More Firestones Hitting the Pavement — I Think I’ve Seen This Movie — Twice
Posted @ 7:48 pm - Filed under 1031 Exchanges, Real Estate Investing, Boise, Mentoring, Economy, Investment Lessons, Dallas, Austin, Kansas City
I’ve been putting the writing of this post off ‘until tomorrow’ for a few weeks now. Though an optimist by nature, a realist by training, and a skeptic all the time, I’ve decided it’s time.
I began my career at 16 while at the dinner table. Told Dad I wanted to be in real estate, and work at his company. (I already worked for his company as the janitor, printer/distributor of lisings, 
and all around underpaid servant.) A couple years later I was two months past my 18th birthday, spending my first day ever as an agent in a real live real estate office.
My experience as a real estate investment broker began sometime in the summer of 1976, and was set in concrete in January of 1977. When you start a company, albeit with your father, (who’d been semi-retired since ‘71) go through the trouble of becoming a broker, (as opposed to an agent) then take the bigger step of becoming the designated broker of your new company — your decision has indeed been set in concrete. 
From day one the market was on a wild ride up. Double digit appreciation was the rule for around four years or so. It all came crashing down around and on top
of us in ’79’s last quarter. From then on until about the last quarter of ‘83 or so, things were not good. Not good is real estate investment code for very, very bad. How bad? I was elated when I sold a seven unit property to a client and was able to get him one of the first adjustable rate loans — which started out under 12%!
We struggled like crazy in those down years, but emerged intact and much the wiser. You think a seller carrying back a note is creative financing? Hah! The things I did and observed first hand would fill a book. Some of the most innovative thinking you can imagine made seemingly impossible transactions possible. There were several sales and exchanges in which I was either a principal or a broker, in which the lender had no clue whatsoever what was happening.
Some day I’m gonna write a book about it.
I fondly remember Grandma explaining to me how proud she was of my survival. She said it would become one of my most valuable assets. She was right. She also smiled knowingly when I told her the main factor in my survival back then had been a working wife. I’ve noted when invited to speak to groups of other pros, how the backbone of the real estate industry in bad times is often the working wife. That comment almost always elicits knowing smiles of experience.
When the market again took off in the mid-’80’s we were back in business, the hard times quickly and almost effortlessly forgotten. Then the S & L chaos struck. In many ways it was worse than the previous downturn. It lasted through ‘94, some would say ‘95. By ‘96 we were doing business in a more or less normal market. By then it wasn’t normal to me, it was nirvana.
We crossed into the 21st century. NASDAQ crumbled. The recession of ‘01 arrived. 9/11 hit. I was prepared for the worst. However, much to everyone’s surprise, by around Halloween normalcy returned. The recession had no impact on real estate or my clients’ investments whatsoever. In fact, I can still hear one client telling me that if he hadn’t been told by talking heads that a recession really was in force, he wouldn’t have known it.
It was a legitimate observation, especially in hindsight.
I’ve always believed the lessons I learned during those terrible times were invaluable. True enough. I’ve since realized an even more valuable lesson. Ironically, it never occurred to me what I’d missed learning until one of my mentors laughed himself silly at dinner one night. Ever seen something twice and still not realized what your were seeing — and shoulda been learning? He wondered aloud if this wasn’t my first rodeo. Old School charter members can be cold dudes.
Clyde and I had just closed an exchange, and were congratulating ourselves on our brilliance, as it had been more involved than usual. (It’s a guy thing.) Clyde was in his sixties and pretty experienced. He tolerated me cuz we’d worked side by side in the early ’80’s mess. Even though I was only 30 when those bad times struck, he grudgingly admitted I’d hung in there, and gutted it out. Some of my favorite war stories find Clyde in the starring role. Old School? Look it up and you’ll find his picture.
Anyway, I’d mentioned in passing how in ‘83 and again in ‘94 or ‘95 I’d noticed not only an increase in potential new investor traffic coming my way, but also in their interest level. I distinctly remember taking a bite of steak, as we were at the local real estate watering hole, when he startled me by laughing out loud without warning and for no apparent reason.
“You dumb $^&*@# kid” he said. “Do you need a flashing neon sign to tell you things are changing?” Still not getting it, he turned serious, and demanded I listen closely. (Or words to that effect.)
I’d missed the signs of transitioning markets twice. I’m certainly not ready to say the third time is here, cuz I’m not. However, since maybe the middle of October I’ve noticed a clearly defined shift in Brown and Brown ‘traffic’. Unlike the daily drive home from the office, traffic coming our way has definitely increased measurably.
My records since then show an increase of at least 25% in initial queries from all sources. This extends across the country, as we’re not geographically bound. Though we don’t talk about them much, we speak to groups of investors all over. The numbers have been increasing steadily. Also, a much higher percentage are following through with Purposeful action. More plainly put — a bigger percentage of folks are turning their talking into walking –putting the Firestones on the pavement. A good thing.
This could be an indicator of nothing, or it could be the initial stirrings of changing times. In the ’80’s the change took about a year to show itself as real. In the ’90’s it took longer, maybe a year and a half.
The good thing was how I was able that night to see, with Clyde’s help, what I’d experienced twice, without knowing it. He was right. He then went on, promising to tell me his stories as long as I agreed to pay for dinner. No problem old man — start talkin’.
His stories went back to the late ’50’s. They were no different than mine. More calls, more referrals, and an easily discernible increase in the quality of inquiries. More people without the commensurate qualitative improvement isn’t an indicator of anything.
At best this is anecdotal evidence proving — not much if anything. When you see it in San Diego, Dallas, Boise, Phoenix (yes, even there), Maryland, Austin, Sacramento, and of all places, Kansas City, it makes you stop and wonder. Is this the start of something? Or is this the group looking 
to buy when the buying is good — you know, under-the-radar good. That kinda good.
Why? Cuz it’s always, without any exception I’ve either seen or heard of, the under-the-radar folk who seem to act as scouts for the hoards who show up much later.
We’re seeing this increase almost weekly. There’s a technical real estate technical term for this — putting the Firestone’s on the pavement. More folks are now walking their talk than was the case even six months ago.
I’ll keep you posted — and please, you do the same.
Anyone seeing what we are?
This entry was posted on Saturday, January 12th, 2008 at 7:48 pm and is filed under 1031 Exchanges, Real Estate Investing, Boise, Mentoring, Economy, Investment Lessons, Dallas, Austin, Kansas City. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.