How to Finance a Short Term Rental in Blue Ridge, GA: Cabin Loans Explained

Luke Carl [00:00:03]:
Welcome to the Short Term show from Blue Ridge, Georgia. We will cover everything you need to know, including buying, holding, managing from a distance, raising rents, renovating, and how to rent it when you are not using your very own vacation home in the North Georgia mountains. For more information on current purchase prices and income data, please visit theshortermshop.com welcome to the Short Term show special episodes from Blue Ridge. Here we are, we are in Blue Ridge with the Short Term show and today we are talking about financing. We’ve got Yak, who’s of course a familiar face. He does sell houses in this market and he’s a rock star. And we got Max who’s got his own brokerage and does, does financing, does loans and mortgages, et cetera. So Max, welcome aboard.

Luke Carl [00:01:08]:
Good to have you.

Max Kalos [00:01:09]:
Hey, thank you so much for having me. I appreciate it.

Luke Carl [00:01:11]:
Absolutely. So I do want to start out by talking something that’s outside, you know, slightly outside of your wheelhouse and you might know about it anyway. But all three of us will just kind of banter on the topic of creative financing. We’ll get that out of the way. To me, this is not really something I’m all that interested in, quite frankly. I like to go get a loan the old fashioned way. But it is pretty popular or at least, at least on Tick tock anyway, so I guess let’s cover that. Are you guys seeing anybody do.

Luke Carl [00:01:40]:
Well right now, sub 2 is the big popular one. Are you seeing anybody do subject to. Are you seeing anybody get successfully doing seller financing? Any kind of creative stuff going on in your market at all?

Yok Re [00:01:52]:
I’ll. I can say honestly no, because a lot of times on these creative financing deals, you know, the purchaser is kind of basing their numbers off an interest rate that’s probably in the sixes and when the, when the seller actually has it in the eights, let’s just say they bought a year ago and you know, an investment loan or something like that, and they’re in the low eights. A lot of times for them the numbers just don’t work out. I’ve shot a few deals across the bow to some of my clients, but I haven’t seen it work out. And to be honest with you, I haven’t seen. It just hasn’t made sense. You know, in a lot of these cases, if somebody is, especially for somebody that just recently purchased the property and their, their mortgage rate is, you know, high sevens, low eights, it just doesn’t work for the purchaser.

Luke Carl [00:02:40]:
Max, logistically, how does that work? Let’s say I’ve got a mortgage, a 30 year note that I got four years ago at 3%. Can somebody assume that loan?

Max Kalos [00:02:49]:
Yes and no. So it depends on the kind of mortgage. It depends on the type of mortgage. So typically the only mortgages that are sumo are going to be FHA and VA which are not going to be kind of what we’re talking about here today. Because those are strictly for primary residence. You cannot do a second home as an FHA loan. VA loan is a second home. That being said, some jumbo is assumable.

Max Kalos [00:03:09]:
It’s not unheard of to have a jumbo loan that is assumable meaning a loan over. It depends when they took the loan out because that changes every year. Matter of fact the new loan limits came out today. But you know, generally speaking, if you’re talking about $1 million loan, some of those may be assumable.

Luke Carl [00:03:24]:
Right? Have you seen anybody do subject to.

Max Kalos [00:03:26]:
I haven’t seen subject to. You know we hear about DSCR a lot. I know dsr, DCR gets done a lot. My, you know my comments people is I call that kind of like the nuclear last option. Any client we talk to, we always try to see if we can skin the cat, get them in conventional, just being creative. Anything we can do to get them in convent and then if we can’t then we’re going to flip them to like a dscr.

Luke Carl [00:03:49]:
So you do offer DSCR or your company does not?

Max Kalos [00:03:52]:
We do.

Luke Carl [00:03:52]:
Okay, but you would prefer to not go that direction.

Max Kalos [00:03:57]:
You get way better rates, terms, everything going conventional. So I always try just to be very candid, I’ve never actually closed the DSCR because 99 times out of 100 if I get a client we are typically able to find a way to get them into a conventional. I had a matter of fact a client of YOX not, not too, too long ago, it was sometime in 2023, another lender told them they had to go DSCR. We got them close. Conventional rates were I think a point 2 points lower. No prepayment penalties. So much, much better financing.

