SEE: Mortgage Basics

The Foreclosure Nightmare

The ugly threat of foreclosure lurks in the minds of many homeowners. Sometimes unanticipated financial troubles, like losing a job, high medical bills, divorce or a death in the family can affect a homeowner’s ability to make his or her mortgage payments. Foreclosure occurs when you fall behind in your mortgage payments, thus authorizing your lender to repossess your property.

In some cases, the property is worth less than the total amount owed to the lender. This may complicate things, as it allows your lender to pursue a deficiency judgment, which represents the difference between the sold price of the property and the amount owed to the lender. If this happens, not only will you lose your home, but you will also be forced to fork out additional money to pay the lender. For instance, if your house is worth $200,000 at the time that a foreclosure occurs and you owe $220,000 to your lending company, a deficiency judgment of payment of $20,000 to your lender can totally knock you out.

Worst of all, foreclosures and deficiency judgments will usually have a negative influence on your credit score. A foreclosure stays put on your credit report for about seven to 10 years and will imply to other future lenders that you are a high risk borrower. This will make it more difficult for you to get a mortgage – or any other loan – in the future. (For more insight, read Consumer Credit Report: What’s On It.)

Preventing Foreclosure

The moment you receive foreclosure notice, the first thing to do is to contact your lender’s Loss Mitigation Department and let them know about your monetary problems and situation. If necessary, take along your personal financial statements/documents and explain your insufficient income and rising living expenses.

Get in touch with your local government-approved housing counseling agency. It will provide free information about the list of organizations ready to bail you out when the bank is threatening to foreclose.

That said, some of the best ways to prevent foreclosure start before you even receive your initial notice. It is never too late to start keeping an eye on your extravagant monthly expenses and begin following a tighter budget. The extra savings from a less expensive lifestyle will allow you to create an emergency mortgage fund that you can tap into if you run into problems down the road. Having a minimum savings of six to eight months’ earnings should give you a reasonable amount of slack until you can improve your financial situation. (To learn more, read Build Yourself An Emergency Fund.)

If the need arises, take the help of your local foreclosure service provider or loss mitigation consultant, provided you have made enough inquiries regarding the legitimacy of these organizations.

Beware of Foreclosure Scams

Unfortunately, there are a number fraudulent foreclosure-related companies ready to jump on you and prey on your unfortunate financial circumstances. The looming risk of foreclosure makes you susceptible to these foreclosure predators. These bogus companies may call themselves “foreclosure consultants” or “foreclosure specialists”. Before opting for any of these companies, make sure you take a close look at their credentials and business reputations by checking them out at sources such as the U.S. Department of Housing and Urban Development.

How do these foreclosure scam-artists find you? It’s rather simple. When your lender files your foreclosure notice with the public trustee, your community is alerted about it through the foreclosure listing in your local newspaper. Soon, phone calls, mail and people from these companies start hounding you.

There are many methods used by these fake companies to swindle homeowners. Let’s go through the tricks that you need to be aware of in case of a foreclosure:

1 Equity Skimming

In this scenario, a person who calls himself a buyer stops at your door and convinces you to sell your property to him (usually for less than market value) and promises to pay off your mortgage. The buyer is likely to advise you to transfer the deed of the property to him, move out of the house and stop interacting with your mortgage lender. The buyer will then rent out your property to a third party and start collecting monthly rental payments. Unfortunately, the buyer will make no effort to pay the mortgage payments, thereby allowing the lender to foreclose on your property. The skimming aspect comes into effect if you have a reasonable amount of equity in your property; the scammer will flip the property to pay off the debt and then make a profit by keeping the equity. Remember: signing a deed over to a third party does not relieve you from your mortgage obligations.

2 Equity Stripping

In an equity-stripping scam, an unscrupulous mortgage lender will come to you with an offer to get you a loan; this person is usually aware of your poor financial condition. The lender pushes you to exaggerate your income on the application form to get the loan approved. You accept the loan because you need the money, even though you aren’t entirely sure that you can afford the monthly payments. The moment you default on your mortgage payments, the lender will rush in to foreclose your property and strip you of your home’s hard-earned equity.

3 Phony Counseling Agencies

You may find a large number of phony counseling agencies that offer their services – for an outrageous fee. But all they do is make some inexpensive phone calls and complete paperwork. These agencies may negotiate a repayment plan with your lender or organize a pre-foreclosure house sale on your behalf. However, the jobs these companies perform can all be easily performed by the homeowner without the additional cost. The main aim of these agencies is to mislead and stop you from getting real help. So take care that you confirm that an agency is genuine before using its services and never undertake to pay up front for foreclosure services.

4 Lender Scams

When you are on the brink of foreclosure, a lender may claim to rescue you from this situation by refinancing your loan with lower mortgage payments. In the beginning, the mortgage payments are considerably low as you are paying the interest only. At the end of the term, you suddenly realize that the total amount you borrowed is still due in a lump sum balloon payment. If you can’t make the entire balloon payment or get your loan refinanced, you may lose your home to the lender.

5 Phony Loan Transaction

In a phony loan transaction, a lender introduces you to a refinancing loan document that claims to bring your neglected loan current. However, the document may have the hidden motive of transferring the title of your home to the company’s name for a very small part of its value. Many times the loan’s terms will include prepayment penalties, balloon or interest-only payments, huge fees and immediate rate adjustments. Therefore, it is prudent to get all legal documents assessed by your attorney before signing them. (For related reading, check out Mortgages: Fixed-Rate Versus Adjustable Rate and ARMed And Dangerous.)

6 Loan Flipping

In this type of scam, your lender may offer to refinance your loan and tempt you with some extra cash. If you fall for the trap and consent to get your loan refinanced, as soon as you make some payments, the lender will persuade you to refinance your loan again and offer you more cash for vacations or home renovations. You accept this attractive offer, take the cash and get your previous loan refinanced. In reality, this extra cash may be much less than the additional fees and costs your lender is charging for refinancing your loan. In this scam, your lender may not even make any attempt to explain to you that the increase in the loans imply added fees and points for refinancing, higher interest rates or even prepayment penalties on each time you take a loan. In short, repetitive refinancing could put you deep in debt and may ultimately lead to the foreclosure of your home. (To learn more, read Digging Out Of Personal Debt.)

