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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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Buying & Owning a Home Investing Military

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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Buying & Owning a Home Investing Military

PCS Moves, Part Four: How to Buy

4

When you bought your current home, you may have heard the phrase, “you make your money when you buy”. We say this pretty often in our office, because – let’s be real – we want our clients to make lots of money with us! Not only is a mortgage payment like putting money into an appreciating piggy bank (the piggy bank being home equity), but the house can also help you build wealth AFTER you’re no longer living in it, so long as you look ahead when you buy. Let’s take a look at buying vs renting, buying with the long term goal in mind, & best practices for buying when you’re out-of-state.

How do you even know whether you want to buy at the next duty station? I look at a few key factors:

1. How long do you expect to be stationed there?

2. Do you believe housing prices will be worth more when you PCS again? And,

3. Will you be able to cash flow the house as a rental when you PCS?

If you will only be at the next place for 1 or 2 years, you may want to consider renting unless you can find a great deal or will be able to get good cash flow on the property as a rental after you leave. This is because the costs of selling a home will typically be more than 1 or 2 years worth of appreciation.  I find that the break-even point on the costs of selling a home is typically between 12 and 24 months of ownership.

To answer the other 2 questions, it will be important to speak with some good agents to get their opinion on market rents and expected appreciation trends. Let’s say you’re moving to Ft. Stewart and want to buy a house in the mid $200k point in Richmond Hill, GA. Typically, those homes will rent around $1600-1800/mo, and a $250k mortgage should cost around $1100/mo.  Factor in $160/mo for property management, $100/mo for maintenance, $50/mo for vacancy reserve, and you’ll be looking at $190-370/mo of cash flow straight to your pocket, plus the profit you’ll capture as equity in the home by paying down the mortgage and normal market appreciation. That’s a pretty decent deal, and I expect Richmond Hill to continue to be a strong market over the next few years, so I would recommend buying a house like that. If you were looking at losing money every month instead, then it might actually make sense to rent, though you are taking on the risk that your rent will go up while you’re living there, especially if you plan to be at that duty station for three years or more. Unlike housing prices, rents are very sticky and typically do not go down; even during the 2008-09 recession, rents held steady while housing prices fell 40% or more.

homes for sale near fort stewart ga, homes for sale savannah

Who are the key players to have on your team?

The biggest factor in making sure you’re buying a good deal remotely is working with a trustworthy real estate agent, period. This is someone who will put your best interests first and offer candid advice even if it costs them a commission. As discussed in earlier blogs of this series, the best way to find someone trustworthy is to get a recommendation from friends or another trusted agent who may have relationships with someone in that area, and then doing your own due diligence on that person by researching them, getting information on their background, and checking out their recent transactions on Zillow to make sure that they actually have some experience.

The next piece of the remote-buying puzzle is working with a reputable home inspector. Your agent should have two or three good ones on speed dial, and if your agent is trustworthy, the inspectors they work with will be trustworthy as well. When I’m making offers for out-of-state buyers, I always engage my inspectors before going under contract to see when their earliest available inspection time is. Then, I can make the due diligence (or inspection period) length in the contract just long enough to give us a day or two after the inspection. It’s important to do this right now because sellers love contracts with a short due diligence period. Why? During due diligence, a buyer can back out of the contract with no penalty. After due diligence, they cannot.  If you can offer a seller a 4- or 5-day due diligence, you may be able to beat higher offers that are asking for longer periods of due diligence.

I believe in trust, but verify. Look up online reviews of your agent and home inspector. It’s not uncommon for a trustworthy professional to have one or two bad reviews from disgruntled customers, but if you see a lot, then maybe you shouldn’t place your trust in that person or company. I also like to look around Zillow to double check the rental estimates a person is giving me. If you see numbers that don’t line up, ask them about it. “You said I’d be able to rent this place for $1600/mo, but everything I’m seeing on Zillow is listed at $1300/mo – what’s up?”  Maybe they have some knowledge that isn’t accessible on Zillow that they can share, or maybe they’re fudging numbers on you. You’ll have to be the judge of that.

Don’t forget to check on property taxes and insurance rates as well. Your agent should be able to estimate these for you, and you can verify by going to a county or city’s tax assessor website and speaking with your own insurance agent about a property you are interested in.

I’ve got my team. Now what?

 

1. Get acquainted with the area

If you can, it’s really great to fly out to your new duty station for a long weekend so you can tour neighborhoods, even if it’s a few months before you’ll be moving. Google street view is a great tool to scope out a neighborhood from afar, but that only goes so far, and there’s nothing quite like getting on the ground and spending a day or two driving around. I absolutely recommend at the very least taking a google street view tour of a neighborhood that you want to make an offer on, and check to make sure that the imagery is relatively current (street view will tell you what month and year the imagery was captured). Also, take a look at the overhead map – how close are you to interstates, railroads, or airports? Is there a left turn onto a busy road at the end of a development you like that doesn’t have a stop light? Things like that can be aggravating.

Checking out drive times to work is also important. You can do this by going to google maps and setting your arrival time to a certain time, like 6:30 AM at your new unit or 6:00 PM at a potential house. Your agent should also be able to provide insight here.

 

2. Get to know potential common pitfalls

Other important investment considerations relate to the home itself. Homes built after 1985 or so are typically going to be built well and up to current building standards but there are still things to watch out for, like polybutylene (PB) plumbing that was common in the mid to late 80s.  I own a home with PB plumbing that hasn’t been an issue, but some folks have experienced issues with it and it is no longer used. HVAC systems and water heaters are typically expected to last 10-15 years, and roofs 25-40 years depending on type of shingle used. If you have an old roof, old HVAC, and old water heater, you might expect to spend $15k in a relatively short period of time replacing all of those items. Maybe the deal is good enough to justify those expenses, maybe not.

