The Next Deal

In Uncertain Times, Opportunity is Everywhere

2008-09-30T13:29:00.003-04:00

Last night, I had a long talk with my 14-year old son about the current unheaval in our economy. For both of my sons, I talk freely with them about any and all issues. From economics to politics to religion, anything is fair game in my house. All I ask is that they have an understanding of the issues and back your position with facts not just opinion.

Anyway, John and I were talking about how the financial crisis will affect our family. He is understandably concerned about the future. My (hopefully) reassuring message to him was that we are in a major turning point in our country. This turning point is very similar to others in history: October, 1929; Pearl Harbor; the atomic bombing of Hiroshima and Nagasaki; the assasination of JFK, Watergate, Falling of the Berlin Wall, etc.

With historical understanding of present conditions, you will see that ultimately our country will prevail. I told him that with every change comes an opportunity to grow and fix the problems that face us. If life were boring, there would be no challenges. Without challenges, there would be no greatness.

Of course, these words come from a person who has be pretty conservative in his financial dealings in the past few years. As a result, we are reasonably prepared to deal with the economic changes. There are many in our economy who are not. For them, the changes are terrifying and they may need help from their friends and neighbors.

My final message to my son is that we are all in this together. Hopefully, we as a nation can come together to deal with the crisis and resulting economic downturn. We have done this before, and we can do it again.

An Understandable Expanation of the Credit Market Bail Out

2008-09-21T13:03:00.002-04:00

This past week is a pretty big deal. If you are paying attention, you would know that the Treasury and the Federal Reserve have a plan to address the failing investment banks on Wall Street.

This plan will work to free up the credit markets and may help avert a larger disaster. However, the press seems to focus on the taxpayers bailing out rich banks. In fact, this has little to do with saving the banks. I will explain further. I will say, that the taxpayers are as much a part of the problem as the banks. It takes two to tango. Likewise, it takes both lenders and borrowers to make a mess this big.

Before I go further, please don't use the usual ADD response and say that this stuff hurts your brain or is too complicated. It is important and the more people who understand what is happening the better.

What has happened before this week:

In the past five or six years, we have seen access to mortgages open up in a way never before seen. Home prices rose at fantastic rates across the country. People who had never bought a home before were able to get adjustable rate mortgages with no money down and no mortgage insurance. Brokers, underwriters, and Wall Street happily took the money and passed on the risk to others in what is essentially, mortgage backed securities.

What went wrong:

Obviously, the problem was bound to happen. People started defaulting on their loans. Everyone has known there were bad loans out there for the past year. The problem is that no one knew where those bad loans were. They were mixed in with good loans and traded from one bank to another as securities. Everything limped along until investors (depositors) at the big investment banks started wanting their money back. Those big banks (Lehman Brothers for example) needed to liquidate (sell) their holdings in mortgage backed securities to give the money back to their investors. The problem is that no one wanted to buy them (they were illiquid). So with the investors screaming for their money back, the only answer was to file for bankruptcy (in Lehman's case). As more investors demand their money back, more banks face failure.

Since the investment banks are giving all their free cash back to their investors, then they are no longer loaning money to good companies for expansion, working capital or other projects. This will threaten to cause non-banking businesses to fail if not fixed quickly.

What the Treasury wants to do:

The fundamental problem is that banks cannot convert these securities over to cash. Treasury Secretary Paulson wants to use federal money to buy these securities from the investment banks. That will fix the run on the investment banks as well as thaw the frozen credit markets which will enable other businesses to borrow money for expansion or working capital.

Here is where the reporting is wrong. People are saying that the taxpayers are bailing out the banks and getting stuck with the bill. But in reality the taxpayers are the ones who owe the money back to the banks in the first place. (Circular market). With the Federal Government owning the mortgage paper, there are a number of things they can do which will help.

First, they can separate out the good loans from the bad loans. They will then sell the good loans back to Wall Street for a pretty fat profit.

Next, they can take the bad loans and work them out. This may mean changing the interest rate back to the first year rate for that loan. This would allow time for the homeowner to refinance or sell their home. In either case, they would avoid foreclosure.

