Posted on July 7, 2007 @ 12:40 pm - Written by BawldGuy
Today we learn about dry rot and those nasty pests from Kris Berg the resident expert on such things. 
Phil Hoover shows us the long term results of significant and prolonged growth. And Chris Smith demonstrates how being transparent while in negotiations is the way to go. Any time you think there’s something worth sharing, please email me — your kindness will be appreciated.
Kris Berg has written on a topic near and dear to both buyers and sellers — pests & dry rot. It’s not that the subject is exciting, but that most people just don’t know much about it. Kris, in her predictably lucid style, explains how it’s just not the big deal some think. And she’s right on the money. Ask the Brokers - How Rotten is Dry Rot? is a MUST READ for buyers and sellers who just don’t quite understand what the deal is.
Phil Hoover tells us how one little Idaho community is already scheduled for such explosive growth, they’ll have to add as many as 17 new schools! And you wonder why I’m constantly calling the Boise region a monster capital growth opportunity. Geez. Eagle Growth Could Require 17 New Schools is just another example of paying attention to different regions than your own. Since I’ve been in San Diego there has been so much growth we’ve added entire school districts.
Chris Smith simply gets it. The key to managing tricky negotiations :: fearless, transparent honesty is poetry disguised as a blog post. The philosophy he espouses when in negotiations with a buyer or seller is mine too. Concrete questions should be met head-on with concrete transparent responses. This is, Duh, a MUST READ.
“…and remember. The daily Bawldys have approximately 1/365th the value of our annual awards.”
Posted on June 25, 2007 @ 9:48 pm - Written by BawldGuy
I wrote of this very young, very smart couple a few days ago, who’d found me through an internet search. They were deciding between a non-appreciating, but income producing asset vs real estate income property. You’d think that decision was an easy one, but you have to put yourselves in their shoes a bit.
I’ll speak for myself here, but when I was 20-something and married, the over/under for the day was whether I actually knew what day it was. This couple was conducting some pretty serious and relatively in depth research of the various investment options available. Let that sink in a moment. Can you see how daunting that task could become — especially when it’s given the weight it deserves? Wow.
To make a long story short, they sent me an email yesterday saying they’d decided to go down a path different than I was advising. They respected my advice, but had made their decision. However, they continued, they’d very much like me to find an investment property in Boise — using 100% financing. What? Uh?
Where did that come from? Talk about getting a 98 mph fastball down the middle when you just knew a curve was coming your way. You end up holding the bat funny with that RCA Dog look on your face.
I wrote them back addressing some observations they’d made concerning the Boise rental market. (Historically low vacancy rates, and rising rental rates. Nice combo, eh?) Then I jumped into the 100% financing request. I told them, that with respect, I couldn’t guide them while they bought property using that strategy. Furthermore, and now I’m taking this verbatim from the email:
As policy, I won’t be a part of guiding investors, especially young investors with as little knowledge as you guys possess, into no down investments. It’s an invitation to disaster – period. Advisors who ‘guide’ clients into using such methods are either without conscience, expertise, experience, or all three. Nothing down will work only in the most wildly up-trending markets, and then only most of the time. Even I didn’t do it in the market.
In fact, Greg, I’m now doing my best to help three young investors, like you, in their 20’s with kids, who are now upside down – do to using zero down financing. It’s a total disaster.They live in Boise too. They’re so buried they have to look up to see down. You should ask them what they think of no-down real estate investing.
I received no immediate response to that email, but this morning they met with my Ace Mortgage Dude Jed, who proceeded to personally tell this couple exactly what his experience has been with me so far. They went home, and sent me the following email: (I’ve edited some personal stuff out, and changed any names mentioned. Italics and/or emphasis is mine.)
I appreciate your response. As you said in your email, Monica and I are just trying to find the best route for us to take. The more I learn, the more I realize I don’t know. As you know, I have read multiple books, spoken with financial advisors (you and Gene D.), as well as friends at work (one used to be a stock broker and the other has a finance degree) and my own parents. I have had a hard time sifting through all this information and that is why I have been shifting back and forth so much. Anyway, due to my own lack of knowledge on the subjects involved, it ultimately came down to me……….. and trusting to my feelings. I feel that, overall, you are the one who has my best interest in mind as well as the necessary knowledge to help me achieve my goals. After hearing Jed’s experiences this morning, in addition to your email, I have decided to commit myself to follow your advice.
And that, my friends, is why I love this business. You can’t buy how that makes me feel. The thoughts expressed in that email is worth more, by far, than any money I may earn helping them. It put a glassy-eyed smile on a grizzled real estate vet.
