The Quintessence of Love

Have you ever looked at your child and just admired?

Just watched him or her in wonderment?

This being, this otherworldly life form who is half you?

I have.  I do.  And I do it on a regular basis.  It fascinates me.  The depth of my love for these three boys my wife and I created is truly beyond otherworldly.

While on vacation, you sometimes have time to reflect, sit back, and study your life, of what you have become and surmise at what the possibilities are for the future.  For me, it seems to be even more pronounced, as each year I take my family back to my parents’ home in Cape Cod to share our life with them.  We have been doing this for over twenty years now.  The boys know this town, the places to eat, the best ice cream, the walks we take, and the many activities that summertime brings.  In addition, the cousins roll in and out as time permits, and we are grateful for the family we have, no matter the time we spend with them.

Also, we watch as my parents get older and slow down.  There are more naps and the need for quiet and personal space amidst the insanity of so many people in their home.  While they will miss it when we are gone, I have no doubt a clean and orderly house gives them equal comfort.  While I have been questioned by friends and family why or how we could go back to the same place each year and do the same things, what drives me, I believe, is the quintessence of love.

I simply love my parents with all of my heart, and I love my family equally.  It is what love is.

I look at each of my sons and I know their strengths and weaknesses; and I am fairly certain they know mine.  I relish the times we can still hold hands on walks, play basketball in the pool, and hug for no reason at all.  It is simple, it is quiet, it is epic.  I am still the dad who they look to for a laugh, for entertainment, for fun.  And I am fully aware it won’t always be that way… no matter how much I want it to be.  At 13, 11, and 8, I have maybe eight more years of this; obviously less with my older sons.  It is a finite amount of time.  My role will transition to something different, something I am not aware of at this time.  I love my role now, and I am afraid of the role that is coming.  I like that they rely on me.  That they count on me.  I choose to make less income in favor of them.  Hours I could spend working or making more money are forsaken.  Forsaken in favor of love.

A child needs you.  Our children need us.

I find that love for a child is selfless.  We need to take the backseat and provide the teaching moments they need – what hurts your feelings, what makes you feel good, how we must feel empathy for others. 

This is the quintessence of love.

The Advantages and Disadvantages of Business Loans for Startups

Let me be real up front with you….

A true business loan from a traditional bank for your startup will NEVER, please let me repeat even louder, NEVER happen.  NEVER!  So put your delusional mind aside.

Banks are not in the business of betting on long shots… of any kind.  Even if you think you have found the idea that will turn a turd into fresh drinking water, there is simply no way a traditional bank will bet on you; that’s not what they do.  They make informed business decisions on seemingly credit worthy borrowers and even then, they are still skittish because life interferes with even solid credit borrowers with tons of money.  That means bad things happen to good people sometimes, or good people get greedy, or stupid, or careless…

You feel me, right?

Here’s the skinny… it is always best to get money from your parents, relatives, your savings, or your friends… if those are an option.  They won’t expect (errr, take) much of your company because they believe in you and the novelty of what you are doing.  Simple as that.  Yup, Daddy’s greenbacks, like when you were a kid, still rules.

It is a massive advantage to you, the founder, no matter how crafty you are, no matter how good your pitch is, for someone to give you even one penny for your idea.  Because that’s just it, an idea and nothing more.  The key to your idea will be your ability to execute and be extremely smart (efficient) with their money.  Execution is difficult and takes people, money, and time.  Making your investors’ money go a long way is a gift; some people have it, others… not so much.

So, here are the advantages of business loans for startups:

Advantages:

  1. You are really frickin’ lucky you have money
  2. You can attempt to grow
  3. It gives you time until you need money… again!
  4. You survive another day

Now, the disadvantages:

  1. You will own less of your company
  2. Others’ opinions now matter (they have a say)

Since you now realize a bank will never give you money for your startup, you must realize that by accepting money for your startup, you will give a portion of the company away.  You will have to do this multiple times and, if the valuations of your company are not big enough, each time you will own less and less of the company.  That stinks, but it is a reality.  This is why you must be careful when accepting other people’s money and why you must efficiently use every cent you take.

