Mike Browning

Tag: real estate investing

  • Take The Win

    Take The Win

    You don’t also have to announce it.

    Celina’s city council recently approved some incentives to land a second Walmart. I won’t break it down here, but it could be pretty substantial. And probably a smart move, I’d say. Sales tax is one of the few revenue levers a city actually controls, and a big box store just inside your line pulls shoppers in from both sides while the tax dollars only land on yours. So far, so good.

    Then the mayor opened his mouth.

    Ryan Tubbs told the room they were going to build the best Walmart they could “so every resident of Pilot Point comes and visits Celina and shops at Walmart… so that we cause sales tax leakage for our lovely neighbors.”

    He’s not wrong, that’s exactly what’s going to happen. Pilot Point residents will drive to the closer store, and Celina banks the tax revenue while Pilot Point’s roads absorb the traffic that got them there.

    But saying it out loud like that is a low status move. It’s also not smart business.

    There’s about a 100% chance Tubbs sits across a table from somebody in Pilot Point again before too long. A road project, a shared utility line, some regional thing nobody can avoid. And now he’s the guy who stood up and gloated about it on the record. Doesn’t matter that he was right. That’s not a great position to negotiate from the next time he needs something from them.

    Win the deal. Then keep your mouth shut about it. Be gracious.

    If you’re a land investor you know this.

    You make your money when you buy, not when you sell. Old idea, still true every time.

    When somebody’s willing to sell below market today, there’s almost always a reason behind it. A health scare, a divorce, a job that’s moving them, an estate nobody in the family wants to deal with, a note coming due next month.

    You didn’t create the situation. You just showed up with a solution when they needed one, and the price reflected the circumstances.

    The deal closes. You’re very happy with the deal. That doesn’t mean you explain to the seller how much you saved, or mention it to their neighbor, or bring it up again down the road when the tract’s worth double.

    You say thank you and you mean it.

    And that you hope your paths cross again, because in this business they usually do, and you want to still be the guy they’d sell to next time.

    Gloating doesn’t get you anything the win didn’t already get you. It just costs you the next deal, or the next referral, or the next seller who was on the fence and heard how you talk about the last one.

    Most of the good deals I’ve gotten over the years came from somebody who trusted me enough to call again.

    People have long memories when you make them feel like the loser.

    PS- If you’d rather hear about a deal before it goes anywhere else, I keep a short list for that. Nothing fancy about it. When something worth a second look clears my screen, the people on the list hear first. No spam, no newsletter, nothing on a schedule.

    [Add me to the list.]

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  • Only Two Problems

    Only Two Problems

    Most people only solve one.

    There’s a line that’s been passed around for years, usually credited to Jim Rohn, who said he got it from Neil Armstrong.

    Going to the moon only involves two problems. How to get there, and how to get back.

    The key is you don’t leave until you’ve solved both.

    Rural land investment is pretty similar, although a lot of people ignore one of the problems.

    First problem is pretty straightforward. You find something underpriced in an area where you expect values to grow. Then you run all the traps, and if it checks out you have something worth buying.

    What a lot of people forget is the second problem. What’s the plan for unwinding it on the back end?

    Then they buy it anyway.

    Ask how they get back out and you’ll usually get a shrug. Something about how land always goes up.

    There are only so many ways out of a piece of ground, and they’re all worth knowing before you own it. Hold it and sell it whole to somebody who wants what you wanted. Split it into smaller tracts, since smaller acreage generally brings more per acre. Develop it, if the location and the money and your patience all happen to line up. Put a building on it and collect rent. Farm it or lease it and let it carry itself while you wait.

    None of those is the right answer. The point is knowing which one you’re betting on.

    You don’t want to be rigid about it. Things change. Sometimes a better exit shows up than the one you planned on. A road gets built, a neighbor decides he’d rather be your buyer than your neighbor. Someone shows up with a plan you never considered and offers you a price you didn’t expect.

    When that happens you don’t turn it down, and you don’t fret about being “wrong” about how you would exit.

    But there’s a difference between changing your plan and never having one.

    And there’s a difference between a deal that looks good going in and a deal you know how to get out of.

    A land deal needs to work today, on today’s numbers. It also needs a believable way back out before you write the check. Both, not one.

    Miss the first one and you overpaid. That stings, and you find out about it fairly quick.

