Friday, May 2, 2008
Now that I've conducted my virtual garage sale, it's time for a new beginning. This will be my last post on "Overcoming Real Estate Losses." It's practical to move at this time of year. You know, the time when, traditionally, real estate sales are up and inventory moves briskly. Here in Temecula, however, I may be the only person relocating--and there's plenty of real estate on hand.
It seems appropriate that this last post contain an accurate total of the real estate losses we incurred during the two years that we owned the apartment buildings . . . $814,000. That's an incredible amount of money. It's gone and there's nothing that I can do about it now--except learn from the past and not repeat it. That's a given. My husband said that we sold our rental houses at the peak of the market. I guess we did it halfway right. It was the second half that tanked.
Back to new beginnings--besides raising and educating my children, I'm focused on our growing promotional products business, with all the hopes and excitement that new opportunities bring. If we hadn't had such a crushing financial blow, we would have never been motivated to do what we do now. What a blessing!
So, if you want to continue to experience my perspective on business, real estate, kids, and everything else in life that interests me (and, hopefully, you), please visit my new digs.
You can bring an appetizer, and I'll supply the whine.
Thursday, May 1, 2008
A potted plant that was very attractive when we received it as a gift three years ago. I just recently put it outside to liven up the patio.
A bubble wand without the bubbles.
I have no idea what this screen-like device is or where it came from, but I'm sure it could prove useful to someone.
A fire pit that we bought five years ago. We used it at two events on the property, and someone got burned each time.
A sword that was hand-made (bet you couldn't tell) by one of the boys. Don't worry, he won't notice when it's gone because we have a dozen of them laying around.
An old play tool bench with a broken cover and missing parts.
An sturdy paper weight.
A children's metal chair that we bought in 1989. Tetanus shot required.
A fresh stalk of broccoli from our garden. Even the kids will love it---raw, of course!
Let the bidding begin!
Wednesday, April 30, 2008
Tuesday, April 29, 2008
After I dropped my son off at soccer practice last night, I had to return our overnight movie rental ("Snow Buddies"). I called my husband and asked which store I should take it to. He said that it didn't matter. I was directly between two Albertson's--the one on 79 South (which has been renamed Temecula Parkway) and the one on Rancho California Road. I decided to drive down to the 79, as I wondered what my post for tomorrow would be about.
When I pulled into Home Depot and swung around to Albertson's, I noticed some people hanging around their cars and looking toward the Home Depot parking lot. I thought they had gotten in a fender bender and were just waiting around. As I neared the grocery store, there were people in front gazing in the same direction, so I peered over my shoulder looking for a fire or tow truck or something. I didn't see anything.
I pulled around to find a good spot when I noticed that there was a cop standing in the middle of the parking lot with his gun drawn. I turned to get out of there, but that only got me within 10 feet of the cop. Did I tell you that his gun was drawn?
It was pointing at a guy who was lying face up on the asphalt, legs spread, hands behind his head. The police officer was all by himself. All alone. Gun drawn. Guy on the ground. People staring. Where was all the back up?
I thought of calling 911 for this poor cop, who never took one eyeball off the perp. Then I figured that his radio had a direct connection. But where was everyone and how long was he supposed to stand there? I thought of offering to help, but I really didn't think it was a good idea to startle a guy holding a loaded weapon.
So I did the next best thing. I pulled passed them both, parked, ran out of range, and started shooting--my camera, that is. I thought my boys would get a real kick out of this!
Since the crime rate in Temecula is virtually zero, I figured that I'd better get pictures of what possibly may be the only police activity in this sleepy town all year.
"Mommy, why is he standing so far away from the bad guy?" my sons asked. Uh, because he's all by himself, dear.
Finally, reinforcements arrive to subdue the dangerous criminal--who never moved a muscle because there was a big guy pointing a loaded gun right at him.
The back up moves in to get a closer look. Yep, he's laying on his back doin' nothin'.
Time to put the gun away and get the handcuffs on.
Good talkin' with ya. Thanks for not having a buddy jump me from behind while I was concentrating on keeping my loaded gun aimed at you.
By the time they had the deadly suspect subdued, there were six or seven police cars in The Home Depot shopping center--but not a donut shop in sight.
Monday, April 28, 2008
Excuse me, but how many people do you know who would give up their first born before sacrificing their cup of coffee in order to save money? I mean, coffee is vital. You can't wake up without it. You can't work without it. You can't go to a meeting without it. You can't drive home without it. You can't unwind after a revved up day without decaf. Going broke is no reason to give up a $3 cup of coffee.
Sorry, but the ole' "let's blame housing values for yet another economic woe" will never fly when it comes to America's favorite addiction.
Have you ever seen losing gamblers at a roulette table? They don't stand up and walk away when they run out of the change in their pockets. They pull out the credit cards, equity lines, checkbooks from everyone they've pilfered, jewelry that's been handed down through the family for hundreds of years, and their cars. The lack of money doesn't stop a gambler from his mission.
Same with coffee. Believe me. If you're anything like my husband and I (and our friends), you'll be living in the street--literally, on the asphalt--before you would dream of giving up your morning fix (we patronize coffee houses other than Starbucks, though).
