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
116. Strategic Market Shifts: Leveraging Interest Rates, Dynamic Pricing, and Recession-Proof Investments in Real Estate
Can you really afford to ignore the shifting tides of the real estate market? Discover how the landscape has morphed from a seller's to a buyer's market and why rising interest rates could be your golden ticket to striking incredible deals. My co-host, Liban, and I unpack the newfound negotiation power and the increase in properties falling out of contract, arming you with practical strategies to make the most of this evolving terrain. We spill the beans on why strategic decision-making is crucial right now and share actionable insights on enhancing your investment portfolio.
Ready to supercharge your real estate investment strategy? Learn how dynamic pricing can become your secret weapon in attracting more bookings during slower travel seasons. With my co-host, Nas, in the mix, we break down the art of extending nightly stays and reducing overhead costs to boost your bottom line. Liban chimes in with vital backup plans—think converting properties to Airbnb or pad splits—which can keep you resilient when market conditions make selling a headache. This episode is packed with tips to stay ahead of the curve and optimize your property investments.
Ever wondered how to balance cash flow and equity growth in different markets? We tackle the unique challenges of real estate investment, from leveraging Section 8 housing as a recession-proof strategy to understanding the nuances of urban versus sub-market investments. And just when you think it couldn't get more comprehensive, we throw in tips for managing car insurance costs and enhancing short-term rental experiences with personalized local recommendations. Join us for an episode loaded with expert advice, real-world anecdotes, and strategies to keep your investments thriving, even in tough economic times.
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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 ride 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 Nii Adanwale, host of the Acaba Home Financial Freedom Mastermind Group, and I'm excited to be joining you here on this Wednesday, august 14th, and we are just all enrolling through the year and it's been going by very quickly, and so today we're actually going to be having an open session and, lastly, we had a very lively discussion around just working through real estate contracts and how you can get the upper hand, and today what we're going to focus on is where we are in the market right now and how you should be going about optimizing your portfolio and what we're actually doing with our portfolio to get the most out of it. But my co-host, lebon, is going to be joining shortly and then we will kick this thing off. But if you have any questions, any comments, again, this is an open session, so feel free to throw that into the chat and we will pause for a second. Lebon, how you doing, man? Doing good. How are you doing today? Super good, I see you coming through with a fresh cut. I like it.
Speaker 3:You know it's too hot. It's too hot. Georgia heat really gets to you when you got a lot, so it was time to join the wave, so it's a lot better I get up and leave now. You might keep that.
Speaker 2:Hey, nothing wrong with that. And to that point, all it took was that rain to stop the 15 days in a row that it rained and for that heat to come back. For a change, for a change. I ain't going to cut mine off. I ain't going to cut mine off. Join the wave man. Join the wave man. Come on, man and Justin. You got a bit of an echo, but, justin, how you doing man? It's been a minute. Give me one second. I'm going to try to fix the echo. Aj, how are you? I'm solid man. I think I'm trying to figure out some technical difficulties myself to once again get into my headphones, but they aren't working right now.
Speaker 2:But I'm solid man, how y'all doing, hey, we're super good. And while you in asia, asia, you said, how did that go? Yeah, you're the one with that for a second in lebanon. Yeah, I don't know, you're probably not framed. You got framed, come on. I was like how is my video I see the one having? Is that better guys? No, did you know? Is it about your headphones?
Speaker 2:While aj is doing that, there was one topic that we wanted to dive into today and kind of go on a round table discussion to understand what everybody's doing to optimize the portfolio of whether attributing expenses, whether that's increasing the income, but first and foremost, I think you got to look at the market to understand why this is a need to optimize the portfolio, whether attributing expenses, whether that's increasing the income, but first and foremost, I think you got to look at the market to understand why this is a need, right.
Speaker 2:And so, levon, I'll get to you in a second. But when I look at the market and talk to a lot of different clients that I'm working personally with, I'm seeing the shift right. A couple of years ago, we were definitely in a seller's market where, as a buyer, you could just submit your highest and best and hope that you can get something under cash back. And then it shifted to more of a neutral and market where, if the property's been sitting for a while or if you become an aggressive, you may have an opportunity to put a nice deal together. And now it's completely shifted to a buyer's market, with those interest rates staying high, and so we're putting some incredible deals together from a buyer perspective. But, levon, what are you seeing? Kind of the similar especially with me.
Speaker 3:I work with primarily a lot of flippers, so I'm noticing now one thing that was rare is credits. We're able to negotiate credits more so often, especially now, just due to the amount of homes that are available, especially now just due to the amount of homes that are available. Another thing, too, I'm overall noticing is some markets are having an overage on properties that are falling out of contracts. So things will go under contract but they don't close, and we're seeing more of those overall than previously, and I think it's just more so due to the fact that buyers now have options.
