Eddie Milligan Position: President, Hansen Dam Equestrian Center Inc. Born: Philadelphia, 1931 Education: Quit high school with one semester to go Most Admired Person: Michael Milken Personal: Married with three adult children, six grandchildren By CHRISTOPHER WOODARD Staff Reporter At 14, Eddie Milligan rode from his native Philadelphia to California in a boxcar full of racehorses to follow his dream of becoming a jockey. By his own admission, Milligan wasn’t much of a jockey, but the experience launched him on a new career path that took him from jockey to horse trainer, car salesman to home and equestrian center developer. For the past 10 years, Milligan and his family have operated the Hansen Dam Equestrian Center in Lake View Terrace, but his most recent claim to fame is putting together a deal with San Francisco businessman Kjell Qvale and professional golfer Jim Colbert to develop a $20 million golf course and equine hospital at Pierce College. The son of a horse trader, Milligan loves wheeling and dealing, but the Pierce College project, if approved by the Los Angeles Community College District trustees in the coming weeks, will rank as his ultimate deal. Question: How did you make the transition from jockey to developer? Answer: Well, from jockey I went to training horses. And then breeding horses. Then in the ’60s I got real lucky. I bought a piece of property in San Dimas to put a horse place on it, and they built a golf course around it. It made it so damn valuable. I went in and got a subdivision approved and that was my introduction to the real estate development business. I came out of that extremely well and parlayed the proceeds into my next venture. I also learned that real estate made a lot more money than horses. Q: How did you get involved in developing equestrian centers? A: A friend of mine had an opportunity to build the first equestrian center in Whittier. That’s when I took my expertise in the horse world and my knowledge in the building trade, and I created a company that became one of the original prefabricated barn builders. It was a manufacturing company that made the steel framework that made up the components of the buildings for horse housing. All your major centers the city of L.A., the city of South Pasadena, the city of Irwindale, the city of Huntington Beach were designed and built by Better Built Enterprises. Q: How did the Pierce project unfold? A: In the horse world, we carry a good reputation. So last year, I was contacted (by the college) and they told me the horse program was in dire need of assistance. I had a lot of things going on here, but I finally agreed to go out. I told them, “I don’t know why you guys are sitting here worrying about your horse program, your whole damn college needs to be saved.” Q: What did you see that made you think that? A: Just the condition of the campus. I took time to go through everything, not just where the horses are. And when I saw that, it reminded me of this facility (Hansen Dam) when I took it over. And then it was explained to me that there were budget cuts and budget cuts and budget cuts, and that’s why they didn’t have any money to maintain the horses or the campus. Q: So where did you go from there? A: I called my man, Mr. Qvale in San Francisco, and told him I needed $10 million. And he said “What the hell for?” I said, “Jump in your plane and I’ll tell you about it.” I picked him up at Van Nuys Airport and took him to the top of the hill (at Pierce College). That’s when I dropped it on him what I want to do, build a golf course. He said, “This is beautiful. This would work.” He had just finished three golf courses in Las Vegas, so he said he’d get hold of Jim Colbert and have him and his team come and take a look at it. Q: How did you structure the deal to appeal to the college? A: After Colbert came on and his people did their due diligence, he said, “Hey, this area warrants the finest. This is not going to be just another golf course. This is going to be one of the premier golf courses in Southern California.” That’s why the cost jumped to $20 million from my original estimate of $10 million. But anybody could have built a golf course. Anybody and his brother. But if you check the (five) proposals (submitted to the college), we’re the only one that came in with classes and curriculum to advance the enrollment of the college. We’re proposing an additional $3 million worth of brand new buildings for agriculture and animal science and equine science classrooms, operating rooms, everything. That’s over and above the golf course. We’re also guaranteeing an $800,000 lease payment and we’re contributing $250,000 in (scholarship) grants to the college. Q: What kind of course offerings are you suggesting? A: What we’ll do in concert with Pierce is develop a two-year program, an associate’s program. At the golf course, it will have all brand new classrooms, teachers’ offices and brand new workshops to teach these students. The golf course becomes the largest living laboratory and classroom on the campus. We’ll also have state-of-the-art veterinarian tech programs for large animals. Q: What’s in this deal for you and your partners? A: We intend to make a return on the investment. We can either lose a lot of money or make a profit, which we’re sure as hell entitled to. That’s my only answer when it comes to money questions. Q: Critics have said any project on that site would destroy one of the last big chucks of open space in the Valley. What do you say to that? A: It does exactly the opposite. It retains it as open space indefinitely. That’s the only way you can answer it. Q: Where did you learn to make deals? A: All of my talents wheeling and dealing and trading came from my dad. He taught me when I was just a kid, you never go broke taking a profit. If you have a horse, and you can make a profit on it, sell it. He also taught me that if you have something to sell, but someone doesn’t have all the money, but they have other items you can take in on trade that you can market, don’t lose the deal. Q: Some have described you as brash, even abrasive. How do you respond to that? A: Why, I accept that as a compliment. Because when you’re a businessman, when you’re dealing with people, you want to get your message through. And you want to get your point through. With some people you’re talking to, you better be abrasive or they ain’t going to listen.