Finally, since the banks are the ones selling the loans to the Fed or Treasury, then they will have to play by the rules set up to make this fair. That might mean the CEO's of the banks are limited to their pay. It may mean they have to take a big hit on the sale price. It might mean some other security is given. In any case, the banks are not going to "win" under this proposal. The banks will survive, but certainly will not make money on this thing.

Going Forward:

In the future, it is going to be like the past. For instance, when I bought my first home, I had to have 20% down. I had to prove that I didn't borrow that money. If I had only 10% of the purchase price, then I had to pay for PMI or Primary Mortgage Insurance. In other words, I had not only the security of the house, but the insurance plan to protect the lender.

This means that going forward, it is going to be much harder to buy a home. It means that people will have to save for years before being able to afford their homes. We can count on some 20-30% of the buying market not able to qualify for a home loan.

So in a nutshell, the American Dream will go back to being something you worked for 20 or 30 years to attain. It will no longer be something a typical 25 year old will be able to achieve.

The Dog Days of Summer

2008-08-13T11:15:00.002-04:00

August is typically a very slow time of the year in the meeting and events industry. It makes sense. With so many people on vacation, it is hard to get meetings and events filled with participants.

During this time of the year, we work pretty hard at retooling and cleaning house. I am amazed at how much stuff is created by our little company.

Anyway, right now we are in the process of working on a new marketing video. In addition, we are testing some new screens which are a bit lighter than the current screens. You may not realize it, but screens are a big part of our business.

In other update news, we are happy to say that we have kept our shipping costs stable throughout the massive increases in fuel over the past year. In fact, we haven't increased our shipping charges at all during the past 10 years.

Projector Smash

2008-07-25T12:56:00.002-04:00

Here is the updated video:

Laptop Rentals

2008-07-16T10:07:00.002-04:00

Over the past few years, we have seen a tremendous increase in laptop rentals. Of course, we built the company on projector rentals for meetings and seminars. The laptop rentals were really a surprise.

At first, I avoided buying and renting laptop computers. I thought the opportunity for catastrophic failure was too great. But just like always, our clients made the decision easy.

Ultimately, we were able to add and maintain close to 400 laptops to our inventory. Today, we carry the Durabook which is a rugged military grade laptop.

Private Space Launches and Satellite Hunters

2008-07-08T10:38:00.002-04:00

I saw the movie Walle yesterday with my youngest son. The movie was fantastic! While the aim of the movie was to entertain, there were certainly "green" issues shown. This is a good thing. However, there was one part of the movie that made me think a little.

At one scene, the hero Walle holds onto a space ship as it launches. When they pass out of the Earth's atmosphere, they break through a solid ring of dead satellites.

Currently there are some 500 working satelittes in orbit and several thousand that are dead, space junk. We rely quite heavily upon satellites for things such as gps, meterology, earthquake study, communication, television, radio, and national defense.

These satellites are pretty safe from bad guys. Trying to damage or shoot down a moving satellite is pretty difficult. However, in recent years we have begun to see new technology move us closer to civilian population of space. This will start with Virgin Galactic and other space tourism ventures. In these, thrill seekers will go into space for a few short minutes of weightlessness.

Over time, the technology will become more reliable just as the airplane did in the first part of the 20th century. Eventually, there will be loads more people and stuff in low earth orbit. This presents the problem. If you can get people into space, then you will be able to put satellites into space cheaper too. What if someone designed a small "hunter" satellite that could seek out a target and push it out of orbit or simply damage it by getting close enough and exploding.

The resulting space terrorism would mean constant interruptions in our communications and financial systems and so much more. It would present all sorts of problems for those entrusted with protecting these things. (How do you protect a 20 pound, flimsy satellite from an attack?)

Now for the scary part: The FDA is moving forward with replacing the outdated radar systems at airports with GPS systems. Without GPS, pilots would be able to revert to using visual navigation, however, air traffic controllers would be blind.

Okay, so my prediction is that within the next 10 years, there will be an attack upon a satellite in orbit.

How to Respond to an Economic Slowdown

2008-05-22T15:41:00.002-04:00

The press is going nuts over the economic slowdown here in the US. Everyday I hear talk of higher gas and food prices. People are worried about losing their jobs. The credit markets are frozen. So what is any respectable entreprenuer to do?

