Posted on September 2, 2009 @ 3:28 pm - Written by BawldGuy
Last week you got that raise. At 40 you’re making what you thought you would be at 50. Way to go! Once the raise kicks in you’ll be banking more Benjamins than ever. And that three unit property you bought back in ‘99? It’s cash flowing like an ATM thank you very much. You’re in the money — and things are really looking up. As a matter of fact, those units have gone up over $100K since you bought them — even after the current market correction.
How could things be any better? The answer? Easy.
Let’s do this by employing just a little Socratic questioning. Read the rest of this entry »
Posted on August 5, 2009 @ 6:22 pm - Written by BawldGuy
Are rates gonna stay down? Is the economy about to recover? Are we in a recovery now? Are real estate prices at the bottom? Will Lassie find Timmy in time? I have the answers for you tonight. No, really, stop laughin’.
Here’s the only answer you can take to the bank — so to speak. 
Lassie will find Timmy in time. It’s a lock. Count on it. It’ll happen.
Rates? I’m pretty firm in my belief we have from now ’till sometime between next August and the first quarter of 2011. That’s our window based on facts in evidence, discussed here recently. Is it as much of a slam dunk as Lassie and Timmy? Gimme a break, OK? Windows open and windows close. Your magic dust is no doubt as effective as mine. Read the rest of this entry »
Posted on July 15, 2009 @ 8:41 pm - Written by BawldGuy
Let’s talk a little real estate history tonight, along with (takes a deep breath) some governmental lessons we’ve already lived through, if not learned from. (That screamin’ you hear in the background is my high school English teacher.) This isn’t a post on politics as much as it’s a review of the litter left on the roadside by history — litter some of us prefer calling empirical evidence.
As I said last night, the ’70’s was the first time economic policy went full speed executing the combination of massive spending + tax hikes + huge increases in our money supply. That troika proved beyond a doubt to be THE slam dunk recipe for record inflation, real estate appreciation not seen in my lifetime ’till then, or since the end of WW II for that matter, interest rates over 15%, and a continued marginal tax rate for the biggest income earners of — wait for it — here it comes — 70%! If you lived in California back then, and found yourself in that tax bracket, you netted roughly 21¢ on every subsequent dollar of income after taxes. In technical terms, I think economists call that a disincentive. Read the rest of this entry »
Posted on July 14, 2009 @ 7:15 pm - Written by BawldGuy
Yeah, I know, there are more than two schools of thought when we start talkin’ about what’s next in the national economy — especially in the context of the oh so important real estate markets. I get that. But the fork I see are two roads really more or less going in the same direction, which I realize is confusing. Hang with me.
This isn’t new ground by any stretch, as many have written endlessly on ‘what’s next’ — to the point we’re all hittin’ the weary wall. Sooner or later though, it’s gonna break one way or the other, something on which there is universal agreement.
The most likely direction I see us taking is on the same sad dirt road on which we found ourselves in the ’70’s and early ’80’s. I was gonna go all linky on ya, but decided it’d be far more instructive to simply begin the discussion. Read the rest of this entry »
Posted on July 7, 2009 @ 8:32 pm - Written by BawldGuy
Earlier this year I said San Diego real estate prices had fallen to the point of being a strong ‘B-List’ item on local investors’ options menu. I don’t say that as a backhanded complement — merely as a professional opinion based upon solid comparative analysis. That’s my way of sayin’ it is what it is. But that’s not the point of this post, at least primarily. Neither is opining that it’s clear to me San Diego’s real estate values will continue their downward tilt through 2010. Again, an opinion, but based on much data and the feeling in my right knee.
NOTE: Before continuing it’s important to understand San Diego ain’t the Lone Ranger here. There are numerous similar markets. All of SoCal and most of NoCal for example. But around the country, whatever I say here about SD is likely to have traction in many, many regions.
