PLUS the craziest escrow story!
Let's do a deal deep dive into our most recent multi-family property in San Diego, CA. We are renovating it, adding a unit, and going to Airbnb part of it!
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FULL EPISODE TRANSCRIPT:
0:16
Hey there, welcome to the MORE podcast. My name is Erica Daily and along with my co host Dr. Raf, we're going to expand your mind when it comes to the pursuit of wealth and freedom! On this podcast, we're going to share stories, ideas, and examples from our real life in order to help you make more money, have more freedom, so you have even more time to do what you love. Speaking of which, let's jump right into today's episode.
0:48
Man, it feels good we are. We'll get into it today. But a lot has changed for us in the last three weeks, we are up two houses. And we added a dog to the family. So things are different. But man, it feels good to be back with you guys in this podcast. So we can share some more of what we learned these past few weeks.
1:04
Yeah, so today's podcast is actually going to be a deal deep dive into this most recent purchase that we made in the house that we are now living in, or I should say property. And real quick, I want to give you guys a rundown of what we're going through. So we're going to talk about what we were looking for, when we first got started, who our team was and what kind of things you want to look for for your team. We're gonna talk all about the shopping process the escrow process, because that is a crazy story. And then we're going to talk about the numbers at the very end. And then I'm going to tease you guys with a little Airbnb loophole information, which I'm going to eventually go into a whole podcast episode all about the San Diego short term rental licenses and that whole mess is this is more of an investment property. For us. This isn't really our personal home, even though we will be living here for about a year or so. And the reason we did that is because we wanted to get an owner occupied loan so that we could do less money down and therefore have more money to do all of the renovations we wanted to do. So I kind of feel like sharing your personal, private home numbers is a bit tacky. And the whole point of sharing this information in the first place is for investment purposes and educational purposes.
2:20
Yeah, I mean, I don't feel tacky, sharing that kind of stuff. But I think it is good to know that houses when you're investing to a property can be all over the price spectrum. I mean, it can be low could be high, I bought and I bought a house for as low as $30,000 before in Michigan. And this house as you guys will find out was quite a bit more than that. Date. That's it makes sense, regardless of the purchase price.
2:50
Guys know what was going through our head when we first got started. So number one thing we wanted 100% was to property hack. And I don't know if that's actually a term I kind of just wrote that down because we're not house hacking per se, more so property because there's multiple houses on this property. So really, what we were looking for was two standalone houses. And we ended up deciding that we wanted a minimum of two bedrooms, one bath, and we were looking for a freestanding garage, because we wanted the ability to convert that into a nother unit, which also required us to have the proper zoning for that. And then we also wanted a fairly good size yard because I feel like outdoor space is so fun, especially because we were going to be using these for Airbnb. And we also wanted something that was a little bit ugly because we wanted to be able to do the renovations ourselves and also increase the property value by doing so. And I put this on here but I wanted something that wasn't too weird. I toured some houses you guys that were so bizarre. It was like there was no fixing it. And so we ended up getting really lucky. I feel like with our house because there's nothing that's that weird.
4:00
Well, getting lucky is one aspect aspect of it. But I think that we get laser like focused on what our goals actually were. And I think this goes for anything in life you guys looking for the more you can refine it down and get down to the nitty gritty details of exactly what you want. So we get super clear on what we wanted. We wanted two properties on one piece of land two standalone homes, not a duplex not attached but to standalones that were both at least two bedroom, one bath that way. We had a very desirable Airbnb property and we could live in one as well and then have an office for us to work out of as well as our main bedroom. And then like Erica said, the big thing the big kicker was that stand alone garage, especially in southern California. The ability to convert those into an adu is, is priceless. It's so valuable In an area like we're in right now, normal heights we'll dive into here in a second. When you can add that square footage by by converting a garage into a livable adu and going through the entire permit process. Holy cow, can you add a ton of value to what your property is worth post renovation?
5:18
Yeah. And can you tell people what adu stands for? If they don't know, I've never heard of
5:21
it, I believe is exhilarate dwelling unit. Yes, not additional Bugzilla. Sorry, I'm not sure why they call it that, I would say additional. But essentially, it's taking a piece of something that's less than 800 square feet and making it into an additional living space that you can then rent out or use to produce income.
