Real Estate Market – December Sales And 2021 Totals

December 2021 and Year-To-Date Residential Sales Numbers

Here’s an update on the local market in the Bayou Board of REALTORS® region, showing December 2021 and the Year-To-Date numbers.

Listings fell in December by almost a third compared to December 2020, which is also reflected in the overall trend for Months Supply and Inventory of Homes being lower YoY.

Pending sales were slightly down and closed sales were up 5%.

Both Median and Average sale prices were down for the month, but up YTD.

Speaking of Year-To-Date, New Listings were down 9%, but Pending and Closed Sales were both up.

What Does It Mean?

There is no doubt that we are still in a Seller’s market. There are less homes for sale than there are buyers looking.

If you are a buyer, it means that it may be a little tougher to find a deal. Homes are being put under contract almost immediately after being listed, so working with a dedicated REALTOR® can help you to get you in the home you want.

If you are a seller, this means that there are lots of buyers out there for your home. Things can move quickly! And with the Median Sales Price continually climbing, it makes even more sense to consider selling and harvest your equity appreciation.

Median Sales Price, December 2021

If you are thinking about selling your home and would like to get a valuation estimate, click here to request a Complimentary Home Valuation Estimate.

Let me know if you have any questions about the market. I’d be happy to help you with any needs.

Remember, if you have a real estate need, whether buying or selling, give me a call or shoot me an email. It doesn’t matter if you are outside of my area, I can connect you with a Rockstar Real Estate Agent!

Clint C. Galliano, REALTOR® 985.647.4479

Clint C. Galliano, a native of Lafourche Parish, has lived in the Houma-Thibodaux area for over 34 years and is currently a REALTOR® with Keller Williams Realty Bayou Partners in Houma, La. He has been involved with real estate investing since 2017 and hosts the local Real Estate Investment Association. Real Estate is his passion. Clint previously worked in drilling fluids and drilling fluids automation for 28 years. He lives in Bayou Blue with his wife and two daughters.

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Personal Finance – Cutting the Cord Edition

Do you have cable and/or cable services like phone, tv plus premium channels, and internet? Does it seem like the cost keeps going up? ME TOO! LOL

Read on to see what we did to reduce our costs for these services.

Initial Setup

Our entertainment setup consisted of two Tivos, (1-Premiere model capable of cable & OTA Reception, 1-Roamio model-cable reception only), four TVs, (1-LR, 3-BR), two digital signal adapters for the Kids’ bedrooms, two Firesticks (LR & MBR), VoIP phone from the cable provider, mid-tier cable TV package with no premium channels, (up to) 150 MB/s internet connection, a family Netflix subscription (allowing simultaneous logins), Prime Video (complimentary with Prime account), and a promotional Hulu account for $0.99/month for a year. Our cable, phone, and internet were all with Comcast.

Our bill has gone up & down depending on what promotional package we would renegotiate for, but that involved going to the cable company office, in person, and asking for it, usually after waiting in line for a while. That was aggravating enough, but the bill would continuously increase, outside of the changes to promotional status.

We don’t watch a lot of TV. Just a few shows. And we never watch them live. We have too much other stuff going on. I started to evaluate our habits after our total bill came off of promotional status, raising the cost from approximately $137/month to $165/month. Then, for no reason, it went up to $174/month.

It turns out that most of the shows we watch are either only on a streaming service or show up on Hulu. It should be acceptable to only use streaming services. We decided to get an antenna to pick up local stations. We figured it would be hit-or-miss, because we live between 40-50 miles from the regular broadcast network towers. BUT, if we could get some channels, we could still get news during a storm if the internet goes down.

Click on this link to get your own free copy of the Rental Property Tax Guide by Stessa.

What We Changed

I discussed the idea with my wife and we decided to get an antenna and try it out. I researched antennas and almost bought a couple of different expensive ones, (amplified, slick advertising, etc.), but decided to start at a lower price point, always having the option to escalate, if needed. I settled on the GE Pro Outdoor/Attic Mount Antenna. It claimed to have a range that would allow us to receive the stations we wanted.

When it arrived, I connected it to the TV in the living room, (with the antenna sitting on my couch) and scanned for channels. It was able to pick up around 33 channels!

I then mounted it up in the attic and connected the living room TV to it, resulting in 38 – 42 stations coming in, depending on the weather.

I added a signal booster / splitter that would allow me to connect the other three TVs to the antenna. I was able to hook them up and get the same channels, so all was well.

The Tivo Premiere is able to receive Over The Air (OTA) signals to the tuner, so we set it up to record all of our broadcast network shows and we can use the  Tivo Roamio in our bedroom to watch the recordings via network transfer between the Tivos.

We additionally got Firesticks for each of the kids’ TVs, allowing them to access Netflix & Hulu on their TVs.

Because we were still using the “Triple-Play Gateway” modem-router-access point, it would continue to cost us an additional $13/month in device rental fees. I didn’t like that. Time for more research!

