The Best Time To Buy Or Sell A Home? In The Winter When Others Don’t!

The Best Time To Buy Or Sell A Home? In The Winter When Others Don’t!

Putting off buying or selling a home because it is the holidays and winter is coming up? Not so fast! This time of the year can provide excellent opportunities for homebuyers, sellers and real estate investors.

We talk to Licensed Branch Manager with Angel Oak Ivy Eilerman and her husband, Rickey Eilerman, who is a highly successful Realtor. They have expert advice on buying, selling and building real estate portfolios.

Putting off buying or selling a home because it is the holidays and winter is coming up? Not so fast! This time of the year can provide excellent opportunities for homebuyers, sellers and real estate investors.

We talk to Licensed Branch Manager with Angel Oak Ivy Eilerman and her husband, Rickey Eilerman, who is a highly successful Realtor. They have expert advice on buying, selling and building real estate portfolios.

Michael Chabot
Welcome back to another episode of Your Mortgage Matters brought to you by Angel Oak Home Loans. I’m your host Michael Chabot. Today’s show is about buying and selling real estate The best time to do it. And we’ll even touch on how to build an investment property portfolio. Excuse me. Our guest today are Ivy and Rickey Eilerman.

Rickey Eilerman
Eilerman, it’s okay.

Michael Chabot
Eilerman Thank you. So Ivy is from Savannah, Georgia and as a multi generation Savannahian. And did I say that correctly? All right. She has been in lending in some capacity for nearly 20 years. She started as an assistant then became a loan processor, before making her way to manage a branch in Savannah. Her husband is a realtor and she says it’s all real estate all the time in their house. And of course, Rickey is her husband who’s a realtor. He’s also a veteran, a former professional fireman and a family man, he states. I know what it’s like to work tirelessly, tirelessly for the American dream. I can help you achieve your goal, whether it’s be a first time family home or an investment. I’m your guy. I generally enjoy working with first time homebuyers, especially families. In the end, I want to see all my clients safely planted in their new homes. Ivan, Rickey, welcome to the show. Appreciate it. Appreciate your time. And Rickey, as I said off air before we started recording, thank you for your service. I love to help veterans. So I always like to recognize the service you’ve given to our country.

Rickey Eilerman
Thank you. And we do too. That’s one of our one of our other niches. We love helping veterans andmilitary relocation, anything like that. We’re a big, big veteran community in Georgia. So we have several bases and it’s just we love those guys and girls.

Michael Chabot
I love that I’ll have to connect you with one of my buddies in California he runs a real estate company. It’s called Romeo echo and they basically all they do is try to help veterans that try and help them with their VA benefits with you know, buying and selling homes, etc. So I think it’d be a great connection. So IV so you are multi generational Savannahian and what’s it like growing up and and now helping serve that community?

Ivy Eilerman
It’s been a true blessing for me. Just being able to, to see friends and, and colleagues like grow personally, as well as financially. And partnering with my husband on several occasions, we’ve been able to help lots of folks, even some folks in and our family in the past. Just get to where they wanted to be in the communities. They wanted to be in and raise children and you know, live and work and pray and so we’re blessed to be able to do that.

Michael Chabot
Is Savannah considered like a bedroom community? Because it’s a it’s a pretty small town, right? It’s not a very large community.

Rickey Eilerman
Savannas pretty big.

Michael Chabot
Maybe it has grown some since I’ve seen it.

Rickey Eilerman
Yeah. Chatham County as a whole is huge. And then a lot of people, like most big cities, they’ll say they’re from Savannah, but there’s tons of underlying cities that connect and intertwine. So Savannah is just kind of a broad term. For example, our MLS is the savannah MLS, but we go all the way down to runswick. You know, all the way up to South Carolina. So it’s kind of it’s pretty big. It’s pretty big.

Michael Chabot
So you guys cover a real wide area?

Ivy Eilerman
We do and there’s a lot of, I guess, a different experience from one town to the next. So you know, we’ve got coastal area Tybee Island. So we kind of have you know, the beachy areas and then in Savannah, it’s more city font, I guess you’d say, historic districts. So you’ve got a lot of people that are traveling and visiting in that area all the time year round. And actually where we live is in the next county over it’s Effingham County. And that’s even though I was born in Savannah, that’s where where I grew up. And most of the families in our area are kind of migrating that way because of the school systems and I think also, there’s been for the most part more affordability in that area as well.

Rickey Eilerman
You could pick up a house and Guyton. Let’s just say the average purchase price in Effingham County is about $250,000. If you were to take one of those two or $50,000 houses and put it downtown Savannah or somewhere Wilmington Island or something like that you’re looking at you know, $400,000 Easy, like it changes like that, and wow, wow, that’s a big difference.

Michael Chabot
So let’s, that’s actually a good segue. I believe in ladies first so I’m going to ask you this question. First, is what trends are you seeing in the lending Arena in your marketplace?

