0:32

So you see me Run

0:36

, run . Dude , so five

0:38

o'clock this morning . We just

0:40

hear like a bedroom door open and I

0:42

hear footsteps on the stairs . I'm like what

0:44

the fuck is this . So of course , in

0:46

my mind I'm like I should get the gun . And

0:48

then all of a sudden , I just look on the camera and my son

0:50

snuck out and he's walking downstairs .

0:53

Oh yeah , you love that .

0:55

It's beautiful .

0:58

You hear the pitter patter of the footsteps as they're

1:00

running down . You're like God

1:02

damn it , not this early . I know , I

1:04

know what's going on .

1:06

Anyways , welcome back everyone to Craft Advice with Jack and Sean . We

1:09

got Matt Roberts back for a real estate update

1:11

. Sean

1:14

, don't kick us off .

1:16

Hello , hello , welcome back folks . Yeah , Matt

1:18

, so obviously lots been going on since

1:20

we last spoke , I think

1:22

the 30 year or

1:25

30 year fixed mortgage just at the last time

1:27

we spoke , we're probably somewhere in the five to six

1:29

ranges Just hit eight

1:31

, pretty psyched I'm sure

1:33

. But

1:36

yeah , yeah , I mean obviously you do stuff kind

1:38

of all over the place in terms of new builds

1:41

, selling existing stuff , so

1:43

you've got a pretty good beat on the North Florida

1:45

market , especially on the residential

1:47

side . Yeah , kind of , maybe give

1:49

us an update on some things you've

1:51

been seeing and kind of what's out

1:53

there what's exciting ? Maybe Absolutely

1:56

. Yeah , what's going on off the market ?

1:57

I also want to know what's the buyer ? Demographic

2:00

change I felt like for a while there was a lot of institutions

2:02

that were buying up funds and then

2:05

packaging it into a REIT and then calling us .

2:06

Yeah , a lot of out of state and also a lot of out of state

2:08

cash buyers , right ? Yeah , I know that was

2:10

kind of a big thing for a while . So , yeah , just kind of give us an update

2:12

on what's going on with all that stuff .

