Ekabo Home Financial Freedom Mastermind Podcast
A podcast for those who do not believe they were put on this earth to work 40 to 50 hours per week for 40 to 50 years, to hopefully retire at the age of 65.
Ekabo Home Financial Freedom Mastermind Podcast
115. Mastering Real Estate Contracts: Georgia Strategies, Financing Tactics, and Portfolio Growth Secrets for Success
Unlock the secrets to mastering real estate contracts and secure your financial future with our expert insights. This week, Niyi Adewole and the Ekabo Home team break down the essential elements of Georgia real estate contracts, ensuring you have the tools to protect yourself and make strategic investments. We discuss the critical roles of due diligence, financing contingencies, and appraisal contingencies, alongside the importance of earnest money and working with reliable lenders. Learn how to safeguard your investments while positioning yourself for success in the competitive real estate market.
Discover the art of real estate financing and closing strategies that can save you money and maximize your investment potential. We'll share tips on leveraging various loan types like FHA, VA, and USDA loans to cover closing costs and property upgrades. Understand how Georgia's unique eight-day unilateral extension for closing can rescue deals and why timing your closing date is crucial for maximizing the time before your first mortgage payment. We'll also explore creative strategies for using seller credits to enhance your property, helping you turn potential hurdles into opportunities for growth.
Scale your real estate portfolio and navigate the challenges of property management with advanced strategies from our latest episode. We discuss opportunities for seller financing, subject-to deals, and optimizing rental portfolios through innovative tools like StayFi's Wi-Fi receivers. Whether you manage multiple Airbnb properties or are looking to expand your portfolio, our insights on creating direct booking sites, efficient cleaning schedules, and maintaining property quality will help you build a resilient, profitable business.
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Niyi Adewole is a licensed realtor in Georgia, brokered by EXP Realty. Feel free to reach out at Niyi.Adewole@exprealty.com if you would like to work with an investor friendly real estate agent.
Welcome to the Financial Freedom Mastermind Group Podcast. Here we're all about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions and keep the momentum going.
Speaker 2:Good evening everyone. This is me, e Adewale, host of the Acaba Home Financial Freedom Mastermind Podcast, and I'm excited to be joining you on this Wednesday, august 7th. We are officially really kicking into the back half of the year, right? We talked the last time that we met and had an interview with Nasir Young. We got to hear about his story, and tonight's going to be more of an open session, and I actually have a couple of topics that I want to cover tonight all around the Georgia contract and how you can rework real estate deals, and so Katie and I say we'll also be in an open session, so please feel free to jump in, ask any questions, send anything through the chat and we will definitely address that, but we want to take a deep dive session into contracting and how to work this in your favor as we're going after deals, and how the Acaba Home team uses the contracts to protect our clients and put them in a position to win even bigger. And so, before I even jump into that, it's been a while since I actually introduced a full team, so I'm going to share my screen here, and what you're looking at right now is the Acaba Home team as it stands today At this time last year, I want to say, we had about six members in the team.
Speaker 2:We are now at 13, and we actually have members in Florida as well as Georgia, and so we're covering the whole state of Georgia as well as Florida, and we are helping a lot of investors get closer to financial freedom, as well as helping regularly reach out to buyers and sellers, either at Dispo Ware house, for getting to their dream home. And so if you, or if you are looking, or you know anybody else that's looking to purchase a home or sell a home, feel free to reach out to the Acabo home team. We have a lot of referral partners that we work with across the state and we are personally servicing customers in Georgia as well as in Florida. That's a major upkeep announcement, and the reason that we're jumping into contracts today is because tomorrow I'm actually leading a session, an internal session, with my team to walk through the contracts and how we can use it in our favor to make sure that we're getting the best deals for our clients. And so a couple of disclaimers up front. One, I am not a lawyer and nor do I play one in TV, and so please verify all this with your real estate lawyer. I'm just going to speak anecdotally about some of the ways that we've used this contract for Georgia Real Estate to help make deals even sweeter for our clients, and then I'll also show some examples and explain some of the concepts behind these things that we have in that Georgia contractia track. So again, if you got any questions, feel free to jump into the chat and or join live to ask, and we will go from there.