Ivy Eilerman
Purchases are actually actually still huge here. In fact, November, I just closed out my biggest month of the year as far as purchase business goes. But we’re also seeing a trend of, I guess, current homeowners that don’t want to sell necessarily, they are starting to refinance with cash out so that they can make improvements that would allow them to stay in their home longer, and also ultimately build some equity so that when they are ready to take that step to sell their property, they’re gonna be able to realize an even greater return on that on that sale.

Michael Chabot
Are you seeing rising interest rates affecting business at all?

Ivy Eilerman
Not so much. I think that the rates are still low enough that they’re still super low. As far as in terms of the span of our life, our lifetime, what we’ve seen, the rates are still historically low for our lifetime. So people are not balking at that at all.

Michael Chabot
All right. So Rickey, What trends are you seeing in the real estate side of the marketplace?

Rickey Eilerman
It’s kind of the same thing. We have I actually advise people, you know, when they talk about, oh, how much money can I make on my house? Yeah, you could, we could sell it like that. But where are you going to go? Inventory right now I just checked, I think we only have like 150 houses that were on the market today or somewhere. Don’t quote me on that. But it wasn’t that much that many homes. And so people are like I said that $250,000 price point those homes are gone, like talking two, three days on the market five days on the market most. And there’s a such a high demand. There’s so many buyers that we’re trying to keep the inventory up. But then again, the scare is where are we gonna go you know, there’s so many buyers everything saturated. So those sellers that kind of asked me that question, I just kind of throw them to IV or another lender. Um, any tequila, you get some money out, maybe you can do some improvements. And then when this thing turns around, you be able to make your money back. And it’s kind of talking myself out of business, but it’s the honest truth. You know, especially with wintertime, you know, January is the biggest job change month so people are moving and relocating, but it’s just tough. So it’s, you know, just stay in steady. This is crazy steady.

Michael Chabot
Alright, he dropped a couple of good things there. Thank you. But first, I want to ask you, so you guys still seeing bidding wars?

Rickey Eilerman
Oh, yeah. 100%, bidding wars, appraisal, gap clauses, escalation clauses, everything under the sun, for example, I listed a house today, for a veteran it was his rental $185,000 Isn’t this not a huge house, three bedroom, two bath half an acre. One day on the market, I’ve got six offers to review with him right now. So wow, they’re just people are offering crazy amounts due to I’ve got a $200,000 offer on it. And, you know, we as real estate agents, we we do our best to make it fair, and I got to worry about appraisal, I don’t want to go under contract for 200,000 with some of our appraisal 185 183. So that’s it’s huge. And, you know, that’s when you got to really trust your real estate agent, I’m not going to let my buyer buy $30 per foot home, that’s worth 185 I’m not gonna let him pay $200,000 court. So you know, and that’s where it comes in, you know, she’s, you know, losing out her clients to I guess when they’re offered crazy amounts, and they just not appraise. And so it’s nuts.

Michael Chabot
Well, and Ivy that kind of transitions to you, because I just had this conversation with a client of mine, they wrote an offer no appraisal contingency. But yet, as you and I know, if you don’t get a waiver through Fannie Mae or Freddie Mac, you don’t have a loan until you have an appraisal. And so I think it’d be great for you to talk a little bit a little bit about Excuse me, what we’re seeing in the marketplace, as far as most clients are having to waive appraisals, at least in my area. And I’d like you guys to touch on that. And, but sometimes the appraisal doesn’t come in doesn’t?

Ivy Eilerman
And I guess my concern is that, you know, we deal with a lot of first time homebuyers, and people that frankly don’t have a ton of money to put down. And they don’t have money to bridge the gap in the appraisal and the purchase price between the two. And so my concern is that this market cuts those people out of being able to be a player in the game. And so what we’re seeing is that we have more established people financially, they’re actually the only players right now.

Michael Chabot
Yeah, I agree. I’m, I don’t know about you guys. I’m hoping that we get a little more balance in the marketplace here in the near future. But I think Ricky, you touched on it. Most people It sounds like to me and I’d love for you to answer this. It sounds like to me a lot of people aren’t selling because they’re like, Well, where am I gonna go I want to move but yeah, what am I gonna do?

Rickey Eilerman
Personally, I you know, we’re talking about a little bit but I mean, I have, you know, investments in our main house right now is honestly too big for us. So we’ve talked about selling, but, you know, we’re not going to get this for what we paid for it back in, what was it? 2016? There’s no way, you know, so why would we sell and to downsize but pay more money for the home, you know, this is there’s just a huge demand. So and that’s from the real estate professionals to you know, that’s, that’s the mortgage Lady and the realtor saying, you know, it doesn’t make sense for me. But there are a lot of people that have worked really hard to get that 150 $185,000 home. And those are the ones that are kind of suffering right now. Because the people that have played the market, and were able to play the market are sweeping them up and turning them into investment property. So it’s a good time to buy rentals. I mean, if you can afford it, you know, rentals are an all time low too. Not that that helps the mortgage industry what, you know, $1,200 a month, that’s a standard 1100 square foot house.

