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Video: PCS Webinar Recording – Our Best PCS Tips in 30 Minutes!

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Full Video Transcript

Hey, everybody. Thanks for tuning in. My name is Pat Wilver. I’m one of the co-owners of Trophy Point Realty Group. I was a third ID veteran stationed here from 2014 to 19, and I decided to stick around Savannah after I got out of the army. We’re here today to talk a little bit about some things to consider when doing a PCS move. So we’re gonna start off with selling a home. We’re gonna, we’re gonna assume that you’re selling a home wherever you’re coming here from, and we’re gonna go over some, some tips and tricks in that regard. If that’s not the case, if you’re not selling, feel free to go ahead and skip ahead past this section, because it’s not gonna be super relevant to you. Now, when you look at selling, there’s a couple things to consider. First of all, is the, is the, the money factor, the monetary factor.

And that is, “Hey, if I sell this house, can I take the equity that I have in that house and take that cash and go put it to use somewhere else that’s gonna make me more money than if I were to hold onto this house and rent it out?” And if all you care about is the money, that’s the only question you wanna look at. If the answer is “yes, I can find a better use for that money elsewhere,” then you should sell you should sell or you should at least refinance and pull out some of that money. Also personal preference comes into play. Maybe you don’t want to be a landlord. Being a landlord can, can kind of be a pain. And some people just don’t want to do that. And that’s perfectly fine. There’s nothing wrong with that. So that’s the reason to sell. And then third, you might have to sell maybe you can’t qualify for a second mortgage.

Maybe you can’t you can’t qualify for a second mortgage or maybe you’re having a divorce or changing your financial situation where it’s just not feasible for you to to actually keep onto that house and then buy a second one. So those are the three main considerations. So let’s take a look here. Next slide. Alright. So factor one that we look at is money. So we already kind of talked about this a little bit, so let’s just go ahead and go to the next slide, but we’ll get a little more detail. So this is an example. Let’s say you can sell your home and put $50k in your pocket or you can rent it out and make $5,000 in profit each year. And that’s, let’s just say that that’s your cash profit. That’s your, your cash flow. The cashflow of about $450/month.

That’s a, that’s a really good cash return on your equity. Actually, that’s, that’s really good. You, if that was me, I’d probably wanna look at, hold on. How do I hold onto that rental and buy something else? If I was making that much cash that’s, that’s pretty solid. Especially if you bought that home with a VA loan and you don’t have any money down, that’s, that’s pretty sweet. So, but let’s say you’ve got that $50k of equity and you know, you’re not gonna cashflow or maybe you’re gonna be cash negative. That’s gonna be a situation where, you know, look, look possibly to selling that property. And, and there is some other options too, we’ll talk about later. You don’t necessarily have to sell, if you have a lot of equity in your home, you can look into into a cash out refinance perhaps, and you can pull out some of that money, not all of it, but some of it and your cashflow will probably go down a little bit, but that’s, that’s a way to hold onto your property.

So personal preference, right? So we, we kind of talked about this. Do you want to rent, even if the numbers don’t necessarily add up? You can, you can do a HELOC which basically you know, as a line of credit, that’s tied to your home, that you can, you know, take out money. A lot of people use those to renovate homes, people who flip houses like to use HELOCs for those or cash out refinances, put a new 30-year loan on, pull out some cash. Other personal preference – do you wanna be a landlord? There’s property management, there’s answering tenant questions and issues quickly, there’s covering maintenance items. You know, it’s, the air conditioning goes out, you know, boom, there’s probably a $7,000 bill that you, you have to cover. So that’s, you know, some people don’t wanna do that.

And then, you know, maybe, maybe you have a use for that equity outside of, outside of making money as an investment. Maybe you’d need it to make a down payment on your next house. You about to send your kids to college. Maybe you have some credit card debt that you’d like to pay off. That’s, that’s a use, that’s a good use of that equity. And that might be a reason to sell outside of, you know, looking for a better investment. So necessity, right? Maybe you need to free up your VA entitlement. It is possible to have two VA loans at the same time. I actually myself have done that. There are some things you need to go to. You’re gonna want to talk to a good lender about your situation and, and ask a question. Can I get a second VA loan?

And if so, you know, in my case, when I got my second VA loan, I had to bring some money to the table as a down payment. So you, you may have to do that. Especially if the house you currently own on your VA loan is, is worth a good amount of money. So maybe you need to free up that VA entitlement. Maybe you need to maybe you just can’t qualify for two homes at the same time. Maybe you’re starting out your career in the army. You’re not making a ton of money yet, or maybe you’ve got a lot of other debt obligations out there or your credit’s not so great. Again, that’s a lender question – you have to ask if you can even qualify for a second mortgage. Like we kind of talked about maybe you need to access home equity in order to make the next purchase. And then of course changing your financial situation, divorce, things like that. Sometimes will make it necessary to, to sell a house, even if you don’t want to.

All right. So let’s look a little bit into renting out your home after you move away. So let’s say that you decided you want to rent out. What does that look like? Here’s the bottom line up front. If you, if you want to self-manage, if you want to not have to pay a property manager, then you need to already have connections with handyman, contractors, and other vendors that you’ve worked with and you trust. It’s very difficult to, to self-manage from a distance, unless you already have these relationships built. And there are people that, you know, you’ve worked with before and you trust them. So if you’re going to PCS in three months and you’re trying to self-manage and you haven’t built any of those relationships, yet, it, it might be a little bit too late to do that. So that’s important. So let’s talk about, you know, what are some landlord duties, right?

Well, the hardest one is really placing a tenant. It’s finding that tenant placing in under property. This is very, very difficult. I tried to do it once from a distance and it just didn’t work out. I ended up hiring a friend of mine who is an agent. This is before I became an agent and I was still in the military, and I just hired him to find me a tenant. It’s gonna be very, very difficult to do from a distance, not necessarily impossible, but you’re gonna have to pay somebody to do something. If you pay an agent to do it, and they’re doing this as a one-off I’d probably expect to pay one month on rent and commission for them to do that work. Maybe if they do you a solid, they do it for cheaper, but you know, me personally, I, I don’t really even like to place tenants.

It’s a lot more work than it’s worth to me. Unless it’s a rental property, that’s really close to where I live and it, and it’s not a burden for me to drive over and show it. So we’re also, you know, figuring out tenant issues and questions. Tenant calls you, Hey you know, the, “the sink’s clogged” the, you know, “I locked myself out” or, “Hey, I think there’s something wrong with the, with the stove”. These are things that come up. And, and what makes it difficult, this is the important contingency plan, right? You know, what, if you’re at NTC, what if you’re deployed? What if they can’t get ahold of you? Who, who a) is gonna answer the phone when you can’t and b) who can make a decision, say if you’re out in the box at NTC and say, you just went out and you got 10 days and air conditioning goes out and it’s summertime, you know, who’s, you need to have somebody who can make that decision for you while you’re not around, because your tenants are not gonna wanna wait 10 days for you to get back from the box to approve a $6,000 repair, right?

So that’s important. That’s very important. That’s something, if you don’t have a good answer to that, you should just have a property manager to handle that for you property management, typically a low-margin business. So it’s a natural incentive for property managers to cut costs. There’s, there’s some good ones. There’s a lot of bad ones, most real estate people who do property management, they typically do it as a way to keep their their past clients kind of in-house and top-of-mind, because eventually down the road they’re gonna want to sell. And, you know, you want to be the first person they think of. So a, a lot of the incentive to do property management, it’s not so much to make money on the management. It is just to kind of keep your past clients kind of in the, in the circle, right?

So get recommendations – investor Facebook groups are a good place to go, you know, find your local area and search on Facebook for real estate investors. Ask some, ask some people there. You know, if not, Google, call around, I find referrals typically to be the best. And then cost, you know, in this market is typically 10% plus tenant placement fees. And the Savannah market is typically a half a month rent is tenant placement. Other markets are as high as a full month rent, tenant placement. And you also need to vet these people, right? So interview a couple, don’t just go with the first person you talk to. Go meet with them, check out their offices. It look organized, you know, do they, do they speak well? Do they write well? Ask them, you know, what kind of software did they use?

Are they using a professional software like Appfolio, or are they, you know, old school or, or no software at all? How many properties do they have under management versus how many people on staff? Right. If they have 300 properties under management and only one person on staff, that person is gonna be overwhelmed and they probably won’t be doing a good job. And then it’s also good, I think, to call as a tenant. You know, look up a property they’re advertising, pretend to be a tenant. “Hey, I’d like to see this property.” How responsive are they? Right. do they get back to you or do they kind of just, you know, let things slide? Because I, I see properties sometimes, you know, listed for rent that are at a good price that should have rented. And they don’t. And I, a lot of the times it’s because the property managers are just not following up with those leads. So you don’t want that to be your house.

All right. So let’s, let’s say you decided to sell, let’s say selling’s the best best decision for you. And instead of going that route. So hey inventory is super low, right? The pretty strong seller’s market, even with rates going up as they are we still find it’s a pretty strong seller’s market. So you think the house will sell itself. Right? And that’s not always the case. There are a few things that you can do to get every dollar of equity possible out of the sale of your home while – and this is bold and underlined – making the process smooth and easy. Because you got a PCs move. You there’s a lot of, there’s a lot of steps and a lot of moving pieces that go into selling a home. And it’s, you know, a lot of work when you’re also trying to clear post and, you know, figure out the, the kids schooling situation and find a new house where you’re moving, et cetera.

So the first steps, right? So we have here, number one, call trusted agent, as soon as you can. Of course, I’m an agent I’m incentivized to get you to use an agent, but there, there are really two big reasons why I recommend that. And one is I myself will use an agent in a market that I do not understand. Other markets that I invest in. I use an agent, even though I’ve done a hundred plus transactions here in the Savannah/Fort Stewart market. I just do that because there’s so many different things and it’s not just, you know, figuring out what the market value of the home should be, but there’s different customs and different things that people do in different markets. That if, if you don’t know how those things work you know, it’s, it’s, you’re gonna be missing out on some things making it difficult on yourself and possibly leaving money on the table as well.

If you don’t know an agent, like I said, I always say, ask your friends for recommendations first. Right? That being said, your friends might have worked with a dud and not even known it. So you still want to vet these people, but, but ask and always talk to a couple different agents. You want to, you want to interview them, you wanna make sure that they return your calls, right? If you’re talking to, if you’re talking to somebody who say they take, takes them a day to get back to you, right. You know, typically either they’re, they’re too busy, you know, to take you on or they’re just lazy. One, one or the other. And I’ve been there before where I’ve, you know, sometimes forgotten to text people back. And that’s when I decided to start bringing on new agents onto my team, because I knew that I was getting busy to the point where I myself could not provide the level of service that I need to.

So I hired more people and, and now we do that. And take a peek at some of their listings. Right. you always wanna ask them “Hey, can I see some of your old listings?” Or if you go on Zillow and you search that agent you’ll, you’ll see their old listings the ones where they represented the seller, look at some of the photos. Did they, did they look professionally down or were they cell phone pictures? How did they sell? Did they go under contract quickly? Things like that. You know, the good thing about when you’re trying to vet a real estate agent is it’s very easy to look at their past work, because it’s on Zillow, it’s on realtor.com for you to see, you know, how they are. And how much deal flow they have. Are they doing 20, 30 deals a year or are they doing two or three?

You probably don’t want to work with the guy that’s doing two or three or the person that just started. Unless that person is working with a, you know, a team like mine, where they have people that they can reach to for guidance and, and wisdom and things like that. Our, our younger agents, we always take them under our wing and their first few months in the business, until they’ve established and they got rock and rolling, we, we help them every step of the way. So not necessarily bad to work with that rookie, as long as that rookie’s got a mentor, that’s helping them out, right? Sometimes I find rookies are the best because they have the most time and they’re putting in the most work. And they’re so scared about doing a bad job, that they can be very, very, you know, really very good.

As long as they’ve got some guidance. So what it’s next, right? Call your agent and look at some look at some, what are some home improvement projects that we can do, right? What, what’s some stuff that we can do to add some value? There might be some very easy things that you could do to add a lot of value to your home, um depending on what you’re looking at. So here’s some examples, you know, you can mulch the flower beds, replace your beat-up doorknobs, fixing dents in the drywall, touching up paint, easy things. This is something, if you’re a little bit handy, you know, you can take, you know, the two months before you go to move and you can just work on that, you know, Saturday afternoons and get that done. And I think it’s good. That’s why you wanna call an agent sooner rather than later, because you can agent in your house six months before, you know, you’re gonna move, um they can go over some of that stuff. And that way you’re not stressed out trying to get all these projects done right in the last month before you PCS. And then there’s some bigger projects too that you might want to hire out to a contractor. Maybe your flooring is really beat up and it’s time for some new flooring. Maybe your kitchen cabinets are just trash and maybe you want to, you know, do a little bit of a bigger project. That might be worth it. That might not. That’s why you want a listing agent’s help. So your agent should be able to ballpark you what it’s gonna cost, estimate how much value it’ll, it’ll add to the home and then provide recommendations for good contractors who will do the job, right and at a fair price.

So there’s some things not to do, right? If you’re, if you’re in a cheap, cheap, old starter home and all the homes around you are cheap starter homes it’s not gonna get you a bunch of money to put in stone countertops. Okay? It’s just probably not gonna be worth it. Go for butcher block. It’s gonna be a lot cheaper. It looks nice. Like for real also the real hardwood flooring, you almost never, it almost never makes sense to put real hardwood flooring. I met a couple sellers who wanted me to sell their house and they were just bragging, “oh, I put this real hardwood in, it costed so much money. It’s gonna add so much value,” and it’s, they never want to hear it when I tell them it’s not, it’s not gonna add value because every other house in this neighborhood has the laminate floors, the vinyl plank floors, buyers here are totally satisfied with that.

