Happy end of summer (or is it?)
The death of Ted Kennedy brings me back to the summer of 1968, when Bobby Kennedy (RFK) died.
It was the beginning of the summer of 1968, I was 17 years old, thin, I had completed my first year of college at St. Johns University and I was one of a handful of paid employees on the staff of RFK for President, 1968 New York. I was hired because of my experience in running the physical plant of city/wide state/wide political campaigns, and was hired to help run the Eugene Nickerson for U S Senate campaign (run the office, put out mailings, create, prepare, and distribute campaign literature, etc.)
I started working in big city political campaigns when I was 14, when I was on the staff of Screvane, Lehman, Moynihan, during the mayoral election of 1965, and was somewhat of a prodigy. Somewhere in a box are several articles written about me in New York Newspapers when I was a teenager.
I had gotten a call from Ken Auletta, whom I had worked with before in Howard Samuels campaigns, and asked if I would work for the campaign. He was the campaign manager.
I had previously worked for RFK. In 1966 I was employed by “Citizens for a New Constitution”. It was a voter referendum to have a constitutional convention for New York State. It passed, they had the convention, but the new constitution didn’t pass when it was voted on in 1967. I’ll never forget that RFK did the TV commercial to tell people to vote for the referendum. After he made the commercial, we had to go through all kinds of gymnastics to get his social security number, because theoretically he received payment for doing the commercial (the Kennedy’s were never union busters so he got paid scale). There are calls for a new constitution in New York currently, especially with the shenanigans over the leadership of the Senate this past session.
Gene Nickerson was the first democratic county executive in Nassau County. He was a good guy. Bobby Kennedy recognized his abilities and persuaded him to run for US Senate on his ticket. We were running against Joe Resnick, an upstate congressman with a lot of money, who hated Bobby Kennedy; and Paul O ‘Dwyer, who was a New York liberal, running with Eugene McCarthy. We were the favorites, because Kennedy was expected to win the New York primary by a landslide, and we were going to coast in on his coat tails.
Just before the California Primary, Joe Resnick took out a full page ad in the New York Times that said: Bobby Kennedy is a liar. We couldn’t wait for RFK to come in and kick his butt.
The Kennedy Presidential campaign headquarters were set up in a two story store front in mid Manhattan. There was a room where they had the Xerox machine, postage meter, mimeograph machines, etc. A work room. There was also a juke box in this room. But the juke box only had a couple of records on it. The song that kept playing was MacArthur Park. It gets to you after a while, the same long song.
We were located inside in one of the corners. Not a whole lot had occurred in the campaign up to that point, because we didn’t have any money, because the Kennedy money was being used to fight the various primaries around the country. We were busy planning for the day that the campaign was going to return to New York, and what we were going to do then.
That would be the day that RFK comes back to New York to campaign to win the New York Primary-
That was the day after the California primary.
The campaign was supposed to start on June 6, 1968.
We were meeting at 5 am, to start. We were going out on walking tours, rally’s, all over the state with Gene Nickerson along with RFK,
But early in the morning on June 6th, (or in the middle of the night- depends upon how you look at it), my father woke me up to tell me that RFK had been shot.
So on June 6th, 1968; instead of going to work, ready to run, ready to start our state wide senatorial campaign, I walked into a wake.
People were standing around crying, moping, understandably upset.
Well, we had a funeral to run.
First thing that we had to do was send out the invitations.
We are talking about the days before fax machines.
This was the days of the telex. The telex was a cylinder (round) machine that had a metal band around it which spun and sent the message to another telex machine somehow. 1960’s high tech.
We invited every congressman, senator, head of state, governor, mucky muck in the world (except for Joe Resnick, but he showed up anyway). Everyone had to get a telegram or a telex.
We cut the list into manageable sizes, and we delivered them to Western Union offices, and to friends of the campaign who had telex machines in their office.
RFK was laid out at St Patrick’s, and the line to see the coffin was never ending. But they made arrangements for a special time for us to jump the line and pay our last respects.
And then we had to make the arrangements for the train to Washington, the guest list, limo arrangements, seating arrangements, provide for food. All this stuff had to be done.
Can you imagine the arrangements that went into Ted Kennedy’s funeral where they had months to prepare? Longest funeral I’ve ever seen on TV. They even had to provide for umbrellas in case it rained, which it did- did you see all the umbrellas?
Gene Nickerson, the senatorial candidate without a presidential candidate, was still running. But no one wanted to do anything. No active campaigning for a while, don’t forget Martin Luther King had just been assassinated, and now Bobby. All campaigning came to a halt for all of the campaigns.
Except for me.
I didn’t take the train to Washington. I had a campaign to run. I was a professional.
I decided that we would put out a negative mailing about Joe Resnick. The press had noted that he wasn’t invited to the funeral and he showed up anyway.
First thing I did was order One Million Envelopes for the Kennedy campaign. I had them bring it to the shop where the Kennedy mailings were done, so that they would address them (I “borrowed” the Kennedy mailing list). (These were the days before computers also. Rolodex was everything. While everyone was grieving, I was rolodexing).
There was no one to confirm or deny my order, so they did it on my say so, although I had no authorization, just a lot of nerve. I was 17 years old. Besides I had all the right names, numbers, etc.
The campaign finance director owned an insurance company on Madison Avenue. They had three real commercial grade mimeograph machines/ printing presses. I was given access to the equipment, a couple employees, and sufficient supplies after 5pm, and we ran them over night, and printed the million copies of stuff that had to go into the envelopes.
After the funeral, we moved out of the Kennedy Headquarters, into the Doral Hotel on Park Avenue. (I wonder if it’s still there or still called the Doral.) Nickerson and his home staff were from Long Island so they needed a place to change clothes, and stay, etc. I took over their living room, and added an extra room or two to run the campaign from.
I set up a couple of rooms with long tables and showed people how to stuff envelopes (pre-folded the stuffing’s, put them in order, open up the backs of the envelopes- I was pretty good at this stuff).
I grabbed Nickerson, his wife, and his 4 daughters and had them stuff envelopes too. All the mucky mucks from Long Island got to stuff envelopes. And everyone had a great time. Took everyone’s mind off of the assassination.
I stopped people walking on Park Avenue, in front of the hotel, and asked them if they would help Kennedy, and come in and stuff envelopes.
Some of the people who worked in the hotel helped.
I was able to get some of the Kennedy people to help out.
We bought sandwiches’ from a deli on Park Avenue.
I borrowed the Kennedy postage meter. (It had just been loaded because the campaign was about to get started, and they never used it)
I would fill up big postage bags full of mail, and when we had 4 or 5 of them I would take them to the post office. I would go to different post offices because the postal workers often would leave bags around if there were too many. I remember coming back from a run to the post office around 2 or 3 am and parking in front thinking I’d be out again shortly, but I fell asleep. Luckily someone was up when the tow truck was about to take the car (rush hour).
But the mailing got out.
A job well done.
But, unfortunately we lost the primary the following Tuesday.
Thanks to my mailing, Paul O ‘Dwyer won the primary. (His people will say that my mailing had nothing to do with it, but call it literary license, as we get older, our stories get better). I suppose we should have said something in the mailing about voting for us. But we didn’t.
Jacob Javits and Richard Nixon won the general election.
Gene Nickerson went on to become a federal court judge, presiding over Abner Louima, and finding Chin Gigante fit to stand trial. He died in 2002.
Ken Auletta is now a distinguished award winning Journalist, who writes books about media, has written the media column in the New Yorker since 1982, and has written several best sellers. His 11th book, “Googled, the end of the world as we know it” is being published this fall.
After a very short stint with Hubert Humphrey (I quit during the Democratic National Convention), I wound up at Andrew Stein for Assembly but that’s another story for another email.
……….to be continued
NOTES:
After I finished writing this story, I put on my sneakers, and went outside, took out the lawn mower, checked the oil, added some gasoline, took out my hearing aid, and mowed the lawn. Even though I hadn’t done it in almost two months, it all came right back. It’s like riding a bike, once you get started it all comes back.
You know one of the nicest things about mowing the lawn for me is that I don’t have to hear. I put my hearing aid into this small jar with these little balls in it that absorb the moisture, and for a while, I am free, free of having to try to hear, and free of the anxiety of not hearing.
Showing posts with label Alan Lasher;. Show all posts
Showing posts with label Alan Lasher;. Show all posts
Thursday, September 3, 2009
Saturday, August 8, 2009
The long road to the bottom of the market.
Are we there yet? Are we there yet? Are we there yet?
Those of you that receive my emails of foreclosures have been seeing notes on some of the properties saying things like “This price must be the bottom of the market,” or “this house is another sign of the bottom of the market.” (Those of you who don’t receive these emails, and would like to, please tell me. Those of you who would like to receive the cheapo cheapo listings, that I no longer send out, email me to be put on the cheapo cheapo list).
In preparation of writing this article, I gazed at my crystal ball, read tea leaves, threw tarot cards, and counted the bumps on my head, to find the answers. What did I find? I found Questions, like:
Which market are we looking at for the bottom? We have the stock market, we have the bond market, we have the gold market, we have the Real Estate market, and lots of other markets.
The Stock Market
The stock market reacts to all of the markets. Wall Street says that this recession and fall of the stock market is in response to the crash of the subprime mortgage market. My friends in the market tell me that the market still hasn’t dealt with the inflation, and unemployment, so the stock market has not hit bottom, and could even have another serious down spin, or crash. Of course that’s easy to say.
The Unemployment Factor
Many say that we haven’t peaked in unemployment as yet. That as unemployment grows, more people will lose their houses to foreclosures, and there will be more REO property on the market, less buyers due to unemployment, and on and on.
345,000 US jobs were lost in May 2009, and the unemployment rate jumped to 9.4%, its highest point in 25 years (1984- just before the wild 80’s took off?). Economists said that job losses are likely to continue to pile up through the rest of the year.
Yet the stock market took this as a good sign, because the pace of losses was lower than they anticipated, and that is was showing sustained signs of stabilizing (does stabilizing mean hitting bottom?).
But does the stock market really ever make sense?
There are lots of people selling books and emails, and courses that offer advice on how to buy and sell stocks, and play the market, based upon their formulas which always worked, always did better than the stock market. I just Googled “bottom of the market” and came across one of these guys, who shows how to tell the signs of the bottom of the market. This particular genius stated that after a crash; check the BKX index for a 10% rise…that will be the bottom. He also said when the economy reaches the front page of the NY Times, and every other major newspaper, that is when the market has hit mega bottom, and it is time to buy. He was wrong, the market continued to tank.
I never trusted the stock market. I never trusted the prices of stocks, IPO’s, stock tips, etc. If I got a stock tip, I know how far down the food chain I am, it can’t possibly be any good at that point. It was probably time to sell, by the time I got the tip. Especially after watching the films Wall Street and Pretty Woman. And what about Ivan Boesky, Michael Milken and Nicholas Leeson,… companies manipulate stock prices for their own accounts, and to big Wall Street players. We all know that.
