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David:
This is the BiggerPockets Podcast, show 678.

Jamil:
Now is the time for you to talk to your real estate agent about pitching creative options to their sellers, right? Maybe this is just the right time where you can go get a seller finance or a seller carryback, a subject to. These are the conversations that we can start having when there’s motivation and not a lot of equity to deal with.
So, I think that all of the things that we talked about today were fantastic and they opened the door to even more creative opportunities.

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets for Real Estate podcast, here today with a special episode where we talk about, on versus off market opportunities and what strategies work in both.
I’m joined today by my co-host, Jamil Damji, joining me live from San Diego.
Jamil, what’s going on?

Jamil:
Man, I’m just enjoying the market, enjoying San Diego, and all the deals out there, just sitting on the market ready for me to grab them.

David:
Right for the picking. That’s exactly right. And in today’s show, we share some very tactical strategies that anyone can implement, to get the best deal possible, while the market is in a place where it’s actually favorable for buyers to do so, finally.
Before we get into that, today’s quick tip is, real estate is relationship business and now more so than ever. Really focus on building relationships with the right people. Jamil talks in today’s show about how he gets deals before they hit the market. Realtors literally bring it to him and he gets to write an offer before it even goes on the MLS, and he even wholesales deals like this.
BiggerPockets wants to help you do this. There’s lots of agents like me that are on the agent finder. You can use the BiggerPockets agent finder to be connected to an agent in your area, or reach out to me or Jamil, if we happen to be in the area that you are for recommendations of agents that we like, we found through BiggerPockets.
All right, Jamil, any last words before we get into the show?

Jamil:
I’m excited to get these techniques out there so that people can get out there, take action and get some business.

David:
Now, last week you and I had a very interesting interview with Taylor Wing, who is a young man who’s crushing it, finding off market deals, and it’s not that uncommon to hear about off market. In fact, it’s sort of been the talk of the town for the last couple years. Off market has been idolized. If you just said, “I have an off market deal,” immediately people were like, “Ooh, tell me more. It was the pocket listing, right?”
Off market was just, yes, that was the coveted thing that every… It was Pearl Jam tickets in the nineties. Everybody wanted it. It was very hard to get. But the market has shifted, and as someone who has their finger on the pulse of the markets, I think that you and I are pretty well qualified to talk about this because we both purchase off market and on market and then we also make our livings from on market dealings. So tell me, Jamil, what have you been noticing in the last couple months that’s changed regarding the on market/off market dynamic?

Jamil:
Well, oddly enough, I think that it has reversed in with respect to how good of a deal you can actually get. Here’s what I mean.
When you’re talking to a homeowner, going direct to seller, and you are trying to explain to them how the market has shifted, that prices have dramatically corrected in certain markets, I think that it’s a much more difficult conversation to have with people, where their entire life isn’t dedicated to real estate.
Imagine this, you live in a neighborhood, a nice subdivision. The guy across the road has a model match to the house that you have. They completed a nice renovation and they sold at say, $500,000 in March of this year.
Now, we know March of this year was a very, very interesting time because the competition for housing was insane. Everything got bit up, sometimes 50, 60 or a hundred thousand dollars over what I think the house was really worth. That emotional equity comes into play. And what I think is happening now is sellers still haven’t come to terms that things have shifted, massively.
So what I’ve been seeing is that if you engage with a real estate agent, or if you go online and go to the MLS and look for opportunities that might have been sitting for some time or houses that might be listed at a higher price but are still in original condition. You know those listings I’m talking about, where the agent is literally basing their price expectation, or the seller is basing their price expectation, with respect to something that had sold in the same subdivision but was fully remodeled. Those houses exist all the time.
I think right now you are finding some incredible opportunities, having real conversations with realtors because they see it. Their phones have stopped ringing. Everything that we’re experiencing in the market, they’re experiencing in the market as well. And so it gives you that layer of relatability, and I think that if you can have that advocate that is speaking sense to your seller, you’ll do better.

David:
Yeah, we can dissect that a little bit. Let’s think about why the dynamic has changed. So when you would go off market, and I would even add this. Off market used to be valuable because you weren’t competing with other buyers. That was the main value is, theoretically it was you and the seller. You didn’t get that 12 offer competition where, “Well, do I have to go a million over or can I just go 800,000 over? I don’t want to go 200,000 more than I have to.” Nobody likes to do that.
So with off market, you can make a offer, get a counter. But the other benefit that still exists is, you get to talk to the seller. You get to figure out the story. That’s very, very, very valuable, especially if someone isn’t necessarily sophisticated on what the asset is worth or good with finances. They just have a problem. You can help solve it. It’s trickier to do that when you’re having to go through your agents.
But what you’re describing, I really like it. If you get to know the agents who have these deals, they know their client’s story. It used to be with listing agents that you couldn’t get them to tell you anything other than highest and best. It was like a parrot squawking on a pirate shoulder. “Highest and best. Highest the best.” And they called themselves an agent. It was very frustrating.
Well, now they know which of their clients are like, “Nah, I don’t have to sell. I’ll hold on to this thing and I’ll wait for the market to shift.” And which one are like, “Nope, I’ve got a house being built in Texas, right now. I got to sell to pay for it. Bring me an offer.” And if you can figure out that story, you’ll know which deals you should be pursuing with the more motivated sellers.

Jamil:
It’s exactly right. There’s four pillars that I would say really determine whether or not an opportunity is going to make sense for what we do as investors.
First and foremost, you always want to understand price. You want to understand condition. You need to understand the seller’s timeline and their motivation. See, for us, when we’re typically negotiating belly to belly with a seller, you can get the answers to those like you just said, very easily or through some rapport building and conversation.
But typically, in the past, real estate agents because of the fiduciary duty that they have to their sellers and as well as if you’re talking to a listing agent direct, they’ve got to be very careful. But I think people are more open right now to sharing the reality, and I’m hearing it more and more and more. You’ve got these sellers that are in a desperate situation.
Right now, especially if they’ve taken the time to list the property, you and I both know that very rarely can you just list a house, put it on the market, and it sell. You’ve got to prepare for these things. You’ve got to do some repairs or maybe clean up the house and maybe even move out of the house. There’s things that people do to make their house more attractive to a retail buyer.
So if you’re taking that investment and if you’re doing these things, I think it’s really to your advantage to have a conversation with the agent to at least find out motivation and timeline. I think those things can really help you make adjustments to the price.

David:
Well, off market could have been, in many cases it was, sort of the make me move approach. I don’t have to sell my house, but if you get me two million for it, I’ll sell it. Get me 800. So then, some realtor would go and say, “Hey, I got an off market deal. It would probably sell for 950 if I put it on the market, but you could get it for 940,” and people were moving forward on those deals.
But now that isn’t the case, a lot of those non-motivated people, they’re sitting in the off market space. The motivated people, like you said, if you’re putting your house on the MLS, you’ve done some work. You have to be motivated to do that. You had to get it cleaned up. You had to spruce things up. You had to go get it ready for pictures. You had to spend some money on the pictures. You had to meet with the realtor. The realtor had to put some time and attention into this. It’s actually takes quite a bit of time to get a house listed on the MLS. It’s not just you push a button and it happens. So everyone’s motivated. The realtor’s motivated, the seller is motivated and the other people that are involved in the transaction are motivated.
So going on market, you typically will find a higher percentage of motivated buyers… Or sorry, motivated sellers and that’s what we’re looking for. So, I wanted to play a little bit of a game with you. I wanted to take turns seeing if you and I could share some of the ways that we know that a market has shifted from a seller’s market to a buyer’s market. Sound good?

Jamil:
I love it, man. Let’s go.

David:
Okay, I’ll go first.
One way that I can tell. The number of rings that it takes before a listing agent answers their phone. You try to call listening agent during the seller’s market, they don’t answer their phone. You have experiences like that too?

Jamil:
No, they’re overwhelmed. Oh my gosh. It was out of control. It was one of the most challenging things I would actually find in connecting and trying to buy houses was realtors just took a completely different… And I all due respect to people who work at airports. I travel a lot and so I definitely respect what they do but did you notice that there was when you couldn’t get away with even saying, “Boo” to anybody at the airport. You have to just be nice to everybody at an airport, right?

David:
That was that whole, you can’t say, “bomb” on an airplane skit, from Meet the Parents?

Jamil:
Yeah, yeah. You can’t do anything at an airport right now that somebody wouldn’t like because you can just get put on the no-fly list and thrown out. Right? It’s like, and that’s just what it is. And so everybody at airports is just insanely rude. I can’t… I’m not finding even the people at the coffee shop aren’t really nice to you at the airport anymore.
So, I feel like that’s sort of what happened with real estate agents. They got this power rush and they were like, “No, I don’t even have to answer my phone. You know what? I’m going to go get a recent headshot. I’m going to go to get a recent headshot and you’re going to do business with me even though I look 90 years old.”

David:
That could be one of the ones you say, right? The market shifted when the realtors are bold enough to put a recent headshot up.

Jamil:
Yeah.

David:
That’s a joke.

Jamil:
I’m going to go with that one.

David:
Realtors use headshots from… Okay, that’s going to be yours. It reminds me of a scene in the Office with Dwight and Jim where Dwight gets a raise and Jim says something like, “Never before has such little power led to someone having such a big head in the history of man.” That was listing agents, right? I sell one house a year and I have a listing and they would just be running around a 16 year old in their dad’s Ferrari, thinking that they were hot stuff. So true.

Jamil:
Insane. The other thing that I’ve noticed has happened very rapidly and it never before, is realtors are really interested in me now. When I do get ahold of them on the phone and I start talking to them, they want to know all about me. They want my full name now. They’re taking the time to actually write things down, right? Before it was just like, “Oh no, you send me a text. Oh no, you send me an email. Oh no, you do everything and make sure that you’re finding. I’ll forget you. I get so many people call me. So many people text me. There’s no chance I’m going to remember you at 5:00 PM today.”
Now it’s like, “Oh, hold on a second. Okay, you said your name was Jamil and how do I pronounce that? Wonderful. Oh my God. Such an interesting name. Where are you from? Where are you from?”

David:
That’s so true.

Jamil:
And you’re getting real…

David:
Descended from Mount Olympics.

Jamil:
It’s real. Yes.

David:
They’re rubbing elbows with mere mortals again.

Jamil:
So good.

David:
Okay, that’s a good one. How about this. The number of agents that will follow you on social media after you make contact? So sometimes when I call the listing agent directly, not only do they answer their phone after one ring, when it used to be you could call four times in a row and they were just going to send you to voicemail.
Now you actually see that they go follow you on Instagram, follow you on Facebook. After they get your name, they want to go see what’s up with this. Is this a real buyer? Is this someone I could actually make friends with? Have you noticed that too?

Jamil:
My gosh, I have actually had that happen to me while I was on the phone with an agent. My life has gotten a little bit more public in the last couple of years and so I have a blue check and I was on call with a realtor who searched me and found me on Instagram and said, “Oh my gosh, you have a blue check mark besides your name.” And to me that’s not a deal anymore. When I first got to blue check, it got to my head a little bit. I purposely left comments on people’s pages just to be like, yeah, because I feel like I had jewelry now. You got Instagram jewelry when you have a blue check. I’m over it now.
But when that agent said that, I was like, “Oh wow, you literally just went to IG right now, typed in my name, found me, and now you’re scrolling through my photos to see if I’m legit.”

David:
That’s very true. I’ve walked out of open houses and had realtors that looked me up and when I came back later that day, they were saying things that they wouldn’t have normally known. You didn’t see that when the market was hot. Nobody cared who you were. All they cared about was that price at the top of that residential purchase agreement that you better be sending over.
All right, how about this one? What about the percentage of times that we hear the phrase, the sellers are open to all offers?

Jamil:
Oh my god. What does that say? It’s tell me you’re desperate without telling me you’re desperate. Really though the number of like that, it’s like the sellers are open to anything, but back in the day… Well when I say back in the day, I mean March, okay?

David:
Yeah, right.

Jamil:
Back in the day, in the other world, you would literally have no low balls. You dare ask for repairs. The seller is not open to anything. I would love this to be a non-refundable earnest deposit, like as-is, all of the things. And now it’s like the sellers are open to all offers it. It’s like, what I almost want to know is, was it the sellers who became monsters or was it their realtors who became monsters when the market went crazy? Because I think a lot of those things the sellers wouldn’t even know to do, right?
What seller, who is an accountant out there in the world and doesn’t trade real estate very often, how many of them do you think know about escalation clauses?

David:
I mean escalation clauses weren’t even talked about until it was a ridiculously hot offer and it was a way for the buyer’s agents to be like, “Look, I don’t want to have to write 14 offers. When a higher one comes in, can I just write an escalation clause and be done with it?”

Jamil:
Yeah. For those of you that don’t know what an escalation clause, it’s what David just said, but think of it this way. Your agent was basically saying, “Hey look. If you get an offer of 450, we’ll go $5,000 higher up to 600,000.” How likely do you think that that offer hit 600 grand? I mean more often than not, it got there. I’m not trying to say that people were not being honest with respect to what those highest and best numbers were, but there was a lot of money that got thrown on the table that probably shouldn’t have.

David:
Yeah. That’s not hard to do. When you’re the listening agent and you get escalation clauses where they’re like, “Hey, we’ll pay 10,000 more than your highest offer and your highest offer is 550, you could just ask your buddy in the office, ‘Can you send me over an offer at 575?’” And then like, “Oh, now we’re getting 585.” That type of stuff would happen frequently, which is why I never ever advised escalation clauses. There’s no way that you can tell. We never use those on the David Greene team and sometimes buyers would get upset because they thought it was a guarantee and far from it.
What was the one that you mentioned? I forgot you had an example.

Jamil:
Oh, I was just talking about those head shots, man. Just coming in and really what I was thinking too? These promotional companies that make the fridge magnets and all the notepads and the pens, for a year, they had no business from realtors. Not a single realtor was like, “I’m going to invest in promotional items this year and going to make sure that people remember me when they’re using magnets.” No, no. The agents stopped doing anything. They stopped caring. A lot of them just were like, “I don’t even have to brush my teeth and I get paid.”
I think everything has changed. It’s a totally different world. Totally different world. I, oh… There was another thing, David, that I had no I’d noticed. So, price reductions. Oh my gosh, right? Price reductions. They didn’t happen for the better part of the early part of 2022, but now they’re very, very prevalent and I’ve talked to some realtors and have asked them their opinion on price reductions and why they do them.
Some of them think that when they make a reduction in price that it repopulates in the MLS and it bumps the listing up to a higher visibility and so they like doing that because if there’s an agent that may be a little bit less likely to scroll through all of the listings, maybe they just want to skim off the top, those realtors will now see, or I should say real estate agents because now I learn the difference between a realtor and a real estate agent and I didn’t realize that there was a distinction. But those real estate agents, they would see that and now these price reductions have become silly, right? It’s like every real estate agent wants their listing to be at the top, so you’re getting price reductions of a hundred bucks.

David:
There’s a lot of that. So, that you’re right. What happens is when people set their buyers up for a search, what happens is you can look for every house within parameters, like this price range, this size, and it will show you all of them.
Then after that, it won’t show you the same houses every day you’ve seen, it will only show you the new stuff that just came on, or something that had a price reduction. So that was a little trick that we figured out. If we’re not getting traction, we can do a price reduction. People will see it again, which might make sense after it’s been on the market a week. It’s not still product yet, but it didn’t get an offer in the first week, we would do that. But like you said, people just, they always do what people do. They get a good thing and they ruin it.
So you have realtors dropping it by a hundred dollars or by $50 and then it shows price reduction and it like the little negative 50 or something, so that’s another sign that you’re in a buyer’s market is when you start seeing ridiculous things like that. Or when the seller’s like, “Well nobody wants my house for 900, so let’s drop it to 875.” I promise you brother, if no one was buying it at 900, because there’s so much competition, it doesn’t make sense at 875. You actually have to accept, I need to drop my price to 800 or 775. The market has gotten away from me.
So in these hot markets you’ll frequently see these price reductions that are just minuscule that aren’t even keeping up with how fast the market is dropping and it’s almost funny. What is going on in their head that they’re like, “Maybe if I just change this one little thing, the universe will bless me with the buyer that I’m looking for.” And that’s not how it works.