Michael Chabot
And we’re gonna get into that in a bit. I can’t wait to pick your brains on that. So there’s a myth. There’s a myth that this is the worst time to list your home for sale. A lot of clients say, I’m going to wait till after the holidays are a lot of sellers. I’m gonna wait till spring to list my house. So Rickey will go to you first. Is that good or bad? What do you think?

Rickey Eilerman
Well, so right now it’s, it’s I guess you could say it’s a seller’s market, because of the low inventory. However, traditionally, yeah, it has been, nobody wants to move during the holidays. It’s cold, mainly for like the most the northern style states, houses bolt shows good in the wintertime, houses, you know, there’s there’s a lot of contenders. But down here in the south, it’s kind of stay steady. But uh, the way I look at it, is, it is a good time to list your house, hey, you got travelers coming to Georgia to visit family that want to be closer. So they’re going to look for houses for sale, they’re going to see what’s out there be your real estate agents are going to be swamped in the in the summer spring months. So if you want the real attention, and to be the number one client, although we are busy, I’d say when are you going to get more attention? But yeah, you know, like I said, job changes in January. That’s a huge thing. Everybody’s waiting for the new year tax and tax income, refund, stuff like that. So I don’t think right now, I really don’t think that that myth is is viable? Because, you know, we could we could list anything right now and sell it.

Michael Chabot
So I agree. I agree Ivy, what’s your take on it?

Ivy Eilerman
I agree with Ricky and I feel like people are moving, for the most part because they have to. So it’s not really a choice that they can make because there’s probably a job lined up for them or something going on with their family. Maybe some middle aged families are taking care of parents. So there’s a lot of different moving parts for lots of different families. So if I felt like if you’re ready to list then you should do it. Because somebody out there has a need. And you can you can really make some good money right now.

Rickey Eilerman
Especially playing on that myth. If the majority of the people think that you decide, hey, I’m gonna chill out on my Christmas decorations list the house to let people come where a lot of people have their house is exploding with Christmas and there’s no room there’s family staying over. So you know, your if they’re waiting, you know what, what you’re waiting for somebody else decided yesterday. Does that make sense?

Michael Chabot
Yeah, makes perfect.

Rickey Eilerman
Two identical houses. One person list you just missed out on that sale? So? Yeah, that’s yeah.

Michael Chabot
And I think if you are a seller, I mean, from what I’ve seen in the different markets, where I work is that a lot of sellers think that wow, yeah, I just don’t want to do it. Now. I’m just gonna wait till spring, when they probably have less competition now, even in this crazy market, I would say because a lot of sellers probably feel that way. I had a question for Ivy. Do you guys in your marketplace? Are you seeing growth in the self employment market, meaning more and more people self employed gig economy, that type of thing?

Ivy Eilerman
Absolutely. Yes. There’s, there’s tons of that. And then I probably see a little bit more of it than I ever have in my career just because of where I work, because we have loans that cater to self employed borrowers. That yes, most definitely. We’re seeing a trend of that.

Michael Chabot
You know, that’s great. And do you want to elaborate quickly just on some of the programs that you have to help self employed borrowers?

Ivy Eilerman
Sure. So probably our most attractive program and most widely used is going to be our bank statement learn. So self employed borrowers who’ve been self employed for at least two years or 299. For at least two years, they may be eligible for the bank statement, learn in cases where their tax returns don’t show enough income to qualify. So that one’s been pretty popular. And we also have another program that is good for investors. That’s pretty popular the investor cash flow program and it allows the individual to qualify based on the property’s ability to cash flow instead of the individual’s ability to cash or print the ability to repay. So that was pretty popular too. But those are, you know, those are just some highlights, we’ve got some more programs in house two that also cater to people that might have lots of different facets to their financial picture self employed, plus a bankruptcy in the past, or foreclosure, credit events, and maybe some other strange things. But yeah, I’ve really liked having the flexibility of that, I would say that 80% of what we do is the standard VA, FHA, USDA and conventional loan, but it’s really great to have a plan B. And also, I’m really excited about our condo department, because we can finance condos a little bit easier here than I’ve ever had an experience with. So that’s pretty cool.

Michael Chabot
Awesome. Alright, so I got to ask you guys a question. Is it difficult sometimes working together as husband and wife and then as business partners?

Rickey Eilerman
Yeah, we do pretty good. We did pretty good. But then there’s like, you know, we do we are very good about honoring, you know, the relationships of our customer. So I never hear income or credit scores or anything I don’t need to know. But then it’s also, you know, she has a bad day at work. I get the brunt end of it, even though I’m one of her customers, too. So, you know.

Ivy Eilerman
Most people don’t have to get elbowed and woken up and said, Hey, go get me a pre-qual.

Rickey Eilerman
Yeah, it happens.

Michael Chabot
Guys, do you have a cut off or like an agreement that says, Okay, we can’t talk about business after eight o’clock or nine o’clock at night.