    Miss the second one and you didn’t buy an investment. You bought a place to keep your money where you can’t reach it.

    That one’s quieter. Nobody finds out for years.

    Then they need the money.

    P.S. Most of what crosses my screen doesn’t survive the first problem, let alone the second. When something clears both — priced right today, with a way back out I can actually explain — I send a short note to a small list of people who asked to see them.

    No spam, no newsletter, nothing on a schedule. Just a note when there’s something worth looking at.

    Check it out here

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  • The Ones You Never Heard About

    The Ones You Never Heard About

    Not every deal I lose track of was a bad one.

    A while back I flagged a property that looked promising. Priced well below recent comps, no obvious defects, decent location. The kind of thing I’d usually already have a home for before I even finished looking at the listing.

    This one, I didn’t.

    I made a couple calls. Nobody was in a spot for it right then. One guy just closed something else. Another was focused on a different area. By the time I got to the third call, somebody else had already put it under contract.

    I never even found out who bought it.

    That’s the part that sticks with me. Not that I lost the deal. I didn’t have a deal to lose. I just didn’t have the right person on the other end of the phone in time.

    It happens more than you’d think.

    Most of what I see isn’t worth a second look. Access, utilities, topography, floodplain, buyer demand, surrounding uses, and a dozen other factors kill most of it before it goes anywhere. But every so often something survives all that, and when it does, it doesn’t wait around.

    The properties that are actually underpriced don’t sit on the market long enough for you to find them on your own. Somebody has to already be looking, already know what you want, and already have your number.

    I think there’s a difference between wanting to hear about a good deal and actually being set up to hear about one.

    If you’re not on my list, you’re not missing out on deals I send. You’re missing out on deals I never get the chance to send, because I didn’t know to call you.

    I’m trying to fix that, one name at a time.

    If you’re an investor and want to be one of the calls I make when something survives the filtering, click below and tell me what you’re looking for.

    No obligation. No pressure. Just a way to make sure you’re one of the calls I get to make instead of one of the ones I don’t.

    Is it a bad idea to be on that list?

    Learn About The MBR Buyers Short List

  • It’s All In How You Look At It

    It’s All In How You Look At It

    We often make things harder in our minds than they really are.

    I’ve heard land investors talk about searching for deals and use the metaphor “like looking for a needle in a haystack.” And I get it. You have to look through a lot of stuff you don’t want to (maybe) find what you do want.

    But think about it a minute.

    And don’t assume rules that nobody spoke.

    Hay is flammable. Needles aren’t.

    Needles are magnetic. Ashes aren’t.

    So if you really want to find that needle, just burn the haystack. Then take a magnet or metal detector to find the needle in the ashes. And you’re done.

    Instead of getting worked up about how hard something sounds, just think it through and see if there’s a creative solution.

    I recently ran a quick search in the greater North Texas area (22 counties). In the land category, there were a little over 4,200 properties available.

    That’s a pretty big haystack. Over 99% of those aren’t going to be suitable for what you’re looking for. Makes it hard to want to start looking.

    And even if you could look through them all, the list changes every day. New properties come on the market. Others sell, expire, get canceled, or get reduced.

    I’ve figured out a way to screen daily for new and reduced properties that appear to be priced well based on recent nearby sales. Burning the haystack, if you will. That leaves me with a much shorter list to run the magnet over.

    Most low-priced properties are cheap for a reason. Floodplain. Access problems. Utility issues. Some other defect that isn’t obvious from the listing. Those get ruled out too.

    Every so often I end up with one or two that are worth a closer look.

    And I have a list of people I alert when that happens.

    But there’s not always a fit.

    It may not be in an area they like. Or it’s more (or less) money than they’re looking to invest. Or maybe they just bought something else.

    So every now and then I end up looking at something I think deserves a closer look and don’t really have the right investor to send it to.

    I’m trying to fix that.

    To hear about opportunities when they survive the filtering, click below and tell me what you’re looking for.

    No obligation. No pressure. Just a way to see what catches my attention before it disappears.

    Would it be a bad idea to know about them?

    Learn More Here

  • Everything Is Great, Til It Isn’t

    Everything Is Great, Til It Isn’t

    Then they explain to you how it wasn’t really their fault they lost 100% of your investment.