HOW TO “READ” A MODEL HOME If you’re like most new home buyers, you’ve toured a number of model homes, and have fallen in love with more than one. Builders today are working harder than ever to give you the home you want, and the excellent selection of styles available is making what used to be a cut-and-dried decision tougher than ever. The floorplan is one of the five key factors to consider when choosing a home. The other four are general location, price, neighborhood and the builder’s reputation. The following tips can help you narrow the field to find the floorplan and overall home plan that’s perfect for you. 1. KNOW WHAT YOU’RE LOOKING FOR. Start shopping for your new home with as clear an idea as possible of the type of home you need. Get a good sense of the number of bedrooms and floors you need, and the type of home “format” you’re looking for. 2. HOW DOES THE HOME LIVE? Walk through the models as if you lived there. How are the rooms laid out, and what is the overall feeling you get when inside the home? Think about the mechanics of the house. Will guests sleep next to a noisy washing machine? Is there a space for the children to play? Also think about the feeling of the home. Does it feel like a place you’d be happy in? A good gut-level feeling about a home is as important as everything else. 3. LOOK FOR WASTED SPACE. Most homes are priced on the basis of cost per square foot, so unusable space can add significantly to the cost of a new home. Entry-level and first-time move-up buyers, often sensitive to price, can save by choosing an efficiently-designed floorplan. Telltale signs of wasted space are unusable areas that can’t be furnished, awkward hallways and small rooms that leave you feeling claustrophobic. On the other hand, multi-purpose rooms and open designs can maximize efficiency and make a smaller, more affordably-priced home seem large and roomy. 4. READ THE BLUEPRINT AND TOUR A PRODUCTION HOME. Don’t expect your home to look and feel exactly like the model home. Outfitted with professionally-designed decor and upgraded features, model homes can sometimes seem different than the home you receive. To avoid surprises after you’ve purchased your home, ask your salesperson to let you see the blueprints and tour a production home to learn what the home will look like upon delivery. Under California law, a blueprint for each home must be kept in the sales office, for public viewing when requested. Review the blueprints with your builder to learn about room and window sizes, and other important features. Tour a “production” home, one that has just been completed, to see what a home without the frills looks and feels like. If a home feels right when you see it unadorned, you’ll like it for the long term. 5. WILL YOUR FURNITURE WORK? If you will need to move your existing furniture into your new home, the blueprint can give you exact room sizes to see how well your furniture will fit. Computer programs now available allow you to plug in room and furniture sizes and try different arrangements. 6. TALK TO THE PEOPLE WHO WILL BUILD YOUR HOME. What you see when you tour a home is only about half of what you’re paying for. The rest is hidden in the plumbing, foundation, insulation, and other unseen features. Ask the sales representative to introduce you to the construction team. They can tell you about the materials and construction processes they used building in your home, and the quality of the home, inside and out. Taking the time up front to compare homes on a detailed level can make all the difference. A complete understanding of your floorplan helps guarantee you make the best overall choice, and ultimately the best investment decision. In addition, you’ll have the confidence that comes from knowing you’ve moved into the right home — for all the right reasons.

