Agent Rock Star Wannabe

Sometimes I wonder what’s in people’s mind that makes them do things which makes them look totally stupid..... this is the story of Real Estate Agent/ Rock Star Wannabe- For the sake of this story we will call him “Agent P.”.... nothing to do with R as in Rock or S as in Star , Agent P. just sounds better …and it is my blog after all!

                                                                                            Agent P- Courtesy Disney Channel

A buyer comes into town and shares his willingness to purchase a pre-construction condominium overlooking the bay, Agent P is a good residential agent with knowledge of the local condo market and every new project that is being built or will be developed in the area .... he even works as a member of the inside sales team for a high end developer and apparently does a decent job. 

                                                                                                                           Downtown Miami- The Arsht Center

Me on the other hand, although I know how to perform in a residential sale because I have done many myself, I decided to pursue Commercial Real Estate. At the beginning of my career I sold anything from low end condos to high end units in high rises, low and high end single family dwellings.... you name it, I’ve sold it!  But it was all the same over and over and over again and quickly got bored;  many years ago I decided to pursue the commercial side of Real Estate, only to realize that it is a monster with many heads and within every head there are many smaller heads that wear different types of hats...which makes it even more challenging and interesting. 

                                                                                Cerberus- Courtesy of Allison Smith, Amosink Interactive Week

As I have mentioned in other posts, every time I close a commercial deal I take home not only my commission check but also the knowledge and experience that the deal made me gain which is priceless.

Agent P. came to me one day asking about what did I have that was a good deal for, presumably, a group of his investors. I told him more or less what was there and asked him to give me a synopsis of his buyers, I would sign a Non Circumvention and a NDA as I usually do and that way I could even meet them in person and do what I do best, make the deal happen…..FOR BOTH OF US! I waited for about 2 weeks for him to set up the meeting and one day I encountered him; the first thing he told me was “you left me waiting for that list of properties”... to which my only reply was “I told you to set up a meeting with them because probably you will not be able to answer specific questions that will go way beyond the square footage of the property and what kind of return they can expect”- End of story haven’t heard back from him ever. This guy pretended not only that I gave him a list of confidential  listings from other agents that have entrusted me with them but also pretended to handle a commercial transaction by himself which most likely has never done one before, he probably has not even seen one on Twitter or YouTube.... 
Greed took the best of him.....unfortunately I have seen Greed taking the best of most real estate agents that I have met throughout these years.

                                                    Shakespeare Sacrificed: Or the Offering to Avarice by James Gillray.

You get a lot of those Agent P’s that tell you that they do everything from residential sales, to leases, to commercial deals going from industrial to single tenant passing thru raw land and cemeteries with knowledge in shopping centers and restaurants, not to mention their expertise in office buildings and commercial leases but the minute you ask them things as simple as : “What about IRR or environmental issues, or ask them to explain how would a 1031 exchange work in a specific case, then all you get as an answer is uuuhhh, ahhh, ehmmm.... see... ehmmm…. I will get back to you with the info” , and trust me that questions from seasoned investors go a lot deeper than that... so you gotta be prepared and totally dominate the subject at hand.

                                             Jim Carrey as "The Riddler" in Batman Forever- Courtesy of Warner Bros.

My dear friends, all I’m trying to say is, don’t look like an ass in front of a buyer; credibility is one of the most precious assets a Real Estate agent has and losing it is not an option. It is far better to share a deal with someone that really knows what he is talking about than trying to be Jack(ass) of all trades- 

                                                                                       Courtesy of Katie Colombo

When a buyer comes and asks for a specific type of investment, if you really  know what you are doing, without your ego getting in the way, so be it, go ahead and handle it but if you feel a slight doubt then be wise and associate yourself with someone that knows that specific type of deal or that could have the ability to steer your buyer to what he knows best, because sometimes buyers think they want something and in reality they do not even know what it is that they exactly want (I will write about this issue in another post).

