Vanilla Ice Project

When I got an email from Jose in Santa Clara asking my opinion of The Vanilla Ice Project, a  real estate rehab television show, I was taken aback.

THAT Vanilla Ice???  Never heard of the show.  Wish I never heard of this song!



But yes, Robert Matthew Van Winkle, who we all grew to love (and hate) back in the 1990s is now hawking himself as a real estate guru and rehab specialist.

Watching the video on his website made me have Tom Vu flashbacks.

Fistfuls of hundred dollar bills, hot girls wearing almost nothing, Rolls Royce limos, huge mansions, boats, and everything that smells of money.  The only thing missing was Robin Leach.



I have never seen The Vanilla Ice Project so I'm asking for the public's help in learning some more about it.  From the video posted on his website it looks like an ATYPICAL real estate rehab and not one that most single family home rehabbers encounter.

For example, one video features a big mansion being gutted with lots of money for renovations and not much real world accounting for such important matters as the value of the rehabber's time.

For all I know, Vanilla (or is it Mr. Ice?) has made millions in real estate and if true, God bless him and his family.  I'm curious now, which of course makes me want to know more.

But the real problem I have with this advertisement is simple.

Vanilla Ice is NOT a person.  He's a character Mr. Van Winkle plays on stage.  All the gangster, hip-hop lingo ("pimp your place") rings hollow in this serious educational context.  If Mr. Van Winkle wants to be a real estate guru, then let him teach.  But a character in costume spouting lines from awful song lyrics circa 1991 is more laughable than authentic.  People want REAL real estate information, not quackery, and stunts like this give me the willies.

And I guess I have to ask?  What's next?  Flavor Flav's Investing in Tax Liens Home Study Course?

If you have seen The Vanilla Ice Project and can offer me some information about it or your recommendation, please email me at robertjabalos@gmail.com.

Thanks!

Notorious Urban Ruin Site for Sale

The remains of the Alfaretta Apartments in downtown Seattle is now up for sale.  This bizarre half-demolished shell of a building has captivated many people since my first blog post on the urban ruin in October 2009.

The Alfaretta Apartments, or more precisely, what is left of it, is still there.  The ruin has become a stop on many tourist routes through the downtown area.  For the record, it is at the intersection of 8th Avenue and Seneca Street, across the street from Seattle's famous Town Hall.

People come to see the Alfaretta for one simple reason.  It's strange.

The site is just plain weird to behold.  It is so captivating I shot a video of the Alfaretta and put it up on YouTube.  I hear about the ruin all the time, get questions about it frequently, and saw the doomed relic for the first time in months today.

For sale sign across the front.

This building site is one of the best in all of downtown Seattle.  Perfect location, perfect zoning, perfect just about everything EXCEPT the perfect market to build new condos in downtown Seattle.

I suspect the Alfaretta's days are numbered, but then again how many more days should a 80% demolished building really have?

See the Alfaretta while you can.

Investing in Land Free Articles

The Free Article Page of the new Investing in Land website at www.investinginland.com is now active.

The first article I posted is on the definition between investment and speculation and why it does not matter so much anymore.  People worry about this issue endlessly in my opinion for no reason at all.

You can visit the free article page by clicking here.

I will be posting free articles on my new website very regularly so please check back here often.

Mike's Chili Parlor

No visit to Seattle is complete without a visit to the city's many famous and celebrated dive bars and one of the best is Mike's Chili Parlor in Ballard.

The place from the outside looks exactly like the rundown dump it is.  Inside you will meet a motley cast of characters that remind me of those foggy waterfront bars in every Charlie Chan movie.  This part of Seattle is known for its fishing fleet and even today the waterfront is filled with masts so the comparison is not just my imagination....

Mike's Chili has that seedy, down-on-your-luck feel to it.  In fact, director Bud Yorkin made Mike's a movie star when he featured the bar in his 1985 film, TWICE OF A LIFETIME, which stars Gene Hackman and Anne Margaret.  Some pivotal scenes take place in this bar between Hackman and Stephen Lang which prove how good both actors really are.  Great film!

But what Mike's Chili is really famous for is its chili.  They put chili on EVERYTHING.  And this is the only bar I know where they sell chili by the gallon.

Here is a piece featuring Mike's Chili from the Food Network.

So what does any of this have to do with real estate?

