5 Key Players You Need to Succeed When Buying a Short Term Rental in Gulf Shores

Avery Carl [00:00:02]:
Hey guys, welcome to our 10 episode deep dive of the Gulf Shores, Alabama market. I’m your host, Avery Carle and I wanted to let you know really quick before we get started that we do have some supplemental materials for you to go along with this podcast on our website, the shorttermshop.com. so what we have there is the current purchase prices in this market. So you can set yourself up a search, look at properties, do all that fun real estate stuff like kind of like Zillow. We’ve got it on our website and you can check out exactly how much it costs to buy a condo or single family home or townhouse in the Gulf Shores market right now. Also to go along with that, we have the air DNA data, thanks to our friends over at airdna for this market for the past few years. So you can compare purchase prices versus the air DNA data and kind of do some analysis there. We’ve also got a really cool calculator on the website that I built around short term rental investing to go along with all these things.

Avery Carl [00:00:53]:
Or if you know you want to buy in Gulf Shores and you’re ready to start talking to an agent, you can, you can reach out to us at agents the shorttermshop.com and we’ll get you connected with our agent in Gulf Shores. And last but not least, if you just really like us and you want to hang out with us more, we’d love to see more of you. There’s a few ways you can do that. You can join our Facebook group. It’s called Short Term Rental, Long Term wealth, same title as my book. It’s a community of over 60,000 investors sharing best practices and just kind of being friends with each other. It’s pretty cool. Or if you want to talk to us in person, you can do that every Thursday.

Avery Carl [00:01:28]:
You can, you can sign up@strquestions.com we have a one hour lunch hour, just office hours where you can ask us anything you want about short term rental investing. So we appreciate you guys listening and please reach out to us with any questions. Follow us on Instagram TikTok Facebook. Join us in our community on Facebook as well and I guess we’ll get to the episode now. Thanks guys. Hey guys. Welcome back to another episode of LeBron episode five of the Short Term show special episode series on Gulf Shores. Right now we are going to talk about building your buying team so where you’re finding people, what questions to ask those vendors, all that fun stuff and we’ll go ahead and get started.

Avery Carl [00:02:15]:
Two very familiar Faces here, Tim Grillo and Jonathan Lazzarino. You guys just want to introduce yourselves really quick for those who may not have listened to the previous episodes. Go ahead.

Jonathan Lazzarino [00:02:25]:
He hey, I’m Jonathan here with a short term shop in Gulf Shores and Orange beach and excited to be here today with you.

Tim Grillot [00:02:32]:
Good morning. My name is Tim. I actually live in the Smokies and own several properties in the Smokies and Gulf Shores. I am an agent in the Smokies, but not in Gulf Shores, but we own properties in Gulf Shore, so we, we know a bit about both.

Avery Carl [00:02:44]:
All right, easy enough. Everybody should be pretty familiar with you guys by now. So let’s we’re going to start with the people that you need to actually buy the deal. So the people that you need before closing and then towards the end of the show, we’ move to people who you need after closing to help you manage so acquisition and then management. So the first person, or actually could be the second person, it could go either way. Your first or second person that you need to help you is going to be a real estate agent and then the other first or second person is going to be a loan officer. So sometimes you’ll find the agent first. Sometimes maybe you already have a lender that you work with, but you want to buy in a new market.

Avery Carl [00:03:23]:
So then you find the agent. So let’s start with agents. What are some good ways to find some short term rental specific agents in a market?

Jonathan Lazzarino [00:03:31]:
I think the best way is to email agents at the short term.

Avery Carl [00:03:37]:
Yes, agents at the short term, shop.com. that’s how you find them. And hit record. We’re done.

Tim Grillot [00:03:42]:
Yeah, in all serious. No, in all seriousness, I can’t say that word today. But anyway, in all seriousness, you know, you do want somebody that is specific to what you’re buying. You know, you don’t want to use, you know, if your best friend’s an agent, but all they do is sell primary homes. You know, no offense to them, but you don’t necessarily want to use them to buy a short term rental and vice versa. You know, I mean, I sell short term rentals in the Smokies, but I have zero interest in trying to help somebody buy a primary house because that’s not what I specialize in. You want, you want somebody that specializes in what you’re buying, regardless of what that is and that, you know, happens to be, you know, we happen to be what we do. So, you know, not to plug us over and over, but that’s what we do here.

Tim Grillot [00:04:21]:
And so you Know Jonathan, for example, on this team, he knows everything about short term rentals in Gulf Shores. So that’s, you know, the kind of thing that you want to get to, you know. So I’m going to get into questions, you want to ask them, what do you specialize in? What are most your deals? You know, and, and if it’s all short term rentals, then that’s kind of what you want. You know, on a side note, I.

Jonathan Lazzarino [00:04:39]:
Know this is talked about a lot, but a lot of the short term shop agents, if not all of them, are active investors. So we do think a little different than realtors who may not be investors as well. So I think that is in my opinion pretty important to have somebody that is doing the same thing you’re, you’re doing as well.

Avery Carl [00:04:56]:
Yeah, yeah. So it’s important to find an agent who understands short term rentals, especially one, if you can find one who specializes in it, that would be best. But you know, not every market is going to have that. But you definitely want to find an agent who’s very familiar with those, with the regulations of short term rentals, the zoning. Because the last thing you want to do is, you know, call up your cousin’s friend or whoever and we call them the Aunt Susie agent here. And you know, maybe you get under contract on something and close on something that is outside of the zone that allows short term rentals. Because we talked about that on a previous episode. There are some specific areas of Gulf Shores and Orange beach that would make great rentals, but they’re not allowed right there.