By MARVIN R. SELTER “Every morning in Africa, a gazelle wakes up. It knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re a lion or a gazelle when the sun comes up, you’d better be running.” There are lessons to be learned from this parable, particularly when it comes to the San Fernando Valley and the Los Angeles economy. We simply can’t afford to be smug or complacent, even in times of prosperity. Who can predict when the next economic free-fall will be upon us? That’s why it is incumbent upon us to support industries offering the greatest potential for regional economic development. At the top of the list is the entertainment sector particularly, the film, television and music industries. These businesses employ tens of thousands in the big studios and even more employees in ancillary service industries that support the entertainment business. It’s an industry that has shown remarkable growth, creating jobs and spawning small-business development here in the San Fernando Valley and throughout the region. Entertainment production growth has been focused in Los Angeles County. According to the Motion Picture Association of America, in 1996 the industry poured approximately $25.6 billion into the region. The number of jobs directly generated by motion picture and television production grew by 38 percent between 1992 and 1996. In contrast, U.S. employment increased by 10 percent in the same time frame. This dramatic expansion has revived the Valley economy. We must not take this industry for granted. Many covet it the Canadians, other states, neighboring cities, among others. And these challengers are making some headway, according to recent news stories. Although the Southern California region has a competitive advantage in entertainment and tourism, it can only maintain this edge if the studios are able to respond quickly and creatively to shifting market trends. If the studios are restrained from doing so, our economy will surely be affected. It’s a simple fact: The entertainment industry is considered the single most important key to our economic future. That’s why I’ve become a strong advocate of Universal Studios’ expansion plan here in the Valley. What’s this plan all about? It’s about the creation of 8,000 new jobs for the Valley at Universal City over a 15-year period. That’s above and beyond the 14,000-plus jobs that exist at Universal today. It’s about a total economic output in the city and county of Los Angeles of more than $3 billion annually, plus the $3 billion to be expended during construction of the new development. It’s about nearly $15 million in new tax revenue each year to Los Angeles city and county money that is sorely needed to fund and improve public services. It’s about a major studio making a major investment in the future of Los Angeles. Advancing a substantial development project through the political process in Los Angeles is always difficult. But when it comes to Universal’s project, the pathway has been particularly frustrating. It’s two years and 14 public hearings later. And there is still no closure. Universal is a worldwide business with many choices as to where to put its money and its people. The company is known for its film and television business, operating the largest studio in the nation at Universal City, and for its theme parks, which are going worldwide. But there is much, much more. The company’s recent acquisition of PolyGram propels Universal to the top of the music world, both here and around the globe. This bodes well for Los Angeles and the Valley, which hopefully will be the major host for these mega-music operations. I believe Universal continues to weigh its business needs, as all responsible businesses do. The media has reported that the company is evaluating the costs and benefits of the Universal City expansion plan before it re-enters the arduous permitting process. To date, Universal has made many concessions related to the plan. Expensive concessions have been discussed by decision-makers. Many have been agreed to by Universal. But these costly concessions seem never-ending. When Universal takes its plan off the shelf and plunges in once again, we all must pay attention. Everyone who cares about the city’s and Valley’s economic well-being must come to the table. We can’t let this billion-dollar investment in the future of the Valley, the county and the region get away from us. Laying back won’t cut it ask the gazelle and the lion that survived. Marvin R. Selter is president of CMS Inc., a management consulting firm in Sherman Oaks, and immediate past chairman of the Valley Industry and Commerce Association.

