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 July 3, 2008 @ 12:45 am - Written by BawldGuy
Warning Warning Warning — Pictures found while reading this post have absolutely nothing, nada, zilch, to do with the subject at hand. I just like inserting them. I am open to requests though. Ok, that’s it — you may continue. 
Estoppel is a silly sounding legal word sometimes used in purchase contracts when tenants are involved. Of course there are many time an attorney might use the concept of estoppel, but since it doesn’t say lawyer on my expansive forehead, I’ll stick to the purchase of real estate investment property.
I’ve taught the concept, been taught the concept, partnered with a real estate attorney for a decade and listened to him pontificate endlessly on the concept. It’s a giant pain in the patute. Yet, I’m still gonna give it a shot here. If you really insist on confusing yourself you can click the above link, but I recommend you take two aspirin first.
Here Goes
You’re lookin’ to make an offer on some income property. You’ve gone over the offer to purchase three times, and are finally satisfied yer covered. Due diligence period — check. Subject to your inspection and approval of interiors/exteriors — check. Seller’s gotta turn over income/expenses last 2-3 years — check. 23 other things — check, check, and check. Eyes begin to blur, and the thought of watching a soccer game between East Toilet Seat, Wisconsin and Rubber Chicken, Kentucky is soundin’ pretty dang good about now.
Got it covered, right? Not so fast estoppel breath. Read the rest of this entry »
Posted on July 1, 2008 @ 9:07 pm - Written by BawldGuy
You and I are having a relaxed conversation. You’ve been thinkin’ of contacting me for quite awhile, and finally took the plunge. You’re now pondering the answer to my first question — What do you want your retirement to look like? As surprising as it may be, that question is a poser for lots of folks.
Try not to primarily think in terms of retirement income. Think lifestyle. How much of a traveler do ya wanna be? Wanna be a globe trotter, or are you more a see the grandkids type? What about how you’ll be traveling? Gonna be an ocean goer? Maybe you’ll be staying in the contiguous 48 and takin’ long trips in the cool RV — maybe a $400,000 RV? Hey, it’s your retirement, what do you want? You and I will make it happen. Our #1 weapons? Your vision and my Purposeful Plan.
See what I mean? It’s one thing to randomly think or even talk about your retirement, but try to answer the question concretely and it becomes a different tale altogether. Read the rest of this entry »
Posted on July 1, 2008 @ 12:35 am - Written by BawldGuy
How many times have we been out to breakfast, looking at a menu showing mouth watering pictures of fresh squeezed orange juice? You know the one — a pitcher of juice surrounded by the most perfect oranges the Good Lord ever made? Then while leaving you pass the kitchen and see them mixin’ up another batch, throwing away the frozen concentrate. Hey, those oranges were fresh at some point, right?
It’s all about expectations, isn’t it? I’ve spoken to investment clubs, and the experience generally falls into three categories.
- Newish club so mostly newbie investors — great questions, solid response
- More mature club, a few ‘leaders’, one of which I inadvertently cross while talking
- The ‘1 in 10′ club, interested only in real info, in depth detail, real expertise and advice
After a conversation yesterday with a long time client, I’ve decided what the heck, it might be time to revisit clubs. She recounted a recent trip outa state to her see her brother. They’re both seasoned investors, and he took her a meeting of the local club. She’d told them during a break about how we do things at Brown and Brown, and that we used to speak to clubs like theirs. Read the rest of this entry »
Posted on June 29, 2008 @ 6:59 pm - Written by BawldGuy
When speaking to audiences in historically high appreciation areas, it’s common to hear them voice serious concern with regions I’m recommending. Their real problem? They’re lookin’ at appreciation at the cost of capital growth — theirs. They’re literally penalizing themselves to the tune of millions over the long term. In baseball terms, strikeouts are cool, but how many earned runs a pitcher allows per game is the real gold standard. No? Ask yourself if for the big game you’d want the guy who strikes out 12 batters a game but has a 5.3 ‘earned run average’ (ERA), or the guy who hardly ever strikes anyone out but only allows three runs a game?
Not a difficult decision, is it? ‘Course not. It’s obvious on it’s face. Why? ‘Cuz in baseball the winner is decided by how who has the most runs at the end of the game — not the team sporting the pitcher with the most strikeouts.
Appreciation = Strikeout Pitcher whereas Capital Growth = Very low Earned Run Average
In real estate investment terms, here’s how it shakes out in real life. Read the rest of this entry »