Speaker 2:Yeah, 100% agree. And so it's a time in the market where it's similar, more so due to the fact that buyers now have options. Yeah, 100% agree. And so it's a time in the market where it's similar to what Warren Buffett says I think we talked about this before, but he says you always want to do the opposite. Basically, right, so when there's blood in the water, right, that's when you want to be buying, and things of that nature.
Speaker 2:I'm butchering this whole quote, but, long story short, you want to zig when everybody's zagging, and so I can tell you that in the past week, I've had four separate conversations with different individuals, some within our network, some completely outside of our network that just found a number that are looking to sell their house. Right, like, hey, you know, dah, dah, dah, dah, I'm trying to sell things of that nature. And so what we advise is exactly what we would do. First and foremost, this is not the time to sell if you do not have to, right, like most people would say oh, yeah, you want to sell, we'll take the contract Me, our investors, ourselves and so it's like hey, this is not the time to sell unless you have to. Now, if it's a flip, something where you bought it super cheap and now you're selling it a bit higher, but it's still under. There's still enough value there. That makes sense. But if it's something you just bought 18 months ago as a long-term and now you're looking to sell because the market shifted a bit, that is not ideal. That being said, we've had those conversations with a couple of different individuals, and so when I'm looking at this market, it's one where, if you're able to hang on to your properties and just buckle down, that's the ideal solution. And so that's why I wanted to talk about optimizing properties, of what you're doing to reduce costs, what you're doing to make more money off those properties.
Speaker 2:And so, kicking off the round table discussion, justin, I know you've done an awesome job of really optimizing your properties over the past couple of months. Any tips on how you're getting more value out of them? Yeah, I'm just trying to get my ADR to the best possible spot that I can, while I can shoot high as well. Okay, y'all being here, I think my little girl is going crazy in the background but I'm trying to optimize as best I can by basically keeping my overhead low and keeping my ADR and my IPPC as high as I can, then working with the Fag Planner for a good little bit. So we start from the great foot and I make sure I can't go off low. I think the biggest thing you alluded to it earlier like, the less I'm out with these bands, the less I'm going to make money. As long as you're keeping that thing net neutral, your cash flowing, you're always in a good spot. So that's one of my main concerns right now.
Speaker 2:August has actually been a tough month for me. We had two weekends back to back we didn't get booked. We had two weekends back to back we didn't get booked. We're already booked for the third weekend, almost like a month out. So we made a pretty good spread on that. But we lost two weekends back to back on one of our properties, but the other property had just finished up a 21 day stay. So with the good, you have the bad sometimes. So we're just kind of weathering the storm right now.
Speaker 2:But everything's looking up, aj, shifting gears, what about you? What are you doing to optimize your portfolio? Yeah, um, so, uh, jessa and I you know we've been meeting pretty frequently and just kind of talking about, you know, our ups and downs with, like you know personal life and also our businesses. But one thing that I thought that we had in common, which was kind of interesting, was, um, august actually is coming like to be a bit of a slower month and I'm probably just assuming that just to the kids at school. You know, families aren't traveling as much.
Speaker 2:So one thing that I'm doing actually right now is just paying attention to my dynamic pricing. On price lapse, I'm totally down, just, you know, a little bit about five or ten bucks here and there, but really just trying to drive value, because I don't want to have a property where, you know, the 90 rate is too high in a season where people aren't traveling as much, right. So I think, for my property I want, you know, my guests to make sure they're getting the value out of it. Just making sure I'm tweaking my dynamic pricing here and there and making sure I'm, you know, giving the customer a good value when they're going out traveling. That is a major tip and it makes a lot of sense. Just keep an eye on. It. Kind of goes in hand with what Justin was saying, right, if it's looking like it's a little lighter in the month, making those adjustments to try to get people in and get your property noticed.
Speaker 2:Nas, what about you, man? What adjustments are you making in this season to optimize your portfolio, whether it's on the expense or the income side? So the one thing I'm looking at doing now just moved out a long-term tenant, so I'm shifting that unit to an Airbnb and obviously, with us leaving the summer months, I'm already anticipating not having it booked out, obviously like a summer stay would be, like you know, like obviously like a summer night, a summer, um, a summer stay would be. I said what I'm doing to kind of mitigate, that is, extending the nightly stay and reducing the cost so at least I'm not taking as much overhead on the cleaning fees. So if I can get like four or five nights days other than three nights, you know then it it kind of balances back out If I can stay a little lower on the market than other people, especially in the area that I'm in. The good thing is I'm next to the airport, so I'm hoping to balance that out Absolutely.
Speaker 2:Being close to the airport does help, right, because then you get some of that business travel, people that need to stay just for you know, just a couple of days right Before bouncing out of town, and that's one of the unique benefits of the metro of Atlanta. Right, it's not just a vacation destination. We're in a recession, people stop vacationing. It's a stop where we have to go over work. But, levon, I know one of the things that you talked about before is having that backup plan, even for some of the flippers you're working with, right, knowing like, hey, if something happens with the market to where there's not enough buyers to get out there, being able to flip it to something else. Can you talk a little bit about that?