 

3. Get to know the homes

Video tours are a great way to get a better look at a home. When doing video tours for my remote clients I do a few things to make the video as useful as possible:

– Put my phone into a stabilizing gyro to keep it level and steady at all times

– Use a wide angle lens on my phone as I’ve found it to be better for giving a client the real feel of the home’s layout

– Keep videos 60-90 seconds long so they send easily in iMessage or WhatsApp

– Use a 60 FPS rate as I’ve found that reduces the choppiness of the image when I pan from room to room

* I do NOT like using facetime for virtual showings as the video quality often sucks and the buyer can’t look at the video again to get another look. I just try to be careful to narrate the answer to every question they might think of (ie: “These are stone countertops, this sink has good flow, this AC appears to be somewhat old, there is some minor scuffing on the floors, etc.”)

Another decent idea is to secure short term rental accommodations so you can house hunt in person. This might be a great option if you’re a single soldier and can rent a spare bedroom from a friend for a couple months, but isn’t a workable solution for everyone for obvious reasons. You might even be able to find month-to-month furnished rentals on AirBNB or Furnished Finder.

4. Lock down your house

Of course, once you find a good investment candidate, you’ll actually need to win the contract on it. This is not easy to do at the moment and some markets are tougher than others, but there are always levers that we can pull to make our offers stand out in a competitive situation.

What levers to pull depend on many factors including the buyer’s ability to pull them (if you don’t have much cash on hand, we can’t exactly guarantee to cover an appraisal shortfall for example), and the seller’s needs (if we can find out from the seller’s agent that they need a 30 day rent-back after closing then we might want to pull that lever). Here are a couple common tools that I’ve advised various clients to use:

  • Price price price! Price is often the number one consideration to a seller.  Sometimes winning a bidding war comes down to just that.
  • Not asking for any seller paid closing costs. Most winning contracts in my market are not asking for seller paid closing costs.  We can always negotiate for them after the inspection, but I typically advise folks not to ask for them up front.
  • Escalation clauses. I personally do not love escalation clauses as a seller, but they can be effective. You should at least offer to pay $1000 more than the next highest offer when you choose this option.
  • Appraisal gaps. You can say “I will pay $200k, and if it appraises low, I will cover the difference up to $10k.” You’ll also want to provide proof of funds showing that you actually have the $10k that you might end up needing to do this.
  • Large earnest money deposits. Earnest money is money that you put on deposit while you are under contract. This money goes towards your closing costs or down payment at closing, or is refunded to you if you don’t need to use all of it to close. If you terminate the contract during your due diligence period, you get it back. If you terminate after, you don’t under most circumstances. This money is basically insurance to the seller. It’s typically expected to put up 1% of the purchase price as the deposit. Putting more indicates your financial strength and desire to close.
  • Short (or no) due diligence periods. Never ask for more than 10 days in this market. If you’re buying a newer house, it might be worth rolling the dice to ask for none – a good agent can give a solid once-over of a house to check for the biggest potential issues.
  • Option money (non-refundable earnest money). Option money is saying “I want a due diligence period where I can get my earnest money back, but I will make a portion of that earnest money non-refundable for any reason”.  Typically, this will be $250-500. This again just demonstrates that you’re serious about the deal and don’t intend to jerk the seller around during due diligence.
  • And more. We elaborate on all these tools and offer a few more in our Ways to Win in Multiple Offer Situations blog.

As a remote buyer in this day and age, you have plenty of resources to help you succeed not just in finding any home, but a home that will continue to make you good money. Use these resources! Talk to agents, get recommendations, research agents & home inspectors online, research neighborhoods using maps, & figure out what you can offer to win a great house in a competitive market. A great real estate agent will propel you in every one of these facets. Always know my team and I are happy to talk and help you out any way we can. Get the conversation started online at www.trophypointrealty.com/contact. We’re looking forward to seeing you and fellow military build wealth through real estate!

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Written by: Pat Wilver

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Military Selling a Home

PCS Moves, Part Three: Selling Your Home

Hunter army airfield homes

Maybe you decided renting isn’t for you right now, or maybe you’re still curious and want to know more about the selling side before choosing what to do. It’s no small decision, so I’m glad you’re continuing your research and reading these blogs to figure out what’s best for you and your family. Selling your home is a pretty attractive option right now – housing demand is high & supply is low. But, as a real estate agent (incentivized to convince you to sell your house), I’m actually going to challenge the current narrative that selling is easier than it’s ever been and definitely the best option for everyone. Let’s take an honest look at what it would look like to sell your house in this market and the best practices to get the most out of your situation.

Housing inventory is as low as it’s ever been. This is a strong sellers market, so the house should sell itself, right? Not quite. While it is easier to find a buyer, it is still as important as ever to put your best foot forward as a seller. The truth is that there are a few easy things we can do to extract every dollar of equity possible out of the sale of the home and do it as painlessly as possible. So, what are the steps to selling a home once you come down on PCS orders?

First, we recommend that you call a trusted agent as soon as possible after receiving your orders, or even just when you are reasonably sure you will be coming down on orders soon. If you don’t have a trusted agent, ask your friends for referrals and interview at least 2 to 3 agents.  Make sure they return your calls, write and speak well, and have experience in the market. Take a look at a couple of their past listings to make sure they look good aesthetically and check that they actually sold!

You’ll want to consult with an agent as soon as possible because they can recommend home improvement projects that will make sense to do. There are a lot of easy things that can be done in your free time over the months leading up to your PCS move that can make a huge difference. Even things as basic as spreading new mulch in the flower beds, replacing beat up door knobs, fixing the dent in the drywall from that time you tripped bringing the new bed up the stairs, and other easy fixes can make a big difference.

There may also be bigger projects that would make sense to get done. Maybe it’s been a few years since the home has had a fresh coat of paint, or maybe some flooring needs to be replaced, etc. If you don’t want to do it yourself, then your agent should be able to recommend a few different contractors for you to call. Your agent should also be able to give you a ballpark estimate for what these projects will cost and how much added value they should bring to the home.