    (This one needs a big fat disclaimer: I’m not a CPA, licensed securities professional, an attorney, or anything like that. I’m a real estate broker. I shoot straight, but none of this is legal or financial advice. You should consult the relevant professionals in those fields should you have questions. All of this is for informational purposes only.)

    If you follow business news at all, over the last few months you know that commercial foreclosures are up (“commercial” being a catchall for anything non-residential, not necessarily retail buildings). Office and multifamily seem to be hardest hit. Especially class B and C properties.

    This month another large real estate fund announced investors would receive no return of capital.

    I’ve been at it long enough to see it play out more than once, although not always in the same market segment. You’ll see glowing profiles on a supposed investment genius who’s outperforming everyone, then a few years later you’ll see much more subdued stories about how his company imploded.

    Most of the time in these things, the people who appear the most successful when times are good are simply the ones who are taking the most risk.

    A rising market can hide a lot of mistakes, which you may not even realize you’re making. You start to believe your own hype, things keep working, and you do more and bigger deals. And since you’re succeeding, people throw more and more money at you, meaning you have to keep doing even more.

    Then the market turns, and there’s really nothing you can say but sorry.

    It happens over and over, especially when debt or leverage is involved. One minute you’re riding high, then your guru calls you and tells you all your money is gone.

    I prefer land investing on a cash basis. One reason: it doesn’t require a heroic story. It doesn’t need perfect occupancy, rent growth, refinancing, or favorable debt markets. You buy it right, keep your carrying costs low, and let time do most of the work. You may not see giant annual returns, but you’re also a lot less likely to lose everything because someone borrowed money against your investment. It may take longer to see a return, but looking at it historically, land prices have trended up in north Texas.

    That doesn’t mean throw a dart at the map and buy whatever it hits, of course. You make your money when you buy, not when you sell. The safest way to play is to buy things that are underpriced in today’s market, while also being in an area expected to grow.

    Easier said than done for most of us.

    I spend a lot of time looking at land. Most of what I see isn’t interesting. Occasionally something is.

    When I find something I think deserves a closer look, I let a short list of people know first. If that sounds useful, click below and tell me what you’re looking for.

    Takes a couple minutes, no commitment required.

    Learn About It Here

  • Sometimes It Just Works

    Sometimes It Just Works

    But even then, there’s always something when it comes to real estate.

    A few weeks ago one of my clients who’s worked with me over 20 years called and asked me to help him find something pretty specialized. I don’t take that sort of project on all the time, but I did it for him.

    And I’m glad I did.

    I ran a search that day, which flagged two properties. One was basically a perfect fit, so we made a cash offer and closed it yesterday. Less than 30 days from the initial phone call to the closing table.

    Sometimes it just falls into place.

    Thanks to Amin and Perry, listing agent Bill Benton, and the folks at Texas Pioneer Title for making it all go as smoothly as possible.

    When I say as smoothly as possible, I mean everyone was on the same page from end to end. A willing buyer and seller working to get it done.

    But it’s still real estate.

    Even after close to 30 years, it seems like something I’ve never seen before pops up on almost every deal. So you never really know if it’s closing until after it’s done.

    That happened on this one too, but we got it done.

    I don’t do much buyer representation in the way a lot of agents do. For several reasons. I keep my eyes open, and if I see an opportunity I usually know who to take it to. But doing a dedicated search for a specific thing for a specific person, not nearly as often.

    If they were all like the one that closed yesterday, I might change my mind.

    We found exactly what he was looking for, got it under contract quickly, and closed in less than a month.

    Every week I look at hundreds of properties. Most aren’t worth talking about. Some are. And every so often one comes along where my first thought isn’t:

    “Who’s selling this?”

    It’s:

    “Who do I know that should see it?”

    A lot of times I have an answer immediately.

    Sometimes I don’t.

    Wrong area. Wrong deal size. They just bought something else. Whatever the reason, occasionally I end up looking at something I think deserves a closer look and don’t have the right investor to send it to.

    I’m trying to fix that.

    If you’re an investor and would like to hear about opportunities when they come across my desk, click below and tell me what you’re looking for.

    No obligation. No pressure. Just a way for me to know who might be interested when something survives the first round of filtering.

    Is it crazy to think you might want to see the deals I see?

