Posted on September 27, 2008 @ 3:32 pm - Written by BawldGuy
The other day I was asked how many exchanges I’ve done that failed. The answer is simple — none, zero, nada, zilch. Don’t know how many I’ve done, ‘cuz I stopped counting after a couple hundred. The proof I can offer than none ever failed? I’m alive. What would you do to me if the IRS sent you a tax bill for 5-6 figures when you thought you’d deferred ‘em?
Exactly. 
I’m still here, so…
Just this month, folks asking for help, have told me about unintended capital gains taxes incurred, surpassing a quarter million bucks. Ouch!!
The story that hit me hardest was the lady who had ‘pro’ advice from her CPA and her accomodator. I’m not countin’ her banker, who endorsed her actions, as I’m sure she had no clue of the context.
Next April the IRS will show up with their palms up, asking for +/- $100,000.
Though I’ve said many times here and elsewhere that tax deferred exchanges don’t require the IQ of NASA scientists, the rules are the rules. It’s not for beginners or wannabes by any stretch. If you have a question, or wonder if your 1031 is gonna accomplish that for which it’s been designed, call or write me, and we’ll take a gander.
There’s no gray areas here people — it’s akin to gravity. It’s either your best friend or your worst enemy. Or, in a word? Unforgiving. Years of planning for retirement can be injured significantly by one signature.
BawldGuy Axiom: Grandma was right — closing the barn door when the horse is already long gone, doesn’t do ya much good. Pay attention.
As I alluded to at the beginning, every year I’m consulted by several investors, wondering if their exchange will pass muster. Don’t wanna instigate a surprise visit from Captain Obvious, but those questions are best asked before anything has closed escrow. Just sayin’…
Wanna learn some things? Listen to some of the 10-20 minute podcasts, located at the top, on the right. They’re relatively short, and very much to the point — substantive.
Enjoy your weekend. If ya wanna talk, go ahead and click the ‘Contact BawldGuy’ link up top. See ya
Posted on September 13, 2008 @ 10:57 pm - Written by BawldGuy
This’ll be short ‘n sweet.
When I first recognized a correction was headed our way, back in ‘03, I made plans to adjust. Very shortly thereafter, Brown and Brown was on its way Outa Dodge. The correction hit like Satan’s hammer in late summer of ‘05. We were ready for it.
If it wasn’t for our own Purposeful Plan, the firm, and our clients would be stuck in San Diego wondering why nobody wants to buy their ancient income properties for prices demanding 40% down and more in order not to lose money every month.
Meanwhile, back at Outa Dodge Ranch, real estate investors all over the country were discovering more vibrant markets. Our clients were among them. The best return for them was being out of San Diego’s market. Over the next 10-20 years, it’ll mean an additional $500,000 to $2 Million per investor in terms of net worth.
So tell me again why yer holdin’ on to your San Diego income property like a dog with a bone? Many of you missed the bus the first time, before the market correction hit. Don’t miss it the second time — which is pretty much, well, uh, now.
What does it mean to your retirement? In terms of retirement income it means the San Diego real estate investor who gets their equity Outa Dodge now, will receive an extra $2,500-12,000 — every month.
Most folks, if they never benefit from more than 5% annual appreciation, but make use of prudent leverage, will take home an extra $5,000 monthly just by executing a tax deferred exchange out of San Diego, or any place like it — now. It’s only at that point it’s even possible to resume some kind of positive capital growth rate. (Northern and Central California — you listening?)
That ain’t chump change, as Grandpa used to say.
No, it ain’t.
So, ya gotta ask yourself — why? Why haven’t you sent me a note, or hit the Contact BawldGuy thingy, to begin a conversation? I’m the easiest guy around to get a hold of. Ask anybody. Have a good one.
Oh, almost forgot. GO CHARGERS!!!
Posted on September 8, 2008 @ 10:29 pm - Written by BawldGuy
Early adapters will be the big winners when it comes to capital growth and investing in outa town real estate. Those who insist on keepin’ their capital here in San Diego will look back a few years from now, realizing they could’ve done much better. In just five years the difference can be far more injurious to your retirement plan than you might imagine. How so?
