All New Eastside Business News Site is Live!

The All New Eastside Business News site is now live at EastsideBusiness.com

Mucho thanks to Ramey Bell and Rocket Fuel Marketing.

I think that you will like it a lot and look forward to your comments.

Please make sure to visit our Business Directory and list your Eastside business or organization for FREE. Featured listings are available for a limited time at only $50 a year on a first-come, first-served basis, although priority is given to advertisers in the print edition of Eastside Business Monthly. For more info send an email to Ads@EastsideBusiness.com

The China Eggs

This is a great story that was in today’s Small Business Advocate e-newsletter from Jim Blasingame. I recommend that anyone in business sign-up for and read his newsletter.

The China Egg
“Farm-fresh eggs.” Seeing those words on a breakfast menu harkens me back to when that was a daily reality. But farmers know that hens don’t lay eggs for our breakfast. Consequently, they harvest the fresh eggs each day, and leave a China egg in each nest, which is sufficient to prevent the hens from abandoning their nests and continue production.

There are China eggs in business, too. They’re the prospects you keep calling on who never buy anything. Since you’re smarter than a chicken, don’t spend time and resources sitting on China eggs.

On the farm or in business, China eggs never hatch.

The message I get from this is that your time is your key resource and you cannot afford to spend it on those who waste it and will never buy or do business with you. On the other hand, my brother is a pit-bull salesperson who will call on a prospect every month or couple of weeks in person until they do buy from him. He will tell them straight up “I’m going to keep on coming by until you end up buying from me”. It almost always works – although he occasionally has had to call on a person for 2 or 3 years before getting an order.

New Website almost Ready

Hello Dedicated Readers:

I wanted to let you know that we have been hard at work on the new, and greatly improved Eastside Business website. Thanks to the design work of Ramey Bell, I believe it kicks ass on all the other local news sites, including the King County Journal’s.

You’ll have to take a look on the 1st of Decemeber (or maybe a day or two earlier) and see for yourself. Please let us know what you think!

When it goes live, we will be consolidating the websites for Eastside Business Weekly and Eastside Business Monthly into one great site at EastsideBusiness.com.

Besides being updated on a daily basis, one of the great features of the new site is that local businesses and organizations will be able to add themselves to the online Eastside Business Directory free of charge. Visitors will then be able to rate these businesses and write reviews.

It’s cool and I’m looking forward to introducing it to you!!!

Why Option Arms Are A Bad Idea

In today’s Early to Rise Newsletter (which I fully recommend EVERYBODY subscribe to), Michael Masterson wrote the following piece:

Sometimes It’s Hard to Make Money Giving Good Advice
Alex, a broker and Jiu Jitsu buddy, has been telling me that he’s been having a hard time selling mortgages because his customers don’t want to hear his advice: that it’s a bad idea for most of them to buy into the new option adjustable-rate mortgages (ARMs). (See Message #1528 .)

The Wall Street Journal reports that the big U.S. mortgage lenders are selling these “riskier” loans to protect themselves from the “possibility of a surge in defaults once the housing market simmers down.” But bank regulators are worried about option ARMs. They are afraid that buyers are going to use them to get themselves into homes they can’t afford.

Alex doesn’t think that might be happening. He knows it. That’s why he has been trying to dissuade his clients from taking such loans.

Yesterday, after training, we were talking. I asked him how things were going.

“Better now that I’ve given up my scruples a bit.”

I asked him what he meant.

“When someone comes to me wanting to borrow more money than they should by using one of these mortgages, I tell them, ‘Look, this loan is not for you. Yes, you will be fine if prices keep going up. But if they stop or even slow down, you could be cash negative.’ When I say that, they look at me like I have four eyes. They say, ‘Don’t worry about that. The market is going to keep going up.’ I used to try to persuade them to take on a more sensible loan – but then they’d leave me for someone else. Nowadays, I warn them once. Then, if they insist, I sell them what they want.”

Alex told me he just sold a $640,000 mortgage to a lady who wanted to move into an $800,000 house. Her initial monthly payments are only $600. “Can you believe that!” he said, “$600 a month gets you into an $800,000 house!”

I told him I could see how tempting that must be.

“The thing is,” he said, “they don’t ask the right questions. They want to know how much their initial monthly payments are, and that’s it. They never ask about the actual terms of the mortgage, what the real rates are, and, more importantly, what the fees and charges are.”

“I guess these people have never heard of negative amortization,” I said.

“Exactly,” he said. “Most of them will never be able to pay off their loans.”