As I have said many times before, I stick to what I know and believe me it is not a limited niche, I have positioned myself in the mind of many people right where I want to be, and I have accomplished that by thoroughly experiencing those markets that I deal with on a daily basis.....and I still consider that I have a lot to learn about them, imagine if now I would go and try to sell let’s say a Marina or a Hotel not knowing anything about these type of businesses .... it would be totally ridiculous unless I take the time and study.

See you on my next blog!’

Cheers

moz@avantiway.com

Amazing Growth

http://www.businessweek.com/articles/2012-03-15/apple-goes-from-500-to-600-in-a-month

True or Fraud? I'll let you be the judge...read on please !

Hello my dear readers and I want to start this post by simply apologizing for misleading you on purpose- 

You might’ve typed any word searching for something in particular that you thought you were going to read here and instead I want you to read and find out about something that I think it is very important. You might already heard about it or about this man rather; the name is BURZYNSKI...... Dr. Stanislaw Burzynski !!

The Burzynski Clinic in Houston, TX

Last night I saw the documentary by the same name which tells the story about this Biochemist and Physician born in Poland who had this “crazy” idea of finding the cure for cancer which got him into a lot of trouble with the American Cancer Society and the FDA  ultimately risking  a prison sentence and a hefty fine. The amazing thing narrated in this documentary is that his clinical trials started back in 1976, and according to what is portrayed in the film, as soon as he started obtaining positive results such as actually CURING CANCER he got bombarded with questionings, congressional hearings, subpoena of all his records and files, all kinds of obstacles were posed for him not to continue his research and studies-

Anyways, I will not bore you with the details, I want to one more time apologize for having misled you to my blog page but I truly felt compelled to help spread the word about this documentary, wether you agree or not ..... you will be the judge! 

In Times of Turmoil.... (PART V)

Hello everyone and welcome to the final post of this series “In Times of Turmoil”. Let me start by saying THANK YOU to all of you that have read and followed this new venture of mine ....BLOGGING! 

Let’s get started with GSA properties as promised-
All I can tell you is that I really like the United States Government as a tenant, they are very demanding, but I like the stability, strength and return that goes with it. 

Let me start by telling the downside and that is that GSA will not sign a contract for more than 10 years firm or a 5 year firm with an option to 5 more years.

“So, what is it that you like so much about GSA? “ you might ask, well you have to pick your investment very carefully and by that I mean you will have to analyze and understand the way they think, the way they operate. In a nutshell,the GSA will put out for bid a request to obtain and get into a building within certain specific coordinates and once a government approved contractor gets that bid awarded he will proceed to build their structure according to their specs. The tenant will then request the TI’s which will get paid back to the builder/landlord as a loan with interests and everyone is happy.
GSA does pay premium rent but the owner has to be ready to take on any issues or problems that may arise 24/7 so property management is somewhat tough, but any of this buildings can generate a NET CAP of 8%+ and that is what I like about it !!! Also what I like is that more often than not I have seen the GSA as a tenant in certain buildings for more than 3 decades !!

When it comes to analyze these type of investments you have to look at several factors such as size of land for them to grow without moving, services around the building such as fast food chains, bus stops, also amount of interior improvements paid by them, all of these issues are closely related to the possibility of the tenant wanting to move to another location at the end of any of the terms of the lease; would it be really feasible to move at a lower cost than renewing one more time the lease contract? 

Remember, just because it’s the US Government does not mean they do not get treated as any other VIP tenant, VIP but nevertheless a tenant- One catch is that you have to go thru their bureaucracy to get approved as a buyer/landlord and also if you want to take on the property management you need sub-contractors that could get approved by them to enter their facilities, after all you are dealing with national security.

I recently sold a building where the tenant is one of the largest government agencies and it was a beautiful transaction, a few weeks later after the transaction closed, the insurance company notified me, as I was listed as the new landlord’s liaison since they are from out of the US, that the tenant was complaining about the concrete car stops in the parking lot that their own customers damaged with their cars, my buyer is a client located overseas as I just mentioned, I had to contract someone, get him approved and replace or repair those car stops all before the Irene storm was due to hit us (which it never did down here in South Florida anyways), the total cost was less than $500 and I got it done in less than a week but this building is producing a net revenue of 8% on year 1 with yearly escalations and the likelihood of the tenant moving to another location is close to “zero” -

So.... to finish up this series of “In times of turmoil” I want to conclude by saying that some people may look at it as there’s no hope, I look at it as a great opportunity to make a lot of money.