7 Internet and Phone Scams

Some con lenders convince you to apply for a low interest mortgage loan on the phone or internet. They then extract vital information about your social security and bank account numbers. In this scam, the loan is immediately accepted, after which you start faxing the documents and sending wire transfer payments to the phony company without even meeting the lender. Unfortunately, this scam will put you in twice as much trouble – your personal details have been stolen or sold and your home is still at risk of foreclosure. (To learn more about avoiding this scenario, see Identity Theft: How To Avoid It and Identity Theft: What To Do If It Happens.)

The Bottom Line

Foreclosure is a grave issue and, if not taken care of immediately, can leave you evicted from your home with a damaged credit score. The best way to save your home is to learn everything about foreclosure and track down appropriate mortgage help companies that will help you out of this jam. The instant you stop giving proper attention to this predicament, fake foreclosure companies will start exploiting you unfairly. Other than your family, your home is your biggest asset and, certainly, you are not going to let a few missed mortgage loan payments, some phony company or even your even mortgage lender to take it away from you without a fight.

Avoiding Foreclosure Scams
by Pooja Dave
Read more: http://www.investopedia.com/articles/pf/07/foreclosure_scam.asp#ixzz1mzzY5X13

Low interest rates and an improving jobs picture have given real estate investment trusts a boost that makes them an attractive alternative to stocks and bonds.

Commonly called REITs, the trusts have underperformed stocks this year just slightly but face strong prospects going forward as the two critical factors propelling the commercial real estate market continue to take hold.

REITs invest across a broad array of sectors, from office buildings to shopping malls and hotels. There also are health care, timber and infrastructure REITs. They are required to distribute 90 percent of their taxable income to investors through dividends.

“That really is a perfect storm that’s very good for REITs,” says Rick Romano, co-manager of the Prudential Global Real Estate Fund in Newark, N.J. “It will mean the economy isn’t growing fast enough to add new supply and for rates to increase, but we have enough jobs growth so vacancies are starting to push rents.”

Ironically, it is the tepid but steady pace of job growth — less than 150,000 per month — that creates a Goldilocks environment where the jobs picture is not too hot so as to drive home-buying but just hot enough to propel rents higher.

“If we can stay around 100,000 to 200,000 (new jobs) a month, we think that’s kind of a good backdrop for REITs and real estate,” Romano says.

The MSCI REIT Index has gained about 6.5 percent in 2012 after rising 8.7 percent the previous year.

Industrial REITs have done best, gaining 15.5 percent, while hotels are up 11.4 percent and shopping centers about 11 percent, according to the National Association of Real Estate Investment Trusts.

That compares to stocks, where the Standard & Poor’s 500 [.SPX1361.23|3.19(+0.23%)] has gained 7.4 percent, and Treasurys, which have lost about 2 percent.

But the $200 billion U.S. REIT market doesn’t face quite the same challenges as stocks and bonds, and offers an attractive dividend at about 3.6 percent industrywide.

The real estate sector, struggling thought it may be, boasts strong support from government policy makers — the Federal Reserve has pledged to keep rates low — and faces less danger from headwinds such as the sovereign debt crisis in Europe.

S&P on Wednesday reiterated its “stable” outlook on REITs and said they should do better than home builders this year. Making that view even more positive is that sentiment as registered by the National Association of Home Builders has hit its highest level since May 2007, according to data released Wednesday.

“The commercial real estate sector is in the midst of a gradual recovery that, in many markets, rests more on limited new supply than on tenant demand, which remains subdued,” said Standard & Poor’s credit analyst Lisa Sarajian.

“However, our current stable outlook for REITs anticipates that they will keep outperforming the broader commercial real estate market and their private competitors — and their manageable funding needs and access to diverse sources of capital position them well for growth,” she added in an analysis.

For investors, a number of publicly traded companies offer attractive opportunities.

American Tower briefly hit an all-time high Wednesday and has gained more than 14 percent over the past year, even though the REIT trades at more than seven times book value.

The popular Vornado Realty Trust and the industrial real estate conglomerate Prologis also are attractive, says Scott Colyer, CEO and chief investment officer at Advisors Asset Management in Monument, Colo.

“It’s probably one of your best trades this year,” Colyer says of the REIT space. “Real estate to us is the ultimate hard asset, the ultimate guard against inflation. What the Fed is doing is actually very supportive of the real estate market and probably will be for quite some time. Low rates and rising demand is a pretty good combination for the real estate market.”

Indeed, the timing seems to be right as a number of economists believe real estate at least has reached a plateau if not a decided turn higher.

“We think that growing investment demand will prompt homebuilders to increase significantly construction of multi-family units in 2012,” Paul Diggle, property economist at Capital Economics in London, said in a research note. “But in a turnaround from last year’s performance, we also expect single-family starts to increase this year.”

Residential REITs have underperformed so far, making them one area investors may want to look for future gains should housing pick up. Apartment REITs have returned just 1.72 percent, though manufactured homes are up nearly 4 percent, according to NAREIT.

“All the well-known real estate tycoons were waiting for potential armageddon in commercial real estate, but it didn’t happen,” Colyer says. “You’re buying real estate at the right time in the cycle, when there’s a tailwind behind it and it should do well for many years to come.”

Source: CNBC.com
REITs Find ‘Perfect Storm’ to Ride Real Estate Wave
By: Jeff Cox
CNBC.com Senior Writer

The founder and CEO of Cornerstone Wealth Management, who bought the 5,000 sq. ft. property in 2005 for $1.8 million and has spent $500,000 improving it, considers the abode a wonderful place for his family. But ask him to rate his home — or any home, for that matter — as a financial investment, and Arzaga balks.

“It’s the American Dream to own a home, but whoever said that didn’t do the analysis on it,” says Arzaga, knowing he’s taking a contrarian stance to conventional wisdom.

Examining 250 properties around the U.S., and going through close to 40 client files to project the financial impact of owning real estate versus liquidating it, Arzaga, an adjunct professor in personal finance at the University of California at Berkeley, found that, “100 percent of the time it was better to rent, rather than own.”

That’s right: 100 percent.

The reason is simple. While a home is the main repository of wealth for many Americans, it comes with numerous hefty expenses. The carrying costs — what’s needed to hold and maintain the asset — range from property taxes and home insurance to emergency repairs and renovations.

In a rental situation, the landlord covers those costs, leaving the occupant free to invest revenue in other areas.

“I don’t have the emotions a lot of people do surrounding real estate,” Arzaga says. “I have steely eyes for how investing in real estate works, and I’d better be a prudent investor for my clients.”

Owning a dream home, he says, creates a drain on other financial priorities, causing homeowners “not to meet their financial goals. They were going to fail.”

Some real estate experts thought there was some truth to Arzaga’s argument, albeit with several conditions.

