AskDong

Last week, I was shamelessly reading People Magazine. The Pitt-Jolie twins were the featured topic. While I may at times slavishly follow the no holds barred divorce of Christine Brinkley and Peter Cook. The twins interest me, not so much. I’m not much of a baby person in print or in the flesh.

While my interest in twins was little too non existent, my interest in how much Angelina and Brad were paid was quite a bit. Apparently they were paid $16 million for the the first pictures. I don’t think I could I pay someone to look at my baby pictures. While Jolie and Pitt are set to donate their booty to charity, this is still another example of how the haves are in the position to have more.

I’m not making a political or social comment or at least I’m not trying to, but rather attempting to emphasize how success, financial and otherwise, is a function of success. To become rich, it’s easier if you’re rich already. In the blogging world, this is apparent in the way the more popular blogs are the blogs that most easily gain readership. This is an example of the Network Effect. More generally speaking there is something like the network effect in all aspects of life. If you ask Bill Gates, I’m sure he’ll tell you that making the first billion was much harder than making the 2nd. I say this not discourage anyone, but rather to give hope.

Hello Dong, I’m a condo owner in Washington DC and could really use some advice.
Here is a very quick run down of my situation:

• there are 12 total units in our condo association (3 buildings side by side
  with 4 units in each)
• 3 units have been bought and are being lived in. 1 other unit is finished, and
  the 8 remaining units are approximately 75% - 85% finished.
• our developer has notified our acting property manager that they do not have any funds available to pay for upcoming insurance premiums (covering all three buildings) and repair costs for fixing our water heater a couple of times and possibly replacing our sump pump. The developer also said their lender would not give them any more money. Since I moved into the condo in March there has
  been no work done on the 8 unfinished units.

Since there are only 3 of us condo owners (25% occupancy) the developer is still in charge of the condo association, which, to me, seems to leaves us with few options. There has been talk with our property manager about doing a special assessment (for the 3 homeowners) to cover the insurance and repair costs. However, is it possible to have a special assessment that only applies to 3 homeowners? The developer still technically owns the other 9 units and I don’t believe they should be excluded. But if they are broke then what? We can’t try to foreclose on the unoccupied and unfinished units because we don’t control the condo association.

I guess some of our options could include suing the developer, making our building where the three of us live a separate condo association, or doing the
special assessment and then recouping costs later down the road when (or if) the developer finishes and sells the remaining 9 units.

Are there more options out there? I’d like to hear opinions from anyone willing to share them. We are in the process of getting a lawyer and I know that might be our only option, but I thought it would be interesting to see if you guys have any other suggestions or anything further to add. If anyone needs any more information please let me know.

Thanks,
Patrick

Patrick has quite a situation, and one which I’m not very qualified to answer. It’s clearly a legal issue more than anything else. This is not to say I don’t have any thoughts. I even took a little time to get some quick legal advice from actual lawyers. The first thing that Patrick needs to do is review all the documentation associated with the property. This includes the Condo Association bylaws, the Master Deed, and Purchase and Sales agreements. There might be something in those documents to hold the Developers accountable and or specify a predetermined remedy.

The bigger problem is not so much holding the Developers accountable, but what then. The problem with the developers is that they probably don’t have any money. I think Patrick and his fellow homeowners should exact what they can from the negligent developers, but it’s unclear how much of anything the developers have to contribute. Given that the developers is not paying dues and being a responsible member of the condo association, they may forfeit some of their voting rights as a member of the association. It’s unclear to me if this would be the case as the laws vary state to state. In the least the Condo association should begin the process of getting a lien against the properties so that they are in position to be paid.

As for having a special assessment that applies only to small subset of the unit owners, apparently in Massachusetts this is the de-facto course of action when more than 50 percent but less than 75% of the condo owners agree to the improvements. In Patrick’s case, actual owners only have a 25% interest. However, it might be different in Washington DC.

At the end of the day in this situation as in many other situations in life, it’s important to acknowledge common interests and not just take the opposing position. It’s in the best interest of both the current Condo Owners (Patrick and his compatriots) and the interests of the Developers to make the required fixes. The more work that’s done on the property, the better off the developers are. Ultimately all the developer wants to do is to sell the properties, and if the property is in disrepair his chances of doing so are diminished. With that in mind I think it’s important to both talk a lawyer and talk to the developers about coming to an agreement. I wonder if there’s opportunity for Patrick and the other owners to help developer sell the remaining units to owners who have the money to finish up the property and pay the assessment? Hopefully everything works out for a Patrick, and if anybody else has any thoughts please share in the comments. Both I and Patrick would appreciate it, especially if you’re a real estate lawyer

Having had my iPhone for a full week now, I’m prepared to give a full evaluation of the phone itself. I’m still reserving judgement on how I feel about AT&T and the pricing plan. The initial butterflies have fluttered away, but I still very much love the phone, and in some ways love it more than the day I brought it.

