Rum and Real Estate – Episode 10

Low interest rates are making many clients consider a refinance. How, when and under what circumstances should you refinance? I offer some tips and rules of thumb on how to think about whether a refinance is right for you. It’s not just about the interest rate.

Rum of the day: Botran Aged Rum from Guatemala!

Stay Positive and Love Your Life,

David Madaffari, Realtor

Beware of Tenants

When tenants in your rental go bad, they can go REAL bad. Check out some of the photos of this home in Old Jefferson after the tenants vacated. They basically didn’t let their pets out of the house for two years. If it is what you think it is, you are absolutely right….

This caused about $6,000 worth of damage to the house and required the entire concrete floor to be scrubbed and resurfaced in order to mitigate the stench, meaning all flooring had to be removed. Every wall had to be repainted since they also decided to repaint without permission either. Word to the wise – screen your tenants and check in OFTEN!

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David Madaffari, Realtor

Mobile: (225) 772-3283
Email: David@GrassrootsTeam.com

Jonathan Diez, Realtor

Mobile: (225) 938-4653
Email: Jonathan@GrassrootsTeam.com

Keller Williams Realty First Choice
17111 Commerce Centre Dr.
Prairieville, LA 70769
(225) 744-0044

Mobile Home for Sale – $1,000 OBO

A client of mine owns this trailer, and is looking for someone to come take it.  It needs a lot of work, but $1,000 for a shell is a good deal for someone who can fix it and rent it on their own land.  The trailer is located in Boutte and is ready movable.  Call  me at 225-772-3283 for details.

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Multi-Family Property Roundup

Here are some of my favorite multi-family property listings on the market right now, that have great returns that justify the prices they are asking.

5244 Brightside Park Units A-D, Baton Rouge, LA 70820

  • 4 Units, 2 bed/1.5 baths, 1,100 sq ft each in great shape.
  • Asking $419,900, Potential gross income $4000/month

 

 

343-345 Jennifer Jean Dr, Baton Rouge, LA 70820

  • Two 3 bedroom/2 bath units close to LSU, renovated nicely.
  • Asking $225,000, Potential gross income $2,200-$2,400/month 

4504 Walmsley Ave, New Orleans, LA 70125

  • Two 3 bedroom/1 bath units, renovated in New Orleans.
  • Asking $195,000, potential gross income $2,100/month

Call me to place a bid on any of these, I have extensive knowledge on each!

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

Home Prices expected to rise 4.8% in 2015

Investors Business Daily, my go-to site for stock and economic news had this article regarding home price trends in 2014 and the outlook for 2015.  It’s a quick read, but very informative.

http://news.investors.com/business-inside-real-estate/020715-738427-real-estate-home-price-forecast.htm?ref=HPLNews

Maybe I should invest in some DR Horton stock – they’re building everything in sight these days!

– David

 

Cash is King – REO Property Sales 2014

Yesterday we saw that all distressed and REO property sales in Ascension combined for a 97% average list/sold price ratio when considering all types of financing.  When we think about that, that’s pretty much a normal market for non-distressed property.  “But aren’t foreclosures and short sales supposed be deals for investing?”  Yes, but knowing HOW to buy is just as important as WHAT to buy.

Simply put: Cash is KING.

Looking at the cash sale numbers you’ll see what I mean.  Check out the percentages now for all 58 cash purchases:

2014

2013

In 2014, the average discount you could expect was 87% from the original list price; in 2013 it was 86%.  Looking at the bottom line of each graphic, the total volume of lis/sold prices was 86% in 2014, 8 points higher than the total volume of 2013.  The conclusion? There is more competition for these properties.

So while banks are putting their properties on the market at fair market value,  the ability to pay cash is the best leverage you can have to get the right price.  Offering at 86%-88% of list price represents where you can expect the highest rate of negotiating success.

Tomorrow we’ll do all East Baton Rouge cash sales.  In 2013 the average was 88% – how did 2014 fare?

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

REO Properties – 2014 Sales numbers

In today’s REO Properties update, we look at the numbers for all Ascension Parish distressed sales in 2014. These are for ALL financing types, not just cash only sales:

2014 Ascension parish REO Sales

Compared to 2013:

The main numbers to look at are the Avg Selling Price to List price (SP/LP) ratio.  For all sales, foreclosed homes sold for 97% of the bank’s list price at the time of sale in 2014, up 1% from 2013.  The implication here is that Baton Rouge is a hot foreclosure market not just for investors but for all buyers.  Banks know this, so it is more time-consuming to find the deals.  We have seen more financed foreclosed sales from owner-occupants in 2014 than in 2013 too, which means investors have faced competition for the same property they enjoyed almost free reign on from 2011-2013.

Tomorrow we’ll look at how just the CASH sales for Ascension parish REOs changed from 2013 to 2014, a figure investors should use to determine what their bid prices should be for 2015.

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

Can Tigerland be saved?

I’ve been wondering about this for years.  What seemed like a good investment for rental investors is now becoming a no man’s land.  The 70s era pictures of Tigerland are great though!

Can Tigerland be saved?

 

 

 

 

 

 

 

 

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

Adjustable Rate Mortgages Making a Comeback

I saw a post by a fellow agent on Facebook asking our opinions on the below article from the Wall Street Journal.  It talks about how Adjustable Rate Mortgages (ARMs) are seeing more interest from borrowers, but lenders insist that instead of focusing on subprime borrowers, they are marketing to the “jumbo” loan market.

Adjustable Rate Mortgages Make a Comeback – WSJ

I believe these loans still have a place in our market, even for non-jumbo borrowers.  For example, I refinanced my own home to a 5-year ARM loan in 2012- where the interest rate is fixed for 5 years before adjusting each year.  I locked in a paltry 2.75% interest rate for 5 years, cutting my interest rate 45%.  I now save $414/month on my mortgage, and the cap is 7.75% once it starts adjusting.  Even if it got that high I wouldn’t be paying any more than I already was when i bought the house, probably STILL less.  And with 5 years of a 2.75% interest rate, more of my payment is going towards principal and NOT interest.

It does beg the question – has the media lambasted the ARM loan to a point where consumers don’t even consider them without knowing the details?  With a good down payment and a short-term window, ARM loans are a great way to save money.  You can get them in 3, 5, or even 7 year terms, all with lower fixed rates than conventional financing.

What are your thoughts?

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

Trulia and Zillow Stock Hammered by Bad Earnings Report

Friday was not a great day to be in the online real estate information business.  After Trulia’s horrendous earnings report of a $11.1 BILLION loss in the December quarter of 2013, the stock tanked almost 18%.   As a secondary effect of the report, rival Zillow also fell about 10%.  Click here to read the full story.

One thing to remember about sites like Trulia and Zillow are that while they spend a lot of effort marketing their site to sponsors, agents, brokers and end-users, it is ultimately your trusted Realtor who can give you the most ACCURATE information on any property.  I can’t tell you how many times I have fielded the response “Zillow says this house is for sale” when it was actually withdrawn or even sold two months ago.  Remember, third-party sites not linked directly to your Realtor will always have a lag time when it comes to updating information.

What Trulia and Zillow do is rather extraordinary – they gather MLS and public record data from all over the country and display it for the world to see.  But something so complicated does have it’s drawbacks, and increasingly Realtors have similar tools (like our new Realtor Property Resource tool or MLS Data Co-Op) that can find the most up-to-date information for you.

As an investment, I’d buy into Trulia right now only because an 18% dip only has one way to go and that is up.  It’d be an easy way to make a few bucks at least!

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