Speaker 2:When you look at the georgia real estate contracts, right, the first thing that I think about is how can you be protected? And there's literally three protections that come to mind. The first one is due diligence, and due diligence is the strongest protection that you have when you enter into a real estate, residential estate. Due diligence period with our team is typically between five and twelve days, unless you're working on a flip, which at times flip due diligence could be zero days. You get one day, you get three days, but it's significantly less because it's on your property as is and you should be getting it heavily discounted so that you can go and make the profits after fixing it up.
Speaker 2:And so during due diligence period, you can literally walk away for any reason and get your earnest money back and so, taking a step back, earnest money is typically 1% of the purchase price, and so if you're buying a house for $100,000, earnest lending would be $1,000. And that's what you put at risk with the closing attorneys to show the seller that you're serious about buying your house. Otherwise he would say, yeah, I'll pay you whatever for the house, put it under contract and then not execute without any penalties. That security deposit for earnest money actually puts you to have some skin in the game and it allows the seller to feel more comfortable, allowing you to go under contract with that property. And so, if they're even guilty, you can walk away for any reason. You can literally wake up and say, hey, it's raining outside and the sun's not shining. I think I'm going to exit this contract and you can get your full earnest money back. That's your first protection.
Speaker 2:Your second protection is financing contingency. We typically set this at 14 days, and what this does is, if you get pre-approved for one of the lenders that we work with, we're pretty confident that you're going to qualify for that loan, because we've vetted a lot of lenders, we've worked with a lot of lenders, we've found the one that's going to execute and get it done. Now, if you're working with a random lender, right, who's pushed it to the max and all of a sudden they're wearing some snags and once they see the property, like, hey, you can't approve this, then if they send us a letter within 14 days, we're able to use that to present to the seller and get your earnest and get out of the deal as well. That's financing contingency, and then the final piece is the appraisal contingency, which protects you on the value of the home. And so when you look at the appraisal contingency, when you're looking at properties, especially for investors, what we're focused on is running the numbers as well as the neighborhood, to ensure that this is going to be a solid investment over time and that it's going to hit the metrics and the numbers that the investor is looking for.
Speaker 2:What our team is coached to do is not necessarily to try to become a crazier. Right, we do run CMAs, but we're not appraisers. We don't know what that appraiser is going to feel like on a given day and if they're going to appraise a high, low or somewhere in between. But what we do do is make sure that in our contracts that aren't flips, that we have an appraisal contingency built in typically it's 21 days so that if the home appraise is low, we have the ability to renegotiate that with the seller, right. And we've negotiated a lot of bills where we'd be able to get the seller to reduce the price because we're so close to closing and that in turn they deal with some great deal. Or if the seller's unwilling to budge on that number, we can walk away and take the earnest money and still be protected. And so that's your appraisal tendency and those are those three top protections.
Speaker 2:Now, one of the things that a lot of people are starting to explore and we're educating our clients on is the use and the reason behind seller credits. And so when you look at your closing costs, if you're buying that primary home, your closing costs should be anywhere from should be roughly about 3%, right. But if you're buying an invested property or anything in between, or like a vacation home, it's usually between 3% and 5%. So that's a lot, especially when you factor that in on top of the down payment that you're giving. Let's say that you're putting 20% down on a $100,000 house freezing math, that's 20K. You've got to come up with another 5% potentially right, another five grand, to put down just a couple of closing costs. That's not going toward the mortgage or things of that nature.
Speaker 2:And so one of the things that we've done as a team is we prioritize trying to get these seller credits toward closing that we can use to knock out some of these closing costs and if we get a significant amount, we can potentially buy down the interest rate for our clients to help them lower that amount out of pocket up front, right, which essentially increases their cash on cash return because they had less money in the deal. And so when you look at the government and what they're trying to incentivize, they make it very clear they like homeownership because one it's helping with the housing issue. It means that a different homeowner who's going to live in that house has now purchased there and they give you another taxpayer and so that's how they use all the community resources and pay to different vendors that are around the neighborhood which overall helps the overall kind of neighborhood and things of that nature. Right, when I say that renters don't or investors don't, it's just a homeowner is going to use a lot more of the resources in the area to help that neighborhood. And so the way that federal lending and things of that nature works is they've subtly incentivized home ownership, and I'll get into that no-transcript.