Jamil:
It’s not. It’s lazy.

David:
I agree with you. That’s another…

Jamil:
Ir’s super lazy and I’m sorry if you’re listening to this and I’m talking to you right now. We’re onto you.

David:
We are onto you and we are sharing the information with BiggerPockets, as Jamil who works with realtors and me who is a realtor, we know the schemes, we know the tricks, we live in the matrix and they’re not going to work on us.

Jamil:
What about these interesting times that people are conducting their showings. Back in the day first, and when I say back in the day again guys, I mean March. In March, there were no open houses. There was just, it wasn’t going to happen. But now they’re doing broker opens and they’re doing twilight open houses and they get wine. You could actually feed your entire family for a whole… I bet you could feed your family for an entire month going around from open house to open house to open house and have some of the best food. You’d get a charcuterie board everywhere you went for the next 30 days if you wanted to, on the house.

David:
This is such a good example because I know what it’s like to be in the agent’s shoes. When you have that seller that you want to list at 975, they insist on going in at 1.1 because they think they know better and they’re looking at prices from back in the day, March, thinking that they’re still going to get that again. Right?
And so the house isn’t selling and you go back to them. You’re like, “Look, it’s been four weeks. We’ve had two showings. Not only are they not writing offers, no one’s even looking at your house because it’s priced too high. When they see what 1.1 gets them, they have better options. And when they, the people that can actually afford this house are looking at the 975 range, they’re not looking at the 1.1. We got to drop it.” And they never say, “Yes.” They always say, “Well, have you held a twilight open house? Maybe if you get the twilight and you get better cheese. What cheese are you putting out, actually? Are using the cheap stuff? I’m paying you 3%. I want the nice cheese. That’s going to get people to come see my house.”
You scratch your head because they will never know there is an open house because they’re not looking at houses like yours in the 1.1 price range. It’s like it’s so frustrating when you’re dealing with those sellers that still think that way and you’re as the agent and you have to tell them, “No, you maniac, this twilight open house with all your expensive cheese, is not going to provide any more people showing up. And if they do, it’s just going to, your neighbors that come eat your cheese.”

Jamil:
My gosh, dude. Now I just figured out where they came up with the name Laughing Cow cheese. The cow is laughing at you for putting the cheese in there, you dummies.

David:
That’s it. So if you’re listening to this and your house is listed at 1.1, it’s getting two showings, drop it to 975.
All right, let’s move on to the next hero. We are going to talk about on market versus off market strategies, particularly what you can do if you want to get a deal on market house.
Now before we go there, Jamil, do you have any advice for off market deals? Is there anything you’re seeing particularly that’s working or do you just think that space isn’t as good of an option right now?

Jamil:
Well, I do have one. I got one trick. For off market doesn’t necessarily have to be without agent. Okay? Let’s understand the distinction between off market just means it’s not listed on the MLS, but that doesn’t mean that it doesn’t have agent representation, or could be a pocket listing, or there could be a relationship that a realtor has with a specific seller that they know they’re not quite ready yet, but it could be coming to market at some point. There is a massive opportunity for the entire BiggerPockets audience to hear this, take action, and get it done.
You want to take advantage of all of the industry knowhow or all the industry knowledge, all of the current market condition knowledge, but still get an off market house, start having conversations with realtors, building relationships with them and finding out if they have anything coming to market that’s an original condition or needing a substantial amount of work that you might be able to take a look at before it gets listed.
You see, there’s nothing that an agent hates more than a stale listing and they know that if they list some of these really gnarly houses on the MLS, it’s just going to collect days on market and it’s actually going to be to the detriment of the seller. You can convince a realtor to really take that into consideration and present that solution to a seller to say, “Hey, would you just like to hear from this investor and see what their offer would be? I think that we might be able to get him to pay more than he may have been able to pay if it was just on the market.” And that gives you that entrance through the side or back door guys, that still gets you an off market deal but still is being dealt with through a real estate professional who can talk sense into your seller.

David:
And someone might hear that and immediately think that’s not going to work. I tried it before. If you tried it during a seller’s market, it wasn’t it likely to work because the agent wants the ego boost to being able to go drive their dad’s Ferrari. I have a listing, I am now posh, I put my pinky out when I drink. I swirl my wine that I have at breakfast. Nothing gets a realtor going more than being able to say they have a one or two expensive listings and so you saw just the power went to their head right off the bat. It was very frustrating.
Not like that. The tides have turned. These realtors are now desperate. Like, “You got to buyer. Oh my god, let’s talk. My seller’s open to any offer,” is what’s coming out a lot. So I agree. Asking realtors for something they have coming, especially if they’re thinking they might get to double end it, they will prioritize you over putting it on the market, having to spend money on pictures, having to put the worker going to MLS, having to have the talk with their seller every single week why nobody looked at the house and everyone blames the realtor when that happens. That’s just how this works. The question’s always, “What are you doing to sell my house?”

Jamil:
And those gnarly houses, David, like those ones where the seller is really, really worried about how much they’re going to have to do to get the house prepped for the listing. I mean when you’re talking a hoarder situation or something that’s just falling to pieces, I mean those people really need our offers, they need our help, and you can put together some pretty great situations.
Imagine this, the realtor gets to double end it. They take 4% instead of 6%. The additional 2% goes back to the seller and it’s a win-win-win. What a beautiful day.

David:
So, if you’re going to look for off market deals that don’t have representation, that can help you too. I would say go for both. Talk to realtors about what they have coming on and if you come across a seller that might want to sell their house, they’re probably hearing the same news everyone else is hearing and there’s a good chance they understand the market’s turning I want to sell before it gets worse. That was different than I won’t sell, unless I get a ridiculously good offer.
The psychology, the collective psychology of the entire market has shifted drastically, and that’s a situation where you have an advantage as well. The standard seller doesn’t listen to the podcast, doesn’t follow the news, doesn’t know what the other houses are selling for. They’re not aware of the market we are. They don’t know what it costs to fix something. If they know they have a house with problems they don’t know. They can’t convert that problem into a dollar. We can because we live in this industry all the time. So, you have an advantage dealing with a seller who doesn’t have representation and you also have an advantage dealing with an agent with the deal before it’s gone to the market. Take advantage of both of those situations and off market opportunities.

Jamil:
Absolutely.

David:
All right, let’s talk about some on market strategies now that will work. Frankly, this is what I’ve been using. I bought a handful of deals off market, maybe I can think of two, maybe three, but probably 15, 16 that I bought on market. And it’s funny because I’m finding that there is more motivation on market, especially when you follow the techniques that we are about to give you.
So take out your pencil or if you’re not old, take out your phone and write some notes down where people actually take notes now. Don’t know why I said pencil. I’m sure the day is coming when people will look at a pencil and be the same as if we looked at a cassette player.
Do you think, Jamil, I’ve always wondered, how old do you think people are that don’t know why the save icon is a floppy disc on a computer?

Jamil:
I mean I bet you, right, there’s like a whole generation that doesn’t understand it. That they have no idea what it is. They don’t even know what they’d never seen a three and a half inch floppy disc. Or what about the floppy discs before that? Remember the black ones with the little film on it and you couldn’t touch them because if you touched them in that little spot, then they would be… It would… It’s like wiping the fairy dust off of fairy. They can’t fly anymore.

David:
Like exposing your camera film to the sun, which now there is no camera film. You don’t have to worry about that. Yeah, that was a thing we were really worried about that you are hold your breath when you’re like, “Oh God, I have to take the film out of my camera. I hope I don’t do it wrong.” Don’t have to worry about that anymore either. All right.
So one of the things that we’ve talked about is sellers are going to be more motivated if they’ve gone through the work of putting their house on the market.
Another is the emotional influences that are inherent in on market deals. So sellers are often looking at other homes, while their house is on the market. They don’t just sit there like a disciplined person should and say, “I’m going to wait for my house to go into contract, see what price I get, wait for contingencies to be waived, then I will go look at houses.”
No, no, no, no, no. They get emotionally involved in their next house while their house is sitting, which creates this pressure cooker. Because on one side they have pressure, “I want to put this house in contract. Someone else is going to buy it, I want to move on.”
And on the other side, they have this pressure of, “Nobody’s going to buy my house. Prices are dropping. Rates are going up, and as rates go up, my house is worth less. But at the same time, the house I want to buy, I’m going to have a higher rate. I got to do something now.” And you want to be the person to come in and take the pressure off of them.

Jamil:
I saw that play out right in front of my eyes right now on a flip. We had a flip that we had a seller come in, they wanted the house so bad. They said, We have to sell our house.” And we thought, “No, we can’t do a contingent offer. This is never going to work.” But we asked if they would allow us to help them with pricing. So, we had to approve the price that they were going to list the property at, in order for us to accept the contingent offer and they agreed. They agreed to that. And so we helped them come up with the listing price and they actually went under contract, after multiple offers in this crazy market.
So, we had them listed pretty low, but they still got multiple offers and so that absolutely worked. And what you just described right now, David, is on the nose. It’s on the nose. When you create that pressure cooker and you can be the person that comes in and relieves the pressure, there’s nothing like that. And you want to talk about getting a tremendous opportunity, rewind what he just said. Actually, what’s the new word for rewind? Is there a new technical word for rewind?

David:
Yeah, we don’t rewind anymore. We’re talking about this old technology. That’s exactly right. Put your finger on the red circle and move it to the left.

Jamil:
I love it.

David:
So, that’s why having a good agent really helps, right? Because if you’ve got me or another agent who actually owns property, we understand the psychological component to negotiating, not just the numbers element of it. Real estate is very, very emotional even though people don’t realize it.
All right, let’s get into the next one. This is the most important thing to look at of all of your thing. It’s that the number of days the house is on market. When I’m looking for deals, I don’t even look at something that hasn’t been on for 30 to 40 days. When I put my search together, I start at 30 to 40 days and then I prioritize 80, 90, a hundred days on the market.
So when people say, “Well it’s easy for you to find deals. If you started looking at the clearance bin, you’d find that the store was much more likely to negotiate on the price as well. These are sellers that have already had their dreams destroyed of selling with multiple offers really easy. They’ve been told at this point, “You have to fix up your house. You have to make repairs. You have to clean it. It can’t smell like dog urine.” There’s things that have to be done and they’ve just staunchly decided they would not do that. They’ve already been marinating in worry and they are prime for you to come in with a very aggressive offer that won’t look bad to them because it’s better than no offer.

Jamil:
I totally agree. There’s one caveat. There’s one little scenario where this has a little bit of a lower likelihood to work and that’s when they went under contract, immediately after listing, and it fell out and then it sits. Oh, when a seller gets that first taste of we’re under contract and they think that the house was going to work at that number and usually it’s a wholesaler that comes in and screws it up for everybody because they’ll go in and put it under contract too high. They’re thinking that there’s a deal there. They comped it wrong and there’s no deal there. And now all of a sudden the seller has this misguided belief that their house will actually trade at that number and now it’s this standoff and the seller is trying to get it. But high day is on market, David, it is the holy grail of getting a good deal.

David:
Absolutely. Now you bring up a really good point that would relate to the next point we’re going to make here, which is look for houses that are back on the market.
So back on the market means it was under contract, it fell out, it’s back on the market. There’s two ways this goes. The first is what you just said, Jamil. They got a taste of thinking their house is worth way more than it is and now they don’t want to accept that it didn’t sell at that price. In their head, if they sell for less, they’re losing money. Even though the market is clearly telling them that wasn’t accurate. The other person, receives that same information, but goes a different direction. They go, “Oh my God, I was this close to getting it sold. I had my next house picked out. I had the furniture ordered. I walked the house with my kids and they picked out their bedrooms. My whole family is ready to move in. We’re already researching the schools.” They made that mistake and now their house falls out of the market and their dream is being threatened and maybe their house was under contract at 900,000 and they only owe 500,000.
For that person, you go write an offer at 775. That still makes sense because it keeps their dream alive. They’re not just looking at the money.

Jamil:
This is the magic scenario, right? Because you’ve got that person emotionally invested. And guys, we really have to take this to heart. When David says this, it is absolutely facts. People will walk away from hundreds of thousands of dollars of perceived value, in order to keep their emotional dream alive.
I can tell you this, as a person who was a real estate investor myself. The dumbest decisions I’ve ever made was buying personal residences. Ever. I know better. I always know better. I know what to buy, I know how to get a deal. But it’s when my wife looks at me and says, “But honey, I really love it.” And my children are, like you said, picking out their rooms and thinking about which of their friends live nearby so that who are they going to hang out with and play with?
I was actually, funny enough, I was trying to buy a house not too long ago. For tax purposes, I was trying to see if I could buy a house in my LLC and then rent it to myself. It doesn’t work. There’s a arms length situation there that didn’t make it work. But we were going to go buy a very expensive home and to make this situation work as a tax break. My wife got really invested into it and my kids got really invested into it and it didn’t work out for us and it was heartbreaking, brother. I would walked away from hundreds of thousands of dollars just to make that situation real.

David:
There’s a person involved in the BiggerPockets community who I will not say their name, who at one point wanted to buy a primary residence and didn’t quite have enough capital to make it happen. They came to me and said, “Hey, can you lend me a couple hundred thousand dollars so I can close on this house? I’ll pay you back later.” And it was a two million primary residence that they had fallen in love with. It was the same story that you’re telling. Beautiful backyard. Every amenity they could ever hope for. They fell in love with the house and there was 10 other people that also fell in love with it. And I was like, “All right, I’ll just tell you right now. You’re my friend. I’ll let you borrow the money if you want. So, let’s just set that aside. Let’s talk about if this is a good move for you.”
I talked sense into them. Friends don’t let friends overspend on primary residence moments and I am so glad that they admitted, “I don’t want to do this. I’m kind of pissed at you for telling me this, but I’m just going to listen to you because you’ve been in longer than me.”
Two months later, the entire market shifted. That would’ve been one of those stories that you hear about someone bought their dream home and then lost it to foreclosure because they would’ve overpaid. But man, that never goes away. That fear is real. You got to talk to people when you’re getting ready to make a decision like that because you need that perspective. It’s like you get drunk on this home. Home intoxication is a real thing. So, I agree. You got to be careful on those primaries.

Jamil:
I want to get that put on a t-shirt; Friends Don’t Let Friends Overspend On Their Primary Residences. I’m going to put that on a shirt.

David:
Yes, that’s good.
Next thing is listen to the news. If you hear Jerome Powell saying the market’s going to crash. We’re going to keep raising rates. The sky’s falling. All the home sellers are hearing that too. And I will purposely, when I hear the Fed come out with bad news or all the YouTube channels saying, “Oh terrible things are going to happen,” I make it a priority to go write more aggressive offers the next couple days because the sellers are probably hearing the exact same thing and you want to hit people when they’re in that panic mode.

Jamil:
Yeah, that’s a brilliant strategy and you know what? I haven’t used it enough, but I think that that gives us a lot of days to look forward to. I mean, leading up to a rate hike, I think you could and we know that they’re coming. We know that there’s more coming down around the corner. I think that you could start having those conversations with homeowners prior to, so if we’re the week leading up to a rate hike and then the week following a rate hike, I think that you’ve got two weeks of juicy negotiating opportunity there. I think that’s brilliant, David, and I would absolutely, absolutely advise people to do that.

