Archive for the Uncategorized Category

Port of Long Beach GLOBAL BIZ CONFERENCE May 3

Posted in Uncategorized on April 19, 2012 by David Griffith

Want to learn more about import/export?  Curious about the many US export initiatives and assistance programs offered at the state and federal level? Then don’t miss the Port of Long Beach’s GLOBAL BIZ CONFERENCE May 3.

Meet Sr.Officials from Port of Long Beach, Homeland Security, Dept of Commerce and many other agencies along with numerous internatl trade attorneys.  $150 includes 3 separate panels, lunch and private tour of port facilities by boat.  Discounted tix available at www.OCTalkRadio.net.

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“Clean Tech” still has a Bright Future

Posted in Uncategorized on March 15, 2012 by David Griffith

By Christina DesMarais | Inc.com – Tue, Mar 13, 2012

Why the start-up community remains bullish on the industry–despite its Solyndra-sized failures.

Clean tech start-ups have gotten a bad rap thanks to notable failures such as Solyndra, Beacon Power, and Ener1 subsidiary EnerDel, all of which collectively received hundreds of millions of dollars from the Department of Energy before going belly up.

And they’re not the only ones. Solar module maker Abound Solar, which received a $400 million Department of Energy loan guarantee, announced last month it is laying off 70% of its Colorado workforce blaming competition from Chinese manufacturers. It’s not a Solyndra yet; in the next six to nine months the company promises to make a better, cheaper product.

With all the trouble the DOE has backpeddled on funding start-ups. Next Autoworks, Aptera Motors, and Bright Automotive are a few that have had to pull the plug on their plans to make eco-friendly cars after either giving up on or being refused loans from the agency.

Yet in spite of all the doom and gloom, not everyone is skittish about clean tech. In fact, some in the industry are positively enraptured with the possibilites.

Reducing Dependence on Foreign Oil

Avi Yashchin is one such proponent. CEO of the clean tech training company CleanEdison, Yashchin is passionate about sustainability and sees American investment in the space as a way to save the country on a couple of different fronts. He points out that the United States spends $600 billion a year on foreign oil and another $200 billion defending it. Meanwhile, Middle Eastern companies on the other end of that money are also buying up chunks of U.S. companies such CitiGroup and International Lease Financing Corp., the world’s largest owner and leaser of airplanes.

“I really think you have one of the world’s greatest transfers of wealth ever happening… and it needs to stop and I’m going to try [to do something about it],” he says.

The clean tech industry, he explains, was born out of the oil embargo back in the 1970s when long lines at the gas pump made America’s dependency on foreign oil crystal clear. But even though things like solar panels and wind-powered generators were invented then, the technologies didn’t really take off because oil prices dropped considerably and stayed low for a long time.

Until recently, that is. In 2005 Goldman Sachs analyst Arjun N. Murti predicted oil would hit $105 a barrel, which it did—and then soared to $150 a barrel in the summer of 2008.  Suddenly clean tech was hot again and investors wanted in on renewable infrastructure opportunities. Until all the bankruptcies, that is.

Competing on Cost

Even so, Yashchin insists clean tech can be profitable now. There are a few examples to back him up: Wireless lighting controls company Adura Technologies and LED lighting company Albeo Technologies are a couple that have recently boasted tremendous growth in sales and revenue. Looking ahead, he sees clean energy sources becoming much more cost competitive, especially if the price of oil again hits 2008 levels.

What’s confounding, he says, is that the price of oil remains so high even though the global economy is still largely in the can. What’s going to happen when the billion middle class people in China and India start to boost the demand for goods? The price of oil is only going to trend upward, Yashchin says.  “All it takes is a shock to [the price of oil, natural gas, or technology like solar panels] and clean tech all of the sudden becomes wildly, wildly profitable,” he says.

