ATM LEASEBACK SCHEMES-- any insight?

Stock and Bond Fraud, including Boiler Rooms / Pump and Dump Schemes, Mutual Fund & Hedge Fund Fraud, FOREX scams, plus Churning, Private Placements, Venture and Bridge Funding, IPOs, Viaticals Fraud, HYIP and Prime Bank scams, MTNs, Historical Notes, Recovery Schemes, etc. Includes the Jim Norman Project and the Michael Dotson Project and similar HYIP scams.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby SomeYuppie » Fri Jan 17, 2014 12:13 am

Arthur Rubin wrote:I was wrong. SEC v. Edwards, 540 US 389 (2004) seems on point that this should be considered a security, and regulated by the SEC.

So, even if it isn't a scam, it's an illegal security.


Per the facts, that WAS a Ponzi scheme, open to the general public, marketed through distributors and sales forces. ETS Payphones offered a fixed income, which was the main thing about the case, from what I saw. ETS also used internet websites to market the investments.

With NAS, the only public marketing I see is to business owners to place their machines. They don't market anything to potential investors. Investment income is variable, and while investors don't have control of the machines, we do have control of our returns, there are options that have not been discussed in the thread that we can do.

Anyone an expert here? I'd like someone who really, like really knows the laws, and can ask good questions to apply all relevant facts and see if it's really a security. If so, I'll sell off my investment.

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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 1:44 am

SomeYuppie wrote:I just skimmed and from what I saw only four people have stated numbers for the initial investment. Those four are myself, Ted, flatsix, and BeverlyHills. flatsix, BeverlyHills, and myself have all mentioned the current 12,000 cost per machine. The only one who stated anything different is also the only one of us four who has never had any direct contact with NAS or Gillis.


Yet you are the only one who supposedly deals with them that has been specific about things like the transaction fee or actual payment made and what it is based on. Which has been a question. As a matter of fact you were the only one that said much of anything.

I believe I did answer this already. ATM's are insured by NAS to cover their liability to us. NAS has all the rights and liabilities of ownership per operating agreement. ATM is licensed to them. If something happens, it's on NAS. If something happens to NAS, we the investor are the beneficiary of an insurance policy that covers our original investment. That policy is paid from NAS's end and does not come out of our 50 cent per txn amount. We (the investor) are paid net 30, so I think we lose the check for the month if something like that happens.


You sorta answered it. You stated that NAS held actual ownership of the machine IIRC. No mention of the insurance or whatnot. Reason I asked is I would hate to see someothing happen, machine is registered to you but not owned by you and you are liable for a bunch of fees and no recourse to get anything out of it.

Dealing with payment processors as part of my job, I do know that banks have raised their fees to processors, which in turn raise their fees on us. I know ATMs across the country have seen fee increases over the past 2 years, so I can assume costs have gone up and the increase is covering those costs. If I'm getting 30% anyways, why be greedy and complain?


Could very well be. I have not dealt with that part of the business since 2011. When I was still doing it 1.9% was the high end charged by an issuer.

The what varies per contract and per how desirable the location is. I think I heard that it's about what we, the investor gets, which is around 50 cents but does vary. Why? This is obvious to me. Why wouldn't a business owner want compensation if an ATM is being installed in their "high traffic" area? Per the business model that Gillis told me, they compete for these profitable areas and win contracts because they pay location owners a few cents more than competitors.


I'll quote something I said earlier:
I never paid a location to put a machine in. I may have to setup an agreement where they get a portion of the intake for using their space but at the end of the day you are saving the customer a ton of money and heartache and giving the end user a convenience so why would you have to pay them for that? If anything several locations paid us a small fee to bring one in.
I can quite literally count the number of places that we paid a % on one hand. You are providing a service to them, why should you pay for it? The only places that wanted a fee we paid a very small fee to and dumped as soon as we could get another location.


Again, it's just Ted, who hasn't dealt with NAS directly, with the most conflicting information. Everyone else seems to more or less say the same thing.


Not going to go back through and double check. Too tired. I do recall $12k being agreed to as the now price but others mentioned $11k and BeverlyHills dude said it had always been $12k. Again, IIRC.

I do respectfully disagree with the terminology. I have seen other leasebacks schemes (involving virtual hotel concierges) where the leasing company used a processor and were financially backed by another company, and all of these companies had the same owner. Needless to say, I didn't invest. I consider each company in that set up to be a related party.

