Am in New England on some business and some personal downtime this week, and heard the most horrid "subprime mortgage" story. A friend in southern Maine tells me that an acquaintance of his, with mediocre credit, was denied an $80,000 mortgage for a home on 2 acres in the woods "because a single woman with two kids shouldn't be living alone in the woods." Now, that is not grounds to deny a mortgage. But what makes it worse is that she supposedly was approved for a $130,000 mortgage for a house in town that she was concerned was more than she could support.
Guess what? Now she's in a bind financially and may lose the house. And the mortgage broker who found her the great deal and had a colleague find her the bigger home in town she really didn't want, has his fee and will feel none of the problems she is experiencing.
I deal a lot with incredibly honest, caring and smart mortgage people in the commercial/investment world. From big projects to small ones. It irks me to no end what has happened to people and their homes today. Some of it is "keeping up with the Jones" and overextending on credit, or taking that "interest-only" loan now because they figure they'll be doing even better financially in three years. But more and more it is being shown that a few uncrupulous mortgage brokers put people into homes the broker knew they would never be able to keep. At outrageous fees, at outrageous terms. And our economy is paying the price . . .
Okay, time to take a walk. Headed up a logging road for a long hike today. Maybe that will help me cool off!
Tuesday, July 31, 2007
Sunday, July 29, 2007
Mailing Gets Under My Skin . . .
I can't believe what I got in the mail yesterday!!! A solicitation, via the National Association of Realtors, to buy life insurance annuities. This drives me nuts, especially since I can do better with real estate investments than I can with most stocks, bonds, annuities, etc.
Its funny, I bump heads occasionally with my "colleagues" at Prudential Financial, who sell insurance products for wealthbuilding. And we compare notes, and they tell me they don't want me anywhere near their clients. Because mine is a better argument.
Anyway, I have GOT to find out who to call at the NAR about this solicitation! Why in the HECK are they pushing insurance vehicles instead of the product in which we all specialize???? Sheesh!!
Its funny, I bump heads occasionally with my "colleagues" at Prudential Financial, who sell insurance products for wealthbuilding. And we compare notes, and they tell me they don't want me anywhere near their clients. Because mine is a better argument.
Anyway, I have GOT to find out who to call at the NAR about this solicitation! Why in the HECK are they pushing insurance vehicles instead of the product in which we all specialize???? Sheesh!!
Thursday, July 19, 2007
Fed's Bernanke Finally Chimes In On Subprime Mess
Rising delinquencies and foreclosures, said Federal Reserve Chairman Ben Bernanke in remarks yesterday, "are creating personal, economic, and social distress for many homeowners and communities -- problems that likely will get worse before they get better."
Thank you Mr. Bernanke for echoing what I have been telling clients for more than three months now. I'm glad for the validation.
Thank you Mr. Bernanke for echoing what I have been telling clients for more than three months now. I'm glad for the validation.
Wednesday, July 18, 2007
Ownership vs. Securities Investments
Reason Number 89,652 (okay I'm exaggerating a little, but I wanted to get your attention) to own your OWN investment real estate, and avoid unregulated risk in the market . . .
THIS AFTERNOON Bear Stearns told investors in a letter that two hedge funds that invested in securities backed by subprime mortgages have very little or no value. The news, coupled with last week's decisions by ratings agencies to downgrade their ratings on billions of securities backed by subprime loans, could force other securities firms to write down the value of such investments.
THIS AFTERNOON Bear Stearns told investors in a letter that two hedge funds that invested in securities backed by subprime mortgages have very little or no value. The news, coupled with last week's decisions by ratings agencies to downgrade their ratings on billions of securities backed by subprime loans, could force other securities firms to write down the value of such investments.
Look At The Green Grow!
A new McGraw-Hill Construction report states that 2009 will be a tipping point for green building. The report predicts that within two years sustainable buildings will comprise 16 percent of large corporations' real estate portfolios. Why? Because energy costs are the largest controllable expense in office buildings.
McGraw-Hill cites the following payback on green commercial real estate: 8-9 percent decrease in operating costs; 7.5 percent increase in building value; 6.6 percent ROI improvement; 3.5 percent occupancy increase; and 3 percent rent increase.
McGraw-Hill cites the following payback on green commercial real estate: 8-9 percent decrease in operating costs; 7.5 percent increase in building value; 6.6 percent ROI improvement; 3.5 percent occupancy increase; and 3 percent rent increase.
Monday, July 9, 2007
Fridays Keep The Business Interesting
You never know what will happen when you're in the office on a Friday afternoon.
I recently completed a lease project with a major Atlanta exhibition company that was looking for retail space in Central Ohio. High profile exhibition that the entire community is talking about. I'm now looking for space for this same company in another Midwest market. I would not have had the opportunity had I not been in the office on a Friday afternoon. Ironically, they needed an architect. I called a few I knew and who were referred, and the gentlemen who did a fantastic job for this client answered his phone . . . when? . . . on a Friday afternoon.
Along the same lines, I've got a West Coast company coming into Central Ohio and we have found a couple possible spaces for them to lease. I'm also on a task force of Prudential CRES agents representing a California-based IT client that is developing the nation's most secure online data center -- inside a mountain in eastern Kentucky. We are the leasing agents for the Tier 4+ facility that will ultimately be 10 times the size of the NORAD complex in Colorado's Cheyenne Mountain.
Its why I love this business. I get to work with so many different people and companies. And once more I'm sitting here rambling while waiting for a case in the jury pool at Franklin County Municipal Court.