So, what could be the real reason that Starbucks is losing customers?
Friday, April 25, 2008
A bit further down the road, however, this seller used a miniature billboard to attract potential buyers. It's clearly seen from the adjacent busy road (there was also a small sign that said "No Trespassing", but for you, dear readers, the law is merely a suggestion):
The competition is so severe, that, as I continued along, I almost ran into this sign:
I had to stop--risking life and limb--to snap a picture of this for you.
Finally, we have the answer of how to market to the most finicky of buyers---make sure that your sign is bigger than the house that you're trying to
Thursday, April 24, 2008
I really feel for the previous owners because we could have been in the same situation. But we didn't wait to sell off our albatrosses.
Don't you all put your offers in at the same time now.
Foreclosure - Bank Owned
25014 Las Brisas Road, UNIT A & UNIT B
Murrieta, CA 92562
The property is a part of a four building, 16-unit condominium project known as the Los Alamos Business Park; located on a 1.62-acre site that contains 70,567 SF. The improvements were constructed in 2006 and collectively have an area of 2,585 square feet within a 5,110 square feet building..
The property is located on the booming I-215 Corridor with freeway frontage at the Los Alamos overpass in the city of Murrieta.
At the base of the Santa Ana Mountains, Murrieta is located in the midst of one of California' s fastest growing regions. Known for its natural beauty, Murrieta offers an attractive quality of life for individuals and families, as well as businesses, seeking to relocate. A safe, family-oriented environment and a well-educated work force combine to make Murrieta an ideal place to live, work and play.
28736 Calle Del Lago
Murrieta, CA 92563
County: RiversideProperty Description:
*PRICE DROP OF $205,000! Property now listed at $595,000. This is pricing from 2004 and before. This is a distressed property. This is not a short sale, real estate owned property (REO), or foreclosure.
Murrieta's Apartment Row, conveniently located right off of Murrieta Hot Springs on Calle Del Lago.
INCOME PROPERTY::Great for First Time Investor
28919 Calle Del Lago
Murrieta, CA 92563
*PRICE DROP OF $200,000! Property now listed at $550,000. This is pricing from 2004 and before. This is a distressed property. This is not a short sale, real estate owned property (REO), or foreclosure.
Murrieta's Apartment Row, conveniently located right off of Murrieta Hot Springs on Calle Del Lago.
Wednesday, April 23, 2008
“She’s been off the grid for years. She has a small home in Colorado and a place in the mountains of Malibu. Her shower is outside. Her living room is outside. It’s a small cabin. She’s 100 percent organic. She grows her own food.
“But she’s not nuts. She gets dressed up, goes out, travels and doesn’t fly private unless she absolutely has to.”
It's a good thing that she's learning to live off the land because, with the plunge in real estate values, her two houses can't be worth nearly as much as they were a couple of years ago. And remember, she only uses a private jet when she has to. Can someone please tell me how much longer our earth will be around because Daryl Hannah showers outside? What if we all showered outside? Then how long will it last?
Personally, I've always done my best to try to respect the gifts that I've been given. It seems to me that the proponents of global warming feel that humans are a scourge to this poor planet. I really don't know if the earth will fade away in 20 years just because I keep my chicken coup light on before dusk and dawn, and I prefer to shower in the comfort and privacy of my home.
If you are one to be easily swayed by the opinion of celebrities (I have a feeling that none of you are), then you would believe that the new "in" is to be green. It kind of reminds me of the belly shirts from a few years ago that showed off the despicable muffin top midriffs. It seemed that everyone was wearing them, and people ignored the fact that they weren't flattering or attractive. If you look around now, the layered, longer tops for women are in, and more stylish (it's my personal favorite, too). Not that fashion is akin to saving the earth, but do celebrities understand what they're supporting--and does the general public really want to emulate them?
Same with GW, I believe. Recycling and renewable energy sources have been around for decades. But suddenly many businesses are changing their practices and advertising their earthen responsibility--and spending millions doing so--even if no one can tell us whether or not it will make an impact on the planet. It's so popular at this time that I feel it soon may go out of style the way of the belly shirts.
I'm not making a political statement here. We just need to think for ourselves and read the scientific evidence to all the facts that are presented to us. For as many scientists who support the GW theory, there are as many, if not more, who debunk it.
As for me? While the debate rages on, I'm going to enjoy my warm indoor showers and fresh eggs--until heat and electricity are outlawed because our intelligent celebrity lobbyists convince Washington that the sky really is falling.
Tuesday, April 22, 2008
There is nothing like the smell of orange groves blooming in the spring. I can't imagine that Heaven smells better than this. I thought that, in year's past, it had happened in March, so I've been bummed for a month, thinking that I missed it. However, we noticed it a few nights ago, driving home from soccer practice.
In the evening, when the air is moist, the smell is strong and can be detected from a long distance away. It's so lovely to drive with the windows down. During the day, you need to concentrate in order to pick up the fragrance, but it's there.
It's a strange dichotomy that something so beautiful lies in the midst of the ever-increasing foreclosure inventory out here.