By JENNIFER NETHERBY Staff Reporter The average sale price for homes in the San Fernando Valley continued to increase in January, even as the number of homes sold saw a 12.6 percent decline from the previous year, according to a Southland Regional Association of Realtors report. “Overall, we do think the market is showing we’re strong and we’re in pretty good shape,” said Beth Sommer, association president. The real estate trade group reports that 721 homes were sold in January, down from 825 in January 1998. Still, January 1999 had the second highest number of homes sold this decade. Sommer believes sales this year will remain high. “Last year was the comeback of the marketplace,” Sommer said. “(January 1999) was decent. It’s the beginning of the upcurve. In spring and summer, (home sales) start to go up.” The average price of a home rose from $237,500 in January 1998 to $256,200 January 1999. The most recent average price is actually a decline from December 1998, when the average Valley home sold for $267,300. The median price for a single family home in January 1999 was $190,000, up from $174,400 in January 1998, according to the report. Last month, the association reported that 1998 home sales were the highest in 10 years, up almost $1 billion over 1997.

BUSINESS RELOCATION: BUY OR LEASE? By Rob Fullarton Before you make any final decisions about leasing or buying a new commercial property you should consider the following: 1. Start your decision making process up to one year before you have to move. By allowing yourself this time you can explore the marketplace and find out what sales prices are for your type of property needed and learn to compare these prices with the rental market. 2. What are my space requirements for the next 5-10 years? Many businesses move into new facilities that meet their requirements for today but find themselves out of room within 12-24 months. This can be a problem if you have signed a 5 year lease and find yourself with no room to hire new employees. When buying, it can be lucrative to purchase a building a slightly larger building than needed, with built in tenants. This allows future growth potential and generates income to offset your monthly mortgage. 3. Consider the location of your office carefully. There can be large differences in values between the sub-markets in the San Fernando Valley. For instance, North Hollywood prices can be 10-20% lower than Burbank. What will re-locating 2 miles north of Ventura Boulevard do to your business. Mortgage payments or rent payments can be quite different by moving from one neighborhood to another in the Valley. 4. Talk to a qualified commercial real estate agent about values and opportunities available. Many businesses looking to lease never consider buying. However, by searching all possible alternatives many companies can afford to buy a property and spend no more than if they lease a similar property. 5. Talk to a commercial real estate loan agent to see how you business qualifies . Many businesses are taking advantage of today’s low interest rates and small down payment requirements of the SBA loan to buy rather than lease. By being pre-qualified and by working with a professional real estate agent you can act quickly when the right opportunity is found. In today’s active real estate market you must be ready to move when the right property is found. You can be ahead of the competition if you have a pre-qualification letter in hand and feel comfortable with your knowledge of the marketplace since you have spent the time to research all of the opportunities available for your company. Rob Fullarton is with Gribin Properties. Gribin Properties specializes in sales and leasing of office, retail and industrial properties in the San Fernando Valley.

By JENNIFER NETHERBY Staff Reporter For property management firms, 1998 was the year of the merger, with four of the top 15 firms on the Business Journal list either merging or buying other firms and boosting their Valley holdings overall. “The real estate service business is very fragmented across the country and the trend is toward consolidation,” said Dorcey Abshier, managing director of Trammell Crow Co., which bought L.A.-based Tooley & Co. in March. The acquisition pushed Trammell Crow into the No. 3 spot on the list. Trammell Crow’s biggest Valley property is Harmon International Business Campus in Northridge at 830,000 square feet. Joy DeBacker, vice president and regional manager for La Salle Partners, said mergers are becoming necessary because many clients are expanding globally and are looking for companies that can serve them worldwide. La Salle merged with Compass Management and Leasing in October. “The world became a lot smaller,” she said. “Our client base tends to be not just here in the United States, but internationally. You can’t be limited geographically.” Jason Fine, director of portfolio services for Seeley-Ewing Partners, said despite his company’s acquisition of parts of Newport Beach company Koll Real Estate, his firm will continue to focus on smaller properties in Southern California. “We’re just trying to focus on our back door,” Fine said. “For us, (consolidation) just narrows the competition.” CB Richard Ellis merged last year with REI Ltd. of London and Hillier, Parker, May & Rowden. Overall, property managers saw steady growth in 1998. The top two firms held their places on the list for a second year. Woodland Hills-based Voit Management Cos., the only top firm with headquarters in the Valley, held on to the No. 1 spot, managing 3.7 million square feet of Valley office and retail space and 156,000 square feet of industrial space. The company continued steady growth as it added 400,000 square feet to its portfolio in 1998. Voit’s most lucrative property is Warner Center in Woodland Hills, where tenants include Health Net, SunAmerica Inc. and the California Endowment. “In terms of sale prices, there’s a feverish pitch continuing for good property,” said Jeff Lapin, Voit vice president and regional manager. “At Warner Center, we’re at 90-plus percent occupancy and rents in excess of $2 (per month per square foot).” Charles Dunn Real Estate Services Inc. was