Retirement Income –Real Estate Investment — 1031 Exchanges — Purposeful Planning

Posted @ 1:36 am - Filed under Cool Info, 1031 Exchanges, Purposeful Planning, Weekend Thoughts, San Diego Property Owners, Real Estate Markets, Retirement Income, Builders

That’s a bit much for a Saturday title, isn’t it?

We’re in what Grandma used to smile and call challenging times. She was the oldest of eight kids in the depression. The family lived in Missouri. This was one of my all time favorite stories about life at the very beginning of the depression.

Her dad, (my great-grandpa) had found work in Nebraska shucking corn of all things. But a job was a job and he packed his raggedy, taped up suitcase and told the family where he was going and why. That’s when Grandma, his oldest daughter, volunteered to go with him. She was 17-19 years old, I forget exactly, but her dad didn’t hesitate long before giving his assent. The family desperately needed the money. Having two money earners was a huge bonus.

Grandma said they got there by way of freight trains — really. She said in those dark days it wasn’t uncommon for whole families moving via that mode. I can’t imagine what it must have been like for a teenage girl in the worst economic days of America’s history, traveling with her dad by freight train car. And it was hot she said, even though it was very early fall. She remembered the ’30’s as much hotter than any other time since.

Anyway, they arrived in Nebraska and did get the jobs. They went from field to field in conditions that pretty much wouldn’t be allowed today. But that was the way it was. They didn’t whine and complain about how bad things were. They lived their lives — and got things done.

The jobs offered shucking corn in another state was viewed by Great-grandpa and Grandma as a golden opportunity to simply survive — while earning it fair and square. The money they earned, though absolutely paltry by any of today’s standards, allowed the family to make it through the winter. Not just because of the money they brought back, but because of the time that money bought for Great-grandpa. See, he was a preacher. Preachers didn’t exactly make the big coin in those days. That money not only helped the family survive, it brought Grandma, when they got back home, into contact with the guy who turned out to be — Grandpa. He was a preacher too.

She told me that story when I was around 35 or so. The look in her eyes was a new experience for me, because as she was talking, her mind was back in the ’30’s. She was living it all over again. When I asked her how Great-grandpa handled those times, she lit up with a look of pride only a daughter can have for her father.

She said, “Your great-grandpa acted just like he did over 20 years later when he was in much taller cotton.” She told me he never looked anything but relaxed and confident, even while rocking back and forth in the railroad car. It was just another job. One that, as head of a pretty big brood, was par for the course. In other words, he simply did what was necessary to do.

Grandma had never told me a story like before. It answered a lot of questions for me, that’s for sure. Like how was Grandma always so calm in what seemed to me to be bad times? When they were first married, later in the depression, Grandpa was already an artist. He was a preacher first, but his talent for painting was well known.

He had to use that talent to feed his family too. With a new wife, and my mom on the way, he had to paint store-front signs for a living. Honest work for sure, but not exactly what an artist dreams of. Grandma told me that story after Grandpa died in 1992. She said his biggest thrill, was being able to spend an extra 10¢ on a Friday afternoon once, for a couple big, nice pork chops. She said that dime was a pretty big deal back then — not to mention having thick pork chops for dinner. That dinner happened about 60 years or so before she told me about it, but you could tell it was one of her fondest, and proudest memories of Grandpa.

What does this have to do with real estate investment or retirement income? Is there some kind of connection with tax deferred (1031) exchanges and Purposeful Planning? Plenty.

The year she told me this story, I had two young kids, my own real estate firm (and its expenses) — and the worst set of national economic circumstances I’d ever seen. Times were tough. I’d done a couple small sales and exactly one tax deferred exchange that year — through June. The latest correction was underway when the S & L Crisis hit like a falling anvil. To make matters more challenging, two of San Diego’s largest employers took a powder and left the area. Wow! I was feeling pretty sorry for myself.

