Episode Transcript
[00:00:02] This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Carl.
[00:00:16] Short Term Rental Management.
[00:00:18] It is the long hair millionaire Luke Carl in the cash cave here on this glorious Tuesday morning. And today we're going to talk about selling a house, which is something I don't normally do, but I am doing it right now and it's going pretty well. But before that, I did want to mention I'm covered in toilet water. Why? Because I got the bright idea to swap out the guts on a toilet. I live in a vacation town, it's vacation season. Getting a plumber over here I decided was going to be a pain in the rear end because they're going to be stoned and they're not even going to know what time to show up and all that kind of stuff. And I'm not talking about, about plumbers, but it's a small town and it's just hard, you know, it's hard to get people to show up.
[00:01:03] So I took the kids to the hardware store and we had some fun and got some parts for the toilet and I pulled it apart and started putting it back together. And then I realized I needed more parts, so I went back to the damn hardware store again. And at that point I said, man, I should have called a damn plumber. So it's a fine line between, you know, keeping your chops up, I suppose is a good way to put that. If you've got a. If you've got rental real estate, you do need to kind of keep your chops up as far, far as you know how to work on things.
[00:01:35] But at the same time, you know, I think most millionaires would tell you you're out of your mind for working on a house. You need to call people to do that for you. And in this case I thought, I mean, I got a little cocky maybe, you know, I thought I could get it done myself. And sure enough, I proved myself wrong. And I did get it done.
[00:01:53] Just wasn't as efficient as I would have liked it to have been. And I could have used my time elsewhere to make more money. Will make some money rather than spending time on a damn toilet. I could have maybe cleaned my office and gone through some of this giant stack of mail that's adding up. By the way, can we be done with the mail now, please? And I hate to say that I'm two generations.
[00:02:18] Well, my grandfather was a mailman. Well, he was Navy, World War II. And then he went into the postal service and Was a mail carrier until he retired. And my dad did the same thing. He was Vietnam army for six or seven years and then he went into the postal service until he retired. And I'm just a little bit too young for all that. I. I could have been a mailman, but instead I'm a generation that doesn't want to bother with going to the post office because it's terrible. So I've got stacks of junk mail boxes and what have you and just junk all over and it's hard to get to it. And I'm sorry about that. I could have done that while I was fixing the toilet guts. But, you know, that being said, I do think it's probably a decent idea to keep up on your chops. Like I said, you got to be able to know how to fix a house, talk, to talk, walk the walk. This particular toilet had some sort of weird.
[00:03:13] The flex hose was some sort of old style.
[00:03:18] I don't know. I'm sure it's something a plumber sees every day. It's not something I was familiar with. It wasn't something that they even had at the hardware store. I wasn't trying to replace it with the same item, but I just out of curiosity, I did look to see if they had this item, this hose at the hardware store. So I would at least know the name of this type of hose. And they didn't even carry it at the box store, so must be outdated.
[00:03:44] And by the way, I didn't go to a box store. I let me correct myself there. I went to Ace Hardware, which if I have the choice as a landlord, as a property manager, I much prefer Ace Hardware. Obviously there's a lot of things that Ace doesn't carry that Lowe's and Home Depot do, but in my case, they are a little bit further away. And if I'm taking the kids like I did today, I took my son and my nephew teaching the boys how to fix a toilet at a very young age. It's a good skill to have.
[00:04:15] Ace has the miniature shopping carts and the popcorn and they have baseball cards for sale at the checkout, which I very much like all of those things and reminds me of being a kid and my grandfather taking me to the hardware store, which of course, when I was a kid would probably have been a true value or a Westlake, but all some sort of version of what we would find in an Ace Hardware today, right? So fond memories of being a child and going to the hardware store. So hopefully. Although that toilet did take me way Too long this morning. Multiple trips, etc. I hope that the kids remember just a tiny bit of it. They're very young, but maybe they'll remember when Uncle Luke. Uncle Luke took them to the. Or. Dad, dad slash Uncle Luke took them to the hardware store to fix the toilet and they got some gummy worms out of it too. So that's always nice.
[00:05:13] Anyway, it's been an eventful morning and I could use a shower.
[00:05:18] But of course, you know, it's not the gross. Toilet water never even opened the lid. I. It was all the back of the toilet toilet water. And it went pretty smooth other than the fact that I had to run back to the hardware store.
