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
120. Refinancing for Freedom: Master Real Estate & Rent Like a Pro!
🌟 Unlock Your Path to Financial Freedom! 🌟
Join us for an electrifying episode of the Financial Freedom Mastermind Group Podcast with your host, Niyi Adewole, alongside the insightful Desmond and AJ! Dive deep into my transformative journey of refinancing a property to escape crippling high interest rates—this could be the game-changer you’ve been waiting for!
💡 What to Expect:
➣AJ's Proactive Job Hunting Tips: Discover how to tackle job searching with a fresh mindset that sets you apart.
➣Desmond's Enthusiastic Insights: Even with connectivity challenges, ➣Desmond’s passion shines through, reminding us of the strength found in community support.
➣Embrace the Process: We discuss why focusing on the journey is more crucial than fixating on the end results.
Summary
In this engaging session, Niyi Adewole and guests discuss various aspects of real estate investment, focusing on refinancing opportunities, property value enhancement, and the impact of market trends. The conversation also delves into the pros and cons of midterm versus short-term rentals, sharing personal experiences and strategies for maximizing property value and rental income. The session concludes with thoughts on future opportunities and potential partnerships in the real estate space.
🚀 Key Highlights:
➣Strategies to multiply your property value through smart renovations.
➣The benefits of securing a Home Equity Line of Credit.
➣Navigating the rental market post-Hurricane Helene, including credit-based rent adjustments and the shift from short-term to mid-term rentals.
➣Personal tips on maximizing mid-term rentals and innovative tenant strategies.
➣Refinancing can lead to significant savings on interest rates.
➣The process of achieving financial goals is as important as the outcome.
➣Market trends can influence the decision to refinance or hold properties.
➣Adding amenities can enhance property value and tenant experience.
➣Understanding the local market is crucial for property investment success.
➣Midterm rentals can provide stable income with less management stress.
➣It's essential to balance property upgrades with market realities.
➣Networking and partnerships can open new opportunities in real estate.
➣Effective communication with tenants enhances the rental experience.
➣Continuous learning and adaptation are key in the real estate market.
Sound Bites
"This is an open session."
"It's a good time to look into refinances."
"I'm considering getting an appraisal."
Chapters
00:00 Introduction and Open Session Overview
02:08 Refinancing Insights and Personal Experiences
05:45 Real Estate Market Trends and Strategies
09:22 Property Value Enhancement and Appraisal Discussion
10:27 Hurricane Impact and Property Renovations
11:59 Balancing Property Upgrades and Market Realities
15:10 Midterm vs Short-term Rentals: A Comparative Analysis
22:39 Future Opportunities and Partnerships in Real Estate
🔔 Subscribe for
🗓️ Tune in every Wednesday at 7 PM Eastern! Don’t miss out on our journey toward financial freedom through smart investments.
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Our Links
➣ Financial Freedom Mastermind Facebook Group - https://www.facebook.com/groups/53083...
➣ Peer Space Host Referral Link https://www.peerspace.com/referrals/g...
➣ AirBNB Host Referral Link https://www.airbnb.com/r/niyia41
➣ Ekabo Home Network (IG, Youtube, Email) https://linktr.ee/ekabohome
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 so you can share successes, ask questions and keep the momentum going.
Speaker 2:Good evening everyone. This is Nihi Adewale, host of the Acaba Home Financial Freedom Mastermind Group, and tonight I am joining you from my home office again and I'm excited to be here midway through October. For those that live in the Atlanta area, you can tell that fall is now officially in the air. I think it was like 40-something degrees this morning, but then it got up to the 70s. But it's a beautiful time to be out this way. You see the leaves starting to change colors, you see it getting darker a little bit earlier and I personally, being a fall baby, am a fan of the fall.