Luke Carl [00:04:26]:
Okay, so just, just again I’m. Let me throw this out there. Not a professional of any kind here in the finance world but for some folks DCR is a wonderful product and if like if they have a, if you have a 1099 situation or a day job, W2 situation, that kind of thing but max, it’s not necessarily in your wheelhouse, you can offer it, but don’t, don’t really do that on a daily Basis.

Max Kalos [00:04:49]:
Correct. So where, where I feel like, to your point, DSR is a great loan for a group of people, like professional investors, if they’ve got 10, 12, 14 second homes, investment properties. Absolutely, 100%. You know, when, when I get the call, 99 times out of 100, it’s somebody buying their first home, second home. And so we try to see, you know, if we can, if we can get it done. Kind of conventional. Yep.

Luke Carl [00:05:13]:
Yeah, yeah. And I think, was there a period of time, again, you’re not closing really any dscr, but when the rate started going nuts, wasn’t there, was there a small period of time where the DSCR had a better rate than the conventional?

Max Kalos [00:05:25]:
Never. That I saw. But to your point, I wasn’t checking it daily. I see our Yak would probably be able to answer that better than I would because I know he’s got clients that have closed DSCR and so that he may have a better answer to that.

Yok Re [00:05:38]:
Oh, it’s very few, to be honest with you. Probably two or three in the past two or three years, you know, nine times out of ten, like I said, once people see the rates and all the fees and everything associated with them, you know, we’re flipping them over to conventional now. Also think that’s a byproduct. You know, the amount of DSCR loans are using here in Blue Ridge is a byproduct of who these buyers are. You know, a lot of these mega investors that have, you know, 10, 20 houses in their portfolio, they’re buying, you know, they’re buying in 30A and they’re buying in the Smokies. You know, I think the, you know, a lot of the clients, you know, our short term shop, you know, brethren that are coming, you know, from other markets, they may only have one or two properties and it’s, you know, conventional tends to be the best product for them.

Max Kalos [00:06:22]:
I know, I’m going to step in and say I know DSCR is important and valid. So I’ve actually signed up with the largest DSCR lender in the country and they go right off appraisal rent schedules and they use air. Is it air DNA data versus long term rental data, which is the problem you run into with a Fannie Mae appraisal, so to speak. So, you know, we just have it available because I know it’s going to be needed at some point.

Luke Carl [00:06:47]:
Yeah. Okay, well, Max, go ahead and give me your just, you know, kind of general overview of your bread and butter, which I would assume is going to be a 30 year fixed conventional mortgage. What is that and why do I want it?

Max Kalos [00:07:01]:
So, so most of what we do is going to be, to your point, 30 year fixed, you know, Fannie Mae, Freddie Mac, Virginia, FHA, second homes, investment properties, primary residences. Anything over five units is going to be considered commercial. So that’s not, that’s not where we are either. I love a 30 year fixed. It’s, it’s tried and true. You don’t have to worry about it. Every now and then somebody wants to talk 15, 20 year fixed. The ARMs, adjustable rate mortgages don’t really price great right now and they haven’t for a while.

Max Kalos [00:07:36]:
So I mean, I can’t even remember the last time we off, you know, we, we sold an arm. So I would say most of America right now is fitting into that bucket.

Luke Carl [00:07:44]:
Right? I call them the golden ticket. Right. Each, each, each individual gets 10 conventional loans. And of course there is a little bit of red tape getting over eight of them. But, but you know, to me it’s like first of all, you can’t get a 30 year fix anywhere else. This is one of the best things about America. You know, you go to, you go to Australia and tell them you want a 30 year fixed mortgage and they’re going to be like, are you crazy? What is that? That doesn’t exist.