Over the past several years, prior to the crash of the sub-prime mortgage crisis, I sat on the side lines, and watched as the prices of real estate climbed, and the stock market went up, despite our financial losses and costs in running the war in Iraq. (Which at this point seems small). I never could understand why the prices of stocks kept going up, and why the prices of real estate kept going up. Made no sense then.
So why should the stock market make sense now? Has anything changed? Aren’t the big players, just buying up the bargains while they can? They have the money; they borrowed billions from the fed. They had to have done something with the money; they bought stock that they can manipulate later. And didn’t they clean house? Got rid of the older high paid employees? Trimmed the fat, as it were? But mark my words, when the time is right, when the money is flowing again, when their customers are in the mode called buy and spend, they will re-sell these companies and stocks at huge profits. Next time the stock market is on the rise.
Housing Market
Now the housing market is different than the stock market. The major difference is that housing is a necessity shelter. People have to have a place where they can go with a roof over their heads to protect them from the elements. I don’t have to explain the use and necessity of housing.
But in the housing market there are certain constants, and there are always new people entering the housing market, and people ready to make a move to their next house:
People graduate; get married; have babies; get new jobs; get promotions; hit the lottery and/or have other windfalls and inheritances; children grow, and leave the house (empty nesters- I wish).
So there is a constant flow of new people entering the housing market, but what happens during the bad market times (or whatever you want to call whatever it is), these people don’t enter the market.
Why aren’t they entering the market now?
People aren’t entering the market for the obvious reasons, like they are afraid, they want to wait until the bottom is hit, they are waiting for the buy of their life to come knocking on their door. No one wants to buy on the way down, when it could still go down further. When things start to go up however, “when the train is starting to leave the station” according to my friend Jon Salmon, that’s when everyone wants to buy!
While there are good reasons to buy now, and good reasons not to buy now, the result of these people not buying is being felt in the market. Today, there is a growing amount of pent up demand for housing. At some point, we will understand that we have passed the bottom, and that it is “okay” to buy real estate now. At that time, there will be a rush, which will bring the prices up, because of this pent up demand. (Look what happened with the stimulus package to buy a new car and trade in your clunker- all of the pent up demand hit the market and the program was overwhelmed- The amount provided to last for 3 months, was used up in 3 days).
History has this strange habit of repeating itself.
In the late 70’s and again in the early 80’s, our economy was in really bad shape. We had left Vietnam, in disgrace, and the Shah of Iran was overthrown and our embassy was held hostage for 444 days. Our cities were falling apart; New York was on the verge of bankruptcy. Money for mortgages disappeared. Interest rates were up to 16% for a home mortgage, if you could get one.
And the real estate industry, including new home construction, grinded to a halt.
So some of the builders and some of the bankers came up with an idea, where they could lower the interest on the mortgage for a short period (3 years or so), and make them affordable.
Woodbrook Condominiums had just opened its first phase, and they offered a deal where you could get a mortgage at Citibank where the interest rate for the first three years was 10.5%. The builder paid the bank three years interest on the difference in rates, and sales were phenomenal. (they were called negative amortization mortgages).Other builders got the idea, and the market began again, slowly. And then we ran out of inventory, the builders that had the jobs ready to go, became the biggest builders. (Does Mirador ring a bell?).
Perhaps what really kick started the real estate market was the influx of foreign money, in the mid 80’s, as the United States had become such a terrific bargain. Large buyers from Japan, Germany and other European countries went on a buying spree, stimulating the market, as these dollars trickled down. Of course they not only spent money on real estate, they also spent money buying companies, and stocks. Next came the wild days of the 80’s where people made so much money that opulence was the way of the day.
The buzz around was he who has the most toys at the end- wins. Michael Douglas’ movie Wall Street had a scene where he was preaching GREED to his shareholders.
The builders on Staten Island decided that the best way to go was to utilize existing zoning laws and build as many townhouses on a piece of land as was possible. Houses went from 20 feet wide to 12 feet wide. Townhouses’ were built attached on all sides including the rear so the only property would be the 8’ front yard. And the price of houses went through the roof. I remember wondering how a person making $40,000 is going to be able to buy a house that cost $180,000. The price of homes went up faster than the salaries.
But then in the late 80’s government got into the act and all of a sudden the market crashed, and all of the banks built on their houses of cards fell with them.
In New York City, government (city council) decided to change the zoning laws and created something called contextual zoning. This only affected houses in Staten Island and Queens. It meant that from then on, garages counted in the computations of FAR (Floor Area Ratio’s), and other changes that made absolutely no sense to us on Staten Island were enacted. The net effect was that houses would either be 1/3rd smaller, buyers would get less room (no more garages, lofts, splays, etc.) and builders would get less units or yield from their land.
At the same time, President Reagan changed the tax code and eliminated capital gains treatment in real estate. That meant that profit from real estate was taxed as ordinary income, instead of as capital gains, which is taxed at a lower rate.
Bye Bye foreign money, hello recession.
Bye Bye banks, hello RTC (Resolution Trust Corporation.)
And then there were lean years and slow markets, etc., but then a funny thing happened.
Instead of building townhouses, some builders started to build detached one and two family homes, and the people who were ready to move out of their “starter home” into their next home, started buying these homes. The new entry level buyers, with all of that pent up demand, started buying the resale’s from those I just mentioned, and again we ran out of inventory, and prices started to climb again.
Only this time, they were fueled by real easy credit, and the subprime mortgage business, which enabled anyone who could breath and had a driver’s license (or was it a library card) could get a mortgage and buy a house.
So what will happen this time?
Smart money is already buying up the bargains. How much longer do you really believe that you will be able to buy a two family house for under $200,000? C’mon. Maybe we haven’t hit bottom, but some of the merchandise has.
Is now the time to invest in Real Estate?
Yes
Here are some of the reasons why:
First: $8,000 Tax Incentive available at closing- does not get paid back. (Unless you don’t live in the house as your primary residence or violate the other terms). Expires November 30, 2009. (First time homebuyers- haven't owned a home in 3 years)
Second: 96.5% Financing FHA & SONYMA
Third: Lowest Rates in History, and below market programs available.
Fourth: Lowest prices in 20 years
Fifth: This is a buyer’s market- Huge Inventories. Sellers are nervous and are negotiable.
Sixth: High amount of foreclosures and short sales available. There are bargains galore in every area of town, even Million dollar short sales.
Seventh: Prices in the neighborhood that you are interested in are relatively stable- either they are holding their own, increasing, or the pace of decline is slowing.
Eighth: You plan on staying in this home for more than 5 years. That way regardless of the market at this point, it will have stabilized and you will ride out any downturn, and come out ahead in price.
Ninth: Your rent equals a mortgage payment.
Tenth: You can use the tax deduction against your income.
Eleventh: You’ve found the right house in the right area for you. The schools are great. You know that if the market were better, this house would have been sold already, or there would be more competition for it.
Twelfth: You’ve got equity in your house, and want to move to a smaller house (empty nester). Although you will not be getting as much for your sale, you will more than make up for it in your purchase.
Thirteenth: If you don't buy now, you will kick yourself for the rest of your life.
Fourteenth: There probably will never be another market like this one in our lifetimes.
There is a lot of competition for the bargains
While there are lots of good deals out there these days, there are also a lot of savvy real estate professionals in the marketplace that are buying up the good deals wherever they can. Here on Staten Island, because of the large numbers of foreclosures on the market, there are a whole new group of OFF Island Realtors® who have joined SIBOR, because they receive foreclosures (REO) from the banks. These off island realtors also have “off island customers” who have discovered Staten Island as a fantastic bargain basement -the best bang for the buck- (compared to the prices of real estate in Brooklyn and Queens, and are grabbing huge amounts of these great deals as they occur.)
So how will we know that we’ve hit the Bottom of the Market?
We will know for sure that we've hit the bottom of the market, well after we are on the way up. We will read about it in Newsweek and Time Magazine, we will see TV shows about it. More and more of the articles and stories we hear and read about will be talking about the bottom, and then they will be talking about the bottom as having passed the bottom. In other words, we won't know for sure officially that we are at the bottom, until we are well passed it.
So are we there yet?
Yes and No.
The June numbers are in, and new construction sales are up for the 4th month in a row, although still below last year's numbers.
New Building Permits are up for the 4th month in a row, which means that the Building Industry is confident that the worst is over.
I am getting more calls than ever before, and more inquiries and requests to be added to the email list to receive free foreclosure listings.
Some aspects have hit bottom, others haven’t. Some things will get worse, some things are getting better.
Some house prices have hit the bottom, others have a ways to go.
So what is the answer?
…………………to be continued
Those of you that receive my emails of foreclosures have been seeing notes on some of the properties saying things like “This price must be the bottom of the market,” or “this house is another sign of the bottom of the market.” (Those of you who don’t receive these emails, and would like to, please tell me. Those of you who would like to receive the cheapo cheapo listings, that I no longer send out, email me to be put on the cheapo cheapo list).
In preparation of writing this article, I gazed at my crystal ball, read tea leaves, threw tarot cards, and counted the bumps on my head, to find the answers. What did I find? I found Questions, like:
Which market are we looking at for the bottom? We have the stock market, we have the bond market, we have the gold market, we have the Real Estate market, and lots of other markets.
The Stock Market
The stock market reacts to all of the markets. Wall Street says that this recession and fall of the stock market is in response to the crash of the subprime mortgage market. My friends in the market tell me that the market still hasn’t dealt with the inflation, and unemployment, so the stock market has not hit bottom, and could even have another serious down spin, or crash. Of course that’s easy to say.
The Unemployment Factor
Many say that we haven’t peaked in unemployment as yet. That as unemployment grows, more people will lose their houses to foreclosures, and there will be more REO property on the market, less buyers due to unemployment, and on and on.
345,000 US jobs were lost in May 2009, and the unemployment rate jumped to 9.4%, its highest point in 25 years (1984- just before the wild 80’s took off?). Economists said that job losses are likely to continue to pile up through the rest of the year.
Yet the stock market took this as a good sign, because the pace of losses was lower than they anticipated, and that is was showing sustained signs of stabilizing (does stabilizing mean hitting bottom?).
But does the stock market really ever make sense?
There are lots of people selling books and emails, and courses that offer advice on how to buy and sell stocks, and play the market, based upon their formulas which always worked, always did better than the stock market. I just Googled “bottom of the market” and came across one of these guys, who shows how to tell the signs of the bottom of the market. This particular genius stated that after a crash; check the BKX index for a 10% rise…that will be the bottom. He also said when the economy reaches the front page of the NY Times, and every other major newspaper, that is when the market has hit mega bottom, and it is time to buy. He was wrong, the market continued to tank.
I never trusted the stock market. I never trusted the prices of stocks, IPO’s, stock tips, etc. If I got a stock tip, I know how far down the food chain I am, it can’t possibly be any good at that point. It was probably time to sell, by the time I got the tip. Especially after watching the films Wall Street and Pretty Woman. And what about Ivan Boesky, Michael Milken and Nicholas Leeson,… companies manipulate stock prices for their own accounts, and to big Wall Street players. We all know that.
