The Other Kind of Privacy- Property Postings

Although there are many reasons people move from the city to the country, some of the most common include the desire for a little elbow room and some privacy. I am always surprised when I found out what my real estate clients mean when I ask them to define both. When I lived in Manhattan “elbow room” was measured in small amounts of square feet and the difference between a large apartment and a small one could be as little as 100 square feet (just 10’ by 10’), and if you wanted privacy, forget about it. There is no such thing. The solution for some of us was to purchase a second home upstate. 

I lucked out. The short story was that in 1985 I had two kids, a 3 and 5 year old who both needed to go to school in Manhattan. At least at that time this meant private school. With limited resources we went with a school in the village, Little Red on Sixth Avenue. No Dalton, but safe and reasonable. I used to call it “10 fingers and 10 toes.” (This meant I was relatively sure my kids would come home with the same amount of digits they left our loft with in the morning.) It costs $10,000 per kid per year back then. I have no idea what that would cost today. The bottom line was that we had purchased a vacation home with relatives upstate and while writing the check for the 1985-86 school year we decided we needed a big change. We bought out the other relatives (partners) and decided to go “Green Acres,”  and in 1986 we sold our loft and moved permanently to East Durham, New York. 

As I said, we lucked out. Our new home was at the end of a dead end road. It is 98 acres with two streams, a 1 acre pond and fully treed. Once we thinned some of our south facing trees we got awesome views of the mountains. Better yet we were surrounded by other large parcels so we have unbelievable privacy. Always looking ahead I started to research the best ways to reduce our taxes, knowing that this was going to be our biggest growing budget number. I didn't want to deal with ever increasing property taxes so I found out about Section 480-a of the tax code which allows for a large tax abatement if the landowner complied with an approved NYS forestry plan. New York State allows such a plan on parcels with 50 or more acres of wooded property. I’m saving a full explanation of this plan for a future post but if you are interested just follow this LINK and read about the process. 

1. You must own or have land use rights on the property to be posted.
2. Signs must bear the name and address of the owner, lawful occupant or other person or organization authorized to post the area. The first names can be only initials (so mine simply say H&C Zucker) and the address need only be the town, not actual street address (so mine simply says East Durham, NY. My post office address is actually a different town, Cairo, but because the property is actually in East Durham my signs must say East Durham, not Cairo.)
3. The sign must be at least 11” by 11” and the written part must take up at least 9” by 9” or 80% of the sign.
4. The sign must bear a conspicuous statement which shall either consist of the word "POSTED" or warn against entry for specified purposes or all purposeswithout the consent of the person whose name appears on the sign.
5. At least one sign must be set on each side of the protected area and on each side of all corners that can be reasonably identified. Signs should be no more than 660 feet apart, close to or along the boundaries of the protected area. Since the signs must be conspicuous, they should be high enough, and spaced closely enough to be seen. Please don't turn your property into an eyesore by using more signs than are necessary, although I do recommend that on street boundaries where the most trespassers may come from I shrink the distance and put signs every 200 to 300 feet.
6. Signs must be maintained annually by the landowner.

One of the requirements for this tax reduction plan involves the marking and posting of your property. Marking is easy. This means you would pick a symbol, mine are two horizontal blue lines, and paint the symbol on boundary trees. The posting requirement is a bit more involved. Whether you are posting for NYS Forestry reasons or just to keep others off your property, the requirements are the same. Below are the important steps and requirements for proper posting in New York State:
There are a few other things that might be helpful. The first is that you have no obligation to post. Anyone who trespasses is still legally a trespasser  The property does not have to be posted to prosecute the offender, but it is much more likely that a judge will prosecute the offender if the property is properly posted. You may also post only a portion of your property. You can include language on the signs that require permission for entry. This serves multiple purposes. By giving permission to some people for some activities you will be in a better position if any adverse possession issues come up. It also lets the public know that if asked, permission might be granted. 

One of the funniest things that has ever happened to me, and says something about the times we live in took place a few years ago. As I said, my property is very large with multiple streams. One of those streams has a series of waterfalls, one of which has over a 50 foot drop and is very dramatic. In the winter it is simply beautiful. One day a brand new Land Cruiser pulled up to my front door and a handsome, well dressed man got out and introduced himself as “almost” a neighbor. By “almost” he meant that his property bordered a parcel that bordered my property. After the introduction he asked me what I still consider to be the stupidest question I ever heard. “My wife and I love your property and walk it all the time. Can we buy your waterfall?” 

At first I thought that he was kidding, but he wasn't  Once I realized that he actually meant it, I told him “NO” and reminded him that he was trespassing and should ask permission if he ever wanted to enter it again. While this may seem like an un-neighborly thing to do, it wasn't  It was simply protective. Whether the property is posted or not, the General Obligations Law protects landowners from liability for non-paying recreationalists on their property. Because of this protection, recreational liability lawsuits against rural landowners are uncommon, however this protection does not apply in cases of willful or malicious failure to guard or warn against dangers. The problem with this is that “willful or malicious failure to guard or warn against dangers” is not specific and is interpretable. A rope or dropped tree across a path on the property could be a viewed as a danger and as we have become a very litigious people, not something a landowner should take jokingly. Remember, some crazy woman successfully sued McDonald's for a scalding she claimed she got from a cup of hot coffee. I’d take no chances. Murphy’s Law is real and the best way to protect yourself is to protect your property rights. I will always give neighbors the right to walk my property, but do expect a call for permission. It would be best for you to protect yourself as well. Click here to download the "Ask Permission Slip" (26kb pdf).

The Benefits of being a Green Landlord

Like every other business, residential property management has changed to match this new internet based business model that has become the new normal and while most real estate has yet to “come back” to the value of just a few years ago, apartments are one real estate asset  that has keep it’s value. I would be lying if I didn't say that my real estate investments have been my most predictable income stream and the main reason this recession has been bearable. A few years ago I decided that I should take my own advice and Green up my apartament's and it may be the time for you to do the same. The process has three steps: greening the marketing/application process, greening the apartment painting and preparation area and finally making each unit and the building as a whole, more energy efficient.