Avery Carl [00:05:40]:
So you want to find an agent who is very aware of that, understands those places. You can find agents in specific markets other than just emailing us. Definitely there’s, there’s market specific short term rental Facebook groups for pretty much every market nowadays. So you can post in there. I would say that when you’re posting in Facebook groups or Bigger Pockets forums or any kind of a forum, you want to make sure whoever’s sending recommendations that you message them and say, hey, have you actually worked with this person? Have, did you actually purchase a house with this person? Because you’re going to see a lot of people again recommending their cousins who they love, but may or may not really have that experience that you need personally. So you want to make sure with any vendor that you’re only taking recommendations from people who have actually used them. So Facebook groups, recommendations from other investors, pretty easy ways to find those types of agents. Now what kinds of questions when you find an agent, what kind of questions are you asking them to uncover if they do have this experience that you need to buy a short term rental with?

Jonathan Lazzarino [00:06:46]:
Well, first of all, I mean my first question would be what area of real estate do you specialize in? And if they rattle off like 15, 20 different areas, you may have somebody who’s kind of a jack of all.

Tim Grillot [00:06:58]:
Trades, but they’re not a specialist of anything at that point usually.

Jonathan Lazzarino [00:07:02]:
Exactly. But if the first thing they say is, oh, short term rentals, vacation rentals, that’s what I do, that’s a pretty good thing. And then if you ask them how, how many, you know, volume does matter too. If they close one or two, they may not have, you know, seeing all different types of short term rentals and experience some of the, you know, some things you have to learn through experience as well. So my main questions would be what your specialty is, what your experience level is. And honestly, if you, if you own any short term rentals yourself, would be some of my qualifying questions.

Tim Grillot [00:07:33]:
That’s a bit of a biggie for me. And it’s not an absolute deal killer if an agent doesn’t own any. Because some people, it’s just not there, you know, you can be, they can be a specialist in it not only, and that’s okay. But you know, if you got an owner or an agent that owns, you know, anywhere from one to ten of these things and they manage themselves, they’re going to know they’re going to have been through the wringer on a lot of stuff that an agent that, you know, there’s, there’s no way to know some stuff without doing it, you know, I mean, once you’ve actually done it yourself, it does kind of change your outlook on a lot of things. So that to me, that’s, that’s a biggie, you know.

Avery Carl [00:08:04]:
Well, really just like the empathy factor, I think, because I will never forget the fear of buying our first one in between our closing date and getting our first booking. So we’d already close, closed, but we didn’t have it live to get bookings yet. And we’re like, oh my God, did we just ruin our lives? So just understanding what the client feels like when they’re in that position can be really, really helpful as well. But again, you know, that one’s not a deal breaker for me personally as long as they specialize in it and, and have the knowledge. But that empathy factor really does help.

Tim Grillot [00:08:35]:
Absolutely. I’m gonna jump back. You know, you, we kind of talked about, you know, the two first people and, and this kind of goes hand in hand. There’s a little bit of chicken and egg there, you know, between whether it’s the lender or the agent who’s the first person you need. There’s nothing wrong. Come to the table with a lender in hand. And actually that’s great. If you’re already talking to lenders, that’s fantastic because that’s a whole skill set in itself.

Tim Grillot [00:08:55]:
But having a good agent that specializes in the market may know things about certain lenders for certain types of properties in that market that may be advantageous to you to, to, to use. So it’s like that is another question you can ask your agent is like, do you know lenders that will help into a condo? That’s something that’s pretty important because not, not all lenders can lend on a condo. And quite frankly, not all lenders are even super knowledgeable about short term rentals, you know, and that can make a big difference. So working with a lender that we’re working with an agent that knows the ins and outs of lending on a short term rental does make a big difference.

Avery Carl [00:09:30]:
Yeah. And I want to jump back to that specialist thing. So I’ll tell a story about some of you might have heard if you follow me. And I’m sorry for only having so many stories, but I was actually fired one time back when I still, I didn’t want to pigeonhole myself as being the quote, short term rental girl. So still trying to like call me for all your real estate needs, which that’s. Guys, that is a red flag. That is not a specialist. If anyone, any agent says call me for all your real estate needs.

Avery Carl [00:09:56]:
This is not a specialist. And I’m about to tell you what I wasn’t a specialist in. So I had some friends of mine’s parents run me all over Middle Tennessee for like four weekends in a row. And these houses were like four hours apart from each other. So there were times I was spending like 15 hours in the car, I was super pregnant, I was slamming Popeye’s Spicy Fried Chicken in between because I felt terrible. And they ended up, I was looking with the mom like the whole time. And then the dad came to town and he fired me after looking at like two things because I didn’t know where to find the. It’s not, it’s not called a serial number, but it’s something like that HUD plate I think is what it’s called on a mobile home.

Avery Carl [00:10:33]:
And I’m like, well, in my brain I just closed like $35 million worth of cabins this year. This is the end of the year, is right around Christmas and here I am getting fired over this because I didn’t know this one little detail about this thing that I’ve been running all over Tennessee for. And so it was at that point that I was like, okay, I’m going to, I’m going to specialize. So you could experience the opposite. Like the, an agent who’s trying to do all the primary homes and all the whatever, whatever, any kind of real estate, they’re not going to know those little special things that you want them to know about what you’re buying because they’re trying to be everything to one and that’s just not possible. So you want a specialist and how do you find out they are.

Tim Grillot [00:11:11]:
I mean, really asking a question. I’ll go the extreme opposite of that. I, I made a horrible mistake on, on one of my first purchases on short term rentals. And this was before I even really knew about the short term shop, but it was actually in Gulf Shores. But I bought my first place without a realtor, not an agent and unrepresented. And I thought, you know, that was a good idea because I thought, oh, I’m saving all this money and whatever and it ended up costing us a lot of money. There was some stuff that any agent would have picked up on and I just was not knowledgeable. You know, I knew I’d bought lots of houses.