Would someone please buy this property?
36275 Glenoaks RD, TEMECULA, 92592, CA
Year Built: 2002
House size: 2,200 sq. feet
Lot size: 178,596 sq. feet
Great opportunity to re-open Glen Oaks Nursery! The oldest Nursery in the beautiful Temecula Wine Country. 4+ acres with two homes, one stick built home and a Manufactured home. Each home has 3 bedrooms and two baths, a living room & family room. Property is Residential/Ag Zoning. Check with County for possible uses. Many trees including some Christmas trees and lovely landscaping. Don't miss this truly one-of-a kind property!
I passed by it today and was surprised to find a "For Sale" sign in front of it again. We used to get our fresh Christmas trees from this now-closed nursery. We'd go in the beginning of November and tag our live tree, before all the good ones were taken. The most they charged was about $8/ft, I think. Then we'd be able to return and have them cut it for us at any time. That was before global warming was discovered. I sure would like it if someone would reopen the nursery and offer the trees that are still there.
The property went up for sale a couple of years ago. On the market, off the market. You know the routine. I thought it sold, but I don't know the history. Did it ever sell? Or did someone buy it and have to give it back? Anyway, this property is in the heart of the orange groves and vineyards. I bet the scent from there is present throughout the day and night.
Well, this incredible bouquet lasts only a couple of weeks or so. If you're able to drive to any orange grove in California, I suggest you do so now. For those of you who can make the trip, come out to Whine Country and enjoy the views and the scent. Just take Interstate 15 to Rancho California Road and exit east. You need to drive past the last traffic light and keep going through vineyards, groves, and wineries to achieve the full effect. Turn around at Lake Skinner and return the same way. Repeat as needed for the most intoxicating aromatherapy that you'll ever experience. Best of all, it's free!
Monday, April 21, 2008
Much to the consternation of my friends and family, I have my voice back! It was so bad when I wrote the post that I had a very hard time reading to my children. Then, on Thursday night, I attended a charismatic Healing Mass in San Diego County (these are not conducted as a replacement for proper medical care). It was celebrated by a priest who I am proud to call a close friend and advisor to our family.
There is a part of the Roman Catholic Church that many people, especially those who are not Catholic, are not aware of. It's the charismatic movement. These Masses are different in that they include what's called "praise and worship" in music and words. With arms raised, the choir and congregation frequently praise aloud during the whole Mass. The priests get into it, too. The music has more of a Christian pop flavor, and everyone is very verbal and joyful. For many people, it adds to the reverent nature of what most would imagine is a typical, yet contemplative, Mass. This is not my charism, yet I enjoy being in the environment. Although my arms aren't outstretched, my heart is soaring.
In a Healing Mass, the priest offers the sacrament of the Anointing of the Sick (or Extreme Unction). After the anointing, you have an opportunity to be prayed over. This is the time that many are "slain by the Holy Spirit"--right unto the floor. No, this has not happened to me.
I can attest to the healing nature of the Mass and sacrament. As Father stated in the beginning of the celebration, everyone receives a healing before they leave for the evening. However, it may be in ways that they didn't request or expect. I got my voice back. I was surprised, but I shouldn't have been. I just didn't expect it so sudden and so soon. BIG GOD, little me. I was even able to shout in support of my sons at soccer this weekend. Not wanting to inflame my nodule scars again, I didn't get boisterous, but I did yell their names every so often.
Speaking of soccer--a very unsettling event unfolded on the sidelines right before my eyes on Saturday. I was at the game for the 10 and 11 year olds. I keep to myself and my children, for the most part, but I noticed that many of the moms seem to know each other very well. All the more for me not to want to meet any of them.
I had not prepared for the bitter cold winds, so my daughter and I ended up looking like homeless people (sweatshirt with stains that I found buried in the van, a blanket that I wrapped around us, my daughter's summer dress tucked inside some big sweats). There was a bit of movement by one of the moms, with her walking up and down the side of the field, speaking with her child's father, yet sitting in another location. At one point, she was standing next to me with another man. Her younger son walked by them and the man said, "Aren't you going to say 'Hi' to me?" He didn't. Then the mom said, "Say 'Hello' to Steven." Awkward moment.
Are you with me? Then the mom walks back and forth again and stops on the other side of me. She tells another mom, "Where did she go? Is she gone now that she heard us talking about her?" Hello, Ladies! I'm trying to watch the game here. You know, the game where kids are playing to have a good time. So, I look over, and, sure enough, her child's dad is having a heated discussion with another woman. Uh-oh. This happened several times during the game.
Fine. You want to play like you're in junior high? No problem, everyone has a dream. But, come on, folks, there are children involved. Not only the girl on my son's team and her brother, but both new significant others had children, too. Anyone out there from divorced families having flashbacks right now? I put myself in the shoes of those kids for about a split second, before I became so nauseous, I had to distract myself by actually watching the game again.
I wanted to turn to the mother and say, "Maybe if you stopped gossiping about your husband's girlfriend, your children may find just a bit of peace in their broken lives. Do you realize how destructive your behavior is?" But I didn't. I figured that she wouldn't take too kindly to advice from someone who lives on the street.
