Posted on July 1, 2008 @ 12:35 am - Written by BawldGuy
How many times have we been out to breakfast, looking at a menu showing mouth watering pictures of fresh squeezed orange juice? You know the one — a pitcher of juice surrounded by the most perfect oranges the Good Lord ever made? Then while leaving you pass the kitchen and see them mixin’ up another batch, throwing away the frozen concentrate. Hey, those oranges were fresh at some point, right?
It’s all about expectations, isn’t it? I’ve spoken to investment clubs, and the experience generally falls into three categories.
Newish club so mostly newbie investors — great questions, solid response
More mature club, a few ‘leaders’, one of which I inadvertently cross while talking
The ‘1 in 10′ club, interested only in real info, in depth detail, real expertise and advice
After a conversation yesterday with a long time client, I’ve decided what the heck, it might be time to revisit clubs. She recounted a recent trip outa state to her see her brother. They’re both seasoned investors, and he took her a meeting of the local club. She’d told them during a break about how we do things at Brown and Brown, and that we used to speak to clubs like theirs. Read the rest of this entry »
Posted on June 27, 2008 @ 11:10 pm - Written by BawldGuy
There are plenty of things you can do, not the least of which is to recognize the sea change happening in real time before our eyes. I’m worried for your future. You should be too. And no, I don’t think your properties are gonna put you in the poor house, ‘cuz they’re not. This market correction will end, and at some point your properties will not only regain their value, but go higher.
The Problem?
If your real estate investment world begins and ends at San Diego’s borders, you have a big problem. If they don’t, takin’ your equities Outa Dodge will easily mean $1 Million in additional capital growth for most of you in the next decade. And that figure’s a relatively safe one. Talk about the tortoise and the hare. And for the record? It’s only in the fable that the tortoise wins. Where we’ll take you, the hares don’t stop and lollygag. All things being equal, those leaving San Diego with their real estate investment equity/capital will race past those who stay in town.
It’s a no-brainer. Those who leave now, will be working towards another $5,000 a month retirement income in the next 10 years or so, give or take. This isn’t a game. This is your retirement, and I’m serious as a heart attack about this subject. It’s what I do.
Do not invest in San Diego income property now, or keep what you have longer than it takes to sell/tax defer (1031 exchange) your way out. I’ve been tellin’ folks to buy SD property since Carter was in office. I don’t say these things lightly, as I understand the gravity of decisions based upon one’s future retirement income. But it’s the right thing to do. That makes it an easy call.
I’ll be in town this weekend, available by phone and email. I’m pretty good about gettin’ back to folks quickly. So Contact the Hairless One and let’s see what it’s gonna take to get your retirement back in high gear. Oh, and by the way, for clients doing tax deferred exchanges with Brown and Brown, the selling costs will be reduced by $10,000 or more 90% of the time.
Really — wouldn’t kid ya ’bout that.
Now for some kinda sorta on-topic weekend music. (Just go with it, OK?) Have a good one.
Posted on June 19, 2008 @ 10:26 pm - Written by BawldGuy
Had to write on this subject, as it’s been consistently coming up lately. And if clients bring it up, it needs to be addressed here. Asset protection, in my humble opinion, has become a racket — a huge cash cow racket — but a racket nonetheless. I’ll make use of the BawldGuy Disclosure:
The following opinion plus my Starbucks card will get us both some strong coffee and some really cool cookies. At least my opinion has been vetted by some pretty impressive attorneys.
(That last part is me saying, ‘Neener neener neener’ to doubters.) ‘Course I don’t actually say those words, I just refer to the bazillion dollar an hour attorneys I consulted. Gets the job done though, doesn’t it? Works for me.
Been sayin’ this for years — at least since the mid-90’s. After nearly 15 years of Asset Protection seminars, infomercials, and Fred yer next door neighbor tellin’ you how everything you own is in danger, you should smarten up and spend thousands on LLC’s and new fangled limited partnership agreements, and they should all tie into the…Stop! My ears are bleeding.
Has anyone told you the cost of residing in California with a few LLC’s? Try about $800 a year just to file the LLC tax return. Unless you’re unfortunate enough to have established one of those Blue Light Special LLC’s for ‘Just $99 Today!’ a real live LLC drafted by a real live real estate attorney with more than five minutes experience, will cost you $2,500-4000 for the first one. He’s creating it for you, not the last dozen clients. That cost real money. From then on the price crashes to $250-500 depending upon the attorney, and/or their mood. Gonna buy half a dozen properties? You’ll be advised to initiate more than one LLC. Let’s say the first one costs $3,000, and the next couple are $250 apiece. That’s $3,500 right off the bat.
You hold the properties for five years. That’s $12,000 of filing fees. Geez. I’ve already posted before about the tax deferred exchange problems. They’re not nearly as bad as they used to be, but they still can present problems. Lenders are usually the catalysts. I’ll skip that part of the story, but suffice to say holding investment property in a way which might possibly weaken or, perish the thought, cause a 1031 exchange to be disallowed, ain’t the way to a consistent sleep pattern, know what I mean, Verne?
Look, liability is what yer trying to protect yourself from when all the smoke clears, right? Right. This ain’t rocket science people. I’m not the Lone Ranger when it comes to this school of thought. I’ve finally heard the LLC word one too many times. So here’s my thinking, and that of the three real estate attorneys queried on the subject. Read the rest of this entry »
Posted on June 14, 2008 @ 9:23 pm - Written by BawldGuy
I’ll make this short and sweet.
Whatever you buy in SD you can buy in better locations, younger, with better tenants, with far more attractive leverage — elsewhere.
Not by a little bit either. By orders of magnitude. Seriously? It’s not close. Do not keep yourself in denial, as it’s literally gonna cost you seven figures in the next 10-20 years. Every $1 Million you don’t have at retirement ‘cuz you insisted on staying in San Diego means the following.
A minimum of $5,000 a month in retirement income you’ll never see. $2 Million? Uh, that’d be $10,000 that’ll never touch your bank account — month in, and month out.
Get — Outa — Dodge. I’ll help ya. Follow our advice and we’ll save ya, on average well over $10,000 when executing a tax deferred (1031) exchange outa San Diego. No kiddin’ — no games — just get ahold of me ASAP and we’ll get ‘er done.
‘Nuff said.
By the way, Cinnamon Girl already got her stuff Outa Dodge.
Posted on June 12, 2008 @ 9:14 pm - Written by BawldGuy
There are a few myths out there held as nearly doctrinaire by many. This one though packs a surprise waiting in ambush — timed to go off at retirement.
It’s held as almost the 11 commandment that once you retire, your income tax rate will drop significantly. This is so far from the reality, it’s akin to teaching summer brings cooling temperatures.
Ya can’t have it both ways. Those for whom the myth is almost a spiritual mantra, are the same ones who preach save and invest from the crib. Amass ginormous amounts of capital. Capital which will yield massive amounts of retirement income. Really? Massive income? Yet lowered income tax rates? Anyone see a problem here?
There’s only one reason for most folk’s income tax rate to fall in retirement: They simply didn’t Purposefully Plan — resulting in a retirement income capable of keeping food on the table, but sadly, not much more. Of course their income tax rate will fall.