Speaker 3:that other strategy, yeah, so I mean essentially it's buying properties. That, of course, when you come up to me, hey, I want to do a flip, we're going to do a flip right. However, over the course, just overall, what we've seen in the market the home's value that you think it is and what we think it is, and it might truly be the issue might be because of where rates are, it's a tough time to buy right now, especially with all the other factors that are coming up with August 17,. All of that stuff where now buyers can have a little more costs. If you're in a position where you have a home that's priced correctly but you're in a market where it takes a long time to sell, that can affect your ability to hold.
Speaker 3:So one of the things we look at is other strategies. Hey, if I Airbnb'd it, if I pad split it. Those two, primarily, are where we look at, because we don't want a situation where we have a long-term tenant in place and even though we okay, market's doing well, let's go ahead and put it on the back on market.
Speaker 2:We have to wait an extremely long time.
Speaker 3:So it was just kind of preparing for the worst cases. That way, when those things happen, you're not in a state of panic, you're in a state of preparedness, because you were aware of what was going to happen and you planned for this outcome already. Additionally too I mean in real estate you make all your money on the buy. So even when we are pricing it on the sell side, I typically don't like to be top of the market, because when you're top of the market you have to justify why you're top of the market. And in the market that we're in right now, it's very hard to be a premium product, specifically with just the amount of buyers that are available who will say I'm not going to go for the 350. I'll go for the 300 that I can do a little bit of work to right, especially if it's a long-term buyer.
Speaker 2:Let me make sure I understood you correctly, so you're advising some of your flipters to kind of just hold that property as an Airbnb or SDR? I just want to make sure I heard you right.
Speaker 3:No, no, no. I mean we're not advising, we're saying, hey, we're going to plan to go on market. But with the way the market is kind of in the last couple of months and unpredictable, specifically with the days on market piece, we don't want a situation where we're on market, it's been three months, we haven't even got an offer and we can't pivot into something else to wait for a quote, unquote, better time, right. So it's just kind of building out that preparedness. And I think it's just kind of building out that preparedness and I think it's a good thing to do too, because it helps you practice your fundamentals on buying right the first time.
Speaker 2:And to that point, piggybacking off of that, I can give a lot of example of just having a backup plan, right? So a lot of people on here know that I was selling my previous house and actually in my new house, and so we were under contract for about two months and we just kept extending and you never know what's going to happen to a deal. We made it all the way into the closing table and the last piece that was needed was for the driveway to get redone to allow, essentially, a car from Fast and Furious right Super low to the ground, four inches off the ground, to park in a steep driveway. We redid the driveway twice and it was just like any other car could fit in there Trucks, cars, tesla, all that stuff but it's not going to fit. You know, a Porsche, essentially right, you can't even go over a speed bump with that and so the guys cut it all the way down and it got stuck at that last bit and so unfortunately, we didn't go through On the last two weeks of that and it was getting down to that.
Speaker 2:I said you know what? Just in case, let me list this as a rental as well, to see what we can hire because it is a single with an in-law suite, so I listed it separately as well as the agent auction to rent the whole thing out together and, long story short, we were able to rent it out for $1,000 more than the mortgage and I just handed over the keys actually today. So that's going to give us another year so that we can reevaluate and be able to sell this thing for more. Anyway, we were giving a major deal to this individual to the tune of about 60K off of the appraised value and so, with interest rates coming down now, a lease in place to where we don't got to worry about this thing. The extra thousand is going to be for any maintenance concerns over the year, keep that property solid and then be able to come back to the market potentially higher if interest rates are lower, if the market settles down next year. That's what we're talking about Going into it eyes wide open, having a backup plan. We're actively doing this ourselves and so we're trying to help our clients and that's one way to optimize right. Another way to optimize that I've been looking into across the portfolio I highly recommend, and we've actually started, to build partnerships with other lenders that specialize in this. Let's talk to a lender that can get you down to as low as about a. 6% of that points on refinances, and so I'm actively connecting with our network to let them know, but that's a piece.
Speaker 2:If your interest rate is 7 plus percent over the last two years of buying real estate, refinance is something that you definitely want to look at, especially as these interest rates start coming down, because that could be the difference between a hundred extra dollars in your pocket covered from that standpoint. Yeah, I like that. I think you're at an advantage too. You have a unique situation because you didn't sell the home but you're renting it out, and I don't know if they would be interested the tenants but at some point after renting they could be potentially interested in just buying the property from you. 100% agree, actually, they got so much interest. It was like okay, this is actually kind of cool.
