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HOME INVESTMENTS INC
3000 shares of Class B stock
(B= nonvoting)
Designed for total return
Designed to invest in the age old dream "The American Home"
Interest income
Price $'s to issuer Home Investments Inc.
15310 Beaverbrook Ct.
Per Unit $30.83 $30.83 Suite 2-E
Total $92500 $92500 Silver Spring, Maryland
20906
301-438-2320
HOME INVESTMENTS INC
The object of Home Investments is TOTAL RETURN through a
combination of home owner appreciation and dividend income. The
holdings in the current Portfolio were selected by following a strategy
that invests in quality bonds, homes, condos and land. The home
owner LOAN division will provide funds to qualified applicants in
search of their American dream.
The risk factor of Home Investments Inc is best described as a "Safe
Harbor" for your hard earned dollars. (See page 2)
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Inquiries should be directed to the Trustee at 301-438-2320.
Investors should read this prospectus carefully and retain it for future
reference.
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HOME INVESTMENTS INC.
Equity investing is America's oldest and largest family of unit
investments where each year there is added billions of dollars
in home buying. Currently, Home Investments assets are in a
Merrill Lynch portfolio of preselected securities. They (the 3000
existing shares) represent equal shares of the underlying assets.
Simply stated, 3000 shares of stock = $92500 in Merrill Lynch at
$30.53 per share. Now we hope to expand.
Home Investments Inc. stock offers a distinct advantage that you know
in advance what you are investing in and that changes in the portfolio
are limited. Most of the equity assets in the fund pay interest monthly.
The portfolio offers a convenient and simple way to invest.
Our size and market presence enables us to offer personalized service to
potential investors.
The terms of the Merrill Lynch assets in the portfolio are as short as
one year or as long as 30 years. Many of the assets are "laddered
maturities" to help protect against changing interest rates.
DEFINING THE STRATEGY
Home Investments Inc. will follow a simple time-tested strategy for
expansion:
(1) find those stable families interested in buying or improving the
age-old dream "The American Home"
(2) lend them money at market rates
OR
(3) find those sellers that are willing to part with their dream at 30%
below the market price and buy it.
ALSO
(4) invest the cash flow in short-term tax free bonds.
This strategy provides a disciplined approach to investing, based on buy
and hold philosophy, which ignores market timing, investment research
and rejects active management. The Sponsors anticipate the Portfolio
will remain unchanged over its one-year life despite any adverse
developments concerning an issuer, an industry or the economy or stock
market generally. While the Strategy does not work perfectly each and
every year, our Strategy had higher total return than the DJIA in 4 of the
last 5 years. Of course, past performance of the Strategy is no guarantee
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of future results and there can be no guarantee that the Portfolio will
meet its objective or will not lose money over its one-year life or over
consecutive annual periods.
DEFINING YOUR RISKS
The equities in the portfolio generally share attributes that will caused
them to have gradually declining value as homeowners pay off their loan.
However, they have higher yields relative to stocks in the Dow Jones.
The portfolio does not reflect any investment recommendations of the
Sponsors and one or more of the stocks in the Portfolio may, from time
to time, be subject to sell recommendations.
The Portfolio is not an appropriate investment for those who are not
comfortable with the Strategy or for those who are unable or unwilling
to assume the risk involved generally with an equity investment. It may
not be appropriate for investors seeking either preservation of capital
or high current income.
There can be no assurance that the market factors that caused the
relatively low prices and high yields of the Home Investment stock will
change, that any negative conditions adversely affecting the stock price
will not deteriorate, that the dividend rates on the Home Investment
stock will be maintained or that share prices will not decline further
during the life of the Portfolio, or that the Home Investment stock will
continue to be included in listed markets.
Unit price fluctuates with the value of the Portfolio, and the value of the
Portfolio could be affected by changes in the financial condition of the
issuers, changes in the various industries represented in the Portfolio,
movements in stock prices generally, the impact of purchase and sale of
securities for the Portfolio (especially during the primary offering period
of units) and other factors. Additionally, equity markets have been at
historically high levers and no assurance can be given that these levels
will continue. Therefore, there is no guarantee that the objective of the
Portfolio will be achieved. Also, the return on an investment in the
Portfolio will be lower than the hypothetical returns on Strategy Stocks
if sales charges are applied. Unlike a mutual fund, the Portfolio is not
actively traded every day and the Sponsors receive no management fee.