Speaker 2:And so if you're looking to buy a primary or secondary loan, if you put down less than 10% as a down payment, you can have a higher than 90-10 loan to value. You could only get a max of 3% toward close. And so in that 100,000 example, you get 3K toward closing. You'd have to pay the other potential 2K out of pocket closing. You'd have to pay the other potential, you know, 2k out of pocket If you were going to do more than 10%. Between 10% and 25% down, you can get up to 6% toward closing, which is awesome. That means you would cover your closing costs in that scenario and have $1,000 of the potential to buy it out of MainStreetSquare for $7,000 a year. And if you have a 25% down payment or more right, then you can get up to 90% in seller credits, which now you're really cooking. You're really doing well if you're able to put down 25% on the property and you negotiate 90% to work closely.
Speaker 2:Now for investment properties. It doesn't really matter how you pick it up as an investment property, whether it's the SCR loan with 15% down or a conventional loan 20%, 25% down. You can get a max of 2% in seller credits toward closing, and so they still are essentially forcing you to pay even more out-of-pocket, which makes it harder for you to buy investment properties as they carry to a home buyer's primary residence. If you and a home buyer had the exact same budget okay, I can only afford X the home buyer would be in a more advantaged position. You offer a little bit more for that house and get it, because they would not have potentially have to pay as many closing costs. One and two. They potentially could have a lot more assistance from the seller to help them get across the finish line.
Speaker 2:Now, when you talk about FHA loans, the cool thing about FHA is that is an automatic 6% that you're allowed to get toward closing, which is awesome, and so sometimes if you're on the edge of the conventional and FHA, this piece may push you over, depending on what you're going to negotiate, because 6% toward closing can be a heck of a lot and a major utility for what you're trying to do with bond and interest and making that dealing easier. Va loans is an automatic 4% toward closing and then USDA loans is 6% toward closing and it kind of continues from there. And so one of the pieces that we as an Acaba home team have been able to do for our clients because we're investors ourselves, we see these limits and we always are asking questions of one, why are they there? And we're not looking at to say right, we're always asking how could it be done and is there a way to get creative? And so, for example, we've had a few deals where we've gone well over that amount and we'll say, quote unquote loophole is, if you're able to negotiate all these credits and maintain an amicable relationship with the seller to where they're willing to do some of the work and you're glad to do ahead of time, you can reallocate those credits to checks that are cut to the vendors at closing for the work that they're doing. So, for example, let's say that you want a kitchenette put into your basement right, so you can turn it into a basement rental unit, and that kitchenette is going to cost you $10,000 to put it in. If you've already agreed to, say, 20,000 seller credits and you only need 10 to cover closing, you could essentially and this is what we've done a couple of times give back that 10K before closing and have that contractor complete the work ahead of time and then get paid at closing from seller proceeds, and so it's money coming from the seller. It's the seller doing work on their own property and getting paid. It's the same net to the seller, but now you are coming with less out of pocket, which again increases your cash on FIFO chart because you've racked getting a unit updated into your loan. Now, not all sellers are going to go for this, but we found a way to explain it to seller agents in a way that it's a bit less threatening, and we had a pretty good success rate in getting this done, which is awesome. I actually just did it with a personal property where we got that H-TED.
Speaker 2:The other thing to think about is extensions right, extensions. There's something that's new, or not even new. It's unique to the Georgia real estate contract and it's called the eight-day unilateral extension. It's supposed to be. The buyer or the seller can utilize this for financing reasons. If there's like hey, I hadn't received my disclosures in time before closing, or a myriad of reasons, you can use the eight-day unilateral, give notice to the other side that you're going to extend closing for up to eight days, and this single line that's inside the Georgia contract has helped save countless number of deals, because there's signs of really attitude at the end and the lenders are still working. If you're not coming to things in nature and you need that extra day or two and you're able to utilize this eight-day unilateral to get up to eight days to make it happen from there, and so that's one that we've utilized a significant amount and it's something that we're keeping in our back pocket, and it ties into the next piece that I'm going to talk about as well, which is closing day right. A lot of people will take their foot off the gas when you start getting toward that closing day piece and for us, as fiduciaries for our clients, what we're trying to do is make sure that we get you all the way through the whole process right, and we want to make sure that we capitalize on every portion of it. So what I've explained this whole time is how we negotiate your diligence, how we negotiate financing, how we negotiate the appraisal contingency seller credits, how we're using it right to try to make the deal even sweeter.