Speaker 2:One of the individuals that applied they just applied late and these guys got approved and like, hey, we got the check right now. So like, all right, you guys got it. Um, wanted to be a rent-to-own situation. Uh, which is kind of cool. Uh, my partner out in louisville does that all day, like she does. She has a couple of those running uh at all times, and so it's something I definitely want to look into. But you're right, these individuals may love the house and say, hey, they've already postured and said that they lived in the previous house. They were in for five years before that person sold it. That's why they're living for another one and they want to stay long-term and wherever they're at. So, who knows, we may be providing an update here in a couple of months.
Speaker 3:And I was going to question the rent to own. The way that works is they put a deposit down and the rent that they're paying gets credited as, hey, you're kind of building in equity. At what point do then they buy you out and get a loan? Because that's what ends up happening, right, once they have a certain amount of equity accrued, they go to a bank and then say, hey, I have a rent-to-own situation here, this is how much I have, et cetera.
Speaker 2:Typically rent-to-own is not like a cashflow issue. The way I've seen it, mostly the people that I talk to it's usually hey, I run my own business, they have the cash, we could put all this down. But maybe the credit's not there. The credit's not there or the bank's not lending because they would need to put down X amount or have X credit or X history. And so, yes, I put down the deposit amount and then the rent is actually going to you. Now if they pay above and beyond that rent or you negotiate like, hey, the rent's going to be X amount, right, but if you pay $500 more I'll credit this toward the actual non-fundable deposit, you can definitely do that. But that's kind of how my realtor department works out there as well in Louisville.
Speaker 2:So we kind of bummed out once you found out, like you know, obviously you have the intent to sell, but you know things didn't go the way it was intended. Can you talk about that process? Kind of like what you were thinking. I'm sure you were kind of I was pissed, I was more than bummed out. It was like you know, like you put so much time in and you is not sure this is me coming back after everything is like smoothed out, right. This real estate game is nothing. You know this right. There's a lot of up and down. I appreciate these calls, we can talk about this stuff, and it's kind of funny when you're in a group. It's all right, it's not that bad, right. But yeah, I mean, I already had plans for those funds to go here, here, here and different investments that we're doing and to shore up different pieces as we head into a potential recession, and so I had to scramble a bit and move some other things around and kind of cancel some stuff which I didn't like.
Speaker 2:Long story short, the main thing is, when I look at this, this is a buyer's market.
Speaker 2:You want to stay in the game with as many properties as you can, with what we have coming down the pike, because when you look at the overall landscape of real estate, it's usually up and to the right, and you look at the rest of the land, it's definitely up and to the right over the next five to 10 years.
Speaker 2:And so, yes, I was pissed initially, but we figured it out and we started putting backup plans in just before the end to make sure like, hey, if this thing blows up, in the end we're going to be okay and end up working. Those pivots are crucial and keeping a positive mindset while you're going through it it's honestly the best thing you can do in those situations. And then there's additional tax benefits from holding the property longer now and, as the market's about to open up, it puts you in a better position. So then hopefully the market shifts to be a seller's market. There's definitely added benefits. And just was kind of interesting to talk to him because he has the complete opposite mindset of us, because we're kind of all growth mindset.
Speaker 3:Hey, we're trying to acquire more, acquire more. He had something along the lines of like 50 properties, right, and he told me of the 50, 60% of the properties he has are like section eight. And he knows like, hey, I might not be able to demand top of the market. Has are like section eight and he knows like, hey, I might not be able to demand top of the market. But he's saying and he said this to me, he's like when you're buying, keep a percentage of your you know portfolio section eight, or you know that, or lower the market, because in that position he just cares about maintaining and protecting. And with that section eight, specifically, the strategy he utilized, because it's government backed, he knows every position. He just cares about maintaining and protecting.
Speaker 3:And with that Section 8, specifically the strategy he utilized, because it's government backed, he knows every month he's going to get his check. So he's saying, hey, as long as I have this minimum, which is what that 60% brings in, now that 40% can be my Airbnbs, my pad splits, all that other stuff. I kind of just wanted to, especially since you mentioned, hey, going into recession. He specifically said it's recession proof, right, and so is that a strategy that you guys see yourselves undertaking after the fact, when we're old and gray.
Speaker 2:Absolutely. Going into the Section 8 market is unique. And it's unique because you get all the same benefits that you get if you go into a regular market. But the difference is you're never going to not have a tenant right, because that pipeline to feed section eight, it's always somebody waiting and you're always going to get a check from the government. What makes it even more unique is the buy-in criteria is a lot less than what we traditionally pay.
Speaker 2:So if I'm cashflow on that property, I got two options I can build my nest egg back up to then go and buy another one in section eight, or I can hold on it, put it in some interest bearing account, pay down my equity and now I have a fully producing cashflow in house. Now I'm rolling in the building. You kind of go to the Ramsey's mindset right when it's like pay it off and just let the money come in. I'm not generally a fan of that because I mean, I grew up in this era, so I'm going to use the leverage so I can scale faster. But it is nice to have that many properties and just let the cash roll in. Yeah, I'm not there yet, but once I get to $20, yeah for sure.
