Posted on December 11, 2009 @ 9:18 am - Written by BawldGuy
Though I’m finally at the point where writing a book chronicling my years as an investment broker, plus more than a little of what I’ve learned, I keep being prodded (bullied?) to write an eBook first. That won’t be a problem, as I’ve given myself 10 years to do the ‘real’ book right.
I’d love to write about stuff important/interesting to me, but would no doubt be better advised to write on topics about which you guys wanna read & learn. It would please me greatly, and I’d be eternally grateful if you’d drop by here to let me know your preference(s).
Thanks so much for your input.
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 January 15, 2009 @ 11:12 pm - Written by BawldGuy
Tonight let’s take a look at what’s possible when times are, uh, not normal — whatever that is. Believe it or not, I was in the business over three decades before I saw interest rates below 7%. Think about that. My perception was that 7% was the best rate possible. When in 2003, one afternoon for about 90 minutes, rates went just under 5%? I thought maybe I’d accidentally ingested an hallucinogenic — I knew 4.9% was fictional. There was no other plausible explanation.
I tell you that to give some perspective to today’s goings on. Step back and really get the lay of the land. What we have here, say my long gone, but never forgotten mentors, is a failure to communicate.
We used to have meetings at the Wenchell’s Donuts down the street from my office. We’d get there at 7 AM. The owner let us use his little cubby hole of an office. Over what I still believe is some of the best coffee ever, and 15 minute old apple fritters, they’d start talkin’ about real estate investing in general. One such meeting found me whining about double digit interest rates, and the state of the local market — i.e. just this much better off than death on a cracker.
Almost on cue, they all began wiping phantom tears from their eyes while they openly mocked me into embarrassed silence. I was 31 at the time. One of them had a 20-something year old grand daughter. They threw no empathy my way. They did do their job though, and really took me to school that morning. Read the rest of this entry »
Posted on November 7, 2008 @ 7:14 pm - Written by BawldGuy
Been havin’ fun talkin’ with a veteran of the real estate income property wars the last week or so. He’s retired outa state now, but we still talk when the spirit moves him, and the fish ain’t bitin’. He’s more private than I am, which is sayin’ something. He’s also one of the smartest real estate guys I’ve met in person — ever. Jim and I met about eight years ago, shared office space, and have cracked each other up consistently since. He was also a real estate licensee. We’ve almost always arrived at the same solutions to challenges or interpretations of markets. That said, he would usually be waiting patiently for me to arrive where he’d been nearly instantly.
I’m a smart guy, but Jim’s unreal. How smart is he? He once took a job teaching in a small college. The subject was chemistry, something he hadn’t studied since high school. He just stayed a couple chapters ahead of his students and pulled it off for two semesters. They offered him a raise to stay! His intelligence literally dominated a room.
He said he liked me ‘cuz though slow on the uptake, (always the comedian) I was able to get to the core of his ideas. One such idea was one for which I’d been using myself for quite awhile, which amused Jim no end. His amusement I suspect came from the delight with which I informed him of my prior knowledge and implementation. He’d refined it a bit, but we were in immediately agreement that when executed as designed, the results were tasty at worst, and incredible at best. Read the rest of this entry »
Posted on April 26, 2008 @ 12:03 am - Written by BawldGuy
It’s never a good day when I find it necessary to tell someone I can’t take them on as a client. Sometimes it’s ‘cuz they find themselves in quicksand and need help — but they’re too far gone. Most of the time though, it’s ‘cuz they’re under capitalized. They either want me to help them invest with 0-5% down, which I won’t do period, end of sentence, or they’ll have zip, zero, nada cash reserves to establish their Sominex Account.
As I’ve said dozens of times here, no Sominex Account means we can’t work with you. Though it’s designed to help the client sleep when Murphy makes his inevitable visit(s), it’s also there so I can sleep, know what I mean, Verne? I don’t like those weird dreams when I’m stressed.
Still, to those for whom I can’t help for this reason, and who obviously have more courage than is safe, I offer the following. Read the rest of this entry »
Posted on April 7, 2008 @ 9:51 pm - Written by BawldGuy
Countless times on these pages I’ve admitted my addiction to the process of taking real estate investors from ‘now to retirement’. Of course, there are nearly an infinite menu of investor flavors. There’s the experienced veteran. The investor who’s owned their first property for quite awhile, but hasn’t experienced a tax deferred exchange yet. Obviously there’s all the variations in between.
