Posted on July 27, 2009 @ 8:11 pm - Written by BawldGuy
Seems the topic of the month for local and outa town real estate investors has been what kinda San Diego income property should they be buying, and what’s my opinion? I think the phrase I’ve used most in the last couple weeks as been ‘B-List Property’. Having lived here since 1967, it pains me to tell someone my own hometown isn’t on my A-List of favorite places for clients’ investment capital.
I mean seriously, you think I prefer traveling all over searchin’ for superior regions? Hardly, it’s a giant pain, at least logistically speaking. I love the real estate part, but the details can make ya crazy. I’d much rather do what I did so enthusiastically from 1976 through 2003, which was be happy as a bug in a rug in San Diego, the nation’s closest thing to Paradise I know. Life was almost infinitely simpler — Duh. Read the rest of this entry »
Posted on June 29, 2009 @ 9:31 pm - Written by BawldGuy
Don’t wish to sound trite, but it hurts my heart when I speak with folks calling to explore their options, and at least half of what they’ve done in the last 5-10 years or so would’ve been diametrically opposed to the advice I would’ve offered. Worse is when they’ve stood pat, when they had incredibly solid options for action on their menu. The story usually starts with how they spent so much time and money ‘learning the ropes’ at how-to seminars. How to make a million without breakin’ a sweat. How to become the flip and/or rehab champ. How to…well, you get the idea, right?
What they learned in fact is that they could study what an expert does for six months and not know what the expert’s forgotten. That may sound somewhat harsh, but step back a bit and ponder what an expert is. Not what our culture has done to discount the concept of elite expertise, but what our Grandpas told us. An expert is an authority on a subject or group of related subjects. An expert’s knowledge can be correctly described as comprehensive. Along with the comprehensive knowledge and authority comes experience. Read the rest of this entry »
Posted on May 13, 2009 @ 10:08 pm - Written by BawldGuy
Gotta figure out how folks who don’t know each other, live thousands of miles apart, but come up with the same set of circumstances — all call me in the same week or so. It happens more than you’d suspect, and I’m beginning to suspect conspiracy. 
Anywho, it’s been the whole free ‘n clear land thing — four times — since last week Tuesday. Go figure.
Land unencumbered by debt is usually looked upon as at least neutral, if not downright positively, but when you put it on the market it’s more than a tad irritating when the only response is the sound of crickets.
The value of land is incredibly sensitive to the use for which it’s slotted by the local powers that be. Zoned for a buncha homes is way mo betta than zoned for a lonely little duplex. Plus, most of the investing public simply couldn’t care less about building and developing and the headaches accompanying said activities. This, as you might imagine, being the well read person you are, is probably truer today than in boom times. (Is that Captain Obvious waving at us?) Read the rest of this entry »
Posted on April 28, 2009 @ 7:16 pm - Written by BawldGuy
The subject of retirement is so overdone in so many parts of our culture, confusion reigns supreme — or so it seems to me. The horse is put before the cart so often, no wonder false ‘truths’ remain staples in so much of what Americans read on the subject. Words like ‘prudent’, ‘cautious’, and one of my all time favs, ‘diversification’ are thrown around as if they’re the equivalent of magic fairy dust.
Folks retiring well — defined as measurably superior — with and through real estate vastly outnumber those who’ve retired in all other ways. ‘Course most Americans have bought the weak, and frankly, illogical concept of 401s and IRAs. Take a step back and ask yourself why on earth you’d save a little over $100,000 in income taxes over 20-35 years for the privilege of paying 100-200% of that amount before you reached the 5th year of retirement? That’s insane. Yet it’s the mainstream approach — one that in my view will result in millions of Boomers working well into their 70’s.
Yes, real estate has its dark days the same as Wall Street. That’s not the point. But we all need somewhere to lay our heads at night — some will own that ’somewhere’ and some will rent it. Business needs the same thing — a place to do their thing, whatever it is. Though I’m not a fan of narrowly defined commercial property, much preferring residential income, history shows that long term, real estate is clearly more reliable when it comes to regular folk than anything else ya wanna mention.
So — what’s important about retirement income? Read the rest of this entry »
Posted on March 31, 2009 @ 10:47 pm - Written by BawldGuy
Tonight we’ll take a look at how the ‘Millers’ real estate investors who Planned well, adapted to the inevitable downturns/corrections, and pulled the trigger with solid timing during the fun times. It’s a fiction perpetuated by the ever infamous ‘they’, that says any real estate investor will end up at retirement without a couple problems to solve, as long as they planned. B-o-l-o-n-e-y. I receive emails consistently from folks who’ve reached retirement only to realize there are a few irritating realities with which they must deal — which they should, and head on.
