12 comments to “California Real Estate Investors Using 1031 Exchanges To Turbo Charge Portfolio”

Joshua on July 31st, 2008 at 9:18 am said:

• I loved the Dollar Store bit and the example figures! I would like to make a future post request:

  The examples help me to understand how all this works and what can be “expected”. My post request is: Can you give us a real life example, from start to finish, in a timeline like format (with explanations along the way) of one of your clients?

  Of course, anoninimity is important and would only be expected. But if one of your clients would volunteer as an example I think it would be really cool to see your genius at work.

  Maybe I’m asking to much but it sounds like a very interesting and educating subject.

Jeff Brown on July 31st, 2008 at 9:47 am said:

• Josh — Einstein was Babe Ruth if I’m a genius.

  Though in the past I’ve done detailed case studies, my clients prefer, as you suggested, to avoid being one. Part of the problem is even though I change names, they’re known not only around their town, (many in San Diego) but by each other. They like to keep their business their own.

  Still, I think I have an idea.

David Shafer on July 31st, 2008 at 9:53 am said:

• In Buffett’s terms, the basic environment has changed, so its time to sell and buy where the value is best!

Jeff Brown on July 31st, 2008 at 10:00 am said:

• Dave — Buffett is one of my role models in the sense that he insists on empirical data, not gut or fluff. His bottom line has always been what is, not what might have always been.

Dennis Fassett on July 31st, 2008 at 10:27 am said:

• Are you kidding me? So now everywhere else is a Dollar store compared to California?

  Typical California arrogance!!!

  I’ve lived in Northern California (on the Peninsula) and Southern California (LA and Pasadena) and I can tell you first hand that the quality of homes here in the midwest far exceeds the quality of the homes that I experienced out there.

  Plus we have brick exteriors and basements, (which don’t get included in the square footage).

  So yes - your dollar goes a LOT further here, AND you get a better built home to boot.

  I understand what you were trying to say, I just don’t appreciate the way that you said it!

BawldGuy on July 31st, 2008 at 10:38 am said:

• Dennis — We’re in agreement. I wasn’t addressing quality. This is why I brought up the age differences. I should have been more clear.

  It’s the price AND the quality that should motivate CA income property owners to Get Outa Dodge.

  Thanks so much for your kind correction. Regular readers have already learned to assume a kind hearted intent on my part, so don’t assume any mean spirit.

  Again, you and I are in agreement.

David Shafer on July 31st, 2008 at 10:59 am said:

• Dennis, Jeff has mentioned the age and quality issue many times on this blog. In fact it is one of his reasons for suggesting non-California re investments.

Lani Anglin-Rosales on July 31st, 2008 at 11:12 am said:

• Dennis- knowing you on Twitter, I’m quite surprised that the tone you’ve taken here (especially as you address “how something was said”). Jeff has brought great business to us in Texas, to our friends in Kansas (and many other states) and has a wonderful understanding of national investing (and has done it since well before I was born), so I along with his readership agrees with his guidance (none of which was in contradiction to your harsh comment). He would not speak in a condescending tone as I know from his track record, he can prove that his motive is not a negative one as your tone indicated.

  You know what, Dennis? I bet he’d bring investment dollars to your side of town too regardless of the strength or weakness of a dollar (or of the analogies he chooses to write with).

Dennis Fassett on July 31st, 2008 at 11:15 am said:

• Jeff - I know what you really meant - and I know from our prior interactions that what I took from the analogy was in no way indicative of your thought process or intent.

  My apologies for the harsh response. Lani is absolutely correct.

  So let me try and dig myself out . . . .

  I wanted to offer a different perspective since I have first-hand experience with this “capital flight” topic, because part of my business here in Michigan (called ForeclosureConcierge.com) actually involves working with out of state investors as a consultant to help them find properties to either flip or buy and hold.

  A large majority of the inquiries come from Southern California, and I have to say that in some cases I have had to “educate” some of these investors, because it seems that, after having seen pictures of burned-out houses in downtown Detroit (which isn’t much different from South Central LA), they think the whole metropolitan area is like that and begin treating locals here in a very condescending manner. You can imagine how that goes over here, and I have spent many minutes on the phone trying to smooth ruffled feathers.

  So again, having lived in both places I wanted to make the point that it’s important for out-of-state investors to understand and appreciate the fact that some people, like me, choose NOT to live in California, and are very comfortable and prosperous in the areas that we’ve chosen, and that we enjoy living here.

  That being said, bring your money!

  I just bought a 3 bedroom brick ranch with one and a half baths, full finished basement, all appliances and a two car garage for $69,000 – and it’s rented for $1000 per month. And there’s another one just like it down the street that I know they’ll take $70k for.

BawldGuy on July 31st, 2008 at 11:24 am said:

• Dennis — No harm, no foul. Lord knows I’m not protecting my perfect record. I accept your apology, though I think from now on I’m gonna be a lot more specific when using that analogy. I can see how those in other states might read the wrong message between the lines.

  My track record the last 5 years has been to take CA investors out of CA in large part because of price, but just as importantly because of the quality to which you refer. Price is pretty much an empty suit without that quality.

  I’m friends now with somebody you probably know, Tom Vanderwell, a very solid mortgage guy in Grand Rapids. I’m hopin’ to visit there some day soon.

  I’ve always loved the price/rent ratio in your state, but can’t find data to support current and/or positive employment data. I’m always open to be shown what I’ve been missin’. That’s how I lifted my Texas embargo in the first place.

  Thanks again, Dennis.

Dennis Fassett on July 31st, 2008 at 11:53 am said:

• Jeff I’m going to quit while I’m behind - I just re-read my second post and I don’t like that one any better. Serves me right for trying to bungee in and out during work between meetings.

  The issues with the detroit metro area - and the opportunities as well - are complex.

  The area is resilient, though, and it weathered a much more violent economic storm back in the 70’s and 80’s to come storming back in the 90’s and have the highest growth rate and lowest unemployment in the nation. This is, unfortunately, qualitative not quantitative analysis.

  But suffice it to say that the discussion here is all about when, and not if, this area is coming back.

  Me? I’m bullish. I have a waiting list as long as my arm of people that want to rent homes from me, and there’s a ton of supply available at dirt cheap prices. And at these prices I’m still covered if rents tank 20%, although I doubt that they will because at present they’re rising.

  As always keep up the great work on the blog.

BawldGuy on July 31st, 2008 at 11:59 am said:

• Dennis — Looks like I’ve located my official Detroit connection. Thanks so much.

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