I’ve always been weary of the size and shape of PDA phones in opposition to standard cell phone. PDAs are much wider than standard phones, and I always thought it looked odd talking to wide flat brick. Having used the phone to make a few calls, I’ve gotten used to the shape and realize it’s more important that a phone picks up sounds properly regardless of the shape of the phone. Psychologically, I’m still getting used to talking into a flat brick.

The iPhone as a Phone
So far so good. The iPhone has been a more than adequate replacement for my old LG 5200. The call quality has been good on the 3G network, and not bad on the old EDGE network. One of the more common complaints about the iPhone don’t apply to me. I don’t use voice dialing and as result don’t miss that feature. I also live in a major city and really haven’t noticed much of difference from leaving Verizon. I image depending on where you live, the lack of choice of carrier become a deal breaker.

The iPhone For Email
I haven’t had a PDA since my Handspring, and I’ve never had any kind of mobile device on which I’ve been able to read email in the past. Given this limited background, I’ve found the iPhone’s email functionality more than adequate. The mail client is easy to use, and has a simple interface that makes reading emails quick and easy.

That said, I know the iPhone is not the best mobile email platform out there. Apple’s mobile me service has had a rocky debut. Apple’s strong suit is not service offerings, and they would be better served sticking to their bread and butter (hardware and software). Push email works on the iPhone, and have had success with Yahoo, but comparing it with the Blackberry, the push is not quite as good. It’s not as quick. For most casual users of mobile email like myself, the mail services are more than fine. However, it’s in the email client that I most miss copy and paste functionality. If I were using the iphone for serious business correspondence, the lack of copy and paste really does become a deal breaker. Luckily, I’m more interested in reading email than replying to them.

The iPhone For Organization
I’m trying to become better at scheduling and organizing. I haven’t really ever kept a calendar. I don’t wear a watch and haven’t owned one except for a tourist trinket in over 14 year. I’m starting to keep a calendar, and so far so good. There’s not much in the calendar so far, but that’s probably because I really don’t like having plans…

Late last week, the aggregate value of one my larger holdings (WFIVX - a Wilshire 5000 Index Fund) turned red. Up through about November of last year I had been investing steadily since September of 2003, mostly through monthly purchases and occasional large purchase. I have since shifted over to Vanguard, but because of the rich history of steady contributions the value of those holdings serves as a bell weather of my overall investment exposure.

Lately that bell weather has behaved more like a canary in coal mine. Effectively all the paper gains of the last couple years have been erased. Everything purchased after November 2006 is worth less than what I purchased the shares at, and down enough that those losses offset the gains on purchases made before then. That’s over 5 years of investing that’s effectively currently a wash. I’m OK. For me right now it’s all numbers on a page.

For those are are near retirement age or retired, the current market conditions might be quite devastating. My parents fall in this camp, and they’re rightly worried but worried more than they should be. I’ve already moved a substantial portion of their holdings out of equities. For people like my parents who are dependent are investment income rather than real income to support their lifestyle, market moves can be gut wrenching. That’s why it’s so important to have the appropriate life stage asset allocation.

The other more salient point that I think we can all take away from the markets is not to count on 10% returns. I could easily go through my whole asset accumulation portion of my life and experience low single digit returns if that. Like so many things in life, it’s all about timing. While many people pooh pooh market timing, all investors are implicitly timing the market by virtue of what era they live in. Unfortunately, I don’t believe I timed my birth particularly well in terms of the market. Oh well.

A friend of me pointed to this article on NPR on the benefits of taking turns paying the tab. I’ve always been a fan taking turns. My friends and I almost always do it with drinks, and sometimes with smaller meals, but hardly with more expensive meals. Maybe we should start.

The basic premise is that whenever we have to spend money, we feel a little bit of pain regardless of how much that is. As a result it’s better to take turns paying the bill because only one person feels that pain. In addition that person who picks up the tab gets the opportunity to feel good about him or herself. It’s good feelings all around.

This is all great, but from purely financial perspective there can be pitfalls. There of course is the free loader problem, something I feel fortunate in not suffering from amongst my group of friends. However, usually there will be at least one person if not a few individuals who will take advantage of the generosity of others, purposely or by thoughtlessness. This problem can be avoided by not associating with these individuals which is generally advisable anyways.

The bigger problem is overspending. Because taking turns is really quite effective in minimizing the pain of spending money, we often spend too much. I know this is the case, and there is no place more obvious than at a bar when taking turns buying rounds of drinks…