San Diego (California in general) takes another couple years to stop the decline. Another to stabilize. Two years at 2-5% appreciation. Before ya know it you’ve raised enough to pay for half your sales costs in five years. Let’s party.
OR
You can take yer $100-500,000 into a growth region or three and get 3-7% for the next five years. Even if it’s say 5%, if you executed a tax deferred (1031) exchange into say $1 million of property, your first year you’ve grown by $50,000. Even if your $450,000 duplex or rental home in SD went up 10% you’re still behind — and the gap only widens.
BawldGuy Axiom: Waiting for California (San Diego, Palo Alto) real estate to resume normal capital growth rate is akin to waitin’ for your cat to bark. Definitely not a good use of yer time — or your capital.
This cat wouldn’t bark no matter what drug the vet gave it. Sweet relief from broken leg suffered in three story miscalculation. The bird made a clean getaway.
You might as well be waitin’ for yer cat to bark as wait for the San Diego market to keep your capital on the growth trail. Adapt to the new reality. It’s now almost the same trading to other states as it is staying home. And in the end? Your capital doesn’t know where it is. It does have a need to flourish though. The Boss’s cat wasn’t even gonna
Texas, including Dallas and surrounding areas, Austin, Kansas City, and hopefully soon, the Carolinas and Georgia — all better performing markets than San Diego. Not even a close call.
Oh, and for the record? No matter how long you stare at yer cat, it ain’t gonna bark.
Maybe while yer starin’ at Fluffy, you can send me a quick note. We’ll talk about how a Purposeful Plan will most assuredly make the difference in turbo charging your equity’s growth rate. Have a good one — and thanks Kelley.
Posted on September 4, 2008 @ 12:31 am - Written by BawldGuy
It’s so easy to talk about moving real estate equities from here to there like your rearranging furniture in the living room. In practice it takes real experience, knowledge, and expertise to pull off. Though I’ve ‘captained’ hundreds of tax deferred exchanges (stopped counting), each one has to be executed to near perfection ‘cuz that’s the only thing the IRS understands. It’s not rocket science, which is what so many real estate folk want you to believe. Still, do it with a cocky attitude and you’ll find out in real time what a bad day’s all about.
For the record, Brown & Brown has never, not once, failed to successfully finish a 1031 exchange. How do you know that’s true? ‘Cuz I’m alive, dude! What would you do if an agent messed up your exchange, costing you six figures in capital gains taxes? Exactly.
Let’s talk nuts and bolts first. How do you sell a property in a place like San Diego these days? That’s no walk in the park, as you may have guessed. It’s not like yer able to head over to the parts store like Grandpa used to, when the family jalopy needed work.
Gonna be brief tonight.
When selling property in a buyer’s market, which is also known for it’s relatively high prices, you must be serious. I’ll only talk tonight about the first step, which is simple as pie. Read the rest of this entry »
Posted on August 27, 2008 @ 9:46 pm - Written by BawldGuy
Ironically, pics tonight will be of Durango and Silverton trip. As you might expect however, after this post there’ll be San Diego pics galore just around the corner.
It’s now been almost five years since we begun refusing to sell anyone San Diego investment property to investors. Shortly after Labor Day we’re reentering the San Diego market. Don’t jump to any premature conclusions about this turn of events. We still won’t sell local property to investors. The lone exception is if their Plan is to live there also. Even then, it’ll be a last resort.
To subtle? We’re comin’ back to help local real estate investors move their SD equities Outa Dodge and into far better areas for capital growth. That is why you invested in the first place, right? You know, grow yer capital so your retirement would be the best you could make it? Thought so. We will not assist folks in the acquisition of local property. The lone exception will be for those few who will be living in the property. Even that exception will be considered a last resort. See? No change of heart whatsoever. We believe with all our hearts San Diego is truly Paradise — as a place in which to live. It’s where real estate investment portfolios go to die though. Just so ya know where we stand. Kinda left subtle in the dust with that one.
BawldGuy Axiom: San Diego (Paradise) is the best place on earth to live, but not the region in which real estate investors should put their capital. San Diego income property is over for the foreseeable future. Read the rest of this entry »