บทถอดความฉบับเต็มของ Jonathan Gonzalez - eXP Realty - Chattanooga Real Estate Market is Booming.

then we do have our locals as well, like you, you know, you're doing your own fixer uppers. In fact, I would love to talk a little bit more about that later on. Um, but yeah, it's been mainly fixer uppers and then first time home buyers is what I'm seeing a lot. Or relocation. Like job opportunities that have to come here or a family, um, working with the client right now that they're only moving here because their mom is being, you know, a little bit older. And so it's time for them to be closer to family. So it's, it's really those type of, um, changes in their life that  we've seen a lot of people coming from out of state and buying sight unseen.  Yeah. You  mentioned one. Tell me about that  one. Yeah. So the one that we just finished, um, we're currently under contract, fingers crossed that everything still goes through. Fingers crossed. Come on guys.  Cross your fingers guys.  Uh, so we're under contract on that one. Uh, but the buyer's from California. Yeah. And they had a local agent that came through and looked at everything and then obviously hired a home inspector. And they've never stepped foot on the property. So they want to, I guess, sell what they have in California and just move here in the houses. Ready for them when they show up. That's the thing. They have  prices over in California. I was just there a little over a month ago. Like at 1, 400 square feet. And Northern California is 1. 6 million. Yeah, that's insane. Wild. So when they see something here, it's like, Oh, there's nothing like, you know, that's petty cash for them when they sell their  property. Yeah, you see people out there, they live in a Uh, a little bungalow or something and they sell it for 800, 000. They have 500, 000 in equity and then they come here and pay cash for a three times the house for 400, 000 and then they still have money left over to buy their Tesla. Yeah, yeah, exactly.   Now,  now help me understand  if you were, if you were to give advice to those people, people who are coming from California, from New York, from these places, from these metropolitan centers coming here, trying to find those houses, what would you say to them as a realtor?  Yeah, I just want to see what their, their needs are first, because a lot of times when they're coming there, they're looking for that change of environment when it comes to space. They want more land, um, they want, you know, if they're with their family members and they want a good school zone that educate them on, you know, Udawah, Lookout Mountain, I know a lot of those people love that Signal Mountain area because of the mountain, the views, and the price point for those properties aren't cheap either, but it's, it's a good area for them, um, so really just educate, educating them on different areas, what's, You know, sometimes they want more  middle to upper range of their price point, I would say. Um, people that can't afford. Um, like,  downtown Chattanooga, they always be like, no, I don't want to go there. Yeah, so I just educate them on what different, the different cities. Um, I, I really highly advise them lately as like Harrison is starting to become, there's still a lot of land over there that you can get for a good price. Um, Ottawa, I think Ottawa will continue to grow.  And the prices are ridiculous. I mean, I was here, I went to the high school. You've been here, right? Yeah, I actually went to Udawah as well. It's wild how much Udawah has changed since when, I remember when it used to be just Walmart. Or not even Walmart, I was there before Walmart. And so it's, and then the McKees, you know, the Amazons or the Volkswagen, there's just It's just going to continue to grow over there. It's going to be hard to find some good deals for investments in  that area. There's a lot of international companies coming here. Yeah. And, uh, there's a lot of people traveling here. I mean, the airport's about to be international. It's, uh, it's growing like crazy. Yeah.  Didn't they say they're going to. Increase the capacity in that airport. So that's  going to be they have to Volkswagen kind of I feel like started a lot of that stuff, especially being An international company. Yeah, and so they've got people coming in all the time. Uh, that's where you know airbnbs and um Long term, um, rentals, commercial rentals, uh, fully furnished.  