Pura Vida

Recently my wife and I visited Costa Rica. Wow, what a great trip. We enjoyed it so much that we are planning to go back in the near future. I even made a video about it if you’re interested. I’ll put the link at the end of this post.

One thing that really hit home to me on this trip was the idea of  just getting away and its importance. Taking the time to remove yourself from the work-a-day-world and experience something different, new, completely relaxing or exciting is an amazing thing. It rebuilds your drive, your focus and your spirit. I had a wonderful time, spent some quality time with my wife and eternal companion and just rested and relaxed. I also found that upon my return I was better able to handle the stress, meet my deadlines and complete my work than I had been prior to the trip. I now better understand “recreation.”  Take the word apart and you’ll see what I mean.

Now, I hasten to add that I am not talking about completely rebuilding yourself from the inside out into an entirely different person (even though for some people that might be a good thing). I’m talking about re-aligning ideas, re-focusing thoughts, re-ordering priorities and re-identifying the things that are most important to you. When we rebuild ourselves within the realities and structure of our existence, I believe we can and will experience greater success, greater joy and greater progress in our undertakings, whether they be financial, physical, emotional, mental or spiritual.



I guess I’m a bit like a flashlight. When my batteries are fully charged, I shine brighter. I’m sure that’s true with you too. I sincerely hope that you, whoever you are, get the time and the opportunity to re-create and recharge yourself too. Below, as promised, is the video I mentioned earlier.



Don’t march in the parade.

Watch out. Here they come. The parade is about to march on by.

You are about to be barraged with another round of real estate promises, profit projections and programs that “are sure to make you rich.” Yes, you’ve heard it all before, but today is different isn’t it? Now, this time, because of the recent recession and drop in prices, it will really work. Now is the window you have been waiting for. Right? … Wrong! The recession happened for a variety of reasons. And those reasons still exist.

It has been said that life is a wheel and that what goes around comes around. That’s true. But,  it is important to recognize that life is not only a wheel, it is also a parade.

Every time I see another “remake” of an old movie I saw as a kid, I have to wonder why the producers are not smart enough or creative enough to come up with something new.  Sadly, the fact is, they don’t need to. So it is with those that promote the promise of real estate profits. Like it or not, the same old promises that sold programs 10, 20 or 30 years ago still sell today. Not because they really work, but because there are a whole batch of new buyers that just don’t know any better than to buy. Thirty years ago it was me and my friends. Today it is our kids. In the relatively near future it will be our grandchildren. The parade will continue to march on by with new participants, and they will once again spend unbelievable amounts of time and money on the proven failures or the past. Despite their self proclaimed altruism, the promoters that sell these programs obviously find it easier and more profitable to sell the promise of real estate riches than to actually produce it themselves. If they really knew how to do what they claim, they would be guarding that secret in Fort Knox.  Not selling it to possible competitors as part of a magical coaching package.

The facts are simple.  Just like a holiday parade, at the appointed hour, you can expect the marchers to trudge on by with bright colors and big smiles.  While the clowns wave enthusiastically to the crowd, there will be wise and prudent real estate professionals who will watch the parade go by, while quietly amassing amazing amounts of real estate wealth. That is the nature of the business. So, is it even possible for you to make money in real estate? Of course it is.  But you will have to do it as a professional. The men and women that capitalize on real estate have always shared important traits with their successful predecessors. Knowledge, intelligence and hard work.

So if you are serious about making money with real estate, here’s my advise. “Finish your homework, know the market and do the math.”  The benefits for those who pay the price are amazing. On the other hand, if you don’t want to pay the price in time and effort, you can jump in with both feet and find real estate to be an easy business. An easy business in which to loose huge amounts of money. Here’s wishing you success.



Thank you for making my life better.

The other day I stopped into a 7-11 to buy a healthy lunch of a hot dog, chips and a diet coke. (I am as you know very health conscious.) Anyhow, as I checked out, the young man behind the counter asked how I was doing. I answered honestly. After all, it was a warm day, the air was fresh and clean, I was having a pleasant peaceful day without stress.

I said, “Thank you for asking. You are very kind to be concerned and I can tell you that life is great. Great day. Great weather. And now a great hot dog for lunch. All things considered, my life is better than I deserve.”

His response surprised me. He stood silent for  maybe two or three seconds looking directly at me. Then he explained that he had spent the morning dealing with people who were rude, ill tempered and demanding. “They all seemed to be very unhappy”, he said with a delightful accent, “and that made me unhappy too.  Then you come in here with a big smile and some nice words. You have made me feel better. You have made me happy again. Thank you for making my life better.”

I sensed from his sincerity that he actually felt better. Then I realized something very important. Perhaps my positive interaction with him had in fact made his life better. Furthermore, I knew for sure that his positive response to me had improved my day. And I told him so.