2:15

Absolutely Well . Thank you for having me

2:17

back on . Gentlemen , appreciate it . It's

2:21

been a very interesting year for

2:24

real estate , especially in the Florida

2:26

market . I know everywhere , but in particularly

2:28

the Florida market has not

2:31

cooled down as much as other

2:33

states have across the country , so we've

2:36

still been moving . Beginning of the

2:38

year was bonkers , I'd

2:41

say Q1 , q2 . We

2:44

were still getting multiple offers . We were still

2:46

selling homes above

2:48

ask price , as long

2:50

as they were priced accordingly and not

2:52

overpriced . I should stress

2:54

that . But still , essentially

2:57

we had a lot more demand than we did supply

2:59

in the first two quarters of the year . Still

3:03

a lot of town out of town buyers . The

3:05

institutions have very , very , very

3:07

much slowed down this entire year pretty much

3:09

. But as

3:12

we've gotten into Q2 or

3:14

in Q3 and now into

3:16

Q4 , we started to see kind

3:19

of a slowdown , not a halt

3:21

or anything like that , but definitely kind of a

3:23

trickle slowdown as we're getting

3:25

into the beginning of Q4 . A

3:28

lot of that has to do , obviously , with the interest

3:30

rates and a

3:33

lot of it right now what we're seeing

3:35

has to do with the economy , the war

3:37

and just the fear of the state of kind

3:39

of where we're at . So we

3:41

got into Q4 . We're at heightened

3:44

what we just hit 8% rate

3:46

. The treasury bonds at what ? Over 5%

3:49

? So I mean things are expensive

3:51

and prices are still expensive

3:54

as well . So what we've been seeing here lately

3:56

is we're no longer , let's

3:58

say , the last month or two , we're no longer

4:01

getting multiple

4:03

offers on properties or selling

4:07

them for above list price . We're

4:09

doing a little bit more negotiations , but the prices

4:11

are still high . Right , I

4:14

mean they are still . Our market year

4:16

over year is down like 1.7%

4:19

. So the difference now

4:21

is buyers actually

4:23

have negotiating power when purchasing

4:25

a home . So , due

4:27

to the rates

4:29

, our inventory is . I mean we

4:32

have a little bit more inventory that we did , but it

4:34

is still nothing like

4:36

we were at pre-pandemic levels . Nothing

4:39

of the average inventory that's on the market

4:41

where nowhere near . But we are starting

4:43

to trickle up because homes

4:46

, instead of getting listed on market now

4:48

and going under contract in

4:50

the same weekend they're generally

4:52

about two to three weeks before it's under

4:54

contract . So people now

4:57

have time to actually go look

4:59

at multiple homes , find the right

5:01

home that's for them and make the

5:03

right decision and in

5:05

doing that they

5:07

get some negotiating power because they don't have

5:09

10 people all coming in at one time just

5:11

bidding against themselves . So

5:14

a lot of buyers have been on

5:16

the fence but

5:18

lately we're seeing kind of a I

5:21

would say a little bit of an uptick in buyer interest

5:23

because the ones that realize

5:25

that they can now actually

5:27

get a quote unquote

5:30

deal on a home , they're actually

5:32

leveraging that and one of the things that

5:34

they're doing is like say , a home is listed for

5:36

$400,000 , you know , say

5:39

it doesn't sell for 400 , it's not selling

5:41

for 410 , 420 , like it was in the beginning

5:43

of the year . It may sell

5:45

for 390 now . So

5:47

you're still getting a high price point . But those

5:49

people are using , they're

5:51

negotiating and a rate buy down is

5:53

one of the biggest things we're seeing right now . So

5:56

people will pay a higher price and say , okay

5:58

, I'll give you 400 for the house , give

6:00

me 10 grand to buy my rate down

6:02

and buy a 2-1 rate . Buy down and they can

6:04

get two points off their mortgage . So

6:07

if you structure it accordingly

6:09

to that and there's a program out there where it's

6:11

you know , say , your rate is 8%

6:14

for the first year at 6 and then

6:16

it goes down two points . For the next year it's

6:18

seven , then it goes up to eight by the third

6:20

year and the goal is to

6:22

refinance before it gets back up to

6:24

that you know 8% rate , which should

6:27

be likely . So instead

6:29

of the buyer now having to come out of pocket and

6:32

hey , these expenses to

6:34

get their rates where they want to be , the

6:36

sellers are doing that . So it actually

6:39

allows the buyers to kind

6:41

of get it home for For

6:44

the affordability that they need . Right , because the biggest

6:46

issue is the biggest issue I'm seeing is

6:48

is your monthly mortgage payment and the affordability

6:51

of that . Yeah , I mean it's getting ridiculous , we

6:53

all know that . So this is a way

6:55

to To be able to still

6:58

pay the premium pricing but for these

7:00

buyers to , you know , still be in

7:02

the affordability that they need every month . Yeah

7:05

, so it's working out well . And and to

7:07

Jack , to your question of like who the buyers

7:09

are , because these institutions

7:12

have have really backed out and there's , you

7:15

know , there's some local , you know People and investors

7:17

that still try to buy but they're not buying

7:19

. You know market price , turnkey

7:22

homes , so these buyers

7:24

don't have that competition that they had

7:26

of the cash anymore . Yeah

7:28

, now we still get quite a bit

7:31

of people Sales

7:33

from people out of town , people still moving here

7:35

. It is still going

7:38

on , it is not a specific region

7:40

.

7:40

You're saying a lot of traction from no , it's

7:42

.

7:42

I mean , northeast was our

7:44

biggest for quite a while and we're still

7:47

getting that . But last

7:49

year at this time when you get into

7:51

the winter season , everyone

7:53

from up north was moving like they were . The goal

7:55

was , hey , we need to have a house by November

7:57

because we want to be out of the snow , and

8:00

it's not really like that anymore . It's kind of kind of

8:02

it's kind of scattered around . People are moving for

8:04

work , people are , you know , moving because they

8:06

can still work from home and then , you know

8:08

, fly to their office or whatever they may

8:10

be . But it's definitely

8:12

more of a mixed demographic and I would

8:14

say like more standardized Market

8:17

that we're kind of getting into right now .

8:19

Yeah , so it sounds like

8:21

you know that's your point . You're

8:24

saying that the Negotiating

8:26

power of the buyers going up

8:28

. I mean sounds like at the end of

8:30

the day the high prices

8:32

aren't going anywhere and this is kind

8:34

of the the workaround for right now . Right

8:36

, kind of give me your price

8:39

and I'll give you my terms scenario . Right

8:41

, where you'll get , you'll guarantee you

8:43

know you get as close to that asking price

8:45

now because at the end of the day there really is no supply

8:47

so there's nothing else out there . But

8:49

they've been , they've been able to negotiate

8:52

better terms .

8:53

Yeah , that's exactly it . Yep , because

8:55

the high prices it's

8:57

gonna take a while for those without

9:00

Something drastic happening into our

9:02

economy . It's gonna take a while for it to like

9:04

go down , because you've got to think

9:06

of how comps are run when you

9:08

have a sale of a home and they run comparable

9:11

sales . They run the last six

9:13

months of comparable sales , so those are

9:15

all still high pricing . Yeah , now

9:17

obviously you've got to have the buyer

9:19

willing to pay that and you're gonna

9:21

have a little bit off of those high pricing

9:24

. So people now are kind of offering

9:26

hey , here's the terms I need , of like

9:28

whether how long they need for clothes , how long they

9:30

need for their closing costs and their rate buy down . And

9:33

then the last thing they're worried about , like you said

9:35

, is that purchase price . So they're gonna start with

9:37

all their terms in a lower purchase price and

9:39

then the offer terms stay the same and

9:41

they just try To get the lowest purchase price

9:43

they can until we all come to an agreement , agreement

9:46

.

