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 2, 2008 @ 11:56 pm - Written by BawldGuy
I was asked an excellent question over the weekend. It forced me to pause awhile before answering. It wasn’t that the answer wasn’t coming to me, it was how to frame it. The questioner was gonna hear an answer they didn’t necessarily bargain for, and how it was presented was important to me. I didn’t wish to offend or cause hurt feelings. The question?
“In your opinion, what is the most common hindrance to the real estate investor’s chance for long term success?”
Seems innocent enough, doesn’t it? Not by a long shot. Understanding the answer is critical to discerning why one investor seems to do better than another. It’s too late, at least much of the time, once the rubber has hit the road. Understanding the answer to this question is one of the keys to attaining the retirement for which you’ve worked so hard.
The real estate investors with whom I speak daily, answer this question themselves. In their own words they remark on something I said, maybe even as a throwaway thought.
The Answer Read the rest of this entry »
Posted on May 27, 2008 @ 3:44 pm - Written by BawldGuy
I’m proud to introduce David Shafer, a very smart guy. Today’s topic, EIUL’s have been a subject close to my heart. Though I’ve written about it several times here, and at BloodhoundBlog, I thought it was time to bring in an expert.
NOTE: David used numbers even more conservative than I would, which is just fine by me. For example, even though the performance of the S & P over the last half century is around 8%, David uses 6.5%. Why don’t I care? ‘Cuz I’ve never had a client complain when real life performance exceeds projections. Duh.
When BawldGuy asked me to blog on equity indexed universal life insurance (EIUL), I thought no problem, since I had been blogging on it for a couple of years on both my site and others. Then he asked me to look at the archives from Bloodhound to see his previous blogs and I knew I had to write something a little different. In order to make sense of EIUL contracts you really need to understand the misinformation that underlie the arguments being put out by folks in books, the mass media and blogs on both sides of the issue. You need to be clear on what your wealth creation plan is and what it isn’t. So bear with me for a few paragraphs as I burn down the straw-men arguments before we get into the mechanics of EIUL’s.
Usually these discussions surround a common theme, EIUL’s versus mutual funds inside a tax deferred wrapper (401K, IRA’s). First let’s talk about mutual funds. Mutual funds were designed to reduce risk or as financial experts describe it variance. They were a boom to Wall Street as mutual funds induced many folks to invest in stocks, something they were not inclined to do in the past. They have been around for 2 generations so we have plenty of data to tell us accurately how people do investing in mutual funds. Read the rest of this entry »
Posted on April 24, 2008 @ 10:44 pm - Written by BawldGuy
The following are some well known and not so well known real estate words and phrases. I’ve found they’re so many times thrown around with bastardized, and/or implied by incorrect meanings. Misunderstanding basic definitions in real estate investments can lead to some unintended consequences. In this business the old saying, ‘Words mean things’ should be taken literally — ‘cuz they do.
The pictures aren’t connected, but then when it comes to definitions, they almost never are, right? It’s just cool to have ‘em.
Ground Lease — one that rents the land only. You often find this when land is so expensive it’s the only way to make the whole property, including the land, affordable. Lenders and the IRS have much to say about the length of a ground lease. Most lenders have a problem making a loan on property with a ground lease with less than 30 years to go. The IRS goes as far as Read the rest of this entry »
Posted on April 14, 2008 @ 9:29 pm - Written by BawldGuy
As regular readers are aware, periodically I take the time to throw out some words and phrases commonly used in the practice of real estate. It’s proven more popular than I initially imagined. Go figure. There’s no rhyme or reason, or even a particular order — just quick definitions for you to reference. Much of the real estate nomenclature, both in general, and investment oriented, has been either misunderstood, or unintentionally modified by misinformed word of mouth.
In any case, here’s a new batch for you. If you have any words or phrases you’d like included next time, let me know. Also, the pictures are in no way related to any of the definitions. I just liked them.
Note: BawldGuy Radio is coming Read the rest of this entry »