Property Grunt

Thursday, May 29, 2008

Harvey Korman: You will be missed.

Make the Angels laugh!

Tuesday, May 27, 2008


You can discover what your enemy fears most by observing the means he uses to frighten you.

Eric Hoffer

Greetings good people. I hope you all enjoyed your weekend. And what a great way to start the summer with some more real estate chaos.

New York Times
has published a detailed story on the Tishman Speyer crackdown on violators of rent stabilization laws. Its not pretty.

Tishman Speyer has hired an army of lawyers and private investigators on tenants who are targeting abusers of the rent stabilization system. The problem is that alot of innocent tenants are caught in the cross fire.Here are two quotes that are of interest.

Tenants and their lawyers say they do not doubt that in some cases in which tenants gave up their apartments, the tenants had been abusing the rent-stabilization system. But they also believe that many of them were legitimate tenants who wanted to avoid, or were intimidated by, a potential legal battle with their landlord.

Referring to Tishman Speyer, Mr. Fishman, Ms. Shapiro’s lawyer, said, “They realize that a certain percentage of tenants will get this notice and simply pack, because they’re afraid.”

The objective of this pogrom is simple. Get the rent stabilized tenants out and replace them so you can charge market rates for the rent. But it begs two questions. Why is Tishman acting in this manner? Does it really make sense to do that in a market where New York City economy is getting eviscerated? Rent stabilized tenant or not, you need a cashflow if you are a landlord. And if you have a vacant apartment then you are not getting any cashflow no matter how much rent you are charging. The second question is Tishman really doing this?

I speculate that Tishman is in the process of preparing for a sale in the future. Yes. I know they just bouught Stuy town but I suspect the reason why they are going through with this pogrom is to beef up their balance sheets and to also make it more attractive to potential buyers.

Or it could be they need more money and that by clearing out the rent stabilized flotsam they could get a better loan.

It is a risky manuver because these tenants could ban together and file a class action suit. Or worse. Intiate a rent strike. Then Stuy town will never get these people out.

And another surprise is that more Wall Street jobs have been wiped out.

May 27 (Bloomberg) -- It's as if the entire workforce at Goldman Sachs Group Inc. and Morgan Stanley vanished in less than a year.

From Tokyo to London to New York, financial companies announced plans to shed more than 83,000 jobs since last July as revenue and compensation pools evaporated, according to figures compiled by Bloomberg. The dismissals range from 90 jobs, or 0.1 percent of the total, at London-based HBOS Plc to about 9,160 jobs, or 66 percent of the workforce, at New York-based Bear Stearns Cos., which is being acquired by JPMorgan Chase & Co.

The cuts add up to 3.3 percent of employees at the 28 firms eliminating positions. That's significantly less than the market slump from 2000 to 2003, when 17 percent of banking and securities jobs in New York were wiped out, data from the Bureau of Labor Statistics show. Given the record-breaking losses of the past year -- banks and brokers have taken $383 billion of writedowns and credit losses -- some economic forecasters and industry veterans expect the number of dismissals to increase.

``My guess is there's probably more to come,'' said Sanford ``Sandy'' Weill, chairman emeritus of Citigroup Inc., who worked on Wall Street for 53 years, in a May 21 interview. ``I think this is tougher'' than the last market decline, Weill, 75, said.

New York-based Citigroup, the biggest U.S. bank by assets, has announced 15,900 job cuts worldwide, about 4 percent of its employees.

The big surprise is that this appears to be just the beginning of something bigger and scarier.

``My guess is there's probably more to come,'' said Sanford ``Sandy'' Weill, chairman emeritus of Citigroup Inc., who worked on Wall Street for 53 years, in a May 21 interview. ``I think this is tougher'' than the last market decline, Weill, 75, said.

Since reading The True Believer, I have become quite an avid reader of his work. He has knack for being able to cut the social that holds up the meat of society.

Hoffer's quote about fear definitely applies to these two articles. It appears these Masters of the Universe are simply laying down the hammer in their respective domains. Their minions scampering away to find cover, running past the carcasses of the unlucky ones.

But remember, tables can turn on these Masters of the Universe. Remember, they are doing all of these things to deal with their desperate times. We are all scared.

