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Jonathan Rose is not the same Jonathan Rose as at Capital Gold Group....... Jonathan Rose has spent the 15 years as a real estate trader, developer and serial entrepreneur. His belief is if you can buy something and then add value you can sell it for more, only however if you bought it right in... More
My company:
Jonathan Rose Company LLC
My blog:
Future Sight
  • Has America Economy Matured into the Protectionistic Phase

    Has America's economy finally matured into the protectionist, authoritarian, inflexible, hierarchical, elitist society that eliminates innovation, creativity, quashes the human spirit and stifles the once proud and great American dream. This was how America was created and what made it great, the land of initiative and energy; where effort and a desire to succeed were rewarded and people were celebrated for their success rather than berated and beaten down by the wealthy artistocracy. Is no longer possible to rise above your class or place in society unless you have exceptional sporting or singing talent. It used to be that America fostered and praised innovation, creative thought and change. There was a time when people were able to get off a boat and start a business, grow profitable and successful and prosper. Sergey Brin, Levi Strauss, Madeline Albright, Arnold Schwartzenegger are but a few who immigrated to the United States to build their fame and fortunes, will these sort of people continue to be attracted.

    These days it seems that those who "have" will do anything they can to attack the "have not's" the government bodies will do anything in their power to protect the old boy network and maintain the current status quo. The cronyism of the Bush administration is far from ended, the equality of the White House is not as pure as it seems. Large and highly corrupt organisations continue business as usual using government subsidies and legislative protection to further grow their personal wealth so long as they ensure the right people receive the right lunches, accolades and kickbacks. The SEC and NYC AG are of course investigating these alleged kickbacks.... hopefully they do a little better in these investigations than they did with Madoff, Enron, Global Crossing, worldcom, Countrywide Financial, SEC, AIG ow this list seems to be endless..... Still with countless successes under their belt from beating down start ups and small companies who cannot afford the hundred of thousands of dollars it costs to create an adequate and successful defense to their long winded, seemingly endless requests for papers and documents in an attempt the unearth some increiminating nuance of the law that only a handful of people, costing more than $500 an hour to hire, would even know about, the SEC can hold their head high and proudly declare they had a good day protecting the US population.
    An interesting article was recently published on the new Czars of industry elected by the current government and it is also interesting to see the matching "charitable" party contributions/ donations they made. The time has come for the President to show his metal, the current system is nbot just flawed it is irrevocably broken and is beyond repair, we have had one bailout totalling over $3 Trillion in reality and now there is talk of a second as the economy slumps further in spite of false profit reporting and media maninpulation. The SEC, Rating Agencies, Banking System, Insurance companies and all associated regulatory agencies need an overhaul, it has been long due and too many scandals and abuses have occured in recent years to sweep under the carpet. The time to act is now, the opportunity is here, solutions abound and rehashing what hasnt worked and doesnt work isnt going to improve the life of the average American, it is time to answer to the people and protect them not the elite few.
    Jul 09 12:12 AM | Link | Comment!
  • Sell, Sell, Sell

     Sell on any rally within the next few months, I strongly believe the market will crash again in September or October and test resistance. I expect us to dip below the 52% decline and break the 53% resistance barrier of the great depression.

    The market rallied artificially on bank profits, the government cash injections allowed them to show this but the reality is that the bank stress tests based on older non current data showed the majority to still be unable to withstand certain market factors. In my opinion many are insolvent and I wouldn't have a penny over the FDIC limit in any of them.


    Jun 10 1:32 PM | Link | Comment!
  • What constitutes good value in a real estate purchase.

    Its funny how many times in the last few months that I have heard brokers tell me a property is a steal or I would be crazy to miss out on this opportunity.
    I was recently looking at a house that was originally listed at $805,000 in 2007. ( A seller can ask what they want the do not have to justify this figure to anyone and it is not justified by anyone)
    The property only received a few offers which were all around $450,000. (This in my opinion establishes true market value as a property is worth what someone is willing to pay for it not what the seller is asking for it)
    The house was unsurprisingly foreclosed upon by the bank who owned the property at around $395,000. (cost of borrowing)
    I was told with confidence by the broker that I could have the house at $350,000 and another broker corroborated this telling me it was a "steal" at $350,000
    So here is my question..... how did the brokers establish the initial value of $805,000 and how do they know it is a steal at $350,000.
    I think the initial value was a market gut feel, which is what happened so often in the leadup to the crash and was a massive contributory factor. This is what I think the house can be sold for based upon the common hysteria in the market and if I ask it and there are no comparable sales it creates a market value of its own.
    Why did the developer not sell it at a profit at $450,000 - was he lead by the brokers and the promise of higher returns or was he greedy??? It is hard to tell but so often I have sold properties below the value I think they are worth and seen them resold by others for more within a year or so.... however if i crystalized a profit on the transaction then I came out ahead in my opinion as I was able to move forward to the next deal with more cash in my pocket than Ihad originally. I never attempt to sell at the very top of the market as it can easily move down during the transaction and may well not close.... at which point a profit making situation becomes a loss and a possible black mark on your credit.
    Funnily enough there is a property in the same development nearby which stands the developer at $750,000 which is beautifully built and has fabulous Viking appliances etc. Whilst this is great for winning awards etc when a developer gets personally involved in the property there are all manner of upgrades that go in that are not supported by the development, type of buyer looking at the property or the market.
    Why am I suggesting a $250,000 value for the property when I am being told it is a steal???? I have owned and managed rental properties since I was 16 years old. If I know i can only rent a property for $1800 a month then I make the following calculations.
    $1,800 x 11 = $19,800 (I leave out 1 month for renting fees, vacancy and refurbishment as experience has taught me this is most likely with any non commmerical property)
    $2500 = Taxes, HOA's and other associated costs
    $17,300 is my total income for the property - I am thinking a 7% yield would be fair - ideally Iwould like 10-12% but seeingas I can lock my loan at around 6% today that makes sense as you will see later.
    Therefore my multiple is 14.25714 to give me a 7% yield
    I would then subtract my closing costs of $2,471 and I have my exact offer price.
    Now what has been happening is people have been ignoring these calculations and subsidizing the mortgage in lue of a return from Capital Appreciation - This is a dangerous gamble though as you have brokers fees, early repayment on mortgage etc associated with selling a property and would have to see at least approximately 8% appreciation just to cover carrying costs.
    When one takes the emotion out of property and looks at it in the same fashion as a commerical property or business decision we receive a firm indication that the market is far from bottoming out in certain areas. I personally would advocate that appraisers and realtors are required to go through this type of process and produce similar maths to establish a selling price.
    California is correcting well as I was saw a trailer on PCH in Pacific Pallisades that would have been $280-350,000 at the height of the market is around $95,000 - 1/3 of its original suggested listing price.

    Jun 10 1:28 PM | Link | Comment!
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