WBEZ | Venture http://www.wbez.org/tags/venture Latest from WBEZ Chicago Public Radio en How to go ghost-hunting on a budget http://www.wbez.org/story/venture-how-go-ghost-hunting-budget-93614 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-October/2011-10-30/Halloween by fabbio CROPPED.jpg" alt="" /><p><p>Let's face it. Ghost-busting can be a budget-buster. For instance, if you want to get a recording of a ghost, any old recorder won’t do. The Olympus EVP recorder (that’s Electronic Voice Phenomena recorder) costs 80 bucks at ghoststop.com. Add another $250 for an EMF meter (Electro-Magnetic Field meter, natch) to pick up the fields ghosts generate, and tracking down ghosts is a lot of money--especially considering we might be more inclined toward believing in the paranormal when we have less money to spend.</p><p>“Based on income, [poorer] people are more likely to believe in the paranormal,” says Joseph Baker, a sociology professor at East Tennessee State University, who studies belief in the supernatural.</p><p>“We know this is true with ghosts, and we also know that in terms of higher levels of engagement—say, consulting a horoscope—lower income actually leads people to be more likely to do those things.”</p><p>Now, people with lots of money still believe in the paranormal. Baker says they just specialize. Rich people typically believe in one fringe-y thing—so if you're wealthy you’re more likely to be “that UFO guy” or “the chupacabra lady.”</p><p>Whereas, if you’re less well-off, according to Baker, “You’re much more likely to, as we say, ‘sample the supernatural buffet.’”</p><p>So, you’re broke, and you think you’ve got a ghost. How do you hunt it down?</p><p>There’s actually a book on just this subject. It’s called <em>Poor Man’s Paranormal</em>.&nbsp; We talked with the author, Joshua Warren.</p><p>“One of the simplest tools is a compass,” Warren says. “If it doesn’t point North, it’s being affected by some kind of magnetic interference, especially if it starts to spin in circles or do something else weird. So if you find that as you walk through your house, it deviates from North at certain places, you may have confirmation that this is your hot spot.”</p><p>So, it could mean you have a ghost.</p><p>It could also mean you have a magnet.</p><p>Warren has other tricks as well.&nbsp; “We know that when ghosts appear, there seems to be evidence of an electrostatic charge in the air,” he says, “and you can detect that simply enough by carrying around a fluorescent bulb in your hand, when it’s dark at night.”</p><p>If it lights up, you may have a ghost.</p><p>We decided to try it at one of Chicago’s most haunted locations:&nbsp; Hooters.</p><p>Our waitress, Erin, confirmed the rumors that the restaurant chain’s Near North Side location is haunted.</p><p>“It’s just little whisperings,” she says. “You’ll think that someone’s around, but you know that you’re down there and nobody else is around. You’ll be down there and you’ll think that there’s somebody down there and you’ll just talk a little. I really didn’t even know our Hooters was haunted. I found out from a customer. I was like, ‘Oh okay—my manager didn’t tell me that, but thank you.’”</p><p>To make sure we got the whole story, we brought an expert with us to Hooters: Ghost investigator—and tour guide for Chicago Unbelievable—Adam Selzer.</p><p>“In 1875, there was a group of grave robbers that used this space as kind of a hub,” Adam told us once we were seated. “So they’d dig up the bodies, put them in a barrel labeled poultry, and send them off.”</p><p>(And, we had just ordered chicken. Yeesh.)</p><p>Incidentally, working with Adam may be the most affordable of all the ghost-detection strategies we checked out. If your home—or breast-themed restaurant—is haunted, Adam, like many ghost hunters, doesn’t charge to investigate.</p><p>“Charging for things like that is considered tacky,” Adam said. “It’s like the people on TV saying, ‘Have you been injured in an accident? Call this number.’ In the paranormal researcher world, people who charge for investigations are generally considered scams. The most I can get out of it financially is I’ll have another story to tell on my tours.”</p><p>According to Adam, the cadaver dump wasn’t exactly in the restaurant.</p><p>It was closer to the alley behind the Hooters.</p><p>So the three of us went out back with our tools to check things out.</p><p>When we took out our fluorescent lightbulb, Adam said that even without an EVP recorder, we may have been overdoing it, equipment-wise.</p><p>“You can go ghost hunting with anything,” he said. “You could bring your electric toothbrush. If it turns on, you could say it’s a ghost.”</p><p>Ian’s compass started pointing North, so we asked Adam if that might be a sign something was happening.</p><p>As usual, his response didn’t exactly send shivers down our spines.</p><p>“I’m not a psychic,” he said. “But, no, I don’t feel anything.”</p><p>Then, he had a question for us: “You want me to lie?”</p><p>He doesn’t usually put this question to his clients, but he says it does cross his mind. “One thing I’ve learned is you make a lot more money if you tell people what they want to hear.”</p><p>He has to play it straight, though: “Everybody on the tour has a smart phone now,” he says. “They can fact-check me on these things!”