EXCELLENT RE Article on..... - Posted by JHyre in Ohio

Posted by JohnBoy on October 22, 2000 at 15:35:38:

NONE OF THE ABOVE! :slight_smile:

EXCELLENT RE Article on… - Posted by JHyre in Ohio

Posted by JHyre in Ohio on October 20, 2000 at 15:29:48:

front page of today’s Wall Street Journal about gentrification of a neighborhood, a real estate investor, some decent but poor families and several do-gooders. Just excellent. Pay close attention to Mr. Mulugeta, the investor. His story is inspiratinal to RE investors…though the poor advocates dislike him since he won’t give them a few million, gee, whatta stingy guy, NOT.

John Hyre

Impressed by his business moves… - Posted by IB (NJ)

Posted by IB (NJ) on October 21, 2000 at 23:24:44:

but not impressed by his lack of caring for the people. Let’s remember that the tenants of this building are mostly imigrants from third world countries (and if you check the history you will find that America and the parents who it descended from help create this ‘third world’ status). I’ve aways been involved in the community. I’ve always been an advocate of the poor (to think that the poor is entirely made up of people who want to do nothing in life but accept handouts is severely naive). I guess you can call me a socialist capitalist (if there is such a thing). That is, I am for the people. But I also believe that the answer to the problems of the poor as they exist is a capitalistic society like the one we live in is for them to gain economic empowerment and freedom. Stating it is one thing. Convincing and educating them on this is an entirely different ballgame. Unfortunately, poverty is a state of mind thus, a way of life for millions of Americans.

With that said, I would have done 1 of 2 things. (1) Since I already work with communities of the poor I would have used my leverage to help provide alternative housing for the existing tenants. Maybe work with the local government and non-profit organizations on finding some sort of solution. But as a capitalist, I would have wanted to sell the building for a profit. I just couldn’t do it with the “I don’t care what they do” attitude Mr. Mulugeta has for the people (the man actually wanted to evict a disabled man and his 3 kids - and he’s my inspiration in RE???) My other option: I would have sold the building with stipulations that housing be provided for the existing tenants like his wife suggested.

I’m in this thing to make money. Not to put people out in the street. The program that the Nuns are running are having a positive effect on people who want to better themsleves. Mr. Mulugeta’s assumption that evicting them will make them better off in the long run is absurd.

Can you provide a link to it? (nt) - Posted by Ben (NJ)

Posted by Ben (NJ) on October 21, 2000 at 18:28:52:

nt

Are you joking? - Posted by Suec

Posted by Suec on October 21, 2000 at 05:46:16:

One thing that is sorely lacking in this society is compassion - not everyone can be a “go getter” and make tons of money - money and profit and building your millions on the backs of working poor is NOT respectable or admirable.

Where would we be as investors if EVERYONE had to be an investor in order to find a place to live? It’s just SAD when people - ESPECIALLY those of us starting with very little - are completely unable to see the big picture.

Stingy? I thikn so. I notice Mr. Mulugeta isn’t hiring ANY local workers - despite his millions - to help rehab the building - he is putting NOTHING BACK into the community, just taking. Great, he had no shoes. Did anyone ask whether or not that equals poverty where he grew up? He has forgotten where he’s come from. He isn’t doing the things Kiyosaki for example suggests - teach, and give back. And, I’d suspect his and his wife’s comments were completely insincere, nothing more than poorly disguised effort to divert the negative attention.

So, big deal, he’s made millions. That’s all he’s got in my opinion.

…the rest of the story is here-> - Posted by Mrs SD

Posted by Mrs SD on October 20, 2000 at 16:52:27:

into condominiums.

Today, the Daughters of Charity and the Junior League are still talking about
raising money to make a bid for Carriage Manor. But Mr. Mulugeta says
that by the end of next month, he expects to complete his $5 million deal with
the Silicon Valley real-estate firm.

“After that,” he adds, “I don’t care what they do.”

Write to Johnathan Kaufman at johnathan.kaufman@wsj.com

Forget Donald Trump!! THIS is inspirational!! - Posted by Mrs SD

Posted by Mrs SD on October 20, 2000 at 16:51:13:

Junior Leaguers Join Nuns in Effort
To Thwart Silicon Valley Landlord

By JONATHAN KAUFMAN
Staff Reporter of THE WALL STREET JOURNAL

EAST PALO ALTO, Calif. – When Sister Trinitas Hernandez was looking
for a place to serve the poor in Silicon Valley, she settled on this two-story
dirty yellow apartment building wrapped around a barren courtyard. Grandly
named “Carriage Manor,” it’s home to 48 Latino families working in the
low-wage eddies of the high-tech economy: fast food, gardening, day-labor
construction and housecleaning. Many of the families live five or six people
to a room. Stray dogs roam the street outside.

Within a few months of her arrival in January 1997, Sister Trinitas started
three on-site English classes. She brought in volunteers from the Junior
League of Palo Alto, the tony town next door, to staff a play group.