[00:05:31] And even when the second trip I forgot to measure the flex hose, so I just had to guess. And I ended up with. I bought three because I didn't want to have to go back again. And the smallest one I got was still a little too long. So, you know, good times. Call the plumber, right? Of course. Small town. Sometimes calling the plumber is more of a pain than doing it yourself. And it's, it's just part of the journey. Part of it. Right.
[00:05:56] Funny thing is with my kids is someday they may end up owning these homes.
[00:06:01] That was not the case with my dad and my grandfather teaching me how to do all this stuff. Although I have almost purchased both of those houses. My grandfather's house and my dad's house. The deal didn't work out, but I did make offers on both of them last time they came up for sale.
[00:06:17] Anyway, today I want to talk about selling a house.
[00:06:21] I put a vacation rental home up for sale. Vacation home up for sale.
[00:06:29] And I did so with my trusted team at the Short Term Shop which of course sells homes. And I work for the Short Term shop and teach folks how to be good landlords and provide value. And that's what we do. The shorttermshop.com But I had a home that I was ready to sell for whatever reason.
[00:06:48] I mean, do you want reasons? I'll be honest with you, you don't need a reason.
[00:06:54] I'm actually going to write that down. Give me a second here.
[00:06:57] But I'll give you my reason and then I'll tell you why you don't care about reasons. Okay. My reason was because it's kind of all.
[00:07:05] I've got several reasons that are sort of related on this one. It was meant to be a second home for me and the family and myself and the family. And it's in a beautiful location that's Kind of out in the middle of nowhere. And it's close, close enough to home that we can get there when we want to. And we, we have used it many, many times.
[00:07:23] But we have shifted our second home situation towards New Orleans. We bought, we bought a property in New Orleans last fall and we have found ourselves going there. A lot of big city culture, food.
[00:07:38] It's our closest big city to where we live. We are falling madly in love with this New Orleans. So this other second home, which we do rent out, is not getting as much attention. That paired with the fact that it is all by itself down there in the middle of nowhere.
[00:07:52] I don't have other properties down there. So my systems are not as, you know, as easy as they would be somewhere where I have five or 10 homes or 30 homes.
[00:08:01] That and it is the opposite direction of New Orleans, which we seem to be going towards more and more often.
[00:08:09] Also further away from family. Family's actually in the direction of New Orleans.
[00:08:14] Anyway, there's just some reasons we decided to go ahead and let it go.
[00:08:20] If you're looking to buy a beach house, a lake house, a mountain house, a vacation house, a short term rental, a vacation rental, a second home, please contact your friends at the short term shop. We are a family owned business and we operate in all of the best vacation rental markets in America including the Great Smoky Mountains, the Emerald coast with Destin, Panama City Beach, Orlando, Florida, the Disney Market, Gulf Shores, Blue Ridge, Outer Banks, Carolina Beach, Western North Carolina, Scottsdale, Arizona, Broken Bow, Oklahoma, the list goes on. We are the best in the biz and we want to earn your trust. Please contact us at the short term shop.com I do want to talk about that reasons why people sell a house. Okay, that comes up all the time if you're fairly new.
[00:09:23] And I know this podcast is about property management in general, but I do want to mention if you are looking to buy a home and you're new, ish question that comes up very often is why are they selling it?
[00:09:37] And the truth is you do not care.
[00:09:43] Now here's the deal. In 2025 it is a little bit different because if they bought it in 21, they paid premium price, they probably have a little less wiggle room, et cetera. That does things a little bit. Maybe you care about when they bought it as far as that concerned, you know, if they bought it in 2014, they probably have more wiggle room. But then again, did they refinance at the peak in 2021 and they don't have any wiggle room. You know, all these things need to be considered. But in general, if you are asking, why are they selling this house? You are probably a noob.
[00:10:21] It's just kind of an amateur question. Who cares?
[00:10:26] Why do you care?
[00:10:28] Think about it. You need to get over that. And I, I get it. You know, when I first started, you wanted to know. You wanted to know this, that and the other. Putting a story together about this home you're buying. But at the end of the day, it's just a damn house. And I'm preaching to the choir right now. I'm preaching to myself, it's just a house. Who cares?
[00:10:45] And even if it's an apartment building, who cares? Just an apartment building.
[00:10:49] Not that big a deal. Let me get a cold one going here.
[00:10:54] If you're listening on podcast, it's a water.