As we walked back to the van, I happened directly behind the "other" woman. She looked like the saddest person in the world. I wanted to say to her, "Are you prepared to live this way for rest of your life? Because I doubt that things will get better. Why don't you just get out now and let them battle it out without any interference?" But I didn't. I had to get my son to another park to take soccer pictures.
We had 20 minutes to get from the game to the pictures, which were 10-15 minutes away. Unfortunately, it takes me 15 minutes to load up the van because I have to put every single item exactly where it belongs so that I can find it again. (My husband, by the way, was assistant coaching one of our other son's team at approximately the same time.)
In my rush to get out of there, I lost my footing on the step of the front seat, as I was reaching for the trash bag inside. I fell out of the van. When my head hit the door, it broke my fall, but opened wider. When the door stopped moving, this gave my body an opportunity to knock against it one more time. My son gasped, "Are you okay, Mom?" I had no idea. I had to get to pictures. I didn't have time to take inventory of my wounds. I picked myself up, put the stroller in the back and jumped in the driver's seat. Luckily, the double vision subsided as I turned the motor on. Then the pains and sting from the scrapes began to materialize. I wondered if another Healing Mass would be celebrated soon so that I could go for the internal injuries that I'm sure this old body sustained.
I was consoled by telling myself that I can't possibly be as miserable as the people who I witnessed embroiled in battle on the field. My scars will heal (hopefully, soon) and be forgotten, but will theirs?
Friday, April 18, 2008
Borrowing money doesn't just get the average Joe in trouble:
. . . chains regularly borrow large sums to cover routine expenses, like wages and electricity bills. When sales are strong, as they typically are during the holiday season, the debts are repaid.
Fortunoff, a jewelry and home furnishing chain in the Northeast, relied on $90 million in loans to help operate its 23 stores, using merchandise as collateral.
But by early 2008, as the housing market struggled, the chain’s profits dropped, meaning its collateral was losing value and the amount it could borrow fell.
As Sharky pointed out this week:
It was the credit card companies who got the bankruptcy laws tightened to protect their own profit margins. In my view, it was this that sounded the death knell of the Housing Bubble.
He was talking about Chapter 7 or 13. Most retailers file Chapter 11, which allows them to restructure in order to save the company. But the bottom line is the same: it's the issuance of credit (secured or unsecured--because loans based on assets may not always stay that way) that is the current downfall to the consumers, the retailers, and the economy, as a whole. Maybe I will be seeing more stores closing in this area, after all, as the impact of this trickles down.
As the article points out, this is a far-reaching disaster with a chain reaction that may extend through many industries. Who would ever make the connection that UPS will suffer because Sharper Image is closing down stores? And why didn't Levitz pay Sealy the $1.4M for the merchandise it's selling? (I know the answer to that, but I'm just saying that it's a poor business practice to be saddled with so much stock). I can only assume that Sealy owes some furniture factories money, and that they, in turn, have outstanding debts to the suppliers of the raw materials. So whose paying the loggers and weavers?
The stores mentioned in the article are hurting because they can't get loans as easily as they used to. But would that have solved their problems in the long run? This is a challenge for society at large, but also, on a much broader scale, for store chains. So, they get to borrow a few million (or billion) dollars to stay open longer. What does that do to the value of their stock and how is the payback accounted for?
Our business is a microcosm of these huge conglomerates. We deal in cash only (okay, so we take checks, too). Most smaller retailers (and other institutions we do business with) don't want to pay us with a credit card. I don't know why, but that's the way 99% of them prefer to do business. They request the items, pay us half up front, we order the merchandise, deliver it, and receive the balance. The most we'll do is a Net30 (that's only for our biggest clients), which we also ask for from some of our suppliers. That means that we have 30 days to pay an invoice. The assumption is that the merchandise will move by then and we'll be paid for it. And we always have. Almost a year in business and we've never been stiffed. If we didn't pay our Net30, then we'd be cut off from the supplier, so there's not much opportunity to accumulate large debt that way.
Will we be making trillions of dollars? Uh, I seriously doubt it. But, we don't owe anyone anything and they don't owe us. Our business has no debt. I guess a good word to describe us would be "solvent". Can't say the same about the banks and some large retailers right now--and it's downright scary.
Thursday, April 17, 2008
Several years ago, I lost my voice for six months. It used to disappear for a few days after a cold, but six months was a wee bit long. So I saw an otolaryngologist, who put a small camera down my throat--after numbing it, that is. Gag me. He saw nodules on my vocal chords. Any amateur singer knows that nodules are a kiss of death to your voice.
So I went to a speech therapist who taught me how to talk so as to not slap my vocal chords together. Whispering is bad. Talking in your pitch is good. Coffee is bad. Room temperature water is good. Speaking on the phone is bad. Listening to someone else talk, instead, is good. Saying the hard "c" is bad. Skipping those sounds is good. ("Let's _onfer by the _offee table in _lark's office on the _orner.") I'm not joking.