</p><p>&nbsp;***</p><p>For this week’s Windy Indicator, we went to visit Lost Eras, a costume shop that has haunted the Rogers Park neighborhood for decades—and where Halloween provides a bright spot in a dark and scary economy.</p><p>“This shop has been in my family for about forty years,” says owner Charlotte Walters.&nbsp; Lost Eras also sells antiques and rents costumes and props to local theater productions.</p><p>The theater trade—and the rep that comes with it—brings in Halloween customers too. “When people want really legitimate clothing, and costumes,” says Walters, “like if they want to look like Lestat from Interview with a Vampire, or they want Scarlett O’Hara—they come here to rent the same costumes the theaters rent.”</p><p>For most of the year, rentals to theaters are the shop’s bread and butter.&nbsp; But a lot of theaters have had a tough few years, and there’s been less bread.</p><p>So Halloween becomes especially important, and Walters says that part of her business has been holding steady, with customers coming in to pick out costumes as early as September first.&nbsp;&nbsp; “The job pressures and economic pressures have been so hard on people, they can’t wait to party on Halloween,” she says with a laugh.</p><p>And Walters has been giving her customers some incentives to keep renting their getups from Lost Eras.&nbsp; “We’ve extended the period of time they can have the costume,” she says.&nbsp; “Instead of charging for one or two days, we’ll let ‘em take it for four or five days, so they can at least wear the costume for at least two parties. Or three parties.”</p><p>Walters herself plans to hit as many as five parties—dressed as a gothic witch.</p></p> Mon, 31 Oct 2011 01:39:00 -0500 http://www.wbez.org/story/venture-how-go-ghost-hunting-budget-93614 United Airline's move downtown leaves suburban land behind http://www.wbez.org/story/united-airlines-move-downtown-leaves-suburban-land-behind-92139 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-September/2011-09-19/photo.JPG" alt="" /><p><p>Anyone trying to sell a home these days has to have an iron stomach and a philosophical attitude. But if you think selling a house is hard, try unloading more than 60 acres. United Airlines has had a plot of land in the northwest suburbs on the market for two years,&nbsp; even though it's prime property in Cook County, where that much space is hard to come by.</p><p>Imagine the advertisement: For sale: 66-acres of land. A million square feet of office space. Close to O'Hare Airport and major highway. Three thousand parking spaces. Loads of green space. Equipped with tennis courts and a pond with one of those little fountains in the middle. Open to redevelopment. And no municipal taxes.</p><p>Okay, that's not an actual real estate ad,&nbsp; but it is a real piece of property. And the Cook County assessor's office says it's the biggest chunk of non-farm land available in Cook County.</p><p>The owner is United Airlines. It's been trying to find a buyer for its massive corporate open space and buildings for two years, as it's been relocating employees to Chicago. As the land sits unsold and pretty much unused, the site may be a cautionary tale about the changing nature of what corporations want.</p><p>SCHULER: These old campuses that have been built. I mean, people work differently today.</p><p>Fred Schuler is with the commercial real estate firm Jones Lang LaSalle. He's a guy who follows how businesses are organized.</p><p>SCHULER: They're working in more efficient layouts. They're going from one window office to one secretary to, you know, open, lots of light in a cubed environment. You know, much more communication.</p><p>United is a client of Schuler's firm and neither United nor Schuler wanted to talk directly about the sale. But Schuler was quick to point out that downtown relocation is not the only trend for companies.</p><p>ARNOLD: We're not writing the obituary on the corporate campus any time soon, then?<br> SCHULER: No, not at all. You know, I was just looking at a list of tenants in the market and the ones that are maybe moving from suburbs to downtown get a ton of publicity, but what happens is, corporations out in the suburbs are asking us to put them in a more efficient environment and cost-effective environment.</p><p>Schuler says transportation, parking, environmentally friendly settings are now the priorities when companies think about their work spaces. And offices are more compact than they used to be. As companies constrict, more space is available for lease.</p><p>Earlier this year, Jones Lang LaSalle calculated almost 17 percent of office space is vacant in downtown Chicago. In the suburbs, they found 25 percent of office space not occupied. And there could be more open space coming. Other companies with big suburban campuses are showing signs of itchy feet.</p><p>Motorola Solutions just expanded from its Schaumburg base to some new office space in the Loop. Sara Lee has reportedly thought about leaving Downers Grove. And Sears has also reportedly been thinking of leaving its 200-acre campus - and Illinois - altogether.</p><p>So in this climate of change, who might be seeing United's space as a real value? Well, if you're a land-locked village with little room to grow, 66 acres is an attractive chunk of land. Enter the Village of Mount Prospect. Bill Cooney is in charge of community development for the village, which rubs up against the United property but doesn't include it. Cooney says the village has wanted the land for decades and now has its shot at controlling what happens there.