Most importantly, your agent will know what projects NOT to do. Some projects will not add as much value to the home as you think. For example, if you live in a low-price-point home, it might not make any sense to put in marble countertops – buyers will be plenty happy with laminate or butcher block.  I also promise that no buyers will consider paying $10k more than the house is worth because you put in real hardwood floors – I only really notice a difference in pricing with hardwood vs click-and-lock vinyl flooring (LVP) in price points above $400k or occasionally old homes where a buyer might expect to see old hardwood anyway.  It won’t make a difference in your 2018 built home in the suburbs that sells for $285k – those buyers will be expecting LVP.  (This is something to keep in mind any time you want to do a big home project, not just when you’re getting ready to sell. Talk to an agent about your project so they can recommend which materials & ideas are or aren’t worth your time & money according to the projected home value.)

Now that you have recommendations on house projects, you can spend a few months leisurely knocking out those tasks. When do you actually want to put the home on the market? Again – it depends! The main consideration should be whether you need to sell the home BEFORE going under contract to buy a home at your next duty station.

To find the answer to this question, you need to have a conversation with a good lender about whether your debt-to-income ratio can support you covering a second mortgage for a short period of time. If the answer to this question is no, then I find it best, from a money perspective, to list the home after you are out of the house. Why? All the clutter will be gone, there won’t be moving boxes everywhere, you can have it professionally cleaned, and buyers can tour the house at any time without having to coordinate the showings through you and your agent. AKA, your home will be more presentable leading to more and/or better offers.

And what about staging? Is it really necessary? Sometimes. Again, ask your agent for their opinion. I flip houses and am always selling my own houses, and sometimes I don’t stage them. If they’re a cookie cutter house with a simple floor plan, I typically don’t. If they’re unique or have a floor plan where a buyer can’t immediately envision where they might place their living room setup, then it really makes sense to stage because you want the buyer to be able to imagine them living in that space. Staging is also good to get a buyer’s eyes off imperfections in the house. It might also be good to stage if you’re living on goodwill furniture like I was as a cheap young Lieutenant! Also keep in mind that you don’t need to stage everything – sometimes even adding a couple nice decorations on the walls, kitchen, and baths can go a long way and is very cost effective. Last note on this – it’s almost never necessary to stage bedrooms unless you have a small or awkward space.

If you are willing and able to list after moving out, your timeline will likely look like this:

    • Move out day (let’s assume this will be June 1st)
    • Professional cleaning (or DIY):  June 2nd-3rd
    • Move in staging furniture (not always necessary):  June 4th
    • Professional photography (coordinated by your agent):  June 5th
    • Listing goes live on the market (June 7th)
    • Accepted offer (June 10th)
      • Typically move-in ready homes will go under contact in a weekend in the Savannah market unless priced too high
    • Buyer conducts inspection (June 15th)
    • Buyer ends due diligence (June 17th)
    • Appraisal (June 25th)
    • Buyer closes on home (July 10th)

This timeline assumes that the first buyer does not back out after their inspection – this does happen sometimes, so you’ll need to prepare for it. Sometimes appraisals come back bad as well, but not as frequently, and in today’s strong seller’s market we are sometimes able to get the buyers to agree to cover an appraisal shortfall when they first go under contract to mitigate this risk. Occasionally, a contract will fall through at the last minute because of the buyer’s lender not approving the loan, though a good agent will recommend strategies to mitigate this risk as well.

For many people, this isn’t possible and that’s okay. You’ll just want to take extra care to spend the week or two leading up to the listing date cleaning the house top to bottom, trying to keep your moving boxes out of the way in a garage or spare bedroom, and taking down as many personal effects as possible so that the buyer can more easily imagine their own photos and trinkets up on the wall. It might be worth the money to hire a professional cleaner to come just before listing – if you’re like me and hate cleaning, it’ll be a few hundred dollars very well spent.  Once you actually list the home for sale, the rest of the timeline will be very similar to the one above.

Another important thing to consider, for those of us who need to sell a home before buying the next one, is that there are things we can ask buyers for to make our transition easier. The best thing to ask for is a seller rent-back after closing. This means you can sell your house and continue to live in it for a couple of weeks while you prepare to execute your PCS move to the next duty station. This is important to those of us who cannot qualify for a second mortgage or don’t want to have two mortgages at the same time, because you can start making offers on homes in the next duty station after selling (but still living in) the first. The reason you might want to get the first home off your books before trying to buy the next is because this strong seller’s market exists across the country and it is VERY difficult right now to find a seller who will accept an offer that is contingent on the sale of property elsewhere. Imagine if you’re selling your home here at Fort Stewart and a buyer says “I’ll pay you asking price, but I want to be able to back out if I can’t sell my house at Fort Hood first.” Would you be inclined to accept that offer if you had another offer that didn’t have this contingency? Probably not.

The big takeaway to selling a home when PCSing is that there are a lot of moving pieces and everyone’s situation is different. You’ll make your life so much easier if you hire dedicated professionals to help guide you along the way. It’s also very important to make sure that the agent who is helping you sell your current home is connected with both the agent who will help you to buy the next one and the lender who will help you borrow the money. Everyone needs to be talking, because the market conditions in the market you are moving to may influence the decisions you need to make as you sell. If you don’t know any lenders or agents in the area you’re PCSing to, ask the agent who will help you sell if they have any recommendations. At Trophy Point Realty Group, we have relationships with agents in most military markets because we work with so many military buyers and sellers. We would love nothing more than to connect you to someone that we trust and work well with, so that all of us can coordinate your efforts to make the PCS move easy and lucrative! More on buying a home remotely in the next blog of this series.

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Written by: Pat Wilver

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Investing Military Rentals Savannah Market

PCS Moves, Part Two: Renting Out Your Home

homes for sale near fort stewart ga

Most people know what’s generally involved when selling your home, but renting out your home? That’s not as widely known, and finding the right information can be difficult. In the first blog of this series, I went over other options aside from selling your home when you’ve gotten PCS orders, and lightly touched on the pros and cons of both selling and renting. Let’s figure out the basics of renting out your home, since that’s likely where most of the questions are at, and I’ll add in my take from when I was renting out properties in Savannah while serving in Korea.