Tim Grillot [00:11:43]:
You know, I’ve done tons of, you know, tons of transactions personally in long term rentals in other states, but never in that area. And there were things that are different about the, there’s things that are different in every area that I didn’t know about. And there were some stuff that, you know, shortly after closing cost us quite a bit of money. And so anyway, don’t go that route either and just think you don’t need an agent. You know, an agent provides tons and tons and tons of value that it’s little things that stack up. And so again, having a specialist that not only is an agent, but specializes in what you’re looking at, all the little things that stack up are just invaluable. And, and as a buyer, the agent’s free. You know, it’s not even like you’re paying them, you know, because I say that.

Tim Grillot [00:12:23]:
Is that the right way to put it?

Avery Carl [00:12:25]:
Roundabout. Roundabout way, yeah. Generally sellers proceeds, but you’re technically your loan that’s paying them. So either way. Yeah, yeah, you’re, you’re pay cash out of your pocket.

Tim Grillot [00:12:35]:
But generally you’re not going to get a better deal without when using. And actually in the long run, it puts you at a lot of risk and stuff to make.

Avery Carl [00:12:42]:
Well, you’re actually just paying the listing agent double to work against you.

Tim Grillot [00:12:47]:
Right?

Avery Carl [00:12:47]:
Because there’s like a lot of real estate investor podcasts. It’s like, go to the listing agent, you’ll get a better deal. And people think that that means that the commission will automatically cut in half. So whether the total commission is 6% to be split 50, 50 between a buyer agent and listing agent, if you go direct to the listing agent, unless you specifically negotiate that, it just, they just get paid 6% for you to not be represented. So keep that in mind on that.

Tim Grillot [00:13:14]:
Just like, like hit on that a little bit. Because their job is to represent the seller and the seller’s best interest, you know, so that, that’s the other side of that token is, you know, you’re, you’re, you are on your own when you do that. So.

Avery Carl [00:13:26]:
Yeah, totally, totally. And let’s talk about busy agents. So a myth that I would like to dispel that other real estate, older real estate investing podcasts and really more long term rental ones have produced is that the agent who answers my phone call first gets the deal. Why is that a dangerous way to go?

Tim Grillot [00:13:47]:
Because if, you know, if an agent has all day long to answer every phone call and talk for four hours to every client, that means they’re not doing much. Typically, you know, and that’s not always true, you know, you know, catch somebody on the wrong day or whatever. But generally, you know, you, you don’t want, you don’t want to use the agent that has nothing going on. You know, you don’t necessarily want to use the absolute busiest either all the time. But you know, there’s a happy medium there.

Avery Carl [00:14:11]:
So yeah, all it means if the agent answers the phone when you randomly call them is that they happen to be the agent that was standing next to their phone when you called. It doesn’t mean they’re the best, it doesn’t mean they’re the most knowledgeable. So I would be aware of that advice. Jonathan, did you have something to add to that?

Jonathan Lazzarino [00:14:27]:
Oh, I was just going to say when I first started, I answered my phone faster than lightning. And now that I’m busier, which is a good thing, it could be, you know, I may be in a meeting for an hour, but it’s because I’ve, you know, because I have a big book of business, because I have worked really Hard and put in a lot of hours per day. And a lot of the people who are thriving have to have to time block their time in order to keep up with the demand that they have because of their expertise. I mean, it’s just part of it.

Tim Grillot [00:14:57]:
And to every point it can be as simple as the person that answers call could be driving in between showings and you just call them at the right time. You know, if you call, if you call me right when I’m in the middle of a showing, I’m probably not going to answer. I’ll generally shoot you a text back, say hey, I’ll call you back. But you know, that’s just kind of the way that works. So.

Avery Carl [00:15:13]:
Yeah, and another thing, another reason I like to see a busy agent. So like my agent that I use in Chattanooga is like crazy busy. He does a ton of business, but he knows everything about everything. And the reason that I like to use him is because of that, that expertise and an agent who does a lot of business. So for example, an agent who does four or five deals a month versus an agent who does four or five deals a year can really, really be important when it comes to having their finger on the pulse of the market. And you know what gets, gets offers accepted. What are the things that are working now to get buyers discounts or get buyers concessions. So you know, two years ago if you went to an Aunt Susie agent and everybody’s got one got an Aunt Suzie agent, you know, they’ve been in the business 30 years, but they may only do a few deals a year.

Avery Carl [00:16:02]:
Nothing against an Aunt Susie agent, but you know, two years ago if you’d use an Aunt Susie agent, they might not have done a deal yet. And by the time you get rolled around to June of 2021 and they might not have known that, hey, you got to offer like 100,000 over asking to even be consider considered for your offer to get accepted. So you might have lost a few deals over that. And then conversely, now if you hire an Aunt Susie agent who maybe did a few deals in 2021, 2022, finally got the picture that the market was really crazy, they might still be telling you to offer a hundred thousand over asking when you don’t have to do that now you can negotiate and offer under and make lower offers and get concessions. So you want somebody that’s got that constant flow of transactions. So A, they understand what’s working and not working in the market right now, but B, they’ also working with the other busy agents in the market. So they have a good rapport. You know, they’re talking to these people weekly and they not necessarily enjoy but they do business with each other regularly.

Avery Carl [00:17:02]:
So they’re familiar, they know how everything works. Relationships are everything in real estate and you know. Yeah. Relationships with other agents are as important as relationships with investors.

Tim Grillot [00:17:13]:
And a big takeaway there is, is this stuff changes quickly. Quickly and all the time quickly and frequently. Is that right? Yeah. And, but anyway this stuff, you know, all the stuff that she just talked talked about changes all the time. And having an agent that is current I guess is another way to put it. You know, you say busy or current or whatever but it’s everything and you talk about the relationships and that’s going to kind of segue into the rest of this. But when you’re building your team, a lot of times your agent is somewhat your hub of your team. And having an agent that is current with everything, you know the same thing like handymen that are available or inspectors.

Tim Grillot [00:17:47]:
That stuff changes all the time too. You know, as, as regulations. Everything changes all the time. And you know the, the people that might get recommended to do inspections or things like that could be completely different from what they were six months ago.

