Dave Paladino’s Blog

I have told many of you that I am a big believer in ice baths. If you are an athlete of any type, hopefully at some point someone has told you the advantages of putting four or five bags of ice in your bathtub, filling it with water and siting in it for fifteen minutes. I can tell you from personal experience if you work out for more than two hours or do a especially hard crossfit workout such as Fran or Murph, an ice bath will allow you to recover in a fraction of the time. There of course is a catch. It takes enormous mental toughness to get into and stay seated in water that is fourty degress. I think a icebath is a great example of how the best things in life are not easy. What is suprising about icebaths and I suspect all things that require mental toughness is that many people simply avoid them even though their coach recomends them. In the endurance world there is a lot of transperancy. It is difficult to hide the fact that bonked on the marathon. You can look into someones eyes and see they bonked. In the business world it is much more deficult to see what really happened that led to someones failure in a particular area or event. Most of us don’t want to verbalize the real reason we failed. I propose that the reason that many people fail is that they did not poses the mental toughness needed to do what it takes to succeed. Hopefully you will never look at the bathtub the same way again.

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Note to self….do not try to hang with professional triathletes on a fourty mile ride after not being in the saddle for four months

Ryan Nebuda one of our sales guys posted on his blog recently some facts about the universities in Omaha. After looking through the information I noticed UNO was around $4800 a year. Wow. I am not sure I have posted this on my blog. But I think that UNO is hands down the best school in the region. Several of my family members, employees, friends and business assocaites graduated from UNO. When you compare their critical reasoning skills, work ethic, industry knowledge, and ability to adapt to a dynamic market place to other college graduates in the region there is no reason for companies to recruit from other schools. I am not just talking about the business college or the real estate program. It’s all the programs from international studies to the IST college. The best part is that it is cheap. So to all you parents and high school juniors and seniors out the look no more you found where to go to college.

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If you have not seen the movie “Its complicated” Its a must see. Although it is not as good as Blind Side. It is hilarious. There are several parts that I could not stop laughing. Just ask Jim and Dawn Posey and Lisa, there are parts of the movie they missed because I was laughing so hard

On to more serious stuff:

Here is my pitch for all you college grads that think you need to go to a top Ivy league school to get your MBA. As you know I am a grad of the Center for Real Estate at MIT and hands down you will get the best education from the brightest people you will ever encounter. The web site to the school is

http://web.mit.edu/cre/

While looking at the site I cam across a very interesting article by Bill Wheaton. Bill was the Director of the CRE while I was there and taught a class on Real Estate Economics. He canceled class once and was so disappointed because I wanted to here him speak. As I think about this I feel this could be one definition of a geek and one of the reasons that I enjoyed MIT so much.

Bill wrote an article entitle US residential investment: the sleeping Giant

“Residential investment is no longer a drag on the U.S. economy.” So states MIT/CRE Professor William Wheaton, whose research with collaborator Gleb Nechayev suggests that a major driver in the economic recovery will be residential investment, “a sleeping giant…about to wake up”

Here is a link to the article.

http://web.mit.edu/cre/research/pdf/wheaton-nechayev_sleeping-giant_12-29-09.pdf

I think if you are a builder you will want to show this to your banker

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We rented six places this week the rents were
$450 Apartment
$400 Aparmtnet All bills paid
$450 House
$495 Duplex
$1150 House
$450 Apartment water paid

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I got this article out of the wWSJ

http://online.wsj.com/article/SB10001424052748704509704575019462787197650.html?mod=WSJ_Real+Estate_RIGHTTopCarousel

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Last July, while Lisa’s parents and Lisa’s Sister’s three grandchildren (figure that one out) were spending a month in the Midwest on summer vacation with us, the children’s father died. Their mother and father were divorced and the mother was out of the picture due to addiction issues. So the family, Lisa and I all agreed that Lisa and I would be the best ones to adopt the three children. The children were already ward’s of the state because of all the problems the family was having. So Lisa and I went to the State Of New Mexico to formally petition the state to adopt the children. Yesterday it was finally decided that we would be adopting them. Their names are Zech (10) Alex(8) and Ila(5) they are currently living in Albuquerque with Lisa parents and will move to Omaha once school is over in May. Lisa and I are very excited about this. As many of you know I have never had kids and I am looking forward to being a father. Lisa says “Great now I will have four kids and two gigantic dogs to look after” the more I think about this the more I realize that Children are a blessing from God.

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I just got done reading this book. Although I found his first book more interesting overall than the first one, I thought this book to be a lot more relevant to what is going on in today’s economy. One thing that stands out is that Levin talks repeatedly about how the government tends to over react with legislation when it comes to establishing new laws. He makes some interesting remarks about Al Gore and the environment. There are two things that I got as take always.
1. Unintended consequences.
For every action you take there will be a consequence that you did not intend. For example. If you pay an employee strictly by commission they will have almost no incentive to actually work unless they know they know they will get a commission. We have seen amazing lengths that people that are 100% commission go to get out of working unless it is a sure thing
2. The law of negative externality. When people act and there is a negative outcome to their action that has no impact on them, they have little incentive to change. This is very true when it comes to polluting the environment. One country such as Mali can pollute the environment because the huge cost to not pollute the environment has a inversely correlated benefits