 

The best part of greening the marketing and advertising section of your job is that it requires less work and is faster and simpler than the paper version of the same job. To start with, I’ll assume you are already marketing on Craigslist or some other online classified listing site. To fully take advantage of these sites remember that the busier the market, the more that is posted, the less face time your ad will have with the limited quality prospective tenants. That means that you need to refresh your listing every week by removing them and then replacing them with an updated version which will move your ad up the daily listings. Secondly, take advantage of the 4 pictures you are allowed to upload with your listing and take your time to show the best features of that particular apartment. If the building itself is impressive, use a picture of the building in the ad as well.

 

In your ad try to list all the information you want prospective tenants to know, leave nothing out. This information should include what would like to highlight about the apartment and building amenities, as well as any of the shortcomings that particular apartment might have.  You might want to ask why would I tell you to include any of the negatives in the apartment but the reason should be obvious, if those negatives are going to bother the prospective tenant when they see the apartment, you would be better off not wasting time with that match.  An example would be that I have a number of apartments with very small kitchens and I really can’t hide that.  I know that anybody who does a lot of cooking is not to want one of those apartments and so it would be wise for me to tell prospective tenants because I know that for many people, a small kitchen is unimportant.  Any correspondence with the prospective tenant can be used as a filtering device.

 

Now that you’ve limited the wrong tenants and found a needs matching potential tenant try to continue to keep the process electronic.  I create all my applications, disclosures, and blank lease forms in Google docs so that I can simply “share” these documents with my potential tenant.  I have them email me permission to run a credit check and return the documents with this “sharing” once they credit check comes back as a go-ahead.  This takes care of my legal position in running a credit check and also verify their email address and contact information.  I then ask them if the lease is acceptable and then to either scan the documents and email back to me as a .pdf file or mail to hard copies via snail mail to my office address.  I then can send them back a fully executed lease, also as a .pdf file.

 

Included in my application process is the requirement for an e-mail address and a cell phone number and permission to use text messages and email as the default communication method. Once completed I know I can communicate with my tenant with a minimum of effort.

 

The second part of the Greening process is all the work in the apartment itself.  I include three separate areas in this process.  The first is cleaning, the second painting and the third is windows and appliances.  For anybody who has followed my posts this year there should be at least a few related to using non-toxic, biodegradable, natural cleaning products so I won’t go into that right now. These products were named and linked in my 11/6/12 post. Using these natural products will not only save you money but will give you a giant marketing advantage in marketing your apartments as Green.

 

As most apartments get painted at least every three years so it’s important to know that almost all of the major paint manufacturers have a line of either no VOC’s or low VOCs. (VOC’s are Volatile Organic Compounds, which are gases that may have both short and long term health issues. These new paint’s have about a 10% premium in pricing but have two major advantages in usage. The first is there is no smell from the paint (it’s the smell that are those chemicals) and so it is both pleasant to paint as well as a nice for the tenant moving in to not have that “latex” smell in the apartment. The second advantage is the ability to market the apartment to a progressive thinking tenant. Landlords sometimes have a view of their tenants that does not match reality. We sometimes use reverse-discrimination and believe that only high income tenants care about environmental air quality but from real-life experience I can tell you that this is not the case.  While you may not be able to get a higher rent from low income tenants you will get a better quality tenant from Greening even your least expensive apartment.

 

 A few more suggestions:
Use only one interior color in painting all apartments.  This means ceilings, walls and woodwork will get one color.
Pick a color that is neutral, that you think anyone would like and make that the color of every apartment in that property. I use either Benjamin Moore Linen White or Benjamin Moore Antique White. All other paint manufacturers will match either of those colors.  Since 2011 almost all of the paint manufacturers have gone to low VOC paint formula as well as having a VOC free version.
At least once a year, or maybe once the lease is signed with the new tenant, the tenant will ask you if they can paint one room, or in some cases a more than one room a different color. Your answer should always be no. (If you absolutely have to give in you should add an amount equal to two times the cost of repainting the apartment as additional security deposit.)
 Use either flat or eggshell on ceilings and walls and semigloss or gloss for all woodwork.

 

The last step greening your apartment building is to make each unit as energy efficient as possible. If you are here in the Northeast that means that the biggest bang for the buck is in weatherizing. On a purely selfish level most of the appliances may be owned by you but the electrical usage is billed to the tenant so while you may want to modernize the apartment (for rental reasons) with a new refrigerator, your best return on investment will be in saving money in heating costs. The more you keep the utility costs down, the more you make. On a per apartment basis the bulk of the heat lost in each apartment is due to the windows (and window frames) and exterior electrical outlets. The exterior electrical outlets can be insulated easily by purchasing electrical outlet insulator’s at your local hardware store.  They are typically sold in packs of 10 for $1.99. Best two bucks you’ll ever spend.

 

The windows and window frames are not so simple. First you need to access the situation. What type and the age of the windows are is important.  Most home or apartment windows are called double hung and have a movable lower and upper pane and are either single pane or double pane (sometimes called an insulated window.)  If your windows are relatively new and are double pane windows you need go no further.  However if these are the older single pane windows the next question would be “Is there a storm window outside this window?” If there is a storm window all we would need to do is to make sure it was working properly. If there are no storm window’s then the option would be to either completely replace the window’s (with a cost of $250-$500/window), put on a storm window (with a cost of $65-$100/window) or install an interior storm (with a cost of $100/window.)

