares of stock is a new trend gaining popularity in the investment and securities arena. Typically companies will sell 144 restricted stock for Trade Dollars which is a form of currency recognized by the IRS. They can then use the Trade Dollars to offset cash marketing costs with trade thus marketing the stock and advertising the company to gain name recognition and market share.
Other cash expenses that can be offset with trade purchases include design of company logos and collateral materials, printing of annual reports, 10Ks and 10Qs, legal services, Internet site design and a host of other services typically needed to launch an IPO.
Pre-IPO companies can also use stock sales to build a Trade Dollar reserve which may be used as assets. Or, Trade Dollars can be used to purchase other hard assets such as real estate. Companies should always do their due diligence by discussing these concepts with their adviser or accountant to determine their feasibility.
An added benefit to companies that sell stock for Trade Dollars is the accrual of new investors who talk about their investment to friends, family and associates who can become potential cash investors thus creating demand for the stock and trading activity.
Since Trade Dollars come from excess capacity or from additional new business and have a low incremental cash cost, many investors can be more aggressive and take chances in investing in new companies. Because UNITE members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative stocks and wait for share values to go up. Once the restriction expires, it's possible to turn trade investments into cash.
Home Mortgages with Barter
You can still buy real estate, including property, homes, condos, even though you don't have sufficient trade available to pay for it. Trade exchange members have recently purchased a condo in Vermont, 14 building lots in Riverhead, building lots in the Poconos, a 30,000 square foot office building, a 10,000 square foot warehouse and a condo in Pennsylvania. These transactions ranged from $60,000 to over $1 million. Typically, the buyer paid a 20-30% down payment in Trade Dollars. The balance was financed with a barter mortgage, just like in the cash world.
UNITE makes mortgages available to qualified buyers of real estate, where the monthly principal and interest is paid in Trade Dollars. You provide your product or service to UNITE members and deposit the Trade Dollars into your account. A set amount is deducted from your account each month to cover the mortgage payment. Even better, UNITE brokers refer the new business you need to make the payments, and online sales can enable you to pay off the property even faster. It's that simple.
A recent offering was a beautiful house in New Jersey. The owner wasn't able to sell it in the year it was listed with a realtor. Because he had a need for Trade Dollars, he was willing to take 100% of his equity in the home in Trade Dollars. The asking price was $450,000. The equity of $225,000 was paid in Trade Dollars, the balance of $225,000 was paid by obtaining financing with a bank mortgage.
An example of creative trading would be for the buyer to apply for 60% financing of the $450,000 and get a $270,000 mortgage to purchase the house. The seller only requires $225,000 in cash to pay off his indebtedness, leaving an excess of $45,000 cash that the buyer keeps. The buyer also makes a down payment of 25% of the barter mortgage, $56,250 in trade, leaving a barter mortgage of $168,750. This can be paid in product or service of approximately $4,000/month for five years. The house needs approximately $25,000 in cosmetic interior renovation, most of which can be done on trade.
Bottom line is, the house can be bought for trade and cash, the buyer walks away with $45,000 in cash and lives in or rents the house for five years. The house can then be sold for at least $425,000. Pay off the remaining cash mortgage of approximately $225,000, and walk away with another $200,000 in cash.
If you are interested in creative trading that turns Trade Dollars into cash, let us know. Then the next time a deal comes along, you'll be the first to know.
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Real Estate and Barter
Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn't a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter. Since Trade Dollars come from selling surplus or from additional new business and have a low incremental cash cost, many investors find that they can be more aggressive in pursuing investments such as real estate.
Because UNITE members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it's even possible to walk away with a pocket full of cash.
Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here's how it works. Let's say a business has an incremental cost of 35 percent in its Trade Dollars.
The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn't care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.
Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor's cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.
Even when a contractor isn't a UNITE member, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can be traded to contractors.
Where electricians, remodelers, plumbers or other contractors are UNITE members, owners can easily upgrade the cash value their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.
Advertising with Barter
Advertising is the best way to use Trade Dollars to attract cash business. Advertising media, including radio, television, magazines, newspapers, billboards, and direct mail, are all available on trade. After all, there's no way to store advertising media and sell it later, so media companies welcome trade.
If a minute of available advertising time passes at a radio station without an advertiser buying it, that minute is lost forever. It can't be put back on the shelf and sold tomorrow. The same is true in various ways for all other advertising media.
Bartered advertising is very affordable, particularly since your Trade Dollar income generally represents new business. This means the cost basis in your bartered advertising dollars is very low.
For example, a restaurant may have food costs representing 30 percent of the price of a meal. Since barter represents new business the restaurant would have been unlikely to attract, the actual cash cost of those Trade Dollars is 30 cents on the dollar. There is no additional cost in rent, electricity, insurance, payroll, etc. to service the additional business. The only expense is the incremental cost of the food.
Using Trade Dollars, the restaurant can buy advertising to bring in new cash business for less than a third of the regular cash cost. And advertising is a readily available barter commodity, one that represents an immediate opportunity to generate new cash business. In the example above, the restaurant has tripled the purchasing power of its actual cash cost.
Not everyone recognizes the opportunities barter represents, but anyone can learn. It just takes some creative minds and exposure to new ideas to fit barter into your every day way of doing business.
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