9:47

Yeah , um , no , that's . That's definitely

9:49

a good , a good sign . I mean , at the end of the

9:51

day , um , deals are still being done . It's

9:54

not to that point where you know the

9:56

whole system's kind of freezing up , nobody's buying

9:58

, nobody spending any money . Hopefully doesn't get

10:00

to that point , obviously , but yeah we definitely sounds

10:02

like the , the market's finding creative ways

10:04

to Keep things going , because

10:07

there's definitely still people moving in Florida , that's

10:09

for sure .

10:09

Yeah , and in to that point too

10:11

it's . You've got a lot of people that

10:13

are like the locals here that are looking either

10:16

for their first home or say they need to Upgrade

10:18

because they've had , you know , the another kid

10:21

and they need another bedroom . So you have

10:23

those people who are are upgrading

10:25

their homes , but a lot of people are

10:27

still putting a lot of money down , like

10:29

I just sold like 25 30 percent

10:32

down in the last home sale . So people are still

10:34

spending money on

10:36

these properties and have money to spend

10:38

as well . It's just now

10:40

More defined and

10:43

making sure it's going to the right places

10:45

.

10:45

Yeah . Now what about condition for

10:47

homes ? I know a lot of times obviously people

10:49

want to have something Move-in ready

10:51

. Are you seeing stuff that's that needs a

10:53

little work sitting longer Is there is

10:56

a type of property that's moving

10:58

. I guess this is probably good for people that are either

11:00

selling or buying . What's

11:02

the market look like if it's not moving ready

11:04

and what's the market look like if it's pristine ?

11:07

Yeah , there's a . There's a big divide

11:10

between that now and it's funny because

11:12

this goes in cycles . So when I started

11:14

in 2016 , the

11:17

majority of people didn't want move-in ready

11:19

homes . If they

11:21

were fully updated , they would sit , and if they

11:23

were not updated , people wanted

11:25

them because HGTV and the flipping

11:27

shows were big and people wanted to do

11:29

that and build their equity . And

11:32

now it's the opposite they

11:35

want the move-in ready homes , they want the turnkey

11:38

homes . They're willing to pay the much higher price for

11:40

it because they're realizing that

11:42

if they buy a house that needs

11:46

a lot of work and you're getting a much cheaper price

11:48

, you have to come up one with the capital

11:50

out of your pocket to do that . Rehab

11:53

and

11:55

remodeling a home from six years ago

11:57

to now is probably tripled

11:59

in price . I mean , a kitchen will cost

12:02

you $60,000-70,000 these days

12:04

. It's wild . So people don't want

12:06

to go spend $100,000

12:08

of their cash in the remodel . They'll

12:10

screw this . I'll just put a down payment and buy

12:12

one that's already done . So

12:15

the homes that need updates

12:17

they're definitely sitting on market longer

12:19

and those are the properties where , if you

12:21

have someone who is either a first-time

12:23

home buyer or who is handy and

12:26

can , the home is livable , but

12:28

they can update it as they go . You can

12:30

really start to build equity in these properties

12:32

now and that's kind of what we're seeing

12:34

. For those people who are willing to

12:37

take that risk and do that work and have the

12:39

longer play of the equity and not the nicest

12:42

home right off the bat , we're getting real

12:44

good deals with it on that , that

12:46

makes sense Matt tell

12:48

them what's the

12:50

kind of investment market looking like right now

12:52

in terms of again

12:54

them coming in and buying up either single

12:56

family , multi-family type things .

12:58

What are you guys seeing there ?

