by Paul Slaybaugh | May 13, 2010 | Scottsdale Real Estate, This & That
A well-heeled businessman strode into the foyer of a nondescript office building. Tossing a nod over his shoulder at the exiting secretary who held the door for him, he failed to suppress the knowing grin that tugged at the corners of his mouth. A quick appraisal of the surroundings threatened to dampen his buoyant mood, however. The threadbare plaid couch in the waiting area appeared to be a reluctant holdover from his grandparent’s den, circa 1981. Were it not for the well-thumbed magazines littered about the adjoining table, he would not have believed that clients were actually expected to plant their backsides into the hungry springs that surely laid in wait just beneath the sweat-stained fabric. The secretarial desk, vacant now that the evening receptionist had departed, seemed smallish somehow. The faux wood laminate counter tops didn’t mesh with his recollection of level four granite, either. The walls needed a coat of paint. The soothing antique white had faded to a sickly yellow.
How does someone run a business like this, he wondered.
A low, reverential whistle interrupted his silent consternation.
“Well, look at you,” the familiar voice gushed. “I’m still paying for those shoes, you know.”
He felt a twinge of remorse as he looked down at the Italian leather loafers. Whoever heard of tapping a line of credit for footwear? The moment quickly passed. The projection of success was a cornerstone principle to the manifestation of such.
“What price can you put on comfort,” he retorted.
“Sixteen hundred dollars and twenty eight cents.”
“Bah, it’s like walking on clouds. Besides, how can you possibly remember the exact amount?”
“Come on back,” his counterpart responded by way of an invitation.
Settling into the chair opposite the desk in his host’s office, he considered the barren wall to his right.
“Where are the awards?”
“Packed them away last year.”
“Why? I worked my butt off for those.”
“The game has changed, Junior. In case you haven’t looked around lately, people are hurting. Shoot, we’ve done our own share of hurting. Nobody cares about your sales records.”
For the first time, he really studied the face in front of him. The florescent lighting of the private office revealed deep creases that had remained hidden in the shadows of the dank reception area. The urgency in the red-rimmed, greenish-brown eyes was as palpable as the fatigue. There was an unmistakably hard edge to the countenance that seemed at odds with its hound dog expression. He was looking into a face that had seen too much combat.
“You didn’t invite me here to talk about my shoes.”
“You’ve always had a good head underneath that fifty dollar haircut. It’s time you started using it,” came the cryptic reply.
Sensing it was not his turn to speak, he let the silence expand before his counterpart continued.
“For starters, the cars, the vacations, the nights out … you’ve gotta knock all of that stuff off. It’s time you started hanging on to the dough that earned you all of those plaques,” he said, motioning to the empty wall.
“But-”
“No buts. Look around, Chief. This is what’s waiting for you if you don’t get it together.”
He clamped his mouth shut, deciding to let the enigma in faded blue jeans say his piece. The sooner he got out of here, the sooner he’d make it to the range. He didn’t have the slightest idea where the slice in his fairway driver had come from, but he needed to get it ironed out before the charity tournament on Saturday. Children’s Leukemia this time? Diabetes Awareness? He couldn’t remember.
“Moving on,” his appointed conscience interjected. “The real reason I asked you here today is to clear the air about the message you are promoting. Torpedo the kids’ college fund if you like, we’re resilient, but your clients deserve better from you.”
Kids, he thought as he folded his arms and sat back in the chair, bracing for the sanctimonious diatribe that was sure to follow. As in plural?
“Bear with me one second.”
His host pulled a worn, blue notebook out of one of the desk drawers.
“Hey, I’ve been looking for that,” he objected.
“Confiscated for your own good. Our own good. Let’s take a look at what you have been telling consumers, shall we?”
A brief pause accompanied the turning of pages.
“July 7th, 2004. You told Mr. Davis that if he didn’t buy now, he might soon be priced out of the market.”
“I was right! By December, prices in the neighborhood he was looking in had risen an additional ten percent –”
“And now it’s down forty percent. I know you thought you were looking out for his interests, but you only considered the short term prognosis.”
“That’s not possible! Property values never decline in Scottsdale! We’ve been historically undervalued, especially compared to California. We’ve remained stable when other markets have tanked!”
“February 2, 2005. You told Mr. & Mrs. Flemming that the forthcoming bubble was a media myth.”