With NAS, processor has completely different ownership and is located in Texas. Processor funds NAS with fees due with a transaction count per machine. NAS pays us out based on the transaction count and gives us a statement from the processor. I did mention a third party audit when I originally invested and Gillis said he doesn't have means to audit the processor he uses and that's the most important part since he simply sends us statements generated by the processor with the txn count, along with a check that pays 50 cents per transaction.


Credit processors, IIRC, HAVE to be audited regularly to keep the licensing they need to do business. Not really as important to me as NAS itself being audited.


Per your rough calculation, NAS makes a ton of money, even if the ATM's don't do near 400/month. Like I also said, if they perform badly, they are moved. Like I also said, there's been only one among the people I know where they didn't do 20% and it was for one investor and for one year, which still did 18%. Where does that money come from? Seems like per your calculation, NAS can easily afford it. If they truly have a system for success and know what they are doing, I don't see a single problem with this considering you're telling us that a good machine can pay for itself in a year, which would be a 100% return. If even in a bad area they don't average 400, yet still make 40% before giving out payment to the "investor", they can easily make money while still paying out a 20% return.


True. My biggest thing is that it not only sounds kinda hinky, it reminds me of MLMs which pay people out of the intake. Coupled with "incentives" to bring more people in.

I'm hesitant of responding to Ted. He has an original post from 2009 showing concern, yet has never come into contact with NAS. Like I said, myself, the half a dozen people I know, flatsix, and BeverlyHills all say one thing, yet Ted is mentioning a possible third party charging rates that none of us get.


Again, maybe there are parts of the company you don't see. Not making excuses but you don't run it, no matter what information you get from a few others.

So if they want as much money as they can get their hands on, could be a Ponzi scheme. If they play it slow, could be a Ponzi scheme. Got it.


You asked why they wouldn't take someones money if they were a ponzi. I answered.


Yeah, when I said I work for a wealthy guy, he has made investments that have had ROE's in the thousands. He's also had investments where he literally pissed away a million or two. Point is, from my experience, 20% returns on passive investments aren't that farfetched.


Not farfetched to achieve 20%, kinda farfetched to guarantee 20%. You can make an incredible amount of money, but can't guarantee that you can.

At least Vincent has provided information that shows me he had prior dealings with machines and made statements where I believe him to be knowledgeable enough on the topic. I enjoy his posts and he has asked good questions. I suspect he will ask one that I don't know which will lead me to follow up with Gillis at one point.


I want to thank you for that. It's kinda hard sometimes to figure out where I fit in a forum primarily dedicated to tax and/or financial scams not being an attorney, CPA, accountant, etc. But, like you said, I do have experience in this particular business and tend to have a good feel for what is what in business.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby webhick » Fri Jan 17, 2014 2:54 am

JamesVincent wrote:
SomeYuppie wrote:
I believe I did answer this already. ATM's are insured by NAS to cover their liability to us. NAS has all the rights and liabilities of ownership per operating agreement. ATM is licensed to them. If something happens, it's on NAS. If something happens to NAS, we the investor are the beneficiary of an insurance policy that covers our original investment. That policy is paid from NAS's end and does not come out of our 50 cent per txn amount. We (the investor) are paid net 30, so I think we lose the check for the month if something like that happens.


You sorta answered it. You stated that NAS held actual ownership of the machine IIRC. No mention of the insurance or whatnot. Reason I asked is I would hate to see someothing happen, machine is registered to you but not owned by you and you are liable for a bunch of fees and no recourse to get anything out of it.


NAS says they "maintain" 20k ATMs. SomeYuppie indicates that NAS effectively owns the machines. At 20k machines, that would place them just above BOA on the Top 5 list of owners.

Oh, but they don't own them! Unless you're talking about licensing and insurance...then they totally own them!

This investment smells like my sinus infection.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 3:52 am

webhick wrote:NAS says they "maintain" 20k ATMs. SomeYuppie indicates that NAS effectively owns the machines. At 20k machines, that would place them just above BOA on the Top 5 list of owners.

Oh, but they don't own them! Unless you're talking about licensing and insurance...then they totally own them!

This investment smells like my sinus infection.