 

I can’t tell you which is best for you.  The return on investment is only one part of the equation.
New windows also have a  marketing value in addition to saving you operating expenses. Certainly if you can afford to replace the old windows this would be your best choice, however almost as important as the windows is the frame the window is sitting in. In most cases the window itself was put into a frame with a quarter inch gap on all sides (called a rough opening).  The window was then shimmed and nailed.  The gap was then filled with fiberglass insulation and then trimmed out and painted.  In most cases even if it’s a new window it might have been installed this way.  The best thing to do then is to take off the casement trim on the window and see if the insulation is fiberglass or foam. if the insulation is foam you can close it up and be happy you have a well sealed house.  However if it is fiberglass insulation you will need to remove the insulation and replace with non-expanding foam. (Expanding foam would ruin the window so make sure the foam you purchase is non-expanding.)

 

There will always be more to do when winterizing your apartment building and the apartments within. If the apartment has it’s own thermostat, switching to a programmable EnergyStar® thermostat will help. Once your improvement’s are made your marketing can begin. You will be amazed at the results of simply adding Green to your marketing campaign. Good luck. If you do it right, it will mean more green in your pocket.

Best Towns with Public Transportation in Upstate New York

All of the counties north of New York City are great places for a second home in upstate New York. Generally one of the most important issues facing city folk in deciding where the best place is how long will it take to get there. When I moved up to East Durham in 1986 it had to be in the 2 ½- 3 hour driving range (this of course does not include traffic time.) While driving time was most important to me, today the younger crowd is much more ecological and while time is still one of the most important issues, many now travel by train or bus and this changes the equation considerably. To that end let me show you the public transportation (trains, buses, shuttles and local transportation) options and the best places to look for a home.

 

I will make some assumptions before I begin to explain these options. The first criteria that I am going to assume is a 3 ½ hour maximum trip (not counting the time from the arriving bus or train station to your upstate home.) I will assume only train or bus transportation. Lastly, as a Realtor® I will remind you that there will be a relationship between these bus and train stations and the price of housing. An example, the closer to NYC the more expensive the housing. The closer to a bus or train station the more expensive.

 

To begin, below is the northern Amtrack stops and schedules for the Adirondack Route which leaves Penn Station in NYC and travels north to Montreal. If you look at the schedule (below) you will be able to see the timeline for each stop. (Example: If you took the 8:15 am train from NYC to Hudson, NY you would arrive at 10:15 am.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For additional calculations (east or west of the train stops) it is worth adding 2 minutes per mile to your ultimate destination. Example: If you were to calculate travel time from Penn Station to the Town of Cairo the travel time would be 2 hours (Penn Station to Hudson, NY) plus 28 minutes to Cairo, NY (14 miles west of Hudson, NY) for total travel time of 2 hours 28 minutes. To extrapolate, if you wanted to travel further north you would need to stay closer to the station, if you were willing to spend more for a second home, you could purchase closer to Croton-Harmon, Poughkeepsie or Rhinecliff, NY, the 3 stops closer to NYC which would allow you either a shorter trip or the time to travel to a town east or west and still stay in the same 2 ½ -3 hour travel limit.

 

Using this schedule and the 3 ½ hour limit you could look all the way up the Hudson River to Saratoga Springs. There is bus service (with 4 routes) from Hudson to Albany through most of the most popular Columbia County towns. For more in depth information for local transportation for Columbia County, Greene County, Dutchess County, Ulster County & Sullivan County for bus routes click HERE. For more information for shuttle services closer to Hudson, click HERE.

 

The bus transportation availability is a bit more complex.HERE is the Trailway Bus Line map which includes 11 other carriers. For practical purposes this is the most relevant section, which includes the most popular towns from Newburgh to Oneonta and from Poughkeepsie to Stanford. Note the insert from Haines Falls to Hunter. The travel time from Port Authority Terminal (on 42nd Street) to Saugerties is 2 ½ hours, NYC to Phoenicia is 2 hours 45 minutes.

 

From a real estate POV, the important thing to remember is that while the closer to NYC the higher the hosue prices will be, there are also other variables like hipness, closeness to shopping and activities (like fishing or skiing) that will add value/price to real estate in these towns and hamlets. Towns like Woodstock and Phoenicia will have a premium (for hipness), Windham and Hunter (for views and closeness to skiing), Kingston, Saugerties and Catskill for Hudson River access and any town along the Esopus Creek, Woodland Valley, the East branches of the Delaware, East and West Kills, Batavia Kill and the Catskill Creek for great fishing.

 

If you haven’t bought a second or retirement home yet, this is an opportunity of a lifetime. Prices upstate are now at levels not found for 15-20 years. We are at a point in time when the price of real estate in these locations reflects not only a much lower cost than just a few years ago but also reflect a 20% to 30% discount on the replacement cost (actual cost of purchasing land, adding infrastructures and building a house.) As with all previous recessions, we won’t know it’s over until we have already gone into the next growth cycle and prices are back up. With most towns in upstate upping their subdivision and construction permitting standards this cost of new construction is bound to increase, making an existing home more valuable. If you haven’t purchased your getaway home yet, now is the time to get off the fence and jump.

How to be GREEN, living in the Country

Whether you live in the county or just suburbia, the lifestyle leads to some very unhealthy, polluting living. From cutting the grass to trimming trees or just blowing leaves you are more likely going to be using both four cycle and two cycle engines. We can use four cycle engines more efficiently and two cycle engine are as dirty as it gets. We need to turn that around and clean up our act. Due to the fact that two cycle engines mix oil and gas prior to burning, the use of these engines lead to both a waste of fuel (almost 40% of the fuel is not burned) as well as as much pollution per hour of usage as the largest gas guzzling SUV’s. The good news is that most of this pollution is controllable.

 

To start with, we can use environmentally safe engine oil in our four cycle engines (like lawn mowers or lawn tractors). Developed by Green Earth Technologies®  we now can switch from petroleum based motor oil to G-Oil®  an environmentally safe non-petroleum substitute. As is the case with most energy savings issues, we can reduce both pollution and fuel savings by making two lifestyle changes. The first is mowing less often and/or mowing less areas around our homes. I have a 5 acre yard but for years I only mow 1 of the 5 acres when necessary, not regularly (just because it’s Sunday doesn’t mean I have to cut the grass.) Due to the deer tick problem up here in Greene county I do cut the other 4 acres once a month. If you really want to help, switch to G-Oil® for your lawn mower and/or lawn tractor as well as your car’s oil changes. Follow this link to see all of the oil change locations in both upstate New York as well as the entire New York Metropolitan area. These locations also sell G-Oil®  for the do-it-yourselfer's.

