Some Real Estate Executives are Diversifying : )

Hersch Klaff of Klaff Realty is making a bid for the rights to the Chicago Cubs. With all of the negative press that real estate has gotten in recent months, I am taking this bit of news as a breath of fresh air.

Klaff Realty is known for acquiring distressed retail / office space. Obviously, Mr. Klaff sees value in the Chicago Cubs, who haven't won the World Series since 1908. Although I am sure that Hersch is a sports fan, I think that he also sees value in this franchise. With bids expected to exceed $1 billion, it's apparent that each one of these investors wishes to be the one to bring a World Series Championship back to the Chicago Cubs who haven't won it all for 99 years.

9 other parties also see value in this opportunity and are competing with Mr. Klaff, so at this point the auction has just begun. According to reports, the Chicago Tribune, who currently own the rights to the team, will not finalize the deal until the conclusion of the 2008 season. Their goal is to have the deal close by the end of the calendar year, or the first part of 2009.

Only 5 of the 10 parties that are currently bidding will be honored to make it to the next round. Something tells me that Mr. Klaff is going to move forward. With Klaff Realty stationed in Chicago, I am sure that he is considering his investment group to be one of the front runners. His business is rehabilitating distressed properties and making them profitable. Not to say that the Chicago Cubs are a distressed organization, but the Tribune Company is restructuring it's portfolio and has decided to unload the historic organization.

What a chance to both make some money and get a little fame. If there are 10 groups in the running for the chance to take over the reigns, the juice must be worth the squeeze. If I had the money, I would be number 11...

GO FIGURE

This logo will no longer be used. The bank formerly know as Indymac bank will now be called Indymac federal bank. What do you know...this coming days after Indymac laid off 2400 employees. This is the latest in collapses due to questionable lending practices during the most recent real estate boom. When is the downward spiral going to stop?

Nobody knows for sure, but right now Americans need to strap in and brace for the financial storm. Things are getting hairy and they are only going to get hairier in the coming months.

Home Prices in Malibu..SF...Ahhhhemmmmmmm

Wow! This $65 million dollar listing that Steven Shapiro with WEA real estate has in Malibu could potentially set the all time record for price in the Malibu area for a single family residence. It's located at 21804 PACIFIC COAST HWY, MALIBU, CA 90265. The realtor.com mortgage calculator indicated that the estimated monthly expense for a mortgage would be over $352,000!!! Holy smokes...Who in the HE-double hockey sticks can afford that kind of nut every month.

The funny thing about this listing is that it's located right on Pacific Coast Highway...Granted, you have private sand on the highly desired Carbon Beach...but you are still on PCH. That amazes me!

In San Francisco, there is a listing at the same price of $65 million located in the famous Pacific Heights district. The address is 2845 Broadway St. San Francisco, CA 94115 and the property is listed by Warwick Properties.

There is such a small group of people in this World that will ever have the resources to purchase either of these homes. I mean, let's get serious...$65 million! What extravagance...Even if I did have the money for either one of these homes, I think I would feel a little strange living in the clouds like this when there are still people in the street begging for money and food. The homeless problem in both Los Angeles as well as San Francisco is literally out of control.

Areas like Pacific Heights in San Francisco and Malibu in Los Angeles are 2 examples of extremely posh living. Despite the headlines in the papers and online about the collapse in the real estate market, one wouldn't know it by evaluating either of the neighborhoods that I have featured in this entry.

Indymac on the Ropes

For those of you who haven't read the financial section of your local newspaper, Indymac cut roughly 24% of it's workforce or 2,400 jobs.

This is the only plan that Indymac sees in order to return the company to profitability according to Mike Perry (pictured) the company's CEO. Here is one more domino freshly fallen in a long series of disasters that is effecting our economy and specifically our real estate market. Indymac also forsees having to lay off an additional 500 to 1000 employees in the next six months to a year. Yikes :(

These are tough times that we are going through. Many people in this business don't have the corporate "Golden Parachute" where they will either receive a buyout package, or have their jobs spared. One thing is for sure...If I was working for Indymac, I wouldn't be calling in sick any time soon...

Goodbye Mozilo....Hello BofA

Talk about getting phased out of the business completely. Angelo Mozilo is done. His career is done. His career in court, however sounds like it could be a different story. There are many people in this country that say that Angelo's drive and determination to be #1 in the industry led to the dramatic, Enron-esque collapse of his empire at Countrywide Home Loans.

The thing that really chaps me is the word on the street that Mozilo single handedly manipulated the loan structure for some of his "high profile" clientele. By manipulate, I mean that he gave them the best deal in the country. Unreal, rates... and the appraisals...even more unreal. Some of these restructurings that he made happen included massive cash out refinancing with obscenely exorbanent appraisals in ridiculously short periods of time. One particular instance took place a mere 4 months after the initial financing. Only the appraiser declared the house to be worth several hundred thousand more dollars that the previous appraiser noted just 4 months after the purchase took place.

Something smells funny doesn't it? That's right...It's Mozilo...

What ticks me off personally as a consumer is that Angelo is giving the sweetheart deal to someone that probably doesn't need it. He just wanted to put his financing cape on and play superhero for someone. In the process, he pissed off Americans accross the country, in the nation's capital, and made a mess that it will probably take the rest of his life in order to clear it up...if at all.

Thanks for all the good times Angelo. I am glad to see that we are finally turning the page.