Monday, January 28, 2008

Random Photos and Meanderings

Webcam & iPhone photos, i.e., a little too much free time between deals...

Someone recently commented on one of my blogs: "What's up with the Blair Witch photo?" Nice. So I shot a new one with the same webcam but without the winterwear (see at top). Not much better. My mother hates them both so of course what do I do? I post them for the entire world to see. The truth is, no matter how bad of a picture I take, I look even worse in person. That's why people enjoy me for my personality and general real estate expertise and not for anything particularly above skin level. HaHa...I mean, LOL.

So, from the top down:

My new webcam picture, the best of a bad lot.

My favorite Chicago building, The Rookery.

A funny sign on my way to the office.

The subject business that allegedly 'skips cycles' and has 'poor management.' Go figure.

The Chicago Brown Line EL advertising non-stop flights to London and New York. Go figure again.

'Blair Witch Geno.'

'Blair Witch Elvis.'

'Blair Witch Oscar.'

Anyway, these are things that made me smile this week. Coming soon, a list of things that didn't...

Friday, January 18, 2008

No, it's not that kind of 'green'

What would Frances Cabrini and William Green think? The remaining few red brick (the Reds) and white concrete (the Whites) highrise canyons known as Cabrini-Green are slowly but finally, resting in pieces. Sixty-five years after the inception of one of the least successful social experiments in U.S. history, closure, if not complete demolition, is finally in order.

Dotted along a stretch of land that was planned as an enclave of low income housing and actually occupied by Italian imigrants in its early days, the experiment hit the Near North Chicago landscape (and social elite) like a series of undefendable meteors over a twenty year period. The notorious Green, a community that in many way began decaying before its roots ever took hold, is all but gone now. Only a few skeletons and the ghosts and memories of a couple hundred thousand Chicagoans from a past era remain.

In another five years it will be as if Cabrini-Green never existed; just like the current intersection of Armitage and Sheffield, the cafe society ground zero of upscale Lincoln Park (Starbucks, Vosges, Rugby) that once was home instead, to five (5) liquor stores on four (4) adjacent corners and dozens of heroin 'shooting galleries' within spitting distance. I'm not saying one way or another which is better although I suppose if forced to choose, I'd rather be caught dead in a Polo shirt and Dockers in Lincoln Park in the year 2008 than in an alley with a needle in my arm in 1968. But believe me, both scenarios are pure fiction.

Anyway, here's to the future of Urban Development and responsible City Planning---may they eventually get it right so we can all move on to more pressing issues, like bringing the 2016 Olympics to town, saving the Public Transportation infrastructure, and watching baseball when the ivy is brown at Wrigley or the Autumn wind is blowing out over left-center at 35th and Wentworth...

images by technovelgy and me

Geno Petro

Wednesday, January 16, 2008

Conforming Mumbo Jumbo...

Okay, this is my idea. It came to me the other night as I lie awake mentally tossing around all my deals and wondering how many of them might actually make it to the finish line (i.e. the Closing Table). Thinking as an Investor/Developer, I pondered this: Find a way to buy, construct then market a neighborhood project with an across the board price point that hovers precisely at the Conforming/Jumbo loan rate cutoff--in other words every Unit in this community would have a cost basis price of $417,000 out, or rather, 'in the door'--plus... whatever down payment the Lender requires. They can fight amongst themselves for that business. Also, all the 2nd Mortgage people who don't want to lend money anymore wouldn't have a thing to worry about because they aren't invited to this party.

Price increases can only occur if the Conforming Rate moves up. Want to offer less? The answer is NO. Want to offer more? That ultimate number would be between the Buyer and the Lender. In other words, the cost of a house in my utopian 'hood would be whatever the Conforming rate currently is plus whatever Down Payment the Buyer can negotiate with the Bank on his/her own. This amount would then be placed in Escrow in a different financial vehicle; something with both upside and guarantees, like an Annuity, or stock in Google, to be determined of course, at a later date when and if this economic flying machine ever got off the ground.

