BloodhoundBlog

There’s always something to howl about.

Author: Jeff Brown (page 11 of 15)

Real Estate Investments Broker

October 24, 2007

The Hyper-Local Farm II — My Ferrari Blows the Doors Off Your VW

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Real Estate Investments Broker

Author website

Prologue: My initial post on this subject, was widely read, and seemed to generate responses on one side or the other, not many in the middle. That makes sense. One commenter came at me full throttle, remaining civil, detailing why, a hyper-local farm not only wouldn’t work, but wouldn’t be any more productive than what he’s doing now, offline.

We both, no doubt, think the other is partaking of herbs not meant for cooking. 🙂 In short, I think he’s a good guy, harboring an honest difference of opinion. The following is how we have disagreed.

vw van ferrari

I think I’d really like Spencer Barron. In fact, judging by our give and take in the comments of my most recent post, I like him and respect him. We have respectfully disagreed on the concept of the hyper-local farm site, but it’s been fun. He’s obviously a pretty smart guy.

Can you feel the butter, Spencer? 🙂

Spenser — The next time I’m in Denver, I’m buying. We gotta meet, cuz it’s always fun to talk with guys who disagree with me so much, yet so well, and stay so wrong. 🙂

Your VW just passed me? To extend the metaphor, you’re driving a VW because your approach can’t generate enough money to acquire a Ferrari. 🙂

Let’s count the ways you are, in my view, not only dead wrong, but worse, basing your thinking on absolutely false premises — a mistake that almost always proves fatal.

You said — Since you will be continuously marketing them to go to your blog, why don’t you just tell them why they should use you. You could try to appeal directly to the people your trying to reach, home sellers. Why all the coy games?

False Premise #1 — Wait a minute, let me write that one down. 🙂 You mean, I should actually tell them why I’m the best agent for them? Well I’ll be dogged.

I’ll be continuously marketing them to go to my blog. All that will be done in the infancy of the site (blog? website? hybrid? who cares?) because that’s what’ll make it go. Read more

October 23, 2007

San Diego Fire Update — The Calvary Has Arrived — Air Attacks Have Started!! — Radio Link

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Real Estate Investments Broker

Author website

They’re leaving from multiple launch points, and being seen all over. This is the best news we could hope for. They’re fighting through some very dangerous visual conditions.

For the people who’ve expressed an interest in more in depth info, in real time….

You can go online and listen live to KOGO AM 600 in San Diego.

Let me know if you encounter any problems connecting to the stream. I’ve tested it with no problem.
< ?php include("SDfiresupdates.php"); ?>

October 23, 2007

San Diego Fire Update — It’s Now Approaching Historical — 10% of Population Evacuated

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Real Estate Investments Broker

Author website

The phone range at 3:44 AM this morning — Mom was calling to tell me she was packing, as she said, “Just in case”.

‘Just in case’ became reality when she answered the knock on her door around 5. It was a concerned neighbor, ensuring herself Mom knew things were getting maybe too close for comfort. She lives in Spring Valley, a community just east and a touch south of where I live, in La Mesa. Her call came as I was still in bed, listening to the radio. She saved me a call, cuz I was about to assert my rights as concerned son, politely insisting she pack a quick bag, and head over to my place.

While writing, from my living room window I can see to the south and east. Spring Valley’s Mt. Miguel is ablaze — I can clearly see the flames. They’ve been visible since I first looked, around 5:10 this morning.

Before continuing, some folks in other parts of the country, have said they’re not getting nearly enough info on San Diego. For those who would like to find out about friends and relatives here, one of our local TV stations has a pretty solid website, giving updates, maps, and overall coverage of the fires.

Also, the San Diego County Emergency Homepage might be of some help for those seeking info.

300,000 San Diegans have been evacuated — fully 10% of the county’s population.

One trivial note: The Charger’s home game appears almost surely to be moved to Glendale Arizona’s new stadium. The team left yesterday for AZ, hoping they’d be able to return for Sunday’s game. That’s a fantasy. They’ll be in AZ until after they’ve played the game there.

Ramona a town in the northeast part of the country, and Fallbrook, located off of the 15, not far from Temecula, have both been completely evacuated, according to news reports.

I called my brother-in-law just after 6. He lives fairly close to the path the fire has been taking in Spring Valley. He says he’s already got several boxes packed, and his pickup ready Read more

October 22, 2007

Pardon Me For Not Returning Your Call/Email — But San Diego’s On Fire

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Real Estate Investments Broker

Author website

Geez, another fire, no, two of the nasty boogers. Santa Ana’s suck. What’s a Santa Ana you ask? It’s when desert winds from the northeast come swooping down into So Cal, bringing super low humidity, and winds blowing the wrong way. It also brings mid-80’s temperatures in late October.

