Categories
Savannah Market

May’s Market Update

Monthly Market Update: May

For the month of May in the entire Savannah MLS (which covers all of Chatham, Effingham, Bryan, and parts of Long and Liberty Counties), we have seen the following:

 

  • 1,484 new listings, compared to 1,359 new listings in April & 1,424 new listings in May of last year, 2021
  • 1,101 homes sold, compared to 1,053 homes sold in April & 1,174 homes sold in May of last year, 2021

 

There were 1,667 homes total on the market in May. This brings us to a total of 1.7 months of inventory, compared to 1.36 months of inventory in March, and 1.47 months worth in April. In a balanced market, we expect to see 6 months of inventory, so we are still very much in a seller’s market.

 

Here, we can see the trends from the last 5 years of months of inventory (in green – remember, the balanced market is right around 6 months) & median home sale prices (in blue).

And this chart shows us the trends, also over the last 5 years, of the number of new listings (green) & number of houses sold (blue).

Another interesting trend we can see through this graph is the number of homes that have sold each month over the past 5 years for under $250,000.

For those interested in multifamily properties, here are a few graphs to look at:

Savannah’s number of multifamily listings was up to 25 properties in May 2022, compared to 27 active in April 2022 and 21 active last May (2021).

This chart shows us trends over 5 years of new listings (in green) compared with the number of closings (in blue) for multifamily properties.

And this zooms in to just the past year’s number of multifamily new listings and closings by month:

The fact that months of inventory continues to stay low even though the number of new listings is roughly in line with historic trends can point to only one thing – there are a lot of people moving to Savannah, and supply is not keeping up. This is great news if you’re a seller of course, not so much if you’re a buyer. The good news for buyers is this – population forecasts for the next five years point to a continued trend of migration to Savannah. We do not believe that prices will decline as long as folks are still moving here faster than they’re building houses – that’s basic economics.

 

Interest rates rising have so far had little to no effect on the market. Some buyers are beginning to bow out of the market, but most are simply looking at lower price points. The other harsh truth for those in need of housing is this – rents have risen sharply over the past two years as well, and supply of available rentals is very tight. For example, on May the 2nd of this year I ran a search to see how many 3 bedroom rentals are available in Chatham county for less than $1600/mo – I counted five. Two years ago I would have been able to find 30 or more.

 

If interest rates continue to climb, then they will eventually reach a point where they cool the market. When and if we get there is hard to say.

 

If you’re interested in seeing some trends in individual segments of the market, please keep scrolling. As always, we love to answer your questions – please don’t hesitate to reach out if you’d like to pick our brains about any of the information you see here today!

 

Here is our index of neighborhoods:

  1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside
  2. The Islands
  3. Historic Districts
  4. Starland/Thomas Square/South Victorian District
  5. Eastside
  6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights
  7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt
  8. West Savannah
  9. Cloverdale/Tremont Park/Liberty City
  10. Cuyler Brownsville/Cann Park
  11. Midtown
  12. Southside
  13. Georgetown/Chevis/Little Neck
  14. The Landings/Isle of Hope/Dutch Island/Burnside Island
  15. Berwick/Southbridge
  16. Garden City/Old Port Wentworth
  17. New Port Wentworth/North Pooler
  18. Pooler/Bloomingdale
  19. Rincon
  20. Guyton/Springfield
  21. Richmond Hill
  22. Keller
  23. Midway
  24. Hinesville

1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside

  • 25 new listings
    • 29 new listings in April 2022
    • 31 new listings this time last year (May 2021)
  • 25 properties sold
  • Average sale price: $562k
  • Price difference from last year to now: +$89k
Ardsley park homes for sale

2. The Islands

  • 91 new listings
    • 76 new listings in April 2022
    • 86 new listings this time last year (May 2021)
  • 62 properties sold
  • Average sale price: $437k
  • Price difference from last year to now: +$69k
savannah islands homes for sale

3. Historic Downtown Districts

  • 25 new listings
    • 24 new listings in April 2022
    • 34 new listings this time last year (May 2021)
  • 20 properties sold
  • Average sale price: $1.3M
  • Price difference from last year to now: +$801k
homes for sale in downtown savannah

4. Starland/Thomas Square/South Victorian District

  • 25 new listings
    • 32 new listings in April 2022
    • 27 new listings this time last year (May 2021)
  • 19 properties sold
  • Average sale price: $550k
  • Price difference from last year to now: +$155k
starland homes for sale

5. Eastside

  • 24 new listings
    • 18 new listings in April 2022
    • 17 new listings this time last year (May 2021)
  • 15 properties sold
  • Average sale price: $400k
  • Price difference from last year to now: +$180k
eastside savannah homes for sale

6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights

  • 31 new listings
    • 17 new listings in April 2022
    • 21 new listings this time last year (May 2021)
  • 21 properties sold
  • Average sale price: $255k
  • Price difference from last year to now: +$113k
pine gardens homes for sale

7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt

  • 37 new listings
    • 19 new listings in April 2022
    • 30 new listings this time last year (May 2021)
  • 19 properties sold
  • Average sale price: $245k
  • Price difference from last year to now: +$65k
laroche homes for sale

8. West Savannah

  • 3 new listings
    • 6 new listings in April 2022
    • 4 new listings this time last year (May 2021)
  • 1 property sold
  • Average sale price: $245k
  • Price difference from last year to now: +$187k
west savannah homes for sale

9. Cloverdale/Tremont Park/Liberty City

  • 3 new listings
    • 7 new listings in April 2022
    • 8 new listings this time last year (May 2021)
  • 5 properties sold
  • Average sale price: $149k
  • Price difference from last year to now: +$61k
cloverdale homes for sale

10. Cuyler Brownsville/Cann Park

  • 11 new listings
    • 10 new listings in April 2022
    • 9 new listings this time last year (May 2021)
  • 8 properties sold
  • Average sale price: $229k
  • Price difference from last year to now: +$100k
cuyler homes for sale

11. Midtown

  • 27 new listings
    • 37 new listings in April 2022
    • 33 new listings this time last year (May 2021)
  • 39 properties sold
  • Average sale price: $275k
  • Price difference from last year to now: -$5k
midtown homes for sale savannah

12. Southside

  • 66 new listings
    • 80 new listings in April 2022
    • 75 new listings this time last year (May 2021)
  • 64 properties sold
  • Average sale price: $238k
  • Price difference from last year to now: +$31k
savannah southside homes for sale

13. Georgetown/Chevis/Little Neck

  • 48 new listings
    • 61 new listings in April 2022
    • 46 new listings this time last year (May 2021)
  • 48 properties sold
  • Average sale price: $279k
  • Price difference from last year to now: +$35k
homes for sale georgetown

14. The Landings/Isle of Hope/Dutch Island/Burnside Island

  • 56 new listings
    • 43 new listings in April 2022
    • 58 new listings this time last year (May 2021)
  • 39 properties sold
  • Average sale price: $700k
  • Price difference from last year to now: +$208k
savannah islands homes for sale

15. Berwick/Southbridge

  • 44 new listings
    • 46 new listings in April 2022
    • 49 new listings this time last year (May 2021)
  • 39 properties sold
  • Average sale price: $389k
  • Price difference from last year to now: +$75k
southbridge homes for sale

16. Garden City/Old Port Wentworth

  • 7 new listings
    • 9 new listings in April 2022
    • 13 new listings this time last year (May 2021)
  • 6 properties sold
  • Average sale price: $223k
  • Price difference from last year to now: +$64k
garden city homes for sale

17. New Port Wentworth/North Pooler

  • 32 new listings
    • 42 new listings in April 2022
    • 64 new listings this time last year (May 2021)
  • 45 properties sold
  • Average sale price: $327k
  • Price difference from last year to now: +$82k
wentworth homes for sale

18. Pooler/Bloomingdale

  • 125 new listings
    • 106 new listings in April 2022
    • 116 new listings this time last year (May 2021)
  • 83 properties sold
  • Average sale price: $348k
  • Price difference from last year to now: +$96k
pooler homes for sale

19. Rincon

  • 86 new listings
    • 66 new listings in April 2022
    • 89 new listings this time last year (May 2021)
  • 62 properties sold
  • Average sale price: $306k
  • Price difference from last year to now: +$76k
rincon homes for sale

20. Guyton/Springfield

  • 46 new listings
    • 45 new listings in April 2022
    • 72 new listings this time last year (May 2021)
  • 42 properties sold
  • Average sale price: $253k
  • Price difference from last year to now: +$4k
guyton homes for sale

21. Richmond Hill

  • 103 new listings
    • 92 new listings in April 2022
    • 87 new listings this time last year (May 2021)
  • 70 properties sold
  • Average sale price: $336k
  • Price difference from last year to now: +$74k
richmond hill homes for sale

22. Keller

  • 79 new listings
    • 94 new listings in April 2022
    • 61 new listings this time last year (May 2021)
  • 72 properties sold
  • Average sale price: $400k
  • Price difference from last year to now: +$48k
savannah real estate

23. Midway

  • 59 new listings
    • 48 new listings in April 2022
    • 44 new listings this time last year (May 2021)
  • 42 properties sold
realtor savannah ga

24. Hinesville

  • 91 new listings
    • 72 new listings in April 2022
    • 83 new listings this time last year (May 2021)
  • 51 properties sold
realtors in hinesville ga

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Categories
Savannah Market

April’s Market Update

[av_section min_height='' min_height_pc='25' min_height_px='500px' padding='default' margin='' custom_margin='0px' color='main_color' background='bg_color' custom_bg='' background_gradient_color1='' background_gradient_color2='' background_gradient_direction='vertical' src='' attach='scroll' position='top left' repeat='no-repeat' video='' video_ratio='16:9' video_mobile_disabled='' overlay_enable='' overlay_opacity='0.5' overlay_color='' overlay_pattern='' overlay_custom_pattern='' shadow='no-border-styling' bottom_border='no-border-styling' bottom_border_diagonal_color='#333333' bottom_border_diagonal_direction='' bottom_border_style='' scroll_down='' custom_arrow_bg='' av-desktop-hide='' av-medium-hide='' av-small-hide='' av-mini-hide='' id='' custom_class='' template_class='' aria_label='' av_element_hidden_in_editor='0' av_uid='av-3ay0ui' sc_version='1.0'] [av_textblock size='' av-medium-font-size='' av-small-font-size='' av-mini-font-size='' font_color='' color='' id='' custom_class='' template_class='' av_uid='av-l2ulkjdv' sc_version='1.0' admin_preview_bg=''] Happy May! It's time for another market update - let's take a look at what April brought to the real estate market. While many have been waiting for a major slow-down in the real estate market, we’re still seeing homes fly off the shelves, especially in the $100-200k price range. Inventory is continually staying low, keeping the market hot.

