Posted on July 22, 2009 @ 6:36 pm - Written by BawldGuy
Short ‘n sweet tonight — or not, depending upon your outlook. I’m biased big time towards San Diego as an area for real estate investment capital. That said, there’s personal bias, and real life data. The facts are not kind to our local product, regardless of the opinion held by those who’ve lived here since the ’60’s or earlier as I have.
Investors look at the big picture, then drill down in order to come as close as possible to comparing apples and apples. Factors like location, income/price ratio, tenant quality, current and potential trends, property age, demographics, and many more play huge roles in the decision making process.
Does this describe your region? It’s a description of the vast majority of San Diego’s income property. Read the rest of this entry »
Posted on June 24, 2009 @ 7:21 pm - Written by BawldGuy
Hey AI — Let’s apply your Devil’s Advocate take to San Diego. AI’s thoughts can be found in the comment section of yesterday’s post.
Here are Another Investor’s Devil’s Advocate positions, followed by my thoughts. For the record, AI is one smart cookie. A very experienced investor with a keen analytical mind. Talking with AI is one of my new favorite things to do. So, here we go — AI’s point by point Devil’s advocate position — and my answers.
1. People want to live in SD. Read the rest of this entry »
Posted on January 6, 2009 @ 10:01 pm - Written by BawldGuy
It’s the perfect time of year to revisit the concept of cash reserves, which as regular readers know, is called a Sominex Account around here. Sominex is a brand of sleeping pill. Get it? A generous cash reserve account allows us to sleep even when life’s little surprises land at our doors. Of all the factors involved in real estate investing, cash reserves almost always get short shrift. As an integral part of every Purposeful Plan, (see podcasts) cash reserves cannot be ignored. It’s easy getting caught up in the various opportunities these days, as there are more nuggets laying around than most folks know. In a buyer’s market investors tend to get not only a false sense of security, but superiority.
Memories are short, aren’t they?
In the best of times cash reserves are a must. There can be no debate on this point. Brown and Brown has been touting this from every mountain top we can find. If reserves are a must in the best of times, how critical are they today? Right, don’t answer — it’s a rhetorical question.
Our company policy is very clearly stated: No Sominex Account means we can’t work with you.
Why such a ‘take no prisoners‘ policy? I’ve lost property myself, and it ain’t fun. Read the rest of this entry »
Posted on December 4, 2008 @ 11:18 pm - Written by BawldGuy
This post was inspired by Benn Rosales over at Agent Genius. He was talkin’ about agents, but I was moved to write about what I perceive the difference is between perceptions of regular folk.
No, this isn’t about the glass being full or empty, half or otherwise. It’s about dealing with what is, and making decisions based upon what is, not emotion.
Here’s a totally unrelated example of emotion based pessimism vs the ability to see reality, while effectively probing for avenues of potential success. What? Huh?
There was once a 13 year old playin’ centerfield in an all-star baseball tournament years ago. His team found itself in the position of no outs and bases loaded — in the top of the 1st inning. He was waved in by the manager to get them out of the dilemma. (A pitcher when not an outfielder.) What to do? Since he’d paid attention to the base runners while in the outfield, he’d noticed the runners on 1st and 2nd were both pretty cocky.
To make a long story short, in the next three ‘pitches’ he picked off the runner on 2nd, then the one on 1st. The next batter, lookin’ to make up for this in one swing, feebly popped up. Four pitches, three outs, no runs. The same exact scenario played out the next day. The results were the same, except for one run on a seeing eye 17 hopper through the infield. Six runners, no outs, one run scored. Read the rest of this entry »
Posted on September 25, 2008 @ 12:16 am - Written by BawldGuy
I was thinkin’ today about the national economy, and how the third reel of this sequel to the “We’re All Gonna Die” franchise is indeed followin’ the script. The tension finally reached a crescendo, and all the major characters suddenly showed up as if instructed by an invisible director. Friends and foes alike are now on TV singin’ from the same songbook and same song, if not always the same verse. The posturing by politicians of both sides is the Achilles Heel of this movie, as even first time movie goers, new to this franchise, can sense the false notes being sounded by many of the actors.
