Hiatus

Wow!

These past couple of weeks have really been a whirlwind for me. I just spent the last couple of weeks in San Diego on a business opportunity. It was a great learning experience and the contacts that I made will surely be helpful along the way.

For those of you who have never been to California, you're really missing out. The scenic views, the culture, the people; they are all much different from the east coast. Not a bad different, just... Well... Different. I thoroughly enjoyed my time there and hope to get back there as soon as possible.

In the mean time, I have neglected keeping up with my blog. Not a good look on my part. My apologies. I'll be back at it this week with a new post and will try to catch up on my tweeting as well.

Stay tuned!

Criminal Minds

Like I said before, I love satirical comic strips and Dilbert is definitely a classic. They can sum up a situation much better (and funnier) than most blogs, articles or news segments. While there is plenty of comedic value in the fact that someone would invest money with Dogbert, its really no different than what is going on in the real world.

During the recent real estate boom, many people were throwing money at any & everyone who could promise huge returns on their investments. Many of these investors did so without doing any kind of background check or asking for references. In essence, this is no better than giving the money to Dogbert. Needless to say, these investors were taken by the myriad of ponzi schemes that were out there.

One recent case stands out was that of Antoinette Hodgson. She defrauded over 20 investors for over $45 million in New Jersey. Of that $45 million, only $6 million was used for residential real estate. Why would these well-endowed citizens be willing to fork over millions of dollars over to Hodgson? The simple answer is because during the peak of the housing bubble, it seemed as if this would be a cash cow forever. But once the bubble burst, it left embarrassing remnants on many of these investors faces.

Hopefully, lawmakers, impose tougher penalties on these types of crimes. These penalties would definitely help to deter these scammers from defrauding others (or at least have to work a little harder for it). Just as fast as these lawmakers were to drop the hammer on mortgage fraud, they need to have just as much zeal protecting people caught up in these scams.

On the other hand, it is up to the investors to do their due diligence when it comes to any opportunity that may come across their table. Even though the general population is much more tight fisted with money, that will not stop fraudulent schemes from being created. As time goes on, more cases similar to that of Hodgson's will come out. If jail time doesn't scare away the scammers, the press releases of the wealthy being "taken" by Dogberts will definitely scare investors into doing their homework before opening their check books.

Update on Growing a Shrinking City

Not to beat a twice dead horse, but I found a great follow up to my blog posting last week about the plans for Detroit and the vacant space. There’s an initiative going on to encourage the citizens to be proactive in the rebuilding of the city called the Detroit Works Project. The first of five community forums was held last night and from what blogger Desiree Cooper described, it may not be as easy to incorporate some of these ideas into the population.

At the helm were the City’s Deputy Director of the Planning and Development Department Marja Winters and nationally renowned urban planner Toni L. Griffin. They greeted the crowd, then urged the massive gathering  to divide into break-out sessions to discuss one of four topics: Innovating our Neighborhoods for the 21^st Century, Creating a City that Works, Connecting Detroit & the Great Lakes Region, or Growing a Thriving Economy for the 21^st Century.

An angry tide washed over the crowd. “You mean the mayor isn’t going to speak?” people balked. “We need to know what the Mayor’s vision is first, then we can help!” objected Wanda Hill. “It’s disrespectful that he’s not here.”

The staff tried to quell the dissention, assuring everyone that the mayor would be visiting each of the breakout groups to listen to citizen feedback. But people didn’t believe them. “He’s not coming here,” the man next to me mumbled.

I have been in Detroit for more than a quarter century, but I hadn’t realized how deeply the learned helplessness had soaked to the bone.  There was a time when top-down planning would have caused an uproar in Detroit. Not anymore. It’s time for us to decide what our city should look like and how we can get there, and all we can do is fling ourselves against the walls of a very small box. Maybe Detroiters have lived so long with so little hope, that blue-sky thinking has become impossible.

While I think this is a more of a hyperbolized view (I'm sure that a good portion of people there were interested in getting information as well as giving suggestions), I hope this isn't a sign of things to come. The post goes on to say that the mayor did show up and that the sessions did began to have some progressive dialogue. However, they were cut short again by the mayor. Hopefully, the next forums are more organized and give more of a system of how the citizens can guide the vision of Detroit.

With the Detroit Metro area still being one of the largest in the nation, I'm positive that many of the progressive thinkers will step up to the plate.

Growing A Shrinking City

With dwindling commercial & retail businesses being paired with a lack of population, there are now huge vacant pockets in the city of Detroit. Being a leader means making unpopular decisions some times. Mayor Dave Bing had to do just that when he made the choice to tear down vacant residential and commercial structures. Turning what were once bountiful urban communities into flatland. This would effectively stop the urban sprawl and make better and more efficient use of the current infrastructure. By not having to service these areas, it will allow for some relief of the stressed city budget. While this could actually be a great idea for the city, what is the plan for this land? Will they simply be replacing horrible eyesores for more tolerable ones? Let’s take a look at a few ideas that are being tossed around.

Urban farming seems to be the front runner among the ideas being considered. Ground has already broken on a downtown farm plot sponsored by MGM Grand and Greening. John Hantz has created a farming company that wants to do business in the city on a huge scale also. With promises of “green” jobs and a new industry to the area, this definitely could be promising. Critics like Patrick Crouch of Earthworks Urban Farm believe that smaller plots are a better idea to fit the immediate surrounding community as oppose to the large scale plans that people like Hantz has. Crouch believes that the commercial plans are "a substitute for community redevelopment instead of being a catalyst for community redevelopment."