David:
That is actually another method. I call it, having several lines in the water. So, I don’t usually pursue one house at a time. I’ve got several offers and actually this combine two methods here.
I’ll say let’s, I’ve got six houses in areas I really like. I really like the property they’re listed at. Let’s just assume all of them are at 1.2 million. I don’t want to write an offer that’s going to be accepted immediately upon issuing it. That means I went too high. I look at an offer. In a seller’s market, when they have all the power, you got to throw haymakers. You got to knock them out in one punch. That’s your only chance. This you better throw a superman punch to start the fight and if you don’t get it, you’re getting torn apart.
But in a buyer’s market, you want to throw a jab. An offer is just meant to test them. How motivated are they? How far down do they come off their price in their counter offer? Are they eager or are they not eager? If they’re not eager, I just let it go. If they are, now that starts the negotiating process of how far can I get you down?
If I do that with five or six different homes and I’ve got several different sellers that I’m working on over the next coming weeks, like you said, they they’re at 1.2, I write it at 900 or I write it at 950. They counter me at 1,000,050. They came down a lot. Okay, that’s a motivated person. I stay in touch with them, but I don’t try to put it in a contract the next day. I want to see is the news going to turn bad while we’re here? Are rates going to go up again? What are they thinking? Are they falling into Chicken Little? As the days on market, maybe I wrote the offer, it was at 40, now it’s at 60. Now it’s at 70. That’s stacking in my favor as the buyer. I have the leverage, I have the thing they want, which is the ability to close. They used to have the thing everyone else wanted, which was the asset.
So, I’ve got all these lines in the water and the fish are coming towards the boat at varying degrees and I’m just waiting to see which one of these fish gives up and just jumps on into the boat.

Jamil:
Brother, that’s such a masterful negotiation strategy. One of the ones that I’ve been really paying attention to as well, is how much of a relationship I can build with the listing agent. And that brings us to the next one is really finding ways to create positive relationships with these listing agents, where maybe they’ll let you do a dual representation. Maybe there’s some states that don’t allow it and I understand that it’s not going to work all the time. But even in those markets where you can’t do a dual representation, I will still contact a listing agent, create a relationship with them, and then I’ll ask, “Since I’m not working with anybody, do you have somebody that you could refer me to, that could write the offer for me?” And now all of a sudden it’s their daughter or their cousin or somebody in their office that they owe a favor to.
So, you’re still getting that proximity. You’re still aligning to their side of the equation, which wins them over essentially. Because look, if it’s a family member that might just be coming into their business as well. If it’s a friend that they owe a favor to, this is emotional income. This is an opportunity for them to scratch somebody’s back, that they’ve been wanting to scratch for a while.
So aligning yourself with listing agents so that you gain proximity, closer proximity to the seller, it’s such a powerful way to play guys. Because now they’re gunning for your offer to be accepted. They’re telling the seller all the reasons why you’re the person that they should go with.

David:
That is another point we have on our list, Jamil. It’s like you were born to do this. You have to win over the listing agent and this is something I learned in the real estate agent game, myself. If the listing agent takes the offer, let’s say their client’s house is listed at a million and my client wrote an offer at 900,000. There’s two ways it could be presented.
“Hey guys. I have an offer I’m legally obligated to present you to, but just don’t worry, we’re not even going to consider it. These idiots think that they can buy your house for 900,000. They’re low balling jerks. Don’t worry about it. I’m going to get you a better offer. Hang in there. We’re just going to reject this. Okay?”
Versus, “Hey guys, good news. We got an offer and it’s actually not too far off. We’ve been considering a price reduction. We might not have to do it. This is close to what we were thinking we were going to have to reduce it to and they’re willing to shorten their contingencies. They wrote it at $900,000 and there’s a very strong earnest money deposit here. What do you guys think about this? We can start looking at your next house.”
The lens that the listing agent presents that information to the client through, is wildly important. And this is why if your agent is a butt-head or has a big ego and gets into it with the other people, it has a significant effect on how your offer is presented.
Now when there’s going to be 12 offers, it doesn’t matter, they’re just going to go with the highest price in the best terms. But in the situation where there’s not multiple offer, that human component is very powerful. And what you’re describing there, Jamil, is how you yourself can win over the listening agent.
One of the things when I’ve got those six lines in the water, one of the actual metrics I’m looking at is not just the home, it’s the agent. If I got an agent who’s not interested in us, who doesn’t really get back to us, who doesn’t seem like he’s that motivated, I won’t prioritize that fish or that line, nearly as much as the other ones because I got an uphill battle trying to convince that agent to sell the client.
When I have an agent that’s like, “Please get me an offer. Let’s make this happen,” and I know they’re going to present my information in a positive light, I will even coach that agent. I will say, “Hey, here’s the way you should present this to the client. I know the price is low, however, tell them that you negotiated an extra $12,000 higher than I was stuck on and tell the clients that you saved them an extra 12 grand if they take this and then just we’ll have a $25,000 closing cost credit, which you can just tell them is standard in the market right now.”
If they take what advice I give and they actually go say that, you’d be amazed how often the sellers will come back and accept that. I had this on a house I put under contract a couple days ago. They were listed at 1.175. I wrote the offer at 1,000,050 with about 40,000 in closing cost credits. They said, “No.” I waited. Or no, then they countered me in 1,000,075. I waited. They came back and accepted 1,000,050. I said, “Well, that was my offer four weeks ago before they raised rates. Now you’re going to have to do better.” I didn’t even send a new offer. I told my agent what to say. He went to their agent, they came back and said, “We’ll do 1,000,025,” and I still got the closing cost credits. So now I’m under a million on the net price on a house that was listed at 1.175 that I’m going to double the size of through the BRRRR Method.
All of that was just because of the way that we got their agent to communicate the information to them. I timed it with the rates just went up and the Fed said they’re going to keep raising rates, so now the agent can go to the client and, “Guys, if we don’t take this offer, it’s going to be even worse in a month. The market’s going down.”
So, those are all ways like Jamil, that what you said, there’s nuance this. It’s not just about shotgunning offers, like what worked in 2015, when the advice was, just write a hundred offers and five of them will be accepted and of those you’ll close on three. This is a different space.

Jamil:
That was crummy advice then too, though. That was crummy advice back then, as well. You know what? This guy’s… Let’s understand that this is a business of relationships, right?
Let me tell you, there’s one thing that I have very rarely done. Multiple deals with a homeowner, when I go seller direct. Very rarely do you go and go direct to seller and build a relationship and do such a great job for them that they give you 10 more houses. Doesn’t happen, right? Because you build a relationship or they have one house and they sell you their one house, and that’s the end of the day.
But I can tell you I’ve got multiple relationships, in fact, dozens of relationships out there with real estate agents, that I’ve done upwards of 10 to 15 houses with on a year to year basis. Now just imagine that. These are friends. These are people that invite me to their Christmas parties. These are people that I hear about what’s going on with their lives and with their children’s lives. And we’re actually in each other’s worlds. I get first look at any listing those agents have. I get to write them a cash offer, day one, and they’re always telling their sellers how great of an investor I am and how I always perform.
And even when the market was nutty, even when prices went, skyrocketed, I was still in the conversation.

David:
That’s brilliant. That’s where the money’s going to come from. Okay, we covered a couple points to the example I gave. One of them was make your offer and if they don’t accept it right away, you can go back to the agent and say, “Hey, that was our offer on that day. The market has decreased. If they want to sell me their house, it’s going to be less. I would advise you to accept the offer before it gets worse.” Jonathan Greene mentioned that on previous podcast we did. I think that that is good. You don’t always have to say it as directly, but if they come back to you, it is okay to say, “Yeah, that was my offer three weeks ago. The market’s not as good.”
Another one that we mentioned there was to have several lines in the water and then to set a follow up system. So, I’ll write an offer. They say, “Thank you, but no.” Or they counter, but their counter isn’t aggressive enough. That doesn’t mean I give up. They go into a CRM. We get a reminder. They go on a spreadsheet of offers I’ve written and every week we reach out and say, “Hey, has anything changed?” Because guys, things change. They find that next house they want to buy, they hear the news and they get scared. They realize that, okay, I was listed way too high. They hear some horror story of somebody else who had to sell their house for way less. They get emotional and in that moment, they go sell and this is how people do things.
This is why stocks, crypto, everything tends to crash at once. Everyone hears the same news. Everyone goes and immediately panics and does the same thing and this is why you see markets collectively go up and down. So, use that to your advantage.
The last point that I have here is going to be a silly one, but it’s to look for poor marketing pictures. The way that real estate sales used to work is that you would have to, as an agent, actually do work to go market a property. You had to find ways to get it in front of someone. The newspaper, a periodical, a magazine, the classifieds, some billboard, right? How can I get someone to see this house and make them interested in it and then they will call.
And the problem is, realtors still act like that’s how it works. You’ll hear them say, “I will get your house in front of more eyeballs than anybody else ever can. I’m going to advertise it on Facebook where everyone’s going to see it.” Until those go, “Ooh, that sounds good to me. We’re on Facebook.”
And you never think, Has any of us ever saw a house on Facebook and said, “I’m going to go buy it right now without looking at any other houses. I haven’t been shopping. I’m not pre-approved. I don’t want to see any of the other homes. I’m just going to buy that one.” It’s crazy. That just gets advertisement for the realtor. It’s not for the house.
The way it works now is online dating. Everybody sees everything. There’s no secret place to go look at houses other people aren’t seeing. Not only are they all in the MLS, but they’re on Zillow, Realtor, Redfin, Movoto, all of it. The key, just in online dating, is to have a picture that everyone sees and says, “I want that one.”
Now, I’m not in online dating, but a long time ago when I was in law enforcement was kind of my only option because the crazy hours I worked and I remember how horrible that was because there was way more dudes than girls, so it was kind of like being a buyer in a seller’s market where it’s very difficult to get any attention there and they’re getting way more opportunities than a guy would be getting. They don’t know anything about you, so they don’t know if you’re a serious buyer or if you’re not. They just see a picture and the only shot you have is that very first picture someone sees has to catch their attention. If not, they’re swiping the other direction. I don’t even think it was swiping at the time I was doing it, but you get the picture.
So now if you want attention on your listing, that first picture has to be amazing. The next couple really have to pull you in, or they’re not even going to look at all of them. They’re going to go like two, three pictures in, Nope, forget it, I’m done.
So, I purposely look for terrible listing photos. I like it when four pictures in, the photos sideways. Or they skipped on the commission, so the realtor didn’t get professional pictures taken and you see them in the bathroom mirror taking their own picture. It’s dark. It’s poor angles. Things a professional photographer would never do. Because even if people see that house, if it’s priced well, they don’t look deep into it. It doesn’t catch their attention and they don’t want to set up a date, which the equivalent would be going to actually look at the house where emotional connection can be made.

Jamil:
David, it’s so interesting that you bring this up. I remember laughing my butt off at one photo that I had seen an agent put up and I actually ended up wholesaling this property. I got under contract, wholesale at mid money.
We literally fixed the marketing, which is what you’re talking about. The photo that this agent had taken was from the second story bedroom window, into the backyard. There is dog pooping in backyard. The perfect time, perfect place, perfect opportunity for a great, great segment. I was waiting for you to drink that water and I’d swallow it.
So, the thing is, I’m looking at this, I’m like, there’s no way this house is ever going to sell with this. This is the most unappealing thing I think I’ve ever seen in a house. And a realtor thought, and maybe the agent thought this was funny, or maybe they thought cute. Whatever it was, terrible decision. And we ended up getting the house at a steep, steep, steep, steep discount.

David:
I feel pretty confident Jamil, that if you had looked into that, you would’ve seen that it was a discounted commission. That’s what that sounds like to be.

Jamil:
Oh, absolutely. Absolutely. There was no care there. There was no care there on the part of the realtor. And the fact that the seller, I’m sure that they looked online and saw that and must have been mortified by it but what can they do?
You see, the thing about retail home buying is, I’ve learned this. That when somebody’s looking at a house that they potentially want to buy, they’re not making that decision by themselves. They’re sending that listing to all of their friends and all of their family, and they’re looking at the pictures. And then when they’re looking through the pictures, they’re responding to their friend or family saying, “That’s the one. That’s the house. Oh my God.”
So not only does it have to create an emotional impact on the person who may be the buyer, but it’s got to win over all of their family and friends. And if you can’t see how somebody’s marketing is going to be able to do that, there’s a really good chance that you have an opportunity to get in there and get a deal.

David:
Yeah, you’re supporting my online dating theory here. If your picture’s terrible and that girl sending it to her cousins and her aunt and she’s like, “What do you think about this person?” And they’re like, “Oh, you could do better than that.” It doesn’t matter that you could have a lot of other good qualities. They don’t show up in that picture, you’re not getting a chance there.
So you have, this is how brains have been formulated to work and the world that we live in now. Dating works this way. Real estate works this way. A lot of things work this way. Pictures, photos, the visual aesthetic of something has become more important than it probably should be. So, I’m a big fan of, I want to see those pictures that look bad. I want to go look at the house because odds are that house with a dog pooping in the backyard probably looked just like every other house on the block. When you actually saw it, it didn’t give you the same impression as that terrible picture but you want to go look at that one because all your competition, all the other buyers, they don’t want to go look at it. They think that the pictures are terrible.

Jamil:
David, I got one last one for us guys. In times like this, especially with all the things that we’ve just talked about, now is the time for you to talk to your real estate agent about pitching creative options to their sellers. Maybe this is just the right time where you can go get a seller finance or a seller carryback, a subject to. These are the conversations that we can start having when there’s motivation and not a lot of equity to deal with. So, I think that all of the things that we talked about today were fantastic and they opened the door to even more creative opportunities.

David:
It’s exactly right. No, but no seller wants to do something scary when they don’t have to. When someone’s just going to go get a loan from a bank and put a big down payment, of course they’re going to take that option.
However, when it’s getting close to prom and you don’t have a date for the dance, you’re willing to lower your standards a little bit and some of these creating options that we teach on a podcast like this can become much more useful. So, you got to have to coach your agent, or the other agent and how they work, but you should definitely look at that.
Jamil, I really appreciate you being here and sharing some of this information about what you’re seeing for buying on market deals. Quite frankly, this is why I say I’m having more fun now investing in real estate than I ever have in my career because I’ve never been able to use any of these techniques with the success that I am right now.
I’ve used them to a degree for my clients in some ways, but oh boy. Now if you’re a buyer, if you can get pre-approved, if you have the capital and you’re willing to play, all of the balls are in your court.

Jamil:
I absolutely love this and I think guys, now more than ever, especially if you’re looking at, how do I get involved? How do I go and kick down the door of my real estate investing career? Take some of these tactics, take some of the things that we’ve taught you today, and go and get yourself your first deal. Get that deal and you can steal it right now. Go take advantage of the opportunity. Go take advantage of the market. Get yourself the best deal you would’ve ever been able to get and make a life out of it.

David:
All right, Jamil, before I let you get out of here, where can people find out more about you?

Jamil:
You can find me on my Instagram @JDAMJI. That’s @JDAMJI. Also, I have a YouTube page where I talk a lot about stuff like this. It’s just youtube.com/jamildamji.

David:
There it is. You can find me @DavidGreene24, all over social media, talking real estate, and on YouTube at David Greene Real Estate.
If anybody listening knows anyone at Instagram that can get me the blue check mark, there are so many fake accounts. They come up every single day. It’s exhausting trying to take care of that. I’ve applied 25 times, I can’t get the check mark. I’d love it. Jamil, you’re raising your hand. Does that mean that you can help?

Jamil:
Yeah, I got some people.

David:
Okay. Well thank you for that. Hopefully this happens. It’s been more difficult to break in to than Fort Knox, every single time I’ve tried, but it would be very nice if people could know who the real David Greene is.
Until then, be very, very careful. Look for underscores. Look for periods. Look very closely at the screen name of whoever is messaging with my pictures because it’s often not me.
Thank you very much, Jamil. Appreciate you being here. I hope we see you on future shows and I will see you soon at BP Con.

