Category Archives: Real Estate

House Hunting: Tips to Buy a Home in a Seller’s Market

It's house hunting season, which can be an exciting and yes, stressful time. Living in a sellers market, it can seem like an incredible challenge.

Today we'll go over how to financially prepare and give you a map on finding a place that you love that's still within your budget!

Home Buying Tips for a Hot Market

If you’re thinking of buying a house, you have to be prepared. Besides being a huge purchase, you have rising interest rates and hot markets that can make it difficult to find a place you love that’s still affordable.

If you’re a first-time homebuyer or it’s been awhile since you’ve had to house hunt, I want to lift some of the burden.

Today I’ll give you a high-level view of the buying process so you’ll have an idea of what to expect along with some tips and resources to keep you on track with your big financial picture. 

In this episode, we’ll dive into:

  • Ways you can prepare your finances 
  • What to look for during the house hunt so you’re finding a hidden gem and not a money pit
  • Explain what to consider with your offer and the closing process

We have a lot to cover, so let’s get started! 

Resources on Buying a House

If you’re looking to buy, here are some resources to help you find an affordable place you love!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

See how Coastal can help you with your mortgage needs!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Before You House Hunt, Get Your Finances in a Good Spot

Even before you start shopping around for a lender or real estate agent. Take some time to run the numbers and review your finances. Verify that you can handle this transition to homeownership.

I know interest rates are rising, so there's this temptation to jump in and get started as fast as possible, but it really does pay off for you to sit down and use those mortgage calculators online to get an idea of what you can comfortably afford.

Budget Beyond the Mortgage

Besides the mortgage, you need to include in your budget home insurance, property tax, and maintenance costs. Knowing those numbers puts you in a better spot when you do shop around for lenders.

So, how do you find lenders? The first time we bought a house, we used a mortgage broker who compared different lenders.

The second time we did a little more legwork on our own scouring online and we went with our credit union Coastal since they not only had great rates but they offered some discounts with their Daymark Realty team.

It is a bit of work upfront. But you can significantly save money.

As you're shopping around, make sure you're not just looking at the lenders, but that you also are looking at the right mortgage option for you. If you don't have a significant down payment.

There are different loan programs like FHA, VA, and USDA that can make it easier to buy. Weigh the pros and cons of each of these to make sure that you qualify for them and that they work for you.

Pre-approved Versus Getting Pre-qualified

I do want to clarify two terms. You want to get pre-approved versus getting pre-qualified. Pre-approval means the lender went over your numbers and told you how much you qualify for with borrowing. Versus a prequalification was, is just an estimate.

If you're in a seller's market where you have to move fast, you definitely want to have that preapproval letter.

As you talk with your lender, they're going to give you their rates and numbers. But you still want to make sure that what they say you qualify for is what you feel comfortable with.

You can also start shopping around for a real estate agent. Ask for recommendations from people who not only bought a home, but they're happy with it. Also interview your agents, see how knowledgeable they are about the area, the market, and how effective they've been for their clients.

Now, with those pieces in place, you have a lender. And you have your agent. You can now go house hunting, feeling comfortable that your finances are in a good spot.

The House Hunt

While you're working with your lender on getting pre-approved and you're trying to find a real estate agent. This is also a good time to sit down and figure out. What are your priorities for the house that you want to buy?

What type of house, first of all, are you looking for. Are you going with a single-family, condo, or townhouse?

Do you want to live in a neighborhood with an HOA? What size house would make you most comfortable? If you have a yard, how big do you want it? Or do you even want a yard and have that maintenance?

What distance from work are you looking for? Or if you have kids, how far away do you want to be from their school?

Talking about and defining your must-haves is incredibly helpful for your real estate agent because then they can tailor their search for what you need. They can also temper your expectations about what you can find in the area for your budget. We have an entire episode where I interviewed Coastal's vice president of real estate, Louis gamma.

And he broke down how to go about your house hunt so that you can find neighborhoods that are hidden gems. And that checkoff a lot of things on your list while still keeping you on your budget. I'll include a link in the show notes.

As you're going through this house hunt. I just want to tell you. Sometimes that is an apt description, especially if you're in a hot market. It can be chaotic with other buyers competing for a limited amount of homes. As you're going through the houses and places and taking these tours. You'll start noticing. That certain things on your list are going to get adjusted.

There may be priorities you felt were must-haves. That moved down on that list and vice versa. Where there's something you thought that wasn't such a big deal, but when you're in that space, in that house, you realize that it's very important to you. That's normal.

This actually happened with my mom when she was buying a house here in Raleigh in 2020. She had a list. She had prepared her must haves and want to have, but as we were looking at different properties in the area, Things got adjusted and shifted.

It seemed a little stressful at the time, making these adjustments. But it worked out to her favor because now she's in a home that she loves and it has all the main features that she wanted.

Just make sure you're not sacrificing too much just to buy a house. I would hate for you to be in a home that you don't like with the 15 or 30 year mortgage. Ideally, you want to find a place that has all your must haves in a neighborhood that you love.

When you do find that spot. You can then put in your offer.

Putting In Your Offer and The Closing

All right. Let's talk a bit about the offer. You may include contingencies with your offer. Meaning certain things have to be fulfilled such as a home inspection. Financing selling your existing home or appraisal.

Depending on the market, you may decide to waive some of those contingencies, but please be aware of the potential downsides of that.

Personally with how large a purchase. This is, I'd keep the inspection and appraisal.