                                                                    Courtesy of Jim Watson/AFP/Getty Images 


Remember one thing and that is that a lot of the big companies out there were founded in times of financial turbulence, think of 3M, GE, Apple, HP, KRAFT...these guys are part of the backbone structure of our economy, capitalism at its best. There is always a great opportunity to make it, especially in times of turmoil, take advantage of it since it will last a little longer. This year, 2012 we might see a little bit of improvement, but remember that it is usually the case during election years; unemployment rate it is still in the red, CPI and PPI still show no significant inflation and interest rates are still at an all time low, altogether it is not such a good overall scenario; the road to recovery will be long so if cash is king keep it safe, invest it into something that is stable and low risk.... your grandchildren will thank you for it!

Cheers !!!

In Times of Turmoil.... (PART III)

                                                                    Courtesy of  Mel Evans/AP

Welcome to PART III of this post in which I will cover a little about Real Estate Investments, which by the way is one of my areas of expertise and I make a steady and good living out of it. Let’s first separate an investor from a speculator by saying that our current financial crisis and real estate collapse was caused mainly by speculators with a big helping hand from our financial institutions that started offering quick and easy approvals for mortgages. We basically had for a while a rule that said “If you are able to breathe you’re approved for a mortgage”; I remember at one point in time seeing a product offered by a lender that was a 106% LTV (Loan to Value) NINA (No Income No Assets), which was totally ridiculous and suicidal...but let’s not get into it now and rather focus on what the core of this PART III is - Real Estate Investments- 

So, Speculators are those that are in for the quick buck versus Investors which are those who really analyze and study any particular opportunity, and by drawing numbers are able to make a sound decision on wether any particular investment will yield the return they are seeking or not, (perfect example of financial education versus lack of it)-

I cater mostly to investors that know what they’re doing, since I need to enjoy what I do for a living (otherwise I wouldn’t be doing it), it is crucial that they either know what they want with a solid argument about their needs and wants or that they let me guide them wisely towards what suits their needs and wants.

There is no such thing as good or bad when it comes to chose which type of real estate investment one person needs to buy, actually I think they are all good BUT, and there’s always a BUT, I have the opinion that it goes with the times. For instance, I strongly believe that at this time Shopping Centers and Strip Malls are not such a good investment because risk is too high, retailers are filing for bankruptcy left and right and the risk of having a 

50,000 Sq.Ft. plaza with no tenants is too greater of a risk; unemployment rate is still very high at 8.5%, even though it showed lower for the month of December of 2011 as shown on the January 2012 report, but remember that those numbers are affected by a lot of factors that I will not discuss in this post, nevertheless they are not accurate, bottom line is that unemployed folks do not have extra cash to buy an extra pair of sneakers therefore the footlocker store in that shopping plaza is at risk of filing for chapter 11 and eventually vacate that spot along with the ladies shoe store, the clothing and accessories boutique, the gym and the hair stylist, for now NO SHOPPING CENTERS- Another type of investment that I get asked a lot for is Multifamily apartment buildings 

Courtesy of Peter Conti & Jerry Norton

 I gotta tell you that I have mixed feelings about it, they do yield a 9% or 10% + which I like, but you have to deal with too many eggs in one single basket and any of those could brake at any given time therefore greatly diminishing that high CAP rate, so at this time I try not to sell any of those even though many people have done so which I think it obeys to the necessity of doing something quick with the cash at hand as we discussed in  PART I and II- (Poorly taken decisions obeying to a lack of financial education)- 

I can go on and on over all the types of investments out there but I am not going to do that, I rather tell you what at this point in time I really like as a safe investment and that is NNN single tenant buildings and GSA tenants-

The former are Walgreens, CVS, Fedex, AT&T , etc

and the latter are buildings where the tenant is the U.S. Government as in IRS, FBI, Social Security Administration, etc. 