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I have always posted on Omaha being pro business. But check out these stats
2009 rankings for the Omaha area

No. 1, Best-Bang-for-the-Buck City, Forbes
No. 1, America’s Fastest-Recovering Cities, Forbes
No. 1, lowest urban unemployment at 5 percent, U.S. Bureau of Labor Statistics
No. 3, Best Cities for Business, MarketWatch
No. 3, Cities Where Americans Are Getting Richer, Forbes
No. 3, Papillion, Best Places to Live in America – Small Towns,” CNNMoney
No. 3, Papillion, Best Home Deals in the Best Places, CNNMoney
No. 3, Best Midsize Metros for Small Business Startups, CNNMoney
No. 5, Best Places to Start Over, Business Week
No. 6, 10 Affordable Places to Retire, Yahoo Real Estate
No. 6, 2009 Next Cities – Midsize, includes best U.S. and Canadian cities for young professionals, Next Generation Consulting
No. 6, Best Midsize Cities for Next Gen Workers, Next Generation Consulting
No. 6: Most Favorable Cities for a Plant That Turns an Ethanol Byproduct into Health Food, the Boyd Co.
No. 10: Top Midsize Metros for 2008, Site Selection magazine
No. 11: 2009 Best Large Cities for Job Growth, NewGeography
One of 79: (out of 381) metro areas in recovery from the recession in August, Moody’s Economy
One of 10 metro areas posting faster growth in jobs and economic output in the third quarter than in the second quarter.
No. 8: America’s 10 Best Undervalued Places to Live, IHS Global Insights’ “2009 House Prices in America” report
No. 12: 100 of America’s Best Cheap Cities, Forbes
No. 25: U.S. Cities Sustainability Ranking, SustainLane
One of 15 Logistics Hot Spots for 2009, Inbound Logistics, ranking on inbound call centers
No. 10: America’s Most Recession-Resistant Cities, Brookings Institution
Listed among Top 10 Fittest Cities in America, Men’s Fitness
Listed among America’s 25 Strongest Housing Markets, Forbes and Moody’s Economy.com
No. 17 of 124 midsize metros for best quality of life, Bizjournals
Papillion ranked No. 1 in Nebraska, 2009 Best Affordable Suburbs, Business Week
No. 35 of 200, Best Places for Business and Careers, Forbes
No. 33 of 200, cost of living, Forbes
No. 35 of 200, projected job growth, Forbes
rankings for other Nebraska counties
No. 2: Platte County, No. 3 Sarpy County, No. 8, Madison County, Best Places for Jobs, CNNMoney
rankings for the state of nebraska
No. 1: Financially Happiest States in the Union, MainStreet Happiness Index
No. 1: in percentage of people ages 16 to 64 in the work force (83 percent), American Community Survey
No. 2: lowest unemployment rates, Bureau of Labor Statistics
No. 2: second-highest rate of volunteering, Volunteering in America
No. 5: comparison of 44 quality-of-life characteristics, Congressional Quarterly Press
No. 5: Best States for Business, Directorship Boardroom Intelligence
No. 6: National Physical Health Ranking, Forbes
No. 7: lowest cost of living, CNBC
No. 7: Healthiest States in America, AOL Money and Finance
No. 10: Best States for Business, Forbes
No. 7: income growth leaders, U.S. Census Bureau
No. 7: Energy Cost Index, Small Business and Entrepreneurship Council
No. 8: America’s Least Expensive States for Closing Costs, U.S. News and World Report
No. 9: Best States for Business, Forbes
Top 10 Pro-Business State for 2009, Pollina Corporate Real Estate
one of nine, Best Places to Avoid a Recession, JobBait
one of 10 states outperforming the U.S. economy, Nelson A. Rockefeller Institute of Government
No. 12: quality of life, CNBC
Top 10 States Where Struggling Americans Can Find a Fresh Start, BusinessWeek
No. 11: Best States for Business in 2009, CNBC
No. 16: America’s Best States to Live, Forbes
Top 20 Safest States for 2009, WalletPop
90+ percent recession-proof from 1991 through 2009, JobBait
Source: Greater Omaha Chamber of Commerce

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The fact that it is been so dificult to borrow money is having a positive effect on the rental acrtivity. we rented seven places today. Considering the fact that we have had record snow fall and it should be one of the slowest times of the year this is nothing short of amazing. On top of that we are seeing the quality of peoeple that are applying to rent getting better. My sales people call me “Mr Rain cloud” for my outlook on the economy. So I am waiting for the other shoe to drop

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I recently send out an RFP for a new bank loan on a project we are working on. Here is an overview of what the terms would be, expect something similar if you are looking for a loan. This is for investment property; if you are looking for a loan on a personal residence the terms would be completely different
60-70% LTV
1.3 DCR(Debt Coverage Ratio)
15 Year Amortization
6.5% Interest
6 months of payments deposited in there bank. I guess this is some sort of a safety net for the bank to have on hand if you do not pay

I am not saying that you could not find a better deal. I am just saying these are the general parameters of a new loan. I send a RFP to about 20 banks. Four banks were interested enough in giving me a term sheet. All four banks I had done a significant amount of business with in the past.

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