How much should you offer? This is where you want to work with your real estate agent and why it's so important to interview them beforehand. You want someone knowledgeable so that they'll have the information about what's selling in the area and give you recommendations on what's more likely to be accepted.

In a competitive market, it can be emotionally exhausting because you have so many sellers. Making multiple offers on a few homes. When I was helping my mom out with buying her house, that was the situation. We saw quite a bit of homes we put in offers and yes, there was a temptation at one point to break the budget because of the timing.

Of her going back to work in the fall. But with some patience and diligence, she thankfully found a wonderful home in a fantastic neighborhood. So if you're buying any sellers market, Please don't get discouraged. If your first offers aren't accepted.

When you put in an offer. You're also going to be putting in some money upfront. It's known as earnest money deposit. Some people call it good faith deposit.

Basically, you're signaling to the seller that you're serious about buying this money will be held in an escrow account and we'll go towards your down payment or closing costs.

It's there as a protection. If the buyer falls through on their end. The seller gets to keep that money. However, if one of the contingencies in your offer happens, let's say the home inspection failed. You'd get that earnest money back.

Now let's say the seller accepted your offer. Now, what? Typically, this is where things like your home inspection and appraisals happen.

A home inspection lets you see if there are any major issues with the house and an appraisal is for your lender to verify that home is worth the loan.

Some needed repairs may come up during inspection. Depending on that market and whether or not you waive those contingencies. You may or may not be able to negotiate on the price.

In the meantime, your agent's going to be assisting in getting the paperwork prepared for closing. This can include things like checking the property title. So make sure you're in contact with them. So if they need anything from you, you can quickly get that to them.

Assuming everything goes smoothly, you'll get a closing disclosure from your lender, telling you how much you need to have ready. You and your agent will do a final walkthrough of the house you're buying. Then it's closing day.

Just a heads up, expect a lot of paperwork. The good news though, is that your agent and the attorney there should be able to walk you through step-by-step with everything. Ask any questions you need to and have before you sign.

Finally, we get to the best part. Getting your keys and moving into your new home. There you have it.

If you're a first-time home buyer, it might seem a lot. But once you have a place that you love. You know, what's worth it.

Support the Podcast!

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Photo by Daniel Frank

Want to Make Money as an AirBnb Host? Here’s What You Need to Know

Thinking about becoming an AirBnb host? A superhost shares the scoop about the costs setting up your place, figuring out your price, and how to make money with your space!

The 411 About Making Money as an Airbnb Host

One of the big shifts we've had during this pandemic is how we travel.

We've pretty much gone with renting entire spaces on Airbnb if we're doing a family vacation or getaway so far, it's been a really good experience. The value we get from having a place with a kitchen and yard has been a game changer.

Now the personal finance side of me was looking around and. How profitable was it being an Airbnb host? Also how much work was involved as a guest?

Most of our hosts had wonderful local recommendations, and if we needed anything, there were only a text away, but pretty much they were hands off.

It almost seems like the perfect passive income stream, but is that really. What's going on behind the scenes. I wanted to find out and I discovered I didn't have to venture very far.

During our last trip to Asheville we went out to meet up with some good friends we hadn't seen in a while.

While we were catching up with Barb and Don, I discovered she was an Airbnb host.

Knowing her hospitality, I had a sense that she was a natural candidate for hosting . Airbnb also agrees because she's listed as a Superhost. In case you're not familiar with the term. It means she's experienced highly rated and committed to providing great stays for her guests.

I'm happy to have Barb on the show today to share her story about becoming a host.

In this episode, we get into:

  •  setting her place up, 
  • figuring out prices, and 
  • making her guests’ stays fun and relaxing. 

We have some fantastic tips and even better stories so let’s get started! 

Resources for Managing Your Money and Becoming an AirBnb Host

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

As an added bonus, Coastal also offers business accounts, so you have a way to easily manage your side hustle or income stream.

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

The Rewards and Risk of AirBnb Hosting

Elle Martinez: How long have you been an Airbnb host?

Barb Kelly: Let's see, this summer will be two years.

Elle Martinez: Okay. Nice.

Barb Kelly: Yeah. We ended up doing that because we were living in a little cabin in a really nice little neighborhood, but it's very scenic.

It's was a safe, good neighborhood with awesome neighbors. We built a smaller house in the same town, but we needed to downsize and get away from stairs and a steep slope.

We ended up having this little cabin afterwards and we're trying to figure out, should we sell it now? The market wasn't terrific. I came up with the idea of Airbnb, because I had been seeing, what everybody else sees, ‘oh, you can make extra money' and we're on a fixed income.

Extra money is always a plus if you don't have to kill yourself doing it. Anyway so I looked into it, my husband's like, ‘I don't know about this. You hate people'.

And I really don't hate people, but I just don't like to get involved in any kind of drama so I wasn't sure how that was going to work out.

I started to research it a little bit and I thought, well, we actually have the perfect setup for it. As long as I wouldn't have to really deal with people, face-to-face a whole lot. I mean, of course I would be available if they needed me. I spoke to him about it and he's like, well, as long as I have to do anything, he has his own stuff.

Elle Martinez: Yeah, so he didn't veto it.

Earning Money Through AirBnb

Barb Kelly: Yeah. I said, well, let's just try it. If we try it for a couple months and it completely stinks. I mean, we're not signing any kind of contract or anything. We can quit at anytime that we want to.

