Posted on December 26, 2007 @ 8:34 pm - Written by BawldGuy
It’s late Christmas afternoon, and Trophy Wife and I are watching our laptops, Tom Hanks & Meg Ryan in You’ve Got Mail, and each other while 15″ away apart. I’m writing this, while one of my brain’s many caches is helping me ponder what’s next on today’s list of, How Much Food Can I Eat Today? The list has truly risen to the level of felonious, accomplishing that effortlessly before noon. For a guy who’s been shamelessly bragging about losing so many pounds and inches, the 24 hour period from last night through tonight has been nothing short of a culinary crime spree.
I couldn’t care less. It took me three days to lose back the 4 pounds gained in Texas, so I’m more afraid of what’s ahead this week in the gym, than I am of the actual crime. That’s my story, and I’m stickin’ to it.
Next up: Either a plate of cold shrimp and way spicy sauce OR Nachos with ground beef and everything needed to ensure a week of nothing but paying the price the gym will require.
Turns out there was a third choice. Josh came over and decided a new batch of warm chocolate chip cookies would be the perfect
On to predictions and the 2007 report card.
Remember now, these predictions are what I think, for my own reasons. Your laughter will not detour me from my appointed rounds. If you think we’re all goin’ to hell in a hand basket on June 22nd next year, good for you. Just make sure you act accordingly. 
Prediction — Apartments, including 2-4 unit props — my all time favorite real estate investment — will become even more of a darling with serious real estate investors. As more folks are relegated to the growing list of what appears to be permanent renters, apartments will be their obvious destination. Rents will, over the long run, go up a bunch. (real estate technical term)
Tip: Buy duplexes and fourplexes by the dozen. Houses, townhomes, and condos are wonderful, and they’ll probably out-appreciate every kind of apartment property. That’s why currently much of what we recommend fall into those categories. That said, when we locate solid multi-family product, we get all tingly inside and make our move. Especially — and this is key — when the units are already sporting their own separate tax ID numbers for each unit.
Prediction — Many large (at least 1 office w/75+ agents) real estate offices close their doors. This will give birth to more narrowly defined and much smaller operations. These companies will be populated by established, seasoned pros, who many times will also own a piece of the pie. They’ll take business from larger but less talented firms.
Prediction — What I’ve been hearing for the nearly 40 years of my career may finally be approaching reality. As a direct result of smaller (boutique?), far more talented real estate firms, the pretenders will accelerate their permanent exit from the real estate brokerage business. This will pose a huge problem for Prudential, C/21, and all the rest of the biggies who rely heavily on Chuck and Debbie Newbie selling/listing a couple family and/or friends’s homes — while paying Chuck and Debbie a commission of only 50%. It’s in large part what’s been keepin’ many of those firms above water. Those listings will start going to solid pros whose expertise, experience, and plain old savvy will trump their favorite niece/nephew.
Prediction — Lenders will split into a couple camps — incredibly conservative
, and those who will be more conservative than they’ve been, but still wanting to live up to their title as lenders. I’m betting a new loan approach, predicted in Volume I, will come from the latter group of campers. Brian Brady thinks it’ll be pretty radical in four states. Those currently investing in solid growth regions outside of those states, will reap the benefits of those fleeing said states. (I even talk that way sometimes just to crack myself up.)
Tip They’ll be heading towards anything they can remotely describe as stable. Which means they definitely won’t be headed our way, San Diego. You need to be headin’ out now. If Brady’s correct, and I think he is, just not with as dire consequences, you’ll be facing stiff competition as you try to sell your income property. Now is the time to make your move.
2007 Predictions — Some came true — Some went into the porcelain fixture.
Said fixed rate loans would be 5.5% by the end of the year. Close, but no cigar. The last client to refi their home, a San Diegan, is now happily paying 5.75%. Rates are still available at just under 6%. I’m hoping for a half point drop by next Monday, but not betting much on it. wrong — but close.
Said traditional neg-am loans would give way to some sort of compromise (hybrid?) which would help solve the issue of lenders becoming grotesque hogs in the setting of their neg-am spreads between payment rates and indexed rates. Right on the money. It was a simple modification too.