“Maybe not a myth, but it’s definitely a media creation! If the talking heads wouldn’t go on the news scaring the beejeezus out of buyers every night-”
“Right, Katie Couric created no-qual financing and the subsequent investor-driven spike of artificial demand that led to a massive housing glut and a skittish buyer pool. God help us if Anderson Cooper ever goes on air to tell us about the Easter Bunny.”
“You’re telling me they’re right?”
“You don’t know the half of it,” his colleague responded with chagrin.
“Yeah, yeah, well hindsight being twenty twenty …”
“March 8, 2006. You opined to Mrs. Sanjeve that the market still had some legs.”
“Things have slowed down, sure, but prices are still inching up,” he responded meekly.
“You had to know things were getting ready to go sideways. Prices may have held steady before the coming plummet, but days on market were starting to pile up. Homes that received five offers before the sign even got planted in the front yard were now taking thirty to sixty days to sell. The writing was on the wall, you just couldn’t interpret the black and white truth through those rose-colored glasses of yours. Heck, you nearly got caught holding an investment property yourself.”
“I believe in our market. Scottsdale has always been the apex destination in Arizona. Our values don’t decline. Ever.”
“There’s that pre-bubble thinking again. Watch that reliance on past performance, Champ. Any market that relies on human buyers and sellers is subject to downs as well as up. No more fortune telling, you understand me? From now on, save the tea leaves for the missus’s iced chai lattes.”
“She doesn’t drink chai,” he answered.
“She will.”
“Okay.”
“August 18, 2007. Right before their portfolio took an irreparable beating with the jumbo loan market disintegration, you advised the Echols that they act now before interest rates rise.”
“Wait a minute, 2007? That one’s not on me!”
“Oh, you’re right. My apologies. Forgot which market I plucked you out of. Do me a favor and send in 2007-2008 on your way out, would you? He should be here by now. Looks a lot like you, just a little stressed out.”
He chuckled.
There was a knock at the door.
“That must be us now.”
Instead of the expected visitor, however, a young woman poked her head into the room.
“Okay, your hour’s up. I’m sorry, but I really need the room back now,” she said.
He looked at his younger self and gave an embarrassed shrug of his shoulders before nodding in the direction of the new arrival.
“Tracey here just got her license in the fall.”
A rueful shake of the head accompanied another pause. He glanced down at the neatly packed duffel of personal affects at his feet, wondering for the umpteenth time if the makeshift home office would hold it all. He raised his head and found the eyes of his disbelieving doppelganger.
“Last piece of advice. Spare yourself the martyr act and list some freaking REOs.”
________________________________________________
*PLEASE NOTE NO CAREERS WERE HARMED DURING THE WRITING OF THIS FICTION*
Just stretching my creative legs a bit, people 😉
by Paul Slaybaugh | May 12, 2010 | Scottsdale Real Estate, This & That
Ninety two contentious minutes into a 90 minute contest, the pitch is littered with casualties. Spent forwards, midfielders and fullbacks slogging wearily through stoppage time. Lungs seared from fruitless forays into the opposing half of the field, calves and hamstrings cramping from dehydration, members of both squads looking to the official for mercy.
Stop the game already, their eyes plead. In their weakened states, they are satisfied with a draw. Nil-nil. No glory, but no shame either. Just end this madness and take away the pain.
Not me. I play this game to win. Always. Fighting through elbows and spikes-up challenges all afternoon, I await my chance. That one bounce of the ball that will loose me. A coiled spring, all I need is one step and I’m gone. The jamoke trying to defend me does not have a prayer. Just let the ball squirt free along this right sideline. Just once.
And then it happens.
A poor touch by the center midfielder and the shining sphere of possibility bounces my way. Twenty yards in front of me with no defender in sight, the ball urges speed into my heavy legs. My shadow senses the moment, too. It’s a footrace.
Not feeling the handful of jersey being tugged from behind, ignoring the attempts to ensnare my feet, I rocket past my rival. He might as well be dipped in lead and cast in stone. Are my feet even touching the ground?
By the time I reach my quarry, I’ve built a full head of steam. The sweeper is running headlong towards me, but his is a fool’s errand. Lothar Matteus himself stands no chance at this very moment. A quick juke to the left followed by a step-over to the right, and his legs are agape. A deft touch of the ball through his wickets and I blow past his shoulder to recollect what is mine.