Ivy Eilerman
It’s all the time.

Michael Chabot
I was gonna say, That’s what you said, right? All real estate, all the time.

Rickey Eilerman
My gears are turning. And we’re, I just had this conversation yesterday with somebody, you know, we motivate each other to, but our gears are always turning. And we’re always we’re always motivating each other to do something or coming up with an idea. And I think that really kind of, I mean, I think I felt it on a loan once or twice when we’re just brainstorming, it has a problem. I think I’ve said something. She’s like, Oh, my god, yeah, let me check into that. And it’s kind of cool to have two people that know a little bit about each of their jobs. She’s helped me out writing contracts and things like, well, you know, if you want to win the, you want to win this bidding war, you know, use this kind of verbiage. That way, the, you know, the lender is going to accept it better. Whatever it is, even if it wasn’t her company or somebody else. She’s, you know, we just, but we do talk about work pretty much 24/7 is kind of sad, actually.

Michael Chabot
You guys are making it work. And thank you for sharing that. So interesting. So I have some stats here. This goes back to we’re talking about seasonal. So it says according to realtor.com, and I have to read it. And Adam data solutions, the last week of October through winter months, is the best season to buy based on less competition from other buyers. I don’t know how true that is for this year, because there’s so many buyers in the market. The best day to buy is December 26, the day after Christmas.

Rickey Eilerman
Based on your experience, would you say this is true? Well, last year, December was one of my busiest months of IBM about you.

Ivy Eilerman
I don’t know if any of the national statistics really applied to our area, I think where we are sitting. It’s just such a popular area. And we’re nestled in between three military bases as well. And we’re also in the area that has the most new construction growth in the state. So I feel like we’re always in a little bit of a bubble, that bubble wrap cushion and a safety net from the rest of the country. And that does change the flow of real estate traffic as well. It’s just been steady truly has.

Rickey Eilerman
I think, I think I agree the the stats come from usually over, you know, heavily populated areas. I’m assuming, you know, Maryland, DC, New York, Charlotte, stuff like that. Places like that. And I think that uh, I agree with it. 100% We, I really don’t see a roller coaster or trend here at all. This December we’re still staying busy last December was one of my biggest months, all year. And then you know, sometimes, couple years ago, July was really slow. And then last year, July was just popping so it’s it’s I really couldn’t put a label on it at all. I couldn’t put a statistic to it.

Michael Chabot
I think you guys make good points on I would say that since the pandemic we see a lot of people leaving big cities and coming out to more in the suburbs, which is probably why you guys

Ivy Eilerman
You’re having such an explosion in your area, right? Because everybody wants to be away from the big cities, right? They want to be, like you said, Ivy, they want better schools for their kids and quality of life. And so it’s, it’s, it’s nice to hear that you’re in a community where you’re not seeing so much turbulence in the market. And then certainly, the big C word no one wants to say, has contributed to that, because I think a lot of people wanted to escape, I guess, likelihood of being around the germs, and so go into less populated areas. Maybe they even found, you know, through unfortunate losses that they wanted to be closer to family. So that’s also triggered just more and more moves for people.

Rickey Eilerman
You know, politically, the mandates and everything like, you know, not getting into that political atmosphere. But we’re a lot. We’re a lot less.

Michael Chabot
Strict, I guess, the controversy, controversy. Yeah, that’s pretty Yeah. And I know what you’re saying is people want to just be also I mean, look, we’re recording this podcast, I’m in Denver, Colorado, you guys are, you know, in Georgia, technology has allowed more and more people to work from home and remotely, so they can live wherever they want to live. Right. And so I think that has added to the demand. So let’s transition I want to know from each one of you guys, before we get into the investment stuff, what are your thoughts on where the market goes next year into 2022? And we’ll start with Ivy.

Ivy Eilerman
Well, we hear a lot about proposed market compression. So I think there might be a little bit of slowdown with any types of refinances that are just standard right term refinances. I think people are still going to want to continue to make improvements to their homes, if they’re not willing to do so we’ll probably still see some cash out refinances from the folks that have an opportunity to do that for themselves. The purchase business, I just don’t see it slowing down, I think a lot of companies have, like you were saying adapted to allowing their, sorry, their employees to work from home. And they’ve probably also realized that the productivity is a little bit better, and their expenses are lower, because we’re not having to keep lights on and different buildings and such. So I think the purchase business is going to continue, hopefully, the rates stay reasonable like they are now. And we’ll just all keep helping people and benefit from it ourselves.

