BloodhoundBlog

There’s always something to howl about.

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Redfin.com’s Glenn Kelman issues a non-apology apology: This is what it sounds like when pigs fly . . .

Oh, good grief

If Redfin.com wants to make peace with the real estate industry, all it has to do is hold up its end. If it wants to be a cowbird bottom-feeding parasite — defaulting on its responsibilities and disbursing that default as “savings” — it has to live with the contempt fully earned and deserved by cowbird bottom-feeding parasites.

Glenn Kelman should take solace — or take a drink — or just take a nap — however. The contempt Redfin.com earns doesn’t originate in his inflammatory comments — even if these are really, truly, honestly, please-please-you-must-believe-me a real estate-specific form of Tourette Syndrome.

Did any one of us make it through middle school without understanding demagoguery? If so, here are the review notes:

The skinny kid spewing half-witted insults is a coward who is terrified of two things: That his posturing is ludicrous, and that you know it…

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Make Your Mark

We have talked a lot about the public’s negative perception of real estate agents and the industry as a whole. We have blamed our image crisis on too few barriers to entry, and more recently I placed some blame with the Brokers and their hiring practices.

It is time for some agents to accept some responsibility as well. As one of a large herd, what image are you projecting? Forgive the tired play on words, but with so many out standing in our field, why aren’t more agents aspiring to be outstanding?

Distinguish Yourself

We picked up another business card from a listing yesterday that is heading directly to our marketing Wall of Shame. The agent had no website address and her email address was listed as agentname8@hotmail.com. To add to the shame, the back side of her card carried only the following message: Business Cards are FREE at www.companyname.com! Now, as a consumer, doesn’t that give me just a bunch of confidence in this agent’s ability to provide me with professional service?

To all of the agents out there afraid to invest in themselves, let me give you some free advice. For fewer than ten bucks a year you can own your own domain! Add another ten bucks, and you can have a professional-sounding email address which will foward to any free hotmail or gmail or other email account of your choosing!

Most of you reading this will say, as my children often so eloquently put it, “Well, duh!”. But I see too many addresses such as sarasotasamsellshomes2u@aol.com to believe that the majority of agents are getting it. You could be the greatest thing to real estate since the introduction of the BMW 7 series, but beerme@sbcglobal.net is not the image that will convey as much.

But My Company Has a Website!

And if you use your company “website” (which, for your purposes, is really a web page), that is exactly where all of your leads will end up – With your company. Your site does not have to cost thousands of dollars to design and thousands more to maintain, but it should be unique to Read more

The Blogfather Part II: I could have blogged all night . . .

The folks at ActiveRain are putting together a contest. It’s Pygmalion for webloggers, wherein experienced real estate webloggers take eager young blogging caterpillars into their tutelage, and, Henry Higgins-like, bring forth beautiful blogging butterflies in a few months’ time. The winning pair of bloggers will split $5,000 amongst their favorite charities.

(I predict my favorite charity will turn out to have something to do with stray animals.)

In any case, I’m looking for a patsy, er pigeon, er victim, er volunteer — I’m looking for a volunteer to learn the art and science of real estate weblogging with me as your tutor, er mentor, er insufferable bastard.

To disclaim is to disclose: I am not the gentlest teacher in the world. But I know a lot about weblogging, and I can teach you as much as can be taught about this art, this praxis, this obsession.

If you are at or very near the stage of being a total wannablogger with a will to make the leap to something that can blow kisses at true greatness, you’re my ideal candidate. I love you best in Phoenix, but if you’re not here, you’re just not here.

If you want to learn to do real estate weblogging wisely and well, with style, with grace, with humor and panache — I’m your volunteer.

But: I really, really like to win. So: Write to me and tell me why I should pick you as my co-competitor…
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Video can supplement photos and virtual tours in a listing, but it can’t supplant them . . .

However…

BtoB:

One day someone will be driving through a neighborhood and they’ll see a sign with a podcast URL. A few minutes later they could be sitting in front of the property, watching a video tour on their cell phone.

When you create a brand new category, you’re a category-killer by default…

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Key Questions to Ask Your Realtor Before you Buy a Commercial Property

Cooksquared Enterprises is very close to taking its first humble step back into investing after a two year hiatus. After a disappointing stint in Greensboro, we have settled on 32 units in Winston Salem, which is about an hour away. Over the past two weeks I have been going back and forth with the broker, asking a ton of questions, clarifying local business practices, and doing my best to get in touch with the seller. Through all of this I thought it might be helpful for other investors to understand the major questions I ask of my realtor when looking at a deal. For you veterans out there, read on and feel free to add some value in the comments section if I miss anything.