And then there is what I have termed the “Hollywood Syndrome.”  Hollywood, you say?  Hollywood is a place where people go to become movie stars.  We always hear stories of the kid who was eating Top Ramen and down to his last dime when he booked that national commercial or the pilot that then went on to run for seven years straight.  “Hollywood” because it is not real i.e. we never hear about the thousands of boys and girls, men and women, who tucked their tails between their legs and went back home because they didn’t make it.  Sad to say but those stories are way more prevalent than the former; I know because I am one of them.

The startup world similarly has the “Hollywood Syndrome.”  Those startups that crap their proverbial pants and implode, or peter out, or close their doors, because there is no more funding.  It happens all the time on a daily basis.  You just never hear about these stories because, like in the real Hollywood, they simply are not sexy.  No one wants to hear the story about the loser…

… except me.

The disadvantages of getting any kind of business loan for your startup are few.  Sure, you’ll have less ownership of your company but you’ll have money for another day, or, as I like to say, a fighting chance.

Take the money and use it wisely.

The Flight of the Valkyries or Gone are the Middlemen

The world is changing.

There is a seismic shift in the vocational underpinnings of America.  It is not a day or week, or even a year time table.  Rather, it is a tectonic shift in the way the world does business.

Amazon is a killer.  Love them or hate them, they have changed and continue to change the way commerce flows in our world.  They have made things easier, more convenient, and cheaper in this nesting society we have become.  Darker undertones through the advent of terrorism on our own soil have become merely a precipitating factor in what we have been witnessing over the last twenty years.

Gone are the travel agents, the bookstores, and now the mid to lower end apparel stores that were once so popular during the mall centric 80’s and 90’s: Sears, Pac Sun, K-Mart, Abercrombie, etc.  They face certain demise, if not extinction.  And what will become of the mall as we know it?  Sure, there will still be a place for it but I suspect that too will morph into something different, a veritable cocktail of office space, pop-up stores, and/or meeting places.

Looking into the future, I see real estate agents and mortgage brokers among the most vulnerable industries; in many ways the consummate middlemen of our era.

Real estate agents:

We love them, some of our moms are them.  This is not an indictment against them.  It will just go away.  People will get their information online, see the house, and get their questions answered, all without the use of a person.  It is coming.  We have already seen a slight erosion in this industry when the heretofore de rigeur pricing was 6% commission on everything; today, there is the more standard 5%.  I will not argue the various pros and cons of having an agent and there truly are some.  I am simply here to tell you it, as a vocation, will cease to exist in the near future.  The coveted control brokers and agents have over the Magna Carta-like preciousness of their localized real estate worlds, known simply as MLS, is also slowly eroding with the advent of sites like Redfin, Zillow, Zenlist, Trulia, Realtor.com, etc.  It is happening before our eyes.

Real estate brokers:

Real estate brokers are the middlemen between the prospective homebuyer and the lender.  They are the boots on the ground, the handsome face that gets you into your home faster.  Few know or realize that mortgage brokers generally never offer the best pricing when it comes to mortgages.  They generally all have the same pricing sheet and build in their margin (profit) by offering you a rate a few percentage of points (or fractional points) over what they are seeing on their rate sheet from their go to lender or bank.  Do they offer a valuable service?  Again, not arguing their value.  That is up to the buyer.  I simply believe this, as a profession, is in serious jeopardy as more people trust online sources for all their needs, whether it be consumer purchasing or their real estate needs.

There is a Norse myth of the Valkyries in which beautiful handmaidens choose who will die in battle.  I am not in the position to choose but I will unequivocally say technology will be the Chosen One to have this omnipotent power.

Is it fair?

No.

But it’s coming.  Just ask the travel agent… if you can find one.

The Hernia

I am fifty-two years old and have never had a surgery.  My parents are 77 and have had multiple friends who have had hernia surgeries.  They have told me how rough it will be for me.  They told me elaborate stories of pain, narcotics, and constipation.  Yup, constipation.  So much so, I found myself eating a steady diet of broccoli and salad a week prior to my operation.