I gathered up by hot dog and chips and headed out the door. As the door was closing I heard another customer say “hi, how are you” to the clerk. To which he responded. “It is a beautiful day. It is warm and fresh and wonderful.” His customer glanced out the big front windows and said you know, you’re right. I put my drink on top of my car while I opened the door and glanced back in the store. The young man was looking my way and when he saw I was looking back, he smiled a big warm smile and waved. My hands were full so I nodded back to a new friend.

As I drove to my office I couldn’t help but wonder how many people we each touch, for good or bad, every day through our simple acts of kindness or thoughtless disregard. I think it is like having a contagious disease. Without even trying, we all share things with the people around us every day. The question is what are we sharing? I then committed to personally smile more, have more gratitude and tell others when they have made a positive difference for me. If it is that easy to make things better, I have no excuse for not doing so. I want my wonderful life to be contagious whenever possible.

Don’t Panic!

In a market where you read conflicting news about the real estate investment market almost daily, the first and most important thing to remember is DON’T PANIC. Have the courage to fight the short term battle in order to win over the long haul.

Real estate by its very nature is a long term investment. While there are ways to earn income over a short period of time, the greatest wealth building that utilizes real estate as an investment takes time. The compounding of values adds up to a staggering amount if you’ll have the patience to wait a few years. Buying and selling based on short market movements is akin to investors who watch the ticker tape and sell as soon as a stock price looses a little ground. Odd lot buyers (small time investors who buy less than 100 shares of a stock at a time) are notorious for making bad purchase and sales decisions. They seem to watch a stock grow in value until they are finally convinced it will keep going up forever; then they buy. Unfortunately for them, this occurs typically at or near the top of the bell curve and soon the stock starts to slide. When that happens, they panic and sell. They seem to forget that all stocks go up and down in value during differing periods of time, but over the long haul the good ones always go up. Interestingly, there are successful stock speculators who do nothing more that watch the odd lot numbers and then do exactly the opposite. Just think what you could have achieved if you had watched all the small time “get-rich-quick” buyers and then done exactly the opposite. Wow … you would have made a bundle. Therein is the difference between the unprofessional and amature speculator, and the seasoned professional. I did not lose one red cent in the great market downturn! I’m sorry if you did.

Like it or not, to maximize your return in real estate, you will need to weather some storms. This is yet another good reason for buying right in the first place. If you are stretched so tight that you cannot make it through the lean times and are forced to sell, you may never see the fat times full of profit.

The trick, if there is a trick, is to do your homework before you buy. It is far better than being taught a lesson by the marketplace. When you buy, expect some good and some bad, because you’ll have both. Be patient and give the market time to rebound from any corrections and you will benefit greatly. Real estate is the basis for all wealth. Get your share and then let it do its thing over a long enough period that it will meet your goals. Wealth building is most successful with an intelligent mind, a patient attitude and a pocket book deep enough to smooth out the rough spots on the road to success. Good luck in your career, and remember, no matter what happens, don’t panic.

The wrong trousers.

Just like in the Wallace and Gromet episode, a series of interesting and unnerving events can occur if you somehow get on the wrong trousers. I know. It happened to me.

A couple blogs ago I trumpeted my shame at the need to buy bigger pants. Now I am forced to admit I was wrong. I was pulled into a web of deceit and misinformation. I was duped, bamboozled, even buffaloed. It turns out that I, even I, was a victim of the vicious elements that conspired against me. I rushed headlong into the fray, buying up new pants, disposing of the old, hoping to hide the evidence of my expanding girth. Then the truth hit hard, like business end of a 6-pound sledge. With that shock came the realization that I had been momentarily confused and the recognition that I am simply not as fat as I thought I was. And I blame my pants.

It all started on a dark and stormy night. Lightening flashed in the southern sky. I heard the creak of the floor, even though I was alone in the house and standing perfectly still. A shudder inched its way up my back and a sudden chill made the perspiration beaded on my brow into ice cold pools of pure fear. A gasp caught in my throat. I instinctively drew in my breath as though I might need it to cry out for help, even though I knew no one would hear. With all the strength I could muster, I buttoned the waist of my new pants then ever so slowly expelled the air in my lungs, but incredibly felt no relief. Instead I sensed an unusual pressure, an uncomfortable constriction, it remained somehow in my gut but also immediately haunted my mind. I yearned for freedom. I ached for mobility. I desired to walk, bend over or even just sit down. But I was frozen in place. They were new, hand picked and should have been supportive while giving me the agency to live my life with the security of denim and copper rivets to protect me from the elements. They had instead hurt me deeply and very personally. I had trusted them, but they mocked me, ridiculed my desire for comfort and left me feeling a shell of a man gripped in a vise of his own design. Reaching out for confirmation that I was still somehow the man I thought I was, I found nothing to grasp and instead fell into a pit of self pity and despair. And I blame my pants.