5:42
Yeah, I think you can actually build one from scratch as well. Also known as like a granny flat, whatever. Okay, and you want to talk about our team, because we had the most badass team that helped us get this deal done.
5:55
Yeah, I mean, you guys, I can't say it enough. Your team is everything. Without our team, there's no way we would be in this property. I think every real estate adventure we'll call that has its own challenges, but ours had a ton of challenges. And if it wasn't for our amazing real estate agent Seth, who is so knowledgeable, and in this so clear, and so good, when it comes to negotiating and getting clear information across, we would not be in this property. And then on top of that, our lending agent Michael has been phenomenal. He is literally my guardian angel love to do to death, and we would not be here without him at all.
6:39
And something to know is that Seth actually sold my dad's home in Poway. And he set a record for the highest square price per square foot in the entire neighborhood, which is amazing. And my dad was super stoked on that. And then with Michael, the lender, he's a great friend of ours, he's so good at what he does. So if you guys are looking to buy a home, make sure that you reach out to him, see what you can get qualified for. Because that leads us in to the next part, which is the shopping process.
7:08
Oh, the shopping process. Yeah, I love that kind of stuff.
7:11
I did love that. And it was weird, because I had to do a lot of it by myself, because RAF was working and I had more flexibility. But once we knew how much we were able to spend, we could go out there and start writing offers. And so the crazy thing that we found when we were looking at multi families is that almost all the properties we were looking at, you could not see them in person until you had an offer accepted. And I think that's really because most of them had tenants in them. And they didn't want just a ton of people running through the houses, especially because we were still have COVID going on. And so they would not let you see inside without an accepted offer. Yeah,
7:46
quick note on the multifamily aspect, you guys, that is one of the challenges that a lot of these multifamily units in properties actually have tenants in there because they're owned by investors as well. So that's one of the challenges. The other caveat, though, is that when you're looking to buy, as an owner occupied and the multifamily, you actually qualify for more than you would for a single family. That's because the additional income from the second or third unit, whatever harmony you have in the property actually helps offset some of the mortgage expense. So when you talk to a lender, make sure they're looking into that aspect for you if you are going down the path of a multifamily property to Yeah,
8:25
I think we should actually do a whole episode on multifamily because it's such a cool way to invest. So back to the shopping process. There is a few super weird houses that we saw. I remember this one. We were so excited to see it because the square footage was wrong on Zillow. And we were like there's no way that that could be the whole house. It has to be each half. Now this one was an attached house. So we put in an offer we got it accepted and me and Seth went down there to look at it. And you guys imagine a square house but they cut it down the middle. How would you say it like diagonally? So it was like two triangles and it made for the weirdest layout like there was no way you could fix it. It was so bizarre and we were like so let down because there really isn't like a ton the drawing board I remember this other one that was actually really close to the house that we ended up buying and this ceiling had to have been maybe in room was probably 50 square feet.
9:34
I cannot when you hear the agony and Erica's voice when she calls you when you're at work saying babe This is not the place for us. You just know and you agree and you understand because
9:47
no way that we'd want to live there. But on top of that when you're running a vacation rental provide an amazing experience. So if you don't want to stay there, chances are they don't want to stay there either.
10:03
Yeah, you can't really do the funky, especially with Airbnb.
