by David Safier
I've slacked off on posting about charter schools lately, but I haven't stopped collecting material from around the country.
It's clear that, in charter schools' under-regulated wild, wild west, there's lots of money to be made. And with Arne Duncan plowing huge sums into charters across the country, the money scramble is increasing.
The best way to make a fast buck on charter schools, it seems, is to build or buy a school building, then lease it to the school. More and more investment companies are finding this to be a money making strategy. After all, the schools have a guaranteed state funding source, so they're not going to go out of business or move like a hair salon. And charter operators aren't business people who know how to get the best bang for their school leasing buck. Some schools pay as much as 40% of their state funding on the building.
What brought this to mind was an ad I saw in the Sunday Star's business section from Lawson Financial Corporation, a Phoenix-based investment company.
Not being an investor, I don't know quite what to make of this, so I'm just putting it out there.
Here's what I think it means. Private companies are floating bonds to fund school buildings for charters. And based on the high interest rates, these bonds come with a significant risk, which implies to me there is also significant profit involved.
Anybody out there know more about this than I do?
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Ready for your arm hair to stand on end? Lawson Financial Corp. is based out of Florida. The holy land of chater schools.
It’s been a while since I’ve been in the investment world. My limited experience was a bond offering at 5.5% was good enough to see most any broker digging into their book, calling those who liked to park their money for their estates/trusts. But that was back in 1998.
Now it would take someone far more seasoned than I to tell you if due to the recession if bonds are a better bet than most mutuals, stocks. Otherwise, this may not be that easy of a sell when even the most experienced and “long in the tooth” investors aren’t holding on to enough money to scoop up anything only to watch it simmer for a couple of 30 years. No matter how sexy the rate of return.
Keep in mind, I’ve been out of this loop a while. And there’s a reason I’m out of it.