Rickey Eilerman
So I think it’s going to continue to stay steady. And there’s a couple reasons. Obviously, it’s driven by the mortgage, whatever the interest rates are. But I particularly work for one builder. I sell some of his homes, and he’s actually withholding inventory. Right now, he’s not doing any pre builds. Because during the pre builds and your unit pre selections, and your colors and your tiles, and then all sudden, the seaward happen and they can’t get their materials. I had a customer that was supposed to close six months ago, but their framing package didn’t show up for six months. So they’re done doing the pre bills, you know, are they I’m sorry, the semi customs. So what they’re doing is they’re just creating inventory. He’s got several homes that he could list right now and close in three months, but he’s just going to hold out until January because he doesn’t want any more headaches, he wants to finish out his fiscal year interesting. And that’s been a trend. Our sister, our sister in law is doing a new construction right now, she didn’t get to pick your pile color, anything. It’s just it is what it is. And that’s a big difference than last year. And so if all the builders are doing and like I’ve said, we have the fastest growing new construction in Georgia, in this area, I mean, we’re not going to have a shortage of inventory, and it’s just gonna keep rolling. So as long as you guys keep those interest rates where they are, you know, it’s gonna it’s gonna, I think it’s going to continue to keep on trucking.

Michael Chabot
And I think Ivy and I wish we had the ultimate control to keep rates low, right. I think I’ll just kind of put a bow on that. I think that rates will stay in this range for sure. I think demand will stay high because there’s so much as Ricky touched on it, there’s so many buyers out there. And as inventory hits the market and I’ve done this interview with with several groups from around the country. And it’s funny because the language is the same pretty much everywhere right now. Except for some big cities because I think most people just want to be more rural more in the suburbs or route they’re closer to their family as you touched on Ivy. So something it’d be interesting to see.

Rickey Eilerman
So the thing about too is that there’s a lot of fire sale or pressure sales right now people like I gotta get a house you know might be exactly what they want. So they’re just jumping into something because they could afford it. It was cheap, it was close to work and they got a good interest rate right? They’re gonna want to sell soon they’re not you know, that’s not the end all be all house they’re just moving the move because they don’t want to keep paying rent. Get this on this rate. So I feel like we’re just gonna, it’s just gonna keep this we’ve entered into a new, we’ve entered into a new cycle for a while, that’s really strong. We believe that. Yeah, I agree.

Michael Chabot
Alright, so let’s, let’s, let’s now turn our focus on. And I want to start like this. So I know you guys own rental properties yourself. There are many of my clients that I hear from friends and family members that say, you know, I’ve always wanted to own rental property, I’d like to own three or four, I’d like to create a retirement plan, I want to talk about with you guys, you know, a little insight on how you did it. And then maybe how, you know, give advice to those people that want to put, you know, dip their toe in the water and get started. And then maybe if they have one or two, get 2345, etc.

Ivy Eilerman
I’ll start on that. So we actually, first house that we bought as an investment was a second home, actually. And it’s because we, we love to go to the lake. There’s Strom Thurmond Lake, near Augusta, Georgia. And we’ve gone there for years and years. And we stumbled upon an opportunity one day by boat, and I convinced my husband to let me or to put an offer on this house for me below asking price, and he didn’t think they take it. So he sent it just to make me happy, and they go away. Okay, so fast forward. You know, we we didn’t get to spend as much time there as we wanted to. So he said, You really should think about trying to rent this place out, you know, short term vacation rentals. So I looked into it and started doing that. And it ended up being very profitable for us. And it allowed us an income and additional income. And in saving that additional income, it allowed us to put money down to purchase another property that is close to the beach. So we started another short term vacation rental. And right now,

we are in the process of finalizing a renovation on another property that is actually in a college town because Airbnb says that’s the way to go. And, and then another one, that’s, that’s in the works as well. It just needs a full renovation. But you know, we just we just kind of took baby steps to get there and stumbled upon some really good opportunities. As far as the property and the timing, I will say that both of those purchases were over two years ago, the first two that are profitable now. But yeah, we were excited to see where it takes us. And it is our retirement plan. I’d like to call it my exit strategy. And so my plan is that I’m going to try to get as many profitable short term vacation rentals as I can. And then I’ll be able to retire one day, maybe in about 20 years.