General Market Trends

For the month of April in the entire Savannah MLS (which covers all of Chatham, Effingham, Bryan, and parts of Long and Liberty Counties), we have seen the following:
  • 1,333 new listings, compared to 1,402 new listings in March & 1,404 new listings in April of 2021
  • 967 homes sold, compared to 1,070 homes sold in March & 1,202 homes sold in April of 2021
There are 1,285 homes total on the market. This brings us to a total of 1.77 months of inventory, compared to 1.91 months of inventory in February, and 1.85 months worth in March. In a balanced market, we expect to see 6 months of inventory, so we are still very much in a seller’s market. Here, we can see the trends from the last 5 years of months of inventory (in green - remember, the balanced market is right around 6 months) & average home sale prices (in blue). And this chart shows us the trends, also over the last 5 years, of the number of new listings (green) & number of houses sold (blue). Another interesting trend we can see from this graph is the number of homes selling for under $250k around Savannah from the last 5 years. For those interested in multifamily homes, here are a few tidbits to look at: Savannah's number of multifamily listings was up to 27 properties in April 2022, compared with 30 active in March 2022 and 22 last April (2021). This chart shows us trends over 5 years of number of new listings (in green) compared with the number of closings (in blue) for multifamily properties. And this will show the number of new listings (in green) compared with closings (in blue) over the last year. The fact that months of inventory continues to decrease even though the number of new listings is roughly in line with historic trends can point to only one thing - there are a lot of people moving to Savannah, and supply is not keeping up. This is great news if you’re a seller of course, not so much if you’re a buyer. The good news for buyers is this: population forecasts for the next five years point to a continued trend of migration to Savannah. We do not believe that prices will decline as long as folks are still moving here faster than they’re building houses; that’s basic economics. Interest rates rising have so far had little to no effect on the market. Some buyers are beginning to bow out of the market, but most are simply looking at lower price points. The other harsh truth for those in need of housing is this - rents have risen sharply over the past two years as well, and supply of available rentals is very tight. For example, on May the 2nd of this year we ran a search to see how many 3-bedroom rentals are available in Chatham county for less than $1600/mo. I counted five.  Two years ago, I would have been able to find 30 or more. If interest rates continue to climb, then they will eventually reach a point where they cool the market. When and if we get there is hard to say. We'll be posting a blog within the next few weeks to share more information on these rising rates. If you’re interested in seeing some trends in individual neighborhoods or areas of the market, please keep scrolling. As always, we love to answer your questions - please don’t hesitate to reach out if you’d like to pick our brains about any of the information you see here today! Here is our index of neighborhoods:
  1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside
  2. The Islands
  3. Historic Districts
  4. Starland/Thomas Square/South Victorian District
  5. Eastside
  6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights
  7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt
  8. West Savannah
  9. Cloverdale/Tremont Park/Liberty City
  10. Cuyler Brownsville/Cann Park
  11. Midtwon
  12. Southside
  13. Georgetown/Chevis/Little Neck
  14. The Landings/Isle of Hope/Dutch Island/Burnside Island
  15. Berwick/Southbridge
  16. Garden City/Old Port Wentworth
  17. New Port Wentworth/North Pooler
  18. Pooler/Bloomingdale
  19. Rincon
  20. Guyton/Springfield
  21. Richmond Hill
  22. Keller
  23. Midway
  24. Hinesville

1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside

  • 29 new listings
    • 21 new listings in March 2022
    • 28 new listings this time last year (April 2021)
  • 18 properties sold
  • Average sale price: $464k
  • 5-year inventory of homes <$250k: 311
  • Price difference from last year to now: +$127k

2. The Islands

  • 74 new listings
    • 79 new listings in March 2022
    • 81 new listings this time last year (April 2021)
  • 61 properties sold
  • Average sale price: $435k
  • 5-year inventory of homes <$250k: 2,134
  • Price difference from last year to now: +$103k

3. Historic District

  • 25 new listings
    • 26 new listings in March 2022
    • 32 new listings this time last year (April 2021)
  • 17 properties sold
  • Average sale price: $899k
  • 5-year inventory of homes <$250k: 388
  • Price difference from last year to now: +$279k

4. Starland/Thomas Square/South Victorian District

  • 33 new listings
    • 34 new listings in March 2022
    • 30 new listings this time last year (April 2021)
  • 20 properties sold
  • Average sale price: $569k
  • 5-year inventory of homes <$250k: 420
  • Price difference from last year to now: +$179k

5. Eastside

  • 18 new listings
    • 21 new listings in March 2022
    • 18 new listings this time last year (April 2021)
  • 22 properties sold
  • Average sale price: $279k
  • 5-year inventory of homes <$250k: 802
  • Price difference from last year to now: +$45k

6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights

  • 21 new listings
    • 21 new listings in March 2022
    • 26 new listings this time last year (April 2021)
  • 17 properties sold
  • Average sale price: $225k
  • 5-year inventory of homes <$250k: 916
  • Price difference from last year to now: +$73k

7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt

  • 22 new listings
    • 37 new listings in March 2022
    • 33 new listings this time last year (April 2021)
  • 27 properties sold
  • Average sale price: $230k
  • 5-year inventory of homes <$250k: 1,237
  • Price difference from last year to now: +$18k

8. West Savannah

  • 6 new listings
    • 3 new listings in March 2022
    • 7 new listings this time last year (April 2021)
  • 2 properties sold
  • Average sale price: $76k
  • 5-year inventory of homes <$250k: 252
  • Price difference from last year to now: +$2k

9. Cloverdale/Tremont Park/Liberty City

  • 7 new listings
    • 9 new listings in March 2022
    • 8 new listings this time last year (April 2021)
  • 7 properties sold
  • Average sale price: $177k
  • 5-year inventory of homes <$250k: 473
  • Price difference from last year to now: +$27k

10. Cuyler Brownsville/Cann Park

  • 10 new listings
    • 14 new listings in March 2022
    • 11 new listings this time last year (April 2021)
  • 8 properties sold
  • Average sale price: $132k
  • 5-year inventory of homes <$250k: 465
  • Price difference from last year to now: +$52k

11. Midtown

  • 36 new listings
    • 40 new listings in March 2022
    • 44 new listings this time last year (April 2021)
  • 21 properties sold
  • Average sale price: $367k
  • 5-year inventory of homes <$250k: 945
  • Price difference from last year to now: +$129k

12. Southside

  • 83 new listings
    • 74 new listings in March 2022
    • 71 new listings this time last year (April 2021)
  • 71 properties sold
  • Average sale price: $236k
  • 5-year inventory of homes <$250k: 3,254
  • Price difference from last year to now: +$36k

13. Georgetown/Chevis/Little Neck

  • 62 new listings
    • 57 new listings in March 2022
    • 64 new listings this time last year (April 2021)
  • 67 properties sold
  • Average sale price: $268k
  • 5-year inventory of homes <$250k: 2,345
  • Price difference from last year to now: +$20k

14. The Landings, Isle of Hope, Dutch Island, Burnside Island

  • 42 new listings
    • 64 new listings in March 2022
    • 46 new listings this time last year (April 2021)
  • 39 properties sold
  • Average sale price: $541k
  • 5-year inventory of homes <$250k: 423
  • Price difference from last year to now: +$85k

15. Berwick/Southbridge

  • 46 new listings
    • 43 new listings in March 2022
    • 51 new listings this time last year (April 2021)
  • 39 properties sold
  • Average sale price: $395k
  • 5-year inventory of homes <$250k: 1,219
  • Price difference from last year to now: +$121k

16. Garden City/Old Port Wentworth

  • 9 new listings
    • 9 new listings in March 2022
    • 11 new listings this time last year (April 2021)
  • 5 properties sold
  • Average sale price: $199k
  • 5-year inventory of homes <$250k: 627
  • Price difference from last year to now: +$70k

17. New Port Wentworth/North Pooler

  • 42 new listings
    • 39 new listings in March 2022
    • 49 new listings this time last year (April 2021)
  • 32 properties sold
  • Average sale price: $310k
  • 5-year inventory of homes <$250k: 1,868
  • Price difference from last year to now: +$68k

18. Pooler/Bloomingdale

  • 106 new listings
    • 99 new listings in March 2022
    • 101 new listings this time last year (April 2021)
  • 75 properties sold
  • Average sale price: $311k
  • 5-year inventory of homes <$250k: 3,112
  • Price difference from last year to now: +$54k

19. Rincon

  • 97 new listings
    • 101 new listings in March 2022
    • 65 new listings this time last year (April 2021)
  • 63 properties sold
  • Average sale price: $304k
  • 5-year inventory of homes <$250k: 3,264
  • Price difference from last year to now: +$46k

20. Guyton/Springfield

  • 49 new listings
    • 83 new listings in March 2022
    • 66 new listings this time last year (April 2021)
  • 45 properties sold
  • Average sale price: $235k
  • 5-year inventory of homes <$250k: 3,567
  • Price difference from last year to now: +$13k

21. Richmond Hill

  • 90 new listings
    • 96 new listings in March 2022
    • 101 new listings this time last year (April 2021)
  • 68 properties sold
  • Average sale price: $308k
  • 5-year inventory of homes <$250k: 2,322
  • Price difference from last year to now: +$44k

22. Keller

  • 93 new listings
    • 72 new listings in March 2022
    • 70 new listings this time last year (April 2021)
  • 46 properties sold
  • Average sale price: $370k
  • 5-year inventory of homes <$250k: 601
  • Price difference from last year to now: +$49k

23. Midway

  • 48 new listings
    • 53 new listings in March 2022
    • 50 new listings this time last year (April 2021)
  • 37 properties sold

24. Hinesville

  • 72 new listings
    • 66 new listings in March 2022
    • 84 new listings this time last year (April 2021)
  • 55 properties sold
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Categories
Buying & Owning a Home Investing Loans & Financing Military Rentals Savannah Market Selling a Home

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 Savannah Market Selling a Home

Savannah Suburb Flip: Before & After

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Full Video Transcript

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

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

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

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

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

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

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

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

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

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

Video: Initial Flip Screening & CMA

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Full Video Transcript

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Come on

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

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

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

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

February’s Market Update

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March is here and with it, beautifully warm weather. Many people consider springtime to be the busier time of the year in real estate, and we’re certainly seeing a sight rise in the number of homes on the market. February’s listings came in at just under 1,100 homes compared to January’s 975 new listings. But more and more people are looking to buy, which still lands us heavy in a seller’s market. Let’s take a look, starting first with general trends and then dialing in on trends in your neighborhood.