The answer is simple: invest and grow. Going into this slowdown, I have replaced 70% of my rental inventory with new, better projectors and laptops. This required us to take on some significant debt. I have effectively lowered prices on projector rentals across the board. Is it a big risk? Nope! Not at all.

In fact, doing nothing is a bigger risk. By investing in new equipment, I can give my clients a better rental experience. Happy clients means more business. It is really very simple.

On my real estate side, I have a new building that has three empty spaces. These are office spaces, so the build out isn't special for each tenant. Over the past several months I have invested in finishing these spaces out with the best interiors I can afford. The payoff is finding great long term tenants who would otherwise pass my building over because the spaces were concrete floors and studs. Now, they have wood floors, kitchenettes, lots of interior glass doors and windows, and fiber optic internet service.

While everyone seems to be pulling back, I choose to push forward. The payoff is very good in the long term. In the short term, I am not wasting energy pulling back.

Website Improvements

2008-05-13T10:17:00.002-04:00

Over the past several months, I have been working on the Rentquick website (www.rentquick.com).

There have been some nice major changes. First, the site is centered instead of left justified. Second, we now have a css site, which I am still working the bugs out of. Finally, I went through and got rid of the thousands of old pages which date back to 1998.

There were files on the site which were just dead. It was a nice walk down memory lane, though. Since RentQuick is now 10 years old, this was a good time to clean things up.

Projector Rentals

2008-04-29T10:51:00.002-04:00

I thought it might be a good time to talk about what we really do. At RentQuick, we provide projector rentals, laptop rentals, and other audiovisual rentals for the meeting, training and corporate markets.

We operate differently from other AV providers since we are not actually on site when the rental is taking place. Instead, we ship the equipment to arrive the day before the rental begins and have the client ship it back on a premade airbill on the day after the event.

We support our equipment with a 24/7 technical support line. All our rentals are guaranteed--no questions asked.

Many of our clients use our services daily for their national training programs or seminars. Other clients call us when their own equipment is overbooked or being serviced.

We have been doing this for 10 years and really enjoy serving the needs of our clients.

Thanks for listening to my keyword filled plea which is entirely designed to make the search engines happy!

It is time for an energy solution

2008-03-09T10:42:00.003-04:00

From 1939 to 1945, the United States and her allies Canada and the UK, worked on a secret project unlike anything ever seen before in modern history. It was the Manhattan Project, a government research and development project with the intent on finding a way to build nuclear fission weapons.

In 1959, the USSR launched Sputnik. The act sparked what would become the space race between the two great super powers. For the first few years, it appeared that the US was way behind. It was not until May 25, 1961 that Jack Kennedy propossed sending a man to the moon and returning him safely to earth.

In 1945, when the Allies entered Germany, they found the Autobahn. The Autobahn to them was unlike anything they had seen before. It consisted of four lanes on a well-built highway divided by a median. Of course, today we take the Interstates for granted. But the inspiration for the Interstate system came from the Autobahn. From the early 50's until the 80's new interstate highways were constructed. It fueled and supported an economic expansion still felt today. In fact, the interstate highway system may well be the greatest economic infrasture improvement ever.

The Manhattan Project, Kennedy's Moon Challenge, and The Interstate Highways are three examples of what good government can do and how problems can be solved. The efforts made by those previous administrations will be felt for generations to come. The spin off technologies and scientific and engineering development from these efforts are inumberable.

I challenge Congress and whichever candidate wins the Presidency to support and fund a research and development program unlike anything seen before. I challenge them to create a Manhattan Project for energy independence.

Imagine a world where oil no longer mattered. Imagine automobiles who do not polute. Now imagine the economic and technological benefit a country who develops the solutions would have.

All of our foreign wars since Vietnam have been connected to oil in some way or another. Iran, Iraq, Lybia, Kuwait, Saudi Arabia and even Afganistan (Bin Laden was pissed about the troops being in the holy land during Gulf War I) have been tied to oil. If we no longer needed oil, those conflicts and occupations would stop.