Said Brown and Brown would sell less than $1 Million worth of San Diego income property. The younger of the two Browns confirms this as having come true in the strictest sense possible. Though this was more or less part of our ‘07 plan, he wants to see that changed in ‘08. I agree. Right again! Not only less — none — zip zero nada. Very little of it sold period — with us or without us. As I keep bellowing from the mountain top — get outa Dodge now.
Said the Dodgers would win the National League West Division crown. Wrong.
Also said the Padres wouldn’t win the division. Another one for One With Smooth Pate.
Said Keller-Williams would be an exception to those losing money and closing their doors. Since they tend to attract more than their share of Alpha Dogs, it makes sense. Also, since they share profits, their agents do their best to ensure there are profits to share. Right. I also think they’ll be attracting more than their share of solid producers as they jump sinking ships.
That makes me 6/10 so far. That’s a cool .600 batting average for 2007 predictions. Of course, that’s not all of them by a long shot. I was wrong 40% of the time so far. In subsequent Volumes we’ll see if my batting average holds up, or folds under the weight of life’s merciless and unrelenting reality.
Volume III soon — plus more of my 2007 report card. As always, feel free to add your predictions to mine, and let us know how your ‘07 predictions fared.
If you Christmas was as cool in every way as mine, you’re still smiling from ear to ear — while not movin’ to quickly just yet.
Posted on July 22, 2007 @ 1:46 pm - Written by BawldGuy
The subject today is Kansas City Mortgage Brokers.
Are there any mortgage brokers there who are as reliable, experienced, 
and just plain good as either Jed Galbraith or Brian Brady? I know there has to be — and probably a lot more than one. We’re looking for a mortgage broker that will measure up.
We’ve already brought our right hand guy on board for our team there — but he’s not a mortgage broker. Are you our Kansas City mortgage broker?
I’m bound and determined to be in KC before too long. In fact, I’d like to be there around 4:30 yesterday afternoon. My firm however (he says, as if he and Josh aren’t the firm), has a policy that we simply do not make our initial foray into a new market without local clients in tow. How do we do that you ask?
Why do we do that?
HOW — We give a seminar to folks culled from the database of a local, high quality mortgage broker. These are clients who’ve already done business with him, and have expressed a sincere desire to begin investing in real estate. Many of them may already have an investment property or two, but aren’t satisfied with their results. They know they can do better, don’t have someone like me or Josh to guide them. 
These seminars have proven very effective in acquiring local clients in the new area. This also helps give us credibility locally.
WHY — I just mentioned local credibility. We also use all the local professionals needed to create a seamless process for our clients. In Boise, it’s Jed Galbraith, (Opie in the picture). If they want, a client can (and most do), invest all over the country with Brown & Brown and never leave their living room. So having access to the most excellent lenders, property managers, title pros, inspectors, and the rest, is not negotiable for us. When the locals see we’re using pros right where they live, their comfort level grows. In fact, so does ours, for obvious reasons. The pros live there too, and know the area and its practices way better than we do.
Why would a mortgage broker want to sponsor our seminar? Chris Lengquist says he can’t find any KC mortgage brokers who would vote for making more loans. I can’t believe that’s true.
It’s as simple as this: Any seminar attendee who becomes a client of ours will use the lender hosting the seminar — period. This could include a refinance of the client’s home. Then there will be his subsequent investment property purchases. (yes, plural) And it doesn’t stop there. When, down the road, it’s time for that client to pull the trigger on a tax deferred (1031) exchange into more property — who do you think gets all the loan business? Duh.
This is why we’re so careful when allowing a mortgage broker to host our seminars. They must understand what great service is. They must perform — period. They must understand what we do — we’ll explain it to them in detail — it ain’t rocket science.
What else must the mortgage broker understand? First thing is, that they’ll need sufficient support staff to handle the additional business. Jed in Idaho, is now busier than a one-legged man in a butt-kicking contest. Not only that, but the new borrowers are not only from the seminars he hosted. (He’s hosted five by the way.) He’s performed so well for us, and proven himself so completely, we’re now giving him much of our Idaho business generated from sources totally unrelated to his efforts.
He’s just started with us, and between loans in the pipeline, and ones closed — he’s already approaching a couple million. Remember, that’s in Idaho prices, not San Diego values. And that’s just the first month of doing business with us. He’ll end up doing roughly $5-10Mil in loans in the last six months of this year — by virtue of hosting seminars with Josh and I.