They’re not gonna pay you $15,000 more for their hardwood that they don’t really care about anyway. Right? so yeah, take a look at recent sales in your neighborhood. You know, what, what do they look like? And of course, again, talk to your agent. They should know. And you know, anytime you’re thinking of any home improvement project, maybe you just moved into your house and you’re thinking, “Hey, you know what, if I do this?” Call your agent, ask him, “Hey, is this gonna add value?” and just because it won’t add value doesn’t necessarily mean you don’t do it. If you want to do it for you because you would enjoy it. But that way you at least know you know, how much money are you gonna invest in this project versus how much will you get out when you sell it?

So getting to the market, right? Talk to the lender and figure out how much your debt to income ratio can support a second mortgage. If you can get approved for second mortgage, I recommend buying your new home and moving into it. Before you sell the old one and that way vacant houses typically are able to sell for more 1) because you are going to, it’s gonna be a lot easier for agents to schedule appointments. They can just show up versus having a schedule, makes it easier on you as well. Also you can really do a deep clean, you can really make sure everything’s perfect. And you know, especially I know when, when I was in the military and even now to an extent, because I’m kind of cheap. I had just had all this beat up furniture because I was PCSing all the time and it all looks terrible.

And sometimes it, I haven’t, you know, sold a house PCSing. I kept everything I bought as a rental. But if you were like me and have beat-up, ratty furniture, it’s better if that stuff’s out of the house, right? Staging, staging is sometimes good even in this hot market. I recently did a, a renovation project, a flip it was a beautiful, gorgeous flip. And I spent, you know, about $2,000 staging and I think it was worth every penny. Sometimes it makes sense. Sometimes not – depends on your situation and you don’t necessarily have to stage all the rooms. Sometimes just a few little decorative pieces can go a long way. Your agent should know who a good stager is. So let’s take a look. This is the timeline. This is a rough timeline. So let’s say, you know, June 1st is your move-out day, right?

These are your kind of big touch points here, right? So you want to do the cleaning after you move out. You want to do the staging after that if, if that’s something you’re gonna do. The day after that, professional photos, photos take a day or two to get back, boom, listing’s live on the seventh, right? If it’s priced well in this market, you know, if it’s priced well, you typically under contract – say you list on a Friday morning. Typically by Sunday night, Monday morning, you figured out who’s gonna buy your house. Right? Couple days later, buyer’s gonna do their inspection, a couple days after that they’re out of due diligence. And that means basically they’re buying the house unless it appraises low or they somehow don’t get approved for the loan. Takes another week after that, and then we can typically expect to close typically in 30 days.

So June 10th, July 10th, typically 30 days is that that’s most contracts that we’re seeing, right? So we’re looking at about a 40, 45 day period between the time you move out and the time that that house is being sold, more or less. Now what this doesn’t account for is sometimes an, an inspection happens and a buyer backs out. Well, that’s gonna add, you know, five days, five to seven and days on your timeline or it doesn’t appraise and the buyer backs out. That’s gonna add about 20 days onto this timeline. Those are things that happen. It’s it’s, you know, anytime you go under contract on that house, just keep in mind that it’s not, it’s not happening until the, the money hits your bank account, right? So always, you know, don’t start making big plans until you’re getting closer to that, to that closing time.

Alright. So getting to the market, so hey, most people won’t be able to move out before listing that’s okay. We just modify that timeline. You know, you get the, you get the cleaning done while you’re still living there and we just work around the schedule. That’s not so big a deal. The big thing is, try to take it down some of your trinkets some of your different photos and stuff because you want to have the house be as neutral as possible to appeal to the widest amount of people. And so that they can imagine themselves living in the house, right? If it’s all, you know, all your personal effects and all your trinkets, well, they’re gonna come in and that’s still gonna be your house, not theirs. You want them to walk through the home and, and imagine their own personal effects on the wall. Also, you know, try to keep the moving boxes, put them in a garage, put them in a spare bedroom. It’s much better if all of your random junk is in one spare bedroom and, you know, buyer can open a door and say, oh yeah, this is where they’re stashing all their stuff versus having moving boxes all over the house. So yeah.

All right. So here we go. There’s a couple things that we can, we can look to do to make the, make the transition easier. Right now in this market, sellers are pretty successful in getting a seller rent-back period. And what’s good about that is you can, you can basically sell your house, say you sell your house on June 30th and you still live in it until July 30th, right? That allows you to do two things. One, it makes your move less stressful. And two, the biggest thing is it makes purchasing your new home in your new duty station a lot, lot easier because it is very difficult right now, if you make an offer, say you’re going to Fort Carson and you make an offer. And in that offer, it says, “Hey, this is my offer and it’s contingent on my house in Fort Stewart selling”. That offer is probably not gonna go anywhere.

It’s probably not gonna get accepted. So if the house is already sold, you don’t have to make that that contingency, right? So that’s a good thing about that. Especially if you can’t qualify for that second mortgage without selling the first home, that’s a great thing to look at. And that’s, that’s why you want, you know, we see this next bullet point, lots of moving pieces, right? The agent helping you sell your home and the agent that’s gonna help you buy your new home and the lender that’s gonna give you the money to buy your new home, should all be kind of touching base about your situation, because you know, the, the, the agent that’s gonna help you buy a new home and the lender are gonna have information that the agent agent who’s helping you sell your home needs to know. So make sure that, you know, you trust both these people. If you don’t know someone, you know, in a duty station you’re going to you know, ask, ask your agent. If you ask me, “Hey, do you know a good agent in Carson?” “Yes, I do.” “Lewis?” “Yes, I do.” Bliss, Hood, you know, Bragg. I, you know, so especially if your agent does a lot of military PCS moves, they I’m sure they know somebody where you’re going. Somebody who’s good.

So what’s the relationship look like? You know, you can be as involved as, as you want to. Most of the time, you know, our clients don’t wanna be involved cause they have a bunch of stuff going on. They don’t have time to worry about it. That’s why they hired us. You should hear from your agent at least once a week typically, you know, at least once a day, your first weekend on the market just kind of keeping you updated, “Hey, we got these offers,” this, that, “let’s, you know, let’s pick a time to talk about all of them.” and then you sit down and you go over all the offers and the pros and cons each one, you pick one, you go under contract. Once you go under contract, you know, it shouldn’t be an everyday kind of thing, just as things come up you should hear from your agent. Um you know, it’s best to let your agent do the job that they’re good at, but always trust with verifying.

Don’t be afraid to ask why. It’s something sometimes I forget to explain why upfront. I just assume that people know things that, you know, they shouldn’t know, or they wouldn’t know. And so, you know, I like when my clients ask me, “Hey, why are we doing this?” “Oh, well, this is why we’re doing it because of, you know, this thing.” never talk to buyers. Don’t talk to buyers, do not talk to buyers, do not talk to buyers. I have never seen a seller talk to a buyer and do anything but give the buyer information that the buyer can use as leverage. It’s best not to talk to them. Really, whenever buyers are looking at the house, you should not be in the house. Couple reasons – one, you know, they’re not going to, they’re going to feel rushed. They might feel like you’re looking over their shoulders.

They’re not gonna say the things to their agent that they want to. But two, the biggest thing is you never do anything good by talking to those buyers or especially their agent. I love when I’m working with a buyer, I love when the seller’s in the house and I just love to talk to them and I put on my friendly face and I’m I’m friendly, but I’m always trying to get – what kind of information can I get that’s gonna help me negotiate the deal? You don’t want to be there. All right, so, Hey, let’s move on to buying, right. How do we buy? So when do you make your money in real estate? It’s not when you sell. It is when you buy, right? You make your money when you buy. What that means is if you pay too much now, it doesn’t matter what happens in the market, you’re gonna be in a tough spot later. You know, why I like owning real estate is the homes tend to appreciate over time. And every month, you’re paying off your mortgage balance instead of paying off your landlord mortgage. And you, the other good thing is too, you buy a home, you own a 30 year fixed mortgage. Your payment’s not gonna change. Whereas rents have traditionally always increased. So how do we do it remotely? When we look at some, some quick things, let’s say, you’re, you’re gonna be somewhere for only a year. Maybe you’re going to you know, Fort Benning for the captain’s career course or something, probably don’t buy there. Right. I, I didn’t buy when I went to the career course. It’s probably best to rent. Unless you just find a smoking good deal, which are kind of hard to find in this market.

Right. do you believe housing prices would be worth more when you, when you leave? So say you’re PCSing to a duty station that just got word that they’re gonna lose a whole brigade that might make a big impact, right? A negative impact on the housing prices. So, you know, do a little research on the local economy you know, like Savannah Savannah’s growing Fort Stewart’s growing. It’s, it’s the only the only port it’s, it’s the only armored assets on the east coast, the only armored assets within 50 miles of the deep water port. I don’t think Fort Stewart’s going anywhere, right. It they spend a bunch of money modernizing the brigades that, you know, so anyway, I’m bullish on Savannah and on the Fort Stewart market. And then will you be able to cashflow the house as a rental when you PCS?

It’s always something to look at. If, if you expect that you’re gonna be somewhere for five years, that’s not so much of a consideration because in five years, you know, there might be some fluctuations in housing prices, but typically in five years you’re gonna see appreciation not only in housing prices, but in rental amounts. So that should be a, a little safer, but I think it’s always good, like, “Hey, can I at least break even, if I have to rent this place, can I at least break even on it?” “if something crazy happens to the economy and I have to rent this thing for a year or two after I PCS, can I?” And, and at least kind of break even it’s a, it’s something important to look at. So here’s an example. If you’re going to Stewart and you’re buying a house in the mid $200,000 price point in Richmond Hill, those places usually run for $1700 to $1850 a month give or take.

And here’s some of your numbers here. So with your mortgage property management costs maintenance, vacancy reserve, you’re looking at, you know, roughly two to $300 every month in cashflow. So, so that’s good. All right. Awesome. and in addition to, you’ve also got increases in your equity that come from paying off your mortgage every month and from appreciation. So I I’d say that’s a good deal. And, and don’t forget these property taxes and insurance is not the same everywhere. It’s different in Richmond Hill than it is in Savannah. And, you know, it’s, which is different than it is in Texas and North Carolina. So if you’re going to on different market, you know, these numbers might be a little different for you. And also this mortgage payment, I mean, rates are going up, right? I did just edit this, you know, two months ago when I did this slide, it was $1100 a month.

You know, now it’s closer to $1200, it could be more or less whatever. So key players, right? It’s real estate. And we’ve, I, I think I’ve hit on this a lot. They should put your interest first. They should be candid. They should have a decent background with recent transactions. And communicative is, is the biggest thing. If they’re responsive and they get back to you quickly and they, and they work hard and they have some work ethic ethic, that is probably the most important thing that you’re looking at. Home inspector, right? I have my home inspectors that I like and I use over and over and over again for my own transactions and for my clients. I found that every time a client wants to use their own home inspector, it doesn’t go well. I, I had a client use one that he wanted to use and the inspector ended up missing about $20,000 worth of foundation issues that should have been found. So lender, you know, I have lenders that I like to work with. And again, I find when clients bring their own lenders, I’m typically not too satisfied. Although sometimes I am, I have found some good lenders from clients of mine, but I’d say four times out of five, they bring me a, a terrible lender. And now as always trust but verify, right? Look at reviews, Google, Facebook, Zillow, things like that.

So get acquainted with the area, right? If you can, fly out. Even if it’s a couple months before, and you’re not even ready to buy yet, just fly out. Tour some neighborhoods, meet up with your agent, drive around for an afternoon with them and, and get to know what you’re looking at. That’s important. All right. You can’t always do that though. So Google street view goes a long way. If you’re looking at a house and you can’t go see it, pull it up on street view drive kind of “drive” around the neighborhood on street view, and check the check, the date stamp on that imagery. If it’s from 2008, you know, it’s probably not good imagery anymore, right? And then check the overhead map, right? Are you close to an airport, interstate, railroad check the commute, you know, you can go on Google and you can, you can put the commute from that address to where you’re gonna be on post and you can, can actually set your arrival time to say, “Hey, I want to arrive at 0630” or really probably 0615 at least.

And see what, you know, you can see what gate traffic’s gonna look like. And as always, your agent should be able to provide insight as well. So common pitfalls, right? Generally, you know, your homes built after ’85 are gonna be up to current building standards, except some of those between like ’85 and ’90, you’re gonna have polyline plumbing, which isn’t that big of a deal really, but they don’t use it anymore because it has had some issues. If you’re buying something that was built in 2005, there’s probably nothing majorly wrong with it, right. You know, big ticket items: HVAC water heater is, you know, they typically have a 10 to 15 year service life $5k-10k for an HVAC, depending on how large your house is. And typically $1,000-$1500 hundred bucks to get a water heater replaced.

And people always freak out about water heaters. Like that’s really not a super expensive item. And then your roof, 25 to 40 years, depending on the type of shingle. $5K-$10K to replace those roofs, typically different markets are different. You know, I was talking to somebody who’s doing stuff in Virginia and he says, he typically has to pay a lot more than that. This is, this is for, for my market in Savannah, kind of what I typically pay for a roof. So, you know, it’s always the old houses you gotta watch out for. But the newer houses are typically pretty easy, especially for me as an experienced agent who does a lot of renovation projects, I can typically know pretty well, whether the inspector’s gonna find major issues. Virtual tours, right? So you’re, you’re remote. What I like to do is, you know, I got a little stabilizing gyro and I run it on wide angle lines at 60 frames per second.

