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A Wisconsin company that manufactures and distributes food-processing ingredients has been selected to purchase the opulent Chateaux on Central brownstone project. The winning bid: $7 million.

The unfinished residential development at the northwest corner of Central Avenue and Palm Lane has been financially troubled since construction started in 2005. All forward movement stopped when the lender, Mortgages Ltd., took it back in 2008 shortly before that company was forced into Chapter 11 bankruptcy protection.

Mark Winkleman, chief operating officer of ML Manager LLC, said MSI West Investments LLC submitted the winning bid for the Chateaux. Closing on the property is scheduled for March 12.

ML Manager is the court-approved entity administering the Mortgages Ltd. loan portfolio in the wake of the lender’s bankruptcy. The Chateaux is one of the first Mortgages Ltd. properties to be sold off.

Dave Clark, CEO of Mainstreet Ingredients of La Crosse, Wis., confirmed that his company is behind the winning bid. Mainstreet recently created MSI West, a limited-liability company registered with the Arizona Corporation Commission.

“We are looking to diversify,” Clark said. “We’re very excited about this.”

The company has purchased real estate in other states and started looking around the Phoenix area last year.

“We like what we see in downtown Phoenix,” Clark said. “We feel this will be a good investment, but we’re not here to turn a dollar.”

Clark said he didn’t want to talk about plans or other participants in the deal until the transaction closes, but said he expects the community and city officials to be pleased when that information is revealed.

He did not disclose whether the property would remain a luxury brownstone community of multimillion-dollar homes — the original vision of Phil and Mollie Anderson, owners of Pro Star Realty Inc. and founders of Central PHX Partners LLC, the Chateaux’s development entity.

The project was designed as 21 five-story residences with private elevators and rooftop terraces. The announced prices ranged from $2.8 million to $4.5 million per unit, but none were sold.

Desert Hills Bank provided the first construction loan, but the relationship soured when the bank filed a lien on the property. The late Scott Coles, then CEO of Mortgages Ltd., stepped in to salvage the project, saying he believed in what the Andersons were trying to accomplish.

According to Winkleman, Mortgages Ltd. loaned Central PHX Partners $37 million. When that was not enough to complete the development, Coles took back the property in spring 2008.

In an April 2008 story by the Phoenix Business Journal, Coles said the loan was in default. “I always try to work with these guys, but I have to protect my investors,” he said in that story.

Coles committed suicide on June 2, 2008, thrusting the entire Mortgages Ltd. loan and property portfolio into limbo.

Within a month of Coles’ death, several borrowers forced Mortgages Ltd. into Chapter 11 bankruptcy. After more than a year, a reorganization plan was put into place with Winkleman, former commissioner of the Arizona State Land Department, named to administer the loans.

Winkleman said his sole responsibility is collecting on those loans, either from the borrowers or through foreclosure actions, and paying investors whatever can be collected from the proceeds. Winkleman said several bids were submitted prior to the Chateaux on Central auction.

“We received several offers, but this buyer took the time to carefully inspect the project and proved to us that they had the funds to close the transaction,” Winkleman said.

According to Mainstreet Ingredients’ Web site, Clark founded the company in 1989 “with an in-depth understanding of the dairy and food markets and a commitment to the highest possible standards for the food industry.”

The company employs food scientists who have created trademarked food stabilizers, protein products, and dairy-based and bakery ingredients. The company shipped 125 million pounds of product last year, according to the site.

Wisconsin company to buy Chateaux for $7M – Phoenix Business Journal:.

Today HUD lifted its rule prohibiting FHA borrowers from purchasing properties which were acquired within 90 days by the seller. The waiver of this rule takes effect February 1, 2010. Here are the main limitations:

1. The transaction must be arms-length. In order to ensure no inappropriate collusion between parties, the following rules must be met:
a. Seller holds title to the property;
b. LLCs, corporations and trusts that are serving as sellers must be organized and operating in accordance with State and Federal law;
c. There must be no pattern of flipping for the preceding 12 months; and
d. The property must be marketed openly and fairly (an MLS listing would satisfy this requirement). Sales that have an “assignment of contract” would be a red flag.