Managing a rental isn’t always easy, even when you live close to the rental. It’s harder when you’re a few states away. I actually did manage to self-manage two rental properties when I spent a year in Korea on the 8th Army Staff and it wasn’t terrible. I made an arrangement with a local handyman who I trusted; basically, I’d pay him a small retainer and, in return, he agreed to be the primary point of contact for my tenants if they had an issue. It worked well enough, but only because I had someone on the ground that I could trust.

realtors hinesville ga

Key takeaway here: if you want to self-manage, you NEED to already have connections with handymen, contractors, and other vendors that you TRUST. You also need to build those relationships before you PCS away because it’s hard to build solid relationships over the phone.

Now, self-managing did not work for me when it came time to place a new tenant.  I ended up paying a real estate agent to do the tenant placement for me for a one-time fee of 1 month’s rent. This is an option, but keep in mind that a good agent isn’t really going to want to go through the hassle of placing a tenant when they can make 5x more selling a house (for less effort than it takes to place a tenant). So, you’ll either need to find a young upstart or, if you already have a relationship with an agent, they may be willing to do a favor for you.

The other consideration to self-managing in the Army is you HAVE to have someone who can make decisions in your absence. Sometimes, these are big money decisions. What if you’re at NTC without a cell phone for 10 days, and on day 2 of the rotation, your HVAC goes out or roof springs a leak? You could be looking at thousands of dollars, and these decisions may not be able to wait a week for you to get your cell phone back. Do you have a contingency plan for this? If not, I strongly recommend having a good property manager in place.

Speaking of property managers – how do you find a good one? The truth to property management is that it’s a low-margin business. There’s not a lot of money in property management, and there’s a lot of incentive to cut costs. It’s not a business that I particularly enjoy. To find a good manager, ask for recommendations. Most areas have a local Facebook group for investors, which would be a good place to ask for recommendations.

Also keep in mind that you might not want to look for the cheapest solution. I’d rather pay another 1-2% for someone that I know will answer the phone, is highly organized, and looks out for my best interests over someone who will charge the bare minimum but also do the bare minimum. And, as with any decision, you should always interview at least 2 or 3 managers to see who you like the best. Ask them about their business, what software they use, how many different contractors they send jobs to, how many properties they have under management. It’s also not a bad idea to call in and pretend to be an interested tenant – how well do they market their rental listings? Are they responsive and helpful?

Still not sure renting is your best option? We’ll talk more thoroughly about the selling process in our next blog. But with a great lay work, renting your home while out-of-state and in the Army is feasible and will get you passive income. Just start now – it’s never too early to create a plan and build connections with local realtors, handymen, and property managers. When it’s time to leave town, you’ll be glad you put in a lot of work on the front-end so that you can focus on what’s most important to you.

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Written by: Pat Wilver

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Categories
Military Selling a Home

PCS Moves, Part One: Sell or Rent?

homes for sale near fort stewart ga

You’ve come down on orders and you own your current home – is it better to rent the home when you leave or sell it? It depends – there are both monetary and personal lifestyle considerations to take into account.  Before making any decision, we need to fully explore and understand our options, so let’s take a look.

If you’re only concerned about the money, then this shouldn’t be a very tough decision to make; it boils down to this question: if I sell this house, will I be able to use the check I’ll get at the closing table to make more money than I would make if I kept the house and rented it out instead? If the answer is yes, then sell. If not, then it’s better to rent it out.

But finding the answer to that question can be tricky, especially if you’re new to real estate investing, so let’s look at an example.

Let’s say you can…

a) sell your home and put $50k in your pocket, or

b) rent it and make $5000 in profit each year. This equates to a 10% return on your equity, which is pretty decent.

If you can put that $50k to work making more than 10%, then perhaps you should sell. If not, look toward renting it out.

You might be thinking at this point “well how do I know exactly how much equity I have, or what my property will rent for?” Glad you asked – the easiest thing to do is to seek the advice of a trusted real estate agent. Keep in mind that an agent will have a significant monetary incentive to convince you to sell the house (that’s how agents get paid!), so make sure that this person is someone you really trust. If you don’t have someone like that, ask around for some referrals and interview two or three to get their opinions on market sale price vs rent price. Then, when you’re ready to run your numbers, check out our blog on running the rental numbers.

Savannah real estate

But, it’s not usually all about the money. We all have a personal preference. I like to be a landlord, and I don’t like selling houses once I own them. I’ve held onto homes even when I have a lot of equity in them that could better be put to work elsewhere. In cases like this, you might want to explore doing a cash-out refinance of the home, or even using a home equity line of credit (HELOC) to access some of that home’s equity if you don’t want to sell it. This will, of course, make your payment go up, but it may be a great option to access some equity.

Other folks just don’t want to be landlords, and I understand that. I sometimes get frustrated answering tenant questions and maintenance requests, especially when they call me at an odd hour to ask a dumb question (one time I had a tenant who didn’t understand that you’re supposed to brush the toilet bowl every once in a while and complained about mold in the toilet!)

There are ways to mitigate this hassle, the best being to hire a great property manager. A good manager will only bring the most important issues to your attention, but they will typically cost you 10% per month and also charge tenant placement fees.

In addition to the occasional late-night call, a landlord also has to be prepared to fix tenant issues quickly. You NEED to have a reserve fund set aside to cover major maintenance items that come up from time to time. In Georgia, for example, if the heat goes out, you must fix it ASAP (even if that means paying a few thousand dollars out-of-pocket to replace the HVAC system). So even if you do want to keep the house and it makes sense as a rental, make sure you can cover a major expense. Even home warranty companies do not always come through like they promise, so don’t rely on them.

As a practical matter, it is pretty difficult to self-manage after you PCS to a new duty station. But more on that in the next blog of this series!

Until then – need some questions answered? We love nerding out about this stuff! Reach us at our contact page.