10:07
Well, I think it's big to some multi families are built to be multifamily into more than one unit or more than one property, and just doesn't work very well, very often. Yeah, that's
10:21
where it gets funky or like people are trying to fit like, more bedrooms, more bathrooms, and it's just like, so, so bizarre. But anyways, that's like a whole tangent I could go on and how weird some of these houses work. Now, something that's interesting to note is we actually saw the property that we ended up buying at the very beginning. And we had Seth called the sellers agent. Now mind you this property, it had one photo, that was it, it was the very front picture of the front house, and all you saw was a huge crack along the what we thought was the foundation, I guess it is the foundation, and it looked like a big like red flag. But we're like, hey, let's just seeing calm, see what it's about. And so apparently, the sellers agent told us that there was foundation problems and that the tenants were being uncooperative. So we were like, you know, what, there is a, what is it called an eviction moratorium right now. So if they're not cooperating, we can't even kick them out. They're not paying. This is like a really bad investment. So we're like, you know what, we'll just skip it and keep moving along. Liking anything, and I remember at this point, I was like, Maybe we should pray a little bit more specifically for what we want. And so that's when we really, really got clear, and we were like, two bedrooms, minimum, one bath minimum, we want the houses deep, like separate from each other. So two standalone houses, and that detached standalone garage that we could convert in the good zoning with a nice yard. I think that's all we said. Yeah. But I mean, we
11:50
prayed about it, right. But we also changed our filters on Redfin, and Zillow, to make sure we can go in there and only see those properties. So I think that goes back to what we were saying in the beginning, you get really clear on what you want. You You pray about it, you make sure you have peace about it, and then you go after it.
12:06
Yeah. So what's funny is like a few days later, Raph was like, Man, that Spanish style house the crack, remember it? It was super cute. I always liked it. It's still for sale. Like why not? Let's just see about it again. So we had Seth call again. And this time, there was no mention of uncooperative tenants. So we were like, oh, and I think they had just dropped the price too. Right?
12:29
Yep. So the property was originally listed at $999,000. They're entertaining offers between 999k. And then they just dropped the price, reduced it to listing it as 900k as of like, a week prior, I believe.
12:45
Yeah. And I think at this point, it was like
12:51
they're going to pull it off at 60 days.
12:53
Okay, cool. So at this point, we're like, okay, if the tenants are cooperative, let's go ahead and put in an offer, so we decided to put in an offer for $850,000 FHA loan with a 60 day escrow so that we could do a 203 K renovation loan, and they accepted so we were like, sweet, now we can go look at it. I think I skipped something too. Before this, they actually sent us some reports and some more internal pictures. And we were like pleasantly surprised at how like nice the insides actually work because when you looked at the outside didn't seem very well kept. And then we also saw in those reports about the foundation and that it didn't seem like it was as bad as we thought.
13:39
Right so so let's let's rewind for a second and unpack what Erika said there's a lot of information in one sentence on which we go to that with clarity but essentially do a good job yeah. When you list a house in San Diego anywhere right now with a market as hot as it is house it usually go for above asking price when they go pretty quickly. Days on Market here in San Diego are less than like 29 At the time I believe. I'm pretty sure they're probably less than 14 but I'm not positive so I'm saying all this double it's a 29 Be safe, but she listed no picture. Earth image where you saw a big horizontal crack along the front left of the house with what's called the northwest corner of the house and then nothing else. Pictures no garage pictures. So we had drew drove the property a few times. We wouldn't know what it looked like when we finally did get the pictures. We thought it would wood floors decent walls dated but still in really good shape. So at that point in time, still not having actually been in the property. We submit the offer at 850 found out that's actually their their bare bottom number they be willing to take that accepted So 850,000 as is. And then we asked for a 60 day escrow because we were trying to do are attempting to do a two or 3k renovation loan which is the first time homebuyer, which allows us to put much less down people are used to hearing you're 20% and even 10% down on your first home, you can actually do an FHA loan. That, but the biggest pro for us was cash flow to be able to do the renovations, because as you guys find out here in a second that will actually wrap the cost of the renovation into your mortgage. Hidden
15:48
and something that he said to his how he drove by, which is a good point, because as I said before, you couldn't see these houses without having your offer accepted. But what we would do at least was go drive by it and make sure we liked the neighborhood, we'd get out like peek around, not disturb the tenants, but look around and see if we could tell you know, any more information and then at that point, decide if we wanted to submit an offer. And by the way, you can submit an offer and that you can pull draw it out at any time. So if you look at it, and you don't like it, you just cancel the offer. So it's not like you're, you know, locked in or anything because I think some people you know, get that confused. So now that we had the offer accepted, escrow starts, and this is where it gets crazy. So babe, I'm gonna let you go ahead and take this away, I'll just interject some points. Because you're a good storyteller.