I see the referee out of the corner of my eye, surprised into action. He’s glancing at his watch, but he knows there will be resolution before putting lips to whistle. The linesman is galloping up his sideline in vain attempt to follow the action. Forget it, old boy. You will be a distant spectator to this penultimate play.
It’s just me and the keeper.
Having utterly stonewalled my mates thus far, my foe is formidable. Six foot four and full of muscles.
I choose my angle of attack and approach at 3/4 speed. All the while, competing voices in my head are shouting instructions:
“Deke it past him low and hard! ”
“Wait for him to go into his slide, then lift the ball over him!”
“Blow right past him and dribble the ball into the net!”
“Blast it into the upper 90!”
I ignore them all. I have been here before, and my body knows what to do. Years of practice guide me through the next three seconds. The crowd disappears. The field becomes the neighborhood park where I spent the weekends of my youth. I see the orange cones staggered over the next ten yards and navigate them flawlessly. Drawing my right leg back powerfully, I don’t even look at the hard-charging goalie.
BOOM.
All of my remaining energy and force are transferred into the ball. I know I’ve caught it well because I don’t feel a thing as I strike through it. Utterly drained and yielding to momentum, I fall forward with the shot. I hear the shrill hiss as the ball charts a path to destiny. Lifting my face from the ground to track its flight, I see it just nick the goalkeper’s outstretched fingertip. Enough to alter its path? Hard to say.
And so I watch. And I wait.
by Paul Slaybaugh | May 10, 2010 | Scottsdale Real Estate, This & That
Real Estate Investor.
The phrase alone inspires a host of reactions that run the full gamut between antipathy and, well, slightly lesser antipathy, depending on the audience.
As any semi-interested news watcher and industry blog reader can attest, the Real Estate investor is the greatest scourge to befall our fragile ecosystem since polybutylene plumbing. What, with the housing supply lines ill-equipped to handle the artificial demand, our flimsy pipes swell and burst when the pump and dump investment surge strikes a hapless market. Aside from the banks who flooded Wall Street with dubious mortgage backed securities that were chopped and reconstituted in more numerous and indiscernible ways than Joan Rivers’ alleged face, the fount of no-money-down investors is the most vocally derided catalyst of the Great Real Estate Bubble of 2005 ©.
Well, guess what? The investor is back … and that’s a good thing.
Hold your rotten tomatoes and easy with the pitchforks, if you will. How can I possibly opine that the reemergence of the buyer subset that sent values through the roof, only to crash them through the basement when they left a valley of foreclosed “investments” in their wake is a good thing? Is the demand any less artificial now than it was when the previous incarnation of ne’er do wells spiked our collective punchbowl?
In a word, yes.
The 2010 investor is not the fly-by-night operator who purchased the nearest home for sale at the conclusion of a four hour seminar on how to get rich in Real Estate investing with no money down. Shoot, who needed money down when you barely needed a pulse and a job to buy a house back then? No, today’s investor, by and large, is showing up at trustee sales and plunking down cash on a barrel. He has the skin in the game that his counterpart of yesteryear did not. He is investing in a very real sense of the word.
In addition to securing an interest in the property with his own bankroll (thus making the prospects of simply walking away from a property that doesn’t return as hoped less palatable), the other crucial dynamic at play is the return of sanity to the overall investment arena. When investors were driving Scottsdale and Phoenix property values into the stratosphere back in 2005, there was little regard to the initial purchase price. Our entire market temporarily forgot that you make your money on the purchase. Buy a property right, and the return will be there when it’s time to sell. In the throes of insanity, investors were climbing over themselves and each other to purchase property, any property, for 50k over whatever ludicrous price was being sought by an apoplectic seller. Investors were betting on the come. Pay whatever now, and the joint will be worth 100k more in two months whether a hammer is ever swung in renovation or not. With the year long fervor, they got away with it … for awhile.
Today’s investor is not settling for just any property he can get his hands on, but is showing up at the courthouse and robbing the bank blind. Paying pennies on the dollar and rehabbing a previously dismantled home, his margin is large enough to bring the distressed apple of his eye to market at a price actually supported by recent sales comps.