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Written by: Pat Wilver

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Buying & Owning a Home Life in Savannah Military

PCS’ing to Savannah

PCS'ING TO SAVANNAH

our best answers to your most important questions
fort stewart homes

You just came down on orders to Fort Stewart or Hunter Army Airfield – congratulations! I first  PCS’d here in 2014. I loved it so much that I decided to make Savannah my home when I ETS’d in 2019, and I believe this to be one of the best places you can be stationed. Why?

1. Savannah is a very fun town! There’s a ton to eat, see, and do. To check out some of my favorites, you can peruse this map I made. 

2. Coastal Georgia (or “the Low Country” as we call it) is a sportsman’s paradise. The hunting on Fort Stewart is great, you can rent boats from the MWR for dirt cheap and spend weekends fishing and boating in our beautiful salt water marshes that are a very unique habitat. We are also an easy 4-hour drive from the beautiful mountains of North Georgia.

3. The international airport has direct flights to any major city east of Dallas and the fares are reasonable.

4. The local housing market, while hot, is nowhere near as competitive as other duty stations like Fort Carson or JBLM.

5. There’s great diversity in places to live. If a short commute is your thing, you can live in Hinesville and still be only 45 minutes away from downtown Savannah. There are rural options in places like Midway. There’s the halfway point of Richmond Hill, where you can be about 25 minutes from both post and downtown Savannah. Or you can get a place right in downtown Savannah if you prioritize easy access to culture and nightlife over having a short commute.  

Inprocessing

More about places to live soon – let’s talk about what inprocessing will look like.  If you’re coming to any of the units at Fort Stewart or HAAF, you will start out at the Marne Reception Center for inprocessing. E9/O4’s and above can get expedited inprocessing, everyone else will more or less be spending your first 4 duty days doing 9-5 inprocessing tasks.  I thought it was a bit unnecessary to be honest and would have much preferred to be able to do inprocessing at my own pace, but hey – welcome to 3ID. You’ll also do PT in the morning. Yikes.

https://home.army.mil/stewart/index.php/about/Garrison/DHR/MPD/marne-reception-center 

The problem with doing inprocessing this way is that you have to squeeze in time during the day to do things like finding a place to live. So either find a place to live before you start MRC or know that you’ll be in the hotel. PTDY is typically taken after completing MRC and reporting to your gaining unit, unless you got PTDY from your old unit. I do recommend trying to get PTDY from the unit you are leaving and finding your long-term housing situation BEFORE reporting to the MRC if possible. Once you finish MRC and report to your unit, you are not guaranteed getting that PTDY – it is up to your BN commander’s discretion. If you happen to be walking into a big field problem, you might find yourself going straight to the field and unable to sort out the housing situation right away.

Where do you want to live?

So, speaking of housing – where do you want to live? Let’s discuss a few of the different local communities. I put them in order from the closest to Fort Stewart to the furthest away. If you are PCSing to HAAF, just know that HAAF is in midtown Savannah, roughly 7 minutes from the downtown area and about 45 minutes from Hinesville/Fort Stewart.

 

Hinesville

Hinesville is the place to live if a short commute is your primary concern. Some areas of Hinesville are better to live in than others, depending on where you will work. If you will be in the 92nd Engineer BN, for example, you’ll want to live outside of gate 15 for the fastest commute. If you’ll be at 2nd Brigade, you’ll probably want to be able to get to Old Sunbury Road quickly, as that is the most direct way onto that compound. For 1st Brigade, the main gate or Veterans Pkwy gates will likely be the fastest. See this map for more information on gates. Hinesville has a lot of food and grocery store options from Walmart, Kroger, Home Depot and Lowes, Tractor Supply, Applebees, Chick-Fil-A, Zaxbys, Starbucks, and a few independently-owned restaurants like Zum Rosenhof. In Hinesville and the surrounding areas, there’s typically a fair amount of inventory for decent 3-bed homes in the mid-$100k price point, and there are newer builds in the 3- to 4-bed range for sale in the low-$200k range.

 

Flemington

Flemington is just east of Hinesville and most folks basically think of it as Hinesville. Flemington is near the Old Sunbury Road that I mentioned earlier.

 

Allenhurst/Walthourville

Properties here will still have Hinesville addresses typically, and these areas are 10-20 minutes from the main gate. These are probably not ideal places to live if you’ll be in 2nd brigade and you really care about the commute.

 

Ludowici

Ludowici is about as far west as it is practical to live. You’ll drive about 25 minutes to get to work and about 1:15 to get to Savannah.  There are lots of newer builds out here and the prices are typically cheaper than the same kind of house in Hinesville proper. Not a ton of dining or shopping out here – you’ll probably be driving to Hinesville a lot.

 

Midway

Midway has a broad diversity of housing stock from newer builds to trailers. I actually rented a doublewide out there for $600/mo when I first got to Stewart. There’s a cool lake community out there called Lake George that is great if you are into boating, or just want a more quiet place to live.  Your drive to work can vary greatly – mine was about 10 minutes, but it’s possible to live in parts of Midway that will take 30 minutes to get to work. Midway gives fast access to I-95 and you’ll be about 40 minutes from Savannah. There’s not a whole lot of shopping or food options in Midway, so you’ll probably end up driving to Hinesville for most of that.

 

Riceboro

I don’t really know of anyone who lives in Riceboro and commutes to Fort Stewart. It’s a bit of a haul and there’s nothing too nice there. 

 

Richmond Hill

Richmond Hill is the convenient halfway-point between FSGA and Savannah. If you live in the parts of Richmond Hill that are closer to I-95, your commute to work will be 25-35 minutes. But if you live closer to Keller, you’ll need to tack on ten minutes or so. Richmond Hill has some great schools as well, but, with that, prices are going to be higher than Hinesville. It’s hard to find anything under $200k in Richmond Hill, and the average sale is upwards of $300k.  Inventory in the mid-$200s is competitive, but there are deals to be made. Richmond Hill has three grocery stores including a Publix, a decent amount of chain restaurants, and a few good local places, including one of my favorites, a restaurant on the Ogeechee river called Fishtales. Richmond Hill is also home to Fort McAllister state park, which is where I typically launched the boats I would rent from the MWR for weekends on the water. New construction in Richmond Hill typically starts at $250k for a 3-bed.