 

Even more polluting than mowers and tractors are the dirty two cycle engine string trimmers, leaf blowers and chainsaws that have become part of our life. For this problem I have two solutions. The first is switching from standard two cycle engine oil to 2 Cycle G-Oil, also manufactured by Green Earth Technologies®. If you are handy, in addition to switching oils you can save huge amounts of fuel by making your regular 2 cycle engine into a Direct Injection engine. (A retrofit kit can be purchased at Envirfit.org.)

 

Like all families, some of us are a bit more environmentally aware than our partners or family members. In my family I have to deal with a wonderful wife who is also a bit OCD. (The kids and I used to torture her by just moving things in the house by a few inches and sitting back to watch her.) Well one of “her things” is a certain look of our front yard. I must string trim weekly and include killing all weeds growing on our driveway and pathways. I’ve already switched to 2 Cycle G-Oil in my string trimmer. As is typical to most environmental challenges the solution is both less expensive and very easy. There are few products worse than the most popular herbicide RoundOut®. The good news is that I can both save you money and make your home environment less toxic. For the past 15 years I have been using a home brew of 1 gallon white vinegar and a cap-full of any citrus based degreaser (which is non-toxic and biodegradable) in a pump sprayer to kill any of the weeds that grow along my driveway and other yard paths. It works within a day and does just as good a job as toxic chemicals in a non-toxic biodegradable way.

 

While you are changing the way you treat your yard, why not make as many indoor changes as you have made outdoors. While most of the typical cleaning products manufacturers now have “green” products, why not buy wholesale from a NYC company American Cleaning Solutions which is local (Brooklyn, NY), doesn’t sell the bad stuff as well as green products (like the Clorox company) and sells concentrates that are both economical and environmentally safe. Over 10 years ago I purchased a gallon each of GC 55 GLASS & WINDOW CLEANER,MP 11 MULTI-PURPOSE CLEANER (which cleans floors, walls, chrome, stainless steel, table tops, vinyl, sealed wood and many other surfaces not harmed by water) and SAFE 2 CLEAN PEROXIDE CLEANER(for cleaning toilets). I have yet to use more than ½ of any of them as they each make between 32 and 64 gallons of products. Let me repeat, it has been 10 years since I have been using these products and assume they will last another 10 years. The only unfortunate thing is that as the company sells wholesale directly to janitorial supply companies so if you want their products you must call them at 888-929-7587 to order them. They also make a number of other green products so it is definitely worth checking out their website.

 

Lastly, with the winter coming on we can all do the earth a favor by not using non-environmental salt melting agents. While there is no perfect melting solution, the best choices are any of the acetates. These can be purchased at any good hardware stores. If you can’t find it nearby, it can be purchased in bulk at Meltsnow.com.. That’s it for now. Have a green winter.

24 Tips for Finding a Great (Caretaker, Handyman, etc.) in Upstate New York

I moved from Manhattan to my home in East Durham, New York, full time in 1986, and since then I’ve made a living primarily as a Realtor with an office in Cairo, New York. The question that downstate buyers ask most often is where to find a qualified caretaker of some sort: a handyman, property manager, mover or caretaker, or someone to do snow removal or lawn maintenance.

If you need all of those things, I suggest going with a professional property manager. But if you’re looking for something less, we need to talk. The first step is always to understand that the goal is not a simple one. These helpers come in every skill level and vary from amateur to professional and everything in between. Will they be paid by check or in cash? Will it be a one time thing, a seasonal hire or a true employee (part time or full time)? Lastly, just how rural is the location? Some towns are so small that it would be impossible to satisfy all those needs with anything other than professional management company, or multiple people.

I’m going to assume that what you need is a basic handyman (basic plumbing, electrical, painting, drywall and landscaping skills.) Here in Greene County (the surrounding counties would be slightly higher), pricing for a person calling themselves a handyman will vary from $10/hour to as much as $35/hour. The number is really irrelevant. Why? Because (and here is the most important tip you’ll get) the price per hour is not as important as:

1. What is the job worth?
2. How long does the handyman think it will take to complete the job and is that how long it really took?
3. How close is the estimate to the final price?
4. Do you trust it was done correctly (some stuff is behind the walls)?
5. Does the quality of the work fairly represent the quality stated and desired (sometimes  just a tweak is needed)? Are you getting it?

Forget about dollar per hour prices. Forget about what you are used to. Start to understand that things are done differently upstate and with less skilled people when you interview (2nd tip, never hire anyone you haven’t met and talked to) the best approach is to have a list of tasks or jobs ready to go and ask the handyman how long he/she thinks it should take and estimate what that would cost. (This is actually a test. I have tried handymen who always underestimate either time, scope of work or both.) Again, if they start with “I have no idea how long that will take but I only charge $10/hour,” you have the wrong person. Am I being completely clear?This interview is the most important part of the hire.

The biggest complaints I hear from clients have to do with poor communication. Sometimes it may be the handyman but many times it is the client themselves. When estimating a job, the scope of work should be clearly stated. “I want you to paint the master bedroom,” is not a clear scope of job. You must be specific:

1. All walls should be cleaned, all holes sparkled and sanded and then primed with (fill in the blank) paint.
2. You need an estimate of amount of primer and paint that will be needed. (Almost all paint has a 300 square foot coverage. If 3 or more gallons are needed, it might make sense to purchase the paint in a 5 gallon bucket rather than by the gallon.
3. The specifics of the paint should be specific as to brand of paint, color and finish (matte, eggshell, semi-gloss, gloss, etc.)
4. All work should be done on a cloth drop cloth. (If you are not this specific you will be paying for clean up time or worse.)
5. Finish coat specifics should be as specific as the prep work for the primer.
6. The handyman should be able to break up the estimate into materials and labor. (Another test. The list of materials should not include brushes and rollers. These are tools that should be owned by the handyman. Roller pads are only used once so they may be on the list. If brushes and rollers are included it should be stated that they would become your property when the job is done.) H

opefully just by looking at the above you are understanding what your job is. This example should be transferable to any job you have. If you are a detail person this will come naturally (although if you get too compulsive you will pay for it.) If you are not you will need to understand and take responsibility for setting the scope. Below is a list of tips that are general but very important.