Therefore, any adverse financial condition of an issuer or any market
movement in the price of a security will not require the sale of securities
from the Portfolio. Although the Portfolio may sell securities under
certain limited circumstances, given the investment philosophy of the
Portfolio, it is not likely to do so.. The Portfolio may continue to
purchase or hold securities originally selected even though the market
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value and yields on the securities may have changed or the securities
may no longer be included in the Dow Jones.
USE OF PROCEEDS
The net proceeds of the offering will be use to provide financing for the
first time home buyers who have a high two income position but just
enough savings to pay closing costs on their American dream.
DEFINING THE OFFERING PRICE
Public Offering Price per Unit $30.83
The Public Offering Price as of September 21, 1998, the business day
prior to the initial date of deposit is based on the aggregate value of the
underlying securities ($92500) and any cash held to purchase securities,
divided by the number of units outstanding (3000), plus any initial sale
charge. The Public Offering Price on any subsequent date will vary. The
underlying securities are valued by the Trustee on the basis of their
closing sale prices at 4 p.m. Eastern time every business day.
Sales Charges:The total sales charge for this investment combines the
initial costs of the S.E.C. certification and the costs of having a broker
certify the company and list it on an exchange. If you buy the shares
directly from the company, there will be no sales commission.
Plan of Distribution: You will receive distributions of dividend income,
net of expenses, on the 25th of November 1998 and February; April
and June 1999 if you own units on the 10th of those months. Distribution
of any securities to be registered that are to be offered other than thru
underwriters will be delivered by certified mail after confirmation of
money received.
Reinvestment Option: You can elect to automatically reinvest your
distributions into additional units of the Portfolio subject only to the
deferred sales charge remaining at the time of reinvestment. Reinvesting
helps to compound your income for a greater total return.
Taxes: The annual statement and the relevant tax reporting forms you
receive at year-end will be based upon the amount paid to you (net of
sales charge and charge for organizational expenses).
DILUTION
The net tangible book value per share of the stock is the same, before
and after the distribution. In simple terms, this means that any new
buyer of stock will pay the same price for a share of stock that initial
investors paid.
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SELLING SECURITY HOLDERS
Stock holders of this business are not offering securities owned by them
selves.That means:The 3000 shares currently held, will continue to
be held by the original owners of the stock. Any stock sold, will be
NEW issue.
PLAN OF DISTRIBUTION
The current plan is NOT to offer the securities through an underwriter.
Securities to be registered and sold (3000 shares) will be marketed by
Home Investments Inc. You bring us the money and we will give you the
certificate of ownership, or, we will bring the certificate of ownership to
you and you give us the money. No fees for us, no fees for you.
LEGAL PROCEEDINGS
The issuer is not a party to any pending legal proceedings
DIRECTORS, EXECUTIVE OFFICERS
Allen Melton 61 elected president and C.E.O. for a one year term. Mr.
Melton has held this position since inception of the corporation in 1991.
His business experience guided the company to profitability every year.
Mary Melton 59 (wife) elected vice president for a one year term. Ms.
Melton has held this position since 1991.
Lisa Pedersen age 36 (daughter) elected treasurer for a one year term.
Ms Pedersen has held this position since 1964
SECURITY OWNERSHIP
There are currently 3000 shares outstanding Class A voting shares:
Class Name Amount %of Class
A Allen Melton II 1000 33 1/3 %
Damascus, Md
A Cheryl Herlihy 1000 33 1/3 %
Gaithersburg, Md
A Lisa Pedersen 1000 33 1/3 %
Poolesville, Md.
There are no rights to acquire beneficial ownership of any more shares.
DESCRIPTION OF THE SECURITIES
Securities offered for sale are Class B nonvoting but, they do pay
dividends based on the net profit of the corporation. For the year 1998,
the company forcasts a 6%dividend per share. There are no conversion
rights to Class A. Shares may be liquidated when there is a willing buyer.
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INTEREST OF EXPERTS/ COUNCIL
No one will receive a direct or indirect interest in the business for
services rendered.
INDEMNIFICATION for SEC Act Liab.
There is no indemnification provision for directors, officers or controlling
persons of the business insurer against liability under the Securities Act.
ORGANIZATION WITHIN LAST 5 YRS
The current owners of securities of the business issuer has not received
any extra or special benefit that was not shared equally (pro rata) by all
holders of securities of the class.
DESCRIPTION OF BUSINESS
(1) The business is a real estate investment firm, incorporated in 1991.
(2) There are no bankruptcy, receivership or similar proceedings.
(3) There are no material reclassification, merger, consolidation, or
purchase or sale of a significant amount of assets not in the ordinary
course of business.
