Karen
Lee Bertiger
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A SOMETIMES IRREVERENT PERSPECTIVE ON SELECTED REAL ESTATE ISSUES AND DAILY
LIVING
November 13, 2006
A warning to attorneys who deal with people such as myself. You all seem to
think you can do no wrong & that computers & word processing programs are
fool-proof. I cannot count the number of times I have corrected attorneys'
prepared documents, they'll make that correction, & then re-submit another
document with that correction, but put back in the previous inaccuracy --
they'll do it right in front of you if you are in their offices. It is
unconscionable to have to sit in an attorney's office for hours on end proofing
and re-proofing the documents that were supposed to have been prepared for a
closing. (I have several files where attorneys have created a pile of crap 3
feet high -- apparently for billing purposes. Be careful about padding those
bills, too. It will come back to get you one day.) A wise client will not allow
an attorney to take back a document that had to be corrected without marking it
up with a pen (I now think that even that isn't enough - clients in closings
need to take photos of their markups of documents they previously corrected to
prevent incompetent or crooked attorneys from re-attaching that page you
corrected to your signature page) -- or just take the marked-up corrected
document with you - DO NOT LET the attorney take it back to reinsert it
somewhere in a document that will be filed with a public entity, which creates
mistakes on public records, & can have disastrous effects for those actually
signing the documents. This is one of the most disgusting legal practices I have
witnessed over more than two decades. In fact my personal advice now is to take
all of the documents home with you, proof them more than once, no matter how
long it takes, leave a copy at home or in another safe place to prove what you
were signing & then go in to sign what should be the final versions. The next
attorney who pulls this kind of stunt on me or any of my clients is going to
have hell to pay. I don't care who you think you are. A great number of you
belong in jail for operating a criminal enterprise.
November 2, 2006
As owner of the "Tiger's Pause" sport-fishing yacht, it's always fun to see
who's pausing. You'll certainly remember Tiger Woods' famous shot on the links
(my yacht was named long before Tiger's shot), the Federal Reserve's pauses in
interest rates, etc. Some really great books have also been written with
chapters on pauses; i.e., The Seven Habits of Highly Effective People (the pause
that refreshes.) Here's a
great link to a Jim Rohn article on pauses and why they are so important in
sales -- so many times while listening to a moderator or engaging in a question
& answer session, I have been interrupted by other salespeople in my industry
who mistakenly assume that a pause must mean that you do not know the answer to
a specific question -- and thereby try to make the "pauser" appear as not
knowing what they are doing. If only they understood that they are demonstrating
a true lack of sales professionalism by injecting themselves into the middle of
such an exchange. Part of being a true professional, particularly in investment
real estate, is making sure that you are truly listening.......
Proposed billboard ads along I-95 & the Florida Turnpike for my hometown
community: Huge photo of alligator, wearing a harness (like K-9 officer)
complete with official police badge, warning stupid criminals that if they
decide to stop by the side of the highway in our city/county, to commit criminal
acts close to the woods offroad, that our guard gators will be there to greet
them (there are swampy areas immediately offroad and we have more than a million
alligators in Florida.) Ahhhh .... all those stupid city criminals might think
twice. Critter cams, anyone?
Speaking of critters, we have woodpeckers at our summer home who can't seem
to understand they should be pecking holes in the trees, not my house. Well, you
can't just go out & harass them -- some of them are on the endangered or
threatened species list, so you have to first determine what kind of woodpecker
it is, then determine if it's on either species list & then figure out what to
do about it. I've always lived around a multitude of critters that city slickers
would find a little scary, but they really are quite a bit of fun to observe. In
Arizona, some of the critters on our property included mountain lions, bobcats,
mule deer, havelina, gila monsters, diamondback rattlesnakes, bats (they
pollinate saguaro flowers), coyotes (the animals), red-tailed hawks, owls,
tarantulas, pack rats, lizards, desert honeybees, etc. Here in Florida, we have
an alligator, lots of birds including bald eagles, rattlesnakes, Florida
panthers, water moccasins, sharks, stingrays, swordfish, marlin, etc. -- what a
28 year Arizona former resident calls "tame." We have lots of critter stories.
that are quite funny.