Speaker 3:All of his homes were not in Atlanta. They were in sub-markets like Valdosta, columbus, riverdale, where we're not necessarily same equity growth but the cashflow numbers work really well because of the locations.
Speaker 2:And what we just said is key, like when you talk about equity growth versus cashflow, like, for example, in Louisville. I had a bunch of Section 8 in, especially this one 12 year that we bought. That we were like turning it over from, say, d plus to a, c minus, and it took a while. A lot of headaches, a lot of different things happened. I think we talked about some of that stuff, but long story short um, we had a lot of like housing individuals in there and during the pandemic.
Speaker 2:It was amazing. When that pandemic hit, we didn't miss anything. It was so boom, boom, boom, boom, boom, boom. All the payments are still coming through because it's the government. The government's not going to default, right, that being said, and you look at the values and how those increased, that's the trade-off. And to Nas's point, if you're looking to like, hey, I just want to have a paid off portfolio and just have cash flow coming in, that's amazing.
Speaker 2:But if you're taking a look at the whole scope of things like, okay, back in the day you could buy a house in Atlanta for $100,000. Now you'd be happy to have land. You know what I mean for $100,000. When you look at that and think, 30 years from now, which is going to be more valuable, the cash flow or the equity? I would argue the equity. But just enough to get the car to you. I'm going to leave that.
Speaker 2:I just want to know what happened with the driveway situation. You just had to eat the cost of changing it twice. That is it. We ate the cost. The cost of changing it twice was roughly $9,500, which it's worth, right. So the first time was $5,000. The second time, coming back, was $4,500. Beautiful.
Speaker 2:Literally any car can get in there now except a. Fast and furious forces off the ground. Sports, right, that's what you get to get in. You go with the same company to redo it the second time.
Speaker 2:Because I mean, could they not assure you, did they not know I'm as clarence the poor shaz and know what kind of slow a put on the dry weight to figure it out because it's not so bad they did is, it's, it's too tight to actually. They cut it down as low as they can go, like the second time. They were like all right, we're cutting this thing down as low as we can go, redoing this whole pipe and drainage like it was. It was a lot going on and it got all the way down to the bottom, but there was still an ocean that would not let it just make that clearance. And, honestly, if he got in, I don't know how he would get out. Right, I, you got to get in and then you got to get out, and so, yeah, we weren't able to make it happen, unfortunately, unless you take the whole garage apart, not you, and so, yeah, sounds like a Larry G only issue.
Speaker 3:He got a very large swing at the sledgehammer. Yeah, we're buying a $600,000 home.
Speaker 2:we gotta have a garage somewhere, you know yeah and no, this was the person who was gonna buy the house tenant to farm. They were good, their cars were fine. This was, um, it was actually a Mercedes AMG, so if you know that car, super low, okay. So that was kind of like a deal breaker for them. Like they had to have that driveway like set up. Let him get that car in.
Speaker 2:Okay, the person travels a lot for work. In their previous house they weren't able to have a garage. So, like with this, they were like, hey, we'll pay the price because we want a garage and we need to get a car in it. And that was the piece and we waited through all the stuff. Right, make sure we get through big diligence, negotiate that piece. Spraisal came in high, all that stuff, but it was, it was pretty solid. No, street is free. No, there's street parking. There's definitely street parking Anywhere, but it's just getting into the garage and out at the bottom you can park any car, just not one where you can barely go over steam. Yeah, nobody's going for parking at AMG on the street, hey guys.
Speaker 3:This is Atlanta, hello.
Speaker 2:That's crazy. That's what that thing called a dent. Come on, though, put some thin coyote man.
Speaker 2:Let me get you 10 grand. You don't have to do anything to the front way. I'll kill as low as the car. Yeah, super low, it's super low. Yeah, hey, got a couple hours trying to figure out. He imagined he left. Hey man, if he turned this thing all the way inside.
Speaker 2:But we talked about two pieces, right. So we talked about two pieces, right. So we talked about a little bit of the optimization. I talked about refinancing. Another piece that I've been looking into is insurance, right? So if this is something that you haven't changed for, say, two years or more so you've gone two cycles for the insurance I highly recommend connecting with an insurance broker. We can connect you with one that we used to get that money back.
Speaker 2:I've been able to say significant over the years. I can tell you, the first time I did this and now I have a reminder every year to like, hey, send all my properties to the insurance broker, see what you can do. But the first time I did this, many years ago, I had just been acquiring properties, right, and each property I got, I would just go call my car insurance or call somebody and say, okay, I need to get the best insurance for this property and then I'd look up and it's like you got like five or six properties and then I finally talked to an insurance broker. I was like, hey, what can you do with this? They ended up taking me from paying, I want to say, like seven grand a year in insurance to like four grand by making a portfolio insurance covering all the properties and actually got a check in the mail for the remainder. And so this is one that can lead to major savings, especially if you're on the acquire mode, and then also making sure that your previous home if you move that one and turn it into a rental that's one of the things I actually just sent to my insurance broker was the quickest home. Okay, put this for landlord insurance, because it's typically a little bit lower than home owner's insurance. Absolutely, absolutely, absolutely. I don't have anything to add to that because like yeah, absolutely yeah I didn't mean to get that changed up for myself.