Jonathan Lazzarino [00:18:00]:
So it on, on that one note too if you, everybody that we help or I would say 99 of the people we help are going to self manage. So we’re always referring different handyman and cleaning people. And so my, I have a, you know, ever changing. It’s a living list of people that I have that clients are coming back and referring to me that if you aren’t working with somebody that’s working with self managers to that extent they’re going to be using property managers things that they, they won’t be able to help you in that regard too. So there’s you know, also specialists that help with self managing clients can also make a difference as well.

Tim Grillot [00:18:39]:
And I see it across the board. I mean insurance, you know, everything, you know, insurance, lending, everything, you know, that stuff is always constantly changing and, and a current agent and a busy agent is generally on top of all the intricacies of things that change all the time.

Avery Carl [00:18:53]:
Absolutely. And the last thing, and I think the most often overlooked thing about choosing an agent and you can kind of tell this from people’s social media and, and just from talking to them is emotional intelligence. So emotional intelligence gets deals, emotional intelligence gets concessions for buyers. You know. So using like a red flag for me is when agents are like I’m a bulldog, I’m a pit Bull. I fight for my clients. Well, I kind of liken it to. And this is a terrible analogy, but maybe I’m trying to just draw some parallels here to gentle parenting.

Avery Carl [00:19:29]:
So, you know, in the 80s, gentle parenting was not a thing, and people were really, really tough with their kids. And it’s, you know, you’re going to be quiet right now. I don’t care if you’re having a meltdown. You are going to be quiet. And that’s the end of it, because I said so. And then nowadays, we’ve learned over the course of decades that that does not necessarily produce the best outcome for children, you know, mentally and emotionally. So nowadays, you gentle parent, you’re like, hey, you know, a kid doesn’t want to be having a meltdown. They don’t want to be freaking out.

Avery Carl [00:19:58]:
They’re not choosing that. It’s not fun. But something has worked them up to this, so you have to be gentle with them. And like, hey, let’s calm down. Let’s chill out for a minute maybe. Let’s go sit over here for a minute. And you’re not, you know, being so hard on them. Same thing when you’re doing a deal with somebody just like a kid.

Avery Carl [00:20:14]:
It doesn’t help a kid to scream at them and yell at them and be super aggressive. It doesn’t help a deal either. It doesn’t help a listing agent, doesn’t help a seller. If you’re coming at them really aggressive and like, well, you’re going to give us this $40,000 or we’re walking, you’re not going to get the same result as if you make them feel heard and understood and appreciated. But here’s what we need. Here’s why we need it. What can we do to come to this agreement to get this and you guys still be happy. That goes so much further than the whole, like, I’m a.

Avery Carl [00:20:44]:
I’m a pit bull because it doesn’t work anymore. That’s real 70s sales.

Tim Grillot [00:20:49]:
Yeah. And on that, you know, generally, relatively speaking, most of these markets are pretty small towns, and agents that have that reputation have that reputation. And, you know, when you choose somebody like that going in, you just got to know that pretty much everybody around knows that, and they just kind of treat that person differently anyway, so back to Avery’s point, you know, having somebody with some emotional intelligence and. And being able to speak, you know, having a good why goes a lot further than. Than just trying to be forceful all the time, you know, and so anyway, reputation goes a long way in these Markets. And, and that’s both sides of the coin, you know, I mean, almost all of us, we do listings and, and buyer side, you know, so, you know, what can, what can make you a rock star buyer, agent, you know, I say rock star, you know, you think you’re being a bulldog, it can come back to bite you, you know, when you’re trying to list something, so. And vice versa.

Avery Carl [00:21:40]:
So. Yeah, and I mean, it comes back to bite you in that deal. Like if you’re just. If I’m a seller and you’re strong arming me for no reason and you’re just, well, I’m gonna walk if you don’t give me this, well, fine, walk.

Tim Grillot [00:21:51]:
Yeah. And we’re kind of going down here. But like, through the process, there’s several contingencies you can get through. And being a bulldog and one of them can absolutely hurt you down the line. When you need something like you, you think you get this big win because you bulldog somebody on an inspection. Well, then you need an extension or something towards the end, or you need something, something comes up that you need, the tables can turn really quickly and it’s not fun.

Jonathan Lazzarino [00:22:14]:
So y, in my opinion, the best deal you can do is when you’re representing a buyer and they get pretty much everything they want, but the seller still walks away feeling like, like they got what they want too. It’s just, if you can keep it really smooth throughout the whole transaction, it’s better for everybody.

Tim Grillot [00:22:29]:
Yeah, there’s no, there’s no real winning and losing, you know, it’s just doing a transaction and, and moving along. So.

Avery Carl [00:22:35]:
I agree. Well, let’s, let’s move on to the next, either one or two, depending on which one you go to first. Your lender. So you’re kind of, you’re kind of doing the same thing, asking the same questions of a lender when you’re talking to them like, hey, how many short term rentals have you done? Do you do this often? Because, guys, I think you’re going to find when you’re interviewing agents and, or lenders and you say, do you do short term rentals? The answer will be yes. I mean, they’re going to say, everybody’s going to say yes no matter what because they want to do a deal. So you want to ask some qualifying questions. Okay, well, how many deals did you do last year of those deals? How many of those were short term rentals? Okay, great. Of those short term rental deals? Because now the thing about lenders is there can be a lot of times Less local than real estate agents.

Avery Carl [00:23:21]:
Like all real estate agents need to be local to the area. But when it comes to lenders, sometimes there’s regional lenders, sometimes there’s national lenders. So anyway, there’s a little bit less of a localness going. So the next question is, okay, of those short term rental deals that you did, how many of them were in Gulf Shores or Orange beach or Fort Morgan or wherever you’re buying and you want somebody who’s, who’s done it? Quite a bit of the, a good number of loans of the asset class you’re trying to buy, which is short term rentals in the market you’re trying to buy in. That’s what you want. Like you’re not going to come call me, buy a 20 unit multifamily because I don’t, that’s not my specialty, that’s not my asset class. Same thing with a lender. You want to buy a lender who does multiple deals of the asset class in the market you’re trying to buy in.