General Market Trends

For the month of February in the entire Savannah MLS (which covers all of Chatham, Effingham, Bryan, and parts of Long and Liberty Counties), we have seen the following:

  • 1,097 new listings, compared to 975 new listings in January & 1,167 new listings in February of last year, 2021
  • 688 homes sold, compared to 739 homes sold in January & 805 homes sold in February of last year, 2021

There were 1,314 homes total on the market in February. In January, there were 1,259. Last February, for more reference, there were 1,306 homes on the market. This brings us to a total of 1.93 months of inventory, compared to 1.85 months of inventory in January. In a balanced market, we expect to see 6 months of inventory, so we are still very much in a seller’s market

Here, we can see the trends from the last 5 years of months of inventory (in green – remember, the balanced market is right around 6 months) & median home sale prices (in blue).

And this chart shows us the trends, also over the last 5 years, of the number of new listings (green) & number of houses sold (blue).

Here is our index of neighborhoods:

  1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside
  2. The Islands
  3. Historic Districts
  4. Starland/Thomas Square/South Victorian District
  5. Eastside
  6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights
  7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt
  8. West Savannah
  9. Cloverdale/Tremont Park/Liberty City
  10. Cuyler Brownsville/Cann Park
  11. Midtown
  12. Southside
  13. Georgetown/Chevis/Little Neck
  14. The Landings/Isle of Hope/Dutch Island/Burnside Island
  15. Berwick/Southbridge
  16. Garden City/Old Port Wentworth
  17. New Port Wentworth/North Pooler
  18. Pooler/Bloomingdale
  19. Rincon
  20. Guyton/Springfield
  21. Richmond Hill
  22. Keller
  23. Midway
  24. Hinesville

1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside

  • 24 new listings
    • 24 new listings in January
    • 21 new listings this time last year (February 2021)
  • 11 properties sold
  • Average sold price: $412k

2. The Islands

  • 63 new listings
    • 50 new listings in January
    • 79 new listings this time last year (February 2021)
  • 34 properties sold
  • Average sold price: $443k

3. Historic District

  • 29 new listings
    • 27 new listings in January
    • 34 new listings this time last year (February 2021)
  • 13 properties sold
  • Average sold price: $644k

4. Starland/Thomas Square/South Victorian District

  • 17 new listings
    • 20 new listings in January
    • 22 new listings this time last year (February 2021)
  • 12 properties sold
  • Average sold price: $436k

5. Eastside

  • 22 new listings
    • 21 new listings in January
    • 15 new listings this time last year (February 2021)
  • 7 properties sold
  • Average sold price: $207k

6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights

  • 23 new listings
    • 23 new listings in January
    • 27 new listings this time last year (February 2021)
  • 14 properties sold
  • Average sold price: $236k

7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt

  • 26 new listings
    • 30 new listings in January
    • 26 new listings this time last year (February 2021)
  • 17 properties sold
  • Average sold price: $259k

8. West Savannah

  • 3 new listings
    • 9 new listings in January
    • 5 new listings this time last year (February 2021)
  • 4 properties sold
  • Average sold price: $99k

9. Cloverdale/Tremont Park/Liberty City

  • 6 new listings
    • 14 new listings in January
    • 3 new listings this time last year (February 2021)
  • 16 properties sold
  • Average sold price: $155k

10. Cuyler Brownsville/Cann Park

  • 13 new listings
    • 9 new listings in January
    • 6 new listings this time last year (February 2021)
  • 7 properties sold
  • Average sold price: $121k
  •  

11. Midtown

  • 22 new listings
    • 27 new listings in January
    • 27 new listings this time last year (February 2021)
  • 17 properties sold
  • Average sold price: $306k

12. Southside

  • 63 new listings
    • 56 new listings in January
    • 53 new listings this time last year (February 2021)
  • 42 properties sold
  • Average sold price: $243k

13. Georgetown/Chevis/Little Neck

  • 53 new listings
    • 43 new listings in January
    • 44 new listings this time last year (February 2021)
  • 23 properties sold
  • Average sold price: $246k

14. The Landings, Isle of Hope, Dutch Island, Burnside Island

  • 38 new listings
    • 41 new listings in January
    • 58 new listings this time last year (February 2021)
  • 25 properties sold
  • Average sold price: $597k

15. Berwick/Southbridge

  • 31 new listings
    • 35 new listings in January
    • 46 new listings this time last year (February 2021)
  • 26 properties sold
  • Average sold price: $316k

16. Garden City/Old Port Wentworth

  • 13 new listings
    • 23 new listings in January
    • 6 new listings this time last year (February 2021)
  • 3 properties sold
  • Average sold price: $170k

17. New Port Wentworth/North Pooler

  • 42 new listings
    • 30 new listings in January
    • 40 new listings this time last year (February 2021)
  • 31 properties sold
  • Average sold price: $285k

18. Pooler/Bloomingdale

  • 69 new listings
    • 75 new listings in January
    • 81 new listings this time last year (February 2021)
  • 67 properties sold
  • Average sold price: $311k

19. Rincon

  • 85 new listings
    • 47 new listings in January
    • 65 new listings this time last year (February 2021)
  • 29 properties sold
  • Average sold price: $285k

20. Guyton/Springfield

  • 34 new listings
    • 29 new listings in January
    • 63 new listings this time last year (February 2021)
  • 38 properties sold
  • Average sold price: $256k

21. Richmond Hill

  • 68 new listings
    • 54 new listings in January
    • 55 new listings this time last year (February 2021)
  • 37 properties sold
  • Average sold price: $307k

22. Keller

  • 35 new listings
    • 31 new listings in January
    • 51 new listings this time last year (February 2021)
  • 34 properties sold
  • Average sold price: $401k

23. Midway

  • 22 new listings
    • 29 new listings in January
    • 34 new listings this time last year (February 2021)
  • 23 properties sold

24. Hinesville

  • 60 new listings
    • 64 new listings in January
    • 52 new listings this time last year (February 2021)
  • 44 properties sold

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Categories
Investing Rentals Savannah Market

Buying & Owning STVR’s in Savannah

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Full Video Transcript

Sam

Good morning. I’m Sam Finney at Trophy Point Realty Group. And this morning we’re doing some training on short term vacation rentals.

So basically for short term vacation rentals, it’s a lot easier to get it anywhere outside of city limits than inside of city limits of Savannah.

So I put a lot in here about what they, you know, the different limits that they have within the city limits. Basically a short term vacation rental is anything less than 30 days, so you can have something up and do 30 days or longer, pretty much all of these rules don’t apply to you. But there’s a whole bunch of verbiage on the city website about the different wards. The cap is 20%, they put in that cap a few years ago. And generally speaking, it’s pretty much filled up inside of the city and all the wards, they have a couple of different maps to show you where the current vacation rentals are. But those aren’t frequently updated and could be wrong. So basically the simplest and easiest way to go about it is to find somewhere outside of the city limits. I included a map

A little bit down below, so the rest of unincorporated Chatham county, and then the map word right there has a link that you can use to go check it out. But I’m not gonna dwell on that a whole bunch. There’s a variety of rules and regulations. But in general, it’s a lot easier just to have one outside of the city than it is inside. Right. So I’ll let y’all look that over read through it a little bit. And if you got any questions at the end, we can kind of circle back to it. What is possible and very doable inside the city limits is what’s called an executive rental. So it’s basically a furnished place for rented out for 30 days or longer. The target there is pretty much traveling nurses. You can also do like movie producers or anybody that’s, you know, on a work-from-home sort of situation and is looking to come stay in Savannah for an extended period of time.

And those can also rent for generally much higher than a regular long term rental can be. With those you probably, you’re going to want to obviously talk to the guests and see whether they want the place cleaned regularly whether they don’t want it cleaned at all, and then kind of come to an agreement on what what’s expected of you and what’s expected of them, right? Some people might want it cleaned every week. They might want fresh toilet treat, you know, toilet paper, all that stuff, restocked that’s just a conversation you probably want to have up front rather than getting a phone call a weekend, saying “I’m out of toilet paper. You need to get some more so usually smaller units. So again, most of the time you’re not catering necessarily to families here. It’s more to individuals who are coming in.

So a 2-1 or even a studio apartment would probably work best. Now the only caveat for that would be I have seen, you know, executive rentals that they work a lot with insurance companies. So if somebody’s house burns down, their family needs a place to stay, the insurance company would pay for that, right? So that’s another option that would probably be better for larger places. But something, something to dig in further at a later date. Uh moving down. So Tybee they recently put a cap on it. Wynn, you got in just before the bell!

Wynn (background)

6 o’clock meeting, we got it done before the bell. 2 hours to spare!

Sam

There you go. There you go. So yeah, Tybee pretty much unless it already has a certificate. My understanding is going to be pretty difficult to get it Thunderbolt. So now we’re, we’re kind of venturing out into Chatham county. Thunderbolt recently changed their regulations a couple months ago. So now it’s a, before there were no regulations. Now it’s a $700 annual fee for a license and you have to get a license now. There is not a cap to my knowledge. But again, these things, they seem to be changing pretty rapidly. So whatever, and there’s a little note at the bottom, but if you’re ever going under contract, just double check during due diligence, if it already has a certificate that it’s transferable and make sure that that’s the case. And then if it’s one of these other areas that we’re saying, it’s, it’s probably good to go. Double check that during due diligence, because it could change pretty quick,

Kelly (background)

Do you know where to go to get a license?

Sam

Um so for Chatham County, it’s going to be over kind of where the Truman changes from going south to going west. So in that area, that’s where the Chatham County. Now I can, I can text it out or add it to this document afterwards as well. But if you’re not in Thunderbolt, a lot of these other places that are listed Whitemarsh, Wilmington, Georgetown, Port Wentworth, a lot of those are just going to fall under Chatham county. So that’s going to be $350. You need to make sure that you’ve got a fire station subscription, which is like $300, I think. And then you have to show proof that you’ve already paid for trash. And I’ll, I meant to include that as a link, I’ll throw that in here after this, but I’ll, I’ll have a link for the application there as well.

