Investing – The Clint Galliano

20-Mar-202419-Mar-2024

Wealth Building Wednesday – Debt Management Strategies

Wealth Building Wednesday – Debt Management Strategies on Clint’s YouTube Channel.

Hey everyone, Clint here, bringing you this week’s episode of Wealth Building Wednesday, with some practical advice on managing debt. Here’s some quick tips on what works and what doesn’t in the realm of debt.

Good vs. Bad Debt: First things first, not all debt is created equal. There’s the kind that’s working for you, like investments in real estate that bring in more than they take out. Robert Kiyosaki likes to promote good debt as debt used to purchase assets. He describes assets as anything that brings you a return.

Then there’s the kind we’d rather avoid—high-interest culprits like credit card debts. It’s OK to have and use credit cards, but not to carry a balance on them. You should pay them off every month either when they are due or before they are due to ensure you don’t pay interest. This is a good strategy if you don’t have a balance or have paid off your balance. If you already have a balance on your credit card(s), see below how to eliminate them.

Mortgages can be a smart play if you’re investing in your future home, as long as you maintain the home and can expect decent appreciation. Even then, it will depend on what your interest rate is. If it is low, as in less than 5%, you may not want to pay off your mortgage, unless you would feel better not owing anything on your home.

Student loans are a mixed bag depending on what you’re aiming for career-wise, what type of loans you have, and again, what the interest rates are. Students should be informed on the expected ROI of their chosen degree program. The same degree program at different schools can range from a moderately positive ROI (165% or so) at one school to an extremely negative ROI (-450% or so) for a music education degree. This information was found here when researching in-state music education undergraduate degrees in Louisiana for my oldest daughter. The fact that Northwestern State University had the highest ROI for that degree and the largest amount of scholarships offered between, she will wind up with an almost infinite return for her degree.

Tackling the Debt Dilemma: We’ve touched on strategies like the debt avalanche and snowball methods before—both solid tactics depending on whether you want to hit the high-interest debts first or knock out smaller debts for quick wins. The goal? Eliminate your bad debt so you’re not bleeding money on interest and can focus on growing your wealth.

Why It Matters: Let’s be real…debt can be a drag on your financial journey, especially if it’s the kind that doesn’t give back. Shaking off that debt means more freedom to invest in your future, and that’s what we’re all about here.

Eliminating your debt will give you options…and thee who hath the most options, wins!

Got a question or a thought to share? Leave a comment or shoot me an email; I’m here to help or dig deeper if needed. And hey, if you found this chat helpful, why not share it with a friend?

Clint C. Galliano, a native of Lafourche Parish, has lived in the Houma-Thibodaux area for over 36 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.

Clint C. Galliano, REALTOR®
985.647.4479
clint.galliano@kw.com
Licensed by the Louisiana Real Estate Commission
Keller Williams Realty Bayou Partners
985.262.4400
307 Bayou Gardens Blvd
Houma, La 70364
Each Office is Independently Owned & Operated

15-Feb-202415-Feb-2024

Wealth Building Wednesday: Wealth & Net Worth

Graph on computer, person writing in notebook, AI-generated.

Below is an AI-generated summary of the video along with the transcript. You can also watch it here.

In an era where financial literacy has become a cornerstone of personal growth and security, understanding the fundamental concepts of wealth and net worth is not just beneficial—it’s essential. Drawing insights from a thought-provoking video on these subjects, this post aims to unravel the complexities of financial well-being, offering a fresh perspective on what it means to be truly wealthy.

Video Show Notes:

In this episode of Wealth Building Wednesday, we embark on a comprehensive exploration of the fundamental concepts of wealth and net worth. Clint emphasizes the goal of providing financial wisdom to cultivate a secure and prosperous future. The discussion underscores that wealth transcends mere monetary accumulation; it embodies a lifestyle abundant in opportunities and devoid of financial stress.

As the episode unfolds, the focus shifts to demystifying wealth and net worth. The narrative is geared towards unraveling these concepts to lay a solid foundation for financial empowerment. Through engaging explanations and insightful examples, viewers are guided through the nuances of financial health, investment strategies, and the principles of asset management.

The episode is designed to be an enlightening journey, encouraging viewers to rethink their approach to personal finance. It aims to equip the audience with the knowledge and tools necessary to navigate the complexities of wealth building, fostering a community of financially savvy individuals committed to achieving long-term security and success.

If you are thinking about selling your home or maybe just curious about what it is worth, click here to Get an Instant Home Valuation Estimate.

Transcript

“Welcome to Wealth Building Wednesday, your weekly dose of financial wisdom to help you build a secure and prosperous future.