Thank you Web. There was something else bothering me and I just couldn't put a finger on it. Everyone who has talked about the plan says you "buy" the machines and then lease them back to the company, hence "leaseback". Yet nothing is in your name but a piece of paper that says you "own" a machine that is in someone else's name. Which is registered in someone elses name, licensed in someone elses name, receipted in someone elses name, delivered in someone elses name, insured in someone elses name, etc. What exactly do you "buy" but that piece of paper? Seems like a long away around to hand someone else a lot of money. God forbid but if something did happen every investor would be SOL in a handbasket without training wheels. You'd have what you had gotten up to that point (maybe, if you weren't chased down for something) and that would be it.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby MarvinGardens » Fri Jan 17, 2014 4:27 am

I'm new on this board and encountered it because I have a client who owns leaseback contracts with Nationwide Automated Systems, Inc. (NASI) and I'm doing due diligence.

This client has purchased contracts with NASI over the last 17 years and has received the 20% "guaranteed" return over the entire time. I have read every post on this thread. My client also receives compensation for binging new investors into the pool. These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements." They are a significant proportion of his annual income. I have no comment on what my client has told me.

Here is a letter that has been sent to all investors of NASI according to my client:

Nationwide Automated Systems, Inc. (NASI)
5000 North Parkway Calabasas
Suite 303
Calabasas, CA 91302

Mr. Joel Gillis, President
818-223-0930
Fax-818-591-1762

One purchases an ATM machine from NASI for $19,800, then leases it back to
the company.. Whereby they place, manage, insure and maintain all aspects of
the equipment and investment, which includes upgrades or damages/loss.

Machines are now placed in Convenience Stores ("the best producing locations
that we've ever had in our 17 years of being in business")
They were formerly installed in hotel chains and gas station mini-marts.

The investor receives 50 cents per transaction or 20% per annum,
(whichever is greater), payable monthly in amounts of $330. Per machine.
This is the guaranteed 20% per year (4K), paid in monthly checks on the
first for the prior month. A monthly printout of the serial number, location
and activity of each machine, by an independent company that services the
account, is included with the check.

One can also hold ATMS in an IRA account. So contact the office for the
information on the Custodial companies.

There are tax depreciation advantages so consult your CPA.

Please call Joel Gillis, 818-223-0930, during regular business hours, for
more information or to receive a contract.
Thank you
----------------------------------------------------------------------------------------------
This should put to rest what NASI's offer is.

I'm not sophisticated with computers and am unable to copy the text of another communication with my client. But the gist of it is this:

Announcing 300 more convenience store locations!

Our distributor has released to us more Convenience Store Locations. We are putting up for sale 300 of these locations to investors.

these are the best producing locations that we have ever had in our 17 years of being in this business. ... They are returning between 20% and 30% per annum.

----------------------------------------------------------------------------------------------------------------
I've been in the investment business for 35 years. I have had at one point $500 million under management. I am now retired and work privately with high net worth clients.

I have done a little research on the ATM business. The average ATM disbursement is about $60. The average charge for this convenience is $2. The ATM business can return as high as 350% per annum but that assumes high traffic and a high service charge. So there is plenty of room there for a high payout and commissions.

Are any of you out there bankers? Would a bank loan money for ATM equipment purchases given a 17 year track record of success? If not, why not?

The real bottom line question for me is this: Why would a company do leasebacks when bank loans should be cheaper. Am I missing something here?

My client has 2/3 of his net worth in this investment and it is substantial. I don't want to stir up a hornet's nest. Has anyone here asked for NASI's financial statements? I may do that, but I'd rather someone else did. How does NASI make its money? I don't care if they are as guilty as the Japanese in the rape of Nanjing as long as my client is safe. Any comments?

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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby Tednewsom » Fri Jan 17, 2014 5:23 am

I like the part where you wrote "One purchases an ATM machine from NASI for $19,800, then leases it back to the company."

Well, okay, you didn't write it... Joel Gillis wrote it. That's even better.

These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements."


Mmmm. Anybody want to take that one?

So, someyuppy? Is MarvinGardens one of those phantoms I pulled out of the air?
Last edited by Tednewsom on Fri Jan 17, 2014 5:39 am, edited 1 time in total.

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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby webhick » Fri Jan 17, 2014 5:39 am

Welcome to Quatloos, MarvinGardens. I love building hotels on you.