I believe that if left to the major energy corporations or to the automakers, we will never see a break from oil. They have too much invested in the older technology. Barriers to entry are very significant in both energy and automobile manufacturing. Expecting a major investment of this size to be carried by industry is unreasonable. That is why we need to have the best and brightest in the country and among our allies to go on the government payroll, move to a single research center, and develop a solution. Once the solution is developed, the technology can be licensed to private industry to market it.

It has been done before. We have the infrastructure to do it. We have the money to do it. (Take the savings from no more oil wars) When gas reaches $4 a gallon, we will have the political will to do it.

The plan is simple: Invest $1 Trillion into a research and developement program which will have the stated goal of getting the United States to be a net exporter of energy withing ten years.

Government Gone Wrong

2008-03-07T18:55:00.001-05:00

This June you will hear of a modern day Scopes Monkey Trial in my own
hometown of Staunton, Virginia.

At issue is the local prosecuter charging both the owner and an employee
of an adult video store with indecency.

Regardless of your opinion on the subject of porn, you should be worried
about the government, any government, arresting people based upon the
content of the media they possess.

If they are successful in defining crimes based upon content rather than
actions, then they become free to define any content as objectionable.
When this happens, the book burnings and political executions are quick
to follow.

The Need for a Better Cell Phone

2008-03-03T16:11:00.002-05:00

I have been using the Motorola Q for about 15 months now. To be honest, it is both the best and worst cell phone I have ever had.

In the best column: It has email, internet (slow), calendar, syncs with my outlook on my desktop, and a blue tooth head set.

In the worst column: It eats battery life like crazy. I am lucky if I can get 45 minutes of talk and 3 hours of standby.

In an attempt to fix the problem, (I have 9 months left on the current contract) I spent Sunday tracking down various fixes and hacks for the damned thing. What I found was that for about $40 I can get the extra large battery. I ordered it today.

After that, I made some adjustments (http://www.everythingq.com) found online. These include a handy little program called Candlelight which lowers the back light but makes it impossible to see in sunlight. I also learned that I need to kill all the programs all the time. Apparently, when you start your mail program, for instance, it runs forever. You need to "kill" through a messed up series of menus.

So if you are looking for a smart phone, stay the hell away from the Q.

Ten Years of RentQuick

2008-02-29T09:52:00.004-05:00

RentQuick has been in business now for 10 years. Recently, I took some time to look back at where we started and what my predictions were about the meeting industry. What I found was that I was wrong more than I was right.

For instance, I believed that costs of delivery would increase with normal inflation. So my math models showed a 3% increase in shipping each year. Instead, we have seen the actual cost of shipping increase 8% per year (close to 125% total). The main cause has been the fuel surcharge. The secondary cause is the oligopoly that is UPS and Federal Express. During the entire 10 year period, we have only increased our shipping rates to our clients 8% in total.

In my predictions, I believed that the equipment rental industry would eventually go through a series of mergers or consolidations. This has not happened. It is likely because as an AV company gets bigger, the margins compress. In any case, I don't have competitors calling me regularly about buying me our or wanting to be bought out.

Fundamentally, our model for delivery of projector rentals and other AV equipment has not changed. We hopefully have become more efficient and better at what we do, but the basic rules still apply. We send it out, it is used and it is sent back. Pretty simple stuff.

Over the past ten years, I have truly enjoyed serving the needs of my clients. I can honestly say that my small crew are the best employees I have ever had. In fact, I would say they are the most customer-centered people I have ever met. That is no reflection on me. I believe they are caring people who love serving others. I am lucky to have them on my side.

As an entreprenuer who has several irons in the fire at any given time, RentQuick, my crew and our clients are the best business I could ever hope to have.

Updates to ProjectHayes Site

2008-02-19T16:51:00.001-05:00

I just spend the afternoon doing two things:

1. Making changes and updates to the projecthayes.com site (http://www.projecthayes.com)

2. Getting a filling fixed by my dentist.

I can honestly say that the dentist trip was the more enjoyable.

I have found that my ability to convert my ideas into a web page have diminished greatly since I did my first site in 1995. The main issue is that there are far more options now than there were then. In those days, all you needed to do what follow the narrow set of constructs and make sure you spelled everything right. Today, with the Cascading Style Sheets, the possibilities are endless.

Of course, I am dealing in rather boring business sites. It isn't like I am selling the latest luxury cologne. However, I still would like to be stylish, but not off-putting.