Rickey Eilerman
She you missed it, you I gotta be husband and wife. We gotta be husband, wife, and she missed a huge, huge step here. We started out like everybody else. She was, you know, not doing lending at the moment she was processing. I was a firefighter going to school, and we were in Florida. And we had bought our first house to the VA and it was a very nice big house. We got it right when the market crashed. So we were able to afford it, you know, we got to 2008 fire sale kind of thing going on? Well, after we decided to move back to Georgia. Now. We were we couldn’t sell the house what we had into it just like everybody else, we own what we owed, and we’re gonna make any money and it was not beneficial. So we decided to rent that house, we moved to Georgia. So I had the VA and it was all her idea and we use the VA loan on that house. And then we used you had your entitlements. So I was able to use another portion of my entitlement for a cheaper house in Georgia. Well, that house in Georgia was, you know, 14 acres, whatever. We worked our butts off on that house. And then finally, we made a huge profit when we decided we made $70,000 on it in about two years. Just because of you know, our good had a good real estate agent at the time. And then we bought the house we’re in now. So that Florida House paid for itself. We use the equity that we made on the sale of our other house to pay off our debt. Get in a good position. Once that Florida House, I mean that was almost 1011 12 years ago, somewhere around there. That firehouse paid for itself. We had the VA and then after we upgraded that, you know you establish you save money we upgraded we were able to rent that thing for double what our mortgage was. So we were making a whole nother house payment on top of that house which enabled us to pay for the lake house and then the lake house made money we pay for the beach house. So we just used our investments to trickle and, you know, obviously, our careers, you know, took off and we were able to just composition ourselves, but we’re no different. Anybody else. It just started with that one. Oh, crap, we can’t sell this house, what are we going to do? Well, let’s figure it out. And that’s why having a good lender, and at the time, we had a good real estate agent that was like, Hey, I think this house is more valuable than what you’re getting for it. Let’s do it. And then the house that she just said, We just bought recently, that wasn’t for sale. I use my little, you know, real estate investing investigation techniques to track down a house that we like, I looked it up on the the the county website there, you know, the tax assessor site, sent them a Facebook message once I found it’s kind of a stalker, and found out who they were. So you want to sell this? Yeah, so what here’s the cost, here’s the numbers. And we got to do it. Once the house is remodeled, we’re gonna have $30,000 equity. So deals can still be gotten. And it always takes that first step. So we always tell people that don’t be scared, use your benefits, use your lender, figure out the best deal and save your money. That’s, that’s it.

Michael Chabot
What I love about that story is there was no special magic, you weren’t sitting on a pile of cash. Definitely not. You know, it was you used leverage, meaning you know, you had a mortgage on this house, you were able to rent it, use your VA benefit to go and buy something else. And it was you know, blood, sweat and tears, but you had the dream and you’re making it work and Ivy dropped some really good nuggets that I want to talk about, because it’s a huge trend that I’m seeing in the market. He talks about Airbnb, we could be I say VRBO. But I don’t know if it’s verbo yet ever. But short term vacation rentals. So I’ll just give you guys a quick example. And then I’ll let you expand on a client who bought one in Southern California. If she was to rent it long term, the rental income was about $6,000 a month, the short term vacation rental income was about $12,000 a month. Yeah. Craziness. Yeah. So let’s expand on that. Because a lot of my clients are like, man, that’s where I want to get into how do it is there anything special that you have to do? Is it more difficult, I want you to guys to expand on that?

Ivy Eilerman
Well, first, you have to make sure that the property is going to be eligible for that type of rental, because there are a lot of restrictions in different cities and communities. But if it is something that is available, it’s most definitely more profitable to do a short term vacation rental or VRBO, or Airbnb versus a long term rental. Both are great, I guess in their own way, because the there’s pros and cons. If you do short term vacation rental, and you’re managing that yourself, you’re gonna hear from your guests. Maybe during their stay maybe just in between, but you’ll have a lot of turnover. So you’ve got to make sure your maintenance is is done well. And you’re, you know, the yards cut and the that you’ve got good cleaning crew in there and between guests and that you’re following the COVID guidelines for Airbnb if you’re using them. So all that stuff is a little bit time consuming. And some people do opt to use a management company, which is great to

that if you’re more hands on and you just kind of want to understand the flow of it, I would definitely recommend doing it yourself for the first year, at least. So you understand the business flow of it. And also feel like in some cases, not with everyone but in some cases, when you hand it over to a management company, some of the quality of work that you’re you’re the quality of of cleanliness and things like that can be diminished when you’re not the one inspecting. So I’d recommend if you’re going to get into that type of investment, make sure the property is within you know, a couple hours strive at the most if anything comes up because there’s not always going to be someone that can show up when a tree limb falls on your guests car or whatever could possibly happen.

