Posted on January 9, 2008 @ 11:57 am - Written by BawldGuy
Today I want to take some time to speak to you from the heart. Those who know me well will be surprised to read that sentence. Friends and family will tell you I’m a sensitive guy. I’ll leave that sort of thing to others, and speak for myself.
Real estate investors come from different schools. There’s the Buy & Hold Forever school. Selling any property for
nearly any reason is a sin against God. These are very serious people. I know cuz I used to do battle with them back in the days when I was the son in Brown and Brown Investment Properties. They were his clients, who wondered, often aloud in my presence, why he put up with me. 
As far as I was concerned they were charter members of The Old School as was Dad. In fact, and I’m being literal here — my dad actually did go to school for several years in a little red school house. Wow.
Raised to be respectful, especially of my elders, I would glance at Dad, roll my eyes dramatically, and make some joke about nepotism being a good thing. This used to irritate Dad in a major way, as he knew the truth. He was a house guy turned real estate attorney with an investment broker son. He repeatedly told them I was the one to which they should listen. To no avail. The problem however, was not generated solely from their side of the table.
In my DNA was the innate ability to deal well with people, one on one. Problem was, it hadn’t been activated back then. I was a 29 years old, and couldn’t fathom why they couldn’t understand what I was saying. In investment real estate back then, 29 years old was a teenager. Dad said it would come, just keep it up. I should relax he said. I knew what I was talking about he said. They’d eventually see that. Regardless of the fact Dad had zero investment training, and repeatedly told them how much training I had, it didn’t matter. In their eyes, he was The Man.
That all changed one day at the local bank. What happened that day would forever change not only how Dad’s clients/friends viewed me, but how he himself did. It’s actually not that big a deal, though they sure thought so. They all new this banker, as he was the president, and golfed with them now and then. They were all dinosaurs from where I was coming. I felt perpetually ganged up on. It was as if there shoulda been warnings like we see on certain roads. You know, deer crossings.
Here’s the short version.
An investment client wanted, in the worst way, to buy a mixed use property on a main street in a suburb located in San Diego’s East County. I don’t wanna say it was old, but I think Cortez may have stayed in one of the cottages once. It consisted of three commercial spaces, with sidewalk frontage. In back were seven of the cutest little one bedroom cottages you’ve ever seen. The courtyard between all these buildings was brick flatwork that brought it all together.
It was a fixer. On a scale of 1-10, 10 being buildings held up by virtue of the termite union agreeing to hold hands, this was probably a 3-4. It’s only real problems were years of inattention and age. My client had a successful retail store down the street and around the corner. He knew it was a potential gold mine. People would kill to live in the back, (correct) and the storefronts never got old on that street.
The banker made some loan demands he thought were impossible to meet. I went back to the office and attacked the problem with my trusty HP 38E, which is now a 12C, which now, as my clients know, I refer to as my brains. When my solution not only met, but exceeded his needs, he was good to his word — he made the loan.
Back to The Old School.
From that point on, and no doubt at least in part cuz the bank prez told the whole story to Dad and all his friends while golfing — they began to ask me for advice every now and then. It was at that point I was grateful their species of dinosaurs could talk.
One day it finally got to me, and I asked Dad why that one episode with the banker seemed to make such a difference. His answer sticks with me always.
Paraphrased after almost a bizillion years…
“Son, it’s simple. You demonstrated knowledge and expertise. Only this time you weren’t such a smart aleck. Also, since you actually did know what you were talking about, it came through, loud and clear. And that’s why my dinosaur friends are listening to you now.”
To this day, I’ve always avoided like the plague what I thought was Dad’s wish. Turns out I never had a chance. I was meant to be Old School. Though it’s too late for him to realize his success, I’m sure this is how he always visualized our company picture.
He went on to say I could’ve made it happen sooner by answering their questions the same way I did with the banker. In other words, answer questions with more detail, explanation, and evidence as possible. Nothing replaces competence founded upon actually understanding the words flowing out of your mouth. People know real when they see it.
That’s why to this day I proudly call myself Old School — cuz I wouldn’t have it any other way.
And to Ray, Lew, Jack, Andy, Ellsworth, Jim, Bobby, and the rest of the now departed dinosaurs — I miss you guys. You never made it easy for me. You demanded I toe the line and understand the business I was in. You prepared me for the times in which we now find ourselves. Nobody has ever made me feel I belonged in this side of the business the way you guys did. When challenged you insisted I stare back calmly while inundating the questioner with a specific answer to their specific question — plus answers to the questions they should’ve asked.