October 8, 2006
Last year (2005) the US Census Bureau reported that about 1,100 people per
day moved into Florida. We created more jobs and lower unemployment rates than
most, if not all of the rest of the US. If that rate were to continue, Florida
would surpass New York to become the 3rd most populated state behind California
and Texas. Florida also had more than 80,000,000 tourist visits according to the
state. Yeah, you read that number correctly. Everyone is complaining that it's
too expensive to live here for the average worker. My advice is that that if you
have a good job offer in Florida (and we have lots of jobs that are going
unfilled) but the salary isn't what you need to purchase a property, first try
to negotiate a higher salary as opposed to more benefits and then rent a condo
or house from an investor (many are quite negotiable now) near your new job. Then purchase a more affordable property in another area of Florida to
fulfill your residency -- if your job doesn't require your principal residence to
be in the county where you work -- we have no state income tax or capital gains
tax. You would only have to commute twice a week during your work week, which
also saves on your transportation costs. There are many ways to get that great
job, beat down the cost of living, and still enjoy the beaches and outdoors
attractions here. Run the numbers yourself after a little creative daydreaming
and if you have questions call a Realtor. Many residential Realtors are waiting
to help you, and have the time to give you more personal attention these days.
Sorry New Yorkers, but this arrangement might even work for those wishing to
live the Palm Beach lifestyle in reverse, which might even help an airline or
two (if you can't afford a home in NY or California, we still look pretty darn good
.)
Now that the US Supreme Court has started its new term, I'm wondering what
will happen during this session. Personally, I will miss reading Chief Justice
Rehnquist's (deceased) opinions, as well as former Justice Sandra Day O'Connor's
opinions. Justice O'Connor said it best (my opinion), in last year's
landmark private property rights case, Kelo v. New London, CT, "Any property
may now be taken for the benefit of another private party, but the fallout from
this decision will not be random. The beneficiaries are likely to be those
citizens with disproportionate influence and power in the political process,
including large corporations and development firms." This could turn out to
be the most prophetic comment ever (in my memory concerning the real estate
markets in local communities.) Consolidation in the financial
industries, the possibilities of widespread failures in commercial banks (from
holding subprime debts-CMBS), inadequate enforcement of banking and
securities laws, and lax oversight of hedge funds would leave too many
opportunities for those same players to go into business or collusion with large
development firms to rob individuals of their properties. This is one of the
reasons that the National Association of Realtors has fought the entry of
commercial banks into the real estate brokerage and development businesses.
Guess who not only loses their property, but then has to pay to bail out
these same goliath players -- the homeowners and taxpayers. Talk about a recipe
for destruction.
September 30, 2006
If you haven't been in the real estate investment business you may not
realize that when someone like me is asked the question, "How do you determine
which properties you'll consider purchasing?" I'll usually say " I CFAT"
(pronounced I See Fat) which is how I classify property for further examination
based on my investor's Cash Flow After Taxes. Some people probably think I'm
chubby, but that's their problem. It's also a quick way for me to determine if
I'm working with an investor who actually knows what they're doing or is quickly
teachable. You wanna-be a real estate investor? You have to know the real lingo.
PIGs are not police officers (have some respect, people), pork bellies traded on
the futures exchanges, Harley-Davidson Hogs (well maybe a dealership property),
or farm animals (unless you are in the farm business) -- PIGs in the real estate
investment business are Passive Income Generators. Therefore, certain friends
should not take offense if I start talking about PIGs. Certainly I can see how
one could make an insult out of misunderstanding a little real estate investment
humor - ICFAT PIGs.
Of course, if you are investing within a retirement plan, you want to focus on
your NOI (net operating income) with as much uncertainty removed via due
diligence as possible (easier said than done these days.) It's all about calculated risks
these days. So many speculators and beginning investors were being urged to
utilize highly advanced real estate investment techniques involving leverage
without any true knowledge of what they were doing. I'd be willing to bet that
many real estate speculators couldn't tell me whether they had positive, neutral
or negative leverage. The blank looks are truly informative. They also probably
can't tell me if they know how to get an interest free loan . . . via tax
deferral. The newbies are going to reinvent the wheel and learn the hard way I
guess.
I also like to contemplate the answers I get when I ask the question, "What's
your investment objective and time horizon?" It's better than contemplating a
"Fuzzy Navel" floating around the ocean. The way people make decisions is
fascinating. Particularly in the male part of the species. It's difficult enough
to deal with hot flashes, both hormonal and intellectual without dealing with
male mid-life crises (and the hole-in-the-wall-et syndrome that causes.)