Creating Jobs

Not only does Yashchin think clean tech is a sound bet, he also sees it as a significant source for American jobs.
In three years his company, CleanEdison, has trained more than 10,000 students in 49 states to do things like install solar panels and conduct energy audits. The demand for training is there, which is good news for his company—it pulled in $3.5 million in 2011 and has doubled in size every year since launching.

“When we train people to go install solar panels it’s improving the domestic housing stock,” Yashchin says. “And these are jobs that will never go to India.” What America really needs, he says, is a new industry to take the place of home building and manufacturing, both of which aren’t coming back. Clean tech, he maintains, can be that industry.

The Funding Is There

Mitch Lowe, managing partner of the San Francisco-based clean tech accelerator Greenstart, has no qualms about investing in the space now. In fact, Greenstart is taking applications for its third round of companies to go through its program, which offers start-ups the opportunity to receive a $100,000 convertible note in addition to a $15,000 seed investment upon joining. (The deadline to apply for Greenstart’s fall program is April 11.)
Greenstart invests in companies innovating in cleantech and IT, primarily in four areas: smart grid, the built environment, transportation, and consumer services.

“The right software solutions will drive innovation, making clean tech the biggest investment area of next 10 years and beyond,” Lowe says. “It’s going to make Web 2.0 look tiny by comparison,” Lowe says.

Note to Banks: Give Short Sales a Chance!

Posted in Uncategorized on October 25, 2010 by David Griffith

David Griffith Commentary: We’re now facing a lost generation of homeowners, where the American dream has been damaged beyond repair… to paraphrase John Lennon, ‘… give short sales a chance…’

Owners Seek Short Sales as Banks Push Foreclosure

NY TIMES      MICHAEL POWELL, On Monday October 25, 2010, 6:48 am EDT

PHOENIX — Bank of America and GMAC are firing up their formidable foreclosure machines again today, after a brief pause.

But hard-pressed homeowners like Lydia Sweetland are asking why lenders often balk at a less disruptive solution: short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage.

Ms. Sweetland, 47, tried such a sale this summer out of desperation. She had lost her high-paying job and drained her once-flush retirement savings, and her bank, GMAC, wouldn’t modify her mortgage. After seven months of being unable to pay her mortgage, she decided that a short sale would give her more time to move out of her Phoenix home and damage her credit rating less than a foreclosure.

She owes $206,000 and found a buyer who would pay $200,000. Last Friday, GMAC rejected that offer and said it would foreclose in seven days, even though, according to Ms. Sweetland’s broker, the bank estimates it will make $19,000 less on a foreclosure than on a short sale.

“I guess I could salute and say, ‘O.K., I’m walking, here’s the keys,’ ” says Ms. Sweetland, as she sits in a plastic Adirondack chair on her patio. “But I need a little time, and I don’t want to just leave the house vacant. I loved this neighborhood.”

GMAC declined to be interviewed about Ms. Sweetland’s case.

The halt in most foreclosures the last few weeks gave a hint of hope to homeowners like Ms. Sweetland, who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation.

But some major lenders took a quick inventory of their foreclosure practices and insisted their processes were sound. They now seem intent on resuming foreclosures. And that could have a profound effect on many homeowners.

In Arizona, thousands of homeowners have turned to short sales to avoid foreclosures, and many end up running a daunting procedural gantlet. Several of the largest lenders have set up complicated and balky application systems.

Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.

Short sales are also hindered when homeowners fail to forward the proper papers, have tax liens or cannot find a buyer.

Because of such concerns, homeowners often are instructed that they must be delinquent and they must apply for a modification first, even if chances of approval are slim. The aversion to short sales also leads banks to take many months to process applications, and some lenders set unrealistically high sales prices — known as broker price opinions — and hire workers who say they are poorly trained.

As a result, quite a few homeowners seeking short sales — banks will not provide precise numbers — topple into foreclosure, sometimes, critics say, for reasons that are hard to understand. Ms. Sweetland and her broker say they are confounded by her foreclosure, because in Arizona’s depressed real estate market, foreclosed homes often sit vacant for many months before banks are able to resell them.