13:00

I'm not seeing anything on the large-scale

13:02

investment . Like we were like with the REITs

13:05

and the big companies , I

13:09

haven't got an offer from one of them at

13:12

least six months , I'd say on

13:14

any of our listings . They

13:16

were coming in . I mean , every listing that came

13:19

out you would have like just like four

13:21

auto emails from big REITs that

13:23

were just like we'll buy our property cash , and I was like

13:25

, if I need to , I will Deal , I'm gonna get somebody

13:27

to pay more . So

13:31

they've kind of stopped . The local investors

13:33

are still moving , but it's a

13:35

lot slower . Money's

13:39

more expensive , trades are

13:41

more expensive , work is more

13:43

expensive , so returns

13:45

are tighter . So

13:47

things are kind of moving in the investment space

13:49

a little bit slower . On that point I

13:52

know personally for myself . My

13:54

investments are new construction that we

13:56

build and sell . I've tightened

13:59

up my underwriting quite

14:01

a bit to make

14:03

sure , because in a new construction property

14:05

when we do this I'm analyzing

14:08

a year out . We're buying a property that

14:10

we're gonna build a home on and it's not gonna be

14:12

, we're not gonna get a return and sold for generally

14:15

about one year . So now

14:17

I have to like , really take

14:20

into consideration hey , I'm

14:22

giving myself a big buffer , because if

14:24

we have not a

14:26

crash , but like a correction

14:28

, a downturn , whatever you want to call it , I've

14:31

got to make sure that I've got the room to

14:33

always at least break even and

14:35

still make a lot of profit if

14:38

that does happen and that the prices are

14:40

5% , 10% , 20% , less

14:42

next year , just in case . So

14:44

I'm so . A few deals

14:47

have come across my desk the last few weeks

14:49

and I passed on them over about like 30

14:51

, 20 , 30 grand difference because I'm

14:53

like that that could be . I

14:55

could be a big swing , you know , next year

14:57

. I just don't know yet .

14:59

So you typically trying to buffer in there 15%

15:02

, so typically

15:04

15 something In town .

15:06

I will . I look for 20% return on

15:08

investment and at the beaches

15:11

I look for 15% return investment

15:13

, just because it's a little bit More

15:16

competitive . Yeah , it's more competitive at the beach

15:18

and it's easier for us

15:20

to work at the beach as I live here . So

15:22

my time I have to make more in

15:24

town because my time going back and forth to

15:26

properties and managing that and working

15:29

on those is eating up on that . And

15:32

I'd say that's kind of what I've been running out

15:34

for the last since I started

15:36

building in 2020 . And now I'm

15:38

if if a deal is , if

15:41

it works and it's less than that

15:43

on a percent percentage return , like

15:45

I'll take probably a 12%

15:47

return at the beach and like

15:49

15 in town now with my underwriting

15:52

guidelines , just because I'm very confident in how

15:54

I underwrite the deals . But yeah

15:56

, I mean , you've got to be willing . I don't want to say

15:59

you've got to be willing , but like I'm willing to take a

16:01

little bit less return

16:03

right now , just because things are

16:05

not much tighter .

16:06

So how dumb did it get at

16:08

the peak of this . It was the dumbest stuff

16:10

you saw .

16:12

It was insane Like it

16:14

was . It was amazing for my bank

16:16

account , but it was not amazing

16:19

for any other aspect of my life For

16:22

about a year straight . I mean , if my phone

16:25

rang , it didn't matter like what time of the day

16:27

. Besides , in the middle of the night I

16:29

answered it and you had to

16:31

go because when it was at

16:34

the peak it was , you got to call , a property

16:36

was just listed that one of your buyers is

16:38

like hey , I just saw it and you

16:40

know damn well I have to go right

16:42

now or it's gone . So it's either

16:44

I go in or I'm doing my client service

16:47

. So you have to drop whatever you're doing

16:49

. You have to go . Then you're writing up an offer . So

16:51

it was wild and it just

16:53

got to the point where people , I mean , I

16:55

loved it when it was just cash and I was like I'll give you

16:57

100 grand more , I'll sign it . I

17:01

did , I did really like that .

17:03

So we did well .

17:05

Exactly we had . I remember we had

17:07

at one point like the most wild thing we had when

17:09

we were building is we had two duplexes

17:12

, two town home buildings next to each other

17:14

, so it was four units , and I built

17:17

like eight of these buildings last year or

17:19

two years ago and

17:21

they are . All four units were done at the exact

17:23

same time and I was like , damn

17:25

, I like to stagger them a little bit . So I

17:27

put them on market and I literally

17:30

had a line it was

17:32

just a weekend , a line of people

17:34

down the sidewalk to go into each and every

17:36

single one of those and I had them all under

17:38

contract that I had multiple offers on

17:40

every single one , skyrocket pricing

17:42

. It was like hard to keep in , like

17:44

to realize which one was which . Yeah

17:47

, but yeah

17:49

no . It was great problems to have when you get to that

17:51

point , but keeping up with

17:53

that is just . It's hard

17:55

to do that on for you know , a long term

17:58

scale .

17:58

Yeah , what about on the new construction side

18:00

? I know because cost , like you said , a kitchen cost forever

18:03

or so much more to do . I know I'm looking

18:05

at doing a addition of my house here and it's not

18:07

cheap . But what's the

18:09

economics been like on the

18:12

new construction , the new build

18:14

process ? Has that been more favorable , less

18:16

favorable ?