Who knows?

On Finding Competant Contractors

2008-02-18T19:43:00.002-05:00

It has become apparent to me in recent months that finding good vendors is extremely difficult. People who should know exactly what they are doing, tend no to be so competent when pushed.

I could name examples, but it would only make matters worse. During my work as an entreprenuer, developer and investor I have found that most of the licensed professionals who I hire are mediocre at best and impressively incompetant at worse. I am sometimes at my breaking point when dealing with these guys.

The logical solution is to check references, follow up on details and dump bad vendors quickly. However, recognizing that they don't know what they are doing early is difficult. We are talking about a group of people who somehow continue to earn a living while performing their work very poorly. They know how to hide things. That is the one thing they are good at.

So I will trudge on often paying double for someone else to fix the mistakes of the first guy. In the future, I will try to less forgiving of failed promises early on. When a hired professional fails me, I will cut them before they destroy the entire project.

I want to go into space

2008-01-31T17:38:00.000-05:00

I was so excited to read in the Economist about Virgin Galactic's progress on space tourism. In the next year or so, they will begin taking regular ol' people up into space for a few minutes. Virgin is using an interesting system whereby the space ship is dropped from a mother plan then launched into space. Very efficient. As it turns out, they will be able to launch from any commerical airport.

I know what you are saying: Only the super rich can afford the $200,000 to go up. Yes, that is true. However, it has been that way for a long time. You could risk you life and go up in a Russian rocket if you paid enough. However, this is different. In this case, it is the goal of Virgin Galactic to get you into space. Whereas with the Russians, it was just about the big payoff.

For those of you who think this is just a waste of money for people to get shot into space, consider this: you need the early adopters to pay the big bucks early so later on, the regular guy can do it.

Just like in the case of air travel, early on only crazy people and the rich could go flying. Now, everyone with teeth has flown at some point in their lives.

Would I spend big bucks to fly into space? You bet! What an opportunity! Imagine doing something that was only dreamed about two generations back. Even if it is only for a few minutes, the idea of breaking the confines of this planet would be incredible. Yes, it is tourism and a little kitchy. Who cares? It is space...the final frontier and all.

Bin Laden's son or Klingon?

2008-01-22T13:55:00.000-05:00

Try to see if you can pick which of these guys is Bin Laden's son and which is a Klingon?

Millenials On 60 Minutes

2007-11-12T11:24:00.000-05:00

Last night, 60 Minutes ran a story about the "Millenials", which refers to the new generation of workers born between 1980 and 1995. In the peice, they discuss how the "new" workers are very technologically savy, but lack the traditional work loyalty and drive that previous generations have had.

While we all have dealt with the slacker-20-something in the workplace, it isn't really a new thing. If you go back to the boomer generation, you had the hippie set who weren't really that motivated or ambitious. Before that you had the beatnicks, bums and village idiots. The fact is that every generation looks like lazy little bastards to those who are older.

I don't want to defend the little jerks who walk around with ipods, text message constantly, spend thier days on MySpace, YouTube or whatever else they are doing. However, they are just young and don't have the responsibilities that a 42 year old guy with an ex-wife, current wife, combined 5 kids spread over 3 states and credit card debt up to his double chin has. If we just give the 20-somethings time, they will eventually get themselves into crappy life circumstances where loyalty to the company and the job will override their selfish desires to be happy.

The media has to come up with some way to segment people to make broad generalizations about generations since they can no longer generalize according to race, ethinicity, sex or any of the previous groupings.

Am I concerned that the fat little kids who are self involved are going to run our country into the ground? No, not at all. By the time these guys are in charge and in a position to screw up our economy, we should have the GDP of Paraguay thanks to the current crop of morons running our macro economy.

Getting into commercial real estate

2007-11-09T10:31:00.000-05:00

I am now completing my third commercial building. The three projects have been the Industrial building, the John R. Hayes building, and the new W. Adin Hayes building. I sold the industrial building this past summer. So I have two buildings that I am keeping.

Everything I have learned about commercial real estate has been through doing and reading. I should mention that very little in my MBA prepared me for the commercial real estate world with the exception of a couple of finance classes.