I studied the hand-outs that she gave me and decided that the most important things to remember was to talk in my pitch and drink water (albeit, I like it ice cold). When she asked me what I had learned from the new instructions she passed out the week before, I would shrug. I just needed my voice back. I didn't feel that it was necessary to memorize the positive attributes of tea with honey.
Eventually, I regained my voice and once again was able to yell
My voice has felt fragile now for at least two months. When I talk, I sound like Bonnie Tyler. It takes more and more energy to get my words out, so sometimes I don't even try (big cheer from those in my household).
The trip to Yosemite in March was the turning point in convincing me that I didn't have much time left of the vocal chord meter. I didn't drink enough water while I was there and I was traveling with friends. All we did was talk. That's the fun of it. Thirteen hours in the car--we gabbed. In the 15-seater, there was much noise from the van, the occupants, and the road. So, of course, I had to talk over all of that because everything I had to say was important enough for me to risk being mute in order to express it.
I should probably see someone about it. The only problem is that I'd rather go in for a colonoscopy than have a camera stuck down my throat again. I could use some speech therapy, but where would I ever find the time? Besides, my lack of verbalization seems to make everyone around me so happy. I'm trying to use the lessons that I learned from the last speech therapist, but I still run to the phone when it rings. When I answer, people mistake me for my husband, who sang bass when we were in the high school choir together.
I take a deep breathe in order to blow out all of my words and say, "No, this is _arol."
Wednesday, April 16, 2008
This is post 164 since last September. The theme of my blog is real estate and business. As you know, however, I throw in many different topics when the opportunity arises. When this happens, I sometimes think that those who log on may feel a bit cheated or misled by the title or by someone who referred them here. So, at least several times a week, I like to stay on the topic of real estate, or some tangent thereof.
I've given this much thought for several months now, and I feel that it's time to title my blog something that better fits its content. Therefore, I've started a blog identical to this one in every way, except format and name, called "Whine Country Chronicles". I soon will be updating it every weekday. But not yet. I want to finish playing around with text fonts and colors first, and to make sure that anyone who logs on here can make the easy transition to the new one. Once it's up and running, I'll feel comfortable entertaining you there, as I do here.
I hope not to lose those of you who have logged on faithfully for some time now, or the ones who have just found me. The new blog will be exactly like this one, but with a title that better defines the content.
I'll keep this blog here for as long as Blogger lets me, so that anyone accessing my new blog will be able to link here for background reference. I'll make it clear when my last post is written on this site. Then it will be a rebirthing of sorts (speaking of birthdays, a happy one today to our good friend Munko Bunko). So, until the time that my new digs are ready, you can catch me at this address. I'll keep a pot of coffee on for you.
Tuesday, April 15, 2008
Well, can someone please tell the developers in the Temecula and surrounding areas? Honestly, if I never read the news, I wouldn't know by driving around that there was a problem with real estate right now. Yes, there are more "for sale" signs on corners, but there is also a lot of construction going on. I'm talking brand-spanking new developments. These builders must have signed on the dotted lines for their financing before last summer, and now are forced to proceed with their projects.
There are housing developments that haven't seemed to be hindered by the economy, except that they've lowered their prices a tad. But the most surprising construction is that of commercial properties, specifically retail and office. As a matter of fact, a new sign for a strip mall just went up in Whine Country--eight miles off the freeway. What?!
Sometimes I want to stop the car and yell over the noise of the tractors, "I know that we're kinda close to the San Diego County line, but this is Riverside County. R . . I . . V . . E . . R . . S . . I . . D . . E COUNTY!! Do you hear me? It's one of the areas with the biggest decline in real estate!" But I think they'd just keep grading.
There also hasn't been an impact on too many businesses lately. Ever since we've moved here, retail establishments come and go, especially restaurants, that seem to have a lifespan of about one year. But most of the strip malls appear to be occupied at the level, or just a little less, than they were two years ago. If the economy is in a tailspin, why are all the retailers still open?
Don't get me wrong. I'm not trying to prove that there's nothing to be worried about. I'm just curious as to why some sectors in this area are moving toward, what seems like, the inevitable train wreck. Surely, they must know more about this than I do. They must have performed their due diligence and market research studies. They must have economists on staff who are pros at predicting where investments of this kind are headed. They must realize that what they're doing seems odd, at best, and disastrous, at worst. Maybe they figure that the economy will be heading up before they have their grand openings.
Adding more inventory to the ever-increasing pool. Yup, that oughta help the housing market recover.
Monday, April 14, 2008
As Congress moves ahead with efforts to fix the mortgage mess — and head off another million or more foreclosures — a lot of readers are wondering: why should homeowners who got in over their heads get help from the government?
My question is this. It seems to me that too many people in this country are getting a free pass with this mortgage mess. I, for one, got a 30-year fixed loan, paid the fees, pay my mortgage on time and so on. But all these people who took the easy way, low payments for two years, zero down etc., are basically getting bailed out in some form or another, whether it be mortgage companies rewriting their loans, or doing a short sale. Where is my free money for doing it the right way in the first place and paying my bills like I agreed to? — Dave B., Sultan, Wash.
It’s absolutely a fair question.