 

Georgetown

Georgetown is next closest. These homes are very similar to what you’ll find in Richmond Hill, and the price point is typically a touch lower. Georgetown will add about ten minutes to your commute to Stewart vs living in Richmond Hill, and you’ll be about 20 minutes from downtown Savannah. Georgetown is only a few minutes away from the Rio Road gate at HAAF.  

 

Henderson/Berwick/Quacco/Little Neck

There are a variety of subdivisions north of Georgetown roughly between US-17 and I-95.  These are similar to what you’ll find in Georgetown.

 

Southside Savannah/Windsor Forest/Largo Woods

You probably won’t live here if you’re working at FSGA, but this will be a good option for folks at HAAF. Most of these homes were built in the 70s and you can still pick up some of them in the high $100k’s.  Windsor Forest will typically be a touch more expensive than Largo Woods. Here in the southside is where most of your national retail and dining brands will be located and you’ll be about 15 minutes from downtown Savannah.

 

Midtown Savannah/Ardsley Park/Kensington Park

There’s a lot of different neighborhoods in Midtown, but to keep it short, Midtown will be the fastest commute to the main gate or Stevenson Ave gates of Hunter. Ardsley Park is probably the nicest residential neighborhood you can live in Savannah, most of the homes were early 1900s builds, and you’d be hard pressed to find anything cheaper than $300k here except for small bungalows. I’m a big fan of Ardsley Park! It’s quiet, no tourists, tons of mature trees and parks, and the homes are very unique and pretty.

 

Downtown Savannah north of Victory Drive

This is another large area that has a lot of variability in neighborhoods, but for the most part, if you live here, you can either walk or ride a bike to anything worth doing in downtown Savannah. I personally live in the Eastside neighborhood, and I chose to live here because the cost of living is much cheaper than downtown, but I’m still close enough to take a $7 uber or ride my bike downtown on a Friday night. Starland/Thomas square is probably my favorite place to be in this area – it includes some of the best restaurants, and it’s not yet overrun by tourists.

 

Thunderbolt and the Islands

Thunderbolt, Whitemarsh (pronounced Whit-Marsh), Wilmington, and Tybee. Chances are, you won’t want to live here if you work at Stewart, but the commute to HAAF from any of these places will be 10-25 minutes depending on how close to Tybee you live. Tybee Island probably won’t be a very viable option for most because of the prices out there, but tons of soldiers stationed at HAAF live on Wilmington and Whitemarsh. Typically, you’ll spend between $250-350k for a decent 3-bed in these areas. Schools on Wilmington are pretty good as well. There is also an abundance of dining and grocery stores.

 

Pooler

Pooler is also a popular place to be for many people. I personally don’t love it, but if you like being close to the outlet mall and big national retail brands, then Pooler is where you want to be and plenty of folks enjoy living there. You’ll be about 45 minutes from Stewart, 15-20 minutes from downtown, and 5-10 minutes from the airport.  A 3-bed home in the old part of Pooler will typically run you $200k, and most of the new construction going up will run between $250-300k, but goes much higher depending on what you’re looking for.

 

Pembroke

This is a town just north of the FSGA training area and some folks live out there. There’s not much to do in Pembroke. You’ll drive a minimum of 25 minutes to get to work, and be about an hour from Savannah. I don’t recommend Pembroke, but if you’re into more of a quiet, rural setting then it is an option.  

 Commute to FSGACommute to HAAF/SavannahArea Summary
Hinesville10 mins45 minsShortest commute to FSGA, good diversity of chain restaurants and big brand retail
Flemington10 mins40 minsNortheast adjacent of Hinesville

Allenhurst/

Walthourville

15 mins1 hourQuiet suburban Southwest Hinesville
Ludowici25 mins1 hour 15 minsRural West Hinesville with acre+ properties
Midway35 mins35 minsSmall town/rural community equidistant of FSGA and HAAF and the rest of Savannah
Riceboro40 mins45 minsSouth of Midway, rural lots with land
Richmond Hill35 mins20 minsChain and local shopping and food, convenient access to Savannah and FSGA
Georgetown40 mins10 minsSuburbs West of downtown and HAAF
West Savannah35 mins15 minsNewer construction subdivisions, minutes from shopping and food in Pooler
South Savannah55 mins5 minsEasy access to major retailers and restaurants, closest to HAAF

Midtown

Savannah

1 hour10 minsSouthern architecture and large open parks, minutes from downtown
Downtown Savannah

1 hour

10 mins

15 minsNightlife and gourmet restaurant access within walking distance
Thunderbolt/Islands

1 hour

20 mins

15 mins –

25 mins

Abundant grocery and restaurant options, as well as water access and good schools
Pooler45 mins25 minsNew construction with access to the airport, large retailers, and chain restaurants
Pembroke25 mins45 minsQuaint old Georgia town outside the city

Rent or Buy?

This is the classic question, isn’t it? The answer really is – it depends. If all you care about is the numbers, then we’ll need to take a look at where you want to buy, what you can expect to pay for a house there, and how much you can rent it out for when you move, or what you might expect to sell it for in a few years.  

Typically, I find that the break-even point in the rent vs own calculation tips towards owning around 18-24 months of ownership. If you think you’ll be here for a short time, it might not make sense to buy, financially-speaking.  We have an easy-to-use rent vs buy calculator that we would be happy to share with you to use when making this decision – shoot us a note if you’d like to see it!

What about renting for a short period of time while you get a feel for the area? This isn’t a bad choice, but of course the downside is that you’ll have to move twice. This might be a good decision if you are single or don’t have a ton of possessions. It typically isn’t easy to get a landlord to sign any less than a 12 month lease, but it’s not too difficult to find someone willing to do 6 months if you are willing to pay a little bit more. It is difficult to find furnished short-term rentals.

