Mike Browning

Tag: real estate investing

  • 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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  • Avoiding Self-Inflicted Wounds Since 1999

    Avoiding Self-Inflicted Wounds Since 1999

    I’ve been learning from mistakes (mine and others) for a long time

    A client of mine recently went under contract on a tract we think is prime for an acreage lot development. It’s outside any city limits—thankfully—so we’re dealing with the county instead of some slow-moving municipal planning department.

    County processes? Still not fast. But we’re talking 1–2 months for plat approval instead of 5–6. That’s a win.

    Even better, the seller had already started working with an engineer, so we’re ahead of schedule compared to most deals like this.

    But before you do anything with a plat, you have to confirm the local water co-op has capacity to serve the project. If they don’t, you need to know what has to happen to get service.

    That starts with paying $1,000 to their engineer—just for them to look at it. Seems like a few hours of work, right? Nah, they’ll quote you “a few weeks.” Feels like a racket because it kind of is. But here we are.

    Knowing this, I negotiated a 60-day option period for my client to complete due diligence. And in case we needed more time, we got two 30-day extensions built in—for a nominal fee that gets credited toward the purchase price. So, effectively free if the deal closes.

    Now here’s where things really went our way:

    The engineer came back quickly (shocker) and confirmed there is capacity—without needing system upgrades. That never happens. But we’ll take it.

    Phase I of the plat has already been approved. It just needs to be filed, and we can start selling those lots—they don’t require new streets. The rest of the plat is moving toward approval too.

    Now the seller wants to know: “Are you going to skip the extensions and close sooner?”

    I haven’t even asked my client, but I can already tell you the answer—hard no.

    Here’s why:

    When you’ve got a property under contract, you control it—without paying for it yet. That means we can start talking to builders and buyers, even write contracts on the lots. We just can’t close those until we officially own the land.

    Meanwhile, the purchase money? Sitting in my client’s bank account, earning interest.

    No brainer.

    When negotiating, I honestly expected the seller to insist that any extension fees be added to the price, not credited toward it. And that it be new money, not just a release of funds already at title. Nothing too crazy—just enough to make it worth our while to forgo an extension we don’t really need. And we’d have agreed to it.

    Why didn’t he? No idea. Maybe he didn’t think it through.

    Why didn’t I point it out? I’d have been breaking my fiduciary duty to my client. Plain and simple. It’s my job to get my client then best deal, not the other way around.

    So here are two takeaways:

    1. If your contract gives a buyer extension options, assume they’ll use every single one and close on the last day possible. That’s just smart business on their part.
    2. If you’re not experienced negotiating land contracts, there’s a good chance you’ll put yourself in a non-ideal but avoidable situation. This can cost you time, money or both.

    Having the right person on your side matters. Not every deal is perfect, but if I’m representing you, you’ll know exactly what you’re getting into—before you sign anything. Not after.

    Thinking about selling? You know where to find me.

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