“Banks are historically reluctant to do short sales, fearing that somehow the homeowner is getting an advantage on them,” said Diane E. Thompson, of counsel to the National Consumer Law Center. “There’s this irrational belief that if you foreclose and hold on to the property for six months, somehow prices will rebound.”

Homeowners, advocates and realty agents offer particularly pointed criticism of Bank of America, the nation’s largest servicer of mortgages, and a recipient of billions of dollars in federal bailout aid. Its holdings account for 31 percent of the pending foreclosures in Maricopa County, which includes Phoenix and Scottsdale, according to an analysis for The Arizona Republic.

The bank instructs real estate agents to use its computer program to evaluate short sales. But in three cases observed by The New York Times in collaboration with two real estate agents, the bank’s system repeatedly asked for and lost the same information and generated inaccurate responses.

In half a dozen more cases examined by The New York Times, Bank of America rejected short sale offers, foreclosed and auctioned off houses at lower prices.

“When I hear that a client’s mortgage is held by Bank of America, I just sigh. Our chances of getting an approval for them just went from 90 percent to 50-50,” said Benjamin Toma, who has a family-run real estate agency in Phoenix.

Bank of America officials also declined interview requests. A Bank of America spokeswoman said in an e-mail that the bank had processed 61,000 short sales nationwide this year; she declined to provide numbers for Arizona or to discuss criticisms of the company’s processing.

Fannie Mae, the mortgage finance company with federal backing, gives cash incentives to encourage servicers, who are affiliated with banks and who oversee great bundles of delinquent mortgages, to approve short sales.

But less obvious financial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.

Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.

Short sales, to be sure, are no free ride for homeowners. They take a hit to their credit ratings, although for three to five years rather than seven after a foreclosure. An owner seeking a short sale must satisfy a laundry list of conditions, including making a detailed disclosure of income, tax and credit liens. And owners must prove that they have no connection to the buyer.

Still, bank decision-making, at least from a homeowner’s perspective, often appears arbitrary. That is certainly the view of Nicholas Yannuzzi, who after 30 years in Arizona still talks with a Philadelphia rasp. Mr. Yannuzzi has owned five houses over time, without any financial problems. When his wife was diagnosed with bone cancer, he put 20 percent down and bought a ranch house in North Scottsdale so that she would not have to climb stairs.

In the last few years, his wife died, he lost his job and he used his retirement fund to pay his mortgage for five months. His bank, Wells Fargo, denied his mortgage modification request and then his request for a short sale.

The bank officer told him that Fannie Mae, which held the mortgage, would not take a discount. At the end of last week, he was waiting to be locked out of his home.

“I’m a proud man. I’ve worked since I was 20 years old,” he said. “But I’ve run out of my 79 weeks of unemployment, so that’s it.”

He shrugged. “I try to keep in the frame of mind that a lot of people have it worse than me.”

Back in Phoenix, Ms. Sweetland’s real estate agent, Sherry Rampy, appeared to receive good news last week. GMAC re-examined her client’s application and suggested it might be approved.

But the bank attached a condition: Ms. Sweetland must come up with $2,000 in closing costs or pay $100 a month for 50 months to the bank. Ms. Sweetland, however, is flat broke.

A late afternoon desert sun angles across her Pasadena neighborhood.

“After this, I’ll never buy again,” Ms. Sweetland says. “This is not the American dream. This is not my American dream.”

 

Foreign Buyers See Big Opportunity in US Housing Bust

Posted in Uncategorized on October 4, 2010 by David Griffith

Michelle Conlin, AP Real Estate Writer, On Monday October 4, 2010, 5:46 pm EDT

The Viceroy, a swanky condominium complex in downtown Miami, gives the impression that the United States is in another real estate boom. The sales office is strangely exuberant. Buyers gush about the glam condos — designed by hipster tastemaker Kelly Wearstler — and their hotel-like amenities: poolside libations, daily housekeeping and room service food stirred up by a celebrity chef.