Speaker 2:But tonight is going to be an open session. You may be asking what this thing is. That's kind of in the view right here. That's my mic. I got a new mic because I was alerted that the past two or three episodes the other mic was cutting out and it wasn't necessarily displaying what I was saying accurately, and so we got this new mic with this new condenser to make sure that you can hear me clearly. I look forward to hearing from some of that feedback. But some housekeeping items before we get started with the open session. This is going to be an open session, but if you have not already and you want to continue to support the Acabo Home Financial Freedom Mastermind podcast, please go to wherever you're watching or listening to this and go ahead and hit that like, hit that follow, hit that subscribe and also leave us a comment. Let us know how we're doing. We would love to hear your feedback as we continue to edit for future episodes. That being said, this is an open session and so feel free to throw any questions you have into the chat and or join live. I look forward to hearing from you soon and while we're waiting for others to join and throw things into the chat, I actually wanted to give you an update.
Speaker 2:So I've been working on a refinance for one of my properties. I think we mentioned it last year. I bought a fourplex at the height of the interest rates last year and when I was doing that I'm a 1099 employee now right, so I don't have a W-2, so my interest rates are higher. So I got the interest rate at like a 925. And so, although interest rates went up a little bit, I'm actually right now going through the refinance piece to get that one dropped by roughly two points, it's going to go to like seven, something based on where we're at today, which is significant savings, and so this is a good time right To start looking into some refinances. If you bought in the last couple of years, and or if you, if you are like above 8% or right around eight, this is a good time to try to look at a refinance. If you're less than that, I may wait until middle of next year. But with that being said, desmond, aj, how you guys doing what's going on, brother?
Speaker 3:I'm great, Great. Today. Had a pretty solid day, productive day One o'clock here, so after this call I'll be getting some grub. Come on now. What's up guys, you were eating later than I do.
Speaker 2:Okay, I try to get all my food in before 8. Desmond, how you doing.
Speaker 4:Feeling good. Man, can you hear me? I'm outside at a restaurant so my connection might be a little spotty, but I'm chilling man, I'm chilling.
Speaker 2:We appreciate your dedication. Yes, we can hear you, I've been good.
Speaker 3:Cool, I thought you were at the Microsoft Hub for a second the refi piece.
Speaker 4:I honestly don't go into the office as much as I should, but yeah, no, the refi piece is something I've been kind of thinking about and I feel like, with me improving, can y'all hear me? Good, okay.
Speaker 2:Yes, there's a slight delay, but we can hear you.
Speaker 4:Okay, I might switch over. Then Give me one second, I'm going to be right back. I'm going to be right back.
Speaker 2:I'm going to switch my wi-fi, okay, while he's working on his wi-fi.
Speaker 3:Aj, you said you had a good day, man, how's it coming what you've been up to? So? Um, I gave the update on the last podcast that I was kind of going through a job situation right now. So I'm just trying to make sure my days are productive, even though I don't have a job currently. Like every day is still like a job. So I'm just reaching out to different recruiters, you know, touching up my resume, things like that. So every day is a grind, but you know, I just try to approach it with a positive mindset and attitude.
Speaker 3:So yes that's pretty much it.
Speaker 2:Come on now and literally what you just said is the key. It's not necessarily the end result, it's the process. What are we doing to get there? And if we've done what we can, we take a step back and we relax. We go and enjoy the rest of the day, because the thinking, thinking, thinking, worrying about this, that and the other does not help. So I love the positivity and, yeah, it's the way to attack problems and look for solutions.
Speaker 3:Yeah. But aside from that, I'm excited to just kind of talk about some real estate today. Just because you get so caught up into the job application process, I want to be able to get my mind off of that. So I think you started off with a pretty interesting topic. Going ahead and trying to get into some refinancing and things like that, that's going to do wonders for your monthly payment.
Speaker 3:Dropping down two whole percentage points is a crazy big deal. I know with my properties I won't be able to take advantage of that right now, and that's not a bad thing. My first deal was under 5%, so went ahead and got that 4% interest rate, not complaining about that at all one bit. And then actually my second deal was a really under six percent at a five nine nine. So right now, at this point in time, it doesn't make sense for me to go ahead and look into a refinance deal. But I'm just holding on where I am. But hey, at some point, you know, if they ever dip below those, those two areas I'm definitely interested in, you know, looking into that process and taking advantage of that Come on now and I hope it honestly does not dip below that, because if it does, if it goes into, like well, the 599, it should dip below that.