The coup de grace? Today’s investor fills a need that the banks won’t. He is essentially financing the fix-up costs that many banks have abandoned in self-defense. Against a backdrop of tight lending purse strings, consider the difficulty many people have just in coming up with 3.5% or 20% down payments, let alone remodeling capital. With home equity lines all but vanished from the marketplace, that stripped bank-owned home bargain isn’t all that realistic for the buyer who doesn’t have the available cash to put it back together, regardless of how appealing the price tag. When you could tap a line of credit to finance improvements, it wasn’t that big of a deal to throw in some new carpet, counter tops and appliances after closing. Now, you have few options other than reaching into your own pockets. Thus, there is a sizable buyer pool for a move-in ready home. The well heeled investor who assumes the risk and fills that need is not to be derided.
Take the mom & pop homeowners who are unable to price their homes competitively due to high loan balances, mix with the interminable wait of short sales, fold in the distressed condition of much of the bank-owned inventory and bake at four hundred degrees to create a casserole of supreme frustration for many disenchanted home shoppers. A rehabbed home at an affordable price, if not the outright theft that was envisioned at the outset of their house hunt, begins to look more and more appealing to many buyers after getting an up close look at what the reputed bargains actually look like live and in color. In essence, by purchasing a property from an investor, a buyer has found an end-around to financing renovation costs.
If your last nickel is earmarked for your down payment, and you can purchase a renovated home at a fair market value that you can afford, don’t begrudge the man his margin. While the stereotype of the lecherous vulture remains, we would be remiss not to acknowledge the good he can, and does, bring to a market like ours.
Investors: they’re not just for nuclear Real Estate holocausts anymore.
by Paul Slaybaugh | May 2, 2010 | This & That
Ever throw rocks at the ice cream man when you were a kid?
I did.
I have absolutely no idea why either. Were we bored? Most likely. Did we suspect him of secretly poisoning the chocolate milkshakes? Absolutely. Of course, we also had it on good authority that the house at the end of the street was haunted, and that the Fairfields were running some form of illicit enterprise or another from their darkened living room. The exact nature of what transpired behind those drawn curtains was a source of great debate, but the more outrageous the speculation, the more weight it held. Bullies like Mike Fairfield, with their predatory eyes and facial spasms, didn’t just create themselves. Our block was rife with the ready intrigue and danger demanded by the collective imagination of ten year old boys.
So it was one day that we decided it would be a good idea to hide behind the wall of the Carlson’s house and heave handfuls of gravel at the little white truck that played the Siren song of a modern day pied piper as it slowly made its way down North 80th Place. What made this the day for the insurrection that had been welling ever since our parents started fretting about the dangers of tampered Halloween candy (and effectively spawning yet another ghost for us to chase)? I honestly can’t say, other than we thought it would be funny.
And it was funny. RAT-A-TAT-TAT!!!
The sounds of impact. Music to a young boy’s ears.
We laughed about it for 3 days straight. Then we laughed about it some more. Oh, if we could only have seen the ice cream man’s face when that granite avalanche came crashing down on his truck!
Eventually, we stopped laughing. The ice cream man didn’t come back the next week. Or the week after that. In fact,the ice cream man never came back. Flash forward a quarter of a century. My parents still live in that house on North 80th Place. As McCormick Ranch has always been a haven for families, there is no shortage of kids in the neighborhood. A new generation of receptive customers. And still … no ice cream man.
I can’t help but wonder if my friends and I didn’t mess things up years ago for these kids today. Is it possible that the ice cream man is simply fading into the sepia tones of yesteryear through no fault of our own? Sure. But is it also possible that the ice cream man is visiting other neighborhoods at this very instant – auspiciously avoiding the forever blacklisted site of the fated ambush? Yes.
The temptation to yield to instant gratification is very real for us all. Our actions far outlast the immediate consequences, however. Those who would operate in the margins of ethical behavior to expedite the task at hand fail to account for the lasting repercussions that such short-sided tactics promise. Ever slander a competitor? Exploit confidential or inappropriately obtained information for leverage? How about trying to separate a colleague from a few dollars worth of commission or an established client? It’s self-defeating. Regardless of the immediate outcome, debasing oneself in such a manner is guaranteed to set off a chain of events that may not be fully realized for years to come. Reputations and livelihoods are at stake, and not just our own. Often, our actions prove detrimental to those we will never even meet.
So when you reach one of those forks in the road, take a moment to think, lest you forfeit your spoon.
And don’t throw rocks at the ice cream man.
