Posted on September 30, 2009 @ 6:57 pm - Written by BawldGuy
Over the next week or two I’m gonna be talking about how folks can begin the process of recovering the losses inflicted by the latest Wall Street meltdown. Most aren’t aware of some of the options their menu offers. Most have lost roughly 37-45% of their current job related retirement plans, so it’s probably past time they explore other avenues — avenues most don’t know exist.
We’ll be talking about converting your Qualified Plans into a ship with you at the helm. No more ambiguity. No more low, medium, high risk diversity, as if you were ordering a meal at a Chinese restaurant. Relatively reliable annual dividends (um, that’d be cash flow to us), prudent (capital P) leverage, all in an asset, real estate, that doesn’t fluctuate in value merely because the president catches a cold. Read the rest of this entry »
Posted on September 24, 2009 @ 10:11 am - Written by BawldGuy
This is a question taken from the old story of buying in an upcoming but previously ‘grungy’ area compared with buying in the tried and true ‘clean’ locations. I’d ask my client, “Would you rather have a clean $10 or a dirty $20?” Most, if not 90% said they’d rather have the dirty $20 of course.
It amazes me how many times investors opt for local properties when they have empirical evidence showing they’ll do way better in a region a state or two away. It just doesn’t make sense. This is especially true when technology keeps us so informed, usually in real time. Living in Iowa and investing in another state isn’t anything like it was 30 years ago. Back then an investor had the phone and snail mail. Read the rest of this entry »
Posted on September 15, 2009 @ 10:32 am - Written by BawldGuy
For upwards of a couple years now I’ve been singing the praises of the Texas market for investment properties — specifically smallish residential income. Here’s a short (7 minutes) video that’s well worth the time. Some of the facts will raise an eyebrow, some will surprise, but in the end, you’ll see what I’ve been talking about here all this time.
Growth is the name of the game, capital growth especially, as it relates to investing in real estate for your retirement. The #1 factor in any region’s economic growth is always about jobs — now and in the foreseeable future. Job growth generates population growth which then becomes a dynamic formula for long term success.
I encourage San Diego income property owners to pay close attention. While watching, mentally compare our investment/business atmosphere to those of Texas. Then ask yourself why you’re not already in the process of moving your equity there.
When you’ve finished watching and pondering, give me a call at 619 889-7100. We’ll figure out if your situation merits a move at this time. Have a good one.
Posted on September 14, 2009 @ 7:42 pm - Written by BawldGuy
You don’t hafta own debt free income property in San Diego, or Palo Alto, San Francisco, Orange County — heck, the west coast in general, to know how much of a value hit you’ve taken recently. For so many regular folks who’ve called me, the conversation often follows the same script. The good news (no always) is they own free and clear residential income units, usually 1-4 units per property. The bad news is they’ve dropped in value anywhere from 25-50% depending upon where they are and when they were acquired. Ouch and a half!
There are many areas like San Diego, where many of these calls originate. When duplexes are still selling for $300-450,000 with Net Operating Incomes (NOI) of $15,000 or less, the numbers simply don’t work for 90% of the investors out there. When it still requires 35% down just to break even every month, folks tend to look elsewhere — especially these days. There are several pockets around the country where a 20-25% down payment will yield positive cash flow from Day 1. Ironically, those alternative markets are more likely than not to offer better relative locations along with higher quality tenants to boot. Read the rest of this entry »
Posted on September 9, 2009 @ 3:46 pm - Written by BawldGuy
If what we’ve been through as a nation economically has a bright side, it just may be the new and improved eyes now available to investors of all stripes. Real estate investors for sure have, or should have, added much wisdom the last few years. Many have become enthusiastic students of Old School teaching. In markets like San Diego where real estate appreciation is considered both a redundant phrase and a birthright, this has been a most trying time. Since I blew the ink dry on my first license back in October of 1969, making money buying local property has never been fodder for serious debate — ’till now.
A reader, one of my favorites, and a wise, experienced investor, sent me a link showing Phoenix residential rents have been taking a hit, and may continue their downward slide — various reasons were given. On the other hand, the prices have been lower than they have since the boom. Buyers have been paying cash for homes, resulting in lower rents due to the lack of loan payments. They’re buying, for the most part, for capital growth. Cash flow is fine, but not their primary aim. Read the rest of this entry »
Posted on September 8, 2009 @ 5:49 pm - Written by BawldGuy
A client once observed something about how some folks seem to live their lives. He’d seen a video of an interview of both Steve Jobs and Bill Gates in which Jobs said the following, loosely paraphrased:
Steve said, about Bill’s philanthropy — “Bill decided he didn’t want to be the richest guy in the cemetery.”
That’s an incredible observation, and one, at least for me, having many potential applications.
For instance, how many times have you said to yourself, “When I get to this point, I’ll do this particular activity”? Speaking for myself it’s been a real surprise how many times I’ve said that, and the contingency for which I was waiting had nothing, nada, zilch to do with either more money, or my ability to make it happen without that contingency becoming reality. Bill Gates has been able to transform himself into a hugely effective philanthropist simply because he made the decision to do it. Read the rest of this entry »
Posted on August 20, 2009 @ 10:06 pm - Written by BawldGuy
Just a brief reminder — you very rarely get a second bite at the retirement planning apple. You’re 35? Good on ya. Here’s a bulletin: Time, regardless of how immortal you may feel today, simply isn’t your friend. Don’t believe me, believe those who’re 45 at your company. If they started contributing to their company’s Qualified Plan (401(k) ) when they were 25, by the time they’d passed 40, they were feelin’ like world beaters. Time? They had 15-25 years to grow their already impressive portfolio just a few short years ago.
Wonder what they’re thinkin’ now? The lesson all of us learn as we age is that time, like the tides, come and go regardless of anything else in the universe. We all get caught in the backwash of Black Swans at least once in our lives.
Posted on August 13, 2009 @ 9:30 pm - Written by BawldGuy
Those born in the 60’s, in their 40’s now, are part of a demographic which I’ve called ‘Tweeners’ for lack of a better name. Between what is the next logical question, right? They’re makin’ significantly more money than their 30-something counterparts, at least most of ‘em are. Their kids are older too. They’re starin’ at college expenses either imminently or in about 5-7 years, give or take.
The big difference though is time. A 40-something earner who’d been diligently forkin’ over part of their paycheck to their company’s 401(k) the last 15-20 years have been rocked big time by the huge downturn in the stock market. Most have experienced a drop somewhere between 40-50%, seemingly overnight — a literally chilling development when you’re lookin’ 50 squarely in the eye.