The other big thing – your insurance needs to see that you have a, a short term rental or at least some sort of rental going on at that property. And they have the exact verbiage on the website. So, and as you can see, so these different areas, right, you’re going to attract a different crowd for each of them. So probably on the islands you’re going to have a lot of bachelor, bachelorette parties possibly, and then just families that are coming to visit and a lot of this, right? So if you got a bigger place, you’re going to be catering more towards family gatherings and large groups. If you got a smaller place, it might be more couples coming out or something a little bit toned down. So for Port Wentworth, so up there, there’s a lot of work going on at the dock obviously and SCAD’s got a lot of work. So like we’ve had the same person who’s working as a SCAD contractor stay at our place, I think four, four weeks, Monday through Thursday in the last two months. And he just keeps, keeps coming back. So that’s also an option. What’s up, Wynn?

I was going to say I’ve never thought about contractors and traveling people who come out to town during the week and then go back during the weekends. They just need something for a few days during the week.

Yep. So, and then even, you know, at the port or a lot of people you know, bring their ships here to get worked on and yachts or whatever else. So they might be stuck here for a month or two months and you could have more an executive sort of thing going on there. So there’s a lot of options. I mean, Kate and I have had folks from, folks visiting from France that came in and stayed. We had a professional golfer with his two golf buddies that were coming in for a tournament that stayed for a week long. So you get, you get a lot of different folks coming in. And then finally, and this is kind of going back to inside the city of Savannah. The best way to get around the cap is to either buy a multifamily and have an own-occupy permit, the trouble with that is if you ever move out, then you’ve got to shift it over into executive rentals. And technically you won’t be able to do long term rentals or excuse me, short term rentals anymore or get something that’s commercially zoned. And then the cap doesn’t apply or shouldn’t apply.

So, moving down, so some of the best practices and just a little bit of background. So there are two different ways that you can kind of go about doing it. You can just use Airbnb, which is the simplest and you can get a lot of traffic. So there’s a lot of folks that don’t, don’t even go outside of Airbnb. So they automatically take out all the taxes for you, file those so you don’t have to worry about it. It’s, it’s a simpler process in that respect. If you start expanding to like VRBO and having it listed on multiple different sites, then you got to start worrying about the calendar, making sure that you don’t have double bookings and all of that. So usually so Logify is one that Aaron Miller uses for his rentals. I use as well, but it kind of keeps your calendar straight and makes sure that there aren’t double bookings or anything like that.

All right. And then the other thing kind of with that is there’s a whole bunch of pricing software out there. So like, I don’t know when, you know, some concert’s going on in Savannah or when a big event’s going on. So Price Labs, there’s a whole bunch of different ones out there, but you pay like $20 a month per listing and they automatically raise the price if there’s not much available, or lower the price a little bit if it doesn’t look like it’s going to be a busy weekend. And then you can go in there and modify and adjust it as you see fit.

Wynn (background)

The different sites have different fees too, right? Airbnb fee is different than VRBO and different than all these others.

Sam

Correct.

Tucker (background)

Not to dwell on that too much, but do they like change the price for you or do they just send you an email with a suggestion?

Sam

No. So they they’ll change the price for you and then you can go in there and adjust it. So like for ours, we were noticing we’ve got every single weekend out to, I think July booked right now. So I went in there and I upped the Friday night and Saturday night rate by 25%. And then the week days, we don’t, I mean, some of them are booked some of them aren’t. And so if there’s a weekday that’s coming up, you can either select certain days and lower the price X percentage. Or like I have Monday, I guess, Sunday through Thursday, discounted like 15%. So, you can play around with it a lot. You can have it to be where, if it’s, if there’s a vacancy in like the next week, then it slowly discounts the price as it gets closer and closer to try and make sure you’re, you’re keeping your doors open.

But again, I mean, similar to long term rentals, the lower the price goes sometimes the less, the less good people take care of it. Right? So if you, if you’re willing to lower your price way down, you might be making more money on the books, but that’s not to account for them completely trashing the place or breaking things or whatever else. Right. So there’s kind of a, there’s kind of a balance there of what you’re okay with going down to. So another way that this is very different and y’all can see when we go down here, the management fees. So usually long term management is 10%, short term management is between 20-25% of the gross revenue. Right. And that’s because some of these best practices it’s more of a hospitality business. So think of hotels more than anything. So if, you know, for example, if there’s a rat in the property and you get a call at nine o’clock, then you’re going to be calling an exterminator and getting him out there immediately, or you’re going to be going Walmart and getting some rat traps, which I’ve done before.

So yeah, so you need to be responsive. You need to make sure that there’s some clear expectations. So as far as like pictures and everything, right? So you want to, you want the place to look good, but you also don’t want to have the place look so far above and beyond what’s there that people show up and they go, “what the hell is this? Like, I booked a nice place and this is not nice,” right? So I’ve seen that happen before. So if you’re going to, if you’re going to market it as a very high quality stay you need to make sure that it actually is reflected and that the pictures don’t just make it look awesome. And then they walk through the door and it’s, it’s less than awesome.

Wynn (background)

Can I hop in?

Sam

Yep.

Wynn (background)

So if the guest comes and destroys or break something in the house, so you have it on, we have it through a website at Airbnb or a, like, is that, is that, is there an insurance policy on that separate than your homeowner’s insurance or who pays for the, I mean the, how does that get adjudicated?

Sam

Yeah. So there’s, There’s a couple of things. So you have a security deposit. So we have ours set at $200. So it’s for basically anything, a little bit smaller. If it was a bigger issue, like somebody punched a hole through a wall or completely destroyed the, the kitchen or something like that, um then yeah, you would, you would file it through Airbnb. You’d provide pictures and all kinds of stuff.

Wynn (background)

And they’d file it for you?

Sam

Correct. Yeah. So that’s,

Wynn (background)

They would then go through, they’re probably insured, have a rental policy, for this kind of stuff.

Sam

Yeah. And like, I mean, like anything dealing with insurance, it’s going to be, it’ll be an uphill battle. Yeah. It’s probably going to be a real pain in the butt. So the best, the best way to do it is just to try and prevent it all together. And you can set the, the settings to where they have to message you first about why they’re coming into town or whatever else. And then Airbnb, I’m not sure on VRBO but you can set your house rules. Right. So you can say that,

Kelly (background)

I know some say no bachelor parties, like absolutely not allowed. Like I’ve seen some of those before.

Sam

Yeah. So yeah, you can set your house rules however you want to, and then if they’re violating those, and there’s a lot of, there’s a lot of different gadgets that you can get, like one of them is called noise-aware. And so it basically averages out the sound volume over a period of a couple minutes. And so if the, if the noise threshold is above a certain level or averages above a certain level for over a couple minutes, then you’ll get an alert on your phone. Then you can go check it out, right? So it’s not list to what they’re what they’re saying necessarily. (Kelly/peanut Gallery: sure you’re not, Sam!) I’m not, I don’t care that much. I got, I got other things to do.

Kelly (background)

But then you’d know if like a dog’s barking.

Pat (background)

You’re not allowed to have cameras all around the house, though, right?

Wynn (background)

Not allowed to have cameras in the house for privacy.

Sam

I believe so. Yeah. I don’t, I’ve never had any desire to put cameras in the house. And I think,

Wynn (background)

No. And make sure not to. But like, just make sure it’s, that you’re not breaking rules.

Tucker (background)

Like when you start using Airbnb, they make you sign basically the [unintelligible] if I read and agree to all their conditions and it’s 18 pages long and in there, it says you can’t do any of that.

[Group consensus that we agree]

Wynn (background)

What about cameras, like exterior, like on the entrance?

Sam

Yeah. So like installing a Ring or something?

Wynn (background)

Um either a Ring or a camera light that just only looks at the driveway.

Kelly (background)

I think you can have a Ring, so you’re alerted, yeah. I’ve stayed at multiple that have a Ring.

Wynn (background)

Yeah at that way at least you have some knowledge of a bachelor party or something.

Pat (background)

Yeah, something to coordinate entry that way, or like check in too. Different systems for, for how to do that and the smart locks and you can buy locks that you can like reset from your phone.

Sam

Yeah. So I mean, there’s anyways getting back to like the, the insurance thing, like yeah. You, you go through the whole process, you file a claim. Just like anything, there are horror stories out there of them not doing anything to help out. I don’t know. We haven’t, we haven’t gone through it, but I’d say the best, the best thing would be just to avoid it all together.

Wynn (background)

It’s a risk, whether it’s long term short term, people could destroy your house if you own it and have people staying, whether it’s for a couple days or a couple years, like you are, it’s not free money. It’s a calculated investment that you’re taking to say, “Hey, I want to do this,” but it’s. Yeah.

Tucker (background)

They also sign a lot of paperwork when they ask for refunds. Sign to your account, to your property, sign [unintelligible].

Sam

All right. So going down a little bit so we already touched on photography a little bit. All right. As far as like designing the house, I got lucky Kate loves designing places. But like Pat mentioned, when we were going over this, it’s definitely worth, worth it to have somebody who’s a professional or has an eye for it, make it look good. Right. because again, you don’t want to make it look better than it is, but you want to make it as good, good looking as possible. And one of the big things, Kate and I have been surprised by is there’s been, I don’t know, probably 10% of the people who have left us a review that have commented on the kitchen and how they booked it because of the kitchen or their favorite part was the kitchen. Right. So something, I mean, that’s something that we didn’t expect. But I think the kitchen and kind of the common spaces and a little bit more of an open floor plan, obviously if you’re having a get-together, you don’t want a house that’s completely closed off in every room. Right.

I know one of our buddies is in another company where it’s mandated, like, you want to use this, you need this design style, kind of everything the same. So you couldn’t go and do what you wanted to do. If you wanted be with their company, you needed to kind of use their designer and have a certain style.

Yeah. And it gets down even into, you know, like what white sheets, people like white sheets, a lot more than different-colored sheets. Right. just for, I think the cleanliness aspect or the hotel, looking like a hotel, aspect. But some different resources for pricing. So AirDNA, you have to pay for that one included a website. They have actually do short term vacation rental loans. So they, if you type in whatever address you’re looking at, hit the beds, the baths, and then the number of people that you could probably have there, then it’ll spit out a price from AirDNA. So it’s not good for all across the market, but if you’re just looking at one or two properties that, that would help out and then MashVisors another one I’ve seen used it’s more so used for like new markets. You can do overlays of the average housing price and, you know, in different suburbs of the neighborhood or whatever else, and then the occupancy rates. So that’s kind of how you could use it to target a new, a new city.

