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James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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The Most Profitable Real Estate Investment In The World

cell phone tower

There’s an explosive NEW real estate in town. It doesn’t have any walls, and it’s driven by our voracious appetite for technology and connectivity. But the biggest opportunity is a highly profitable $75.6-billion niche segment few investors know about.

When the wireless revolution first swept across the U.S., most investors were skeptics, thinking cell phones were for the already-rich, or for drug dealers. But those that saw this opportunity for what it was—and what we see now—made billions. And they are still making billions today.

Ronald Reagan dished out public domains to private upstarts like candy in the 1980s—via lotteries--and then they were re-sold to telecoms giants, such as AT&T.

Mark Warner of Colombia Capital, dubbed ‘The Man with the Golden iPhone’, made $150 million on these lotteries, and he was just getting started. He wasn’t wealthy, and he wasn’t a drug dealer—he simply saw the coming revolution. Then he became a U.S. Senator.

Likewise, Steve Case—Washington’s new ‘tech whisperer’—made his fortune when he founded AOL. He’s worth $1.39 billion today.

But that was the beginning of the wireless revolution. Now the quickest and purest way to profit in this industry is in a niche segment that you might have been taking for granted.

Three companies in this most profitable niche have seen crazy 10-year returns for early-in investors.

• Crown Castle International Corp. (NYSE:CCI): CCI rose from about $2.00 to its current price of $101... handing investors a 4,950 percent return.

• American Tower Corp. (NYSE:AMT): AMT rose from about $1.50 to its current price of $131... handing investors an 8,633 percent return.

• SBA Communications (NASDAQ:SBAC): SBAC rose from about 30 cents to its current price of $134... handing investors a 44,566 percent return.

American Tower Corp (AMT) 10-Year Returns

(Click to enlarge)

SBA Communication (SBAC) 10-Year Returns

Crown Castle International Corp (CCI )10-Year Returns

Source: CNN Money

Still, today, only 25 percent of the world has access to the vast global communications network. But the wireless revolution that swept through the U.S. and minted millionaires out of the investors in these three companies is now sweeping through South America.

And … one little-known company is next in line to take advantage of this explosive opportunity.

They are in the same profitable niche as the three companies above: Cell phone towers.

That company is Tower One Wireless (CNX:TO + OTC: TOWTF).

The three little-known companies that cashed in on the cell phone tower niche by building 450,000 towers and rising to a combined market cap of more than $100 billion were just the beginning.

Tower One Wireless is next in line to repeat this in South America.

Only 100,000 cell towers have been built so far in South America--a far cry from the 520,000 towers needed by 2020.

That's 420,000 TOWERS that need to be built in the space of just 3 years!

That’s 5X growth!

South America has been slower than other regions in migrating towards a TowerCo model—but now that wireless is affordable across the globe it’s about to roll out big.

And that represents a huge opportunity for early-in investors.

Independent tower companies are springing up to meet massive demand for cell towers by wireless companies scrambling to compete with each other to provide unlimited wireless internet and mobile phone data.

These most profitable of wireless ‘landlords’ build thousands of cell towers and rent them out to wireless providers scrambling to rapidly increase their capacity and coverage.

This type of business model is usually kept TOP SECRET because it generates so much net profit and continuous cash flow.

There are only 4 publicly-traded cell tower companies on the planet, and Tower One (CNX:TO + OTC: TOWTF) is one of them.

Founded in 2015 and sporting a market cap of just $11.23 million, Tower One is the ONLY small-cap entry point into the industry, period.

The three others are basically in the same business; huge multi-billion-dollar market cap companies. Naturally, the law of large numbers limits how quickly they can grow, and stock prices limit first-in opportunities for investors to make outsized gains.

According to a Mott McDonald study on South America's Cell Tower Investment Opportunity, rapid wireless subscriber growth and heavy investments in LTE rollout make South America a fertile investment opportunity for tower companies.



NPV=Net Presence Value

Source: TMT Finance

But even more importantly for investors, this is one of the easiest niches to make money in. The simplicity is elegant: You either rent or buy land, you have a fixed cost installation for your tower infrastructure, and then you rent your installation to giant telcos.

A single tower can serve up to 4 telcos, while the tower company sits back and enjoys pure profit for years and years...

Very few industries can boast of such a clear-cut path to profitability. In fact, it might be the most profitable real estate investment by square foot on the planet.

This is the model that is most likely to attract C-level executives from Fortune 500 companies to South America.

Here are 5 reasons to watch Tower One (CNX:TO + OTC:TOWTF) very closely:

#1 Little Competition

TowerOne is the only small-cap Tower company in South America, and provides an excellent opportunity to grow your capital. All the other three incumbents are mature companies worth tens of billions apiece. Small-cap companies with great business models offer some of the best opportunities for capital growth.

The great thing is that the big boys such as American Tower have no advantage over Tower One in South America despite their size. This is mainly because they are all starting operations at the same time. Everyone is starting from scratch, so the playing field is leveled.

#2 80 percent EBITDA Margins

The margins in this business segment are potentially massive.

We are talking about 80 percent EBITDA margins, much higher than typical margins by other sectors.

Each tower costs from $50k - $100k, and generates $12k-$15k per year per operator. Assuming each tower serves two operators, it takes only two years for the tower to pay for itself. And then the profits start flowing.