Max Kalos [00:08:09]:
You know, I got a great story to that point. I was, I flew up to Montreal, did a 24, 48 hour boomerang to see my grandmother because she wasn’t doing well. And I was on a train trying to get to Ottawa and I was, the train was relatively empty and the guy, we were both laptops, phones, and the guy literally on the other side of the train to me was talking about debt to income and underwriting. And I was like, are you a lender? He’s like, I’m a broker here in Canada. I’m like, oh, interesting. So we started chatting. Their loans are two to five years tops. That is it.

Max Kalos [00:08:39]:
You have to reset your mortgage every two to five years.

Luke Carl [00:08:43]:
Yeah, it’s crazy.

Max Kalos [00:08:43]:
It’s wild.

Luke Carl [00:08:44]:
Yeah. And again, you know, that’s, we’ll talk about commercial loans here in the States because that’s fairly. Sounds like kind of like a commercial loan here, but you know, in the U.S. man, one of the greatest things about this country is We’ve got a 30 year fixed mortgage and you can get cash flow off of that. If you can’t cash flow with a 30 year fix, don’t, don’t do it. You know, I mean, so it’s just, you know, take advantage of them. They’re amazing. Right now, obviously, rates are not as, as amazing as they used to be.

Luke Carl [00:09:13]:
And Max, talk to me about that. Where, where are we going with these rates? And again, at the recording of this, which is right between 23 and 24.

Max Kalos [00:09:23]:
Yeah. So that’s funny. Yes. I was actually making some sales calls prior to this, letting agents know, hey, you know, might be time to start reaching out to people on the sidelines because rates have trended back down the last couple of weeks. If you remember about a month, month and a half ago, we were at brokers, like people that are priced cheap. We’re at 8%. Banks are at 8 and a quarter, 8 and a half. We’re in the high sixes and it’s coming down.

Max Kalos [00:09:44]:
And then we’re talking residents again.

Luke Carl [00:09:47]:
This is so timely. Like, you know, somebody listening to this. In six months, possibly none of this part of the conversation is going to make any sense. But you’re that right now you can get me a conventional loan in the high sixes.

Max Kalos [00:10:00]:
And if you want to pay a point, I get you one in the mid to low sixes. And I sent yok actually some, some pricing, actually, from one of our second homes and investor properties. They’re, they’re the pack leader. And they’re, if you’re putting, if you got a sizable down payment, which a lot of these folks do, that are, that are buying right now on investment second homes, we can do high sixes on those as well.

Luke Carl [00:10:23]:
Is that going to make purchase prices start creeping back up again?

Max Kalos [00:10:27]:
Well, and that was kind of the point of my sales calls this morning. What I was telling agents was, hey, if you’ve got a listing that pulled because they couldn’t find a house they wanted to buy or you have somebody that’s talking about potentially listing, I think it’s a great time to reach out to them. Beat the spring market beat. You know, in Georgia here, March, April, things really, really get crazy and competitive. Maybe get ahead of that curve and say, hey, you might want to start thinking about listing early, especially if you’re trying to buy, because rates are coming back to like a, what I’m going to call a very, very reasonable spot. If you Google the 30 year fixed, I tell everybody this over 50, 60 years, there’s two outliers. The free money at 2 1/2% and the Jimmy Carter money at 18%. Outside of that, rates always trended between 6 and 11% with clients paying 1 to 2 points to get those.

Max Kalos [00:11:10]:
So if you can get a 30 year fix that six and a half with no points. 6.99 with no points. Take it. Don’t be greedy. Go get that money.

Luke Carl [00:11:17]:
I’m happy with 699. We get. People were getting greedy with these 2 and 3%. It was, it was fake. You know, I mean, and then I look back at my, my, you know, my spreadsheets and I’ve got loans from prior to that craziness that are sixes and sevens. And I, I never bothered to refinance them. I didn’t even want to waste my time. They were 30 year fixed and I just, it’s a lot of red tape to go back through that again.

Luke Carl [00:11:39]:
So I kept my 6% interest rate. So, you know, it’s an interesting conversation that again is. No, not, not even close to Evergreen with. And I think that that’s the biggest problem right now is that these rates have changed so dramatically in such short periods of time. And that’s just kind of a, kind of where we’re at right now. But anyway, let me talk to you about. You’re a brokerage, yes?