So here’s what happened. I wanted some new pants so I went to WalMart and found my size, paid for them and took them home. I washed and dried them and the next morning put them on. Perhaps it would be more accurate to say that I pulled and pried them on while all the time tucking in more than my shirt. The new trousers were as I’m sure you’ve guessed, too small. It seemed all too obvious, certainly I must have grown.

So later that day I bought the next size bigger. Five pairs of them to be exact. I took them home, washed and dried them and put one of them on. Sure it was more comfortable, even airy I might say, but I was not comfortable about the fact that my pants seemed at every opportunity to show portions of my anatomy that even though every teenager in the world seems comfortable with showing theirs, I was not willing to share mine with the world. So I cinched up my belt and went about my business. After almost a week I never could get used to the fit. Then it happened, a flash of insight. What if the villainous pants that had started this avalanche of activity were the wrong size? What if I wasn’t to blame? What if it was my pants?

So I got out the trousers that had started this mess and laid then next to a pair of the new larger pants on my bed and it was immediately obvious. The pants at the root of this problem were “way” smaller than the new ones. I looked at the label, it read as I thought it should, so I was again confused and bewildered. Then I got out the last pair of my old smaller pants and placed them next to the culprit pants. And again, the new suspect pants were smaller than the old pair. I couldn’t believe it. I had inadvertently discovered and now conclusively proven a conspiracy. A pant’s mislabeling conspiracy. And I have fallen prey to their affront. I wondered how many others had suffered tragically from this heinous act. So I did the only thing a victim of such a travesty could do. I gave away the five new larger pairs and bought some new ones the right size.

I have however learned from this experience. I shall now remain ever vigilant against another such event. I shall take, and live by, my son Bryce’s advise. When he heard the story he said simply, “You know Dad, this wouldn’t happen if you’d try them on in the store before you buy them.” There it is; from the mouth of babes. I have to wonder though “What’s this world coming to when your kids start teaching you lessons in life.” I’m a little embarrassed by this whole thing so I’d appreciate it if you wouldn’t mention it to anyone else.

Active vs Passive Investment in Real Estate

If you don’t know the difference between “active” and “passive” investment in real estate, you could well be filing inaccurate tax returns. So when the IRS calls and says you own a pile of taxes and some very painful penalties, don’t be surprised.

If you are a passive investor you are limited to $25,000 maximum in deduction (filing jointly) regardless of the real estate “losses” generated by your investment property. An “active” investor has no such limit. If you don’t know if you are active or passive, chances are astronomical that you are passive and that your losses (tax write offs) are limited. They are also limited as to how they can be used to reduce your tax liability. You see, passive losses can only offset passive income. That means that your passive real estate loss cannot offset your salary, commissions or traditional incomes.

To be able to write off all of the real estate losses generated, you must be a real estate “Professional”. That means that you have to spend 750 hours a year in your real estate business activities, and be able to make that argument successfully.

However, there are different types of real estate oriented business that can provide an avenue for massive losses when others would be severely limited. That however is a topic for a future review. Good luck. If I can answer any questions please feel free to contact me.





Are time-shares money down the drain?

A friend of mine is thinking about buying a time-share. I suggested that if he was seriously thinking about it, he should think again.

You’ve probably seen the ads on late night TV. “Own a fabulous time share in paradise for only a few dollars.” And you don’t need to worry about getting bored with the location you bought, because you can trade your time in Rogerville for time in Hawaii, California, Florida or the Bahamas. (Why do you think the industry came up with this trade out deal? Because everybody was so deliriously happy with their purchase and the time-shares were so easy to sell?) The promos sound great don’t they? Advertising messages usually do. They know how to play to our greed, our fantasies and our stupidity. And why do they do it? Consider hotel time shares that cost $10,000 per week to purchase. Lets see; $10,000 times 52 weeks per year equals $520,000.00 per room! Then they earn all the other associated maintenance, association and use fees as well. Do you think this could be profitable for the time-share company? Ya think?

If you’ve ever been to a high pressure time-share sales pitch where you are in a big room with other people who are regretting  having fallen for the “free stay if you sit through our pitch” ploy, you may have noticed an unusual  activity.  You might even have wondered, “Why, when someone buys a time share, do they announce the buyer overhead like they just won the lottery, blow whistles, uncork champagne and every body claps like mad?” Because hype sells. Excitement sells. “I can be special too” sells. “I want people to clap for me” sells. I’ve been there, and as I suspect you already know, I didn’t buy.