MarvinGardens wrote:These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements."

"Here's $10 grand in cash, don't tell anybody." :whistle:
Sounds like a totally legitimate business transaction... :sarcastic: (I actually went out of my way and uploaded a sarcastic smiley, just for this occasion)

Magic Joel wrote:One can also hold ATMS in an IRA account. So contact the office for the
information on the Custodial companies.

Say what? Is... is it possible to hold a physical object inside an IRA? Or are we talking the Irish Republican Army?

Are any of you out there bankers? Would a bank loan money for ATM equipment purchases given a 17 year track record of success? If not, why not?

Considering how much money NASI is likely making and the amount of years they've been in business, they shouldn't need a bank loan to get machines. Like, I could understand in the beginning doing a leaseback to get the capital up, but there's no good reason after a while when you can dramatically increase your profit margins by cutting out the "leaseholders".

The real bottom line question for me is this: Why would a company do leasebacks when bank loans should be cheaper. Am I missing something here?

Do you mean the "leaseholder?" or NASI?


I don't want to stir up a hornet's nest. Has anyone here asked for NASI's financial statements?

Scams that get high activity on this forum have a habit of folding. I can't say we're responsible for it, but law enforcement types do tend to check in here and we're like the first hit on Google when you search for NAS's full name (of which I'm too lazy to look up or type out even though I'm clearly not so lazy that I can't type this out), so someone with authority is likely to check in on this sooner rather than later. Especially since more information about the operations are coming to light thanks to people like you.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby webhick » Fri Jan 17, 2014 5:43 am

Tednewsom wrote:So, someyuppy? Is MarvinGardens one of those phantoms I pulled out of the air?


I checked the thread for sockpuppets and no two users in this thread are using the same IP. We also have security measures that make it very difficult/frustrating to us an anonymizer service, so that also limits the use of sockpuppets.

SomeYuppy is out of gas on that half-hearted accusation.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby Tednewsom » Fri Jan 17, 2014 5:55 am

MarvinGardens wrote:Has anyone here asked for NASI's financial statements? I may do that, but I'd rather someone else did.


Straight answer: yes, at least one specific example of asking is listed above from another person who was in your position-- and oddly enough, the information was never forthcoming, calls not returned.

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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 1:44 pm

webhick wrote:
The real bottom line question for me is this: Why would a company do leasebacks when bank loans should be cheaper. Am I missing something here?

Do you mean the "leaseholder?" or NASI?


I think he means NAS Web. It would be a lot cheaper to get a loan and pay, what, 2% then to pay out to "investors". Or even better a line of credit. I would think they would be capable of that by now.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby The Observer » Fri Jan 17, 2014 4:47 pm

JamesVincent wrote:
webhick wrote:
The real bottom line question for me is this: Why would a company do leasebacks when bank loans should be cheaper. Am I missing something here?

Do you mean the "leaseholder?" or NASI?


I think he means NAS Web. It would be a lot cheaper to get a loan and pay, what, 2% then to pay out to "investors". Or even better a line of credit. I would think they would be capable of that by now.


I agree with James. And this point ties into the question that AndyK and I have asked: Why would anyone fork over a 20% return to outsiders, epecially if they could fund the purchase of new ATMS from lenders for cheaper? Even if NAS could not secure a prime rate loan and had to take out higher interest loans, say at 8%, it is still more profitable than shelling out money to third-party investors. And if they are really pulling in 20% or higher returns as NAS claims, there would be no lack of lenders who would love to get some of the action.

In short it sounds to me that NAS can't attract commercial lenders because the returns on these ATMS are iffy at best, and it is easier to promise an attractive return to the rubes out there and effectively get low interest-free loans in return.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 6:06 pm

Something I just thought about Observer. Could they be doing it to shift the capital out of their name to avoid taxes? If some else buys it then they won't owe on that initial chunk. I think that it would also change the table by it being a joint venture. Maybe one of you guys could work through that, beyond what I'm familiar with.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby The Observer » Fri Jan 17, 2014 6:17 pm

JamesVincent wrote:Could they be doing it to shift the capital out of their name to avoid taxes?


Anything is possible, when it comes to filling out the blanks on a tax return. On the other hand, who gets to claim the depreciation on all of those machines? It is implied that the investors might be able to claim depreciation as an expense of their investment. At this point, it is all mere speculation on our part on what is going on behind closed doors. But I would admit that looking at the corporate or partnership return would be very enlightening in view of the other statement that NAS has made:

These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements."