Over the past several years, prior to the crash of the sub-prime mortgage crisis, I sat on the side lines, and watched as the prices of real estate climbed, and the stock market went up, despite our financial losses and costs in running the war in Iraq. (Which at this point seems small). I never could understand why the prices of stocks kept going up, and why the prices of real estate kept going up. Made no sense then.
So why should the stock market make sense now? Has anything changed? Aren’t the big players, just buying up the bargains while they can? They have the money; they borrowed billions from the fed. They had to have done something with the money; they bought stock that they can manipulate later. And didn’t they clean house? Got rid of the older high paid employees? Trimmed the fat, as it were? But mark my words, when the time is right, when the money is flowing again, when their customers are in the mode called buy and spend, they will re-sell these companies and stocks at huge profits. Next time the stock market is on the rise.
Housing Market
Now the housing market is different than the stock market. The major difference is that housing is a necessity shelter. People have to have a place where they can go with a roof over their heads to protect them from the elements. I don’t have to explain the use and necessity of housing.
But in the housing market there are certain constants, and there are always new people entering the housing market, and people ready to make a move to their next house:
People graduate; get married; have babies; get new jobs; get promotions; hit the lottery and/or have other windfalls and inheritances; children grow, and leave the house (empty nesters- I wish).
So there is a constant flow of new people entering the housing market, but what happens during the bad market times (or whatever you want to call whatever it is), these people don’t enter the market.
Why aren’t they entering the market now?
People aren’t entering the market for the obvious reasons, like they are afraid, they want to wait until the bottom is hit, they are waiting for the buy of their life to come knocking on their door. No one wants to buy on the way down, when it could still go down further. When things start to go up however, “when the train is starting to leave the station” according to my friend Jon Salmon, that’s when everyone wants to buy!
While there are good reasons to buy now, and good reasons not to buy now, the result of these people not buying is being felt in the market. Today, there is a growing amount of pent up demand for housing. At some point, we will understand that we have passed the bottom, and that it is “okay” to buy real estate now. At that time, there will be a rush, which will bring the prices up, because of this pent up demand. (Look what happened with the stimulus package to buy a new car and trade in your clunker- all of the pent up demand hit the market and the program was overwhelmed- The amount provided to last for 3 months, was used up in 3 days).
History has this strange habit of repeating itself.
In the late 70’s and again in the early 80’s, our economy was in really bad shape. We had left Vietnam, in disgrace, and the Shah of Iran was overthrown and our embassy was held hostage for 444 days. Our cities were falling apart; New York was on the verge of bankruptcy. Money for mortgages disappeared. Interest rates were up to 16% for a home mortgage, if you could get one.
And the real estate industry, including new home construction, grinded to a halt.
So some of the builders and some of the bankers came up with an idea, where they could lower the interest on the mortgage for a short period (3 years or so), and make them affordable.
Woodbrook Condominiums had just opened its first phase, and they offered a deal where you could get a mortgage at Citibank where the interest rate for the first three years was 10.5%. The builder paid the bank three years interest on the difference in rates, and sales were phenomenal. (they were called negative amortization mortgages).Other builders got the idea, and the market began again, slowly. And then we ran out of inventory, the builders that had the jobs ready to go, became the biggest builders. (Does Mirador ring a bell?).
Perhaps what really kick started the real estate market was the influx of foreign money, in the mid 80’s, as the United States had become such a terrific bargain. Large buyers from Japan, Germany and other European countries went on a buying spree, stimulating the market, as these dollars trickled down. Of course they not only spent money on real estate, they also spent money buying companies, and stocks. Next came the wild days of the 80’s where people made so much money that opulence was the way of the day.
The buzz around was he who has the most toys at the end- wins. Michael Douglas’ movie Wall Street had a scene where he was preaching GREED to his shareholders.
The builders on Staten Island decided that the best way to go was to utilize existing zoning laws and build as many townhouses on a piece of land as was possible. Houses went from 20 feet wide to 12 feet wide. Townhouses’ were built attached on all sides including the rear so the only property would be the 8’ front yard. And the price of houses went through the roof. I remember wondering how a person making $40,000 is going to be able to buy a house that cost $180,000. The price of homes went up faster than the salaries.
But then in the late 80’s government got into the act and all of a sudden the market crashed, and all of the banks built on their houses of cards fell with them.
In New York City, government (city council) decided to change the zoning laws and created something called contextual zoning. This only affected houses in Staten Island and Queens. It meant that from then on, garages counted in the computations of FAR (Floor Area Ratio’s), and other changes that made absolutely no sense to us on Staten Island were enacted. The net effect was that houses would either be 1/3rd smaller, buyers would get less room (no more garages, lofts, splays, etc.) and builders would get less units or yield from their land.
At the same time, President Reagan changed the tax code and eliminated capital gains treatment in real estate. That meant that profit from real estate was taxed as ordinary income, instead of as capital gains, which is taxed at a lower rate.
Bye Bye foreign money, hello recession.
Bye Bye banks, hello RTC (Resolution Trust Corporation.)
And then there were lean years and slow markets, etc., but then a funny thing happened.
Instead of building townhouses, some builders started to build detached one and two family homes, and the people who were ready to move out of their “starter home” into their next home, started buying these homes. The new entry level buyers, with all of that pent up demand, started buying the resale’s from those I just mentioned, and again we ran out of inventory, and prices started to climb again.
Only this time, they were fueled by real easy credit, and the subprime mortgage business, which enabled anyone who could breath and had a driver’s license (or was it a library card) could get a mortgage and buy a house.
So what will happen this time?
Smart money is already buying up the bargains. How much longer do you really believe that you will be able to buy a two family house for under $200,000? C’mon. Maybe we haven’t hit bottom, but some of the merchandise has.
Is now the time to invest in Real Estate?
Yes
Here are some of the reasons why:
First: $8,000 Tax Incentive available at closing- does not get paid back. (Unless you don’t live in the house as your primary residence or violate the other terms). Expires November 30, 2009. (First time homebuyers- haven't owned a home in 3 years)
Second: 96.5% Financing FHA & SONYMA
Third: Lowest Rates in History, and below market programs available.
Fourth: Lowest prices in 20 years
Fifth: This is a buyer’s market- Huge Inventories. Sellers are nervous and are negotiable.
Sixth: High amount of foreclosures and short sales available. There are bargains galore in every area of town, even Million dollar short sales.
Seventh: Prices in the neighborhood that you are interested in are relatively stable- either they are holding their own, increasing, or the pace of decline is slowing.
Eighth: You plan on staying in this home for more than 5 years. That way regardless of the market at this point, it will have stabilized and you will ride out any downturn, and come out ahead in price.
Ninth: Your rent equals a mortgage payment.
Tenth: You can use the tax deduction against your income.
Eleventh: You’ve found the right house in the right area for you. The schools are great. You know that if the market were better, this house would have been sold already, or there would be more competition for it.
Twelfth: You’ve got equity in your house, and want to move to a smaller house (empty nester). Although you will not be getting as much for your sale, you will more than make up for it in your purchase.
Thirteenth: If you don't buy now, you will kick yourself for the rest of your life.
Fourteenth: There probably will never be another market like this one in our lifetimes.
There is a lot of competition for the bargains
While there are lots of good deals out there these days, there are also a lot of savvy real estate professionals in the marketplace that are buying up the good deals wherever they can. Here on Staten Island, because of the large numbers of foreclosures on the market, there are a whole new group of OFF Island Realtors® who have joined SIBOR, because they receive foreclosures (REO) from the banks. These off island realtors also have “off island customers” who have discovered Staten Island as a fantastic bargain basement -the best bang for the buck- (compared to the prices of real estate in Brooklyn and Queens, and are grabbing huge amounts of these great deals as they occur.)
So how will we know that we’ve hit the Bottom of the Market?
We will know for sure that we've hit the bottom of the market, well after we are on the way up. We will read about it in Newsweek and Time Magazine, we will see TV shows about it. More and more of the articles and stories we hear and read about will be talking about the bottom, and then they will be talking about the bottom as having passed the bottom. In other words, we won't know for sure officially that we are at the bottom, until we are well passed it.
So are we there yet?
Yes and No.
The June numbers are in, and new construction sales are up for the 4th month in a row, although still below last year's numbers.
New Building Permits are up for the 4th month in a row, which means that the Building Industry is confident that the worst is over.
I am getting more calls than ever before, and more inquiries and requests to be added to the email list to receive free foreclosure listings.
Some aspects have hit bottom, others haven’t. Some things will get worse, some things are getting better.
Some house prices have hit the bottom, others have a ways to go.
So what is the answer?
…………………to be continued
Friday, July 24, 2009
Mother's Day, Father's Day, and Mowing the Lawn
This year was a very special mother’s day for my wife, Angela.
Angela was adopted.
Angela said that her entire life she felt like there was something missing and she always wanted to find her birth mother, even though she has a cousin who is also adopted who has a relationship with her birth mother, that isn't very good.
A couple of times when she was younger, she went to psychics who both told her that she was very close to her birth mother. She was living in Queens.
In 2003, Angela was diagnosed with advanced lung cancer, and she became even more determined to find her Mom.
She registered on several black market adoption sites, and continually updated them through the years. Every time there was a new person who found adoptees on one of the talk shows, Angela would go to their web site and register.
Now somewhere along the line, Angela had gotten a copy of one of the adoption proceedings, which had the birth mother’s last name. We tried to find a Brooklyn phone book from 1960, but were unsuccessful.
Angela’s birth mother’s name was a somewhat common Italian name, and there are a couple of politicians including an assemblyman who had the same name. We reached out to a couple of local politicians to make the call, but no one wanted to get involved.
At some point, under the guise of trying to find medical history, I went to the Surrogate and asked him to call his counterpart in Brooklyn, where the adoption took place 40 some odd years ago, but of course he said no.
Well, Angela went through her chemo therapy, radiation therapy, surgery, more chemo, over the next couple of years, without finding her birth mother, but continued to update her information at all of the adoption sites…nothing ever happened.
Out of nowhere, Angela received an email from her birthmother’s sister whose other sister had Googled Angela’s birth mothers name, and came across one of Angela’s postings.
Very soon after the email, we met at a restaurant at Grand Central Station- (Angela, me, two aunts and her newly found younger brother).
At it happened, Angela’s birth mother had died several years ago- of lung cancer (isn’t that spooky?).
For most of her life, they lived 9 blocks away from each other.
They kept the same telephone number until 2006.
No relation to the Assemblyman, or the other two well known politicians.
Anyway, Angela’s life has now become fuller, more complete, and she is a much happier person. She has a brother that she kids around with, like you only can with a sibling, and a whole new family that she has become extremely close with including nieces, nephews, and aunts.