Behind the scenes you can imagine the panic as so many of them shed their brave fronts while lookin’ to the calm, experienced leaders with the real power to take charge. The real power is now tellin’ the faux power how it’s all gonna shake out. It’s been like this since one man had power over another. But I digress.
No matter where twisters show up, weak or strong, they’re local in nature. There are no exceptions, nor have there ever been. Real estate behaves similarly. Grand Rapids, Michigan can be depressed, while Mesquite, Texas is thriving. This dichotomy can exist in times both boom and bust. It’s quite a paradox at times, to say the least. Read the rest of this entry »
Posted on June 11, 2008 @ 11:15 pm - Written by BawldGuy
Some of today’s post comes via inspiration from conversations I have sometimes with one of my Starbucks buddies. Our conversations are wide ranging, which at times becomes the catalyst for some serious thought when it comes to real estate investors and investing.
‘Course, since random is the theme today, pictures shall be congruently random also.
Gray Bomb
Though I’ve written here often on what drives my decisions to recommend one property/region over others, it still boils down to the same basics it always has. Jobs, job creation, commerce, etc. The continued migration of large population segments from the north, most of the midwest, and the northeast towards sunbelt regions is still strong and will continue to be. No surprise there.
The phrase Gray Bomb though, will begin to have more and more meaning and impact upon real estate as time does its thing. Boomers are now pretty much graying right in front of us. I know, ‘cuz I are one. Though there’s absolutely no gray on my head. (Thanks Schick) They’re making life decisions regarding their retirements, which are impacting the economy in general, and real estate markets specifically to an ever growing degree.
This isn’t new of course, but it’s beginning to become a much more important factor in how Brown and Brown views data these days. When shrapnel from Gray Grenades land in concentrated bunches, it’s news the real estate investor should follow with real interest. Read the rest of this entry »
Posted on April 22, 2008 @ 11:33 pm - Written by BawldGuy
Was talking with a client today, when she brought up a common misnomer. “Shouldn’t we be buying 10-20% below market value? Isn’t it a buyer’s market?” Great question. (Thanks Brandi) The answer may surprise some. It falls under, ‘Ya can’t have it both ways’.
Though in the last year or so we’ve been able to secure clients some impressive discounts, most of the circumstances making those discounts possible have changed.
Let’s think this through. Demand for well located real estate is increasing in the regions in which we do business. This is a good thing. Take Austin — a place we no longer do business. Don’t get me wrong, we love the place, but the demand has increased to the point prices have made it relatively unattractive to investors. The rent/price ratio has degenerated to the point where investors must now put enlarged down payments in order to break even.
See? On one hand you have the good news showing the Austin area roaring back from the market correction. On the other hand you have the consequences of that same good news. A double edged sword just waiting for the inexperienced investor. Higher prices driven by significantly increased demand, outpacing rents, (Increased rents will very soon follow, but not fast enough in Austin.) results in investors looking elsewhere. Why spend your hard earned capital in Austin for $X worth of property, when you can go to friendlier areas and acquire $2X worth of property? If capital growth is numero uno on your agenda, investing in half the property you could prudently afford makes zero sense.
Now let’s consider the project begging folks to buy their stuff at deep discounts. Read the rest of this entry »
Posted on April 13, 2008 @ 12:58 pm - Written by BawldGuy
The San Diego real estate market has been courted by investors since I’ve know what a real estate investor was. She’s always been a flirt, but when the chips were down, she’s been there for you. Now she’s singing a different song, one you’ve never heard. She’s changed the way you think of her, and the worst part is, she doesn’t care.
Has your retirement Plan been put on hold while you wait for ‘normal’ to resume? Normal isn’t coming back — it’s being redefined by the pretty lady you’ve always loved — San Diego’s real estate investment market.
How many ways has she chosen to break your heart? Read the rest of this entry »