second on the list with 2.6 million square feet of office and retail space in the Valley and 605,000 square feet of industrial space. The list changed little over last year, with TrizecHahn Office Properties Inc. being the only new entrant. The other big shift in the property management industry last year was the slowdown of competition from real estate investment trusts. Over the past few years, REITs had been buying up properties, taking over more control of tenant management and pushing property management firms out of the market. “The REITs have pulled back a bit,” Lapin said. “The REITs have not had access to capital as they did last year. They’re not as strongly competing for property.” Mark Leonard, Trammell Crow’s principle senior vice president, said in 1999, the industry will probably see more consolidation and growth in the Valley market. Lapin agreed that the property management business will continue to grow in the next year, but said he doesn’t expect it to match that of 1998. “1998 was an incredible year for everyone,” he said. “1999 will be a little slower. There will be sustainable growth in 1999, which I prefer.”

TIPS TO BUYING A HOME IN THE VALLEY What is the first step to buying a home? Finding out what you can afford is one of the fist steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalificaiton, but it will be expected of you when you make an offer on a home. What are the pros and cons of adding on or buying new? Before making a choice between adding on to an existing home or buying a larger one, consider these questions: * How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house? * How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level? * What do local zoning and building ordinances permit? * How much equity already exists in the property? * Are there affordable properties for sale that would satisfy housing needs? Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value. According to Remodeling magazine’s annual “Cost vs. Value Report,” remodeling a home not only improves its livability but its curb appeal with potential buyers. The highest paybacks come from updating kitchens and baths and, most recently, adding on a home office, according to the survey. For more information, check out “The Do-able Renewable Home,” a free booklet available from the American Association of Retired Persons, Fulfillment Department, 601 E St., N.W., Washington, DC 20049; (202) 434-2277. What do all of those real estate acronyms in the ads mean? If you find yourself stumbling over weird acronyms in a real estate listing, don’t be alarmed. There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges). Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section: * assum. fin. — assumable financing * dk — deck * gar — garage (garden is usually abbreviated “gard”) * expansion pot’l — may be extra space on the lot, or possibly vertical potential for a top floor or room addition. Verify actual potential by checking local zoning restrictions prior to purchase. * fab pentrm — fabulous pentroom, a room on top, underneath the roof, that sometimes has views * FDR — formal dining room (not the former president) * frplc, fplc, FP — fireplace * grmet kit — gourmet kitchen * HDW, HWF, Hdwd — hardwood floors * hi ceils — high ceilings * In-law potential — potential for a separate apartment. Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first. * large E-2 plan — this is one of several floor plans available in a specific building * lsd pkg. — leased parking area, may come with an additional cost * lo dues — find out just how low these homeowner’s dues are, and in comparison to what? * nr bst schls — near the best schools * pvt — private * pwdr rm — powder room, or half-bath * upr- upper floor * vw, vu, vws, vus — view(s) * Wow! — better check this one out. Resources: * “Real Estate’s Ambiguous Language You Oughtta Understand,” Glennon H. Neubauer, Ethos Group Publishing, Diamond Bar, CA; 1993. Do we dig deep and buy a dream home or settle for a starter home? Choosing between a smaller house in an affluent neighborhood, an older, bigger house in a more working-class community or a brand-new home is not easy. If you’re in this situation, start by examining your priorities and asking the following questions: * Is the surrounding neighborhood or the home itself the most important consideration? * Is each of the neighborhoods safe? * Is quality of the schools an issue? * Do any of the areas seem to attract more families with children or adult residents? And where do you fit in? As for the return on your investment, home-price appreciation is hard to predict. In the late 1980s, the more expensive move-up housing appreciated wildly. But during the recession that followed, smaller homes tended to hold their value better than more expensive ones. How do I get the real scoop on homes I am looking at? Home inspections, seller disclosure requirements and the agent’s experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form: * In the kitchen — a range, oven, microwave, dishwasher, garbage disposal, trash compactor. * Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom. * The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump. * Amenities such as a pool or spa, patio or deck, built-in barbeque and fireplaces. * Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels. * The type of water heater, water supply, sewer system or septic tank also should be disclosed. Sellers also are required to indicate any significant defects or malfunctions existing in the home’s major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems. The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property. Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides. People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions. It’s important to note that the simple idea of disclosing defects has broadened significantly in recent years. Many jurisdictions have their own mandated disclosure forms as do many brokers and agents. Also, the home inspection and home warranty industries have grown significantly to accommodate increased demand from cautious buyers. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you.