And I send the videos. I don’t FaceTime because FaceTime gets grainy. I’ll send videos keep them kind of short so they send easily on iMessage and WhatsApp. And I, and I give narration, I can kind of anticipate the questions that somebody would ask on FaceTime and I’ll say, “Hey, these counters are made out of this. And this flooring is made of that. And you know, the flow in the shower is good, et cetera.” you know, some people, especially if you’re a really, really kind of picky person, maybe you want to get some short term rental set up for the first couple months that you are, you know, do your PCS, get a short term rental, and you know, actually go that route. That’s not, there’s not anything wrong with that. And of course, if possible, you know, you, it’s not very efficient for you to fly out when you’re viewing homes, right?

Especially in this market, you’re gonna probably lose some bids before you lock one up, so lock it up. And then during your due diligence period, when that home inspection’s going on, if you want to see it, then fly out or drive out and, and take a look. It’s definitely, definitely what I would recommend. So here’s, here’s how we kind of lock them down, right? It’s like, like I said, this is a seller’s market. So what do we do to win offers? Well, number one is price. I mean, cash is king, you know, how much money you coming in with. That’s the most important tied into that is kind of the escalation clauses. So we can say, “Hey, we’ll pay you $225k, but if you have a higher offer, we’ll go up to $235k to beat it,” something like that. No seller closing costs, right?

It’s hard to get to sellers to pay your closing costs. I, I don’t ever recommend that people ask for closing costs in this market. Typically your average home that people buy here in the Fort Stewart market, you’re looking at $6,000 in closing costs for like a low $200,000 home. And if you up to $500,000, you’re probably looking at closer to like $12k, $13k in closing costs, just to give you an idea of what that’s gonna cost. An appraisal gap, you know, that’s that’s a way to win. You say, “Hey, if it appraises low, we’ll pay the difference up to $10k in cash,” boom, you know. Large earnest money deposits. Your earnest money is a deposit that you make within a couple days of going under contract that gets sent typically to the closing attorney to hold onto. And that’s kind of your good faith thing.

It means, “Hey, first of all, I’m in the financial financially secure enough position to make this deposit. And two, if I don’t fulfill the terms of the agreement that we agreed to, that you get to keep that money. So if it’s the day before closing and I back out of the deal you keep that money, right?” It’s a little bit of security. Option money is that’s an optional thing. And that basically says, “Hey, I have this due diligence period where my earnest money is, is refundable, but you get to keep, you know, $200-300 bucks regardless. If I back out during due diligence, because I find some problems, you still keep that money.” it helps keep your due diligence periods tight. You’re not gonna get a two-week due diligence. Okay. A couple years ago used to be able to get a two-week due diligence. Nowadays, I don’t recommend any more than 10 days and really 5 days should be enough time to get an inspection done on most houses.

This is an important point. You don’t need to pull all the available levers, right? I, I won one. Oh, here’s the most important – seller’s needs and wants, right? So I find out from a seller one time that he needs to sell his house before he can buy a new one. So we offered him a 45-day rent-back and that’s what won us that bid. There were higher bids, but we offered the rent back and we won it. So it’s always important for your agent to ask that seller’s agent, “what do you need? What do you want? What are things that we can do to win this bid that are important to your seller?” so that that’s an important piece as well. Awesome. So that pretty much ties it up guys. You know, this isn’t a live thing, so there’s not gonna be question and answer from the audience.

This is a recording. I encourage you, if you have any questions leave us a comment. Send us an email or, or a text. We’ll put some contact information up. We would love to talk to you. And there’s a lot of, this is a very general try to make this somewhat fast. There’s a lot of information in your specific situation that we probably didn’t cover. So hopefully now you at least know what questions you should be asking. Please reach out to us, ask us the questions, ask how we can help. Even if you’re not doing business in Savannah or Fort Stewart. And you’re trying to go somewhere else. If you happen to see this video and maybe you’re moving from Carson, to Bliss, give us a shout. We’re happy to recommend friends of ours out in those markets and help you out. Thanks, guys!
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Investing Selling a Home

Video: Making Your Home WOW – Design Tips with Kelly, Pat, & Wynn

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Full Video Transcript

Pat Wilver:

We’re here today to talk about some of the design decisions that we made when laying out this home. And I think this will be a very useful video for you, whether you’re getting into home flipping, maybe you’re thinking about selling your home soon, and you wanna know how to get the most value out of it. Or even if you’re considering a renovation, maybe you never want to sell the home. There will be some useful tips and tricks that you can apply to really knock it out of the park.

Wynn Martin:

Nobody has an unlimited a budget. So where you put your resources is very important. Most of the time your kitchens and bathrooms are gonna be the best bang for your buck. Once the renovation project is complete, do you, or don’t you stage it? Pat and I are in hundreds of houses a month, some staged some unstaged. And when we do our comparables, when we run all the numbers at the end of the day, the staged houses that we’ve been in do sell for more. Even in this hot market.

Kelly Duncan:

Patrick gave me a call. He had a unique flip coming up. It had a very unique layout. You name it, it had it – from floral wallpaper to hideous wall color, to awful carpet, a very outdated kitchen.

Pat Wilver:

From the first time that I walked into this house, I could see the vision and I could see what this could be, even though it was a total atrocious dump back then. And now when we walk through, we’re immediately greeted by the, the black accent wall, that corner wall with the fireplace, and it catches the attention, kind of draws you to turn right, and the black accent wall, really make it so it’s not a dull space. And it’s interesting, you got this beautiful natural light with these huge windows.

Wynn Martin:

It’s a good focal point for the beauty of the room. Lets in the natural light. And as you can see the way it’s staged it just looks great.

Kelly Duncan:

When I walked into this space, I knew it had that modern feel. I knew we had to have white bright walls. So as the light changed throughout the day, the colors of the walls would not. We picked a very light flooring to brighten the space even more, wood tones throughout and black metals and shag rugs. The uniqueness of this living room space is it almost had an alcove, and I knew immediately it had to be an additional sitting space. So a buyer could come in and visualize that this is an extra large living room.

Pat Wilver:

This is a great space to entertain, to have friends and family over plenty of places to sit. We’ve got the beautiful kitchen that we come through. In the kitchen, we wanted to make it different with this shelves and vent hood that’s that’s in right now. And we’re able to do that because there’s so much countertop space, plenty room to put in microwave. The gray cabinets, again, it’s unique. We tie everything together with the, the color of the handles and the, you know, the faucet is something unique.

Wynn Martin:

It’s really cool! Black and gold, it’s got a whole bunch of little widgets and everything like that. For the cost that he mentioned, it’s well worth the cost. Having a really nice sink – farmhouse sink, kitchen looks great. And he did upgrade the stone. The stone. He could have gone with a level one kind of granite or something like that. He spent a little bit more money, a little bit extra and it looks like a million bucks.

Pat Wilver:

That faucet that we used is maybe $100 more than a more standard one we could have done. So we’re talking $300 worth of difference for, you know, I don’t have the exact number, how much more money did I get because of that? I’m not sure. I know it’s more than $300. The bar room is the really, the only space that I didn’t put a personal touch on because in this case, that’s something I wanna leave up to who buys this home. People could do so many different things with that, but it’s there. It’s ready to go. It’s gonna be a great space. The hall bath is spacious. It’s well-designed, but it’s a hall bath. There’s not a lot of thrills. The master bath and the master bed is really the statement here. A huge, huge, huge master bed. Nice big closet, much larger than most of the houses in this neighborhood so we stand out. In the bathroom with the, the massive double vanity what we did with the lights and the mirrors and, and the black I think is, is good. Not a lot of people are doing black right now. So I like to be, as we said, I like to be different. And I, I love the shower. It’s so big. You don’t even need a door on that thing. Really, really happy with how this turned out,

Wynn Martin:

Whether you’re doing a personal project or whether you’re doing it for a client this case here, this beautiful home we’re in is Pat’s. Any of our clients, anybody that works with us knows that we do it right. Trophy Point Realty Group – we want to do things the right way, honesty, transparency, integrity. We need to tell you what you need to hear, not what you want to hear. And that goes a long way in the finished product. In working with professionals, Pat mentioned professional contractors staging, design we’re certainly professionals. And we want to make sure that every experience that anybody has is top notch.

Kelly Duncan:

You get the full package with us because I’ve had years of experience in home staging and picking design materials. We can give that to all of our clientele. So if you are an investor that is out of state and doesn’t wanna pick materials, but doesn’t wanna pay that designer price, you can reach out to Trophy Point Realty group. We offer all of it.

Pat Wilver:

Whether you have a heavy lift or you just need a couple little pointers, maybe you’ve got a weekend and $300 you want to spend to add some wow factor to your house. We’re happy to help and pass on our lessons learned so that you don’t have to reinvent the wheel. You can draw on our experience to help you.
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Buying & Owning a Home Investing Savannah Market Selling a Home

Savannah Suburb Flip: Before & After

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Full Video Transcript

We’re heading out to a new property out in Georgetown little suburb of Savannah, about 15 minutes from downtown, and it’s a new place. We just bought it on Friday. Today’s Tuesday and we’re starting demo day. Got my contractors out there. They’re already out there. So we’re hoping to to catch ’em before they get too much done. It’s just fun. I don’t know, swinging a hammer, knocking out cabinets, like that shit’s fun. Right? Who, who doesn’t like getting licensed to destroy a house? You know?

I wanted to talk a little bit about the numbers and about, you know, how I decide what a good deal is. So this particular deal, first thing you do is just a little bit of digging and the easiest thing to do, you can do it from your computer is what will this house be worth when it’s fixed up? $289K was my number. It’s gonna be worth $289k. It’s a 4 bed, 2 bath, 2400 square feet. Big house. We’re gonna make it nice. The next thing I look at is where’s the seller at right now on his number? What does he want? And I knew that he was around $140,000 on what he wanted for it. So I said, well, that’s, you know, we could make that work. $73K is the rehab budget. If we add purchase price and rehab budget together and round up a little bit, we’ll call that $220k is our, is our all-in for hard costs.

Do not forget to factor in your various soft costs. My interest closing costs – it’s gonna be around $5k or $6k and then insurance is gonna run me about $1,000, you know, power and water. And so all in our soft costs are, are gonna be around $15k. I know I can sell it for $289k. Obviously there’s a good bit of room there, right? There’s, you know, sounds like we’ll make money. So I feel pretty good about this. You know, these, these projects, they should make you a little nervous going into ’em. And, and I find that, you know, the action is what takes away the nerves. When I see my contractors out there, you know, getting it done early in the morning makes me feel good. You know, we’re seeing progress. So demo days, man, they’re fun. Check it out. We are finally done with 18 Red Fox here in Georgia. I’m so excited to be done with this. It’s taken a little bit longer than we wanted to, and it’s always a little bit stressful, but we’re under contract already. We’re selling a place – we didn’t even have to go to market. So I gonna take you through, I wanna talk about all these different design decisions and how it led up to the final product, what you see before you right now. So let’s go take a look.

I love how you’re just greeted instantly with natural light from those windows. This is very well laid out – staging, I think, looks great. And I love the fireplace wall. I think looks great. You know, white and black is in right now. So we’re always trying to stay on top of the trends, but not only is it trendy, I think it’s something that’s gonna look good still 10 years from now, because this is a very classic kind of thing. One of the things we like to do when we’re flipping a house is we wanna try to make it appeal to the most amount of people as possible. So, I love how this turned out. I think the staging here really ties this together. When I walked in after the staging and I saw what Kelly, the stager, had done with this space, it just made sense. It just clicks with me. I’m like, oh, of course we’re gonna put chairs there. That makes total sense.

Love the kitchen. Man, they say kitchens and baths sell houses. So, if you’re gonna spend money in a house by God, spend it here. In, in this kitchen, some of the design elements, we wanted this to kind of be the statement. And you, you walk in and your, your attention’s drawn to this, right? Shelves are in, stainless steel vent hoods are in, you know, subway, tile back splash to the ceiling taking that all the way to the ceiling. Did it cost a little bit more money? Yes. Okay. A lot of people will stop it. You know, maybe at the top shelf or maybe they’ll just do a little run of back splash, but we’re talking a couple hundred bucks maybe. And, and what’s the difference in quality in that wow factor? I think, I think it’s pretty huge. So I love the way this turned out.

It kind of makes a statement and it’s very functional. Look how much space there is. This is a large run, and believe me, I know because I spent a lot of money on this stone, right? But it’s large. It’s very functional, you know, for cooking large meals, we can have some, you know, stools here for a little breakfast nook if somebody wanted to do that. Very, I think this is a really great combination between functionality and just, it looks good. So the color are good. You see the colors here. Grays, whites and blacks are very neutral. So that’s why we kind of go with, with this. And then we, you know, we throw on these, handles it just kind of give it a little, a little touch of pizzazz right? Or this sink. I love farmhouse sinks. I think it looks really good. It costs a little bit more money than a standard undermount sink. But well worth the money I think. And I love this. It took me a while to figure out how to even use this dang thing because it’s coming out here, but then what do you do here? And look at that, you know, that’s just, that’s cool. You know, that’s better than the sink I have at my house. So, you know, I kind of live in a shitbox and I make all these nice places for other people.

We definitely spent a lot more money in the master bath than the hall bath, but we still want this to look good. It doesn’t make any sense to have a kitchen that looks like that and then put like a vinyl insert shower, right? That just does not flow well. This costs more than a vinyl insert. Probably spent $2,000 to $3,000 more tiling this than if we would’ve just got one of those inserts that you get at Home Depot. But again, that’s, in my mind, a money well spent kind of thing and, and we didn’t get too fancy. This tile on the floor is pretty cheap. I think it’s like maybe $2 a foot. This subway tile is not very expensive. This vanity, you know, is, is kind of like an off-the-shelf. You could probably go to Home Depot right now and buy this, but it’s the simple things.