Speaker 2:But if it goes into the fours, something bad happened right, like it was not good, and we may have something else on our hands.
Speaker 3:I agree.
Speaker 2:Desmond, what are your thoughts on the whole refinance piece?
Speaker 4:Yeah, man, I definitely think it's something to take advantage of and I'm doing a bit of remodel slash renovation right now, so I'm considering potentially getting like an appraisal once I'm done and once all of the work's been done, um, just to see how much appreciation I can actually force. You know, I know we talk about forced appreciation and like property value increasing a lot, but I'm really curious to see how the specific updates that I'm making so adding a washer and dryer, you know, retiling the shower to be a bit more modern, adding more modern.
Speaker 4:LVP, how those specific upgrades you know increase the value. And I'd even be curious to talk to the appraiser and say, hey, like what dollar amount you know, is this raising my value? I don't know if he can get that granular or they can get that granular, but I'd be really curious to see just how much the value has gone up, naturally, right, but also how much I can force as well.
Speaker 2:Yeah, and the interesting thing about your situation is one I'm with you You're adding tremendous value. You've got four units, and four units where you're at are hard to come by, right Like you probably see now. Even when you look out, it's like dude, there's like nothing out there, and when you do see them, the price just gets elevated and elevated more, especially now that you can put down 5%, and that's only going to continue in the future. The one caveat is what rate did you lock in on that property again?
Speaker 4:The rate we locked in was a 3.75.
Speaker 2:Yeah, I wouldn't be looking too hard at a refinance. I'd probably be looking at like a HELOC or something. Yeah, and based on what you just said, a HELOC's never a bad option because it literally sits there like a credit card line that you can use for the next decade. So I really like that option for tapping into your equity, especially when you have that low of an interest rate. One other piece and I think we've talked about it on a past call before but one thing you could do is we could look at running like a CMA just to see roughly where's the value and if it's worth it.
Speaker 2:It's a lot cheaper to reach out to the mortgage company and have them send an appraiser than it is to hire one yourself to try to get the PMI removed. That's something I did for two properties last year, or no, was it this year? It all blends together. I did it recently. Within the last 12 months, I did appraisals on two properties to get the PMI removed and I was successful. One of them was a personal house that I bought for 5% down and they were able to get that removed. I bought that less than three years ago the market has just taken off and the other one was one I put 15% down on and that one appraised as well, so they were able to remove the PMI and that was a couple hundred dollars in savings that I got every month. That's something you can get immediately. And then you can get a HELOC as well if you want it. And first off, desmond is 100% correct, right, so you can't remove that PMI, it's there forever Until you change that loan over. But the interest rate is crazy. So that's one piece.
Speaker 2:Cma is a current market value analysis, right, and that's something that we do as realtors, and so I've seen enough appraiser reports and seen enough properties to be able to run comps. I'm not going to be as tight as the appraiser, but I can get you closer than Zillow and closer than some of the tools we use, ie HomeBot. I would say if we had to rank it in order, an appraiser is going to be the most quote unquote accurate, and the reason they are is because I mean, that's the end, all be all right, and we got to fight that piece. That's one. Number two would be doing one of these market analysis, because that's me getting eyes and understanding your property and looking at others and saying, okay, here goes the comps. The third one would be the HomeBot system because it's pulling in actual comps that are around you. And fourth would be Zillow, because it's kind of broad. They're like just planning a whole neighborhood. It'll tell you like the trend. So did I answer your question.
Speaker 4:It's useful.
Speaker 2:Desmond, one piece for AJ's benefit, because it's funny. It's crazy because a couple of weeks ago we were all on the call and we're talking about, hey, what amenities can you add in? And then we had, you know, this hurricane come through, and I know it wasn't fun, right, but do you mind just catching them up on what happened and why this is coming to fruition?
Speaker 4:Yeah, for sure, and we had chatted a little bit at the um meetup that we have. But I, yeah, I think the full story I haven't really given. But yeah, man, like I had, we had hurricane helene come through and I had already been dealing with water issues. Funny enough, and it's so crazy because, like I had a water issue in 2023 that has kind of dragged on into 2024. And I've been trying, I've been trying to figure out what's the correct solution. I had a French drain installed that I later had to get my money back for because it just absolutely didn't work.