I recently completed a lease project with a major Atlanta exhibition company that was looking for retail space in Central Ohio. High profile exhibition that the entire community is talking about. I'm now looking for space for this same company in another Midwest market. I would not have had the opportunity had I not been in the office on a Friday afternoon. Ironically, they needed an architect. I called a few I knew and who were referred, and the gentlemen who did a fantastic job for this client answered his phone . . . when? . . . on a Friday afternoon.
Along the same lines, I've got a West Coast company coming into Central Ohio and we have found a couple possible spaces for them to lease. I'm also on a task force of Prudential CRES agents representing a California-based IT client that is developing the nation's most secure online data center -- inside a mountain in eastern Kentucky. We are the leasing agents for the Tier 4+ facility that will ultimately be 10 times the size of the NORAD complex in Colorado's Cheyenne Mountain.
Its why I love this business. I get to work with so many different people and companies. And once more I'm sitting here rambling while waiting for a case in the jury pool at Franklin County Municipal Court.
Thursday, July 5, 2007
Blackstone Buys Hilton Hotel Chain
Wow! Being on jury duty gives you a lot more time to catch up on your reading. As you might have guessed, as of this writing I still have not been called to a case.
It has been announced that Blackstone Group -- the formerly private investment fund that purchased Equity Office several months ago -- has purchased the Hilton Hotel Chain. Big money for everyone! As of this transaction, the total dollar value of hotel transactions in 2007 has surpassed that of all of 2006.
Little Paris Hilton will surely have extra $$$ in her portfolio now to dig her out of trouble the next time!! But seriously, the acquisition is different for Blackstone this time, in that they plan to hold most if not all of these properties for the foreseeable future. In the Equity transaction, Blackstone spun off many of Equity's holdings, creating a bigger cash reserve for the acquisition minded firm, which took itself public last week
It has been announced that Blackstone Group -- the formerly private investment fund that purchased Equity Office several months ago -- has purchased the Hilton Hotel Chain. Big money for everyone! As of this transaction, the total dollar value of hotel transactions in 2007 has surpassed that of all of 2006.
Little Paris Hilton will surely have extra $$$ in her portfolio now to dig her out of trouble the next time!! But seriously, the acquisition is different for Blackstone this time, in that they plan to hold most if not all of these properties for the foreseeable future. In the Equity transaction, Blackstone spun off many of Equity's holdings, creating a bigger cash reserve for the acquisition minded firm, which took itself public last week
NBC News Misleads Public On Power of Hedge Funds
Did anyone notice the big lead story NBC's Today show had late last week about the booming "success" of hedge funds, and how the wealthiest of the wealthy are getting wealthier using them?
Now, what NBC News missed is that hedge funds have been around for decades. What they got right was that some creative investment gurus are using them for even more spectacular gains (though there is incredibly high risk) using vehicles that are not regulated to ensure people don't lose their shirts.
What NBC DID NOT MENTION is that hedge funds have been imploding for more than a month. Why? Because a lot of these funds were invested heavily in companies making home buying loans to high risk borrowers. And anyone who hasn't been in Europe -- or ill -- knows that the residential real estate market has been on the skids largely due to millions of dollars in bad loans. And yet, they still aired a story that was riddled with misinformation.
So people walked away from the story thinking that 1) hedge funds are the place to make oodles of money (not right now or for the foreseeable future), and 2) that real estate funds of one sort or another are the only place to make money.
Once again, the media ignores the power of purchasing investment real estate to "hold."
Now, what NBC News missed is that hedge funds have been around for decades. What they got right was that some creative investment gurus are using them for even more spectacular gains (though there is incredibly high risk) using vehicles that are not regulated to ensure people don't lose their shirts.
What NBC DID NOT MENTION is that hedge funds have been imploding for more than a month. Why? Because a lot of these funds were invested heavily in companies making home buying loans to high risk borrowers. And anyone who hasn't been in Europe -- or ill -- knows that the residential real estate market has been on the skids largely due to millions of dollars in bad loans. And yet, they still aired a story that was riddled with misinformation.
So people walked away from the story thinking that 1) hedge funds are the place to make oodles of money (not right now or for the foreseeable future), and 2) that real estate funds of one sort or another are the only place to make money.
Once again, the media ignores the power of purchasing investment real estate to "hold."
Tuesday, July 3, 2007
Jury Duty Has Given Me More Time To Read, Pontificate
I'm in jury duty in Franklin County (Ohio) Municipal Court this week and next, which has provided me a lot of time to read the paper and some magazines (at least more than I usually do). I found story after story online and in hard copy of people losing their pensions, people not sure of the future of their 401(k)s, etc.
It got me thinking on how many people in real estate I know, and people I know who sell stocks, own real estate as an investment. An office building, an apartment building or two, or even a warehouse. Having other people pay your bills for you makes sense when you boil it down. Yet so many people consider it mysterious and even dangerous. Flipping houses is dangerous. Owning real estate to hold, and knowing what you're doing or having a real estate professional help you, is smart. It is astute.
So I'll probably be commenting more in the coming days on stories in the news. I'll either debunk myths or point out a great success someone had. In the meantime, Happy Independence Day!!! And to veterans and service men and women, as well as my three nephews in the service in harm's way in the Middle East, thank you for your service!!!
It got me thinking on how many people in real estate I know, and people I know who sell stocks, own real estate as an investment. An office building, an apartment building or two, or even a warehouse. Having other people pay your bills for you makes sense when you boil it down. Yet so many people consider it mysterious and even dangerous. Flipping houses is dangerous. Owning real estate to hold, and knowing what you're doing or having a real estate professional help you, is smart. It is astute.
So I'll probably be commenting more in the coming days on stories in the news. I'll either debunk myths or point out a great success someone had. In the meantime, Happy Independence Day!!! And to veterans and service men and women, as well as my three nephews in the service in harm's way in the Middle East, thank you for your service!!!
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