16:39
Good lord, you guys, this was the escrow from hell. And I say that because I bought a few properties before my life, I have friends in the real estate world, both the agent and our lender on this, who are both good friends of ours. And maybe the worst closing have ever gone through. And if it wasn't for you guys, if we didn't love you guys so much, we probably within it could have been done a few different ways. So one, make sure you're close with your team have great relationships and relationships to drive things in life. But realize this when we open that escrow period. And get this house because this house had so much potential for what we wanted to do. So once we open escrow just out to the house to give us bids in order to then get the bid submitted for the 203 K renovation loan. So that there's some steps in that process. I don't want to detail out and don't need to detail out right now. But realize it is a lot more stuff getting done. So contractors coming in disturbing tenants in getting actual inspection done next,
17:50
yes, and something I'll point out because because there was tenants, you had to give them 24 hours notice, we had to schedule it with them, then we had to schedule with all the contractors. And the front house tenant was very, how do you say this very demanding in terms of what she wanted people to wear as far as PPE going through her property. So only a few people could go in at a time you had to wear booties, a face mask, gloves, the whole shebang. So it wasn't very easy, but I'll let you continue.
18:22
So then we had to get an inspection done, which is simple, easy. And then we got another foundation inspection done to make sure we were really dotting our eyes and crossing our T's when it came to that. And then we had to have someone go out and appraise the property, but with the ability to appraise it at a post renovation value. So once they had the bids and the contractors in hand with the renovations in mind to make sure that the renovation you want to do to the property can support be supported by the value of the property in the neighborhood attend to
18:54
Yeah, and a note on the foundation and I think this is something that's really important for people to know especially if you're in a market like San Diego that is so hot, is again, we were willing to spend some money to get more information. And really you know, get creative with this. Most people saw that crack and ran the other way. And we were like hey, let's just find out some more information and come to find out you know, most foundation issues can be like 10s of 1000s of dollars to repair but come to find out ours was maybe going to be 10 to $15,000 which you know we got such a great deal on the purchase price that was no big deal to us. So if you're having a hard time finding homes in your market, get creative and start looking at the homes that people are passing up and you know and if it was too much work and it was way too expensive. We could have you know, lost a few $100 but it would have been worth it to get the house which we ended up getting. So do a little homework, be willing to spend a little bit of money to get more information because it can work out really really well for you
20:02
No matter where you are, if you're in San Diego with his houses at Austin, that's great. When we had to actually pay for the appraiser to come out to the house, we were on a boat back in Michigan. So we had to actually get off the boat to get back to a computer to transfer money to have the appraisal done. And then it turns out, the guy who was supposed to do the appraisal didn't do it,
20:22
he just disappeared, like, no one could get ahold of them, his and the funny thing is, too, when you're working with an appraiser go through somebody else, because they're trying to avoid you bribing them, or doing something to get the appraisal that you want. So we couldn't get ahold of them. And he wasn't making his appointment. So he was really dragging this process out for us which we needed that time.
20:47
I mean, I think he drove a drug it out for at least five days. And by this point in time, the seller was getting a bit antsy, and they're trying to get us to release our contingency. So because we felt so confident, and our agent felt so confident with the appraisal value of this house, we went ahead and release contingency, before we could actually have the appraisal done. And then it turned out, we couldn't do the 203 K renovation loan, so that appraiser didn't matter anyway, so we had a refund, come back for that appraisal. And then we had to get a different appraiser out there. And we had a very hard time one getting her booked, but to getting her final report and final appraisal, actually in hand from the property.