“To state that owning a home is or isn’t a good investment is too simplistic,” says Jeffrey Rogers, president and COO of Integra Realty Resources. “It depends. In times of relatively higher rents, low home values, and low interest rates, it makes sense to own a home. But in a reverse market, it wouldn’t be economically feasible. Over time, those who purchase in down or flat markets with low interest rates come out ahead.”

“Our lifetimes are a long time, and when we look over the long term, real estate and other investments tend to have a positive return,” says Jed Kolko, chief economist at Trulia.com, a real estate search and research website.

“But when it comes to real estate, changing your mind is expensive. There are a lot of costs involved in buying, selling and moving. If you move every two years, it’s probably a bad investment for you. It also depends on your job market. If you’re in a one-company town and the company goes down, there goes your job and there goes your home value.”

Greg McBride, a senior analyst at Bankrate.com, agrees with one point of Arzaga’s. “Home ownership is not so much a creator of wealth as a store of wealth,” he says. “The promise of home ownership is that over the long haul, it can rebate many or perhaps all of your costs, unlike rent, which doesn’t rebate a dime.”

The trouble, he says, is that many Americans want a home so badly, they neglect other ways to grow wealth and financial security.

“You have the other financial bases covered: emergency savings, retirement savings, paying off debt, saving for the education of your children,” McBride says. “There’s no sense in buying a home if it’s going to deplete your emergency or retirement savings.”

McBride crunched the numbers in a pre-bubble era (2004) for a home purchased at $200,000 by a buyer in the 27 percent marginal tax bracket. Factoring in a 30-year mortgage, $1,200 in annual home insurance, closing costs of $5,500 and maintenance costs of $100 a month, along with property taxes, he calculated that it would take a selling price, 10 years later, of $395,404 just to break even. His conclusion gave Arzaga’s view credence: “Homeownership may not be the moneymaker you think it is.”

Then there’s the emergency fund, a must for when a home requires unexpected repair work.

“As far as emergency savings is concerned, six months of a cushion is adequate,” McBride says. “But only 24 percent of people have that kind of cushion, and about 65 percent own homes.”

So while home ownership may sound glamorous, you need a lot of money to make it work, without much guarantee of positive returns in a post-bubble era. Indeed, Arzaga cites himself as an example of how home ownership doesn’t pay off. His residence is today worth $1.5 million, about 17 percent less than what he paid.

So why not sell? For Arzaga, it’s a lifestyle choice, and one that he doesn’t regret, since his big money-making investments are elsewhere.

Source: Thomson Reuters
As Investment, Renting Beats Owning ’100% of Time’
http://www.cnbc.com/id/46413058

Our system of law doesn’t acknowledge the derivative nature of creativity. Instead, ideas are regarded as property, as unique and original lots with distinct boundaries. But ideas aren’t so tidy. They’re layered, they’re interwoven, they’re tangled. And when the system conflicts with the reality… the system starts to fail.

The whole intellectual property system needs a total overhaul. But why? How did it come to this? Kirby Ferguson’s sublime Everything Is a Remix series comes to a conclusion with this really smart explanation of how the spirit of IP laws has been totally perverted by modern corporate culture.

If you enjoyed watching this video, check out the series at http://www.everythingisaremix.info/watch-the-series/.

I strongly recommend clicking the HD button for enhanced resolution.

Everything That’s Wrong with Patent and Copyright Laws in One Brilliant Video
by Kirby Ferguson

Add investment banking to the list of things that could be dangerous to your health.

A University of Southern California researcher found insomnia, alcoholism, heart palpitations, eating disorders and an explosive temper in some of the roughly two dozen entry-level investment bankers she shadowed fresh out of business school.

Every individual she observed over a decade developed a stress-related physical or emotional ailment within several years on the job, she says in a study to be published this month.

Investment banking has long been a beacon for ambitious people who crave competition, big money, steak dinners and paid-for town-car service. The 100-hour workweek, these ironmen and ironwomen tell themselves, is just the opening ante in a high-stakes game.

But investment bankers, salespeople and traders are only human. Under the immense stress of their jobs, many suffer personal and emotional problems that escalate into full-blown crises, with some bankers developing conditions that linger long after they have left the industry.

Of course, no one is being drafted into high finance. Aspiring Wall Street stars sign up for the punishing hours with eyes open. What’s more, the study’s small size and the lack of a control group raise questions about how closely the findings apply to the broader population of roughly 267,000 would-be masters of the universe.

But Lindley DeGarmo, 58 years old, a former director at Salomon Brothers who left the finance industry in 1995 to become a pastor, recalls how managers often worked the younger hires to exhaustion. “The culture was very much that these were dogs’ bodies,” he says.

Add investment banking to the list of things that could be dangerous to your health.

A University of Southern California researcher found insomnia, alcoholism, heart palpitations, eating disorders and an explosive temper in some of the roughly two dozen entry-level investment bankers she shadowed fresh out of business school.

Every individual she observed over a decade developed a stress-related physical or emotional ailment within several years on the job, she says in a study to be published this month.

Investment banking has long been a beacon for ambitious people who crave competition, big money, steak dinners and paid-for town-car service. The 100-hour workweek, these ironmen and ironwomen tell themselves, is just the opening ante in a high-stakes game.

But investment bankers, salespeople and traders are only human. Under the immense stress of their jobs, many suffer personal and emotional problems that escalate into full-blown crises, with some bankers developing conditions that linger long after they have left the industry.

Of course, no one is being drafted into high finance. Aspiring Wall Street stars sign up for the punishing hours with eyes open. What’s more, the study’s small size and the lack of a control group raise questions about how closely the findings apply to the broader population of roughly 267,000 would-be masters of the universe.

But Lindley DeGarmo, 58 years old, a former director at Salomon Brothers who left the finance industry in 1995 to become a pastor, recalls how managers often worked the younger hires to exhaustion. “The culture was very much that these were dogs’ bodies,” he says.

John Chrin, a former managing director at J.P. Morgan Chase & Co. who left the firm in June 2009 to pursue an executive-in-residence position at Lehigh University, recalls seeing junior staff gain 30 or 40 pounds within a couple years on the job. When he worked at Merrill Lynch & Co., now a unit of Bank of America Corp., he recalls that one managing director ordered a chauffeur to turn on the air conditioning even though it was out of order, causing the car to burst into flames. The managing director then threatened to have the driver fired. Bank of America declined to comment.

“Maybe the job amplifies some of the tendencies that were already there,” he says.