This probably feels like a lot of information, and it may bring up even more questions left unanswered. Along with our experience in the market, and having been in your boots, we are ready to provide you with all the options available to you, as well as the services you need to get where you want to be. So, it’s easy! Just contact us & we’ll be happy to chat through your questions & options.

Written by: Pat Wilver

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Categories
Buying & Owning a Home Investing Loans & Financing Military Selling a Home

Building Wealth with the VA Loan: Cosmetic Repairs and Appreciation

BUILDING WEALTH WITH THE VA LOAN

Today’s post is a guest post from our friend Jonathan Lee of Military Money Matters. Jonathan studied economics at West Point and has made it his mission to provide high quality educational content to help the military community invest their money wisely. This particular post is an introductory post geared toward those who wish to buy a property, conduct some cosmetic renovation while they live in it, and sell once they have orders to a new duty station. I’ve included some of my own commentary in italics.

The focus of today’s post will be the accumulation of wealth from a powerful tool available to you: the VA loan. For details on how to use your VA loan, see our post here. Today’s topic will be understanding how to generate wealth from the loan. There are two ways to do so: cash flow on rental properties (after you’ve moved out) and appreciation. Today we will talk about appreciation.

Appreciation is an increase in the value of the home you purchase over time. For example, if you purchase a home for $120,000 and sell if for $150,000, it has appreciated by $30,000. Bear in mind that there are significant closing costs associated with selling a home so all of that money doesn’t necessarily go to you. You can typically expect to pay between 6% and 10% in commissions, closing costs, and maintenance expenses on the sale. Here’s a 3 step look at how to make money through appreciation with your VA Loan.

 

Step 1: Choose the right home!

If you’re looking to make money from appreciation this step is essential. Certain areas appreciate more than others. Hawaii, for example (where I purchased my first home) tends to appreciate rapidly. Look at historical data for the community to see what drives growth. The Zestimate (see Zillow.com) may provide a good tool at predicting prices as well, but given the number of factors that drive house prices, it’s not always accurate.

Editors Note: Realtors hate Zestimates, but if you aren’t a real estate agent or haven’t been tracking the local market, Zestimates aren’t a bad place to start. Just don’t be surprised when your agent tells you that the Zestimate is wrong.

fort stewart homes

Other things to consider on this step include the specific neighborhood and the quality of the home. If you’re trying to flip the house, you never want to purchase the nicest house in a bad neighborhood. It’s already been flipped! You also don’t want one that’s already entirely redone. Try to avoid those granite countertops when purchasing a home you intend to add value to.

Additionally, look at big projects in the area. Is a new shopping mall going up? Is the city undergoing a huge re-imaging campaign and building new parks and recreational areas? If the answer is yes, that’s a good sign.

Editors note: Check out our post about future development in Savannah here and here. Jonathan gives great advice when he says to avoid the nicest house in the neighborhood, and it’s also not wise to renovate into becoming the nicest house– spend enough money to make your house as nice as other recent renovations in your area and no more. It’s also important to note that when buying a house that needs work with a VA loan, cosmetic repairs are fine but if there is anything wrong with the home structurally or mechanically, the VA will not underwrite the loan.

 

Step 2: Renovate!

If you’re looking to increase the value of your home, certain upgrades pay off more than others. As a rule of thumb, minor kitchen and bathroom improvements drive up the value of homes, but don’t shoot for anything excessive. Top of the line granite countertops do just about as much as generic granite. The top value producing renovations are listed here.

If you’re really looking to generate wealth through appreciation, this can be a powerful step if you purchase older homes, foreclosures, or short sales. In these homes, however, check to ensure that the home is available to purchase with a VA loan first! Also, make the home look good for staging. Prior to selling, consider a new paint job, modern light fixtures, or other small repairs.

Editors Note: You don’t always have to renovate to see a nice appreciation on a home. If you PCSd to Stewart in 2013 and bought a nice three bedroom home in Georgetown, for example, you likely paid about $135k. That same home would sell for about $165-170k today even if you did no renovations. However, if you only spend two to three years at a duty station, it is unlikely you will see great appreciation in that short amount of time– but you’ll still have more money in your pocket than if you rented!

 

Step 3: Timing the sale

This is probably the hardest step but can significantly impact the sale price of your home. While you need to do what’s right for you, (maybe you’re about to PCS) timing the sale can make thousands of dollars in difference. In certain markets, for example the summer moths cause a boom in housing prices of 2-3%. People like to purchase homes in the summer because their kids are out of school or they’re PCSing to a new location.

Editors Note: The Savannah market specifically does see these shifts, and they are more pronounced as you get closer to Fort Stewart. I think 2-3% is a tough high for the change in pricing here, typically prices will remain similar but days on the market may increase during the winter months.

If you purchased in that up-and-coming neighborhood, the time to sell might be when 50-75% of the homes in the area have also been renovated or “flipped.” Maybe the new park down the street has been built and you’re ready to sell.

Editors Note: To me, the best time to sell if you’re a novice is when it’s time to PCS. If you’re interested in making money by flipping houses, then I recommend buying a second house to work as a flip from day one. Flipping houses is part science, part art, and to really make the best returns you have to buy a dump of a place, fix it up to be line with what the market wants, and sell quickly.

Trophy Point Realty Group would like to thank Jonathan for letting us cross-post this blog, and we look forward to some more collaboration the future! If you are in the military or a veteran, you really need to go check out his blog — he’s got great insight on everything from real estate, the TSP, blended retirement, GI bill, transition, and everything in between. www.militarymoneymatters.org

Interested in using this plan to build wealth here in the coastal empire? Trophy Point Realty is owned by military veterans who have used the VA loan themselves and are experienced in renovations. We’d love to be your trusted advisors and we work in Savannah, Hunter AAF, Fort Stewart, Hinesville, Richmond Hill, and Pooler. Get in touch with us today!

