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 July 7, 2010 @ 12:03 pm - Written by BawldGuy
If you haven’t read yesterday’s post, take some time now to go read it here — A San Diego County Duplex vs Texas Duplex. In it, I show the core rationale for San Diego real estate investors, and really the entire west coast, for Gettin’ Outa Dodge. In it I promised to publish a post today showing what the owner of that La Mesa duplex could accomplish in real life with a tax deferred exchange into Texas. This be that post.
The premise is that the La Mesa duplex investor has owned it since forever, and owes nothing on it. He’ll sell it for $300,000 — netting about $275,000 or so after all sales/closing costs. In fact, let’s make that $270,000 — as it’s no doubt being held in place by all the termites holding hands. 
Yeah, a cheap shot, but I speak from painful and personal experience. Own San Diego real estate? You have termites. Get over it. Read the rest of this entry »
Posted on March 31, 2010 @ 5:25 pm - Written by BawldGuy
Ever wonder who writes definitions of any particular industry’s nomenclature? In baseball for instance, a little over half my time umpiring was spent doin’ the ‘dish’. The what? The dish is home plate, where the plate umpire’s main duty is to call balls and strikes. When a hitter’s at the dish lookin’ ‘dead red’, he’s up there lookin’ for nothin’ but a fastball. Ever heard of Louisiana Ball? The hitter just struck out, swingin’ late on a fastball. From the pitcher’s dugout you might hear, “That musta been some Louisiana ball, cuz that one was Bayou!” Baseball lovers know what I’m talkin’ ’bout cuz there are a million of ‘em.
Same happens in real estate investments, though its nomenclature, sadly, isn’t nearly as plentiful or colorful as is baseball’s. Here are a few terms with some plain English definitions. Some of them are formal terms, some slang. Hope this helps. Read the rest of this entry »
Posted on March 25, 2010 @ 3:52 pm - Written by BawldGuy
The other day I read about a real life real estate investor who’d been pretty successful, and had decided to step away from the life, and begin their retirement. Sounds good to me. Betcha there’re a lotta folks readin’ this askin’ themselves under their breath, “Where do I sign up?” The article in question was about a guy who’d followed what he’d thought was the tried ‘n true strategy one of his mentors had taught him. Buy property — never EVER get rid of it — refi for more investment cash when prudent and possible — rinse, lather, repeat. It’s not relevant if the agenda was cash flow or capital growth. The ending will be roughly the same.
Though it’s not absolutely necessary, that strategy almost always results in the following relocation for the investor. Between a rock, a hard place, the IRS, and post job existence more analogous to a life sentence than a dream retirement. This presents a thorny problem for those who wish robust second careers requiring much capital, or those for whom after tax cash flow from real estate is paramount to the success of their retirement. Here are some of the details to which you may look forward after following such a rigidly defined investment strategy. Read the rest of this entry »
Posted on March 23, 2010 @ 5:49 pm - Written by BawldGuy
Had a wonderful conversation this morning with a very smart new client. She and her husband have recently come on board, and now have a Purposeful Plan, which has already been at least partially put into play. A good portion of their Plan will be executed via the wife’s self-directed IRA. They already own a rental property which is now on the market, with the intent to effect a tax deferred exchange (1031).
One of the things ‘Connie Marie’ wanted to do, was consult with a financial planner to see how much of her funds might be invested in stocks, mutual funds and the like, and how much in real estate. The point of this quest was to discover if diversification would be an issue. As I said already, Connie is one very smart lady, helped further by her occupation, which is banking. She’s no stranger to financial goings on to say the least.
Here’s the gist of our conversation. Read the rest of this entry »
Posted on March 8, 2010 @ 6:55 pm - Written by BawldGuy
BawldGuy Axiom: Expectations are sometimes akin to potential — a blessing and a curse — both dressed up like the prom queen.
How many times have we seen college sports superstars with a world of potential fall flat on their faces in the pros, dashing the expectations thrust upon them? In baseball it’s even worse sometimes, as high school phenoms sign for a few million bucks only to disappear in the land of shoulda coulda woulda.
In real estate investing, the potential for building a solid retirement is very real. Countless people have done it — you may be in one stage or another as you read this. Expectations generated from potential, no matter how well researched, are the foundation for much of the disappointment felt down the road by investors. This is a direct result of embedding potential into analysis — a definite no-no. Read the rest of this entry »
Posted on March 4, 2010 @ 8:43 pm - Written by BawldGuy
BawldGuy Axiom: When the farmer plants corn in the spring after proper preparation, tends his fields diligently, fertilizes as needed, and adjusts to any bumps in the road, he’s not surprised when he’s harvesting corn in the fall.
A robust harvest was his end game. He had a Plan — executed it — adjusted to any unscheduled visits by Murphy, Though probably not the perfect analogy, it gets the message across.
Here are 10 ways folks investing in real estate for retirement can delay and/or diminish their retirement. Read the rest of this entry »
Posted on March 2, 2010 @ 5:22 pm - Written by BawldGuy
BawldGuy Note: Cuz Max Whitmore’s computer needs are so rare, (some pretty intense and sophisticated software/analysis) he’ll be unable to post until the specially designed machine he’s ordered is delivered, probably by this Friday. (Fingers/Toes crossed.) Which leads us to:
BawldGuy Axiom: When life is boiled down to its essence, logistics rule us all.
Max and I thank you for your patience.
This conversation happens a few times a year. Got a call recently from a very nice house agent, who was concerned one of her clients/friends was entering into a tax deferred exchange. I asked why the concern? Doing an exchange is common, just do ‘em right. Apparently the transaction was being done as a result of the advice of a recently retained local accountant. She’d feel better if I’d talk with them — would I please humor her? Not a problem. Read the rest of this entry »