I was recommended to a doctor.  I went in, met him, and I liked him.  We live in the same area, coach our children’s basketball teams, even knew Tulane, the school where he got his training.  Said he does hundreds of these operations a year and that he will go in laparoscopically and take care of it; not a big deal.  I believe him; seems competent enough.

He also told me I would know when the time would be to do it.  The pain would become more regular, more pronounced.  When it started really bothering me, I scheduled the procedure.  I went to an outpatient surgery center, my wife at my side, laid down, did my paperwork, and after the first nurse missed my vein, a second one used my other arm and hit pay dirt.  “We have a gusher!”  After being wheeled into surgery room, another saucy nurse put some liquid in my IV and WHAM! I woke up in recovery room with my beautiful bride at my side.  Good stuff, you should market that.

I was read the various caveats of post-surgery: no lifting, Norco as needed every four hours, no showers for the first 48 hours, no pool for a week, and lots of rest.  I found myself fearing the constipation more than the pain.

The doctor checked on me 24 hours later and asked how I felt.  I told him, “Surprisingly well.”  He almost sounded surprised, too.  I told him of my fear of constipation and he said, “That comes from the narcotics.  The sooner you’re off the narcotics, the sooner that ends.”  I had a few bowl movements that were… were… well, odd.  And this is what I feel the medical community isn’t truly honest about so I am here to clarify for you.  When you are sedated, placed totally under anesthesia, something very striking happens to your innards.  Now, I am very lucky to have a good friend who is an anesthesiologist, so I tell him…

Dude, it’s just jacked up for a few days… simple.

And that’s all I needed.  The smells are different, the consistency is different, you just need to get it out of your body and things will get back to normal; normal, once you get there with 48 hours of no narcotics.

Now, the narcotics are funny.  You don’t want pain, and we are all trained to “keep ahead of the pain” but how do you know you have pain if you are medicating to keep ahead of it?  This was my dilemma.  A dilemma that was worth a lab rat-like experiment on myself to avoid the “parental constipation” shot across the bow I had been so vigorously warned about.  I stopped the Norco on the second morning: operation Tuesday, got home, took the Norco twice that night, then once more Wednesday morning.  I went for a short walk Wednesday morning, and I literally iced the shit out of my incision.  In fact, I literally never took an ice pack off all day expect for sleeping.  I was vigilant with the ice packs, so much so my wife said, ”Enough with the ice packs, the swelling is gone.”

I did ice packs every day until Monday, six days after the operation.  It felt good, and it was easy.  I switched to Motrin for swelling because my pain was truly minimal.  Now, I either got crazy lucky because my doctor was amazing, or I am a FPS (fine physical specimen), which my wife said I told every nurse who would listen in the recovery room ad nauseum.  But sometimes wives exaggerate.

My point, all of our bodies are different.  Listen to your own body and see what works for you.  Avoid the chatter, the constipation can be avoided… and that’s my solid to you.

Sorry, I couldn’t resist.

A Dad’s Summertime Guide To Life

Let’s face it.  Work slows down in the months from July to after Labor Day.  That is a fact.  That is not to say that the work goes on a hiatus, but the pace of the world slows down during those months.  As a Dad, you have to take advantage of this.  And I am not talking about taking the family to the beach for a week or to Disneyland; the week or two vacations that every father takes his family on.  I am talking about that extra mile, leaving work early, going in late, the extras every dad can do in the summer to invest a little more in his family.

Remember… I can guarantee your child will never say, “Wow, Dad, do you remember absolutely crushing it at work in the summer of 2014?  Wasn’t that the best?”

With this in mind, I offer my best tips for dads during summer break.

  1. Relieve Mom

    I know, the gratuitous plug for our better halves.  I speak from my experience only.  In which case, most of my friends already know this, my wife is a saint.  There are days I come home at my regular time, and I judge the tenor of the evening based on the look on my wife’s face.  I relayed this story to one of my co-workers, telling her I came home from work in the early days only to have my wife hand me a screaming baby and say to me, “I am going to Target.”  “But we don’t need anything, you went on Monday,” I said.  To which she would turn to me and say, “I am going to walk the aisles…” and slammed the garage door in my face.  When I shared this story with a co-worker, she laughed and simply said, “I know, I did that all the time.”  Who would know it was a “thing”?  Whatever you do, relieve the Mom and your life will be easier.