By JENNIFER NETHERBY Staff Reporter In September 1993, the 30-year-old Holiday Inn Express in Van Nuys reopened for business following a year-long, $750,000 renovation. Four months later, the Northridge earthquake shut it down again. Now, $2.7 million and another renovation later, the hotel on Roscoe Boulevard and Orion Avenue has opened again, after a six-year hiatus. The first renovation, done by previous owner American General Hospitality, was a cosmetic facelift, which included few if any structural upgrades. As a result, the 1968 building was unable to withstand the January 1994 earthquake. In 1997, National Hotel Management purchased the Van Nuys hotel in a $100 million-plus deal that included 16 other Los Angeles hotels. The vacant Van Nuys hotel was left untouched for another year, while the new company focused on the more lucrative Crowne Plaza Los Angeles Airport and other West L.A. hotels it had acquired in the deal. National Hotel considered demolishing the Van Nuys hotel or selling it. But in 1998, the company decided to renovate the Holiday Inn once again, in an effort to capture a growing Valley hotel market. “We took over from the old company that had attempted to renovate it,” said George Noumer, the hotel’s general manager. “Basically, we were successful and they weren’t.” Noumer was brought in as general manager and National Hotel put in $2.7 million, essentially rebuilding the hotel from the inside out. From the building’s structure to the bed linens, everything was replaced, Noumer said. “The hotel was gutted, sealed and chained,” Noumer said. “Everybody that knew the hotel, they don’t even recognize it now.” National added a fitness center and meeting rooms to the hotel. The building now meets current earthquake safety codes. Area businesses have welcomed the hotel’s second coming. “Thank God,” said Nancy Hoffman, executive vice president of the Mid-Valley Chamber of Commerce. “I’ve had a lot of calls over the years asking whether they were going to sell or open. We’re just happy the business reopened. It’s sorely needed.” Most Valley hotels are located at the basin’s east end, closer to Universal City and Westside attractions. Noumer said National Hotel decided to pump money into renovating the mid-Valley hotel because of its location near Van Nuys Airport and the San Diego (405) Freeway. “This side of the Valley needs a nice hotel,” Noumer said. The nearest hotel is the Airtel Plaza Hotel and Conference Center on Valjean Avenue. “It’s nice to have a place to refer people to if they don’t want a big place like the plaza,” Hoffman said. The mostly industrial area has undergone a commercial rebirth of sorts over the past few years, with the opening of Wal-Mart and other retail stores. Since opening for business in late November, the Holiday Inn has had a steady 60 percent occupancy rate, Noumer said. The average San Fernando Valley hotel occupancy rate for December was 57.42 percent, according to PKF Consulting, which tracks the hotel industry. Most customers are corporate business people who fly into Van Nuys, as well aviation-related business people, Noumer said. He hopes the latest renovation will be the last for awhile. “We’ve had enough of that,” he said.