Mine went blank. What do they call those? Airbnb, short term vacation homes. Short term, yeah. And so, I know there's a lot of neighborhoods, um, in Udawah around that area close to Volkswagen. Where they send in their contractors for like six months and they're renting out fully furnished houses And they're like three or four grand a month. Yeah, it's fully furnished And it's it's cheaper than a hotel and it's way more comfortable. And so I don't know if that had anything to do with the moratorium yeah,  yeah,  you know a little bit about that. I went through that I ended up having to turn an Airbnb that I sunk a bunch of money into because it was in the city limits Into a monthly rental. So what happened? Did they reach out to you? The email sent you  a mailer? We just we didn't want to deal with the problems because they were they were threatening We were in the city limits of Eastridge and they were threatening to to fine Daily and all this it was going to be like 25 to 50 a day Yeah, something like that. And I had taken this house and we put in a four level tree house  for the kids, you know, as, as like a, this is where the kids want to come and stay. It's right there on the interstate. It's close to Lake Winnie. It's close to downtown, the aquarium, all this stuff, uh, the soccer field. And so I built this tree, this treehouse house as an Airbnb, you know, it's going to go for 2, 250 a night. Um, and then it got kind of scary. We're like, you know, we don't want to deal with this. We don't want to have to jump through the loopholes and be kind of sketchy. So we just ended up renting it out monthly. So

obviously you're not going to get as much, but it's a little less headache. But I think it's changing now.  Um, the thing is crazy about the Airbnbs here, bro. It was like, when I first started, it was 2021. They were the number three most profitable city in the U S which is wild. And then when that came, that article came out, cause it came through air DNA, which is a huge platform to know what, where to price your properties, um, your Airbnbs and.  That's when they started to do that moratorium because people California saw that and bro They were just buying things left and right over here because they're like, oh shoot you make him because the price point was a lot Cheaper back then but also you can price  it your price for night. Yeah, because there's so many people passing I mean Chattanooga is a central hub between the north and the south really and so you've got people traveling south South for the winter. Um, and this is, uh, it was explained to me by some Airbnb investors. As you have a lot of people, you know, when they start heading towards Florida for the wintertime as they're traveling, it's about a halfway point for a lot of these people. And so they're coming and staying the night. And a lot of these Airbnbs have a two night minimum. And so they just decided to stay for a few days, and it's really profitable, and we can buy it super cheap. And so that, that's what people were doing. I don't, I don't know who they pissed off. I guess the hotel owners. Yeah,  the hotels, and then neighbors. It was the big deal. I'm like, who? Neighbors actually take their time to like complain about that. I don't think so. I think it's the hotels. I mean, that's where the money's at. If you notice, a ton of hotels are being built right now in Chattanooga by the Hamilton Place Mall in downtown as well. Yeah,  they're popping up everywhere. But But from an investor standpoint, from what I've experienced, um,  your property is going to be a much better condition as an Airbnb than as a long term rental.  I've seen the worst of the worst. I mean, I grew up, everybody in my family has rental houses. I kind of grew up around this stuff and we have seen people just completely demolish a house in 12, 24, 36 months. And you know, you're not going in during that time, typically, unless there's something wrong. Even if there is something wrong, they're not going to tell you. Yeah. The toilet can be leaking, the shower's leaking into the wall, uh, the crawl space is molded and all this stuff, so you gotta make sure, one, that you're, you're doing annual inspections, minimum. But, Toilet water's coming out of the kitchen sink. Exactly, man. And like, and they're not gonna tell you. They don't care, cause it's not their house. With an Airbnb, you got people staying there for a few days, and then you have a cleaning crew coming in. And these people are going to take care of your property. They're not going to be putting holes in the walls because you have their credit card information and all their information. They don't want to get banned off Airbnb. They don't want to get sued. They don't want to get charged. Uh, so from that perspective, from an investment standpoint, not only are you making more money every month, it's also better for your long term investment because you're not having to come in and spend thousands of dollars every time some money moves out. So it makes sense. It does, yeah. Um, I just don't know why  competitors got pissy about it. I don't either.  I  guess because, uh Well, these hotels are, they're, they're chains. That's not local money. These Airbnbs are local. Local,  and it should be A good thing to support those type of small businesses.  Yeah, and I don't know about y'all, but I travel a lot, and I don't like to fly. So, if I travel, I'm typically traveling by road. I mean, I'll ride cross country and back on a motorcycle.  I think it's a supply and demand thing, too. So, if you look at a place like San Francisco, one of the big problems that they ran into when Airbnb first came out is that people started buying up properties at a lower cost and then putting it on Airbnb. Right. What's the biggest problem in San Francisco right now?  