Moving down a little bit. So operating expenses, again, management fee is between 20 and 25% of the gross revenue. So not to insult anybody’s intelligence, but gross revenue. So that’s the total dollar amount coming in. Right? So they take 20 to 25% of that. Prior to a lot of the taxes, a lot of the cleaning, all the other stuff. Okay. And with, with short term rentals, because of all the tax and the, the additional fees and upkeep and all that stuff, it’s, it’s a pretty substantial difference that it’s the gross rather than 25% of the net sales and use tax, hotel tax. So you’re gonna be paying all that as well as, you know, income tax. So 7% for sales and use hotel tax in Georgia’s $5 a day. And then there’s a couple other minor ones. So just for general calculations, I’d put it at, you know, 8 to 9% for taxes.

Kelly (background)

Question Sam, but the hotel tax is that whether it’s occupied or not?

Sam

Yes. Yep. So all of, so the taxes only apply when somebody is staying in there and paying you. Um, cleaning. It depends, it depends a lot on where you’re at. And also it’s one of those things where it’s not worth it to, to skimp on it too much. Right. So you want to get somebody good to clean your property, because if they miss a clean and somebody shows up at four o’clock and the place is a mess then you got a whole other deal and you very well might lose a booking. I mean, I’ve seen week-long, like $3,000 bookings out the window because the place, you know, the yard wasn’t mowed and the place wasn’t clean.

Wynn (background)

Bad reviews, and all of a sudden now you’re not number one yet. Yeah.

Sam

So it, it it really, I mean obviously depends on the size of the house, the location. So out on Tybee, since it’s drive for most people that’s going to be considerably more. So you probably for like a 3-2, you know, 1200-1500 square feet, you’re probably looking at $150, $200 a clean and then kind of the rest of Chatham County, probably between $70-100 for a clean and then downtown again, it’s, it’s more like Tybee prices for the most part. But that’s, that’s a relationship that you either, if you’re doing it, you want to have a good relationship with whoever’s cleaning it or, you know, whoever you have property management, hopefully they have one or two good cleaners. So

Kelly (background)

So you only run yours through AirBnb, you don’t have, you are your property management,

Sam

Correct.

Kelly (background)

Just source out Airbnb. And what was the other one?

Sam

VRBO

Kelly (background)

But the calendar one you said you use, so you’re not messing up.

Sam

Oh, so Logify?

Kelly (background)

Logify, is it on here?

Sam

Uh that is not, I can, I can throw that in as well. Um and there’s a, there’s a lot of different sites like that. It’s like Guesty is another one that does it as well. And basically they just, they’re just trying to simplify the process. So you can have your listing out on a whole bunch of different websites, not get double bookings and then it’s supposed to provide an easier way to communicate with the guests which it kind of does kind of doesn’t because some of the, some of the platforms mesh well together and others don’t. So moving down. So does maintenance become more expensive? Yes and no. Right. you’re seeing you or at least your cleaner is seeing the property probably every week or a couple times a week. So a lot of the deferred maintenance, if there’s a small leak somewhere, something like that, it’s actually a lot better than long term rentals because if you have long term rent renters, you know, the roof can be shot and there could be water dripping through the ceiling in three places and they’ll just put a bowl under it every time it rains, right? And then you come in at the end of the year and you’re like, “dude, you could have just told me!”, right?

Pat (background)

I had a tenant call me last week and said “hey, I think there’s termites in the house. It’s like there’s holes in the drywall and like a crack in the wall” and I’m like, “holy shoot.” Like that’s not good. I sent my guy over, there’s like, it’s just like a, not very great mudding job and like just a normal kind of settling crack, like going on. But I made sure not to like, I’m not going to charge for it. I was like, “thanks for letting me know,” you know.

Wynn (background)

Biggest thing is for any

Kelly (background)

There’s such a fine line there.

Wynn (background)

for any homeowner whether it’s long term or short term stands out maintenance. For maintenance. If, if there’s a, a call like you got to get on it. Cause if you let it go let it go, it’s just going to get worse.

Pat (background)

Honestly, that’s something I didn’t think about though. You’re going to be in there all the time, so you know, you’ll notice a lot of problems before they, before they come up.

Kelly (background)

There’s a fine, like I’ve stayed in so many of these and I actually prefer these over like condos or hotels. Like they’re great for vacations, but it’s like, I’ve dealt with, “Hey, if there’s a problem, call me,” “oh, are you there? Okay, great. You’ve arrived. Do you have everything you need?” And being like overbearing, like I’ve had some where I’m like, there’s like signs everywhere – don’t touch this, don’t do this. Don’t do that. And then there, so there definitely is a line there. I don’t want to be that guy.

Sam

No. Well, and to be honest

Kelly (background)

“Do you need anything? Are you okay?” [Unintelligible]

Sam

I mean, and that’s like not to, not to do too much profiling in here, but that’s probably somebody who has one property who’s might be a little bit older so yeah. That’s, I mean that’s on you, but it takes more time and effort to be that person. Yeah.

Kelly (background)

But I always rate people, but because he was so obnoxious. I didn’t give him a, I didn’t give him bad review, but I didn’t give him a great review cause he wouldn’t leave me alone. And I it almost made me think that was cameras in the cause. I’m like, why are you messaging me? So don’t, don’t use that.

Sam

Yeah.

Pat (background)

So if you get a four star review, is that like, you know, like the kiss of death? Like does it need to be five stars or nothing, or?

Sam

No, it’s not the kiss of death, but if you get a one star review, you’ve got to get like 40 5-star reviews to offset it. So yeah, if you get a one or two star review it’s that’s bad news bears. Yeah.

Kelly (background)

Do you do anything welcoming for your guests? Like we’ve stayed at some of those where they have like, not like we’ve had somewhere it’s like bottle of wine, but again it’s like you said price point, like welcome to our home kind of.

Sam

Um no, we, we don’t I’ve read a little bit up on it and I mean, I, I think, I think what’s a lot more important than, you know, having something out on the table or whatever else, is just having an accurate representation of the place. Right. Because when people, when people come, they’re not going to necessarily expect a box of chocolates. Like we did Kate and I talked about for the dude who came back for like four or five weeks in a row. Like just getting him, getting him something, you know, a small present or something like that or like for Valentine’s Day. And like we decorated the place for Christmas. But I don’t, that’s something if you want to go above and beyond, but I don’t know that you would actually see a great return on it for, for the time spent. I think it’s more important that people, people get what they’re expecting to get and that’s, you know,

Kelly (background)

And I might’ve missed it, Sam, but where do you base your pricing? Because obviously it’s not as easy as pulling rental comps or

Sam

Yeah. So that’s another one where Price Labs comes in, and then they’ll, they’ll recommend a price. And then you can always tweak that too, right. So you can like when Kate and I first had it listed, we didn’t have any reviews or anything like that. So we had ours, I think, substantially lower. Until we started getting some bookings and reviews and I honestly, I left it lower for too long because then we started booking out like a month and a half, two months out and then I finally increased it. But that’s the other thing too. You can, you can play around with it at any point. Right. So if it’s not booked, you can change the price however you want.

Kelly (background)

Do you know anything about Brian county and what Brian county’s rules are with STVR’s?

Sam

I have no idea. Nope.

Katy (background)

Where do you go to find that information?

Sam

To the county websites.

Pat (background)

Every county website has a municipal code. It’s usually what there’s like a website with codes you can just look it up. But just go to municipal code and control F and look for STVR or STR. And then um and then that should shed some light on it. Yeah. I’ve never even looked into Brian County. I imagine, the thing about Richmond Hill, like almost everything Richmond Hill is an HOA and almost every HOA in existence does not allow vacation rentals. And if they do, they won’t, as soon as you start doing it, cause all you need is one obnoxious party and that’s it, you know?

Sam

Yeah. So that’s a, that’s actually a key point that I didn’t throw in here, but yeah. Anywhere, anywhere in Chatham county. Right. If it does have an HOA, that’s pretty much a No-Go

Kelly (background)

For either executive or STVR?

Sam

Um, I think

Pat (background)

It’s in the bylaws, right? Because executive isn’t too much different than a long term rental.

Wynn (background)

Some HOAs don’t even allow long term rentals.

Pat (background)

Yeah, some don’t, I mean.

Wynn (background)

So townhomes, condos, are in their covenants, in their HOAs will vary place to place.

Pat (background)

One thing to keep in mind. Even, even though they allow it, now they change the rules on you. Like, and they probably will, you know, if they don’t have a rule against vacation rentals, then you start doing it, that’s a matter of time before they’re going to outlaw it. Cause most of the people that live there don’t want that. You know? I, yeah. So I would never operate vacation rental in an HOA unless, you know, unless I wouldn’t mind if I go back to being a long term rental, you know?

Wynn (background)

Well, I mean so that’s really anywhere. I mean anybody can change rules.

Pat (background)

That’s true. I mean any governance can change rules.

Wynn (background)

I mean when we put [unintelligible] downtown because people who live in the area don’t want

Kelly (background)

You look at the map and the map, like it has measles, like it’s crazy.

Wynn (background)

We’re on the investing/rental side, so we want them but a lot of people don’t want, three times a week, new neighbors coming in taking their parking spots,

Pat (background)

Not only that but if your renters [unintelligible]. So not only is it the neighbors that don’t like it, but it’s the [unintelligible] you know, in the same, you know, rental numbers. So I, I don’t think they’re going to get rid of vacation rentals at Savannah, but I don’t think we’re ever going to see anymore,

Wynn (background)

But rules can be changed. Whether it’s HOA, governmental city, county, could do with caps, you could

Pat (background)

If I was the city Savannah, I’d have like a $2,000 permit fee every year for vacation rentals, because people would pay it.

Kelly (background)

I just want to build my community of tiny houses and I run a bunch of vacation rentals.

Sam

Get with Kate she’ll, she’ll be all about that

Kelly (background)

That’s what it is – you go to lakes like lake Dewey or whatever, and you’ll pull into a community and it’s all, they’re all the same thing.