Today we’re diving into the essentials of understanding wealth and net worth. Let’s unlock the secrets to financial success together!

Hey Y’all! I’m thrilled to have you join us on this journey towards financial empowerment.

Wealth isn’t just about having lots of money; it’s about creating a life that’s rich in possibilities and free from financial worries.

So where do we start? With understanding wealth and net worth.

First off let’s clarify what we mean by ‘wealth.’

It’s not just your monthly paycheck; it’s the accumulation of valuable assets that provide financial security and freedom.

Now net worth—it’s a simple yet powerful concept.

It’s what you own minus what you owe. Assets like your home investments and savings minus any debts and liabilities.

Imagine a scale. On one side you have your assets and on the other your liabilities.

The goal? To tip the scale in favor of your assets. That’s positive net worth and it’s the foundation of wealth building.

Why focus on net worth? Because it’s the true measure of financial health. A positive net worth means you’re on the right track building a buffer against life’s uncertainties and paving the way for future wealth.

So how do we increase our net worth?

Start by paying down high-interest debt which eats away at your wealth.

Next boost your savings—aim to save at least 20% of your income.

And don’t forget about investing. It’s not just for the wealthy; it’s how the wealthy got there. Even small consistent investments can grow significantly over time thanks to the magic of compound interest.

Remember building wealth is a marathon not a sprint. It’s about making smart choices and staying committed to your financial goals.

And that wraps up our first episode of Wealth Building Wednesday. I hope you’re feeling inspired to take control of your financial future.

Join us next week as we tackle the art of budgeting for wealth. Until then keep striving for financial success.

Thank you for watching!

Don’t forget to like subscribe and hit the notification bell so you never miss an episode of Wealth Building Wednesday.

Share this with someone who could use a financial boost and let’s build wealth together. See you next week!”

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

16-Jul-202316-Jul-2023

How’s The Market? – June 2023 Edition

How's the market? Clint C. Galliano, REALTOR® 985.647.4479; Keller Williams Realty Bayou Partners 985.262.4400

“How is the market?” you ask? It’s doing great!

This information covers the Houma. The numbers are compiled from sales and listings in the month of June, 2023.

Houma

The Houma market is moving towards equilibrium, otherwise known as a balanced market. Figure: 1 shows that we are still in a Seller’s Market but moving towards a balanced market.

There are 4.88 months of inventory on the market for sale, up 17.59% over May, 2023. This means that more homes are being listed for sale and are available to be purchased.

The List to Sold Price Ratio is at 97.1%, meaning that the average price properties are closing at is 97.1% of the original list price. Stated in other words, the sale price is averaging about 2.9% below the list price.

The Median Days value is the value at the midpoint of the number of days properties are on the market. For June, that was 17. That means some sold quicker and some took longer to sell.

The Median Sold Price was $230,000. That value is up 4.93% month over month, indicating that prices are still rising. This is supported by Figure: 2.

Figure: 2 shows Median Estimated Value of homes. This is based on the source’s (Realtor’s Property Resource) valuation models. The chart compares Houma to Terrebonne Parish, Louisiana, and the whole USA.

June’s Median Estimated Value is $220,860, up 0.4% month over month. This is also up 8.8% over the last twelve months.

Interesting Observations: Houma & Terrebonne Parish data track almost in lock-step due to Houma making up the majority of Terrebonne Parish’s data. Both tend to track with a similar trend as the whole state, but Houma is slightly more affordable.

The other thing I’d like to point out here is how the Houma Market is not as volatile as the whole US Market. US Values peaked in July/August of 2022 then dropped, in addition to being way higher than both Louisiana and Houma Median Home Values.

My interpretation of this information is that we don’t see the price shocks some parts of the country have been experiencing recently. We do have some changes, but nowhere near as wild as the east & west coasts or major markets.

So, if you are interested in buying a home, there are deals to be had as more inventory comes on the market.

If you are considering selling, there is still time to harvest your equity and get top dollar for your home.

Give me a call, shoot me a text, or send me an email if you’d like discuss any of this.

16-Oct-201927-Jan-2022

Business Finance: When Things Don’t Go Right

Wow, it has been a while since I’ve written anything here. Things have been busy, to say the least, between my regular job and family. My oldest started high school marching band as a freshman and her schedule is brutal! (Translation: Lots of after-school practice, football games, and marching competitions).

Today we are going to talk about when things don’t go right in a business, from a finance perspective based on a business I am involved in. The names have been changed to protect the innocent.