There’s no doubt that some of the people who are now losing properties to foreclosure entered the market at the height of the boom, put little or no money into the transaction, planned to make a quick buck, and then got burned when the music stopped. They made a bet and lost. The government shouldn’t be expected to help them any more than it should be helping out losers at the craps table in Las Vegas.
The problem is that the lending boom — and in its latter stages it was a lending bubble, not a real estate bubble — swept up a lot of people whose only mistake was trusting a mortgage broker or lender who promised to get them started on the path to homeownership and then wrote them a loan that they knew was unsustainable. Is it really plausible that a novice homeowner could somehow dupe a chain of financially sophisticated players that included mortgage brokers, lenders, Wall Street firms packaging these loans into securities and the investors who bought them?
Unlike those of us who may be on our second or third mortgages, or who learned the hard way that some “trusted professionals” are neither, many first-timers got suckered. I’ve heard from hundreds of readers and talked to dozens who fall into this category. The issue of “personal responsibility” seems irrelevant when the transaction was so complicated it flummoxed even the Wall Street investors who bought these loans and are now writing off hundreds of billions of dollars.
It turns out that, so far, very few mortgages have been rewritten with more favorable terms. True, there are short sales going on, in which the homeowner sells the house before foreclosure begins and the lender agrees to take less than the loan’s full value. But many of the appraisals on which those loans were based were fraudulently inflated — to benefit the lender and mortgage broker, not the buyer. In any case, I’m not sure how a short sale qualifies as a bailout: The homeowner loses everything.
It’s also worth considering the “bailout” that’s been extended to the lenders who made these bad loans in the first place. Even before the $30 billion taxpayer-backed rescue of Bear Stearns, the Fed had been flooding the banking system with cheap money to help lenders recover from the bad decisions they made. And in many cases, these loans were so highly "leveraged" — made with borrowed money — that the investment bankers churning them out had essentially no money down either.
At some point, you also have to consider the issue of protecting the value of your home. If another 1 million to 2 million homes are foreclosed in the next 12 months, it’s hard to see how the housing market will be able to recover. That means the value of all of our houses will continue to fall and the economy likely will slide along with them.
Think of it this way: If your house was in the path of a wildfire, would you object to the fire department putting out the fire on your neighbor’s house to protect yours?
Friday, April 11, 2008
Maybe I'll give the next Big Bird egg face that I get to my smiling dog.
Thursday, April 10, 2008
Due to the recent hail storm, there may be significant damage to peoples' homes. The board is already aware of homes which will need to have their roofs replaced. If you need to have your roof replaced as a result of the Saturday, February 16, 2008, hail storm, you do not need to fill out an Architectural Control form as long as the new roof will be a shingle roof.
Once I was able to figure out what they were trying to say (it's hard to read text without apostrophes or commas), I was surprised that I hadn't heard anything from our PM out there. He didn't say that repairs were required, but he didn't tell me that everything was fine, either. You'd think that it would have rained at least once since then and that the tenants would have complained if there was some leakage from the ceiling.
This house is over 3,600 square feet (two story), so a roof replacement would not be a small, inexpensive job. I know that hail can be a problem in some parts of Texas, but to need a brand new roof due to one hail storm is mind boggling for a native Southern Californian like me. The biggest hail I've ever seen was the size of an air soft pellet and the longest storm lasted about three minutes. Do they really have hail the size of baseballs? What if you happened to be parked outside at the time? Bummer.
So, as much as I'd rather not know, I decided I'd better e-mail the PM and ask if there's something that I should be worried about. Because it's been seven weeks or so since the storm, I thought that I'd receive a reply stating that some houses in the area did experience excessive damage, but that ours was fine.
This was his response:
We will have our roofers check it out. We have two companies that are local, Not "storm chasers", that we can get estimates from. I'll let you know if you need to get your insurance involved.
Yeah, way to stay on top of it. You know, I hired a PM so that he's the one taking care of things like this--without a reminder from me. At least he collects the rent in Texas every single month without any prompting from California. And he's one of the good ones!
Our roof is insured for hail, but the deductible is $1,500. Our expenses on that unit are very low, and we flow a little bit every month. The tenant renewed the lease at the end of last year, so, if they ride it out, we wouldn't have had a vacancy in two years. However, it doesn't thrill me to put $1,500 into it at this point in time. And, if the tenants are inconvenienced during the repairs or replacement, they may ask for a rent reduction for that month, or we may have to pay for a hotel.
I haven't heard back from my PM yet. I wonder how long we have to submit a claim to the insurance company. I guess I have one more call to make today.
Wednesday, April 9, 2008
The entire process usually takes me about seven minutes. Actually, it could take me much longer, but I only get seven minutes to complete my routine.
Well, yesterday, I didn't even have one minute, and I was elected to take my son to his soccer practice. Luckily, his coach isn't our friend who coaches the other two boys. I don't know anyone on this son's team and am not too eager to introduce myself for an eight week season. Besides, when my husband told one mom that we have seven children, she looked disgusted and said that, if she had that many, she'd slit her wrists. My kids just don't get it. What's so bad about constant playmates and babies around all the time for perpetual entertainment? Anyway, my point is that I didn't feel a need to get all dressed up for these people who I don't know and will never see again after soccer is over.
