120. Refinancing for Freedom: Master Real Estate & Rent Like a Pro!

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 .

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 . 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 . 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 ?

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 . So yes that's pretty much it .

So I love the positivity and , yeah , it's the way to attack problems and look for solutions .

Going ahead and trying to get into some refinancing and things like that , that's going to do wonders for your monthly payment . 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 .

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 . 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 .

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 ?

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 .

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 .

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 .

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 ?

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 .

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 ?

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 .

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 .

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 .

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 .

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 . 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 .

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 ? 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 . 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 . 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 .

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 .

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 .

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 .

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 .

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 .

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 .

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 ? Let's do this thing Background checks . You definitely did that .

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 .