Business History

In March of 2017, a group of former colleagues, with me as a minor investor, purchased a door manufacturing business. At this point, none of us had ever been involved in that industry, but we thought that between the four of us, we could figure everything out and grow the business.

Prior to the purchase, we examined the prior owner’s books and he seemed to be making decent revenue and profit. We tried to analyze Cost of Goods Sold (COGS) and Expenses to get a good handle on what our potential revenue could be.

Because three of us were working full time jobs, the fourth partner, we’ll call him Bob, was going to run the business initially, until we could grow the business enough to hire someone to manage it.

We attempted to get Bob to put together a pro forma operating expense projection, but he kept claiming “he would not be able to accomplish this until he was actually working IN the business and understood everything”. RED FLAG #1 (In hindsight, this should have shut down the deal for us.)

Once we purchased the business, Bob assigned himself a $100,000 per year salary because that was what he “needed” to survive on. We, the other investors, had not begun to understand the business’s key financial benchmarks at this point, so let it slide. RED FLAG #2

After six months or so of this, we begin to realize that our working capital was steadily draining. In addition to Bob arguing against every suggestion the board, (other three investors), would make to improve things, agreeing to implement the suggestions, then never acting on them. We slowly started to realize that even though we all agreed at our initial gathering that this was an investment to grow and either sell it for a profit or, after three years of profit reinvestment, provide cash flow and dividends, Bob was acting as if he was setting up Bob’s Kingdom. He wanted to run the business exactly as the previous owner had run things. RED FLAG #3

We made changes. First, we reduced the salary to $50,000, a figure more in line with the position. Then we removed him as President. We attempted to replace him with a salesman we brought on and moved Bob into the sales role, but since Bob was still involved and also trained the salesman, he was set up to fail. Bob did not teach him everything and did not say anything when things slipped through the cracks until after we noticed a couple of months down the line.

Current Status

The business continues to limp along. We have not put any more capital into it. Bob occasionally takes out small invoice-secured loans when the bank account gets too low. He is working at another job and has the lead employee mostly running the business.

We other investors have mostly given up on expending more than just a nominal effort to expand the business since no advice given is followed. We came up with plans and strategies on how to streamline the business and improve revenue, and presented them as a means to grow the business, but they didn’t sit well with King Bob, so they went nowhere.

The best I can hope for is that I can harvest some capital gains from other investments when this business eventually fails so I can offset the losses on my taxes.

In a future post, I plan to lay out the lessons learned from this experience and hopefully it will help you, the reader, to avoid some of our mistakes.

Post in the comments about your things that didn’t go right.

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.

11-Dec-201827-Jan-2022

REI – Acquisition of Rental #3

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

122.Sagewood.FrontElev

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.

122.Sagewood.RentalFlyer2

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.

04-Nov-201827-Jan-2022

REI – Rehabbing A Property: Flipping VS. Renting

Welcome back to me! I was out for the last few weeks due to a combination of work and getting post-surgery treatment for my thyroid.

Today, I am going to go over some differences and similarities between rehabbing a property to flip it and rehabbing a property to retain as a rental.

Compare & Contrast

What is your “Plan A” for a property in a given situation? That is probably an easy question to answer if you only flip properties or if you only buy and hold them as rentals. Some investors do both.

Ultimately, you should already know what you want to do with your property. Then work on a “Plan B” and “Plan C”, just in case your Plan A doesn’t work out.

Compare

Whether rehabbing a property as a flip or as a rental, there are a lot of things that you would do the same in either case. Getting the main home systems in working order, such as plumbing, electrical, roof, HVAC, etc. You need these systems in working order and, with the exception of fixtures, don’t need a lot of variation between the two.

Structures should be stable, rooms may need to be added, and/or rearranged.

Contrast

Rentals

When rehabbing rentals, you want to keep things functional and not too expensive. Depending on the comparable quality of the neighborhood, you may go utilize a higher-end product in a higher-end neighborhood than you would in a lower-end neighborhood.

Especially if you have multiple rentals, you want to go for consistency to normalize your costs. Have a paint scheme, flooring style/type, appliance set, and plumbing & lighting fixtures as a standard so that time will not have to be wasted on trying to decide on colors & styles during rehab and turnovers. Your contractors or turnover specialists should already know what to use.

Flips

When flipping, you are attempting to renovate the property to a standard that will make someone want to buy the home to live in. With that in mind, you want to add finishing touches to a flip that you would not consider for a rental. This could include things like upgraded appliances, fancier light fixtures, premium paint schemes, and so on.

All of this assumes that you have the budget to achieve this and still make money on it.