Before we left for practice, I ran my fingers through my hair and changed into sweats. I intended to drop my son off and stay in the car to do some work, but I decided that it would be best to walk him to the field.
As I was on the sidelines watching him interact with his teammates, I suddenly became self-conscious of my appearance. The wind blew my long curly hair away from my face. The glare from my unpowdered skin must have blinded the parents standing on the other side of the field. I was so grateful for sunglasses. At least my bags were covered by something besides concealer. I wore a big black coat (because it's freeeeezing!) with a hood that I pulled over my head and down to my chin, trying to hide in plain sight. The other parents probably were whispering, "She must be that mother with seven children. No wonder she looks so bad." It really isn't fair to blame my uglies on the kids.
Those were the people who I'd never met. I was afraid of seeing someone I did know as I hurried back to my car. The last time I tried to pull a stunt like this at a grocery store in San Diego, I bumped into my old college roommate, who I hadn't seen in 10 years. I could imagine that she was thinking, "Poor Carol! She sure has let herself go."
As I rushed back to the car yesterday, I bowed my head low and came within inches of tripping a jogger. I raced over to the tiny opening in the fence, designed to keep out bicycles, only to come face to face (I know, I felt bad for her, too) with a woman trying to squeeze herself and her chair through at the same time. "I'm sorry," I mumbled, as I stepped back to let her through. I didn't apologize because I was in her way. It was for the fact that she got a good look at my face and my sick-at-home-with-the-flu clothes.
Next time I'm tempted to cut short my routine, I think I'll let the baby cry at the door for seven minutes in order to save the world from a lifetime of flashbacks and intensive therapy.
Tuesday, April 8, 2008
Another Investor said...
OK, so how much does a decent horse property in Whine Country cost now? THAT would be worth moving for...I meant to respond, but then I forgot. So, to make amends, I'm giving the comment its very own post--right here, right now.
I have many items to write about lately, and I try to put my ideas down as drafts on my list of posts, but some things just slip through the cracks.
Do we have deals here in Whine Country Temecula! How about two kids for the price of one! I'm just kidding. Don't write that I sound bitter and trapped. Everyone who knows me knows that I would never give my kids away--not that cheap, anyway.
Decent horse property would be in the range of $800,000-$1,000,000. That would be for a house between 2,500-4,500 square feet on up to five acres that's less than 15 miles from the freeway. These types of properties had been selling for between $1.6-$2M. I know. I've been tracking them for two years now.
Remember this house that I told you about two months ago?
39030 BELLA VISTA, TEMECULA, 92592, CA
Price $1,200,000 Well, here is the listing now. It's still in great shape, too--at least on the outside. The grounds appear to be meticulously maintained.
If you're moving to Whine Country from, let's say, New York or San Francisco, the prices of the homes here are chump change compared to real estate values where you live. You probably like your area a bunch, but nothing compares to the beauty, serenity, and privacy of living out here.
So what if we have to cohabitate with every species of rodent and insect known to man. At least the kids are constantly entertained. Yesterday, I noticed that my four-year-old was missing somewhere inside the house. As much as I was accomplishing in her exile, I knew that I'd better find out what she was up to before I regretted it (her long absences usually mean major clean up required). I found her sitting on the floor in her bedroom. When I asked her what she was doing, she said, with eyes as big as bowling balls, "I found a baby cricket, but it jumped away and now I don't know where it is!" You have to imagine that voice in a high-pitched whine. Maybe the bug will return to entertain her again at another time.
Well, if that little anecdote didn't encourage you to rush out here to lessen the Whine Country inventory, then maybe these listings will. I make no representations as to their locations (check out the interior of the ugly one! Note to agent: give the exterior a coat of paint other than yellow).
Personally, I've lived near the beach and all over San Diego, which I consider to be the city of paradise. But, you could never convince me to move away from where I am now.
Monday, April 7, 2008
Are you having trouble making your mortgage payments?
Friday, April 4, 2008
It's not a computer game. It's not Sudoku (my husband got over that as soon as I bought him the giant book full of puzzles). It's not a toy. It's not drugs or alcohol, thank God. And it's not candy.
We've become addicted to green beans. I had never cooked them before, and just did my best to stay away. But, after Christmas, we were invited to dinner at a friend's home and one of the side dishes was green beans. My baby was hungry, so out of desperation, I handed her one until I could cut up her chicken. She ate it before I moved my hand away from the tray. I actually tasted one and didn't throw up. The kids had some and asked for more. I thought I was in the Twilight Zone.
I had never had an occasion to steam a vegetable before. I noticed that my friend had one of those steamer trays inserted in a regular pot. I've had one since our wedding, but never knew what it was for (yes, seriously--we like raw veggies, what can I say?). I almost threw it away when I was cleaning out the drawer. Anyway, my husband showed me how to use it and I've been steaming green beans regularly ever since.
