Posted on April 22, 2008 @ 12:04 am - Written by BawldGuy
This month I’ve spoken with more investors owning property in more or less moribund markets than the entire first quarter. I say moribund ‘cuz a common thread found in the descriptions made me think of the phrase, ‘at death’s door’. I know some of these regions, and the description fits some to a ‘T’. Some of these areas are pretty down, but have cause to at least have rationally founded hope.
These investors ask the question — How do we regain the momentum we had for so long? It’s not like we ever experienced double digit appreciation, but at least it was a steady march up in value. What can we do?
The answer for most of them is to take a step back and look at their specific circumstances as objectively as possible. They usually chuckle when I pass that nugget of wisdom to them. After all, they’ve obviously already done that, and concluded, at least temporarily that they’ve put themselves on an unmarked road to nowhere. That’s called being a little too close to the situation. It’s universal, and we all fall prey to it at one time or another. It’s called human nature.
These conversations sometimes take place with real estate agents asking advice for their clients. They’re home agents, but have done such good jobs for their clients over the years, they’re often asked for investment counseling — advice for which they’re admittedly ill equipped. One such conversation led to the agent encouraging his clients to call me.
They subsequently did just that, and the conversation took place this afternoon. Read the rest of this entry »
Posted on April 12, 2008 @ 1:29 pm - Written by BawldGuy
I hesitated more than a little before publishing this post, as it’s never my intention to make folks feel badly, even if unintentionally. The thoughts in this post come from a good place in my heart. The San Diego (or Palo Alto?) real estate investors owning income property have seen the changes happening in real time. I’ll confess my slowness in seeing the writing on the wall here. Let’s face it — we’ve been spoiled since, well, forever.
What’s been more resilient than California real estate? There are some regions sporting a similar track record, but when the roll is called, it sure doesn’t take very long. We, me included, have been lulled into a false sense of security by decade after decade of solid if not spectacular returns on our investments here.
Still, it’s not that the page has turned, but the book, and therefore the story and its ending has been changed.
This is the weekend, so I’m having some fun at San Diego’s expense, and mine too, to be sure. 20/20 hindsight tells me Read the rest of this entry »
Posted on April 4, 2008 @ 8:57 pm - Written by BawldGuy
Until recently I’ve not paid much attention to the role of photography in the marketing of our clients’ real estate investment property. Athol Kay long ago convinced me how important and effective they can be. In fact, he’s already demonstrated how world class photos can literally cut market time literally by several weeks. He’s doing just that in Connecticut.
Now, we use a nationally known photographer to make our properties pop. It makes a difference. Below is a shot Athol said was excellent. Tell me it wouldn’t make you wanna see it.
Some of you may already know of Athol, as I’ve written of him a few times, and awarded a Bawldy to him once or twice. Today, he published some shots put into a local MLS on purpose by an agent who clearly spent some serious time in the 1960’s — ah, medicated.
Go take a look at the shots this guy published of a house he listed. If you were a potential buyer, what would your first impressions be? Also, since the sellers surely have the right to decorate/paint the interior of their home in any manner pleasing them, there’s still a second question. If you were the seller, and you’d painted your home like that, would the thought cross your mind that maybe, just maybe, appealing to the most possible people was the way to go?
Love to hear your thoughts on this.
Seriously, you can’t make up this stuff. 
Posted on April 2, 2008 @ 12:32 am - Written by BawldGuy
Please forgive the title, but sometimes I grow weary of all the nay sayers out there, rooting for a complete collapse. Surely this correction, both for the national economy as a whole, and real estate housing specifically, have demonstrated unique qualities. Subprime is now part of the culture’s lexicon. The banking system has been tested mightily, as has the leadership of the Federal Reserve and its Chairman, Ben Bernanke.
I’ve never been one of those real estate cheerleader types. You know the ones, there’s never a bad time to buy real estate, yadda yadda. When the market’s sucky that’s what I call it. You can’t go through as many bad markets as I have and do otherwise.
Those who’ve been buying real estate investment property lately are gonna feel pretty good about themselves a few years down the road. Even back in the post recession years of ‘74-75, or after the S & L Crisis resolved itself, the perfect storm we see today never materialized. The missing link? The permanent loss of historically reliable investment regions like say, the entire west coast for instance. Or how ’bout the emergence of new ‘destination’ regions in Texas, (Dallas/Fort Worth) Idaho, (Boise) and Kansas City to name a few? But the real difference is the long term fixed interest rates available for investors.
