Posted on July 31, 2008 @ 11:45 pm - Written by BawldGuy
Between learning what’s new on the ‘ya can’t make this stuff up’ channel, and watchin’ a crazy Dutchman’s campaign video for the presidency of the National Association of Realtors, my picks today were relatively easy. Surprisingly, in my opinion, the best was saved for last. Ever wondered if clearing out your email inbox was possible without Divine intervention? I’m here to tell ya it’s not only possible, but thousands just like you and I are gettin’ it done. So enjoy yourself, and thanks to the winners. You’ve helped make Friday a little better for at least 8-10 people.
Doug Quance is a broker in Atlanta — a very good broker. He has a local blog there, and writes mostly about area stuff, but mixes in general real estate topics that are national in scope and timely. This one though, I dunno. It’s gotta be filed under, ‘ya just can’t make this stuff up’. I know, I know, we all say that about so much these days. This one sneaks up on you. I’m not even gonna give it away through the title. Just go there. There’s no way more than .0001% of the population had the faintest clue about this. I know I didn’t. Anyway, here it is for your ‘Are you kiddin’ me’ pleasure.
Kevin Boer is a Realtor in the famous Palo Alto area of NoCal. That’s where the median home can be bought by Warren Buffett and Bill Gates heirs. But I digress. He published a video post this week with tongue almost permanently wedged in cheek, detailing his campaign platform for his run for NAR President. (National Association of Realtors) What makes it funny, is how much truth he speaks. Anyone who’s ever bought or sold a home, or even knows someone who has, will laugh. Here it is.
Merlin Mann Is one of the most readable, wicked smart guys I have on my reader. His posts on twitter several times daily keep me chuckling as I slave away, chopping down my daily (and usually endless) to-do list. I’m bettin’ you’ll become a regular reader, but this post has universal appeal, as it give us all the final answer to the stoopidly overloaded email inboxes we all have. On Peanut Shells And Email Archiving is a Must Read.
“…and remember. The daily Bawldys have approximately 1/365th the value of our annual awards.”
Posted on July 30, 2008 @ 11:47 pm - Written by BawldGuy
Here’s how I explain to real estate investors in other states what it’s like to trade equity from California to much lower priced growth regions.
It’s kinda like buying that killer Norstrom’s dress for yer wife. You honestly thought it was perfect for her. But after she stopped laughing, and could speak English again, you were back in the car, headin’ for a refund. Now, imagine you hafta spend the entire refund at the Dollar Store. That is what the CA real estate investor faces when he exchanges his properties’ equities to another state.
Take a Bay Area, San Jose (Palo Alto), or San Diego income property owner. We’ll use a San Mateo duplex. Let’s say it can sell for $850,000 and with a loan balance of $400,000 the net proceeds would be roughly $385,000 or so. If they paid $600,000 back in the day, their annual tax shelter runs in the neighborhood of $18,000 +/-. (Should be more, but that’s another post.) Their current cash flow is either zip zero nada zilch, or enough to treat the family to a monthly dinner at Sizzler. Oh boy! We’re goin’ to Sizzler!
Here is the ‘before & after’ picture when their 1031 tax deferred exchange has been successfully completed. Read the rest of this entry »
Posted on July 30, 2008 @ 12:10 am - Written by BawldGuy
This was many moons ago. The client was on in years and wanted to execute a tax deferred exchange to younger, higher cash flowing properties. Oh, and by the way, Jeff, can you exit about $75,000 in cash for me? When asked why, and getting the usual lecture from her about it being none of my $%^# business, I explained how her answer would most likely dictate how I’d design her transaction.
She always allowed me a smile after givin’ me the expected hard way to go. It was a dance we did, at her calling. Turns out, since she was gonna keep the newly acquired property for quite awhile, she wanted the cash way ahead of when she actually needed it. Though semi-retired her income was still six figures yearly, as she owned a long established cash cow cafe. (She hated it when I called it that.) Turns out in three years she was turning over the reins to the cafe, and forgoing the income. This worked out ‘cuz by then her portfolio was already cash flowing, uh, more than adequately. (She had quite the portfolio.) This was probably gonna be her last exchange, and it was mostly due to her wanting younger property with lower long term operating expenses.