Max Kalos [00:12:01]:
Yes, Correct.

Yok Re [00:12:01]:
Yep.

Luke Carl [00:12:02]:
All right. Can you explain to me, like I’m four years old what a brokerage is?

Max Kalos [00:12:05]:
That’s a great question. So we are not beholden to a bank. Like my best friend, he works at Ameris. He has to sell Ameris products. Ameris could be priced great at 10 in the morning. They could be priced completely out of the market by 2pm so we work with a bunch of different banks. Banks you’ve heard of Rocket Mortgage, United Wholesale, Ameris and banks you haven’t maybe heard of smaller banks like Kind Lending, for example. And actually they’re getting pretty big too.

Max Kalos [00:12:32]:
But we, we’re, we act as an intermediary between the customer and the bank to try to find them the best rates and terms based on the time. Because rates change sometimes three or four times a day. To my point, just because a bank is priced great at 10am they may be out of the market by 2 or 3pmSo our job is to go find the right bank at the right time to get them the best possible deal. And the biggest question I get, I like to use Rocket as an example. Hey Max, if you’re brokering the mortgage to Rocket, why wouldn’t I just go to Rocket anyway? Cut out the middleman. Actually, you know what? I’ll use a mare since my buddy works there. If you’re brokering into Mares anyway, why wouldn’t I just go to Ameris cut out the middleman fee. There is no middleman fee.

Max Kalos [00:13:08]:
It’s counterintuitive, but as brokers, we actually get lower interest rates than they give their own employees. They’re not paying for my health insurance, they’re not paying for my marketing, they’re not paying for my office space, they’re not paying for my assistant. So when I send them a loan, it’s profit. It’s profit. I mean, it’s just money in the bank for them. So my buddy at Ameris, I call him every now and then and we are typically an eighth to a quarter percent lower on our Ameris rate sheet than he is on his Ameris rate sheet.

Luke Carl [00:13:33]:
Now the consumer, is it costing me extra to use a broker than to go direct?

Max Kalos [00:13:40]:
No, that’s the point. We’re actually cheaper because the banks give us. There is no middleman fee. I’m not charging a fee on top of what Ameris is charging. Ameris actually gives me better rates than they give their own employees because again, they’re not paying for anything. They don’t pay. The only time they pay me is if I sell a product. My buddy who works Ameris, they’re paying his health insurance, they’re paying for his office space, they’re paying for his computers.

Max Kalos [00:14:02]:
For me, I’m a man on an island. If I sell something, it’s pure profit for them. So I actually get better rates. Same thing with Rocket. Rocket gives me better rates than they give their own in house employees.

Luke Carl [00:14:11]:
Are you actually doing loans with Rocket? Does that happen or. Not really?

Max Kalos [00:14:16]:
No. I prefer United Wholesale. We used to broker to Rocket. If I did broker to Rocket, it was typically refinances versus purchases when I was comfortable with that. But I like to use them as an example. Just because everybody knows Rocket, they do a lot of TV advertising, right?

Luke Carl [00:14:31]:
Yeah. It’s a household name. Right? Yeah, but. But from what I understand, they’re kind of a pain to work with because it’s a large, you know, call center type of an environment, but.

Max Kalos [00:14:41]:
Right, that. So refinance, more comfort. When I was brokering to them, I would send them a refinance every now and then. The purchase business was a little tougher just because we want a guaranteed outcome. If I tell you they’re closing on December 20th, they’ve got to close on December 20th. I can’t call an 800 number and wait on hold to figure out if they’re going to close or not.

Luke Carl [00:14:58]:
Right, right, right. Well, you mentioned refinance. You think that those are going to start coming back in style when these rates go down or. I do.

Max Kalos [00:15:06]:
I do. So I actually had a zoom call earlier today with a team, and the conversation I had was just about that rates are trending down right now, which I don’t think most people expected. Most people. So the guy on the train from Montreal, that was a. He was actually in Montreal for a big banking meeting. A bunch of CEOs of big banks were there. Matter of fact, one of the CEOs of the bank was in front of us and they were all saying, hey, third quarter, fourth quarter, we expect, expect Fed rate cuts. Now, Fed rate cuts don’t equal mortgage rate cuts, but they’re expecting them third quarter, fourth quarter, next year, and they think rates might drop back down into the fives.

