Posted on August 10, 2010 @ 8:36 pm - Written by BawldGuy
There are times when real estate investors must realize it makes sense to take a bullet in today’s battle, in order to win the long term war. This is especially true in formerly uber-high appreciation markets like San Diego — the west coast in general? Now you’re wonderin’ what I mean by takin’ a bullet, right?
It means — for the most part — takin’ less money for your current units than you might think they’re worth. But, if you think you’re takin’ thousands less than you should, but are gonna increase your benefits big time in the future, why are you sweatin’ it? Relax — breathe deep the gathering…hugely increased retirement income. 
Read the rest of this entry »
Posted on June 10, 2010 @ 4:23 pm - Written by BawldGuy
Live and invest in real estate in places like San Diego or Palo Alto California? Then you know exactly to what today’s title is referring. Living there is Paradise, but your income property? To be kind, it ain’t what it could be. Even after this correction, as persistent as it’s been, your properties still don’t spin off the income they should, given your current net equities.
Then there is the issue of age, a sore subject in many places, but none more so than San Diego County. Residential income construction has been little more than a faint rumor since Regan’s second term in office. In fact, if you don’t count the ultra-elite apartments which have been built on the coast and in Mission Valley, pretty much nothing of even minor consequence has gone up since around 1987. I know, cuz I’ve seen ‘em not go up. Read the rest of this entry »
Posted on May 26, 2010 @ 6:28 pm - Written by BawldGuy
As in any profession or industry, investment real estate has its own nomenclature — our own language so to speak. Many of the words/concepts we use have been reduced to abbreviations. An example is NOI — Net Operating Income. The one we’ll talk about today is GRM — Gross Rent Multiplier. For those of us who’ve been in the business since Hector’s pup died, it gets even shorter, often referred to as Times Gross — as in “How many times gross do properties sell for in this town?”
First thing we should do is lay out what Gross Rent even means. It refers to the gross scheduled rent of a given property, which will also generally include laundry income if applicable. It should be understood that it’s virtually universal that you’ll be referring to a year’s income — not a month’s. I say that, but there are places that will use monthly income, a pain in the rear end if there ever was one. Numbers are almost always computed using annual figures when producing an analysis on residential income properties. That’s not to say using monthly figures won’t work, but it’s a lot more work than necessary. Read the rest of this entry »
Posted on May 20, 2010 @ 10:19 am - Written by BawldGuy
One of my all-time favorite quotes: “In the end it all comes down to talent. You can talk all you want about intangibles, I just don’t know what that means. Talent makes winners, not intangibles. Can nice guys win? Sure, nice guys can win – if they’re nice guys with a lot of talent. Nice guys with a little talent finish fourth and nice guys with no talent finish last.”
Let me know in the comments who you think might’ve said it. Don’t Google it, OK? Hint: It was an iconic sports figure.
Folks insisting they can do most things in life themselves are not only doers, but to be admired. On the other hand, it’s amazing sometimes what gets on their ‘most things’ list. Some of us can do things very well that others simply can’t or won’t do. For instance, I don’t design my own office interiors — nor do I paint them myself. Could I? Of course. Should I? Um, not if I want clients to think my IQ has three digits before running into that pesky decimal point. Read the rest of this entry »
Posted on May 19, 2010 @ 6:01 pm - Written by BawldGuy
Today I offer you another of one of my all time favorite subjects — the potential nightmare consequences of not just being short on answers, but not knowing the questions to ask. It’s the answers to those questions that can change your own ‘feel good’ movie into Friday the 13th.
Here’s a real life example of what could’ve happened to an investor family who thought for sure they were doing the right thing. But for a fortuitously timed phone call, their financial lives would’ve been set back more than a bit.
It revolves around what we’ve all experienced at one time or another in life — ya can’t know what ya don’t know. I urge you to read this linked post, while asking yourself what you might be doing currently that could have an ending for which you surely never planned.
Please call me at 619 889-7100 with any questions. Have a good one.
Posted on May 13, 2010 @ 4:43 pm - Written by BawldGuy
BawldNote: I haven’t forgotten about the case studies. Murphy has sabotaged this week’s schedule. Just so ya know.
It’s our turn in the ‘tax whatever moves’ game in D.C. Increasing capital gains taxes is on the table, big time. It reminds me of when other monster tax changes affected real estate in the mid-80’s — the last quarter of the year before they became law was like a room full of kindergarteners after a Starbucks/Snickers party. Everyone wanted to make their move before they left for New Year’s Eve parties. It was crazy busy.
I suspect we may be seeing the same thing, though maybe a relatively muted version this year. Even a muted version would spell chaos for the poor lenders, escrow, and title folks. Back in ‘86 they had no lives from Halloween ’till close of business New Year’s Eve.
Are you a candidate for doing something this year with your real estate investment portfolio that may have been penciled in for a year or two from now? Who might wanna think about it?
1. You have a buncha unused depreciation on the shelf gathering dust? Offsetting ‘most’ of a capital gain at 15% may be attractive, but how ’bout 20-25%? Yeah, ouch.
2. It’s my experience once Washington starts down any tax raising road, they begin adding targets to their agenda. Raising cap gains tax rates? “Hey, I gotta idea — let’s raise the depreciation recapture tax too!”
Those are the two biggies — at least for the moment. Whatever they do, it’s more likely than not it’ll go into effect 1/1/2011. If you think moving up a scheduled sale might benefit you, give me a buzz, and we’ll explore it a bit.
Whatever your reason, call me! I need a fix. I ain’t proud, as at least one call a day is required. My number is 619 889-7100. Have a good one.
Posted on April 28, 2010 @ 10:04 am - Written by BawldGuy
Yesterday got away from me, so I’ll talk a bit about what I’ve been thinkin’ lately about my local market, San Diego County. Before I start, I sure wish somebody had warned me about how all the women involved in wedding planning go totally nutball crazy — and that it only gets worse as the date approaches. Each week I seem to lose more hours saluting intense looking ladies as I march off to do their bidding.
Anywho, I’ve been toolin’ up for my imminent return to the San Diego investment property market. Ya might wanna get that look of horror off yer face, cuz I still refuse to be a part of any Brown and Brown client investing long term in San Diego — ain’t gonna happen. What will be happening is the orderly migration of local investment property equities to regions better suited to achieving the investor’s original Plan — to retire well. Read the rest of this entry »
Posted on February 5, 2010 @ 4:00 am - Written by BawldGuy
Ever walked into a movie you’d really been lookin’ forward to, only to learn they’d totally mislead you with the trailers? We all have, and with an exception or two here and there, it rarely turns out to be a movie we like. Don’t ya hate it when the happens? For me, the worst time was when I went to what I thought was a comedy, which sadly turned out not only NOT a comedy, but a chick flick to boot. How it got past my ChickFlickRadar™ I’ll never know.
This is one of those nuts ‘n bolts things every real estate investor should know. The IRS doesn’t usually buy the whole ‘dog ate my homework’ — ‘I had no idea’ type of excuse when it comes to unintentionally recognized capital gains. So, heads up. Read the rest of this entry »