21:27
The specific appraiser and clearly we've had a really bad luck with appraisers, nothing that our team could do. But you know, you just get assigned one, and that's who you're stuck with. So this new appraiser finally comes out to the house. And she's going through and she does see the cracks. And the sellers agent was here, because she has to be on the property while they're here doing it. And she gives this appraiser, the old Civil Engineer report that talked about repairs that could be done in the house. And depending on how you read it, it could have been a really great report and said the foundation is totally fine. Or you could read it a different way. So it's very kind of like convoluted and kind of just depended on the way you read it. And so this report threw off the appraiser and she essentially she said, hey, the house is worth, you know, over what you guys are paying for it. But I'm not gonna sign off on it because of the foundation and some other minor repairs. So we're like crap, now what? So our team's like, Well, hey, let's just get a another report on the foundation from another expert saying that it's fine. It's good enough condition where you don't need to make any repairs. And so at this point, we were asking her will we know someone that's a civil engineer and all these different types of engineers? And she said, No, I will only accept a structural engineer report. So like, right, no problem. So we had to pay to get a structural engineer out here. He came, He typed up something that said, you know, the house is sound, it's structurally sound. And then she asked, Well, did he see the cracks inside and we didn't have him come inside, we figured we just needed to address the cracks on the outside. So we had him come back out, which we had to pay for and took time. And he addressed the cracks inside and resubmitted a report to her. But then she's like, well, there's no pictures. This other report I have has pictures. So we had to have them come back out and take pictures. And then she's like, well, this report isn't really long enough. And she was really just like everything you needed us to do from the get go. So we could have just made sure we had it done. But anyways remembered an important piece of the story that we didn't talk about. So if you remember, the original report that was given to her by the sellers agent was a civil engineers report, which they know about structures, but that's not their expertise. A structural engineer is the person that is the expert in foundations. So she told us the only secondary report that she'd be willing to accept would have to be from a structural engineer. And we had him come out three different times every single time. He said the foundation was totally fine. And she wasn't willing to accept that and what's crazy is she is an appraiser she is not a structural engineer. So for her to try to say that her opinion was overriding the professional that she told us we had to get was just absolutely mind blowing. But the problem was we were really at her mercy at this point to crack and see what happens it all it was was stucco repairs. The stucco was the only thing that was actually cracked but it visually looks like it could be the foundation and just a little explainer on that. I guess what happens is our concrete slab is above ground and the house sits on top of that like the frame of the house. And so they stuck out over that on the outside of the house. So whenever there's any like little shifts, the concrete slab in the house move a little differently and so it causes stucco that's over that to crack. So we're like, let's just pay to get the stucco crack fix, it'll probably be like $1,500, whatever. So we ended up having someone come out like the next day, he fixed it for $350. And we're like, great. Let's send her back out. So she goes out. And she's like, she was in such a bad mood. I heard but she's like, great. You guys fixed that. But what about the cracks inside?
Friend, Bethany, we did it in like two hours. And we're like, hopefully, she can come back today and come look at it. We'll turns out she's like, Oh, I can't go back for another week. And we're like, oh, my gosh, we're already at like, I think we're close to day 60 At this point. And so we had to wait for that. Well, at this point, the sellers are getting frustrated, because it's taking a long time. And so they send us a perform or quit notice. And at this point, every day, we went over escrow, we had to pay, I think 100 or $150. And so I was actually getting nervous at this point. So I'm like, man, we're so close. And technically, because I signed this document, they could cancel on us at any point, and we would lose the deal. And so I wrote them this nice note, like, Hey, guys, like, this is our dream home, please don't cancel, we're so close to the finish line. Blah, blah, blah, blah. And anyways, ended up working out she finally signed off. I think we ended up closing escrow on like day 76 or something, which is a very long escrow. It's normally about 30 days. So that was a crazy ride. And I'm sure there's a lot of details and forgetting the amount of stress that we had during this process was astronomical, because every step of the way, we're like, Okay, finally, we're going to get good news. And then it was the next thing that we had to like hurdle, we had to jump.
26:51
Obviously, but the biggest thing was that we knew that we would do all that we could, but sometimes out of your hands, which is a very, very hard pill to swallow. I mean, if you think back to Erica story, this lady legit wanted someone to come in patch the cracks in the drywall inside of a 95 year old house, before she would give the appraisal up.
27:16
And she called it in inhabitable. And we're like someone literally just moved out of there.