Max Kalos [00:15:37]:
That’s what they’re guessing, right? We’re all guessing. We’re starting to see the drops now. So this morning, for example, I read an article, I don’t remember what, what site it was, but they were talking about, hey, we might start seeing cuts to mortgage rates here, you know, in January, February, first quarter, it might not be third or fourth quarter. So it’s, it’s hard. We’re all guessing. It’s hard to say. But right now they’re certainly trending in the right direction.

Luke Carl [00:15:59]:
Yeah, I’m surprised. I was. I’m one of these guys, I thought. And again, we’re way off topic here, Yak. So feel free to tell us to get going where we’re supposed to go. But I’m one of these guys. I thought it was here to stay. I really did.

Luke Carl [00:16:12]:
You know, I mean, there was such a crazy burst of just, it was insane for about 24 months. And, and I really think that what’s going on right now is probably as healthy as it. In other words, it could be. Even though real estate sales are in the gutter and compared to last year, I mean, they’re really kind of a little bit more normal right now. And I think that what’s going on, again, I, I don’t want to. We’re starting to get into the news and politics, but to me, it could be. It could be a whole lot worse.

Max Kalos [00:16:45]:
Agree.

Yok Re [00:16:46]:
Luke? One thing I did want to touch on here, to kind of take it in a different direction is kind of what the uniqueness of buying in Georgia. And because there’s a lot of times I speak with lenders from out of state and ask them simple things like, you know, hey, let’s just say I have a buyer come to me and I’ll tell them, hey, talk to your lender, ask them how many days of financing and appraisal, contingency you need. And a lot of times these out of state lenders, they don’t understand that. They don’t know what that means. And they’ll say, well, we need about this, you know, I don’t need about, you know, because in Georgia, you have to put a hard fixed number on a contract. And a lot of times when you have 5, 10, 20, 25, even $50,000 worth of earnest money on the table, you have to be very precise. And if you’re not working with a lender, you know, who is intimately familiar with Georgia, with Georgia contracts and how they work, you can get yourself in hot water. And I understand that, you know, the, the credit union down the road from you in Paducah, Kentucky, you know, can give you a loan, you know, an eighth of a point better than whoever here locally.

Yok Re [00:17:53]:
But if they can’t get it done for you in a timely manner and they miss a date on that contract by 24 hours, you could cost yourself tens of thousands of dollars, not to mention the time and effort, and you’re still not owning anything. So for me, I tell everybody, you know, and that’s why I wanted Max to be into this conversation is Tom, these Georgia con contracts are different than a lot of states. They’re similar to North Carolina. They’re not very close to Tennessee and Florida. And we have to work with a, with the precision. And also I feel like in Tennessee and Florida, a lot of times the sellers and everybody involved are kind of a little loosey goose, you know, meaning, hey, yeah, we’re going to close on, you know, October 5th and everybody, ah, man, we didn’t make it. Let’s just close on the 7th. I can tell you here in Georgia, there’s a lot of sellers that will cut your head off if you miss that day by 24 hours or by 24 minutes.

Yok Re [00:18:50]:
Okay? So working with somebody local, in my opinion, is absolutely critical. Max, nine times out of 10, is going to give you a rate that’s going to be competitive to anybody. And I’ll say that with just about anybody local. I’m not trying to pimp Max here by any stretch, but the, the reality is, is, you know, working, working local, if, if I’m buying something in Sevierville, I want to work with somebody, you know, that, that, that knows exactly what’s going on, that understands those contracts, that is chewed through hundreds of those contracts, if not thousands of them like Max has. And we just have some nuances to the way our financing contingencies are designed that, you know, working with the, with, with somebody who has done it a lot in this state has a ton and ton tons of value.

Luke Carl [00:19:34]:
Max, can you, can you speak to that? Tell me what, what am I, you know, what, what are some Georgia specific things?

