Saturday Cup of Joe: a lending and tech(ish) newsletter from Detroit

Saturday Cup of Joe #122.

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Train Hard

Friends & Colleagues,

Week 122 in Detroit. Thanks for all the well wishes after last week’s newsletter. Unfortunately my mother remains hospitalized as she continues her courageous fight against a rare and aggressive form of cancer. My mother and father are inspired by family and faith. Their continued love and positive outlook in the midst of this battle are an inspiration to the rest of our family. Will keep you updated as things progress but I am thankful for every day that I can spend with her. I love you, Mom.

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I don’t know if you noticed it this week but the “back to school” spirit seemed to infect the office. We packed 5 days of meetings and work into 4 days. Somehow shorter weeks end up busier and crazier. That said, how are you thinking about the rest of the year? Are your goals daily? Weekly? Quarterly?

This weekend is the 10 year anniversary of many of the major moments in the credit crisis often referred to as the Great Recession. I reflected a little bit on the date because September 6th was the 10 year anniversary of the government conservatorship of Fannie Mae and Freddie Mac. I may watch Too Big Too Fail on HBO this weekend. Where were you in September 2008? What lessons have you carried with you? What lessons have not (yet) been learned?

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As seen on Instagram @foundr

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“We must believe that we are gifted for something, and that this thing… at whatever cost, must be attained.” — Marie Curie

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Photo by Markus Gempeler on Unsplash

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Housing futures: Who is buying your home? Who is renting you your home? I had an interesting conversation recently with a technology executive who identified a little known dirty secret in the real estate market right now. The “cash offer” that so many home sellers and sellers’ agents covet are often too good to be true. For example, a home is listed in suburban Nashville and within hours the seller receives a cash offer 5% over asking price. The seller excitedly accepts telling friends and family how fast and how easy it was to sell the home. After several delays in scheduling and communication, an inspection is scheduled. Several more days or weeks pass until the inspection can occur and be reviewed. At this point the seller has made commitments, told friends & family and perhaps even scheduled their move or closing of a new home. That’s when the cash offer turns out to be from an institutional buyer and the buyer’s agent begins counteroffering based on minor items from the inspection. Suddenly the cash offer is now 10–15% below asking price. The seller is frustrated but accepts given the expectations and time constraints. The cash offer that wasn’t. This is happening more and more in many markets around the country.

I am not sure I’d call it a scheme but these buyers are growing and hungry for more. If you are curious who are the big players, a recent Business Insider article profiled the companies who are creating large networks of single family home rentals. Even Freddie Mac announced an intention to expand their rental portfolio.

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Housing redux: The housing market is just that — a market. The prices rise and fall on a variety of factors including macroeconomic drivers like employment trends and income levels. Price is also driven by local factors and smaller local drivers like inventory, development and public infrastructure. When speculation or regulation gets involved price and liquidity can be effected. In major cities price is always a problem but not always for the reasons we think.

“Rather, high housing prices are the outcome of a strategy by incumbent homeowners to keep a lid on construction. Keeping cities frozen in time, only more expensive, is great for homeowners and bad for just about everyone else, including local employers and the people who would come to work for them but can’t.”

Check out this Bloomberg article for more on urban prices and regulation.

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Ummmm….A map and explanation of regional barbeque. Yellow sauce in South Carolina? White sauce in Alabama? If you’ve ever wondered about Western North Carolina BBQ sauce versus North Carolina BBQ sauce, this is for you.

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You Be You

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Pumpkin Spice Latte: It’s about to be that time (for some people it already is that time). PSL went on sale August 28. Are you looking forward to it? Here’s a look into the business side.

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Makes Me Think: I noticed an article this week on Amazon’s “dependence” on federal programs such as SNAP (formerly known as food stamps). Senator Bernie Sanders brought it up and then articles like this one surfaced. I noticed in the data that Walmart and McDonald’s are high on the list of other companies with many employees who are eligible for this federal program. In light of that, it might not be surprising that Amazon is on the list. Yet, this week also saw a $1 trillion valuation of Amazon and Jeff Bezos’s net worth reach $166B, at least in theory. With that level of wealth and power should come better strategies for compensation and support at all levels of the organization.

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You Do You

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Millennial minute: Proximity vs. affordability. I write a lot about the changing concept of the American Dream from the required milestone of wealth accumulation or creation to an emotional (and public) commitment to a place, to a community. As millennials become homeowners, there has been a lot of hand wringing over whether or not this cohort will continue to buy homes and if so, where? The general conclusion in the real estate and mortgage industry seems to be — yes, they will continue to buy but it might be later in life than the generations who came before them. Assumptions are also made about “walkable” core cities or suburban core communities. Zillow published research that shows just how valuable proximity to a city continues to be.

Here is the link to the full study.

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Money: Apparently winning the lottery does make you happier. Here is the case study (and conditions) to prove it. “New research suggests that more money really does lead to a more satisfying life. Surveys of thousands of Swedish lottery winners have provided persuasive evidence of this truth.” What would you do if you won the lottery?

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Answer Well: I’ve written before “beware the nugget of truth” meaning that sometimes we take the nugget of truth in something and make it the explanation for the whole situation. Here’s poignant and articulate post from Farnam Street on the same topic — beware generalizations based on individual anecdotes.

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Today’s thought: “Trust, faith, belief are the lubricants of democracy,” said Steve Schmidt a political advisor to John McCain. I thought a lot about culture and performance this week. What makes culture? What makes elite? If trust, faith and belief lubricate democracy, what lubricates your company? Trust. Active. Honest. Creating success in others.

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Quote: “Who is good if he knows not who he is? and who knows what he is, if he forgets that things which have been made are perishable?” — Epictetus

Bonus Content: Transit. “How America Killed Transit.”

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View from a rest area along the Pennsylvania Turnpike

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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