Speaking of Google, if you haven’t yet, you should “Google” your own name & significant others, names, long lost friends, enemies, etc. I ran my father’s name recently and found a photograph of him and his Air Corp. crew from World War II in front of their airplane, a photograph that I had never seen, nor knew that it even existed. (In World War II, the air corp was part of the army, later it became a separate branch of the armed services).
So this mother’s day I wanted to make it special for her.
I drove to Queens, and picked up my mother in law, Angela’s adoptive mother, to spend the weekend.
I cooked (on the grill), and I mowed the lawn.
Now I hadn’t mowed a lawn in perhaps 40 years. I’ve had landscapers all these years. And when I was a kid and mowed the lawn at my parents house, the lawn was 15 feet wide by 15 feet deep if it was that.
But this house has a lot 185 x 185 totally surrounded by grass, except for the driveway, and the house footprint itself. Do the math.
So I borrowed my next door neighbors mower (he does it every weekend, religiously, unless his kids are home from college, and then they do it), but his lawn looks like Yankee Stadium. When I started going straight across, my wife stopped me and pointed me in the right direction (diagonal).
It took me most of the day. Of course I stopped, drank several bottles of water, ate a Myoplex protein-energy bar, but mowed the entire property, all ¾ of an acre, not exactly straight lines, but definitely diagonally. (I can't walk in a straight line on a good day, because of my Meniers disease that I have spoken of, is also a balance disorder- vertigo and all that- you should see me try to do step aerobics).
Although I am a “tad” on the pleasantly plump side, I happen to be in great shape (round is a shape!)- I work out fairly regularly, I go on the cross trainer for 45-60 minutes at a time, several times a week, currently at level 11. I lift weights, do pushups and sit ups. But man, did I ache the next day. In fact when I woke up in the morning, I was totally disoriented, and it took me a couple days to get it back together.
But I did such a great job, my wife decided that we would skip the landscaper this summer and I would do it.
Lucky me.
So a few weeks later we had a day with no rain and I was volunteered into "mowing the lawn" again.
Remember we had record rain fall this year in June. It seems to me that this is the first week and weekend we've had that have felt like summer.
My neighbor was going out for the day so he gave me the mower & gas can and said "Have a Nice Day." Now this lawn mower was pretty old. The lever that you have to pull/turn/click into in order to make the wheels turn had broken off, so you had to have fingers of steel and be strong as an ox to make it catch. Next the bag that collected the mowed lawn was way dented beyond recognition. It still caught most of the grass, but it also makes a trail on the sides of the run, which on the one hand is nice, because it gives definition to the diagonals, but on the other hand makes for a sloppy job.
But, having run out of excuses, I started to mow the lawn again. Only problem this time, was that the lawn mower was smoking, and kept stalling out. I couldn't tell if was stalling because the bag was full of grass (don't forget it had been raining a lot, and it hadn't been mowed in a while, so it could very well have filled up the bag quickly); or if it was some sort of a mechanical issue (which is not my expertise).
So here I am, mowing, and emptying the bag into a paper "recycle mowed lawn bag."
I was able to complete the front and sides of the houses, and was about 1/3rd into the rear when it just pooped out on me, and I was pretty pooped out myself, so I put it in his garage, and took a shower. Actually I used up all his oil, went out and bought a quart and I used half of that, which was probably the reason it was running so hot and smoking. A little while later, his son came home and was mowing his lawn, and he said it was running great - told me I should finish mine, but I begged off for the day. (I probably fixed it so that it worked for him).
Which brings us to FATHERS DAY. Remember fathers' day? That’s the day where fathers get to sleep late, go fishing or go play golf, or do whatever they like to do.
Not moi. I got up on father's day and we got in the car and went to Sears to look at, you guessed it, LAWN MOWERS.
My wish came true, I was getting a brand new lawn mower for father's day. Yippee I Oh kayyea.
Oy Vey.
So off to Sears. Because of the rough terrain of our property we opted for larger wheels in the back than the front. Has to do with turning and working around tree roots, etc. We also wanted one with wheels that turned by themselves (self propelled), and must have a bag to collect the mowed lawn.
Now you can buy a lawn mower for thousands of dollars. Maybe you can. I can't.
We picked one out that they were "pushing" (i.e. on sale), the guy checked the store computer, and sure enough they had one in stock, we picked up a gasoline can (state of the art plastic gasoline can, really cool), and an extra quart of oil. Paid for it, drove around the back to pick it up.
Guess what- they didn't have it in stock. They have one in inventory, but they don't have one in the back of the store where you pick it up. They tried to explain it to me, but it was beyond my comprehension.
Now next to the cash register, where we paid there was a sign that stated Sears policy- If we do not have an advertised item in stock, we will give you a better one for the same price.
Didn't happen. I tried. I said- hey the sign says- but no matter what, they didn't want to hear it, no good, the manager will never go for it (I demanded that they go find the manager, but he was nowhere to be found, it was father's day, he was probably sleeping late or playing golf or gone fishing).
So back to the display, and there was the other just about the same grade lawn mower, self propelled, with a bag, in stock, in the box.
So back to the back of the store, and sure enough, in a box, but mostly assembled (just have to do a couple of little things).
Stopped at the gas station and filled up my new really cool plastic gasoline can (It's not really a can, its plastic, so what is it called?),
Put it all together, added the oil and gasoline, pulled the guaranteed to start every time cord and , vroom vroom, ready to mow the lawn.
So I make the first run, "diagonally" as far as I could go, turned it around, and this brand new, spiffy, bright red lawn mower just isn't working properly. I look at the wheels, and they won't remain level, so I try to adjust the back wheels so that they were on the same page. I can't get the lawn mower level on the driveway. So I take off my glasses so I can see up close (those of you over 50 will know what that meant), and I examine the wheels to see what is wrong.
Sure enough, I notice that the thingamajig that you adjust the wheel with on one of the sides is not stationary. I search some more and I discovered that there is a piece of metal sticking out of the gizmo that is supposed to be fitted into a hole in the thing to secure it in place. But on one side, it isn't there- it's been bent under the hole, instead of sticking straight out through the hole (whoever put it together in China or wherever it was built, cheated), but the point is, it didn't work.
So back in the car, back to Sears.
I can't find the guy who sold me the first two, and the person there is asking me if I drained the oil and gasoline.
Those of you who knew my father, probably remember him as an extremely loud person. He was known to be an extremely loud person. Many people liked him because he was so loud, many people didn't like him because he was so loud.
I am much louder.
#w&#%!!!! Expletive!!!! --deleted--
So while they were looking for my salesman, I went around the back for the third time today.
When I got there, they helped me take it out of the jeep, and took it back, and gave me a piece of paper to bring to the salespeople.
They mentioned that I was supposed to remove the fluids, but that it was "okay", they'd handle it.
(Damn right)
Back to the front, I found a nice lounge chair display to wait for my salesman. When he woke me up, very gently, he told me to stay there while he did the paperwork, and brought me back my money.
Home Depot, there I went
………………….to be continued
Angela was adopted.
Angela said that her entire life she felt like there was something missing and she always wanted to find her birth mother, even though she has a cousin who is also adopted who has a relationship with her birth mother, that isn't very good.
A couple of times when she was younger, she went to psychics who both told her that she was very close to her birth mother. She was living in Queens.
In 2003, Angela was diagnosed with advanced lung cancer, and she became even more determined to find her Mom.
She registered on several black market adoption sites, and continually updated them through the years. Every time there was a new person who found adoptees on one of the talk shows, Angela would go to their web site and register.
Now somewhere along the line, Angela had gotten a copy of one of the adoption proceedings, which had the birth mother’s last name. We tried to find a Brooklyn phone book from 1960, but were unsuccessful.
Angela’s birth mother’s name was a somewhat common Italian name, and there are a couple of politicians including an assemblyman who had the same name. We reached out to a couple of local politicians to make the call, but no one wanted to get involved.
At some point, under the guise of trying to find medical history, I went to the Surrogate and asked him to call his counterpart in Brooklyn, where the adoption took place 40 some odd years ago, but of course he said no.
Well, Angela went through her chemo therapy, radiation therapy, surgery, more chemo, over the next couple of years, without finding her birth mother, but continued to update her information at all of the adoption sites…nothing ever happened.
Out of nowhere, Angela received an email from her birthmother’s sister whose other sister had Googled Angela’s birth mothers name, and came across one of Angela’s postings.
Very soon after the email, we met at a restaurant at Grand Central Station- (Angela, me, two aunts and her newly found younger brother).
At it happened, Angela’s birth mother had died several years ago- of lung cancer (isn’t that spooky?).
For most of her life, they lived 9 blocks away from each other.
They kept the same telephone number until 2006.
No relation to the Assemblyman, or the other two well known politicians.
Anyway, Angela’s life has now become fuller, more complete, and she is a much happier person. She has a brother that she kids around with, like you only can with a sibling, and a whole new family that she has become extremely close with including nieces, nephews, and aunts.
Speaking of Google, if you haven’t yet, you should “Google” your own name & significant others, names, long lost friends, enemies, etc. I ran my father’s name recently and found a photograph of him and his Air Corp. crew from World War II in front of their airplane, a photograph that I had never seen, nor knew that it even existed. (In World War II, the air corp was part of the army, later it became a separate branch of the armed services).
So this mother’s day I wanted to make it special for her.
I drove to Queens, and picked up my mother in law, Angela’s adoptive mother, to spend the weekend.
I cooked (on the grill), and I mowed the lawn.
Now I hadn’t mowed a lawn in perhaps 40 years. I’ve had landscapers all these years. And when I was a kid and mowed the lawn at my parents house, the lawn was 15 feet wide by 15 feet deep if it was that.
But this house has a lot 185 x 185 totally surrounded by grass, except for the driveway, and the house footprint itself. Do the math.
So I borrowed my next door neighbors mower (he does it every weekend, religiously, unless his kids are home from college, and then they do it), but his lawn looks like Yankee Stadium. When I started going straight across, my wife stopped me and pointed me in the right direction (diagonal).
It took me most of the day. Of course I stopped, drank several bottles of water, ate a Myoplex protein-energy bar, but mowed the entire property, all ¾ of an acre, not exactly straight lines, but definitely diagonally. (I can't walk in a straight line on a good day, because of my Meniers disease that I have spoken of, is also a balance disorder- vertigo and all that- you should see me try to do step aerobics).
Although I am a “tad” on the pleasantly plump side, I happen to be in great shape (round is a shape!)- I work out fairly regularly, I go on the cross trainer for 45-60 minutes at a time, several times a week, currently at level 11. I lift weights, do pushups and sit ups. But man, did I ache the next day. In fact when I woke up in the morning, I was totally disoriented, and it took me a couple days to get it back together.
But I did such a great job, my wife decided that we would skip the landscaper this summer and I would do it.
Lucky me.
So a few weeks later we had a day with no rain and I was volunteered into "mowing the lawn" again.
Remember we had record rain fall this year in June. It seems to me that this is the first week and weekend we've had that have felt like summer.