2. If the sales price is 20% or more than the seller’s acquisition costs, the waiver only applies if:
a. There is some evidence to justify the increase in value or a second appraisal. This requires evidence that the seller performed legitimate renovation, repair or rehab work to substantiate the value or, where no such work has been performed, the appraiser provides an explanation of the increase in property value; and
b. A property inspection must be ordered and the report provided to the buyer before closing. The inspector must have no interest in the property or relationship with the seller.

So the main questions that we will be finding out over the next few weeks is, what does a pattern of flipping entail (wholesaler to me is that too many?) and how to justify the increase in costs of property over 20%. If you purchase a property you have to raise the price by 30% to even think about making a profit, especially after any bit of rehabs..

Gordon said that he spends less than $1,000 on vehicle maintenance and repair each year–and that’s averaged out to include the two engine rebuilds he’s had done over the 40-plus years of ownership.

Today a million miles, or even 500,000 miles, is still extremely unusual for a vehicle. But just as Baby Boomer aging and fitness experts are saying that 50 is the new 40, passing the 200,000-mile mark is no longer the rare occasion it once was.

Consumer Reports, through its annual questionnaire, has found that thousands of people have gone over 200,000 miles in their original vehicles without catastrophic failures or major repairs. The common thread of those who kept their vehicles, happily, to high mileage, according to CU deputy online automotive editor Jeff Bartlett, is that they started with a good car and took care of it.

Over ten years, the�Subaru High Mileage Club has also gathered thousands of reports from Subaru owners who have driven their vehicles well into six digits. “It helps to have a solidly built vehicle to begin with,” said founder Rich Kahn, admitting that keeping up on maintenance and minor repairs is the most important aspect to driving a vehicle to high miles without undue expense.

In Gordon’s case, along with those of many other frugal high-mileage drivers, it likely also helped to start with a vehicle that had an enviable reputation for reliability and longevity.

Generally the less trouble-prone a vehicle is, the higher the chance it will be kept by its original owner to high miles, confirmed Bartlett, who says that owners will put up with unexpected repairs on a late-model vehicle to some degree–especially if they like it–but at a certain point they’ll give up if it’s cost-prohibitive. “As cars go beyond 100,000, it really becomes a concern what the cost of those repairs are,” Bartlett said.

On the other hand, if a vehicle is very cheap to maintain and repair, it might be a good choice to keep to high miles even if it’s not a standout for reliability. For instance, Consumer Reports editors were surprised to find that there were so many Ford Ranger pickups being kept to high mileage, until they realized that despite a just-average reliability record, it has one of the lowest overall maintenance and repair costs of any vehicle.

Dan Dillon, a technician for�RepairPal.com,�which provides repair information and price estimates, said that if you want to keep a vehicle to high miles you shouldn’t choose a high-performance model, as maintenance intervals are not only tighter but major repairs are typically more frequent.

Read the Owner’s Manual!
When people ask Irv Gordon–the guy with the 2.7-million-mile car–what they should do to follow his example, he has some surprisingly simple advice. “I always tell people the first thing to do is read the owner’s manual,” he said. Gordon, other experts, and reports from high-mileage drivers all emphasize that you shouldn’t cut any corners on routine maintenance.

Diligent maintenance can make “profound differences,” according to Dillon, in how long your vehicle lasts and how it feels. In addition to the maintenance required by the manufacturer, he recommends regular flushing of critical fluids such as for the transmission,�brakes,�and power steering.

Also, choose your mechanic carefully. Dillon emphasized that a lot of what makes a great mechanic isn’t so much sheer technical prowess but an understanding of the nuances of combustion and what keeps a vehicle in peak operating shape.

Maintaining a vehicle cosmetically is also more important than you might think. Gordon, who lives in Patchogue, New York, and doesn’t garage his 40-year-old Volvo, has only repaired a few rusted areas underneath. Don’t forget to wash your vehicle on a regular basis, wax it on occasion, and keep salt and debris away from the underbody and cowl.

“Generally you don’t need to maintain it more often than the owner’s manual specifies,” assessed Kahn from his own experience and from owner stories on his web site. But he did emphasize the importance of being pre-emptive with some repair or maintenance items, like the timing belt.

Be Proactive And Pre-Emptive
Repairing preemptively–replacing belts and hoses long before they’re in danger of failing–and never ignoring new noises or vibrations, might be the best tip of all, and reflective of the difference in attitude of those who keep their vehicles for hundreds of thousands of miles. It’s abundantly clear that the most successful high-mileage owners are those who understand the cost-effectiveness and importance of addressing the small problem before it becomes a larger one.