Mike's Chili Parlor occupies a prime corner lot right off the Ballard Bridge.  Real estate does not get much better than this.  This lot defines the old axiom "Location, Location, Location."

So when it was announced that a major new retail project was being built on Mike's block, everyone assumed that Mike's was doomed.

Thankfully, we were wrong.

In one of the most impressive build arounds I have ever seen, Mike's Chili Parlor has been preserved for future generations who want to experience a unique Seattle treasure.  Click here and see the new retail block which includes a Trader Joe's and an LA Fitness.  But in the upper right photo look under the sign that reads BALLARD BLOCKS there is little Mike's Chili and its wonderful corner lot.  This is an amazing photograph, a testament to survival.  No one makes me happier to see how that block was developed right around the old bar.

If you check out the Google Maps entry for "Mike's Chili Parlor Seattle" you get a street view that actually shows you the Ballard Block being constructed around Mike's.  Very cool shot.

View Larger Map

No real visit to Seattle is complete without a visit to Mikes.  Yes, they even have pull tabs!

New Investing in Land Website Launched

After four years on hiatus, my Investing in Land website is now live on the Internet.

InvestingInLand.com

Three of the buttons are not yet active but will be over the next few days.

It is GREAT to be back.  I will have much to say over many years to come.

My original Investing in Land website was launched in 2002 and the real estate world is no longer the same.  Today, it is different rules for a new time.

I am hoping my new book will be a contribution to this dialogue and spark new debates.

Facebook Traffic Falls

In the light of the LinkedIn IPO and the talk of Groupon and Facebook soon going public, investors need to keep one important point in mind.

These companies have virtually no intrinsic value and trade solely on the basis of speculation.

I wouldn't go near any of them.  EVER.  As an example, as Groupon prepares for its IPO, the very same analysis I am using here is applied to the stock.  This company cannot make a profit over the long term because its business model, the measure of its intrinsic value, is inherently flawed.

I estimated Facebook, yes Facebook, has an intrinsic value of less than $100 million last October in this blog post.  Today it was reported for the first time Facebook traffic in the United States and Canada fell sharply confirming much of what I said nearly a year ago.

While Facebook traffic is increasing in some countries, it is falling in other whole regions such as the Middle East where advocates falsely claimed the site helped promote the "Arab Spring" revolutions.  Even Facebook's Mark Zuckerberg has denied his company had anything to do with the internal political revolts.

Is Facebook fun?  YES.  I enjoy it and so do hundreds of millions of other people.

Is Facebook a good investment?  HELL NO.  Ask the executives over at MySpace who are desperate to dump the dying social media site for just 10% of what News Corp paid for it just five years ago.

Facebook like all the social media sites are fads, important ones for sure, but just passing ideas that will soon be eclipsed by other more aggressive and relevant ways of making friends, staying in touch with family, and getting a job.

What defines Facebook, Groupon, Twitter, and all the rest as fads is their lack of intrinsic value.

Even Google, the Internet behemoth with its $500+ per share price and worldwide reach is showing signs of age and financial distress due to excessive spending in an attempt to stay relevant.  Again, where is the intrinsic value of an Internet search engine?  Google got built when YAHOO was King and another pretender to the throne is in the wings right now.

The only reason Facebook can think about a $100 billion IPO is because it claims it has 700 million users.

Sorry, but the number is likely to slowly dwindle once it hits a peak which appears to be soon.  Plus only the most naive investor believes that the number of registered users has anything to do with active traffic on a website.  This is like buying TV ads based on the number of actual television sets in a city instead of thinking about what is really on any given station.

I wish Facebook, Twitter, Groupon, and all the rest good luck because these companies all provide great services for people.

The problem is because they have no intrinsic value they cannot ever successfully monetize their users on the site.  Ask yourself the simple question how do you keep making money year after year when you cannot guess how fickle your users will be or when the Next Big Thing is coming along?

Robert Abalos Announces New Twitter Page

I want to thank Dave for his ideas on using Twitter.

I had a Twitter account but did not effectively use it.  Now I understand how Twitter is supposed to work.

My followers on Twitter get access to special deals, freebies, and other offers that non-followers do not.

My new Twitter account is here.

Robert Abalos Announces New Mobile Website App

You can now read The Robert Abalos Real Estate Report on any smart phone.

Take me wherever you go.