On PART IV of this post I will be discussing more in depth these two and show you comparative examples to demonstrate why these are at this time the best way (aside from metal) of having your cash safely invested.

Cheers !

In Times of Turmoil.... (PART II)

Smart people know when something is going on and therefore react in anticipation of trouble. Savvy investors that study trends, seasonal charts, Fibonacci numbers and other systems of “predicting” what the markets are going to do, know where to go once they cash out their positions and have their contingency plan lined up already.

Ask yourself a question : Why is it that gold prices have gone up so sharply precisely since the moment this current crisis started? If price obeys to the laws of offer and demand you got your answer right in front of your eyes.

At one point in time, during the very first trading course that I took, my good friend and financial coach told the story about his father always saying that a person should be invested in three key sectors and those are either Cash, Land or Metal, or if possibilities are sort of unlimited then all three would be just perfect. Let’s dig into this concept a little and try to make some sense out of it.

CASH

                                                        Courtesy of MIA Int'l Art Fair

How many times have we heard the phrase “Cash is King”, imagine if you owned a portfolio consisting of 20 condo units and right before the bubble burst, managed to sell them all at the peak of the real estate boom and kept that amount of cash at hand waiting for the right moment to re-invest it into something that after studying it and researching it and doing the proper due diligence seemed perfect; well I know first hand someone that did just that minus the part of “performing the right due diligence” or at least getting into something that he knew in depth, something that he could manage at will, this friend of mine took advantage and was riding a perfect wave that seemed to be such, cashed in a nice lump sum but did not have the sufficient knowledge or for lack of a better term, did not have the financial background to make a wise decision; he got desperate and felt that he had to do something right away with all that cash, as I mentioned on PART I of this post, some financial moves need to be done “with a cool head”, there is nothing more dangerous than an ignorant person with lots of cash in his hands and not knowing how to swim in turbulent waters surrounded by sharks.

You may ask yourself “Gee...I got cash....what should I do with it?” Read on!

LAND

                                         Courtesy of GMAC Real Estate Northwest 

Historically speaking, land does not depreciate, so nothing safer than that to have your money invested into....right?, but on the flip side it does not generate any return whatsoever and you are basically betting on its appreciation over time which depends on several factors such as “zoning” which eventually, and not for certain, may lead one day in the not so foreseeable future to high demand for it in that specific area ...in maybe the next 20years. The only certain thing is that it will not depreciate but “Time Value of Money” tells us that One Dollar today certainly does not have the value of One Dollar twenty years from now and if inflation finally hits then we could see that investment braking even over a long period of time or having the same value as its original cost which translates into being sort of a loss. Have you ever met someone or have you ever inherited a piece of land that was bought for X amount of money and fifty years later it is still worth the same amount with the “slight” difference that you cannot even buy a popsicle with that amount of cash? It is still worth the same, right? It might’ve increased steadily over the years and tripled its value but if you consider that it has not generated a penny and on top of that, property taxes have been paid every year on it, do the math and see where you stand. Unless you study, analyze and get advise from someone that knows about vacant land, don’t invest in it. A Realtor that specializes in Vacant Land (not my case)  is a good source of knowledge but make sure that his own financial situation does not interfere with his advice, in other words you have to trust this guy since his “counseling” might be biased by his own bank account.

METAL 

Aside from the music genre (which I love) I consider metal the best out of the three. I will get into real estate investments on PART III, but let me elaborate a little on metal. Have you "seen" gold prices? Please note that there is a huge difference between "seen" and "followed". Everyone knows that it has gotten almost to $2,000 an ounce, these are the people that have "seen" the price lately, price has come up all the way from around $600, imagine if you bought 100 Oz. of gold back in 2007, as people that have "followed" the gold trend did, these guys almost quadrupled their investment over the last 4 years,  those are the people that knew something that the rest didn’t, cashed out their positions in other sectors of the markets and “parked” their cash in thousands of ounces of this precious metal; they did not do it for speculation, they did not certainly do it as a short term fliplike investment, they did it to be safe, to have their precious cash that made them Kings into something that would guarantee their King status, they knew where their safe heaven was until the waters got calmer and it was safe for them to navigate them again. Everyone’s waters by the way are different, what could be calm for one could mean a storm for others, this is based solely on the amount of knowledge that a person may have in a certain a determined area; me, for example, could never trade options because I simply do not understand them well, and that is exactly the approach everyone should have. DO NOT GET INTO SOMETHING YOU DON’T KNOW !