[00:10:58] I don't drink. I'm boring. I'm just a dad, you know? Anyway, decided to sell this house. So let's talk about this house I bought it in. I don't know, I bought it in. I bought the house for 850 in 2021, in the peak, basically, July 2021, which was kind of the beginning of the peak. It was somewhere right starting there until about June of 2022. And the prices were as high as they've ever been, and they have not been that high since. It's taking quite some time now for the market and the economy to realize that things are slowing down. Although things do seem to be picking up just a little bit lately. This year, matter of fact, mortgage applications are up 18% year over year through June. The first mortgage applications are up 18% year over Year through June 1, which means that from January 1 through June 1, 2024, and January 1 through June 1, 2025, mortgage applications are up 18%.
[00:12:07] So 18% more mortgages have been applied for in that period of time this year than last year, which is great news. We're also up month over month, week over week, I should say, for the past 17 weeks. So 17 weeks in a row, we've had positive mortgage applications, which is wonderful news. That being said, they were at the rock bottom before all that started, you know, so things are looking a little bit better, but in general, you know, pretty slow out there as far as real estate sales are concerned. That said, let's get back to the numbers on this house. 850 June or July of 2021, give or take. It's in a very small beach town about two hours from where I live. We used to. We Go. I mean I was just there last week. We go there quite a bit, vacation home kind of a deal.
[00:12:57] But of course we do rent it out and it's a very lovely home. You can get gulf views off on all the porches and two, two second and third floor balconies with gulf views etc, very nice home.
[00:13:12] And 2020.
[00:13:16] No it's 2018 build.
[00:13:18] So fairly new home, could stand a paint job, you know not paint job, it's not old enough for a paint job but you know, touch ups and things. It's a rental so it gets rented. So it gets beat up a little bit especially on the staircase. It's got one very narrow staircases that turns and goes back up, you know and when you have a staircase like that or any really any staircase in a rental, it's gonna get, it's gonna get beat up with suitcases etc, black marks on the walls and all that kind of thing.
[00:13:46] So I could stand some paint touch ups and, and I do, I do paint the stairwell at least once a year, if not twice a year.
[00:13:52] But it just happens, you know, you put it in your guidebook, please don't bang up my staircase. And it happens. Anyway but so anyway, long story short, we ran some comps. I'm not a real estate agent by the way. I am not a licensed real estate agent. Never, never have been. But my lovely wife is very well qualified as some of you may know the shorttermshop.com and she ran comps etc and she said we could probably get 950 for it. I said if that's the number I can get it sold for. Let's go 10 lower and then another one lower just for good measure.
[00:14:23] So 939, Bob's your uncle is the list price on this home. We got it full price off for the first week, full price offer the next day. That one ended up becoming a full price backup offer. Things are going pretty well.
[00:14:38] So I will say couple of things about this.
[00:14:41] I priced it right, which most people are not willing to do right now. There are more listings on the market than there have been in ages. As a matter of fact I read somewhere 500,000 more listings than buyers nationwide right now.
[00:14:59] I don't exactly know how they calculate that figure. It's a little bit ridiculous to even think about that figure, right? But there are just under 2 million homes for sale nationwide. Residential, regular, single family homes for sale right now nationwide.
[00:15:16] And I don't know where they come up with this figure but I did hear that there are 500,000 more listings than there are buyers.
[00:15:24] So where they get that, I don't know. Does that mean there's 1.5 million buyers right now and the other 500,000 are not gonna get sold? I have no idea where they got that from. Seems kind of ridiculous, but that's what they're telling me.
[00:15:40] Anyway, all that to be said, it's slow out there. It is. It's very slow market. There are a lot of listings, almost 2 million listings right now nationwide, and not a lot of buyers. And the problem there is that the sellers don't realize it hasn't sunk in yet.
[00:15:58] I got a targeted ad or something came on my feed the other day was a, a Fox News article that is not a political statement of any kind. It just kind of happened to be on my feed.
[00:16:08] And they were, they had a real estate agent on there from New York City and they were talking about the fact that the market is dead. The market is dead. The market is dead. And I was like, finally, we're getting this front in front of regular folks on regular news and maybe we can get our point across here that the market is dead. That's the problem, my friends. If you want my opinion, if you want my honest opinion, the problem right now with the real estate market is that the sellers have no idea it's dead out there. They don't know.
[00:16:41] That's the problem.