Speaker 2:The closing day is also important. A lot of people are just like, oh, yeah, yeah, you know, whatever day you pick is good, but if there is, say, updates that need to be made to the house, say, you're planning to renovate a unit and there's not any income coming from that. What we try to do is set closing as close as we can to the first of the month, reason being if you were to close, say, today, right, today's August 7th. If you close today, your next mortgage payment is not September, it's actually October, right, and it's October 15th. If you wait until the last day to make the payment, and so you essentially have two full months to get all the renovations done, maybe that takes you 30 days, and then you have another 30 days of income coming in from that property that's going to help you pay that mortgage and then opt forward, whereas, let's say, you close toward the end of the month. If you close on August 30th, then your first payment is Octoberober, right, and so that's a lot less time. And so it's ideal, if you can work within the deal, to have the close date either very close to the end of the month, for you to use the eight day unilateral extension and or communicate with the other agent to push it to the first, or to have it on the first of the month, so that you have the ability to get the most time to wrap up some cash personal investment before you actually have a mortgage due, and so these are a couple of tips that I'm going to go over with my team, actually tomorrow and I shared this with you a little bit earlier so those that might have missed it will be able to catch it on the replay but the Acabo Home Realty team has grown significantly through the years.
Speaker 2:In 2021, it 2021, and 2022, it was a team of one, yours truly right, running around having to make a hat. In 2023, you started taking on team members and you ended the year with eight team members on the Ohio Home team, which was awesome, and now, midway through 2024, we actually have 13 team members and growing, and it's pretty incredible. We're covering all of Georgia. We also cover Florida, and so if you know anybody that is looking to buy or sell whether it's an investor or a regular retail buyer we're willing to help and have them see, with love and with that, I think I've been on the soapbox for a bit and, yes, I am with you, aj.
Speaker 2:Shout out to the 8-Day Unilateral, but this is going to be an open session, so feel free to bring any topics you have. Forward any questions forward. What I just covered was just tips and tricks on the Georgia real estate time tracks and how you can use that to your advantage to make a good deal, a real deal. And for the questions comments, feel free to join as well. Yeah, everybody's busy multitasking and watching the Olympics. Hey, no worries. Yeah, that running stuff, man, I got to get on it, but I'm not quite there yet. I got to stick to tennis, steve. We got to get a game here soon. Now that I'm settling into the new place, we will get going here soon. So while we wait for any questions, comments from the group, I'm giving you just my take on the market right now. Right, so this is.
Speaker 2:I think we talked about it a couple weeks ago, but we're essentially in a buyer's market and I think for a lot of us we're in a buyer's market and we're potentially heading into a recession, if we're not our moon, and for a lot of the individuals that are millennials, this is going to be the first quote, unquote recession you've been in where you're an animal right, where you are actively in the market, buying real estate or stock investments and things of that nature, and so and for me, I'm going back and reading some of the books from the graves that I read back in the past from you know, the Warren Buffett's of the world, where he's like when everybody is fearful, that's when you're greedy. When people are greedy, that's when you should be fearful, right, and when you start to think about some of the advice, the sage advice, that is still the test of time. What I notice right now is a lot of people are pretty fearful. I've had to walk a couple I don't even have. I've had a conversation with a lot of different individuals that were in the midst of I think I should sell a house right now and things of that nature, and it's like no, I think you should take a view on the market long-term. You bought this property long-term, and if you try to flip something short-term that wasn't meant to be flipped short-term, like a property, that's how you lose money, whereas when you look at in long-term view and you start to say, okay, here goes the things that are coming to the metro, this is a short lit in the road you talk about just like the next decade, maybe from now you're going to be happy that it's property or not, right, and so I always kind of start thinking long-term and also trying to use that when everybody is digging.