  2. Be a kid again

    There are so many things to do that are fun for your kids and that help you reconnect with your inner child.  It doesn’t matter how silly or ridiculous, your children do not care; all they want is time with you.  In our house, it is generally dunk contests in the pool, Nerf gun wars, or old-fashioned championship wrestling.  Does it feel a little weird when you run around your house with a lime green and orange colored Uzi with a scope?  Only when the neighbor rings your doorbell and sees you.  These Nerf wars can also be surreptitiously cathartic; an almost legitimate opportunity to dot your 13-year-old between the eyes for the last six months of his smug attitude and overt disrespect.  A cheap shot, sure, but oh, so gratifying in restoring Alpha world order to the homestead.

  3. Teach thru fun

    This was a game my dad did with me, and it actually taught me something and got me interested in the stock market.  You and your kids pick a stock and track it all summer, with the winner getting a prize.  You will be surprised how competition will create an interest in stocks: Under Armour, Kelloggs, Nike, Clorox, Smuckers Jelly.  It doesn’t matter what everyone chooses, it educates passively while having fun.  I can’t tell you how this one simple exercise created an endless interest in the stock market that continues to this very day in me.  It is so simple and you find your children checking their phone for the closing of the market on a daily basis.  An absolute winner in our household.

  4. Invite the family to lunch

    Look, you eat most days of your life.  You will be surprised how much your kids love to see you at mid-day; a time they never would if school was in session.  Your wife will appreciate it too because… because… well, just because it will be some human interaction that isn’t a child, for godsakes!

It is so easy, it really is.  You’re not that busy or that important to bring a smile to your family’s face.  If you are, or think you are, you are truly missing the boat.  At your eulogy, I guarantee no one will say you crushed that day of work in the summer of 2014.

Make time, my brotha, make time.

What Sports Can Teach Us About Business Loans

I may be old but I have played sports my whole life growing up.  Primarily baseball, basketball, and football.  I came from a 70’s household where my mother thought football was too rough.  Luckily, I had an older brother who told my parents I would be fine.  That aside, there are many things from the sports I played that can teach us all about business loans.  Here are my top four:

  • Practice, practice, practice
  • Work together toward a common goal
  • Know your weakness and address it
  • Keep track of progress

Practice, practice, practice

I was lucky because I had one of the greatest football coaches Westchester County has ever known.  The legendary Dick Rote, a combination of Vince Lombardi and Tom Landry.  We would practice all the time: triples.  I am not sure it is legal any longer, but I would practice in the morning, at lunch, and in the evening.  I was a quarterback, so as a skilled position you got the extra work.  His idea was simple: the more you do something, the more it becomes easy, sort of like cranial muscle memory.  This will serve you well in business.  The more you do something, the easier, and hopefully, the better you get.  Lenders like borrowers who have practiced; people with skills in leadership positions in a company in the industry they are asking money for.  With enough practice, a lender will feel confident that you have the right skill to effectively run or expand the business.  Very similar to Coach Rote’s philosophy.

Teamwork

Leadership involves either delegating to those more skilled than you or running an effective business that is making money; cash flowing.  Lenders like when a business is cash flowing positively.  This is never the work of simply one person.  Working effectively with your co-workers to run a profitable business is similar to being on a successful team.  Each person has a special skill and those skills working in unison equal an unbeatable team.  Lenders like to see teams of people working effectively together, just like your school wants to see you win that state title.

Know your weakness and address it

Lenders have this innate characteristic of finding exactly what is wrong with your company.  This was exactly what got me so frustrated with borrowing money in the first place to want to create Magilla Loans.  It is always good to have the ability to see what someone might see as a weakness or problem with your company and have an effective answer for it.  If you have looked at your total financial life with an unbiased eye, you will be able to effectively answer any questions a lender may have about your business.