Max Kalos [00:19:41]:
Yeah, absolutely. So that’s a great point, Yak. And it’s, it’s. Even with the market change this calendar year, it’s still that I would say 99% of our closings this year were in 21 days or less. And I mean, just last month we had, I think one or two eight day closings, which, you know, takes a little time off, off my lifespan, but, but we can get it done if need be a little stressful, but we’ll get it there. In Georgia, you’ve got the due diligence, the finance and the appraisal. The due diligence is your get out of jail free. You, you can terminate the contract for any reason or no reason at all.

Max Kalos [00:20:17]:
And those are typically zero to three or four days. Here most finance and appraisal contingencies are, are somewhere between zero and seven days. Which means you’ve got to get the appraisal in and you’ve got to get the loan approved by underwriting within that time frame. And then again, most of our closings are 16 to 21 days. So it’s fast here in Georgia. Now that, you know, if it becomes more buyer centric, is it slowly leaning? Those time frames will loosen up a little bit, but it’s still going to be quick, especially, you know, to your point compared to places like Florida and Tennessee.

Luke Carl [00:20:48]:
Wait a minute, wait a minute. 16 day closing. Can you explain that further? In other words, the. Once the due diligence is done, you only have 16 more days on.

Yok Re [00:20:56]:
No, 16 from binding contract.

Max Kalos [00:20:58]:
Binding contract, yeah. I had two last month that were eight day closing. So we got a contract on like a Monday and we closed it the following Tuesday.

Luke Carl [00:21:05]:
Why?

Max Kalos [00:21:05]:
That’s normal. No, eight days is not normal. 16 to 21 is. 21 is very, very normal.

Luke Carl [00:21:13]:
Was it normal when we were in the peak of things and couldn’t find an appraiser?

Max Kalos [00:21:16]:
Oh, 100%. Yeah. Yeah. I mean, I was doing. Yeah, 100%. Yeah. Because it was super competitive. It was worse.

Max Kalos [00:21:23]:
You had 10 people buying the same house. So everybody’s, the sellers are like, who’s given me the highest sales price and who’s going to guarantee the appraisal? And Financing the fastest. That’s what we’re looking at. So it was worse when it was busy. It was absolutely worse. We would order appraisals on. We would order an appraisal on a Thursday and need it back by Monday.

Luke Carl [00:21:42]:
I’m confused. Why is that? Every other state I’ve ever dealt with, this is 30 day. Just kind of a general, you know, rule of thumb.

Max Kalos [00:21:48]:
Yak, maybe, but answer that better than me. I think it’s just lack of. Georgia is a growing state. Lack of patience, lack of inventory.

Yok Re [00:21:56]:
Our sellers are very shrewd. You know, our sellers are very shrewd. All the agents here are sharks and you know, they’re. I can’t tell you how many times I probably lost, I mean, probably 10 to 20 million dollars worth of business in the past three years simply because the buyers were using somebody out of state and they need 21 days financing and appraisal contingency. And they’re going around the corner to a Max or somebody like that and he’s giving them seven days. And for the sellers, they’re saying to themselves, hey, this guy I know he’s going to be good for a loan in 21 days. He’s got 21 day grace period. These other people have seven days.

Yok Re [00:22:42]:
They’re going to go. If the numbers are similar, they’re going to go with the sure thing. They want to know who’s going to have their loan ready and clear to close in seven days as opposed to 21. And that is such a huge deal. And kind of a unique thing in Georgia is speed matters. And you’ve got to connect yourself with somebody who understands that and is able to get you through those contingencies and will hound you for the information. That’s one thing I like about Max’s team. He’s got a couple pit bulls that works for him and they will call you at 2:00 clock in the morning and leave you nasty messages saying, hey, dude, you want to close this thing? I need your XYZ documents.

Yok Re [00:23:24]:
You know, a lot of, a lot of these lenders just sit on their hands and say, yock. Carl hasn’t uploaded his docs to the portal. And I’m like, well, have you reached out to him? Well, they have the link. That doesn’t work, man. That’s not how Max works. Max 6 the dogs out on them paperwork because he, he can only work as quickly as the clients give him the information.

