Dateline: 23 February 2011
AxSA Factoid of the Week
As a part of the health-care reform package, beginning in 2014, no health-care provider will be allowed to deny coverage to Americans with pre-existing conditions. For now, though, the federal government has set aside $5 billion to fund a pool of plans for high-risk Americans. While there were higher hopes that more people would enroll in these plans, through November, only 8,000 eligible people had enrolled.
News & Commentary
Management Tip of the Day: Coping with Passive-Aggression
Here are some steps to take to fight back if a passive-aggressive colleague is sabotaging your project...Read More
Being the Boss
Scholar Linda Hill discusses her new book Being the Boss, and explains why managing relationships at all levels can help leaders achieve greater organizational performance...Read More
How to Keep Going When You're Out of Gas
Burnout is increasingly common for today's professionals. Here are some ways to cope with stress and fatigue...Read More
Are Hyundai and Kia Unstoppable?
Even though they build no cars in Canada, the two Korean automakers are aggressively seizing market share, and their competitors are very concerned...Read More
Hoteliers Build on the Hipness Factor
Wall Street Journal
Eyeing the success of the W Hotel chain, a slew of developers are hoping that they too can find good fortune in the lifestyle-brand approach...Read More
The steady growth in international box-office revenues has more filmmakers and movie studios looking overseas...Read More
Saudi Arabia Seeks to Calm Market with Words, No Oil
As crude oil prices climb, the only nation capable of responding to potential supply disruptions contends that there is no need for fear...Read More
Silver's Still Looking Good
Silver is outperforming gold, and its growth is likely to continue...Read More
Perspectives from the Corner Office
Financial Management Group
AxSA: As an entrepreneur who has been involved in types of ventures, what is your formula for identifying and building out new opportunities? How do you know if a new venture is worth your investment and time?
McLaughlin: It varies according to the venture and client. However, I try and identify four main factors:
1-My personal knowledge of the venture...Then there is the possible pay day and my comfort level that I can actually close the deal. All other factors serve as variables in the deal.
For example, I have an offer to purchase an outstanding note on a three family in Brooklyn. The note will cost about $297k, and the property is worth $1.2 million. I know that it will take about a year to go through the foreclosure process, as well as maybe another six months to a year to clear out the tenants per NYC standard. But I also know that I have 3 options: I could sell the note for about 350k, as is; I could foreclose and sell the property for about 500k with the tenants in it; or I could wait out the process, kick out the tenants, and sell the property for at least $1 million. So quick turn is $50k, 1 year turn is $230k, or 18month turn is $800k...This is a deal I am running with, because I have total confidence that I can accurately identify the main variables leading to a successful outcome.
2- My existing network that can get the deal done...The more I have in place to close the deal with vendors, the more I have a history and trust making it likely I will go forward.
3- The client him or herself...The more I see the client as a "prospect" and not just a "suspect" the more likely I am to take on the project. The more experienced, knowledgeable, and viable the client the more likely I am to take them on. I also have certain hot buttons, as far as the trust level I feel from the client. If I feel I may have to chase this person to get paid, I will usually pass on a deal...
4- The payday...Simply put, time spent versus compensation received. The more likely the chance of an actual payday the more likely I will spend on it. It's good to "chase" large paydays, but it is better to "close" reasonable ones. However, if the numbers are so high as to warrant taking a calculated risk as far as time and not money are concerned, then I would give it a shot.
That is my basic formula....
Financial Management Group is a financial-consulting firm providing investment, capital-resource, location management, and credit modification services to the commercial and residential real-estate sector. Mr. McLaughlin is a graduate of Baruch College, City University of New York, and he is the owner and CEO of FMG.