Thursday, May 22, 2008

Roll Call: The Reality Check

Reality for this family began when the camera crew left and the bills started piling up.

Folks. Reality shows are not reality as this recent article about Extreme Makeover has indicated.

Extreme Home for sale

Staff writer
Hebert can’t afford upkeep nor time for maintenance

SANDPOINT — Eric Hebert’s Extreme Home Makeover home is for sale.

Although grateful to the community for building the home, Hebert said owning it is more than he can manage time-wise and financially as he raises his late sister’s 11-year-old twins, Keely and Tyler.

His personal priorities changed four years ago and his primary concern is raising two children, Hebert said.

“It’s a little too much for the three of us,” he said.

Hebert is concerned that community residents who helped build his home in November 2006 will think he is selling it to make a profit.

“I’m not doing it (selling) to make a profit. I’m doing it not to lose money,” he said. “I just hope people understand the reality of it.”

Upkeep on the 3,678-square-foot challenge also is difficult. Hebert, who is single, works full-time and spends most evenings taking the kids to baseball and soccer practice. He said wants to enjoy his time with his niece and nephew. The cost to maintain the home is expensive and Hebert is worried about the economy, the price of gas and the cost of food.

Since moving into the new home, Hebert said his bills have tripled. This winter his electrical bill for forced air heating was no less than $300 a month, in addition to him paying for propane, Hebert said.

Sullivan Homes co-owner Lori Sullivan said she understands Hebert’s plight, calling him a great guy. Sullivan Homes was the primary contractor on the project. A number of other contractors from Bonner County and the Spokane area also helped, along with hundreds of local volunteers.

“Home ownership is tough for a lot of people all over the country right now,” Sullivan said.

She does not regret her involvement with building Hebert’s home, she said.

“It’s too bad it’s a burden for him,” Sullivan said. “We’re sad for Eric.”

When his subterranean home was replaced by the existing structure, Hebert was working in construction. However, he was given the opportunity to work at a sales job on 100 -ercent commission.

That did not work out and Hebert went back to his old job in construction. It has been humbling to discover that some things in life just do not work out, Hebert said.

“It took awhile for that reality to set in,” he said.

Hebert would not trade the Extreme Home Makeover experience for anything. He believes it has changed his life and the children’s for the better, citing their opportunity to travel to Washington, D.C., and lobby the American Heart Association, the chance to meet so many caring people in the community and to own a nice home.

Hebert also is realistic and knows there will be some “I told you so’s,” from people who questioned whether he could make his new situation work.

He doubts he will ever live in a home as nice as the one in which he is currently living, but he also does not see a home like the first poorly-built structure that put him on Extreme Home Makeover’s radar in his future either.

The 3,678-square-foot house and the one-acre property it sits on are listed for sale for $529,000 with Jim Watkins of Tomlinson’s Sandpoint Sotheby Realty. Hebert also owns another two acres adjacent to the home and has listed that property for $160,000.

Bonner County has appraised the house at $552,244 and the acreage at $125,000, according to the Bonner County Assessor’s office.

Although Hebert is hopeful someone will buy the property by the end of this summer, he also knows selling it may be a challenge given that there are 48 other homes for sale in the county within the same price range.

Hebert said he loves the home’s layout and its private Baldy Road location, but after six months of thinking about what to do, he said he had to be realistic and put the home up for sale.

The three-bedroom home is spectacular inside and out. It includes three bedrooms, three and a half baths, a bonus room, an office, a master bedroom with access to a deck that includes a fireplace and hot tub.

Two large windows in the two-story great room overlook a tree farm. The floors are covered with hardwood and slate.

Hebert spent six months thinking about whether the decision would be good for the kids who already have lost their mother who died of heart disease.

Fortunately, the kids understand his decision and are “resilient,” he said.

Although Keely’s room and its adjoining bathroom are plush, it is difficult for her to keep the room clean. They spent last weekend cleaning her room to prepare for showing buyers. However, Hebert did not have time to put away the vacuum cleaner and it sits in the middle of the upstairs hallway floor.

The dining room is rarely used — Hebert refers to it as the poker room and a light dust layer covers most surfaces.