Speaker 2:Um, I hey, we'll take it. We'll take it, and to that point I think you're making the most of it with getting the waterproofing done, so now it's going to be solid and doing the updates right, taking carpet out and getting luxury vinyl plank put in. I love your thoughts on the accent walls. There's many ways you can go with that, whether it's painting with planks, whether it's putting wallpaper and then the washer and dryer getting added in. That's immediate value. Once you add that as an amenity, it increases the length of stay that you can get. But but, aj, what are your thoughts on it? Man, what, what can he do to make it even better?
Speaker 3:Yeah.
Speaker 3:So I was going to actually say, um, you might, desmond, you might want to be like careful, driving yourself up a wall trying to prove the property like crazy amounts, especially just because you may be limited to maybe like the location. So, like, in terms of like, I'm going to be making property updates myself, like updating the paint, ripping out some carpets, adding some floorings. I think those are just good maintenance items overall, that you know, we just want to make sure we take care of our property so we're not looking like slum lords and be able to, you know, be able to provide a guest experience for our Airbnb clients. But I think, in terms of like, if you have just a solid property that's doing well overall, I like to prioritize just like updates and improvements by first, your guest experience, you know, providing the basic, basic communication, providing the basic amenities, things like that. The second thing is obviously looks and quality. So, like, what you're trying to do is paint um carpet, uh, adding any vinyl plank, things like that.
Speaker 3:And then the last thing, which is what I say kind of limits you in some respects, is the location right, and I want to bring that up because, like, sometimes you can drive yourself up a wall trying to make so many different updates to the property itself. But you could have a ceiling in a way based on the location, right. So the location and the nearby properties. You could be trying to upgrade your property so much, so much, and then nearby properties may not be as high class as that one. Now, in terms of short-term rentals, right, you can kind of stand out, but at the same time, if you're looking for more like midterm or maybe long-term tenants, for example, you're kind of limited in a sense to like the nearby neighboring properties.
Speaker 3:So, definitely make your upgrades and updates just to make sure you're on top of things, making this, you know, a solid quality property. But you know, don't go like too crazy, thinking like you know you got to be painting walls left and right, adding different like photos and things like that. I think you should just provide a solid guest experience. Make it a solid quality looking property overall and then, just, you know, start the raking, raking the money from from that. But I think, from what I've seen just through my experience in short term rental, short term rentals and renting out via Airbnb and things like that, is just providing a good guest experience, making them feel comfortable at home. Communication is a huge one. Obviously that's handled through hospitable. But I've just been kind of looking into that, seeing how I could like upgrade maybe different communication channels and things like that and just kind of go from there. So that's kind of my two cents on it.
Speaker 2:No, you're good. Yes, it is Exactly.
Speaker 3:True, I think your situation is cool because it's kind of healthy competition in a way, but you kind of still stand out because he isn't doing short-term rentals you are right and he's doing long-term rentals, right. So, yeah, I think that's what you're doing is solid. I just wanted to bring that up, because I always constantly bring you know up ways that I can maybe add like different amenities and try to drive myself crazy. And then I'm like wait a minute, you know, you kind of limit it to some, to some regard, um, to the property area that you're in. So just be mindful of it. But if you guys are going at it and you kind of look up to him and something like that, just give you that competitive drive and edge and like shoot, go for it. Like make up something in your mind to be like I want to be better than his property, I want to have the best amenities, I want to have nice granite countertops and things like that, just don't drive your pockets crazy.
Speaker 2:And, to that point, piggybacking off of that, I love this whole thing, man, this is, this is so. You like sayings. Another saying is a rising tide lifts all ships, and we're in the Metro of Atlanta, like every other day, you're seeing new things that are going up, you're seeing the developments that they're doing, and it's all leading toward a lot of events. They just announced 2028. We're going to be hosting the Super Bowl again. Like, there's a lot going on in the Metro of Atlanta that's rising it, and so if you're able to get some of these investments and take care of them, you're going to be solid. And so I think what AJ was mentioning about putting timeless, classic things in there right, luxury vinyl planks, so you never have to think about it again. Right, this thing is not going to mold. You can get water in it. You can't scratch it. You're going to be fine. Right, granite countertops or quartz countertops, whatever's cheaper, because that's tenant proof, making sure you put the tile in the bathroom, put some glass if you can, things of that nature, or things that are timeless. They're going to make it pop, look great.