18:18

It has . It's been much more favorable , honestly

18:20

, due to , you

18:22

know , because the inventory is so tight

18:25

and people with

18:27

what the wants and needs are people which

18:29

is a turn key ready home . Not

18:32

all , a lot of these , you know , resale

18:34

homes that come up are updated

18:36

and fixed up . So you have

18:38

people who need a home with a

18:40

little bit of inventory on market and

18:43

then you have people who want a home that

18:45

is fully updated and turn key , which is even

18:47

more less or even less likely

18:49

on market . So people are turning a new

18:51

construction homes and

18:54

that has been great for us . A

18:56

lot of the big home builders

18:58

are also offering rate

19:00

buy downs that are included in the price Because

19:03

they own the lending company , they own the title

19:05

company . They can , they can work their numbers all

19:07

they want . So now a lot

19:09

of my actually I think

19:11

every single one of my buyers this year has bought

19:13

new construction In a big community

19:15

. They've gotten rates down to the 4%

19:18

and the 5% for one to two years

19:20

. They're getting all their

19:22

closing costs paid for . So they're coming

19:24

to the table with maybe like five

19:27

to ten grand out of pocket , getting a brand

19:30

new home for an affordable rate Like

19:32

you can't beat that on the resale

19:34

side of things now . So it's

19:37

on the big scale that's good

19:39

and on like the smaller scale , like us

19:41

, most of our , all of our builds right

19:43

now are out at the beach and they're all around a million

19:45

dollars . You know resale value so

19:47

it's not as great dependent

19:50

, but now it is . You

19:52

know , with this buyer market out here at the

19:54

beach it's just getting them done

19:56

to the expectations and the

19:58

quality that people need .

20:02

So , matt , let me ask you this do you think you will

20:04

probably see existing home ? Do

20:06

you think we'll see New

20:09

construction costs come down sooner

20:11

than Home prices , relative

20:14

, you know . I mean as far as , like , the cost

20:16

for a new bill versus a

20:18

gut remodel and

20:21

buying an existing . You know , you know what I'm saying

20:24

. Like it do , will it be more Attractive

20:28

going forward for

20:30

a new bill , especially as these larger builders

20:33

, you know , continue to throw

20:35

out the set of offerings , buybacks , what you

20:37

know , share bar interest rate , buy

20:39

downs , etc .

20:40

Yeah , I think so , because what's

20:43

wild is right now , if you're like

20:45

comparing resale homes to new

20:47

construction homes , their

20:49

2000 square foot home , three

20:51

bedroom , two bath , new construction versus resale

20:54

that's updated they're around the same

20:56

price . So why are you not gonna

20:58

go for the brand new home instead of a 50

21:00

year old home and you get better terms

21:02

. So I think that the

21:05

new construction market will continue

21:07

to hold again . These are all higher prices

21:09

still . Yeah , I think they'll continue to hold

21:11

that and I think that is going to kind

21:13

of push the , the resale Pricing

21:16

down a little bit , especially

21:18

with these rates . Because of that , now

21:20

you're gonna have to get more competitive , exactly

21:23

, and that's what it is , or they're just gonna have to , you

21:25

know , get better deals , whether it be price , whether

21:27

it be concessions and Buydowns

21:29

, but whatever it is , they're having to

21:31

be . They're having to negotiate more

21:33

Because you know this

21:35

is because of the new construction market , and

21:38

I mean there's been . I mean you guys

21:40

are aware there's been a huge gap from

21:42

the Great Recession and here we don't have

21:44

the housing we need . So in

21:46

those big gaps you just have a ton of

21:48

older homes getting older and not

21:51

a lot of new homes being built . So our

21:53

year gaps like it's not a bunch of houses

21:56

in Jacksonville that were built in 2000 that

21:58

are for sale . They were built in like the 50s

22:00

, 60s , 70s and 80s . And

22:02

then you've get the new ones that are built from , like

22:04

you know , 2010s and 2020s

22:06

and on . So there's a big gap

22:09

in age and people are really wanting

22:11

to get into a new home for maintenance

22:14

and , you know , longevity , so that

22:16

they don't worry about us .

22:18

This is basically think of like if the , if the builders

22:20

are offering incentives to reduce

22:23

and buy down the rate , they're taking all of the

22:25

not only the building risk and

22:27

the construction risk and now they're taking the interest

22:30

rate risk off the buyer . So I Don't

22:33

know , I don't know how to

22:35

look at that and say , hey , it's looks like a great

22:37

opportunity , it's phenomenal for a buyer trying to get in there

22:39

. But if they're also then the lender on

22:41

some of these deals you find down , the

22:43

rates on some of these deals , maybe don't buy

22:45

their stock .

22:48

Hey but they're still .

22:49

The thing is there's still selling that high prices

22:51

I mean the pricing is still

22:53

, and that's what they're doing to keep that purchase price

22:55

up here Is they're giving you everything

22:57

else , so our comms are staying high

22:59

, high , high .