I would like to know more about my readers. If you could spare about 2 minutes of your time, please take a survey to tell me what you like about the blog. Just click here to take the survey.

Plans B and C

I mentioned “Plan B” and “Plan C” above, so I just wanted to touch on that before wrapping things up. You should always have an exit plan. Or two. If you are planning to flip, be ready to rent or owner-finance. If you and planning to rent, be prepared to sell.

This is kind of second nature to me coming from the oil and gas industry. It has a direct physical basis, but can be applied metaphorically to pretty much anything.

Having an exit plan means not being stuck in harm’s way. When working on a drilling rig, this has life or death implications. Never put yourself in a corner where you cannot get out of the way of something.

I learned this the hard way when loading eleven and three-quarter-inch casing onto a boat when I first started out in the industry working as a roustabout.

For those of you who don’t know what casing is, it is the large-diameter pipe used to keep the wellbore pressure in and the formation pressures out when drilling and producing a well. Each forty-foot joint weighs approximately two thousand four hundred pounds.

The crane was set up to pick up four joints of casing at a time. Additionally, we were short-handed, so I would hook up the casing on the dock, then jump to the boat to help position it on the deck of the boat so it would stack properly for the ride out to the rig.

On one of the lifts, by the time I got onto the deck of the boat, the pipe was coming towards me and I did not want to be under ten thousand pounds of steel. I attempted to get outside the range of the swing of the crane, but realized that I had no more deck because we were loading onto the stern now.

I dropped down onto the deck, sitting, so that at least if the load dropped, the railing would help stop it from crushing me. I believe that maneuver startled the crane operator and he stopped the crane rotation, thus setting the load swinging like a pendulum. He immediately noticed this and started to drop the load as it got over the deck, but the casing had started to swing back towards the stern, where I was sitting.

The casing made contact with my left shoulder and chest. Luckily, it was only enough to bring out purple, yellow, and green bruises on me the next day, but no permanent damage.

The moral of the story? Have an exit plan that you can execute on.

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.

02-Oct-201827-Jan-2022

Business – Optimizing A Process – Order of Operations Related to Surgery:

This week I am touching on the topic of process optimization. This is another topic that came a conversation between Kevin@deliberateconsulting.com and myself when comparing thyroidectomy procedure results and side effects. He was diagnosed with thyroid cancer and had surgery a couple of months prior to my diagnosis.

Process-Optimization

We compared notes on what was similar and what was different between the two.

(Caveat: There may be some factors that we are not aware of, specific to each of us as individuals, that could have influenced decisions made.)

We both had thyroidectomies. Surgery, an overnight stay. A vacuum bulb to drain the incision area. Released the next morning. Then wait to determine if further treatment is necessary to ensure the eradication of cancer. In Kevin’s case, he needed further treatment, in my case, it is too soon to tell.

The doctors started Kevin on hormone replacement therapy almost immediately after surgery, then had to wait for levels to drop to begin the secondary treatment. I am still not on any replacement hormones until they determine if I need the radioactive iodine ablation, thus shortening the cycle time to start. Since the hormones appear to last about 6 weeks, I am good for a while with no replacements and won’t have to wait for levels to deplete if I do need the RAI.

The way my surgeon planned things seems to be the more efficient way to do things. This got me thinking about how an optimized process for business is cheaper and more efficient than just randomly doing things in a haphazard manner.

I do this in my real estate investing. When rehabbing a property, I evaluate what needs to be done & plan the order of operations so that there won’t have to be re-work because something had to be undone to do something else.

You can look at your business processes and optimize them for efficiency by ensuring the order of operations for each step does not additionally delay some other step.

You can think of it like the sandwich-making analogy I used here…if your current process calls for you to put the peanut butter on the plate, then add the bread, then the jelly or jam, you can optimize it by changing the order of operations to bread, peanut butter, jelly, then another slice of bread.

What inefficient processes have you identified in your business or workplace? How did you change them?

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.

25-Sep-201827-Jan-2022

Business – Revisiting the E-Myth Revisited

Welcome back! I was talking with Kevin@DeliberateConsulting.com about things we should do differently in our business (disclaimer: Kevin & I are partners/investors, along with others, in a high-end door manufacturing business). One of the things he brought up was that all of the partners should have read Michael Gerber’s “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” [http://a.co/d/5JhEnwk] before we decided to invest in a business. Kevin also suggested I write a blog post about it and how it can help you in business.

The E-Myth Revisited

emyth

The E-Myth Revisited is a wonderful book that provides guidance for individuals having an “Entrepreneurial Seizure” as the book’s author, Michael Gerber, puts it. It provides a mix of case history, told as an on-going narrative of a client, and guidelines for successfully organizing an entrepreneurial idea into a business operation manual. It tells how you should work ON your business before you work IN your business. AND, your goal should NOT be an employee of your business, doing things yourself.

