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 30, 2008 @ 12:06 am - Written by BawldGuy
San Diego and (California in general) has been the best girlfriend ever. Loyal, always thinking of just us, enriching our lives almost without fail, and bringing additional commas to our bank accounts. Talk about having it all, we sure did.
She always played our song. Happy days? The status quo. Even when she was down, we knew from experience she’d bounce back — and even more lovable than before. Well, as happens in real life sometimes, that perfect mate has tired of us and left us high and dry. She’s walking away, and she ain’t comin’ back.
People, that’s exactly what’s happened in California. Investment property has taken a different path. The days of buying, holding for a few years, then selling or executing a tax deferred exchange yielding splashy results are gone. I think they’re gone forever. Why?
Glad you asked.
Your property is now worth, after this market correction, 150-300% of competing markets in out of state growth regions. In San Diego for example, a 35 year old duplex in a decent area sells now for $425-525,000 (often more) give or take. Also, in order to break even every month the investor must put down at least 30% and usually 35-45%. In NoCal 40% is considered wicked good leverage — no kiddin’. The Kool-Aid they drink in Palo Alto and the Bay Area in general is phenomenally effective. They’ll realize too late their lovingly loyal maiden has decided they’re not the Knight in shining armor any more.
Surveys show — capital growth rates fall when leverage is severely depressed. (anonymous smart aleck) Read the rest of this entry »
Posted on May 24, 2008 @ 8:24 pm - Written by BawldGuy
This past week, and throughout all of the coming week or two Brown and Brown clients have been and will be closing escrows. Every single client is acquiring multiple properties with 10-20% down payments — with a fixed rate of 6%.
Wait just a doggone minute here! Real estate investors can’t do that any more, can they? Ah, yeah, they can. I keep tellin’ you. Stop drinkin’ MSM’s (mainstream media) Kool-Aid. While from every corner we’re being told what we can’t do, we’ve been doin’ it.
I’ve had clients tell me right up ’till they get confirmation of closing, that the loan won’t materialize. “Hadn’t I been following the news lately?” Read the rest of this entry »
Posted on May 5, 2008 @ 11:39 pm - Written by BawldGuy
Living in Paradise, uh, San Diego, brings with it certain obligations. Today brought one of them — Cinco de Mayo. You will have lunch or dinner, sometimes both, at a local Mexican eatery. It’s the law. Fortunately, you can’t swing a dead cat in San Diego without hitting a Mexican restaurant, and most of them are decent to pretty dang good. The Boss called saying we were having Mexican food tonight, so guess where I just came from?
Eat yer heart out, Chris.
She asked me, as is her special talent, what was the most obvious change we may be seeing in the future of real estate investing. Come on Honey, I’m havin’ chips ‘n dip with a forklift sized plate of enchiladas suiza on the way. (Sad pathetic face.) Pan to The Boss throwing her rolling eyes, ‘what’s yer point?’ look. I immediately went into my response.
Upon hearing me out, she suggested a title including the phrase, ‘an inconvenient truth’ which I immediately liked.
It’s been said here before, but bears repeating, as it’s that important. Read the rest of this entry »
Posted on April 30, 2008 @ 9:25 pm - Written by BawldGuy
Ever had to make up your mind? Pick up on one and leave the other behind? Those words mean nothing to most of those under 40, but those in their 40’s and 50’s are already hummin’ the tune. Sometimes we don’t get to have our cake and eat it too. The decision whether to invest in real estate carries with it just one of those choices.
Should you go for cash flow or capital growth?
Are you inches away from retirement with all your ducks in a row? Cash flow is probably (probably!?) the easy pick. You’ve got quite some time ’till you see yourself quittin’ yer day job? Capital growth is the way to go. Save the purchase of your retirement money tree for uh, retirement.
So where’s the rub you might ask? Come on, really? Human nature insists on at least asking why we can’t have both. I hereby invoke the BawldGuy ‘Cuz Rule. Why can’t you have both? ‘Cuz. 
Here’s the reason. Read the rest of this entry »