But where Sister Trinitas and the Junior Leaguers see a chance to help the
poor, Benyam Mulugeta sees a financial windfall. A real-estate investor
betting on East Palo Alto’s gentrification, he bought Carriage Manor this
spring for $2.1 million, sent eviction notices to a quarter of the tenants and
doubled some of the rents. An immigrant himself who is married to a
Hispanic woman, he came to this country from Ethiopia virtually penniless in
1972. Today he owns millions of dollars in property.

‘Survival of the Fittest’

“I was in their shoes once,” the landlord says of his remaining tenants. “But
sometimes you have to push people to find their inner strengths. It’s survival
of the fittest.” Mr. Mulugeta has little patience for the self-appointed
defenders of Carriage Manor.

At a recent meeting over the fate of the building, Carrie DuBois, a Junior
League official, accused Mr. Mulugeta of “endangering children” and then
described a garden tour she took of posh Silicon Valley homes. “Many of the
people who tend these gardens live in Carriage Manor,” she said. “We need
these people. We need these gardeners.”

If the Junior Leaguers “care so much about the gardeners,” Mr. Mulugeta
said later, “why don’t they pay them $25 an hour rather than $7, so they can
live better?”

The confrontation – which has prompted an unlikely buyout bid orchestrated
by the Junior League – is unfolding at the epicenter of the explosion of new
wealth transforming neighborhoods across America. Silicon Valley has long
turned its back on East Palo Alto, a beaten-down city of 2½ square miles.
Overwhelmingly black and Hispanic, it has some of California’s worst
schools and still bears the scars of a violent crime wave in the 1990s. Many
streets lack sidewalks and street lights.

Suddenly, though, East Palo Alto is hot, as mid-level technology workers,
priced out of the rest of Silicon Valley, move in. Three-bedroom houses in a
new development are selling for $600,000 apiece. The median housing price
has jumped more than $100,000 in the past year, to $325,000. And rents
have doubled, sweeping out residents of places like Carriage Manor.

In their effort to protect these tenants, the Junior Leaguers have tried to
exploit their connections to Silicon Valley wealth. But technology companies
and foundations shy away from giving money to alleviate the housing crisis,
preferring instead to fund programs that bridge the “digital divide,” such as
supporting education and providing computers in the classroom.

‘All the Money in the World’

Housing for the poor in East Palo Alto “is one of those issues that could use
up all the money in the world, plus a dollar,” William Somerville, a local
foundation official, says. At the Junior League’s behest, he tried but failed to
raise money to aid Carriage Manor’s residents. “It’s a hard place to figure
out how you can have an impact,” he says.

Now the clock is ticking on Carriage Manor,
where the altruism of the nuns and the good
intentions of the Junior League are colliding
with the free-market dreams of Mr.
Mulugeta.

On a sunny day, Sister Trinitas, 62 years old,
wearing a light-blue habit and short-sleeve
white blouse, stands before a group of
Carriage Manor women, teasingly threatening
to throw an eraser at them if they don’t speak
English. They giggle and begin reading from
their notebooks: “Yesterday, I went shopping
at Kmart. On Sunday, we went to church and
then had breakfast at McDonald’s.”

The women, none of whom is on welfare,
have all been up since at least 5:30 a.m.,
making breakfast for their husbands and then sending children off to school.
Several of the women leave for jobs themselves once their husbands come
home in the afternoon. More than 30 people a day attend lessons in a
first-floor apartment Sister Trinitas has turned into a makeshift classroom.

Before she moved to the area four years ago, Sister Trinitas had worked
with migrant workers in southern California. She lives only three blocks
away from Carriage Manor, in a modest three-bedroom house she shares
with two other nuns.

Soon after beginning work at Carriage Manor, Sister Trinitas received a call
from Ms. DuBois, 42, a vice president of the Palo Alto chapter of the Junior
League, the social and good-works organization.

A real-estate broker who earns about $100,000 a year, Ms. DuBois is
married with two small children. Her husband, a computer-magazine writer,
brings in an additional $70,000, making them comfortable but not rich by
Silicon Valley standards.

Ms. DuBois likes the elegant teas and black-tie charity dinners that are a
Junior League signature. But she has also worked as a volunteer with
children from abusive and alcoholic homes. Although Ms. DuBois was
raised in an upper-middle-class family in Sacramento, her mother had a
nervous breakdown and left home when Ms. DuBois was eight. “It shattered
my world,” she says. “I can’t save the world, but we need to be sensitive to
children’s needs.”

Ms. DuBois had lived in Silicon Valley for a dozen years, but she had never
visited East Palo Alto. Indeed, she says, “I had never known a poor family.”

A mutual acquaintance suggested she contact Sister Trinitas. The nun and
the Junior Leaguer first met at a trendy health-food restaurant in affluent
Menlo Park. Ms. DuBois talked about how she donated her old, worn-out
clothes to Goodwill.

“You should only give something that you would wear yourself, or something
you would put on your child,” Sister Trinitas chided her.

Ms. DuBois’s first visit to Carriage Manor shocked her. The courtyard was
ankle-deep in water after a rainstorm. Sister Trinitas showed her the studio
apartment of Hilda Marquez and her family – two parents and four children
living in one crowded room.