</p><p>COONEY: When I say control, I'm really talking more about if someone comes along and wants to propose a very large housing development or amusement park; something outside of the boundaries of what we're really looking for.</p><p>Cooney says he doesn't want those houses or amusement parks. But he would welcome a developer who'd bring in a shopping mall or other corporate venture. That way, if the village got the land it could collect the taxes from it. There's just one tiny, little issue. The land is just barely too big for Mount Prospect to simply absorb. Six acres too big. If it were&nbsp; six acres smaller, Mount Prospect could just annex the land. But as it is, it has to reach an agreement with the next owner to make the land part of Mount Prospect.</p><p>Still, Cooney sees it as the village's big moment. But it's a waiting game.</p><p>COONEY: Since this property's been on the market, I've had very few calls on it. It's a combination of the cost and the size and primarily because of the economy.</p><p>That might be a note of warning for other towns with large corporate campuses. And while Mount Prospect sees a big possible win in redevelopment of the United land, Mike Nelson is gearing up to accept a loss. Nelson's a big, tall guy, with a graying Hulk Hogan mustache. He's the fire chief of Elk Grove Township, and he can see the United campus from his office across the street. His firefighters, 15 full time and 25 part time, have been taking care of United's campus in unincorporated Elk Grove Township for years. But that would change if the land is annexed by Mount Prospect; its fire department would be in charge.</p><p>NELSON: I don't see where it's going to happen today, but I'm sure within the next five to 10 years where this is going to wind up being taken in by the village.</p><p>Nelson says he wants the United land to be used eventually. But he's okay with it if the phones don't ring on the big sale for a little while.</p><p>For this week's windy indicator, we went underground, to the State and Lake subway platform on Chicago's Red Line, to hear what the economy looks like to people who have worked there through good times and bad.</p><p>Almost 20 years ago, Joseph Ellison's friends egged him on to bring his guitar to the subway during his lunch hour. He came back upstairs with 80 dollars in his hand, walked into his boss's office and quit.</p><p>ELLISON: I think the economy is really doing bad. I watch everything. We see everything out here.&nbsp; We can tell who's doing well, who's not doing well, who's overspending.</p><p>Ron Christian has been Joseph's musical partner since 1992.</p><p>CHRISTIAN: The way the economy is now, it's hurting everywhere. I used to come down here and make a nice amount of money. People are generous, they just don't have the money to do it. If you have a good talent, you might just get by. I sing with two orchestras, and I'm in a band, so I'm working all the time. I do this full-time, this is my living.&nbsp;</p><p>ELLISON: I believe music has a healing power in it. We're like the doctor. It's not us--it's the music, the lord. Here, I'll show you…</p><p>John Joe:&nbsp; How about Otis Redding?&nbsp; Otis.&nbsp; That's how strong my love is.</p><p>JOE: I"ve never done that before. I just wanted to hear some Otis Redding. They're working hard, they earn every dollar they get. I'm a musician, so I know how hard it is to do that.</p><p>John plays funk and R&amp;B at clubs like Buddy Guy's Legends, but today he's on his way home from school. He's studying to be an X-ray technician.</p><p>JOE:&nbsp; I've got three kids.&nbsp; I'm doing my future for them.</p></p> Mon, 19 Sep 2011 10:00:00 -0500 http://www.wbez.org/story/united-airlines-move-downtown-leaves-suburban-land-behind-92139 Venture: Can you make a living selling handmade crafts online? http://www.wbez.org/story/venture-can-you-make-living-selling-handmade-crafts-online-91158 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-August/2011-08-28/IMG_4616.JPG" alt="" /><p><p><audio class="mejs mediaelement-formatter-identified-1332483670-1" src="http://llnw.wbez.org/story/insert-image/2011-august/2011-08-29/ventrure-110829-ks.mp3">&nbsp;</audio></p><p>With about one in 10 workers unemployed, people are getting creative as they try to make ends meet. Some are turning to a website called <a href="http://www.etsy.com/">Etsy</a> -- kind of an Amazon.com for artists and crafters to sell their handiwork. But a question lingers over this online craft fair: Can you turn Etsy into a viable career path?&nbsp;</p><p>Maybe you're into building children's furniture, sculpting coffee mugs, or crafting fine jewelry. As long as it's handmade, you can sell it on Etsy.</p><p>And a lot of people do: The online craft marketplace has more than 800,000 "shops" according to its website and sales have gone from $30 million in 2007 to $225 million in the first half of this year.</p><p>The site was started in 2005 by a Brooklyn carpenter and artist who tapped into a growing mood for simpler times and handmade products, and figured lots of Internet shoppers would attract craftspeople.</p><p>People like photographer Rebecca Plotnick. Plotnick is a regular at Chicago's Green City farmer's market.