Just to be consistent and on point for my San Diego readers — Get Outa Dodge — and get out now.
Thanks — I needed that. Now back to our regularly scheduled post.
First Sam Zell says what I’ve been saying for months. The housing market isn’t nearly in as bad a shape as mainstream media wants us all to believe. In fact he said a recovery would begin this spring. I think he’s pretty aggressively optimistic to say that, but he’s the billionaire, so I’ll let time tell us if my 3rd to 4th quarter scenario is correct or not.
This was followed shortly thereafter by the markets in Texas I like so much experiencing incredible real estate growth, even more impressive population growth, and a precipitous drop in vacancy rates. Oh, and did I mention the simultaneous increase in apartment construction there? Oh yeah — good times.
This week two giants also decided it’s time to buy. As David Stejkowski duly noted, both Shorenstein and Blackstone have raised prodigious amounts of capital for the acquisition of billions in commercial real estate.
And here’s a gift for San Diego readers who are owners of local income property. Allow a short preface. Your properties are worth significantly less today than they were three years ago. Yet, if you had the choice, you wouldn’t buy your own property for even today’s value. I’ve asked that question of a couple dozen local real estate investors, and with two exceptions, they all admitted they wouldn’t think of buying their own properties again — even at today’s discounted values. 
Read this quote from Mr. Shorenstein and think of what you should be doing with your San Diego income property. (Hint: Get Outa Dodge)
Shorenstein, son of company founder Walter Shorenstein, told the New York Times in 1995: “If somebody is willing to pay a lot more than I would pay, then we’re a seller.”
That quote was taken out of an article published two days ago in the San Francisco Chronicle, entitled — Waiting for real estate bounce. Read the article to learn how Shorenstein is thinking about this market.
Bloomberg tells us about Blackstone’s $10.9 Billion in today’s update. Blackstone Group for those reading the name for the first time, is the world’s largest leveraged buyout fund.
So, there you have it. Sam Zell — Shorenstein Co. — Blackstone Group — all saying the window of opportunity is upon us.
Put that together with what Wall Street has been saying, especially today, and one could conclude the Bulls are about to make their final move against the staggering Bears. The jury is still, of course, out. But I’ve been saying in these pages for the last 90 days or so, that this is the final skirmish between the two. It appears to me the Bulls have the Bears in the corner hoping for a last minute miracle.
Finally, without wavering, I’ve been backing Fed Chairman Bernanke since Day 1. He’s made the correct moves, all the while listening to critics who wanted him to do their bidding on their schedule. He’s done it his way. We won’t know for awhile, but it’s my contention we may look back at the first 92 days of 2008 as the period the good guys triumphed, led by Bernanke.
I’d give you a much clearer picture, but since the crystal ball hasn’t come back from the shop, this’ll have to do. But, just before I put it in the shop, I looked to see what might be next for the general lending outlook.
BawldGuy Prediction: On or before July 4th, real estate loan underwriters and their bosses will have rolled the clock back to basic sanity. Meaning? Loan programs now unavailable will reappear. Virtually impossible underwriting requirements will quietly be retired. Lenders will wake up, realize it says L-E-N-D-E-R on their foreheads. The next thought will be how little they’ve been acting like a lender. Then they will find ways to lend.
Why?
BawldGuy Axiom: Lenders lend.
Posted on March 28, 2008 @ 11:00 pm - Written by BawldGuy
Greg Swann the owner/operator of BloodhoundBlog, one of the most influential real estate blogs in the country. Full disclosure — I’m a contributor there, and have been almost since Bloodhound started recruiting outside bloggers.
Greg had read a comment I’d made on another contributor’s post, and wanted to talk about it. He decided to post the interview on his blog, but let me put it here too.
I’ll be teaching at a conference put on by both Greg and Brian Brady (another BHB contributor) in Phoenix. It’s called Unchained and has already proven popular based on ticket sales. If you’re a real estate professional, agent/broker, mortgage broker, etc., I strongly recommend you consider attending. Most of these things aren’t worth much except for the exceptional networking opportunities. Unchained will definitely be different. Teaching and learning will be jam packed every day.
Back to the interview.
You can listen to the interview here — it’s short, lasting less than 7 minutes.
There are 3 choices at the end of the post allowing you to listen. They all work quickly and well. The ‘download’ option went directly to my iTunes app.
Meanwhile, have a great weekend, as I plan to sleep in big time.