I guess it'll be two years ago this June. It was actually right after we moved. We had not taken all of our furniture with us because we were downsizing.

I thought, ‘oh man, I'm going to have to sell this furniture, get rid of it or do something. When I thought about the Airbnb, I was like, oh, I'll get a pass for a little bit. I won't have to move any of this stuff so it worked out good.

It's a two bedroom, two bath cabin that is entirely on one floor. It has a open concept of a living room kitchen. It has a huge front porch that goes the length of the house that has an, you know, really nice views and it's very quiet.

I just went on Airbnb and read everything I could possibly read and then I looked up everything that I could find about. What's the worst thing that could happen, which is usually my criteria.

Elle Martinez: Yeah, that's good to know. Yeah.

Setting Up a Place on AirBnb

Barb Kelly: be. I want to know what is the worst thing that can happen to me? So I can be prepared, but we listed it on Airbnb and I'm immediately like the whole Summerfield up because we are in an area that has a lot of tourists.

We have a tiny little motel that has like six rooms and the rest of everything in the entire two counties is Airbnbs so I thought, Oh, man, I'm not even gonna make it. Nobody's going to be interested in this.

And I didn't try to oversell it. I didn't say, oh, it's got two twin beds, but you can sleep 12 people. You know, like some of this stuff is ridiculous.

Elle Martinez: Yeah.

Barb Kelly: four people can sleep great and there is a queen size air bed, but I'm just telling you the truth,

Elle Martinez: It's appreciated, as a family that's embraced in Airbnb, we've done them before, but in the pandemic really, that's how we've been taking our vacations.

I appreciate it because sometimes I'll see these and they're beautiful photos, so kudos to the photographer, but I don't know what kind of special lens they use, but I get there.

Huh there's the wall. It just, it felt so great. Then when you have two kids, I'm looking for space and I don't mind paying for that because I just need to have them decompress and relax.

Barb Kelly: Yeah, and you don't want to have to blow up the air bed every single time. Or you don't want to have one with a slow leak in it and the kids are complaining in the morning that they were cold and slept flat on the floor.

I think too, because we like to travel and so we have stayed in Airbnbs and whatever the name they're called all over the world. So we've stayed in enough to know what not to do.

Elle Martinez: Yeah.

Barb Kelly: Like I don't want to take a shower outside unless it's something I specifically asked for, you know, I would go to hip camp if that was the case.

I guess that's the other thing having stayed in the number from really super nice, to just super simple and traveling with other people, you really do want to have a real firm idea of what you're getting, because one place we stayed in Italy, the two bedrooms. They were big and everything, but they were so low. It was like a loft, but it wasn't, it wasn't advertised as a loft. And I got a six foot, three husband that kept banging his head up against the ceiling every time he got up

Elle Martinez: Let's see that makes a memorable trip. Just the wrong reason.

Barb Kelly: Yeah. Or you want to know a place that has really tiny narrow steps or a spiral staircase or whatever, because, you want to know what you're getting. A lot of times I've seen that it's kind of buffed up to look better than it is. And I don't like that.

I rather people come in and Look at it and it's actually better than they thought it was going to be. That's where really good reviews come in so that's, that's kind of the angle I'm going for you get more than you paid for.

Elle Martinez: So kind of rewinding back to when you were first starting, what were your initial goals like? Was this money for maybe your vacations or did you have a particular goal or were you very let's just wait and see, I don't want to budget that money out yet?

Barb Kelly: Like I said, we built a smaller house and so, but that gave us a mortgage so when we did the Airbnb we could pay the mortgage with the Airbnb money.

It wasn't coming out of savings or it wasn't requiring one of us to get a, you know, a full-time job or something like that or go into money that we didn't want to mess with.

But we weren't sure how much it was going to be or how much it was going to cost us to do it. Those were all kind of out there. It was just one of those things where you just had to just jump in there and try it and see how it worked out.

We got through with that.

Elle Martinez: That leads into my next question because yeah, I can see some people say, Hey, you know, I can rent out this room. It's easy to set up and I'll just but realistically, there has to be some costs upfront, to fix it up and get it ready for Airbnb. Do you mind kind of taking me one through what you needed to do to get the place ready?

Then also how complicated or not complicated is it to get on Airbnb and list your place?

Barb Kelly: The getting it ready part was not that hard for us because when we were building our new house we were already doing well and we're good about maintenance anyway. I mean we like a house to be maintained while we were living in it. Mainly it was we had to put in a new parking area.

The slope that we live on was really steep but we did have a pave drive, which was unusual in this neighborhood because most of it is gravel. It's a paved road, but it is in the mountains.

It was pretty, and people will comment on that every once in a while now, but at least it's paved. So you're not sliding and gravel if you're not used to it. It doesn't require you to have an all wheel drive or a four-wheel drive, which a lot of places do.

So we did have to spend some money on that. We, at one point we had to replace our backstairs because they just weren't really up to par. I don't know, we just weren't comfortable that they were completely safe. So we made them a little bit wider and, and the treads a little bit bigger.

We went around and because this is a two story, the front of the house is two story, and it's a rather steep slope. We just made sure that the railings were all in shipshape.

Elle Martinez: As a mom. I'm grateful for that. Thank you.

Barb Kelly: Yeah. We don't want to lose any kids or anything. I went around and I made sure that you, I hate to use this phrase idiot proof, but you do have to kind of idiot proof it.

