Posted on July 3, 2008 @ 12:45 am - Written by BawldGuy
Warning Warning Warning — Pictures found while reading this post have absolutely nothing, nada, zilch, to do with the subject at hand. I just like inserting them. I am open to requests though. Ok, that’s it — you may continue. 
Estoppel is a silly sounding legal word sometimes used in purchase contracts when tenants are involved. Of course there are many time an attorney might use the concept of estoppel, but since it doesn’t say lawyer on my expansive forehead, I’ll stick to the purchase of real estate investment property.
I’ve taught the concept, been taught the concept, partnered with a real estate attorney for a decade and listened to him pontificate endlessly on the concept. It’s a giant pain in the patute. Yet, I’m still gonna give it a shot here. If you really insist on confusing yourself you can click the above link, but I recommend you take two aspirin first.
Here Goes
You’re lookin’ to make an offer on some income property. You’ve gone over the offer to purchase three times, and are finally satisfied yer covered. Due diligence period — check. Subject to your inspection and approval of interiors/exteriors — check. Seller’s gotta turn over income/expenses last 2-3 years — check. 23 other things — check, check, and check. Eyes begin to blur, and the thought of watching a soccer game between East Toilet Seat, Wisconsin and Rubber Chicken, Kentucky is soundin’ pretty dang good about now.
Got it covered, right? Not so fast estoppel breath. Read the rest of this entry »
Posted on June 29, 2008 @ 6:59 pm - Written by BawldGuy
When speaking to audiences in historically high appreciation areas, it’s common to hear them voice serious concern with regions I’m recommending. Their real problem? They’re lookin’ at appreciation at the cost of capital growth — theirs. They’re literally penalizing themselves to the tune of millions over the long term. In baseball terms, strikeouts are cool, but how many earned runs a pitcher allows per game is the real gold standard. No? Ask yourself if for the big game you’d want the guy who strikes out 12 batters a game but has a 5.3 ‘earned run average’ (ERA), or the guy who hardly ever strikes anyone out but only allows three runs a game?
Not a difficult decision, is it? ‘Course not. It’s obvious on it’s face. Why? ‘Cuz in baseball the winner is decided by how who has the most runs at the end of the game — not the team sporting the pitcher with the most strikeouts.
Appreciation = Strikeout Pitcher whereas Capital Growth = Very low Earned Run Average
In real estate investment terms, here’s how it shakes out in real life. Read the rest of this entry »
Posted on June 26, 2008 @ 1:05 am - Written by BawldGuy
We’ve found the right property(s) for you. You’ve successfully entered into escrow, and have navigated all the hurdles and potholes encountered on the way. It’s time to transfer ownership to you. Let’s look at what happens now.
Note: For those who haven’t read the series from the start, and would like to do so, here on some links for you. Here’s Part I, Part II, and Part III
I’m gonna simplify this as much as I can. It’s not my job to make things as difficult and/or complex as possible, right? Right.
How do we know when we’ve arrived at our off ramp? There are as many answers as there are brokers and investors. For me it’s when lender says to get ready for loan docs. Don’t get me wrong, Murphy still has arrows left in his quiver. They’re just harder for him to reach now. At least that’s my story, and I’m stickin’ to it.
BawldGuy Axiom: The escrow ain’t closed ’till someone tells you it’s closed and even then not ’till you’ve confirmed with the title company. You can be fairly sure when you’ve received the payment info from the lender. Probably. Read the rest of this entry »
Posted on June 24, 2008 @ 12:17 am - Written by BawldGuy
You can check out Part I here and Part II here if you need to catch up. Now we can proceed with what you might expect while in escrow. For those thinking, ‘Hey, we have a contract, what could happen?’ I keep a plentiful supply of generic aspirin available.
It’s far easier to list what can go right in an escrow than what can potentially go wrong. As an understatement, that may rate honorable mention on the annual Top 10 List.
5. Incomplete list of what can go sideways while in escrow.
Numero uno on this list is lender related. Name something in the loan process and I’ll give you a real life experience (we call this empirical evidence) of how it can, has before, and will again torpedo an escrow. Let’s count just a few of the myriad possibilities. Read the rest of this entry »
Posted on June 18, 2008 @ 11:08 pm - Written by BawldGuy
Those of you who’re regular readers know I like using pictures to help illustrate points, while breaking up the text monotony. Some posts, (this series for sure) make it difficult to maintain photo/prose continuity. (Great phrase, eh?) Anywho, I mention all this so I can now warn you — today’s pics are more random than a soccer game in a league for five year olds.
Yesterday we got part way through the process a new investor experiences with Brown and Brown. What wasn’t discussed was the behind the curtain kinda stuff that goes on just before, after, and between steps. Info dumps one client calls ‘em. I like it.
First Info Dump
This comes more in verbal form. The newbie hears about the differences between the investment lending process vs buying the family home. They hear terms like declining market, rapid acquisition, and ‘Hey, no problem, we just need one more thing.’ (They mean well, but that last one is almost always a lie.)
They hear why this loan is better for them and their particular properties than that loan. Also, the nuts and bolts of real life investing are at this point beginning to become a part of the vision they have for their retirement. That’s an important moment, as it brings excitement to what is often a tedious process. Read the rest of this entry »