“It didn’t look like America to me,” Ms. DuBois recalls. She brought over
other Junior Leaguers. Upon seeing the Marquez apartment, one member,
Cathy Carlson, exclaimed: “Oh, my God! We’ll adopt them. We’ll move them
somewhere, and we’ll pay the rent for the rest of the year.”

“What happens next year?” Sister Trinitas objected. Paying a year’s rent
wouldn’t change long-term circumstances. The Junior Leaguers “are good
women with good hearts,” the nun says. But what is needed isn’t “constantly
giving to the poor, but working with them so they want to improve
themselves.”

Ms. DuBois was converted, but some in the Junior League balked. They
worried about safety. During one early visit, several Junior Leaguers
declined to get out of the rented bus they had taken to the building. (In fact,
the volunteers haven’t been the victims of any crimes.)

Ms. DuBois told her fellow Junior Leaguers that if the group didn’t support
Carriage Manor’s residents, she would work there on her own. In the spring
of 1997, the organization gave $7,500 to support Sister Trinitas’s activities, an
annual donation that was increased in subsequent years to $20,000. Junior
Leaguers agreed to staff a play group with volunteers to watch residents’
children while the adults take English lessons. Ms. DuBois signed up for a
two-hour stint every Thursday.

A Playroom for Danny

Shortly before noon on a recent weekday, Ms. DuBois, still dressed in her
stylish black business suit, pulls up in front of Carriage Manor in her
Mercedes sedan. She deliberately leaves the car unlocked – a silent rebuke
to more tremulous Junior Leaguers. This morning, she has visited two new
Silicon Valley listings: a four-bedroom house on a busy street that will
probably sell for $799,000 and a five-bedroom “fixer-upper” that needs
landscaping, new bathrooms and a new kitchen, advertised for $899,000.

Ms. DuBois walks across the courtyard to a one-bedroom apartment that
Junior League volunteers have turned into two gaily decorated playrooms,
with animals stenciled on the walls and toys piled along the floor. She
crouches down as the Marquez family’s youngest son, Daniel, six, rushes
over to show her a picture he has drawn.

When Ms. DuBois first began working at Carriage Manor more than two
years ago, Danny refused to touch her. He frequently spat at and hit other
children.

"I thought, ‘Is he going to go to prison?’ " Ms. DuBois recalls.

Now, Sister Trinitas and her fellow nuns have obtained more than $5,000 in
annual scholarships for Danny and two of his siblings to attend St. Elizabeth
Seton, a parochial school in Palo Alto, where almost all of the students
graduate from high school and two-thirds go on to college. Danny, says Ms.
DuBois, “has got such potential.”

Unbeknownst to the Junior League and Sister Trinitas, Mr. Mulugeta also
had his eye on Carriage Manor.

The oldest of 15 children of an Ethiopian government clerk, Mr. Mulugeta
didn’t wear shoes until he was 14. In 1972, when he was 19, a Peace Corps
teacher from California put him in touch with a black family in East Palo
Alto who invited him to come to the U.S. for the first time. He stayed on
with the family in exchange for doing household chores.

Mr. Mulugeta enrolled in a local
college and earned a bachelor’s
and two master’s degrees – in
economics and international
relations. He helped pay his
tuition by cleaning out laboratory
monkey cages at SRI
International, a Silicon Valley
research-and-consulting firm.
After getting a green card, he
moved up to work as a financial
analyst for SRI. He rented a
$275-a-month apartment and married a woman who had immigrated from
Peru. He began bringing family members over from Ethiopia.

In 1981, with his sister, mother, wife and baby son sharing his two-bedroom
apartment, Mr. Mulugeta was evicted for overcrowding. “It was the greatest
thing in my life,” he says, because the ouster spurred him to get into real
estate.

He bought a bank-foreclosed house on a poor, crime-ridden street in East
Menlo Park, next door to East Palo Alto. He paid $60,000, borrowing money
from his brother and from credit cards to raise the 10% down payment.
Within a year, he had fixed up and refinanced the house, raising more than
$30,000 that he used to buy another house. He repeated this maneuver in
poor neighborhoods throughout the Bay area, selling off some of his
renovated properties and keeping others. Five years ago, he bought a
comfortable Palo Alto home for his family for $750,000. Today it is worth
about $2.5 million.

“Only in America, I’m telling you,” says Mr. Mulugeta with a smile. He says
he has sponsored two dozen relatives who have moved to the United States
from Ethiopia.

Mr. Mulugeta, now 48, bought Carriage Manor from an owner who had let
the place sag and hadn’t even collected rent some months. The $2.1 million
price was a bargain, he says, because he and his wife can spruce up the
building themselves and squeeze large rents out of it. Initially, Mr. Mulugeta
thought of Carriage Manor as a source of income for his four children, ages
12 to 18. “I don’t want them to start with nothing the way I did,” he says.

Renovate and Evict

Under East Palo Alto’s rent-control law, a landlord may raise rents
substantially only when apartments become vacant. So, a month after taking
ownership, Mr. Mulugeta started evicting a dozen families he considers “bad
apples.” Municipal law allows a landlord to kick out tenants who overcrowd
their apartments or cause serious damage, among other reasons.

