Real Estate Investing for Beginners

After reviewing my numbers for 2013, about 1/3 of my business this year has been from an investment standpoint.  Whether it was to flip, rent, or even buy for a 4-5 year college student, all of these represent real estate as an investment other than a personal residence.  I personally like to work the investment side of real estate and have worked with a few “newbies” this year, so here are some basic tips for other new investors who may be looking to get started.

  1. Consider forming a LLC –  This is especially important if you are working with rental property.  You do not want to expose your personal finances or your family to any sort of issue that could result in litigation.  They are also beneficial to help keep your accounting in order for tax and write-off purposes. LLCs are inexpensive to set up and information can be found at the Secretary of State’s website.  
  2. It’s all about the numbers – Real estate investing only works if there is a gain to be made in some fashion.  A saying among the investment crowd that is VERY true is that you make your money “when you buy.”  You have to look at the return on your initial investment plus any debt you take on to own it.  The same goes with flipping – a flip only works if you know exactly what it will cost BEFORE going in, and then getting the property at the right price.  If you can’t get it at the right price, move on to the next one.
  3. Know your tolerance for risk – Unlike stocks in which you can move in and out of positions very quickly, real estate investing requires more patience and composure.  Your reward is the higher potential return on your investment in sometimes relatively short periods of time, especially if you are flipping.   Know what kind of investing personality you are – conservative, moderate, aggressive?  There are are real estate investment options for all three types, which leads to tip #4…
  4. HIRE ME for your real estate investing – I have worked with investors of all types, from novices to high-volume professionals.   I have loyal clients who return to me consistently to provide information, do market and investment analyses and to place bids FAST.   Not all real estate agents are a fit for the investing client because of the unique demands required to do it properly.  You need to hire someone who is aware of the investing market, experienced in navigating distressed properties (a main source of investment property), and willing to go the extra mile to ensure your investment is the right one for YOU.  Call me at my number below and I’ll help you get started for 2014!

Sincerely,

David R. Madaffari, Realtor
Keller Williams Realty – First Choice
Office: 225.744.0044
Cell: 225.772.3283 (DAVE)
37325 Market Place Dr. Ste D
Prairieville, LA 70769
www.DavidMadaffari.com
Each office independently owned and operated

Craigslist Kills Off Ability to Post Enhanced Ads – Real Estate Agents and Investors Affected

If anyone has perused Craigslist for homes for sale, you would have noticed the wide array of ads placed from individual sellers to powerful real estate teams.  Real estate agents especially had an advantage by being able to create great-looking HTML ads to place right in their postings to separate from the crowd.  The ability to post links to pre-filtered searches (for example “Click here for all Foreclosed homes in Baton Rouge”) was a great buyer lead-generating tool.  On November 7th, Craigslist eliminated this functionality without warning.  Here is an article below.

Craigslist Kills Off Ability to Post Enhanced Ads – Real Estate Agents and Investors Affected.

As a free market ambassador, I believe whole-heartedly that the motive here is exactly as the article states at the end – to ultimately monetize more of Craigslist.   For now, I guess my HTML and coding background will come in handy as I re-vamp my ads to stand out among the rest!

David R. Madaffari, Realtor
Keller Williams Realty – First Choice
Office: 225.744.0044
Cell: 225.772.3283 (DAVE)
37325 Market Place Dr. Ste D
Prairieville, LA 70769
www.DavidMadaffari.com
Each office independently owned and operated

The City of St. George Gathers more steam

Today I am featuring the website of the proposed new city in East Baton Rouge Parish, the City of St. George.  This new city would be formed from the southern, unincorporated parts of the parish in much the same way that Central incorporated 10 years ago.

The City of St. George, LA.

The proposed city was born out of frustration that a new school district was not granted to the area by the legislature.  After this denial, the residents of this area turned to the state’s procedures for incorporating an entire city in order to achieve their new school district.  With a goal of getting 18,000 signatures on the petition to incorporate, they are roughly 25% of the way there with more petition signing events planned.

If you or someone you know resides in the area described via the map on the website, this is a great chance to learn more about the proposal.

Many opponents say this effort is designed to tear apart the city of Baton Rouge and has more socio-economic underpinnings rather than an altruistic attempt to better the local schools.  So the Questions of the Day are:  

  1. At what point (and size) should a group of citizens be allowed to form their own local governments to reach their own common goals?
  2. Does the state or city government have a right to deny said group of citizens from forming their own local municipality if it is the “will of the people”?

– David Madaffari

Biggert-Waters Flood Insurance Rates Delayed

In the last few days, Congress has come to an agreement to delay the implementation of the Biggert-Waters Act and the proposed rate hikes for those in flood prone areas.  The following article from the Insurance Journal details the story.

Bipartisan Deal Reached to Delay Flood Insurance Premium Hikes: Waters.

This is very good news for our friends in the low-lying parishes as well as us “up here” in the Baton Rouge area.  Ascension and Livingston had been seeing some effects of the proposed changes and while not widespread, some of the renewal rates were shocking.   With this deal, FEMA now has 4 years to conduct more appropriate feasibility and affordability studies to implement this in a responsible and fair manner.

What is more interesting about this legislative fix are who the opponents are.  Some taxpayer groups, are calling the delay “disastrous”, making the case that taxpayers should be furious over the delay in order to fund an insolvent program, essentially wasting tax dollars.   However, it is these same taxpayers that could be literally left out in the cold and sitting on un-sellable property if the original legislation progressed as planned.   Those taxpayers are actually getting what they pay for in the form of a subsidy to help them afford the homes they are in!

What are your thoughts – should we “rip off the band aid” and allow the flood insurance rate hikes to take affect swiftly to make the program solvent?  Or should we delay the implementation at the cost of more taxpayer dollars in order to work through the kinks?


 David Madaffari