I am not sure I have ever encountered any business that woud pay the tax on gross receipts instead of ensuring that their investors would pay their fair share on the earnings by reporting it on the 1099 earnings statements.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby webhick » Fri Jan 17, 2014 9:47 pm

These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements."


I am not sure I have ever encountered any business that woud pay the tax on gross receipts instead of ensuring that their investors would pay their fair share on the earnings by reporting it on the 1099 earnings statements.
[/quote]

I feel like there may be a way for them to cover the taxes, but it'd still be reportable. The reason I feel this way is that if you want to "cover" an employee's share of taxes on a paycheck, there's a special rate you use which accounts for the fact that the taxes you cover are taxable income to the employee. Well, the directions for it make sense anyway. I don't doubt that there's a similar thing for 1099 income.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 10:00 pm

The Observer wrote:Anything is possible, when it comes to filling out the blanks on a tax return. On the other hand, who gets to claim the depreciation on all of those machines? It is implied that the investors might be able to claim depreciation as an expense of their investment.


Here are my thoughts about it. If they have an "investor" buy the machine then they avoid that first tax. The machines are in the company name and are serviced by the company so they claim the depreciation since they "own" them.

At this point, it is all mere speculation on our part on what is going on behind closed doors.


Yes, but very interesting speculation.

But I would admit that looking at the corporate or partnership return would be very enlightening in view of the other statement that NAS has made:

These payments, paid in cash, are not reportable to the IRS because the "the tax has already been paid on these disbursements."


I am not sure I have ever encountered any business that would pay the tax on gross receipts instead of ensuring that their investors would pay their fair share on the earnings by reporting it on the 1099 earnings statements.


What if their not paying on it because it's coming out of another "investors" investment? The money is coming out of that extra that the "investor" is paying to "buy" the machine. At any rate throwing a couple of grand at someone who is bringing them in a potential of $100k over 5 years probably wouldn't phase them.

Again, not an accountant or anything but I kinda understand business write-offs. Maybe I'm completely off but it would kinda explain why they're doing what they do how they do. I agree it would be interesting to not only see their return but also a full copy of the "agreement" they have someone sign. I would like to see exactly how it's worded.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Fri Jan 17, 2014 10:42 pm

MarvinGardens wrote:Are any of you out there bankers? Would a bank loan money for ATM equipment purchases given a 17 year track record of success? If not, why not?


Not a banker but there are lenders out that specialize in loan agreements on entertainment machines, which ATMs are usually considered. Dealt with a couple when looking at putting in multiple machine types at one location. Had a loan lined up one time for 22 pool tables, 10 touchscreens, a jukebox and an ATM for a nightclub that was opening. Ended up not providing the machines because of issues with the owners. There is also the possibility of getting a loan through the SBA since it is an established business and should have the 10% they require.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby The Observer » Fri Jan 17, 2014 11:13 pm

JamesVincent wrote:What if their not paying on it because it's coming out of another "investors" investment? The money is coming out of that extra that the "investor" is paying to "buy" the machine. At any rate throwing a couple of grand at someone who is bringing them in a potential of $100k over 5 years probably wouldn't phase them.


Again, it is speculation and I don't feel qualified to offer anything beyond my original suspicion that this is not an investment that I would recommend to anyone. I don't know how they are actually structuring the purchases, leasebacks, and payouts. I don't know what they are putting on the returns. As I said before, anything is possible when you start off with a form that has a lot of blank lines.

And your theories are no less valid than any other person's in regards to what this firm is actually doing. Your various scenarios could very well be what is happening. But none of that will stand up until this business is audited by an independent party under accepted and legal auditing standards and the audit report made public.

The point I am making is that this isn't how most - and I mean nearly most - successful and upfront companies do business. They don't pay taxes that they don't have to, they don't pay more on interest and loans than they have to, they don't pay out high rates on returns if they don't have to - and they don't give away profit that they can keep for themselves. That is why most investors know that a rate of return from 5-10% is the typical rule and that you don't bank on getting a guaranteed 20% rate of return year in and year out.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby The Observer » Fri Jan 17, 2014 11:17 pm

webhick wrote:I feel like there may be a way for them to cover the taxes, but it'd still be reportable. The reason I feel this way is that if you want to "cover" an employee's share of taxes on a paycheck, there's a special rate you use which accounts for the fact that the taxes you cover are taxable income to the employee. Well, the directions for it make sense anyway. I don't doubt that there's a similar thing for 1099 income.