Sometimes it takes years to bring someone full circle around to what you
originally told them (male or female.) Decades are dragging guys and gals. The
60s and 70s are gone. So are the 80s and 90s. And now we're on the downside of
the first decade of the new millenium. The laws, infrastructure and financial
businesses all need new paradigms or you are all gonna be left in the dust by
those who are willing to accept the present for what it is and get on with the
business of life.
September 19, 2006
In looking at residential single family listings on the market these days it
certainly appears to me that many of these listings aren't even going to make
the first cut list for showing by salespeople. Some of the decor in photos
submitted to the MLSs is SOOOOOOO bad (just my opinion) that photos do not do a
property justice because the decorating just turns people off. Then again, after
being in the real estate business for more than 23 1/2 years, I've literally
seen just about everything (particularly when dealing with foreclosure
properties.) It truly amazes me that some of the home builders have been able to
sell any homes because many of the production builders' homes that are now
listed on the MLSs have such obvious architectural flaws. Well, I think karma
has caught up to them. Practically every home in recently fast growing areas in
the Arizona Regional Multiple Listing Service's database show nothing but garage
doors! It's a good thing they made all that money off anybody willing to buy
such atrocities, but it turns me off. My number one marketing word of wisdom is
to stop that practice. It can't possibly be that much more expensive to make
side entry garages -- oops, that would be cutting into their profits too much.
In my own opinion, most of the production builders need to do a much better job
of building product the market needs and not just what they can shove onto
homebuyers. Of course maybe it really doesn't matter since many of these people
have horrid taste in furnishings anyway! If you are a seller, I'd advise against
putting a home like that on any virtual tour. What you really need is a miracle
or a really low sales price to get anybody through the door.
September 9, 2006
Under the category of "Did You Know?" Tidbits
98 million barrels of oil are projected to be used per day by 2010 (up 22% from
2003.)
40% of commercial property is comprised of small scale scattered development in
13 major metro areas and
I would estimate that a good portion is in Florida and
currently facing insurance issues if the building
improvements are not hardened against hurricane force winds.
Most of those types of properties would
certainly benefit from retrofitting and/or if heavily
damaged during the last two years of hurricanes, razed
and rebuilt.
The Energy Policy Act of 2005 gives commercial property owners tax deductions
for improvements increasing
energy efficiency which are made during 2006 and 2007 of
up to $1.80 psf.
Smart, green buildings, both commercial-investment and residential may cost
slightly more, but those initial
costs are depreciable, and you'll accrue operational savings
in energy expenses, utilities, maintenance and
insurance (which is money out the door) to make it beneficial
for potential tenants to seek out your
buildings instead of your competitors' because your CAM
charges will be lower and your potential tenants' operational
costs will be lower in most instances (depending on the
business.)
The top five (5) national commercial-investment real estate brokerages account for
only 15% of all transactions
and approximately 70% of all commercial-investment
transactions are for $1.5million or less. A good reason
to call someone like me.
August 1, 2006
Lenders just can't stop trying to pick your pockets these days -- which
unfortunately for the uninformed can be quite expensive -- here's an example:
The lender's pitch is that you will be better off if you have a LOW rate fixed
first mortgage loan and an interest only HELOC (home equity line of credit) to
refinance them both into a fixed rate mortgage at today's average rate of 6.75%.
Sounds good to a homeowner who may have seen their interest only payments rise
on their HELOC. However, PLEASE consider that once you refinance your LOWER
fixed rate first loan as well as your HELOC into a new fixed rate loan, you will
be paying points and fees, have stretched out your payments to 30 years, out of
which the first 15 years your payment is predominantly interest anyway and
practically nothing towards your principal, which actually leaves you in worse
financial condition from a net worth standpoint -- but of course the lenders
don't care about that -- only you can control those things that you have choices
about -- do not let a lender lead you astray from having a more secure financial
future. Here's a suggestion -- just pay a little more each month towards
principal on your existing low rate first mortgage to help build your equity
position in your property without paying points and other fees associated with
originating a new mortgage.
July 31, 2006
Been here before - STILL trying to get repairs made to hurricane damaged
property. The minute I leave for another area is the exact time one of the
contractors will inevitably call to make an appointment - and then will not show
up! Makes one wish for the old Star Trek 'beam me up" ability to get from one
place to another in one piece. That would certainly solve many of my problems --
such as how to be in various places to actually get things done.