I put in those little plugs for babies. Cause I don't know if people watch their kids or not. I mean, I'm not there. Really it just updating some things.

The furniture was already really nice so I kind of just added some touches to it, some pictures, some nicer stuff than I've normally seen, but it wasn't expensive because goodwill shopper

Elle Martinez: Oh yeah. You're here. Talented

Barb Kelly: It was those things just made it look a lot nicer; like you just stepped into your home

Elle Martinez: Yeah.

Barb Kelly: just stepped into a hotel room or something like that. We did spend a little bit on really nice linens. I don't like linens that peel up, you know, that get little pills on them.

I bought they weren't real expensive. I got them from Amazon, but a hundred percent Egyptian cotton so that they could be. every single week and they still look like they're brand new.

The same things with towels. I like a hundred percent cotton they're much softer and thicker. Things like that.

We stuck it with hand soaps and things like that and I try to use things that nobody's going to be allergic to. We try to get like organic if we can, but just really Nice things that maybe people wouldn't buy.

Now I can refill a lot of things because we have a little place called Fillmore and it's bulk refills for laundry detergent and all that. They're all organic. We're trying to keep people from breaking out in a rash when they come.

Elle Martinez: Well, I love that. You're being thoughtful with. Both from your own experience, did you do any research, like looking at other in the area, other AB Airbnbs, whether online or , chatting with them?

Barb Kelly: Yeah. What I saw really made me think I could do it because a lot of it was just, I mean, it just, I would have been disappointed if I paid that amount of money to stay at a place that looked like grandma's living room and grandma's bedroom and there were doilies everywhere. I mean, sometimes people would just overdo it or either it was so bare bones that you look like you need to bring your own stuff.

I wanted people to just be able to walk in there and just go, wow, we can just stay here. We don't even have to go out because what I did too in the kitchen, because my husband is a huge foodie. If you come to the cabin, you can make stuff with a blender. There's a crock pot, there's a toaster, there's a there's a french press. There's a drip coffee maker.

Those things weren't expensive to get but people have raved there's even the ice cream maker and a waffle iron. You can do anything that you want to do while you're there.

We've had people really thank us for having such a well-stocked kitchen. You don't have to go out and buy. We keep coffee, tea, and breakfast items really good oatmeal and really good breakfast bars and stuff, because I hate for people to come in. If they come in late, at least you'll be able to have a cup of tea and a power bar before you go to bed.

You don't have to go right to the grocery store. And if we know it's a special occasion, like somebody says, we're coming for our anniversary or we're coming for. Blah, blah, whatever family reunion. I don't know what it is, but anyway, if it's an anniversary, we always leave a bottle of wine and a little bag with candy or something in a card or flowers or whatever.

People flip. I mean, I don't think it's that big a deal, but they think, they think it's

Elle Martinez: Oh, oh for sure. I mean, as a guest, I completely agree and especially like we've been around Asheville during the pandemic, when we go on break and something is relatively simple, you say, like to prepare is such a big help with the coffee.

Sometimes we're not in town and then you have to go like, where's the nearest coffee place and then I got to drive in the morning and I need coffee to get coffee. That's not working for me.

Barb Kelly: I know and that's what I don't want you because we're like seven minutes from town, but there's a most amazing coffee shop, but I want you to be able to get up, have some coffee and sit on the porch in your pajamas and enjoy it.

I don't want you to have to go out and so I do leave the coffee mate creamers, but then I'll leave milk creamers for the people who really want milk like me.

It's just, I have found it really fun because I'm not always dealing with people face to face, but the feedback that I get is. I mean, it's a real ‘attagirl' because it's like, you're doing a great job and you're like, what you enjoyed that?

Oh, that makes me want to do more, that's good part of it. Those are all the good things about it.

I really, I only have one horror story and it was just I would say any horror stories can probably be avoided by making sure that your description that you put on Airbnb has no holes in it because it was somebody who could have, who really did want to make a terrible scene.

It was just, it was awful. And it was because she was trying to say that we're misleading in our listing. And she went to Arabic about us. And they looked at it and they were like, Nope.

She's like my money back. And I don't want to pay for cleaning and I'm going to stay anyway. And then I'm going to leave. And we were like, Nope, you better try this scam on somebody else.

But it's very disheartening. I was really hurt about it because we had had all these good reviews.

And then she left us one that was like, You know, I would give you less than 10. would give you a 10.

Elle Martinez: Well, it's funny. Cause sometimes people reveal themselves because like everybody else before I stay, I look at the reviews and I look at the general tone. Like there's things I'm looking for are the same things broken in every review. Are they like, yeah, the shower

Barb Kelly: my

Elle Martinez: working, you know?

And then the other side is, is most of the reviews, you know, positive. And then there's this one review that doesn't even sound like the same place. And then you click on them and then you're like, other reviews. They just seem angry.

Barb Kelly: Yeah. well, Yeah, hers was like five paragraphs and she only, she stayed less than 24 hours. So and that was because there wasn't a chain lock on the closet door. But anyway, And then they moved all the furniture in front of the closet door. And I was like, oh man, I don't know. And then rated the the neighbors yard and brought in tools and stuff and left them.

I don't know. It w it w I just didn't even want to go over there.

Elle Martinez: yeah.

Barb Kelly: die down. But I did realize when that happened, that Airbnb will support you if you're in the right. Now, if you're not, because he kept saying, do you want to give her a refund? I was like, no. I'm not giving her a read on this is crazy. This is a scam. She just wants to stay for free.