– Michael Masterson

[Early to Rise Copyright ETR, LLC, 2004]

If you’d like to subscribe to Early To Rise or suggest it to a friend,

please visit: http://www.earlytorise.com/Success Partnership.htm

I actually think Michael’s friend not only was correct, but that he didn’t mention that if and when the values of homes do drop and interest rates rise, there is a good chance that many borrowers will not be able to afford the increased payments on their homes. When this happens, they will be forced to sell them at a loss or lose them through foreclosure.

If you are thinking about selling your home, I believe that you should have done it this past summer, but there’s still time to get it done while you can.

Current Market and Mortgage Options

According to tody’s T.J. Knowles Mortgage Newsletter, which I find very informative and entertaining, interest rates are up and expected to keep climbing. He also says that property values are flattening and even going down in some areas. Even though he works in the southern California area, I see the same things being true up here.

His recommended strategies: Take a long position on your mortgages- If you can afford a 30 year fixed or 10 year ARM and plan to keep the property for 4+ years, consider making that move. 40 Year amortization (lower payment) is available, and interest-only terms may be the ticket if you have good equity in your property. If you have good rentals, you may be in the catbird seat as the market slows. Protect your interest in these Non-Owner Occupied properties by securing a longer-term loan. If you anticipate needing cash out for repairs, etc, you may be better off moving on it now rather than in a year or two.

The most important thing contained in his newsletter today:
Supply and demand rule, but those who ignore cycles are bound to be run over by them.

Bill Gate’s “Sea Change” Email – Full Text

Thanks to Dave Winer and Hypercamp we now have the full text of Bill Gate’s by now infamous email noting a “sea change” in technology as well as the complete memo from Ray Ozzie that was attached to that email.

We’re certainly glad that they’ve recognized the need to adapt and hope they can do so quickly and successfully. We’ll certainly do what we can to help.

Slow Down in the Local Residential Market??

In a press release sent out today, the Northwest Multiple Listing Service (NWMLS) says that homebuyers are finding a bigger selection and less competition in the local marketplace. It also goes on to say “But brokers say there is little chance of a bursting housing bubble in Western Washington”. Click here to see the release at EastsideBusinessWeekly.com

As a real estate broker, I’d have to disagree with the last statement – it is my humble opinion that there is a great chance of the bubble bursting. I’ll even go one step further – I fully expect that there will be a bursting bubble in the next 6-12 months, if not sooner.

There are certainly many factors involved here, but I look at the current market values as overly inflated, boosted by low, low interest rates and a high percentage of loans that are interest only and/or are adjustable rates with big balloon payments due.

I’m going on record here as saying that I believe that anyone who does not plan on spending the next 5-10 years in their home should consider selling – and doing it quick. If you would like to consider this option, I would be happy to discuss it with you.

Future Real Estate Trends?

In a recent article written for Business 2.0, Paul Kaihla writes about Seattle, Portland and Eugene all growing together to become a Northwest Megapolitan area he calls “Cascadia”. Here are some of his predictions for the future:

CASCADIA
Vast quantities of cheap, prime greenfield surrounding Seattle, Portland, and Eugene give the Northwest megapolitan explosive growth potential. By 2030 the three metro regions will be intertwined.

KEY DEMOGRAPHIC SHIFT: The Asian population will more than triple; the number of seniors will double.
NEW GROWTH INDUSTRY: Seattle will become one of three global hubs for bioinformatics startups.
BEST BUSINESSES TO START: Architectural firms catering to green developers.
BEST RESIDENTIAL REAL ESTATE BET: $200,000 homes in small towns 30 minutes outside Portland, beyond the urban-growth boundary.
BEST COMMERCIAL REAL ESTATE BET: Retail or office space around Snoqualmie Ridge, one of three “urban villages” in early development near Seattle.
GOVERNMENT CARROT: Oregon’s new property-rights law, which opens the door to more rural development.
IT’S ALREADY TOO LATE TO …: Speculate on Paul Allen’s Seattle redevelopment project, South Lake Union.

The entire article can be found online at: http://www.business2.com/b2/web/articles/0,17863,1122957,00.html

Need Help Buying or Selling a Commercial Property?

Are you looking to buy, lease or sell commercial property in the Puget Sound area? Do you know someone that is?

I’m currently looking for clients to represent. I specialize in negotiating on commercial properties as investments.

For sellers, as part of my comprehensive marketing plan, I will advertise all properties listed with me on CBA, Loopnet, Craigslist, on my websites, and in the print edition of Eastside Business monthly.

For buyers, in addition to my searching through regular channels, I will also research through my extensive owner database, as well as advertise your needs on my websites and in the print edition of Eastside Business Monthly.

Is your property already listed with another broker? Not a problem. AAA Properties will gladly advertise your property for sale or lease with the permission of your current broker.

If you would like my help in buying, selling or leasing commercial property, please give me a call at 425-455-5478. I look forward to speaking with you.