• If it’s too good to be true, it probably is.
• What methods of communication does the handyman prefer. (If one of them is not instantaneous, like texting or cell phone even don’t bother.)
• Ask for 3 client references. (This is not the same as the next suggestion.)
• Ask for the last 3 jobs he/she finished. Ask when they were completed and the contact number for those clients. (If the last completed job was 3 months ago this might not be the right handyman.)
• Does he/she have insurance. (If they don’t, which is very likely, you might want to contact your insurance carrier to make sure any damage is covered by your policy.)
• How far away does he/she live. (Be aware that if it’s over 30 minutes you will most likely be charged travel time. If the job includes being your eyes and ears while you are gone it’s not likely that they will be available for emergencies. I set a personal travel time of 20 minutes for anyone I hire that would handle emergencies.)
• Ask what stores does he/she has accounts with. You do not want to have to set up an account at a vendor for their use. This can become a real potential for abuse.
• Give jobs/tasks one at a time until you are sure that you have found the right person. There are handymen that might start out fine but may start to take advantage as time goes on. I always recommend that no matter how long someone works for you it’s part of your job to create that scope of work list. You may let go of the need for estimates if you’ve grow to trust him/her, but the scope is your job.

The rest of my suggestions are more optional. I prefer to write checks to giving cash. I always try and get any other contractor or specialist from my main contact (my handyman) but while I may ask for referrals I also ask other people I come into contact with who they might suggest. The smaller the town, the more you are likely to get feedback about your hire from neighbors and others. If you don’t really know these people very well you should take each comment (gossip) with a grain of salt. Little towns can be very little. That’s it for now.

The Black Swan

If you live on the east coast you just learned how much luck or fate has to do with your life. A week ago we were told about a storm that was going to hit the east coast from Florida to Maine, maybe. The maybe had to do with the various weather models that were all possible. I‘m not a psychologist but I assume that the study of how people behave when they are faced with a potential crisis, not a known crisis would be exceedingly interesting.

I had just returned from a trip to Florida to see my family and started the process of storm preparation. As the computer models began to create a consensus of similar routes the potential for a terrible storm increased. A year ago we (in New York’s Mid Hudson Valley) had what was called the “storm of the century” with Hurricane Irene and for many of us a storm bigger and badder seems both impossible and inevitable. I still can remember watching the pumps in my basement barely keep up water flow. Now we're now seeing predictions of a much worse storm. One Thousand miles in diameter was the size of Sandy.

Having business in western New York I still pass through towns like Prattsville that are all but gone. Was it possible that our hundred year storm was going to be an annual thing? This new monster had hundred mile an hour winds and I was more fearful of those winds then even the expected high rainfall amounts. For the first time ever I decided that my usual preparedness was not enough. I took anything that could become a projectile and put it away. I tripled the tie downs on my greenhouses and upped the inflation pressure in hopes that when Sandy hit, I was ready. Lastly, I got my son to help me put up huge sheets of hard corrugated plastic on my large windows.

Then we hunkered down. We had an emergency generator for the expected power loss and had unplugged the unnecessary appliances. The storm was to hit at 8 PM. The photos and videos of the devastation in Virginia were morphing into the same but worse for the Jersey shore. OC (as we called it in Philly), or Ocean City was underwater. Scenes of roof rescues in seaside New Jersey were looped on The Weather Channel, along with those ridiculous pictures of weather reporters standing in knee deep water in Battery Park and parts of Brooklyn.

By 7 PM we could see the computer models changed to predict the the storm going further west, not north and up New York. By 8:30 PM we still hadn't lost power and although the winds were 25-30 MPH, it was clear that we had lucked out. The rain was much lighter than expected. The water was coming in my basement in a small stream, not an overwhelming flow. We were not going to have a bad day. Instead we would begin the survivors guilt that comes with “getting away with one.”

All I could think about at that moment was a book I had read years ago called The Black Swan, by Nassim Taleb. The book was one of the most important in my life. A Black Swan is described as “an event, positive or negative, that is deemed improbable yet causes massive consequences.” It was written primarily about economics, but deals with any improbable event and how these events changed all of our lives, either in a positive or negative way. Almost by definition giant weather events are classic black swans. As I sat holding my wife I knew that we had just, by luck or by chance, been on the positive side of a black swan. As the pictures and video’s continue to come in and are splashed across our TV screens we should feel empathy for the hundreds of thousands whose life has changed forever, on the negative side. The only known fact is that there will be more black swans in our lives.

TO HELP WITH HURRICANE SANDY RELIEF, CLICK HERE.