When a few years of dry weather come one after the other, this is never good for San Diego. Add to the mix all kinds of dry dead wood for fuel, and you have the formula for what’s on the news the last few days.

As I write this it’s now too dark to see the more southern of the two fires. I have a southeasterly facing balcony with a gorgeous view in San Diego’s East County. As recently as an 45 minutes ago I could clearly see the Potrero fire’s smoke plume. It appears we’re winning that one. From about 4 PM until 6:30 or so, it was losing size, and depth of color. A great sign, based on my experience with these huge fires.

The ‘Witch’ fire is another story altogether. It’s not looking good. As of yesterday, it had already burned over 8,000 acres. Personally, my home isn’t in danger. My aunt and uncle, plus a cousin and his wife, living in La Costa (North San Diego County) have fled to Dana Point. Mom, who lives near me, has been my ‘stringer’, reporting on all the affected family members. My sister and her husband almost left their La Costa home, but when, at the last minute the order to leave was downgraded to voluntary they stayed. My brother-in-law is prone to severe asthma, so traveling to their downtown condo through all the muck was deemed far too risky.

Brian Brady, a good friend and almost neighbor, was the gracious host for five families from a community nearby his coastal home, which is close to Del Mar. They were from the Carmel Valley area, which was under mandatory orders to get outa Dodge.

I spoke to Brian an hour ago, finding him in the parking lot, J-3 to be specific, Read more

October 18, 2007

House Agents — Wanna Start the New Year Kickin’ Ass? Here’s How

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Real Estate Investments Broker

Author website

First off, I’m gonna say right up front, I’m not a house agent, and haven’t been since President Jimmy was in office tellin’ all of us our attitudes sucked. Of course, becoming an ‘investment agent‘ back then wasn’t what one would call prescient timing. About the time I’d learned enough to become dangerous, we had what we now call a correction.

Since everyone’s all excited these days about transparency, I thought I’d disclose I’m not a house agent, even though I’m about to give a boatload of house agent advice. Furthermore, the advice I’m about to give, isn’t new — it’s just my angle on things.

I was a house guy for my first seven years. My main source of business was generated by farming activities. I’d read a few books, and was unimpressed. Then I was given one by my broker, and after reading it, I’d thought he’d given me the key to the vault. 🙂

It was written by the owner of the well known real estate licensing school, Lumbleau. He was the founder, John J. Lumbleau. It told about a concept called Farming, which really furrowed my brow. Remember, this was the early ’70’s — farming? In real estate?

Even though it involves a little technology, I guarantee you, if I can handle it, your Aunt Fannie can do it. My son Josh’s favorite question for me is, “You made that up, right? You can’t be serious, asking me that question!” It’s almost always a software or a basic computer question, so honest, the hi-tech will be easy.

I’ve been speaking to a few agents around the country this year. I’ve said the same thing to all of them: Build a hyper-local farm as a website/blog.

See? Told ya it wasn’t anything new.

The problem as I see it, is nobody (that I’ve found so far) does it the way I think would work like gangbusters. I keep hearing agents, a couple whom I know, say they tried it, but there just wasn’t any traction. In my opinion they didn’t give it even half a chance to take its first Read more

September 17, 2007

Nobody Behind the Curtain — Cookies and Milk — Judo — And NOT Repeating History

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Real Estate Investments Broker

Author website

What went on with the speculation about the Fed Funds Rate all last week, and will surely intensify today and tomorrow, has been almost, but not quite analogous to the scene in The Wizard of Oz, when we discovered there was a man behind thehide in plain sight curtain. The characters were told to ignore him — by the guy behind the curtain.

Dr. Bernanke is not in any way analogous to that guy.

Bernanke has, in my opinion, played this whole melodrama out while hiding in plain sight, instead of behind a curtain. He’s using what I’m now calling Bernanke Judo. That is, he’s using the other guy’s energy against him, which keeps them off balance. Nobody is paying attention to what he’s really been doing the last few weeks, because he’s got everyone watching his interest rate hand. Meanwhile, he’s been free to play out his real agenda with the other hand.

The almost humorous part of his plan is how simple it’s been to execute — again — in plain sight.

First he treated all the whiners on Wall Street like petulant children by giving them all cookies and milk. It came in the form of a cut in the Fed Discount Rate. Everyone smiled, and the warm and milk and cookiesfuzzies returned to the land of bulls and bears. Confidence was bolstered.