27:20
I mean, she didn't even want a professional she said anyone can do it. I just don't want to see the cracks. I mean, you guys Erica's patch job is pretty good. But you can tell she patched it oh is nothing changed in the structure. But she wanted that because that was her high horse I think she wanted to make sure she she held on to. So just realize this. People are the best part about anything you do. But people can also be the hardest part about anything that you do. Always lead with your best foot. And make sure you make those strong connections. And be nice to people. You guys always be nice to people. Yeah,
27:58
I honestly and I don't want to say this, but I do. I do feel like the seller's agent could come off. Like she had a really big attitude. And I'm like, maybe she rubbed her the wrong way when she met her. Who knows. But I also forgot to mention that we had a very high earnest money deposit, at least I think it was $15,000. And so once we were already dealing with this second appraiser, we would if we lost the deal, we would lose that money. So we would have been out like 20k if we lost this deal. So there was like a lot more riding on it than just like our emotional attachment. There was also a lot of money that we would have lost. And I mean, if we would have lost it would have been a big learning experience. But I'm just glad that it worked out.
28:40
Like the kids say risky for the biscuit. Yeah.
28:43
So I'm sure a lot of you guys have been waiting to hear the numbers. This is the part that I'm going to pass on to Rafael because he is the numbers guy. And yeah,
28:53
well we bought the property for $850,000 We had the earnest money deposit, which is 15k. And then for the remaining fee for the rest of the downpayment and closing costs, it was $33,000 more so we went in with a three and a half percent down payment. The renovation budget we have is between 150 to $160,000. Now that sounds like a ton but that is to not only renovate both houses to patch up fix stabilized foundation to do a full yard in the front, middle yard hot tub firepit seating at our kitchen, but also to convert that two car garage into a third unit to that's where a lot of the the increase in value is coming from. If we had to do this on a really tight budget, we would probably do a lot less in the to establish houses and we will make sure we still converted the garage because you gain so much equity by adding that square footage.
29:57
Yeah, but something that we knew that we wanted to do and all Honestly, I feel like when we tell people what we're doing, they're like dang only 150,000. But we will deal I interview so many people for every single thing that we need done and so that we can make sure we're getting the best price. And I'm taking on the yard 100%. Well, almost 100% by myself, some of you guys are watching me on Instagram, you probably saw that I got that hot tub for $400. So there's a lot of ways you can do this really creatively. But we definitely wanted to renovate the front and back house that's already existing because it's going to be an Airbnb. And so you want to make it really nice because you just get more money for it has
30:35
to be mastery. Here's one of the inside tips you guys and Erica has a phenomenal course that teaches so many different ways to be profitable and Airbnb brilliant across any short term rental platform. But houses that aren't nice, or places that don't look nice, don't do well, whether it's a hodgepodge of old furniture and quilts and blankets and old throw pillows. Or if it's a house with a very dated kitchen and bathroom, people don't want to stay there. And if they don't want to stay there, you won't be booked. And if you're not booked, I don't care what you set your base price for your listing to, you're going to have to decrease it so you can people who want to book there. So if if you want to have a high earning property, which is should be the goal of everyone who has an investment property, make sure it looks nice. And make sure you do all those little details that Erica so genius Lee teaches in a course, to figure out how to make sure you can capture the most income possible.
31:35
Yeah. And what I'll say too, is it's not like you put $1 in and you get your dollar back or even $2. The return on investment, especially when you're going to be using it for Airbnb when you're doing these kinds of renovations is so so high because of the amount of cash flow that you can make every single month. And really between like a ugly, outdated Airbnb versus a newly remodeled one. It's night and day difference. It's not like it's just a little bit different. I would say when you're looking more at like long term rentals, the difference in how much you could make if your property is dated versus renovated isn't that big of a difference. But when it comes to Airbnb income, the gap is just so so big. But the last number I think is really, really exciting is the after renovation value numbers they've so take that away.
32:24
Alright guys hold on to your seats, if my calculations are correct, which they may not be. But what we did was looked at the comps sold in normal heights within a close period of time in a close geographical footprint and broke down the price per square foot for their fully renovated properties that sold it comes out to about 630 bucks a square foot, you multiply that by the amount of square feet we'll have on our three unit property, our ARV is $1.45 million. Now here's the kicker, I'm pretty sure that's higher than it actually is. So let's take a 10% variance, you're still around 1.3 actually 1.2 and a half 1.3 million, which if we come anywhere near that ARV holy cow, did we knock this one out of the park? We also
33:13
asked Seth and he obviously through the whole process knew exactly what we wanted to do the property. And so I believe he told us about 1.3 million would be around the ARV.