There is nothing broken, but I guess I, she took all my toilet paper when she left. So I don't know. That was kind of ugly because paper was to use that stuff.

There is a reason why they give you a review, but there's also a reason why you give them a review. And she had one review. That was one sentence. It was like, they were good. And I'm like, should I take a chance on his? Oh, sure. This, I mean, somebody with kids, how bad. How bad could it be?

Elle Martinez: You gotta have one memorable story, but I'm glad that overall it's good. I'm kind of glad to hear that story, to know that Airbnb will have your back, should something like that happen.

I do want to ask you with the setup. How does that work on Airbnb when you are listing your place? Because I mean, at some point they have to verify that's actually your place, right?

Barb Kelly: Yeah. Well, All I had to do when I did my own pictures. So I didn't have somebody come out and do it. I have a little experience with it and I didn't want it to give false hope either. Like this place looks, but it's only 1200 score.

I really want it to be very honest about what people were getting, but just a little bit of staging. I mean, I'd just leave it like it is. Like, you're going to see it when you walk in there. It's not got any extra stuff, but yeah.

Going on Airbnb, I just, they verify who I am. I had to verify who I am and then putting the pictures. I don't remember that I had to show like a property record card or anything like that. I think they just go off of my personal information as the host.

Elle Martinez: Okay. Did you have to do like a driver's license?

Barb Kelly: Yeah, you have to have two forms of ID and so that wasn't hard to do. And you know that and normally a host will provide a picture too, that goes on there on their little site that will assure people that, you know,

Elle Martinez: It's a real person.

Barb Kelly: That is a real

Elle Martinez: Yeah. Some of those pitches will kind of worried me. I'm like, maybe I'll stay some other place.

Barb Kelly: I know, right. It's like, I don't know. This looks a little

Elle Martinez: They don't look happy to be on Airbnb, but

Barb Kelly: no. We actually stayed in a place that the people did not look happy to have people staying there. And so Don and I were like, yeah, I don't think so, I don't think we'll come back.

Figuring Out How Much to Rent Your Place on AirBnb

Elle Martinez: So you set it up and fixed it up the way you like it and for guest. Okay. Now the part I am curious how people even figure this out. It was like your rate. How did you figure yours out initially? And did you have to adjust it pretty quick?

Barb Kelly: What I did was because there are so many Airbnbs in my area. I had the advantage that that it was a standalone place in a very safe neighborhood and it's on the side of town that's nearest to Asheville so if you're staying like where I live now, it takes me 20 extra minutes to get to Asheville.

On the other side of town, it's a straight shot, 30 minutes and it's interstate.

Elle Martinez: Very nice.

Barb Kelly: What I did was just did a comparison to what was similar to what I've got and my setup and the proximity to where people want to go. I started out with that and my calendar immediately completely filled.

Elle Martinez: Wow.

Barb Kelly: I've thought, whoa, wait a minute, wait a minute. Then I saw where you could do there's a thing on the, on Airbnb called smart pricing so if you if there are holidays or there are like in the mountains, people want to come in the summer and they want to come in the fall.

Elle Martinez: Yeah.

Barb Kelly: winter, not so much unless it's a holiday. What it does is it raised, raises the rate slightly. You give them the criteria you can go from here to here. This is the lowest you can pick, and this is the highest you'll charge.

Some of them I've seen are ridiculous. I mean, they're asked for crazy amount of money, but mine fluctuates about $25. You're not going to pay a whole lot, even for a special occasion. I do give a discount for longer stays which is nice.

I just had one in December, which was great. The people were awesome. That's nice because you don't have to have it cleaned every week, then for a longer stay, they just do their own cleaning and we provide everything, but, I don't want to come in while they're there.

That's how we did and we're still kind of tweaking it because it just depends there. People have shown a lot of interest in it, but I don't want to make it so expensive that it's out of people's range because I don't need to make that much. I'm not trying to, you know, ream people out.

I'm just, I want them to enjoy it too. It's worked for us so we're trying to keep it real reasonable.

Elle Martinez: Well, that's fantastic. I know for a lot of families that are watching their dollars, that's always good.

Barb Kelly: Oh, yeah.

Elle Martinez: Speaking of expenses, you mentioned making sure for every booking there's cleaning. What other extra expenses including maybe wear and tear or any stories about guests that you've had an unexpected expense after visit?

Barb Kelly: Yeah. We have leather furniture in the cabin, and then we have mean like a leather recliner, that's a nicer one. It's not one that looks like at your grandpa's house, but in a nice leather sofa, which to me is better because people I've heard horror stories of ruined upholstery.

So I thought, well, the kiddies have scratched a few places on this, but it still looks good and it's still super comfortable.

We tried to go with furniture that was couldn't really be killed too much, you know? Like I said, anything that needs to be replaced, I'll replace it with something really nice, but I'm going to get that piece of furniture at habitat. If I need to paint it, I will. But so far there hasn't been too much damage.

Like we had these, a young couple that had a couple of kids and I think the mom and dad just decided to party and just let the kids like run wild with blue cake icing. Let me tell you something, you cannot get it out.

It was just like they had a cake fight, know, and that the tequila bottles, I know they had a good time over there. That's one of the, one of two experiences that were terrible.

Everything else, I mean, I haven't had like people ruining my towels and things like that. And a lot of people do because Ladies that wear makeup and don't use a makeup remover wipe they'll that stuff gets out.