Sam

So just kind of going back to the, you know, rules can change whenever. So not to say that the, you know, Savannah or Chatham county or even Tybee couldn’t one day come together and say, all right, no more vacation rentals. Because they potentially could historically though the most that they’ll do are that I know of is they’ll put a cap on it. So they’re not going to screw over whoever has vacation rentals right now, but they’re going to put a cap on it saying we’re not doing any more of these. You got what you got. If you don’t renew your license, then you’re going to lose it. And that’s what we’ve seen historically. So

Wynn (background)

Cities want short term, because they want tourism, right? Tourism in Savannah, is #1. Do away with STVR do away with short term stay, city’s not going to make any money. City doesn’t want to jeopardize all the tax revenue has coming in with hotel tax [unintelligible] tax. The general just tax base was [unintelligible] every year in Savannah, Tybee. They’re going to want that.

Tucker (background)

So five six years ago, this wasn’t even possible just there wasn’t even Airbnb. There wasn’t enough internet presence for any of this to make any sense. So it’s

Wynn (background)

A new world that governments are lagging behind. Go catch up.

Kelly (background)

I think Covid helped too, um cause definitely was an increase with the Airbnb cause nobody wanted to be in a closed combined space. They didn’t want to go to a resort. They didn’t want to go to a hotel or a condo. Like they wanted their own space to be safe. Yeah. And that’s like, I did some reading on that and that’s when they saw like a huge increase. And it’s just getting higher.

Sam

Yeah. Well, and y’all are going to see here in a minute. So we’ll, we’ll finish up the operating expenses part and then kind of open it up for any further questions at the end, but going back to the maintenance where we, where we got started on the tangent. So it’s it is more difficult to plan maintenance, right? Because if you’re looking at doing any sort of serious maintenance, it takes longer than a couple days, right? The average, the average nightly stay for Kate and I’s place is $300. So if you take it off the market for a week, you’re looking at losing $2,000. Right. So in that way you kind of got to be a little bit strategic about it. And sometimes it’s a lot easier to push off maintenance because you can say “well that, that can wait for another little bit.” Right? How much does it cost to furnish? Usually between $10k-20k. And I’ve got a sheet somewhere that I can, I can share with y’all as well about kind of what Kate and I put in ours. And, and there’s a lot of stuff out there on the internet,

Kelly (background)

Your sheet

Sam

My sheet?

Kelly (background)

Yeah, can I see your sheet?

Sam

Sure.

Kelly (background)

I have to send something over to Wynn, I just want to double check.

Sam

Um but yeah, usually about $10-15k for a mid to smaller sized house and then $15k, $15-20k for, you know, 1200-1300 square feet up to 2000 square feet

Kelly (background)

And that’s sheets like it’s everything.

Sam

Well, that’s pretty much everything to start off with. Yep. And obviously that also depends if you’re going to like Ashley’s and buying all new stuff, it’s going to be way higher than that. If you’re going to Wayfair buying, stuff like that. Another good is to have outdoor rugs around every single bed. So outdoor rugs because they don’t stain as easy. And they just kind of help keep, keep the floor for a little bit longer and all that.

Katy (background)

When it comes to high-use furniture or whatever, do you recommend going and spending a little bit more on furniture that, you know, will be easy to clean stains off of, but it costs more like, so I’m thinking of like a sofa, like you could buy a really cheap one off Wayfair and it might be comfy, you know, it’ll work. But like if a stain goes on it that stain is staying no matter how hard you try to clean it, Is it worth spending the extra money on that or does it not matter?

Sam

I think it, it, it just depends on, I mean yeah. It depends on a lot of factors and also, you know, kind of where you’re marketing it at. I mean, I think it’s just, it’s important to understand that the furniture is going to wear out quicker, right? People aren’t going to take the best care of it. It’ll wear out. Whether you get something that’s very, very durable and easy to clean or whether you get something that’s not, it’s going to wear out quicker than it should. Right.

Kelly (background)

Furniture is, Katy, [unintelligible] in essence. But if you’re looking at it as every two years, I’m going to have to replace my sofa, then you would want to lower your price point. But it is that you get what you pay for, for sure.

Sam

So I don’t really, I don’t have a great answer for you there. It just kind of, it depends on what you’re going for.

Kelly

Just don’t do white.

Tucker (background)

You can also put covers on everything, that’s a big, short term thing on Tybee. They just buy covers, they go for $25, go get 25 of them and throw them on a couch every.

Wynn (background)

So asking for a friend. So like, would you do more like cloth or leather would be lot more durable, but then if you like, or do you just do the cheaper?

Kelly (background)

Depends where you are, like what Sam goes back to

Wynn (background)

Suppose you’re on the north side of Tybee for a friend.

Kelly (background)

No. Then you would not put leather in that house. You want a coastal look. In that house. Light blues, light greens, you get away with stuff like that. But no, you want to put leathers like lake cabin, things like that, or just a standard house.

Wynn (background)

The friend’s a good guy by the way.

Sam

Um so yeah. So another thing with like protecting your stuff. So you want to do mattress protectors, like waterproof mattress, protectors, waterproof pillow protectors, all that jazz.

Kelly (background)

That was going to be my question. Like bed bugs – have you ever dealt with that before?

Sam

No, thank the Lord. No, but [unintelligible]

Kelly (background)

But there’s no, there’s no like treatment that you can have like termites or whatever.

Tucker (background)

Not like a yearly thing, but like when it happens, when it comes up.

Kelly (background)

Oh yeah and it costs a shoot ton of money, no I know that. Yeah.

Sam

Yeah. So yeah, pest control is definitely something that’s worth investing in, obviously. Because again, any, you know, a day or two that it’s taken off, the market is $500. So paying a couple hundred for pest control is, is well worth it. And then going down to, how much can we make in this market? The short answer is it really, it really depends. There’s a lot more factors than long term rentals. You got a long term rental, it’s a 3-2, it’s in downtown, you know, it’s going to make, you know, you know, somebody’s going to rent it for $1,800 or something, right? Short term rentals. It goes into, you know, what amenities do you have there? Is there a pool? Is there a hot tub? How does the yard look? Is it private? How does the neighborhood look? What are your ratings? How many different platforms are you on? All, all kinds of stuff there. So as a general rule somewhere between 20% and 60% NOI is what I’ve seen. So substantially higher than any sort of long terms. And I mean, I can, I can talk with y’all a little bit later on about Kate and I’s and how that’s going, but it’s, you can, you can make a lot money in it. The issue is it’s a lot more effort to manage and upkeep than normal. Right?

Kelly (background)

How your return, Sam? What do you, what’s your percentage, you guys set aside of the oh shoot account. Do you guys do that? Do you have an oh shoot account?

Sam

Um we have a personal one, but yeah. I mean, cause you think about it, even if you have, let’s say you have a terrible, terrible guest that trashes the place, right? I mean even worst case in their area. Let’s say they completely destroy the countertops in the kitchen and like, you know, bust the marble and they break, you know, they break or whatever else, a couch, and all that. That’s still going to be cheaper to fix than it would be to put in a new HVAC or a new roof or something like that. Right. So even, even in like the very, very bad case scenarios where they put somebody through a wall, you’re still only looking at, you know, a couple thousand dollars probably. So I don’t know, maybe I’m wrong. It could be

[Unintelligible]

Wynn (background)

For long term rental, the data says, and everybody’s spreadsheet is different but the data has about $1,500 per door per year is what you need to have set aside for a slush fund. Whether it, whether it’s a nickel and dime every month $75, or they don’t get anything for 3 years and all of a sudden you have to replace the HVAC, like, $1,500 per door per year. Think for a short term, you’re at least doubling that just to be on the safe side with wear and tear and everything. So maybe yeah, $3,000 per door per year as a safe buffer maybe?

Sam

Yeah. Well, and I would even go above that. So I’ve seen, I’ve seen like, $10,000 or so for set aside for maintenance, for, you know, a $300,000 property and you know, so, and that’s not

Pat (background)

Of course you have furniture and decorations and you probably need to paint it more often, because with renters you might get away with scuffs on the wall for 3 years but not for,

Sam

So you talking about repainting like doing all new linen every year or so. And the linen, usually you want like 2.5 to 3 sets of everything, right? So you’re buying, if you have four queen beds in a house, we’ll say you’ve got 12 full sheets full queen sheets for it. Right. And you’re going to have to replace those every year.

Kelly (background)

Costco telling the best quality sheet I’ve ever seen in my life. And they have all sorts of patterns, I know you want white, but they might have white, but it’s literally, I think $20, $25, maybe $25 for a king and $20 for a queen and they’re amazing. And they feel good.

Sam

There you go. But yeah, so just for, I mean, I guess the slush fund I would, I would set aside, you know, probably $10,000 for if you’re looking at like a $300,000 place again for painting for sheets, for, and the other thing too, like I was talking about it’s everything is much more time-sensitive, right? So if you got a guest coming in and you know, the guest tells me tonight, “Hey, this isn’t working or this is broken” and there’s another guest who’s coming in tomorrow, who’s paying $2,000 for the next week, then I’m going to be calling whoever it is and telling them, “Hey, if you can get out there within the next five hours, you know, I’ll pay you double whatever it is,”

Wynn (background)

Weekend service calls. Instead of $100, it might be $250-$300 for the same thing you get during the week.

Sam

Yeah. So yeah. So that’s the other reason the price is, is a little bit farther up um.

Tucker (background)

Larger scale, I’ve seen what they pitch to the owners they say they’ll have a 3 bed 2 bath but technically they can sleep 12 people in there so what they’ll do is per head count per person put in there, they want 5% of each per person. 5% per person of however many people you have in there. But that also covers a lot of other things. Like if you can’t rent the place out for two weeks, something happens. In 2020, we had a month where we couldn’t rent out anything because that’s the mandate. Couldn’t do it because of COVID so that fund covered that. It covers repairs. It covers for two weeks, covers when your kid jumps off the bunk then breaks his arm that you’re getting sued, because there’s no corporate bail there. You have to own the property like an owner. So it’s your name. So a kid jumps off of bunk and breaks his arm and then the parents sue you, because they’re idiots, that’s on you. And so that’s also part of that, but that’s on a large scale operation where that’s all under the same, it’s all under an umbrella.