Jamil:
Thank you, David.

David:
This is David Greene, for Jamil, stealing deals, like Ricky Henderson is stealing third. Damji, [inaudible 00:55:34].

Diane Swonk, KPMG chief economist, joins ‘Power Lunch’ to discuss whether the U.S. is currently in a housing recession, if the housing sector is a leading indicator for the rest of the economy and more.

Dave:
Hey, everyone. Welcome to On the Market. We have an excellent show today to talk about one of the most up and coming, most exciting new strategies in real estate known as mid-term rentals. For this interview, I am joined by Kathy Fettke. Kathy, how are you?

Kathy:
Great. So happy to be here. This is a really interesting topic that I think a lot of people want to learn about.

Dave:
Yes. It’s an amazing interview, which we’ll get to in just a moment, but I want to know about your weekend furnishing, your short-term rental. Kathy sent a text to the On the Market team, showing a giant shopping cart full of all sorts of stuff. What were you up to?

Kathy:
Oh, my gosh. Well, you know we have a development in Park City that our company syndicated, and Rich and I bought one of the town homes early on, so we got an amazing deal. Finally, it closed and we’ve been furnishing it, and it was such a pain. After our last show, you and I talked about, “Hey, if we would all just stop spending money just for a month, then maybe inflation would go down,” and then I send a picture of me with this huge shopping cart with all the things, all the things, and so I just thought, “Wouldn’t it be nice if someone would just do this for me?” I had hired my property manager to do it for me, but it just was taking too long and too slow.
Anyway, to have this interview today, just after I spent hours, days trying to furnish this thing, or finish the furnishing, the property manager did a lot of it, but not the final touches, and of course you want to come out of the gate strong, you don’t want your first review to be bad. So, I just thought, “Well, it would be really great to automate,” and that’s something you can really learn from this interview, is how do you automate this stuff to make it easier, so you can travel the world like they do.

Dave:
If you’re curious who they are at Zeona McIntyre and Sarah Weaver who wrote the new book for BiggerPockets, 30-Day Stay, and we’ll get all into that in just a moment. But, yeah, I think Kathy and I both had our minds blown talking about the automation of furnishing. I’ve only done it once, I shared the story, but it’s hard. It is not easy, and it’s something I completely underestimated when I was first doing it, and it is extremely time consuming, and it’s amazing to hear how Zeona and Sarah have created this lifestyle for themselves as really pretty automated, and sounds like it’s only going up from here. It sounds like the growth of this niche could be just at the beginning, we could see a lot more growth in the next couple of years.

Kathy:
Yeah, and how they automated the management of it too. Because in short-term rentals, the management fees are really, really high. If you use a manager, they can take 20, 25%. Oh, that’s a big old chunk.

Dave:
Oh, they could take 40%.

Kathy:
Oh, man.

Dave:
I talked to a couple places that do 40. It’s insane.

Kathy:
Yeah. So, to just that alone, to be able to automate like they do with… I don’t know exactly how they do it. I’m going to read the book again, and I’m going to hire them as a consultant, which they said they would do for me. So, yay.

Dave:
Well, I learned during the course of the interview that, “Kathy wrote the foreword for this book.” So, I think you get some free consulting in exchange for that.

Kathy:
Perfect.

Dave:
Well, with that, let’s not waste any more time. Let’s bring on Zeona and Sarah to talk about mid-term rentals.
Sarah Weaver and Zeona McIntyre, welcome to On the Market. Zeona, how are you doing?

Zeona:
So good. Thanks for having us. It’s very exciting.

Dave:
Sarah, how have you been?

Sarah:
Yeah, really good. Still recovering from BPCON, and excited to be here.

Dave:
Well, and recovering from being in Thailand, right?

Sarah:
Yeah, I’m in the future. 12 hours ahead.

Dave:
I think this is the most global podcast we’ve done. We have three continents represented. We have Sarah’s in Asia, I’m in Europe, and we have everyone else in the US. Pretty cool.

Kathy:
Amazing.

Dave:
All right. Well, both of you are here because you are the newest entrance into the BiggerPockets authors club. Congratulations on your book. Can you tell us a little bit about it, Sarah?

Sarah:
Yeah, absolutely. It’s called 30-Day Stay: A Real Estate Investor’s Guide to Mastering the Medium-Term Rental.

Dave:
How did you decide to write this book?

Sarah:
Yeah, Zeona and I met virtually, like you do most of your real estate investor friends, and we realized we had two things in common. We love to travel, and we both owned furnish rentals. After a few shared Ubers and a shared hotel at a conference, we kind of came up with the idea to pitch a book to BiggerPockets, and here we are exactly a year later with our book, not only written, but in the hands of investors.

Dave:
Wow, that’s amazing. That took one-fifth of the time it took me to write my book. So, well, congratulations.

Zeona:
We were on the fast track, for sure.

Dave:
That’s awesome. Well, Zeona, I know you’ve been in the short-term rental market for a while. How did you start getting into medium-term rentals?

Zeona:
It really happened for me in COVID. So, before then, of course, I’d had some longer requests and longer guests, but it wasn’t until that kind of time in March that was really intense for a lot of short-term rental hosts. I don’t know if either of you were hosting then, but it just happened that one day to the next, all of the reservations canceled, and so it seemed like it was fine, and we were ramping up for a great summer again, and then everybody freaked out around COVID, so it was early March. Then I had to collect myself and pivot and say like, “Well, I’m financially independent if these places are rented, but if they don’t rent, I got to figure something out here.”
So, luckily I saw bookings coming in that were longer, people started to come as relief workers and people needed more space for homeschooling their kids and working from home, and so it started to naturally happen, and I had a lot of places out of state, and so I was like, “Man, the biggest hurdle for me is how am I going to show these properties?” But, luckily I realized pretty quickly that a lot of these people are booking sight unseen, just like a short-term rental, and so I was able to really pivot and adapt and figure out everything online. Took a little bit of iterating.

Kathy:
What’s the difference between the guest? I mean, obviously with a medium-term rental, they’re not necessarily travelers, or are they?

Zeona:
Well, it kind of depends. I can also let Sarah answer this, but…

Kathy:
By that, I mean vacationers. I mean, obviously, it’s traveling people, but…

Zeona:
Yeah, so the typical short-term rental in my experience was three or four nights, and these are more three months, but I’ve seen a lot of digital nomads do one month. So, especially at the beginning, people were like, “I’m going to go to Denver, and then Austin, and then New Orleans,” and so they would just hop around like that. So, I’ve definitely had one month stays, but travel nurses are also big part of our tenant pool, and they’re three months, generally three to six months. Sarah, do you want to mention? I know you’ve had renovations and we’ve both had people from insurance claims, so yeah, what other tenants are you seeing?

Sarah:
Yeah, I think one of the things we want all of the listeners to understand is that it’s not just traveling nurses. The title of the book could have been traveling nurses if that was the only people that we served. But, we really… Medium term rentals can serve all different types of populations. So, I have a friend, she has a duplex in South Kansas City, she has been a hundred percent occupied, had even a couple turnovers in there where it was same day turnovers, and she’s never housed a nurse. I have another friend who has rentals or medium-term rentals in Waco, and she is renting two construction workers who are working on a job site for 60 to 90 days. I’ve housed a divorcee who just messaged and was like, “Can I move in tomorrow?”

Dave:
Wow.

Sarah:
So, we have people from all different walks of life, renting from us, not just traveling nurses.

Dave:
Sarah, did you get into medium-term rentals in the same way? Or, had you been doing it prior to COVID?

Sarah:
Actually, my first furnished rental was a medium-term rental, and so I posted my own unit that I was living in, on Airbnb, and in my mind I was like, “Oh, it’ll get rented on the weekends and then I’ll just go travel, or go visit my grandparents,” and my very first booking was for 30 days, and so I became homeless overnight. For a normal person, that would be a problem, for me, I was like, “Woo hoo, I’m going to Mexico.” So, that’s what I did, and so I actually got into medium-term right away, and then I do what’s called the hybrid model. So, my units are in markets that still allow short-term rentals, meaning municipalities don’t limit the nights of stay. So, I will switch it to a short-term rental in the summer, and kind of utilize those shorter term stays to net more money. But, then I noticed a trend come September, October, no one’s going to Omaha on a Wednesday night, and so I switched from short-term to medium-term to keep my occupancy rates high.

Kathy:
Well, that begs the question, why are people vacationing in Omaha during the summer, or are they?

Sarah:
I had the same question, and I own eight units in Omaha, and I was scratching my head too. So, what I have is in the summer there’s the College World Series, so I can make an entire mortgage payment just by renting a couple of days in June for the College World Series. Then a really interesting trend is that people use Omaha as a stopover on their road trip from Chicago to Denver. At first I was like, “Oh, that’s so interesting.” I was like, “That makes sense, and I allow pets, so they might bring their dog, and they prefer to stay in an Airbnb over a hotel.” But, then it was great, I would have repeat guests. So, they loved my place so much that then they’d stay on the way back as well. Then this summer I had even more repeat guests, where they did that last summer, it worked out really well, so they did it again this summer, and so those are great because they’re staying on a Tuesday or a Wednesday, which really helps with my occupancy rates.

Dave:
I had no idea that was a common travel pipeline.

Kathy:
No.

Dave:
The Chicago to Denver road trip.

Sarah:
Yeah, I at least house, I think, 10 people like that, over the summer.

Dave:
Whoa.

Sarah:
Yeah.

Dave:
Wow.

Kathy:
They would stay in your home versus a hotel because you allow pets? Or, are there other reasons why… Obviously your competition is the hotel.

Sarah:
Yeah, it’s really interesting, especially when we’re talking about medium-term rentals. If someone’s going to stay for a month, they would prefer to stay in a home. We’re seeing a lot more families utilize medium-term rentals in the summer. Maybe one of the parents typically is bound to their job during the summer, but because of COVID they now have the ability to be untethered and work remotely, and so we’re seeing more and more families utilize houses in the summer, even as medium-term rentals, to get away from the city or just change location, because now one of the parents can work remotely or both of them can work remotely.

Dave:
So, as the title of the book suggests is that I assume the cutoff between definition between short-term rental and medium-term is 30 days. Is that sort of the-

Sarah:
Yeah.

Dave:
Okay, so I’m curious, Zeona, what about market conditions… You said you started in COVID, like what makes you think medium-term rentals are going to maintain this demand, going forward?

Zeona:
Yeah, there’s a few things. So, first, just the ability to work from home grew tremendously, and I know some places are bringing people back to work, but I think there’s just been a change in the culture and a lot of people are specifically looking for jobs that are location independent and they might be joining their partners on travels. So, we see a lot of traveling nurses that now bring their partner or their child along with them. So, we’re kind of seeing that trend some more, and then just a lot of people working from home. So, often I’m seeing people wanting two bedrooms so they can each kind of have an office during the day and then go explore on their off hours. I do this with my partner too, Sarah also does this, she lives in Airbnbs full time. So, that is also just a bigger trend. We see that a lot in the financial independence community. A lot of people just go from Airbnb to Airbnb and don’t actually have a home.

Sarah:
So, what we saw with COVID is that there are now 11 million digital nomads, and for those of you that don’t know what a digital nomad is, it just means that they work likely for themselves or for a company and they can live anywhere, and so that number was 7% of the workforce before COVID, and then it jumped to 42%, and so those are significant numbers. They’re not all are our tenants, for example, I don’t just house digital nomads, but it’s becoming more and more, so much so that 24% of Airbnb bookings were for 28 days or more this year.

Dave:
So, I guess the question then is, with medium-term rentals, does it sort of fall in terms of revenue per night? Is it less than short-term rentals but more than a traditional buy and hold year-long lease?

Zeona:
So, this is interesting because this kind of changed for me recently, but what I used to tell people is that there’s market rate, I find medium-term to be like one and a half times, and then short-term to be twice market rate, just as a very loose general rule. But, I found this guy just a couple nights ago that is doing contracts directly with nurse placement and with insurance companies, and although I’ve had some of those bookings, I just don’t necessarily go after them directly. But, he’s saying that, “There’s no reason why you shouldn’t be able to get the short-term rental rate of two times even in your medium-term rental,” and so that’s Jesse Vasquez, I think it’s Vasquez. If you guys want to look him up on YouTube, he’s just kind of getting started, but it seems like he has programs for going after them specifically and building those connections. So, I’m definitely going to try to learn that because that’ll bring up my revenue, which is already fantastic.

Kathy:
So, what markets does the strategy work in?

Sarah:
It seems cheeky to say, but every market. So, I’m seeing medium-term rental work in small town Iowa, in outside of Seattle, Washington. I own a few in the Midwest, Zeona owns some in Colorado, in places where she couldn’t do short-term rental, and so it’s really nice to be able to utilize this in markets that restrict short-term rentals, but then also in markets that you wouldn’t necessarily think to own a short-term rental like Omaha, Nebraska.

Kathy:
How are you managing them when they’re out of state? Do you use a regular property manager or are you still using services like Airbnb?

Sarah:
We both self-manage. So, both of us started out self-managing ourselves to keep costs down and really hit that financial independence number as quickly as possible. Then both Zeona and I now have what I call in-house property management. So, I have a virtual assistant and an executive assistant helping manage these, and neither of them are in the locations that my medium-term rentals are either.

Kathy:
Same for you, Zeona.

Zeona:
Yeah.

Kathy:
I mean, what about the cleaning and the things that a property manager would normally do?

Zeona:
Yeah. So, even when I was teaching people about short-term rentals, I said that, “You could start with a really bare bones team. Once you have the property, all you need is a cleaner and a handyman and you’re off to the races. So, it doesn’t have to be super complicated, and most of those contacts you can get from your agent, so if you’ve got a good investor-friendly agent in that market, they usually have a list of contractors and different people to reach out to.” Yeah, from there, we have taken on assistance and that really helps, but for a long time we were just doing it ourselves. It’s actually pretty management light because you’re only needing potentially four tenants a year. It sounds like a lot if you’re coming from long term rentals, but from short-term rentals it’s like, “Ooh, walk in the park.”

Kathy:
I know when we were at BPCON, I was asking about just what types of property, and it was pretty exciting that it could be not what would be normally a long term rental, so you can go after properties that maybe other people aren’t looking at. So, yeah, Sarah, tell me about that.

Sarah:
Yeah, all of my units are one-one or two-one units, and so what normally might not be as attractive to a long term buy and hold investor, I can go ahead and swoop in because it’s exactly what I want want.

Zeona:
Yeah, and I’ll say that I have a bunch of… Well, not a bunch, but I have a few condos, and so that’s usually the lowest on the totem pole for investors. They don’t want to touch an A2A, they don’t like condos, a one bedroom, no way. So, those I love, because actually they’re being looked over, and I feel like that’s the important thing as an investor, is like, “How can you make something that is overlooked, something really valuable?” So, the condos that I actually love are ones that one bedroom, that have shared utilities in the building, so those might be a shared boiler, shared water heater, so you don’t have to have a furnace and a water heater in your unit, and then even ones with shared laundry, because the longer term stays, they’re fine, they’re not living there forever, so they’re like, “Oh, cool. I’ll just…” As long as there’s laundry in the building, they’re fine with that, and so in my unit, there’s almost no maintenance, because all I have is a fridge and a dishwasher and an oven. So, there’s almost nothing that can go wrong.

Dave:
I was going to ask that because I own just one short-term rental, but just owning one is enough to know that you get some ridiculous tenant stories or guest stories, I guess you could say, how the houses get a little abused. Do you find that the wear and tear on properties is similar with mid-term rentals?