Speaker 2:I was going to say I've recently just switched over to a landlord's policy and I think my biggest fear and like not really getting on it was just the thought that it would always be more expensive than the homeowner's policy. But I actually reached out on that quote and I got a much better rate than I did on the homeowner's policy. So when that happened I was like sign me up, done deal, I even do the cars on there. So we got a bundle package deal. This is something I do every six months. I set up a reminder to basically shop for insurances and I pretty much just, you know, put your car info in there. You know they already have all your info anyway, it doesn't matter. But you know, just go out and shop a little to see if you can get a better rate.
Speaker 2:In this situation I was really glad I was able to. I actually switched from literally mutual to all state and then, like I said, getting that landlord's policy was huge because I actually moved out of my three-bed, two-bed single-family home a little over a year now and the entire time like it's not here, baby now, but the entire time in the back of my head I just had this nagging thing like, oh my God, I have a homeowner policy on a rental property and it was just killing me because, especially with the crazy weather that we get in Atlanta, the biggest thing that was on the top of my mind. I like to think like worst case and then prepare for it. So I'm just thinking like a tree is just going to fall on it and I'm just like, screw, I got Airbnb tenants in there. It's not my primary residence. I'm just like, oh my God, so being able to get that, it was like huge for me. And then, on top of that, to be able to get a lower rate than my homeowner's policy, that was just like, you know, done deal.
Speaker 2:Sign me up Definitely makes me feel better about my situation and just have like that peace of mind, like moving forward. Hey did thing you contact along too. I don't know any. Second, my car insurance is like $7 a month right now. That's insane. No, I mean, I got four cars still insane, bro, oh, I mean, four cars, that's kind of fair. What's your level of that? Get in there, that's. That's not fair, what's your level.
Speaker 1:That that's way. It's way more.
Speaker 2:That's okay it's way more than I'm used to, right like I can remember it, having four cars, well, cycling and everything, and not paying that much psych insurance has just been.
Speaker 3:I don't want to hear what I'm paying.
Speaker 2:Yeah, that's terrible. I mean the numbers, 175 on average. I mean the insurance game is I hate insurance. I really truly hate it. But yeah, it's like a scam. You know you be giving these people money in case something happens and then when something does happen, they're like actually we're not going to insure you anymore. Those are girls, I think, taking into to like account how atlanta like bad, how bad atlanta traffic is getting the rough. You know, 75 a car isn't like terrible. Um, you know I've seen worse people paying like two up to like three hundred dollars per car. Obviously I'm older.
Speaker 3:So, yeah, yeah, but I mean I was paying $300, and then I called them and I was like what if I added my mom? Now, my mom is in Egypt, but just by adding my mom, it went to $200. Yeah, another driver. Yeah, another driver. Yeah, another driver, because she's a 40-year-old woman and I'm a 23-year-old man. It balances out.
Speaker 2:If you're using a 25, it's going to be crazy. Yeah, it's crazy. That bill is going to be high. When I got a new one, I was so crazy. They kept saying so. I always heard that. Like they kept saying so. I always heard that. Like you know, once you get pay five million, like the rates will get better. I noticed I did, but like it wasn't anything like too crazy, like I'm still feeling like I'm paying an arm and a leg for auto.
Speaker 3:You know what uh strategy I used to get my insurance lower? I sent them my grades. I literally sent them my. I sent them my grades and they reduced it. I got a program for you. Yeah, I did a driver's. My first quote was $450. And then I was like no guys come on and I had this. I sent him a transcript. I did a driver safety class and then I shopped around and then even still, I had to add my mom.
Speaker 2:You know it was another thing that they factor in and I hate it. My first car was a chevy malibu and my insurance was like I don't know. It was like 60 bucks. It was low, um. And then I decided to trade up and get a bmw and it shot up to like 450 and I was like I knew it was going to go up because obviously I'm getting a BMW and you have to insure more.
Speaker 2:But after talking to the insurance rep they was like, no, to be honest, the main thing we're considering is that you're in Fort Hood and for your age, demographic for this type of car, the amount of accidents that happen with that specific vehicle are through the roof. It made sense. I was next to an army installation. A bunch of people get their little foreign cars and they get back from deployment and go wreck them. And I was like, yeah, and I did the same thing, good job. No, no, no, I didn't wreck it. But I went and got the exact yeah, no, no, no, I still got my baby. It's sitting out for a now honestly, insurance companies are.