Since I always enjoy sharing what I have learned, here is the first lesson.

Everywhere you look, you will see commercial properties. Some of these are owned by the company who is occupying them. However, most are rental properties. I define commercial rental properties into two groups. The first group is the multi-tenant property. These are everything from strip malls to high-rise office buildings. The second group are single tenant buildings.

While this is a very simplified way to categorize commercial real estate, it works for this lesson.

Making money in commercial real estate as a property owner is not too difficult. First, you need to find a location and secure it someway. I recommend either putting a contract with a few contingencies or purchasing an option on the land. Options are good since they give you more time to bring a deal together, however you are at risk of losing the option and what you paid for it if you take too long to make something happen.

After you have some land locked in, you need to put together a proposal on that land. Maybe it is a speculative building with five office spaces in it. You would want to put together a site plan so you can figure how big the building can be and how it will lay out. Then from that, you could hire a designer to lay out your building. I recommend finding an existing building in a nearby town (similar building codes) and buying that design or modifying it with the original designer. By the way, in some areas you don't need to hire a full architect. A designer who subs out of the structural engineering will do fine.

So now, you have some land that you don't yet own, a site plan (preliminary) that gives you an idea of how the building will lay out, and a building design (exterior only) which gives you some nice 3-D pictures. This is where you need to hustle. First, you should be contacting potential tenants. At the same time, you should be getting cost estimates and financing. All you are going to finance is the shell part of the building and the site work. Make it clear that any tenant upfit will be financed and built after you sign tenants.

Obviously, I have skipped the market research part of things. However, you should know your market very well. Understand what the vacancy rates are, the typical rents, what businesses are there and what is missing. The "missing" is your market. I could spend days talking about this part.

Okay, now you have lots of things going on:

1. An option, contract or piece of land that you have bought.
2. A site plan that is ready to be submitted or has been submitted. (You should already have the proper zoning before you buy the land. Never buy land without the zoning done first!)
3. A shell building design and lots of pretty pictures of it.
4. Bids or estimates of the construction cost from a Class-A contractor (No, you shouldn't play general contractor unless you are one.)
5. You should get some tenants signed up. I recommend a minimum of a 5-year lease.
6. A financing package for 100% of the project cost including interest.

That last part is where people have trouble. This is not your house. This is a commercial building. Therefore, you should be able to build it for a lot less than what it will be worth. That is because you should ultimately appraise the building based on the net operating income it produces. For instances, nationally, commercial properties are valued at about 6.5 to 7% capitization rates. A Cap rate is the rental income after all expenses except for interest, depreciation and taxes divided by the purchase price. So say a building generates $120,000 per year, has operating expenses of $20,000 per year, and was purchased for $1,400,000. Then the cap rate would be 7.1%.

Here is the neat part, if you are building right, you should be able (depending on your market) to get a building going for less than what it is worth based on the cap rate. That is the goal anyway.

If you can build a property that generates $100,000 per year for about $800,000 and borrow $900,000 then you would have a loan to value of $900,000/$1,400,000 or 64%.

If you achieve your financing goal, then you have been able to build your property without any money down. Now you have to figure out how to make money at it.

Using the example above, let's get you a $900,000 note with a 20 year amatorization at 7% at your local bank. They will likely put a 5-year balloon on it so they can milk points out of you every now and then. With that funding, you would have a mortgage payment of $83,732 leaving you about $12,000 in free cash. But wait, there is more. You get to write off the interest, and depreciate the building over 39 years.

If you are smart, you will get leases with inflation kickers that move the rent up a little each year. This is very important since you will want to increase your rents over time. Once your building is full, you can either sell it based on the cap rates or hold it and eventually pay down the debt to have a nice retirement nest egg.

I could go on more about this, and I will--later.

Giving 110%

2007-10-26T09:46:00.000-04:00

Last night I was watching Survivor. (Don't even ask!) On it, the Lunch Lady stated that she always gives one hundred and ten percent. Not to sound like a jerk or anything, but how is that possible?

If someone tells me they give 110%, my response is always, "Why not 195%? Why are you holding back?"

This seems to be a habit for jocks more so than others. Although whenever an employee is in trouble, they are quick to point out that they give it 1,000%. No kidding!