My neighbor was going out for the day so he gave me the mower & gas can and said "Have a Nice Day." Now this lawn mower was pretty old. The lever that you have to pull/turn/click into in order to make the wheels turn had broken off, so you had to have fingers of steel and be strong as an ox to make it catch. Next the bag that collected the mowed lawn was way dented beyond recognition. It still caught most of the grass, but it also makes a trail on the sides of the run, which on the one hand is nice, because it gives definition to the diagonals, but on the other hand makes for a sloppy job.
But, having run out of excuses, I started to mow the lawn again. Only problem this time, was that the lawn mower was smoking, and kept stalling out. I couldn't tell if was stalling because the bag was full of grass (don't forget it had been raining a lot, and it hadn't been mowed in a while, so it could very well have filled up the bag quickly); or if it was some sort of a mechanical issue (which is not my expertise).
So here I am, mowing, and emptying the bag into a paper "recycle mowed lawn bag."
I was able to complete the front and sides of the houses, and was about 1/3rd into the rear when it just pooped out on me, and I was pretty pooped out myself, so I put it in his garage, and took a shower. Actually I used up all his oil, went out and bought a quart and I used half of that, which was probably the reason it was running so hot and smoking. A little while later, his son came home and was mowing his lawn, and he said it was running great - told me I should finish mine, but I begged off for the day. (I probably fixed it so that it worked for him).
Which brings us to FATHERS DAY. Remember fathers' day? That’s the day where fathers get to sleep late, go fishing or go play golf, or do whatever they like to do.
Not moi. I got up on father's day and we got in the car and went to Sears to look at, you guessed it, LAWN MOWERS.
My wish came true, I was getting a brand new lawn mower for father's day. Yippee I Oh kayyea.
Oy Vey.
So off to Sears. Because of the rough terrain of our property we opted for larger wheels in the back than the front. Has to do with turning and working around tree roots, etc. We also wanted one with wheels that turned by themselves (self propelled), and must have a bag to collect the mowed lawn.
Now you can buy a lawn mower for thousands of dollars. Maybe you can. I can't.
We picked one out that they were "pushing" (i.e. on sale), the guy checked the store computer, and sure enough they had one in stock, we picked up a gasoline can (state of the art plastic gasoline can, really cool), and an extra quart of oil. Paid for it, drove around the back to pick it up.
Guess what- they didn't have it in stock. They have one in inventory, but they don't have one in the back of the store where you pick it up. They tried to explain it to me, but it was beyond my comprehension.
Now next to the cash register, where we paid there was a sign that stated Sears policy- If we do not have an advertised item in stock, we will give you a better one for the same price.
Didn't happen. I tried. I said- hey the sign says- but no matter what, they didn't want to hear it, no good, the manager will never go for it (I demanded that they go find the manager, but he was nowhere to be found, it was father's day, he was probably sleeping late or playing golf or gone fishing).
So back to the display, and there was the other just about the same grade lawn mower, self propelled, with a bag, in stock, in the box.
So back to the back of the store, and sure enough, in a box, but mostly assembled (just have to do a couple of little things).
Stopped at the gas station and filled up my new really cool plastic gasoline can (It's not really a can, its plastic, so what is it called?),
Put it all together, added the oil and gasoline, pulled the guaranteed to start every time cord and , vroom vroom, ready to mow the lawn.
So I make the first run, "diagonally" as far as I could go, turned it around, and this brand new, spiffy, bright red lawn mower just isn't working properly. I look at the wheels, and they won't remain level, so I try to adjust the back wheels so that they were on the same page. I can't get the lawn mower level on the driveway. So I take off my glasses so I can see up close (those of you over 50 will know what that meant), and I examine the wheels to see what is wrong.
Sure enough, I notice that the thingamajig that you adjust the wheel with on one of the sides is not stationary. I search some more and I discovered that there is a piece of metal sticking out of the gizmo that is supposed to be fitted into a hole in the thing to secure it in place. But on one side, it isn't there- it's been bent under the hole, instead of sticking straight out through the hole (whoever put it together in China or wherever it was built, cheated), but the point is, it didn't work.
So back in the car, back to Sears.
I can't find the guy who sold me the first two, and the person there is asking me if I drained the oil and gasoline.
Those of you who knew my father, probably remember him as an extremely loud person. He was known to be an extremely loud person. Many people liked him because he was so loud, many people didn't like him because he was so loud.
I am much louder.
#w&#%!!!! Expletive!!!! --deleted--
So while they were looking for my salesman, I went around the back for the third time today.
When I got there, they helped me take it out of the jeep, and took it back, and gave me a piece of paper to bring to the salespeople.
They mentioned that I was supposed to remove the fluids, but that it was "okay", they'd handle it.
(Damn right)
Back to the front, I found a nice lounge chair display to wait for my salesman. When he woke me up, very gently, he told me to stay there while he did the paperwork, and brought me back my money.
Home Depot, there I went
………………….to be continued
Thursday, July 2, 2009
So how do you buy a foreclosure anyway?
While foreclosures are plentiful, making up a huge chunk of the real estate market, the way that you buy them is not a whole lot different than the way that you purchase any other property.
Seeing the Inside of a Foreclosure
First of all, seeing foreclosures is easier than any other house. They are always vacant, generally they have been cleaned out of debris (although not always), and they usually have a lock box These lock boxes have combinations of either numbers or letters, which when set properly will release a key
There are three condo's in a building on the North shore that I have been trying to show for some time to my customer. And we just can't coordinate it. Friday we showed up, and the homeowner wasn't there. One homeowner says only after 4, and one says only before 2, and the third says wait until next Monday. Oy vey.
Foreclosures are Sold “As Is”
When you buy a foreclosure, the banks make no representations, other than good and clean title,. They don’t represent the roof is free from leaks, nor that the plumbing, heating, and electrical systems are working.
Sometimes, you can’t check things because the water has been shut off, and there is no electric on. But you can still see roof and basement leaks, and other structural items. They will allow you to bring in an engineer to make an inspection/evaluation, even after they have accepted your offer. A decent engineer can pretty much tell you the condition of everything, even without electric, gas or water. You know that the bank gave a mortgage to someone and at that time, these things worked. There aren’t that many moving parts in a furnace. You can still follow the path of damage to a unit. You know when the pipes broke, what the damage was. Leaks leave stains and odors.
Speaking of engineers and home inspections, Bill Coull, who was the first person on Staten Island to specifically do home inspections and reports died this week of cancer. I have to wonder how many people bought houses on Staten Island only after Bill said they were okay first. I knew Bill for 30 years, and I never heard a single negative thing ever said about him, or by him. He was a good guy, a good engineer/home inspector, and will surely be missed.
Making an Offer
In order to make an offer, you have to submit, in writing with proof, how you will pay for the property if your offer is accepted. If it is an offer of all cash, you must show proof that you have the cash (bank statements). If you plan on putting down a certain percentage, and getting a mortgage for the balance, then you must substantiate the cash part, and submit a “pre qual”, a letter from a lending institution that states that you have been “pre-qualified” for a loan in the amount of at least what you have put into your offer.
Now some banks/asset managers require that the Pre Qual be case specific- that it specifically mentions the property that you are making the offer on. Not a problem, as most mortgage brokers/bankers want your business and would gladly accommodate you with as many letters as you want. It’s easy since its all word processing anyway.
Some selling banks require that you get the “Pre Qual:” from them, regardless of whether you have a pre qual or not from another lender, they want you to go through them. (They want this to make sure that they aren’t wasting their time - or - to try to sell you a loan?)
Still other banks will make the financing attractive to purchasers of their inventory. Lenders like Wells Fargo, Countywide, Chase, etc. They have bitten the bullet, and decided to make the best of their situation by turning the non-performing loan into a new performing loan. These banks are in the loan business.
Finally, there are situations where there have been undocumented alterations which may render the property un-mortgageable in the conventional market. Often times in these cases the bank will offer the financing.
I had a customer who wanted a certain house, but there was an alteration that needed to be filed, so he couldn't get the 3% down below market first time homebuyer FHA deal he wanted, so he didn't buy the property, even though Wells Fargo agreed to loan 90%.
As you know from my prior emails, no one is quite sure who owns many of the loans that are merely “toxic assets”, Mortgage Based Securities’, that were the cause of the crash of the subprime mortgage industry, and the fall of wall street, etc. These mortgages were bundled in packages and sold to investors, and have ownership like Deutche Bank as trustee of series of bonds #200-212, of 2007, etc.). In these cases, there is no bank to offer financing, and the servicing company is not in the business of making new loans.
(If you are new to Lasher’s List, or just want to re-read some of my past articles including the explanation of the crash, why there are so many foreclosures on Staten Island, the role of organized crime, and all the rest., they are all posted at my blog, at http://lasherslist.blogspot.com/)
When you make an offer to buy a foreclosure, the bank generally responds in one of three ways:
1. If your offer is full asking price, all cash, and close in 30 days, they might say yes.
2. If your offer is for less, and your terms are reasonable and your financing checks out, they probably will counter at “give us your highest and best offer”
3. If your offer is too low, and the servicing agent is not having a good day, then they will not respond at all.
Even if your offer was not responded to, they do not take it personally, you can then make a new higher offer, and again one of the three above will occur.
Some banks respond quicker than others.
Sometimes a property hits the market that is in a desirable location, and lots of people see it and make offers. Sometimes the bank will tell everyone to come back with their highest and best offer, and take the best deal in their eyes.
We don't really know how they see the offers in their eyes - You would think that a stronger buyer all cash would beat out a 3% down deal for more money, but it doesn't. Sometimes higher price wins, sometimes all cash quick closing gets it. Probably depends upon the history of the particular property, how many times they've sold it, but the buyer wasn't able to get financing after a long drawn out process.
Those of you that receive all of my emails receive these BOM's which I identify as outstanding opportunities. If you do not receive all of my emails and would like to, just send me an email and I will move you to the appropriate list. (Some people only get occasional listings, but all of my news type emails and my pontifications).
Your offer is accepted/Contract signing
Now that your offer has been accepted, a contract is sent out to your lawyer, or some banks require the customer to sign an 8-18 page agreement that you are not able to make any changes to. Sign it, or you don’t get the house. It doesn’t matter whether it’s the addendum/agreement or the regular contract of sale by and between the lawyers. Sign it without making any changes, or you don’t get the house. This is just the way that it is.
One of my clients who is a well known substantial builder on Staten Island asked that the contract of sale be put into his building corporation, instead of his personal name. the bank said no, and put the property back on the market, while we prepared a new offer, for the same amount, same terms, in the name of the building corporation, and had to get a separate letter from the bank showing the funds in the name of the building corporation.
Some of the lawyers for the lenders are requiring certified funds or bank checks for the down payments. It used to be that the contract down payment clause said “subject to collection”
I think that it has to do with the fact that the bank is taking a hit, and it's a kind of like their way of getting some sort of Montezuma's revenge.
No biggie, small price to pay for the bargain that you are getting.
Financing a Foreclosure
Financing a foreclosure is no different from financing any other property.