Ms. Marquez, with six people in her one-room studio apartment, discovered
an eviction notice taped to her door one midnight in April, when she arrived
home after finishing the $8-an-hour night shift at Wendy’s. In a panic, she
called her husband in Mexico, where he was visiting his ill mother. “I don’t
want to leave,” she told him. Their children were thriving on parochial-school
scholarships. “I don’t want to put them in a new school,” she said.

During the next few days, Ms. Marquez searched for another place to live.
She and her husband were paying $479 a month at Carriage Manor. Even a
cramped one-bedroom in another East Palo Alto building can cost $1,200 a
month. Ms. Marquez felt desperate.

Mr. Mulugeta next evicted
Martha Perez and her husband,
Robert, and fired Robert from
his job as building
superintendent. Upon learning of
the Perez eviction, Andi
Mallinckrodt, a Junior Leaguer
who had become close to Ms.
Perez, talked to her husband,
George. He’s the West Coast
sales manager at Fisher
Scientific International Inc., a
laboratory-products distributor.
Mr. Mallinckrodt arranged a
new job for Mr. Perez as a $12.50-an-hour materials handler at his firm.
With the new job, the Perezes managed to find another apartment in a
building near Carriage Manor.

As fear about the evictions spread through the building, Ms. DuBois decided
in May to try to persuade Mr. Mulugeta to sell the building to a nonprofit
group that would protect the tenants. She called Mr. Mulugeta and told him,
“I want to buy your building.”

“It’s not for sale,” he responded. “It’s for my family’s future.”

“I hung up and felt sick,” Ms. DuBois recalls.

But the next day, Mr. Mulugeta called back. He would sell for $4.5 million,
more than twice what he paid two months earlier.

Given the madness of the Silicon Valley real-estate market – Ms. DuBois
regularly auctions her listings for amounts way above the asking price – she
considered the $4.5 million price reasonable.

She contacted Mr. Somerville, the head of the Philanthropic Ventures
Foundation, who is active in East Palo Alto. Mr. Somerville contacted four
wealthy high-tech donors, but they all turned him down. Some didn’t want to
give Mr. Mulugeta a quick windfall, says Mr. Somerville, who declines to
identify any of the benefactors. Others prefer giving money to programs
focused on technology and education or to local food and drug-treatment
programs.

“Some things have the cachet that big funders want to get involved in,” Mr.
Somerville says. “Housing for poor people doesn’t have that cachet.”

Melanie Yunk, a Junior Leaguer who runs her own consulting firm, called a
client, Sherif Danish, founder of Saqqara Systems Inc., a San Jose software
company, and asked if his company would contribute to save Carriage
Manor. Mr. Danish declined.

Saqqara isn’t yet profitable, he explains later. “I think that the local
government should intervene to solve the housing problem overall in the
valley,” he says. “Housing in Silicon Valley, including rentals, is out of reach
for a large majority of the residents, not only poor people. It took my
daughter, who graduated a year ago, 10 months to find a rental she could
afford with her salary.”

Ms. Yunk also came up empty-handed at Agilent Technologies Inc., a
high-tech company based in Palo Alto. Agilent focuses its giving on science
education and health care, said Terry Lincoln, the company’s Silicon Valley
community-relations manager. Agilent recently gave $250,000 to Plugged-In,
a nonprofit technology-education group in East Palo Alto.

“Every phone call I get is a good cause,” says Ms. Lincoln. “We’re one
company. We can’t go out and try to fight the housing issue alone.”

The drumbeat of rejections angered Ms. DuBois. “The wealthier this
community becomes, the more it becomes detached from reality,” she says.
“People are losing their homes. It’s right in our backyard, and everyone is
turning their back.”

Ms. DuBois spoke with several local newspapers and television stations
about Carriage Manor, hoping that publicity would stop the evictions or force
Mr. Mulugeta to sell to someone sympathetic to the tenants. At their home in
San Carlos, her husband, Grant, told her to face the “harsh reality” that the
Carriage Manor residents would have to move.

But Ms. DuBois refused to give up. She asked Sister Trinitas whether her
order of nuns, the Daughters of Charity, could buy the building. The order
has substantial resources from donations, and it runs hospitals and other
large nonprofit institutions. The nuns readily agreed to buy the building, fix it
up and lower rents. The Daughters of Charity decided to offer Mr. Mulugeta
$2.6 million for Carriage Manor – a quick $500,000 profit.

Ms. DuBois learned the amount of the nuns’ offer on the May morning that
she and Sister Trinitas went to Palo Alto to meet Mr. Mulugeta. She told
Sister Trinitas the offer wasn’t enough.

“It’s in God’s hands,” Sister Trinitas said.

“Can’t someone else be in charge as well?” Ms. DuBois asked.

The meeting, held in the elegant office of the real-estate firm where Mr.
Mulugeta does brokerage work, quickly turned hostile. Sitting in a
conference room with a marble table and tapestries hanging from the wall,
Mr. Mulugeta felt deceived. He expected to be offered close to his $4.5
million asking price. Privately, he blamed Ms. DuBois for media portrayals
that make him “look like a bad man, a slumlord.” On a recent visit to the
Home Depot in East Palo Alto, a Hispanic girl shouted, "That’s the landlord!"
and began cursing at him.