23:00

So matter where you saying some of those incentive

23:02

, those rape , those rape , buy downs for

23:05

those um , did you say ? I thought

23:08

I heard you say something about them only doing for the first

23:10

few years , or something .

23:11

So there's a product out right now that's really

23:13

popular . It's called the two one buy down

23:15

. So , whatever the rate

23:18

is . Let's just use 8% . Like

23:20

, let's say you go qualify to get your mortgage

23:22

and right now that's at 8%

23:24

is for numbers sake . Yeah , you get

23:26

this two , one buy down , which I can't

23:28

remember the cost of it , but you know there's a cost

23:30

points . For

23:32

the first year it reduces your , your rate

23:34

by 2% , so for the first year

23:36

it would be 6% . The second year

23:38

it would reduce it by 1% , so it would

23:40

go to 7% , and then year 3

23:43

it would go back to 8 . So essentially

23:45

, like you have an 8% mortgage but

23:47

for the first two years you're not paying 8% and

23:49

then so is the angle essentially

23:52

that , yeah , you're gonna refinance in three years . Yep

23:55

and that's and and a lot of these lenders

23:57

at the same time are giving that out

23:59

and then they have . They have a

24:01

Situation now is , if you

24:03

refinance back with them , then

24:06

you don't pay your closing costs on that . Someone

24:09

can get that rape , buy down then refi

24:11

in two years and not have costs for that refi

24:13

and get their mortgage back down when they want to you're

24:15

saying these are , these are packages

24:17

that lenders are pushing or the builders are pushing

24:19

and they're partnering with lenders . Oh

24:22

, so it's a lender ? Yep , it's a lender

24:24

. Like the lenders have these options , but

24:27

the big builders own their own lending companies

24:29

, so they're just offering it off the off

24:32

the bat and if you're buying like a resale

24:34

home , your lender has that option . Now You're

24:36

asking the seller to give you money to

24:38

, to buy those points and get that .

24:40

by now I got it , hmm

24:42

it's a lender and the lender's eating

24:44

this excess costs . Right this .

24:48

No lenders , not lenders getting paid .

24:49

I guess you're paying you . Yeah , what I'm saying

24:51

is you're breaking in what's what ?

24:53

right .

24:53

So there's the builders providing that up front

24:56

, so they're paying for it .

24:57

Yeah , builders paying for it , but like if

24:59

you own the lender and the , the

25:01

building company , I'm sure on the back end you know

25:03

, you know how to work your numbers . But yes

25:05

, they're washing sure eggs , yeah , but

25:08

but they're . They're paying for a quote-a-quote

25:10

.

25:11

Do you keep up , matt , with any additional markets

25:13

outside of North Florida ? I ?

25:16

Know , I really don't , I don't have the time right

25:18

now . Honestly , balls

25:21

to the wall every day between you

25:23

know the brokerage and scaling the

25:25

construction .

25:26

Yeah , I was gonna ask you on the short-term

25:28

rental side , like Airbnb stuff , the

25:31

RBO , what ? What have you seen

25:33

on that Side of things ? Things slow

25:35

down or people still looking to buy those and turn

25:37

those into it . You know , have you seen

25:39

some I don't know any blow-ups from

25:41

folks that you know got into it , maybe

25:44

miss time , the market or the location or some

25:46

Spanish mix ? Oh yeah , you know

25:48

, that's a great question .

25:50

It's um , it's slowed

25:52

down a little bit , but it's still pretty prominent

25:55

. Here in jacks we

25:57

had in and this kind of goes to

25:59

like . What type of like Airbnb

26:02

it is like ? I know it's an Airbnb in a short-term

26:05

rental , but in 2021

26:07

, 2022 , I sold a

26:09

ton of Of of

26:11

my beach new construction homes all homes

26:14

to people as

26:16

a quote-unquote Airbnb , but

26:19

what it really was was just a second

26:21

home for them for tax purposes that

26:23

they staged and then rented out a little

26:25

bit right . These people were not Airbnb

26:28

investors . They're not buying this home to

26:30

make a certain cash flow . They're

26:32

buying it with cash or 50% down

26:34

, getting a small mortgage , having

26:37

a ton of equity and then just getting some

26:39

checks to try and cover bills in the meantime

26:41

for when they didn't come . Now

26:43

I will say I've seen quite

26:45

a few of those sell which , again

26:48

, they weren't trying to long-term Airbnb .

26:50

They're you're saying resell after they bought

26:52

.