</p><p>On Saturday mornings she finds inspiration in piles of purple eggplants and bundles of sunflowers. Plotnick started her photography business on Etsy in 2007, a year after she lost her job at the high-end clothing retailer Chinese Laundry.</p><p>"I started out on this path, thinking I'm going to graduate from college, get a job, I've got health insurance and I'm just going to continue on that way," Plotnick said. "I never expected that I would have this change of lifestyle."</p><p>And her first year wasn't encouraging.&nbsp; Plotnick made $1,000 from her Etsy storefront. The way Etsy works is a crafter posts photos and descriptions of the product-each time you do, you pay Etsy 20 cents. Each time you make a sale, the company gets 3 and a half percent.</p><p>So at first, even with a nanny job and unemployment benefits, Plotnick had to cut costs.</p><p>"My friends made fun of me because I ate peanut butter and jelly like every day," she said. "It's not like I can go to Nordstrom and have a shopping spree."</p><p>Then last year, Plotnick took a leap: She took off for Europe to wander streets with her camera, snapping photos of antique bicycles and cobblestone alleyways. Turns out, Paris sells. This year, Plotnick counts her sales to be on track for $20,000.</p><p>"It's not any different than any other business," said Rosalind Paige, a marketing professor at the University of South Carolina Upstate.&nbsp; She's been studying craft markets for decades and said Plotnick's experience is pretty common.</p><p>"When you could be unemployed or at risk of losing your job, or losing your benefits, your retirement, you begin to think more creatively," Paige said. "The Internet isn't going to go anywhere and more and more people are looking at it for avenues of supplemental and even primary revenue right now."</p><p>Megan Lee left her nine-to-five graphic design job in 2007, and took her chances on Etsy, with Megan Lee Designs.</p><p>In her basement, Lee pulled a wood and rubber bar across a screen. She was printing a picture of three dachshunds riding bicycles onto a t-shirt.&nbsp; Lee spends seven days a week screen printing her designs on t-shirts, tote bags and even onesies for infants.</p><p>Her first year on Etsy, Lee said she made about $25,000 in sales. This year she said she's on track to bring in $100,000.</p><p>By the time she pours money back into apparel, paint and craft shows fees, though she ends up with about half of that in profits.</p><p>"So many people will say, 'Oh, you won't make a profit in the first two, three years,'" Lee said. "And I was like, 'I'm going to have to make a profit before that, because that's not going to work for me!'"</p><p>Sellers like Lee are good news for Etsy because the site makes most of its money from crafters' sales. Anupam Palit is a financial analyst at Green Crest Capital in New York who covers Etsy. He said the company has more handmade crafts listed online than eBay, Artfire, Amazon and buy.com combined.</p><p>"It's certainly a lot smaller than your Amazon and eBays of the world," said Palit. "But that's probably mostly a function of the fact that they've decided to focus on this one niche."</p><p>Still, the number of active shops has more than doubled annually,&nbsp; from 150,000 in 2009 to the 800,000 now. And Palit said such growth can have a downside for sellers.</p><p>"In order to attract buyers, you need to have a lot of stores. People want to go to a place with a lot of selections," Palit said. "Of course, that cuts two ways. The other side of things is that, you're competing with a lot of other stores."</p><p>Etsy spokesman Adam Brown said the company's goal is to increase the number of buyers per seller. Theoretically, that would mean each shop owner would make more money. The company won't say what a typical income is, but researcher Palit insists even Plotnick's $20,000 is way above an Etsy average.</p><p>"Etsy's intended to be a platform and we're certainly not saying you can come here and be a millionaire," Brown said. "Some people are running full-time businesses on Etsy and we're doing our best to support them."</p><p>In spite of all the competition, Plotnick and Lee both say even if corporate jobs were available, as long as they can make some kind of living, they'd like to avoid returning to a more traditional workplace.</p></p> Mon, 29 Aug 2011 10:00:00 -0500 http://www.wbez.org/story/venture-can-you-make-living-selling-handmade-crafts-online-91158 Venture: Does venture capital help - or hurt - a business? http://www.wbez.org/content/venture-does-venture-capital-help-or-hurt-business <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-July/2011-07-25/Jason Freed_WBEZ_Ashley Gross.jpg" alt="" /><p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2011-July/2011-07-25/Jason Freed_WBEZ_Ashley Gross.jpg" style="width: 500px; height: 281px; margin: 5px;" title="Jason Fried, founder of Chicago-based software company 37Signals. (WBEZ/Ashley Gross)"></p><p>This week, engineers and entrepreneurs are converging at TechWeek – a showcase of Chicago’s burgeoning tech scene.</p><p>Many startups hope to entice investors to plunk money into their ideas. But one Chicago software executive says getting venture capital is exactly the wrong thing to do when starting a business.