I think the black all the black fixtures are modern and it’s, and that costs just the same as any other fixtures would’ve cost. Maybe we spent a little bit more money on this light bar than another one, but we’re talking $50. I can’t stand when flippers – I’ll go into somebody’s house, they flipped and they’ve got the same frigging, $100 ceiling fans that everybody else has. And it just, there’s no character, there’s no style and they could have spent $50 a fan more just to go the extra mile. Just doesn’t make any sense to me. So we spend a little bit more money, not much. I think it looks great. This is the master. So this is huge, great closet. I love this bath. I don’t even remember what was here. It was dingy, nasty straight out of 1975.

I love this. This is one of the biggest showers that I’ve done. You’ll notice we don’t have doors on it. So I had some people ask me, oh, why not doors? You know, whatever. A couple reasons. One, honestly I think it’s big enough that you can get away without a door. Two, they cost a lot of money. They’re kind of hard to get right now with the supply chains and all that. And three, it doesn’t really stop a buyer from buying this place. This is a strong seller’s market, as we know, right now. So just not really worth it. If this was a smaller space you know, we probably would, but you know, we’re not even, we’re not even getting water over here. Right. So I don’t think it’s really strictly necessary to have that. So I hope you enjoyed this whole video and seeing the before and after and all the decisions that we made. I hope you learned a lot from it. We’re very excited about this. And you know, we just wanted to say that we do this for ourselves. We flip houses for ourselves and we also love to help clients. If you’re an investor and you’re thinking about doing this, or even if you’re just a homeowner and you want some advice – “how do I sell my house for more?” “What easy projects can I do to get top top dollar?” Or, or maybe you don’t even wanna sell. And you’re just wanting to do a renovation for yourself. Please give us a call. We’re happy to give advice, take a free consultation.

And, and I’ll be honest with you. It’s more important to me to do a good job for my clients because that’s their money. My money, you know, it’s my money. If I lose it, the only person I disappoint is myself. And I, I don’t wanna disappoint anybody else. So we love doing this for ourselves. I genuinely enjoy the process, and seeing a house transformed and then sold on to a new homeowner or a renter, depending on the situation. I love helping other people do it. I think it’s very exciting. It’s a great way to earn a living. So thanks for joining me.
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Video: Pat & Wynn on Closings Costs – Coffee with Kevin, ADPi

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Full Video Transcript

Kevin:

Hey guys Kevin here coming to you live from DC. And we don’t do this often. Well, if you’re in Adam, you know that I do coffee with Kevin videos. Usually every week, you’ll see one pop up in the Facebook group. But what I wanted to do was do some interview style stuff, because I’m sure most of you are sick of hearing me talk. You’re sick of looking at my stupid face. Now you have two other faces to look at, and those faces are our own ADPi ICC agents. Wynn Martin and Pat Wilver out of Savannah, Georgia, they’re my agents. They’re my team. I trust them with my life. And they both went to West Point, despite Pat’s beard. He did in fact go to West Point and they’re crushing it in Savannah. Their, their, their whole operation is growing and just exploding there in the market as they do really, really good business.

Kevin:

But what we’re here to talk about today as we you know, sip our coffees is closing costs. I’ve had a lot of questions in the group come to me privately, or, or, or, or just in the group, Hey, what what’s all involved in closing costs. I hear closing costs are like the worst thing ever. Well, I wanted to bring some agents on and I wanted to bring some ADPi certified agents on to talk about closing costs, what they are and why you shouldn’t necessarily be afraid of them, especially if you plan to VA house hack. And, and I say, ADPi certified agent, what does that mean? So over the last 12 months now, ADPi has been going through, finding agents, and vetting them and, and making sure that they are the best agents in that market to talk to veterans. They have to have a military affiliation.

Kevin:

You know, these, these two gentlemen have been to West Point and, and, and they’re veterans themselves, and they have to know what it means to invest. And these two gentlemen are investors themselves. So they know investments, they are qualified agents and have a military affiliation. So they, we, we, we just don’t want agents just like spewing crap about the VA loan that they just think they heard from their cousin’s, you know, brother, who’s a lender, you know. We wanted to talk to the real deal, so Wynn and Pat, thank you for your time. And let’s talk closing costs.

Pat:

Sure. Pleasure. Yeah.

Kevin:

So closing costs. So the biggest thing that I, I, the question that I get is I wanna use my VA loan. Does that mean I don’t have to pay closing costs? What do you guys say about that?

Pat:

Well, well, you do have to pay closing costs, but you can ask the seller to pay for up to 4% of the the purchase price of your house and closing costs. So generally you can get the seller to cover most, if not all, of your closing costs. But there is still closing costs. Somebody’s got to pay for them.

Kevin:

Okay. So, so what, what are these, what are these closing costs? Like, I have all this, you know, I’m paying, so, so that’s a good tidbit because you said up to 4%. So that means that, you know, if your house is $100,000, I mean, shoot man, you can get $4,000 paid for by the seller if you negotiate right. Is that math right?

Wynn:

Yes. When when you’re writing a contract, make sure that your agent is asking for an appropriate amount of closing costs, maximum amount, if you can. The last probably 10 or 11, we’ve done VA loans. The buyers have actually gotten money back. We’ve asked, we’ve negotiated for a good amount of money. Typically closing costs are three or three and a half percent on a VA loan in our market. So if you ask for 4%, you, you know, they pay too much, you get a little bit back and it’s nice to buy a house no money down and get a check back for, you know, like $1,500. Can’t beat that.

Kevin:

Sure. Can’t so you’re getting paid to buy your investment property.

Wynn:

A lot of times you can.

Kevin:

Whoa. That’s wild. So what, when, when these closing costs break out, what, who’s getting paid? How much are they getting paid typically? And like, why?

Pat:

Well, I mean, first you have an attorney, right? You got your closing attorney, some states, I don’t believe you use attorney we’re we’re in Georgia. So any kind of, you know, anything we talk about is gonna be specific to Georgia. Some things may be different. In Georgia, we have a closing attorney. Their take is usually attorney-related closing costs usually like $2k-$2,500. And that includes a big line of things. I’m holding up an ALTA settlement statement right here. So under the line on, you know, title charges and escrow settlement charges, you have title insurance for the owner and for the lender. In this case this, this particular example, this is about a $200,000 purchase price 100% loan to value VA. In this case, title insurance total was about $1,000 for the lender’s policy and the owner’s policy. Attorney fees in this case are $645. You have some associated, some, some assorted title-related fees, $45, $20, $195 for, for a binder, another $150. There’s a bunch of little,

Kevin:

But it’s kind of all like attorney-related.

Pat:

This is attorney-related stuff. And this isn’t really, this, this is gonna this is gonna change attorney to attorney. There’s so many closing attorneys that they have to be kind of competitive. But that’s, that’s, what’s involved that usually comes out to between $2k and $2,500.

Kevin:

And then title insurance itself correct me if I I’m wrong here, but that is, you know, you’re getting insurance on the title of the property to make sure that the title is coming from Joe, who’s selling the property and Joe is who he says he is. And he actually owns the property, giving it to, to you or transferring it to you and making sure that you own it.

Wynn:

Correct. And every, every state’s different some states don’t require deeds to be recorded in the courthouse. And so they could have a deed in a safety deposit box or buried in the backyard from long time ago. They could present it to a judge and say, this is legally my land. And so what title insurance does, it just prevents you know, it ensures both lender and the owner that that won’t happen. And if it does this title insurance company will go to bat for you.

Kevin:

Right. Okay.

Pat:

Do you want us to get into like what title insurance is, or?

Kevin:

No, no, no, no. Just kind of 30,000-foot overview. I think for our, for our, that’s

Pat:

A good discussion for another time though. I think,

Kevin:

Yeah, we got, Hey, there’s plenty of coffee, man. We got lots of coffee. Yeah.

Wynn:

Now another, another thing in the closing statement, besides the attorney’s fees are gonna be escrow, all VA loans have to have escrow. And that is basically your mortgage company is going to pay your taxes and insurance is what that is. So you’re gonna get a, a monthly statement for say, $1,000 a month. $800 is going to go towards a principle and interest. And then the mortgage company’s gonna set aside a little pot of $200 each month to go in a separate bank account. So when your annual taxes and insurances are due, they’ll pay them on your behalf. What they do at a closing is they collect, you know, normally, you know, three, four months worth of a escrow charges, which is taxes and insurance to kind of prime the pump. They, they take that out on the settlement statement, put it in a bank account to get started. And that’s your starting balance. And then every month in this example, $200 will go towards that. So when tax time comes, you’re covered, so that’s gonna be on the settlement statement also.

Kevin:

Yeah. And, and that’s a really good point, Wynn, because I, I remember Wynn, you know, two, two and a half years ago giving me this same exact speech, because I had so many questions on, on my lending statement. I was like, why am I giving a thousand or whatever it was dollars to escrow? Who is escrow? And but you know, I, I figured it out when that tax bill came and they were like oh your taxes have been deducted from your escrow account. And I was like, oh, so I don’t have to worry about calling the city and paying them? You know, it’s like, Nope, it’s all taken care of.

Pat:

Yep. Lender, lender does it. The, and you’re also paying your first year homeowners insurance also. So that’s in addition to the escrow you’re paying your first year homeowners, insurance premium you’re paying your escrow. This, this statement is two months of property taxes and three months of homeowner, it kind of varies

Kevin:

Yeah

Pat:

How much you’re actually gonna pay the escrow. And you also, we’re talking taxes and insurance. You’re gonna pay your part of the year’s property tax bill at closing. So that’s also gonna show up on your statement.

Kevin:

Yep. Yeah, absolutely.

Wynn:

One of the biggest dollar amounts that you’re gonna see on a VA settlement statement is gonna be under loan charges and it’s all gonna be different depending on the, you know, the state and the, the lender. You’re gonna have appraisals, credit, credit reports, flood certifications, e-recording fees, and then a VA funding fee. VA funding fee you can’t get away from. Now that will vary depending on your eligibility and if you’re disabled and what percent you are disabled. So fees talk to a talk to a, you know, an ADPi lender to see what those fees will be for each specific person. But those, those fees get rolled. The VA funding fee gets rolled into your loan more than likely I would recommend that it would. But that’s also gonna be on the settlement statement. You’re gonna see a whole chunk of loan items origination fees lender credits, all that kind of stuff will be, be on the settlement statement.

Kevin:

Yeah. And, and we call that we, we call that wrapping it into your loan, like, like Wynn was saying, and for those of you who are analyzing a property right now and you thinking, oh, I might might wanna use a VA VA house hacking calculator, a ADPi’s VA house hacking calculator the the base Excel spreadsheet that you have access to in operation Adam right now on the Facebook group, click on files, click on ADPi house hacking calculator that will let you, it gives you the option to roll all of your closing costs into the loan, not just your VA, but you can roll everything that you want and customize that, that property and that analysis the way you want it. So make sure you, you guys are using those products because they’re super helpful. What other fees are we talking about?

Pat:

Right? So we got the funding fee. We talked about, so we talked about taxes, there’s different kind of taxes. So of course there’s your property tax you pay to the city and the county, but whenever you purchase a property, you have taxes related to transfer of the deed, basically. In the state of Georgia you’ll have transfer tax and an intangible tax. Transfer tax is always paid anytime anybody buys a property, even if you buy in cash, you’re paying transfer tax. In Georgia, that’s $1 per thousand dollars of purchase price, right? So in the case of this property that sold for $197,000, that was $197, right. And tangible tax is something you only pay when you take out a loan and you pay that it’s $1.50 per $500 of loan amount in the state of Georgia, alright. This is gonna be different anywhere. Most states have similar taxes, but that’s the state of Georgia in this case $197 of transfer tax, $600 of intangible tax. And then you have court recording fees that’s $70 that’s kind of yep. You know, whatever yep.

Kevin:

Cost of doing business. Yep.

Pat:

Yep.

Kevin:

Yeah. Okay. What about what about realtor fees?

Wynn:

Right? Yep. Realtor fees and commissions. For all the hard work that the realtors do on both sides, it’s gonna vary from state to state. In Georgia, that’s a seller cost, so that’s not gonna be on the buyer at all. When you’re buying a house and you’re working with a realtor, you’ll probably be signing a, a, a buyer brokerage agreement, whether it be exclusive or non-exclusive. And then there’s a little checkbox somewhere that says you know, the, the realtor’s entitled to an X percent commission. If the seller doesn’t pay it, the buyer will or will not be responsible for any difference that is. You know, Trophy Point Realty here, we, we always say not responsible. We never have a buyer be responsible for anything. If we don’t get paid, we don’t get paid. But the, in, in the state of Georgia, sellers pay the commissions. So hopefully,

Kevin:

Yeah,

Wynn:

Most states they can negotiate to, to not have any commissions come out of the buyer’s side.

Kevin:

Yeah. And that’s, that’s really clutch because when you’re buying a property, you know, you’re kind of focused on analyzing the deal and making sure, and we’re talking investment property here, you wanna make sure it cash flows and you don’t wanna be, you know, totally stabbed with these hidden, oh, by the way you owe a 3% commission. No, that comes out of the seller’s end. But that also, you also need to understand that when you’re negotiating with sellers, know that they’re either, they either know or they’re being advised that, Hey, you’re gonna, you know, as a seller, you’re gonna have to pay 6% you know, in commissions, 3% to the agent that you’re working with 3% to people like, you know, that are representing the, the incoming buyer, guys like you. And you know, so you got to know what they’re, you know, when you’re, you’re buying a property or trying to figure out, okay, what’s, what’s the seller’s bottom line, you know?