[00:16:42] And until the sellers start to realize that it's dead out there, the buyers are never going to be able to come around to the fact that they should start making offers. Etc, politics, the economy, the stock market, interest rates, oh my goodness, oh my goodness, oh my goodness.
[00:16:57] None of it matters until the sellers become more realistic and don't think they're living in 2021 anymore.
[00:17:07] Product is not going to move.
[00:17:09] You can be 2025 optimistic or you can be 2021 optimistic. It's your choice.
[00:17:17] But you can't be both.
[00:17:19] You can't be both.
[00:17:21] Anyway, I decided to be realistic. It's 2025 and I know there's people out there hurting. I get that. There's people that are upside down. There's people that bought a primary home to move their kids into in 2022, 2023, they got a low interest rate, but their purchase price was super high. And now they're having another kid and they want to move and they can't because they got a low interest rate and their house is probably worth a little bit less than they paid for it.
[00:17:49] But be honest with you, all things Considered things could be worse right now.
[00:17:56] They definitely could be worse. I'm actually going to show you this house if you happen to be watching on Zoom or on, I'm sorry, on YouTube or Instagram or something like that. Let's go ahead and share screen. Take a look at this bad boy. We will share screen on the world famous Airbnb. All right, here it is. It's a beautiful home.
[00:18:18] Three stories. This is a first floor is just like utility space. It's not really, you know, living space. And then you got a kitchen and a half bath here and then you got three bedrooms and three full baths up here on the third floor. Both of these balconies have views of the Gulf of America, the Gulf of Mexico, I will say, and I've mentioned this home on podcasts in the past on short term rental management.
[00:18:42] This is the infamous, oh my God yellow comforter house that I. These comforters were reversible and the other side was what was supposed to be showing and whoops, Daisy, it didn't work out that way.
[00:18:58] And this ugly, terrible yellow is what ended up being on my, my, my photos. And I'm wearing a different shirt because I screwed up my video. If you're watching on YouTube, no big deal. Anyway, long story short, I, I'm selling a house price. You're right. Got two offers, two full price offers in a week. And Bob's your uncle.
[00:19:22] That's pretty much all there is to it. I do think that this fall is gonna be a perfect buying window for some folks. I think right now we're dealing with some sellers that may or may not be starting to realize that it's difficult to sell right now. They're not still dealing with that 20, 21, my property's worth its weight in gold kind of a deal.
[00:19:41] And I think that right now they're getting six, seven hundred dollars a night in some cases on rent. And they're not all that concerned with selling it right now, you know. So when fall rolls around, yes, fixing my light now video is a mess today. It's totally fine. Just let it rip.
[00:19:59] I think when fall rolls around and they're not getting those rents anymore, especially in beach properties, that kind of thing, October, November, then I really think that that's a perfect buy box for buying a nice piece of property, a nice vacation home.
[00:20:15] And I will also say, if that's the case, we want rates to not go down.
[00:20:20] Okay. And I know that sounds crazy. Well, if rates go down, I can get a better rate and I can get a Better mortgage payment.
[00:20:25] Yeah, but if rates go down, you got millions and millions of people that are going to notice they're just sitting there not paying any attention to real estate right now because rates are been high for a long time and they've completely forgotten about real estate. But if rates go down, it's going to be all over the news. And then all of a sudden you got millions of eyeballs that are back on real estate again. So I think a perfect scenario for getting a deal right now is waiting out the rent, the high rental season, you know, November, somewhere in that neighborhood, October maybe. And also, rates don't go down. I hate to say it, I think if rates don't go down, you will end up getting a better deal on a house. If rates good do go down, you're going to end up with sellers that are getting optimistic again.
[00:21:07] But that being said, you'll have a lower rate, you know, so your monthly will be lower, you know, so depends on how you're looking at things. If you're looking to pay cash, you want rates to stay the same or even go up.
[00:21:21] So, long story long, I sold the house.
[00:21:25] I love you. I got a great quote for you.
[00:21:29] Let me find it here. I wrote it down. It's a fantastic quote. I may have used it before. I have absolutely no, no memory of anything. But the quote is, nobody in the history of the world has washed their rental car.
[00:21:43] In other words, your guests are not going to care as much about your property as you do. That comes from a book called Essentialism. I do think I may have quoted that one already, but my memory just is not all that good. You know, I partied a lot in my 20s, but I love you. I hope you're having a fantastic summer, if it's still summer. I think it is. And don't overthink it.