The USC study began a decade ago at two Wall Street banks that granted access on the condition they remain anonymous.

Alexandra Michel, an assistant management professor at USC’s Marshall School of Business, shadowed the bankers at the office—sitting next to them, following them to meetings, mirroring their hours and even pulling all-nighters—for more than 100 hours a week during the first year, about 80 hours a week during the second year, and then followed up with in-person interviews.

“By the fourth year of the study, many bankers were a mess. Some were sleep-deprived; others developed addictions.”

The study will be published in the next issue of the Administrative Science Quarterly, due out later this month.

During their first two years, the bankers worked on average 80 to 120 hours a week, but remained eager and energetic, she says. They typically arrived at 6 a.m. and left around midnight.

By the fourth year, however, many bankers were a mess, according to the study. Some were sleep-deprived, blaming their bodies for preventing them from finishing their work. Others developed allergies and substance addictions. Still others were diagnosed with long-term health conditions such as Crohn’s disease, psoriasis, rheumatoid arthritis and thyroid disorders.

One mild-mannered banking associate spoke about exploding in rage at a cab driver after unsuccessfully attempting to open a locked door from the outside: “I became so furious that I kept banging against the windows like crazy, swearing at the poor guy. And then I turned around and saw that a managing director was watching with his mouth open. I was so ashamed.”

Meanwhile, company “perks” offered to employees, such as take-out meals and car service, had gradually blurred the lines between work and life.

One vice president described work as a never-ending nightmare, waking up every morning and wishing the day before “was just a bad dream.” Another vice president said he was so worried others might notice his drinking problem that he would “keep losing half of what they are saying.”

By the sixth year, the participants, now in their mid-30s, had split into two camps: the 60% who remained “at war” with their bodies, and the remaining 40% who decided to prioritize their health, meaning they paid more attention to sleep, exercise and diet and set limits on how much they allowed work to consume them.

Roughly one-fifth of the bankers left the profession, she adds. For fear of being exposed, the banks prohibited her from detailing the exact size of the study group, attrition rate and precise start date.

Bankers are at higher risk for burnout and mental-health problems due to the volatility in their profession, says Alden Cass, a New York-based clinical psychologist who specializes in counseling Wall Street professionals. In a study of 26 stockbrokers he conducted a decade ago, Mr. Cass found nearly one-quarter had clinical levels of depression, more than three times the rate among the general population. That was when the economy was booming and compensation levels were high, he adds.

Recent turmoil on Wall Street has served to heighten stress levels. That makes the roughly 40 patients who stream into Mr. Cass’s midtown office each week appear even more anxious and high-strung than before.

Most seek help after their personal relationships are affected by the job. Some are addicted to prescription drugs like Adderall or Ritalin. To cope, they resort to “depersonalization,” a feeling of numbness toward the rest of the world. A few have been suicidal.

Many have neglected their health for so long that Mr. Cass gets them to go for physical check-ups.

“There’s a reason you don’t find an awful lot of old investment bankers,” says Mr. DeGarmo, the former Salomon Brothers director. “It’s a tough life.”

Write to LESLIE KWOH at leslie.kwoh@dowjones.com
Hazard of the Trade: Bankers’ Health – Wall Street Journal

Feb 12th 2012, 21:19 by N.B. | WASHINGTON, D.C.
economist.com

America’s long and costly infrastructure projects

SALON‘s Will Doig had a nice piece last week riffing off a common theme: why does it take so long and cost so much for America to complete infrastructure projects when China seems to complete them in mere months for a fraction of the cost?

On Dec. 31, the Chinese capital opened a new subway line and greatly expanded two others. This year it plans to open four more. A total of eight new lines are under construction. The city started expanding the system in the run-up to the 2008 Olympics, and has kept pushing forward ever since. In 2001 it had 33 miles of track. Today it has 231.Meanwhile, when you hear the completion dates for big U.S. transit projects you often have to calculate your age to figure out if you’ll still be alive. Los Angeles’s Westside subway extension is set to be finished in 2036. Just five years ago, New York’s Second Avenue Subway was supposed to be done by 2020, a goal that seems laughable now.

The sub-headline of Mr Doig’s story promises suggestions for dealing with this problem, but the actual article focuses more on explaining why infrastructure projects take so much longer in America than they do in China. Bureaucracy, lack of money, politics and potential interference with existing infrastructure are the most convincing explanations he offers, although mismanagement and America’s deeper concern for things like private property rights and working conditions surely play a role, too.

The Atlantic’s David Lepeska has some related thoughts on why New York’s Second Avenue subway line, which won’t be completed for years, is costing $1.7 billion per kilometre. He notes that such high-priced transport is not endemic in America: Washington, DC’s Silver Line is considerably cheaper per kilometre (partly because much of it is being built above ground) and light-rail projects in Minneapolis and Denver were comparative bargains.

Slate’s Matt Yglesias, meanwhile, argues that Mr Doig and others who compare New York’s subway costs with China’s are missing the point. “The real issue Americans should be pondering is why our big infrastructure projects are so much slower and more costly than comparable projects in Europe or Japan,” he writes. After all, “even expensive projects in big, old, rich cities like London and Amsterdam come in far cheaper than a New York subway project.”

This is indeed the right question to be asking, but the answers don’t come easily. American politicians often blame labour unions, but these are generally stronger in Europe than in the US. Benjamin Kabak, a blogger whom Mr Lepeska recommends, offers some theories. Alon Levy, a blogger whom we’ve linked to before, has a particularly interesting idea: he thinks the business culture and organisational structure of New York’s Metropolitan Transit Authority could be part of the problem. Mr Levy says the MTA’s in-house team managing infrastructure projects is probably too small and the agency could be too reliant on outside consultants.

I’ve always been an advocate of expanding public transport in America, and critics of the Second Avenue project and similar jobs too often ignore important metrics like costs per projected passenger. But there’s no doubt that America pays too much for its subway projects. There aren’t any easy answers, but pro-transport politicians and activists need to confront the problem, and journalists need to acknowledge it. It’s good to see people like Mr Levy and Mr Lepeska taking the first steps.

By Nellie Akalp
8 Legal Steps for Starting Your Business

With each new year, budding entrepreneurs look to turn their vision into a business. These startups are often overflowing with tremendous ideas, energy and optimism — but don’t always have a roadmap for the legal aspects involved in starting a business. In the flurry of drumming up new customers, getting ready for a website launch and building the first prototype, it’s all too easy to put off some of the less glamorous, more administrative aspects of running a company.