Speaker 2:And the one piece that I wanted to add is so I've never heard of the credit-based rent. That's very interesting of it going up and down based. What I have done in the past and highly recommend is not necessarily turning somebody down for low credit. As long as they don't have low credit plus an eviction history plus criminal background, you got to make sure you look at the whole thing. If it's just low credit and there's a reason for it. What I've done is taken a double security deposit right To make sure, like hey, if you guys whatever, and then the eviction process. That piece you should do anytime, like I have an eviction lawyer because I don't necessarily like going through all that stuff. If somebody's late I just send all the details to him and he's right on it, letters, going out, all that stuff right on time to make sure that we're good. But the one piece I would calculate.
Speaker 2:Desmond, I'm so pumped for you with this opportunity. I don't even look at his competition man, that guy he's. He's in the luxury space, he's on boardwalk. You know, maybe we're in Kentucky Ave, which is close. You're right around the corners to 1600, 1900, that's going to help you be able to push the rents for maybe an 1100 to like a 13, 14, 1500, as he's getting booked out, and so I'd look at what those rents are, kind of compare yours, see if you can build yours up, and then the numbers I'd be looking at with this opportunity that you've been given is, hey, do I even want to turn it back to a short-term rental? How much was I paying for cleanings each month?
Speaker 2:Let me run these numbers and if the math is mathing to where it's within like couple hundred dollars, it actually makes more sense to. Let me get rid of utility costs. Let me get rid of well, you already got the internet. Let me get rid of utility costs. Turn this thing into a long-term rental and, just like you have these other properties I mean you have a really solid comp with your other properties on what you can pull in I would honestly list that property while you're still getting it updated. If the person says, hey, it's going to be updated in a month, I would list it while you still got it updated. Start showing some tenants, potential tenants, and see what rent you can get. And to that point, when you look at that, right, because it stays the same for the year that you bought it in and then it adjusts the next year and that happens A lot of people right that piece right there.
Speaker 2:If you're talking about it and focused on that piece up front, it could keep you from even getting in. Does that make sense? The best thing that both of you guys have done is hey, I'm going to take action, we're going to make it happen. The numbers work, let's move forward on this thing. And now you're starting to figure things out. You've already gotten to the point where, hey, you're going to get two renovated units, you have BNBs up and running, you've got that whole business tightened down and, yes, it has increased. But guess what else has increased? The rents that you're collecting, right, and the BNB income that you can have in. And so it's a delicate balance, right, because it's like, okay, you do need to factor that in.
Speaker 2:But if you start factoring too much of like, hey, well, two years from now, what is this gonna be in three years from now? What about five years from now? It really starts to paralyze. Some people actually had a long, long drawn-out conversation with with a client last week and we had a property in our sites. Like, we put the offer out there, we got a counter. It's like, hey, this is a solid triplex up in Alpharetta, like dude, this is a really good area. And then we started going through the whole exercise of oh well, this is going to change, and then what about this? And then what about that? And I'm like okay, well, are you factoring in rent increases, all this stuff? And long story short, we haven't hauled so long that we came back saying okay, we're going to do it. I called the agent.
Speaker 3:He's like dude like legit, it was legit, they accepted earlier that day. I'm like, all right, you know so. So, yeah, you got to take action on some of this stuff. You're not going to be perfect on everything, but as long as you have directionally the right property in mind, especially if you can get multiple units, it gives you a lot of options to kind of talk about. You guys' point of kind of talking about short-term rentals and also maybe potentially long-term or even mid-term rentals.