Kevin:

Well, make sure you add 6%, if it’s on the market and it’s been listed and they’re working with agents because you know, that’s, that’s gonna be something you have to cut into. That’s why we always try to say, find for sale by owner (FSBO) listings, or find off-market listings. And maybe they’re not working with an agent. Maybe you can, or maybe the seller can, save 3% and then pass those savings on to you as the buyer. That’s why, you know, when, when we’re looking, if you’re looking for investment properties, always try to look off-market.

Pat:

We, yeah. We work a lot of, in the nature of our business, we work with a lot of investors. So we’re looking at a lot of off market deals. And you know, of course we wanna get paid. We try to work some, some payment in for ourselves, but

Kevin:

Of course yeah. Finder’s fee or, or something like that. Yeah.

Pat:

Yeah. But, you know, we, we try to make the deal work for both ends. We’d rather not get paid a whole lot and get a deal to work, you know, than… Some money’s better than no money

Kevin:

Because that investor’s gonna come back to you over and over and over again. Yeah.

Pat:

So it, it generally it’s gonna come back to us, you know, one way or another. But yep, absolutely.

Kevin:

Yeah

Wynn:

And then the last part of our settlement statement here in Georgia is miscellaneous. There’s a big spot for miscellaneous charges. That’s going to be home warranties, termite bonds, HOA fees, any liens that need to be paid off. Your upfront homeowner’s insurance, that’s gonna be down there in the miscellaneous

Kevin:

Home warranties,

Wynn:

Home warranties. Exactly. You can do a, a one year like an Old Republic or American Home Shield home warranty. That’ll be down here termite, bonds, termite letters, any of that stuff can be in miscellaneous. So, you know, it’s gonna be a couple pages. It’s you know, usually three pages, it’s like three pages and it’s, you know, it’s a whole bunch of nickel and dime stuff, but definitely have, have your lender go over it.

Pat:

We didn’t get prepaid interest yet.

Wynn:

Um yeah. And have your, your realtor will help you understand what everything is.

Pat:

Yeah. Pre prepaid interest. So if you close on a property, this is June, right? So you close on a property on June 15th. You’re gonna owe the lender, at closing, interest from, you know, the day you buy the, the property until the end of the month.

Kevin:

Kind of like a prorated. Like if you’re renting, you have to pay prorated rent. If you move in the 15th.

Pat:

Yep. Just interest though. Not, not premium. You’re just paying interest, but your first mortgage payment won’t actually be until the end of the first full month. So if you buy on June 15th, you’re not gonna have a payment on July 1st. You’re gonna have a payment on August 1st. So there’s, there’s some, there’s some ways that you can kind of, you know, play the timing game. I, I mean, I kind of like if you buy a property at the beginning of a month, you almost have two free months.

Kevin:

Yeah. Almost of, of like free mortgage. Yeah. And especially if that, if you have a tenant in there or you can quickly get a tenant in, if we’re talking an investment property here, you know, you’re, you might be able to bank an extra month of cashflow. Right. You’re not, you know,

Pat:

And that’s, that makes a big difference. Yeah. Yeah, we just did a refi on on a duplex that we’re house hacking, and, you know, we timed it pretty well. We’re not paying a mortgage this month, but we’re still getting the rent. I mean, that’s pretty cool. So

Kevin:

Can’t beat that. Yeah. Alright guys. Well, thanks. I think I think we covered most of it and, and like Wynn said, there’s a lot of, it appears like there’s a lot of nickel and diming and like everyone’s trying to get their end, but also remember, in the real estate industry, everyone, the, the entire industry is built around helping buyers find a home. So everyone is working for you. The lender is working for you, your lawyer is working for you, your agent’s working for you, the title company is working for you. All of these players, they all come together and yeah, they all need their little piece of the pie, but ultimately you know, the way the system is set up is that they want people to buy and own homes in America. Like they, they, they want people to, you know, the government and everyone, the system wants people to, to own homes.

Kevin:

So if you can go in and buy smart, we always say, buy smart upfront, buy right upfront, you can use all of these subsidiary services to help you. And honestly it does make your life a lot easier. I mean, especially if you’re an out-of-state investor like me, I rely on guys like Wynn and Pat to do a lot of the hard negotiating for me, I mean, I give them parameters and stuff, but they do the negotiations. They go and walk properties for me, they send me videos. Well, I can’t fly down to Georgia to go look at a quadplex, you know, but these guys can drive, you know, five minutes away, but of course they’re gonna get their end, you know, or whether it’s finder’s fees, or, or commissions or whatever, but you just it’s right on that end. So if y’all have any other questions you know, Pat and Wynn, Pat, where can, where can our viewers find you or get in contact with you?

Pat:

Yeah, so, so we’re on Facebook and Instagram at Trophy Point Realty, we don’t trying to get better at content creation and putting more stuff out there. Usually we’re too busy hunting deals to post on our pages. We got a website, TrophyPointRealty.com. Okay. We got a little blog on there that, you know, I try to write on a decent amount. Again, we get busy but look us up.

Kevin:

Cool. Yeah. Trophy Point Realty Wynn Martin, Pat Wilver. These guys are crushing it in Savannah. So if you’re interested in Savannah, first reach out to me because I can hook you up with all of the market analysis that you need. And then I will send you directly to Wynn and Pat to help you get some investment properties. There’s a lot of cashflowing going on down in the south and you should get on it while the gettin’s good as they say. So thanks guys. Thanks for, for taking the time. And I hope that we can continue working with you guys and maybe do some more of these coffee with Kevin’s in the future.

Pat:

Right, right on. Anytime. Thanks. Talk to you soon.

Kevin:

Thanks man.
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Video: Termite Damage

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Okay. Here’s an example. When you find something, you have to address it. There are two ways to do a renovation. You can do it where you say, Hey, I’m gonna cover it up and not fix it because the next person I’m gonna sucker them and they’re gonna buy a house and it’s gonna be broke. Or the ethical thing to do. And the right thing to do is when you find a problem, you have to address it. In this case, we’re gonna address it – costs some money, costs some time, but it’s the right way to do it. So there are two ways to do a flip, two ways to do a renovation. I think it’s a right way and a wrong way, always there on the side of the road. Here we are in a renovation project here in Savannah, about a hundred-year-old house we have. We’re doing renovation on the bathroom tore everything out, rebuilding the bathroom from scratch. What I wanted to show you today, was an example of what termites can do to a house. Perfect example of termite damage. There was a leak. There was some water infiltration in the shower, came down, made all this wood nice and nice and moist termites, love dark, moist places. And they just feasted on this. And a lot, lot’s already been taken out from the bathroom here.

And this is right here. This will all be reframed. This – the damage – now this has to be sistered on because there’s nothing here to bite into. This was the termite damage. And it was to the point of where it had to be removed because the, the header itself, you could crush the entire header with your hand.

Yeah. All this, all this was destroyed. All this here all the way down should look like this.

And it was all, it was worse. It was worse than the other side. It was really bad. Yeah. You can still see some remnants of the good wood. But once again, when you’re talking about, when you’re talking about good wood, I always take a key. I always take a key and start really hitting into it to know if it’s soft, if it’s what’s going on. So even though this outside part, you know, the, the, the wood there is good, they can sister onto it. Put another piece, another piece on this side, solid wood behind there’s solid wood behind. So you don’t need to rip out this whole thing. You only really need to rip out whatever can’t hold a nail or a screw.

Example of what it looks like. So termites get in and just completely eat away at all these structural supports. And, and you have nothing left. So I mean, just comes right off in your hand which is why, you know, you want to have termite protection, a termite bond, especially in Savannah and south, termites are very rampant down here. And this is something that you’ll never know until you take this down. But, but once again, with a hundred-year-old house, don’t be surprised that we’re probably gonna have some termite damage somewhere. So even though it looks really bad, as long as there is a lot of good support structure here, you can replace all this at a nominal cost. So it doesn’t have to be painful for your wallet. The main thing is make sure all the termites are gone. This is old termite damage. There’s now a bond on this house, a termite bond. So it’s been protected for future termites. We’ll get this taken care of, get back on with the project, little extra cost involved but nothing that you know, nothing that’s gonna break the bank.
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Video: Renovation Progress Check

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Here we are at 1109 East Anderson take you through, show you where the progress is, all the electrical, plumbing all the mechanicals are done. So we have come on. So we have insulation’s already in, been inspected, starting to put up drywall. You’ll see all the different places. So this all be drywalled here in a couple days which really make a big difference. Windows are in. Measuring for cabinets, making sure all the cabinets are gonna fit. And then back here, HVAC unit. Bathroom, bedroom one, bedroom two, bedroom three. Getting ready for drywall. Lot of framing had to be redone.

In the back. The back we’ve got replacements for two washes and two dryers. They’re gonna be communal for everybody here. All three units. We’ll go upstairs here in a minute. All that used to be sky. Do you remember some from these videos? Extended it out the back. Let’s go take a look.

So upstairs, this front room, they already painted.

See what this is gonna look like. Kind of on the more finished side, we’re gonna finish these floors, win- all the windows are in, we’ll case up around.

Ceilings are done.

The living room here

And then this is all new. So you remember from the old. The kitchen’s gonna wrap around, it’ll be a big, wraparound kitchen all the way around – fridge sink, dishwasher, stove, plenty of counter space, all over the place. And then we have four bedrooms. So you have the front bedroom that we just came from, bedroom two, bedroom three, bedroom four.

So we got four bedrooms, two baths upstairs the new bath, we added right over here,

Walking in, Walk in. We’re going to have double vanities, toilet, and tub. This used to be the breakfast nook at the old layout. So, it’s getting there! It’s getting there. Keep you updated as more as more comes.
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Video: Trouble in the Kitchen! Rolling with changes while flipping houses

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Wynn:

Hey, Wynn Martin here at a project house in Savannah. We’re in the carriage house, we ran into a little bit of a design issue. We got Chris Norman here with

Chris:

Southern Home Solutions

Wynn:

Southern home solutions and Ed, here, with

Ed:

Reliance Cabinetry.

Wynn:

Reliance Cabinetry. So what happened? The original plan had a sink, a stove, and a dishwasher. We looked at the window and as we reconfigured, drawings came out but the drawings aren’t always the scale. And they had a fridge here and cabinets up here so that doesn’t work. So we’re here today meeting and trying to figure out how do we, how do we solve this problem to make it functional and economic? So option one would be, I’m sorry, leave the window. Just kind of make this space kind of, it just wouldn’t look, it wouldn’t flow. Option. Number two would be reframe this window, bring this up to here, giving you enough counter counter space smaller window. And then you put the siding on the outside and, and make it look good. But it’s still, you still have some dead space here. You don’t know where you’re gonna fit fridge. So because it’s kind of limited. So the third option is what I think we’re gonna go with delete the whole window, drive all over it, take it out, frame it in, put the siding on the outside, giving you a whole wall that you can now use for whatever kind of design you want with anything.

Chris:

Alright, so, you know, of course with redesigning anything, we, you know, there’s the pros and cons. So taking this window out, reframing it in, repairing the siding, of course, on the outside. One thing that I would like to point out with clients is, you know, we can try to patch it in, but typically unless we reside it, you’re gonna see kind of a variation in the material outside. So it’s going to look like a patch so much on, on this. I don’t think it’s the side of the house over, over there. It’s not so much of a big deal. It was the front of a house. I was say, let’s tear off some siding, you know, and, and do the length. But here, I mean, we’re talking about about $600. As far as this, you know, re- repairing the siding outside, tearing this out, reframing it, putting sheetrock here so we can have a microwave cabinet of course along with that electricity, venting all’s got to be put in. Moving the stove, you’re gonna have to rerun the electrical for that. And also putting the dishwasher over here, we’re gonna have to lower the electrical for that. So those are just some of the pros and cons, probably looking a thousand, $1,200 by the time you get all said and done. But it’s gonna give you the functionality that you guys are looking for to, to, and, and for the people living in the house to, you know, have some type of functional kitchen.

Wynn:

And as always, when you’re doing a flip, you always want all the money put into a project to be worth more than on the backside. But sometimes we run into issues like this. I don’t know if we’re gonna be able to get the money out of it, but it’s something that you need to do. Maybe we’ll be able to squeeze a little extra money out because it, because it’s gonna look a little bit better than if it would, if it were broken up, you know, you run across things like this all the time. Hopefully not on your projects, but running across it on mine where you just, you come across an obstacle that you never thought of once everything was designed and you just have to, you know, do a little bit of an audible, figure out how to, how to make it work. So

Ed:

Prioritize the, the items, you know, you must have that are most important to you or to the buyer. And then base everything else off that. Step by step.

Wynn:

Yeah. Great point. So before, we didn’t have a dishwasher, there was nothing in the design for a dishwasher. Now that we’re getting rid of this window, having a whole wall gives us more space for everything. We’re able to add a dishwasher over here next to the sink which will be a desirable feature for somebody who, who rents it or buys it. So try to make the best of a unfortunate situation, but that’s why you have a good team around you. That’s why I have Ed. That’s why I have Chris that we all put our heads together and come up with the best, best option.

Chris:

So typically I’m, I’m right around $10k or $12k for, for, you know, the cabinets, the granite and the install on a smaller kitchen. You know, that’s probably more reality. And then you’re gonna have another, you know, $3,500 for, for your appliances. So that’s kind of where I, I look at things. This is a more of a kitchenette, so there wasn’t a lot budgeted for it. Because we were just going with the original thing, but being, you know, the type of rental that you’re wanting to do, is it gas, do they want to make it more and more functional for a buyer to, you know, show functionality, get the most for the rent. So that’s why we’re even having this conversation and, and adding more. So they can actually get more for their rent.