Avery Carl [00:24:07]:
I can’t say that sentence enough. But what are some other things and we don’t need to get too far in the weeds on lenders because we are doing financing in the next episode but, and we were are going to get way off in the weeds there. But where are you finding lenders? What questions are you asking them for this market?

Tim Grillot [00:24:25]:
Go ahead, John.

Jonathan Lazzarino [00:24:25]:
Oh, well, I was just going to say when anybody talks to me, I do recommend different for condos. That’s why it’s, the local knowledge is very important from the agent as well. Because if you get a lender from out of state here that claims to know condos and can lend on those, I would, it can get very tricky. So it’s really just about knowing the asset type that you’re going to be going for. Even if you’re going for short term rental in this specific market, are you going for a condo or a house? House. If you’re going for a house, you’re really just looking for the best terms you can find. And you know we can get closed with anybody. If it’s a condo you’re setting yourself up to failure with to go with certain lenders and you, you know, it’s, it’s important to be with a realtor that has closed condos so they can coach you through why that’s the case.

Tim Grillot [00:25:10]:
And that’s a, that’s a great point, Jonathan. And I’m just going to add to that. A lot of lenders will tell you yes, we can do condos. And it, I know you’ve seen it Jonathan, because I have too. They fall apart at the last minute, you know, and that’s another, another thing with lenders, you know, and kind of back to the Aunt Susie thing, you know, you have the same thing with lenders. A lot of people come with the lender that they bought their house with. They have a great relationship and that’s great. And it goes back to just are they a specialist? Because they like Avery said, they will say yes, we can do short term rentals but when it gets down to final underwriting, they don’t usually know a lot of times the right answers to all the questions.

Tim Grillot [00:25:44]:
And they generally sometimes will actually go too conservative and deals can get blown up that could have closed had the loan officer known, had the knowledge up front on how short term rental lending works.

Jonathan Lazzarino [00:25:54]:
So one more quick thing on lending is if you’re, is if you’re working with the realtor who is also an active investor, you may another good part of that is like me, I’m always looking for the next investment. So I’m looking for the best type of financing that I could personally get for, for a property. So I found one right now that was offering 0% portfolio. Now they’re up to 5 for under 500k and 10 from 500 to I think the jumbo limit. But for non multiple condos and it’s, it’s only limited. These credit unions do things. Usually the portfolio products can be pretty limited. But for right now, you know, that’s a pretty killer deal.

Avery Carl [00:26:34]:
That is a really killer deal. Dang. But I’m like all pondering that you’ve, you’ve caught me off guard.

Jonathan Lazzarino [00:26:40]:
Hey, come by.

Tim Grillot [00:26:41]:
Avery’s getting ready to buy some condos. Dump in the water.

Avery Carl [00:26:46]:
Yeah, I’m a big condo fan. Sometimes when you are calling an agent, they might want you to have a pre approval already. So in order to kind of avoid getting caught in that limbo thing, say yep, cool to go get a pre approval. Because some of them will say if you don’t have a pre approval, can’t talk to you until you do. Which isn’t exactly best practice. But if you just say something like hey, I’m happy to go get a pre approval with some lenders that you recommend, then that says, hey, I am serious. I’m not trying to run you around and not be able to buy something. But you know, you tell me who you think is good because I want to make sure I’m using the, the lenders that are able to close, especially if I’m buying a non warrantable condo in this market, I want a smooth process.

Avery Carl [00:27:23]:
So all that’s pretty similar. So let’s talk about now. We’re already under contract. We’re under contract and it’s time for the inspection. Where are we finding our inspector?

Jonathan Lazzarino [00:27:33]:
So, so I just give a couple of recommendations and I’ve just narrowed them down based on mainly I get a lot of feedback from my clients. And you know, these are the inspectors that have done the most thorough jobs that, that they’ve seen. So there are some that I’ve taken off the list that other clients recommended, but then they fell off. And it’s kind of like everything else. It’s something I monitor and, and give my personal opinion on, but I also get a lot of feedback from my clients as well.

Tim Grillot [00:27:59]:
Yeah. And I. So again, you know, going back to your, your, your experienced agent will almost always have recommendations there. But you know, just because your agent recommends, you know, you want your agent to have multiple choices and you should call several of them. And sometimes it kind of comes down to personality. You know, you may get a better vibe with somebody and that’s fine. You know, there’s nothing wrong with that. You know, people communicate different and all kinds of stuff.

Tim Grillot [00:28:19]:
But you know, I think starting off with your agent and their recommendations, if your agent doesn’t have any recommendations for an inspector, they’re not doing enough deals, period. I mean, that’s, that’s, that’s kind of a red flag right there.

Avery Carl [00:28:31]:
So, and one thing I want to note, so your home inspector works for you and we’ll get more into this in a different episode. Home Inspector works for you. So you can get recommendations from your agent, but you definitely need to call them, talk to them, hire them yourself. It’s really easy to just say to your agent, oh, you know, whoever you recommend for Home Inspector, just schedule them. No, you need to call, you need to speak to them, you need to understand what’s included and ask them questions and really just understand what the home inspection covers. Because a home inspection for a condo is going to be different than a beachfront. Like, are the, if it’s beachfront, are the peers inspected? You want to understand exactly what that covers and you want to hire them yourself. You can also, of course, get recommendations from Facebook groups and other investors, but definitely do your due diligence on this type of vendor.

Avery Carl [00:29:22]:
Call them up, interview them, make sure you like them, and hire them yourself. It’s not, it’s actually a Liability for you to have your agent just do all that needs to come from you. You know, you’re driving the ship here.

Tim Grillot [00:29:33]:
That’s absolutely. Can’t, can’t agree with that more. It’s the checks and balances are in your best and you’re in your favor there as a buyer. You know, you want, you want that separation. I mean like I said, the agent should have multiple recommendations and should not be picking one if you got an agent saying use this guy or use this company and only one that’s in my opinion not, not good. So because you want that, you want that separation, you know, so.