Speaker 2:Are geniuses, right, like they have so many models and systems that they're running numbers on to actually know to a t, this is how many we can expect and this is what we can charge from profitable, and so, like you can't even blame, I wish I was in there like that yeah, no, um, what I was gonna say was they even factor location?
Speaker 3:So when I lived in Johns Creek I was paying $180. I moved to Stone Mountain, it shot up to $250. Man, god, somebody been in the hood? Guys, what's going on? But it just goes to show. Now I'm debating whether or not I should go back, but you know you should go back. Literally, literally.
Speaker 2:That is the key and shifting gears back to the topic at hand, any other tips for optimizing your current portfolio, whether it's reducing expenses or increasing the income and I've also been looking at different galleries and optimizing the property itself, right Going in putting an additional you know, three to 5K into you know, repainting, putting some new furniture in there, new photos, things of that nature to make it stand out. And then this latest B&B that we're getting ready to launch. It's going to be a much bigger place and we've put a heck of a lot into it to make it a more luxury BNB. Because what we've seen across the portfolio is that when times get tough, right, and you have, like, a BNB that's similar to others, that's when people start repeating the price. But if yours is huge five bedrooms, et cetera and you put some luxury amenities in there, it's usually going to be able to stick and it's something that large groups can rent out.
Speaker 2:But what do you guys got for optimizing? Man, you just hit the nail on the head and, honestly, I'm in that same process and I'm upset about it. Uh, because I can't even. I mean, I'm doing it right. I have to make the inside aesthetically pleasing. But in addition to doing the inside, I got to start with the outside, and what bothers me is the outside for the deck area. I can advertise that, but I got to rep on the inside. I got to start with the outside and what bothers me is the outside for the deck area. I can advertise that, but I got to repave the entire drive one because it has the cracks and it's a little unsettled. So, like I have to do that to create, you know, a good drive in for my guests. But that comes at a cost, right? So now I'm about to spend, you know, well over nine K on doing exterior, and then I still got to go on the inside and spend well above that as well.
Speaker 2:So this budget is turning into a pretty interesting task, but in considering all that, I should be postured to make it back. Obviously it's not going to be fun in the first couple of months, but, like you said, you're still putting money into an asset. It's going to come back and that's just the way you got to kind of look at it, just power through it and just know that, like if you ran your numbers right, it's always going to work out. That's so weird, aj. Any last thoughts on the opera. I think you guys did right on the head. You know it isn't. You know important topics so, like I said, I'll go back to this. You know making sure you stay on top of pricing, even with the dynamic pricing set it up. I use price lapse.
Speaker 2:You know it's meant to be there to be in place and so you don't have to constantly make updates. But yeah, I remember you know short-term rental, hosting and they were being being verbal and things like that. It's still an active game now and then, you know, I like to just go in there, look at my occupancy. If everything is smooth and my occupancy is high, I'm getting booked out. Then, you know, typically I probably would just leave it as is. You know, if it's not broke I'm trying to fix it. But so most of that while it's, you know, when the kids are going back to school people aren't traveling as much Like. Look at occupancy percentages and then also the competitor pricings. So especially on the weekdays, I'm not too I don't care too much about. You know, give a discount on the weekdays because that's typically a timeframe people don't book as often, right? So if I can get my discount during the weekdays 20%, things like that get the strike-through pricing on Airbnb, make it an attractive property. I can get a one-up on my competitors because they may also be using dynamic pricing, right, they may not be as attractive as I am. You know, giving the 20% discounts, getting a strike-through pricing, things like that. So that's just something. I'm just trying to keep an edge up on the competition and just tweaking the pricing just a little bit here and there.
Speaker 2:I haven't been able to use it yet because I'm about to switch over to short-term rentals, but way back in the day I used to have multiple jobs. One of my side hustles was Uber, and so when I would look at the Uber app it would tell me when big events were coming to town. And so I'm curious to see how predictive that is where I can kind of foresee some of that dynamic pricing and utilize the Uber app to kind of generate how I think the market's going to fall for that week. And I say that because I'm not too far from the Mercedes-Benz stadium and so if they're having a large event that I think would generate a lot of people coming to town, then I should consider okay, well, what is everybody else doing? How are the prices fluctuating? And I'm sure Price Labs does most of that stuff, but I wonder how predictive it is at trying to really hone in on where that market's going to fall for pricing.
Speaker 2:I would say, just through experience, it is pretty solid with that. Like I know, for example, labor Day is coming up, so I've been getting a lot of queries about that weekend, september, I think, end of August, first couple days of September and then if I go and check on the pricing at PriceLab you can tell it's noticeably a bit higher than what it would typically fall from our property. So I would say it's really good at that, especially in Atlanta, I think with all the different college bowl names in the fall season and the winter season I know it should get a pretty significant uptick in the pricing and PriceLab will for the most part take care of that now if you feel like you can get a little bit more on top and you can kind of tweak it a bit. But I will say from my experience price labs is great, solid with that good good question for you guys.