Then they all took a nap — as he knew they would. He knew exactly how to manage their fears and frustrations. Sure, they kept complaining, but they kept it down to a low, manageable roar. They figured they’d finally thrown enough tantrums to get their way.

Bernanke also knew that beyond everything technical and debatable, the one thing he couldn’t let fall below the critical floor, was confidence in the economy as a whole. He cut the discount rate.

So, what’s he been doing you haven’t heard much if anything about the last few weeks? Making history, that’s what.

I can’t find a two week period in the last 40 years where the Fed has increased money supply by over $110Billion — can’t find it. That doesn’t mean it hasn’t happened, but Read more

August 31, 2007

Come On People — NAR Hasn’t Made A Hill Of Beans Difference Since I Was 18

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Real Estate Investments Broker

Author website

There’s been so much talk about what the National Association of Realtors (or Real – I – tors as often mispronounced) should be, is now, and/or should become, I finally couldn’t stay quiet any longer. This subject is as important to the industry, any particular agent or broker, or the public in general, as what color rag I use to check my car’s oil.

They’re surely an easy target with their latest, and some, (including me) would call their weakest PR moves. But who has ever taken them seriously? Pick a real estate related subject, any subject. What lasting or even temporarily lasting and meaningful change has emerged from the fruitless womb of NAR?

I would submit three — Nada, Zip, and None. The industry itself has made things happen from day one.

Whenever they’ve gone up directly against lobbies which actually wield real life political power, they lose far more than they win. And so many of their claimed wins were in the bag anyway. I know, as I’ve been forced to be a member since 1969.

Education? Are you on drugs? With exceptions that wouldn’t take up all the fingers on one hand, what they offer is embarrassing to thinking people. Want a for instance? Ask your cousin the Realtor about his blog, and watch the instantaneous RCA Dog look on his face. Want another one? The dropout rate of agents in any market, good or bad, is always high, as most of them couldn’t find their butts with two helpers, a map, and a GPS.

Having a discussion on which way the NAR should be going is almost, but not quite a waste of time. They’ve never stopped me from doing anything but using my Mac to access the MLS systems around the country. Why? Because they’re either to damn lazy to hire my 16 year old next door neighbor to make the changes, they’re apathetic, or they don’t want me using a Mac. It’s still a non-issue to me, as it’s just to easy to circumvent.

NAR has simply been a non-entity in my career.

I’ve taken one course Read more

August 23, 2007

The Backbone Of Real Estate? Only The Men In the Business Know The Answer

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Real Estate Investments Broker

Author website

On a warm San Diego day in mid-June of 1969 I drove home from my last day of high school. About 60 days later I turned 18. Around 30 days after that I was jumping up and down in front of our mailbox, holding the notice from the California Department of Real Estate informing me I’d passed the salesman’s license test. A few weeks later I was proudly putting a knot in my tie, bright and early Saturday morning, the 18th of October. I had a full head of blonde hair, and was shaving more days of the week than not. 🙂 I was minutes away from driving to the office for the first time ever.

I was still living at home, and going to college full time. 1969 was a recession year, but I didn’t know it. I went full time in February 1974 — the beginning of the ’74-75 recession, and was married a month later. Seems I had great timing from day one. 🙂 Times were tough. San Diego hadn’t had their first real price run-up yet. Interest rates, to the best of my memory were generally in the mid-7’s to 8%.

I remember like it was yesterday, sitting in the office of H & R Block, sometime before the income tax filing deadline, (Big time, wasn’t I?) and the woman doing our taxes looked up at me, my wife looking on, and said, “Mr. Brown, you’d have been better off not having worked last year.” Ouch. To her everlasting credit, my wife looked her in the eye and asked why she was working part time, at night. Was it possibly because her husband wasn’t cuttin’ it? We’ve not been married for a decade now, but we still chuckle about that night. Even with the kidney shot to my ego that night, it was way cool to know she had my back.

1975 wasn’t much of an improvement, as I made more money, but only because I was getting the hang of things. We were still mired in the recession. I remember one guy in my farm area Read more

August 8, 2007

Real Estate Bloggers — Why Are You Blogging? What Currency Does Your Banker Accept?

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Real Estate Investments Broker

Author website

Since BloodhoundBlog isn’t about blogging for its owner’s business — the following doesn’t apply. In fact, Greg seems to abhor even the suggestion this blog might be construed as financially beneficial to him. He wants Bloodhound to be the best place to go when you want real estate information or expertise. His mission is to inform and educate — period. I’m sure there are other blogs who also exist only to distribute valuable information to their readers. This isn’t aimed at them either.