Business of the insurer:
(1) The company does just what the name implies ( Investments) by
looking every day for those chances to buy, sell, loan on real estate. At
the same time, the company does not sit still, but invests the cash flow in
market securities to insure income to the shareholders.
(2) Distribution of our products, are by word-of-mouth. It is you the
stockholder that knows your friends the best and their ability to maintain
payments. It is your stock equity that is being placed in their hands, so
good recommendations keep the company profitable.
(3) There are no publicly announced new products or services.
(4) Our competitive position in the industry is against the banks. The
edge is gained by close ties with Realtors for property and low profile
certification of loan clients.
(5) The names of principal suppliers is arranged by keeping in close
contact with a small circle of Realtors.
(6) We have no dependence on a few major customers.
(7) There are no applications for or any existing patents, trademarks,
licenses, franchises, concessions, royalty agreements or labor contracts
(8) There is no need for government approval of products or services.
(9) There are no existing or probable governmental regulations on the
business.
(10) During the last 2 years, there has been no money spent on research
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and development activities.
(11) There have been no costs or effects of compliance with
environmental laws.
(12) There have been no employees, either part time or full time. The
officers of the company have given their time freely with no expected
renumeration other than the growth of the company.
PLAN OF OPERATION
The issuer's financial condition is stable. The results of operationsfor
each of the last two years has been a six and one half to seven percent
growth each year. The prospect for the future is continued growth at this
level. But how you ask? Well, trends show that long term interest rates
are gradually falling.Therefor lower monthly payments for home buyers,
which means that more of potential first time home buyers will take the
dip, which gives our company the oppertunity to help them achieve their
goal (the American Dream) to buy a home. Here is how it works:
First- find a high dollar two income couple that wants to buy a home,
can afford it, but just can't seem to save the money for a down
payment and closing costs.
Second- determine the value of a house they can afford on their monthly
salary.
Third- Tell them to go find that house.
Forth- Home Investments buys the house for them.
Fifth- Rents it to them for one year, then sells it to them at what HI paid
for it plus closing costs.The money raised by the sale of securities will
provide the seed money for the first couple. Any uncertainties that might
have a material impact on the deal are secured by the fact that HI still
holds title to the house.
DESCRIPTION OF PROPERTY
(a) The real property of Home Investments is located in a office located
in the home of the CEO. For IRS purposes, the area is used exclusively
by HI. There is no rent. It's a place to plan the future and store records.
(b) Investment Policies : There are no restrictions on the percentage of
assets which may be invested in any one investment and this policy may
be changed without a vote of security holders.It is our policy to acquire
assets for income.
(1)The type of real estate in which HI may invest is currently condo's,
town houses, and single family homes. Each purchase of real estate
will require another offering of stock. There is no by-law against
borrowing money for real estate, but the board feels it is more safe
to own each property. We don't want to get in a bind trying to
repay a loan.
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(2) If HI holds a mortgage on some property, it will be a first
mortgage only. These will be for single family dwellings. It will
be originated, serviced and ware housed by HI.
(3) Securities we are invested in:HI's portfolio with Merrill Lynch
contains enough money to buy a decent condo, but the board
prefers to leave this as a cash buffer in case of trouble. There is
about half in tax free bonds and half in mutual funds. This is
certainly a conservative approach, but the preservation of
capital is number one.
CERTAIN RELATIONSHIPS
No promoter will receive anything of value or have the right to receive,
directly or indirectly from the issuer. No assets are acquired or to be
acquired by a promoter.
MARKET FOR COMMON EQUITY
There is no principal market where the small business issuer's common
equity is traded. The company expects to have established a Bid/Ask
price that will be published in a separate table called "SMALLER
LOCAL STOCKS" in the Washington Post.
EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by or paid to any
of the named executives. There is no plan, contract, or arrangement to
which the officers may receive any compensation.
FINANCIAL STATEMENTS
It is the opinion of the Trustee and Holders of Home Investment stock
that the financial statement presents fairly, in all material respects, the
financial position of the Company as of September 1,1998 in
conformity with generally accepted accounting principles.
Trust Property Audited by Josheph L Viscito,PA Gaithersburg, Md
Investments.....................................$92500
Total ......................................$92500
Liability and Interest of Holders
Reimburse of I.P.O. expenses(1) $ 316
Subtotal $ 316
Interest of Holders of 3000 Units
Cost to investors $92816
Subtotal
Total $92500
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(1) A portion of the Public Offering Price consists of cash in an amount
sufficient to pay all or a portion of the costs incurred in establishing the
listing of the company on an accrediated open market maker Bid/Ask
price schedule that is considered "Public Traded".