My assignment was to get her $75,000 — and time it for three years from the close of this exchange. It would be for a long trip she was gonna take, and frankly, just ‘cuz she wanted a little more spending money for when she turned over the cafe to her son and daughter-in-law.
Posted on July 28, 2008 @ 11:18 pm - Written by BawldGuy
Of late I’ve had maybe half a dozen conversations involving tax deferred exchanges. As one astute observer pointed out, there’s even some business models based on them. True enough, but I’ve seen so many folks get themselves in unintended places while worshiping the false god of 1031. I’m here to tell ya true — it ain’t the end all be all to the real estate investor. It’s merely another tool.
Ever met a carpenter whose tool belt had only a hammer? He has levels, saws, various measuring tools, and a bunch more. He uses the tool made for the job at hand. Why? He’s found through experience pounding nails with a level makes for a crazy day. That analogy is nearly exactly on point with the real estate investor’s tool belt. There are times when a partial exchange will do the trick.
Your Purposeful Plan takes into account how you will exit your investments when the time comes. Though most folks will make use of the tax deferral, it’s not anywhere near universal. This is especially the case for those with household ‘day job’ (In IRS-ese that’s ‘ordinary income’.) of $150,000 or more.
Let’s skip process for tonight, and go straight to results. Oh, now yer paying attention. Read the rest of this entry »
Posted on July 27, 2008 @ 8:35 pm - Written by BawldGuy
In my experience, the beginning of the end of relatively bad economic down times, comes when the handful of folks with real power decide it’s time. You think dancers are choreographed? When the real power makes their moves, Fred Astaire is impressed.
The last several weeks, especially during this month, the small group of clean-up hitters have all grabbed their bats. (He said, making use of world class skill at mixed metaphors.) Bernanke bails out one of the biggest Wall Streets houses. Before that he was indirectly increasing liquidity of not only domestic banks but hose across the pond. He then allows banks not on the cool list access to ‘the window’ at the Fed. His latest? Allowing Fannie and Freddie to also belly up to the Fed for dead presidents as they see fit.
Those are serious moves by anyone’s definition.
Next comes the White House. The president blithely strolls up to the podium and announces how he’d be pleased as punch if we turned drilling for oil into a national sport. Geez, I dunno. Ya think that had anything to do with the almost immediate downward pressure on oil prices?
Wanting his own face time was Treasury Secretary Paulson. Henry throws the gauntlet down to the rest of the world — seems the dollar should be strong. Now there’s an idea to ponder. Why didn’t we think of that? A strong dollar tends to solve a plethora of economic ills. This isn’t news, of course, but true nonetheless.
To review, here’s what’s happened, and just as importantly, not happened in the most recent past.
Bear Stearns failure avoided. Liquidity for banking systems not allowed to become huge factor. Secondary market for real estate credit/financing aided. Oil problem finally shown in public to be what it’s been all along — supply and demand. Go figure. The dollar begins to get real support, at least on the talkin’ side. And for bonus points boys and girls, durable goods swats Chicken Little in the butt. The market had already discounted widely accepted expectations of a .2% dip. Instead, they came in at a solid, and surprising full 2% increase.
And no, I’m not gonna argue the finer points with all the MBA’s who think it’s their mission in life to explain how everyone else in the room just doesn’t get it. The fact is, the big boys are now in the first stages of flexing their muscles, and I’m not gonna quibble — except to say it’s about time, guys.
OK, enough of that stuff on a Sunday. let’s listen to some tuneage. Between Bernanke, Bush, and Paulson, seems they’ve choreographed their dance well.
And now, apropos of absolutely nothing, except maybe as homage to The Boss, our Sunday night video. See ya tomorrow.