</p><p>Venture capitalists have money to burn these days and they’re racing to get a slice of the next Facebook or Twitter. But there’s a guy with a successful software business in the West Loop who says “Just say no.”</p><p>TAPE (buzzer sound): 37Signals.</p><p>GROSS: Oh hi, this is Ashley Gross here to see Jason Fried.</p><p>Jason Fried and two others started a company called 37Signals in 1999, just as the last Internet bubble was cresting. They each put in $10,000, but they never needed that money because they landed customers right away.</p><p>Once they started to get some success, he got so many emails from venture capitalists he said they started to seem like those scam emails promising to wire a million dollars to your account. He said thanks, but no thanks, and now he’s kind of an evangelist against venture capital. He’s even started a series of company profiles on the 37Signals blog called Bootstrapped, Profitable and Proud.</p><p>I asked him what’s so wrong with venture capital.</p><p>FRIED: I’m mostly opposed to it upfront. So most people don't go out and raise money, but in the tech world a lot of people do. The first thing they do is think about how to raise money right when they're starting, and I think that's the wrong time to do anything like that. Ultimately, I'm not opposed to taking investment way down the road if you're profitable and you want to do something else, but that's a different scenario than when you're first starting. The reason why it's bad when you first start is that it takes certain pressures off you, which sounds like a good thing but it's not a good thing if you're trying to build a business. And the pressure it's taking off you is the need to have to make money. If you don't have to make money, then you don't have to make decisions that matter about making great product, and treating your customers well because you have someone else's money to spend. I think you want to have no money in the bank and in some ways feel desperate and feel like you have to be scrappy in order to start making your own money.</p><p>GROSS: And you had told me that it makes companies feel like they have to grow really fast, right?</p><p>FRIED: Yes, especially in the tech world, which is what most of these companies are. There are pretty much no costs to entering the business anymore. You need an Internet connection, you need some computers, you don't need an office, you don't need a lot. So what you can spend money on is one of two things - marketing, which you don't have when you don't have a product to market yet. And the other one is hiring, because people will be the most expensive thing you'll ever have, probably. Occasionally you'll have a big expense, but mostly your salaries are what's expensive. So when you have a million bucks in the bank, if you only hire two people, what are you doing with the money? So you've got to spend that money, that's what it's there for. It's there to spend. And they want you to spend it because they want you to come back for more. Very, very few companies have one round of funding. It's like they get addicted to it and have to come back for more, and the VCs want you to spend it, and hiring is a great way to spend money. And again, I think the wrong thing to do upfront is to have too many people working on a problem. You want to have fewer people working on a problem upfront, so you can be as efficient as possible and creative. When you have all the resources in the world and all the people in the world, things slow down, they don't get faster. And you don't come up with better solutions, you come up with worse solutions that are more complicated, more complex, and those again are the wrong forces, especially early on.</p><p>So, venture capitalists of the world, defend yourselves. I called up a veteran of the VC world, Matt McCall, to speak on their behalf. McCall is a partner with New World Ventures, which is controlled by members of the Pritzker family.</p><p>He says venture capitalists help companies in a number of ways, including:</p><p>MCCALL: Capital, external validation, a very large Rolodex.</p><p>For example, getting the stamp of approval from New World Ventures can help grease the wheels for a brand-new company.</p><p>MCCALL: One of our companies right now proudly touts – he goes into close deals and they say who’s your backer and he says the Pritzker family. It brings instant credibility. They kind of check off the box, okay, financial stability, don’t need to worry about that.</p><p>And McCall says he can help businesspeople avoid mistakes because he’s witnessed a lot of companies implode.<br> Jason Fried of 37Signals says yeah, definitely, that advice and those connections can be valuable.</p><p>FRIED: But you have to think about how valuable is it in comparison to what you’re giving up. There’s lots of valuable things, but is it worth 30 percent of your company? Is that advice or connections? Maybe they are. There’s certainly some incredibly smart people in that world, but I’m sure there are quite a few others and I know there are because I’ve heard many stories of this – of them giving the money and the advice is not very good at all. And it’s clear their advice is just being positioned to sell something, to build something to a point to sell it, not to make something great for customers who are using it.