Posted on July 23, 2010 @ 9:02 am - Written by BawldGuy
Written By — Chad Emerson
As I mentioned last week, eventually there was going to be some profit-taking going on at The Wall, and that’s what we saw Thursday. Looks like the Dow has made some recovery, up another 200 today as I write this. Interest rates had a slight tick upwards of 1/8th of a percent. Federal Reserve Chairman a.k.a. ‘Big Ben’ spoke to the HSFC today and repeated exactly what he told the SBC yesterday, that we are still chartering unknown waters, and the economy is showing minor glimpses of improvement from time to time. But, I really think that this is more wishful thinking because he went on to say that the FED is ready to help bolster growth even if that means more purchases of MBS. If you remember, several months ago, the FED stopped purchasing MBS, and this obviously wouldn’t be needed if the economy was improving, but we’ll take a wait-and-see approach. Read the rest of this entry »
Posted on July 12, 2010 @ 4:09 pm - Written by BawldGuy
Many of you have repeatedly asked for the occasional case study, something that would illustrate much of what I talk about in my daily posts. As Lani (A RE blog owner herself) said in a comment last week, “I’ve been waiting YEARS for this side by side comparison.” It’s been her contention these comparisons shoulda been part and parcel of this blog all along. Though my clients live these comparisons, I think my reply to Lani hasta be — guilty as charged.
Sometimes we get too close to a thing, and wonder how anybody could look at two things and not see huge differences — if they indeed exist. My mistake, if you’ll allow me to self-diagnos, is (using baseball analogy in Lani’s honor) akin to me constantly makin’ the point that Major League Baseball (MLB) is vastly superior in quality of play than is seen in the Rookie ‘A’ Ball League in East Toilet Seat, Montana. Problem is, if the reader isn’t either a baseball fan, or would like to be but has no context in which to compare, merely reading about it doesn’t quite do the job.
I get it — mea culpa. Read the rest of this entry »
Posted on June 24, 2010 @ 3:44 pm - Written by BawldGuy
Beginning in 1976 or so, real estate investors, especially in markets like San Diego, the general SoCal region, much of NoCal (Palo Alto is an example), and a few other regions around the country, began to be conditioned to expect values to rise significantly over time. In fact, from 1976 through the end of 2005, their expectations were met without a single exception, long term. The cycle became not only reliable, but predictable. Appreciation, often double digits, would raise values for 3-4 years, much longer for this last one. Recession would cool things off, prices would either flatten out, maybe recede a bit. But they would always resume the seemingly inexorable march to ever higher prices. Read the rest of this entry »
Posted on May 27, 2010 @ 5:32 pm - Written by BawldGuy
Lots of people have been stunned in terms of their relative financial security — especially those whose retirement plans depended largely upon Wall Street. Over and over I hear, “We can watch our stock/bond values so much more closely than we can with real estate.” Boy, ain’t that the truth?!
Segue to total SmartAlec mode.
So, when you were watchin’ your million dollar stock portfolio turn into $600,000 — did watchin’ it add or diminish your sense of financial security? Read the rest of this entry »
Posted on May 26, 2010 @ 6:28 pm - Written by BawldGuy
As in any profession or industry, investment real estate has its own nomenclature — our own language so to speak. Many of the words/concepts we use have been reduced to abbreviations. An example is NOI — Net Operating Income. The one we’ll talk about today is GRM — Gross Rent Multiplier. For those of us who’ve been in the business since Hector’s pup died, it gets even shorter, often referred to as Times Gross — as in “How many times gross do properties sell for in this town?”
First thing we should do is lay out what Gross Rent even means. It refers to the gross scheduled rent of a given property, which will also generally include laundry income if applicable. It should be understood that it’s virtually universal that you’ll be referring to a year’s income — not a month’s. I say that, but there are places that will use monthly income, a pain in the rear end if there ever was one. Numbers are almost always computed using annual figures when producing an analysis on residential income properties. That’s not to say using monthly figures won’t work, but it’s a lot more work than necessary. Read the rest of this entry »
Posted on March 30, 2010 @ 4:50 pm - Written by BawldGuy
You’re in your mid-30’s and have, give or take, between $50-60,000 to invest in real estate. Your income allows you to set aside another $500 monthly to augment any Plan you may set in motion. You believe me when I tell ya no Purposeful Plan these days should factor appreciation into the analysis — appreciation is officially a luxury ’till further notice. From where I stand, those who insist on imputing future appreciation into their before and/or after tax cash flow return analysis are playing with fire.
The strategy to be used in this environment is one of conservatism — combined with an ever watchful eye on your originally invested capital. Boring? OK, ya got me there. Will it get ya to your own Point B? It’s far more likely than having faith in appreciation the next few years. Let’s explore how you might grow your capital and create a sweet income stream for your retirement without the luxury of appreciation. Read the rest of this entry »
Posted on March 19, 2010 @ 9:37 am - Written by BawldGuy
One of the most crucial skill sets a real estate investor must have, is the ability to recognize and adapt to major shifts in longstanding market behaviors. What in the name of Aunt Fannie is he talkin’ about?! Here’s an example. Though thousands of trees have given their lives so a myriad books could be written about real estate cycles, they become deafeningly silent when those so-called predictable patterns become, um, much less predictable.
A case in point is the San Diego income property market. It’s been one of the nation’s darlings for my entire 40 year career. Buy something, hold it, sell it for a profit, usually a nice one, rinse and repeat. Let’s take a close look at the factors now in play that have quite efficiently rewritten the San Diego script. Read the rest of this entry »
Posted on February 5, 2010 @ 2:09 pm - Written by BawldGuy
What a way to enter the weekend. Brian Brady is a mortgage broker for whom I hold the utmost respect. I’ll go further, saying he’s one of the 2-3 most knowledgeable mortgage guys I’ve ever met in person. I’ve met a few in my 40+ years on the job. 
A coup for me today, as Brian has not only agreed to be the go-to guy for my clients’ Self-Directed IRA real estate purchases, he’s also agreed to become a BawldGuy Talking contributor. The rest of this weekend is icing.
Brian is approved to make these loans in all the states still on ‘the list’. At this point i think there are about four states where those loans are virtually impossible to obtain. The good news? They love Texas — and for the same reasons I’ve been yelllin’ from the mountain top about for a few years now. California? They require 50% down here. Turns out I’m not the Lone Ranger after all. Investing here in the Golden State can be very profitable, but pretty much for those with very large stacks of gold. (More on that soon. Hint, hint.)
Brian will begin contributing here shortly — and regularly. He’ll be talkin’ about what goes into the loan process when acquiring investment property through your self-directed plan. You’re gonna love this guy. A couple three years ago he did for me from California what Texas lenders said couldn’t be done — and in their own backyard. It was big time fun to watch in real time as a fly on the wall. Talk about being schooled.
You can contact me at 619 889-7100. Have a good weekend.