First, I am more of a new age investor. I do everything in Excel, using my own personal models painstakingly put together through trial and error. Even if you are not an Excel investor, I personally suggest writing down key learnings from every deal. It’s always good for a laugh when you look back at how long the list was from your first deal, plus it really helps you reflect on what you did well and what you can improve upon. For those of you interested in a very simple model to get you started, I am more than willing to share one if you email me (mc140@cornell.edu). Please remember that I am an apartment investor, so all of my models are based on purchasing apartments.

Once I put the deal in my model, the analysis begins. Typically, the first question to my realtor is where the numbers are coming from. There will be three main areas to focus: Rent rolls, expenses, and cap rates. Typically, Net Operating Income (NOI, which equals Rent roll minus recurring expenses) will be projected and then divided by the current cap rate. Watch out for two seller tricks. The first is to project an unreasonable NOI. For example, many sellers will simply increase rent rolls by 5-10% (or more) and not include a market vacancy rate. The second is either not Read more

HOAs don’t deserve hate; they have a purpose

This is me from this morning’s Arizona Republic (permanent link):

 
HOAs don’t deserve hate; they have a purpose

One of the ironies of our gilded age is that the free-market system, which provides a vast abundance of goods and services ever more cheaply and of ever better quality, is all but universally criticized and derided.

Meanwhile, no amount of fawning attention is too much for our governments, which will happily ram their “benefits” down your throat if you are the least bit reserved in your fawning.

There is one glaring exception to this perverse pattern, however, the only truly voluntary form of government: the homeowners association.

I suppose you could argue that you “join” the government of Glendale or Surprise by moving there, but no form of government is easier to escape than an HOA.

Even worse, as the potential for abuses among governments goes, the HOA is hated all out of proportion to the crimes it might commit. This HOA might get snippy about flagpoles and that one might have a minor league embezzler in its midst. But compared with the offenses municipal and state officials are routinely imprisoned for committing, an HOA hardly qualifies as a government at all.

Moreover, news is news because it is rare, not because it is commonplace. For every HOA that makes the papers because of some tawdry offense, there are hundreds humming away in the obscurity that is proficiency’s public reward.

Truly, the worst common offense an HOA can commit is being lax about upholding its codes, covenants and restrictions. Nobody wants to get a letter — or worse, a fine — from the HOA for an infraction of what may seem to be picayune rules.

But chaos spreads, and not slowly. When an HOA starts to neglect the little things, big things start to crop up almost at once. Before you know it, a once-delightful neighborhood will start to look seedy.

The purpose of the HOA is to maintain everyone’s property values. No one wants to suffer under an abusive HOA. But that’s a correctable nuisance.

A worse fate, possibly, is living with an HOA that has lost the will to lead.

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California is Still The Golden State

Everyone loves to point to California as the prime example of the excessive greed of the recent real estate boom. Media, bubble bloggers, and pundits predict that California will plummet to new lows and bring on a lengthy recession akin to the Great Depression. Even home-grown and respected PIMCO of Newport Beach predicts a heavy fog for the state’s real estate forecast.

Here are a few snippets about the “rising” real estate boom extracted from the Kiplinger California Newsletter:

Evanisko Realty and Investment plans an urban living project with 58 loft-style condominiums targeted at young professionals. The North Hollywood (NoHo) project will be called 4900 and is a conversion from an old theater and auto parts store.

OWR Development is planning 3000 The Plaza, a 200-unit condo tower project near the John Wayne Airport in Orange County. This is the first “urban living” high-rise project in Orange County.

Summerhill plans an urban living condo project at the site of the former Lou’s Village in San Jose. They plan 95 units with 10% of the units having a live-work capability. They expect the price point to be in the mid $600,000 range.

The Sheraton Palace Hotel in San Francisco plans to build a 60 story condo complex ON TOP OF the hotel. There will be over 250 units.

The Towers on Capitol Mall in Sacramento is a 53 story mixed use project with over 750 condos, a four star hotel, and retail space.

The Downtown San Diego condo boom may be over but don’t tell it’s little neighbor to the south, National City. The little municipality plans over 4000 units. Prices could be as low as under $200,000.

How can this development persist in a real estate market that all experts predict to plunge? The simple answer is that demographics are on California’s side:

1- Population still grows here statewide at a 1.5% annual clip. Now that may seem like anemic percentage growth compared to Nevada and Arizona but look at the astounding number of people moving to the Golden State. California enjoys a net gain of some 700,000 Read more

Negotation 201: Dont Just Think about the Best Price

Have you ever negotiated your way out of a good business relationship? I certainly have and I have often regretted it. Novice investors typically fall into two camps: the pushover or the bulldog. While there are certainly times to be both, the context of the situation should remain paramount. Some times the biggest winner in a negotiation can really be the biggest loser in the long run because of relationships that get crushed over a few dollars.