Yes, company filings and regulations are not the most exciting parts of your startup. Yet they’re critical to the health of your business and personal finances. Here’s a quick rundown of eight administrative aspects you need to consider for your startup or small business. Of course, depending on your situation and type of business, hiring a tax accountant and/or good attorney with specific experience in your industry can go a long way toward helping you steer clear of trouble.

With each new year, budding entrepreneurs look to turn their vision into a business. These startups are often overflowing with tremendous ideas, energy and optimism — but don’t always have a roadmap for the legal aspects involved in starting a business. In the flurry of drumming up new customers, getting ready for a website launch and building the first prototype, it’s all too easy to put off some of the less glamorous, more administrative aspects of running a company.

Yes, company filings and regulations are not the most exciting parts of your startup. Yet they’re critical to the health of your business and personal finances. Here’s a quick rundown of eight administrative aspects you need to consider for your startup or small business. Of course, depending on your situation and type of business, hiring a tax accountant and/or good attorney with specific experience in your industry can go a long way toward helping you steer clear of trouble.

1. Did You Pick a Name? Make Sure You’re Legally Permitted to Use It

Before you start printing out business cards, make sure the great new name you thought of isn’t infringing on the rights of an already existing business. In most cases, you don’t need an attorney for this task, as you can perform a free search online that looks at business names registered with the Secretary of State — that will tell you if the name is available in your state. Then, take your search to the next level and conduct a no-conflict, free trademark search to see if your name is available for use in all 50 states.

And considering you can still infringe on someone else’s trademark even if they’ve never formally registered it with the U.S. Patent and Trademark Office, you should also do a comprehensive search into all state and local databases (look for an affordable online service to help you with this).

2. Register a Fictitious Business Name/DBA

Ever notice those endless fictitious name announcements in the classifieds of your local paper? You may need one, too. A DBA (Doing Business As) must be filed whenever your company does business under a different name. If you’ve got a sole proprietorship or general partnership, a DBA is needed if your company name is different from your own name. For an LLC or corporation, a DBA must be filed to conduct business using a name that’s different from the official Corporation or LLC name you filed. For example, my company is officially incorporated as CorpNet, Inc., so we needed to file DBAs for the variations CorpNet.com and CorpNet. These are typically filed at the state and/or county level.

3. Incorporate Your Business or Form an LLC

Forming an LLC or corporation is an essential step to protect your personal assets (such as your personal property or your child’s college fund) from any liabilities of the company. Each business structure has its own advantages and disadvantages, depending on your specific circumstances. Three popular options are: the LLC (great for small businesses that want legal protection, but minimal formality), S Corporation (great for small businesses that can qualify), or C Corporation (for companies who plan to seek funding from a VC or go public).

And one other word of advice, Delaware and Nevada are two popular states for business incorporation. However, if your business has less than five shareholders, you’re better off forming an LLC in the state where you operate your business (i.e. where you live).

4. Get a Federal Tax ID Number

To distinguish your business as a separate legal entity, you’ll need to obtain a Federal Tax Identification Number, also referred to as an Employer Identification Number (EIN). Issued by the IRS, the tax ID number is similar to your personal social security number and allows the IRS to track your company’s transactions. If you’re a sole proprietor, you’re not obligated to get a Tax ID number, but it’s still good practice as you won’t have to provide your personal social security number for business matters.

5. Learn About Employee Laws

Your legal obligations as an employer begin as soon as you hire your first employee. You should spend time with an employment law professional to fully understand your obligations for these (and other) procedures: federal and state payroll and withholding taxes, self-employment taxes, anti-discrimination laws, OSHA regulations, unemployment insurance, workers’ compensation rules, and wage and hour requirements.

6. Obtain the Necessary Business Permits and Licenses

Depending on your business type and physical location, you may be required to have one or more business licenses or permits from the state, local or even federal level. Such licenses include: a general business operation license, zoning and land use permits, sales tax license, health department permits, and occupational or professional licenses.

7. File for Trademark Protection

You’re not actually required by law to register a trademark. Using a name instantly gives you common law rights as an owner, even without formal registration. However, as expected, trademark law is complex and simply registering a DBA in your state doesn’t automatically give you common-law rights. In order to claim first use, the name has to be ‘trademarkable’ and in use in commerce.

Since you’ve spent untold hours brainstorming the ideal name, and you’ll be putting even more effort into cultivating name recognition, you should consider registering your trademark for proper legal protection. Registering a trademark makes it exponentially easier to recover your properties, like if someone happens to use your company name as their Twitter handle. Having the right documentation means you have the legal right to that handle, and Twitter will take steps to give it to you.

8. Open a Bank Account to Start Building Business Credit

When you rely on your personal credit to fund your business, your personal mortgage, auto loan and personal credit cards all affect your ability to qualify for a business loan (and for how much). Using business credit separates your personal activities from that of the business. To begin building your business credit, you should open a bank account in the name of your company, and the account should show a cash flow capable of taking on a business loan.

Get Your Legal Ducks in a Row

No matter how busy things with your startup get, set aside some time to address these matters and take your legal obligations seriously. Getting your legal ducks in a row right from the start will help you avoid any pitfalls down the road, and will help you scale your business successfully as you grow.

By Charles Farrell | Jan 27, 2012

Building your retirement plan while you’re also trying to build your business can be tough. Many retirement plans don’t allow entrepreneurs to put much money away, or if the plans do provide for large contributions, they don’t offer the flexibility a business owner needs to manage uncertain cash flow needs. But there is, finally, one retirement plan that does both. It’s called a solo 401(k).

You qualify for a solo 401(k) if you’re the only employee in your business (the solo part), or if you and your spouse are the only two employees. A solo 401(k) allows you to defer up to $17,000 a year in wages if you’re under age 50 and $22,500 if older. Plus, because it’s a 401(k), it also has a profit-sharing feature, which means that in addition to your 401(k) “salary deferral,” you can also make an employer contribution out of “profits” that could take your total contribution upwards of $50,000 for a year. You can even set up your solo 401(k) to allow for Roth 401(k) contributions, which means you can build a nice tax-free (as opposed to tax-deferred) balance.

Here are a few examples of how a solo 401(k) can help build retirement assets but also respond to business cash flow needs.