‘Don’t Teach Me About Poverty’

And Mr. Mulugeta resented Ms. DuBois for lecturing him on his obligations
to the poor. “They don’t have to teach me about poverty,” he says later. “I
had so many things against me. I’m black, I came from a Third World
country, I didn’t know anyone here. If I made it, anyone can make it.” Ms.
DuBois, he says, “wants her gardener to live [at Carriage Manor], and I will
be paying for it. They want this to be a charity at my expense.”

For Ms. DuBois, wages aren’t the issue; housing is. “You can’t pay people
behind the McDonald’s counter $20,” she says. “A hamburger will cost $15.
You need to have housing for all income levels.”

As spring turned to summer, Sister Trinitas dug in to fight the evictions at
Carriage Manor. At her urging, Ms. Marquez appealed directly to Mr.
Mulugeta’s wife, Paula, who is from Peru and speaks Spanish.

Initially Ms. Mulugeta, an accountant, supported her husband’s plan to evict
tenants and raise rents. During the course of the summer, the eviction
notices helped clear out several apartments, which had new tenants paying
much higher rents.

But Ms. Mulugeta had spent evenings and weekends at Carriage Manor,
painting vacant apartments – and speaking Spanish to the tenants. When her
husband threatened to evict one tenant who criticized him during a television
news interview, Ms. Mulugeta intervened, pointing out the tenant is disabled
and has three children.

“Now that I’ve met all the people, I like them,” Ms. Mulugeta says, sitting
next to her husband in the plush living room of their Palo Alto home. “The
women who live there and I – we talk like sisters. If we sell [Carriage
Manor], I’d like to put some clause in there that these people can all stay.”

“She’s becoming like those nuns,” Mr. Mulugeta scoffs.

Still, under pressure from his wife, Mr. Mulugeta agreed during the summer
to allow the Marquez family to move into a one-bedroom apartment in the
building – although their rent rose to $750, from the $479 they had been
paying for their studio. The increase, Ms. Marquez says, means she can no
longer save to pay for an immigration lawyer to help her and her husband
obtain citizenship.

“They’re poor people, but good people,” says Mr. Mulugeta of the Marquez
family. Like Ms. DuBois, he has become smitten with young Danny, who
often hangs around while Mr. Mulugeta does repair work. “He’s a real
go-getter,” the landlord says. “He reminds me of when I was a kid.”

The media reports about the evictions also had the unintended consequence
of drawing inquiries from other investors interested in buying the property
and upgrading it for high-priced rentals or condominiums. Mr. Mulugeta
won’t identify the potential buyers but says the offers are in the
neighborhood of $4 million. The idea of selling at that price appeals to him.
He could use the nearly 100% profit to diversify by buying a fast-food or
motel franchise. Then, he says, he would like to hire some of the current
Carriage Manor residents as burger-flippers or motel maids for $10 or $11
an hour.

As for where these potential future employees might live if their building is
converted to expensive rentals or condos, he says: “The majority of the
people in Carriage Manor, even if they have to move, they will do better.
They will find within them the means to succeed. My conscience is clear.”

As summer waned, the persistent Junior Leaguers drew up names of
wealthy contacts who might come up with contributions to rescue the
building. “We are a group of determined women who know we can get what
we want,” says Lisa Tayeri, a Carriage Manor volunteer.

Sister Trinitas also vowed to continue the fight. "I’ll stay to the bitter end,"
she says, “until I’m removed bodily.”

One Thursday afternoon, when Ms. DuBois arrives at Carriage Manor for
volunteer duty, she runs into Mr. Mulugeta. She walks over and politely
shakes his hand, saying she still hopes to find a way the nuns or some other
nonprofit can buy the building.

Mr. Mulugeta tells her he signed an agreement the week before to sell the
building to a family-owned real-estate company that invests in shopping malls
and other properties. The price: almost $5 million. If the deal goes through,
he says, the new owner probably will evict everyone and turn the building
into

Wow! No shoes til age 14!! Incredible!!! (nt) - Posted by George(OH)

Posted by George(OH) on October 20, 2000 at 16:01:02:

nt

Start hating me now, 'cause I’ve had it - Posted by The Baze

Posted by The Baze on October 22, 2000 at 11:45:53:

with all this pandering for the poor. The poor of this country have been coddled and spoon fed ever since the crash of 1929 when it somehow became noble to be poor. The poor in this country are far better off than the poor in any other country of the world. You want to see poverty and suffering? Check out Cambodia, India, China, Ethiopia. That’s poverty. The poor in this country do nothing for this country. Do they pay taxes? No! They take, take, and take and contribute nothing.

I’m a firm believer that you are where you are because hat’s where you want to be. Does that mean that everyone who has suffered misfortune wanted that? Of course not. But you know what. You play with the deck you’ve been dealt and you make the best of it. Did Mr. Mulugeta gripe & moan about what a terrible situation he had been born into? No. Why? Because his native Ethiopia couldn’t have done anything about it anyway. There is no welfare there. So he played w/ the deck he’d been dealt and made himself into something.