</p><p>Fried says he still gets emails from venture capitalists eager to invest in 37Signals. &nbsp;</p><p>Instead of accepting, he turns around and makes jokes. Two years ago, he put out a fake press release saying 37Signals was now worth more than $100 billion after an investor bought 0.000000001% of the company for a dollar.</p><p>He says he’s happy to just focus on making profits and skip the investment bubble altogether.</p><p>And now for this week’s Windy Indicator.</p><p>That’s where we veer off the main roads on to the side streets of the economy</p><p>Today — The Neighborhood Bike Shop.</p><p>AMBI: he’s looking for a bike...</p><p>Lesley Tweedie wasn’t really sure what they were getting into when she and her husband Alex opened Roscoe Village Bikes in 2007.</p><p>Turns out…</p><p>TWEEDIE: The bicycle business tends to be a little bit recession proof.&nbsp; The bad economy actually inspires people to ride.</p><p>Revenues reflect that. Tweedie says business has gone up each year since they opened … and still seems to be increasing.</p><p>She counts competitive bikers, commuters and families with kids among those riders ... and shoppers.</p><p>AMBI: Kids playing with bells; phone ringing</p><p>Though her bike shop is thriving, Tweedie says that some of her customers are feeling a financial the pinch.</p><p>TWEEDIE: I would say at least once a week if not everyday someone says they’d like to get a new helmet or replace a lock but they need to wait a little bit.</p><p>The bike shop isn’t selling as many high-end, fancy road bikes this season.</p><p>TWEEDIE: “A lot of our customers do come in with used bikes or old vintage things, then we tune them up and get them working as well as they can.”</p><p>Tweedie says her tune-ups and repairs are up 20 percent compared with last June -- a sign that more people are updating instead of upgrading.</p><p>AMBI: Customers: Like a thumbs up good? so is this the one we’re going to go with? Like walking out with it right now? Okay!”</p><p>Next week, the Windy Indicator gets a stitch in time.</p></p> Mon, 25 Jul 2011 05:01:00 -0500 http://www.wbez.org/content/venture-does-venture-capital-help-or-hurt-business Venture: Is the buyer's market buyer-friendly? http://www.wbez.org/story/venture-buyers-market-buyer-friendly-89183 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-July/2011-07-14/IMG_0125.JPG" alt="" /><p><p>Home prices and interest rates are still low compared to where the market was before it crashed at the end of 2008.&nbsp;It’s created opportunity for new buyers, and buyers who are looking to resell a property for a quick profit.</p><p>My husband Demian and I are packing up our apartment. We’re getting ready to close on our first home any day now.</p><p>Buying wasn’t in our plans a year ago, but we got a little nudge&nbsp;after our landlord swore at us for wanting our water heater fixed.&nbsp;Plus, we kept hearing about how this was the time to buy: low home prices, low interest rates, a buyer’s market.</p><p>Five offers and more than 3 months later, we finally found our house.&nbsp;It’s a 100-year-old Victorian-style&nbsp;in the Avondale neighborhood on Chicago’s Northwest side. It's got a beautiful magnolia tree in the backyard, three bedrooms and 1.75 baths. The 0.25 is a toilet in the basement.</p><p>The packing’s on schedule, but then, just days before our scheduled closing, Demian gets a call. &nbsp;Our loan specialist tells him the closing’s postponed, indefinitely.</p><p>"The short version of it is they do have to get another appraisal," Demian tells me.</p><p>Now, delayed closings aren’t uncommon.&nbsp; But what’s delaying us is how we’re purchasing this house. When we put an offer on the property, it was listed as a short sale for $240,000.</p><p>A short sale can happen when an owner is coming up short on their mortgage loan and can’t pay the bank. Instead of foreclosing, the bank allows the owner to sell at a moderate loss. That hurts his credit less than a foreclosure would.&nbsp;Through a short sale, a buyer can get a house for a below market price, but it can take the bank months to take any action on the buyer's bid. Unless a cash offer comes in.</p><p>Our offer was up against five others including a bid from a cash investor. The bank accepted that investor’s bid.</p><p>"Cash investor is taking precedence here," says Mabel Guzman, president of the Chicago Realtors Association.</p><p>She says this isn't unusual.</p><p>"I worked with a client. We went through 5 separate offers to get to one that actually worked. He was competing really against cash investors," she says.</p><p>Banks like cash because it’s secure.&nbsp;Guzman says based on recent real estate data, 20 to 25 percent of transactions in Chicago are cash deals.</p><p>In our case, before the cash investor officially closed on the house, she asked us other bidders for our best offer. She accepted ours with lots of conditions.&nbsp;She wouldn’t make any improvements to the house. We couldn’t negotiate down price even if we found problems in the inspection.</p><p>"That’s what we call flopping," Guzman says.</p><p>Because we’re buying from the investor, we skip the typical slowness of the short sale transaction, but now we’re paying a higher price.</p><p>"I’m surprised the bank isn’t stepping in and saying you can’t do that. To my understanding in many states they have anti-flopping rules where you just buy it and get someone in place to sell it again," she says.