The Listing Realtor would get paid on the $417,000, The Builder would take his profit out of the $417,000. The initial Acquisition Cost of the Land would come out of the $417,000. Hard costs and bank fees charged to the Builder would come out of the $417,000. All future capital improvements would be 100% tax decuctible and thus, not added on the Price. There are no Appraisers in this near perfect model because the bank pre-appraised everything before the project began. Foreclosures would occur only because a particular Buyer no longer had the financial ability to make the payments on the loan, not because the Unit lost value and simply walking away seemed like the best idea. Oh yeah, want to sell? Fine. The Price is $417,000. The Seller's profit comes out of the side investment. They can also keep any paydown of the original (and only) loan; again, that would be the $417,000. The Bank makes its money on the Origination Fees, Ammortization/Interest /Yield etc...)

If Foreclosure is indeed unavoidable, the Bank would simply keep the Down Payment Escrow and put the Defaulted Property back on the market for....


That's right; $417,000. Oh yeah, plus whatever Down Payment they negotiated with the new Buyer. There would be no Short Sales. Short Sales would be declared an Act of Terrorism and that would be left up to Jenna Bush, by this time the 46th or so President, to decide in the year 2024 or thereabouts, when something like this might make better sense.

Either that....


Another idea of mine called Size 6. It would be a Woman's Store that only sold Size 6 shoes, dresses, bathing suits, etc., regardless of the height and weight of the female customer or how huge her feet are or the actual amount of material needed to construct such individual couture or footwear. The label would simply say... 'Size 6.' The Sign above the store door would say 'Size 6.' All Media advertising would declare...Size 6 is the new Size 14! Again, this would be all be subject to the approval and veto authority of Ms. Bush and whatever she decides is best for the country; she, and of course, Oprah.

I really do need to get some sleep...or something better Close soon, one.


Sunday, January 06, 2008

Hate The Snow? Just Wait 10 minutes

Five Days Later...

There I was, in the exact same spot as I stood just 5 days earlier, staring at the front of my house in winter wonderment. As I pointed my brand new camera equipped iphone in the direction of the porch (my beloved Treo having accidently met its own demise in 6 inches of afore mentioned slush, gurgling its last Google in the gutter as I watched on from the curb), I couldn't help but notice the multi-color Weather widget on the sleek, glassy, electroconductive touch screen in my hand--Fair and 59.

It's one of those things you gotta love about this town. It's climate is as fickle as any woman I've ever known, (not that I've known that many but they've all been fickle. But in a good way, of course...the best of ways, to be I said, you gotta love...I think I'll stop right here.) I snapped the photo, ran into my office, and synced the image to my Desktop. Unbelievable.

Like I mentioned, in just five days, the temperature swing in this town, (or at least on my block), including wind chill factor, was more than 70 degrees. Anyway, if two pictures (see post below) are worth anywhere near the couple thousand words everyone says they are, then I'm going to stop right here as well, before I get started on that whole fickle subject again--fickle, in a beautiful way, of course...

Geno Petro

Tuesday, January 01, 2008

I'm not 'Dreaming of a White' anything...

I reached for the phone but there was no one to call. The six inches of snow on top of the other six inches of last week's snow has made leaving or entering my house challenging, and access to my garage--(the whole point of having one to begin with being harborage from the elements), treacherous. And even though I am my father's son (and the apple never falls too far from that tree, as we are all well aware), it's not my intention this day to discuss the weather.

I'm ticked-off because I don't have a management company to complain to because my walkways are under a foot of snow and the City of Chicago snow-plows, buried my garage door. My mailman, (correction: he prefers to be called a letter carrier per his Christmas card signature...your letter carrier, Roger) Roger won't walk up my icy steps, from the sidewalk, to deliver my bills. I do have a phone number for the Post Office but...well, never mind...

One of the reasons we bought a single family house, nestled between the trees on three contiguous city lots, in the first place was to escape the clutches of condominium association and the ever escalating monthly assessments that are inherent in such an urban housing arrangement. In other words, we no longer wished to be 'One' with our neighbors nor did we wish to continue dropping upwards of three bills a month to participate in such a social networking community.

