Posted on July 13, 2008 @ 8:30 pm - Written by BawldGuy
Been sayin’ this since forever — or at least since this market correction got underway. Ben Bernanke, our Fed Chairman, is real estate’s best friend in the world. Really? Yeah, no kiddin’. He’s maybe the reigning living expert on the Great Depression and it’s causes. And what, pray tell, does he believe was the first domino that was tipped over, triggering the crash of ‘29 and the beginning of the Great Depression?
The collapse of the real estate market in 1927.
He’s written a book on it for Heaven’s sake. So when he opened the New York Federal Reserve Bank to Fannie and Freddie today, it was no surprise whatsoever to those who know his background. Monday morning the two giants of the secondary market will be able to belly up to the cash window if the feel the need — at 2.25%.
Once the European ‘Head Dude’ pulls his head out, setting his ginormous ego aside, things will begin to revert to normal a whole lot mo fasta.
BawldGuy Disclosure:The above opinion combined with my heavily armed Starbucks card, will get us coffee and cookies pretty much any afternoon.
Meanwhile, back at BawldGuy Ranch, it’s time for a kinda sorta on-topic video. This one thanks to Misty Kahn of Arrow Tips. Thanks Misty.
The sun keeps doin’ its thing — and will, regardless of anything the media says.
Posted on July 10, 2008 @ 11:29 pm - Written by BawldGuy
Today let’s talk about the movie we’re all watching and in which we’re all actors.
When giant Wall Street financial firms write off monster losses, direct lenders go down in flames, oil prices translate into nearly $5 gas, and every chart we see seems to tell us to bend over and kiss our butts goodbye, I know we’re watching the latest sequel to We’re All Gonna Die.
I’ve seen this movie several times. I know how it ends. Warning Warning Warning — this post contains spoiler.
Fortunately much of what I have to say today is about stuff that’s already happened, and is beyond debate. What I’m gonna predict as the ending can be debated ’till ya can’t keep yer eyes open any longer. My crystal ball is perpetually cracked, and you’ve never come here and read me claiming otherwise.
Still, I have seen the dang flick a few times before, and the ending is always the same. We’re not at the end of the movie just yet, so let’s table the talk about that a bit. Besides, I wanna make sure you know I’m gonna spoil it for you. So don’t act all crazy when I do. Stop readin’ now if ya don’t wanna know. Lord knows it’s not my intention to mess up yer movie goin’ pleasure.
There are three reels to this film. We’re just beginning the last one. The first reel developed the story line and many of the characters. In essence, the economy is the star. We’re all extras. The second reel brought in the real angst and pain. Stock market goes south in a big way. Lenders teeter on the edge of disaster. Regular folk are suffering financially — not even nearly most of them, but easily enough to be a huge problem. Foreclosure rates are enough to make that point without debate. ‘Nuff said there.
The best part of most movies, at least the ones we really liked, is found in the last reel. Duh.
Irrelevant Note: Bruce Willis never looked better than in the last Die Hard movie. Just sayin’
As we enter this last reel, things just can’t get any worse. Of course that’s how most movies go, right? Then it immediately does get worse. In this case, it not only gets worse, but mainstream media does it’s best to bring copious amounts of $5 gas to pour on the bonfire of eminent disaster, fanning the flames as they go. The media plays a recurring role in all these sequels. The pressure tightens, and the tension becomes almost unbearable. That’s when they give you the signal. It’s incredibly subtle if they’re good at it. But the signal let’s you know just how Bruce Willis is gonna single handedly outsmart the bad guys, and save the day.
Posted on July 3, 2008 @ 11:51 pm - Written by BawldGuy
This is a real simple one people. Flippers with at least 2-3 years experience will see themselves here, and nod their heads. They know exactly what’s what when it comes to what they do and what their real estate investor buddies do.
Ya see, even if the flipper does well, he’s paying ordinary income tax rates on his profits. And if not? He’ll get caught soon enough. Seen it too many times. Most flippers though, earn their profits fairly, pay their taxes, then move on to the next one.
‘Course they gotta take out money for themselves before the movin’ on part actually, you know, moves on. After ’bout the third or fourth one, it becomes fairly clear exactly what’s what.
Here’s the dirty little secret flippers won’t bring up while chowin’ down on the BBQ this weekend.
They very rarely retire well at all. They hit 50 or so, then realize the sun is setting quickly their chances for a stellar retirement. It’s not a good feeling. I’ve consulted with several 50-something flippers in the last couple years. It ain’t been pretty.
They’ve discovered all flippin’s got ‘em is a bigger paycheck, higher taxes, harder work, and more liabilities. And they can’t stop, or it’s back to whatever job they hated before they started flippin’ real estate. They’ve built themselves a prison with no doors. Read the rest of this entry »
Posted on June 27, 2008 @ 11:10 pm - Written by BawldGuy
There are plenty of things you can do, not the least of which is to recognize the sea change happening in real time before our eyes. I’m worried for your future. You should be too. And no, I don’t think your properties are gonna put you in the poor house, ‘cuz they’re not. This market correction will end, and at some point your properties will not only regain their value, but go higher.
The Problem?
If your real estate investment world begins and ends at San Diego’s borders, you have a big problem. If they don’t, takin’ your equities Outa Dodge will easily mean $1 Million in additional capital growth for most of you in the next decade. And that figure’s a relatively safe one. Talk about the tortoise and the hare. And for the record? It’s only in the fable that the tortoise wins. Where we’ll take you, the hares don’t stop and lollygag. All things being equal, those leaving San Diego with their real estate investment equity/capital will race past those who stay in town.
It’s a no-brainer. Those who leave now, will be working towards another $5,000 a month retirement income in the next 10 years or so, give or take. This isn’t a game. This is your retirement, and I’m serious as a heart attack about this subject. It’s what I do.
Do not invest in San Diego income property now, or keep what you have longer than it takes to sell/tax defer (1031 exchange) your way out. I’ve been tellin’ folks to buy SD property since Carter was in office. I don’t say these things lightly, as I understand the gravity of decisions based upon one’s future retirement income. But it’s the right thing to do. That makes it an easy call.
I’ll be in town this weekend, available by phone and email. I’m pretty good about gettin’ back to folks quickly. So Contact the Hairless One and let’s see what it’s gonna take to get your retirement back in high gear. Oh, and by the way, for clients doing tax deferred exchanges with Brown and Brown, the selling costs will be reduced by $10,000 or more 90% of the time.
Really — wouldn’t kid ya ’bout that.
Now for some kinda sorta on-topic weekend music. (Just go with it, OK?) Have a good one.
Posted on June 20, 2008 @ 10:36 pm - Written by BawldGuy
Man, the hucksters are out in force. Been gettin’ emails and phone calls from folks wantin’ me to help them retire in the next 2-4 years through ‘fantastic’ cash flow opportunities in such and such a region. What? Huh? First, let’s ask ourselves a few quick questions.
If we at Brown and Brown could get clients to retirement that quickly, don’t ya think we’d of been braggin’ about it before now? Ya think? Do these magic cash flow properties exist? Well, on paper they do. After that? A whole lotta ‘what the heck is goin’ on here’ is what’s after that.
Seriously, didn’t Grandma tell you about the whole ‘If it sounds too good to be true, it’s probably not’ thing? I’ve literally had over half a dozen conversations this month in which I’ve been questioned about why I won’t fess up about these properties with ATM-like qualities. Wow. What new seminar, Invest In Our Magic Property And Retire Next Tuesday did I miss?