I found a cable modem, (MOTOROLA 24×8 Cable Modem, Model MB7621) that would continue to provide us with the same speeds we were getting with the Comcast gateway, but it was only a one-time cost of approximate $70, as opposed to the monthly charge for the device rental. I got it, hooked it up and was able to configure it online in less than 10 minutes.

Our plan was to keep the internet. During my research, I called Comcast and asked about the internet charges, because their website said normal charges for internet were $71-$80/month, and was told that the price would indeed be $80/month.

Now that all of the hardware was replaced, I went to the Comcast office to return all of the equipment. The guy behind the counter said “OK, we can set you up with a promotional rate of $54.95/month for internet only, at the current speed you have.” Bingo! This is the same promotional rate they are offering to new subscribers for twelve months! I was ecstatic!

Cost Reductions

Before

Monthly recurring costs were $174 for TV, phone & internet = $2,088/year

After

Monthly recurring costs are $55 = $660/year

One-time costs were approximately $240 for the antenna, splitter/booster, 2 Firesticks, and a cable modem.

Net Savings of $1,188 in the first year (495% ROI) and continuing savings of $1,428 per year going forward.

Have you or are you thinking about cutting the cord? Let me know in the comments.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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REI – Acquisition of Rental #3

This post is just a short update on REI. We had a deal drop in our lap.

The Deal

We were not specifically looking to buy another property immediately. As detailed in a previous post, we were working on a deal earlier in the year, but it did not work out.

 

A member of the local REIA, who is also a realtor, has been looking out for properties I might be interested in. I had given her the specifics: three-bedroom, two-bath home on a slab foundation, preferably brick façade, in Thibodaux, in a decent neighborhood.

She had showed a couple of homes that were close, but not quite right for us, in addition to a mobile home park that was just too much for us to take on. (This was just prior to my surgery)

She contacted us with a property that fit our description exactly and told us the listing price, $144,500, and to make an offer. She indicated that the sellers were motivated. I looked it over and saw that we would be looking at a similar ROI to the property we bought last year with an offer of approximately $111,300. I did not think that the owners would accept that and they didn’t. They countered with $125,000 and we countered back with $112,451 cash sale with an end of month closing as a best offer. This would give us a ROI of just under 7%, based on a conservative analysis.

We fully expected things to end there. The sellers asked for the weekend to think about the offer, so we agreed.

On Monday, they accepted the offer (to our surprise) and we began the inspection period.

We set the closing date for the first Friday in December, as this was the soonest that the real estate attorney could complete the paperwork.

 

During the due diligence period, we determined that the only things needed were to change the locks, change an over-sized circuit breaker, and some minor cosmetic work.

 

Updated: We now have it listed for rent and are taking applications. The property was rented for January.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

 

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Personal Finance – What Can I invest In?

This week we are talking about different types of investments that you can utilize to better your personal finances. I’ll briefly touch on traditional investments (stocks, bonds, etc.), investing directly into a business, and various forms of real estate investing.

Additionally, I would like to give a shout-out to @DeliberateKevin for the guest post last week. Go check out Deliberate Consulting.

“Traditional” Investments

Traditional investments are what most people usually think of when they think of “Investing”. This can be stocks, bonds, Exchange Traded Funds (ETF), etc.

There are three main approaches you can use:

• Investment Advisor
• Robo Advisor
• DIY

Investment advisors usually handle clients’ money for a fee. In most cases, that fee is a percentage of the total portfolio balance. Additionally, unless the advisor has a fiduciary duty to you, the investor, they may push you towards investments where they get better or additional commissions, as opposed to investments with less fees and/or commissions involved. Also, you need a sizable balance to start your account, say, in excess of $500,000.

 

Robo Advisors are basically algorithms that select the best investments based for you based on many criteria. They usually invest in ETFs and can automatically do things like rebalance portfolios, automate tax loss harvesting, etc.  They tend to operate on a fractional percentage commission, meaning that they are usually cheaper than a full-blown human investment advisor. Robo Advisors will also allow you to start an account with a much lower balance than a traditional financial advisor, with some allowing you to open an account with no money, though you will need to put money in to invest.

 

DIY or Do It Yourself is another approach you can take. It costs you no fees other than trade fees and you don’t need a large balance to start. But, you will have to spend a lot of time researching your investments and deciding where to put your money. You can start with as little as the price of a single share of stock and the trade fee.

 

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Direct Business Investment

 

You can invest into a business outside of stock. This can be in the form of buying a franchise, buying a share of an existing business, or even taking your non-retirement account money and opening a business. A word of caution: Be sure to perform thorough due diligence into any business you invest in like this and if investing with partner(s), ensure you have a sound operating agreement in place and that everyone abides by it.

See more on starting a business with partners: BUSINESS STARTUP: 9 TIPS FOR STARTING A SMALL BUSINESS WITH PARTNERS

 

If you only have retirement account funds available, either from a 401k from an previous job or an IRA (Individual Retirement Account), you have the option to buy or start a business using those funds through a Rollover Business Startup (ROBS) transaction, also known as Business Owner Retirement Savings Account (BORSA). This allows you to utilize the money you have saved to start a business without incurring taxes or penalty. There are specific restrictions that go along with it and it has to be administered by a qualified group. Companies like DRDA and MySolo401k can help you deal with this type of thing.