Just go to www.robertabalos.com using the browser of your mobile phone and read away!

Thanks to Bruce for the idea.  I honestly never would have thought of it.

Short Sale Fraud Increasing

Short sale fraud is increasing and I bet I know why.

"Flops" as they are called cost banks at least $375 million in 2011.  One study said one in every 52 short sales is now deemed "suspicious."

Much like the get-rich-quick real estate gurus pitched flipping courses during the good years, it's now short sale and foreclosure courses during the bad ones.  The same sleazy tactics, the identical corner-cutting strategies, and the usual assorted of half-truths and three-quarter lies are on display in these courses.

I recently reviewed two such home study courses sent to me by a reader of this blog.  I would welcome any other information from short sale courses you own that speak to this level of mendacity.

Let me be very clear.  Not all investor generated flips are flops, of course.  Here is an excellent article that explains the difference.  But many proposed short sales are intentional flops.  Everyone in the business has experience in this direction.

Once again, when you have real estate gurus openly giving seminars on how to commit short sale fraud, the government and the banks should not be surprised that is precisely what you are going to get.

Anyway, here is some excellent advice on avoiding short sale fraud if you are a homeowner or realtor.

My best advice to you on short sales is simple.

Some homeowners need to do short sales to get out from underwater mortgages.  If this is your situation, work only with a real estate agent with short sale experience.  FORGET ABOUT DOING BUSINESS WITH PEOPLE YOU MEET THROUGH FLYERS MAILED TO YOUR HOME OR PUT ON YOUR DOOR!

My advice to investors is to avoid them nearly all of them at the present time.  Short sales are more bother than they are worth.  Many agents do not want to admit their listings are short sales because buyers know the process means more time and paperwork.

With so many motivated sellers these days, why only target those who are underwater?  They may be more motivated but are also in a less powerful place to make deals with you.

Homeowner Forecloses on Bank of America

This is the ultimate "man bites dog" story, real estate style.

A homeowner gets to foreclose on a Bank of America branch.

I laughed out loud.

Home Prices Fall to 2002 Levels

Home prices continue to fall across the United States and now match their levels from 2002.  Homes on average cost 5.1% less today than they did just one year ago.

Nearly a full decade of real estate price appreciation is gone.

I'm asking one simple question.  Where are the mea culpas from the get-rich-quick real estate gurus?

How wrong they were, and still are.  Virtually every guru still around from 2002-2007 is still pitching the same "best time in a generation" to get into real estate.  Only this time they put away their flipping and lease/option home study courses and are now selling their expertise on buy-and-hold.

The only trouble is if you listened to them in 2008 your investment is now 15% underwater due to falling home prices and will likely fall another 5% this year.

Assume you put down a full 20% when you bought this rental property in 2008.

By 2012, that "excellent" buy-and-hold strategy sold to you by some cheerleading guru will have completely wiped out your equity.

And more losses are on the way to until 2013 or even later.  I'm now predicted 2014 or 2015 at a minimum before we see any real housing strength in the economy.

The get-rich-quick gurus need to cheerlead markets so you'll buy their home study courses and seminar tickets.  If they told you the truth (like me) that real estate was an AWFUL investment since 2002 due to super cheap money from the Fed distorting the normal dynamics of the market beyond all predictability you would never buy their SUPER PROFITS WITH LEASE OPTIONS $497 home study course.

The real money in real estate over the last decade was made short the market.

Ask John Paulson.

The get-rich-quick real estate gurus get you fired up so you can buy their worthless and overpriced courses so then you can lose your life savings following their bad advice.  But don't feel bad.  Many of these gurus actually believe they are real estate geniuses and follow their own terrible advice and go broke in the process.

Ask Alexis McGee of Foreclosures.com.

Genuine real estate investors know the simple investment axiom that you don't catch a falling knife.  You get cut that way.  You wait and see a bottom and then you jump in.  But you see, I'm not selling you a home study course to give you that accurate and truthful advice either.

Never forget one simple fact.

The get-rich-gurus are real estate cheerleaders.  RAH-RAH.  Buy my $1,995 home study course and make a fortune.  TOUCHDOWN!  (For them, not for you.)  You won't buy unless you think the market is great and there is a fortune to be made, even if that is not the truth at all.

But they are some of the ugliest cheerleaders you will ever meet.  Think The Portrait of Dorian Gray applied to the investment world.