    Learn More Here

  • Trump’s Not the Only One Who Does It (And You Should Too)

    Trump’s Not the Only One Who Does It (And You Should Too)

    And the people complaining about it? They probably do it as well.

    A few weeks ago I wrote something on here that went all the way back to the 2016 presidential debates. The moment where Hillary Clinton tried to score points by saying Donald Trump had paid little (if any) income taxes in several years, thinking it would make him look bad.

    Instead of running for cover, Trump handled it exactly right.

    His mic was still on, Hillary kept talking, and he just cut in:

    “That makes me smart.”

    Most politicians would have tried to hide from a charge like that. They’d scramble to justify why they didn’t pay more than legally required.

    And they’d lose the argument before it even started.

    Trump leaned into it. He made it clear he (or his accountants) used the rules as written, which is exactly what anyone with common sense would do.

    If anything, it would be irresponsible not to.

    At the time I wrote that, I offered a short info flyer explaining Section 1031 Exchanges and how they can be used to reduce or defer tax liability on real estate sales. You can get it below if you want.

    (Insert the usual disclaimer here:
    I’m not a CPA or attorney. I’m a real estate broker. This isn’t tax, legal, or financial advice. It’s informational. Read it, ask questions to the right professional, and make your own decisions.)

    Quite a few people downloaded it.

    Probably because many already knew the basics — 1031s aren’t a new trick.

    But another thought crossed my mind:

    Some folks may have avoided the info because they didn’t want to be “associated with Donald Trump.”

    So let’s get something out of the way.

    Using tax law to your advantage isn’t a Donald Trump thing. It’s not a Republican thing. It’s not a Democrat thing.

    It’s a smart thing.

    And people on all political sides do it — especially the ones who complain about it publicly.

    “That makes me smart” wasn’t the last thing Trump said that night.

    When the tax topic resurfaced, he pointed out that Hillary Clinton had been a U.S. Senator and could have tried to change the laws, but didn’t.

    Why?

    Because her friends use the exact same rules he does.

    If you’re not doing the same thing, the only person you’re hurting is yourself.

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    So if you own land or are thinking about selling, and you want to understand how real estate tax law actually works in the real world — not in political talking points — start here.

    Click to learn more.

  • You Don’t Know Who’s Swimming Naked Until the Tide Goes Out

    You Don’t Know Who’s Swimming Naked Until the Tide Goes Out

    Up-markets reward risk. Down-markets reveal fraud.

    (This one needs a big fat disclaimer: I’m not a CPA, licensed securities professional, an attorney, or anything like that. I’m a real estate broker. I shoot straight, but none of this is legal or financial advice. You should consult the relevant professionals in those fields should you have questions. All of this is for informational purposes only.)

    Now that the attorneys are off our back:

    Real estate cycles run longer than stock market cycles.

    That’s because real estate isn’t liquid.

    When stocks fall, you can still sell. There’s always new retirement money flowing in, keeping things moving.

    (yes, it’s by design that the least sophisticated investors basically have no other option but to sink their 401k money into the stock market. He who has ears to hear, let him hear.)

    But in real estate, when the market turns, the buyers disappear.

    And that’s when you find out who was actually making money because they were good — and who was just making money because prices were going up.

    We’ve been in an expansion phase for a long time.

    For most people in the business today, the only market they’ve ever known is a rising one.

    That creates a specific kind of confidence: The kind that comes from never being tested.

    The people who look the smartest in an up-market aren’t usually the best operators.

    They’re the ones taking the most risk.

    Leveraged to the hilt. Borrowing against deals to buy more deals. Investors nodding along because so far everything has worked.

    And yes — some promoters are already doing things their investors don’t know about.

    (I don’t know about anything specific so nobody call their lawyers…it just happens all the time)

    When everything goes up, nobody asks questions.

    When everything stops going up, everyone asks questions at once.

    That’s when the tide goes out.

    And then you’ll hear the stories:

    • “We didn’t know.”
    • “Nobody could have seen it coming.”
    • “We trusted the wrong guy.”

    And some of those investors really will lose everything. Because they either didn’t ask enough questions, or didn’t want to hear the answers.

    Warren Buffett said:

    “You don’t know who’s swimming naked until the tide goes out.”

    He’s right.

    But the part people forget is this:

    The down is always faster than the up.