 

Real Estate

 

The last type of investing option I am going to talk about is real estate. As I have talked about before, I like investing in real estate, in addition to other types of investing. Real Estate has options that range from very hands-on and intensive involvement to very passive hands-off approaches.

 

Direct Investment – Real Estate

If you have money sitting around, or you decide you want to follow the Tim Ferriss approach and dreamline a muse to support real estate investing, you have lots of options.

You can wholesale, which is finding people with a need or desire to sell a property that doesn’t qualify for traditional financing or need the funds in a short time period (need a quick closing).

You can Fix and Flip. This involves buying a distressed property at 30% or more below market value (where market value is considered the after-repair value or ARV) and rehabilitating the property, then selling it at or near market value.

You can also buy and hold, the term for investors that buy property with the intention of renting it out over the long term. Generally, these investors like to acquire their properties in a similar state to the Fix and Flip investors, but do not sell the properties.

A less well-known approach is to invest in Notes. These are mortgages that the banks sell off at a discount to get their capital back & re-deploy it in another loan. There are note funds in addition to you being able to buy notes directly.

Most note funds require that you be a sophisticated investor. No, that does not mean that you have to drink your tea with your pinky out and wear a three-piece suit every day. It is a category defined by the government as having an income of $200,000/year if single, $300,000 if married, OR $1,000,000 in net worth, not including your primary residence.

 

Self-Directed IRA – Real Estate

Like the ROBS/BORSA methodologies mentioned above for direct business investments, there is a self-directed IRA (SDIRA) that can be used to invest in real estate. They can be used to buy investment properties or, in some cases, to actually BE a “bank” of sorts.

Some caveats with using an SDIRA to buy investment property: You cannot take advantage of depreciation on the property, so you lose out on some tax benefits; You cannot receive any immediate benefit from the investment. All returns from the investment belong to the SDIRA.

 

Another option is to become a private lender. Basically, you are becoming the bank, lending money on a short-term basis, to a real estate investor. They benefit from quicker and usually cheaper closings and you as the lender benefit from the interest earned by lending the money, which usually is more than you will make in the bank or other investments.

 

Hopefully giving you this overview of different types of investing will help further your knowledge and be a starting point for your own investigation into how best to invest your money.

 

 

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

Personal Finance – How NOT To Spend Your Money

Welcome back!

This week I am going to go over how NOT to spend your money. There are lots of good things to spend money on, but I continually observe people spending money so they can feel like they are keeping up with the Joneses or because they “deserve” it. And avoid misunderstanding, I am not advocating frugality, just better decision-making when spending money.

 

Everyday Observations

 

Bad spending habits observed recently:

Withdraw money from an old 401k account to go on vacation

Spending money to set up a business, but with no initial business activity

 

Early 401k Withdrawal

If you have money in an old 401k, use it for the intended purpose: Savings for retirement! It is understandable if you have a hardship and need the money to help deal with that, but just pulling the money out to go on vacation is a bit ridiculous. In addition to diminishing the amount of money to be available at retirement, you also have to pay a penalty on the money you withdraw, in addition to taxes at your current rate.

 

Amount needed to withdraw from old 401k to get $8000 for a vacation.

 

As an example, assuming a 24% tax bracket, if you want to use $8000 to go on vacation, you will need to pull out almost $13,000 to cover the $1,290 penalty and approximately $3,097 of taxes to end up with $8000 to go on vacation.

Not only do you lose 34% off of the top of your money, you also loose any additional earnings by not having that total amount of money still invested.

 

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Setting Up a Business Entity with no Business Activity

I understand the desire to get out of the rat race, to start your own business, and not have to work for someone else. I am right there with you! But take a practical approach. Take a practical approach. I see people starting up LLC entities, putting up websites, and paying for business infrastructure before they have any business activity. That is definitely putting the cart before the horse. If you spend that money, but do nothing in the way of generating business, then that is a wasted expense.

You would do better spending money on actual business-generating activities than paying for infrastructure before you need it.

 

Suggestions

 

Vacations

Plan your vacation as inexpensively as possible. Don’t skimp, just don’t pay $1200 a night for a room when you can rent a whole condominium or home for $110 per night in the same area.

Carry snacks and drinks with you so you don’t have to pay $4-$5 a person for snacks and $3-$4 per person for drinks. No need to carry enough for the whole day, but if you can save $28-$36 for one round of snacks & drinks a day, that cuts your total expense.

Save money until you have enough to go on vacation.

 

Businesses

Start your business on minimal infrastructure. Start conducting business now, then add infrastructure as you really need it.

Have a detailed realistic business plan. Plan out costs, expenses, margin, target audience, etc. Know these things before starting your business, much less spending money on infrastructure.

Hopefully these suggestions helped you out. Please comment here with any questions or suggestions regarding tips, tricks, and ideas for judicious spending.

 

And, as always, let me know what you think in the comments. Ask questions, tell your story.

 

 

 

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