Rickey Eilerman
Yeah, Ricky definitely this TVR short term vacation rental certificate. Savannah right now has a list a waiting list. There’s the top person on that waiting list has been on there since 2017 for the historic district. So we people investors that are trying to come from like Tennessee to buy these Victorian mansions and stuff to Airbnb them they can’t. So you know, that’s a that’s a big deal. If you can’t you know if there’s 200 people on the list from 2017 Chances are you’re not gonna make any money. So that might be where okay, I know I want this house. Let me get this into a full time round. We’ll take advantage of the college students and the nurses and doctors transfer and so again, you know, real estate agents can check the values they you know, pull comps, just like we would want to sale how much can we get in rent? What’s the trend and then Like I just said there’s you need to study to you can’t just buy a well I take that back I know some people that have a camper in their driveway in their b&b it for a couple bucks most return you know find out how many and I think a lot of websites it correct me can tell you, you know the statistics but we have a friend that has a tidy house and it’s huge. Well, her turnovers not like ours, because we have a smaller one, you know, sleeps eight, her sleeps 14. So it’s kind of like you’re hitting the different niche markets. Another cool thing about the short term vacation rental is a you don’t have somebody there for long that you can’t stand. if you want to change the price, you can change the price and not worry about somebody getting upset and moving. You’re protected if you’re protected to an extent if they do end up trashing the place as well. Whereas the renter, you know, there’s no evictions, there’s no, you know, you don’t have to go through that process. So it definitely has been more profitable for us but and I agree 100% Keep it close, keep it in a normal commute or have a friend in the area that can go check it out, because I just left the the lake house yesterday as two and a half hour drive. Because the dishwasher was clogged and no repairman would come out. So that was like, you know, you get some stuff like that. But you got to play, you got to roll with the punches. Well, I got one more, one more tip for that, too. I got a client right now that he wants to do the Airbnb thing, but he owns a home. And he doesn’t really want to afford two mortgages. So he doesn’t just want to buy an Airbnb, my advice to him was fine, where you would want your forever home to be, like, you know, let’s say the lake or the beach or whatever. And pony up, yeah, if you want it, get it, you know, pay that extra 100,000 200,000, whatever it is, figure it out, rent it, and just know that that is your end goal. You know, you have a house back here that you can always do a full time around or whatever you want to do with. But you know, our eyes are on the lake house, we want to be there when they’re the beach, you know, we have a decision to make when we get to that point. So if somebody is willing to get started, don’t just do it just to do it, do it somewhere that you could actually make a life out of it too. So you’re not just wasting your time, you know, you’re not going to buy a you’re not gonna buy a Ferrari that you’re never intend to drive. I guess another term for that is

Ivy Eilerman
that you’re talking about this is air DNA. And you can search by the location to see what’s going to be the most profitable in terms of number of heads that it sleeps and things like that. So that’s pretty cool. And you said it was air DNA. All right, because that was one of the questions I was going to ask you.

Michael Chabot
So you guys dropped so many incredible nuggets right there. I want to talk a little bit more about all of them. I took notes. So either you talked about there’s there’s restrictions and areas and communities where you find that information. I actually rely on real estate agents for that information.

Rickey Eilerman
I got a question. Yeah, let’s so Savannah, I use that as an example because that’s the most popular. You just go to whoever wherever the city is, and just ask, you know, who’s who is who’s in charge of short term vacation rentals. For example, Tybee Island, we have to pay our taxes monthly. And they just did a referendum to stop short term vacation rentals. So if you’re not grandfathered in, you can’t get one right now. It’s a six month was it called a moratorium, a six months, six month hold. And, you know, that’s a political thing again, but those people that are under contract, to get the Airbnb they got up, they got to make sure they pay attention. And you do have to do research, you know, just like you would a car, a new grill or whatever, you look into it really hard and make sure it’s going to work. But most most, most communities have a website. And since stvr is such a popular thing, they’ve added a person for that.

Michael Chabot
And are there additional, I mean, I think some cities and you guys would know this, you have to pay licensing fees or additional fees, because I have a client who has one in Palm Desert California, and he was telling me that when he listed it he had to get a license to have short term vacation rental in that town. He had to pay additional fees and like additional tax is that something that’s the norm?

Ivy Eilerman
It varies.

Rickey Eilerman
Yep. So yes, I keep saying stvr That is the actual certificate we have to apply and pay for. Got it. Okay. But

Michael Chabot
what I would like to say and then I want you guys to expand on it is it can be extremely profitable, but like anything, do your homework, do your research, right? Get the right professionals on your team, right, the right lender or the right real estate agent, especially those that have experienced with it like yourselves, to help guide you in the right direction so that you make sure when you make that purchase. You don’t find yourself in a position where now all of a sudden you can’t turn it into an Airbnb or short term rental

Rickey Eilerman
Exactly. And I strongly believe that if your mortgage lender or your realtor like that, I would ask my realtor, do you own a home? Do you have rentals? If they don’t want a home or they don’t have rentals, then they probably don’t wanna be working with them. You know, they need someone who’s been through the trenches.

Ivy Eilerman
Yeah, 100%. I just have one more point. I really thought this would come up earlier, but I wanted to make sure it does. Using the local lender has been such a huge influence to on the contracts, because most people will not most most listing agents will not accept a contract from a big internet lending company without a local representative boots on the ground that they know exists. So that’s, that’s another thing I want to mention to people that are using big internet lending companies, you really want to consider.

Michael Chabot
Also applying with a local lender, even if you don’t end up choosing choosing them, but make sure that you get a pre qualification letter from them and submit your offer with that, because you’re going to have a greater chance of actually having your your offer approved. Accepted. Yeah, that’s a good point. I think, Ricky, you would agree as a realtor 100%, that you want to work with the lender that you know that if you have a question that you can call them, you can reach them, her, excuse me, you can reach he or she, and they’re there. They care about picking up the phone. The problem with these big conglomerate lenders is, if you’re a consumer, you just a number in the many, right. Whereas if you’re working with a local lender, like IV, she’s gonna pick up the phone, she cares, because she wants to help you. Because she cares about your family. And she also cares about helping you in the future. Right? I always tell people, if you can’t call them on the weekend, you know, or at least get a text message back. And if I got two offers that are identical, and one of them was somebody is belongs to the HBA or the local board or something like that, versus somebody I’ve never heard of, you know, you know, who’s getting a loan? You know, who’s getting the deal? So yeah, of course. And I would say IV, I’m sure you experienced this, I get calls a lot from agents saying, Well, you know, they were working with this other lender, and we want to write an offer, but we can’t get in touch with them because they don’t work nights and weekends or they don’t pick up their phone after five o’clock. And it’s like, well, if you’re going to operate your business that way you should do something else. It’s this is a 24/7 You know, boots on the ground. In the game, right?