33:25
Thank you so 12213 Which I feel very confident saying one, two and be very conservative with that number.
33:31
Yeah, which would be excellent. Even so, but we are I know we're gonna make like very, very nice improvements. Okay, and the last thing I wanted to talk about was an Airbnb loophole for you San Diego residents, because if you've heard the buzz licenses are coming to San Diego. They say next July, we'll see I am going to do a deep dive podcast episode on the next episode all about this topic. But something that's really interesting when I was reading through all of the documentation is that they're setting up a tier system. Now most properties that are like a single family, or there's no home sharing, you fall into the category, tier three. Now what that means is anyone that's in tier three, it's going to go into a lottery system, a random lottery, so it's all luck. And after the lottery, they're only going to give out a certain amount of licenses which equal 1% of the inventory in San Diego. And what that means with the current Airbnb is that there are only 1/3 will be able to operate once this goes into effect. So a lot of people are freaking out because they might lose their ability to Airbnb. And if you're just getting started and all the licenses are already taken, then you're not going to be able to do it. But multifamily properties where the host lives on site fall into the category of tier two. And those ones are not capped. So unlimited licenses if you are in tier two. So it's great is that this property would be a tier two property, which ensures that we will get a license. And the other great thing is that supply is obviously going to go down when these licenses go into effect, but demand is going to stay the same, which is always a great thing if you are one of the people that has the supply. So stay tuned for next week's episodes, I'm gonna talk all about the licenses because I know a lot of you guys have been asking questions, and anything that wrap it up with it. How stoked Are you for this house?
35:28
I am? Well, we laugh all the time. Because I am definitely in this world of I need my life to be organized. We are in this is 1,000% worth it, you guys, I have no doubt there. But it's so much fun, and also so hectic to get to live either in or buy a renovation zone. So the blessing is that we can see all the work happening every day, we know we're getting closer and closer and closer. And we're actually moving really damn fast. Yeah, but the curse is that you see all the work happening every day. And you feel like you're so close to the finish line, but you're not quite there.
36:05
And we're living in chaos. The other great thing about buying two homes on one property is you get to live in one, renovate the other. And then what we're doing his flip flopping and moving into the front. But I also figure why don't we actually talk a little bit about the property because unless you're following me on Instagram, which you should be, you might not know what it even looks like or anything about it. So it's a really nice sized lot is it just under 7000 square feet.
36:29
So the law is 6400 square feet zoned for up to four units, the front house is a roughly 11,000 square foot two bed, one bath Spanish style, it was very closed off. And now it's going to be beautiful and open and gorgeous. And the back house is a smaller 830 square foot craftsman. That's two bed one bath as well. And that's going to be a pretty cool little Airbnb, too. And then the back garage, two car garage, we're going to make into probably a one bedroom. And then who knows, maybe in the future, we'll actually build up and have a fourth unit one day, but not yet.
37:02
Yeah, that'd be cool. And the other thing I really like about the yard here is that the front yard, we're gonna, since we're going to be living in the front house, we're gonna completely wall it off and make like a nice private front yard that can be like our private area that's not shared with the Airbnbs. And then behind our house is the second house into the side of it is like the main backyard, which we're gonna make a beautiful common area. And then behind that house is like a patio, like another third yard if you will. And it's kind of nice, because realistically, if there's three different, you know, groups of people staying in each house, you really could be in three different areas of the yard and all being joined that yard. So it's kind of cool, and especially even for like long term in the future, like everyone could have their own space, which is really nice. But yeah, if you guys are not following my Instagram, make sure to do that because I'm sharing the entire renovation process, on my stories where I always am. And it's been really, really fun and things have been moving along really, really well. And we're learning a lot. We're sharing a lot and it's just been a really fun process. Thank you so much for listening. If you liked what you heard, it goes a long way if you could take just 30 seconds and leave us a five star review. And if you have friends who also want more out of life, make sure to share this podcast with them. And don't forget to follow along on social media to see what we are currently up to. I'm probably renovating a house as we speak on my stories and sharing that with you guys. And until next time, keep striving for more