Real Estate Acquisition A Smart Investment When Done Wisely by Nigel Knox Why Buy Real Estate? Because real estate, when properly acquired and managed, provides capital appreciation, equity build up, cash flows, tax benefits and a hedge against inflation. Real estate, both land and improved, has a broad-based marketplace with many and varied values, uses and users. Our country (including the real-estate-plentiful Valley) has a vast supply. The demand for real estate is there always, at some price or terms by users, investors or speculators. Although real estate is not as liquid as a savings account, if you know your market place and a few techniques, real estate equities can quickly turn into cash or cash flows. Equities can be traded for other benefits. For me, real estate is the best investment opportunity around. Having owned land, apartment buildings, commercial properties and single family homes, my preference is the latter. Of all the forms of real estate, the single family house seems to be the one with the most opportunities. It is the easiest to acquire and manage, and has the most liquidity. The small size of a single family transaction is well within the means of most investors. Unlike apartment buildings, a single family portfolio is not subject to a rent strike. There are ample opportunities for each of us who is willing to learn and to do. The key is “proper” acquisition. Finding Single Family House Opportunities If you’re new to single family investing, look at one hundred homes for sale before you write your first offer. Drive around clean, neat and reasonably priced neighborhoods in your area. Where would you would feel comfortable owning a rental house? Jot down the addresses and telephone numbers of FSB’s (For Sale By Owner). Knock on doors and ask questions of the owners. By taking the time to talk with a hundred sellers, you will learn the values in your market place and come to recognize a good deal. You’ll become comfortable asking important questions about the property, the owners and their problems. Find out what the sellers would charge for rent. What are other properties renting for in the neighborhood? Talk with brokers about current sales and rentals. Become the most knowledgeable person in your chosen investment area of town. Stick to your local area. Buying houses in other states and all over the country may impress your friends, but wait until you have a problem a thousand miles away! It can be a very expensive lesson. Let’s assume you have taken the time to learn your market place, talked with one hundred owners and have decided to begin investing in single family houses. Where do you begin? Since we are in the “profit” business, the place to start is distress ownership situations. That’ s where the profit is. You make your profit when you buy, not when you sell. With some effort you can find distressed properties. Eventually, owners will contact you. Now, you must do the locating. You need a system for finding, tracking and cataloguing opportunities. Mine works well and it’s simple. I use 3×5 cards. Everyday I cut out the FSBO ads from the real estate section of my local paper. I paste each to its own card. I copy the ad phone number in the upper left hand corner and the date in the upper right corner. The property address (when I get it) goes in the top center. My cards are filed by the first three digits of the telephone number. I arrange all my 3×5 ad cards in order by telephone number, marked by tabs indicating which set of numbers follow. I know when owners change their ads. I know how long they have been marketing their property without success. Their ads may change, but their phone numbers don’t. By reviewing my cards I can see who has stopped advertising. From this I know who sold their property, gave up, or can no longer afford the ads. All this is important information in the quest of a good deal. Real estate rentals are another opportunity. Two types of owners place “for rent” ads: investors like you (a great source of information) and people hoping to rent properties they’ve failed to sell. (More about these ideas later). These ads get posted in my 3×5 box along with “For Sale” ads. Tack fliers on public bulletin boards and place “house buying” ads in your local newspaper. I have found that the “shopping-guide” newspapers–the free ones thrown in your yard–are good sources and the ad costs are cheaper. Hang “I Buy Houses” ads on doors. Actively canvas subdivisions on foot, bicycle, or car to find FSBO signs. Talk with people you meet in the neighborhood. Always carry a business card or flyer bearing your phone number. It might read, “I Buy Houses.” Get the word to as many people as possible that you are in the single family house buying business. Eventually your phone will not stop ringing! More sources of single family home opportunities are: real estate brokers, foreclosure notices, and bank-owned properties (REOs). Now that you have some sources and your 3×5 card system is in place, begin your phone campaign. The telephone qualifying process separates the lukewarm from the highly motivated. (We want only highly motivated sellers.) Make an Offer Motivated sellers are selling because their situation is