Posted on February 17, 2010 @ 4:00 am - Written by BawldGuy
My parents and grandparents, more so with the latter of course, imbued me with a deep respect and understanding of the economic/financial ‘normal’ which permeated their lives. Even when some of the paradigm shifts radically changed the landscape, post WWII, their mindset for the most part wavered not an inch. I’ll confess to being the typical Boomer, in that my early adult years demonstrated a combination of ignorance and a certain self assuredness not supported by either empirical evidence or personal experience.
Put more succinctly, I was the typical 20-something know-it-all whose real life lack of experience, expertise, and knowledge was nearly immeasurable.
Then several ’storms’ converged to enlighten me. Read the rest of this entry »
Posted on February 9, 2010 @ 11:30 am - Written by BawldGuy
Written by David Shafer
It always amazes me that folks can hold on to foolish ideas in their heads despite ample logical evidence of the foolishness of those ideas. For example, I constantly see referenced a couple of articles written by some Wall Street Lackeys about the superiority of stock investing over real estate investing. When you actually go to look at these articles, they are so poorly argued that it is amazing that the magazines that printed them would consider them fit to print in a financial oriented magazine. But, they get continually recycled.
For the record, historic research into internal rate of returns for investment real estate versus stocks demonstrate a huge advantage for real estate. This is not to say that fortunes can’t be made investing in stocks [Buffett, Lynch, etc.], only that arguing it is always better to invest in stocks over real estate is just dumb. I mean when you look at the wealth of super-wealthy people, on average, there is 3 times as much in investment real estate as stocks and bonds. Read the rest of this entry »
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 »