Posted on July 1, 2009 @ 8:12 pm - Written by BawldGuy
Getting two or more real estate investors talkin’ about when to make a move and/or what move to make can be interesting to say the least. Usually I can listen for awhile and pick out to what ’school’ each investor adheres. One thinks tax deferred exchanges (IRC Sec. 1031) are the be all end all to everything but athlete’s foot. The next guy is horrified at even the mention of voluntarily going out of ownership of a single piece of real estate, absent dire personal emergency. The Achilles heel of both these belief systems is their inflexibility.
You can hand both these guys an incredibly well done analysis showing multiple options and their predictable consequences. They’ll both smile, then do what they’ve always done.
Over the last 30+ years I can’t count how many times I’ve demonstrated beyond debate how their revered approach had cost them hundreds of thousands of dollars, sometimes millions. A few times they’ve challenged me to show their CPA these numbers — much to their chagrin. See, I don’t have a dog in that fight. I care about one thing — which strategy gets them to their Point B faster and/or more safely? Read the rest of this entry »
Posted on June 30, 2009 @ 8:45 pm - Written by BawldGuy
Some weekend when you’re lookin’ for something to do, grab a clipboard, a legal pad, and a pen, then head over to one of your income properties. Start at ground zero and pick a direction to start walkin’ and talkin’ with tenants in the neighborhood. I can almost guarantee an eye opening hour or two. I’ve had clients do this for years as a hands on exercise designed to show them all the things they didn’t know about the area, and all the misconceptions they may have had.
One client called me up laughing. Seems he came upon his high school sweetheart living a couple streets down. Ya never know what you’ll find and/or learn, but you’ll do both if you’re focused.
Here are some suggestions you may wanna incorporate. Read the rest of this entry »
Posted on June 29, 2009 @ 9:31 pm - Written by BawldGuy
Don’t wish to sound trite, but it hurts my heart when I speak with folks calling to explore their options, and at least half of what they’ve done in the last 5-10 years or so would’ve been diametrically opposed to the advice I would’ve offered. Worse is when they’ve stood pat, when they had incredibly solid options for action on their menu. The story usually starts with how they spent so much time and money ‘learning the ropes’ at how-to seminars. How to make a million without breakin’ a sweat. How to become the flip and/or rehab champ. How to…well, you get the idea, right?
What they learned in fact is that they could study what an expert does for six months and not know what the expert’s forgotten. That may sound somewhat harsh, but step back a bit and ponder what an expert is. Not what our culture has done to discount the concept of elite expertise, but what our Grandpas told us. An expert is an authority on a subject or group of related subjects. An expert’s knowledge can be correctly described as comprehensive. Along with the comprehensive knowledge and authority comes experience. Read the rest of this entry »
Posted on June 25, 2009 @ 8:50 pm - Written by BawldGuy
Here’s something almost every client who’s been new to investing has had to learn. It’s so simple I think folks don’t see it, even though it tends to hide in plain sight. Since newly acquired depreciation is akin to having a new kid or four, why wait ’till April for the benefits? If you’re an employee and not an independent contractor, simply talk to those in charge of your paycheck, usually Human Resources. (I think)
Your CPA can tell ya how many exemptions to add. The increased exemptions act to swell your take home pay. It all comes out in the wash at tax time, the same as it would if you indeed had a set of quadruplets. 
Why on earth would ya wanna lend Uncle Sam YOUR money at 0% interest if an easy as pie errand like walkin’ down the hall at work transfers those dollar$ from his coffers to yours? Read the rest of this entry »
Posted on June 24, 2009 @ 7:21 pm - Written by BawldGuy
Hey AI — Let’s apply your Devil’s Advocate take to San Diego. AI’s thoughts can be found in the comment section of yesterday’s post.
Here are Another Investor’s Devil’s Advocate positions, followed by my thoughts. For the record, AI is one smart cookie. A very experienced investor with a keen analytical mind. Talking with AI is one of my new favorite things to do. So, here we go — AI’s point by point Devil’s advocate position — and my answers.
1. People want to live in SD. Read the rest of this entry »
Posted on June 23, 2009 @ 7:08 pm - Written by BawldGuy
In a conversation the other day, I was talking with a local retired investor, about how folks will analyze properties into submission while missing the basic reason why one is easily the better choice. I used to believe it was merely an indicator of human nature — folks will use analysis sometimes to back up their bias for one property over others. But now? Not so much.
It’s not that investors don’t want the best possible results for their capital. It’s almost always the meshing of objective and subjective gears — easier said than done, right? In areas like San Diego, Palo Alto, San Mateo, San Francisco, and much of L.A. and Orange County, the bias for local property over clearly superior options is still present. I’ll use San Diego as an example. Read the rest of this entry »