News Alerts. Nov. 6, 2013. Afternoon Edition. #RealEstate

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  1. Two Charged in Campbell Real Estate Scam | NBC Bay Area

    The Santa Clara County District Attorney's Office has charged two people with running a real estate scam in Campbell and two alleged victims have filed a $100 million federal civil racketeering suit against them.

    Terrance Brown and Antranik Kabajouzian are charged with grand theft and securities fraud in an alleged scheme that bilked 25 victims out of $3.5 million, Deputy District Attorney Katharina Wells said.

    We can't determine guilt or innocence here based upon a mere news report, but we can say that this story is a reminder to do due diligence before turning over money, especially in such quantities.

    Where were the insurance policies? Where is the surety bond? Where were the audited financials? Where were the existing customers with glowing reports and no important negatives going unaddressed? With that much money on the line, why not have taken a weekend plane trip to Detroit to verify the properties and tenants? The list goes on.

    Source … http://www.nbcbayarea.com/news/local/Two -Charged-in-Campbell-Real-Estate-Scam-23 0309711.html


  2. Getting Aggressive

    Andrew Watt writes:

    Unemployment in the euro area continues to rise. On today's figures (which are seasonally adjusted) another 60,000 wasted lives and wasted opportunities for wealth creation in the euro area in September, compared with the previous month, and one million more than a year ago.

    Meanwhile inflation has fallen again, to a paltry 0.7%! Core inflation (stripping out energy, food and tobacco) is almost as low (0.8%).

    I know of no economic theory or textbook that would call on macropolicy to sit on its hands faced with such trends. Meanwhile the US FED continues to buy USD 85 bn of longer-term bonds every month. The Bank of Japan has today reiterated a commitment to buy USD 74 bn of bonds every month until the end of 2014. Linked to all this, and given the passivity of the European Central Bank, the euro goes from strength to strength, which might sound good but is draining the life out of the Euro Area recovery.

    The euro dropped recently relative to the US dollar on positive US economic news; but in our view, Andrew Watt is certainly correct long-term.

    Source … http://socialeurope.staging.wpengine.com  /2013/10/getting-aggressive/


  3. The Taylor Rule: Ignore Fraud Epidemics and Worship Markets | New Economic Perspectives

    You can feel William K. Black's anger at everyone with sway or in a position of power and authority who is turning a blind eye to the fraud perpetrated in the lead-up to the Great Recession.

    An epidemiologist would have been particularly interested in the non-crisis in this era. This was the 1990-1991 surge in lending that we now call liar's loans that we drove out of the S&L industry. Recall Akerlof and Romer's warnings about loans made without underwriting being strong evidence of accounting control fraud.

    Given the dominant role of accounting control fraud in the S&L debacle, the 1990-1991 genesis of liar's loans, and the Enron-era scandals an epidemiologist would have known where to start looking if she were asked to study this crisis. She would have begun by looking for evidence of accounting control fraud.

    Economists act like epidemiologists [who] would act in response to an epidemic [as] if epidemiologists were members of a religion that had a taboo about discussing or studying disease and believed that the body self-corrects if left alone by physicians. Epidemiologists who believed that epidemics do not and cannot exist would never look for the presence of bacteria or viruses, never look for pathogenic environments, and never study the autopsy results. What would we call an epidemiologist who did not believe that epidemics can exist, did not study what made environments pathogenic, did not study bacteria or viruses, and did not study autopsy results? We could call them a theoclassical economist. They would, implicitly, ignore fraud. They would propose anti-regulatory policies that were intensely criminogenic. [emphasis added]

    Similarly, what would we call an engineer who designed homes that had an average life expectancy of three years before they collapsed and caused enormous losses? I'd call them a "financial engineer." Bad economists are very good at appropriating these favorable professional labels to try to pretend to science. Anyone familiar with how a real engineer is trained and their professional ethos of safety and care for protecting others from injury knows that Wall Street "financial engineers" are the opposite of real engineers. Wall Street "financial engineers" are selected on the basis of their ethos of making themselves wealthy at the expense of their clients and then mocking the clients when they suffer losses. Financial engineers view customers as sheep to be sheared (the actual Wall Street verb for what should be done to customers are too vulgar for publication).