Wynn:

Have 15-inch cabinet. So we’ll have a base cabinet, a dishwasher, and then the, the sink is gonna be diagonal, single-basin sink diagonal we’ll have a cabinet, the stove, microwave, another cabinet. Then the corner’s gonna be the refrigerator. We’ll have uppers along this wall. And I think what we’re gonna do over here just for size, we’ll just put some open shelving, open shelving here to kind of, you know, tie this space in.
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Video: Hinesville Flip Scope of Work

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Full Video Transcript

Hi, my name is Augustus Brown and I work for Foreverlasting Renovations Construction Incorporated. And we were basically going through this house to get some painting done, some sheetrock work done, we’re fixing lights. We put in new switches, new gloves already. Let’s go through we’ve had, we’ve had to do some sheet rock repairs in the ceilings with water damage. We’ll be reinsulating that once we get it completely finished up. We’ll be putting in new, we’ll be changing out the thermostat new, um smoke detector, and doorbell. And also what we’ve been doing in here too, is we’re gonna be doing something that kind of unusual, but not undone. We, we do do it. We’re gonna be taking and covering this with a skim coat on the floor, and then we’ll come back and we’re gonna be putting the LVP throughout the whole house. We’ll be removing the laminate that is presently in here.

And at the time we’re also going to be doing sheetrock repairs where cracks in the ceilings are. And in corners where we have sheetrock tape that’s loose, we’ll be repairing that as well. In the bathrooms, we’ll be putting vanities, a vanity in and getting this, getting the finish on the one started, right. So we are just coming in and try to get everything finished with a nice 30-inch white vanity and getting lights put up and putting in the register for the AC unit. On this right here, we had to come back. They, they had kind of did with something come back in here and put a sheet rock here. We gonna come back with 11-inch or a 12-inch board for a window sill, and then we’ll do a little trim out on the bottom and dress it out because of the way they actually put the window in. Unfortunately, sometimes when we come into these projects, we have to kind of work with what we have already.

As we enter into the kitchen area, we had a set of row lights here. We came in and we put some can lights in. On the electrical side with everything that we’ve done so far, put in about $3,800 in that price range. And that includes the fixtures. We did some fans in the, in the bedrooms and we’re doing, we’re doing can lights in this kitchen area here with one can light where the pantry is, and we’ll be changing this out to a nice light that hangs over the table. We are going to be changing the cabinets out in here, we’re looking at right now, we’re looking at possibly doing white cabinets with a butcher block. It all depends on how everything works out, um cost-wise. We’ll be doing a deep sink, new faucet here. And of course we’ll be doing stainless steel appliances. Washer. We’ll be doing the microwave over the stove. We’re going to be doing a stainless steel stove and we’ll be doing a stainless steel refrigerator. And once again, we run into issues in projects and you, you kind of see things that after you get into it, um and here we had some issues with some leaks. We’ll be changing this out putting a new box – box in for the washer and we had to come back and actually fix the holes around the dryer vent that goes outside.

Okay. We also have some minor repairs at the top of the panel box where normally the electrician will cut in to tie into lines, run lines, to different things of that nature. Taken out, it was a door casing, an exterior door case here, no door. But right now we’re looking at possibly doing a case opening here or a door. It depends upon what the owner desires. And then what we are doing here, we’re gonna come back in here as well, we’re going to run exterior framing in here. Because originally when they framed this, the water was getting in and it’s rotted. So we had to repair all of that. We’ll get all that repaired, reinsulate it. And then we’ll get it closed up with sheetrock. But they built a little wall out there, I guess maybe used it for a flower garden, but I believe it’s retaining the water and somehow it’s allowed the water to seep in.

So what we are gonna do is we’re gonna take the wall down. Then we’re gonna take and take concrete, form it up, slope it away from the house. And then what we’re gonna do is all the edges where the wood is, we’re gonna silicon all of that with a paintable silicon to make sure that the the cracks are sealed. Hopefully, that should prevent the water from getting in here. Unfortunately, you know, these projects we don’t build them so we try to work with what’s here already. As one person said, you have to work on the can- canvas that you already have. In here, we have to change out the side door going to the outside and we’ll be changing the front door out as well. We’ll also be changing the fixtures throughout the house, the doorknobs and different things of that nature. It was a garage that was converted into a living space, but you’ll notice they did put air ducts in here.

Normally a garage does not have that in there. And of course we’re insulating to make sure everything’s good. In here, you’ll notice that the sheetrock actually only comes so high because the framing does – they framed up the garage so it’s a little bit higher. More than likely, we’re gonna have to do a 6-inch base in here to try to get it to where it’ll come to the top of the sheet rock right here. This is all concrete down here. So in order to keep everything the same, they put a board here, which was a good idea. And then the baseboards would actually nail to this to cover the top of the sheetrock. In the hot water heater, they changed out the hot water tank. They put in electric tanks originally. They had gas tanks in here. So of course the holes that went through the ceiling,

We’ve already repaired at those holes in the ceiling. And now we will come back and put thermal expansion tanks on here and make sure that the ceilings are repaired and ready for painting. And we will be painting the entire inside of the house – walls and ceilings. And we will be painting the outside of the house and roofing the roof. Shed out back, it was actually framed previously. It was framed out of 2x4s. So it was sagging. It was a lot of water on the inside, but what we have to do is just come back and, and put something more sturdier up there. We went with 2x8s because of the span. And what we’ll do is now we’ll come back and sheet it and then we’ll have the roofer come back and he’ll put down what you call a two-ply, which it is, is a base sheet. And then it’s another cap sheet that goes on top of that. And it’s designed for roofs that are 312-and-less pitch so that you won’t have the issues with the water again. Basically what you see over here is what we just tore out of there. If you’ll notice all of the rotten material, this material here, where it was in bad shape, due to massive amounts of water getting in.

And another thing too, is this roll roofing that they had up there is so thin. It’s just falling apart. So evidently had been up there for quite some time.
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Investing Selling a Home

Video: Hinesville Flip Walkthrough

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Full Video Transcript

Pat:

Right. So we’re in Hinesville, we’re driving out to check out one of our flips that’s been under progress. We closed on it about, about a month ago, a month, five weeks ago a client of mine closed on it. We’ve been managing the, the renovation process and we’re, we’re wrapping up here. So I’m coming to check it out. This project has been basically just a cosmetic-only rehab. We did fix some some rotten wood on one of the sheds, but other than that, you know, new roof, new floors paint inside some paint outside, new kitchen. We got new cabinets in, new countertops. I think the countertops go in today, so hopefully we can see that. Appliances are on order. The total budget was about $32,000 for all that stuff. Which is actually pretty good. I mean, we spent kind of the breakdown was the new roof on the house,

And one of the bigger sheds was about $8,000 and that includes the roof and a on this shed, there was a lot of rotten wood. We had to replace basically all the the 2×6’s on this shed. And the kitchen we spent probably another $7k or so – countertops cabinets just off-the-shelf cabinets, stuff like that. Paint inside was a couple grand, we put new we called LVP. It’s basically vinyl plank floors. It’s that stuff that’s looks like wood, but it’s not that’s very popular in a lot of houses, lot of, lot of buyers like that stuff. Typically we spend about $4 per square foot installing LVP, and that’s the price of material and of labor. So that cost us about $5,500, I guess. So this, this project’s been running along pretty, pretty quick. We’re actually a little bit ahead of schedule, so that’s good. The one thing that’s going to kind of hold us up is with the coronavirus and everything. Actually, the appliances are on back order, because they’re, you know, I guess most of those get made in China and the supply of chains are all messed up. So we’re gonna probably have to list it without the appliances in the house, which is not ideal, but you know, we’ll make do.

Alright, Hey, we’re here at 303 South Maple Drive in Hinesville. We’re gonna check on some progress. What we’ve done so far is you see, we’ve got a brand new roof on there. We’ve already painted. So this, this was just kind of nasty-looking so we painted this. I think it’s come out pretty good. These new shutters. I think, I think this goes really well with the house. This door is new. Of course we’re gonna mow the lawn right before we list this, but not a big concern just yet. This is redone. This is painted. And then you can see this little, little bit of concrete here. This is actually we did this because when we tore out the wall inside, we’ll take a look at it, but there was a lot of rot and the reason was, is water would come down and it would slope and it would get underneath the wall here. So you know, we had the contractor, you know, we said, Hey, let’s, let’s kind of seal this off and now it’s it’ll slope, you know, water will come and then it’ll run out. So that’s why that’s there. That’s a little, that’s a little thing. That’s something we didn’t really have to do. Because no, buyer’s really gonna catch that, but it’s, it’s good to do it. It’s gonna save somebody, you know, a lot of trouble because the same thing would’ve happened that, that wood that’s in that wall. Would’ve just rotted again, it probably take 5 or 10 years and you know, that’s a pretty cheap fix for us to do. Let’s go inside. So this is the LVP I was talking about on the floors. So this is what it looks like.

So this is the this is the LVP that vinyl plank. So it’s pretty thin. What, what a lot of people like about this is it looks pretty good, right? When you look at the floor, it looks good and it’s super durable. You know, you got pets, um you know, somebody, one of the dogs takes a pee on the floor, you know, if you, if you, if it’s on hardwood or if it’s on especially hardwood laminate, and you don’t clean it up right away, it’s gonna ruin that floor. And this stuff? Good to go. No, no problems. So most new construction is gonna have this if you own any rental properties, I would definitely recommend just, just put this in, right? It’s gonna be more upfront cost than carpet, but it’s gonna last so much longer. It’s a lot less hassle. I mean, this is just good stuff. And you can can buy this, um the cheapest I’ve seen is about a $1.60/foot usually about a $1.80/foot. And then like I said in the car, you know, the you’re gonna pay somebody to install. It’s gonna generally be about $2/foot to get this in.

So this was before, this was like an ugly tile in this room and we just, we just put the floor right on top of the tile, save a lot of money that way. Taking out the tile, um that’s, it’s kind of an arduous process. Um looking that way, we had some water damage over there that’s been repaired. So this is, you know, they came to the job said get it replaced, it got replaced, um repainted of course. The, this is new. There we go. This is a new light fixture. We’re keeping the original windows. These are double-paned windows, don’t need to replace them, even though they’re a little older looking, they still function just fine.

Alright. So in this bath we’re gonna clean it up. This is, this is basically the bath that it was before. This is, this is just gonna get cleaned up. We thought this was in good-enough shape. And this is an odd size vanity to find. This would’ve cost us some money to replace this. And now we’re gonna put a mirror in um. This light bar is new. I forget what it was before, but it was kind of ugly. So we just put a new light bar in here. This shower itself um,

We kind of debated on possibly taking the seat out. There’s that, there’s that seat there, right? It would’ve, if we would’ve had, if we would’ve taken that out, it would’ve cost us so much money to retile it. We said, forget it. Let’s just leave it. Somebody’s either gonna like it or not, you know, whatever. At the end of the day, it’s the hall bath. So it’s not as important as the master bath, which we’ll take a look at just in a second.

So here is our master bedroom. So we still got some doors on order that need to come in. You’ll probably notice throughout the whole house, we don’t have any of the air vents yet. So that’s, that’s a punch list item that we usually get towards the end of the project. Umthis window was not trimmed out before. So we put the drywall in here, and we put this window sill in. And this – let’s see.

So here’s our, here’s our doors, right? Our closet doors. This bathroom was actually already, this tile was already up. The previous owner, I guess, had started doing some work, you know, didn’t finish it. We put this new vanity in, we put this light bar that matched the other one. We’re gonna put a mirror in. Other than that, pretty much haven’t done anything. I think we’re, I think we do have a budget for some new, new fixtures here. I can’t remember if that was in the budget or not. There’s really nothing wrong with these the way they are, right. This is Hinesville, you know, we’re not, this isn’t a $300,000 flip, right? So, you know, you kind of want to look at your cost-benefit when you’re looking at money to spend um. Let’s start at the kitchen, and I’ll talk a little bit about some of those considerations.

Totally new kitchen in here. Um these are these are off-the-shelf cabinets. This is, I believe, where our sink’s going to go. So this hasn’t been cut out for the sink yet. This is where it’s gonna be dishwasher here. Stove’s going to be right behind you here. And then you can see this is, this is set up either for electric or you could do gas and I think we’re just doing electric. This will be your microwave and vent. So we kind of talked about all that stuff’s on back order with the coronavirus stuff. Typically, when you bring a house to the market, you want to have all the appliances in it, right? In this case, our choices are, you know, we can bring it to the market next week without some of the appliances, or we can wait three weeks for the appliances to come in. We’re just gonna put it on the market. You know, it’s not ideal, but better get on the market. Somebody’s still probably gonna buy it.

So that’s that so installation of new cabinets and countertops is $4570. All right. So that’s these new cabinets. These are off-the-shelf cabinets. This is butcher block countertop. We like butcher block because it still looks good. We’re gonna stain this a little bit darker. And it still looks good. I think in my opinion looks better than, than the laminate countertops, but it’s about the same price. This price point doesn’t make sense for granite, right? We don’t really spend granite until we get over a $200,000 house. And even in Hinesville, even a $200,000 new construction, they usually don’t have granite. Doesn’t make sense for granite. So butcher block is gonna look sharp. This gonna be stained a little bit darker. There’s gonna be some subway tile around. So I, I think it’s going to be good. You have like a darker wood floor with white, and then darker countertop, stainless appliances, you know, nice deep sink. It’s gonna go right here. Some subway tile. I think it’s gonna look pretty sharp. So we’re excited about that. We put these can lights in can lights are cheap. And I think these were all five of these lights cost us – Hey Gus what did the can lights cost us? Do you remember?

Gus:

I don’t know, $40-50/piece probably.