</p><p>What she calls flopping, the U.S. Department of Housing and Urban Development calls flipping. In fact, it has an anti-flipping policy that forbids the resale of a property within 90 days of acquisition. The purpose is to prevent the rapid escalation of the price of a home. Turns out, HUD's waived its anti-flipping policy for some transactions this year to help move distressed properties through the market more quickly.</p><p>So here we are: the cash investor we’re now buying from never lived in the house and owned it less than three weeks before we took possession. But because she paid cash and we had to buy from her, we ended up paying an inflated price.</p><p>"Well, for one, I wouldn’t say inflated. Look, in terms of your neighborhood grocery store. They buy a gallon of milk at a discount," says Steve Smullin, a commercial investment real estate broker.</p><p>I asked him to explain these transactions from an investor's viewpoint. ASKED HIM TO EXPLAIN THESE TRANSACTIONS FROM AN INVESTOR’S VIEWPOINT.</p><p>"Now, is the grocery store an investor? They’re really just a middle man. Somebody who has bought something with the expectation of selling it to somebody else at a profit," he says.</p><p>Smullin says buyers don’t need to concern themselves with who they’re buying from. They just need to make sure the house doesn’t come with baggage.</p><p>"Other people’s business is other people’s business. Your ultimate concern is that you’re buying a piece of property that is not going to fall into a deep hole," he says.</p><p>After the closing stalled, Demian and I didn't know if we'd ever get the house. We put out an emergency conference call to our realtor and attorney.</p><p>At this point, we’ve already wired our 20 percent down payment which happens to be the majority of our savings. We know our money is theoretically safe, but it still puts knots in our stomachs to see the huge plunge in the bank statement.</p><p>"The nuances of this are incredibly frustrating for you guys," says our lawyer Matt Albrecht.</p><p>We discuss the possibility of starting the process all over again with another mortgage company, and the chance that more offers could still come in from other buyers.</p><p>That's because once our closing date is delayed, the investor has the contractual right to put the house back on the market while we’re working out the technicalities.</p><p>"If someone came in with 285 cash, I’m going to be rude here. If someone came in for 270 cash, they’d probably kick us out," he says.</p><p>Demian and I frantically make a list of people we could stay with if the house falls through. Our landlord certainly wasn’t going to let us stay. But before we could even come up with plan B, the roller coaster takes another lurch, and we’re suddenly cleared to close.</p><p>A day later, we’re doing our final walk through of the house with our realtor Jayne Alofs, making sure things are as we saw them when we put our original offer down.</p><p>Alofs tells us three viewings had been scheduled for the few days the house was back on the market. But not to worry, they were all canceled.</p><p>Now, the house is finally ours.</p><p>"I brought some salt because when you get into a new house, to take all the bad spirits and leave only the good ones for your happiness, we go in and we throw salt," says Susan Kogan.</p><p>That’s my mother-in-law bringing us a few home essentials and some good luck as we get started on painting the house.</p><p>By the way, we ended up buying our house for $285,000. The previous residents bought the house in 2005 for $380,000. Sounds like a bargain, until we found out the cash investor got it for $160,000.</p><p>"Through chaos there’s a lot of opportunity for folks," Guzman says.</p><p>Mabel Guzman with Chicago Realtors means opportunity for people like the investor we ended up buying from. But she also means us; people who couldn't have entered the market a few years ago when prices were much higher.</p><p>So in spite of the home-buying rollercoaster, I think we made a good investment. And best of all, we feel right at home.</p></p> Mon, 18 Jul 2011 10:00:00 -0500 http://www.wbez.org/story/venture-buyers-market-buyer-friendly-89183 Venture: How 'going green' can bring businesses into the black http://www.wbez.org/story/venture-climate-capitalist-says-going-green-brings-businesses-black-86236 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-May/2011-05-09/CityHallGreenRoof.jpg" alt="" /><p><p>Retail sales numbers come out on Thursday, and that will provide clues as to how consumers are feeling, especially with high prices at the pump.</p><p>Lots of businesses these days are counting on people's desire to protect the environment.</p><p>At this weekend's Green Festival at McCormick Place, everything from hemp pet toys to fair trade chocolate will be for sale.</p><p>But there's more to protecting the environment than buying certain products... companies have to fundamentally change how they do business.</p><p>Hunter Lovins says they can do that and boost profits at the same time. She's a Colorado-based consultant who will talk about that at the festival.</p><p>WBEZ's Katie O'Brien spoke with her and first, had to get one question out of the way.</p><p>For this week’s <em>Windy Indicator</em>, WBEZ’s Erica Hunter is looking outside the box for hints on the economy.