But my all time favorite real estate investor? The first timer. Get ‘first timer juice’ flowing in my veins and I’m good for quite awhile. 
Talk about a potent fix. They ask more questions, have more anxieties, are more conservative, searching for ‘lake serenity’, or real fire breathers, braver than is safe. Sometimes all at once. They also offer insight at times which makes me stop and think. They’re unfettered by experience, good, bad, or indifferent, so often bring a fresh take to the arena.
The questions almost always are the ones they should be asking. Many of their queries require a crystal ball, but they understand that — they just want a professional and experienced opinion. Fair enough.
How long will it take to get these properties rented?
Do I include insurance as an expense when analyzing properties I recommend?
How to houses in the area compare to the ’sides’ of a duplex for resale value?
Don’t I need a pre-approval letter for each property?
Can we drive a harder deal with this or that seller?
Why don’t renters buy, when the payments wouldn’t be much different?
See what I mean? All great questions. And those are only a small sampling of what I’ve been asked in just the last several days. I remind people all the time — answering questions is a huge part of my job.
Of course, the best part is when I’m able to answer a question they didn’t know to ask. Lord knows I love when that happens.
When new clients, especially those new to investing, ask us questions, we try our best to give in depth, and richly detailed answers. It’s not always possible, but we give it our best shot. When the answer depends upon our perpetually cracked crystal ball, we laugh about that fact with our client, then proceed to answer the question as best we can.
Sometimes the answers aren’t what they expect. Everything isn’t Grandma’s pancakes and bacon — know what I mean, Verne? Newbies learn quickly — we don’t sugarcoat answers that are sometimes by nature, negative, or at least unpleasant. One of our most often repeated retorts to stunned silence is, “Hey, that’s why we insist on a Sominex Account.” 2 3 4, “Oh, yeah, right.”
That’s when the light comes on — there’s a reason it’s called ‘risk capital’ Virginia. Usually by the time any particular conversation is finished, they’ve learned a new respect for the concept of cash reserves. This is a decidedly good thing. Soon, the excitement of investing for a magnificently abundant retirement is tempered by the realities of the real estate investment arena.
Again, that’s exactly why we call it Purposeful Planning — ‘cuz doing things on purpose with a plan is a whole lot mo betta than the alternative. Right?
Right.
Deciding to take the path of a real estate investor for the first time means you’re gonna take a nearly vertical ride up the learning curve elevator.
I’m always excited to ask — “What floor please?” “Penthouse? Excellent choice.”
It’s my job to answer questions, and do it as long as you have them to ask. Never, ever feel like you can’t ask ‘just one more question’. It’s how you learn, and how I stay high.
First time investors are great fixes.
Posted on February 15, 2008 @ 12:04 am - Written by BawldGuy
It’s shameful the way I used to answer questions from prospects or clients. The excuse of age is available, as I was only about 27 or so. But even youth, or having just transitioned from homes to investments doesn’t wash as an excuse for my pitiful performance back then. It’s truly a blessing there were no hidden cameras or recorders in the office back then.
Clients would ask me if the rents in the area would tend to rise during the holding period. And I’d answer yes. The problem? Most folks asking
questions want the answer, of course. But what they really want is the why or how behind the answer. Back then it irritated me no end that they wouldn’t just accept my answer as if I was quoting the 11th Commandment from the missing third tablet Moses forgot on the mountain. I knew the answer. Why couldn’t they just take my word for it? What a moron I was. I could have been more full of myself back then, but I’m not sure how.
That’s about the time I was blessed by the teachings and example of Chuck Chatham. As far as I’m concerned Mr. Chatham was absolutely the best teacher mentor and practitioner of real estate counseling. He was an artist pure and simple. As the title of his seminar promised, The Art of Real Estate Counseling, (also the title of his book) he was indeed a master. One the subjects near and dear to his heart was how we, as professionals, dealt with questions from our clients, or those pondering becoming a client. He was especially sensitive to young upstarts like me and a few others in his seminar one day.
You first have to imagine a smallish older guy with what appears to be several centuries of experience. He literally oozed authority. I remember his face as having an eagle’s beak nose, and a patrician like stare, that when focused on you, was both chilling and assuring at the same time. Figure that one out.
Anyway, he’d been talking with some of us whipper-snappers during breaks, and was not happy with either our attitude or demeanor. Don’t get me wrong, all of us had immeasurable respect for him. Heck, he was close to deity to most of us in the seminar. But he was concerned about the high opinion we held for our own skills and knowledge — which he felt was humorously over estimated. Go figure.