Speaker 2:I see all that could say that right now is an awesome time If you have liquidity and or partners, you go and purchase real estate. I can't tell you how many deals come across the board each day where there's potential to do seller financing, right To where you could literally come to the table with minimal down and take over somebody else's pay max Subject to seller financing. There's plenty of realtors reaching out and slicing prices like crazy. I just saw those six bedroom, four bath, dope gate, long driveway, big house that would make an amazing Airbnb or midterm rental. That has steadily dropped their price from I think they were at like roughly a million dollars, they were like 950 or so and now they're at like 550, right, it's a company that's still going to appraise this year. It can be more Like there's opportunities in this market If you are willing to be greedy while others are fearful and have a long-term approach and have the liquidity to kind of ride out short-term storms. So I'm excited about that piece and I think I've talked to a couple people on here, but I recently closed on a duplex that we were able to negotiate significant amount of credits and we were able to get a kitchenette put in with some of those credits. So we essentially came at duplex into a try cut. I actually have people back there right now who are probably going to pull an all-nighter putting everything together and I'm going to go join them after this call to make sure that we can get the TVs, get all the wallpaper up, all that stuff and get this thing launched next week as a love-free short commercial, because we are going to lean in to this environment.
Speaker 2:But again, this is an open session. Feel free to drop any questions in the chat or comments and or join live my God, what's up, boss Devin questions in the chat or comments and or join live my God, what's up, boss Desmond, how you doing, man? I'm doing well. How are you? Come on, man, we got another book in that time. I'm good, absolutely, man, I'm good. And dude, I don't know what we were talking about the other day and I was super excited. I'm even more excited because the devices should be here by the end of the week, nevermind.
Speaker 2:So Desmond and I are talking about this way where, as you continue to build your portfolio, how do you optimize it?
Speaker 2:How do you squeeze more lemon or more juice out of that lemon, right?
Speaker 2:You've already gotten multiple short-term rentals and with the Acapulcone team, you have a 35 now under management, and so we recently partnered with this company, stayfi, and they have these Wi-Fi receivers right that you plug into your house and it's like extension devices, but it works like a hotel, where when people check in, they essentially would have to give their email an invalid email and their phone number to access the Wi-Fi and all their devices, and then it goes to a system and it automatically sends email marketing to them. The reason that we're going forward with it is one, we have the breadth of a lot of properties that we can market to, and two, we want to be able to boost our direct numbers right. Right now, I think we're at like around 10% or so of our bookings are direct, or maybe 7%. We want that to be at 30%, and the way that we can do that is by not only marketing to the host that booked it or the guests that booked it, but to the other 11 people that are with them and trying to keep that going.
Speaker 3:Yeah, absolutely, and I think that's a super cool thing, that and we were talking about this earlier it's really cool to see how your portfolio has progressed and now you're bringing in these more sophisticated aspects of the business and I feel like, for someone my operations caliber, so just three short-term rails, I don't really know if it would make sense for, like you know, that small of a portfolio. But then again, I feel like direct can make sense, no matter what kind of rental you have. Right, I think it's just a matter of how much you're willing to lean in on that piece, like right now, or I think in the past I haven't really felt the need to lean into that direct and I've been like grateful for that. But here recently it's definitely been something I've been considering more direct and I've been like grateful for that. But here recently it's definitely been something I've been considering more, just as I've been having to check the calendar more and having to think a bit more about you know, how to attract guests and get bookings and whatnot.
Speaker 3:So yeah, I mean, I think it's something I might even, you know, try out if I can. You know, try that out for chief, or, you know, work that out in some way. But yeah, I think it's a great idea for sure, and I've heard about it a bunch, if not even through stay five just the idea of like collecting guest info to increase the direct Cause, like you never know what's going to happen with the platform and like I hear horror stories all the time of like hosts with like thousands of reviews and like many, many properties and they just get like banned off of one random, one-off experience.
Speaker 2:So even like a divvy one. So we bought a house subject to earlier this year we talked about a while ago and we it was, it was running soon. Like it was bookings velour. You know, we had like a month and a half booked up. We're excited about it. And then midway through all those days, airbnb suspended our listing and they're like oh well, there's another listing of this address. You can't have two listings of the same address. I sent them all the documentation the same day. Like here goes the settlement statement it's a new owner. The other listing's taken down. Look at the. They're different right. All this stuff.
Speaker 2:It took them two weeks and they canceled all the remaining bookings in front of them. It took them two weeks to get us back on live, right, and that was just off of a misunderstanding, not anything happening right, and so when you see stuff like that happen, it definitely shows you that you're vulnerable. And I think three is enough. Man Like you have three properties. It's just set aside some time because hospitable does a lot of the work. Honestly, not that hard to do it through them. It's just going to be a little bit of an extra expense, maybe like 50 extra dollars or something like that.