“You hear a new sound, you don’t just turn up the radio and say it’ll go away,” said Gordon. “Before you know it you have a lot of things going wrong.”

Being attentive to maintenance is one thing, but taking good care of your vehicle also means not abusing it from behind the wheel. Gordon said that he drives smoothly and carefully, but not extremely so. “Some people go out of their way to see how fast they can kill the car,” he said. “I see how long I can get a car to last.”

The affect of this type of driving is undeniable. Gordon said that he typically gets about 100,000 miles between brake jobs and didn’t replace his first clutch until 450,000 miles. Both are wearable repair items that say more about his driving style than the vehicle’s reliability itself.

Whether or not you like the car and can live with it over the long haul is really important. A reputation for quality and top marks for reliability certainly isn’t a guarantee you’ll love it years from now. If you’re shopping for a new car you intend to keep for a decade or more, take it on a long test drive, don’t skimp on the research, and don’t take the decision lightly.

One of the downsides of the high-miles approach is that in keeping a vehicle for ten or fifteen years, you’ll be driving a vehicle with outdated�safety features.�Consider safety another one of your top purchase priorities.

Drivers are much more likely to spring for those major repairs that become needed over 100,000 miles–and more likely to have kept up with maintenance all along–if they still feel positive about the car. How much you like a vehicle after so many years and miles “speaks in your eagerness to take good care of it,” said Bartlett.

Passionate Penny-Pinching
And that leads to a final, and especially important, point: After all these years, Gordon still really likes his little Volvo coupe. Typically, owners of high-mileage vehicles still like them–or at the very least the competitive aspect of seeing how far they can get without problems.

On the flip side, the frugal romance might fizzle or give way to the temptation of new sheet metal. If you simply tire of the vehicle, you’re probably best moving on rather than halfheartedly letting the vehicle decline and eventually break down. If you no longer love the vehicle, it needs repairs that well exceed its value, or rust or structural issues threaten safety, then you should consider parting with the vehicle.

Even if you are feeling a case of the dumps about not driving a newer car or putting hundreds of dollars time and time again into repairs, getting a refresher on the tremendous financial advantage of taking care of a car and keeping it for the long haul might be enough to keep your spirits up. In 2007, Consumer Reports projected–figuring in depreciation, maintenance, repairs, finance costs, fees, and insurance–that drivers could save more than $20,000, typically, by keeping a new vehicle for 15 years and 225,000 miles versus getting a new one every five years.

Yep, that’s in some cases the cost of another new car itself. “It may hurt to put $1,000 into a car over a year, but it’s far cheaper than having car payments,” said Bartlett. “It pays to hold on to a car.”

And by taking care of that vehicle and keeping it alive for another few years–perhaps allowing room in the budget for a vacation or other toys–you might earn superhero status in your own household.

Can Your Car Last 1,000,000 Miles? – Reliable Car – Entrepreneur.com.

“According to a USA Today analysis of federal salary data the number of employees making $100,000 per year increased from 14% to 19% in the recession�s first 18 months. Also in the period from December 2007 until June 2009 the number of Defense Department employees making $150,000 per year increased from 1868 to 10,100. But wait there is more. At the Department of Transportation only one person was making $170,000 or more in late 2007 but in mid 2009 that number had increased to 1690. Finally, the average federal employee salary BEFORE overtime is now $71,206.”

The First Jobs of 10 Wealthy Entrepreneurs | MintLife Blog | Personal Finance News & Advice.

Advertising and Marketing on the Internet: Rules of the Road.

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A global survey of more than 2,000 high-net-worth investors commissioned by Barclays Wealth reveals that approximately one in four respondents (26%) believe that residential and commercial real estate provide better long-term prospects than other asset classes.

Slightly more than half of respondents expect an increase in the value of their real estate investments over the next two years, and 35% plan to increase their real estate exposure in the near term. The survey findings were contained in a Nov. 30 report titled �Prospects for Property: On Solid Foundations?�

What�s the basis of such optimism in the face of global economic headwinds and a lingering credit crunch? One explanation is that 40% of respondents with at least $50 million in assets have more than half of their investment portfolio tied up in real estate.