    So pay attention to who you’re trusting — not just what the deal looks like.

    Because a good deal with the wrong manager is a bad deal. And if you aren’t sure they’re trustworthy?

    Assume they aren’t.

    There are plenty of good deals out there.

    Make sure you’re in one of those.

    Sign up here for more!

    PS: I offer free value analysis on any land or lot property (not houses).

    You’re probably not looking to sell today —

    but the time to prepare is before you need to.

    There’s no charge, and there’s no downside to having current market info.

    Is it ever a bad idea to start getting to know honest people who deal in what you already own?

    Click below:

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  • Guaranteed Returns? Guaranteed Trouble.

    Guaranteed Returns? Guaranteed Trouble.

    Experts aren’t free — but getting scammed will cost you more.

    A few years ago, there were radio ads from an investment firm promising a guaranteed 9% return.

    That always struck me as suspicious. There’s no such thing as guaranteed investment returns. Anyone promising that is either dishonest or incompetent.

    And if you really could generate a 9% return with no risk, there wouldn’t be any need to advertise. Money managers would be running each other over to get clients into it.

    Turns out, I was right. A few years later, the guys behind the scheme were sentenced to decades in prison.

    And in the small-world department — the lead investigator who arrested them was also my daughter’s soccer coach.

    But here’s the thing: if you listen to the radio today, you’ll still hear similar promises. I won’t name names (no need to get a call from anyone’s lawyer), but the fact remains:

    There’s no free lunch. Investments carry risk.

    That’s true whether it’s financial instruments, real estate, stocks, or bonds.

    Those “opportunities” were sold through mass media — where they reach the most people, and often the ones least prepared to know what they’re getting.

    The sad part is, if the victims had talked to an honest professional, they probably would’ve been steered clear of the whole thing.

    We’ve all heard the saying: If something sounds too good to be true, it probably is.

    But here’s something else to remember:

    You always have to do your due diligence, but if the deal comes looking for you instead of the other way around, you have to be especially careful.

    So what does that have to do with real estate?

    You know I’m biased, but if it’s done properly, I think there’s much more opportunity in real estate investing than in retail stocks or mutual funds.

    If it’s done properly.

    If you’re not experienced, it’s easy to get in over your head.

    Like I said, I’m biased — but if you’re not using the services of an experienced and honest broker (hello), you’re setting yourself up for trouble.

    Is it free? No.

    Is it cheap? Not really.

    But it is a bargain.

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    If you’re looking to invest/buy or sell, is it crazy to want to have skilled people on your side?

    Didn’t think so.

    Click below.

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  • A $3.5M Deal That Was Never Meant to Happen

    A $3.5M Deal That Was Never Meant to Happen

    When it looks too good to be true, it usually is.

    Yesterday I was talking about how I need to be able to spot a deal instantly, because the kind of deal I can sell with one phone call doesn’t stick around.

    And how I might only see a few of those in a year, even though I’m looking almost every day. Maybe a 1% chance on any given day, probably less.

    So guess what happened yesterday?

    Right after I finished writing about how rare those are, I jumped into my usual search and came across something that looked promising. Asking price: $3.5M.

    It’s not an area I work in much, near Texas Motor Speedway. Tons of development happening out there. And a quick check showed that several major players already own the land close by.

    That alone tells you a lot. When I say decades of experience pay off, this is what I mean. Not only can what and where tell you something, but who is a big factor too.

    Now, I wasn’t 100% sure it was a deal. But it was close enough to rattle a few cages. That’s another piece of experience: knowing when to share something and when to hold back. You don’t want to be the boy who cried wolf, but you also don’t want to miss something real.

    I’ve done both. It stings more when you don’t share and that person ends up buying it through someone else.

    So I reached out to the listing broker with basic questions about utilities, zoning, etc., and then contacted a client who could handle a deal that size.

    Then I waited.

    Later that evening, I got a mass email from the broker. Turns out their office made a mistake. The asking price wasn’t $3.5M—it was $4.9M. If anyone wanted to update their offers, now’s the time.

    Apparently, they got multiple contracts within hours. Meaning my gut was right: at $3.5M, it was a deal.

    At $4.9M? Not so much.

    So I’ll keep looking.

    And as always—if you ever need someone who can spot these things before the crowd, you know how to reach me.

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