Sarah:
I find that it’s actually less, and so you have these tenants who really take a sense of ownership with the unit, also because they’re there for three months, like if they do break something, they’re going to tell you, and so that allows me to replace something even while that tenant is in the unit, which is less stress at time of turnover. Whereas when you have a short-term rental and you have turnover every two to three days, and then someone’s checking in that same day, it creates a lot of stress in my opinion.
Then to compare it to long term rentals, what I find is that my long term rentals, they move out and they’ve been living there for a year, they haven’t told me anything that’s wrong with the property, so then when I do finally do a walkthrough, it’s like, “How on earth are there scuffs on the ceiling, or silly string on the wall?” And then you have to clean that and paint that and maybe even redo flooring, and so it creates a lot of headache. But, my units, I own nine medium-term rentals now, and I can tell you maybe two stories where it was like, when we went in, there was a bad surprise. But, with all of the turnover that we’ve had, it’s usually really simple.

Kathy:
Yeah, it seems like a very different type of occupant or tenant. The short-term rental’s definitely going to be more of a party in most cases.

Sarah:
Well, and sometimes these nurses, they’re so tired after a long shift that they’re not even using the unit at all, and so I had a cleaner who messaged me, and the tenant had been there for three months, and the cleaner’s like, “I don’t even think she touched a dish. Nothing in the kitchen looked like it had been used.”

Dave:
All right. I want to talk about a subject that I’ve been very interested recently, which is the regulation of short-term rentals that seems to be becoming more and more common across the US, particularly in big cities. Do you think that, one, I’m just curious about your opinion about that, and do you think that trend is going to continue? If so, could that increase demand and maybe supply, like could more short-term rental people start getting into mid-term rentals? Zeona, I’m curious what you think.

Zeona:
Yeah, I mean, I do think that trend is continuing. It seems like most places have already outlawed it that are going to do it, but I still hear about like it started with the cities and then it kind of leaks out, right? Because people are like, “Well, if it’s illegal in the city, I’ll just be right on the border,” which I think is a great strategy. So, they’re starting to say like, “Oh, no. Now it’s the county,” or this or that. So, that is still changing. I see that a lot in Colorado where I live. So, that I think will continue.
I also think that there’s just a trend now towards more urban markets. Just the way that things are happening with a recession happening or on the rise, it just seems like people are scaling back on their travel. So, first they’re not going to do plane travel, so they might cut out Hawaii and Mexico or something, and then I think it moves towards the vacation rental markets where they’re like, “Let’s just drive. We’re going to drive to Orlando.” Or, “We’re going to go to the beach.” Then later, as they get a little more scared, which I’ve been seeing lately, people are saying, “I’m just going to do necessary travel. We have to see our family in Omaha, we’re going to go there.”
So, that ends up being more urban, and I just feel like that’s a little bit safer than buying in these markets where they may stay vacation rental friendly, but they don’t allow you to pivot your strategy. So, if you’re in a place where, I mean, for example, the Smokey Mountains, it’s like people that live there and work in the restaurants or cleaning ladies, they’re not going to rent out your place for $5,000 a month, which is what people’s mortgages tend to be. So, I feel more worried about buying something without a backup plan, right?

Kathy:
Yeah, it just seems like there’s not as much competition for it, whereas there is with STRs. That’s been one of the issues I’ve seen, and that Airbnb came out with saying that, “Yes, there’s actually more people using short-term rentals, but hosts are actually making less because there’s so many more units available.” But, would you say that’s the case with medium-term rentals too? There’s more and more people getting into it?

Sarah:
Well, it’s really interesting. I love talking about the competition because if you’re a listener thinking about turning one of your units into a medium-term rental, what I encourage you to do is go to a website called furnishedfinder.com, and look as if you are a renter, like you’re going to rent a place, and you’ll really quickly see that the units are, I don’t have a nice way to say this, they’re just not as aesthetically pleasing, whereas there’s a lot of beautiful listings on Airbnb, and so competition is so much higher on Airbnb for short-term rentals. Whereas Furnished Finder, which is where I find most of my tenants, I don’t have any competition in Omaha. “Come at me, you guys.” No.
But, what I find is that I’ve had tenants actually say that. So, I had a tenant who was willing to live in a hotel for two and a half weeks, waiting for my unit to come available, and so the first thing I asked as an investor was, “Oh, my gosh, are there no other units?” Meanwhile, I’m texting my agent like, “Must buy more MTRs.” And she said, “No, no, no. There are other units available, but they’re all granny units, none of them are cute like yours. I’ve been a traveling nurse for two years and I’m just sick of living in ugly places, and so when I saw your unit, I’m willing to wait for it to come available.”

Kathy:
So, how does Furnished Finder work? Do you just list your property there and is that the main site that you use?

Zeona:
That’s a great question, Kathy, because at BPCON I realized people don’t know how to use Furnished Finder, so I’m like, “Trying to get the word out.” So, the difference between Furnished Finder and a website like Airbnb is that Airbnb is a booking platform. So, people actually go on there and they book your place through the platform and they market it through there. With Furnished Finder, it’s more of a lead generation platform, and so what they’re doing is they’re capturing people’s information and then they just give you a list of potential tenants, and then from there it’s kind of your job to reach out to these people.
So, they can reach out to you, but you’re not going to see many requests coming through. There’s just like a lot happening. But, if you reach out to people and are proactive, you can have just a copy paste template that’s really easy and just blast that out when you’re doing your tenant searches. But, it’s not that labor-intensive because you’re only looking for tenants maybe a couple times a year. It could be twice a year, it could be three times a year. So, I find that that just makes it a little bit easier.

Kathy:
Sounds like an opportunity for someone to create an app. BiggerPockets, for medium-term rentals.

Dave:
Yeah. Well, we’ll get right on that. I’m curious, it’s sort of along the line of Kathy’s question. In the short-term rental market, there have been some companies that have sprung up with data about demand and pricing, like AirDNA or there’s some other ones. Does that exist for medium-term?

Sarah:
It does. That same website, Furnished Finder, if you go to furnishedfinder.com/stats, that’s where a lot of the data we’re using, we get. It was fun, I actually was using it just this morning before this podcast, because I had a consultation with an investor outside of Salt Lake City, and her area… Sorry, I’m going to go ahead and tell you the market, so now everyone’s going to go there, but it’s Ogden, so it’s just north of Salt Lake City. There were only four listings that rent the entire unit, whereas the other, I think it was eight listings are all only a room in someone’s house. So, that’s a concept we haven’t really touched on is that you can rent a portion of your house to a medium-term tenant as well, and that’s obviously really common, it’s more common in Ogden, for example, there were more listings where you just rent the room than the entire unit.

Kathy:
Wow.

Dave:
Yeah, this is pretty cool. I’m looking at it right now. It seems like if you are curious about this, you can go on furnishedfinder.com/stats, we’ll throw a link to that and you can type in a city and get some information here. I obviously can’t look at all this, but it does seem like there’s some really good ways that you can start measuring demand and seeing where there might be opportunities for you.

Kathy:
So, Sarah, on your Facebook page, I saw you were showing one of your latest renovations and what you do for decorations that attracts nurses and has them want to come back and stay and tell their friends, which I imagine is a thing, there might be some referral in there. So, what are the kinds of furnishings that you want to put in your rentals to make it cozy?

Sarah:
Yeah, absolutely. It sounds silly, but I have always have a $250 coffee table book budget. They are aesthetically pleasing, they photograph well, they’re easy to clean, they’re not going to break, and so I always recommend coffee table books. You want to create texture and depth in your photos, and so that’s a really easy, cheap, beautiful way to make your listing pop, and then the other’s throw pillows. So, many times I see a couch that has either no pillows or they’re just a solid color, no texture. That’s a really inexpensive way to do that. I prefer ones where you can take the cover off and wash them in between guests, but those are two of the most inexpensive ways to do it. Some staples that you have to have in a medium-term rental are blackout curtains in the bedroom, and then I really like using rugs.
So, I go to a store called At Home, and they actually have washable rugs for under $300, and so that really brings a room together, and then I beg everyone, “Please go bigger when you’re buying rugs.” I can’t tell you how many listings I see that have a little three by five in a 15 foot living room, and I’m like, “Oh, man. Why not a bigger rug?” People are so afraid to buy bigger rugs. But, those are some quick tips.

Kathy:
That’s a really good point. I know Rich and I looked up, you can actually look up online what your rug should look like to really make the room look bigger, or its own space, and there’s rules around that. So, yeah, follow the rules. Zeona, how about you? How much do you generally spend on the furnishings?

Zeona:
Oh, well that really depends on the size of the unit. So, I did a unit recently that was two bedrooms, and spent about 8,000, and that was also paying the two helpers that built all the furniture and put it all together. So, it doesn’t have to be crazy expensive. I’d say, again, I don’t like rules of thumb because it really depends, but you can probably get a one bedroom unit for about 5,000 if you’re doing it yourself and it’s all new, and then each bedroom after that might be an additional 2000. Then, yeah, there are companies, Sarah offers us, that will do the furnishing for you. So, they’ll either, on their highest tier, fly out there, on a lower tier, they might just give you a furnishing list, and in the middle, maybe they’ll design the room specifically, but then you have to put it all together.

Kathy:
Where on earth do you shop that you can get prices like that? Because I need to read the book a second time.

Zeona:
So, mostly, let’s see what we do. We do a lot of Wayfair, Amazon, Target, and then we love HomeGoods. So, Amy Levine is on my real estate team and she furnishes all the medium-term rentals in my market, and so we go together and do, she does all my units. Yeah, we love going to HomeGoods.

Kathy:
On a Wayfair, there’s a section that’s more like commercial use furniture. Do you use that, or just regular stuff?

Zeona:
I don’t know that we have, but honestly, Amy picks everything out, and then my assistant orders it. So, I just show up and it’s there. So, I can’t claim to be like that cool.

Kathy:
Because you’re in Hawaii, you’re in Thailand, you don’t have time to be furnishing. I got a lot to learn from you two.

Dave:
It is suffocating.

Zeona:
I know. Let me tell you a little story. So, the last place that I bought was in Denver, and the reason I bought it is because I had this 1031 exchange that didn’t happen, and I had it all planned out, I was like, “Oh, I’m going to buy this place, it’s going to be great, and I have all this time,” and then we ended up buying the place without using the 1031 exchange and then had to find a place fast, and it was just bad timing.
So, the place I found was in Denver, it was like two days before my exchange expired, and I was like, “Oh, my God.” So, I was like, “We picked Denver because it’s close to home. I could just go there and physically furnish it. It’s going to be so easy.” Well, I didn’t think, but actually I was going to be in Europe when I was closing on that place, so I was like, “(Censored) it.” So, I had two of my helpers go do everything, and it turned out beautifully. I still haven’t seen it furnished. Oh, actually I did once. But, yeah, it’s just one of those things where I don’t really know where I’m going to be, and I have helpers for that.

Kathy:
Do you just give the helpers a budget and they just pick out stuff? Or, do they send you… I’m saying this because I just went through it and it was not fun for me at all to do from a distance.

Zeona:
Yeah. Well, Kathy, if you pre-order our book, it comes with a furnishing spreadsheet, and so that’s a great guide. But, yeah, furnishing spreadsheets, I think, they’re like a general rule, and then you have to kind of think, “What is the style? What’s the age of my place? What is it kind of asking for?” And then you customize some of the things. So, we’re always changing things a little bit. But, yeah, I mean, happy to help you the next time you want to do something good.

Kathy:
Thank you.

Sarah:
Yeah, that’s really how my company came about is people saw that I furnished a place in Nebraska while I was living in New Zealand and messages started coming in saying, “Oh, my God. Can you do mine?” At first I was like, “No, because I’m busy, I got other businesses,” and then the entrepreneur in me was like, “Wait a minute, this smells like an opportunity.” So, that’s how Arya Design Services was born, and now just this year alone, we’ve done 27 units in 11 states. So, please tell everyone how terrible it is to furnish your own unit, so that I can get more people using our services.

Kathy:
Wow, that’s a great offer. Yeah, that’s a great service.

Dave:
Yeah, having done a short-term rental myself, furnishing, it’s absolutely miserable. Especially if you don’t know what you’re doing, which I definitely did not know what I was doing, getting into.

Sarah:
He’s texting someone like, “Okay, don’t let Sarah see my three by five rug.”

Dave:
No, I did. I was smart enough to hire an interior designer. I am horrible at design. But, then I went and picked up literally 183 boxes from Ikea, that was one of three runs, and did it all myself, and tricked my friends into helping me. It was absolutely miserable.

Kathy:
And then putting all that stuff together, did you guys do that?

Dave:
Oh.

Kathy:
Oh, no.

Dave:
I did a build your own bed party. I invited my friends, but there were no beds so they could come stay at the house because it’s a cool house, but didn’t tell them that there was no beds. So, then when they got there, they had to build their own beds so they had a place to sleep.

Kathy:
Oh, [inaudible 00:35:01].

Sarah:
That’s amazing.

Dave:
But, seriously, that’s how you have to do it. You have to trick people into helping you.

Kathy:
Or, read their book.

Dave:
Or do it the professional way. Sorry.

Sarah:
Exactly. No, I have some things on the furnish list that they look great, it’s within my budget, but putting it together will make you want to throw the nightstand out the window, and so I never will buy that nightstand again. So, you can rest assured that everything I buy, I have put together myself, and I’m not saying putting it together is fun, but there are things that like never again will I buy that nightstand.

Kathy:
Zeona, how do you find people that they’ll just put the stuff together for you and they like that, that’s their thing?

Zeona:
Well…

Kathy:
I paid my kids to do it, but…

Zeona:
Well, so Amy is a machine. So, Amy Levine that I work with here, it’s crazy. You give her a drill and she just puts stuff together in moments. So, I am really bad at that. I am just not… I’m like, “I will unpack the boxes, I will put things where they live, but I’m not going to build anything.” I’ve seen her really upset around a credenza. It always seems like the credenza brings people down. But, now, yeah, I’ve had a few different assistants that help me with it. I have my showing assistant, she loves to build furniture, so that’s good. Sometimes you bring in a handyman, but I’d say Taskrabbit, if you’re just kind of in a new market and you don’t know people, Taskrabbit’s a great option. Just have them build everything at once, and then help you move it around.

Kathy:
Well, I just think we have to find out where the best place you both have gone to visit while you’re making all this money from your medium-term rentals.

Dave:
Good question.

Zeona:
That is a good question. So, do you have one, Sarah? I have to think.

Sarah:
Yeah, yeah. I keep going back to Antigua Guatemala. It’s great as a digital nomad because it’s Central Time Zone. So, the time zone’s a lot easier than Asia. The price is amazing. I can live like a queen for $1,100 a month, and the flights there, you can fly direct to Miami, Houston or LA for like $79, and so Antigua Guatemala has become my second home, or home away from being homeless.

Dave:
Sounds amazing.

Zeona:
Yeah, I spend a lot of time in Europe and Hawaii because that’s where… My partner’s from Europe, I’m from Hawaii, so we kind of go both of those places a lot. But, for ease of time zone, going down to Mexico, I like doing that a lot. So, Sayulita is a fun place. I like that there’s surf and then also there’s a lot of yoga and healthy food and things like that. So, yeah.

Kathy:
I love Sayulita. Yeah.

Zeona:
Good taste.

Sarah:
Okay. I am not a fan, so I went to Sayulita with Soli. I think you guys just had her on the podcast, Lattes & Leases. We both got a parasite.

Dave:
Oh, no.

Kathy:
Oh.

Sarah:
So, it’s funny how, as a traveler, some places are like, “Yeah, that’s great. I’m so glad you love it.” I’m like here with clinched teeth, like, “Never again will I go there.” But, obviously it’s not the entire town of Sayulita’s fault that we got sick, but…

Dave:
So, before we wrap up, since the show is On the Market, I need to ask you both a little bit about the housing market and how you’re preparing, or are you making any adjustments to your business based on some of the shifts that we’re seeing in the housing market? Do you think medium-term rentals are going to keep going up? Are you adjusting at all? Curious to hear your thoughts. Sarah.