So, KC mortgage brokers — who is gonna step up to the plate? I want to hear from you ASAP. Once we pick our guy, that’s it. We like to find one home run hitter in each area. You’ll get the business we do there — as long as you an do it. Do you see yourself as being on deck, watching the sold out crowd, waiting for your chance to perform big-time? Then you could be our guy or gal.
Our Phoenix guy has done well over $10Mil and counting. When those clients begin exchanging, (in a year or two) that mortgage broker will have his hands full. He’ll be forced to deal with finding roughly $25Mil worth of loans. Nice problem, eh?
Oh, and our San Diego mortgage broker? He was the guy we used to beta test this approach. He is 27 years old, but second generation banker. So far, he’s booked roughly $7Mil in loans — and counting — in a relatively short time.This is for a grand total of — five clients. And they were all beginning investors. The guy flat gets things done.
If you’re a Kansas City mortgage broker, and think you’re of the quality for which we’re searching, please, contact us. This is a top priority for us. We’d like to have found our KC mortgage broker by the middle of August — preferably sooner. You can go through this blog or our website — we’ll respond immediately. We’d love to talk with you. Don’t be shy.
Anyone out there?
Posted on July 19, 2007 @ 9:53 am - Written by BawldGuy
Ever wonder how businesses in need of massive cash infusions induce venture capital firms to put out? Today’s first Bawldy award winner has discovered at least some clues to the answer.
Geez, REITs have been going down in price, so what are insiders doing? Very interesting — very.
Kris Berg shows us how to work fund raising magic with VC’s with Why stop now? Tell Redfin that there’s more where that came from. Apparently she’s had the money right in front of her for a long time. This is a MUST READ if only for comic relief. Kris cracks me up consistently, and this time she openly wonders about (my words) what the VC’s might be smoking.
David Stejkowski in REIT prices down, insiders buy… gives us something new to ponder in today’s real estate market. We can listen to the media as they sell their daily bloodletting, or pay attention to what’s happening on the street. Count David’s discovery as another factoid pointing to a diversified national response to current market conditions. Again — pretty interesting.
“…and remember. The daily Bawldys have approximately 1/365th the value of our annual awards.”
Posted on July 1, 2007 @ 11:47 am - Written by BawldGuy
Today you’ll be inspired by Rocky, learn how to go from pushing to running, make use of dating tips when preparing for that first client meeting, and find out what’s up with the DOW. All in all, a fairly eclectic group.
Brian Brady at America’s Most Opinionated Mortgage Broker wrote It’s About How Hard You Get Hit And Keep Moving Forward, which gives us a huge dose of heart by none other than Rocky Balboa. You’ll have to forgive Brian, as he’s a Philly boy himself, having grown up there. In my way of thinking Brian brings us universal truth with this one. Brian’s mostly heart himself.
Seth Godin tells us when to stop pushing and start running in Pushing And Running. I saw this principle in use (without knowing what I was seeing of course) with my Dad’s company. He ran with it, posting some astounding numbers for several years. As usual with Seth, this is simple, to the poinnt, and a MUST READ.
Austin Realtor’s Wife gives us How Not To Screw Up… which converts the 10 dating disasters to what Realtors should avoid when meeting clients for the first time. I can tell you from personal experience how I was a ’serial victim’ of #1 when I was dating online before I found my lovely bride. When you can’t identify someone by their picture, and the choice is only between them and one person standing next to them………
Max Whitmore gives us his view of what he expects to become a ’super boom’ for the next 3-4 years. Remember, Max’s charts have called every market move since the ’60’s. His recent piece, Dow In Dangerous Territory? is more evidence of his understanding of the big picture. I think you’ll like Max because he goes out of his way to avoid the double-talk and obfuscation most economists use when speaking or writing. He’s one of us. An absolute MUST READ.
“…and remember. The daily Bawldys have approximately 1/365th the value of our annual awards”
Posted on June 20, 2007 @ 10:49 pm - Written by BawldGuy
As a lifetime baseball guy, I realize having my pitcher fill in for my shortstop is a recipe for chaos. I know this because in baseball, someone playing out of position will be found out — and usually sooner rather than later. You can put an infielder in right field, where a ball hasn’t been hit all day. Invariably the ball will find him, and his lack of experience and expertise will cost his team. It can even transform what looks like a sure win into a loss. Mediocre players are kept on the bench for a reason. There are players with expert skills ahead of them.