Author: Jonathan Lee

Editor: Pat Wilver

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Categories
Loans & Financing Military

Understanding your VA Loan Entitlement

UNDERSTANDING YOUR VA LOAN ENTITLEMENT

a guide to selling your home.

If you’re a veteran, you’ve got a multitude of benefits available to you that you might not even know about. You shouldn’t feel greedy for taking advantage of them.

When I decided to serve my country, I didn’t do it for 10% discounts at Lowe’s, tax free booze at the class six, or any of the other Veterans benefits I have access to, but I’ll be damned if I don’t take advantage of some of those benefits today.

How might some of these benefits help you achieve the American dream? How about the ability to qualify for a loan for no down payment at all? If you haven’t heard of the VA loan, or you’re not sure how it works, keep reading.

The VA loan is a loan that’s guaranteed by the Department of Veterans Affairs (VA). Under this program, a bank will lend money to a veteran to buy a house and will not require the veteran to make any down payment at all. The banks can take this risk because the VA will issue a guarantee to the bank that essentially says: “if this veteran becomes unable to make payments on this loan, we will cover your losses.”

It’s a bit more complicated than that, but that’s the bottom line. What you, the buyer, need to know about a VA loan is this:

1. You must still qualify for this loan (if your credit is trashed because you bought a V6 Camaro after your first deployment and later had it repossessed, you’re probably shit outta luck until you fix your credit.)

2. There are certain service requirements a veteran must meet to qualify. Check if you qualify here

3. You must purchase a house that is move-in ready — fixer-uppers will generally not qualify for this program.

4. You can purchase single family homes, duplexes, even quadplexes with this loan.

5. You must agree to live in the property for at least one year. This requirement is waived if you come down on orders after your purchase.

6. Generally, in order to use your VA loan entitlement again, you must sell your VA financed house or refinance your first VA loan into a non-VA product. This is not always the case, especially if your first VA loan was for a small amount. Consult with your lender if you would like to use a second VA loan.

7. The limit on the amount you can finance with a VA loan varies by county, but in Chatham County, GA, that limit is $484,350.

8. If you want to purchase a property with a VA loan for more than this amount, you can. You just have to make a down payment equal to at least 20% of the cost over this amount. So, if you want to buy a house in Savannah for $484,450, you have to make a $20 down payment.

9. If you go into foreclosure, the VA may negotiate to help you out, but at the end of the day they’re not going to save you. Don’t buy more house than you can afford, and leave some cushion in your monthly payments in case your life situation changes. And don’t finance that new Camaro at 20%.

 

Was this really worth it?

fort stewart homes

 

Why should you use your VA loan entitlement? Because you can!

Look, if you like paying your entire BAH check to live in on-post, that’s cool. I’ve lived on post before, sometimes it’s convenient, and if you’ve got a big family it can be the cheapest option. Here’s why I think it’s better to use your VA loan to buy than to live on post or rent off-post:

– Every time you make a mortgage payment, a portion of that payment goes toward paying down that loan. In 30 years, your loan will be paid off and now your only housing expenses are property taxes and maintenance. If you rent, you’ll just paying off your landlord’s mortgage until the day you die.

– Your loan payment will generally be less than your BAH. With interest rates as low as they are I could buy a $240,000 house and my payments would equal O-3 BAH.

– Generally, GENERALLY, housing prices only go up. This obviously didn’t happen from 2006-2011, but check out my previous post on why I don’t think that is likely to happen again here.

– If you’re into saving for retirement (which you should be), owning real estate is one of the most powerful ways to do that for two reasons:

– As discussed earlier, having a paid-off house is huge. In Savannah, a 100 thousand dollar house will generally cost $1200 each year in property taxes and $1000/yr in insurance, and maybe $1000/yr in maintenance. Compare that total of $3200/yr to the $12,000/yr or more you would pay to rent a comparable property here.

– If you are interested in investing in real estate, the VA loan is the best way for a veteran to get started in this game. I currently rent out the first house I ever bought, and make roughly $500 each month in profit on that house. I made no down payment on that house because I used my VA loan – I’m turning a profit every month on an investment that cost me nothing to buy. My wife bought a duplex with her VA loan, and now we live in downtown Savannah and our tenants’ rent covers our entire mortgage payment. You gave Uncle Sam a blank check when you joined the military, why not take advantage of the blank check your deal old Uncle Sam is willing to give you in order to build your wealth?

Here are the steps to using your VA loan:

1. Establish credit. If you’ve never had a loan or a credit card, you don’t have any credit. Open a credit card and use it responsibly! Pay off the entire balance each and every month to avoid unnecessary interest charges. Generally, the more credit cards and loans you have and have had, the better, as long as you make all of your payments on time and maintain a low credit card balance.

2. Check your credit score. A score over 750 is the best, and you generally want to have at least a 580 to buy a house with a VA loan. Start here to check your score. If your score is not where it needs to be, that doesn’t mean you can’t reach out to an agent or a lender — a good one will help you

3. Get pre-qualified for a mortgage. Reach out to a local real estate agent or lender for help with this. Tell them you would like to use your VA loan.

4. Start looking at houses with your agent. Make sure your agent understands your needs and wants and isn’t just trying to earn a paycheck. If he or she doesn’t point out parts of a house that could be problems, he or she probably doesn’t have your best interests at heart — almost every house has something wrong with it. Don’t be afraid to fire your agent if they are not working out for you.

5. Find a house you like and get it under-contract with your agent.

6. Under contract – Once your house is under contract, you will need to complete inspections, loan paperwork, and appraisals. Your agent and lender should help you every step of the way.

7. Closing day — this is the day you sign the paperwork and officially take possession of your new home. You may have to pay some closing costs, but these will generally be no more than a few thousand dollars for a VA loan. In most cases your seller will pay for the majority of these costs, especially in the Savannah market.

If you have any questions or are interested in using your VA loan to buy a house, please leave a comment, reach out, or look me up on Facebook!

Sources:

https://www.benefits.va.gov/homeloans/purchaseco_loan_limits.asp

https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx

Written by: Pat Wilver

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