We've been so addicted to them that I bought some seeds to plant in our garden. Unfortunately, when I read the label again as I was placing them into the soil, I noticed that it said "snap peas". Doesn't matter, though. It's the only seed we planted that didn't grow--at all. Everyone knows that, if you want to give a child an exciting horticultural experience, have them plant a bean seed because they sprout in a week and are a hardy plant. Not here. My garden is the kiss of death to a seed which millions of kindergartners have successfully sprouted before they ever learned how to read.
Our lives seem to revolve around how quickly I'm able to steam the tender pods before the baby starts screaming for them (I try to cook extra so that I just need to reheat, but I seem to run out after every batch). As soon as she catches sight of them, she starts to holler.
Recently, we found another bean that's been making us howl . . . and even cry at times. A friend sent me this:
Now that I have high speed internet, I'm able to download these types of videos and watch them before the next day. We rented Mr. Bean's Holiday a few months ago. It was funny if you like movies with no dialogue and a main character who resembles a cross between Monty Python and a sighted Mr. Magoo.
No one in the family seemed too impressed by the movie. But, when I played the link my friend sent me for my kids, I thought that my teenager was going to pee in his pants. He was laughing so hard, I peered over his shoulder just to make sure that it was the video that I had just previewed and not Brian Regan (again).
Now that we can download the skits, we crowd around the computer at night before bed and bond over Bean. He may be ugly and silly, but it's an addiction, like green beans, that we don't mind having.
Thursday, April 3, 2008
I wrote another reply in the thread about my blog on the San Diego Creative Investors Association yesterday, and someone asked me for examples to support my statement about breaking even or flowing properties in Riverside County. Ugh! Are you gonna make me do all that specific research when I'm not even in the market? I've just been playing with the numbers--nothing serious. Well, because I'm the kind of person that I am (no snide comments, please), I threw some quick listings and links together for your perusal and reading enjoyment. (Please note that none of my links are sponsored.)
These numbers have not been verified by lenders (interest rates), listing agents (HOA fees), or taxing authorities (tax rates). I've estimated using what little knowledge I have of the areas highlighted. If you find an error (because I write my posts in the middle of business calls, making meals, doing laundry, wiping bottoms, and a variety of other non-real estate related tasks), please be kind enough to let me know, and I'll edit the post to reflect accuracy.
Here's a house in Murrieta. As stated above, I'm going to guess on these numbers (if I were serious about buying, I'd have them all down to the penny). Let's say full price (I know that's crazy, but just to be safe) with 10% down at 6%, so your PI is $1,079. Maybe taxes there are a low 1%, so that's another $167/mo. Insurance would be high at $50/mo. Let's put the HOA at $100 and the management fee at $150. Total payment: $1546. Rent can be anywhere between $1,500 and $1,595 ($1/sf for these small houses in Murrieta is on the high side, but not unusual). If you want a zero vacancy rate, you offer them $160,000, and your PI drops to $863, taxes down to $133, PM fee becomes $140. Your payment and expenses are $1,286 and your rent is $1,395.
You can find rentals ads for most areas in Riverside and San Bernardino Counties on this Press Enterprise link.
There's a plethora of condos, but the HOA's can be $250 or more. That bugs me, so, until I can get past that sticking point, I won't consider them at this time--even though they can make sense.
Here is a house on a postage stamp lot. We owned two in Temecula very similar to this one. We sold one for $385,000 and the other for $405,000 in 2005. We would get anywhere between $1,595 and $1,695 for rent back then. Go back to the newspaper link above to see what the rents are like now.
Let's move to the deals in Lake Elsinore, where it seems that 99% of the houses are vacant foreclosures. This area was hit hard--and I have a rental there now.
This huge house is in north Lake Elsinore (not as desirable as the southern part). Let's say you had a brain freeze and bought it for full price, putting 10% down. Your PI would be $1,349. Insurance at $50. Your taxes will be higher than an older neighborhood in Murrieta--anywhere between 1.5 and 1.9%. At 1.9%, they're $396/mo. Doesn't mention an HOA. At this point, the payment and expenses are $1,795. You'd have no problem renting at $1,995. Add in the 10% PM fee of $200, and you're breaking even. However, you're not buying at full price, so your payment and taxes go down, rent stays the same, and HOA is still up in the air.
There are too many in Lake Elsinore to list. The investors will start coming in there again and there will be a glut of rentals, but that will smooth out as they become occupied. Just remember to set your price limit on each house so that you have wiggle room to reduce your rents to below market.
Here is one more for the road because it's just too good to pass up. You can probably snag this little puppy for around $200,000. PI: $1,079, Taxes at 2%: $333, Insurance: $50, HOA: $100, PM fee: $175 on rent of $1750. Expenses: $1,737 (taxes and HOA are estimated high).
Remember, this was a peek at Riverside County. If you move up to the high desert of Victorville and Apple Valley in San Bernardino County, you may find some that work up there, too. Also, the prices don't appear to be headed anywhere but down, so I would play hardball with the banks, and move on to the next one, if they're not willing to negotiate.
Note to agents: Please stop with the "At this price, it will go quickly." A) It's not going anywhere any time soon and B) Nothing is moving quickly, if at all. (While I'm at it, "separate" is spelled with an "a" after the "p". Remember, you never separate the "pa" from the rest of the family.)