Rickey Eilerman
Yep. 100%. Yeah.

Michael Chabot
Anything that we didn’t discuss on on short term rentals, vacation rentals? Actually, I know I had one question for you IV. So if somebody who’s looking to purchase one, how much do they typically need to put down? And I’ll pre frame it by saying I know that each person’s situation is different based on credit, debt to income ratios, etc. But on average, how much do they have to put down. So 20% down is actually the requirement for an investment property. Now, if you are like we were when we purchased our lake house, we actually did purchase it with the intention of making it our second home. So if you go there, now my shoes are in the closet.

Ivy Eilerman
I’ve got clothes in the dresser, I’ve got food in the pantry. So that is our true second home a second home purchase only requires 10% down. So for folks that are considering buying something that they’re going to make their forever home, eventually, that would be the way to go.

Rickey Eilerman
All right, Ricky, anything else you would like to add? That’s awesome. Yeah.

Michael Chabot
Keep your keep your Realtors close in or interview your realtors. And make sure your realtor knows your loan officer as the best the key now? Yeah, I think I like that you guys brought that up. Because it’s such a huge part of the equation. People don’t realize how important it is to have the right team lending and real estate in order to number one, get a deal accepted in this crazy competitive market. Right. And number two, to see it through to the finish line to make sure it closes Absolutely. Work with people that have a commitment in their community and have accountability to you is the big difference. Agreed? Yeah, like those big guys are those big guys aren’t shopping at the same grocery stores worrying if they’re gonna recognize you all that person didn’t close my loan. You know, IV IV is you know, she’s half of another last night. Yep. And I love that you went 100 number. I love that you brought that up Ricky because my mantra in my business is I want to know that if I run into one of my clients in the grocery store at the local hardware store that I can look them in the eyes, shake their hand and know that I did a great job for them. Sir. I agree with that. I know that’s the same philosophy you guys work and live by and

before we wrap this up anything maybe you want to add anything we didn’t ask? Anything else you’d like to add to this

Rickey Eilerman
Make sure your money season’s

money in the bank, or at least have it on record. You know, we can’t, we can’t take the safe money and make it happen. I know it can’t. But I’ve seen that a lot of people are making these sales and investments making money on their homes. And then they’re, they’re afraid of whatever’s going on. So they don’t

what he called appropriate it, and or I don’t know, whatever mortgage term. And so that’s, that’s a biggie. And then, you know, there’s still, there’s still deals to be gotten, we just got to ask, and I have not been ever afraid to go knock on somebody’s door and a house, it’s not for sale, or contact them or find tracking down. That’s what they want to sell their house. Especially if I tell people all the time, you know, there’s nothing on the market. If you see something you like, on your way to work, and man, I’d love to live there, I will go knock that door down and beg them to sell us a home. So that’s why you need

not another number type person on both ends. I love that.

Michael Chabot
Ivy anything you want to add?

Ivy Eilerman
I’m just I’m just thank you. Thank you so much for having us here today. And it’s kind of cool to to be able to chat about other things because I feel like we just move at nine miles an hour at all times don’t really sit down and and take the time to analyze what’s really going on. And it also helps me think about ways that we’ll be able to help clients going forward. So I appreciate you guys talking with me today.

Michael Chabot
Yeah, it’s my pleasure to have you guys, I have another business venture for you guys. It’s to start teaching others on how to buy these short term vacation rentals. Put a kid together, show them how to do it. You know, we think it’s a real need in the marketplace.

Rickey Eilerman
It is and we just we just dabbled into the commercial side, too. We’re renovating an old commercial building, and then do another company out there too. So you know, that’s another retail space for whoever wants it. So that’s kind of where we’re transitioning as well.

Michael Chabot
We’ll have to have you back on and talk about the commercial side and another episode because I know that’s another animal. And I would I would leave you with this. So Rickey talked about it cash is king except for in a real estate transaction when there’s a loan involved, right? We need to know where those where that money came from. And cash is not a good thing. So in cash doesn’t always win either. You know? No, it doesn’t. It doesn’t. Guys, I thank you so much for being here today. Appreciate all your help, all the knowledge. And you know, those of you watching and listening if you liked this, please share it like it comment. And I’m your host Michael Chabot, this is Your Mortgage Matters brought to you by Angel Oak Home Loans, and we’ll see you again on the next episode.