Sarah:
Yeah, so I’m doing a mixture of two strategies. I’m doing out-of-state investing to keep prices lower, and then using the medium-term rental strategy to keep rents high. I find that that’s been the best way to battle inflation, rather than have my money in a money market account, or God forbid, in a checking account. I want to put as much money into real estate as possible. But, then we have these higher interest rates, and so I find that, with the increased cash flow and increased rental income that I’m getting from the medium-term rental, it’s one of the best ways to combat the higher interest rates.

Zeona:
I am a believer, I’ve seen a few trends now since I’ve been in real estate like 10 years, is that the rents are always lagging behind the mortgage prices, and so even though people are seeing softening in their markets, it’s not necessarily that buying a home gets cheaper, it’s just that the interest rates make it so expensive that actually the mortgage price that they’re paying every month is still really high and still getting higher in some places, and so rents have to catch up with that.
Of course, some places, people have owned it for 10 years and they can charge a cheap rent, but for new investors coming in the market, they need to cover their mortgage, and so this idea that like, “Oh, I’m going to save money and be in a cheap rental forever.” That’s not real, that’s not going to happen. So, for us, I see that there’s a lot of demand which helps low supply, and then rents are continuing to come up, and that’s just really going to help us grow. Then of course if you can specialize and get these really high contracts from insurance agencies, that’s going to be a huge bonus.

Kathy:
Yeah, yeah. My daughter experienced that with the California fires just by accident, where she had put her home on the short-term rental Airbnb market, and then when the fires happened in Paradise, California, just the whole city burned down, she was getting calls from insurance companies saying, “Please, this family will pay $3,500 a month,” when her rent had been, or her mortgage was 1200. So, she experienced that firsthand, and then built that relationship with the insurance company. So, when that family left, they had someone ready for her. So, I can see how you want to get to know the insurance companies.

Dave:
All right. Well, thank you both so much for being here. This has been a pleasure, and congratulations on the new book. Is there anything else, Zeona, you think our audience should know about medium-term rentals before you get out of here?

Zeona:
I can’t believe we didn’t mention this, but Kathy wrote the foreword to our book, so that was especially why we had her here. So, definitely go in and read that, guys. So, if you guys pre-order our book now, and that is at biggerpockets.com/pod30, I believe you can use any of our names for 10% off. You get a bunch of bonus content. So, we did some cool behind the scenes interviews with other investors, on furnishing, on whether you should turn your short-term rental or long-term rental into a medium-term rental, we’ve got the furnishing list, we’ve got an analyzer tool, and then there’s going to be a webinar with Sarah and I, in December, for everybody who pre-ordered. Then the last thing is that one lucky person is going to win a one-on-one call with both Sarah and I. We both do consulting on our own, and so that’ll be really fun. I’m excited about it because I don’t know how she consults versus how I consult. So, it’s really just like selfishly awesome.

Dave:
So, both of you’re going to be consulting with one winner?

Zeona:
I know. Their head’s going to explode.

Dave:
Wow.

Zeona:
It’s going to be crazy for us.

Dave:
That’s going to be very valuable. That’s amazing.

Kathy:
Yeah.

Dave:
Well, that’s definitely worth… I mean, the book seems great, so you might as well pre-order and get a chance to win that incredible additional value.

Sarah:
Oh, thank you, guys. We really appreciate it.

Dave:
Does Kathy get entered to win? She wrote the foreword. I mean-

Zeona:
Yeah.

Dave:
… she should probably get entered.

Sarah:
Kathy can call us anytime she wants.

Kathy:
All right.

Sarah:
Actually, for Kathy, I’ll fly to Malibu and do all of our strategy sessions in person.

Kathy:
Let’s do that. Okay.

Zeona:
That’s what I said too. I was like, “Hmm, let’s make this a little more attractive.”

Dave:
Kathy just has the trump card. Yeah, she just is like, “Anyone will go consult for Kathy. You just go get to hang out in Malibu. It’s amazing.”

Zeona:
Come on out, pick the date.

Dave:
Awesome. Sarah, what about you? Any last thoughts on medium-term rentals that our audience should know about?

Sarah:
I think, for investors out there that are thinking, “Oh, yeah. It sounds great, but…” Or, “I’ve always wanted to do that, but…” My biggest urge is to just try it. The best thing that I ever did in my twenties was just buy real estate. I didn’t have all the answers, I didn’t have community, I didn’t have masterminds and coachings and mentors. I just went for it because that’s my personality, and it’s the best thing I could’ve ever done. So, we joke about all the travel that we get to do, but my life is only possible because I chose to invest in real estate, and so if you’re listening to this podcast and you want to own more rentals, you want more cash flow, I urge you, don’t wait, just do it.

Zeona:
I second that.

Kathy:
Yeah.

Zeona:
Time. Time is what makes you wealthy. You can make all the mistakes and it’ll correct you over time.

Dave:
That’s a good way to put it, for sure. Well, Sarah and Zeona, thank you so much for being here. We really appreciate it. Congratulations on the new book. I’m super excited. I’m going to come to that webinar for sure.

Kathy:
Yeah, me too.

Dave:
I sort of swore off active investing when I moved to Europe, but now you all are inspiring me. Maybe I need to get off my ass and start doing things directly again. Thank you for being here, and we’ll post all the information about the book in the show notes as well, if you want to find a place to pre-order and get attached for all of that. Hopefully, we’ll have you on again soon when maybe next year we’ll learn more about what you all are up to.

Sarah:
Thank you.

Dave:
All right. Well, I guess I could ask you what you think, but now I know that you wrote the foreword to this book, so I already know what you think. You think this is cool, right?

Kathy:
I think it’s so cool. What BiggerPockets brings to the table is just so much youthfulness, so many new ideas, new techniques, and this is one of them that I had heard about. There’s been a few people out there talking about it and doing it. I just never really understood what kind of demand was out there for it. I knew traveling nurses, but how many are there, and then we heard that that number’s increasing dramatically. In fact, they said there’s almost more traveling nurses than full time. So, this is just great information. I love all the fresh ideas that BiggerPockets brings.

Dave:
Yeah, it’s super cool, and I think that the work from home thing really will add significant demand there. There is a lot of chatter about work from home declining a little bit, but if you look at the data, it’s pretty stable. It’s staying where it was six months ago, and if there’s a recession and the labor market really changes, that could make a difference. But, I’m guessing that we’ll still keep pretty high elevated levels of work from home for a while, and I think those people, it sounds pretty fun, right? If you had a family and you could work remote and rent a lake house or something over the summer, or go visit family instead of staying in a hotel. It is a really intriguing option for people who don’t… I guess location independent is the word I did not know, but people who are location independent.

Kathy:
Well, especially in this market. On today’s market where the employee has the power, because there’s just not enough employees out there for all the employers that want them. So, I’ve heard that employees are making the demand, “Yeah, I’ll work for you, but on these conditions. I want to be remote, I want to be independent.” So, it is a really exciting thing. We’ve been doing it at RealWealth. For 12 years, we’ve been a remote company.

Dave:
Oh, really?

Kathy:
Yeah. Yeah, because Rich and I wanted to live in Malibu, but we didn’t want to have an office here and our employees didn’t want to move, so it just made sense that… So, we’ve been doing the whole Zoom thing and it started with GoTo Meeting and so forth, and using online systems like Basecamp. So, yeah, I just think more and more companies learned that, “Wow, you can really broaden your pool of potential employees if you can hire anyone from anywhere and not have to move them.” So, a lot of stodgy companies learned some new tricks over the last two years that they might really like, and then cutting back on office space, why would you not? Companies are going to want to cut their budgets. So, yeah, I think the 30-Day Stay, well, it’s a great book, I loved writing the foreword for it and getting to know them better. I’m going to read the book a second time. You and I, I think we have a competition now. We got to go do this.

Dave:
One of us has to do it first. Yeah, I’m already thinking, I have some markets in mind.

Kathy:
Good.

Dave:
Maybe this will be… We’ve already all been talking about how On the Market, our cast, needs to buy something together. Maybe it’ll be a medium-term rental.

Kathy:
Yeah, either we buy together or even just looking at something maybe you own that’s underperforming.

Dave:
Oh, that’s true.

Kathy:
I have a Cleveland property that’s a really nice property. It just never occurred to me to…

Dave:
Oh, that’s a great idea.

Kathy:
It’s a decent income, but wouldn’t it be nice to double it?

Dave:
Yeah, yeah, that would be awesome. I really liked what Sarah is saying, because I guess in my head I don’t know a lot about mid-term rentals but I will read the book, is that I’m always just worried about the regulation. Because right now it’s like 30 days, and I kind of just worry about city’s just moving the goal posts. Like If everyone’s like, “Okay, 30 days,” then the city comes back, they’re like, “Okay, it’s 45,” and it just becomes this game. But, I really like what she said about doing this even in markets where short-term rentals are allowed, because sort of like you’re saying, repurposing an existing property, now that gives you three options. You could have short-term rental, medium-term rental, or a long term rental. It’s the type of maximizing your exit strategies we talk a lot about on BiggerPockets, this is just one more way you can make a lot of cash flow and just keep optimizing your existing portfolio based on current market conditions.

Kathy:
Yeah, and I don’t really worry too much about the regulatory part of it because you just can’t stop progress. People want to and they don’t want things to change. But, look at Uber and all the pressure from the taxi industry saying, “You can’t be here.” They’ve kind of learned to coexist, and I think that’s what we’re going to see here. That 30 day has been pretty common, the month to month lease is 30 days. So, I don’t know, I can’t imagine they can mess with that too much. So, it does seem like a great option if you want that higher income from a furnished rental, but don’t want to deal with regulations on the short-term.

Dave:
Yeah, for sure. It’s really interesting. I think in Arizona maybe, the Supreme Court ruled that the regulations on short-term rentals went against the state’s constitution. So, I’m curious that like it could go that way too and open up more short-term rentals. But, I think we’re just sort of at this weird pivot point now where regulations are coming, maybe they’re illegal, I don’t know. Or, maybe there’ll be more of them. But, I love that idea of just having a lot of optionality. Makes it pretty safe. All right. Well, thanks, Kathy. It was fun as always and appreciate it, and obviously I should’ve known that you wrote the foreword to this book, but it was fun to have someone who is so knowledgeable about this topic. Join for this episode.

Kathy:
Thank you. It was fun. I love being here.

Dave:
All right. Well, thank you all for listening. If you enjoyed this show, please make sure to share it. If you think there’s people you know who would be interested in medium-term rentals, send it along so they can hear about the book and learn from Zeona and Sarah directly. With that, we will see you next time for On the Market.
On the Market is created by me, Dave Meyer and Kalin Bennett. Produced by Kalin Bennett, editing by Joel Esparza and Onyx Media. Copywriting by Nate Weintraub. A very special thanks to the entire BiggerPockets team. The content on the show, On the Market, are opinions only. All listeners should independently verify data points, opinions, and investment strategies.

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Ashley:
This is Real Estate Rookie, episode 228.

Tony:
I know so many rookies today would consider capital maybe as one of their biggest obstacles to getting started, but you got to start thinking outside the box. It’s like BPCON just happened. Hopefully, you’re at BPCON, shaking hands, meeting people, because I guarantee, out of the almost 3,000 people that went to BPCON, a certain percentage of those folks are lending money on a private basis and they have a good time doing it because it’s the most passive return they’re ever going to get in real estate investing. You just got to find the way to connect with those people.

Ashley:
My name is Ashley Kehr, and I’m here with my co-host, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie podcast, where every week, twice a week, we bring you the inspiration, information and stories you need to hear to kickstart your investing journey. We like to start the episodes off by shouting out folks in the Rookie audience who have left us honest rating and reviews on Apple Podcasts.
And this week’s review comes from Rags321, and Rags says, “Great podcast!” with an exclamation mark. “This is a great podcast for learning about real estate through so many different aspects.” So Rags kept it short and sweet but still left us five stars. So if you haven’t yet, please leave us a rating and review on whatever podcast platform it is you’re listening to. The reviews go a long way to helping us find new listeners. And the more listeners we find, the more folks we can help and that is our goal here at the Real Estate Rookie Podcast. Isn’t that right, Ashley?

Ashley:
And you know what I was just thinking of? So this is recorded after BPCON and we talk about the benefits of BPCON throughout this episode, but we’re headed there in a couple of days. And all I thought about while you were reading that review is, man, I need to get myself some muscle and force people into leaving us five star reviews while we’re there. Do it now.

Tony:
We’ll just walk around with a big QR code that links to the podcast.

Ashley:
Yeah. Oh, Darryl and Sarah just pushing people out of the way, “Did you leave a five star review? You can’t enter the conference.”

Tony:
That is such a good idea. So for BPCON next year as part of the registration process, there should be a toggle that says, “Have you left a review? Yes or no?” And if they say yes, then they can buy a ticket. And if they say no, then I don’t know, they’re not able to buy a ticket or it’s double the price or something crazy like that.

Ashley:
And obviously, this word, trademarking this idea right here. So it’ll only be used for our podcast on the market, not steal our idea.

Tony:
You guys are on your own.

Ashley:
But if you guys haven’t already, check out BiggerPockets’ newest podcast on the market with some of our good friends. It actually is a super great podcast.

Tony:
Such a great podcast.

Ashley:
Still number two to us of course, but definitely really interesting. And they don’t have boring banter. It’s actually interesting conversation going on there. So make sure you guys check them out if you haven’t already. So Tony, what’s new with you?

Tony:
Yeah, we are shaking, we’re moving. One of the things that I would love to do, maybe we can do this in front of our future Rookie Replies, is give you guys all an update on our Big Bear Hotel. So I would love to share the story behind that, but we just officially shut that deal down last week, so another buyer swooped in and took it away from us. So it’ll be a lot of, I think, good lessons for folks to hear as far as what we learned, what we do differently next time.
So licking my wounds from that defeat. But nonetheless, we’re still moving forward. We got a bunch of properties we’re setting up right now. I think probably we’re in the process of about to take live. I think what will be my favorite property in our portfolio is this really cool Mars themed property in Joshua Tree. And it’s got the same aesthetic as our usual tiny houses, but it’s actually a two-bedroom property. And it’s like, I’m just super excited for it. So we’re having a good time setting that one up and just all full steam ahead, the usual stuff.

Ashley:
Yeah, I think that would be a great Rookie Reply is talking about that deal because even me, I’ve had to back out of a campground deal and it was just sickening, and I felt awful losing that deal. And then somebody else swooped in and got it. But I think that it’s way better to not force a deal and that wasted time, the money, that was an opportunity cost of losing a little bit of time and a little bit of money compared to the large amount of money and time you could have wasted if you went through that deal and it not being a great deal too.
So social media, the impact it has on people’s lives, I could care less about somebody showing me their fancy things they have that. I have no interest in keeping up with the Joneses, that doesn’t bother me. But somebody talking about, “I never back out of a deal, I always close.” That’s like, “Oh, I had to leave a deal.” That makes me cringe at myself. But also, you never know what people are saying online, but I think it’s perfectly acceptable and should be made more of the norm that it is okay to go out of a deal if it’s not going to work anymore, instead of trying to force it.
And yeah, it does suck to be that person where the seller is like, “Geez, I had a buyer and they’re not buying it anymore. What the heck?” And they can trash talk you or whatever you want or something like that, I don’t even know. But I guess they’re happy they have another deal, but-

Tony:
I got another buyer.

Ashley:
Yeah. So it’s hard to swallow that when it does happen. But lessons learned are huge, I think, from that.

Tony:
Totally. Well, what’s new with you, Ash? What do you got going on?