Notice who he had available for investment advice. His parents, a couple guys at work with some ‘qualifications’, me and another financial advisor, and a bunch of books. Lord only knows what the books said to add to is confusion. Season it with the ‘knowledge’ of his co-workers (well-meaning I’m sure), parents who only want what’s best for their son, and what kind of stew do you think was the result? No wonder he felt a little lost and confused — who the heck wouldn’t?
These guys will retire way sooner than their buddies, and with more income then they ever dreamed. They’re gonna be a great story in the next 10-20 years — and I can’t wait to tell it.
What a great Monday this turned out to be.
Posted on June 25, 2007 @ 8:04 pm - Written by BawldGuy
Here’s today’s entry’s — qualifying for daily Bawldy’s. You go from Boise retail growth to a new kind of concrete — what some might call a wide spectrum. Dig in.
Phil Hoover, new and good friend in Boise, updates us on what’s up with the big retail players in his neck of the woods. It’s as I’ve been screaming from the roof tops for over a year now. His post, Boise Retail Growth Explodes! shows what the big boys think of Boise. Before many of these guys came in, I said it was obvious they had to come there because of the numbers. Phil knows his stuff.
Steve Farber writes about two sides to the story, basic communication, and understanding what the other possibilities just might be. Don’t know about you, but I’ve experienced something like An Old Kit-Kat Tale myself. It’s funny now, but wasn’t then.
Greg Swan the Head Trainer at BloodhoundBlog (Disclosure: I’m a long time contributor there.) wrote State rethinks crackdown on online home appraisals about Arizona’s embarrassing mini-drama instigated by the drama queens running the regions appraisers. It is amazing what a little power can do to some organizations.
Over at Sellius, there’s a very cool new product you must see. Many will want their homes built with it. New Concrete Building Material Lets Light In: LiTraConith it. shows and tells how this new concrete is a real breakthrough.
And there you go — today’s Bawldy’s. Your feedback is not only welcome, but encouraged. I’d particularly like to know what you found incredibly exciting, or unbelievably boring. Enjoy.
Posted on June 20, 2007 @ 10:49 pm - Written by BawldGuy
As a lifetime baseball guy, I realize having my pitcher fill in for my shortstop is a recipe for chaos. I know this because in baseball, someone playing out of position will be found out — and usually sooner rather than later. You can put an infielder in right field, where a ball hasn’t been hit all day. Invariably the ball will find him, and his lack of experience and expertise will cost his team. It can even transform what looks like a sure win into a loss. Mediocre players are kept on the bench for a reason. There are players with expert skills ahead of them.
The same principle applies to investment real estate.
It’s so easy to talk about our team here, and our team there. In fact, before the middle of 2003, when I decided the end was near for San Diego income property, establishing a team in another state wasn’t on the menu. Now? We’re just now in the earliest stage of our third new region. The first task is to establish the local players on our team. As usual, our team’s local agent is the first team member, as without them, we won’t even try to do business in a new region. Local knowledge can’t be faked, and it’s a fool who tries.
Also the norm is the local agent recommending a title company, which is the one he uses — of course it is. Why wouldn’t it be? In Phoenix we were 1 fer two with escrows. Our second choice turned out to be superb. We even assisted, indirectly, in getting her headhunted to the company with whom we preferred she work. She got a raise out of it too.
So I ask the guy in the proposed new region, (name being withheld by my request, along with the area) what escrow he likes. He says, “We don’t use escrows here.” Come again? Yup, seems they just let the agents take care of the contract, get things taken care of in a timely manner, and then close the dang thing. Seriously? He swears he isn’t pulling my leg. I gotta get out more.
One Stop Shops
In all my years, I’ve yet to see a one stop in real estate that did a all-star job in all areas. They say they offer real estate brokerage, mortgage brokerage, property management, and transaction coordination. And they do — just not in an excellent fashion. Even if they’re pretty good at everything, it’s not excellent. And when you’re handling other folks’ money, pretty good just doesn’t cut it.
In the one stop shops, there inevitably is a mixing of responsibilities. Everybody helps everybody else. I’m sorry, but it just doesn’t work that way. I want my lender to have their head in that part of the business all day every day. Same way in spades with professional property managers. They usually don’t have enough time in the day as it is, without having to assist the agent with an open house for Heaven’s sake.
This approach skews the job descriptions. As that happens, you end up with a bunch of happy talking, Kumbaya-singing champions of barely acceptable results. We insist on amazing results — or we make changes.
Merely acceptable results, over time, will bury you as surely as it’ll be over 70˚in Phoenix at noon on July 4th.