To all of you I say a simple but heartfelt Thank You.
Posted on July 31, 2007 @ 12:30 am - Written by BawldGuy
Either I didn’t spend enough time, or today was a tad thin. No matter. These two should be separated from the pack. They’re as different as night and day except for their excellence.
Learn the essence of why you should have an experienced pro with great training and old school values. See into the heart of one of our own as he deals with life as it’s dealt.
There’s a difference between what I call group mentoring, a potially good thing, and in-person infomercials — an almost guaranteed waste of time. I’ve been to both, and you can tell the difference pretty quickly. The problem is, if you get sucked into the latter, and leave too early — you can miss the inspiration that could launch you into building the real deal yourself.
Chris Lengquist touches us where we live with Why You Need A Real Estate Investing Specialist In Kansas City, a seamless yet essentially human post about why all your reading and internet research ain’t worth much when you’re out there investing for your future with the big boys. This is a MUST READ that will likely find you giving your family extra hugs the next time you come home from work.
Greg Swann shows us in A comprehensive take on the StarPower Conference: Reinventing the pearl the Bloodhound way that excellence and its pursuit is its own reward. If Greg believes in anything it’s doing things the way he thinks they should be done. He reminds me of a baseball coach I had once. He was fond of saying, “There’s the right way, the wrong way, and the way I’m gonna teach you.” That’s Greg in a nutshell. If you’re an agent this is a slam dunk MUST READ. If you’re not, this post will give you a glimpse into what lengths agents will go to in order to improve their skills and expertise.
Disclosure: I’m a contributor at BloodhoundBlog where Greg is the lead dog.
“…and remember. The daily Bawldys have approximately 1/365th the value of our annual awards.”
Posted on June 29, 2007 @ 7:54 pm - Written by BawldGuy
Wally Porter passed away this week — and the sense of loss is palpable for hundreds of people who knew him.
Wally was my first real mentor in real estate. He taught me what to say and how to say it. He taught me how to treat people — with empathy and compassion.
His first decade as an adult he was a minister. He had the first integrated church in downtown Los Angeles. I still don’t know for sure how many languages were spoken in that church. He was a very accomplished musician, playing several instruments, and in a traveling jazz band. His second career was in real estate, though he was always in some position of leadership in his local church. The man was ultra talented in everything he did. I’ve tried to remember a day I didn’t see him smiling 90% of the time. He oozed enthusiasm for life. A conversation with Wally was made up of equal parts laughter and him listening to you. He drew people out.
At breakfast, the day after his memorial service, I was told the following story about Wally, which epitomized who he was as a man.
When I was around 22, there was a guy in our office, who, on a good day was a dour man. His outlook on life was, to be kind, sour, cynical, and sometimes mean-spirited. When they told me this story, I knew it was about him, because he’d disappeared from the company like steam in the air one week.
Wally (the firm’s general manager) saw him browbeating a very young couple into buying a home. They became more and more cowed as the guy kept pressuring them. To make a long story short, the couple left, scared and frustrated. Wally went to the guy’s desk, told him to get his stuff together, and fired him on the spot. (You could do that in those days.) He was appalled. He then called the young couple, apologizing profusely, and made an appointment with them for the following day. Wally made sure they ended up with a home they truly wanted. Remember, he was the GM — he ran the company. He didn’t spend precious time showing homes to first time buyers. Anyway, they owned it for many years, and called Wally when it was time to sell. They’d remembered his kindness and compassion.
His memorial couldn’t be held in his own church — it wasn’t big enough to hold the crowd.
There’s always something people can say about a good man when he passes. Wally wasn’t just a good man though. He was one of those Quiet Giants who changed hundreds of people’s lives for the better. I say quiet because he was always about you, and never about himself. He made Dale Carnegie appear to be a bitter old man.
He showed me what the word professional meant when dealing with the public. He showed me how to be a leader. He showed me how to really listen to people. Best of all he showed me how to be a man and a father. I’ve never known a better father.
On Father’s Day I spoke of my Uncle Cork as stepping up to the plate. There are actually three such men in my life. Wally took over where Cork left off. He was my dad’s best friend since they were in high school. This friendship came up when Dad needed a general manager for his company in the ’60’s. Dad’s company was hugely successful, so this was an immensely important hire.