What if everyone decided to be poor? What if all just said the hell w/ it, I’ll let the liberal do gooders out there take care of me. Where would we be then? Somehow the poor have come to be a sacred class, like hadicapped individuals. You can’t say anything negative about them w/out people accusing you of being cruel & heartless.

Now I know I’m going to be called a heartless, cruel person. So be it. I don’t believe that I am. Sure, I know that bad things happen to good people, and that many people desparately want out of poverty through hard work. But we have thrown more money at the poor since 1960 than many countries have spent in their entirety in the same period, and it hasn’t worked. They’re still there. You don’t end poverty by giving money to poor people. You end it by showing them that hard work is a rewarding endeavor, no matter how menial the task may seem. I was a long haul truck driver before I decided I wanted to be a CPA. So before anyone acuses me of being a typical wealthy beneficiary of the Reagan years, know this. I’ve never been financially rich in my life. It’s coming, but it 'aint coming by way of any government do gooder program. It’s coming by hard work, sacrifice and risk taking. And it should be rewarded. Not punished by taking it away and giving to the poor.

Tom Bazley

I posted the whole story below nt - Posted by Mrs SD

Posted by Mrs SD on October 21, 2000 at 18:42:01:

nt

Re: Are you joking? - Posted by chris

Posted by chris on October 21, 2000 at 22:16:46:

Why didn’t the broker buy the property herself and solve all of the problems?

Re: Are you joking? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on October 21, 2000 at 17:39:52:

Before I even read the other responses, your post needs an answer. To wit:

“One thing that is sorely lacking in this society is compassion”

That statement is incredibly wrong. In spite of the tax burden placed upon them, Americans are among the most- if not THE most- generous people when it comes to voluntary giving. In fact, the despised rich give far out of proportion to their numbers OR income even though they bear an obscene portion of the taxes imposed by do-nothings…ungrateful, grasping, greedy do-nothings who think handouts are a right. Many such do-nothings claim to despise profit- and are first in line to seize said profits…usually in the name of compassion. This country can do without such lethal compassion.

Profit is derived from FREE trade between FREE individuals and consistenty produces the richest societies- which can in turn AFFORD some compassion. ANY other system depends on coercion- generally theft and violence, however disguised. In the name of compassion, such systems create poverty, misery and death- every time. The profits which you seem to despise are the root of compassion. No profit, no wealth. No wealth, no compassion, except for fuzzy feelings that fill no stomachs.

“not everyone can be a “go getter” and make tons of money”

True in practice. How is it relevent?

“building your millions on the backs of working poor is NOT respectable or admirable.”

Utterly empty rhetoric. What does it mean? Should one not sell to the poor? THAT would help them, surely. Or never buy from the poor? Equally harmful to them. Maybe you mean buy and sell at prices set by do-gooders who have no clue or care as to value…entire societies have run on that concept and ensured that 1) The poor get nothing and 2) Everyone (except the all knowing do-gooders) was poor. Built on the backs of the poor INDEED! It is a society that efficiently allocates its resources via a FREE market that attracts poor from other places(like, Saaaay, from Mexico to San Fran)- and lets them rise above their poverty. Your apparant philosophy would quickly end such “evil”.

“Where would we be as investors if EVERYONE had to be an investor in order to find a place to live?”

Absurd in the context you use it. In fact, we ARE all investors, whether or not we realize it and act accordingly. We all have limited resources and attempt to maximize return (however measured) when we buy a home.

“It’s just SAD when people - ESPECIALLY those of us starting with very little - are completely unable to see the big picture.”

You are speaking of yourself- you see only the individuals who suffer short-term discomfort in the article, and not the larger societal issues and how those make this society attractive to those same individuals. No profit, no wealth. No wealth, no compassion, except touchy-feely whining that achieves NOTHING GOOD.

“Stingy? I think so. I notice Mr. Mulugeta isn’t hiring ANY local workers - despite his millions - to help rehab the building”

YOU try hiring local low-skill labor to do high-liability skilled work. You’ll be in business until discovered by a decent attorney…or your locally produced labor results in substandard work…and maybe a few deaths…truly the pinnacle of compassion.

“he is putting NOTHING BACK into the community, just taking”.

You are uterly blind. First, he took nothing OUT of “the community” (whatever THAT is), so owes “the community” nothing back. He bought the property from an individual for value- he did not buy or otherwise “take” anything that was not his DUE, because it was paid for by HIS labor. He owed and owes all others in that (or any other) geographical location (that is, your “community”) exactly nothing. Anything he chooses to give would be a GIFT, not “putting back” what he “took”. More empty rhetoric.

“Great, he had no shoes. Did anyone ask whether or not that equals poverty where he grew up?”

OHHHHHHH, a realtivist! So the residents in his (I do emphasize HIS) building aren’t poor because most of them grew up in Latin America, and by Latin standards what they have here is alot? Or did they become poor when they crossed the border, even though their standard of living rose dramtically compared to where they came from? Which is it?