The bottom line is that the purchase price of a time share is only the tip of the financial iceberg. Hidden below the beautiful blue water is the monstrosity that actually keeps the beautiful white tip above water. There are the title charges, transfer fees, ongoing forever maintenance fees, taxes, , association dues and then the use fees for when you are actually in the time share unit. About two decades ago I had a friend let me “use” their time-share in Hawaii. By the time I was done paying the cleaning fees, the use fee and the nickle & dime whatever else they charged me fees, I had paid more than I would have had I stayed at a suite hotel on the island, complete with a kitchen and daily maid service. So I guess you could say that I have a bad attitude. (After all, you can say anything you like. I do. Right here in this blog.) That was my last time at a time-share.

In the interest of fairness, maybe things have changed in the last 20 years. Maybe they are all they are claiming to be. Maybe they are the greatest thing since sliced bread. My problem is that the advertising is the same, the promotion is the same and so I’m thinking that everything else might be the same too. But then again maybe I’m a little cynical. Ya think?

I may have adult onset A.D.D. but I can’t focus on the issue long enough to find out for sure.

OK, I admit it. I have it. It keeps me up late at night. I wake in the morning with my heart and mind racing. I get half way through a movie and realize I can’t remember what has happened so far. I hear voices at every business I visit telling me how things could be run better or made more profitable. I sit in my office and start doing one task and almost immediately find myself doing something entirely different. Yes I have it, the curse that has plagued men and women for years. It took the French to label those with this frightening malady, the horrendous disease that repeatedly makes people surrender to every mental attack, no matter how small. Like it or not, I have to accept it, I am an entrepreneur.

It’s good that I work for myself because I think that a smarter boss might fire me and then I’d have to wait to tell my wife that I had been canned, while all the time thinking that there had to be a better and more profitable way to fire people.

Unlike most people in business, I not only “run the numbers” but I chase after them and try to corral them into a nice functional herd, where upon I promptly shut the gate and leave them to be cared for by someone else. I have to ask, do I really love these numbers over which I have responsibility, or do I just like the idea of being responsible for them, but lack the aptitude and concentration to give them the attention they deserve. Probably so. I suspect that I am perfectly willing to go forward without giving my charges any thought until they start to misbehave, and even then I tend to care only for those numbers that are preceded with a dollar sign.

So I will bear my burden with a smile. I will go forward dragging my inability to focus on only one thing, like writing in my blog, without simultaneously trying to figure out how to monetize this process. It is my lot in life to be open to whatever crazy thing comes along. At least I can honestly say I am never bored. I think I could sell some anti-boredom, I just need to figure out how to package it. I’ll think about that for a while. After all, it’s better than working.

Spring is not the only thing that is bustin’ out all over.

I just got back from lunch and a little shopping. I decided during my running amok that I’d go ahead and confess to the world that I have super-sized, grande-sized and jumbo-sized enough fast food meals in my life that I have now been forced to do the same thing with my pants.
Yes it’s true, I bought some new jeans and I had to add a couple of inches to my pant’s waist size since I’ve added at least that much to my personal non-pants waist size. I decided that this was better than my struggling to take a deep breath and speaking in falsetto. I’ve now graduated up to 38/30s. Oh the shame. Oh the degradation. Oh the humanity.
I think I’ll go drown my humiliation in an order for fries, humongous sized, with lots of dipping sauce and a chocolate shake.

Here we go again.

That old adage “What goes around comes around” has once again proven itself true. For years our real estate investments have produced significant tax shelter due to the depreciation allowances. Now I’m at the stage where we are refining our portfolio, reducing its size and condensing the workload to prepare for what we hope is a simple and care-free retirement. This process brings with it a series of unfortunate events (forgive me Lemony Snickets). Like it or not, sometimes you may have little choice but to sell a property(or properties) to meet your long term goals using the opportunities that present themselves. That happened to us this last year.

We had the opportunity to sell a property at a price that was simply too good to pass up. Recognizing that this would result in a taxable event, we went ahead and sold the property. I used the proceeds to pay down significant debt, thereby condensing the amortization schedules on other properties and allowing for retirement three to 5 years sooner than earlier expected. That all sounds great, but it carried baggage.

Now that tax time is here, my accountant called and suggested I make a payment toward the taxes due that I had not yet covered. He seemed concerned with the amount and I had to ask him three times before he told me what he anticipated I owed. It was like getting hit in the head with a brick. The figure was three times my annual salary!

I’m not exactly sure how to come up with this huge block of funds. (Perhaps huge is too aggressive a term to use to describe the amount, but I certainly don’t think so.) As a matter of fact I have no clue. However, I have found that if I simply take a little time to allow the sea to calm and give it some directed thought, a way will appear. My life’s experience teaches me that the world will move aside and let any man (or woman) pass as they move toward their goals. So once again I declair, get out of the way, cause I have work to do, problems to solve and goals to reach.