Yes, and that is what I was hinting at. There has to be documentation that shows how the taxes were reported for that income, and I would think it would include a copy for the person for whom the taxes were covered, so that they can provide proof to the IRS that this income was already taxed.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby MarvinGardens » Sat Jan 18, 2014 12:09 am

A little more due diligence yields some interesting information.

According to a white paper jointly produced by the ATM Industry Council and Tremont Capital Group: "Independent deployers typically only make 6-7% margins after paying all expenses."

The white paper is available from Tremont Capital Group for $1,000 or to members from the ATM Industry Council for half that.

This from ATM Experts, an all around provider of ATMs and services, (atmexperts.com):

"ATM service companies and ATM distributors look at one thing when deciding wheather or not to place an ATM machine at a particular location. The rule of thumb goes like this. 3% - 5% of the foot traffic that actually sees the ATM machine will use the ATM. So let's figure that you have a total of 300 people a day coming through your doors, and let's say that you are charging a $2.75 surcharge per valid withdrawal. If you take the middle road that 4% of the people that see the ATM machine will use it. Then you can count on your new automated teller machine to generate you a minimum of 360 transactions per month at $2.75 per valid withdrawal. That comes out to $990 per month or a total of $11,880 per year. All that from one ATM machine at one location."
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So if we apply the 7% net profit average to $11,880 we see a net profit of $832. Yet NASI pays its investors a guaranteed $4k per machine, per year.

ATM machines are available that service convenience stores quite well for between $2k and $2500. Leasing is available for about 6% per year. And, there are all sorts of other deals where you can split 50/50 with the distributor even get the ATM for free if you have high enough traffic sites.

According to America's leading ATM franchise sales company you will need from $14k - $30k to stock the machines. And your money plus the surcharge is returned to you in a couple of days. But the cost of doing that should be included in the 7% net figure.

NASI has to generate enough money from its machines to pay 20% per year to its lease-back clients, plus pay significant sales commissions. Hmmm ...

What if NASI is getting machines for $2.5k instead of $4500. That's eight machines for $20k. Five return enough for the client and the rest generate money for NASI and to subsidize returns on machines that under perform.

That's an interesting thing to contemplate ...

So, what if we look at this thing like shares in a business. The sale / lease-back is a purchase of preferred stock at no cost to the company. The $4k annual payment could be thought of as (admittedly high) returns on preferred stock. If all the installation, maintenance etc. were contracted out, or you bought out other ATM companies and used some of the machines to attract more investors you might be able to run a pretty profitable business with little overhead and avoid all the regulatory hassle of having stockholders - something with which I'm pretty familiar.

Now, I'm just playing with numbers doing sort of a horseback analysis. But if, as another member on this thread has said, NASI is unwilling to open the kimono, we have to think about whether or not the business makes sense in order to consider whether or not the company may be a Ponzi scheme as certain members have suggested.

Now, I wouldn't want to be an investor who wanted to get his capital out in case of a bankruptcy if I could only claim title to one machine and that's a risk but does it constitute fraud?

At first glance, a 20% return on any investment is an attention getter. But, I've seen deals return higher than this, sometimes much higher.

Comments?

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Re: ATM LEASEBACK SCHEMES-- any insight?

Postby JamesVincent » Sat Jan 18, 2014 12:35 am

Webhick wrote:Considering how much money NASI is likely making and the amount of years they've been in business, they shouldn't need a bank loan to get machines. Like, I could understand in the beginning doing a leaseback to get the capital up, but there's no good reason after a while when you can dramatically increase your profit margins by cutting out the "leaseholders".


I just wanted to say that if at all possible you don't tie up your capital unless you have to. Get the best rates you can but get a loan. The friend I had talked about earlier always gets SBA loans for anything he does. Only time I have seen him NOT do that is when he had his 52' Chesapeake built. He paid the $500k in a check.
Last edited by JamesVincent on Sat Jan 18, 2014 12:43 am, edited 1 time in total.
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