I’ve mentioned the E-Myth before:

BUSINESS – WE DON’T NEED NO STINKING PROCESSES!…OR DO WE?

MY RESPONSES TO TIM FERRISS’ “TRIBE OF MENTORS” QUESTIONS

I would like to know more about my readers. If you could spare about 2 minutes of your time, please take a survey to tell me what you like about the blog. Just click here to take the survey.

Business Buying, Two Years Post-E. Seizure

I did not read the E-Myth until after we had already purchased the business and were off to the races. I shared it with the other investors, indicating how important it was that we follow its recommendations. Kevin read it and as indicated by the prompt for this post, he feels the same.

Looking back, I have to agree with Kevin. We should all have read the book before deciding to buy a business together. We did not understand how to operate the business. What little “processes” we received from the previous owner were a jumbled bag WTF? and Huh? And, on top of that, the partner directly involved in the business adopted everything wholesale, becoming too mired in the day-to-day to view anything strategically.

This is exactly what the book is designed to avoid. If we had spent more time understanding how the business operated and put in systems & processes to optimize its operation prior to purchase, we would be a lot further ahead.

We are slowly getting things on track and working to bring efficiency to the operation. Only time will tell if we will be successful.

Lessons Learned

Kevin and I are starting to collect lessons learned so we can apply that to future business endeavors, investment advice, and consulting efforts.

Below are some, in no particular order:

Read the E-Myth Revisited
Put together your operating manual
Understand you costs
Create an operating agreement defining who will do what
Stick to your operating agreement
Understand Cash Flow

Please email me, comment below, contact me on LinkedIn, Twitter, or my Facebook page to share your Lessons Learned in operating a business.

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.

04-Sep-201827-Jan-2022

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.

FinChart1

“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

TraditionalInvestingRiskChart

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.

I would like to know more about my readers. If you could spare about 2 minutes of your time, please take a survey to tell me what you like about the blog. Just click here to take the survey.

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.

FinChart2

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.

19-Aug-201827-Jan-2022

REI – An Unstructured List of Why Real Estate Investors Attend REIA Meetings:

This week, I am covering REIAs. I will go over what a REIA is, how REIAs can benefit you if you are interested in investing in real estate, and how to find a REIA in your area. I will also provide details on how to find out about the REIA for the Houma/Thibodaux/Morgan City area.

REIA stands for Real Estate Investor Association. This is a group of like-minded individuals who get together to learn about, discuss, and network over Real Estate Investing.

What is a REIA?

REIA stands for Real Estate Investor Association. This is a group of like-minded individuals who get together to learn about, discuss, and network over Real Estate Investing. From my experience, REIAs are for anyone with an interest in Real Estate Investing (REI), from rank “noobs” to experienced real estate investors.

Meetings usually cover a topic for education on some aspect of Real Estate Investing, such as Tax implications (by an accountant), things to include in your lease (by a real estate attorney), and ensuring a property has a clear title (by a title expert).

Real estate investors also get the opportunity to network with one another. This provides opportunity to learn from each other and can also facilitate deal making. Investors have the opportunity to buy, sell, or trade deals with each other.

Some REIAs do charge a meeting attendance fee to cover a room rental and/or snacks and refreshments while others are in freely available spaces. Some are also held in meeting rooms at restaurants where in exchange for bringing in the group to eat, the room is available for use.

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What can a REIA do for ME?

REIAs are a place to learn. They provide education on many different real estate topics. As stated above, many REIAs bring in subject matter experts to present to the group. These experts are also available for Q & A.

Some REIAs have sponsors who provide REI-specific services, so that allows members to save time in finding said services. These range from title companies to construction contractors & beyond.

There are also likely to be wholesalers at meetings with properties that are for sale at a discount, in addition to investors shuffling their properties.

How can I find a REIA?

A lot of REIAs use Meetup.com to list and promote REIA meetings. Go there and search for REIA and your town name. You can set a radius distance from your target location so it will show meetups within that range, in the event there is a meeting in the next town over. When you find one you want to join, join the group and RSVP for the next meeting. It’s as easy as that.

Are you in the Houma/Thibodaux/Morgan City area?

If you are in the Houma/Thibodaux/Morgan City area, you are cordially invited to join the Bayou Real Estate Investor Networking group. Meetings are usually held on the first Wednesday of the month. Go to the BREIN Meetup page for more information.

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

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