Mr. Mulugeta came to this country with ZIP. He put properties to more productive use (good for society) and made profits in so doing (good for him). THAT is wrong? Every society that has thought so lives in squalor punctuated by bloodbath. How compassionate.

“He has forgotten where he’s come from.”

Very unlikely and totally unsupported assertion. The same general opportunity he availed himself of is WHY his tenants are in the US. The opportunity comes with a cost- a free market. If you are unwilling to bear the cost, bye-bye to the opportunity. No profit, no wealth. No wealth, no compassion worth a thin dime.

“He isn’t doing the things Kiyosaki for example suggests - teach, and give back.”

Isn’t he? The article didn’t say. Statistically, he IS. The rich give FAR more to charity by any absolute or relative measure than do whining do-gooders…who do not create wealth with which to be compassionate. More hot air.

“And, I’d suspect his and his wife’s comments were completely insincere, nothing more than poorly disguised effort to divert the negative attention.”

Your suspicions are irrelevent, though they do betray your bias. I’ve been to South America, and a Peruvian probably has a FAR better grasp of poverty than you, presumably an American by birth, ever could.

“So, big deal, he’s made millions. That’s all he’s got in my opinion.”

You haven’t the facts upon which to form an opinion as to what he truly has or has not. Applied to society, your views are the distillation of raw evil. No free trade between consenting individuals- only coercion by all-knowing do-gooders in the name of permanent victims.

Likely outcome: The residents will find housing- probably at a higher price. That means suburban do-gooders ready to see our entrepeneur part with his millions will have to part with a few more dollars of their own for necessities such as fast food or gardners, while a slum is raised to the level of surrounding areas. And that’s just awful.

John Hyre

Re: Are you joking? - Posted by Mike PA

Posted by Mike PA on October 21, 2000 at 13:09:51:

It’s amazing why those who have become successful are bound by PC thought to never be giving enough back, or else they’re labeled as not remembering where they came from. Believe me, those that are successful know darn well where they’ve come from, it was the motivation they used to get to where they are…

Re: Are you joking? - Posted by JPiper

Posted by JPiper on October 21, 2000 at 10:00:46:

Sue:

One of the great things about our society is that nothing precludes YOU from taking actions that you find ?compassionate?. Just as the nuns offer their help to these ?working poor?, and the yuppie real estate agent drives up in her Mercedes to donate her time, so can YOU take whatever steps you would like to ?help? these working poor.

Other than your rhetoric however, one wonders just exactly what you would propose here. For instance, had you located this property yourself, and had sufficient resources to have bought it as Mr. Mulugeta did, perhaps you would have continued to provide a home for the ?working poor?. Perhaps that home would have included a single room with 6-7 occupants, just as it was when you bought it (a violation of ordinances in virtually EVERY area of this country). Or perhaps you would have upgraded the building WITHOUT rental increases to PAY for these upgrades, forking the money over out of your OWN pocket to HELP the working poor.

Or perhaps you would simply like to be in a position to REQUIRE Mr. Mulegeta to have YOUR particular set of beliefs regarding what is MORAL. Perhaps you would like to be Czar in charge of the living conditions in East Palo Alto and require property owners to comply with your directives. Or perhaps you would like to be in a position to APPOINT a Czar who would do your bidding.

My belief is that the distance between East Palo Alto and the Stone Ages or a Cave is VERY SHORT with the principles expressed in your post. Fortunately for East Palo Alto, Mr. Mulegeta is acting on a different set of beliefs. He?s attempting to make a profit?.the very thing that has brought the highest living standards in the world to the US.

What I would expect to see happen is that the building will be upgraded and/or changed in usuage. Rents will rise?.there are evidently those who are willing to pay. And if the local DO-GOODERS would make an attempt to REMOVE the rent control that evidently exists in the area, then MORE PROFIT SEEKERS might build more buildings to remove the existing blight and take advantage of HIGHER RENTS. Additional units would then serve to put PRESSURE on rents at some point in the future.

Then there?s the other possibility. What on earth will all those yuppies do without their gardeners and maids? Gee?.wonder if they?ll have to pay more to attract people to come from the areas that they have to move to, areas that they CAN afford?

But the FIRST step in ANY improvement or progress in our society is PROFIT. Replace that with COMPASSION and we?ll all be living in huts. Check your history.

JPiper

Re: Are you joking? - Posted by Hugh James

Posted by Hugh James on October 21, 2000 at 09:13:04:

Sue I share many, many of your feelings. And I don’t have the solution to what is a nationwide problem.

I live and work and invest in an area of Chicago where we have a similar situation. We don’t have the kind of value numbers mentioned in the article, but we’re close.

We have investors (speculators, really) who are buying and turning properties very quickly at exceptional profits. The vacant 25X110 lot that I sold 18 months ago for $23K (and happy to get it) is on the market at $125K today.

Our city government is spending billions to “rehab” the city with sewers, bridges, planter boxes, street lighting, etc., in most parts of the city. That’s the good news. The bad news is that property taxes in these areas are rising so rapidly (gotta pay for all this stuff) as gentrification moves forward, that landlords must raise rents substantially even on units not yet rehabbed for the yuppie crowd. (And no, I have nothing against yuppies.) The poor or lower income folks can’t afford it, and have to move. The landlord either sells to a rehabber or rehabs himself and raises rents even higher. (Or converts to a condo.) And the cycle continues.