Let’s say you’re 40 years old and starting your own consulting firm, but your spouse has a regular job and a healthy income. In your first year, you generate $50,000 of net income and you’d like to shelter as much as you can. You could contribute $17,000 of that income into your solo 401(k) plan. You can then make a profit sharing contribution of roughly 20% of your net self-employment income, which roughly amounts to another $9,000, for a total of about $26,000, or a little over a 50 percent contribution. Compare that with an IRA, where you’d be limited to $5,000, or an SEP IRA, where you’d be stuck at 20 percent of $50,000, or about $10,000.

Now, let’s assume next year you net $100,000. You can now make the $17,000 401(k) deferral and about another $18,000 in profit sharing, for a total of about $35,000. Or, if you decide that next year you want cash for expansion, you can contribute $0 to the 401(k), or $5,000 or whatever you want.

Remember, if your spouse also works in the business, you can essentially split the contributions. That means with limits of about $50,000 per person, you could be looking at a $100,000 contribution and a $100,000 tax deduction.

You also have the ability to borrow from your solo 401(k) plan. Generally, you can borrow up to 50 percent of the account balance, up to a maximum of $50,000. This may come in pretty handy if your bank tightens up your credit line.

Most large brokerage firms and many mutual fund companies support solo 401(k)s and can provide you the basic documents. But remember: These plans are more technical than an IRA or SEP IRA, and I’ve only provided you with a summary of some basic options. That means you’re going to want to work with a tax professional. For instance, contribution limits are calculated differently for sole proprietors or pass-through entities like S corporations and LLCs, than they are for C corps. As you can imagine with the tax code, every situation is unique, so make sure you get the guidance you need before starting a solo 401(k). It may cost a few bucks to get your solo 401(k) established, but the tax savings and flexibility are generally more than worth it.

Read more:
Decent 401(k)s for Businesses
Essential Money Tips for Women Owners
Ta-da! Timing the Perfect Product Release

The Best Retirement Plan for Entrepreneurs
Charles Farrell is a principal with Denver-based Northstar Investment Advisors, LLC, and the author of the book Your Money Ratios: 8 Simple Tools for Financial Security, called “one of the best financial books to cross our desks this year” by the Wall Street Journal (WSJ, 12/19/09).

By Ari Weinzweig | Feb 1, 2011

Hardly a day passes without someone asking me for business advice. It might be a student or a struggling entrepreneur or an up-and-comer at a larger company. I’m sure most successful entrepreneurs experience the same thing. As often as not, people want that “one top tip,” that single piece of advice that can put a person on the path to success. Lo, if only things were so simple. On the other hand, there is one thing I wish I had understood more clearly from the get-go: the power of visioning.

When we opened Zingerman’s Delicatessen in Ann Arbor, Michigan, in 1982, I had never even heard the term visioning. Thirty years later, that deli has expanded into Zingerman’s Community of Businesses—eight different businesses (including a mail order company and a business consultancy), with 17 managing partners, 500 employees, and revenue of $37 million a year. It’s safe to say that we wouldn’t be where we are without visioning.

What is a vision? It’s not as mystical or out there as it sounds. A vision, quite simply, is a picture of what success will be at a particular time in the future. It encompasses answers to an array of questions: What does our organization look like? How big is it? What are we famous for? Why does anyone care about what we do? How do people who work here feel about their jobs? How do I, as the founder, feel about the business? What’s my role in it? Complete the visioning process, and you’ll have a clearly articulated end for your organization—something that won’t change every time the market or your mood shifts.

A great vision is inspiring. It gets you and everyone in the organization excited to come to work; it’s the cathedral everyone is coming to work every day to construct. This is not mere wishful thinking. A vision must also be strategically sound. You have to have a reasonable shot at getting there.

At Zingerman’s, we use visioning nearly every time we start a project. For the organization overall, we have our vision for 2020 (e-mail me at ari@zingermans.com, and I’ll send you a copy). We also have visions for each of our business units—and for most of the projects those groups undertake, whether it’s a $6 million renovation at the original deli or a new hot-chocolate recipe we’re developing at Zingerman’s Roadhouse, our sit-down restaurant. Visioning is so much a part of what we do that almost everyone who works here reads at least 20 visions in the first year on the job.

To be clear, a vision is not a strategic plan. The vision articulates where we are going; the plan tells us how we’re actually going to get there. We start that planning work only after we’ve agreed on the vision. Creating a plan without a vision… Well, I just can’t quite figure how one does it. Imagine asking MapQuest to give you directions but not plugging in your desired destination.

Just to give you a small but meaningful example of a vision, here’s the one we wrote for the Thursday-evening farmers’ market we host in the parking lot of Zingerman’s Roadhouse, on the West Side of Ann Arbor. It was written in 2005 and was designed to express our vision for the market three years later.

It’s the longest day of the year; the sun is at its pinnacle of warmth and light. Throngs of people are milling around the Roadhouse parking lot, amazed and excited at the abundance of locally produced goods, ranging from several gorgeous varieties of tomatoes to handmade soap and artisan crafts, to herbs and plants, plus a very strong synergy of Zingerman’s items—cheese from the Creamery, breads from the Bakehouse, and the ever-energetic Roadshow crew caffeinating all the vendors and customers. Every vendor is selling the best of what there is to offer, growing or producing themselves what they sell. There’s a tangible truth patrons have come to trust—that all these products have a story and none of them traveled very far to get here. Tents and awnings cover the stalls, creating a colorful and festive mood. There are 15–20 vendors at the Market, so it’s accessible and maintains variety but remains magnetic and welcoming.

This year, the WSFM planning committee is helping to generate interest and support for the market throughout the area business community. Local businesses hang posters or hand out fliers about the market and participate in promotions that encourage their customers to visit. These companies recognize the potential for the market to draw additional patrons to the area and increase business throughout the West Side. These developing relationships with area businesses and the neighborhood at large are enabling the WSFM to become a more self-sustaining entity. While Zingerman’s remains an active and essential supporter of the Market, the WSFM is a self-sustaining entity.

Remember, this was written before the market even existed. Actually launching the market required long struggles with the city, landlord issues, persuading growers to join us, and probably a hundred other challenges. But read our vision to anyone who comes to the market, and that person will tell you that what’s described above is almost exactly what happens every Thursday evening. In fact, I checked with the market manager to see how many vendors we had at the start of the 2008 season. The answer? Twenty.

This probably sounds silly and New-Agey to people who aren’t into hearing it. It did to me when I first started learning about it. But there’s just no way around it—the power that comes out of this visioning stuff is huge. When we do effective visioning, we’re moving toward the future we want, not just reacting to a present-day reality we don’t like. If we do our job well in this regard, I believe that we keep our competitors reacting to what we’re doing, instead of the other way around.