    Only a theoclassical economist like John Taylor would proclaim, without ever studying or discussing the three most destructive fraud epidemics in world history, would issue a dogmatic statement, that this is the first virgin crisis, conceived without sin [in] the corporate "C" suites.

    Source … http://neweconomicperspectives.org/2013/ 11/taylor-rule-ignore-fraud-epidemics-wo rship-markets.html


  4. MF Vacancy Lowest in 7 Years – Daily News Article – GlobeSt.com

    PHOENIX-Area commercial real estate metrics continue pointing to solid improvement. The latest report, Collier International/Phoenix's Multifamily Research & Forecast Report for Q3 2013, shows vacancy at 7.4%., a decline from the 8.2% reported a year ago.

    Source … http://www.globest.com/news/12_726/phoen ix/multifamily/MF-Vacancy-Lowest-in-7-Ye ars-339282.html


  5. How to qualify retail shopping center tenants?

    Bradley T. Balbo writes:

    These 10 Key Questions Will Help You Determine:

    Do you have the right tenant for the property?

    Will the tenant be successful for the duration of the lease?

    How can I expedite the process and get to the salient facts?

    1. What specifically are you looking for in a retail property?

    2. What is the USE?

    3. Why are you looking for space?

    4. Do you have any special requirements for the space?

    5. If relocating, what specifically is the reason for moving?

    6. How long of a lease term do you want to sign?

    7. What is your rental budget?

    8. What is your timing?

    9. How will the operation be financed?

    10. How did you come to us?

    The article contains excellent details concerning each question. They are also useful questions for the tenant to think about before he or she begins looking. Something very important that is missing though is in-place or planned insurance coverage. Why wait only to find out that obtaining all-important insurance hasn't been adequately factored into the financial plan? Inadequately covered tenants make for greater risk all the way around.

    Source … http://blog.thebrokerlist.com/leasing-fu ndamentals-pt-ii-qualifying-retail-tenan ts/


  6. Guess who's getting rich at the real estate seminar – The Washington Post

    Good advice from Harvey S. Jacobs:

    … before you invest in real estate, you should educate yourself on the local laws, practices, customs, ethics and market conditions. It also does not hurt to learn a bit about construction costs, building codes and materials, how mortgages work and how the local sales and/or rental market is performing. It is also an excellent idea to locate a local mentor who will allow you to observe how things are done in the area and who is willing to take some time to answer the never-stupid questions you may have about how a real estate investment deal actually gets done.

    … you should attend local events. There are local real estate investor associations run by folks who have done and are doing local real estate deals and who are willing to share their expertise and resources. Many libraries have excellent real estate resources available for free.

    Your local bookstore has literally a dozen books on the many legitimate strategies for making money in real estate. …

    Most community colleges have classes on real estate investing, real estate brokerage, home renovation and the like. Stores like Home Depot and Lowe's offer free weekend classes on renovation projects.

    Source … http://www.washingtonpost.com/realestate  /guess-whos-getting-rich-at-the-real-es tate-seminar/2013/10/30/6e531d50-3cf5-11 e3-a94f-b58017bfee6c_story.html


  7. Home prices accelerate in Chinese cities | South China Morning Post

    Chinese home prices rose faster in October than the month before on strong demand and the launch of new housing projects, an independent survey showed Friday.

    They haven't been able to cool the overheated market. It's only been getting hotter.

    Can China grow itself such that all the vacant properties become occupied by people who can afford them without a huge Chinese recession or even depression?

    Source … http://www.scmp.com/business/economy/art icle/1345214/home-prices-accelerate-chin ese-cities


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