Wynn (background)

Which raises another question for liability. So this isn’t a liability talk. But I would think, you know, whether it’s long term short term, a lot of times you may want to take it out of your personal name, just for liability. So in case somebody does get sued, they go after the company assets, not personal assets, so whatever this case is, have it in an LLC, probably have it under an umbrella policy, cover broken arms, lawsuits. That way they’re not coming after their own personal stuff.

Sam

Well, and then that gets into, that gets into the whole lending thing. So if you do have it in an LLC, then you’re looking at a couple percentage points higher for interest and all of that as well. So it’s yeah. Something to think about as well. The other big thing, no lenders like lending for short term vacation rentals. The one way I’ve found is to do what’s called a DSCR loan which is where they have the appraiser come out and appraise the amount that it would be able to rent for long term. As long as you’re appraised long term rent is higher than your mortgage payment, your PITI then they’ll give you the loan. So that’s the best. There’s also some places that do bank statement loans as well. But usually unless you have a proven track record, you’re going to have to get creative with, with how you’re going to get a loan for it. Because banks don’t like it unless you can provide two years of taxes.

Wynn (background)

We can talk more about that after we wrap up.

Sam

Yep. But yeah, kind of to wrap it up. So like we talked about the game is changing constantly. So just because that’s the way it was last week or today doesn’t mean that it’s going to be the same tomorrow. And then just because a place has a permit doesn’t mean it’s going to be able to be transferable, right? So something to keep in mind. And then I guess, does anybody have any other questions? Comments, concerns?

Katy

That was a lot!

Pat

Yeah. Cool. That was good.

I want them so bad. Seems sexy. Just like sexy short term vacation seems like it’s not.

And then you get in there and realize somebody tiled your shower the wrong way,

But I’m not organized or timely enough to deal with that. So,

So, and somebody keep mind with any, any investment for this long term short term you know, you don’t need to be Money Bags McGee to have these, but you do need to have a bit availability capital to take care of issues.

Kelly

This is exactly where I want to go. Eventually for me, just personally

A lot of sense. Yeah. A lot of people have a house or two and are under capitalized and they don’t have you know, the, the ability to, to,

Pat

I mean, there was people selling, you know, April 2020, like literally one month and not make money. And then they had to sell their asset. That’s now worth 30% more.

Not only Don’t have don’t you don’t need to have million dollars to be a landlord, but you do need to have, you know, short term, you need to have 10, $15,000 in an emergency fund. You need to have long term rentals. You need to have $1,500 per door for year emergency fund. A lot of people don’t tenant,

Kelly

Does the bank need to know it’s a vacation rental versus just a normal rental? I’m just saying like, so say can’t change my business plan

Pat (background)

So they you know, if you’re buying a place, if you have an income qualify for one regardless, then they don’t need to know anything, you know, you could buy the house just to buy it and it’s still vacant as long as your personal income means their requirements. Then it’s no big deal. But if you need that income they’re, they’re not, they’re only going to underwrite off. Usually you get it about for 25% now, um but they’re typically looking at long term and, and a lot of times they might want to see a lease in place already, depending on what you’re buying. Or like if you a place and fix it up on a hard money loan and refinance it, they’re not going to refinance it until they see a long term lease in place. Now you can put a long term lease in place for a year, get your refinance, and go [unintelligible], but you also have to change the insurance policy. We have to get a vacation overrider.  okay. You know, so just that you have to, but once you have, once they close the loan you

Wynn (background)

Something to keep in mind a lot of these hard money lenders are switching to DSCR loans banks, saving loans

Pat (background)

You can probably find someone who specializes in vacation rental loans. You’re probably going to pay a higher interest rate.

Wynn (background)

So over the last six months, so the last six months, a lot of our hard lenders that working with are putting out products for converting those hard money loans into long term 30 year notes, which never used to happen. Right. In order to get 30 year note go a bank, lending institution, have two years of bank statements and all that stuff. Now the hard money guys are all starting to offer these 30 year notes in house versus going on.

Kelly (background)

You said still a higher rate.

Wynn (background)

Yes and no. So about three months ago, when I was pulling these out, they were six and a half, 7%. I just got a quote yesterday for converting a hard money loan to a 30 year investment note at 5%. Do you know who they’re selling those notes to? They’re keeping them in house because here’s what’s happening. The inventory is so low. All these hard money groups are investor-based. They raised funds. Hundreds of thousands of dollars or hundreds of millions of dollars of funds are raised. And if the supply of houses is low and people can’t keep flipping houses, all these hard of money guys have money sitting in an account, they’re all cash in. So since the supply is low, they have too many funds in their bank. They’ve got to get that money, making money for these investors who also not going to make their return so they’re starting to put out all these products. All these hard money guys are putting these products. And as they’re more desperate to make returns, their interest rate is coming down to now I got to go to 5%. I mean, if I go to an open market on an investment loan, you’re probably going to get 4.5%-5% going through bank of America or, or whatever, but keeping it in house, they probably have already, already have your financial information. They just do a switch of the loan and you do an appraisal and you’re good to go. So that’s going to be a whole other avenue of lending for investors which is going to be tremendous, all because it’s a side effect of the housing shortage.

Sam

So I guess kind of the last note before we, we wrap up all this officially, but the other thing to think about, right, because I thought about this a little bit, having a short term rental is what, what’s your competition? I mean, your competition is basically hotels right, up until this point. The they’ve put a cap here, they’ve put a cap on Tybee. They’re, I’m convinced that they’re going to put a cap pretty much everywhere because of how much money these things can make and the fact that people are just going to continue to do it and you’re going to get some disgruntled folks in, in the neighborhoods. Right. So you’re going to put a cap at some point, I think. But ultimately it’s less so about competing against other Airbnb’s. And I mean, if you just look at the numbers, you can have, you can rent a place, you know, a hotel room in downtown Savannah for a couple hundred bucks a night, right. You’re still going to be paying all the taxes and fees and all that. Or you could rent a place that sleeps five times as many people for less than double the price with a full kitchen, with some privacy, with a yard. So I see the limiting factor, I think, isn’t going to be, there’s going to get to be too much competition. I think it’s going to be trying to get in before they put a cap on it and before you can’t do it anymore. So

Wynn (background)

Now Sam mentioned DSCR does everyone know what DSCR loan is? No. Right. DSCR loan is Debt Service Coverage Ratio loan. That means they don’t care about your income as long as you cover your debt with a certain ratio. So they took a rental income. And if your debt service, your rental, your mortgage, all your debts needs a certain ratio and if it covers that ratio they’ll cover the loan, not necessarily based on your income or your W2, or any of that stuff.

Pat (background)

They usually look for like 35%, 45%. So like if you’re bringing in you know, $1,000 a month in rent, then you know your mortgage must be around $400. I think that’s, that’s usually what I look for. If I’m getting loan anyway. I mean, you don’t want to need much more than that on your debt service percentage to, you know, revenue.

Sam

So I’ve talked to a few of them Pat, who, and they’re

Pat (background)

If they’re looking at vacation rentals then it’s probably much less than that, I’m talking about long term rental income.

Sam

No. So there’s more than a few places out there that as long as it’s above one, they’ll give you the loan. So if you’re – that is not, that’s not a smart deal. [unintelligible] So if you’re doing a long term rent and your DSCR, you know, if it, if they say, or you can rent it for $1,500 and the amount that you can charge or excuse me, if you can rent it for $1,500 a month and your mortgage payment is $1,450, they’ll be give you a DSCR loan. But that is not something you want to do. Yeah. Because you’re going to have all kinds of vacancy and maintenance and capital expenditures. So you’re going to be losing money on it, but for the sake of short term rentals, it can work out. Gotcha. But yeah, Katy, I think that concludes it unless anybody’s got anything else.
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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.

Written by: Pat Wilver

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Savannah Market

January Market Update

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February is here! Is it just us, or did January fly by? We saw marginally more homes on the market in January than we did in December, likely partially due to people not wanting to list their home during the holidays. Sure enough, January’s inventory of homes went back to what it’s been the majority of 2021, but that still lands us heavy in a seller’s market. Let’s take a look, starting first with general trends and then dialing in on trends in your neighborhood.

General Market Trends

For the month of January in the entire Savannah MLS (which covers all of Chatham, Effingham, Bryan, and parts of Long and Liberty Counties), we have seen the following:

  • 975 new listings, compared to 951 new listings in December & 1,056 new listings in January of last year, 2021
  • 739 homes sold, compared to 1,132 homes sold in December & 791 homes sold in January of last year, 2021

There were 1,259 homes total on the market in January. In December, there were 1,283. Last January, for more reference, there were 2,096 homes on the market. This brings us to a total of 1.85 months of inventory, compared to 1.2 months of inventory in December. In a balanced market, we expect to see 6 months of inventory, so we are still very much in a seller’s market although it’s slightly better than it was in December.

Here, we can see the trends from the last 5 years of months of inventory (in blue – remember, the balanced market is right around 6 months) & median home sale prices (in green).

And this chart shows us the trends, also over the last 5 years, of the amount of new listings (green) & sold houses (blue).