Keep track of your progress

When working out in sports, the more you practice, the better you become.  It is always best to track your progress, whether it is the number of sit ups or pull ups you can do or the number of foul shots you can make out of ten.  Similarly, in business it is important to keep very good records of your dealings and hopefully, progress.  By this I mean a bookkeeper or an accountant.  It is of vital importance to keep records of your progress each year and pay both state and federal taxes.  Hopefully, you will get to the point where you will either buy your own building or need money to expand.  Either way, a lender will want to see three years of business and personal tax returns before giving you even one dime.  Nothing personal, just lending 101.

In reality, sports are a great teacher for helping you get business loans.  Lenders want to see the same kind of dedication to a goal most athletes innately already have.

The Biggest Trends in Home Mortgage Loans We’ve Seen This Year

Magilla Loans is at the epicenter of loans in America. As America’s anonymous loan search engine, we are able to see exactly what loans are closing each day.  Here is what CEO Chris Meyer is seeing:

  • Low inventory
  • Rates climbing
  • HELOC rush

Low inventory

Typical of hot real estate markets, there’s a cycle. Home prices rise, people catch on and want in, and then they decide to sell. Soon, even more people jump in the market and serious sellers make their sale, causing inventory to thin. Buyers get wise to the overheated marketplace and decide to wait until the prices come down. The sellers who are eager to make a buck overprice their houses and when they don’t sell, they become income properties. As a result, the rental markets fill up with income properties, and the inventory continues to thin out.

Rates climbing

While this will happen in the short term, Meyer cautions that it may be a moot topic.  “At Magilla Loans, while we foresee rising rates in the upcoming year, comparatively speaking, they are still at or near historic lows.  Having the ability to obtain a thirty-year mortgage at or near 3.5-4.5% is insane.  Lock and load, and don’t worry about it for the rest of your life,” Meyer says.  It is one of the most unusual transactions in humankind.  We find a house, and we want to obtain a mortgage.  The lender gathers everything he or she needs to complete the transaction and we or they ask to “lock the rate.”  If laypeople were let behind the curtain, they would understand that the rate lock will hurt them half the time and benefit them half the time.

There is puffery in your lender’s rate, and the consumer is generally at a disadvantage.  Speaking honestly, a lender of any kind (broker, loan officer…) has no idea where rates will be tomorrow.  Sure, they have their lifetime of experience and years of knowledge which do help their ability to prognosticate, but it is just that, a guess.  The real and simple fact is that you are in a time of unbelievable historic lows in the residential loan marketplace, and if you are buying or refinancing a residential home mortgage, you are a very lucky human being.  Lucky, because you just happen to be ready at the right time in history to buy or refinance.  Sorry, it just that simple.  We are not slighting any profession, it is simply that sometimes, we all get lucky.

HELOCs rise

“This is the scary part for me,” says Meyer.  When prices rise, especially dramatically, we all feel the mortgage euphoria and go to Zillow.  Then, we pull equity out of our homes for all the wrong reasons (to buy a car, pay for college, a wedding, a boat).  (Yes, we are aware underwriters have gotten stricter, but where there is a will, there is a way.)   PLEASE, PLEASE, PLEASE, everyone, be careful of ever pulling equity out of the place you live.  It is your home, the roof over your head.  Be conservative and only do this as a last resort to improve your home’s value – the true need for a home equity line of credit.

Simple advice

Be cool, pigs get slaughtered.  We are at historic lows for mortgage rates, and they are not going to spike that drastically in the next year that it would preclude you from getting a solid thirty-year fixed rate loan.  The important thing is that you do NOT overpay for a home.  Your desire to have a home must be tempered by the reality of the current state of your marketplace.  This is the difficult part and why some people get absolutely hammered (my technical term).  Figure out your time horizon (how long you will be in the home) and if you could handle a 25% reduction in the value of your home.  This is the minimum reduction you should expect in an overheated market.

Be careful, my friends.

Where Will Commercial Real Estate Be 1 Year From Now?

Up.

I believe in being to the point.  The rest is puffery.

CEO of Magilla, Chris Meyer, sees no slowing down in commercial real estate in the next year.  “In fact, I see a steady increase.  That is what we are witnessing on our site, and we see an increased appetite for these types of loans from our lenders.  Now, Magilla deals with premium borrowers, those with credit scores generally above 720, very favorable assets to liabilities ratios, and clean requests for loans so we may be more optimistic than most, but our metrics continue to see all positive for 2018.”