Since January, 262 of the Viceroy’s 372 units have sold. But there’s a twist: Almost 90 percent of the buyers are foreigners. And they all paid cash.

The Viceroy’s story is playing out across Miami. Individual investors from as far as Argentina, Canada, Colombia, France, Israel, Italy, Norway and Venezuela are swarming the city’s sales offices to get in on what they see as one of the greatest real estate fire sales in the history of the United States.

At one time, these people would have invested in the U.S. stock market. Now they see the opportunity of a lifetime in the nation’s debilitated housing market. The idea is to rent out the properties and then sell them once the economy turns around.

The math is seductive: Prices at the Viceroy are roughly 52 percent off the 2007 peak. Units once sold for as much $670 a square foot. Today the average price is $319.

“I have never seen such a high concentration of foreign nationals acquiring real estate,” says Peter Zalewski, who has been in real estate for 15 years and founded Condo Vultures, a consulting and brokerage firm. “Eighty percent of the sales in downtown Miami are foreign-based. This is unprecedented.”

Miami is hardly the only hot spot for buyers from outside the United States. Real estate brokers say they’ve seen a surge in Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying property sight unseen, says Joe Brazen of Brazen Sotheby’s International. In New York, 25 percent of buyers at the Armani-designed 20 Pine building, near the World Trade Center site, are from overseas.

“It’s a positive in a sea of negatives,” says Jonathan Miller, chief executive of Miller Samuel, a real estate consulting firm in New York.

This year in Phoenix, for the first time, there have been more buyers from Canada than from California, according to real estate data outfit Information Market. With the Canadian dollar approaching parity with its U.S. counterpart, the opportunity was simply irresistible to Jim Chuong, a 38-year-old Novartis sales manager from Toronto.

Chuong, whose house in Canada is already paid off, used to invest in U.S. stocks. Now he’s investing in Phoenix condos, paying $50 a square foot for units that would cost $500 a square foot in Toronto.

“It’s ridiculous is what it is,” Chuong says.

For foreigners with cash, the deals can make them money from day one. Chuong buys two-bedroom condos for less than $40,000 in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each. The deals are now easy to do, thanks to the cottage industry of companies that has grown up to manage virtually everything for foreign buyers, down to badgering renters for the monthly check.

For the international investor class, the United States’ bloated inventory of homes, high unemployment and weak currency make for an unusually attractive buyer’s market.

“Never before have all these things come together like this,” says Patrick O’Neill, chief executive officer of the Hong Kong-based O’Neill Group, which helps Chinese invest in international real estate. O’Neill says Chinese buying in places like New York is on track to double this year.

“Unless you want to go to Baghdad,” O’Neill says, “the United States is the best you can get.”

The trend is showing up in the statistics. In a National Association of Realtors report released in July, 28 percent of brokers reported they had worked with at least one international client, up from 23 percent a year earlier. Among those, 18 percent had completed at least one sale, compared with 12 percent in the 2009 report.

“I was going invest in the stock market, but I decided to invest in real estate instead,” says Diego Garcia, a Mexico City native on assignment in New York City with Pfizer Inc., where he is a regional finance director. Garcia paid $850,000 for a Manhattan one-bedroom in a gleaming new high-rise that he plans to live in for now. “I’m a conservative guy,” Garcia says, “and this was more conservative.”

That’s not to say there aren’t steep risks. An economic jolt could easily throw the whole plan into disarray. The housing market is far from a recovery. In many places, prices continue to fall. What happens if currency values reverse and a foreign owner needs a quick sale? Or a renter bolts in the middle of the night, leaving an empty unit and no cash flow?

It’s not as if foreign buying can be counted on for a housing market turnaround. Overseas buyers represent a mere 7 percent or so of today’s total. Yet in some cities, such as Miami and Washington, the foreign sales are helping to stabilize the markets.