If the buyer is going to occupy the house themselves as their primary residence, then all of the mortgages available for any other buyer is available for the foreclosure, depending upon the condition of the house. In order to get a 96.5% FHA or SONYMA, the house has to be in good shape, with everything working. But regardless of the percentage down, the house is going to have to appraise, and you still only can borrow the percentage in the particular mortgage you apply for (The loan to value of the property).
If the house is a wreck, then foreclosure or resale, the same financing is available generally. The difference is the conditions to obtain financing that the seller allows you. But if the house is a fixer upper with things not working, so that the house doesn’t qualify for FANYMA etc., then you have to go to a commercial lender to get the financing, although there are mortgage programs out there for fixer uppers- but generally calling for you to get architectural plans permits and approvals first.
My associate Don Adler and I just sold the Landmarked 1869 Bedell house in Tottenville to a young lawyer on Lasher’s List, Thomas Kocian and his wife. They plan on restoring it for their primary residence and an office for Tommy’s law practice. This house had gotten a lot of notoriety because the prior owner had painted the outside precipitating the Landmarks Preservation Commission to jump in and landmark the house. The house is/was a wreck. The selling bank required that the “prequal” acknowledge that the house was a Designated Landmark, that it could not be torn down, and that it was in a deplorable condition in order to make an offer. Kocian had a prequal from an international well known bank that he had been doing business with for years, but they refused to issue the specific prequal, as did several other lenders that Kocian tried. Victory State Bank stepped up to the plate, and made the deal happen. Victory loaned the money for the acquisition, and gave a commitment for the rehabilitation, and after the work is completed they will refinance. If you need financing, go see Richie Boyle, head of the Loan Department @ Victory State Bank 718-979-2000. (Tell him I sent you)
Sometimes the seller bank will not give you a mortgage contingency on a property, so what you have to do is either get a loan on your own home, or other property, or go to a commercial lender like Victory that will give financing on your own home as well as the foreclosure being purchased.
But regardless of what you do, it all boils down to Loan to Value (LTV). What percentage is the bank lending of the total purchase?
The Closing
The contracts of sale now have provisions that all of the funds have to be sent to the attorney for the lender and then they will send out the deed. In other words, at the closing the only ones there may be you and your attorney at the lenders office, unless you go to the Sellers lawyers’ office. Closings that are done via wire and fed ex, are similar to how closings are done in other parts of the country.
Another difference with a foreclosure closing and a regular closing is that the buyer usually pays the Real Property Transfer Tax (NYC 1%), and the NYS Transfer Tax .4%, in addition to all other expenses. Normally the seller pays these items. Now because the buyer is paying these items, they pay the tax on the tax too. (1.4% of the purchase price, and 1.4% of the tax- don’t ask me why, makes no sense to me, other than an opportunity for the taxing authorities to make an extra couple of bucks).
Is this negotiable- NO. It is written in Stone.
What is the rationale? When the bank foreclosed on the property, they received a deed from the referee appointed for the foreclosure. In order to record the deed, they had to pay the transfer tax (1% and .4%). Since they just paid it, they don’t want to pay it again, and since they can get away with it, they do. It is called Sour Grapes.
………to be continued
Seeing the Inside of a Foreclosure
First of all, seeing foreclosures is easier than any other house. They are always vacant, generally they have been cleaned out of debris (although not always), and they usually have a lock box These lock boxes have combinations of either numbers or letters, which when set properly will release a key
There are three condo's in a building on the North shore that I have been trying to show for some time to my customer. And we just can't coordinate it. Friday we showed up, and the homeowner wasn't there. One homeowner says only after 4, and one says only before 2, and the third says wait until next Monday. Oy vey.
Foreclosures are Sold “As Is”
When you buy a foreclosure, the banks make no representations, other than good and clean title,. They don’t represent the roof is free from leaks, nor that the plumbing, heating, and electrical systems are working.
Sometimes, you can’t check things because the water has been shut off, and there is no electric on. But you can still see roof and basement leaks, and other structural items. They will allow you to bring in an engineer to make an inspection/evaluation, even after they have accepted your offer. A decent engineer can pretty much tell you the condition of everything, even without electric, gas or water. You know that the bank gave a mortgage to someone and at that time, these things worked. There aren’t that many moving parts in a furnace. You can still follow the path of damage to a unit. You know when the pipes broke, what the damage was. Leaks leave stains and odors.
Speaking of engineers and home inspections, Bill Coull, who was the first person on Staten Island to specifically do home inspections and reports died this week of cancer. I have to wonder how many people bought houses on Staten Island only after Bill said they were okay first. I knew Bill for 30 years, and I never heard a single negative thing ever said about him, or by him. He was a good guy, a good engineer/home inspector, and will surely be missed.
Making an Offer
In order to make an offer, you have to submit, in writing with proof, how you will pay for the property if your offer is accepted. If it is an offer of all cash, you must show proof that you have the cash (bank statements). If you plan on putting down a certain percentage, and getting a mortgage for the balance, then you must substantiate the cash part, and submit a “pre qual”, a letter from a lending institution that states that you have been “pre-qualified” for a loan in the amount of at least what you have put into your offer.
Now some banks/asset managers require that the Pre Qual be case specific- that it specifically mentions the property that you are making the offer on. Not a problem, as most mortgage brokers/bankers want your business and would gladly accommodate you with as many letters as you want. It’s easy since its all word processing anyway.
Some selling banks require that you get the “Pre Qual:” from them, regardless of whether you have a pre qual or not from another lender, they want you to go through them. (They want this to make sure that they aren’t wasting their time - or - to try to sell you a loan?)
Still other banks will make the financing attractive to purchasers of their inventory. Lenders like Wells Fargo, Countywide, Chase, etc. They have bitten the bullet, and decided to make the best of their situation by turning the non-performing loan into a new performing loan. These banks are in the loan business.
Finally, there are situations where there have been undocumented alterations which may render the property un-mortgageable in the conventional market. Often times in these cases the bank will offer the financing.
I had a customer who wanted a certain house, but there was an alteration that needed to be filed, so he couldn't get the 3% down below market first time homebuyer FHA deal he wanted, so he didn't buy the property, even though Wells Fargo agreed to loan 90%.
As you know from my prior emails, no one is quite sure who owns many of the loans that are merely “toxic assets”, Mortgage Based Securities’, that were the cause of the crash of the subprime mortgage industry, and the fall of wall street, etc. These mortgages were bundled in packages and sold to investors, and have ownership like Deutche Bank as trustee of series of bonds #200-212, of 2007, etc.). In these cases, there is no bank to offer financing, and the servicing company is not in the business of making new loans.
(If you are new to Lasher’s List, or just want to re-read some of my past articles including the explanation of the crash, why there are so many foreclosures on Staten Island, the role of organized crime, and all the rest., they are all posted at my blog, at http://lasherslist.blogspot.com/)
When you make an offer to buy a foreclosure, the bank generally responds in one of three ways:
1. If your offer is full asking price, all cash, and close in 30 days, they might say yes.
2. If your offer is for less, and your terms are reasonable and your financing checks out, they probably will counter at “give us your highest and best offer”
3. If your offer is too low, and the servicing agent is not having a good day, then they will not respond at all.
Even if your offer was not responded to, they do not take it personally, you can then make a new higher offer, and again one of the three above will occur.
Some banks respond quicker than others.
Sometimes a property hits the market that is in a desirable location, and lots of people see it and make offers. Sometimes the bank will tell everyone to come back with their highest and best offer, and take the best deal in their eyes.
We don't really know how they see the offers in their eyes - You would think that a stronger buyer all cash would beat out a 3% down deal for more money, but it doesn't. Sometimes higher price wins, sometimes all cash quick closing gets it. Probably depends upon the history of the particular property, how many times they've sold it, but the buyer wasn't able to get financing after a long drawn out process.
Those of you that receive all of my emails receive these BOM's which I identify as outstanding opportunities. If you do not receive all of my emails and would like to, just send me an email and I will move you to the appropriate list. (Some people only get occasional listings, but all of my news type emails and my pontifications).
Your offer is accepted/Contract signing
Now that your offer has been accepted, a contract is sent out to your lawyer, or some banks require the customer to sign an 8-18 page agreement that you are not able to make any changes to. Sign it, or you don’t get the house. It doesn’t matter whether it’s the addendum/agreement or the regular contract of sale by and between the lawyers. Sign it without making any changes, or you don’t get the house. This is just the way that it is.
One of my clients who is a well known substantial builder on Staten Island asked that the contract of sale be put into his building corporation, instead of his personal name. the bank said no, and put the property back on the market, while we prepared a new offer, for the same amount, same terms, in the name of the building corporation, and had to get a separate letter from the bank showing the funds in the name of the building corporation.
Some of the lawyers for the lenders are requiring certified funds or bank checks for the down payments. It used to be that the contract down payment clause said “subject to collection”
I think that it has to do with the fact that the bank is taking a hit, and it's a kind of like their way of getting some sort of Montezuma's revenge.
No biggie, small price to pay for the bargain that you are getting.
Financing a Foreclosure
Financing a foreclosure is no different from financing any other property.
If the buyer is going to occupy the house themselves as their primary residence, then all of the mortgages available for any other buyer is available for the foreclosure, depending upon the condition of the house. In order to get a 96.5% FHA or SONYMA, the house has to be in good shape, with everything working. But regardless of the percentage down, the house is going to have to appraise, and you still only can borrow the percentage in the particular mortgage you apply for (The loan to value of the property).
If the house is a wreck, then foreclosure or resale, the same financing is available generally. The difference is the conditions to obtain financing that the seller allows you. But if the house is a fixer upper with things not working, so that the house doesn’t qualify for FANYMA etc., then you have to go to a commercial lender to get the financing, although there are mortgage programs out there for fixer uppers- but generally calling for you to get architectural plans permits and approvals first.
My associate Don Adler and I just sold the Landmarked 1869 Bedell house in Tottenville to a young lawyer on Lasher’s List, Thomas Kocian and his wife. They plan on restoring it for their primary residence and an office for Tommy’s law practice. This house had gotten a lot of notoriety because the prior owner had painted the outside precipitating the Landmarks Preservation Commission to jump in and landmark the house. The house is/was a wreck. The selling bank required that the “prequal” acknowledge that the house was a Designated Landmark, that it could not be torn down, and that it was in a deplorable condition in order to make an offer. Kocian had a prequal from an international well known bank that he had been doing business with for years, but they refused to issue the specific prequal, as did several other lenders that Kocian tried. Victory State Bank stepped up to the plate, and made the deal happen. Victory loaned the money for the acquisition, and gave a commitment for the rehabilitation, and after the work is completed they will refinance. If you need financing, go see Richie Boyle, head of the Loan Department @ Victory State Bank 718-979-2000. (Tell him I sent you)
Sometimes the seller bank will not give you a mortgage contingency on a property, so what you have to do is either get a loan on your own home, or other property, or go to a commercial lender like Victory that will give financing on your own home as well as the foreclosure being purchased.