As for the investor profiled in the WSJ, I can see his side too. On the one hand, I have a great deal of personal compassion on the folks having to move. (And, no, I would not allow 6 people in a studio apartment, period.) On the other hand, this property owner is not obligated to play the role of a one man public housing authority.

And, as I see it, at this point there is no happy middle ground. Like I said, I don’t have the solution. Wish I did.

So you’re not voting for Al Gore? (nt; lol) - Posted by HR

Posted by HR on October 23, 2000 at 07:29:18:

nt

Re: Start hating me now, 'cause I’ve had it - Posted by Ed S.

Posted by Ed S. on October 22, 2000 at 19:44:22:

The structure of your argument is interesting. On the surface, it might be compelling, but an analysis of its framework could also render it an obscenity.

Here’s an exercise. Substitute the word ‘black’ for ‘poor’ in your post, then reread it.

You’ll get a pretty good idea of how thought structure leads to ethnic and class condemnation.

The people you deal with, you take one at a time. Otherwise, you find yourself at the precipice of blanket dam/nations of classes of folks, whether or not they on an individual basis are deserving.

You are at such a precipice.

I wouldn’t call you cruel and heartless… - Posted by IB (NJ)

Posted by IB (NJ) on October 22, 2000 at 19:26:09:

but I would say that you are msinformed. It never ceases to amaze me how people are quick to point to other ‘less fortunate’ countries in their effort to justify while invalidating the existence of the poor. That argument is voided by the historical actions of this country and other ‘first world’ entities. Who do you think created the cambodias and Ethiopia’s of the world? Why does Aamerica give give give to the poor? Because in many instances it help create them. Give money to the poor to solve their problems? Absolutley not nor am I advocating giving them money! But we’re talking about a man who evicts people strictly for profit without offering any type of alternative housing for them and their children. Is it his responsibility to do so? Well that depends on who you ask? Uncle Sam or God?

Amen!!! - Posted by The Baze

Posted by The Baze on October 21, 2000 at 18:34:56:

John,

You have an incredible ability to speak w/ controlled passion that I’ve never been able to master. Although I mean every word you said, I could not have said it better, at least not w/out a few choice words that never would’ve gotten by the cencors. Absolutely brilliant. I know I don’t have to tell you which name to choose on Nov. 7. If all goes well, we’ll go back to rewarding hard work and risk taking rather than creating class envy and victims.

Tom Bazley

Re: Are you joking? - Posted by Ed S.

Posted by Ed S. on October 21, 2000 at 16:41:34:

There are and will always be moral and ethical implications in real estate investing. Particularly REI, I might add, for there are few other industries where the product is so closely tied with people in a fundamental philosophical sense.

As such, the standard capitalistic retorts to those implications will always sound disingenuous, and in many cases, they are, for it suggests that Mr. Piper’s interpretation of the profit motive and Mr. Mulugeta’s “if I can do it, anyone can” attitude provides succor to the impacted families’ immediate situations. An historical assessment of those notions have shown them to be fictional in the general case (but of course not necessarily in the specific case; there will always be rags-to-riches stories); Mr. Mulugeta’s conviction that he, by evicting families, is somehow forcing them to tap into a hidden inner strength, is sufficiently outrageous to require no comment by me, and Mr. Piper?s notion that the capitalistic imperative is solely responsible for our current living standards can be more simply explained as a world history aberration: a tiny nation in an empty hemisphere with enormous untapped resources would prosper no matter what the local governmental structure?-we were just first. And probably the last.

Back to ethics. As I said, one cannot be involved in REI without being involved in peoples? lives. Any attempt to separate the two brings up moral considerations. All capitalistic equivocations are bitter and ill-fitting. That is the spiritual cost of the business, a cost borne exclusively by the investor.

Sue, you provided an important point: ?Where would we be as investors if EVERYONE had to be an investor in order to find a place to live??

The answer is: nowhere.

The standard mantra of capitalism is, ?If you work smart and hard, you will be successful.? The following question is, ?How hard do I have to work?? The answer to that is, ?Harder and smarter than most of the folks around you.? Therein lies the moral conundrum, for when your success involves taking stock of the work ethics of your neighbors, then your success is less dependant on how hard you work than how little everyone else does!

If everybody worked like Mr. Mulugeta or Mr. Piper, both would have failed in their enterprises. That is the flip side of the capitalist imperative. No one wants to work harder than they have to to ensure success, thus the implicit marketing of mediocrity to everyone else makes only for a sound business, if not moral decision.

So it behooves those who are successful to carefully monitor the efforts of the masses; in a Jeffersonian sense, codify the opportunities for success, and at the same time, muddy the actual mechanics of it, for if too many do what you do, they will threaten what you?ve got. Promote Optimism, Blur Realism.

For those who have religious convictions, there are unavoidable questions to be addressed regarding sin. For others, there are still questions of basic right and wrong to make REI an interesting exercise in how well one sleeps at night.