Avery Carl [00:29:58]:
And another thing I want to note. I have seen buyers before think that home inspectors work for agents and that they have like some kind of deal, like back end deal of to make sure that it closes kind of thing. And I just want to let you guys know that that’s super illegal and most agents who especially you know, busy ones who do a lot of deals are not going to sacrifice their entire livelihood for one transaction or one like whatever back backside deal with a home inspector. So everybody works for you, you’re the boss. But just understand that’s another reason why you’re, you’re calling home inspectors and hiring them and definitely get recommend a few recommendations from your agents. But it’s your job to vet and hire all of your vendors. The next really important one I think for this market, because it’s a coastal market, is an insurance agent. So coastal insurance can be pretty expensive.

Avery Carl [00:30:52]:
So I recommend local insurance agents for this. But what do you guys see?

Tim Grillot [00:30:59]:
Totally agree. I mean you want not just a local, you know, so you want to know how many, how many different companies they care they carry. You know, because you know, a local agent that only carries like one or two that can be problematic because again things change a lot and carriers drop like also no, we’re not covering this one specific thing, you know, and, and that that shifts around all the time. So a good agent that’s local will be able to, you know, when that does happen, they can quickly shift you to another one one and it’s usually not a big deal.

Jonathan Lazzarino [00:31:31]:
So I do have an example of that. I had an agent, a bunch of different, more brokers, insurance brokers I recommend and one of them lost a carrier and some of my clients were experiencing a huge increase in premiums and one of them called me up but I got him in touch with another one who was able to bring them back down to actually lower than they were previously paying. So these things do happen in the coastal market. So you just have to, you know, you may have to switch your, your carriers, but, but you know, a good agent should be keeping up with that.

Tim Grillot [00:32:02]:
Insurance is my least fun thing to do and it, it takes a lot of phone calls and a lot of giving information that is redundant and not fun, but it’s important.

Avery Carl [00:32:11]:
Yeah, totally agree with that. And of course make sure that you’re not only looking at your home insurance, but short term rental specific insurance. Do not rely on Airbnb, do not rely on just regular homeowners insurance. It does have to be short term rental specific. So make sure that whatever insurance agent you’re using, they understand and cover that.

Tim Grillot [00:32:31]:
As well and have a firm understanding what, what that is. You know, I mean, I don’t, this isn’t really an insurance call, but you know, I’m gonna say make sure you know what. And if like loss of use insurance you have with it, you know, again, hurricanes are real. Been through it myself and learned a lot about insurance during that. But you know, again, loss of use. What, what’s your short term rental insurance cover?

Jonathan Lazzarino [00:32:51]:
So that is a good thing is the brokers that I’m gonna, that I refer to clients are all, they deal with short term rentals specifically. So they will go over all that loss abuse and everything that you need. So a lot of people do like to use proper, which is a great insurance company for short term rentals. But I have noticed in certain cases then it can be three times as much in some cases. So, you know.

Avery Carl [00:33:13]:
Yeah. And guys, this doesn’t really have anything to do with hiring your insurance agent, but just a point that I want to make, make sure that every year or every couple years, depending on how quickly things have appreciated that you’re updating your insurance to match what the replacement value of your property will be. Maybe some of you own properties right now that you bought before the pandemic that you haven’t done that. Go do that now because you’ve probably appreciated quite a bit and you want to make sure that you are insured for enough if anything were to ever happen. I almost had that happen to one of mine in the Smokies, so. And I’ve seen it happen. We had a client in the Smokies who bought their property for 300, had it insured for 300, didn’t update it, had it listed with us for a million two during the last round of fires we had. Which I guess was.

Avery Carl [00:34:02]:
What was that last year or two years ago and years I think now. Yeah, it was two weeks from closing and it burnt down. And it was only insured for 300. It was under contract for 1.2. That’s probably the most heartbreaking story I, I’ve heard about that. So make sure that you’re updating your insurance to match what the replacement cost would actually be.

Tim Grillot [00:34:25]:
So I was actually a buyer, the buyer agent on one of those deal. It wasn’t that specific one, but it was another one very similar in the Smokies. And we were under contract like a week from closing and it burnt down and it was. The seller was in the same position as that. And it’s not fun and it’s.

Avery Carl [00:34:41]:
So, yeah, don’t just learn from, learn from this because that was really, really, really horrible. Okay, on another note, those are. Who else do we need while we’re still under contract? You know, if something pops up during your inspection that you need a more specialist vendor, like maybe a foundation person, a roofer, people like that. Any, any advice on finding those more specialized kind of maintenance people? Not maintenance, but specialized technicians, we’ll call them.

Jonathan Lazzarino [00:35:08]:
Well, the main thing so during, I mean, we’ve pretty much. I like during the 10 business days of due diligence that you have just built into the. I mean, of course anything can be negotiated, but normally it’s 10 business days of due diligence during that time. As long as you have the insurance quotes because they’re so variable, you do want to see those numbers. In a good general inspection. The general inspector will normally flag anything that if you need, you know, H Vac is having issues to get specialists out there for that. The main, the main issues in this market are water related. So if you have any existing water damage, any mildew, anything like that that could, could be related to that, you want to get fixed and addressed foundation.

Jonathan Lazzarino [00:35:46]:
The way they do the foundation here, I mean, there’s different ways they do it, but that’s not something you see it very prevalent. I’m not saying it can’t happen, don’t get me wrong on that. But it’s not normally an issue that we see. But, but normally the general inspection will bring up the other questions that you may need to have addressed during the 10 business days of due diligence. And normally the way in this market you can get the inspector out there in three or four business days and then you, you have literally another, you know, another 10 calendar days or so to, to get the specialist out there before your due diligence is up.