Ashley:
So I actually have a lake house that I’m hoping to close on, I think, Friday. But I’d leave on my flight for BPCON Friday, and so I’m trying to get a really early morning closing scheduled here before I take off. So, hopefully closing on that. If not, it won’t be until a week and a half later because I’m pretty much gone all of next week to get it done. So that’s the new thing. And it’s going to be a short-term rental, just on a little lake near us here about 45 minutes from me now.

Tony:
Are there beavers there too?

Ashley:
No, at least I haven’t seen, but there is actually a dam. So the lake, it’s cool. There’s a dam there and they actually drain it. So I think it’s coming up October 2nd or October 3rd. They actually drain the lake. So it’s like a manmade lake. There used to be a town there and they actually picked up … It’s always flooded, so they actually picked up houses and moved it and then they dug it out and they turned it into a dam.
So every year they drain the lake and then they fill it back up in the spring and then everybody boats on it and stuff like that. But I’ve never been to it when it’s drained, and so I can’t wait to go and see it like basically this big crater. And there’s still some water that stays in the bottom of it because they don’t get all of it out, but you can walk around some parts of it and stuff like that.
So it’ll be interesting to see. But a really nice area, nice community, a small town that the lake is in. And I think there’s a lot of potential. There’s not a ton of rentals that are listed there. What are listed don’t have a ton of vacancy, but what I’ve learned is that there’s a lot of, people don’t even have to advertise because they have the same families that come every single year that rent it out and things like that. So I think this actually might be a good opportunity to … There’s a Facebook group for this lake and I think just even posting in the Facebook group as to, “Here’s this new short-term rental.”

Tony:
Oh yeah, I’m glad you mentioned that, Ash, because I feel like that’s … A lot of people when they want to break into real estate investing, they always want to go to the big hotspots. But even for Airbnbs, you can find success in smaller, secondary, tertiary markets because every pocket of every single state has these little spots where people go to spend a night or two to enjoy whatever that little location has to offer.
So even if me on the other side of the country, I’ve never heard of this spot, but everyone in that area knows and goes there. Then there’s an opportunity for you to have a successful short-term rental there too.

Ashley:
And I think part of the large opportunity, and I’ve learned this from my arbitrage, my units, the short-term rental arbitrage where I’m renting out an apartment in an apartment complex, a lot of our guests that stay are actually visiting people that live in the apartment complex. But they live in smaller apartments, one or two bedrooms and it’s family visiting and they maybe have five people or whatever and they can’t fit into their apartments. So they rent this unit when they’re visiting. So like Thanksgiving, Christmas, always book through there people visiting family that live in the apartment complex.
I think since we’ve had it, this would be our third or fourth Christmas and it’s been the same woman that has rented it every Christmas to visit her family that lives in the apartment complex. So the same with this lake house, is getting people that have a lake house already but want to have people come and visit, offering people in the community a discount code or whatever if they have friends or family that want to stay at their house if they can’t accommodate them into their own lake house too.

Tony:
I love that. Great lessons learned, great lessons learned. Well, we got a slew of good questions today as well. Our first question is all about how to fight back when an appraisal comes in short. Ash and I both dealt with that issue and no folks have dealt with that issue. What happens, and this is the second question which I think might be my most favorite, is like what happens if one tenant punches another tenant? How do you handle that as a landlord? And Ash and I kind of share our thoughts on that. And then the third question is about how to remain competitive when you’re going up against cash buyers because I think a lot of folks are feeling that pressure, especially in today’s environment.
So question number one today comes from a listener by the name of Lauren Murphy Niakhu and Lauren’s question is about appraisals. So Lauren says, “My husband and I are refinancing our primary residence, which was just built in 2019. We received the appraisal today and it’s almost $100,000 less than the first appraisal completed in February of 2020. Given the down payment we have in the house, even with the low ball appraisal, we still have over 20% equity.
I don’t want to be reactionary or emotional, but I’m kind of pissed. I haven’t heard from the lender yet, but I’m hoping it doesn’t affect our refi. Obviously, if it does affect the refi, I’ll try to argue against it. One of the three comps to choose was a 30-year-old house with updates. But even if the refi moves forward, is this appraisal something that would affect the future sale of our house when we’re ready to move on?”
So I love a good appraisal question, Ashley, so I’ll let you lead in first. What are your thoughts? Do you think this has an impact on her refi and her ability to sell them in the future?

Ashley:
Yeah, I think I’ll answer the latter question first is, is it going to affect the future sale of their house when they’re ready to move? First of all, this appraisal is not public knowledge, so this will be held in … You don’t have to disclose that appraisal number to anyone. When you are ready to sell your house, if the person is getting a loan when they purchase your property, they will have their own appraisal on the property.
Unfortunately, there is no consistency that the appraisal will turn out the same or turn out different. An appraisal has been considered to be more of an art than a science where it can vastly depend on who the appraiser is that is appraising the property. So yes, it could affect the future sale of your house.
So if you go and list this property and somebody puts in an offer to purchase it and they’re going to be using conventional financing and where the bank would like to have an appraisal on the property and easy math, let’s use a hundred thousand dollars for the purchase price, the bank is going to loan you up to 80% of that value, $80,000. But when it is appraised, it only appraises for $90,000. So now the bank is not going to loan them that $80,000 and that means they’re going to have to come up with more money, a larger down payment because the bank is only going to give them 80% of the appraised value, not what they’re purchasing the property for.
So to kind of go into your other question as to how to dispute this, Tyler Madden, an investor friend of ours actually did this on a recent property he just purchased where he actually was doing a refinance. He held the property for a year, rehabbed it, went through the refinance and he asked his bank to dispute it. He wrote a letter stating that he would like a second opinion on the appraisal. He had to pay to have another appraiser come in and appraise the property. But he also submitted supporting documents.
So if you can show some kind of proof as to maybe you actually have the cost of construction, your original contract with the contractor, if you know of other comps in the area that weren’t included in your property or if you can find out more information about the houses that were used for comps and maybe there was inaccurate information, bring all of this forward.
And with anything, when you are confronting someone that they had made a mistake, don’t throw it in their face and be like, “This is wrong, this is wrong. You did this, you should have done this, blah-blah-blah,” just show them here. I’d like to provide more information and kind of do it in a kindly manner. But you can definitely dispute or request to have an appraisal disputed, but it will depend on the bank. The bank can deny your request and in that time, that’s when you most likely would go to another bank to ask them to finance the loan and to get another appraisal done.

Tony:
Yeah. Ashley, so many good things you mentioned there. I’m just going to add a little bit. So she asked about, will this affect the refi? And Lauren, you said that you’re at about an 80% LTV based on that, the appraisal that just came in. So I don’t know how high of an LTV your bank is willing to go on that refi, but I feel like a lot of times it’s going to max out around that 80%. So you might not have anything left to refi if you only have 20% equity left in the house.
So it definitely could impact the refi. If they’re able to go up to like 85 or 90%, then you’ve got some room there. But obviously that $100,000 difference will impact how much money you’re able to pull out of the house. I think your point, Ashley, about trying to challenge the appraisal are a really good idea. We’ve done that, I think, two or three times successfully now. We actually just got another appraisal that came back on a house that we’re selling that came back super low. So we’re actively challenging that, literally, have a call after we finish recording today to work through that issue.
And things we’ve done is we pointed out some of the inconsistencies in the appraisal that came back. I think your point of them using a house is 30 years old versus a house that’s four years old. Those are two totally different types of construction. And typically, appraisers aren’t going to take a three-decade-old house with a three-year-old house. Those are two different types of houses that you’re looking at.
If you can find better comps within the same search radius, so let’s say they went out a quarter mile, if you can find recent comps that are better comps, I would use those as proof to say, “Hey, here’s something that I think was missed from this report.” And like you said, Tyler, I think given the scope of work for what he did, we’ve done that as well for some of our rehab. So all these things I think help play into the fact of whether or not you’ll be successful in challenging that appraisal.
And then I think, you talked about this as well, that art versus science. Anything that’s dependent upon a person’s opinion, there’s always going to be some sort of fuzziness around how they get to that number because you can send two, three, four appraisers to the exact same property, there’s a good chance they’re all going to come back with a very different opinion of value. And just a slight tangential story, but somewhat related. I know a builder. He builds in Southern California and when he builds his houses, they’re all the same exact property, same exact floor plans, same exact house, but he’s building them in different spots around the city.
So he’ll go. He’ll submit plans for four properties at a time. So he’s submitting four sets of the same exact plans to the county for them to check the plans. Those get submitted to four different plan checkers, same exact property, same exact plans. But guess what happens when he gets his comments back? Not one set of comments are the same thing. Every single plan checker is pointing out something different even though it’s the same exact build, and it makes no sense.
So he’s submitting revisions on plan A that he’s not submitting on plan B, and revisions on plan C that aren’t on plan D. So my point is, whoever goes out there, they’re going to see something that someone else might miss. So if you can point out some of those inconsistencies and things that they might have missed, I think it helps you.

Ashley:
Yeah, that’s definitely a great point. And some appraisals that I’ve done too is I’ll meet the appraiser when they go to the property and I’ll offer them information. So some people have said that they’ve tried to offer appraisers information, they don’t want it. They do their own thing and that’s fine, let them. Don’t push information onto them. But I’ve had appraisers like, “Oh wow, thank you.”
So there was one property, I owned a house down the street and I had had it appraised fairly recent. So I gave that appraisal a copy of that appraisal to the new appraiser that was coming in for this other property also with a list of what updates we had done to the property, how much it cost, things like that. I’ve also had appraisers ask me, “Oh, so what did you put in for new?” And I just tell him. He’s like, “A ballpark, what do you think it cost or whatever?” And just ask my opinion, and no proof. I don’t want to see no receipt or anything. They just ask and I just spew out on a number or whatever it was. And so yeah, it does widely vary depending on the appraiser.
I’m working on getting a hard money loan right now to purchase a property and it’s kind of a hard money lender, not really. They do hard money loans, but I’m actually doing a long-term loan with them. And so we’re having an appraisal on the property and when the appraisal was done, they told me that I could not have a copy of the appraisal yet. And I was like, “Okay, that’s really weird, I am entitled to that.”
But what they said was they were actually having a third-party fact checker go through the appraisal and make sure all of the information was correct. And once that verification was done, then they would send me a copy of the appraisal to look over. And I guess there was some kind of confusion and things that were missing and they had to have the appraiser revise the appraisal because of that, but ended up good. It was $13,000 over what I’m paying, so instant equity right there. So yeah, it just vary.

Tony:
And that happens, appraisers are people and sometimes they get things wrong. Our last successful challenge, they had the square footage off by, I think it was like, I don’t like a 20% difference in the square footage. They had us 20% smaller than what the property actually was. And obviously that has an impact on the value. So go through that appraisal with the fine tooth comb and if you can find some inconsistencies, point that out.
And then lastly, like Ashley said, if you can’t get that challenge successfully and your lender isn’t able to help advocate on your behalf, then maybe find another lender to do this refi with and maybe they’ll have a better chance of getting you the right appraisal.

Ashley:
If you haven’t done an appraisal yet, get a copy of someone’s appraisal. So anybody that has done a loan probably has a copy of their appraisal. So ask your friends and family if they don’t mind giving you one and just go through it and look because it does show almost the formula or kind of the guide of how they do put the appraisal number onto your property.
So you’ll see three to four comparable properties listed there and it’ll go as to what’s the bedroom count. And if your house has three bedrooms and the comparable has four bedrooms, they’ll subtract some off of your house because it’s not as comparable because it’s one less bedroom. And so you can go through and see the things that they actually look at when they’re adding or subtracting value from your property.
So take a look at that and you can probably Google appraisals too and look at them, but if you can find a friend or family member that has gone through an appraisal and get a copy of their report, it is very interesting to look through.
Okay, let’s move on to question number two. This question is from CJ Caneel. Does anyone have any information regarding a landlord’s responsibility for damages caused by a tenant renting a condo to another person on the premises? Specifically, if the HOA documents say a unit owner is liable for damages caused by the tenant, does that extend to intentional acts by the tenant that harm another person?
So for this question, are we assuming these are in the unit or are these in common areas even? I would think that in the unit, it would definitely be the owner responsible because a condo, you actually own your unit. But if this tenant were to go and do harm to someone else in the common area or do harm to the property in the common area, then yes it would be the owner’s responsibility of that unit. What are your thoughts on that?

Tony:
Yeah, that’s tricky because if I’m reading or understanding CJ’s question correctly, it sounds like one tenant hurt another tenant in some way, shape or form. He says, if one tenant causes damage to another person on the premises. So it sounds like maybe there’s some kind of altercation between two tenants. Is the landlord somehow responsible if tenant A beats up tenant B or something like that? And honestly, I do not know and it’s make … Are you not reading it the same way?

Ashley:
No, no. Now, I am. I see it. So if your tenant does damage to the property as the owner of the unit, I think the documents say that you are liable for that. So he does understand that. But what he’s asking is does it extend to intentional acts by the tenant that harm another person? So maybe let’s say that your tenant goes and punches another tenant in the face, are you liable for that?
The first thing I think of though is I feel like that’s not really an HOA issue. I feel like that’s a civil case.

Tony:
Or a criminal case.

Ashley:
Yeah, a criminal case. So I could see if there was maybe damage to the property where the HOA would come back after you, in which case you in turn would sue the tenant for the damages. So yeah, that stinks that you have to go and try and get your money back from the tenant. But as far as an intentional act to harm another person causing physical harm or emotional harm, I would think that would be a civil case against the tenant as the landlord.
So for example, if someone in my property that’s a tenant went and punched the neighbor, the neighbor would go after the tenant, would call the cops on the tenant, not on me. I could see the HOA moving for you to remove that tenant from the property. I could definitely see that in which if the tenant is doing this, it might be a good idea to get the tenant out.

Tony:
Yeah. And CJ, we don’t know what state you’re in or what city you’re investing in, so definitely consult with a local attorney if this is something that you’re concerned about. But yeah, I think I’d agree with Ashley where in most cases, if there’s some sort of physical altercation between one tenant and another, those two tenants would be held responsible, not necessarily use as a landlord now.
If someone is walking in the common areas and they trip over a step and hurt themselves, that’s a different scenario. But just one guy or girl walking up to another and called in some issues, I don’t think that would fall into your lap. But definitely consult with some legal professionals because Ash and I are, either one of us are attorneys or pretend to play one on podcasts.

Ashley:
The only way I can think of is if that person decides to sue you because you rented to that person, because people will sue for anything nowadays.

Tony:
That’s true. If this person had a history or something of violence and you didn’t catch that and maybe they were a threat to the community, who knows?

Ashley:
Yeah. So I think, Tony, is the best advice is consult an attorney. Better to be proactive than reactive. But I would think that it would be very hard for an HOA to monitor. That’s like saying that you’re responsible for another person’s actions. Why would anyone ever want to rent out their property if you are liable for their actions on another person? That’s a huge responsibility there.

Tony:
That’s a huge responsibility, huge responsibility. But it does make me wonder now though, like for Airbnb properties, I wonder if let’s say that my guest gets into a fight with the neighbor next door, I wonder if I could be held liable as the Airbnb owner for maybe something that the guest did like that, so something for me to think about. I got to make some phone calls after this to see what kind of liability we have.

Ashley:
Tony, along those lines, so I’m trying out new software for short-term rental. And one of them has the option where if you want to send almost a lease agreement or rental agreement to the person renting, that is probably something you could put in there. Obviously, there’s still ways people can sue you, even if you have them sign a waiver or something, but put in there that you’re not responsible for their actions or whatever, something like that. And they’re responsible for themselves and what they decide to do. But the second part of that is do you do that?

