The Best Referral Email I've Received All Year

Below is a cut-and-paste of a section of a referral email a realtor sent a colleague regarding a deal we just closed together and your humble correspondent. It’s brief, but I was flattered and thought others deserved to see it.

I wanted to take a moment to e-introduce you to Nicholas

James, Founder and CEO of OCF Financial down in Miami

near you and Ive ccd him here.

Nicholas and I have met recently because we were both

working the buy of a dear set of mutual friends.

He was lender, and I was agent.

The loan was NOT an easy one, and ran full spectrum of

challenges.

Nicholas pulled it off with grace and style, and we closed

on time last Friday.

He specializes in the hard to close loans down in Miami,

and knowing what I do about your market I believe he

could prove to be a great asset for you.

I suggest you guys meet for lunch soon to talk about it.

Instant Curb Appeal on a Budget:

With the fall buying season heating up, at least here is Florida, curb appeal may help your house sell faster.  Below are some easy and inexpensive ways to make your house look even more amazing to prospective buyers driving by. 

Instant Curb Appeal on a Budget:

-Pressure wash everything ($80)

-Mulch around trees and flower beds ($50 buys a lot of mulch)

-Plant a lavender bush ($50)

-Plant honeysuckle vines (average cost $22)

-Add planters under windows where possible (average $16 per)

-Paint your front door ($40)

-Have a nice welcome mat (literally rolling out the welcome mat for $11)

A Discussion Regarding Condo Oversupply in Miami:

I had an interesting discussion this morning with a multi-billion dollar developer via LinkedIn regarding the condo market in Miami. I made allusion to construction slowing due to oversupply. Interesting take, I thought:

Nicholas: "Sputters"? Interesting that word was used. If oversupply is really a threat, why does it seem more projects are being green-lit every week? Or is this a case of comparison-fatigue; the market seeming to cool because it went from white-hot to just red-hot?

Developer: I can appreciate how one could draw this conclusion, but you must decipher fact from fiction. The only two new projects that are coming online is Una and Okan Tower. These projects are the exception because they do not require financing. The developers are multi-billionaires that are building for cash, without the usual financing condition of pre-sales. They are in a very advantageous position, because when these projects come online in 2022 or so, the market will have swung back around, and they will be the hottest product on the market, when others are just starting to break ground. What you see with Elysee and other towers of the 2014-2019 vintage, are developers that made 50% to 80% pre-sales in the building during the 2012-2014 run-up, and now have buyers over a barrel with significant deposits. The cranes are still up, and the developers are closing on many of their units, but the re-sale market is all but frozen. Take a look at several of our Friday Wrap Up videos for details on specific buildings, many of which have 100-400 months of inventory when you look at transaction volume over the last 6-18 months.

What Goes Into a Credit Score

It controls everything. 

Literally everything.  It's scary just how much your credit score affects your life.  What is just as scary is that seemingly nobody knows what goes into calculating the score itself. 

Since I am fairly certain not any people are going to read a long and lengthy blog post about the ins-and-outs of the algorithm, BEHOLD... an infographic: 

IMG_1294.jpg

Renting in the USA

So it has been a while since I have posted anything.  Apologies.  Hopefully you have all been enjoying your summer. 

I came across this piece recently and it is powerful.  It shows how much it costs to rent in all of our markets.  The economy is great, and things are going well but rents are remarkably high.  I have said many, many, many times before that you are paying a mortgage whether you know it or not.  If it's me... I'd rather pay my own as opposed to a landlord's. 

 

 

rent-america.jpg

Kayne just keeps surprising us.

I wish I didn't, but I kind of love all that Kayne has been doing.  Maybe it took someone of his, I'm hesitant to write "stature", but someone of his notoriety to create the tectonic shift in thought that has occurred of late.  For at least a year now I have been a believer, with some, that we are entering what will be looked on in the future as a Golden Age.  The media and entertainment industries are largely stuck in their sclerotic thinking, so it isn't being reported, but that doesn't mean it isn't happening, nor that they can stop it.  

But this is a site devoted to real estate finance so I need to keep blog posts on topic. 

The system here will not let me link directly to websites so please take a look for yourself at the link below, but here is the cut and pasted article:

Forget about albums, Kanye West now drops renderings.

The rapper turned designer, entrepreneur and now developer revealed his newly-formed architecture studio’s first project, a prefabricated affordable housing scheme, via one of his collaborator’s Instagram account this week, according to the Architect’s Newspaper.