For me, I like to give it 5%, but have that increase at a rate of prime + 1 then have that amount compound daily with a balloon on Fridays. Ha! Beat that!

Why I Am A Raging Libertarian

2007-10-25T10:43:00.000-04:00

When I tell people that I am a libertarian, they often mistakenly believe that I am a liberal. So before I go any further, let me explain what a libertarian generally believes.

A libertarian believes in small government, less intrusion, private property rights, fewer laws, less regulation, more independence, more logic, and more freedom. It is actually pretty simple, really: Leave me the hell alone!

Here are a few of the major gripes I have:

1. If I own property, I should be able to do with it what I wish, so long as I am not hurting anyone else. However, the codes, zoning, restrictions and regulation put on my private property are getting onerous. Thirty years ago, there were no zoning regulations. If you wanted to put a hotel out in the middle of now where, then you could. You took the risk that it would be successful. Today, I can't so much as add a parking space to my building without going through a lengthy approval process with the county staff. I am not asking to be able to build a fire-death-trap building, but lay off already.

2. Our prisons are filled with people who are not criminals. In the United States, we have a greater percentage of our population locked up than any other developed country in the world. This isn't because we are all godless killers. It is because we have so many crimes that lack victims. If a guy is smoking weed (a natural plant that grows in the ground), then who is the victim. It is his body. He didn't kill anyone, hurt anyone or steal anything. Our government locks this guy up for 3 to 5 years, takes away his ability to make an honest living, and puts him in an environment where he will become a real criminal. America is supposed to be the land of the free. Let's actually let people be free. Lock up the guys that hurt others, but if there is no victim, then there is no crime.

3. Conservatives say they are for smaller government, but they actually want more government intrusion. Libertarians say, "If there isn't a victim, then butt out." Liberals want to take away people's right to fail. Everyone is a winner. Libertarians say, "Let me succeed or fail based on what I can or cannot do." All this is based upon the concept of freedom. Freedom of movement, freedom of expression, freedom of thought, and freedom of risk.

If a couple of men want to own property together and do the dirty in their own homes, why is that a problem? If I choose to paint my house blue or red or pink or yellow, why can't I? If I want to start up a business to make money, why should I need to check with the government first?

I could rant about this stuff all day long. The biggest frustration I have is that my voice is not heard. There are no national candidates that speak the way I think. I am an American without representation.

The Trouble With Databases

2007-09-06T11:09:00.000-04:00

Over the past 9 years, RentQuick.com has been in the business of providing projector and laptop rentals to the meeting and conference industry. Whenever we do business with someone, like all businesses, we add them to our database. Over the years, we have built up a very large database that in my mind has become a bit of a problem.

Way back in the 20th century, employees would stay at the same company for their entire careers. Today, it looks like people spend two to three years before moving on to another job. I know this, because every year our database loses 20-30% of the contacts.

As a result, our database must be constantly "weeded" and "pruned" (don't you just love the horticulture related jargon?). It takes a good bit of time, because you don't want to just dump data. You need to be sure that the person has really moved on. And if they did move on, you need to find out who took their place.

Finding out any information from most companies today is pretty hard. Yes, you can go online and search, but you really need to make a telephone call to confirm the data. If you send an email, it likely won't be answered. But telephone calls are a pain too because no one actually answers their phone. The let the voice mail do it for them. Then they don't return the call.

All this is very frustrating and costly to a company trying to communicate with the clients. This is the main reason why we no longer do mailed advertisings. Most of the mailings come back undelivered.

So on one hand, I hate my database. It has gotten very big and cumbersome. However, on the other hand, it contains very important information about the most important people: our clients.

Sub-Prime Mortgage Victim Joe

2007-09-05T10:10:00.000-04:00

This past week, President Bush argued that the Federal Government should help the homeowners who are at risk of defaulting on their loans which they can no longer afford.

Over the past month, we have heard the media describe the borrowers as victims. They say that the mortgages were pushed upon them. They were tricked into taking out more money than they could afford.

It is easy to blame the mortgage companies. Yes, they did try a number of ninja loans that were risky. Yes, a bunch of those loans will default. And yes, the homeowners will lose their homes. All terrible stuff, right?