Here is our index of neighborhoods:

  1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside
  2. The Islands
  3. Historic Districts
  4. Starland/Thomas Square/South Victorian District
  5. Eastside
  6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights
  7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt
  8. West Savannah
  9. Cloverdale/Tremont Park/Liberty City
  10. Cuyler Brownsville/Cann Park
  11. Midtwon
  12. Southside
  13. Georgetown/Chevis/Little Neck
  14. The Landings/Isle of Hope/Dutch Island/Burnside Island
  15. Berwick/Southbridge
  16. Garden City/Old Port Wentworth
  17. New Port Wentworth/North Pooler
  18. Pooler/Bloomingdale
  19. Rincon
  20. Guyton/Springfield
  21. Richmond Hill
  22. Keller
  23. Midway
  24. Hinesville

1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside

  • 24 new listings
    • 36 new listings in December 2021
    • 19 new listings this time last year (January 2021)
  • 22 properties sold
  • Average sold price: $395k

2. The Islands

  • 50 new listings
    • 40 new listings in December 2021
    • 68 new listings this time last year (January 2021)
  • 52 properties sold
  • Average sold price: $508k

3. Historic District

  • 27 new listings
    • 29 new listings in December 2021
    • 38 new listings this time last year (January 2021)
  • 19 properties sold
  • Average sold price: $847k

4. Starland/Thomas Square/South Victorian District

  • 20 new listings
    • 14 new listings in December 2021
    • 21 new listings this time last year (January 2021)
  • 10 properties sold
  • Average sold price: $573k

5. Eastside

  • 21 new listings
    • 19 new listings in December 2021
    • 28 new listings this time last year (January 2021)
  • 23 properties sold
  • Average sold price: $209k

6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights

  • 23 new listings
    • 24 new listings in December 2021
    • 20 new listings this time last year (January 2021)
  • 20 properties sold
  • Average sold price: $215k

7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt

  • 30 new listings
    • 48 new listings in December 2021
    • 24 new listings this time last year (January 2021)
  • 20 properties sold
  • Average sold price: $273k

8. West Savannah

  • 9 new listings
    • 5 new listings in September 2021
    • 5 new listings this time last year (October 2020)
  • 5 properties sold
  • Average sold price: $91k

9. Cloverdale/Tremont Park/Liberty City

  • 14 new listings
    • 11 new listings in December 2021
    • 9 new listings this time last year (January 2021)
  • 10 properties sold
  • Average sold price: $114k

10. Cuyler Brownsville/Cann Park

  • 9 new listings
    • 9 new listings in December 2021
    • 5 new listings this time last year (January 2021)
  • 11 properties sold
  • Average sold price: $119k
  •  

11. Midtown

  • 27 new listings
    • 13 new listings in December 2021
    • 21 new listings this time last year (January 2021)
  • 14 properties sold
  • Average sold price: $288k

12. Southside

  • 56 new listings
    • 32 new listings in December 2021
    • 55 new listings this time last year (January 2021)
  • 40 properties sold
  • Average sold price: $309k

13. Georgetown/Chevis/Little Neck

  • 43 new listings
    • 39 new listings in December 2021
    • 41 new listings this time last year (January 2021)
  • 33 properties sold
  • Average sold price: $262k

14. The Landings, Isle of Hope, Dutch Island, Burnside Island

  • 41 new listings
    • 40 new listings in December 2021
    • 37 new listings this time last year (January 2021)
  • 35 properties sold
  • Average sold price: $808k

15. Berwick/Southbridge

  • 35 new listings
    • 14 new listings in December 2021
    • 34 new listings this time last year (January 2021)
  • 23 properties sold
  • Average sold price: $315k

16. Garden City/Old Port Wentworth

  • 23 new listings
    • 11 new listings in December 2021
    • 20 new listings this time last year (January 2021)
  • 20 properties sold
  • Average sold price: $173k

17. New Port Wentworth/North Pooler

  • 30 new listings
    • 37 new listings in December 2021
    • 47 new listings this time last year (January 2021)
  • 28 properties sold
  • Average sold price: $287k

18. Pooler/Bloomingdale

  • 75 new listings
    • 64 new listings in December 2021
    • 72 new listings this time last year (January 2021)
  • 56 properties sold
  • Average sold price: $303k

19. Rincon

  • 47 new listings
    • 58 new listings in December 2021
    • 59 new listings this time last year (January 2021)
  • 52 properties sold
  • Average sold price: $281k

20. Guyton/Springfield

  • 29 new listings
    • 31 new listings in December 2021
    • 58 new listings this time last year (January 2021)
  • 24 properties sold
  • Average sold price: $257k

21. Richmond Hill

  • 54 new listings
    • 52 new listings in December 2021
    • 38 new listings this time last year (January 2021)
  • 35 properties sold
  • Average sold price: $332k

22. Keller

  • 31 new listings
    • 35 new listings in December 2021
    • 45 new listings this time last year (January 2021)
  • 26 properties sold
  • Average sold price: $421k

23. Midway

  • 29 new listings
    • 32 new listings in December 2021
    • 24 new listings this time last year (January 2021)
  • 29 properties sold

24. Hinesville

  • 64 new listings
    • 60 new listings in December 2021
    • 61 new listings this time last year (January 2021)
  • 55 properties sold

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Categories
Savannah Market

December’s Market Update

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Happy January! 2022 is here, & with it, a new market update. December is usually a slower real estate month due to all the holidays and travelling, but 2021 actually ended with a bang. Let’s take a look, starting first with general trends and then dialing in on trends in your neighborhood.

General Market Trends

For the month of December in the entire Savannah MLS (which covers all of Chatham, Effingham, Bryan, and parts of Long and Liberty Counties), we have seen the following:

  • 951 new listings, compared to 1,044 new listings in November & 902 new listings this time last year (in December 2020)
  • 1,132 homes sold, compared to 972 homes sold in November & 979 homes sold this time last year (in December 2020).

There were 1,555 homes on the market in December, for a total of 1.5 months of inventory. In a balanced market, we expect to see 6 months of inventory, so we are still very much in a seller’s market. (We’re actually seeing an even lower inventory in January – 1.3 months – while buyers start coming out of the woodwork ready to house-hunt in the new year.)

Here, we can see the trends from the last 5 years of months of inventory (in blue – remember, the balanced market is right around 6 months) & median home sale prices (in green).

And this chart shows us the trends, also over the last 5 years, of the amount of new listings (green) & sold houses (blue).

Here is our index of neighborhoods:

  1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside
  2. The Islands
  3. Historic Districts
  4. Starland/Thomas Square/South Victorian District
  5. Eastside
  6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights
  7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt
  8. West Savannah
  9. Cloverdale/Tremont Park/Liberty City
  10. Cuyler Brownsville/Cann Park
  11. Midtown
  12. Southside
  13. Georgetown/Chevis/Little Neck
  14. The Landings/Isle of Hope/Dutch Island/Burnside Island
  15. Berwick/Southbridge
  16. Garden City/Old Port Wentworth
  17. New Port Wentworth/North Pooler
  18. Pooler/Bloomingdale
  19. Rincon
  20. Guyton/Springfield
  21. Richmond Hill
  22. Keller
  23. Midway
  24. Hinesville

1. Ardsley Park/Chatham Crescent/Baldwin Park/Parkside

  • 36 new listings
    • 23 new listings in November 2021
    • 19 new listings this time last year (December 2020)
  • 19 properties sold
  • Average sale price: $395k

2. The Islands

  • 40 new listings
    • 52 new listings in November 2021
    • 40 new listings this time last year (December 2020)
  • 71 properties sold
  • Average sale price: $508k

3. Historic District

  • 29 new listings
    • 28 new listings in November 2021
    • 24 new listings this time last year (December 2020)
  • 20 properties sold
  • Average sale price: $847k

4. Starland/Thomas Square/South Victorian District

  • 14 new listings
    • 23 new listings in November 2021
    • 13 new listings this time last year (December 2020)
  • 21 properties sold
  • Average sale price: $573k

5. Eastside

  • 19 new listings
    • 18 new listings in November 2021
    • 13 new listings this time last year (December 2020)
  • 13 properties sold
  • Average sale price: $209k

6. Pine Gardens/Savannah Gardens/Avondale “The States”/Victory Heights

  • 24 new listings
    • 20 new listings in November 2021
    • 14 new listings this time last year (December 2020)
  • 14 properties sold
  • Average sale price: $215k

7. LaRoche/Fernwood/Glynnwood/Savannah State/Skidaway Terrace/Magnolia Park/Thunderbolt

  • 48 new listings
    • 30 new listings in November 2021
    • 11 new listings this time last year (December 2020)
  • 32 properties sold
  • Average sale price: $273k

8. West Savannah

  • 5 new listings
    • 3 new listings in November 2021
    • 4 new listings this time last year (December 2020)
  • 5 properties sold
  • Average sale price: $91k

9. Cloverdale/Tremont Park/Liberty City

  • 11 new listings
    • 11 new listings in November 2021
    • 3 new listings this time last year (December 2020)
  • 5 properties sold
  • Average sale price: $114k

10. Cuyler Brownsville/Cann Park

  • 9 new listings
    • 8 new listings in November 2021
    • 2 new listings this time last year (December 2020)
  • 4 properties sold
  • Average sale price: $119k
  •  

11. Midtown

  • 13 new listings
    • 26 new listings in November 2021
    • 10 new listings this time last year (December 2020)
  • 26 properties sold
  • Average sale price: $288k

12. Southside

  • 32 new listings
    • 55 new listings in November 2021
    • 40 new listings this time last year (December 2020)
  • 74 properties sold
  • Average sale price: $309k

13. Georgetown/Chevis/Little Neck

  • 39 new listings
    • 40 new listings in November 2021
    • 25 new listings this time last year (December 2020)
  • 59 properties sold
  • Average sale price: $262k

14. The Landings, Isle of Hope, Dutch Island, Burnside Island

  • 40 new listings
    • 27 new listings in November 2021
    • 34 new listings this time last year (December 2020)
  • 35 properties sold
  • Average sale price: $808k

15. Berwick/Southbridge

  • 14 new listings
    • 28 new listings in November 2021
    • 20 new listings this time last year (December 2020)
  • 47 properties sold
  • Average sale price: $315k

16. Garden City/Old Port Wentworth

  • 11 new listings
    • 7 new listings in November 2021
    • 7 new listings this time last year (December 2020)
  • 8 properties sold
  • Average sale price: $173k

17. New Port Wentworth/North Pooler

  • 37 new listings
    • 35 new listings in November 2021
    • 31 new listings this time last year (December 2020)
  • 44 properties sold
  • Average sale price: $287k

18. Pooler/Bloomingdale

  • 64 new listings
    • 67 new listings in November 2021
    • 47 new listings this time last year (December 2020)
  • 82 properties sold
  • Average sale price: $303k

19. Rincon

  • 58 new listings
    • 67 new listings in November 2021
    • 30 new listings this time last year (December 2020)
  • 71 properties sold
  • Average sale price: $281k

20. Guyton/Springfield

  • 31 new listings
    • 86 new listings in November 2021
    • 37 new listings this time last year (December 2020)
  • 55 properties sold
  • Average sale price: $257k

21. Richmond Hill

  • 52 new listings
    • 56 new listings in November 2021
    • 51 new listings this time last year (December 2020)
  • 55 properties sold
  • Average sale price: $332k

22. Keller

  • 35 new listings
    • 47 new listings in November 2021
    • 26 new listings this time last year (December 2020)
  • 48 properties sold
  • Average sale price: $421k

23. Midway

  • 32 new listings
    • 29 new listings in November 2021
    • 27 new listings this time last year (December 2020)
  • 31 properties sold

24. Hinesville

  • 60 new listings
    • 64 new listings in November 2021
    • 55 new listings this time last year (December 2020)
  • 66 properties sold

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