But regardless of what you do, it all boils down to Loan to Value (LTV). What percentage is the bank lending of the total purchase?
The Closing
The contracts of sale now have provisions that all of the funds have to be sent to the attorney for the lender and then they will send out the deed. In other words, at the closing the only ones there may be you and your attorney at the lenders office, unless you go to the Sellers lawyers’ office. Closings that are done via wire and fed ex, are similar to how closings are done in other parts of the country.
Another difference with a foreclosure closing and a regular closing is that the buyer usually pays the Real Property Transfer Tax (NYC 1%), and the NYS Transfer Tax .4%, in addition to all other expenses. Normally the seller pays these items. Now because the buyer is paying these items, they pay the tax on the tax too. (1.4% of the purchase price, and 1.4% of the tax- don’t ask me why, makes no sense to me, other than an opportunity for the taxing authorities to make an extra couple of bucks).
Is this negotiable- NO. It is written in Stone.
What is the rationale? When the bank foreclosed on the property, they received a deed from the referee appointed for the foreclosure. In order to record the deed, they had to pay the transfer tax (1% and .4%). Since they just paid it, they don’t want to pay it again, and since they can get away with it, they do. It is called Sour Grapes.
………to be continued
Wednesday, June 3, 2009
Lasher's List: Scams and Scammers
I just got out of my car, and I had this catchy tune in my ear that I just can’t seem to shake. Not a song. I don’t have the range of hearing that allows me to enjoy music on the radio. (To understand my hearing, try listening to the Beatles in perfect stereo with only one speaker turned on- I miss all of the lower and higher ranges of the song). But this is not another rant about my hearing.
No, I can't stop singing a “jingle” 1-800 Kars for Kids. 1-800 Kars for Kids, 1-800 Kars for Kids, donate your car today. Ever notice that the commercials are clearer, and louder, and easier to understand than the regular radio broadcasts? TV too.
Now when I am in my car, and I am able to hear the radio, I listen to either National Public Radio (NPR) (WNYC) which is commercial free, except for when they are asking for donations, or to 1010 WINS, where give your car to charity commercials run all day long.
So what’s that all about?
First of all, to be a not for profit corporation, you need to have a charitable purpose (raise money for charity), form a corporation (there are services like Blumberg’s, XL services, Gerald Weinberg, PC, where you give them 3 names, and a charitable purpose, and a few hundred dollars later, bingo- you have a tax free corporation. Now you have an accountant file with the IRS for whatever the current type of tax free corporation is, and you’re ready.
Now you go to an ad agency, come up with a catch tune, or copy, and make an ad. Then you go to the radio station, and buy commercial time. Now they have all kinds’ of deals. Radio is cheap. And not for profits get special rates.
Every car has two values: Wholesale and retail. There are books published every month that list these values (NADA, GALES) for every car with sub sections to add or deduct for added accessories, or high mileage, etc. They call these prices average wholesale or average retail or average loan given on any year and make automobile up to a certain age. When they get too old, then they don’t publish the values. However that doesn’t mean that a car that is over 5 or 6 years old (whatever it is) has no value, at that point the car dealers know from their own experience what the cars are worth.
Now besides price lists that are broken up by retail and wholesale, there are car dealers that are wholesalers and retailers.
The person in the car dealership, who sells you a new car, is a new car dealer. He pays you very low wholesale for your car, leaving room for him to make a profit when he sells your car to the wholesaler. Of course the wholesaler has to make a profit when he sells the car to the used car dealer who then resells the car for retail to the consumer for high retail.
Now in addition to reselling the cars as cars, there is another whole market for the so called “burdens” that the commercials talk about, cars that don’t run, bad body rot, etc, are dismantled, the parts resold, and anything left is sold as scrap metal.
Cars without titles, requires a form to be sent to the Motor Vehicles for a replacement Title. If you are in a hurry, for the cost of federal express, DMV will overnight you the title, so losing your title is no big deal.
Now they also offer vacations. This is easy. People have donated their time shares that they no longer want, so they have access to free vacations all over the place.
So what do they do with the cars?
They sell them.
Who are we dealing with?
Car dealers.
But what about the charity? Where do they come in?
They talk about high administrative costs of charities. There is a car dealer/wholesaler who is really running the show, who pays the charity so much a car, or charges the charity so much a car for services, so that the charity winds up with a couple of dollars per.
But if you take how much they spend on advertising, and how much they spend on the company that buys and sells the cars, I have to wonder about how much of the gross dollars that they raise actually go to charity. 1%?
Andrew Cuomo- where are you?
And speaking of advertising, there is an ad I hear on the radio where the guy says that he just bought 1 Million copies of a book, home remedies that the doctors don’t want you to know about- and he is going to send it to you for free- except for $4.50 shipping and handling.
What can this be all about?
Well, suppose it cost him between ten and twenty five cents a copy (a dime and a quarter). The real cost of mailing is another dollar. Now there is the answering service and the radio/tv time. So what can the profit be on $4.50? One Dollar? Sell all One Million, make a Million dollars?
Is this about putting together a mailing list to work or sell?
Or is this about collecting credit card numbers for future identify theft or credit card theft?
Andrew Cuomo- are you there?
And you know why they say “Money Back Guaranteed?” Because studies have shown that most people would never ask for their money back. (there are always some). But most people are too embarrassed. But the effect on the buying public is, wow this must be okay- they guarantee to give you back your money if you aren’t satisfied.
Several years ago on Staten Island there was a guy who was selling a tape of the month club deal. You would have a catalogue, or get mailings every month to buy new tapes, similar to the book of the month club. Except you were to buy several new cassette tapes every month. (This was before CD’s).
The first month you got 10 tapes for $9.99 and then you bought more tapes every month for five years. When you signed up, you got a free tape player.
Now what he did, was figured out the value of the tapes- 5 years of 3 tapes per month @ $9.99 per = $1798.20.
But in order to make this deal happen, the people had to finance the $1,798.20 over 5 years. But since you couldn’t secure tapes not purchased, he secured the tape deck. Basically he was selling an $80 tape deck for $1,798.20.
Most people that sign up for things like this, will buy some tapes, and then stop buying, but keep paying until it is paid in full. Most people will not ask for their full money back guaranteed (which of course this conman wasn’t offering). If you really purchased the tapes every month you got a good deal. But statistically, you only bought for a few months, and kept paying the entire amount. Greenberg then would sell all of the $1,729.20 loans to one of those well known finance companies at a 24% discount $1,366.32).
Now a lot of people started complaining when they tried to quit, and realized that they had bought 5 year contracts to buy tapes, and started law suits in civil court, but everything was legal, so that didn’t help the buyers. The Advance got wind, the former District Attorney Murphy started something, and he left town, with his money, never to be seen or heard from again.
And some people bought tapes every month, and some paid the bills, and those who didn’t got sued by the finance company.
Always remember that when a deal sounds too good to be true, it probably isn’t.
…………………..to be continued
UPDATES
MY HAIRCUT:
Well, on Monday after my haircut at the barber college, I went back to my regular place, First Impressions at 2047 Victory Blvd, next door to Schaefer’s, between my office and Starbucks on Victory Blvd., and Nicholas re-cut my head to straighten it out, and now I have to let it grow so he can cut it again, to fix it.
No, I can't stop singing a “jingle” 1-800 Kars for Kids. 1-800 Kars for Kids, 1-800 Kars for Kids, donate your car today. Ever notice that the commercials are clearer, and louder, and easier to understand than the regular radio broadcasts? TV too.
Now when I am in my car, and I am able to hear the radio, I listen to either National Public Radio (NPR) (WNYC) which is commercial free, except for when they are asking for donations, or to 1010 WINS, where give your car to charity commercials run all day long.
So what’s that all about?
First of all, to be a not for profit corporation, you need to have a charitable purpose (raise money for charity), form a corporation (there are services like Blumberg’s, XL services, Gerald Weinberg, PC, where you give them 3 names, and a charitable purpose, and a few hundred dollars later, bingo- you have a tax free corporation. Now you have an accountant file with the IRS for whatever the current type of tax free corporation is, and you’re ready.
Now you go to an ad agency, come up with a catch tune, or copy, and make an ad. Then you go to the radio station, and buy commercial time. Now they have all kinds’ of deals. Radio is cheap. And not for profits get special rates.
Every car has two values: Wholesale and retail. There are books published every month that list these values (NADA, GALES) for every car with sub sections to add or deduct for added accessories, or high mileage, etc. They call these prices average wholesale or average retail or average loan given on any year and make automobile up to a certain age. When they get too old, then they don’t publish the values. However that doesn’t mean that a car that is over 5 or 6 years old (whatever it is) has no value, at that point the car dealers know from their own experience what the cars are worth.
Now besides price lists that are broken up by retail and wholesale, there are car dealers that are wholesalers and retailers.
The person in the car dealership, who sells you a new car, is a new car dealer. He pays you very low wholesale for your car, leaving room for him to make a profit when he sells your car to the wholesaler. Of course the wholesaler has to make a profit when he sells the car to the used car dealer who then resells the car for retail to the consumer for high retail.
Now in addition to reselling the cars as cars, there is another whole market for the so called “burdens” that the commercials talk about, cars that don’t run, bad body rot, etc, are dismantled, the parts resold, and anything left is sold as scrap metal.
Cars without titles, requires a form to be sent to the Motor Vehicles for a replacement Title. If you are in a hurry, for the cost of federal express, DMV will overnight you the title, so losing your title is no big deal.
Now they also offer vacations. This is easy. People have donated their time shares that they no longer want, so they have access to free vacations all over the place.
So what do they do with the cars?
They sell them.
Who are we dealing with?
Car dealers.
But what about the charity? Where do they come in?
They talk about high administrative costs of charities. There is a car dealer/wholesaler who is really running the show, who pays the charity so much a car, or charges the charity so much a car for services, so that the charity winds up with a couple of dollars per.
But if you take how much they spend on advertising, and how much they spend on the company that buys and sells the cars, I have to wonder about how much of the gross dollars that they raise actually go to charity. 1%?
Andrew Cuomo- where are you?
And speaking of advertising, there is an ad I hear on the radio where the guy says that he just bought 1 Million copies of a book, home remedies that the doctors don’t want you to know about- and he is going to send it to you for free- except for $4.50 shipping and handling.
What can this be all about?
Well, suppose it cost him between ten and twenty five cents a copy (a dime and a quarter). The real cost of mailing is another dollar. Now there is the answering service and the radio/tv time. So what can the profit be on $4.50? One Dollar? Sell all One Million, make a Million dollars?
Is this about putting together a mailing list to work or sell?
Or is this about collecting credit card numbers for future identify theft or credit card theft?
Andrew Cuomo- are you there?
And you know why they say “Money Back Guaranteed?” Because studies have shown that most people would never ask for their money back. (there are always some). But most people are too embarrassed. But the effect on the buying public is, wow this must be okay- they guarantee to give you back your money if you aren’t satisfied.