Sometimes the mind operates at warp speed and the body just won't follow....
Our real estate market in Arizona started to change as soon as the Arizona
Association of Realtors changed its standard residential purchase contract forms
-- coincidence or correlated?
July 10, 2006
Can you believe it? Some "financier" in NYC just originated a $200 million
loan for a "dockominium" developer. Yet again, there's another example of a
financing where the underlying industry is completely misunderstood by the
lender. As a yacht owner, I tend to agree with Frank Herhold, executive director
of the Marine Industries Association of South Florida when he says that he
doesn't think owners will pay $125,000-600,000 for a dockominium. Just on a cash
flow basis alone, I could pay rent at an upscale marina for a number of years
with less out of pocket cash flow and risk. Considering the price of diesel fuel
these days, unless you are building dockominiums for 100' + yachts which usually
require a full time captain and crew, which don't come cheaply these days
either, not to mention deep enough water to actually dock such yachts, in my
humble opinion they are dreaming when they say they'll be selling docks
beginning at $125,000. That works out to more than 10 1/2 years of dock fees for
me. I'd rather buy an income property interest for that kind of money! But
that's just my opinion. But if you're interested in bringing a true economic
development to my part of Florida, give me a call - whether you enjoy sport
fishing/yachting or golf!
July 6, 2006
A wonderful "Continental Breakfast" - the best part is a Florida Indian
River red grapefruit or juice.
June 17, 2006
I HAVE HAD ENOUGH OF THIS SLANDER & LIBEL AGAINST OUR SPECIAL FORCES &
MARINES!!!!!
A quick suggestion to the NY Times regarding sliming our special forces and
marines in the national press -- stop it. Why don't you compare the so-called
"too-harsh" tactics to what the homeless veterans in your area put up with on
the street every winter. For heaven's sake -- I have been through worse times
and suffered through worse situations than what you describe. In fact, in case
you are completely freaking clueless our troops and special forces generally put
up with worse conditions than those stated when they are on patrol. They are
subjected to the same or worse conditions as those they detain in the field --
or did you expect that there are sandwich shops & coffee bars where our special
forces operate every day!!!!
June 16, 2006
In 2005, the National Association of Realtors reported that second home
purchases accounted for 39.9% of sales and
27.7% were for investment, 12.2% were for vacation homes.
Florida attracted more new residents than any other state for the period
2000-2004 - 190,894!!!
Seven Florida counties also appeared on the Census Bureau's list of top 25 -
Palm Beach County was on the list.
New Florida legislation signed into law on April 16, 2006 repeals joint and
several liability (deep pockets) in the state. This is great news for small
business owners. Eminent domain legislation has also been passed to further
protect private property.
Mom's Bragging Rights -
My kids were recently chosen as 2 of the "30 Under 30" Realtors featured in
Realtor Magazine. If you are interested in Arizona residential property you may
want to visit their website at
www.therealestatetwins.com
March 9, 2006
Lenders and insurance companies are high on the list of most-hated in many a
hurricane ravaged homeowner's mind these days - and in the process they are
harming their own industries. Take for example a homeowner who is attempting to
get their hurricane damaged home repaired (prevent further damage.) The lenders
won't release the insurance company checks in a timely manner to allow a
homeowner to expeditiously complete repairs to their properties (lenders are
listed as "additional insureds on homeowners' insurance policies and therefore
must sign the insurance checks.) Talk about a self-defeating business practice.
They deserve every further loss they cause each other.
January 23, 2006
Real estate development & marketing, as well as general product advertising
& marketing seem to be dominated by men these days. Here are some words to the
wise:
Your project may not be a success if you ignore a female perspective.
Countless times I have reviewed properties and turned them down for investment
due to fatal flaws in their design from my female perspective; i.e. a spec home
built in Arizona with the kitchen island and appliances facing into the blazing
summer sunset....a woman preparing dinner doesn't necessarily wish to cut off
her multi-million view while she's preparing dinner either inside or out.
On the product side, Clorox makes great products. However, if you are going
to market a toilet cleaning system as a "wand," in my opinion I want the
cleaning fairy that should accompany the "wand." When you guys can
deliver that, you'll have your product development and marketing perfected.