Regarding gold though, there is a BUT as in every other story. 

On the other side of the (golden) coin, you must realize two main things, first you need a lot of capital to buy gold and second it is very volatile so, unless you have unlimited funds don’t get into it because every time gold prices correct, as it has done many times, your blood pressure will rise and your heart beat will make your head spin risking your health over it .

At the time of this post, gold prices are at $1,649.00 per Oz. and if you consider that in Aug/Sep of 2011 was above $1,900 per Oz. then you could calculate the massive loss if someone without the knowledge bought it at a peak, but if you see it from the stand point of someone that bought gold at $1,000 per Oz. he is still coming ahead nicely. The same happened with real estate, and the same happened with the dot coms and the same happened with..... you get the idea! Do you start to grab the concept of “financial education”?- 

                                                      Courtesy of Forex Factory

Now, let’s talk about SILVER for a moment and let me start by saying that it has all the ingredients of being a near perfect investment, and I do not say “totally” perfect (make a note of it)- Silver has many applications in real life; it is bought by the photo industry, many pharmaceutical companies use it, surgical supplies are made thanks to this metal, so there is an actual real application, unless gold, that is used for the sole purpose of manufacturing jewelry and portray that image of power that all of us are addicted to since the beginning of time when in ancient Egypt Pharaohs would wear it even after death. 

Silver prices perform better, it is not such a volatile commodity and the capital needed to buy it is not that big. I personally bought it at $13 per Oz and was forced to sell at $22; it went all the way up to $40 and now is down to $34, if I was still invested in it I would still have made triple my initial capital. The reason why I say that it performs better is just because the “jumps” are not that sharp and it goes up steadily like a goat climbing a mountain, the demand for it is there so it is more likely to keep on performing constantly without any sudden sharp and deep corrections as gold. The only downside of silver is “mobility” and that is why I cannot say that is a totally perfect investment; you will need room to store it and strength to move all that weight if decide to do so, since 1,000 Oz of silver are really heavy, but I consider that a happy problem. 

To conclude this PART II let me tell you a short story about investing and lack of knowledge; I met a guy recently that decided to open a small “WE BUY GOLD” kiosk and the other day he was kind of pale, without him telling me anything I told him “Why don’t you hedge your position?” he looked at me like if I was from Mars,his eyes and the expression on his face staring at me screamed without saying one audible word "WTF is a hedge?" There you have it: Clear example of lack of financial education (Excuse my French by the way) This guy, obviously a nice person, got into this “WE BUY GOLD” business because of the frenzy, the race against time, the fear of not taking advantage of a bubble before it explodes, all of it without possessing the knowledge and he was caught right in the middle of a price correction that obviously has affected him; what will eventually happen is that if this is not indeed a correction of gold prices but rather a reversion of it (bubble burst) this guy will not be in business for long and who knows how deep he’s invested into his venture, that is exactly what is portrayed in the movie “Margin Call” about which I spoke on my very first post and I did that on purpose so I can relate my readers (if I have any) to the idea that I’m trying to render. My new “gold buyer investor” friend is in it over his head, his position is worth more than the current market value of his company and if the gold price moves against him a tiny bit more he risks the total loss of his whole capital invested; how do I know he is over his head in it? He wouldn’t been pale in color when gold prices hit almost $1,500 right around the end of year 2011, that shows that his resources are not unlimited and he does not have a contingency plan such as hedging his position or at least part of it.

So if you got cash, you are indeed king....temporarily! Manage to stay King by studying, reading, researching and don’t worry ....there’s plenty of time to look for the right investment but no time to recoup from a loss- You got cash? Keep it under a mattress until you really know what to do with it !!

Cheers !