You just have to make it into a cleaning rag because you cannot get that stuff out. But so far we've been really fortunate to have people be pretty careful with it, pretty nice to our house.

Elle Martinez: It sounds like overall it's been a good experience with Airbnb.

Barb Kelly: Yeah. I mean, Airbnb takes their cut, not on don't get me wrong and cleaning during COVID is more expensive because we don't play would that.

We wouldn't do it if we could not make it safe for people, because I don't want to go anywhere that people are saying, oh, we clean to the certain protocol and they don't do it.

It takes longer to do it because we go in the first day, spray everything down with a micro band type thing and leave it. We don't even clean that day. We just leave that everything anybody could touch. And then if it's during warm weather, we'll just open the house up and just let that house air out for a solid day.

In the winter, we'll just turn the fan on and it's yeah you don't want to be in there with micro band sprayed everywhere. It's pretty rough, but, but I feel good that people are safe when they come here.

I provide cleaning the cleaning stuff, like masks and gloves and things like that, because I don't want my cleaner to get sick either. She doesn't want to get sick either, so that's going to work,

Elle Martinez: I'm glad you have a system in place in it. I think everyone feels good when you put the effort upfront, do the right job. Everyone feels taken care of and you get repeats. I know we feel that way. If we find a place that they put that care that you're putting in, that's going to be our go-to place. The first place we look for, you know, if we come back to a certain city or anything,

Barb Kelly: We feel that way too. I mean, there are some places that we have stayed that were just so I mean, the host just went out of their way and we could tell it.

We definitely go back there just because we've actually gotten to know the host. That's kind of cool. He feels like you've made friends all over the world just by and I actually have had some guests that were just so they're so funny and nice.

One lady it snowed while they were there. No, no, not snow it was The leaves, it had, the leaves had just all come down on the driveway and it made it so slippery that they could barely get up the driveway. So Don and I went over to clean the driveway off and as soon as we got there, she ran out, she's going to be here. Let me help you give me that. Right. And so we were all standing out the driveway, just, it was, it was really Nice.

I mean, they were just super nice people. Those are the kinds of people you're going to tell it the really good places to go and.

Elle Martinez: Nice.

Barb Kelly: Give him a discount knock on wood. Yeah. It's kind of fun. It like my husband said, you know, I'm not a, I'm not a real people person.

I'm kind of quiet and introverted unless I really know you, but some of the people we've met have just been so nice that you feel like you made a friend and we've had international travelers, even in our little town, we've had a lot of people From everywhere.

I was really surprised like who comes here, but they do. Where we live is kind of unique. So I'm not going to say that, but I often wonder how in the world you hear about it,

Elle Martinez: I'm glad that overall it's been a good experience for you, and I appreciate you taking the time sharing, like the good side and the bad, and also the investment that it takes to make it work in sustainable so I appreciate it.

Barb Kelly: Oh, you're quite welcome.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
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  • Grab a copy of Jumpstart Your Marriage and Your Money

Photo by Andrea Davis from Pexels

Is Real Estate Investing Right for Us?

Besides investing in index funds, many families in the FI space are also investing in real estate.  We'll look at the different avenues involved (flipping, rental properties, REITs) so you can see if investing real estate is right for you!

Is Real Estate Investing Right for Us? 

Have you ever watched one of those shows on HGTV and DIY where they renovate and then sell the homes – Desert Flippers, Good  Bones, and my mom’s favorite – Texas Flip and Move

The transformation of those places can be incredible, but part the draw too – at least for me – is waiting until the end to see how much they sold it for and seeing the profit they take home. 

I don’t know about you, we do think about the potential of real estate. 

If you’re a family working towards financial freedom, one of the things to consider is diversifying your income. 

For some families investing in real estate has been the way to go, but is that the right choice for you? 

That’s something we’re actually considering now. I don’t know about you, but before I put any money in, I want to have a clear idea of how things work so we can see if it’s the best use of our money and fits into the big picture for us. 

This is why I’m so happy Louis Guillama is back on the show. He’s the Vice President of Real Estate Operations at Coastal Credit Union and he’s had decades of experience as a real estate investor. 

In this episode we’ll get into:

  • The various ways you can start investing in real estate 
  • How to financial prepare so if you decide to go in, you have a solid foundation
  • Resources and ways to dig in deeper and learn more

Let’s get started!

Resources on Real Estate

If you’re looking to buy, here are some resources to help you find an affordable place you love!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

If you need an agent, Daymark Realty has a fantastic team ready to help find the perfect house for you in the Triangle area! 

Support the Podcast!

Thank you so much for listening to the podcast!

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple!
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Like the music in this episode? Music by Lee Rosevere and Audiio.

How to Snag a Great Deal When Buying a House

We've heard how you can snag a deal by going with a fixer-upper, but is that really true? Today we’re digging in on the dos and don’ts with house hunting!

Finding and Buying a Fixer-Upper, Not a Money Pit

Buying a house – – it’s probably the biggest purchase you’ll make. 

And depending on where you live, it can be a crazy market. I know here in Raleigh everyone is saying it’s a seller’s market. And I believe it. I’ve seen houses get listed and that sold sticker put on the sign in less than a week. 

Which is great if you’re a homeowner – property values are going up. 

But not so much when you’re trying to buy a house, which is what my mom wants to do. 

She’s recently accepted a job here in Raleigh and after she’s sold her current home, she’s looking to buy.