Grandma lived an hour away, and I wanted a day away from everything, so we packed up the kids and off to Grandma’s we went. She took one look at my hang-dog face, and asked me if some of her muffins would brighten my outlook. (Uh, yeah — they were only the best muffins in the free world.) As the kids played in the yard, and I was drinking coffee to chase down half a dozen raison/bran muffins, she sat down — with that look she got on her face when you’d disappointed her in some way.

Real estate was going through a tough time she said. It was very hard to make a lot of money, much less a simple living. I’d have to really get creative, work longer hours, and make a lot less money. I looked up and smiled — it wasn’t a happy look, trust me.

I was told in a stern voice, and in no uncertain terms, that I was to deal with these bad times the same way I did with good times — with hard work based upon integrity, and the knowledge that all things would work out. If she was anything, she was a woman with massive faith. She told me if Grandpa (who’d passed away a couple months earlier) could paint signs to feed his family, I could wear a suit and tie with a smile while doing what I already loved to do. She had fire in her eyes, which for such a happy and gentle woman was inspiring.

She said I was to work harder, longer, with a smile on my face and a song in my heart because even in very difficult times — I didn’t have to paint store signs to eat.

I’ve never felt sorry for myself in bad times since. And those bad times lasted for another four long years. How bad were they? They were bad enough — I literally took a year off. I started another business — my version of painting store signs, and made it through just fine. If I’d known as much then as I know today, would things have been any different? I think so, but am not in anyway sure. I really don’t know.

So in this correction, which is not by anybody’s standard comparable to the early-mid ’90’s, I work harder, longer, and with as many clients as possible. My experience is helping regular folks to keep their Purposeful Plans moving forward, so their retirement income will not suffer. San Diego is horrible for investment property? Then find areas that are much better. So I have. Loans are harder to get and more expensive? Figure a way — there’s no crying during a 1031 exchange. You don’t kinda do an exchange. It’s executed on time or it isn’t an exchange. You get it done.

It’s times like these, when experience and the ability to see through all the happy talk and doomsday warnings can make the difference. What difference? The difference between becoming immobilized by fear, and making well thought out moves, based on prudent analysis and solid Purposeful Planning. Sometimes opportunities show up when we least expect them.

For Grandma it was finding a job a state and a freight train ride away in the midst of mind-numbing poverty. For us, today? It’s knowing that whatever this correction brings, it’s not even in the S & L Crisis league — much less the depression. And because that’s true, those of you who are able, can fly under the radar into growth areas where sellers are waiting with open arms. And just like those who bought San Diego property in the mid-’90’s — the sellers think the buyers are idiots.

Those idiots today? You know that answer, don’t you?

Many, many people, including me, think that’s possibly the perfect positive storm. Lenders in chaos, prices falling. Builders looking for a way out. And interest rates still at historical lows — though pretty costly these days.

We think our version of grasping opportunity and working harder and longer in today’s challenging times, includes opening an office in another state. It’s in no way remotely comparable to hopping a freight train car in order to work 12 hour days shucking corn. But it’s my way of following Grandma’s admonishment. Like I said — there was no whining around that woman. Period. She’d already shucked her share of corn — and reaped the benefits for a lifetime.

Great retirements are earned through hard work, faith, and the willingness to do what most folks just won’t. In times like these there are many, many opportunities to enhance the size and quality of your retirement income. The ability to prudently acquire investment properties in growth regions during hard times is rare. In almost 40 years this is only the third time I’ve seen that kind of opportunity.

Great-grandpa and Grandma had their own Plan to get through the winter. Hop the train — get the jobs — shuck the corn — come home with the money.

Ready to fly under the radar and start some of your own shucking? These times, especially for those owning investment properties in high priced and stalled, sluggish markets — are the perfect times for such a move. Sell low — but buy lower — and in a far better market(s).

Grandma would be proud of you.

This entry was posted on Saturday, August 11th, 2007 at 1:36 am and is filed under Cool Info, 1031 Exchanges, Purposeful Planning, Weekend Thoughts, San Diego Property Owners, Real Estate Markets, Retirement Income, Builders. 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.