Tim Grillot [00:36:20]:
And for the specialists, I, I really like Facebook groups. To be honest, and not that your agent won’t know some off the top of their head, they probably will. Specialists can be tricky to get out contractors, especially in a short period of time. And, and there’s always a local Facebook group that doesn’t have to necessarily have anything to do with rentals. It can just be like, like I think there’s one down there called what’s happening in Gulf Shores or what’s happening Gulf Shore or something like that. There’s always a local and no matter where you are, Facebook group and just put it up in there, who’s the best roofing guy. And you’ll get, you’ll get 20 locals and a lot of times it is their, their cousins and stuff and that’s fine. You know, start making phone calls again.

Tim Grillot [00:36:53]:
Those are kind of people, you got to call a lot of them and you know, because you’re usually somewhat in a hurry to get, to get an opinion. So. But they’re, you know, any town that has prevalent issues, there’s going to be prevalent contractors there, you know, so, yeah, locals.

Avery Carl [00:37:08]:
Recommending locals in those kind of groups is what January says on the Emerald Coast. So, so next vendor. And this one is a very, very, very important one, your cleaner. So we’ve already talked about ways to find vendors. We don’t have to go through that again, Facebook groups, other investors. But let’s talk about. Here’s where I see new buyers get tripped up. They want to start interviewing cleaners before they get under contract or like two days after they’re under contract.

Avery Carl [00:37:37]:
And why might that not be the best way to go about it?

Tim Grillot [00:37:40]:
It location being one of them? I mean, you, the cleaning deal in these vacation towns, traffic is horrible. And Gulf Shores isn’t as bad as some of the others because it’s smaller. But you, a cleaner that cleans out on Fort Morgan may not even go to Orange Beach. And, and so that’s, that’s the biggie for me. I mean you just. Location matters. And you know, even like building to building, it can get weird, you know. So Jonathan, I’ll let you talk on that a little more.

Tim Grillot [00:38:04]:
You’re there.

Jonathan Lazzarino [00:38:05]:
Yeah, no, that’s, I mean, that’s, that’s really the truth. I mean you don’t want to start wasting your time really interviewing. You don’t know what size of the unit you’re going to have, if you’re going to have a condo versus house, what the specific location, if it’s pet friendly, all these things. The, you know, the cleaner is going to have to have before they even issue a quote. And, and I do have a big list of cleaners that I do recommend. There’s so many of them available here that to me, it’s more important to break it down to do your due diligence on the property in the first 10 business days and make sure it’s the right property then. And you can do the enemy method and look at what similar people are charging for cleaning fees. It’s not going to be too far off from that.

Jonathan Lazzarino [00:38:43]:
But then when you go to Luke’s management class, when you’re done with due diligence, then worry about getting that all set up because then you’ll have, you’ll be through due diligence. You have, the property is picked out. You don’t have to focus on a. Is there any, you know, anything with the property I have to worry about? So to me, it just, it’s easier to break it down that way.

Tim Grillot [00:39:02]:
Anyway, this is a kind of a different tangent, but on that same thing of when you hire your cleaner and when you. Is also hand in hand with, when you start buying stuff. I’ve seen a lot of clients that start, like they get under contract and they start buying towels and sheets and supplies and this and that and everything, and then, then they hire a cleaner that supplies it all and they’re sitting on all this stuff, you know, so different cleaners provide different things. So until you hire your cleaner, I don’t think it’s a great idea to start buying a bunch of stuff for your new place because, you know, cleaners are all very different in how they do that. So anyway, that’s just another side tangent.

Avery Carl [00:39:38]:
Yeah, yeah. So you really don’t want to start material, you really don’t want to start interviewing cleaners until you’re really close to closing, like through your appraisal, you know it’s going to close. They can get out there and look at it because even if it’s, you know, two, two bedrooms can be different. Do they have bunks? Well, that’s going to be more expensive. You know, just any number of things. They need to see the actual property. And a lot of times, especially if you’re buying during a busy season, they just don’t have time for a thousand meetings. So unless they, you know, they want to come, they want to look at it, they want to quote you.

Avery Carl [00:40:11]:
And so just in the name of efficiency and, and just really doing things the right way, wait till you’re close to closing, you know what you’re getting. They can come out and look at it. You know, they’re willing, they’re able to start working you into their calendar in the next couple weeks rather than, oh, it’s like six weeks out, possibly, maybe if they close and they’re going to forget about you. So just wait till then. What are some other questions about, like maybe their processes that you want to ask ask or things to not do? Sometimes that’s more valuable information is what not to do.

Tim Grillot [00:40:39]:
Don’t micromanage them. That’s my biggest thing. Because that always ends up poorly. And then my biggest thing is don’t overthink it. I mean, because I, I hate saying this, but cleaners can be tough. And everybody wants that unicorn perfect, like right out of the box, perfect cleaner that’s going to be with them for the next 10 years. And it just usually doesn’t happen. You know, usually a lot of times you might go through one or two in the first year or two before you kind of settle in on one that you like.

Tim Grillot [00:41:05]:
And. And you’re never going to know that exactly right up front. So don’t, don’t spend too much time overthinking it, trying to get perfection. Obviously, you don’t want to hire a bad cleaner. You don’t want. You don’t want somebody does a crappy job. So I’m not saying that, but there’s a balance there, right? That is.

Jonathan Lazzarino [00:41:19]:
That is going to come down to the individual, how to communicate. And, and like Avery was saying earlier, it’s. That is a big part that you have to build a relationship with the cleaner. So even one that may be great for one client, it may not be so good for the other. And I’ve had that happen where one client’s like, oh, this cleaner is awful. And then the next client’s raving about them and talking about how good they are. And I think a big part of that is their communication with each other.

Avery Carl [00:41:42]:
Totally agree with that.

Tim Grillot [00:41:44]:
And what to ask them. You know, I mean, for us, what’s important, again, kind of Jonathan’s point, what’s important for one person may not be the other.

Avery Carl [00:41:51]:
But I.

