Posted on February 3, 2008 @ 2:07 pm - Written by BawldGuy
Here we are just over an hour from kickoff, and I’ve already had more than a dozen hot wings. Hmm good! Before leaving for her store late this morning, The Boss made sure both the oven and fridge were over stocked with coma producing goodies. I heard 2 Super Bowl food facts on the never ending pre-game show. 5% of the avocado crop is bought with today in mind. Pizza sales double today. Wow.
My diet of choice will consist of more wings, a bag or two of corn tortilla chips, and various dips. Spinach dip will most certainly dominate, though guacamole will surely make its presence known.
By the second half, which by tradition means it’ll probably already be a wipeout for the favorite, I’ll be switching to celery as my dipping shovel of choice. This will allow me to fool myself into believing my intake for the day was intelligently moderated. It’s amazing what we can sell to ourselves, isn’t it?
What if the Super Bowl had been scheduled in San Diego this year? Oops — the entire county of San Diego is in total storm mode.
Of course for us storm means it’s raining longer than a few minutes. Seriously though, if the game was here today it would be the Mud Bowl without a doubt. Visibility is around a mile at best, and it hasn’t stopped raining since I woke up. The weather guy says it won’t stop until tomorrow morning. Add to the rain 20-30 mph winds, with gusts up to 40 mph at times, and you’d of had a disaster Super Bowl scenario. So much for San Diego’s predictable clear skies, mild ocean breeze, and moderate temperature.
While I’m at it, there has been a certain real estate blogger bragging about their city. ‘Our city’s better than yours’ blah blah blah. We in San Diego easily shrug these wannabes off, as so many of those from all these so called ‘better’ or ‘best’ cities end up moving here. Yet they take every opportunity to spout off about how great their abandoned city was. Know what the biggest downside is for San Diego living? Where do you go for vacation? 
For those still confused why don’t you just satisfy yourself and Google ‘America’s Finest City’?
I rest my case in advance.
What if the Giants play the way they did in Foxborough the last game of the regular season? What if they sack Tom Brady 4-5 times? What if Eli has another ‘I’ve arrived’ game? What if the Giant’s running game keeps the Patriot offense on the sidelines?
In San Diego we don’t care for the way the Manning family handled the draft back in ‘04. They showed no respect for us whatsoever. Frankly, I love Eli Manning and think he’ll be among the elite QBs of his generation. He still isn’t as good as our Phil Rivers. He’s not as physically gifted, a fact no football fan would argue. The main edge Rivers has though is his leadership. Though the Chargers are far better known as LT’s team, the players look to Rivers, as he’s shown he has the ‘IT’ great QBs need to achieve great things.
The Giants couldn’t beat the top three teams in the AFC — Chargers, Colts, or Patriots. Heck, the Chargers probably would’ve beat New England in the AFC championship game had it not been for the 3 Pro Bowl players with severe injuries — all on offense. But let’s not cry over spilt milk.
If the Giants play the best game possible, get a few calls and a few Patriot mistakes, they’ll beat the point spread. I want them to win desperately, but reality tells me if they played the game 10 times, the Pats win at least 9.
Patriots 39 Giants 24 And it won’t look that close in real time.
Posted on December 16, 2007 @ 6:12 am - Written by BawldGuy
Late yesterday morning we held a seminar here in Austin. Those in attendance were friends of our hosts, Benn Rosales and his wife Lani. Our practice is to invite those who wish to join us for lunch after the seminar. Normally about 2-4 people will show up. Today, every single seminar attendee joined us for lunch. That’s a first. It’s simply never happened. Our best was several months ago in one of our Boise seminars when about half of those in attendance ate lunch with us.
Benn made an astute observation last night concerning the responses of those attending the seminar. As he was watching them, gauging their responses to the different concept explanations, he began to notice a common thread in their response pattern.
