Opinions

February 9, 2015

Why real estate investment experts are worth paying for….

A Lexus mechanic was removing a cylinder head from the motor of a LS460 when he spotted a well-known cardiologist in his shop.  The cardiologist was there waiting for the service manager to come and take a look at his car when the mechanic shouted across the garage,  “Hey Doc, want to take a look at this?”  The cardiologist, a bit surprised walked over to where the mechanic was working.  The mechanic straightened up, wiped his hands on a rag and asked,  “So Doc, look at this engine. I opened it’s heart, took the valves out, repaired or replaced anything damaged, and then put everything back in, and when I finished, it worked just like new.  So how is it that I make $48,000 a year and you make $1.7M when you and I are doing basically the same  work?  The cardiologist paused, leaned over, and then whispered to the mechanic, […]
March 9, 2016

Housing Market Recovery–Split like Charles Dickens classic….

Today’s WSJ published an article about the US Housing Market recovery diverging into two recoveries.  Reminds me of the Dickens classic a bit…. Essentially, lower priced inventories are vanishing fast while inventory on the higher end piles up.  While on the surface this might seem like “Economics 101” (and it does reflect some of that light) there is more to the story, especially as it relates to your rental portfolio positions and future purchases. WSJ Housing Market Takes on Split Levels 030816. Here’s some of the highlights from the article: On the low end, after a slow recovery from the housing bust, first-time buyers are finally returning to the market, bolstered by still-cheap mortgages. But after years of little new construction, inventory is still tight. High-end buyers, meanwhile, are more sensitive to the stock market’s struggles this year.           So…..how does this information impact your rental […]
April 6, 2016

For when the SHTF in your rental properties….

This post is one of those that isn’t fun to write or read for that matter, unless you’ve been there and done that.  Then you’ll immediately appreciate it. It WILL happen to you. Play the Landlord/rental/Property Manager game long enough and it happens.  A tenant trashes your property.  You have a flooded basement.  You have a fire.  The proverbial Shit hits the Fan. It’s easy to panic.  It’s easy to lose sleep, to not think clearly.  It is tough to regain your sense of control in situations like these, but it can be done.  With some advanced thinking and planning, you can and will survive. Here’s how to protect yourself when SHTF: Remember back to your childhood.  You likely enjoyed playing with Play-doh, right?  Remember the extruder toys where you put a ball of your favorite color into it and pressed the handle and out squirmed a shaped snake of […]
April 12, 2016

Liar Loans making a Comeback….future opportunity to buy more Rental units?

Have you seen this movie yet? If not, don’t worry….you will soon possibly be re-living it in just a few years. According to this WSJ article, similar loans are coming back around. (ADA Moment here:  Did ANYONE on Wall Street or in the lending world learn a damn thing since 2008 real estate meltdown?) Sigh….. Ok, now that I have that out of my system, here’s the link to read the entire article.  Liar Loans making a comeback Here’s my thoughts on this situation: Keep some of your powder dry.  With the reintroduction of these types of higher risk loans, this implies there will be good opportunities in the next 3-5 years to pick up more distressed properties. Greed is good….for you and I to take advantage of others hubris and ignorance.  Just make sure you don’t get too greedy.  Pigs get fat–hogs get slaughtered! Take stock of your current […]
May 18, 2016

How to Create Margin in your Rental portfolio

Margin–that critical component Margin….What comes to mind for most real estate investors, landlords, and property managers is financial concepts, such as Profit Margin.  Or maybe Gross Margin.  Or, if you are a particularly deep financial geek–Contribution Margin.  And that’s all well and fine.  Yes, savvy investors fuel their Financial Freedom by keeping a focused eye on their financial margins because without them, let’s face it, losing money on rental properties flat out sucks. What I’m offering to plant in your fertile mind today is a different kind of margin.  In some very very smart people’s minds, like Dave Ramsey for example, it is one of the best kinds of margin.  The kind of margin I’m mentioning here is margin for the unplanned. Unplanned expenses. Unplanned sources of emotional pain. Ultimately, Unplanned changes in your overall plan for Financial Freedom. Unplanned expenses: In my experience in counseling hundreds of real estate investors […]
May 27, 2016