Even though I was only 16, I asked Dad why he would even consider having Wally as his GM, when he’d only been licensed for just over a year. I’ve never forgotten his reply.
“Son, I could hire any number of very experienced and highly knowledgeable men to be my GM. But I need to trust them implicitly. If Wally told me that at noon on July 4th, in Death Valley, it was going to snow — I’d bring my parka with me.”
How many men can you say that about?
He did hire Wally, and just like he said, it was one of the wisest business moves he’d ever made. Because of his presence we were a company which combined two attributes rarely found in our business in combination. We were the highest volume company with the fewest agents per office (# of agents per sale) AND the happiest sales force in San Diego County. Since Dad was known (mostly affectionately) as Attila the Hun, Wally was the perfect guy to be in charge of day to day operations. To say they were an odd couple is to strain understatement.
Wally wasn’t just a great man — he was a Quiet Giant who changed lives for the better just by his presence. If ever people think of me half of what they thought of him, I will have been a successful man.
For those of you who never met Wally Porter, you missed something special. There are very few Quiet Giants like him among us.
Simply put, I wouldn’t be who I am or where I am today, but for Wally Porter. I’m a much better man because he was in my life.
The world was an infinitely better place because he was in it. I already miss him.
Posted on April 18, 2007 @ 10:38 pm - Written by BawldGuy
After going down memory lane the other day, I realized how lucky I was as a young man struggling to make the transition from homes to investments. It wasn’t another side of real estate, it was another world. What had to be learned was daunting. I spent thousands of ’70’s dollars attending seminars conducted by the icons of real estate investment and exchanging.
Guys like Chuck Chatham, Bill Broadbent, Royce Ringsdorf, and Chet Allen just to name a few. These were the guys I looked up to back in the ’70’s when I landed in their seminars. It was like learning how to hit from Ted Williams; how to pitch from Sandy Koufax; and how to play center field by Willie Mays. In short, it was incredible. Each three day seminar was 24 hours of classroom gold.
I wrote a post on BloodhoundBlog about what I learned about answering questions. You can see it here.
What I learned from Mr. Chatham’s seminar those three days has proven priceless.
Posted on February 25, 2007 @ 3:00 pm - Written by BawldGuy
Have you noticed that the more the media pours it on about sub-prime loans beginning to go under, that rates in general keep trending slightly lower? Lenders, in the end, will do whatever they can to avoid taking back properties. It’ll be interesting to watch how they do it.
Right now there are some attempts to create neg-am hybrids. The actual rate is at least 1-2% lower than current traditional neg-ams, which of late have been transitioning from pig to hog status. It seems folks like WAMU have forgotten the age old wisdom that says pigs get fat and hogs get slaughtered. It’s my contention that their greed will come back to haunt them.
Tax deferred exchanges are being successfully avoided these days by investors who have been barred by the IRC from using depreciation to offset ordinary (job) income. Many of them are surprised to learn they have six figures worth of this unused write-off available to offset capital gain. It’s like finding a key to a new car in your Christmas stocking.
Here’s a quick and easy formula. If you’ve owned an investment property long enough so that you have a 40% equity position, it’s time to make a move. Maybe way past time. Your growth rate is pretty much stalled. If you originally put 10% down, you now need four times the appreciation to equal your first year’s growth rate. You can’t win by keeping it, if growth is your purpose. Those who insist on holding high equity properties while needing growth, will end up losing hundreds of thousands. Yet I see it all the time.
For the real estate pros out there who read me every now and then, I have a question. When was the last time you helped a new or young agent? I don’t mean by answering a question or two. I mean real help. Be honest and remember all the help you got when you could barely spell real estate. Pay it back. You never know how much your advice helps, or who will take it to heart, but it’s the right thing to do. I always get a big kick out of it. So many old vets helped me along the way, I couldn’t possibly pay it all back. But I try.
This week I’ll be talking about cost segregation. It’s a boring subject. Using that process can increase your after tax cash flow like the Golden Goose. So when you see the term in a title this week — read it. You’ll be glad you did, I promise.
If you own investment property in San Diego, ask yourself a question. To what end? Do you really think there will be a buyer for your rental units in the next 3-5 years? Really? Look at their value today and increase it a bit. Would you buy your own units for more than they’re worth today? Not likely. Get outa Dodge now. Denial isn’t helping.