Tim Grillot [00:41:51]:
One of my big things is how do they bill and how often they bill, just because that’s part of the process that that matters. You know, I like monthly billing with my cleaners. Some cleaners want paid every single turn. And that, that can be. That can be rough if you’re gonna, if you’re gonna scale and own a bunch of properties. And so, you know, what are they. What are the. How.

Tim Grillot [00:42:07]:
You know, ask Them, you know, I usually before I start off with a bunch of demands, ask them what, what’s their normal turn? And then what’s, what’s included in normal turn, what’s included in a deep clean? Because that will be massively different. And then what do they supply? How do they bill? And, and then kind of go from there. So you start asking those questions, you’re gonna start, start a conversation.

Avery Carl [00:42:24]:
So awesome. And then the last very important but very different in terms of how to do it. Vendor would be your handy person, your handyman or woman. So again, Facebook groups, recommendations, blah, blah, you guys get it by now. But these are different than a cleaner. So a cleaner, you’re hiring one, a handy person, you might need three or four. And when, because when something happens, it’s more of an on call thing. And if your favorite can’t get to it immediately, then you go down the list to the next one and the next one.

Avery Carl [00:42:53]:
So what are some questions to ask them? And I mean you kind of, maybe you do want to interview them and introduce yourself, but it might not be something that you say, oh yes, this will be my handyman after this interview. It you’re gonna learn as you have problems that you need fixed happen which ones you like the best. So what do you guys think about that?

Tim Grillot [00:43:12]:
Yeah, so first of all, I think finding them that can actually, your cleaner can become a good hub, you know, a lot like your agent, totally different. But cleaners generally know a lot of people, you know, so cleaners can be a great person to ask for. Like, do you know any handyman? And a lot of times it’s a relative of theirs. And I’ll be honest, I’m not generally a huge fan of having like my cleaner’s husband do stuff. I mean it can be good, but I don’t know, I’ve had more bad experiences than I have good. But as far as, as the handyman, I completely agree with Avery. You’re going to want several and, and they’re probably going to annoy you at some point. And I want to say don’t be annoying to them, you know, because they are generally, you know, they’re generally, they’re in there to do their thing and they’re frustrated most of the time and they’re dealing with broken stuff and being in traffic all day long along every single day.

Tim Grillot [00:44:00]:
And so, you know, you kind of gotta, you kind of got to deal with what they got going on on their day a lot of times.

Jonathan Lazzarino [00:44:05]:
So one thing I will bring up that you may not have to do in other markets is you do want to have a good contingency plan with the handyman or about hurricane proofing. Not trying to bring up the H word but just if there is one coming. You do have a lot of advanced warning like you know, other natural disasters don’t have that going for you at least. But you do want, if you don’t have just impact glass or something that’s easy to. You don’t really have to do much preparation for that. If you have the cutouts or something, you want to come out with a. Come up with a number for the cost for them to go out there and do that and have that in place so you don’t have to rush and do that in the event that that does happen.

Avery Carl [00:44:42]:
Yep, all great advice. So that is the last on the list that I have of, of vendors. What, what have we missed? What do the listeners need to hear about in terms of building your buying and management team that we haven’t covered?

Tim Grillot [00:44:57]:
I think just treat it as a web, you know, I mean treat it as they all intertwine and all the people that as you first of all don’t get freaked out when you’re new because you’re not going to have that many and but as you start to build your team, your team is going to know other people that do these things. You know, like I said I mentioned, the cleaner is going to know handyman. The cleaner is, could also know, you know, other things and, and they all, they all kind of intertwine. As you meet a handyman, he may come in and say I can’t fix this but I know a guy that does save all those numbers. Come up with a system in your phone where you’re saving them. I, I use the city name because we’re in multiple markets. So I put their name in and then it’ll be what they do and the city. So if I need.

Tim Grillot [00:45:35]:
Because I don’t remember all this stuff, my memory is horrible. So I’ll like something happens I can Google or not Google search on my phone H Vac Gulf Shores and four people pop up, you know, so just build what that was. That’s what works for me. That’s not saying that’s what you should do but do something to, to have it organized. So because it is a team and it, and, and treat them like a team and treat them like, you know, don’t, don’t treat them like, you know, second tier. Treat them like they’re part team, you know, because they are and have a.

Jonathan Lazzarino [00:46:00]:
Second string have backups just in case.

Tim Grillot [00:46:02]:
Oh, for sure, for sure. And sometimes, you know, your second string guy may become your favorite and, and you just don’t know a lot. Again, you’re, these people are jumping from thing to thing. You don’t know what they were dealing with 10 minutes before you called them. And the next time you call them, they could be, could be in a completely different mood and, and just because of what’s going on their day. And that’s just they, they live, eat and breathe this. And they’re, their focus isn’t always on customer service. You know, their focus is on trying to get to the next thing and get it done.

Tim Grillot [00:46:29]:
So unfortunately, that’s just a reality. You know, would it be a perfect world? Every handyman was like the friendliest person on the planet. It would, but it’s not real.

Avery Carl [00:46:38]:
So all of this is really great advice and we’re coming to the end of this episode. So, guys, if you are interested in learning more about this market, a couple ways you. Well, several ways you could do that. You can join one of our weekly Q A calls or live calls every Thursday. You can sign up for those@strquestions.com you can also join our public Facebook group. It’s called short term rental, Long term wealth, same as my book. And if you’re ready to just take the plunge and start looking with us in Gulf shores, you can email us at agents the shorttermshop.com or you can email Jonathan directly at Jonathan at the short term shop.com and I think that’s everything. So guys, let us know in the comments if you’re, if you’re watching on YouTube, if you like this, if you are listening on one of the podcast platforms, leave us a five star review.

Avery Carl [00:47:24]:
We really appreciate it. Thanks, y’ all.

Tim Grillot [00:47:25]:
Thanks everybody.

Jonathan Lazzarino [00:47:26]:
There.