Captain Obvious says this is what we want to avoid. Duh
What we create is a modified one stop shop. Instead of having everyone under one roof, every team member is a stand-alone company specializing in one thing, and one thing only. They know their field inside and out. When they say something, we can rely on it, and forget about it. I can’t even begin to tell you how valuable that’s proven to be over time. There’s no confusion or blurring of responsibilities whatsoever. Brown and Brown oversees everything. They all report to us.
And the results are indeed, amazing.
Here’s our Idaho Team
We have one company that coordinates all of our transactions. When Becky calls one of our team lenders, escrow, or property manager, they know she’s speaking for me or Josh. She’s not only the best we’ve found in Idaho, she’s the best I’ve seen since the position of transaction coordinator came into being sometime in the early 90’s. She’s that good. Our clients love her.
Possibly the most critical long term teammate is the professional property manager — at least that’s what our clients will tell you. When you’ve invested not only outa town, but in another state altogether, they want to have very warm feelings about their property’s manager. Patty does that for us. Whenever I’m asked to describe her, I tell clients she’s death on misbehaving tenants, and has a BS detector second to none. She flat takes care of business with a no-nonsense approach that would be appreciated by any investor. One of my favorite phone calls is the 90 day check-up. I ask how things are going, and want to know their candid opinion of the job Patty’s doing for them. Almost every time they begin the ‘praise Patty’ chorus. Music to my ears.
Gerald Dalton and Antoinette Roth are my Boise agents. Josh is now a believer in letting the cream rise to the top. Both Gerald and Antoinette are consummate pros. They go about their business in different ways, and with very different styles. The results are predictably the same though. I may have forgotten one, but I can’t remember a transaction we’ve begun in Boise that hasn’t closed — and they’ve been the agents for all of them.
I’ll leave the lenders, our inspector, and the folks at the title/escrow company for later. But you get the point.
Instead of a one-stop shop under one roof, we’ve created a modified one-stop shop under our umbrella.
Better service — Better product — BETTER RESULTS.
Our pitchers pitch, and our shortstops play shortstop.
And we win.
Posted on June 11, 2007 @ 10:46 pm - Written by BawldGuy
If there’s more than a few places the equal of Boise, I’d like to hear about them. The people can only be described as quality folk. The weather is great — no extremes in winter or summer. The business climate is very positive — and most people are from the old school. What does that mean? It means I made a deal with a developer involving a couple million dollars of property — with a handshake, and I haven’t given it a second thought.
Do that in California. (Turn laugh track on now.)
It’s literally been the easiest place to do business I’ve experienced in almost 40 years. I’m doing tax deferred exchanges as easy as ordering 2 acre cheeseburgers at Big Jud’s. Imagine Mayberry in today’s world with about half a million folks — definitely NOT packed together like sardines. It’s Heaven on earth. That said, we’ll put an office there, but stay anchored in San Diego. After all, it IS San Diego, right? Right.
Later this week I’ll talk about what will be available exclusively to our clients. It’s pretty cool.
Anyway, we’re done with the first seminar, Friday afternoon, and headed toward Big Jud’s for the best burgers west of the that big river in the middle with all the s’s i’s and p’s. We were split about evenly, five adults and five kids. So naturally we ordered three of Jud’s ginormous one pound burgers — two regular, and a Hickory Smoked with bacon and onion rings. Very cool. As you can see, nobody was going to go wanting. Fries, tatter tots, onion rings and all the ketchup a kid could use. That wasn’t all either. Ice cream cones (waffle cones — the best kind) with premium chocolate and what they called Espresso Explosion — it was a spiritual experience.
Of course, slammin’ down great burgers with tons of onion rings and fries, followed closely by waffle cones overflowing with artery locking ice cream, can lead to the need to, ah, slow down? Ya think? I’ve not tasted burgers that good since Grandma made them for me as a kid. Especially the Hickory Smoked option with bacon and onion rings packed in. Man! Why Josh is looking so smug is anyone’s guess, as he ate over half of one those Leviathans — plus fries and onion rings. If the camera hadn’t been there, Lord only knows how much he would’ve eaten.
Chris Niederer, one of two owners, and also a client, came over to grab some much deserved glory. Chris personally whipped up this ode to gluttony. He’s not 30 yet and has owned Big Jud’s for over a decade now, along with his real estate investments. The guy is braver than is safe — which is why I’ve applied the famous BawldGuy brake system as part of his Purposeful Plan. I’ve always thought he looks like the doctor on Lost, the TV show.
The last picture I’ll allow to speak for itself. There’s nothing like a child’s ability to live totally in the moment.
Coming this week — investments available to Brown and Brown Investment Properties clients only — in two states. An alternative to your under performing 401(k) and/or IRA. Investing with minimum anxiety from the comfort of your living room.