Pat:

$40-50 bucks a piece. Right? That’s one of those things that it’s worth it. Like put the can lights in people like a lot better. I think there was just like a, was it a fluorescent light?

Gus:

No, it was a some design. Like they had up there with little globe, little little, remember it had like, no, no that was one of the bathrooms. May have been a fluorescent in here.

Pat:

We, we got, we got pictures. We’ll take a look. Yeah, yeah. But whatever it is we looked at, we thought, look, we spend a couple hundred bucks, put some can lights in. It’s gonna look so much better. Looks a lot better. Kitchens, kitchens sell houses. If you’re gonna spend money anywhere, spend it on the kitchen, we spent little extra money. I think it’s gonna pay off well for us in here. So that’s, that’s the kitchen, right? Whenever you’re looking to flip, always check the electric system, right? This is a newer, this is built like ’84. So this is, you know, circuit breaker, right? The, some of the houses in Savannah that are older you’ll see a lot of fuse boxes and stuff, you know, and you might even see some, knobs and tube wiring. Luckily built in the ’80s. Don’t really have to worry about the electrical system.

We did a little work in here. You know, we got a new, new plumbing for the for the washer and dryer, right? So we come in here water heater, right? So, there was, this is like a pressure release valve right here, this little tank that was not on the hot water heater before. And then when you’re, when you look to sell a house to like an FHA or VA buyer, the, the appraiser’s going to come in and if they don’t see this, they put it in there. So we want to, we already know this is gonna go to a VA buyer most likely. So we just put it in before they even ask for it. So that’s something you want to budget for before looking at some of these flips. We, we replaced the whole, the whole roof. So we got new shingles on the house, new shingles here. And we also had to replace the actual you know, roof joints in here. They were two by fours, which is not, it’s not thick enough. Right? So they were all warped and sagging. So we put 2×6’s This was, this was all rotting out.

So I’ll get in the door so you can see, here’s our, our new see the ceiling here that we put in.

This was all rotten out. The reason this was rotten out is you can see the picture of this roof is it’s not very steep, right? When you have, have a shallow roof, you’re not supposed to use like the three half shingles that you see on the house over there. You’re supposed to use like a rolled roof because a shallow pitched the water doesn’t run off fast enough, basically. So you can’t have shingles like you see on a regular roof or else the water will kind of get stuck in there and it will seep through. And it’s just no good. So that’s why this was, this was rotted out.

So this this building here, this is the it’s an outside toilet, right? So it’s a little weird. You don’t often see that. The previous owner used to have a lot of, you take a look in there, used to have a lot of parties, I guess, and people be hanging outside and he thought, well, I want to have a toilet outside, so people don’t have to go in the house. The problem is what are we gonna do this building? We thought maybe, maybe we just tear it out. Right. But if we tear it out that costs money and then we gotta break up this slab and that costs more money, this concrete slab. So what we decided to do was let’s just finish it. So we finish it just to make it look better. And ultimately that’s cheaper than just tearing it out.

Right? Most people, you know, I don’t think this really detracts from the value to house. You know, either, either you want a bathroom outside or you don’t, if you don’t, you just never use it and, you know, whatever. I mean, heck they can tell the new owners can tear the toilet out and the sink and make it a little storage shed. I mean, whatever. You, so, so that’s why we just let that that’s the cost benefit, right? What’s what’s, the cost of tearing this thing out? Probably would’ve been $2k. So we thought let’s, let’s spend $500 or $600 instead just to make it look a little better. So that’s what we did.

So I think the last, the last video we shot was before it even hit the market, right? So we were driving around in the car, you know, my awesome video guy’s gonna edit that and it’s gonna be great. And, and that was a couple days before we hit the market. So we hit the market. You know, we had the photographer, did a really good job and he did 3D photos as well. And it’s like super cheap really worth it. Especially in Hinesville, you have a lot of the military people – like the buyer who, who chose our house actually was moving from a different part of the country. So like he never saw it in person until like a couple days before we closed on it. So I think that the 3D the 3D stuff really helped, you know, I don’t know why, you know, anybody wouldn’t do it for how, how cheap it is.

So we came to the market on like a Thursday. We had, I, we had 3 showings over the course of the first, like 4 or 5 days, which is a little bit, you know, less, definitely less than we’re used to. In like, you know, Savannah. But this is Hinesville. It’s a little different. It was still a little bit less, you know, we were hoping for more, we, we did know that the price that we listed out was probably a touch high. You know, $165k was more where we should have been, we were $169k. We said, Hey, let’s go for it. Like we staged it. We think we really crushed this, you know, this is better than the average house in the neighborhood so let’s, let’s get a little bit more we had one offer at like $160k and they wanted some closing costs.

And we said, no, I mean, we’re not even gonna counter that. Like, you know, that’s, that’s a game we do sometimes, you know, you don’t especially first, first week on the market, I try to get buyers to bid against themselves. You know, you give me a low ball at like the first weekend on the market. I don’t even want to counter it because if I counter it and you agree to it, what if somebody else would’ve taken a look at it, they could’ve put in their own offer. I’ll say, come on, you know, I’ll go to the agent and say, come on you, you gotta do better than that. So we did that and then somebody else showed it, they brought a full price offer. They asked for closing cost assistance, like $5,000, which is typical. Like we expected it. So we said, sure, we’ll go with these guys.

Pretty clean process. They did their inspection and of course they found things. Yeah. They gave us like a, they basically just copy and pasted the inspection report and well some of the stuff was ridiculous. So we just came back and said, look, we’ll do you know some of these, some of these things that ended up costing, like another couple hundred bucks that took about a month little bit more. I think it was like 34 days or something. We got delayed a couple days because of the lender which going into it, you know, they said that they were closing the month and a lot of loans, especially VA loans have been kind of slow lately. So, you know, I said to my client and said, I, I’m not super confident this is gonna close when they say it is. And it didn’t, but it wasn’t that big of a deal because we already kind of expected it.

So it did close, a couple days late. You know, it was a pretty smooth process. The appraisal was just fine, you know, the inspection, like especially any flip, there’s gonna be some things that get overlooked. So when they, when the buyers come in with their home inspection, they’re gonna find some stuff, you fix it, we want to make it right for them. So we did. And then actually, so it closed, it closed late. Right? And the buyer wanted to move in before closing, which is like, no, like you don’t don’t ever do it. I, I, I wouldn’t almost, know, I do have a different deal where we are doing something like that, but that’s a different, you know, high-price-point deal like this is, we just don’t do it, especially right now. There’s an eviction moratorium, a lot of people don’t even know whether you can get somebody out of house.

Because what if you let them move in and then, oh my God, they lose their job and now they can’t get approved for the loan, but now they’re living in this house, like that’s just nightmare fuel, you know, you don’t. We said, Nope, don’t move in. So it’s kind of a burden to him that kind of sucks, but I got to protect my seller, you know, at the end of the day. So anyway, we closed it, closed on time. After that, you know, they said, Hey, we need a couple more days. And they closed it when they said they would after that. And, and it went well, my seller made let’s see, I think $30k, somewhere between $30,000 and $40,000 you know, profit on that. His investment was, I think $18,000 is what he had to make a down payment for when he purchased it.

So he bought for 60… I think it was $66,000 or $68,000. We put about $35k close to $40,000 in repairs into it. And of course it sold for $169k. So after, after paying some of the buyer’s closing costs paying, you know, me, my commission and the buyer’s agent commission, he, he made out a pretty good check. And he didn’t even he was in New York the whole time. He lives in New York. He’s literally never seen his house. So it’s a pretty good, pretty good deal for him. We’re glad that we linked up with Gus up there our contractor, who’s got another job in progress that we’ll show you probably in the next video and he’s, and we’ve probably got another one coming up soon within the next week or two that he’s gonna start. So I think we got a good, good thing going.
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Buying & Owning a Home Investing Savannah Market

Video: Initial Flip Screening & CMA

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Full Video Transcript

Hey, good evening, everybody. This is Pat Wilver with Trophy Point Realty Group out in Savannah, Georgia, here to walk you through a little deal analysis. This is the, the nerd stuff that we do before we put a deal in your contract. So I’m gonna show you my screen. Here it is. So this is, this is, this is my spreadsheet. This is what we look at. So this is a lot I, I really like spreadsheets. I enjoy making them. So yours doesn’t have to be anywhere near this complicated, as long as you get the same terms. And a lot of people look at a flip, you know, all they’re looking at is I buy it for this much. I put this much in the rehabbing. I sell it for this much, and my profit is the difference. And that is not the case at all. Because you’re paying interest. You’re paying well you’re probably paying a realtor. You’re paying insurance taxes, utilities, all kinds of things. So we’re gonna break it down real smooth. Like this is 806 East 33rd, Savannah, Georgia.

So this is where it is on the map right here. If you’re not familiar with Savannah basically this is the historic district. This is where the tourists hang out. This is the million-dollar homes and all of that. Here’s Forsyth park. This is all really nice stuff. This kind of a chic, locals-only district Starland district. This part of town called the east side is kind of on an up and up. A lot of investors are coming in, buying up distressed properties rundown places, fixing them up, making them nice, selling them, renting them, whatever the deal is. I really I’m pretty bullish on this part of town. So I’m, I’m, I’m pumped to get this deal and look at a little street view. So here she is, right. This is our, this is our new deal. So this block is a lot of these craftsman-style, little bungalows. Ours kind of unfortunately has this closed in porch, um now and it does add square footage. Usually more square footage is better. I’m not so sure. Well, I like the porch better, but it’s not in the budget. It costs a lot of money to, to redo the layout of a whole house. So we’re just gonna leave this as it is probably spruce it out, but let’s not get into that too much right now. Looking at the neighborhood. So this is a pretty decent street. This is honestly a decent little street. The thing about Savannah, if you’re not from here, is this town is very block to block and the character of neighborhood can really change quickly. So it’s important to really know it. If you don’t know the area, like it’s not enough to just look at the street view. If you are an out-of-state investor, you got to have somebody who lives here, who knows, you know, what what’s going on, whether that be a business partner, you know, an equity partner or an agent or whoever. So here’s your property. What’s the first thing we do? Well, the first thing that we do is, you know, before we do all the work at filling out all the cells in the spreadsheet, we kind of take a quick, quick look at the deal. In this case I was told that I could get the deal for $98,000,

Right? Actually I was initially told the price was $125k. And I worked a guy down, but let’s start with $98,000. So $98,000 for this, this is a 2 bed, 1 bath, about 1200 square feet. And I knew just, you know, by all the business I do around here that a property like that, you know, probably sells between $180k and $210k, right? So let’s, you know, go kind of in the middle and say $190,000 ARV. So it’s gonna be worth $190,000 when we sell it. That’s where we start. Now we apply this thing called the 70% rule, which is what we use to quickly screen a deal. So we take basically that final number $190 x 0.7 (70%) gives us $133,000. So $133 is kind of what we want our all-in number to be. Then we got to think of what the rehab budget is. So, you know, I said, this guy first pitched the deal to me at $125k. I said, well, you know, if, If your number’s $125k, it’s going to be pretty much turnkey. None of these houses ever are turnkey, by the way, if you don’t know means basically it’s good to resell just the way it is. It’s like a perfect house.

So $133k, usually the cheapest that you would do a cosmetic renovation on a house that big would be about $30,000, right? So $133k minus $30k equal equals $103k, probably want to get it somewhere, you know, $103,000 or cheaper. So that’s why, you know, if somebody pitches to me like a deal like this to me and they say I want $98,000, I’m gonna be instantly very interested, because I know that I can probably make this guy work. You. So I want to check it out. I actually got my rehab budget closer to $40,000, right? So $40,000, $190k x 0.7, $133k minus $40k gives $93k, right. $93K is closer to number. Right. But the, the cool thing about being a real estate agent, such as I am, means that I get to save a lot of money on commission selling the house. So I realize a little bit of efficiency. I can kind of take a deal that maybe somebody else can’t. So, you know, one thing that we’ve noticed lately

Is a lot of deals have been getting expensive, margins been getting thin. So if you don’t have some sort of efficiency built in, it can be hard to do some deals. So me, I’m an agent that’s in efficiency. Other people are contractors himself. That’s an efficiency because they save a lot of money. So anyway I like this deal, we put it under contract, here is a little bit of the analysis. Let’s go through it. So I’m going to focus on this video – um we’ll do a couple, couple series – this one’s gonna be more about ARV comps. So ARV means after rehab value. This is basically how we determine what we’re gonna sell it for. Right? So I have a spreadsheet here it’s pretty much already filled out. So this is the property. 810 East 33rd, 2 bed, 1 bath, 1254sqft. Alright, right. Here’s some data. I just, I didn’t fill it out. I use that for like quick approximation. So we’re gonna focus on this table right here. Here’s where I have some comparable properties that I’m using. So the first one’s 802 East 31st. Let’s take a look at that comp.

Go to East 31st, which is Paulson. Here it is. Okay. Oh, 1002 – got the wrong. Oh, oh we are starting whatever. We’ll start with this one. This is actually the second comp. We’ll start here. 1002 East 31st. This is 2 bed, 1 bath, 1,035 square feet. Let’s take a look at some pictures. Alright. This is another kind of craftsmanship style that, that porch you through there, um this one’s brick. Most of them aren’t brick. So this is a little unique. These windows look like the older style, single-pane. But I mean, curb appeal’s pretty decent, you know, good-looking house, corner lot. Okay. Here’s our backyard. I usually don’t start right with the backyard pics, but this is a pretty good-looking backyard. Right here we go. Living room. We’ve got some staging or maybe this is somebody’s furniture. Nice looking floors. Nice looking fireplace there. Okay. Yeah. This is a good, this is a good-looking house here. You don’t like the beige paint, but it looks good there. Here’s our kitchen. Hm looks pretty good. I’m not a fan of the island. That’s got linoleum, this price point. Typically you want butcher block or, or stone? Like a granite or marble, but it looks clean. Gas, stone, small kitchen, but you know, not bad. Bathroom looks good.