11th commandment

Let’s begin with what everyone who knows me realizes pretty quickly — I’m not a tech guy, and surely not a blogging expert. However, after blogging for a year now, I’ve noticed a few things in the so called blogging world. Wanna be a blogging expert? Just call yourself one. No kiddin’, that’s just about all you need to do.

In my first few months these so-called experts would write blogging commandments as if they’d found them on the third tablet Moses lost on his way down the mountain. You would have thought the 11th commandment was for blogging experts only — hidden in a secret place known only to them. At first I took them seriously. My mistake. My audience started to ask me what was up. What was up? I was listening to the experts, that’s what.

Kris Berg’s post on this subject was spectacularly on point. She then followed it up with the perfect satirical application of what she learned from the experts in San Francisco.

small dinner

Since I’m not in the house side of the business my subjects are……..different. They’re like a full dinner. They involve, at least much of the time, some relatively complex principles and concepts. They can’t be half a small bowl of broth. Uh, usually it’s the principles adding up that make a concept. Duh. Yet, I was constantly feeling like I was being criticized by the experts because my posts were too long. They said I needed to be short and snappy. As Kris quoted the experts: “Readers are scanners…….five paragraphs……max.”

Here’s some exaggerated examples of what they wished I would adhere to. Read more

July 25, 2007

Keeping Up With What Frank Doesn’t Know — Earth Round — Circles Sun

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Real Estate Investments Broker

Author website

There’s a mindset that has always befuddled me. It’s origin seems to be grounded in the belief that if I’ve believed X for years, than something proclaimed to be superior to X just can’t be true. Furthermore, the evidence I point to, is how many people agree with my belief in X.

Huh?

The world’s population believed the earth was flat, and that the sun circled it. They were wrong. However, when Copernicus found empirical evidence to the contrary, he was wrong, because he was virtually alone. (Sometimes I think Greg Swann is directly descended from Copernicus.) 🙂 The central argument against him was — all, 100%, totally — false data based upon a long held belief — which was based upon subjective interpretations of bad science — and anger at having their food dishes moved. How dare Copernicus?!

Those arguing for 401(k)’s as superior to F.I.U.L.’s (Now, often referred to as E.I.U.L.) are no doubt sincere in their beliefs. The problem is, when they retire, they’ll notice the guy next door who opted for the insurance approach, and realize very quickly, sadly too, I’m sure — they were sincerely wrong.

I watched NOVA last night, and they said without reservation that the earth is still round, and it revolves around the sun, not the other way around.

My hope is, this post hits its intended target: Those who run companies. Employees who are relying upon the experts made available to them — by their employers.

Before I continue, let me correct a mistake made in one the previous two posts. I’d misread a ‘3’ for a ‘2’ and subsequently wrote 20 instead of 30 years for one of my examples. My error — as I reviewed the document, it indeed read 30 years, not 20. This resulted in misstating one of my numbers. This didn’t change the outcome of the piece though, as you’ll shortly see for yourself.

As we get into the nitty-gritty of the actual comparison of 401(k)’s and F.I.U.L.’s, let’s establish exactly where I’m getting the numbers, and if the source I’m using is credible. 🙂 I do this because it became Read more

June 5, 2007

Point Weak — Shout Loud — Keeping Up With Everything Frank Doesn’t Know

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Real Estate Investments Broker

Author website

Several days ago I wrote a piece talking about qualified plans, better known as IRA’s and 401(k)’s. It was titled 401(k)’s IRA’s & Urban Myths, and discussed some of the false beliefs many people have on the subject. It also brought an alternative to the table — investment grade insurance.

Though you should read the post to get context, in a nutshell here’s what I said.

By putting your tax deferred money into qualified plans you’re setting yourself up for a nasty surprise upon retirement. Your income will be taxed at a rate for which most folks won’t have planned. Therefore, they should stop contributing to those plans and begin putting that money instead, into investment grade life insurance. It’s not really for the insurance, but has some really cool results — especially when compared side by side with qualified plans.