#3 Massive Demand in a Growth Industry

The growth runways for TowerOne (CNX:TO + OTC:TOWTF) are fantastic. Basically, the more towers the company builds, the more valuable it becomes. South America needs 420,000 towers built over the next three years. Tower One expects to collect ~$180k in profit from each tower.

So, the South American market is worth $180k * 420,000 = $75.6 billion.

Tower One Growth projections:

Current:11 towers

Market cap only $11m! (25 towers in development/construction)

Q1 2018:100 towers

Q1 2018 Fair value would be $60.4m Market Cap($504k value per tower). That's a more than 6x increase from today's Market cap!

Q1 2019: 250-300 towers

Q1 2019 Fair value would be $200-300m Market Cap ($504k value per tower). That's more than 22x current market cap!

This is a potential multibagger in just two years.

Tower One estimates that it will need to raise $5-$10m (in equity or debt) to finance and build the next 200 towers. After this, the company should be able to self-finance future growth through internal cash-flow.

#4 Power Team + Plenty of Experience in Telco

Tower One is led by a world-class team and industry insiders with high-level experience in the top echelons of the telco industry.

Alex Ochoa (CEO)--Alex recently left his directorship at Mackie Research Capital, one of the top retail and institutional brokerage firms in Canada, to focus solely on building Tower One Wireless. Alex and his management team have previously financed the tower industry for over $150 million and helped create tens of billions of dollars-worth of shareholder value

Rolland Bopp (Advisor)--Roland is a former CEO of Deutche Telekom USA known today as T-Mobile which is part of Deutche Telekom AG of Germany. And, knowing how profitable the cell phone tower market is, he’s joined the team... and headed toward a billion dollar pay day.

With 60 percent of shares in the hands of its management, you can be sure that supply will remain tight... meaning higher share prices.

Alex Ochoa and team are major stakeholders in Tower One (with 30m shares) and are focused on maintaining sound structure while creating shareholder value. He has voluntarily locked up the entire 30m shares for 3 years.

Early-in investors can therefore expect very minimal share dilution so with this supply locked up... demand will send the price even higher.

#5. Potential for Immediate Cash Flow

It takes just 30 days to build out cell tower infrastructure, and by day 45, you’re already collecting cash flow. A typical contract runs for 10-20 years, so there is excellent predictable revenue visibility with no down years.

Each tower on average yields $1,000 per tenant, per month. Each tower has the ability to attract up to four operators per month. On a realistic basis, the ability to add a second tenant is 75 percent, a third is about 50/50, a 4th would be a long shot. So, with 1 operator, you’re looking at 25 percent cash on cash, with 2 operators you double that, with a third, you triple that.

But here’s what’s truly unique about the TowerCo model: To get that 2nd and 3rd additional operator, you have zero additional expense.

The bottom line is this: Tower One Wireless (CNX:TO + OTC:TOWTF) is the only small cap entry point into an industry with just four publicly-listed companies. It’s also the only small-cap positioned to take advantage of the massive South American market where the next wireless revolution is already unfolding with demand for over half a million cell towers.

So, for investors looking for a first-in opportunity in an industry that is bursting at the growth seams, the best way is to slip in through the back door of what makes all this connectivity possible in the first place.

By James Burgess of Oilprice.com

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  • Stephen Aracic on June 19 2017 said:
    “Lessons of the Energy Export Boom” proclaimed that the United States is becoming the oil and gas superpower of the world. This despite the uncomfortable fact that it is also the world’s biggest importer of crude oil.

    The Journal uses statistical sleight-of-hand to argue that the U.S. only imports 25% of its oil but the average is 47% for 2017. Saudi Arabia and Russia–the real oil superpowers–import no oil.
    ******************************************************************
    Have you experts ever stopped and think about, that crude oil can't last for ever. Just over 200 years since first oil well was sunk and now we have a lot of oil reservoirs left dry. What is replacing that cavity if not flared with sea water? Problem with 'Mother Earth' is that it is very active internally as its spinning trough Universe to keep balance of things, so its shifting its exiles, North and South Polls. Volcanic eruption are very active as I'm writing this and emptying hot lava out and building rocks a way from its original place. Take a tyre on a vehicle and if its not regular balanced it will in time blowout. Our earth is similar on the much bigger scale. This is why we have earth quacks so often. Earth has shifted many times since it fully formed about 4,000 million years ago, give or take few.
    What will happen if and when hot liquid lava fined its way in to oil empty reservers? I'll let you to think about it.
  • Jack on June 21 2017 said:
    Way back in the late 90's I replied to an ad on TV that was for investment in cell towers. Having no idea about the business I was drawn to the possibilities. I had come into a few bucks and could "get in " for 5 grand..or 10. I bit and then went on to another business(vending). The cell towers would take 6 months to a year before my investment would begin to show a profit. I told myself to check back in a year. The vending service took off because I knew several bar owners. Word of mouth and great service paid off. Problem was..I really hated the business..LOL..sold it with a good profit. Back to the cell towers. Long story, short..I made more in a year then I did in vending. I'm still getting checks. Good thing as I love forex but suck at it. So cell T keeps me doing what I love and I'm actually making money. After 10 years....I'll probably get more involved w/ towers. Can't loose.

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