Hebert is unsure what he will do once his home sells. He may stay in the area because he has a lot of friends here as well as an aunt and uncle in Kootenai with whom he is close. However, he also has friends in Montana.

“One thing at a time,” he said. “But I like it (Sandpoint). It’s a great place to raise kids.

It was a nice gesture on part of the show, however it jutt goes to show that the designers were more interested in building a showcase of a home instead of building home that suited the needs of the Mr. Hebert's household. Of course Mr. Hebert's timing could not be worse.

And it looks like even politicians are now getting in on the foreclosure act.

Update: Congresswoman denies foreclosure report

Update: California Rep. Laura Richardson today denied a published report that her $535,000 Sacramento home had slipped into foreclosure, saying she had renegotiated her loan to keep the home.

The house "... is not in foreclosure and has NOT been seized by the bank," Richardson, a Democrat from Long Beach, said in a statement. "I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement -- with no special provisions." (Richardson's entire statement is at the bottom of this article).

In other words she got a workout. However it still does not inspire alot of confidence in her constituents that someone that they elected nearly lost her home.

Tuesday, May 20, 2008

Last Saturday night..

I was taking the Metro North with a family member into Westchester when we got delayed at one stop. The conductor announced the delay was caused by train traffic caused by a fatality at Scarsdale. The moment he said that there was a murmur of speculation in the car.

As we stopped by Scarsdale we saw the train on the northbound track and a ladder that led to the rails and which I assume where they found the body. Standing on the platform in between the ladder and the train was a conductor with a grim look on his face.

Later on that night, I would learn that someone did jump in front of the train but didn’t know the full details until Monday morning.

SCARSDALE - Students walked to Scarsdale High School silently this morning, their somber faces reflecting the widespread shock at a freshman's suicide over the weekend.

Akshay Menon, 14, jumped in front of a Metro-North express train at 9:10 p.m. Saturday, about a mile from the Post Road school building. The tragic news quickly spread to his classmates, more than 200 of whom are connected to him through the Facebook social networking Web site.

The school is offering mental health services today for its students, particularly the school's 375 freshmen, said Victoria Presser, district spokeswoman.
"Administrators are going into the classrooms, particularly the ninth-grade classrooms, throughout the high school just to listen to the students and help them with the process of dealing with this," she said. "We provide as much support as we can."

Scarsdale High School has about 1,450 students in grades 9 through 12. Presser said she did not know how long Menon had been a student in the district.
Chloe Baum, 16, a Scarsdale High sophomore, said she did not know Menon well, but mutual friends had told her he felt pressured to achieve top grades. Still, she said, no one had thought he was depressed enough to kill himself.
"They didn't see any signs," she said. "A lot of people seemed to like him and thought he was a funny kid."

Look at this beautiful face.

Akshay Menon was just a baby. A child. He was a young boy that barely knew life, what demons tortured him to take his own life? I can’t imagine what his parents are going through right now. They have my heartfelt condolences.

Remember my rant against going to my reunion? So it is no big surprise that I hated high school. There was many a day when I felt my life was falling apart because of my grades, my social life,getting into college and other incidents. When I look back on it now, it all seems rather foolish. But back then it was all I knew. It is all any of us know when we are at that age.

For a lot of people, high school is the highlight of their lives. For some of us the fact that we simply survived 4 years is good enough for us. I was in the latter category.

You know what I learned? Life does not end with high school; in fact it does not even begin there. It is just 4 years of your life. After that you have the rest of your life to see what is really out there and what you are really about.

Monday, May 19, 2008

I am alive

I haven't been able to post due to an old injury. Nothing major. More posts this week.

Tuesday, May 13, 2008

Kelly Kreth Goes Prime Time

I got an email from Kelly Kreth who just landed a primo tv client. Here's the trailer.

NEW YORK, NY - Sparkway Media and Sokol Media announce their first joint full-length television production, NY Residential TV. The weekly, hour-long show will debut on CW11 at 9am.

Experienced hosts Cathy Hobbs and Jeff Appel bring eager couples, interested viewers, brokers and real estate experts together as they scan all five boroughs of New York City for the perfect home. Location and price all come into play as Hobbs and Appel give tips and tricks of the trade, ranging from the latest trends to current market values on city properties.