Speaker 2:So go ahead and build your direct site, because now, even when you're looking to market to other owners like, hey, I can manage yours. I don't necessarily send them the Airbnb. I usually send the link to our hospitable so they can see all of it and it's nice and clean. They see our marketing. It's like, oh man, this is awesome Pictures, right, and you're not distracted by okay, what is this? One bad review, right? As opposed to look at the breadth of a fuller man.
Speaker 3:Yeah, absolutely, absolutely. Yeah, you're definitely right. Like, honestly, I've been like I said, I think I've just been fortunate enough to where I haven't really had to like think about it or like things have kind of just been flowing smoothly up until this point. But I'm definitely at the point to where I want to like optimize, I want to just be better about you know how I'm running things. So, yeah, it's definitely a point to that I'm going to, I'm going to follow you up on and like, yeah, get on that, because I don't want to, you know, one day randomly get blocked either.
Speaker 2:So no, and I'm definitely going to keep you posted on kind of how the SafeHive experiment goes, please do. We're going to be launching this Loader B&B here next week. Actually, that guy's working right now. We're planning to go over there. I wish it'd be awesome and get this thing done, because there's some bonuses in play. So they're like, hey, we're going to do that, so that's cool. So, looking forward to that piece $5 versus one of us Should we add it? Yeah, yeah, there may be an extra fee for that piece, which is actually not that bad, but, yeah, I'll keep you posted.
Speaker 2:On the StayFive piece, it's one where you just keep adding things little by little over time. I think I'm talking about that. It definitely didn't start off like this before. It was bootstrapping it, and then, over time, you can add other layers because there's more income coming in, and you can start to add other services that make a lot of sense. The one thing I'm trying to figure out, though, is how it would work to bring cleaners in, to pay hourly on staff, whether they're working or not, and figure out that amount, because right now, when I look at the dollars that are going out to the cleaners every month, they're awesome, amazing, amazing proves. But it's upwards of 20K a month. So when I look at that, I'm like this could be funds coming back to the management company. If it were to pay somebody say I don't know, $15 to $20 an hour, 40 hours a week right, and you're not necessarily going to work 40 hours a week. Right, and you're not necessarily going to work 40 hours a week. You just get consistent. I'm trying to think through that?
Speaker 3:Yeah, because that's something that has kind of been in the back of my mind too. Even just with having three, I'm like man, especially if the occupancy is where it should be and where I want it to be. The cleaners are here on a pretty consistent basis and I think it's the piece of having consistent pay and consistent work that can be challenging and can, I think, be the tough piece that's figured out. Because, yeah, sure, typically you might have three or four cleans a week maybe, but it can be so variable that I think it's going to be hard for someone to want to sign on to saying, hey, I'm okay with my schedule being variable and being based off the calendar. So I think some sort of consistent pay is required.
Speaker 3:But I think it would take some figuring out and some like good crunching of the numbers to make sure that like you're not screwing yourself out Right and like there's enough work for it makes sense, but then also like it's going to make sense for someone to want to take on that job and like you're paying them enough. But yeah, I definitely think the size of where you're at, I wouldn't be surprised if you know they're doing a cleaning every day or cleaning every other day at least right. And even if you just start with a few people, you know people starting off. I feel like I would imagine that being another kind of next natural step for you to take as you continue to build things out.
Speaker 2:Dude, I'm 100% with you, and it's one where we are at a scale where it couldn't make sense. If you were to just map this out, dollars is a lot per hour, right times 40. Sometimes, 40 hours, 800 times four. I was like I'm gonna round up, it's 3200, but I'm gonna run it to 3500. Say you need 500 per month for one person, and then say you need at least, say, three people right, because you need one person that can work weekends and others you can work during the week consistently. And then another person is like a backup, right? 3,500 times three, it's 10,500. That's not that bad.
