connolly properties excess cash at inception
DESCRIPTION
This table shows the excess cash above the prospectus estimates of capital reserve that David Connolly raised in five purchases, The Livingston, Watchung Gardens, Siesta Park, Cornell Pingry Arms and Grand Court Villas. This was through selling more shares than advertised, and obtaining higher mortgages than advertised. He took this cash ($4.8m total for just these five) and used it for purposes other than for each of the properties in question.TRANSCRIPT
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Siesta Park Watchung Gardens Cornell Pingry Arms Livingston Grand Court VillasPrice Per Share $30,000 $50,000 $50,000 $50,000 $50,000
Prospectus shares sold 23 60 70 34 41Prospectus shares given to Connolly 2 8 5 4 3
Prospectus total 25 68 75 38 44Actual shares sold 26 71.875 1 79 35.5 42.5 2
Actual shares given to Connolly 2 8.5 5 4.5 3Actual share total 28 80.375 84 40 45.5
Additional shares sold 3 11.875 9 1.5 1.5Additional shares issued 3 12.375 9 2 1.5
Distribution per share/month @ 12% annually $300 $500 $500 $500 $500Prospectus distribution/month $7,500 $34,000 $37,500 $19,000 $22,000
Additional distribution required/month $900 $6,188 $4,500 $1,000 $750Prospectus investor contributions $690,000 $3,000,000 $3,500,000 $1,700,000 $2,050,000
Actual investor contributions $780,000 $3,593,750 $3,950,000 $1,775,000 $2,125,000Additional capital from increased share sales C $90,000 $593,750 $450,000 $75,000 $75,000
Prospectus sales price $2,400,000 $7,500,000 $8,600,000 $3,500,000 $6,136,000Actual sales price3 $2,400,000 $7,500,000 $8,650,000 $3,475,000 $6,150,000
Increase in sales price compared to prospectus S $0 $0 $50,000 -$25,000 $14,000
Prospectus mortgage $1,900,000 $5,625,000 $6,450,000 $2,450,000 $4,602,000Actual mortgage3 $1,936,028 $6,230,000 4 $6,487,500 $2,760,000 $4,910,000
Increase in mortgage compared to prospectus M $36,028 $605,000 $37,500 $310,000 $308,000
Prospectus estimated closing costs $66,015 $538,925 5 $419,225 6 $455,000 $137,608Actual closing costs unknown unknown unknown unknown unknown
Prospectus cash reserve $123,985 $586,075 $930,775 $195,000 $378,392Surplus cash obtained at inception C-S+M $126,028 $1,198,750 $437,500 $410,000 $369,000
Predicted cash reserve at inception $250,013 $1,784,825 $1,368,275 $605,000 $747,392
1From cash flow statements provided by Connolly 4Watchung Gardens received a first mortgage of $5,625,0002See Exhibit BC for derivation and a 2nd mortgage of $605,000 on the same day3From County Deed and Tax records 5Per prospectus this includes $305,000 req'd by bank to be held for capital improvements
6Per prospectus this includes $200K in funded reserve
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