With real estate television programming booming, NY Residential TV sets itself apart by catering to a regional market as well as being multi-faceted in ways other shows are not. Aside from traditional house hunting, showcasing properties and open houses, NY Residential TV will also be a program that assists those who have found a home, decorate; those who need to flip a home, renovate; and those who are looking to buy or sell, negotiate. Hobbs and Appel will show viewers how to find foreclosures, as well as the best way to make your new home "green." In addition the show will include segments on new gadgets, how to “go green,” open houses and new development launch events in the area.

While NY Residential TV can stand on its content alone, Hobbs and Appel bring credibility and charisma to the show. Cathy Hobbs, an Emmy-award winning television journalist and interior designer who was just nominated for this year's annual DIFFA "Dining by Design" Event perfectly complements Jeff Appel, a real estate industry expert and lecturer. The two bring help and humor together in a way that's educational and entertaining.

NY Residential TV will prove to be a powerful medium for sponsors--such as builders, developers, agents and financers--that align with the show's mission of providing great content while showcasing great properties.

In addition to traditional TV spot ads, NY Residential TV's real estate and development sponsors will take viewers on guided tours of homes that their companies are offering for sale. This is an innovative and experimental approach to marrying the right advertisers with quality targeted programming.

For more information on NY Residential TV or other Sparkway programming, please visit: or For interviews or any other press inquiries, please contact Kelly Kreth at Kreth Communications: 201-417-8691 or

March on Kelly.

Friday, May 09, 2008

Hurting, Must Stop

Propertyshark has rolled out its monthly pdf foreclosure report for the month of April and it is pretty much more of the same.

Queens still reigns supreme with 58% of New York City’s foreclosures, right behind it is Brooklyn and Staten Island while Manahttan and the Bronx have been able to weather the foreclosure storm with only a combined 11% of the month of April.

As I have stated before, if you have the fortitude, the resources and a plan, you can probably find a lot of investment opportunities out there.

On the flipside, it probably sucks ass to be a seller in those neighborhoods or to be a broker.

So when will this all bottom out? Who knows. But it is till going to hurt.

Friday, May 02, 2008

Going Down

Hear about the Craigslist scammer?

Craigslist scams targeting renters desperate for affordable apartments

Monday, February 11th 2008, 4:00 AM

The apartment sounded too good to be true.

A fully furnished two-bedroom with a balcony in Bay Ridge, Brooklyn, going for $950 instead of the $2,200 it would normally fetch because of the tenant's sudden job transfer.

The catch: You have to take it sight unseen - and send a security deposit.

The bogus rental was even more of a steal than unsuspecting would-be tenants thought, part of a growing number of scams cooked up to profit from gullible people desperate for affordable housing in the city, according to Internet fraud and security expert Craig Solomon.

"It is becoming more common because New York apartments have become such a hot commodity," said Solomon. "People are so desperate that they aren't always thinking clearly."

This particular listing on, the go-to site for frazzled city dwellers, featured appealing photos and a quick response to inquiries from a scam artist who used the alias "JoAnn Rinaggio" and a tale about being transferred to North Carolina.

"I will like to tell you that we are doing this based on trust and I would like you to trust me as I trust you. ... You can see the beautiful apartment in the pictures, but not in person yet," she writes, asking prospective tenants to wire a $550 security deposit and promising a return envelope with the apartment keys.

According to Solomon, "countless" victims fell for this ruse, sent money, never heard back from "Rinaggio" and learned the hard way that the address for the dream apartment, 8235 Fourth Ave., also was bogus.

Documents obtained by the Daily News show the phony name was used by a convicted serial rubber-check writer, JoAnne Smith, who was convicted nine times between 1986 and 2004 for fake checks totaling $20,000.

"Craigslist is made to sell local, and whenever anyone from out of state is involved, red flags should immediately go up," said Solomon. "Avoiding the scam is simple. Try to always do business face-to-face, and never, ever, wire money anywhere."

This is also the advice posted under "avoiding scams and fraud" by Craigslist on its Web site, which urges users not to wire money, give out personal financial information or respond to any offers requiring you to provide escrow money.