Speaker 2:There's going to be some times where you're not going to have as many cleanings and you still got to keep people on staff, but if you put that money aside for the good times, it could be a whole like. When I look at that and I say, okay, 50 increase in in profits if you work the head of kind of taking it on and having some people on staff. The piece that I question, though, is jack, and he said, like it is really weird, it's not like a normal job, or hey, you're coming here on wednesday. Wednesday, you're literally well, but it could be. It could be. I'm paying you X amount per month and these are the days that you work, the days you got to hit X number of properties and there could be no properties.
Speaker 3:Right, I think that's the piece that you have to be comfortable with and might take a little more thinking of, like, when there is no work, is it okay for the cleaner to do nothing, or do I have them go to the property and clean up outside, right, I don't want to just be creating work, you know, for no reason, but I also don't want to just be, you know, handing out money for you to be sitting on the couch just because, like, jimmy, extended for another week.
Speaker 3:You know, it's true, I think that's the piece that for me, would be tough to part with, that money of like. Oh, I know there's not gonna be a cleaning for the next month, right, but you're getting paid, so likely it's not gonna be that long. But so I think that's the piece that, like, in my mind, is a bit harder to understand, because I think there are still things that like could be done that aren't think there are still things that like could be done that aren't necessarily a part of, like, the day-to-day cleaning, right. So, even if it's okay, here's a, here's a piece that I've really tried to like, get better at and just think through is like, deep cleans, checkups every so often, and I saw aj puts on his instagram story not so long ago as he was doing one like a monthly checkup of his airbnb. I'm gonna try to go in there at least. Well, I have on my kind of schedule to go in there every three months and do like a deep clean. So that's beyond what the cleaners are doing, beyond what I expect them to do, and it's really something I want to be doing myself and like want to have my own kind of eyes and ears and hands on to where you know I'm cleaning the couch and you know we're dusting the fans and like the specific things I'm doing inventory.
Speaker 3:And right now I have a small enough, you know portfolio to where I can go and do that on my own and like I'm still doing that myself. I think eventually I will even offload that, but for now, like that's my task, I'm okay with that. But offload that. But for now, like that's my task, I'm okay with that. But I realized like that's something that's going to have to be offloaded, but I think it's something like that could be thought about right To where like hey, if we don't have a cleaning this day, well, let's go make another property, you know just that much better.
Speaker 3:I think, like you don't want to be creating busy work, because people can sense that, but you have enough properties to where it's like, if you're doing it every three months, that's probably like a week, you know, or every week that a deep clean would be done, and I don't know if you guys have. I know you said you'd have the operation manager and she goes and does those kind of checks and stuff, but I don't know what kind of cadence you know you have. You know what that looks like.
Speaker 2:But to that like, will you just and I love workshop on this stuff with folks that are in this too, because we all you know you come from a different angle. I love what you just said because I didn't think about that. Like you're these days, you're on call from this time to this time, right, and so if a house needs to get, you know, recleaned, or somebody's like, hey, I need to do whatever, something got missed, you know. Or let's say that a operations manager, it has to hit three houses to go change batteries. But even, that being said, these three people are under your purview for these days, or these two people. And then on these days, it's these two people. I think that can work out. Then you always have to hey, your cleaning is the priority, I think that could work out. Then you always have like, hey, your cleaning is the priority. But if there's not a lot of cleanings to like assign to them, then it shifts over to what we're approaching.
Speaker 3:Yeah, everything goes within reason. I think it's like you know telling them hey, the operations manager isn't going to go tell you to jump off a bridge, right? No?
Speaker 2:And this is something that can't be done.
Speaker 3:If you're on the clock, right, and like we want you over here, you know, helping us out, and that's a very reasonable request. Right, and there are, you know, you don't know what could come up. So for instance, for me today, I got a message from a guest earlier this morning and he was saying hey, desmond, you know everything is great, but I was trying to make a cup of Shureg. Like isn't working and it has the descale light on and I'm like okay, like that's fair. So if you, if you have a coffee machine, you know here, maybe like year and a half for some reason, the machine needs to be what's called descaled. I don't really know what that means. Do you have to do some special process descaling and then you can make coffee again? I know that's a requirement. So like it comes up, you know not enough to where, truly, I had like a reminder for it or to do item for that. But like now I all of a sudden had two curex sitting on my you know kitchen table that need to be descaled. So I guess later tonight at like 9 00 am, I'm gonna be descaling curex and like did I plan to be doing that? No, but like is that something that comes up and needs to be done?