Winning the Indy 500 and your Financial Freedom–The Commonalities

It’s Race Weekend! Indianapolis buzzes excitedly during the month of May with the Indy 500.  If you’ve never attended, it is a highly recommended ‘bucket list’ item.  Over 300,000 spectators watch 33 drivers strap themselves into horizontal rocket ships zipping at 230 mph around a 2.5 mile oval.  It is simply a spectacle to watch. Before the weekend activities commence, I thought it would be enjoyable to compare how the best racing teams win this pinnacle event with how the best investors, landlords, and property managers win their own pinnacle event–their Financial Freedom. Rules of Racing As with every kind of sport, there are rules, regulations, laws, and customs that must be obeyed.  Some of the rules are for playing fair with each other, some are there to provide a base level of safety, and some are there to provide an element of controlled risk/enjoyment for the players.  Just like in the […]
June 20, 2016

Why You Should NOT Own Rental Properties….perhaps.

  Some investments just are not good for everyone.  Real estate is one of those investments. If you identify with any of these following Top 7 Reasons why investors fail in real estate investing, please seek professional guidance before something goes catastrophically wrong for you. Insufficient Capital–things break, plans go sideways, tenants misbehave.  This is, in my professional experience and opinion, the Number One reason investors go crazy or go broke.  Almost every investor I know can easily, if not guided by hard numbers and calculations compared to ‘their gut, their instinct’, will commonly Over-Estimate Revenue and Under-Estimate Expenses.  Both cause trouble, but in different ways. Inability to Control Your Emotions–The old saying of “If it was easy, everyone would do it certainly applies to real estate investing.  The ability to control your responses to certain events is what separates the folks who last in the business and those who flame […]
July 5, 2016

Your Freedom

Our Constitutional Republic just celebrated the 240th Anniversary of Freedom yesterday. Assuming you celebrated and still have all your appendages from shooting off fireworks, it’s back to the daily grind of working on your Financial Freedom. I’d like to throw this question out there for comment: What ONE thing could you do this month that would put you a step closer to your Financial Freedom? Just like you, I get sidetracked and bombarded with the Urgent but Not Important issues in my daily activities.  This simple question keeps me grounded and gets me refocused on my Financial Freedom.  Sometimes the answer for me is as simple as shutting off my Outlook notification on the computer so I don’t get distracted when working on a project with incoming emails.  Other times, it’s asking my insurance agent to pull together new numbers on our properties policies.  And other times, it’s scrolling through […]
July 26, 2016

The Big Why…

So a friend asked me yesterday about my Big Why….“Why did I recently announce that I am writing a book about property management and leasing and rentals?  Especially when nobody reads anymore these days.” (He’s an Asshole like that…but he’s also a good friend who knows me well.) Here the synopsis of my answer in a stream of consciousness during the phone call. When I was done rambling, he said,”Yeah, that makes a whole lot of sense. Never heard anyone put it like that before….” “You know, there’s days in my job where I get F’ing tired of having to un-F*** the shit that landlords put up with from their management companies or worse that they bring upon themselves. I’m the one that has to make the sucky phone calls to these people and tell them we have no good news for them, it sucks, and there’s no magic wand […]
July 30, 2016

More Good News for Investors and Landlords

NPR just posted this short recording clip containing some new conclusions on Rental Rates and, more importantly, Tenant Behavioral patterns. Take a listen as it’s music to your ears as a Landlord and Real Estate Investor.  It’s barely 4 minutes long but it’s jam packed with nuggets of knowledge. The retirement to the beach just got a lot closer, folks. If you are not aware of what your portfolio pricing should be, please get aware.  Golden opportunities like this don’t come around often in investing cycles. Here’s the link:  http://www.npr.org/player/embed/487470787/487522888?sf31908941=1 Your Financial Freedom awaits….