Luke Carl [00:23:48]:
You’re getting me fired up. I’m ready. Let’s close the deal. I love it.

Max Kalos [00:23:51]:
The messages aren’t that nasty.

Luke Carl [00:23:54]:
Hey Max, let’s say I’m new and I’m scared and I want to shop around. Can I pull credit with you and pull credit with somebody else? And only one credit hit, and how does that work?

Max Kalos [00:24:05]:
Yeah, so that’s a great question. So generally speaking, so first and foremost, I’ve actually met with reps for the credit bureaus. They will not tell anybody exactly how credit works. They will not. It’s, it’s secret, double secret probation. And the reason for that is they don’t want us trying to rig the system. But generally speaking, the rule is within 30 to 60 days you can have multiple hard pulls. And if you want to talk hard versus soft pulls, we can talk about that because that’s an important topic too, if we’ve got time for it.

Max Kalos [00:24:30]:
But you have time within 30 to 60 days to get multiple hard pulls and, and shop around. And it should not affect your credit scores. Generally speaking, pulling credit does not really affect your credit. What affects your credit is late payments, collections, yada, yada, yada.

Luke Carl [00:24:46]:
I’m going to ask you a personal question. If you find out that a client has pulled credit with somebody else, do you get annoyed?

Max Kalos [00:24:51]:
No, not at all. I tell everybody if you shop 10 reputable local lenders, we’re always going to price in the top one or two. I get that you want to shop. The reality of it is it’s difficult to shop, especially on a purchase. To Riyak’s point, you have 18 to 21 days to close. If, if you call me today and say I’m, I haven’t even found a house, I’m just looking, I can send you numbers, but they’re, they’re irrelevant. The numbers could be different in an hour. So the, the problem is I had a young lady that was shopping me.

Max Kalos [00:25:20]:
I think she was shopping me against a credit union. And it was, I’ll never forget this, it was earlier this year and it was like a, it was like a Wednesday afternoon. She said, hey, she sent me and this other lender thing and one of our things is we’re really responsive. We try to, even if it’s the weekend, get back to people really, really quickly. And so she said, hey, I’m under contract. Here it is, I need numbers. So I sent her numbers in like five minutes. Rates got worse.

Max Kalos [00:25:41]:
And I said, hey, did you get the, the quote from the note? Haven’t. I haven’t even heard back from it. Next morning rolls around. So we’ve only been, it’s been Three, four business hours tops. That other lender still has not sent her deal numbers. It’s the next day, it was a $300,000 loan. By the time that lender responded to her and their rates were worse, we had lost almost $3,000 in, in fees. So her fees went up three grand in like four business hours by sitting on the sideline waiting for.

Max Kalos [00:26:07]:
So I tell everybody when we get a contract, if you pre approve with us, we lock you in. There’s no cost, no obligation because if rates go up, I want you protected. I’m a broker. If rates go down tomorrow, I’ll just move you to another bank and start over. No harm, no foul.

Luke Carl [00:26:18]:
I think I’ll be a little annoyed with that, but I get it, I get it. What was I going to say? Oh, let me talk about briefly. With conventional commercial loans now, you do not have to get a 30 year fix, all right? You don’t have to get a 30 year fix. You can go to a local bank and get a, what some people call it a portfolio loan, a commercial loan. Usually that’s going to be a five year loan amortized over 20 years. But there are tons of variables there. Sometimes you can get 25 years, sometimes you don’t want 25, maybe go 15. And that is just a local bank.

Luke Carl [00:26:56]:
It’s more of a handshake situation. It’s usually for folks that have been in the business a little longer, although I have seen folks that start, start out with conventional or commercial loans and with the local bank. So keep in mind that that’s not what we’re talking about today. That does exist. We don’t really hear it all that often in here at the short term shop. I use them, I use commercial loans. Quite frankly, I ran out of conventional loans a really long time ago, but it’s a good problem to have. And then eventually maybe you stop trying to use loans altogether.