�The survey has revealed that investors are holding a much higher proportion of their wealth in real estate than we would normally recommend,� says Michael Dicks, chief economist at Barclays Wealth in New York. �This suggests a real need for people to consider diversifying their portfolios into other asset classes in order to reduce risk.�

Barclays Wealth provides high-net-worth clients worldwide with banking and investment management services. The global wealth manager�s client assets total $221 billion.

The Economic Intelligence Unit, a division of London�s Economist Group, conducted the survey of high-net-worth individuals with investable assets ranging from $800,000 to more than $48 million. The survey was conducted in August and September.

U.S. gets thumbs up

Slightly more than 75% of respondents currently invest primarily in their domestic real estate markets. The United States ranks as the most attractive global market for commercial and residential real estate, with 16% of respondents selecting this market.

China and the United Kingdom are tied as second most appealing real estate markets, according to the survey results, while India is a tad behind in fourth place. France, Spain, Canada, Brazil, Germany and Australia round out the list of top 10 markets.

Among the 10 countries and regions most heavily represented in the survey, investors from Middle Eastern countries and Canada are most likely to increase their allocations, while Spain is the only country in which the average allocation to real estate is expected to fall.

“Within the context of their existing real estate portfolios, it is encouraging to see that some respondents are looking overseas,� says Dicks of Barclays Wealth. �However, there is evidence in the report of home bias, when investors prefer to focus on the market they know best. Diversification overseas is an important means of avoiding an excessively concentrated real estate portfolio, and investors also seem to underestimate how straightforward it can be to achieve this through vehicles like REITS (real estate investment trusts).�

What�s the advantage to investing in residential real estate? Nearly four out of 10 respondents (38.3%) say that the key advantage is the potential for rental income, followed by the capital gains potential (28.6%), and the long-term track record of the sector (27.1%).

�Investors find real estate to be an attractive investment for a variety of reasons, including the potential for both capital appreciation and rental income,� concludes Brian Nick, investment strategist at Barclays. �But we have to weigh those potential benefits against the fact that the real estate market is neither liquid nor transparent, which are also desirable characteristics for assets in a portfolio.�

High-Net-Worth Investors Turn Bullish on Real Estate, But Study Suggests They Are Too Exposed.

This one hits closer to home, I think we have at least another year of bank failures before things get back in the plus. There is a large confidence factor that is going to take a long time to come back. People just don’t trust banks and especially equities..

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AmTrust Bank customers have been moved over to New York Community Bancorp after federal regulators seized the bank�s assets Friday.

The bank, which was based in Cleveland, had 12 branches in Arizona. Federal regulators sold the assets to the Westbury, N.Y.-based New York Community Bank. That amounted to about $11 billion in assets, including loans, cash and securities.

AmTrust had about $11 billion in liabilities when the bank was seized. Customers could continue all the banking activities starting Saturday.

AmTrust had 66 branches with 29 in Ohio and 25 in Florida in addition to its Arizona operations.

AmTrust Bank assets seized by FDIC, bought by New York Community Bank – Phoenix Business Journal:.

So mortgage lending is going down, and the solution? Lets make it more difficult for borrowers to qualify, that will spike the economy.

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WASHINGTON, Nov. 26 (UPI) — Fannie Mae, the giant mortgage finance company that helps shape lending guidelines, plans more crackdowns next month to further tighten lending practices.

U.S. officials say the plan includes the raising of minimum credit score requirements and limiting the amount of overall debt that can be carried related to income.

There is concern, however, that the mortgage industry may become too restrictive and impede an economic recovery in its attempts to roll back loose lending standards that led to the current crisis, The Washington Post says.

Lending by U.S. banks plunged by 2.8 percent in the third quarter, the largest drop since at least 1984, federal data released this week indicates.

Some of that problem is said to be fostered by Fannie Mae and Freddie Mac, which refuse to buy loans that do not meet their rules.

Starting Dec. 12, the automated system that Fannie Mae uses to approve loans will reject certain borrowers at a higher cutoff point. These borrowers would have at least a 20 percent down payment but whose credit scores fall below 620 out of 850. Previously, the cut-off was 580.

Also, for borrowers with a 20 percent down payment, no more than 45 percent of their gross monthly income can go toward paying debts.

via Fannie Mae to tighten lending standards – UPI.com.