Why California Proposition 37 is Important to You! (or why Corporations grow crap while family farmers grow crops)

No matter what state you live in, California’s Proposition 37 should be important to you. If you don’t know what that is let me explain. ( A full legal explanation is HERE). California has always been a leader in everything from energy to ecology. This Prop (the word is going to come up a zillion times in this post so I will be abbreviating from here on in) is backing a bill to require all foods containing Genetically Modified Organisms (GMO’s) as such. It is simply a labeling requirement. The proposition does not in anyway make the sale of these products illegal or restricted. There are currently 61 other countries that require labeling of genetically engineered products. The bill even has exemptions for retail sales made in restaurants. (One would think companies like Pepsi & Coke would support this prop but both are as much a part of the opposition as Monsanto, DuPont, BASF and Dow. See full list in the next paragraph.)
Seems harmless enough. After all, it is simply informing consumers of what is in a product so why is the current food (and chemical) industries spending $35,000,000 to defeat this measure? (For a full list of all those funding both sides of this proposition click HERE.) The reason is simple. As proven in the current list of countries which require labeling, when consumers are given the choice between products that have GMO’s and those that don’t have GMO’s, consumers overwhelmingly choose those with no or limited amounts of GMO’s. Additionally, while the main crops currently are corn and soybeans, the list of crops is growing daily. 
            What is essential to understand about the importance of this issue for non Californians is that this prop is really about much more than labeling. This prop is also about the creation of big chemical companies becoming two sides of the food industry. Currently the most popular weed killer is Monsanto’s Round-Out® pesticide. Unfortunately Round-Out® kills everything it is sprayed on. That is, until now. These chemical companies are now in the food production business, patenting Round-Out® resistant seeds and plants. Imagine that. They create poisons and then crops that resist those poisons. Just when the public is asking for less pesticides and herbicides on their food crops (the sale of natural and organic foods are increasing exponentially) these companies are creating more crops that resist the poisons that they create. 
            While Round-Out® is the most popular crop poison, all of the major chemical companies are getting into this closed circle of poisons and crops that resist these poisons. While Monsanto donated over $7,000,000 to the fight, DuPont has donated almost $5,000,000 to the effort. (Interestingly, DuPont has patented their own version of both the poison and the antidote.) Doesn't this concept bother you even a little bit? Remember, all these crops are patented so farmers will have no choice but to purchase seeds from them. What drives me crazy is that these are the same companies that support politicians that preach “family values.” Is there any greater family value then not poisoning our children? 
            We have already lost ? of our planets topsoil, we can’t afford to poison what’s left. Since this prop is only in California, most of us are not yet involved in what has been called the new food war. It’s not just about poisons, it’s about patents and it’s being sold the same way the chemical companies sold farmers on fertilizers. The world population is growing and this “is the only way we can feed the world.” Just as we learned the myth of chemical fertilizers we will learn the myth of this world solution to poverty and hunger. Standard farming involves crops that produce seeds that can be replanted. The problem with that is farmers purchase less seeds, producing less profits for seed companies. Farmers planting GMO seeds are sued for patent infringement. So much for solving poverty and hunger. America has abundant food. India, not so. Physicist Vandana Shiva says "Native seed is going through a holocaust as corporations are controlling seed supply. The future of our world depends on how we steward our land, soil, water, and seeds, and pass them on to future generations." If you say you care about the kids and the future, check out Dirt! The Movie. Then make up your mind and get involved.

The Next Big Bubble- Consumer Loans & Direct Lending Funds

 If there is anything we can learn from history it is that it will eventually repeat itself. When the last bubble burst (in 2007) we went into the worst recession since the Great Depression. As a 60 year old I have been through a few recessions myself (1973,1980,1990,2001,2007). Being in the real estate business I felt all of them. It appears that there are two consistencies to these crises. The first is that recessions are cyclical (and repetitive if changes are not made to correct the reasons for that particular recession) and the second is that we tend to fix the problems for the last recession, but we do not look forward to speculate on and correct what might be the next bubble by creating laws and policies to avoid it. (For those who want to see the actual history of recessions from 1776 through today follow this link.)

Most economists agree that this current recession was caused by three main reasons. The first is banking deregulation allowing for the merger of investment banks with traditional banks (reversal of the Glass-Steagall Act), the second is the lessening of requirements for home loans and the packaging of these loans to investors (at artificially high values) and the third was the foreign financing of the accumulated national debt. Of these three pieces of the puzzle, the only one that was corrected was the loan requirements of home buyers (although the process may have become safer, but more cumbersome.) We still have merged banks (that are too big to fail) and we still (at least for now) have foreign financing of the accumulated national debt. (We all are in agreement that the level of overall national debt is too high. We simply have too much debt for our federal income and it doesn't help putting 2 wars and two tax breaks on our federal credit card, both bad policy and high risk.)

For the purpose of this post I will look at the one ingredient of the bubble that is bound to cause or accelerate the bursting of the next bubble. With the last (or current) recession (and the devaluation of peoples prime asset, their home) many Americans find themselves in the position of having a home that is valued below their current mortgage (an upside down mortgage). Many of those people are hard working americans who simply won’t let themselves default on any loans that they have. Other have defaulted but due to the inaction on a federal level we still haven’t forced banks to either write off their losses or foreclosed on these properties thereby stabilizing the housing market. (We actually have a client who hasn't made a mortgage payment in 4 years and is still in their home.)

An unfortunate solution for some is seeking alternative financing and whether they are borrowing for personal use or business reasons they are going to be forced to borrow from non-standard lenders. These can be either consumer credit companies or Direct Lenders. As were the case with sub-prime mortgages, they tend to seek borrowers with credit scores of 700 or higher and charge interest rates in the 13%-15% range. For some borrowers there is little option. They can be very large banks like Wells Fargo or Bank of America or they can be part of the ever growing private placement companies (Direct Lending companies.) Some are righteous, some are not. All are betting on Americans paying their bills, but just like the housing market, these loans are being packaged and sold on the equity market to many investors who, as with sub-prime loans, simply don’t understand these s unregulated product.

Once sold, these security sellers do not care what happens. There is a lot of money to be made selling these large loan packages. Many buyer's (primarily hedge funds and private equity funds) bet that they are making safe investments based upon an assumption that the loans are properly rated. As with the housing loans, once the low risk borrowers are maxed out, the quality of the borrowers are reduced but the rating are not. It’s really a game of “hot potato” or “musical chairs”. The last holder (investor) is the loser. Sellers of debt only care about the sale, not the investor or the market. (It still amazes me how few investors of those sub-prime loan packages bit the bullet and never sued the investment houses that simply lied to them about the quality of those loans.)