Every time I referred to either Purposeful Planning or doing something on purpose, they visibly perked up, many adding to their notebooks. I was of course pleased, but not surprised. Purposeful Planning has always had this affect on investors.
At lunch, a pretty formal affair, held at Fudrucker’s, the atmosphere is relaxed and more one on one. We talked a lot of real estate investment, but the latest in the baseball steroids to-do was brought up, along with all the normal topics.
Everything went as smooth as silk — a direct result of the organizers, Benn and Lani. My job was to show up with my shirt tucked in. Pastry, a couple kinds of burritos, and other cool stuff awaited people as they arrived. Everything those two do is first class then a little bit more. The three of us worked hard this weekend. Our days have started relatively early and ended relatively late. Our brains have slowly morphed into likenesses of the mashed potatoes and gravy we had for dinner with our chicken fried steaks.
Yeah, honey, the healthy diet I’ve been eating went to hell in a hand basket while I’ve been in Texas.
The best thing coming out of this working weekend has been the successful creation of a new language — BawldBennese. Slowly but surely, like mice making fewer and fewer wrong turns in a maze, Benn and I can just about communicate using the new language.
Lani is, how do I put it? Different? She’s different alright — in all the best ways. Smart, gracious, discerning, and possibly the best all around wife/assistant I’ve ever seen in action on the planet. Josh and I need a Lani, but we’d have to pay her six figures. Remember the movies back in the good ol’ days when the powerful exec had an assistant who seemed to make whatever was necessary happen like magic?
That’s Lani. It’s a good thing she’s Benn’s wife, cuz otherwise, he couldn’t afford her. Professionally they’re a well oiled machine and impressive as all get-out.
If it’s Sunday morning, I must be on my way to Dallas. The agenda there is twofold — conclude negotiations with a stellar builder and a good man on a couple dozen duplexes give or take — and hopefully meet Benn’s brother Michael to check out some pretty cool homes nearby. The ambiguity is intentional as we’ve gotta stay under the radar, remember?
A heartfelt thanks to Benn and Lani for a seamlessly executed weekend. Your gracious hospitality, attention to detail, and competence was appreciated — and the coffee cups are very cool. Can’t wait for our visit next month.
Posted on November 16, 2007 @ 9:54 am - Written by BawldGuy
How many times have we all said that? I’ll confess to probably more than my share.
Back in 2003 I’d begun telling clients, and whoever else who’d listen, to forgo the cartoonish San Diego appreciation and head to more stable ground. Once blue collar 40 year old duplexes are selling for over half a million? 
Seriously, did the Lord tap me on the shoulder and whisper into my ear? Did He give me the scoop?
“Thou shalt leave San Diego and wander yonder, until the promised investment lands are found.”
“Investment lands? Plural?”
“Verily I say unto you — get outa Dodge! Folks listen to you — at least sometimes. Many of them will make the correct decision — most will hang in San Diego, wandering for who knows how long. The last guy I tried to lead to some great real estate took 40 years and…never mind it’s a long story. Besides, I already wrote a book about it.”
There’s no Promised Land out there — at least I’ve not found it. Been lookin’ for it so long, flying so often, a Southwest flight attendant recently asked me how Mom was doing.
There are some places out there offering solid locations, very reasonable prices, old school financing, and pretty attractive rent/price ratios. Translation: relatively higher rents & lower prices. It’s one of those ‘best of both worlds’ kinda things.
It’s my contention the next 10 years could be the most boring decade in recent memory. However, like vanilla ice cream, possibly the most boring dessert ever created, it can be significantly improved upon.
For instance, a little chocolate sauce, even warmed up a tad, makes vanilla ice cream nearly edible. Now Jamocha Almond Fudge…
Back to the next 10 years.
The South and West are benefitting from consistent population shifts aimed at those two compass points. That trend will only continue, as folks will always follow jobs and a better lifestyle.