She's asked me to tag along and help.  And I‘m happy to. 

It’s just this means we’re going to have to really hunt for a deal. 

A fixer-upper would work for her. 

And maybe you’re in the same boat – you’re looking for a diamond in the rough that you can buy a great price and then you can fix it up the way that you want. 

The tricky part is making sure you don’t get stuck with a money pit. 

Which is why I’m glad Louis Guillama is on today to offer his expertise.  He's the Vice President of Real Estate Operations at Coastal Credit Union.

He has three decades of experience with the real estate agent side as well as home renovations. 

In this episode we’ll discuss: 

  • Differences Between buying a house that’s new construction vs resale
  • Spotting great and still affordable neighborhoods
  • Finding a fixer-upper (instead of being stuck with a money pit)

Let’s get started! 

Resources on Buying a House

If you’re looking to buy, here are some resources to help you find an affordable place you love!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

If you need an agent, Daymark Realty has a fantastic team ready to help find the perfect house for you in the Triangle area! 

Buying a House in a Seller's Market

Elle Martinez: I don't know how things are in your area, but here in Raleigh, if there is a strip of land, they will build on it. We have new developments coming up around our neighborhood, across the city, and we've noticed that our home property value is rising and that can be a good thing.

But it also means that if you're buying new, the prices are going to be much higher than when we first got in the first time we went house hunting.

My husband and I went with a new construction. It was in a townhouse on the north side of the city.

The second time around we went with an older home a little bit closer to downtown, more convenient for how we live now.

And there are noticeable differences with buying new vs. a resale. So if you're hunting, you may be wondering what's the best option for you? And Lewis was sharing that with the new construction there's going to be an additional expense.

Louis Guillama: Obviously, when you buy something that's new. You got to pay a slight premium on that as opposed to buying something resale.

And there are quite a few differences between new construction and resale home when it comes to the pricing, character development of the property and the neighborhood in general. So there definite considerations of any home buyer should make.

Buying a Home with an HOA

Elle Martinez: And also with new developments, you're looking at potentially having an HOA. While some may have very strong feelings about them, particularly negative. Lewis pointed out how they can work to your benefit.

Louis Guillama: And so historically, HOAs will be enforced when a new development forms and then they may tend to expire after a period of time. And that tends to be 20 to 30 years unless they're renewed by covenants.

Most every new development will have an age away. And that's not necessarily a bad thing that really aids the neighborhood and its development and the culture that it forms. Because, you know, you have all these different personalities and, you know, moving into the neighborhood so it can go in any of any number of different directions.

It kind of put rails on it and kind of guide the development, the neighborhood. The city can't change colors. This has to be uniformity and a structure. You can't park commercial cars in front of the house. So you're are not necessarily a bad thing. You can help.

They were developed to where it was intended to go. That can be problematic for some people, you know, if they have a larger number of pets than is typical.

Now, I just met someone and they had six dogs. So that may not be permissible, but the most age ways. But there are some areas that they can find a nice home.

Elle Martinez: So if you're considering buying a home with an HOA, take some time, do the research and better understanding not just with the costs, but what you're getting out of it.

Louis Guillama: Those covenants are recorded at the inception of the neighborhood. They get recorded at the Register of Deeds so anybody can go into the public records at the Register of Deeds of County and then do a search by the name of the HLA. And if you look at the names the way whether it's Wakefield Plantation or Brian Creek searching there and you'll see the provenance come up and then just read the covenants that are that apply your property.

How to Spot an Up-and-Coming Neighborhood Before It's Popular

Elle Martinez: It's very tempting to buy into a trendy or popular neighborhood.

It seems like only a few spots have the best restaurants, fantastic parks and incredible schools. But if you're determined to live in a particular neighborhood that's really popular right now. Expect to pay a premium in something to keep in mind is when you buy into a popular neighborhood.

It's not always going to be the best move for you or your finances.

Louis Guillama: The best thing that I can recommend to finding homes with good value and good neighborhoods is to look at at a longer track record than what's trending today.

You know what I have seen in my experience and we're talking 20 years in the real estate business, is that neighborhoods and areas so that everything operates on a cycle. So, for example, here in the Raleigh area back in 2005, the Wakefield location neighborhood was immensely popular.

Everybody wanted to live in that neighborhood. Homes were selling for up to two hundred dollars a square foot today.

Now we're almost 15 years removed from that. And we encounter people that aren't able to sell their homes because of the price that they paid moving into it. It was they who I actually bought at the peak of the market in a really bad neighborhood. And so they paid a price. Now, obviously, there is value in use and value and trade. Right. So we got a lot of enjoyment out of it with a great neighborhood. Got some prestige and cachet out of it. But now value in trade is not as high as they'd want it to be.

Elle Martinez: So what do you do? How do you find these gems are hit in spots and neighborhoods?

Louis Guillama: What I always recommend to people is pick an area that's convenient to you that supports your your particular lifestyle is close, close proximity to your work into the places that you normally visit, and then don't buy the most expensive home in the neighborhood. Don't buy the prettiest home in the neighborhood. I always recommend look for the home that has. No, that's not the shiny new coin in the neighborhood.

Finding a Fixer-Upper (and Not a Money Pit)

Elle Martinez: Finding those diamonds in the rough or another way they say them fixer uppers. If you ever watched House Hunters, you've probably seen this, a couple looks at a home and they start making comments about the place and sometimes it's a legit complaint. They notice maybe the AC unit isn't in good working condition. Most times they complain or compliment all those surface finishes, the appliances, the countertops, the flooring in my favorites definitely have to be the couples who hate the paint. When I spoke with Lewis, he told me that time and again people buy based on what they see, which is understandable. But if you're trying to get a great deal, you need to focus deeper on the crucial areas of the home.