Several years ago on Staten Island there was a guy who was selling a tape of the month club deal. You would have a catalogue, or get mailings every month to buy new tapes, similar to the book of the month club. Except you were to buy several new cassette tapes every month. (This was before CD’s).
The first month you got 10 tapes for $9.99 and then you bought more tapes every month for five years. When you signed up, you got a free tape player.
Now what he did, was figured out the value of the tapes- 5 years of 3 tapes per month @ $9.99 per = $1798.20.
But in order to make this deal happen, the people had to finance the $1,798.20 over 5 years. But since you couldn’t secure tapes not purchased, he secured the tape deck. Basically he was selling an $80 tape deck for $1,798.20.
Most people that sign up for things like this, will buy some tapes, and then stop buying, but keep paying until it is paid in full. Most people will not ask for their full money back guaranteed (which of course this conman wasn’t offering). If you really purchased the tapes every month you got a good deal. But statistically, you only bought for a few months, and kept paying the entire amount. Greenberg then would sell all of the $1,729.20 loans to one of those well known finance companies at a 24% discount $1,366.32).
Now a lot of people started complaining when they tried to quit, and realized that they had bought 5 year contracts to buy tapes, and started law suits in civil court, but everything was legal, so that didn’t help the buyers. The Advance got wind, the former District Attorney Murphy started something, and he left town, with his money, never to be seen or heard from again.
And some people bought tapes every month, and some paid the bills, and those who didn’t got sued by the finance company.
Always remember that when a deal sounds too good to be true, it probably isn’t.
…………………..to be continued
UPDATES
MY HAIRCUT:
Well, on Monday after my haircut at the barber college, I went back to my regular place, First Impressions at 2047 Victory Blvd, next door to Schaefer’s, between my office and Starbucks on Victory Blvd., and Nicholas re-cut my head to straighten it out, and now I have to let it grow so he can cut it again, to fix it.
Monday, December 15, 2008
So what's the deal with all those email addresses?
Believe it or not, it isn’t easy sending out these emails.
First of course, I have to write them. That’s the easy part. Figuring out what I am going to write about, that’s the hard part. I spend the better part of the week, kicking around ideas, (or hoping that I get an idea) and usually write it on Saturday/Sunday. Once in a while I’ll have the idea set for the following week, like I was going to write about Short Sales today, having written about foreclosures last week, but I’m not in the mood. There is plenty of time after New Years to talk about how to survive these times that are affecting each and every one of us. I have a couple of really nice topics that I’m toying with for next week already.
But anyway, once it’s written, then I have to think about it, let is stew. Go out for a while, do something else, play spider solitaire, eat a meal, drink some Perrier. Then I read it again, then out loud, constantly editing, adding stuff, deleting stuff, until I’m past okay and am happy with what I’ve written.
Then I send it out to a couple of people for their grammatical, spelling, typographical, and editorial assistance and comments. One is my cousin Stuart, in California, and the other is my friend Jon Salmon. Thank you both. They take it very seriously, and are very strict about not letting me say something that could get me into trouble (content wise).
Now we’re back to the hard part again. Sending them out.
When I first started, I thought that I could just send them all out at once. Like an email.
Boy was I wrong.
Doesn’t work like that, at all.
At that time I had about 700 email addresses on my Microsoft Office Outlook 2007 program, so after I wrote my first email, - I clicked on all the names, and it didn’t go through. I got back notices that the emails didn’t reach the intended recipients with a bunch of different error codes that I had no idea what it meant.
I called my computer friend Al Russo, (Paper Solve) and he explained to me that the free services (Gmail, Verizon, AOL, etc.) limit the amount of emails that you can send out at one time.
So I tried sending them from AlanLasher@OurIslandRealEstate.com, a pay account, but that was even worse than the g-mail account. After consulting with our technical guy, and the domains tech support, I discovered that the Our Island Real Estate domain only allows 10 emails to be sent at a time. No wonder it took 9 hours to send out the emails.
So then I took my list and created “distribution lists” on my Outlook account, and kept them under about 50. I organized my list according to various categories, Builders, Trades, CPA’s, Health Care Providers, Bankers, Insurance Brokers, Architects’ & Engineers; my REO customers, etc. (Some of the categories are so large that I had to make multiples, like Lawyers A-G; H-M; N-R; S-Z)
Finally, I thought that I was home, but no, after a few emails, I received emails back, that some of the emails didn’t reach their intended recipients because I had exceeded the daily limit (500 emails per day). I didn’t know that I was limited to 500 emails per day, but I know that now.
I tried going to some of the online mail services, Constant Contact is one that you might hear advertising. Not a bad deal, it doesn’t cost much, they get the emails out, but…………..
I can’t just forward the email listings that I currently send out the way that they are, I have to make them fit into neat little packages that they have set up (templates).
Creating a bunch of email addresses seemed to be the answer. AlanLasherRealty@gmail.com; ALasherRealty@gmail.com; ADLasherRealty@gmail.com; LashersList@gmail.com; AlanLashersList@gmail.com; AlanDLashersList@gmail.com, etc. (pretty clever I say). That’s fine. Each email address can handle 500 emails per day. I have a sheet that I use that contains all of the distribution lists (categories), and I know that I can send just about half the list using one email, and the other half using the second email, (although the list is growing every day, I am up to almost 1200 names), but I don’t send every person every email. Realtors don’t get my foreclosure listings (after all does Macy’s tell Gimbel’s? Does anyone remember Gimbel’s?). (I live in a big old house near where Mr. Gimbel had his big old house, but I guess it wasn’t old when he lived in it).
Everything is fine, but sometimes I send the email’s out too quickly, and guess what- my account gets knocked off the air for 24 hours (can’t send), and I receive error messages, and the emails don’t go through.
Gmail tells me that they work very hard to fight spam. This not only includes spam coming into Gmail, but also spam being sent out from Gmail. Apparently they have filters that look for spam. One of the ways that they do it is looking for large mailings where the recipients are sent to cc/bcc recipients. (Other things that trip the spam filters are links to other sites and the word VIAGRA). So I’ve learned that I cannot send out the next batch, until a few minutes after the prior batch went through.
I called Leore, my graphics guy from the Bar Newsletter days, and it just so happens that he is also in the business of sending out multiple emails to people. He has proposed that I send him the listing, with the wording that I want, etc., and he’ll turn it into a package that can be sent out en masse…..for a fee.
So that’s where it stands right now.
Some of you must be saying, thank you spam control filters, and others are thinking, call Leore, get it going, so you can send us more emails every day.
Which are you?
…………………………to be continued
First of course, I have to write them. That’s the easy part. Figuring out what I am going to write about, that’s the hard part. I spend the better part of the week, kicking around ideas, (or hoping that I get an idea) and usually write it on Saturday/Sunday. Once in a while I’ll have the idea set for the following week, like I was going to write about Short Sales today, having written about foreclosures last week, but I’m not in the mood. There is plenty of time after New Years to talk about how to survive these times that are affecting each and every one of us. I have a couple of really nice topics that I’m toying with for next week already.
But anyway, once it’s written, then I have to think about it, let is stew. Go out for a while, do something else, play spider solitaire, eat a meal, drink some Perrier. Then I read it again, then out loud, constantly editing, adding stuff, deleting stuff, until I’m past okay and am happy with what I’ve written.
Then I send it out to a couple of people for their grammatical, spelling, typographical, and editorial assistance and comments. One is my cousin Stuart, in California, and the other is my friend Jon Salmon. Thank you both. They take it very seriously, and are very strict about not letting me say something that could get me into trouble (content wise).
Now we’re back to the hard part again. Sending them out.
When I first started, I thought that I could just send them all out at once. Like an email.
Boy was I wrong.
Doesn’t work like that, at all.
At that time I had about 700 email addresses on my Microsoft Office Outlook 2007 program, so after I wrote my first email, - I clicked on all the names, and it didn’t go through. I got back notices that the emails didn’t reach the intended recipients with a bunch of different error codes that I had no idea what it meant.
I called my computer friend Al Russo, (Paper Solve) and he explained to me that the free services (Gmail, Verizon, AOL, etc.) limit the amount of emails that you can send out at one time.
So I tried sending them from AlanLasher@OurIslandRealEstate.com, a pay account, but that was even worse than the g-mail account. After consulting with our technical guy, and the domains tech support, I discovered that the Our Island Real Estate domain only allows 10 emails to be sent at a time. No wonder it took 9 hours to send out the emails.
So then I took my list and created “distribution lists” on my Outlook account, and kept them under about 50. I organized my list according to various categories, Builders, Trades, CPA’s, Health Care Providers, Bankers, Insurance Brokers, Architects’ & Engineers; my REO customers, etc. (Some of the categories are so large that I had to make multiples, like Lawyers A-G; H-M; N-R; S-Z)
Finally, I thought that I was home, but no, after a few emails, I received emails back, that some of the emails didn’t reach their intended recipients because I had exceeded the daily limit (500 emails per day). I didn’t know that I was limited to 500 emails per day, but I know that now.
I tried going to some of the online mail services, Constant Contact is one that you might hear advertising. Not a bad deal, it doesn’t cost much, they get the emails out, but…………..
I can’t just forward the email listings that I currently send out the way that they are, I have to make them fit into neat little packages that they have set up (templates).
Creating a bunch of email addresses seemed to be the answer. AlanLasherRealty@gmail.com; ALasherRealty@gmail.com; ADLasherRealty@gmail.com; LashersList@gmail.com; AlanLashersList@gmail.com; AlanDLashersList@gmail.com, etc. (pretty clever I say). That’s fine. Each email address can handle 500 emails per day. I have a sheet that I use that contains all of the distribution lists (categories), and I know that I can send just about half the list using one email, and the other half using the second email, (although the list is growing every day, I am up to almost 1200 names), but I don’t send every person every email. Realtors don’t get my foreclosure listings (after all does Macy’s tell Gimbel’s? Does anyone remember Gimbel’s?). (I live in a big old house near where Mr. Gimbel had his big old house, but I guess it wasn’t old when he lived in it).
Everything is fine, but sometimes I send the email’s out too quickly, and guess what- my account gets knocked off the air for 24 hours (can’t send), and I receive error messages, and the emails don’t go through.
Gmail tells me that they work very hard to fight spam. This not only includes spam coming into Gmail, but also spam being sent out from Gmail. Apparently they have filters that look for spam. One of the ways that they do it is looking for large mailings where the recipients are sent to cc/bcc recipients. (Other things that trip the spam filters are links to other sites and the word VIAGRA). So I’ve learned that I cannot send out the next batch, until a few minutes after the prior batch went through.
I called Leore, my graphics guy from the Bar Newsletter days, and it just so happens that he is also in the business of sending out multiple emails to people. He has proposed that I send him the listing, with the wording that I want, etc., and he’ll turn it into a package that can be sent out en masse…..for a fee.
So that’s where it stands right now.
Some of you must be saying, thank you spam control filters, and others are thinking, call Leore, get it going, so you can send us more emails every day.
Which are you?
…………………………to be continued
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