Our investor, I’m calling them the Millers, have been buying/selling/exchanging income property since 1976. Their first investment was a modest duplex in a blue collar section of town. They were immediately spoiled, if not misled by their initial experiences back then, as the market was in it’s first climb via double digit annual appreciation rates. As they began to believe in their ‘natural born wisdom’, October of 1979 hit, and well, it dawned on them they might not have been descendants of Midas after all.
They survived by merely holding on longer than anticipated, ’till things began to thaw in 1984. They regained their confidence by the end of 1985, exchanging up to more property, while making use of as much leverage as was prudent. They executed yet another 1031, en masse, in 1988 — taking full advantage of the second rising tide in just over a decade.
Shortly thereafter the S & L Crisis hit, and yet another holding period was extended, this time for longer than before. They didn’t make a move until the second half of 1996. I won’t go on with every move they made, but bottom line, as they entered 2009, their net equity had reached a number in excess of $3 Million — exclusive of their home and non-real estate assets. Read the rest of this entry »
Posted on March 16, 2009 @ 11:21 am - Written by BawldGuy
When giving talks, I’m almost always asked what question I hear most often from clients. I couldn’t swear to this, but my guess would be it’s concerning the ‘end game’. “At what point do we stop growing our capital, cash out and sail into the sunset?” Or something similar. My kingdom to make it that simple. Alas, not only is it not that simple, it’s not the same for everyone — not even close.
The variables are as many as life’s unscheduled course changes — some fun, some not so much. Purposeful Plans by definition must be flexible. Life happens, markets change, people change, booms and busts come and go. Meanwhile our crystal balls remain as defective as they’ve always been — and the smart folks realize that factor will never change.
The theme of investing in real estate for retirement is the foundation of my firm’s mission statement, and I’ve always believed the principles can’t be repeated enough. Those who’re regular readers here know that may be this month’s understatement award winner. But the principles are either so universally misunderstood or worse, mythologized, that repeating principles and axiomatic realities here becomes more a process of self defense than anything else. Read the rest of this entry »
Posted on February 3, 2009 @ 11:39 pm - Written by BawldGuy
First some housekeeping. Part II of the series began yesterday will be published tomorrow.
For readers unaware of my photo policy, it’s been called, um, different. Photos here very rarely have anything whatsoever to do with the content. They’re there for my enjoyment and hopefully yours. There’s usually a theme, but I don’t even hold myself to that. OK, I should start writin’ now.
What matters most when implementing a Purposeful Plan is the thought process preceding it. That process involves the application and integration of several principles and concepts. The foundation though is the all encompassing drive for safe, reliable retirement income, preferably as sheltered from governmental taxation as possible, given the individual investor’s unique circumstances.
Many who like real estate as both a capital growth and cash flow vehicle, fail to clearly understand what roll both approaches play in their retirement. Possibly the #1 myth is that buying real estate for cash flow is always the way to go. It’s that attitude which has led many an investor to mediocre retirement income, and/or the forbearance of millions of dollars in net worth. It’s the latter you can blame for most of the disappointment when talking ’bout retirement income.
Maximizing your retirement income through real estate investing is all about timing. Read the rest of this entry »
Posted on January 20, 2009 @ 11:26 pm - Written by BawldGuy
The concept isn’t earth shattering in any way. What it is though is just short of the most overused phrase on the net, a paradigm shift. It’s not, of course. It’s more a subtle shift. That said, we’ve all had experiences in which we’ve witnessed incredible results/changes/consequences from so called subtle shifts. Here’s a simple yet illustrative example. I’ll use baseball. (grin)
A pitcher can subtly shift his grip on the ball by setting it more deeply in his hand, instead of using only his fingers and thumb. This very subtle change in grip allows him to throw the ball exactly the same way he throws his fastball. However, because of the slightly altered grip, the ball is literally incapable of gaining the velocity of his fastball. The consequence? The batter sees the pitcher’s arm behaving exactly like he’s throwing a fastball — yet instead of a 90+ miles an hour heat seeker, he gets an 81 mile an hour change-up. More often than not the batter is clearly fooled and either swings early and badly or stands there like a Popsicle, weakly watching the umpire’s right arm fly up, signaling what he’s already realized.
All from a single subtle shift. Read the rest of this entry »