Posted on November 18, 2008 @ 9:54 pm - Written by BawldGuy
Before we start today, allow me an observation. Over the years, I’ve noticed when confronted with simple concepts, some folks act as if they’ve always known about them, and have applied the concepts in question often. Bull Pucky. (Excuse my French) There are any number of these simple and reliable realities we use when analyzing properties or scenarios. Financing is one of the obviously more important factors in any real estate investment. So let’s go over how an itty bitty modification here and there can mean literally six figures in less time than you might imagine.
Let’s look at what would happen if a real estate investor, whose Purposeful Plan calls for capital growth, makes one simple tweak in their loan terms. And yeah, I know it’s so simple it’s basic, but when was the last time you applied it? Yeah, thought so.
There was a time back in the 80’s when tweakin’ loan terms for a client’s transaction made the difference on a couple levels. First, it made the deal possible, as the lender wasn’t gonna do it ’till I came up with terms that worked for everyone. Second, the terms themselves put more money into my client’s hands during his holding period. Read the rest of this entry »
Posted on November 13, 2008 @ 8:55 pm - Written by BawldGuy
Since it’s been awhile since we’ve talked about specific strategies, why don’t we delve into one — nicely timeed for those lookin’ to improve their position, but who also have some real losers stinkin’ up their portfolio. (Like sayin’ portfolio.) There’s a light at the end of that tunnel in which you’ve found yourself lately, and no, it’s not a freight train barreling down on ya.
As luck would have it, I’d been mullin’ over this post for awhile, when I recently spoke with a local client about this very strategy. He’s one of those incredibly smart dudes who asked about it. He’d wondered about it himself, which is one of the reasons I like the guy so much. That, and he’s a baseball guy through and through. That never hurts.
Anywho, let’s set the table here. Does this describe you?
You own income property(s) bought a few years or more (Maybe much more?) before the market correction began. Appreciation was nice, and even with the drop in values, you’re still ahead. That’s the good news. The bad news? You also own property bought just in time to have been ravaged by the correction. If you sold today, you’d net enough to take the family out to Carl’s Jr. — if you didn’t super-size anything. Read the rest of this entry »
Posted on November 10, 2008 @ 9:20 pm - Written by BawldGuy
I’m talkin’ ’bout San Diego’s real estate investment market ‘cuz that’s where my office is. Well, the new one is in La Mesa, but it’s still San Diego. But if your local market is relatively high priced, the same thoughts will apply. This week I’m gonna talk about how sharp real estate investor types can create real world value increases in income properties. So, how silly is San Diego’s income property market?
This silly.
Even with historically large drops in values, small income properties are still asking for prices that should be embarrassing for the agents marketing them publicly. Think about it, if the prices are still showing wicked stoopid relationships with property income, how will the investor/buyer explain to friends and family what a great deal it was? I have a guess.
They’re defending their buying decisions based upon the market correction and it’s impressively lowered values. Fair enough. Fair, but spread that explanation evenly over your lawn, water regularly, and you’ll have the greenest lawn in your neighborhood in no time. It’s flaw is foundational in nature.
Buying income property on price is, please excuse me here, as I mean no offense, ignorant. It’s not called income property ‘cuz it sounds cool. It’s called income property ‘cuz it’s very value is based upon its, uhm, income. The price only has relevance when coupled with the subject property’s income. Read the rest of this entry »
Posted on November 9, 2008 @ 1:14 pm - Written by BawldGuy
Yeah, I know, your market used to love what you had to offer. It did everything possible to court your loving attention. And boy was it mutual. You couldn’t get enough. Every opportunity your beloved market offered, you were there, smilin’ with sweet anticipation. It felt so good to feel so wanted. Your confidence level was unstoppable. What an exciting relationship.
Then you began to notice your market couldn’t care less about you or what used to make it so excited, so happy to see you. Sure it still ‘let’ you participate with it, but now it was a relatively worthless experience. Your market would look at the desire in your eyes, roll its eyes, pretend to give a #%$&, take what you had, and resume whatever it was it was doing before you showed up chompin’ at the bit.
Still not gettin’ the drift here? Let me come from another direction, usin’ a different analogy.
Ever had a favorite restaurant? You know what I mean, the one that made your favorite dish exactly the way you liked it? You loved that place, didn’t ya? And it was obviously mutual. Every time you showed up it seemed to make their day. You had what they offered, and they eagerly returned in kind. It was a match made in Heaven. 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 »