26:52

Yeah , like , so , like a couple

26:54

years I've seen quite a bit of

26:56

those you know , kind of go back on market

26:58

and resell , yeah but they weren't . They

27:01

weren't bought with a . Hey , I'm an Airbnb

27:03

person and I'm just here to buy

27:05

an investment property and cash flow . I got it so

27:07

those have come back up , but

27:10

a lot I mean a handful

27:12

every now , and then you'll have an Airbnb that comes

27:15

up . That's like a legit Airbnb , airbnb

27:17

that you know puts the financials up , yeah

27:19

, and you know sells , and

27:21

you'll have a few of those . But the

27:24

headlines of like , oh , the

27:26

Airbnb market's gonna crash , the

27:28

, the real estate market , there's gonna be an influx

27:30

of supply . We haven't

27:33

seen any of that . The , the Everyone

27:35

that I know that still has Airbnb's

27:37

. The biggest change that they've had is

27:40

that their nightly rates have come down a little bit , and

27:42

that's just because they have a lot of

27:45

competition . Now there's more competition

27:47

and with the market

27:49

you've got it . You know downplay that

27:51

price economy . Yeah , for sure in the

27:53

economy , but there's still but

27:57

they're still getting booked up for two to three weeks

28:00

out of the month . So I mean your occupancy

28:02

is still fantastic . You just are

28:04

adjusting for supply and demand

28:06

. So things are still going . I

28:08

mean , I know , when I travel I still

28:10

love Depending on where I go I typically

28:12

love to stare in Airbnb's , unless it's

28:14

you know some resort or area that you want

28:16

to have everything in one you know hotel

28:18

. But it's still been good

28:21

. I just will say they're not buying as many

28:23

of them anymore . Sure .

28:25

I definitely .

28:26

I don't have that . I'm probably

28:28

due to rate as well , because even

28:30

on the short term , short-term rental and long-term

28:32

rental , cash flow right now is it's

28:35

pretty minimal between prices and interest rates If

28:38

you're using lending .

28:39

I mean it sounds like the big thing here is obviously

28:41

, you know , location , which is always

28:44

, like you hear , real estate . It's just location

28:46

is the most important thing . Obviously

28:48

, we live in a coastal city , so

28:50

we've got that benefit right . We've got that kind

28:52

of tailwind always present

28:54

that we live on the coast , it's also in

28:56

a desirable city , it's also

28:58

in a desirable region , so

29:01

that's kind of all that bakes into it . You

29:03

know this is a very , you know a

29:05

very juicy market that seems

29:07

like it's got a lot of steam . That continue to go on , irregardless

29:10

of what happens nationally , even

29:13

if we do see some level of pullback probably won't

29:15

see like some other areas , but

29:17

you know there's obviously we see the headlines people

29:20

pulling back and fewer homes

29:22

being purchased and in certain markets

29:25

, you know , obviously out west there's a big

29:27

outflow folks . So there's things

29:29

. Some I wonder and I'd like

29:31

to hear your thoughts on this I wonder what some of those opportunities

29:34

could look like in , you

29:36

know , 10 years from now , 15

29:38

years from now . You know a lot of these areas in California

29:40

, for example , or you know , north

29:42

in the northeast , where

29:45

you know , because of Political

29:48

things that are going on , crime and

29:50

other things or what have you , they

29:52

really drive and the prices down in these markets

29:54

and forcing people out , but the

29:56

things that kind of Nature's healing

29:58

itself . Nature ceiling , that's

30:01

right , it's called self-correction check . But

30:04

what I'm saying is , eventually

30:06

these markets will become attractive right

30:08

at it . At every point some asset

30:10

becomes attractive Because the price goes

30:13

down until the market flushes it out

30:15

its equilibrium and now it's like , okay , well , this is a good

30:17

deal now and then I'm gonna buy it . So

30:19

at some point , california , in those

30:21

areas where people are fleeing , will become attractive

30:23

to buy it and I wonder what your thoughts are on

30:25

this being potentially

30:27

a really good long-term investment type

30:30

of move . And some in not just California

30:32

, just certain markets that are getting beaten up

30:34

because , again , some are getting it really

30:37

badly and some are getting a lot of the benefit

30:39

of a lot of the migration flows , a lot

30:41

of inflows of people , us particularly

30:43

.

30:44

Yeah , I think it will be huge over

30:46

the next five to ten years if you can

30:48

get into those locations Because

30:51

, like you said , everything is

30:53

about location and and we don't have a big

30:55

swing in here in my

30:57

market of Jacksonville per se , because

30:59

it's coastal and because the demand for

31:02

the beaches area and for East Jacksonville Is

31:04

the highest in the city . It's always gonna

31:06

stay like that . But , to your point

31:08

, the north side of Jacksonville is seen as

31:10

significant price decrease . Yeah

31:12

, like they , everyone that bought up there there's

31:15

. You know , a lot of new construction that's being built in

31:17

North Jacksonville as well , which is great , but

31:19

those prices got outrageous , like when I

31:21

started . I mean I started seeing people pay like 400

31:24

thousands for you know small homes on the north

31:26

side . I was like whoa , whoa , whoa , and

31:29

now I mean you've got 50

31:31

70,000 . You know dollar swings

31:33

where it's already down and every

31:35

listing that we've had this year .