I will start by sharing a personal story. First, let me say that I fall squarely in the bulldog category. I have been getting my way since I was knee high by just about any means necessary (all ethical of course). Add to this all of seedy things I have heard about contractors and real estate agents and I became a real pain to negotiate with. In my first rehab, my wife and I were able to secure two workers, who happen to be down on their luck. They did great work, but really needed to be micromanaged. We really had all the power in this situation because they needed the work and didn’t really have any other leads. Long story short, they did a lot of work very cheaply, but as soon as they began getting other jobs we got the shaft (deservedly so). I squandered an opportunity to build a great relationship with two good contractors to save myself a few thousand dollars.

One of the most important life lessons I have learned is to pay people what they are worth. There will always be times when you have the power to under pay someone. I suggest you steer clear of that apple, no matter how good it may look. The hidden cost of putting the screws to someone when you can is evident in the form of decreased loyalty and a deteriorating relationship. Reflect back on the personal story I just shared. At the rate my wife and I were buying houses, we could have keep them in work for years. We would have enjoyed the benefits of getting honest reasonably Read more

So what’s changed at Zillow.com?

Last look before going to bed, I saw this image at Drew Meyers’ very insightful Insights weblog:

I bumped it up in FireFox and got the same image. Then I hit refresh and got a normal Zillow.com home page.

What had changed?

I know this won’t last, but I love it that I can bug people who work for multi-million dollar corporations in the dead of the night and have them answer me. I emailed Drew, and he replied in half an instant:

[W]e changed our wiki landing page, added page counters, and fixed some bugs.

The page counters are the primary feature that we added — which I think is a VERY cool feature (that numerous users requested). For instance, check this random house I just pulled up in Phoenix and scroll to the bottom of the page – http://www.zillow.com/HomeDetails.htm?zprop=7786893

This is the counter from that page, clipped to fit:

A small enough change, I suppose, but most big things are accretions of little things. And we didn’t have to wait to find out what had changed…

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Real Estate Carnivals: Nigel Swaby wins Carnival of Real Estate Investing, our own Allen Butler wins Carnival of Real Estate . . .

BloodhoundBlog was this week’s host of the Carnival of Real Estate Investing. Nigel Swaby from the Salt Lake Real Estate Blog was this week’s winner, with Creative Financing – Conversion to Traditional Mortgages.

We had a total of seven entries and four judges: Michael Cook, Cathleen Collins, Jeff Brown and Brian Brady.

This week’s Carnival of Real Estate was hosted by Pittsburgh Homes Daily. Our own Allen Butler won, with his SPAC Disease Reaches Pandemic Proportions.

This marks the third time BloodhoundBlog has won the Carnival of Real Estate. Past Winners are Kris Berg and me, Greg Swann. Michael Cook is a past winner of the Carnival of Real Estate Investing.

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The ABC’s of Agent Hiring – Oops, They Did it Again

I sat down today fully intending to log my own comments on the ongoing dual agency debate. Yawn… I will save it for another time.

Somewhere along the way in my thought process (brought to you by Tylenol), I drifted to the big news this weekend: Britney Spears is apparently channeling Jeff Brown. The big news is not that she has joined the follicly challenged-by- choice ranks of our own Bawld Guy or even that she is an emotional train wreck, but that she seems to be self-destructing. Here is someone with some talent (I will table the “how much” argument) and a truckload of marketability. I have to wonder, then, how she got to this point. Was it too much to soon, was it burn out, was it the challenge of competing in a cut-throat industry, or did her handlers simply not adequately prepare her for sustained success?

These questions, of course (because my brain works in mysterious ways), led me to consider the evolution of the real estate agent. First, I will offer a couple of maxims which few industry insiders will argue. There are too many licensed agents, the ease with which one can obtain a License to Sell is shameful and serves to bastardize the profession, agents are not highly respected by the general populace, and individual brokerages are in large part to blame for what I see as the industry’s current public relations crisis.

I am going to give Glenn Kelman credit for that last one. In my recent sit-down with him, he commented:

Brokerages recruit more agents than a market needs because they want the split or they want the desk fee.

We know why this is. Brian Brady talked about the formula for broker profitability and how the A, B and C agents must all be courted. My question is, why do the brokerages seem to court the newer or lower producing C agents without the intent of giving them a realistic chance of becoming an A agent? Further, why do I see so many C agents who do not possess the fundamental skill sets or traits that could Read more