City parks are another idea for the currently unused land. Using the land for recreational space would be an ideal use as well. The city has about 9 square miles of park space already. Letting many of the open plots of land return to nature would be much more cost effective then redeveloping it for residential use.

In the fall of 2008, the American Institute of Architects held a session to brainstorm solutions to the spacing/planning issues plaguing Detroit. Alan Mallach, research director of the National Housing Institute in Maplewood, NJ, led the session. He stated:

To re-invent Detroit, a new way is needed. It would involve visualizing Detroit still as a core, but with distinct urban villages, or hubs, with green spaces. This would involve de-urbanizing parts of Detroit that were once part of the urban fabric but are now vacant. These areas would be redeveloped into areas for farming and lakes. These green spaces would replace land and property not utilized. It would involve visualizing Detroit still as a core, but with distinct urban villages, or hubs, with green spaces.”

Creating new or rejuvenating current “urban villages” with the combination of the aforementioned ideas of farm and parkland, has become popular as well. The idea is for the communities to have everything that’s needed for everyday life within a 20 minute walking distance; moreover, these neighborhoods would have smaller farm plots along with natural forests growing around the village as well. Blogger John Cruz has some really great insights on how this can become a reality. Cruz explains that some key benefits for this idea is that will be easier to identify electric power station & water line problems and service them more efficiently, the population would not be as scattered with denser communities being created, and the denser areas would be prime for retail growth.

With Detroit’s back against the wall, the city leaders are forced to make some tough decisions to bring the city out of stagnation. As long as they remain open minded, the city can become a prototype for other shrinking cities so that they will once again rise into the urban centers that they once were. Stay tuned.

Wishful Thinking

I ran across Cartoon Stock when I was doing some research for starting up this blog. They have a number of cartoons related to commercial real estate. Being the corn ball that I am, I found these cartoons hilarious. They are simple, yet right on target with the points that they are trying to make.


This particular one speaks to a thought that I believe many people hold. I have met plenty of individuals who have literally lived in apartments for their whole lives. It has less to do with the fact that they are not qualified to own their own home, as much they have a fear of taking on more commitment. I am by no means attacking these individuals at all. There are a myriad of other reasons why some may make this decision; however, many people, especially those leaving in the inner city, don’t believe that they are capable of being home owners.

The economic downturn didn’t make things any better. As a matter of fact, it made things much worse. It did nothing but prove the worst fears of renting potential home buyers. There is no adjustable interest rate on your rental unit. If the price gets too high, then you can move into a lower priced unit. It’s a virtual impossibility to get upside down in your apartment; moreover, even if you could, why not just move? There’s a much lower risk in renting and in most people’s eyes there’s a cozy comfort zone in it.

For some strange reason, the education system thinks it is important for me to know all of my states & the corresponding capitals, yet learning how to use my credit effectively is left off the curriculum at all 13 levels. (Hold that thought as I will most likely re-visit this point at another time) So unless your parents are financially savvy (and most of the population’s parents are not especially those in the inner city) you will live very similar to the situation that you grew up in. This creates a perpetual circle of folks who will never have ownership.

I think that it’s important to change the mentality of those who are handcuffed to the idea of being permanent renters. While it is a convenience to be able to rely on the landlord to handle most repairs, owning a home will generally make most people take more pride in their dwelling. The chicken bone that you would usually put down the garbage disposal and wait for the landlord to fix will now get its rightful place in the trash. The mentality that, “this will just become someone else’s problem later,” will not be as prevalent for home owners; thus, the children will be raised in a similar fashion as well.

Not only is a home the single biggest investment that most of us will make in our lives, it is one of the most important. Your home can be used as an investment vehicle in a variety of ways. (Yes, the economy stinks worse than a Jennifer Aniston movie, but your home is still a very viable investment tool depending on where you buy and the type of deal you get on it.) There are a lot of programs geared towards first time home buyers. Whether it’s through the federal government or other grant programs, home ownership can go from a distant dream to a reality.

Even though we live in a capitalistic society, many people never realize their full potential in it. But it is up to the general population of tenants to step out of their comfort zone and look into home ownership to make this cartoon a good joke as oppose to a painfully truthful satire.

Hello! It's me! Surprise

Salutations!

Thanks for taking time out to check out my blog. I am a young real estate development professional currently residing in the Washington, DC area. My experience has given me exposure to all facets of the real industry and afforded me the opportunity to associate with construction laborers to VPs of construction divisions. I have had the pleasure of relating with low-income housing tenants to CEOs. All of these connections have aided in developing my passion of real estate.

I would like to consider myself as cosmopolitan; however, as a life-long urbanite, my opinion is as one who is from the inner-city. Growing up in Detroit, MI, I witnessed the decline of a once thriving city firsthand. Relocating to DC has given me so many ideas as to how my hometown can advance out of the doldrums in terms of real estate. As a former educator, I have a zeal for sharing information with others to increase not only their knowledge, but mine as well. So in helping others, I am the beneficiary also.

The topics will range from a myriad of subjects, but the main theme will be based around real estate. From property management strategies and updates of new developments to editorials on real estate current events and  policy changes; Arrested Development will educate and entertain the curious novice up to the well vested "lifer".

Enjoy!