Wrong. The homeowners don't actually own anything. In fact, some of them will make a good bit of money out of their little mess. First, if they have a 125% loan-to-value deal, that means they never put any money into the house. If they have been paying interest only, then they have zero equity to lose. They are glorified renters. When the bank forcloses on the house, they will end up keeping that extra 25% of the loan. Why? Because it was used to pay off their credit card debt (Victims of the subprime mess were also victims of the credit card debt mess too).

So here is a little example:

Joe buys a house for $300,000. He takes out a ninja loan for $350,000 to pay off and "consolidate" his credit card debt which he ran up in his wild 20's. His monthly interest-only payment starts off at $1458 per month. All is well in the world. Joe is a fancy guy in a fancy house.

But wait! The evil lender pulled a fast one. (Not really, it was all spelled out in their loan agreement and Joe had an attorney do his close so he should have known it was coming!) The lender tied the 3rd year of the loan to float with prime. Now Joe is paying Prime +1 which makes his interest only payment $2890. How ever will Joe be able to get that new HD-DVR he has been wishing and praying for over the past 2 weeks.

Of course, this is when the Today show comes out with the sad story and the sad music about Joe. Joe who has already lost his dog to a Michael Vick dogfight. Joe who is a good guy and likes to work 40 hours a week. Joe who is an American just like you and me. (I apologize to our international readers, but being an American today means you never fail. That is why we have a government) Joe who is about to lose his house to a foreclosure.

After all the tears and sad commentary only briefly interrupted by a Flomax commercial, we all feel a little less secure.

If Joe, who is an American just like you and me, can lose his house then so can I!

On and on it goes with no end in sight. Here is the straight talk:

1. Joe is an idiot. He should never have bought a house without a down payment.

2. If Joe had not spent his earnings of his 30's while he was in his 20's (credit card debt) he might have a down payment.

3. Joe is an idiot (again). He never took the time to learn about how floating rate mortgages work. Nor did he ever learn how to plan beyond the next week.

4. Did I mention Joe was an idiot? By the way, Joe will make money by walking away from his loan because he is effectively paying off all his credit card debt when they take the house. You might say, but his credit would be destroyed. Duh! This idiot didn't have any credit. That is why he needed a sub-prime loan in the first place.

5. Finally, the government needs to butt out. Keep liquidity where needed. But forget about the Joe's of the world. Don't bail them out or the lenders or anyone else. Allow people to fail. It is part of life. It is how we grow and learn.

And this isn't even the reason I am so pissed today!

Helping the Helpless

2007-09-04T17:21:00.000-04:00

I have been in the business field for most of my adult life, less 6 years in the Marine Corps. As a result, I have developed a wide range of business experience. As a result, I tend to get a large number of people who come to me for advice on thier businesses.

Although I have never charged for this advice, I put alot of effort into helping these guys out. Recently, I did some advising to a family business that I have done work with in the past. These guys had gotten themselves into a mess and they needed to make some tough decisions to get out of it.

I evaluated the deal and came up with what I thought was a pretty good route for them to move past the problems. I even pulled in some of my resources to help them refinance their business. The recommendations I made were agreed to by all the parties and it looked like a solution was in the works. Then...kablamm! They went a completely different route.

By different route, I mean they did nothing. They faced and continue to face total extinction, but they don't seem to worry about it at all. They have not moved on any of my advice and are in the process of actually working backwards.

The moral of this little story, and the only part that matters in our conversation is this: it is not the idea that matters, it is the execution. You can think things through, but if you don't act then you are going nowhere fast.

As a result, I have defined this as helping the helpless. They don't really want any help.

The Waiting Game

2007-08-13T10:05:00.000-04:00

Right now I have several projects which are being done by other people. These are:

1. Earthwork construction at DeWitt Crossing
2. Building Construction of new office building
3. Engineering work for a stormwater detention pond
4. RentQuick.com website re-design

Here is my problem: I hate waiting on other people to do their work. Now, I know sometimes problems arise or other work interferes with getting my jobs done, but it always seems to be that way.

I have spent the better part of my Monday morning trying to get a handle on where everything is and what is going on. To be honest, I think I am at the same stage I was a month ago. Things are not progressing fast enough.

The word of the day is frustration.