Here's the problem, with investment rates so low on secure classic investments those with large investors are more and more seeking higher returns in this new marketplace of consumer credit. I don’t want to get sued so I’m not going to identify these companies but I recently was asked by a client about investing $25,000 in one of these funds. Understand that this market is now over a trillion dollar market. The particular company my client was planning on investing with promised a 10%-12% annual return. He was told that the fund was a 3 year commitment with a portfolio of 450+ borrowers (with 700 plus credit scores) paying 15% on the loans with a default rate of 4.7%, therefore allowing for this 10%-12% return.

As Bill Clinton said a few weeks ago, “it’s the arithmetic.” Think about who these people are who are willing to borrow at 15%. You don’t have to be a genius to figure out that these are high risk customers, under duress in many cases. As anyone in the last sub-prime crisis will tell you, the default rate on FHA guaranteed mortgages went from 4.5% to over 8% in less than a year. By 2007 the rate was over 14.5%. If you are borrowing at 15% you are either a business with no other borrowing options (and keeping your business open just waiting for the economic turn-a-round) or an individual with no other options available. Either way while most may get through this without having to go through bankruptcy, the default rate will surely go up. Whether it is enough to create a small recession or major double dip recession is still unclear but we should be careful, each time we see those “need cash” ads on TV we are watching the next big bubble getting bigger.

The solution is simple. Put back Glass-Steagall. As is, most economists believe that this could take a few years to implement. Additionally, while this may seem radical to some, the only other protection we need is the inclusion of federal Usury laws for consumer loans.  A federal usury rate would not have all of the loopholes in current state usury laws and could be written in a way that protects both banks and consumers (most likely having an inflation factor included.) 

I’m sure that the banking industry will freak out at first, but the point is that for almost all business borrowing these rates would be irrelevant (most current business loans are under 10%) and for individuals it would limit the crazy chances these individuals could take. Additionally, federal standards would simplify and clarify the ultimate amount of debt anyone could take on. (Currently states not only have usury rates that are too high, but the loopholes are big enough to drive a truck through. In New York, with a usury rate of 16%, with penalties and fees that rate can reach as high as 22%-25%. Is anyone really going to pay back a loan at 25%? These loans are destine to default and as with the last bank bale out, we all will be left holding the bag.

Holiday Gift's For Those Who Still Read

 At some point, very shortly, the nightmare we all deal with is about to happen. That nightmare, Christmas, is just around the corner. Just the word alone brings chills to many of us. Soon you will start to notice the front ? of all retail stores looking very red and white. If you’re parent of a small child you’re faced with the real nightmare of buying expensive and ever larger presents that are rarely appreciated. If you’re kids are older, or better yet, if you are lucky enough to have them out of the house, you’re busy looking up the amount of last years check (god forbid you jipp them and give less than last year.) To that end it may be time to buy yourself a few gifts to take your mind off all this consumerism. If you are a real rebel, try books. (Hey, I’m hip. I don’t mean they actually things that have pages. I’m an Kindle guy. By the way, most of the descriptions below came from Amazon and the links are to Amazons book section.) Here are this year's reading suggestions: (WARNING:There are no novels here. Sorry, I’m a non-fiction nerd.)

I. Who We Are Books
A.  Guns, Germs, and Steel: The Fates of Human Societies by Jared Diamond. This is a      must-read about why where you were born will affect what kind of life you will have. It “answers the question of why the peoples of certain continents succeeded in invading other continents and conquering or displacing their peoples”. As Jared Diamond vividly reveals, the very people who gained a head start in producing food would collide with preliterate cultures, shaping the modern world through conquest, displacement, and genocide.The paths that lead from scattered centers of food to broad bands of settlement had a great deal to do with climate and geography. Before you give yourself credit for your great life, read this book, it’s humbling.

B. 1493: Uncovering the New World Columbus Created by Charles C. Mann. Presenting the latest research by biologists, anthropologists, archaeologists, and historians, Mann shows how the post-Colombian network of ecological and economic exchange fostered the rise of Europe, devastated imperial China, convulsed Africa, and for two centuries made Mexico City—where Asia, Europe, and the new frontier of the Americas dynamically interacted—the center of the world. In this history, Mann uncovers the germ of today's fiercest political disputes, from immigration to trade policy to culture wars.

C. Bobos In Paradise: The New Upper Class and How They Got There by David Brooks. Do you believe that spending $15,000 on a media center is vulgar, but that spending $15,000 on a slate shower stall is a sign that you are at one with the Zenlike rhythms of nature? Do you work for one of those visionary software companies where people come to work wearing hiking boots and glacier glasses, as if a wall of ice were about to come sliding through the parking lot? If so, you might be a Bobo. In his bestselling work of "comic sociology," David Brooks coins a new word, Bobo, to describe today's upper class -- those who have wed the bourgeois world of capitalist enterprise to the hippie values of the bohemian counterculture. Their hybrid lifestyle is the atmosphere we breathe, and in this witty and serious look at the cultural consequences of the information age, Brooks has defined a new generation.

II. God, or Lack Thereof 
        A. Rocks of Ages: Science and Religion in the Fullness of Life  by Stephen Jay Gould. Is it possible to be a scientist and a believer? In his distinctively elegant style, Gould offers a lucid, contemporary principle that allows science and religion to coexist peacefully in a position of respectful noninterference. Science defines the natural world; religion our moral world in recognition of their separate spheres of influence. In exploring this thought-provoking concept, Gould delves into the history of science, sketching affecting portraits of scientists and moral leaders wrestling with matters of faith and reason. Stories of seminal figures such as Galileo, Darwin, and Thomas Henry Huxley make vivid his argument that individuals and cultures must cultivate both a life of the spirit and a life of rational inquiry in order to experience the fullness of being human.