Places like Phoenix, Boise, Salt Lake City, Austin, Kansas City, Denver, Atlanta, parts of both Carolinas, and several more, are going to experience long term, steady, boring — growth. Some them, Boise and Austin to name two, will change dramatically in the next 10-15 years. Austin’s already well on its way, and Boise? That one will be fun to watch. The stars are aligned in favor of that city. Weather, recreation, very family friendly, median prices still comparable to San Diego — in 1995.
Nobody knows what the next decade will bring. Anyone who takes themselves seriously can only make a guess, based on incomplete data, and conclude what they will. Extrapolating 10 years from now will only make us blush later on.
Make a pact with yourself. Regardless of how the next 10 years turn out — don’t be in the position of lamenting — Shoulda Woulda Coulda.
Where you invest wisely, with a Purposeful Plan, and a vision — that’s your Promised Land.
Endless wandering will get you nowhere fast.
Posted on August 27, 2007 @ 12:40 pm - Written by BawldGuy
After finally forcing the tendons attached to my elbows to revolt, I was forced to discontinue my march towards breaking all of Arnold’s old records. I’d of caught him too, as long as I was able to keep my personal parallel universe intact.
That was almost four years, 30 pounds, and half a tape measure ago. My waist had gone from, gulp, 33½ to just under 41. At 5′ 9″ and 182 muscular pounds of Bawld Beauty, I’d grown to 212 pounds of, “Is that really you Jeff? Wow! — Dude, what happened?” Not to mention, my so-called guns (biceps to the uninitiated) had gone from pretty cool, and way grande, to “Geez Dad, would you please stop wearing the tank tops?” I was in my own home. The ego hasn’t exactly been getting a daily massage lately, know what I mean, Verne?
While getting some pics taken recently, my wife asked me to tuck my chin in a bit, which I obediently did. Whereupon she said, “I meant both of them.” Everyone’s a comedian. Piling on though is the Boss’s job, right?
About a month ago I decided enough was enough. Josh showed me a photo of me, which he denied had been tampered with. He insisted it was untouched, then wondered out loud what kind of mind bending mirrors I must have installed at home for me to be in that much denial. “You can’t possibly look into a real mirror without either laughing or crying.” Funny guy. And he’s the other Brown. It doesn’t help of course, that he’s built like a swimmer who discovered the weight room. He’s barely tolerable. (And newly single, I might add.)
I could no longer use my permanently weakened tendons as an excuse for my new identity as Jabba the Hutt. I’ve been a competitive body builder, and run half a dozen marathons. It just doesn’t feel good to be this big, and out of shape. Bawld Jabba is on the mend!
Let’s have a little fun at my expense here, while I try to compare losing my ginormous waist, along with whatever Godzilla-like Jello-mold that keeps following me around, to investing for retirement.
When utilizing a Purposeful Plan, the first thing to do is find out where you are right now.
Though I’d successfully lost about 17 of the 30 I’d gained (in the last year or so), you must remember that much of the weight at my peak was muscle, which is almost twice as heavy as fat, given the same volume. This means after almost four years of no weight lifting, my muscles are in full retreat. This also means if I only lose down to my weight when lifting, I’d still be, uh, more than a touch rotund. 
This is the reality of going from low body fat and high muscle content, to losing lean tissue while adding 30-35 pounds of fat.
Boiled down, this means I gotta go from the buck-95 I’ve gone down to so far, to somewhere in the buck-60’s range. We’ll have to see. The gold standard is gonna be a 32″ waist. And you can just stop that this instant, as laughing will not deter me in the least.
This reality check is somewhat akin to learning your annuities aren’t what’s gonna get the job done. Or letting your home sit with a 60% equity position — which is like being 40 pounds overweight while trying to convince everyone you’re gonna run a marathon next month. Or how ’bout figuring out that the rental you bought using 100% financing is the investment equivalent to losing weight by fasting on water-only for a month. It’s a quick fix that almost always causes more problems than it solves.