His remedy was to teach by example. He took one of the students who was about to start looking for his first investment property, 
and asked him to participate in an impromptu role play. Mr. Chatham would be the professional and the student the prospect. The prospect began asking questions. And that’s when I begin to feel as if I knew nada, zip, zilch about how to really answer questions in a way that actually helped the person across the desk or on the phone. (add email to that today)
It was awesome. It was like watching the Mona Lisa being painted by da Vinci himself. If on my best day, about 30 years later, I can be half as good as he was that day, I’ll die a happy man.
Here’s what I learned that day.
If possible, give the short answer at first.
Follow that up with an explanation for that answer.
Ensure that explanation is pure substance, with no guessing on your part.
Give an example if possible, illustrating your explanation.
Allow for chronological context if appropriate.
Finally, ask them if your answer was sufficient.
You’ll be surprised how many times that last one generates very solid follow-up questions. When this happens it’s often an indicator they now have more confidence in your expertise and real world knowledge and experience.
Why?
Because in the end, you can’t fake solid substantive answers to real questions. This is especially true when they’re from folks who are asking those questions in part to ascertain whether you actually know more than they do.
When people decide to take a trip down the Question Hiway, you can bet the ranch their destination is Answer City. It’s the pro’s job to honor the question with a worthy answer.
Short dismissive answers given with a false tone of authority just won’t cut it — not in the long run. You must actually know what you’re talking about.
When we as pros answer questions, we must give answers so complete, forthcoming, and informative the questioner is somewhat taken aback — positively. If you begin putting this into practice you’ll never go back to the short, dismissive, “you’re questions are a pain in the rear end” answers.
Why? The change in the way they look at you. You gave them a real answer with an impeccable explanation, and instead of getting served instant pudding, you gave them filet mignon. Talk about separating yourself from the crowd.
Of course, this requires that you actually know the answers. That’s always the challenge, isn’t it?
Posted on January 15, 2008 @ 12:18 am - Written by BawldGuy
Though it’s my policy to keep emails private, those communicating the following to me have personally given me their official Okey Dokey to pass on their thoughts anonymously. The subject was increasing traffic from people expressing an interest in buying/investing in real estate the last 2-3 months.
I’ll boil them down to bullet points.
The number of calls/emails has risen measurably since school started
The percentage of people actually doing something has also risen visibly
It doesn’t seem to be geographically bound either
Arizona, Texas, Oregon, Minnesota, even New England and Canada reported in
Most, but not all said market times have decreased a little bit
Lenders are proactively reaching out — all but one mentioned this
Brian Brady, my go to mortgage guy, said today lenders are bringing back 80% non-owner occupied stated loans. What will they think of next?
Keep in mind — Whatever Bernanke does or doesn’t do with rates is, in his thinking, secondary to money supply. Keep a watch on how much cash he’s continually dumping into the system. It’s been going on for months now, without the appearance of the inflation monster. Many of his harshest critics are now reduced to calling names, cuz he won’t play by their rules. Yet, as much as they complain he doesn’t get it, things have improved. Even his critics now grudgingly admit his mission to add liquidity is having a positive affect. The jury’s still out, but my money is still on Dr. Ben.
This Thursday Josh and I are winging our way to Kansas City. 
We’ll be speaking to a couple small groups of local investors, giving them a better understanding of their current investment options. It’s invitation only, and you must already own investment real estate to attend. Don’t tell anyone, but though I’m excited about speaking to these folks, of equal importance is getting to finally find out first hand about Kansas City BBQ. Our goal is to be able to walk on our own power and fit into the airplane seats on the flight back.
Very soon, you’ll be able to see for yourself the results of what I’ve spent the last three years molding and shaping. The ‘other’ Brown will begin publishing his own stand alone blog. There are a few who’ve met or talked with him, 
but he’s remained pretty much a mystery since replacing me in the part of ‘Son’ in the Brown and Brown movie. I was first cast in the part back in the ’70’s at about his age. We’re looking forward to launching his blog, and will announce it loudly when it’s imminent. It’s past due, but he’s carrying his weight, and has been from Day 1. Being Dad in this sequel has been eye opening. There have been times when I’ve been in conversations with Josh about one thing or another, when it suddenly dawned on me — wow! I’ve had this conversation before, except I was the son, not the ah, elder statesman. Yeah, that’s the ticket.
Meanwhile, back at the ranch — buy low, sell high, and remember to keep yer Sominex Account topped off. Man, I gotta start goin’ to bed earlier.