INDEMNIFICATION OF DIRECTORS AND OFFICERS
There is no statute, charter provisions, by-laws, contract or other
arrangements that insures or indemnifies a controlling person, director
or officer of the small business insurer affects his or her liability in
that capacity.
OTHER EXPENSES
Itemized expenses of the offering:
1. S.E.C. registration fee $ 28.00
2. Federal Taxes 247.50
3. Printing Prospectus 37.50
4. Legal fee $ 100.00
5. Accounting fee $ 135.00
RECENT SALES OF STOCK
There have been no sale of stock. Only the shares of stock (3000) that
were established when the company was formed is currently in
existence.
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EXHIBITS
Articles Of Incorporation
STATE OF DELAWARE
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
Secretary of State
Division of Corporations
Filed 09:00 AM 09/08/1993
First: The name of this corporation is Home Investments Inc
2nd: Its Registered Office in the State of Delaware is to be located at
25 Greystone Manor in the city of Lews the county of Sussex
with zip code 19958. The registered agent in charge thereof is
AAA Filers Inc. Services.
Third: The purpose of the corporation is to engage in any lawful act or
activity for which Corporations may be organized under the
General Corporation Law of Delaware.
Forth: The amount of the total authorized capital stock of this
corporation will be 3000 shares initially. Increases are to be
determinated by the Board of Directors.
Fifth: The name and mailing address of the incorporator are:
Allen Melton 15310 Beaverbrook Ct Suite 2-E
Silver Spring, Md. 20906
I the Undersigned, for the purpose of forming a
corporation under the laws of the State of Delaware,
do make, file and record this Certificate, and do certify
that the facts herein stated are true,
and I have accordingly hereunto set my hand this day.
Allen G Melton
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By-Laws
Agreement Regarding Securities Account
Home Investments Inc, and Merrill Lynch Inc. agree as follows:
1. All transactions in the account are subject to the constitution, rules,
regulation, customs, usages, rulings, and interpretations of the exchange
or market and its clearing house where the transactions are executed
by the National Association of Securities Dealers.
2.Unless we give Merrill Lynch instructions, they will hold any securities
we purchase and the proceeds of any securities we sell.
3.Merrill Lynch will direct our order for securities to multi-listed market
places, unless we give specific instructions to direct the order elsewhere.
4.Merrill Lynch will hold bonds and preferred stocks in bulk segregation.
5. The Bd. of Directors have the right to vote the full shares held in the
account.
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Statement of per share earnings
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
3Months Ending March 31, 3 Months Ending June 30
1997 1998 1997 1998
____________________________________________________
<S> <C> <C> <C> <C>
NET INT. 1112 1254 2315 2507
OPER.COST 0 0 0 0
AND EXP.
CAP.GAIN 508 562 1009 1125
INCOME
OTHER INCM (105) (131) (226) (232)
(EXPENSE)
_____________
NET INCOME 1515 1685 3098 3400
AVG. SHARES 3000 3000 3000 3000
OUTSTANDING
______________
EARN PER .50 .56 1.00 1.13
SHARE
EARN PER CENT 6 ½ 7 6 ½ 7
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL DATA SCHEDULE
ITEM NUM ITEM DESCRIPTION AMOUNT
- -------------- ------------------------- -----------
<S> <C>
5-02(1) CASH 0
5-02(2) MARKETABLE SECURITIES 92500
5-02(3)(a)(1) NOTES/ ACCOUNTS REC 0
5-02(4) ALLOW FOR DOUBTFUL ACCT 0
5-02(6) INVENTORY 0
5-02(9) TOTAL CURRENT ASSETS 92500
5-02(13) PROPERTY PLANT EQUIPMENT 0
5-02(14) ACCUMULATED DEPRECIATION 0
5-02(18) TOTAL ASSETS 0
5-02(21) TOTAL CURRENT LIABILITIES 316
5-02(22) BONDS, MORTGAGES 0
5-02(28) PREFERRED STOCK 0
5-02(30) COMMON STOCK 92816
5-02(32) TOT LIA. & STK HLDR EQUITY 92500
5-03(b)1 TOTAL REVENUE 3400
5-03(b)3 OTHER COSTS AND EXPENSES 232
5-03(b)10 INCOME BEFORE TAXES 3168
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authoruized
A GREY MELTON
(Registrant)