The public release of the renderings come weeks after West filmed an interview where he spoke about his plans to build a real estate empire. In a lengthy taped conversation between him and radio and television personality Charlamagne Tha God, West said, “I’m going to be one of the biggest real estate developers of all time. Like what Howard Hughes was to aircrafts and what Henry Ford was to cars.”

The interview concluded with both men walking along a grassy hilltop on a 300-acre property owned by West, which he claimed would be the location of his first “community.” West said he planned to build five properties on the land.

West’s had a long-standing interest in architecture — he appeared at Harvard’s Graduate School of Design in 2013 to address a class from on top a desk– and has collaborated with architects such as OMA, Family, John Pawson, and Alex Vervoodt as Architect’s Newspaper reported. And, more recently, West worked with Willo Perron to renovate a more than 14,000-square-foot office building from the 1970s into the headquarters of his company, Yeezy Studio, in Calabasas, California.

But it was only last month, via Twitter, that he announced his new venture to bring architectural design in-house: “We’re starting a Yeezy architecture arm called Yeezy home,” he tweeted. “We’re looking for architects and industrial designers who want to make the world better.”

https://therealdeal.com/2018/06/09/kanye-west-to-be-one-of-the-biggest-real-estate-developers-of-all-time/#new_tab#new_tab

If You Were Born Between 1975 and 1985 You Got Screwed.

The Wall Street Journal had a blog post today that really hit home for me.  What I have long suspected for a long time is that a subsection of a generation (my subsection as fortune would have it) happened to be born at a time that dictated they would be coming into the work force or starting their first businesses at a time when the Great Recession hit. 

Something just seemed off to me... and I'm not talking about generational envy or "why can't I have" whatever.  My parents generation and the brief sub-generation between them and me had their own struggles I'm sure.  But still, it seemed as if my generation was working harder and longer and had much less to show for it despite technological advances.  And now that I think about that, imagine how large the disparity would be if we removed the technological advances from the equation.  In any event it puts the "just go down to the personnel office and apply for a job" advice from the guy who got one job in 1979 that he had for the rest of his life (with full-benefits and paid vacation) into perspective. 

I do love he fact that "the central bank" added the caveat that "this generation has time on their side".  Translation:  "You have time to work even harder and maybe get yourself out of the hole that we put you in". 

From the Wall Street Journal:

People born in '80s are poorer

Americans born in the ‘80s began life on the back foot economically, according to a report by the Federal Reserve. Because of the Great Recession, these people now have wealth levels “34% below where they would be absent the financial crisis and its aftermath,” The Wall Street Journal writes of the report. Those born in the ‘70s are 18% less wealthy, while those in the '60s are down 11%. The '80s generation entered the workforce during the crisis. Crucially, though, this generation has time on their side, the central bank added. This and high education levels may lift them toward their financial goals in the end.

Ray Dalio's "Principles".

If you have the time, I highly, highly, highly recommend reading Ray Dalio's "Principles".  If you don't know Ray, he is the Founder and recently retired CEO of Bridgewater Capital, the most successful hedge fund in the world.  After starting working out of his detached garage with a few friends in the 80's; Bridgewater now required a minimum liquid net worth, (I think) of $75,000,000 for them to even consider them giving you an invitation for collaboration.   You read that right, you ask them if you can give them your money, and they tell you whether or not you have enough.

It's a nice place to be in business. 

So when Mr. Dalio wrote a book that was basically a collection of the email instructions he has been sending out to his employees over the last decade, I pre-ordered.  However it is a little bulky and you do start to get lost. 

Ray boiled down the main principles of "Principles" down to a 30 minute video which I highly recommend. 

https://www.principles.com/principles-for-success/?utm_source=fb&utm_medium=ads&utm_content=152325972&utm_campaign=BPI_FB_AW_RayDalio_PFS-FB-AMP

 

Market Recap for the Week.

 

The consumer price index, which measures inflation, was slightly lower than expected in April. Lack of inflationary pressure helps keep rates lower.

The producer price index was also a bit lower than April's forecast, another sign of lower inflation pressure. Prices rose 0.1% instead of the expected 0.3%.

Oil prices continue to rise, hitting the highest levels since 2014. Increasing oil prices could push rates higher.

Could more inventory start hitting the market? In a recent FannieMae survey, 45% of respondents said it's a good time to sell, a new survey high.

Amazon's Alexa system is gaining ground in powering smart homes. New home builder Lennar announced plans to include the technology in all new homes.