changing rapidly for the worse for any number of reasons. They are highly motivated to act now to solve their problem. Tactfully probe: why are they selling? What are their bottom-line needs? From your phone questions you should have a firm grasp of their situation and problem. Tailor your offer to meet just those needs–no more. Be absolutely certain you can perform on what you have offered. (You will hear all kinds of sad stories; this is the time for action; not charity.) Remember, always write at least one offer. You will be surprised how often they are accepted or reasonably countered. There are as many ways to make an offer as there are sellers. Offers can be structured in numerous ways depending upon the seller’s motivation and your abilities to perform. Let’s talk about a few approaches to offers. Seller Financing Today many transactions involve seller financing where the seller holds paper for part or all of the equity. As buyer, the trick here is to get the softest terms possible. One technique is interest only with the balance (balloon) due some time in the future. Be careful about having too many balloons on a number of different properties all coming due at the same time. You will find yourself in a real fire drill in a hurry. Try to structure an escape mechanism in the balloon, such as bubbles where you can extend the balance for an additional period of time by making a small payment at the due date of the balloon. This small payment will buy you time to get your ducks in a row and avert a liquidity crisis. In a number cases you will be able to write your contract in such a manner as to create a principal only loan. For example, an absentee seller with a $50,000 free and clear house is motivated to sell. Offer $3000 down. You’ll pay the balance ($47,000) with payment of $470.00 per month for 100 months. Now you have a principal-only loan. Nigel Knox is an investment advisor based in Tarzana.

Valley of the WHAT? As a sponsor of a recent Ladies Professional Golf Association tournament in Glendale, the Economic Alliance of the San Fernando Valley picked up international publicity for its campaign to promote the Valley. As part of the event title, “Valley of the Stars” was mentioned repeatedly in media coverage as far away as South Korea, where viewers tuned into see that country’s golf sensation, Se Ri Pak. “It was incredible. Everywhere we turned TV, newspapers, radio, Web sites the Valley of the Stars name and logo was all over the place,” said Alliance President Bill Allen. “You just can’t buy that kind of exposure.” One question dogged the three-day event, though. What exactly is the Valley of the Stars? Allen was happy to explain to the world’s media that the “Valley of the Stars” campaign is meant to promote the Valley and its connections to the entertainment industry. Still, you’ve got to figure folks in faraway lands were left scratching their heads. Speaking of Publicity Dave Fleming, an attorney and chairman of the Economic Alliance board, thought it would be fun to play in the pro-am tournament at the recent LPGA tournament, so he plunked down $6,000 to pay for a foursome. Fleming, an avid golfer, got a chance to play with his favorite tour pro, Dottie Pepper, during the pro-am, which as the name implies is an event for professionals and amateurs. To the amusement of his friends with the alliance, Fleming and his group did well enough to win. Fleming picked up a crystal trophy and bragging rights until next year’s tournament. Habla Espanol? Don’t Bother Grupo Gigante, a Mexican supermarket chain, has been in the news a lot lately now that it is moving into the Southern California market, and workers at the company’s Mexico City-based headquarters have been bracing for the media calls. One Business Journal reporter was relieved to find a bilingual receptionist who responded to her clumsily phrased request (in Spanish) to speak to the executive in charge of U.S. operations with a welcome and familiar “I’m sorry, he’s not available now. May I take a message?” But it turns out she wasn’t the only reporter who underestimated the language skills of the Gigante staff. Justo Frias, president of Gigante USA, reported that a journalist from another Los Angeles publication, fearing she would need to conduct her interview in Spanish, asked a Latino co-worker to pinch hit and ask the questions. But, after a minute of listening to that reporter’s bad Spanish, Frias suggested in perfect English that the interview be done in that language. Boss Schmoss It isn’t easy being a whiz kid. Roger S. Bloxberg and Todd J. Helfstein, the principals of Nova Development Corp., a Calabasas software developer, were still full-time students at UCLA when they founded the now 15-year-old company. As a result, they often found themselves juggling their interest in building the business with their class schedule. It wasn’t easy. “We’d be sitting in a meeting that was running late, and we’d realize we had a class starting in five minutes,” said Bloxberg. Wrapping up meetings with clients or vendors proved easy enough. But the real trick was making excuses to their employees. “It was embarrassing to have to tell them we had to leave early to go to class,” Bloxberg said.