Six Months Ago

"Think of all the money we'll save in monthly maintenance fees...," I pitched to my lovely wife as I pushed the sales contract across the table for her signature then quickly refilled her wine glass. Ignoring the gesture, she looked me in the eye and asked...

"Do you even know how to cut grass?"

"Who me? Grass? Sure..." I declared. "I've cut a lot of grass in my day." That particular day being many, many years ago.

"What about leaves, and snow, and painting and..."

"Fine," I said, snatching back the paperwork. "We'll stay in the Dorm."

Actually, we 'stayed' in a lovely condominium complex surrounded by wonderful people amidst the great Chicago neighborhood of Lincoln Park. I called it a Dorm only because I was easily 10 years older than anyone else who had purchased there. I wanted a house goddammit, and I wasn't going to let a litte snow, grass or paint get in my way. So, I pouted...

"Give me the paperwork," she said, snatching it back. She signed, dated, and pushed the completed offer back to my side of the table. "So what...?" she finished..."Are you going to cut grass in a leather jacket and Dior sunglasses?"

I honestly hadn't thought about that. Yard work apparel...

Home Sweet Home

So in the three months since we closed on the new house (actually built in the 1890s and a whole different subject for an entirely different blizzard), I've spent:

$ 1737 Home Depot (all kinds of home ownership stuff I shoved into my garage and basement.)

$ 200 One Time Autumn Leaf Removal Service (although part of the above mentioned $1737 does include an actual leaf blower and a rake which, to my wife's delectation, I haven't yet found the time, energy or apparel to utilize.)

$ 100 Snow Removal Door Knocking Gypsies (who only shoveled half the agreed upon area before disappearing into the last flurry forever with the pre-paid loot and a magazine from my mailbox.)

$ 195 Water and Sewage Bill (which I forgot was included in our afore mentioned condo maintenance fee until my complaint was addressed by the City of Chicago Water Department-- that 'address' being a sharp city worker comment, "You live in an actual house, now, Mr. Petro. You pay the water and sewage bill yourself. Capisce?" Da Bears.

$ 200 Interior Design Consultation

$ 5,500 Custom Interior Paint Job as a result of the consultation.

I think I'll stop right here as I'm fairly close to telling myself, "I told you so." I just spend three years worth of assessment budget in three months and I don't even have anyone to call to make this snow go away. Instead, I'm staring out the window onto a winter wonderland--aptly named as I sit here wondering which kindhearted neighbor might show up with a snowblower. I honestly hope the deadbeat shovelers come knocking again. I'll pay them double.

At the end of the day...

I walk across the room and gaze out the other window toward the quickly setting sun. I forgot about all those bags of grass seed, ferilizer, mulch, and lime stacked behind the garage next to the six or seven 55 gallon lawn bags of twigs, tree limbs and branches (oh yeah, add a chainsaw, weed wacker, hacksaw and another $350 to the list) I keep meaning to do something with---but have no idea what. The City of Chicago garbage truck for my street refuses to haul it all away although they did take the case of beer I tried to bribe them with the last time I dragged everything to the curb on Christmas Eve. I suppose if the favor is never returned then it's not actually considered graft in this Administration. So much for the quid pro quo everyone is always yakking about in this town.

My Managing Broker Joe Pinto, gave me a high pressure power washer as a house warming gift. I considered hooking it up to the hose I forgot to pull in for the winter and blasting the snow off my walkways but after playing that mental tape all the way through, so to speak, I decided to take a pass. Besides, the hose is frozen to the ground and the sprinkler head is a block of ice--a slow leak or something. Probably a good thing, as I thought more about the idea and the potential rat's nest of a mess that might ensue.

"You know," Joe once mentioned over a typical afternoon lunch, "...people who complain about high assessments in condos don't have a clue how much it costs to maintain a building or a property. Anytime you drive down a street and see a single family homeowner cutting his own grass, washing his own windows or shoveling his own snow...anytime you see that, just know that there's a financial trade off for those efforts."

But how would I know? I've yet to do any of those things. I just bought all the accessories at Home Depot. Oh yeah, and the house.

Geno Petro