This would be consistent to what the tenor of the commercial real estate brokerage houses are indicating.  “We believe, more than anything else, low interest rates will drive further investment.”  While some would indicate that Janet Yellen and the Fed have their hearts set on raising interest rates, Magilla believes this will only last a few more quarters, at which time it will level off at rates that are still generationally low, comparatively speaking.

More importantly, we are seeing an almost insatiable appetite not only from foreign investment, but from ancillary equity partners (REITS, endowments, pension funds, life insurance companies) seeking a safe-haven and/or diversification from the mundane stock market returns of recent times.  We see the losers are the smaller investors in local areas who are constantly being out-bid by these larger pools of money.  We are, however, seeing some success from the micro, more nimble, investors, who have a better understanding of the local areas and can seek deals not commercial marketed by the large commercial brokerage houses.  “Those who are pounding the pavement day-in-and-day-out, will always have success.”  We spoke with a few small investors, those doing deals under five million dollars, who are still finding success, presumably because the larger money players are not competing for those deals.

The one major driving force is the Leviathan that is Amazon and how this is effectively centralizing the mall industry in America.  While we see the need for malls and the desire for some purchasers to touch and feel the item they are going to buy, an overarching theme is for people to order three different sizes from Amazon and send it back if they don’t like it.  While malls still provide entertainment and destination value for some people to see a movie and/or have dinner and meet friends, the retail component of the mall faces serious challenges that are very real.  The other challenge that Amazon provides, especially in light of the recent purchase of Whole Foods, is how this will challenge the grocery store plans for expansion.  We believe, particularly in the ordering of dry (non-perishable) items, Amazon will have a very real effect on certainly the grocery store chains, but also Costco and Sam’s Club (Have you ever tried to carry the 84 pack of toilet paper out of the store?).

The real question for the grocery world is how long will it be before a drone can deliver a warm meal to your doorstep at precisely 6PM?

As we said before…the commercial real estate market is “up” in 2018.

There’s No Way Those Rates Are Real!

Since 2015, Magilla Loans has been surprising users by connecting them to FDIC-insured lenders who offer incredible rates. So incredible, many people have a hard time believing they are real. Magilla makes the process fast and easy by allowing borrowers to shop and compare loans without revealing any private information. Our lenders offer real estate, home, business, medical, agriculture, and equipment loans. Simply answer a few questions, then compare real loan proposals, from real lenders.

Behind the scenes with co-founder Chris Meyer:

“It was a picturesque day in the high 70’s with complete sunshine and blue skies. Whales and dolphins were thirty yards off the coast, frolicking in the morning sea. Unreal. The directing team Tough Town, a New Yorker and California kid, handled every detail. They were the rock stars, handling everything with ease and asking our opinion just enough to be respectful. They were tasked with making sure we got enough coverage (digital film of every shot they would need to create the commercial we wanted). The producer, a friend of a friend from my LA years, was a Jean Reno doppelganger who had a clear vision of what would look good; he wasn’t a “yes” man that agreed with everything the client (us) said. We had an instant connection and would recommend him to any human looking to shoot a commercial, Dan Strickland and his company, Dream Society.

Our cast was found by Tough Town and Dan through auditions. Of course, we had input on who to choose, but they were the professionals who put this all together. We found amazing talent and I can only say how many genuine, real actors there are in Los Angeles. Perhaps it is because I lived in LA and was a struggling writer for almost eleven years of my life, but to see these people come onto a small commercial shoot and just completely nail your vision is inspiring.

For all of you actors, writers, and crew struggling in LA, we salute you and pray you will get the recognition you deserve… I know the struggle. The star of our commercial was a twenty-year-old bikini model from Palmdale. I found her through a friend of a friend at a local gym… true story. She may not be known now, but we expect great things from our Kinsey.

Perhaps the greatest thing is to see your vision that started as a seed in your brain and then bantered back and forth between you and your partner, committed to paper. While people think we are crazy to shoot this at such a young age in our company, maybe that is just the type of crazy this world needs. Wish us luck… because we’re gonna need it.”