Speaker 3:So I want to speak to that because, like I'm living proof of it and I think, desmond, in your situation, I think it would be ideal to kind of sit down and look at the numbers, right, and that's something that I recently did, and if you're, you know, currently I'm doing mid-term rentals at both of my properties Assess, like you know, what the revenue is with short term rentals and then also what it's like with midterm rentals. And the thing is, even if you're bringing in less with midterm rentals slightly less, right, you don't want to be too drastically low, but just think about and this is the kicker for me so, after I evaluated and ran the numbers with what a midterm rental would look like versus bringing in an income with short-term rentals the numbers weren't that drastically different. So that was one piece. I think it was around maybe the same, just for this season that I'm doing midterm rentals. So that's number one. But then number two, the big kicker for me was not having to worry about any overhead, right. So I'm not paying for any cleaning fees, I'm not worrying about guest communication optimizing, get through hospitable, I'm not tweaking prices through price labs, through this.
Speaker 3:I've kind of gotten a bit lazy, I'll admit, because, honestly, for the past, like I don't even know so my current house hack this guy's been staying since April, so I think we're nearing like six, seven months or something like that Haven't had to worry about anything. And then my single family property out in South Atlanta, the three bed, two bathroom that recently started to get rented out on a midterm basis, I believe in August. So, honestly, for the past, however many months, I've kind of just been sitting back and collecting rent. Now, like I said, in the short-term rental space, yes, I'm trying to prepare myself now for when I do get back into that space in the next couple of months or so and those tenants do move out, then I'm ready to jump back in it.
Speaker 3:But, honestly, after evaluating the numbers and then also looking at my stress levels in terms of, like, managing the short term rentals, like I'm like living a dream right now, just collecting the rent and not worrying about too much. So just definitely think about that and if you can kind of transition, like just look at the numbers, I think that's a really good idea. Just literally write it out, that's the best way to go about it. Be objective, not subjective.
Speaker 2:Come on now and we are coming up on time for this week, but I wanted to leave one last thought and it'd be something we follow up with, probably in person, aj, and it's around. Well, it's two things. So Desmond has been and and, desmond, I owe you because I've been delayed again, so I'm gonna send that your way. This just reminded me. But Desmond's created like an ancillary business right where he's helping individuals get their booking dot coms optimized, right and actually listed, because that was something that I attempted many years ago and it definitely didn't work out. And Desmond's figured out the softs for that piece and it makes a lot of sense.
Speaker 2:And for you, one of the things that I keep hearing over and over, I think it's you and your wife have a knack for this, but it's getting the midterm opportunities through like furnished finders. So, aj, I'd love to talk to you personally about while your properties are booked first, your properties come first, right, but if they're booked and you have somebody inquiring what it could look like, you kind of pitching some of ours right Based on the availability which you can see through our chart and all that stuff, and and taking like a percentage of the initial, would love to talk to you about that, if you're open to it, because, yeah, like you got any midterm people that are banging down your door like, hey, can I get it? Right now you can't. We would love to take a mom and get plenty of properties and midterm is the way to go.
Speaker 2:I think I mentioned it before, but we just midterms the mansion right, which is we got somebody staying there for six months paying a hell of a lot, right, and it's like they're already situated. We're just collecting and it's kind of cool, man, I'm like this is pretty chill. We don't got to worry about neighbors calling about a party or something Like. It's like, hey, this is pretty relaxed, it's very calm, very demure, but anyway, just, hey, is the is the platter here? Okay?
Speaker 2:Let's do this thing Background checks. You definitely did that.
Speaker 3:Honestly, midterm is where it's at Um, you can bring in a high revenue with Airbnb, but even if, like I said, I brought up uh, you know, even if you're bringing in slightly less than Airbnb, it's just that management level that you don't have to worry about and I'm honestly been enjoying it. So, yeah, definitely hit me up or you know I can reach out to you, we can talk about things. I have experience doing it for probably over a year or so now, maybe even longer, I can't remember. But yeah, we're definitely working that thing and, with me preparing to get back into the short term rental space, I would ideally love to just get another midterm tenant right in there and don't have to worry about a thing. So we can definitely talk about it.
Speaker 2:Done and done. I think we got some partnerships brewing and I appreciate you guys and Desmond. We got to work on the Wi-Fi next time. Mario, I will catch up next week and look forward to hearing about the renovations to the unit too. See you guys.