Josh and I have been culling through our database looking for folks who’re best positioned to make a high quality move of their equity(s). We’ve been blessed and handicapped simultaneously by the reality of gettin’ up to speed on a brand new piece of database software. The blessing though is far outstripping the irritations of the necessary learning curve involved. It’s a killer program — the best I’ve ever seen. Anywho, we’ve been noticing a disturbing trend as it relates to new loans on investment properties.
Does this describe you? Read the rest of this entry »
Posted on April 1, 2009 @ 10:26 pm - Written by BawldGuy
Don’t know ’bout you, but I get more than a tad irritated when I read something like, “Since we knew the market was turning, we pounced, making our move ahead of the curve.” What a crocka crappola. I’ve had strong opinions in previous markets, big deal. I’ve been right, and I’ve been wrong, in both cases either a bit early or late. But those claiming to have known about past markets and subsequently bought, sold, or exchanged with precise timing? Gimme a break.
I’ve made some purchases which when looked upon in the light of 20/20 hindsight made me look like a freakin’ genius. Sure, I thought it was the right time, but pure luck was the reason my timing was so spot on. My timing has pretty much been 1-3 quarters off either way — and frankly, I’m more than fine with that. My track record? So happy you asked.
I switched to investment property from listing/selling homes in 1976. I wasn’t quite 25 at the time, which of course meant I knew everything. The first wave of the tsunami appreciation storm had already spread its magic elixir all over San Diego, yet I was clueless as to the strength or the ‘legs’ of that upward market movement. It lasted pretty much through 1979 — averaging around 2% appreciation monthly for almost four years. At least I had youth and inexperience as an excuse back then. Read the rest of this entry »
Posted on March 31, 2009 @ 10:47 pm - Written by BawldGuy
Tonight we’ll take a look at how the ‘Millers’ real estate investors who Planned well, adapted to the inevitable downturns/corrections, and pulled the trigger with solid timing during the fun times. It’s a fiction perpetuated by the ever infamous ‘they’, that says any real estate investor will end up at retirement without a couple problems to solve, as long as they planned. B-o-l-o-n-e-y. I receive emails consistently from folks who’ve reached retirement only to realize there are a few irritating realities with which they must deal — which they should, and head on.
Our investor, I’m calling them the Millers, have been buying/selling/exchanging income property since 1976. Their first investment was a modest duplex in a blue collar section of town. They were immediately spoiled, if not misled by their initial experiences back then, as the market was in it’s first climb via double digit annual appreciation rates. As they began to believe in their ‘natural born wisdom’, October of 1979 hit, and well, it dawned on them they might not have been descendants of Midas after all.
They survived by merely holding on longer than anticipated, ’till things began to thaw in 1984. They regained their confidence by the end of 1985, exchanging up to more property, while making use of as much leverage as was prudent. They executed yet another 1031, en masse, in 1988 — taking full advantage of the second rising tide in just over a decade.
Shortly thereafter the S & L Crisis hit, and yet another holding period was extended, this time for longer than before. They didn’t make a move until the second half of 1996. I won’t go on with every move they made, but bottom line, as they entered 2009, their net equity had reached a number in excess of $3 Million — exclusive of their home and non-real estate assets. Read the rest of this entry »
Posted on March 18, 2009 @ 10:05 pm - Written by BawldGuy
Let’s get down to a more or less real time, real life example. I’ll use an investor owning over a dozen investment properties spread out geographically. This example will be a composite investor. I’ve taken factors/properties from existing and past clients, along with folks with whom I’ve been talking recently. Let’s get started. But first, a word about pictures.
I include pictures in my posts which aren’t connected in any way to the posts’ content. I do it ‘cuz it pleases me, and with the hope it pleases my readers. They should resume tomorrow.
Tonight I’ll address what the scenario is, some personal info, and the initial portion of the Purposeful Plan I’d construct for them. As the series progresses I’ll flesh out the specific reasons for the advise given. It’s important that I keep each post to a more or less digestible size. Know what I mean, Verne?
First, let’s figure out a few things about the properties themselves. Where are they? When were they acquired? Their equity to value? Condition? How’s their local real estate market performing? And….well, you get the idea, right? Read the rest of this entry »