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New England Realty Associates (NEN)

December 2003

NEN has been my long term investment holding since December 2001.
For 2 years I have not sold a single share.

There is old article for new members. Please be aware
that NEN is limited partnership stock so that tax on NEN
is more complicated than regular stock.

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Today just read an article in Wall Street journal on
apartment building business claiming the cap rate currently
is 7.5% average.

By the way, from my own study of other apartment building purchases
the cap rate in Boston is around
7.7% - 7.5% .

Assuming 7.5% cap rate income appraisal is correct, It
means the true PE for building price is 13, then
the real estate building value + cash - mortgage for NEN
is $89 per share.

Currently NEN is still trading at $59 a share, still
33% discount over its real estate value.

Conclusion: continue to hold NEN after 2 years of holding
as long term investor.

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NEN is public traded limited partnership.

10 NEN shares of deposit equal 1 Unit of limited Partnership.

Lots of information in Yahoo is wrong.

Market cap for NEN is 95.75 Million dollar. True earning last year
was 11 million dollar. True PE is only 8.7 . In real estate
depreciation is not real cost so that true earning is much larger
than Net Income reported by company.

Net Asset Value or True book for NEN is $89 dollar a share as
I reported previously.

It is not surprising that there has been insider buying over
last 2 years. NEN is still dirt cheap.

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