Seems to be a little bit small. Good-Looking bath. Good-Looking. You know, it’s good-looking house. Yep. Okay. Here’s our backyard, looks pretty big. All right. So that’s our first comp. So how do we, how do we compare this to our property? How do we do a CMA is what it’s called. So we’re here 1002. These 3 so first $206,000 is what it sold for. And it was a two bed, one bath, 1,035 square feet comes out to price per square foot of about $199. So the first thing we do is called a square foot adjustment. So our subject property 810 E 33rd, we call that the subject property, is 1,254 square feet. This comparable property, but the comp is only 1035. So we got to do a little adjustment. That adjustment ends up being $35,000. Right? So basically what we’re doing is when we do a CMA, you’re either adding or subtracting from this comparable sale. So we’re taking this $206,000, we’re adding $35,000 to it. We’re adding $35,000 because our subject property is larger, therefore more valuable than the comp anyway. Lost my train of thought.

Yeah, CMA. So square foot, the adjustment. So we’re adding that $35,000, right? If, if this comparable property would’ve happened to be larger, then we would have to subtract instead of add. So that’s what we do. So we have a square foot adjustment. So we take that $206k, we add $35,000 to it. And we end up raising the value of the house, but we have some more adjustments to do. So for, we have I said, Hey, comparable property is brick. It’s got a nice porch. It’s got more curb peel, right? We look at the difference between this property and this property, right? Even we’re gonna screw this up. We’re gonna make it look better, but it’s not gonna look that good. So little adjustment, right? We subtracted $10,000. How do I know $10,000? I don’t know, man. It’s just, it’s just what I think it is. Right?

This, this is always part science, part art. When you look at something like this, there’s no way to really quantify a house is not a stock or a house is not a hundred unit multifamily property. You value just off the numbers, you value these things, partly off the numbers and partly off how it feels. I don’t know, hard to explain. So that’s why, you know, experience, you know, you, you, you can make up for lack of experience in certain ways. And, and even I am not super experienced by any means. So $10,000 is what we give to that. So yard. So the yard, why do I have a $12,000 judgment for the yard? And that’s a negative $12,000. That negative means that the comparable property, this one at, at 31st street, right? That means that this property is better. And this one, we have a negative adjustment. Why? But you can’t see it from Google earth, but this house here, the one that we’re gonna flip has a, basically a garage kind of like a carport with pavement. It’s not like a nice backyard. It’s paved. It would be great if you, if you’re a mechanic, you know but not if you like a backyard, so we’ve got an adjustment, right?

There’s nothing that we could do to make the backyard of this property look as good as the backyard of this property, right? This backyard – short of tearing out all that concrete, doing totally new landscaping, that costs a lot of money. It’s just gonna be cost-prohibitive. It’s not gonna be worth it. And it’s gonna add a lot of time too. And time is money. So we’re doing a $12,000 adjustment. Comparable property has the current property kitchen is not as nice as a subject property. So we’re gonna have a nice kitchen. We’re gonna have butcher block, like, we’re gonna have subway tile, new appliances, gonna be bigger. Our kitchen’s gonna be better. I’m adding $3,000. Again, that’s just kind of, you know, a number the comparable property is in a better area, right? This, this 31st street. You know, I, I just believe that block is a touch better. Generally the closer to Anderson street, you are, the better. So I assigned $5,000 of that. Cool. All right. Let’s look at 802 east 31st. Where’s this house at? That’s this one. Go to east 31st. So this is the new construction. This one just got built. 1200 square feet, 3 bed, 2 bath. Sold for $255k, was on the market for forever. Actually showed this to two different clients. And I told them I thought I was overpriced and somebody bought it.

So this is, this is a cool-looking house. I mean, it’s got curb appeal. It’s a new construction too. So it’s got a builder’s warranty. Everything in there is modern. You don’t have to worry about a lot of maintenance. Like it’s pretty cool. Doo doo doo. Good looking house. Yeah. It’s a new construction lot. Carpet in the bedrooms. That backyard is pretty decent. Okay, awesome. So part of the reason, and this comes with, you know, living in Savannah and having shown this house to two different buyers, is… Let’s go down Paulson,

Let’s go to… Here’s 31st street. So here’s a vacant lot. This is where those two houses were built. Look what’s over here. This derelict, rundown commercial building here, right. Actually happened to know that there’s some plans to renovate this within the next couple years and make this a lot nicer. But it’s not right now. So the view from your front porch over here is this nasty stuff. I mean, that, that costs money. It’s hard to quantify. What is that worth? $10,000, $15,000, who really knows? Right. So our property’s back here. It doesn’t have that right in front of it, but you are gonna drive past it to get there. So it kind of factors in a little bit.

All right. So here we go. So $255, 1200 square feet is about 50 square feet smaller. So we have a square foot adjustment about $10,000, right? You can see my formula up here just don’t even, I’m not even gonna get into it right now. All right. Comparable property was new construction. I assigned a value of $25,000. That’s just what I feel like it’s worth, $25,000. What is it worth to you to have a new construction house? It’s actually worth a lot, um because of the maintenance that goes into an old house, even a renovated house is gonna have more maintenance than new construction. New construction has a builder’s warranty. It just, it’s always a better layout. Right? This new construction has an extra bedroom, $15,000. I usually throw $15,000 per an extra bed. An extra bed is worth more. Like going from one bedroom to two bedroom, hell it’s probably worth $30k, $40,000. Going from two to three, you know, $15k. Three to four is worth a little bit less. Going from four to five is worth even less still. You know, so because you think about the utility. If you go from one bed to two bedroom, doubling your beds, two beds to three beds, you know, three beds to four beds, that that number goes down.

Extra bath, $8,000 um curb appeal of the comparable property is better – $15,000, right? I think I use the same actually. I use a little. So you see how I have a $15,000 curb appeal adjustment here versus $10,000 on that brick house? Well the new construction house looks even better than the brick house. Hence, a larger adjustment. Compared property has a decent yard, but not as nice as that first one we looked at, the brick house, had a really nice big yard, right? So this is, you see how these adjustments are a little different each time. Here we go. Compared property near a condemned property. I give that a $10,000 and that’s $10,000 plus. So we are adjusting the price up now because of that, because the property that we’re gonna flip, 810 East 33rd is surrounded by, um, pretty decent-looking properties. Awesome. Alright. 733 East Waldburg. This is an interesting property. I’m really pumped how much this property sold for. So this property, our subject property is right over here. Right, right about here. And this property on Waldburg is right here. Alight? So it’s across Henry and Anderson. Usually I won’t

Use a property that far away as a comp in Savannah. You can get away with that in the suburbs where all the houses are the same. In Savannah, you can’t, but the reason I pulled this comp is because the character of this block is very similar to the character of this block. So this is a cool house. When this one listed, it listed for $240,000, I thought they were nuts. I said, they’re never gonna get this much money. Well, they got $230,000, very surprising to me. It took them you know, over three months to do it, but they got it. But this is a really cool house. I mean, look, it just looks, I mean, that’s a good-looking house. Hardwood floors, french doors. I mean, this is a cool house. With that kitchen, we got subway tile to the ceiling, all around, steel vent hood. These things look so good. That cost them like $250, by the way, it’s super cheap. The farmhouse sink. I mean this thing’s got it all look at. I mean, this is a lot of is a lot of friggin’ subway tile. It’s good-looking the kitchen. Butcher block too. Butcher block. It looks so good. It’s cheaper than granite. You know if I’m flip- I think I might never do granite again unless it’s in a really high price point. I I think butcher block looks good as hell.

Yeah, so good-looking good-looking spot. Bathroom looks great. Look at that tub. Come on. Highlighting this is, this is a $250 vent hood. They’re highlighting it, but it looks good. I mean, nobody knows how much this stuff costs unless you flip houses. This is a new HVAC. Yard, big yard. Not landscaped. Not that good looking. Still looks better than the concrete. It’s gonna be your yard. It is what it is. All right. So 3 bed/2 bath, 1,000 square feet.

So if we go back to the spreadsheet, plug it in at $230k, 3/2, 1,000 square feet, have a huge square foot adjustment. We’re adjusting $46,000, right? For a difference of 250 square feet. Wow. So that’s a lot. So we have our other adjustments. We got our curb appeal, $15k. Honestly, I feel like that should be like $18k. It’s a good-looking house. That great kitchen, $6k, right? Our kitchen is not gonna be that good. It’s gonna be good. It’s not gonna be that good. Do the $6,000. Hell, let’s give it $8,000. New HVAC, $3,000. So the HVAC that we have is not that old. An HVAC to do a swap-out on a house this size is like $4k-$5k. So put $3k there um… Compared property, slightly better yard, $3,000

Compared property has an extra bed, $15,000; extra bath, $8,000. Right? So that takes this is, this is a cool example, right? So this one sold for $230,000. It was 1,000 square feet, 250 feet smaller, right? So we had that adjustment. We added $46,000, but all of these other ones we took away from that, we end up with $221,000 is the adjusted sale price. You know, hopefully you’re starting to catch on to how we do these comparable sale analysis. So we took a property that sold for $230,000. It was 250 square feet smaller. And by the time I made all these adjustments, I said, Hey, this property, when you make it like an apples to comparison to, to our subject property would lead us to believe that our subject property looking at just this property alone is worth $221,000. You know, that’s kind of the difference that curb appeal and an extra bedroom like bedrooms are huge. Curb appeal is huge. Kitchens, you know, all that. So 705 East Duffy. That’s the last one we’ll look at. We’re gonna look at at least three properties when you do these. Of course, you know, the more you do the better, but, but four is perfectly fine. So this one on Duffy sold not too long ago,

We’re totally in the wrong. Here we go. This is it.

Come on

705 east Duffy two beds, one bath. So it’s good. I, I wanted to pull another two bedroom comp 832 square feet, so a lot smaller. This curb appeal. And this is just final sliding this curb appeal’s not great. It’s still better than, than ours. Ours doesn’t have a lot. Alright. This is like a standard house, LVP floors. This is the vinyl plank. Great walls. I mean, this is a standard, very standard flip. It’s got granite countertops. I wouldn’t have done granite, but whatever. Nice back splash. It’s a good-looking house. Separate laundry. This little bathroom. Yep, yep. Looks good. Okay. Backyard looks big, better backyard than ours. Wish I could show you. I should’ve got a picture of that backyard. Okay. So we got a feel for that one. Here we go. We plug it in. So $164,000, 2 bed, one bath, 832 square feet price for square foot, 197. So we do that adjustment. We’ll add $55k, right? $55K is the price.

We do some other adjustments. I said comparable property was in a better area. I like Duffy. It’s a good street. Curb appeal, not as big of an adjustment as some of the other ones. You know, that one on Waldburg was an $18,000 adjustment. This one’s only $6k, right? Why? Because the Waldburg house looked great. This house looks like just another regular house. Then we had a yard adjustment, right? So that comes out to $199k. So if we average everything out, right, this is our rehab value outputs, right? So if we average everything out, we get a CMA of $211,000, $211k. So what I did, you see my opinion here, $190k, anytime you see a blue cell, that means that it’s something that I’m filling out myself, right? So I filled out $190k. Why, why did I take $20k off this? Right. Why go through all the trouble of doing this analysis, just to take $20k off? And just to basically, I basically just threw it away. I was like, alright, I did all this work. I did all this research. But screw it because I’m right and it’s wrong. Well, first of all, we wanna be conservative in our assumptions. So you know, conservative assumption is – my, my light’s running out here, it’s getting very dark, so I’m gonna plug this thing in – a conservative assumption, you know, is basically when we’re looking at any deal, you wanna, you kind of wanna make sure you’re gonna make money.

I mean, that’s important. So you give yourself, you know, in the, in the engineering world, we call it a factor of safety. And a factor of safety basically says, Hey, you know, just in case I screwed this thing up, which I could I’m building in a little safety zone just in case. Sorry guys, hang on, can’t stop the show. There we go. Alright. So you’re building in a little, little cushion, little buffer. The other reason why is, I just, you kind of get an intuition, you know, once you do a certain amount of deals that no matter what the numbers are telling you they just don’t feel right. So we’re gonna use $190,000 when we do all the underwriting of this deal. Now bear in mind. When, when I go to list it, I’m probably gonna list it at $199k. Typically when it goes to listing a property for sale,

You don’t, you don’t really want to shoot for the stars, especially if you’re flipper. If you’re a flipper, the name of the game is doing the work quickly, listing it quickly, selling it quickly, so you can get your cash back and you can do another deal. It’s about volume. If you list too high, you end up stagnating that listing and, and that’s not good to do. So I’m definitely like I’m not gonna list this thing for $220,000, you know, for sure. $210K, maybe, you know, one of the things that, that I always do is I do my underwriting. Right. But I don’t lock myself in because the markets change. Somebody could list a house next door for $230,000. Right. And that’s gonna change the calculus. Right. So we’re, we’re sticking with $190k. I’m probably gonna list it at $199k. That’d be great if I get it, but you know, $190k, all right. $190K. That’s how we do a comparable sales analysis. So the next one we’ll go over rehab budgets. We’ll talk about soft costs, right? Including your taxes and appraisals and lender fees and all that stuff. But for right now, the part of these spreadsheets that we filled out, $98,000 purchase price. Right. And we know that our ARV is gonna be $190,000. We’ll take a look at the rest after we, we get some pictures of the property. Take care.
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