Speaker 3:Yes, and I feel like there are just always, it seems like those one-off random things batteries or descaling, or oh, there's a spot on the couch and the cleaners weren't able to get it. They had to leave, like you know, whatever it might like, there's a million things I feel like that can come up and I think, with the amount of properties you have, it doesn't have to always be like the routine cleaning. It can be almost like you said, everything under the sun that the operations manager needs help with within reason, right, and going from there and just like starting from there and then building that out and having a specific scope of work eventually, but starting out like hey, look, it's cleanings and then whatever else we need before, yeah, and I think it could get broken down because now I'm thinking even deeper we could figure out what that daily amount is, and maybe it's you know.
Speaker 2:So we talk about $3,500 a month. You know. You divide that by 30. We're looking at like $125 or so a day. We'll call it yeah, something like that, right, $125 or so a day. We'll call it yeah, something like that, right. So like $125 a day. So each day that you're on call it's $125. That's coming your way to pay you weekly. And so if you're like, hey, I want to work X number of days with your team, on these days you're working with us, and that would help you to even scale up to have more staff. The only piece that kind of comes back is, right now, it's pretty autonomous. You know how. Those are the cleaners, right? People aren't really thinking about it at all, they're doing their own thing. You're managing it. If somebody shows up sick or whatever, you're replacing them with somebody else. And so are we ready to take on that task of really recruiting and maintaining and kind of going from there.
Speaker 3:Yeah, and that's something that I was kind of like worried about too, and like having in-house cleaning is like now you are taking on the role of basically cleaning manager, right, like you're the you're the manager of a cleaning team.
Speaker 3:So it's like all those problems that, like you know, typically like terrified was handling or whoever you know was handling that before now, like that's kind of coming back to you. But I think it's all about having someone responsible. So I think, just how you have an operations manager, maybe that means you now have a cleaning manager and every cleaner is actually, you know, reporting to her, and that cleaning manager is the one who you know is responsible for kind of. You know she might even start doing the weekly, like, hey, let's do a weekly. You know is responsible for kind of. You know she might even start doing the weekly, like hey, let's do a weekly, you know, make sure we're doing the cleanings, and you know. So I definitely think it's something you could build out and like have one person you really trust you know to maybe hey you heard it here first.
Speaker 2:Our desk just described the role we're looking for a cleaning manager. I haven't figured out the pay yet. It's probably not being incentivized based off of what we make right so that you can grow with the company. And so if you're interested and have some experience managing cleaners, hit me up seriously, because that would be awesome to get another 10K or so into the business. That'd be pretty cool.
Speaker 3:Yeah, that, actually. That's super cool. I'm looking for a role too. I don't know what it is, so don't apply.
Speaker 2:I'm looking for a role. Somebody help me.
Speaker 3:You tell me what we need to do. No, seriously, yeah, that's funny. And I think it's funny because I feel like you know, in this kind of like and we've talked about it before like in this weird like small-medium range, I feel like that's kind of a sentiment of a lot of owners, or at least I hear a lot to where it's like you're not big enough yet, but you're big enough to where you have, you know, constant stuff that needs to be done. So I think it's a common problem. I think it's it's good to know that, like it's good having groups like this, I'll say right, especially when it's a larger group, right, and we are, you know, typically know just whatever it comes up and we can talk about, and like I think having folks to go through it with together can definitely be super important. So I'm, you know, grateful for you for setting up a space like this. So come on now.
Speaker 2:Thank you, this is real estate strategy and it's also a therapy session. So I appreciate you Truly. Real estate strategy and it's also a therapy session. So I appreciate you, charlie, and everybody that joins, for continuing with that spirit, because, at the end of the day, the longer we all stick with this, the better it gets. It just gets better and better each year, more stabilized. All of a sudden there's more income coming in. It's just when you're new in this and I remember the feeling that you get like a hey, I need to jump, mentality. But you got to have that long-term vision, figure it out one problem at a time and over a short distance of three to five years. All of a sudden you're not even thinking about that property and it's just growing and helping you hit your goals. Yeah, absolutely All right, man. Well, desmond, I appreciate you jumping on. Aj, I know you're still running man Kill that hollow for us and I will catch you a little bit later.
Speaker 1:All right, man, take it easy. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast-track your path to.
