Archive for July 1st, 2009

Michael Jackson’s Neverland the Next Graceland? Never! say Locals

Continue Reading Add comment July 1st, 2009

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The parallels are almost eerie. A world-famous singing sensation, known for his distinctive dance moves, glittery wardrobe and bizarre behavior, dies of heart failure amidst a pile of prescription drugs. Fans line up outside the gates of his estate—waiting to pay their respects to the King. It’s Michael Jackson we’re talking about though, not Elvis. But there is still plenty of speculation that Jackson’s famous home—Neverland Ranch—could become a tourist attraction ala Presley’s Graceland.

For days rumors swirled that his family was considering a public viewing of Jackson’s body at Neverland, a 2,800 acre spread, located 33 miles northeast of Santa Barbara, Calif. News crews booked hotel rooms. AT&T and Verizon were allegedly moving in emergency cell phone antennas. The appearance of a cement truck at the ranch on June 30 had readers of celebrity gossip site TMZ.com speculating there may even be a crypt under construction.

The man who controls the ranch, real estate investor Thomas Barrack, is mum about the long term plans. Barrack’s Colony Capital bought the $22 million mortgage on the property just before it went up for auction last year. It’s now owned in a joint venture with Jackson’s estate, says Barrack spokesperson Joanne Lessner. She released an effusively worded letter from Barrack to local residents on June 30. Citing pioneering California missionary Junipero Serra, Jackson’s 2005 acquittal on child molestation charges and “a Western tradition of kindness and hospitality,” Barrack asks his neighbors to bear with the public onslaught and let the world take in the “magic elixir” of the Santa Ynez Valley.

Locals say it is highly unlikely Barrack or the Jackson family could get permission to build a Graceland-like tourist attraction at the site, however. Local real estate broker and long time area resident William Etling recently blogged about the issues that might prohibit such a development. The ranch, he notes, is zoned for agricultural not commercial use. After talking with a local mortician, Etling says it is unlikely that Jackson’s body could legally be buried on the property.

Then there is the issue of the community support. Last year voters in Santa Barbara County shot down a candidate for supervisor who was seen as pro-hotel development. Locals, including celebrity residents such as Bo Derek and David Crosby, have vigorously opposed expansion plans by the local Chumash Indian casino. Lately locals have taken to calling the ranch Never!-land.

As a real estate broker, Etling would seemingly have an interest in seeing more development of the bucolic region, which saw a surge in tourism five years ago after the movie Sideways was filmed there. But Etling says the largely wealthy area residents have no interest in opening more of their valley to John Q. Public. “It would depreciate our property to have that carnival,” he says. “It’s not that type of place. It’s very stable. There’s not a lot of mobility.”

Jackson’s ranch is located about five miles north of the tiny wine country hamlet of Los Olivos. It’s one of the most beautiful spots in the country, blessed with rolling hills, vineyards and cool, damp air from the nearby ocean.

It is a part of the world Barrack knows well. He’s owned a ranch and vineyard near Neverland for three decades. Last year he reached a settlement with neighbors that allowed him to open his Happy Canyon Winery to wine salespeople and critics but not for public wine tastings, which locals had opposed.

Retired venture capitalist Bob Field, who says his own property overlooks Barrack’s vineyard, has another suggestion for his neighbor—dismantle Neverland and take it piece by piece to Las Vegas, where Barrack’s company owns the Las Vegas Hilton and an interest in Station Casinos—a string of gambling joints aimed at local residents. “This is a small valley,” Field says. “We don’t have the roads, hospitals or airport. It will take him multiple years to develop anything here. It would cost him a fraction of that in Las Vegas. The day it opened, there would be many times the visitors.”

If a Neverland museum doesn’t get developed in Vegas or Los Olivos there are other cities that might welcome it. The mayor of Jackson’s hometown of Gary, Indiana is practically begging to have the star’s remains find a permanent home there.

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Housing rebound continues, barely

Continue Reading Add comment July 1st, 2009

Home sales continued their modest upward swing in May, according to a closely watched industry report that rose for the fourth straight month for the first time in nearly 5 years. Read more »

Investing in Home Loans Online

Continue Reading Add comment July 1st, 2009

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Investors purchase stocks online. Will they buy somebody’s mortgage over the Web as well? A start-up called BigBidder.com hopes so.

The backers of BigBidder already run lfc.com, a commercial real estate auction site, and Freedom Realty Exchange (fre.com), a site that sells homes online.

Paul Lyons, a senior vice president of the company, says BigBidder is auctioning off home loans owned by banks, mortgage companies and other investors. The loans are both performing and non-performing—–the latter meaning the homeowners aren’t making their monthly payments. Lyons says much of the site’s sales are in “re-performing” loans, meaning the home owner was delinquent until the lender changed the terms of the loan and now the borrower is making payments again.

BigBidder charges the buyer a fee of from 1% to 5% of the loan purchase price, depending on the size of the loan. Some recent deals include an $83,000 first mortgage carrying a 9.8% interest rate on a 3 bedroom house in Gas City, Indiana. It sold for less than half of the loan amount. Meanwhile, a $100,000 adjustable rate second mortgage on a home in North Hills, California currently carrying a rate of 6.2% sold for just 25 cents on the dollar. Both of those loans were performing.

Lyons says documentation, such as the original loan application and credit reports on the borrower, is available on the Web site. I’m not recommending anyone dive into this kind of investment, certainly not without a lot of thought and research. Judging by those discounts the sellers don’t think these loans are going to get paid back in full any time soon.

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