Hi, my name is BawldGuy, and I’m a real estate investment addict. Wanna talk about it — anything at all to do about it? I’m your guy. I have no pride, as these phone calls are almost literally, fixes. The most common thing I hear from callers is, “I can’t believe you’ve spent so much time with me.”
Did I mention the part about me being an addict?
I love what I do. Well, most of what I do. Takin’ folks from where they are today to a retirement worthy of their efforts, is a rush most don’t understand unless they do something like it. I’ve run many marathons, was a competitive bodybuilder, and am a retired NCAA baseball umpire — all of which generated serious endorphin rushes. Yet, none of those comes close to the rush I enjoy when a Plan begins to take shape, or better yet, comes together. There’s not much like it. Continue reading
When it comes to real estate investing for the long haul — read: retirement income — formulas are good for a few things.
Derisive laughter, missed opportunities, and severely retarded cash flow and/or net worth at retirement — or worse.
OK, so the one tellin’ us to buy low, sell high has stood the test of time. But even that one ignores too many factors to list here. I can’t resist listing at least one — timing. If we make a decades long story short, here’s the difference the lack of timing can make when a so-called formula is being adhered to slavishly.
Lady buys a San Diego duplex for around $30,000 in 1975. If she sold at the top of the latest bubble, around 2006, she easily netted a gross pre-tax profit over $500,000. Sweet, eh? She bought low, and boy, did she ever sell high. Half a million does sound sexy, doesn’t it? Thing is, timing tends to change things up a bit. If she’d sold/bought/exchanged when common freakin’ sense dictated, she’d of had — conservatively — far in excess of $2 million. Now what does that half a mil look to ya? Yesterday’s meatloaf, that’s what. For the most part, formulas share one thing in common: A built-in lack of flexibility. Continue reading
In some ways the purchase of a car is similar to the purchase of real estate. Like a car there are generally less concerns when buying new. Older cars and buildings can have deferred maintenance issues. You will soon see there can be many other issues as well.
As investors we commonly check that a used property is sound and fit to be used as a rental. Sometimes though there are hidden surprises that are harder to see or take more digging to find. If they are not found before you purchase the property they can prove to be hidden time bombs.
I recently spoke with an investor that bought a property in Maine. The home had recently been remodeled looked quite well and was sold as an energy efficient building. As winter rolled in my friend discovered the home had little to know insulation – a huge problem in Maine. Can you say unhappy tenants and big utility bills?
This kind of surprise usually sees the light of the day early on. Other surprises can be just as costly or more costly and lay hidden for years. Continue reading
Thanks in advance for dealing with a longish post. I thought the topic merited a more detailed treatment.
Headlines the last six years or so have been negative, especially when the economy has been the topic. Duh. The thing is, speaking purely from a Boomer point of view, you learn there are hard times, and then there are HARD times. I’m speaking in macro economic terms here, not drilling down to individual families. We all know challenging circumstances can strike any of us, even in the best of times. Let’s focus today on the here and now, not try and predict the future. Frankly, if you told me we were about to enter another recession shortly, it’d be just as credible if you’d said significant inflation instead. We simply don’t know. But . . .
Let’s compare economic downturns since the year I got into the family business, 1969. Continue reading
Every week I speak to some pretty smart cookies. They’ve invested in several properties in their hometown. The thing is, I spend somewhere around 40% of my time tellin’ investors they’re doin’ just fine, don’t change a thing. Or maybe change a few things and you’re flyin’ high. They’re usually surprised, but happy.
There are three basic factors to consider when deciding to sell/trade or keep a local income property.
1. The true quality of it’s location.
2. The true quality of it’s construction.
3. The current age of the property.
Location quality Continue reading