In past downturns, buying a property in the U.S. was the prestigious purview of the wealthy, but today the market is within reach of the swelling ranks of the global upper-middle class.

Colombians, who often call Miami the most beautiful city in their country, have always been drawn to Florida. The difference now is the upside-down economics. It is cheaper to buy in Miami than in Bogota, and you can fly between the two cities for $59 each way.

“Muchos muchos muchos muchos opportunity,” says Elsa de Blaschke, who owns a construction company with her husband in Barranquilla, Colombia, and is hunting for an investment property to buy in Miami. De Blaschke chose not to invest the capital at home because she says Florida offers a better chance of a bigger return.

“The international buyer pool is better than we have ever seen it before,” says Phillip White, president of Sotheby’s International, based in New York.

To match demand, U.S. brokerages are hiring agents who can speak foreign languages and are pouring more resources into marketing overseas.

In October, agents from 11 Sotheby’s International branches will descend on Hong Kong’s convention center to regale wealthy buyers there with slick visuals on showcase properties. In Toronto, agents from Florida Home Finders play to crowds of 800 every other Sunday at a Holiday Inn banquet hall. Jenny Huertas, Condo Vultures’ international sales director, throws seminars for potential clients across South America.

“Their jaws drop. They can’t believe it,” Huertas says. “They think these deals are too good to be true.”

How To Buy a House at a $100,000 Discount

Posted in Uncategorized on October 4, 2010 by David Griffith

By Anna Maria Andriotis
Tuesday, September 28, 2010

To pare down their growing inventory of properties, Fannie Mae and Freddie Mac are scrambling to unload nearly 150,000 foreclosed homes. And that means 2004-esque deals — like requiring as little as 3% down, offering to pay a portion of the closing costs and arranging special financing and warranties for repairs and renovations.
It’s another option for home owners who want to trade up — and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.

The best bargain might be the home’s price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.

And while many of Fannie and Freddie’s homes are at the lower end of the market and in less-desirable areas, a SmartMoney.com search of Fannie Mae and Freddie Mac listings revealed that buyers could find properties in good neighborhoods — and for $100,000 less than comparable houses nearby. For example, a five-bedroom, three-bath with a backyard, deck and two-car garage in tony Alexandria, Va., was listed for $445,000, $100,000 less than the average listing price in the area, according to Trulia.com. Four blocks away, a similar non-foreclosed colonial is listed for $639,900.

Or how about a three-bedroom, two-bath in Bergen County’s leafy River Edge, N.J for $359,900 — $85,000 less than the average listing in the area. One avenue over, a non-foreclosed similar home is listed for $474,888.
The downside: Angry neighbors. These types of listings are devaluing nearby properties, says David Howell, realtor and executive vice president at McEnearney Associates, which sells homes in the metropolitan Washington D.C. area. That means in some areas where Freddie and Fannie homes are on the market, buyers could find a better deal on a nearby market-rate home that doesn’t require repairs, he says.

Buying a Fannie or Freddie home can be more complex than pursuing an open-market real estate listing — or even a commercial bank foreclosed property. There’s a smaller selection of appealing properties — there were just six higher-end homes listed on a recent day in Alexandria, for example — and those tend to sell the fastest. And there’s little room to negotiate price.
“Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them,” says a Freddie Mac spokesman. “We absolutely have no motivation to be leading a downward spiral in home prices.”
The three best features of Fannie and Freddie foreclosures that make digging for these deals worthwhile:

Small Down Payment
For its foreclosed properties, Fannie Mae will accept down payments as low as 3% on 30-year mortgages at the same interest rates banks are currently offering. And Fannie Mae doesn’t require private mortgage insurance. Compared to a typical bank mortgage, which requires 10% down, plus PMI for buyers with less than 20%, that’s a huge savings — an estimated $51,000 up front and upwards of $2,500 per year PMI on a $300,000 mortgage.
It’s a tradeoff, though. For buyers with 20% down, mortgage payments on a 30-year mortgage loan at 5% would be $1,288 a month. With just 3% down, the buyer would need to borrow $291,000 and make a $1,562 monthly payment.
Help with Renovations
Fannie and Freddie have fixed big flaws like leaky roofs and damaged electrical work, and they often handle small projects like replacing appliances that are broken or missing, tearing up old carpet, or fixing other damage left by former owners or vandals.
Now, to entice buyers who want to update or upgrade, many of Fannie Mae’s properties come with an optional mortgage that includes extra financing up to $30,000 for repairs and improvements. But with a little down payment and the extra amount tacked on, the buyer could end up owing more than the house is worth — especially if home prices continue to drop.
First Dibs
Buyers who plan to live in their Freddie Mac-purchased home will get to see properties for at least the first 15 days they’re on the market — before the listing opens to would-be landlords. Many bank-owned foreclosure properties are snatched up by cash-stocked investors who can wait out the downturn to sell later at a profit.
And Fannie and Freddie homes can be seen inside and out — unlike some regular foreclosure listings. Consider bringing along a contractor when you view the home to help spot areas that need repairs and provide pricing. (Most contractors will do this for free.)
“It gives families who want to buy a home to live in the opportunity to look and bid without competition from cash-rich investors,” says a Freddie Mac spokesman.

Franchising Provides Over 10% of US Workforce

Posted in Uncategorized on September 16, 2010 by David Griffith

September 15th, 2010 Posted by Jan Norman, small-business columnist

More than one in every 10 (10.5%) U.S. businesses that have employees is a franchise, reports the U.S. Census Bureau, based on the latest Economic Census data. This is the first time the Economic Census has gathered comprehensive data about franchising, which is a way of doing business whereby a successful company contracts with independent owners to use a trade name and method of operations in exchange for a fee and usually ongoing royalties.

Some of the world’s best known brands are franchises, including Subway sandwich shops, 7-Eleven convenience stores and H&R Block tax preparation. Among the franchising companies based in Orange County are Taco Bell in Irvine, AM/PM Mini Markets in La Palma, Budget Blinds in Orange and Aussie Pet Mobile in Dana Point.

According to the Economic Census: Franchises have total annual sales of $1.3 trillion; Franchised firms employ 7.9 million workers; Franchised firms have total payrolls of $153.7 billion; New car dealers were the top franchises in sales, $687.7 billion, followed by gas stations with convenience stores and fast-food restaurants; Fast-food restaurants have the most franchise establishments, 124,898; Franchises dominate some industries: 100% of new car dealers are franchises, 74.4% of fast food restaurants are franchises; 62.7% of diet and weight loss centers are franchises.

However, the Economic Census collected its data in 2007, and franchises like every other aspect of the economy have been hit by the recession. It is likely, for example, that many of franchisees counted for the construction industry three years ago are now out of business.

The International Franchise Association and PricewaterhouseCoopers have done two economic impact studies of the franchise industry. In December, that report indicated that franchising in general had lost 409,000 businesses and $5.7 billion in 2009. The same report forecast a recovery in 2010, but actual economic activity for 2010 won’t be reported until the IFA convention in February 2011.

Tom Mesenbourg, deputy director of the Census Bureau said, “The understanding we gain from these statistics about what impact franchise businesses have on the U.S. economy is a good example of how government and business can partner to provide relevant quality data to the business community.”
IFA Chairman Ken Walker said, “Franchising plays a vital role in our nation’s economy and drives new job creation. This 2007 Economic Census Franchise Report will provide valuable data for the IFA’s third edition of the Economic Impact of Franchised Businesses, conducted by PricewaterhouseCoopers.
The inclusion of franchising questions in the 2007 Economic Census came from cooperation between the Census Bureau and IFA, the trade organization said.