Posted on February 5, 2010 @ 4:00 am - Written by BawldGuy
Ever walked into a movie you’d really been lookin’ forward to, only to learn they’d totally mislead you with the trailers? We all have, and with an exception or two here and there, it rarely turns out to be a movie we like. Don’t ya hate it when the happens? For me, the worst time was when I went to what I thought was a comedy, which sadly turned out not only NOT a comedy, but a chick flick to boot. How it got past my ChickFlickRadar™ I’ll never know. 
This is one of those nuts ‘n bolts things every real estate investor should know. The IRS doesn’t usually buy the whole ‘dog ate my homework’ — ‘I had no idea’ type of excuse when it comes to unintentionally recognized capital gains. So, heads up. Read the rest of this entry »
Posted on January 25, 2010 @ 7:37 pm - Written by BawldGuy
In our last episode of As the Leveraged World Turns, (so sorry ’bout that one, really) we talked of what leverage really is primarily — and what it’s (mainly) NOT, which is a low down payment. One of my favorite readers asked if I could give an example, using real numbers.
Gonna make this short and simple so I don’t fall into the War & Peace trap. Read the rest of this entry »
Posted on December 11, 2009 @ 9:18 am - Written by BawldGuy
Though I’m finally at the point where writing a book chronicling my years as an investment broker, plus more than a little of what I’ve learned, I keep being prodded (bullied?) to write an eBook first. That won’t be a problem, as I’ve given myself 10 years to do the ‘real’ book right.
I’d love to write about stuff important/interesting to me, but would no doubt be better advised to write on topics about which you guys wanna read & learn. It would please me greatly, and I’d be eternally grateful if you’d drop by here to let me know your preference(s).
Thanks so much for your input.
Posted on December 8, 2009 @ 5:10 pm - Written by BawldGuy
The cliché about partial knowledge often being more dangerous than downright ignorance has proven true in my professional experience. We humans seem to desire absolutes when we learn new things, especially when it comes to investing. Allow me to smash that fantasy once and for all. The old saw sayin’, “The only absolutes are death and taxes” is as real as a heart attach. Ironic, cuz the consequences of behaving as if things are narrowly defined in the Internal Revenue Code as infinitely incontrovertible truths of the universe, impervious to changing facts, are sometimes heart stopping.
Consider the following. I wrote about this earlier this year, but in the last several weeks, there have been similar requested consults. Sadly, a couple of them came to me too late for me to really help much. Pay attention, cuz this particular story gets played out every year across the country. Gettin’ a huge tax bill as a complete and shocking surprise is no fun — I know, I experienced it as a young man. It was gut wrenching to say the least.
This particular story has a pretty happy ending — not always the case, unfortunately. Earlier this year an agent called me out of the blue. I’d never met them, but they’d been reading my stuff here and over at BloodhoundBlog.They had just one question, which led to a boatload more, as usual. Read the rest of this entry »
Posted on December 2, 2009 @ 6:13 pm - Written by BawldGuy
As I chatted with so many people at the National Association of Realtors (NAR) convention, held in the GasLamp section of downtown San Diego a few weeks ago, it became evident there were two kinds of brokers/agents. I didn’t attend the convention myself, though I did go to the ‘Real Estate BarCamp’ held all day Thursday, and written about here earlier. I also spent much time with many of them after hours both Thursday and Saturday, gettin’ the feel of future expectations from a pretty wide variety of fellow pros, all but one of which were in the home selling part of the industry, or vendors servicing home selling agents.
A few of these conversations were not only enlightening, but very revealing. The two kinds of brokers/agents? Using a broad brush, they generally fell into either the ‘now‘ group or the ‘long term/big picture’ group.
Their responses got me to thinkin’ more and more about how the real estate investor usually falls into the same couple categories. They’re either focused on the now, and possibly the following year or so, or they’re keenly interested in what strategies would be best applied over the next 10, 20, even 30 years. In my experience, which spans 40 years now, I’ve noticed a distinct difference between the two camps. Read the rest of this entry »
Posted on December 1, 2009 @ 5:54 pm - Written by BawldGuy
You might be wondering why anyone would even have rent increases on their menu these days. Fair enough. But there are regions in which the future will indeed include rising rents — in fact the last 12 months have seen rents head northward for the folks who’ve invested in the Texas neighborhoods I’ve recommended. It’s been roughly 2-4% in our real life/real time experience there. Just food for thought.
My decades as a real estate investment broker have led me to understand how landlords can rationalize just about anything, especially when it comes to direct dealings with their tenants. This is a good time to recommend professional management, as my stance has always been that your income property should work for you, not you for it. It’s not always feasible, and I get that, but if it’s at all possible, at least consider it seriously.
The question is often posed, “Should I always be on the cutting edge of market rents?” OR “What will happen if I raise my rents and they all move out?” There are myriad iterations. Read the rest of this entry »
Posted on October 27, 2009 @ 4:22 pm - Written by BawldGuy
When analysts wanna illustrate a point with a little extra gravitas, they’ll often invoke the concept of the vaunted ‘Fundamentals’. Given analysis with them vs without them, we’d all opt to have them well blended into the equation, right? Of course.
Here’s the problem though, especially as it relates to the garbage in/garbage out principle in the form of an axiom.
BawldGuy Axiom: Using most of the required tools to complete a job well ain’t gonna work — and the proof will show up in the results.
Ever been workin’ out in the gym and seen one of those guys who didn’t get the memo about workin’ the body as a whole? They generally look like Ahnold from the waist up and Olive Oil from the waist down. I’ll bet you’ve seen this before. They’re applying the fundamentals of body building through resistance training — but doing it selectively. FAIL. Read the rest of this entry »
Posted on September 9, 2009 @ 3:46 pm - Written by BawldGuy
If what we’ve been through as a nation economically has a bright side, it just may be the new and improved eyes now available to investors of all stripes. Real estate investors for sure have, or should have, added much wisdom the last few years. Many have become enthusiastic students of Old School teaching. In markets like San Diego where real estate appreciation is considered both a redundant phrase and a birthright, this has been a most trying time. Since I blew the ink dry on my first license back in October of 1969, making money buying local property has never been fodder for serious debate — ’till now.
A reader, one of my favorites, and a wise, experienced investor, sent me a link showing Phoenix residential rents have been taking a hit, and may continue their downward slide — various reasons were given. On the other hand, the prices have been lower than they have since the boom. Buyers have been paying cash for homes, resulting in lower rents due to the lack of loan payments. They’re buying, for the most part, for capital growth. Cash flow is fine, but not their primary aim. Read the rest of this entry »