</p><p>The start of May is one of those times Chicagoans are surrounded by boxes; moving boxes, that is. Pete Horvath is the owner of <a href="http://www.move-tastic.com/about/">Move-tastic Moving Company</a> on Chicago’s North Side and he said his trucks and movers have kept busy this moving season.</p><p>“We have been overwhelmed with the amount of business. We turn away the majority of our business towards the end of the month. Nowadays we’re typically booking up two to three weeks in advance.” Horvath said.</p><p>But he says his company’s experience may not be typical.</p><p>“Not every moving company is doing well right now,” Horvath said. “It’s tough to run a business right now, so I think the people that aren’t adapting to what people want are the ones that are having difficulty.”</p><p>And what people want is service Horvath said.&nbsp; And boy are his guys fast.</p><p>Sometimes people are so stressed they don’t even think about tipping, but Horvath remained patient.</p><p>“We never bring it up on a move,” he said. “That’s rule number one. You never say, so where’s my tip?”</p><p>But on busy May 1st, for instance, he got tipped for every move. Horvath said he’s a schmoozer.</p><p>Next week, our <em>Windy Indicator</em> gets formal and takes a peek at proms.</p></p> Mon, 09 May 2011 12:37:00 -0500 http://www.wbez.org/story/venture-climate-capitalist-says-going-green-brings-businesses-black-86236 Venture: The mistress of metal http://www.wbez.org/story/business/venture-mistress-metal <img typeof="foaf:Image" src="http://llnw.wbez.org/IMG_3542.JPG" alt="" /><p><p>Here on Venture, we'll trek out into the business world to hunt up people who can tell us more about the economy than the numbers alone.<br> &nbsp;<br> Every week, the economic news cascades over us like a waterfall of numbers - housing starts, consumer confidence, jobless claims. It's easy to tune them out.<br> <br> But all those numbers signify someone's livelihood, someone's home, someone's wallet. That someone is us. We want to get insight into the health of the economy by exploring how people all around us are experiencing it.<br> <br> This week, we'll get data on the manufacturing sector.&nbsp; Someone in the Chicago area who knows a lot about manufacturing is Marsha Serlin.<br> <br> Back in 1978, she was stuck in a situation a lot of people face these days - she was newly divorced with two kids, staring at foreclosure. She needed to make some money.&nbsp;So when she saw a neighbor with a truck picking up scrap metal in alleys, she had a flash of inspiration.<br> &nbsp;<br> "I was strong, I was young and I said, you know, I can do this," Serlin said. "I said, if he can do it, I can do it."<br> &nbsp;<br> She didn't let her lack of knowledge stand in the way. She just started asking other scrap collectors for tips.<br> &nbsp;<br> "I said what about all that material, where do you get it?" Serlin said. "And they said, 'It comes from factories.' So I started knocking on doors. I was driving the truck in the beginning and then I had to hire people to do that and lo and behold, I had a fleet of trucks."<br> &nbsp;<br> Now she wears a bubblegum pink hardhat and oversees a scrap empire in Cicero that stretches over 38 acres. United Scrap Metal’s annual revenue is about $200 million.&nbsp; It’s a noisy place. There are gigantic sorting machines that Serlin describes as straight out of Willy Wonka.<br> &nbsp;<br> Outside she stops in front of a mountain of metal that includes remnants of old Coca Cola vending machines.&nbsp; From these scrap piles, she has a unique perspective on the economy. Serlin can tell if the country’s factories are humming or dead,&nbsp; based on how much metal they buy from her.<br> &nbsp;<br> That’s the kind of savvy that can help us make sense of this week’s manufacturing numbers, which have been showing some improvement lately.&nbsp;She says the industry is clawing its way out of a deep hole:</p><p><audio class="mejs mediaelement-formatter-identified-1332483413-1" src="http://llnw.wbez.org/story/insert-image/2011-march/2011-03-10/venture-scrap-seg-1.mp3">&nbsp;</audio></p><p>Marsha Serlin's business is now one of the largest scrap recyclers in the country. I wanted to know what gave her the drive and business savvy to go from picking up scrap in alleys to running a multi-million dollar company.</p><p><audio class="mejs mediaelement-formatter-identified-1332483413-1" src="http://llnw.wbez.org/story/insert-image/2011-march/2011-03-10/venture-scrap-seg-2.mp3">&nbsp;</audio></p><p>From scrap yards to tattoos...</p><p>Tattoos are this week's Windy Indicator, where we search the Windy City's nooks and crannies for a read on the wider economy.</p><p>Even on a recent snowy day, customers stream into Tatu Tattoo in Wicker Park. Marci&nbsp;Mundo is the manager. She says business has slowed down since the recession hit, but they've adapted as their customers have scaled back:</p><p><audio class="mejs mediaelement-formatter-identified-1332483413-1" src="http://llnw.wbez.org/story/insert-image/2011-march/2011-03-10/venture-tattoo.mp3">&nbsp;</audio></p><p>Check back in with us next Monday for another installment of Venture. We'll meet an artist who's become an accidental real estate mogul and then head over for a good old-fashioned shoeshine.</p></p> Mon, 14 Mar 2011 05:01:00 -0500 http://www.wbez.org/story/business/venture-mistress-metal