Speaker 2:When it comes to short-term rentals, right, how do you feel about, like welcome gifts? Do you guys do that for your properties? So obviously I haven't implemented it yet, but from staying at an airbnb, um, one of the things that I've found that I found I like a lot is getting there and they'll have like a what to do in the city. But the clever ones is when they break it down and they'll put like different genres of music, and that's saying something without saying something, right? So, whether you, whether you want to go out and have country music night or you want to have a hip-hop night or a jazz night, they give recommendations in line with that genre, right, and so that helps out a lot when you're going to a town that you've never been to, but you want to go out and have a little bit of fun, well, if you want to go listen to jazz music, here's a restaurant that's going to play some slow jazz while you're eating. Here's the the night out that you're looking for. If you want to be romantic, those small ads, I was like man, this is good, and obviously I ended up doing one of them. Have you said that to me? Just how have you said that? Because that's something that, um, probably about.
Speaker 2:There's been some time, probably about like five months ago but in my messaging after the guests have checked in on the first morning I send a list of not just any generic ones, because I, you know, go out in Atlanta and I know what the food is like, but I specifically put some of my personal favorites and guests really like that. So if you guys aren't already doing that which I'm assuming you guys probably do, if not highly recommend doing that, because that's also been reflected in my reviews. Guests really like that and I'm glad that you mentioned that, because when you come in, especially if you've never been before on Eats, that's one of the first things you want to do. I took a long flying flight. I've been driving for hours. I want to get, took a long flying flight and driving for hours following a good bite to eat. So if you recommend a good spot to eat, guests really do appreciate that and, like I said, it does reflect in the reviews. Just make sure you don't recommend any bad spots because then they probably might say something I don't know. I'll give you a bad review. I think the benefits far outweigh the risks. At the end of the day, it's just a recommendation, right? Just let the guests know hey, these aren't my personal favorites, that doesn't mean that you're going to like it. You can't please everybody. So can we just be honest here and admit that that is an issue? I feel like that is specific to Atlanta. So one fear experience from this kind sunday is why I'm laughing.
Speaker 2:Has anybody ever eaten at liberty marsh? That's uh. That's that's on um. That's on my tech, right, it's in, uh, kirkwood. That's that's, dude.
Speaker 2:I love that spot. You know, I know everybody. I go there. Probably before I moved I went there probably like two, three times a month. No, we ate there. That's where we, that's where we met up. That was way back when I thought so I thought I'd been there. I wasn't 100% sure. That's like the small cafe spot, right? Yes, okay, a little more there. Long story short, I was there on Sunday taking my mom and my wife Two weeks ago. I don't know what happened to management, but like it's half the menu's gone. They don't serve drinks anymore Now. It's all plastic, it's like a takeout spot. It's not like it was a major disappointment To that point Justin's saying that's definitely an issue.
Speaker 2:So you definitely want to check back in those places. One of the things I'm thinking about doing and we haven't done it for a while, I used to do this back in the day is for this new luxury one. I'm thinking about putting a skylight. You've got those skylight digital frames where you can send recommendations photos to it, and it just slides us through, thinking about putting one of those on the bookshelf again, and then you're able to delete recommendations, so I can delete Flippanty Marseille on there and add them virtually without actually having to go back to the digital guidebook and kind of go from there. But I like this recommendation. Wow, that was hard, justin. Yeah, we need to get a bell for this. That was a bell moment, just like these contractors. Hey, ring a bell it this. That was a bell moment, just like the contractors. Hey, ring a bell. It hurt almost as much as the dry bone. I was like man, this is my spot. Yeah, I'm like yeah, we're going to get this. It's going to be like it's not a menu anymore. What?
Speaker 3:It's not a menu anymore.
Speaker 2:I still would say that's like a big issue in Atlanta. Atlanta's food market is terrible. You can find a good spot every town. Again, all the way out there it is. Instagram is deceiving. It's so deceiving It'll pop up on Instagram like, oh, check this out Deceiving. Yeah, my up on Instagram like, oh, check this out this evening. Yeah, my first couple weeks here, I tried out STK and I was like, oh, it's terrible, it's terrible.
Speaker 3:Yeah, it is yeah it is, yeah, it's all over the place.
Speaker 2:Yeah, and it was not worth it. I know because Kona and SDK are owned by the same company it's wild, though, because when I got there, the wait was ridiculous and I'm like, oh, this place really must be good, and it's like, no, you probably just got duped on Instagram too there's been so many reasons why yeah, yeah. I highly recommend Pennsylvania's top top. They're the ones that gave us the food. I went great, they're amazing. Was that the food for the catering event for the?
Speaker 2:yes, that was good I would have had to snatch out a LeBron's head in 40 minutes. I'm like, hey, what's he doing? I don't know Well guys, we completely derailed in the last few minutes. I don't know how, but it was a good connection. Without leaving off, I look forward to seeing you next week. Everybody, we say yes.
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