Tony:
It’s so funny. So we just had our short-term rental summit a few weeks ago and one of the speakers or two of the speakers were Sarah and Annette from the Thanks For Visiting podcast. Great podcast, you guys should definitely check them out. But they’re super dialed in with all their systems and they send rental agreements before every guest checks in. And they have it as part of their house rules on Airbnb and Vrbo, that if the guest doesn’t sign the rental agreement 24 hours before checking in, they can cancel their reservation without any kind of penalty.
So essentially someone will pay for the reservation, not fill out the rental agreement, they don’t get their money back. So we’ve been having some discussions and turned it around like, does it make sense to add a rental agreement as well? So we don’t do it yet, but after talking to a Sarah and Annette a couple weeks ago, it’s something that’s on our roadmap to add in for sure.

Ashley:
Yeah, super interesting because I really hadn’t thought about that. But then I did see their talk at the summit, it was really great information and then when it came up again with checking out the software. So yeah, I was just interested in that.
But I think that if this is something that you are worried about is being responsible for your tenant’s actions that especially short-term rental or even in your long-term leases, putting in some kind of clause that protects you. And the best place to get the proper wording for a clause like that is from an attorney. And it also probably varies based on what state you live in too, because some states, it’s a lot easier to sue people for frivolous things than it is in others.

Tony:
Awesome. All right, well, let’s keep rolling. We got one more amazing question to dive into and our third question today comes from Anthony Emerson. And Anthony says, “As a first time buyer, what are some ways to beat out a cash buyer?” This is a great question, Anthony. I think one that’s popped up multiple times both in the podcast and the Real Estate Rookie Facebook group. Here’s what I’ll say.
So a seller is motivated by one of three things. Its convenience, its speed and its price. A cash buyer, typically they’re going to beat you out by speed because if you’re a cash buyer, you don’t have to jump through all the hoops that a typical mortgage-backed buyer has to go through. There’s no appraisal process. You don’t have to if you’re paying cash. You can skip on a lot of inspections and you can close tomorrow if you really wanted to.
But when you’re buying with a traditional loan, you’ve got to go through the appraisal process. You’ve got to get your title work done. There are so many things that a traditional lender will want to see, which adds to that escrow period. So if a buyer is looking for speed, someone with cash will typically win.
The other thing that cash gives you, and I guess this is the fourth reason, is certainty. A lot of times, people can get pre-approved for a loan, but when they go out to actually close, some things pop up that prevent them from getting to the finish line. But if someone has cold hard cash in the bank, there’s a certain level of certainty that comes along with someone that has cash in the bank. So with cash, you get speed and you get certainty.
On the other side, ways that you can be competitive are with the actual price and with convenience. I met an investor one time that got a crazy good deal on a property because they offered to help the seller move. Seller had been in the house for her whole adult life, had accumulated a bunch of stuff and the thought of her having to leave was just overwhelming for her. But the seller just offered to hire a moving truck, and because they offered to help that person move, they added a certain level of convenience that allowed them to get that deal.
So if you can find what the pain point is for that seller and find a way to soften the blow or make that pain point a little bit easier, you’re giving them a level of convenience that might make them choose you over another offer.
And then the last thing you can do is the actual price. Some sellers are just motivated by what is the highest dollar amount that I’m going to give. You have to remember, on the seller’s side, they’re just going to get a check when you close. It doesn’t matter if it’s cash or if it’s with the loan, right? They just get a check at closing.
And even though the cash might come faster, even if that buyer has a loan that they’re getting on the property, the seller is still going to get a big fat check at the closing table. So if you can give them a bigger, fatter check, some people are motivated by that. So, speed and certainty, maybe you lose out to on the cash side but you can beat them out with offering a higher price and giving them a certain level of convenience.

Ashley:
Tony, that was great, great information. And to tell you, whenever you go off and giving this great information, all I do is imagine this turning into a nice Instagram reel on your Instagram account.
Oh, I only have a couple things to add to that, but I think those three things apply to any kind of property you’re going after. Every seller has one of those three things, or maybe a couple of those things that motivates them. So the advice I would give is to go for off-market deals. So you’re going to have less competition because it’s not listed on the MLS.
So, off-market deals you can find by driving for dollars, sending out mailers, calling people, word of mouth, telling anyone and everyone what you’re trying to buy. And maybe somebody’s cousin will come and say, “Hey, you know what? My cousin is selling this, and blah-blah. I thought of you because you were talking about it.”
I wouldn’t rely on that as your only lead source. I’m waiting for people to bring deals to you, but also wholesalers too. So the thing with wholesalers though would be is that a lot of times they will only accept cash purchases, but that’s not always the case. So that’s something to talk to a wholesaler up front is if you are financing the property if they would accept terms when purchasing a property.
What you can do is if you do find an off-market deal, and I think this is a big misconception sometimes, is that because you’re buying the property off market, the seller is going to expect you to close fast and to bring cash. And that is not true. That’s not the case. You can give them an offer of any type of financing that you have available to you. And it doesn’t mean you if you are getting a conventional loan, that you have to buy a property on the MLS.
So I think that’s a great route to go is to actually do some deal sourcing yourself, find a deal, and then make an offer on it where it’s just you offering and nobody else. So that there is that, they don’t have tons of people submitting offers by 10:00 PM on Sunday evening for whatever.
Another thing too I like about off market deals is that you’re talking direct to seller. So it’s a lot easier to find out what their motivation is. Where when you’re on the MLS, it’s you talking to your agent, talking to their agent, talking to the seller, and it’s like playing telephone. Even now I’m in New York state, you have to use attorneys to close and I’m doing an off-market deal on a lake house. And it’s like me to my attorney, to their attorney, to them.
And finally, we just called them and it’s like, “Whoa, whoa, no that’s not what’s happening. I don’t know why our attorney said this and your attorney said that,” like no. And we were able to, within 24 hours, get the deal back on the table and the ball rolling and moving. So I think there is an advantage sometimes to having a middle man when you’re working on a deal, but other times, it’s even better just to go directly to the seller and be able to talk to them and figure out what they want and what their motivation is.
And then you can negotiate from there, sit down with them, give them your offer. And if they’re like, “No, we don’t want to do it,” you can talk to them and say, “Okay, well what would be some things that would maybe make this deal happen for you?” Maybe it will work out, maybe it won’t, but don’t go into the deal just because you want the deal and don’t agree to their terms just to make it happen, because there will be other deals out there.
So definitely, try finding your own deals by going off market. There’s a lot of ways to do that, just even driving around looking at properties. One thing you will have to be careful of is that when you are looking for off-market deals, you will have to make sure that the bank will finance the property if you are using a loan. So if you’re using your FHA loan, you have to go through and do a kind of an FHA inspection. So this is separate from the inspector you hire. This is completely separate from that where they want to see the property as up to code.
I remember when my cousin purchased a property with an FHA loan, she had to install handrails going up the one stairs because it didn’t have it and stuff, before they would actually finance the property. So, do be careful of that that you’re looking at properties that would pass an FHA inspection or that the property would actually finance. Because if the property is too dilapidated, a bank may say, “You know what? We’re not going to touch that.”
And banks also have lending limits. I found that very common. A lot of banks won’t even give you a mortgage if it’s less than $50,000 too on the property. So watch out for those kind of things when you are going for those off-market deals. The best way to find out what property won’t work is to go directly to the lender that you’re using and ask what are properties that you stay away from or you won’t lend on. If it’s inhabitable, there’s no running water yet or anything like that, the bank probably will say, “Yeah, we don’t finance those type of properties. You have to get it livable, at least for us to finance.”

Tony:
Yeah, so many good things, Ashley. As I just want to piggyback on what you said about playing telephone, where it goes from you to your agent to their agent to them. The same exact thing happened to me on a deal we’re negotiating on this past summer where I wanted to present some updated terms to the seller. And the agent, he was a dual agent, so he was representing both the buyer and the seller in this situation. I was the buyer, the other person was the seller. And I said, “Hey, just pitch this to them and let’s see what they say.” And the broker was just so hesitant. He’s like, “I think I might make the deal fall apart and the seller is really antsy and I don’t want you to lose this deal,” so whatever.
I hang up from him, I just called the seller. And I say, “Hey, here’s what I’m thinking. What are your thoughts?” Without hesitation, they’re like, “Yes, let’s do it.” So it’s like sometimes if you can skip that middleman, it does help I think bring a more creative deal together. And it also helps build that relationship, I think, if you can talk to that person directly.
The other thing too is that it doesn’t necessarily have to be your cash. So Anthony, if you have friends or family or even hard money that you can go out and get, that will give you an opportunity to be a cash buyer in a way. Because cash just means like can you buy it without getting a traditional loan? So if you can go out and raise $500,000 from friends and family or go out and get hard money, now you’re able to close within the same timeframe that a cash buyer will.
And if you think about, I looked it up while we were talking, the S&P 500 is down 22% year-to-date. So the people that have had their money majority in the stock market are down 22% this year. So do you think that there might be an appetite for someone to say, “Hey, I’d rather give you a private money note at 10%, 12%, whatever it is, as opposed to leaving the stock market right now that’s taking a nose dive”? So there’s probably an appetite in today’s environment to say maybe private money lending is a better way for me to get a return on my investment because the S&P 500 has taken a nose dive.
So I think get creative, Anthony, doesn’t necessarily have to be your cash and see if there’s some other ways where you can get some cash but not be yours.

Ashley:
I’m going to give some unsolicited advice on the stock market right now. I am going to say if you do have money in the stock market even though it is down 22%, I would say-

Tony:
Don’t pull it out.

Ashley:
… leaving your money in there and let it ride it out, because if you look at the history of the S&P 500, it will go back up. And if you are losing money right now, you will lose money if you pull it out.
So a lot of people don’t follow that advice, they panic. So just to Tony’s point is those people that do pull their money out, great opportunity for you to make the money. And there are going to be, and probably already are tons of people that are pulling out of the stock market and kind of panicking. Just like in 2008, a lot of people did that. And if they would’ve left their money in, they would have a lot more than what they do have now because they did pull their money out.
So yeah, I think that’s a great point is you can offer a better return right now than a savings account, money market account, things like that, and even just someone putting their money into the stock market.

Tony:
And there’s probably a lot of people just sitting on cash too. It’s like a lot of people had equity. A lot of people sold homes over the last year. A lot of people refinanced over the last year. A lot of people pulled HELOC. So they just have this cash that they’re sitting on that they would like to put to work. They don’t want to put in the stock market because of how things are going. So if you can present them with a safer alternative investment strategy that gives them a better return, you can be a lifesaver.
I know so many rookies today would consider capital maybe is one of their biggest obstacles to getting started, but you got to start thinking outside the box. It’s like BPCON just happened. Hopefully, you’re at BPCON, shaking hands, meeting people, because I guarantee out of the almost 3,000 people that went to BPCON, a certain percentage of those folks are lending money on a private basis. And they have a good time doing it because it’s the most passive return they’re ever going to get in real estate investing. You just got to find a way to connect with those people.

Ashley:
Yeah, I think to add on to that too, if you do have money to invest, actually right now is a great time to put into the stock market because you’re getting stocks on sale. But once we get a lot of people will do that. But also if you are planning on retiring in the next couple of years, the stock market may not-

Tony:
Rebound.

Ashley:
… rebound in time when you are ready to retire. So this is also a great person to go after. Somebody who’s retiring in the next several years maybe doesn’t want to put any more money into the stock market and they want to put it into a nice safe investment with you. So what did we learn? We want to go after old people that are on the verge of retirement.

Tony:
We got to start doing presentations at the senior home, the geriatric centers. It’s where the best private money lenders are.

Ashley:
And you know what? It seems like, not even old people. If you’re retiring, hopefully you’re not that old because you guys are rockstar real estate investors and you were going to retire at the age of 30, 40 you a lot sooner than …

Tony:
So that’s the hot tip for today’s episode. You got to go to the senior citizen, local senior citizen, like community center in your city and do your presentation there to find your private money.

Ashley:
Okay, let’s really break this down and let’s go through the sold homes. Let’s look up people who have sold their homes. So look for the Dorothys, maybe the Carols, all of the old fashioned names that have sold their homes for cash for way more than they bought it for 30 years ago. They’re sitting on their lump sum of cash. Search what nursing home they’re at or long-term care facility and then that’s where you’re volunteering.

Tony:
There you go. That’s million dollar plan right there. You’re welcome to everybody.

Ashley:
Okay, so Tony, we’ve been our last episode, our first one doing these longer extended episodes, we had a little bonus content kind of talking about market interest rates. So did you have something that you wanted to touch on today that we could boring banter about?

Tony:
So BPCON just wrapped. And I know we’ve talked about this in the past before, but I think it’s always good to put networking front and center because I really do believe that that’s one of the most important things that a new investor can do to kickstart their investing journey. So I’m just going to share what someone can do if you are hesitant to network or maybe you feel like networking isn’t quite your cup of tea.
So first thing I’ll say is that you don’t have to be an extrovert to enjoy networking. I think I’m naturally an introverted person because I know I re-energize by being by myself. I need alone time to have my energy levels come back up. Whereas if you’re an extrovert, you need that people connection, that energy of other people being with you to feel re-energized. So I’m by nature an introvert.
But I still find joy in networking, and here’s typically what I’ll do. So even before I was Tony J. Robinson from the BiggerPockets Real Estate Rookie Podcast, and I was just going to meetups as Tony Robinson with the nobody-listens-to-my-podcast podcast, I would go into a room and I would find a group of people. And all I would say is like, “Hey, do you mind if I join you guys?”
And a hundred times out of a hundred times, they’re going to say yes. I’ve never been told, “No, you can’t join us.” And once you join into that group, it’s a simple question, ” So, hey, what brings you here today?” Or, “Hey, where are you at on your real estate investing journey?” And then people kind of go off and start telling you their story. And that’s how you build connections with people. And it’s not necessarily about meeting as many people as you can in the room, it’s more so about like, can I build a genuine connection with any of these people? And you never know where these little conversations or where these little connections might lead you.
I’ve shared in the podcast before that the only reason that we started investing in Airbnbs was because Alex Sabio … His name is Alex Sabio. He’s another investor here in southern California. He started buying Airbnbs and he and I met at a meetup. And after he bought his first one, he said, “I think you guys should buy one too.” Three weeks later, we close on our first cabin. So you never know where those connections will lead you.”So hey, can I join you guys? And where are you out in your investing journey?” Those two sentences will take you so far when it comes to networking.

Ashley:
The point you made about establishing a genuine connection was right on. I do think that sometimes people get over-concerned with, “Oh, I got to build my list of connections. I collect as many business cards as I can and enter them into some kind of data collection software so I can track the people that I’ve made a touch point with.”
But having, instead of meeting 20 people that night, talking to three people where you actually were interested in what they’re saying and the same back to you and you built a connection with them, that may be on your way to a friendship instead of just that business connection, that networking. That will be so much more valuable to you than looking at a list of 20 people that you met that night but can barely remember or put a face to a name as to who these people actually were.
You may make a note on the back of their business card, what they do or something like that, or one thing you learned about them. But the genuine connections are really what are going to help you. And also you can provide so much value to those people too.
And because you have that genuine connection, they’re actually going to want to help you and the same, and you’re going to want to help them because you truly care about them and you become friends or whatever that relationship has turned into. So I think right there was a huge takeaway. And sometimes when we talk about things on this podcast that are business-wise, I think of it too as even just in life in general.
As I’ve gotten younger but yet wiser, I’ve somehow learned that in life, I would rather have that core group of friends that are super genuine and best friends than have 50 friends that you don’t have that genuineness from because you’re just like trying to keep your friendship going with 50 people instead of those four or five people where you build that genuine connection. So I think that works in all aspects of life, I guess.

Tony:
So true.

Ashley:
Well, you guys, thank you so much for listening to this week’s Rookie Reply. My name is Ashley, and you can find me at WealthfromRentals, and he’s Tony at tonyjrobinson on Instagram. And please, if you are loving the new Rookie Replies, leave us a five-star review on your favorite podcast platform. We’ll see you guys back on Wednesday with a guest.

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