        B. Man's Search for Meaning  by Viktor E. Frankl. This is a book that you will not want to read, but you should. I avoided it myself until I had a crisis of “finding meaning”. Psychiatrist Viktor Frankl's memoir has riveted generations of readers with its descriptions of life in Nazi death camps and its lessons for spiritual survival. Between 1942 and 1945 Frankl labored in four different camps, including Auschwitz, while his parents, brother, and pregnant wife perished. Based on his own experience and the experiences of those he treated in his practice, Frankl argues that we cannot avoid suffering but we can choose how to cope with it, find meaning in it, and move forward with renewed purpose. Frankl's theory—known as logotherapy, from the Greek word logos ("meaning")—holds that our primary drive in life is not pleasure, as Freud maintained, but the discovery and pursuit of what we personally find meaningful.

        C. The End of Faith: Religion, Terror, and the Future of Reason  by Sam Harris. As a leader of the “New Atheists” Sam Harris’ important and timely book delivers a startling analysis of the clash of faith and reason in today's world. Harris offers a vivid historical tour of mankind's willingness to suspend reason in favor of religious beliefs, even when those beliefs are used to justify harmful behavior and sometimes-heinous crimes. He asserts that in the shadow of weapons of mass destruction, we can no longer tolerate views that pit one true god against another. Most controversially, he argues that we cannot afford moderate lip service to religion; an accommodation that only blinds us to the real perils of fundamentalism. While warning against the encroachment of organized religion into world politics, Harris also draws on new evidence from neuroscience and insights from philosophy to explore spirituality as a biological, brain-based need. He calls on us to invoke that need in taking a secular humanistic approach to solving the problems of this world.

        D. Freethinkers: A History of American Secularism.  by Susan Jacoby. At a time when the separation of church and state is under attack as never before, Freethinkers offers a powerful defense of the secularist heritage that gave Americans the first government in the world founded not on the authority of religion but on the bedrock of human reason. In impassioned, elegant prose, celebrated author Susan Jacoby traces more than two hundred years of secularist activism, beginning with the fierce debate over the omission of God from the Constitution. Moving from nineteenth-century abolitionism and suffragism through the twentieth century's civil liberties, civil rights, and feminist movements, Freethinkers illuminates the neglected achievements of secularists who, allied with tolerant believers, have led the battle for reform in the past and today.

        E. The Relaxation Response by Miriam Z. Klipper and Herbert Benson. I put this book under the God heading but it really should be in its own area. It is not really about either God or religion but is about spirituality. Even that word creeps me out. Take a read, you’ll like it. For those who always wanted to learn meditation but didn’t want to deal with all the BS, this book is for you. When Dr. Herbert Benson introduced this simple, effective, mind/body approach to relieve stress in The Relaxation Response twenty-five years ago, the book became an instant national bestseller. Since that time, millions of people have learned the secret of the relaxation response--without high-priced lectures, drugs, or prescription medicine. The tremendous success of this approach has turned The Relaxation Response into the classic reference recommended by most healthcare professionals and authorities to treat the harmful effects of stress. 

III. Economics, Ecology and/or Politics
        A. The Right Nation: Conservative Power in America by John Micklethwait and Adrian Wooldridge. If you are a “Lefty”, this is a must read. No matter what side you are on politically, and I am going to assume that most of my readers are left leaning and vote Democratic, you need to understand and empathize with conservatism. This book will help you understand your conservative friends. No conservative friends- you really need to read this book. How did America's government become so much more conservative in just a generation? Compared to Europe-or to America under Richard Nixon-even President Howard Dean would preside over a distinctly more conservative nation in many crucial respects: welfare is gone; the death penalty is deeply rooted; abortion is under siege; regulations are being rolled back; the pillars of New Deal liberalism are turning to sand. Conservative positions have not prevailed everywhere, of course, but this book shows us why they've been so successfully advanced over such a broad front.

        B. The Soul of Capitalism: Opening Paths to a Moral Economy by William Greider. From the Godfather of Moral Capitalism comes The Soul of Capitalism. Greider examines how the greatest wealth-creation engine in the history of the world is failing most of us, why it must be changed, and how specifically it can be transformed. Brilliantly perceptive and sweeping in its ambition, The Soul of Capitalism is also hard-headed and practical, as Greider, one of our most eloquent populist spokesmen, assures us we are not powerless. He illustrates how American capitalism can be aligned more faithfully and obediently with what people want and need in their lives, with what American society needs for a healthy, balanced, and humane future. He proves that it is within our power to reinvent capitalism to make it work for us.

        C. The Ecology of Commerce Revised Edition: A Declaration of Sustainability (Collins Business Essentials) by Paul Hawken. Unfortunately many business people believe that environmentalism is anti-business. In this book we see a way to be both pro-business and at the same time an environmentalist. In this book Hawken makes an impassioned argument—that business both causes the most egregious abuses of the environment and, crucially, holds the most potential for solving our sustainability problems and this updated book is more relevant and resonant than ever.

        D. The Divine Right of Capital: Dethroning the Corporate Aristocracy by Marjorie Kelly. This book is for true believers. Wealth inequity, corporate welfare, and industrial pollution are the symptoms of our sickened economy, Marjorie Kelly suggests. The underlying illness is shareholder primacy. In The Divine Right of Capital, she shows that the corporate drive to maximize shareholder profits at any cost is not only out of step with democratic and free-market principles, but is detrimental to the long-term health of individual companies and the economy as a whole. Kelly offers a far-reaching solution to rebuild corporations in a way that serves all.

I hope that you enjoy my suggestions. Some of these are new (published in 2012), some older (some originally published in the late 1940’s) but all are worth the effort. If you are an electronic book reader you can always download a sample to see if you like them. It has been my experience that when I went from book (hardcover and paperback) to electronic Kindle (or any electronic variation) I more than doubled my reading. Maybe you can kill two birds with one stone and get your kids hooked on reading using a Kindle. One of the things we did in our family (since I was the first Kindle reader) was to purchased all subsequent Kindles under my account so we can all share the books purchased. This makes your purchase even better.Have a nice holiday.