A vision also makes it much easier to handle the strategic opportunities that present themselves every day. In my experience, most organizations, and most people, pick and choose from opportunities when they arise. The calls come in every day. And then we agonize over what to do. Having a vision makes decisions much easier: The only opportunities even worth considering are those that are going to help us attain our vision.

This has enormous organizational benefits. It means that when opportunities emerge that are out of the bounds of our vision (and they do all the time), we can veto them quickly—saving extraordinary amounts of time and energy. Life is short, and time spent agonizing over opportunities that seem too good to pass up but aren’t going to help us get where we really want to go is, in my opinion, time wasted. I’d prefer to spend my time working toward the future I’ve chosen to create. Trust me—I’ve worked both ways, and using visioning as I’ve described here is about 1,500 times more rewarding.

The good news is that crafting a vision is a lot easier and less time-consuming than you might think. As I outline in the steps below, getting started should take no more than 30 minutes.

I can already see the eyes rolling. A half-hour to write a future for my entire organization? What about gathering the appropriate data, consulting with experts, assessing the big trends and the leading economic indicators? Good questions, but to get going, you don’t need any of that. Why? Though we spend most of our work lives responding to problems and opportunities as the world presents them to us, visioning comes from the inside out. It’s about what you believe, what gets you excited, what you truly want to accomplish.

Eight steps to a vision of greatness

STEP 1

PICK YOUR TOPIC
Because visioning can be used for just about anything, it’s important to start by being clear about what you’re working on. Is it a vision for your organization overall? Or just for a particular piece? For today’s shift? Or your retirement? We do visions for all of the above and everything in between.

STEP 2

PICK YOUR TIME FRAME
How far out should you look? There’s no right answer, but as a general principle, visioning works best if you go far out enough to get beyond present-day problems but not so far out that you have no sense at all of actually getting there. We have a long-term organizational vision that’s set in 2020. Most organizational visions will probably be set somewhere from two to 10 years out—but five is a typical place to start.

STEP 3

PUT TOGETHER A LIST OF “PROUDS”
Think about the work you’re embarking on, and throw down a list of past positive achievements that seem at least somewhat relevant. You might include specific contributions that you or your colleagues have made to past successes, or skills, techniques, and resources that could be assets in achieving your vision.

At Zingerman’s, it might sound like this: “I feel good about the past three projects we’ve successfully implemented: (1) the team really came together; (2) we’ve improved cheese quality a lot in the past two years; and (3) we’ve brought our staff turnover rate down 20 percent since 2007.” Anything good that comes to mind is fine. And don’t stress out about it—just do it. It shouldn’t take more than 10 minutes. The idea is just to create a base of positive energy and high-quality experiences on which you can build for future success. The more people focus on the positives, not on the present-day problems, the more likely you are to attain the greatness you envision.

STEP 4

WRITE THE FIRST DRAFT
Writing a vision is hugely important, but don’t let its perceived weightiness work against you. The amount of time you spend drafting it is, in my experience, generally unrelated to the quality of the vision. I would actually argue that the two are inversely related—those who just dive in and get something down on paper almost always are the ones who emerge from this process with the most creative and inspiring visions.

You can compose your vision in any style you like—prose or bullet points, by hand or on the computer. I’ve seen people draw it and then talk through what they’ve illustrated while someone else takes notes. Just make sure you put the word DRAFT on your document. We’ve found that by simply writing the word at the top of the page, we get a lot more input; whereas without it, people tend to assume the vision is final and there’s no point providing any real feedback.

Before you start writing, let me provide a few technical tips. If you follow them, the work will be way better:

Go for something great. The work here is about writing a vision of greatness—so put something wild out there. I think about John Kennedy’s call to go to the moon, winning the NBA championship…things that are big but also specific, scary but also exciting. Get past the 59 reasons why it won’t work. If the early draft isn’t kind of scaring you a bit, then you probably haven’t pushed yourself hard enough.

Write from the heart. Go with your gut and put down what pours out, not what you think other people want to see. Often that means including what you’ve always wanted to do but have been told so many times by others that you couldn’t, a notion that you’ve long since filed away under “impossible.”

Step into the future. Having gone through this process a few thousand times, I can tell you that it works way better when you write as if you’re already sitting in the future you’re envisioning. This seems strange, but it really is critical. Don’t write as if your vision going to happen; write as if it already has happened.

Go quickly. The visions I’ve been involved with turned out much better when we didn’t drag out the process. Just sit down in a reasonably comfortable spot at a reasonably comfortable time and get to writing. Once you start, keep writing for 15 to 30 minutes, regardless of how silly you sound. Don’t start self-editing. The most interesting and insightful elements of my visions are the ones that I initially wanted to leave out but forced myself to put down anyway.

Get personal. In our visioning work, we blend the personal and professional so we arrive at a single vision, or at least two compatible and mutually supportive ones. If you’re the one running the business, it makes sense that you build your passions into what you write. If you want to teach, put that in the vision. If you want to work less, say it. If you’ve “retired” into an advisory-only role in the company, talk about how the person who took your position feels about his or her role and how you relate to that person. In other words, don’t write a vision that you aren’t a part of.

Now, with all these rules in mind, take no more than 30 minutes and put down a vision draft. Then put the draft aside for a few days. Go back to all the other stuff you do every day.

STEP 5

REVIEW AND REDRAFT
When you’re ready to revise, read your draft through from start to finish. Don’t erase anything. If you’re on the computer, start the second round by copying your first file so you can edit what you wrote without losing the original version. In my experience, at least 80 percent of what is in that first scary rendition is pretty right on. In any case, you’ll have plenty of opportunity to edit the content and the language. As you read through, keep in the back of your mind: Does this sound inspiring? Do I get excited when I’m reading it? Note that in this context, excited does not preclude anxiety about the challenges of implementation.

How specific should you get? More detail is better than less—it helps make the vision more real. Stay away from vague statements like “We’re busier than ever”; instead, use real sales numbers that mean something. Without definition, you will have no details on what success actually looks like. “I want to be wealthy” is well and good, but one person’s view of what makes you rich is another’s only-slightly-better-than-poor. So spell it out. What are the key financial numbers that define success for you? Sales levels? Salary? Savings? Status?

Along the same lines, a personal vision might say, “I spend a lot of time with my kids.” That’s great, but I think you’ll get a lot further with something like, “I’m spending two to three weeks a year traveling the country with my kids. It’s amazing how much fun we’re having.” Or, “One night a week I go out to dinner with just my entire family.”