So what Purposeful Plan have I developed for losing weight and inches, while simultaneously replacing at least some of the muscle that went AWOL so long ago?
I had to combine diet, muscle development, and aerobic training. Captain Obvious, standing in the corner, is now rolling his eyes dramatically.
For retirement, you may have to clear the decks by correcting past mistakes, or converting other assets to cash. Getting rid of fat (mistakes - duh), and modifying the way you exploit available capital (diet) is crucial to your success. 
Pretending everything isn’t part of the Plan will only lead to ultimate failure and disappointment.
If I work hard both aerobically and anaerobically (resistance training), but eat all my meals at McDonald’s, Pizza Hut, and my favorite Taco Shop, my results will be mediocre at best. At worst I might find myself in the physical poor house when I’m finished. Seriously though, the carne asada nachos are nasty-good.
So far I’m only in the first third of my Plan, which I’ll divulge next time out. I’ll lay out exactly what I’m doing to reclaim the ‘Inner Stud’ that’s in all of us.
And yes, that means all of us have a magnificent and abundant retirement on our menu — if only we decide to go after it Purposefully.
Posted on July 30, 2007 @ 12:17 am - Written by BawldGuy
These two topics are written about ad nauseam all over the mainstream media and the internet. Everyone has an opinion. I do too. Perhaps the one thing we all have in common is a cracked crystal ball. Calling my take on the timing of corrections and recoveries an opinion might be too much. My take isn’t so much a strongly held opinion as it is a sense of what might be a potential outcome based upon previous experience. (Of course, that’s opposed to future experience, right?)
Corrections and their recoveries have come and gone for reasons many times totally unrelated to the previous cycle. 
This isn’t meant to be an economic treatise, as I’m not even close to being an economist. The following is merely one guy’s opinion — and a pretty weak one at that.
Just an aside, but, the term correction fascinates me. The immediate visual popping into my head is one of the Liquid Paper we used back in the day to correct typing mistakes.
There was an historical run-up in prices back in 1976-1979. The correction began in the fall of ‘79. It lasted roughly four very long years. I remember closing an apartment sale in December of ‘83 (7 units) and was beside myself with glee when the adjustable rate loan started under 12%! I distinctly remember telling my client the interest rate would fall slowly over time, as it was attached to the COFI (cost of funds index). It did exactly that.
The cause for that boom real estate market? 
In short, and again, in my opinion, it was a direct result of the monetary policy urging of the inflation of our money supply. It was as if there was a machine somewhere spitting out hundred dollar bills like M & M’s. As soon as the Fed, with Paul Volker as chairman, threw the money printing machines away, interest rates and inflation both subsided — with a vengeance.
I remember FHA rates over 16%. Also, inflation over 20%. Prime rate was in the same range. Anyone who lived it will tell you it was a very ugly combination.
From late 1985 through the end of 1989 we saw another boom lasting around four years or so. The main reason was the tremendous power exhibited by the income tax cuts finally making themselves felt — along with the incredible turbo-charging affect of investors’ ability to take advantage of depreciation. The normal, (at the time) 30 year depreciation schedule for residential investment property was reduced to 15 years. When combined with all the new jobs that also resulted from the tax cuts, the economy as a whole took off. The 15 year depreciation schedule caused millions of investors and agents/brokers alike to lose significant weight due to all the dancing in the streets.
Along came deregulation of the savings and loan industry, (a huge mistake he said, using 20/20 hindsight) and with it, the S & L crisis. And a crisis it was, no doubt about it — senate hearings and all. 
Licensed since Nixon’s first months in office, this was the worst correction, downturn, whatever you want to call it, I’ve ever seen first hand. Most of the trash talk today by the doom-and-gloomers, though hyperbolic in many cases, still doesn’t match the reality of the early to mid 90’s. I’ll speak of San Diego here. Vacancy rates in the 20’s. Rental rates falling 15-30% depending upon location. It was as close to blood in the streets as I’ve ever seen in person.