Louis Guillama: Everyone's maintenance issues is predicated upon your purchase decision. You have to look past your first initial or your emotional response to the property because we're all visual, right? And so people will walk into the property and they're basing their opinion, they're forming their opinion on the property based on what they see. But they're not really looking at the details behind the property. So the three key components to every home, there's the foundation and structure. Yeah, mechanicals and plumbing is like your air conditioner to your hot water heater as well as the plumbing pipe itself. And then you have the surface finishes, which is what we're really responding to when we enter a home. Look at the wood floors, look at the quality, the cabinets, the paint surfaces, etc. And I encourage buyers to take a close look at the foundation and the structure, make sure that that is sound and that'll be determined by any competent home inspector. I always recommend doing a home inspection, even in new construction homes.

Elle Martinez: So this I can tell you from personal experience, he is absolutely right.

Our first home, that new construction. Yeah, we thought we could save some money because it was brand new and not have a home inspection. Well, sometimes when you see these builders come in and have developments go up quickly, the quality isn't what you expect. We saw things here in there that weren't done right the first time. And when it came time to sell. Another issue was evident. The window seals were broken.

We pretty much had replace all but one window, which is kind of ridiculous because at that point the home was about five years old. So you better believe that the next time around we did have a home inspector and we followed him closely with this house. When we came in, we immediately loved it. He loved the layout. The natural light in overall location. But the basement. There was so much potential. But between with the home inspector found in ourselves comfort level. We saw we needed to make a pretty major repair if we planned on finishing and using it. If we bought as is, while we technically could have still afforded it, money would have been really tight for a while. Instead, we took that information we got from the home inspector and our agent negotiated a lower price. It allowed us to get the basement properly fixed, keep the mortgage affordable, and now have an awesome home office space for both of us, which is a huge win in our book. So if you looking for a fixer upper, it pays well to well pay someone to dig into your potential home so you can avoid a money pit.

Louis Guillama: Then if you don't want a you know and trap yourself in a money pit, you want to make sure that the mechanical systems of the property have been updated to make sure that the air conditioning is in good shape and in working order. And that is one key component that a lot of people allow their home inspector to test. I always like a man to get an H bag or air conditioning specialist. Take a look at it, because they, unlike a home inspector, was just going to measure the temperature of the air that's going into and out of the system will actually just take off the top or connect all the gauges and make sure that it's functioning the way it was intended. That's where you really encounter the money pit situations where you purchase a house because it looks cosmetically, it looks fantastic, but the underlying support systems are old and not functioning properly and you're constantly putting money into them. And air conditioning in particular can be very expensive. I mean, your typical HD back service call is about 300 hours, so you're not going to get away from from a cheap service call when it comes to HIV problems and you'll normally go to three or four of them before you decide ultimately to replace it.

Elle Martinez: And so that's a sure way to avoid the money that you're really hammering in on this, because how you buy a home will have a huge effect when you go to sell your home.

Louis Guillama: I recommend for people is not to be attracted to the prettiest looking house in the neighborhood. You have a lot of investors that go into the, you know, trendy neighborhoods and they will do cosmetic updates to replace kitchen cabinets so that they'll be finished the floors they've given. Yup, it looks really beautiful, but the underlying portions of the house, the foundation, the plumbing system, the mechanical are not in the best condition. And so people are paying a premium because it looks great. But over time, it creates maintenance problems for them and they're really not going to derive as much benefit for them because when they go to resale, it's not going to be looking like that because they're not going to spend the money updating it. And so you pay a premium for looking great. But then when it comes to resale, the prices drop a little bit because now it's more used. Right. The same thing happens with new construction properties. A lot of people think that they'll buy a brand new home and then maybe in three to five years they'll sell it and move somewhere else. Well, in reality of new construction, there is a very large premium between new construction and resale properties, and that could be as high as 20 percent. And so what happens is within the first three years, at least in most areas, your property is actually declined in value from what you paid for it. You have to wait until the resale market comes up as it appreciates and reaches your price point, your entry point in that new construction home.

And then it will continue appreciating along with the rest of the market, because the day after you move into a brand new home, now you're in a resale property because you're the only people that can sell new construction or builders. And that's it no matter what you do to it. Even if you completely renovate your home, you're still in there compared to the resale market. And that market is selling at a slight discount from new construction. So, you know, I work with a lot of buyers that we would go look at houses and then we'd simply fall in love with the houses that investors, the savvy investors have just clean them up, made them look nice and shiny, and they're willing to pay top dollar for those. But if they look past that, look at their house in the same neighborhood, that maybe hasn't been updated. The structure is the same as the shiny new one, that maybe the flooring has to be replaced or the paint needs to be redone. You could save a considerable amount of money in that mine in my 20 years or actually now 30 years of homeownership. I have never bought the prettiest or nicest home in the neighborhood. I will look for a quality neighborhood and I'll buy the ugliest property that I can find in that neighborhood. This suits my lifestyle and then we'll go ahead and fix it up and you can recover so much wealth that way. Just five minor updating and just improving the presentation of the problem.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Like the music in this episode? Music is by Lee Rosevere and Music for Makers.