For instance, the income produced by the insurance which from now on will be called FIUL – Fixed Index Universal Life, is tax free for life . You’ll notice maybe what it’s not – a VUL or Variable Universal Life. One guy decided I was talking about VUL’s — wrong again. He was a reasonable guy, wanting to maybe hear from my in-house expert. He will. I often find it entertaining the way some wish to compare apples to lizards when they disagree. One such example is a guy who wanted to compare the results of $350/mo into FIUL’s vs $750 into his qualifed (employer matching) plan. As good as your investment guy might be, nobody is going to beat someone who is investing more than twice the amount as the other guy. It’s a silly comparison. Now to give him the benefit of the doubt, I did compare taking $350/mo vs $500/mo — and the 401(k) lost big time. (For the record, the annual after tax retirement incomes were the same, but the FIUL income was available for life, not subject to rising future taxes, and upon the death of the taxpayer there was literally no tax owed, as it wasn’t part of his estate in the first place.)

I will tell you Read more

June 4, 2007

Coming Soon — How Ignorance Can Yield Golden Opportunities

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Real Estate Investments Broker

Author website

I’m back in the saddle, but will have the promised post on qualified plans vs. investment grade insurance tomorrow or Wednesday, as my energy level didn’t return as quickly as I’d hoped. Ignorance can produce golden opportunities, as long as it runs into real knowledge. Again, the plan is for that to happen in a day or two. Thanks for your patience. 🙂

Meanwhile, you can take a look at what might happen if you look through the wrong end of the telescope.

May 29, 2007

401(k)’s IRA’s & Urban Myths

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Real Estate Investments Broker

Author website

In a recent post, Retirement — A New Class Being Created, I predicted a new class of retiree living a life tied to their free and clear home, with little monthly income. It inspired some interesting comments, and a question that is the inspiration for this post. One reader, Eric, was surprised to hear his 401(k) would be taxed when he retired and began taking distributions. So he asked the following question.

Help a young man out here – what tax bite do you speak of? Early withdrawal? I was under the impression that so long as a 401k built up to a certain age (65?) that it was relatively tax free?

Rain on my parade, I’m wearing my parka. 🙂

It’s not Eric’s fault (at least mostly) he thinks his withdrawals would be ‘relatively’ tax free. I’ve had many people in my office tell me what they know on the subject, most of it based on what some expert at work told them. But alas, it is taxed just like you’re being taxed now Eric. And if you’re not taking out what Big Brother thinks you should be by the time you’re in your early 70’s, they’ll make you take out more, or penalize your butt.

That’s when Chuchundra came in to soften things up for poor Eric. Chuchundra then offered some advice to Eric using the number one urban myth out there on the subject. In his comment, Brian Brady recognized this advise for what it was — pure urban myth. Chuchundra said:

If you have a standard, pre-tax 401K or IRA, you pay tax on your distributions. It’s considered regular income. You didn’t pay tax on the money you put in or on the capital gains that money made over the years, so you pay when you take it out. The idea being that you’ll be in a lower tax bracket when you’re retired, so the tax bite will be smaller.

Now that might very well be true for those who followed the Grandpa Economics school of How To Retire With A Free & Clear Home While Learning To Live On Coupons, Read more

May 25, 2007

Retirement — A New Class Being Created

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Real Estate Investments Broker

Author website

In the seminars we’ve been conducting in San Diego and out of state, we’ve been noticing a common denominator that is becoming more and more troublesome to us. It’s the number of stories being told of parents, grandparents, or the storytellers themselves.

It often begins with, “My dad is in his 70’s, healthy, and owns his home free and clear. He has Social Security, a small annuity, plus the income from his life savings. It all adds up to around $35,000 a year or so. His retirement years aren’t anything like he planned — and he’s becoming more disillusioned each year.”

That’s sad enough on its own merit. How would you like to live your so called Golden Years pinching pennies in a 50+ year old house, and enough after tax income to survive? Now imagine what his kids must think as they begin to enter their 50’s. “Is that my future? Why bother?”

Why bother indeed. Let’s crank up the way-back machine, and see if we can’t shed some light on Dad’s thinking when he was in his 20’s and 30’s.

Let’s say he was 25 in 1957. What if…..

What if we found Dad in ’57 and gave him a choice. He could work hard, invest in real estate, make some sacrifices early in life, and end up with a pretty nice retirement. His other choice would be in the form of a guarantee. How about we guarantee him a $35,000 annual income AND a free and clear home? The median income back then was no doubt less than $10,000 a year. I’ll bet he’d have taken the guarantee. To him it would have been a no-brainer. Yet folks who today find themselves in that exact position are leading lives far different than they ever envisioned.

True Story

I was talking with a prospect the other day, who lives in another state. His parents live in an adjoining state, are retired, and in their 70’s. They enjoy very good health, and are able physically to travel. They are living the very life described above — an old free and clear home, with a little less Read more

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