31:37

So don't just blindly buy out of town thinking

31:39

that this investment property is gonna be a great . Oh

31:41

, I just need to buy something in Florida because it's

31:43

exactly Great .

31:45

Yeah , just cuz it's in Jacksonville , just cuz that market

31:47

is booming , you still have to know or work

31:49

with a broker who knows the areas

31:52

of that city , that's because they

31:54

it makes such a big difference . So I think

31:56

that's gonna be huge . I mean , I I was

31:58

listening to a podcast a few weeks ago I can't remember

32:00

what city it was , but I believe there's a city

32:02

in Texas where they were building

32:05

a bunch of single-family home communities

32:07

and they're all vacant and empty

32:09

and they can't sell them . So , like

32:11

those things where , like someone tried

32:14

you know a different market that

32:16

wasn't used to it , it's not working . Those

32:18

are gonna be good by opportunities in the coming

32:20

years .

32:21

Yeah , how about anything that , Matt , you

32:23

saying on the commercial side ? I know a lot of places

32:25

have said some of the commercial stuff is slowing

32:27

down quite a bit , but I'm not sure if you have any direct

32:29

exposure on the commercial side in the

32:32

Northeast Florida .

32:33

Yeah . So the retail

32:35

side of the commercial space is still

32:38

booming . On

32:40

anything for like office space , shops

32:43

, everything like you can't get a

32:45

spot out here around the beaches , it's hard

32:47

Prices are have come

32:50

up . They're not crazy , they're pretty fair

32:52

they're . They're nothing like the residential

32:54

side of the prices that have increased . I've

32:57

seen like a couple of dollar price per square foot over

32:59

the last few years like increase , but

33:01

nothing like the residential side . It's

33:04

more of it's your . Obviously you

33:06

guys know , like your big office space , your downtown

33:08

buildings , different

33:11

sectors of that commercial

33:13

, anything very large has been

33:15

kind of sitting now but anything

33:17

that's small For retail

33:20

use or like regular use is still

33:22

moving pretty quickly . But overall

33:24

I mean it is slowed down in commercial

33:27

in pretty drastically .

33:29

Yeah , yeah , I mean I figured most

33:31

people on the commercial space . If it's , it's

33:33

already probably been built up by this point

33:35

. But if you had , I guess , if

33:37

you're looking at people that are getting into

33:39

the real estate market for Maybe

33:42

the first time , whether it's a new investor or

33:44

someone looking to buy a home any current

33:46

advice in the current market You'd give anyone who's

33:50

trying to come into the market is work

33:52

with a good professional

33:55

real estate person , whether it be a broker

33:57

or an agent , because that's how you're

33:59

going to get not

34:01

going in blind is how you're going to get a

34:04

good deal .

34:05

Make sure that your buy

34:07

is held and you're not losing , like your asset

34:09

or your equity . That is really

34:11

the biggest thing right now , because if you buy incorrectly

34:15

, you can lose a pretty significant

34:17

amount of money .

34:18

Yeah , yeah .

34:19

Agreed .

34:20

All right Sean any

34:22

final .

34:24

No , I think that's good . On those notes . I mean we touch

34:26

on a lot of things . I mean , at the end of the day , most

34:28

important thing with real estate sounds like you

34:31

know what Matt was saying is obviously

34:33

location working with qualified

34:35

folks . Matt , make

34:38

sure you plug

34:40

the businesses . Yeah , plug the businesses .

34:43

Yeah , if anyone's listening , it's in the Jacksonville

34:45

area , Duval County , St John's

34:47

County , St Augustine . Got

34:49

a brokerage up here Happy to help anyone

34:51

who's looking to buy , sell , invest . Got

34:54

a team of people we do new construction

34:56

, regular resale investors . We work

34:58

with everybody and we

35:00

know this market very well so we are

35:02

happy to help someday

35:04

homes realty and just

35:06

reach out to us .

35:08

All right everyone . Well , Matt

35:11

, thanks for the update . We'll do another one in a

35:14

quarter . Sean , thanks for the mustache .

35:16

That's pretty dope , yeah , all the

35:18

house baby .

35:20

Again . Thanks for everybody for listening . Again

35:22

. Reach out to Matt Someday Homes , if you're

35:24

in the Northeast Florida area looking for

35:26

flips , buys

35:28

, new construction , all that stuff

35:30

. Any parting thoughts for everybody , matt ?

35:34

Let's make it a great day .

35:35

There we go , always

35:37

remember to work with a qualified real estate professional

35:39

. Yes , cheers boys . Cheers

35:42

.

35:42

Later .