Posted on August 27, 2008 @ 12:16 am - Written by BawldGuy
Have some cool shots of our trip that I’ll disperse randomly tonight, and for the next few nights. Just so ya know. This first shot was ‘posed to be of two people, our hostess Vanessa, and me. Turns out it was two people, just not me.
In Durango, Colorado as in San Diego, real estate values are way up the last decade, even after the steep decline of the last three years. If you can only afford a $400,000 home, the fact that the $600,000 place yer lookin’ at used to be $700,000 doesn’t really matter, does it? Hardly.
Posted on August 17, 2008 @ 11:10 pm - Written by BawldGuy
Of course I have no empirical evidence of this contention. However, dealin’ with real estate investors for over three decades, I’ve been able to observe certain personality traits repeat themselves. One of these is the so called ‘maverick’ gene. You know, when I was in high school, you either loved the Beatles or the Stones. The ones who didn’t care what others thought, went for the second tier, so called ‘cuz they weren’t the Beatles or the Stones.
I liked the Beatles, but could take or leave most of their stuff. Same with the Stones. ‘Course, they both recorded songs that I still love today. Still, high school buds never tired of laughing at my musical taste — which they said was mostly in my mouth. Not so. I just had what Grandma always said was an eclectic taste in music.
Fast forward to the present, more or less. Unlike the Kingsmen who were almost the poster band for one hit wonders (Louie Louie), These guys have been around for years. Anyway, I like these guys. They do what they think is best and right, and let the chips fall, regardless of what others think. Read the rest of this entry »
Posted on August 15, 2008 @ 11:41 pm - Written by BawldGuy
At a family dinner tonight we had three generations at the table. We were at one of our favorite places, and were enjoying several appetizers. Grandma came up in the conversation as we were talkin’ about the Great Depression. The usual stories were told, but then my daughter asked me to tell her favorite Grandma story.
Here’s some perspective against which you can evaluate our current economic challenges.
In the early parts of the last century, the 1920’s, though history books tell us everyone was in the high cotton, bad times had begun for many areas of the country. We usually hear about the Roaring 20’s with the wild parties, and regular folks makin’ it big time in the stock market.
That’s true as far as it goes. Those in ‘fly over’ country were already gettin’ a preview of what was just around the corner. Grandma was the oldest of eight kids. Think it was like The Waltons? Think again. The story is short, and for Grandma ends up being about, of all things, shoes. But for me? It was always about perspective. Read the rest of this entry »
Posted on July 30, 2008 @ 11:47 pm - Written by BawldGuy
Here’s how I explain to real estate investors in other states what it’s like to trade equity from California to much lower priced growth regions.
It’s kinda like buying that killer Norstrom’s dress for yer wife. You honestly thought it was perfect for her. But after she stopped laughing, and could speak English again, you were back in the car, headin’ for a refund. Now, imagine you hafta spend the entire refund at the Dollar Store. That is what the CA real estate investor faces when he exchanges his properties’ equities to another state.
Take a Bay Area, San Jose (Palo Alto), or San Diego income property owner. We’ll use a San Mateo duplex. Let’s say it can sell for $850,000 and with a loan balance of $400,000 the net proceeds would be roughly $385,000 or so. If they paid $600,000 back in the day, their annual tax shelter runs in the neighborhood of $18,000 +/-. (Should be more, but that’s another post.) Their current cash flow is either zip zero nada zilch, or enough to treat the family to a monthly dinner at Sizzler. Oh boy! We’re goin’ to Sizzler!
Here is the ‘before & after’ picture when their 1031 tax deferred exchange has been successfully completed. Read the rest of this entry »
Posted on July 27, 2008 @ 8:35 pm - Written by BawldGuy
In my experience, the beginning of the end of relatively bad economic down times, comes when the handful of folks with real power decide it’s time. You think dancers are choreographed? When the real power makes their moves, Fred Astaire is impressed.
The last several weeks, especially during this month, the small group of clean-up hitters have all grabbed their bats. (He said, making use of world class skill at mixed metaphors.) Bernanke bails out one of the biggest Wall Streets houses. Before that he was indirectly increasing liquidity of not only domestic banks but hose across the pond. He then allows banks not on the cool list access to ‘the window’ at the Fed. His latest? Allowing Fannie and Freddie to also belly up to the Fed for dead presidents as they see fit.
Those are serious moves by anyone’s definition.
Next comes the White House. The president blithely strolls up to the podium and announces how he’d be pleased as punch if we turned drilling for oil into a national sport. Geez, I dunno. Ya think that had anything to do with the almost immediate downward pressure on oil prices?
Wanting his own face time was Treasury Secretary Paulson. Henry throws the gauntlet down to the rest of the world — seems the dollar should be strong. Now there’s an idea to ponder. Why didn’t we think of that? A strong dollar tends to solve a plethora of economic ills. This isn’t news, of course, but true nonetheless.
To review, here’s what’s happened, and just as importantly, not happened in the most recent past.
Bear Stearns failure avoided. Liquidity for banking systems not allowed to become huge factor. Secondary market for real estate credit/financing aided. Oil problem finally shown in public to be what it’s been all along — supply and demand. Go figure. The dollar begins to get real support, at least on the talkin’ side. And for bonus points boys and girls, durable goods swats Chicken Little in the butt. The market had already discounted widely accepted expectations of a .2% dip. Instead, they came in at a solid, and surprising full 2% increase.
And no, I’m not gonna argue the finer points with all the MBA’s who think it’s their mission in life to explain how everyone else in the room just doesn’t get it. The fact is, the big boys are now in the first stages of flexing their muscles, and I’m not gonna quibble — except to say it’s about time, guys.
OK, enough of that stuff on a Sunday. let’s listen to some tuneage. Between Bernanke, Bush, and Paulson, seems they’ve choreographed their dance well.
And now, apropos of absolutely nothing, except maybe as homage to The Boss, our Sunday night video. See ya tomorrow.