"Know that only a scammer will 'guarantee' your transaction," Craigslist warns.

Beth Ann Bovino, a senior economist at Standard & Poor's, found herself caught up in such a scam when someone posted her address and photos of it as a bargain rental.

"Rents are higher and people are in real need of an affordable place to live," said Bovino. "It is sad to say, but these kinds of scams appeal to desperation and greed."

"People need to remember that if it sounds too good to be true, it probably is."

Here's how it works folks. Never ever give put up the money until you are approved and have a signed lease.

The process is very simple, you pay for the processing fee for the credit check. If you are rejected, you look for another apartment. If you are accepted, then you prepare the checks for the lease signing which will be usually 3 months of rent in certified checks. This covers the safety deposit, first and last month's rent. And the broker's check, if you have used one.

You bring the checks to the lease signing. Once the lease is approved by all parties and signed. Then the checks are released.

Co-ops and condos, the process is different since the board will want to see everything up front in the board package. So you should make copies of the checks and have a signed agreement that will return the checks if you are rejected or if you find another place during the review process. As we all know, it could take a week or month for the board to make a decision. So you should be prepared to be rejected and look for a back up.

Preston over at the Observer sent me this link which I sounded like a complete joke.

Developers Vornado Realty Trust and the Related Companies are grasping for options to keep alive a multi-billion dollar redo of Penn Station and related real estate development, as they have asked the city and state to back a loan to build a new Madison Square Garden in the Farley Post Office across Eight Avenue.

The proposal is intended to lure the Garden back to the table, as the company, led by Chairman James Dolan, pulled out of the larger plan in March. The state is considering the offer as one of many options for the project, a state official confirmed.

In this option, the state and city could be saddled with the cost of the arena—said to be in the range of $900 million to $1 billion—should the larger redo of Penn Station ultimately fall apart.

This is not going to happen and not because of Madison Square Garden.

Gov. David Paterson said spending in the $121.7 billion state budget must be re-examined and lowered in the coming weeks, in light of dramatic drops in tax payments from major Wall Street banks.

Whether legislators in both political parties will take those actions this year remains to be seen, given that all 212 of them are up for election in November. In fact, Senate Majority Leader Joseph Bruno (R-Brunswick) candidly remarked that his goal for the legislation session was "to get out of session."

Paterson repeated calls for fiscal restraint that he started making before the budget passed the state Legislature on April 10, during an event in Troy on Monday. The budget is balanced, but Paterson has said he wants to identify permanent spending cuts now that will reduce a potential $4 billion deficit for the 2009-10 budget.

"We can't afford to be rolling the dice on where the economy is going," Paterson said.

In other words: NO ONE HAS ANY F**KING MONEY!

It appears that even former baseball stars are not immune to foreclosure.

Former baseball star Jose Canseco has Calif. home foreclosed Thu May 1, 10:46 PM ET

Jose Canseco, the former AL MVP who made millions during his baseball career, has had his home foreclosed.

Canseco told the syndicated TV show "Inside Edition" that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn't make sense to continue making payments.

"I do have a judgment on my home and it to me is very strange because it didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else," he said in an interview that aired Thursday.

"You know my life, this financial thing, is a very complicated issue. Obviously, when you make all that money, people think, `OK, let's assume it is $35 million.' People have to understand that $35 million, you're paying the government 41 percent. That leaves you with about $17 or $18 million, not even. Then you're taking care of your whole family."

He added that a couple of divorces cost him $7 million or $8 million.

Canseco said his top earnings year was $6 million and that his financial situation obviously is different than most people who are losing their homes.

"What about other families that we're hearing on TV, that they're saying, `We have nowhere else to go,'" he said. "I mean, that is amazing. I've got books (he's put out two expose-type books on drug use in baseball), we're now trying to produce the movie to both.

"Like I said, my situation was a little more different than most. I decided to just let it (the house) go, but in most cases and most families, they have nowhere else to go."

Calls by The Associated Press to Canseco and to his attorney, Greg Emerson, were not immediately returned.

The lesson here is simple. Do your due diligence and make sure you have the money to cover your payments.