Luke Carl [00:27:30]:
But anyway, what did we miss here, guys? We got a couple of minutes. What, what did we miss? This again, specific to the state of Georgia and, and the mountain north, North Georgia mountains.

Yok Re [00:27:43]:
I would just add, you know, work, work with somebody local does matter. Again, having somebody familiar with Georgia contracts, which are different than, you know, other states, I, I totally understand and can respect if you are from Nevada and your neighbor is a lender and you, you think he’s going to give you the best deal, I would say his deal that he’s going to give you is probably not much better than anybody local. And he’s going to have the problem of being Able to find a local appraiser that’s trusted, that knows how to price these properties. That’s another deal. So, you know, there’s just so much differences from state to state that I highly recommend, you know, if, no offense Max, but if, if I’m buying a cabin on in, or excuse me, a Beach House on 38, I’m not going to use you, man. You know, you’re not, you’re not going to be my guy. I’m going to use somebody that’s familiar with that, that does that all day, every day. And specifically with Georgia, use somebody local.

Yok Re [00:28:45]:
Use somebody who’s, who’s kind of lives, lives it and breathes it every day. Because our contracts are a little bit different. The speed and velocity at which we move, I would say is, is totally different than every state in the Southeast. So again, have somebody familiar with that, you will, let me add this. You will lose deals because you can’t close quickly enough. Because your financing contingencies are too, are too long. Because your appraisal contingencies is too long. You will lose deals.

Yok Re [00:29:15]:
Period. The end.

Luke Carl [00:29:15]:
All right, let’s back up Max. Thank you. Yak. Max, let’s say I’m brand new, I’ve never bought a house ever. Or maybe I bought a house that I live in. Quite frankly, this conversation and it we all just had scares the crap out of me. Can you walk me through just on a, again, a very elementary level, what it looks like to buy my first investment property? What do you need from me? Yeah, am I, am I scared? You know, that kind of thing?

Max Kalos [00:29:43]:
No, absolutely. So we work with a lot of first time buyers. You know, we’re happy to walk first time through experienced buyers through the process. Honestly, I would tell everybody if I could. To Yaak’s point, if it was a Florida loan and I couldn’t do it, didn’t want to do it, and you called me and said, hey, what should I do? I would tell you, get pre approved right away. Get the hard credit pull right away. It gives you time to fix problems, if there’s problems, versus calling us up at the 11th hour going, I found a house I love. What do I do? You know, so get pre approved right away.

Max Kalos [00:30:11]:
The pre approval is good for four plus months. It’s a hard pull. If anybody offers a soft pull, run like hell. Do, do not do it. Okay, so that’s step one. That is a 15 minute process that’s jumping online ballpark data. You know, it’s super, super simple and that allows us to get Your pre approval. It’s really not a hard process.

Max Kalos [00:30:29]:
Most people are shocked about how quick and easy it is for us if you apply at 9am By 10am you’ve probably got a pre approval sitting on your desktop waiting for you with your agent copied on it. So that’s, that’s really the first step. And then we run numbers. Let’s run numbers for you. Make sure we’re looking at the right sales price. Houses, whether it’s an investment property, second home, primary. Let’s run those numbers, run the down payments, make sure you’re comfortable with the pricing. And then from there it’s go find a house.

Max Kalos [00:30:52]:
It’s really not that challenging and not that scary. We try to take it in little chunks so that you kind of eat as you go and you’re, and you’re not getting crushed with data. Lost you.

Luke Carl [00:31:02]:
Sorry, man. All right. You guys wore me out, man. That’s, that’s a whole lot of awesome in a short period of time. I guess I’m going to let you guys go. Max, how do we get ahold of you?

Max Kalos [00:31:12]:
Easiest way is you can go to www.maxcalos.com max k a l l o s.com or you can call me on myself 404-277-5884.

Luke Carl [00:31:25]:
All right. And of course Yak is here for all of your Blue Ridge second home vacation home investment property needs through the the great the world’s greatest short term shop. We’re the best in a business. We would love to earn your business. The shorttermshop.com from Blue Ridge. It’s the short term show.