The same principle applies to investment real estate.
It’s so easy to talk about our team here, and our team there. In fact, before the middle of 2003, when I decided the end was near for San Diego income property, establishing a team in another state wasn’t on the menu. Now? We’re just now in the earliest stage of our third new region. The first task is to establish the local players on our team. As usual, our team’s local agent is the first team member, as without them, we won’t even try to do business in a new region. Local knowledge can’t be faked, and it’s a fool who tries.
Also the norm is the local agent recommending a title company, which is the one he uses — of course it is. Why wouldn’t it be? In Phoenix we were 1 fer two with escrows. Our second choice turned out to be superb. We even assisted, indirectly, in getting her headhunted to the company with whom we preferred she work. She got a raise out of it too.
So I ask the guy in the proposed new region, (name being withheld by my request, along with the area) what escrow he likes. He says, “We don’t use escrows here.” Come again? Yup, seems they just let the agents take care of the contract, get things taken care of in a timely manner, and then close the dang thing. Seriously? He swears he isn’t pulling my leg. I gotta get out more.
One Stop Shops
In all my years, I’ve yet to see a one stop in real estate that did a all-star job in all areas. They say they offer real estate brokerage, mortgage brokerage, property management, and transaction coordination. And they do — just not in an excellent fashion. Even if they’re pretty good at everything, it’s not excellent. And when you’re handling other folks’ money, pretty good just doesn’t cut it.
In the one stop shops, there inevitably is a mixing of responsibilities. Everybody helps everybody else. I’m sorry, but it just doesn’t work that way. I want my lender to have their head in that part of the business all day every day. Same way in spades with professional property managers. They usually don’t have enough time in the day as it is, without having to assist the agent with an open house for Heaven’s sake.
This approach skews the job descriptions. As that happens, you end up with a bunch of happy talking, Kumbaya-singing champions of barely acceptable results. We insist on amazing results — or we make changes.
Merely acceptable results, over time, will bury you as surely as it’ll be over 70˚in Phoenix at noon on July 4th.
Captain Obvious says this is what we want to avoid. Duh
What we create is a modified one stop shop. Instead of having everyone under one roof, every team member is a stand-alone company specializing in one thing, and one thing only. They know their field inside and out. When they say something, we can rely on it, and forget about it. I can’t even begin to tell you how valuable that’s proven to be over time. There’s no confusion or blurring of responsibilities whatsoever. Brown and Brown oversees everything. They all report to us.
And the results are indeed, amazing.
Here’s our Idaho Team
We have one company that coordinates all of our transactions. When Becky calls one of our team lenders, escrow, or property manager, they know she’s speaking for me or Josh. She’s not only the best we’ve found in Idaho, she’s the best I’ve seen since the position of transaction coordinator came into being sometime in the early 90’s. She’s that good. Our clients love her.
Possibly the most critical long term teammate is the professional property manager — at least that’s what our clients will tell you. When you’ve invested not only outa town, but in another state altogether, they want to have very warm feelings about their property’s manager. Patty does that for us. Whenever I’m asked to describe her, I tell clients she’s death on misbehaving tenants, and has a BS detector second to none. She flat takes care of business with a no-nonsense approach that would be appreciated by any investor. One of my favorite phone calls is the 90 day check-up. I ask how things are going, and want to know their candid opinion of the job Patty’s doing for them. Almost every time they begin the ‘praise Patty’ chorus. Music to my ears.
Gerald Dalton and Antoinette Roth are my Boise agents. Josh is now a believer in letting the cream rise to the top. Both Gerald and Antoinette are consummate pros. They go about their business in different ways, and with very different styles. The results are predictably the same though. I may have forgotten one, but I can’t remember a transaction we’ve begun in Boise that hasn’t closed — and they’ve been the agents for all of them.
I’ll leave the lenders, our inspector, and the folks at the title/escrow company for later. But you get the point.
Instead of a one-stop shop under one roof, we’ve created a modified one-stop shop under our umbrella.
Better service — Better product — BETTER RESULTS.
Our pitchers pitch, and our shortstops play shortstop.
And we win.