STEPS 6A, 6B, AND 6C

MORE REDRAFTS
If you want, you can take this second draft and make additional adjustments. But at some point, you had better get your butt in gear and move on to Step 7. Note that there is no 6D. If there were, the D would stand for Done. More than four drafts, and I think you’re headed down the long and unrewarding road of “I’ve been working on a vision for the past few years, but I still don’t have it finished.” I’ve done it, and believe me, it really doesn’t help you—or anyone else.

STEP 7

SOLICIT INPUT
This is where you let the cat out of the bag and get input from people you trust and respect. But remember that it’s your vision, and you’re not obligated to change anything.

Whom should you show it to? Folks who have experience, insight, and expertise relevant to your vision. They might be your business partners, colleagues, peers in the community, mentors, family members, close friends. Again, don’t obsess. You can always get more input later if you think of other people you would like to hear from.

When I am at this early stage, I generally ask folks to let me know what they think (sometimes, I’ll explain the concept of visioning, if they aren’t familiar with the idea). That’s all. Keeping it loose gives people more room to tell me which parts excite them, which ones worry them, and the like.

Inevitably, some of these advisers will shift away from talking about the vision into a discussion of all the action steps that will have to be in a strategic plan. Don’t worry. Just listen carefully, and take notes—some of those ideas might come in handy later, when you begin formulating a plan to bring your vision to life.

How do you know what to add and what to set aside? I wish I had an easy answer. Practice helps. As does learning whom you can rely on to give supportive, helpful input and to have values and views aligned with your own. I like the advice I heard from John Williams, co-founder of Frog’s Leap Winery in Rutherford, California, who said, “Don’t let people beat the passion out of you!”

STEP 8

SHARE THE VISION
Finally, it’s time to share the vision with everyone who will be involved in implementing it. When you roll out your vision to the bigger group, it’s inevitable that people will ask questions about how you intend to achieve the vision. They’re asking you about the how. The vision, however, is the what. It’s totally fine if you don’t know how you’re going to get there. Later, you will figure out the how.

When people disagree with your vision

Some folks who write visions are sole operators who have enough authority to put a vision in place unilaterally. But most of us work with partners, family members, or key managers who are prominent or equal players, and we need to get in alignment with them. Leaders pursuing different visions for the same project will almost always create enormous problems in an organization.

At Zingerman’s, we begin the alignment process by having each of the partners in the group draft their own vision. We’re careful to be sure that everyone is clear on both the time frame and the topic we’ve chosen. Once each person has put together his or her vision, we compare drafts, listening carefully to what each person has to say and capturing themes on a whiteboard as we go.

We then give everyone a chance to weigh in on the strength of their feelings about each theme. If there are 10 themes up on the board, we might give each participant four votes, or something along those lines. The votes help the group get clear on the top-priority items. Remembering that there aren’t any right or wrong visions, we then work to identify common themes and come to agreement on a single vision that we can all work toward.

I don’t want to make it seem like visioning work is always bliss and harmony. We often wind up with themes that seem totally incompatible. And though there are often ways to achieve compromise, other times there just aren’t. All you can really do at that point is work toward consensus. Something has to give, or we have to come up with a different way to go forward.

On occasion, what we reach consensus on is the challenging realization that we actually have incompatible visions, and that we might need to go our separate ways. If our ideas are not compatible, then our larger vision needs to shift. It might become a positive picture of a future in which we’re no longer working together, or at least not working together in the way we are now. It could mean splitting a company in two or living in different cities. It’s painful but far more productive than having people passively go along toward a vision of the future that they don’t really buy into. When that happens, you wind up with two things: tension and trouble. Agreeing, openly and supportively, to pursue different but positive visions allows people to go in the direction they want to go. And ultimately that’s a good thing.

Creating a Company Vision
Ari Weinzweig is co-founder and CEO of Zingerman’s Community of Businesses in Ann Arbor, Michigan. This article is adapted from his recent book, Zingerman’s Guide to Good Leading, Part 1: A Lapsed Anarchist’s Approach to Building a Great Business.

By Lidia Dinkova

Pull over into the designated space. Turn off the engine. And enjoy the oceanfront view as you escalate in a glass elevator that takes you, while you are sitting in your car, to the front door of your apartment.

No, this is not the latest Disney ride.

Porsche Building – The $560 million Jetsonesque tower will rise in Sunny Isles Beach as part of a collaboration between Germany-based Porsche Design Group and a local developer, Gil Dezer. It likely will be the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.

“You don’t have to leave your car until you are in front of your apartment,” said Juergen Gessler, CEO of Porsche Design Group.

Here is how it will work: After the resident pulls over and switches off the engine, a robotic arm that works much like an automatic plank will scoop up the car and put it into the elevator. Once at the desired floor, the same robotic arm will park the car, leaving the resident nearly in front of his front door. Voila, home!

The glass elevators will give residents and their guests unparalleled views of the city or of the ocean during their high-speed ride, expected to last 45 to 90 seconds.

“What this is really doing is taking two technologies that have existed for centuries and putting them together,” said Gil Dezer, president of Dezer Properties. “It’s taking the robotic arm and it’s putting it in an elevator.”

The building, to named Porsche Design Tower, was approved unanimously Thursday night by the Sunny Isles Beach City Commission. Before the meeting, Mayor Norman S. Edelcup said he had not heard any opposition to the plan.

The cylindrical building will be erected on 2.2 acres of land at 18555 Collins Avenue. The 57-story luxury tower will have 132 units. Smaller units will be allocated two parking spaces and larger ones will have four, with 284 robotic parking spaces in total. There will be three elevators.

Residents will be able to see their cars from their living rooms.

“So people with fancy cars and antiques, they will actually have a really nice view of them,’’ Dezer said.

Units will range from 3,800 to 9,500 square feet and could cost up to $9 million.

The car elevators are the latest twist on Miami Beach’s burgeoning passion for designer parking garages. The highly acclaimed 1111 Lincoln Road designed by Swiss architects Herzog & de Meuron opened in 2009; also planned are garages by London architect Zaha Hadid, Mexico’s Enrique Norten and Miami’s own Arquitechonica.

Dezer said his hopes are that many other buildings in the United States and the rest of the world will be constructed following the Porsche Design Tower model.

But this will be the first and last one in South Florida, he said.

“We want to keep this really exclusive and not have this become a McDonald’s kind of style. The tower is going to change the skyline of Miami Beach,” Dezer said. “This is something Floridians should be proud to have in their state.”

Read more here: http://www.miamiherald.com