Posted on June 28, 2010 @ 3:52 pm - Written by BawldGuy
Last Thursday’s post pretty much summed up my thinkin’ about what most, not all real estate investors should now be doing. A common denominator found in the daily calls and emails I receive is the ultimate question — What should I do now, if anything?
You may be surprised, or not, to learn that much of the time my counsel is to stand pat, or almost. For the record, ‘Doing something‘ isn’t a Plan. I read everything I can about the economy and real estate in general, and have frequent conversations with those in the business for whom I hold well earned respect. Allow me some relatively unfiltered PlainSpeak today. 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 6, 2010 @ 6:10 pm - Written by BawldGuy
I’ve written about real estate vs stocks ’till it’s almost like beatin’ a dead horse, at least from Wall Street’s point of view. Half the time the posts were written when stocks were ridin’ high. Everyone was lookin’ in the mirror seein’ Donald Trump starin’ back at ‘em. Every time I write about it, the stock ‘n bond guys come outa da woodwork to put in their two bits — for what it’s worth.
Look, if stocks are your thing, good on ya. But today’s post, though short and sweet will starkly draw the differences between the two.
Let’s do this the way Socrates might. 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 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 January 21, 2010 @ 8:54 am - Written by BawldGuy
Wanted to give ya some food for thought going into the weekend. Leverage has been center stage in real estate and Wall Street the last few years. It’s meaning as it relates to investing of any kind was run through the meat grinder decades ago. In real estate investing, it now has the universal implication of the size of your down payment — a bastardized definition at best — a recipe for disaster at worst. The smaller the down, the more leverage applied. At best that ‘undersatnding’ is secondary to its primary essence.
The reason I bring this up is due to the flippancy with which the subject is tossed around in the media, at conferences I attend, and even by well intentioned real estate investors themselves. Viewing leverage as merely the ratio of down payment over debt is about as wrong as one might construe the concept. I’m reminded of a conversation on one of my all time favorite shows, M*A*S*H. Read the rest of this entry »
Posted on October 21, 2009 @ 2:26 pm - Written by BawldGuy
The human condition is one of constantly merging what we want with what we perceive — with what is in fact, reality. It sounds vanilla simple as ya read it, but we all know what a dangerous outlook human perception can be if it’s not aligned with the world’s merciless empirical truth.
I remember with a wincing smile the day I arrived at a friendly broker’s office to drop of an offer. It was way back in another life. I hadn’t seen this husband/wife team in over a year, so was lookin’ forward to the visit. When I arrived the wife happily remarked, “We were wondering who the chubby blond guy was.”
Ouch! Not exactly how I perceived myself.
That was the inauspicious beginning of my marathon career, another post altogether. Suffice to say, the next year or so saw a loss of 40-something pounds and over 7 inches on the waistline. Ultimately it was the consequence of merging reality with perception. The whole ‘perception is reality’ concept is true enough, but the so-called reality is often nothin’ but a mirage, as was my laughable ‘lean and mean’ self image. Read the rest of this entry »
Posted on September 28, 2009 @ 6:05 pm - Written by BawldGuy
Today I’m addressing the investor interested in growing their net worth through real estate. I’m not talking about those who are investing solely for the benefit of monthly cash flow. Furthermore, there is much room for folks to disagree with what they think the #1 most abused principle might be. I think it’s this one. I’m sure it’s a frequent hot topic around the diner table in your home, right?.
Regardless of the passage of time, one of the constants remaining firmly implanted in many investors’ mindset is the idea that an investment property without abundant cash flow is to be avoided at all costs. The problem inherent with that school of thought is rooted in a few related principles, plus the difference between today’s realities and Grandpa’s memory of the way ‘it used to be’ — which in reality means to Grandpa, ‘the way it should be’.
The Principle in play: To the extent you go for growth you retard cash flow — and vice versa. Read the rest of this entry »