San Diego was hit the worst, at least from where I was sitting. We simultaneously lost major employers (plural), almost overnight. That and the S & L crisis was a cruel and devastating one-two punch. What a nightmare.
Once the foreclosures were pretty much sold off, and the market more or less caught its collective breath, things began to return to normal. 
The sun was allowed to shine again — no more financial eclipse. The actual process took about five years, though you could credibly argue longer. It wasn’t until late ‘95, spring ‘96 that normalcy seemed to be a realistic description of the local market here.
We just saw the end of the latest boom market towards the end of 2005. Low interest rates, liberal, um, underwriting, combined with huge Wall Street cooperation (buying many of the questionable loans) made for the perfect recipe for a real estate boom, didn’t it?
Then along came income tax and capital gains tax cuts.
Again, much like the mid-late 80’s, job creation shot up. California lost jobs due to many businesses throwing in the towel because of the high taxes constantly being aimed their way. State political leaders at the time didn’t realize their favorite Golden Goose, business, could just as easily fly to another state and lay golden eggs without the permission of the political hacks in charge. It was the direct cause of the governor losing his job.
This most recent boom was so powerful it wasn’t even slowed a bit by the recession of 2001. Economists were talking about the weak recovery. That talk stopped soon after with the long term positive affects of cuts in both income and capital gains taxes. Job creation took off, as history shows. Real estate never paused. It turned out to be the longest uninterrupted rising real estate market I’ve ever personally seen — from Nixon to today.
Now most of us are wondering when this market correction will emerge into normalcy — use your own definition for normal.
1976 — 1984 — 1988 — 1996 — 2000 — 2004. 
What do all those years have in common? They’re presidential election years of course. They represent almost 30 years of our most recent history. In all those years, only 1980 and 1992 weren’t good years for real estate or the economy in general. 1980 saw us in the aftermath of the longest running money-printing spree in modern memory. (up to that time) 1992 was smack-dab in the middle of the S & L crisis.
One could argue, both exceptions, ‘80 and ‘92, were the result of catastrophes that hadn’t happened since the end of World War II, and haven’t happened since. In other words, unique events when looked in the historical window of 1946-2007.
Even if you give no value to that idea, (it’s surely not supported in any way by close study) 75% of the years in which presidential elections were held — the economy did from Good+ to Smokin’ Hot.
‘76 — ‘84 — ‘96? All three years actually were the first full calendar years of their period to offer empirical evidence of economic recovery.
When do we get to recover from our current real estate morass?
My thinking is by summer of 2008. Would I bet more than $5 on being right? No way. Nor would I bet more than three people. I refer you to the cracked crystal ball in the corner. Besides, this opinion, and the so-called evidence behind it, has more leaks in it than a coffee filter.
At best what we see is even shaky as a loose correlation. Still, it’s there and it’s history — 75% of the time for the last eight presidential election years.
But if in 2009 we’re reading in the mainstream media, (you know, the Johnny come lastly guys) and they’re pointing to sometime in ‘08 when we were officially in real estate recovery — remember you heard it here.
By the way, in a recent Bawldy award post, Mac Whitmore predicted the bond market yields would not rocket up as many had gleefully been predicting. When he wrote that, the 10 year bond was well over 5%. It’s now at 4.788%.
Seems Max might have seen something others missed. One in a row for the good guys.
Finally, it makes sense to put the current real estate correction in historical perspective.
I’ve lived through several of them, and the two worst, were what followed the October ‘79 crash, and the S & L crisis in the 90’s. Today’s ‘ordeal’? No disrespect intended for those who have suffered, sometimes in life changing ways, but this correction is mild in comparison. In fact, I’ll go a step further.
Compared to those two downturns, this correction is like a six-year-old’s birthday party running out of cake and ice cream. Those who went through earlier bad times know exactly what I’m talking about. Those who are experiencing their first correction?
Ask somebody born before 1960.