Places to live homelessness. Yeah, so, you know, you make it so unaffordable as a result of taking so many of these houses out of the inventory Yeah, but you end up creating these problems that were kind of an unnecessary and an unintended consequence  Of doing that. But I mean, what what is the  solution? There's not really I mean It's the market will just have to adjust itself like it does for anything else And is that when I travel I don't want to stay in a hotel Especially, I mean, if you're traveling with a group of people, you don't want to stay in separate hotel rooms. You don't want to have to go out and eat every single meal.  You don't want to have to deal with other people. So like, if the four of us are going on a business trip together, we're going to go find an Airbnb. We're going to stay in a house, share a kitchen. We're going to have a living room to chill at night. We're going to cook our meals together. It's cheaper because you can cook your own meals. It's more comfortable. It's quieter. And it's typically cheaper. The four of us share an Airbnb that's 300 bucks for the night, or we can go get a hotel that's 150 a piece. I'm not sharing a bed with any of y'all, no offense. I mean, we could. I want my own room.  This has to be a  king size. A king size   bed. Sleeping on the floor, Diego. Negative, I'm not.   I'll sleep under the  bed. I won't dig into conspiracy  theories.  That's a whole nother podcast. We got that one scheduled later. I got that scheduled now  for sure. Um, but for someone who's just starting out.  In investing, you,  you like to invest more into rental properties more than just fix it and then you sell it.  For me, it really just depends on the property itself. Property, location. So, yeah, you know,

it's everything within 15 miles of Chattanooga is basically the same. Yeah. Um, other than you've got some people that are like, I don't want to live in Georgia because of the income tax. That's what we hear. That's all I hear. That's the only thing I hear about it's cheaper. So it's, it balances out. It's really not the same. Um, the way that I got started into it was as a contractor. I was trying to find a way to create more work  as I was bringing on more employees and more crews and stuff. It was a way for me to bring on extra work quickly that we could control. And then it also gave us.  Places to go and work in between jobs. So if we had a week between jobs that were on the books, we could go work on the house that we were flipping. If it was raining and we got rained out on an exterior job, we could go work on the inside. So at first,  it wasn't really about making a big profit, because I knew that we were going to be paying a lot of interest, um, because we were going to stretch these out. You know, like a typical six to eight week flip, we were stretching out over six to eight months. But it kept everybody busy. It kept everybody happy. And then what I ended up realizing was, this is way more fun than working for other people. Yeah. Especially when we go in and do a full flip. So, you've seen some of our stuff. We go in, rip it all the way down to the studs. Yeah. Fix everything. Uh, so when we're done with these houses, they're completely brand new. But the fun part is, and it's the part that I enjoy the most, uh, being an artist. Is the design aspect of it. So I am on my budget, my design, my color schemes, all that stuff. I don't have anybody else that has to approve of that. And the freedom that that gives you  when you're, you're typically, if I can make the same amount of money. When we sell the house at the end is I would have working for 10 other clients during that time I'm gonna flip my own property. I'm not gonna sue myself  Anybody that's a contractor. I don't care how good you are what you've been doing We've all been sued or attempted to be sued. It's a pain in the butt and we've all had people stiff us not want to pay us Uh, you know, that's all another podcast on its own, how to deal with that kind of stuff, uh, professionally and to make sure you're protecting yourself. But what I found was, there's a lot less stress. We could go in and work at night if we wanted to, if my guys needed extra hours, they could go work at night. You know, most people don't want you in their house after five.  They don't want you there on the weekends. And so, if I had a guy that was like, Hey, I was sick on Monday, I was sick, whatever. Hey, I need some extra money this week. Go work. You know where the keys are. Go, go get it done. Clock in, clock out. It's fine. And some of my guys love it. They can crank the radio up as loud as they want to. They can tell their dirty construction jokes. Um, you know, it's uh, Are you able to like,  I'm not used to that. I like that.  So, so let's talk about like, since, since we're on kind of both ends of that as like two people that, that work together on these, from a, the realtor perspective, when, when you're looking for a house for me to purchase as a flip, what are you looking for on your end before you send me something? I mean, you know, kind of my criteria.   your criteria off market deals. Um, I, and I totally get it because you're kind of, you're taking away that commission that they're already pricing it for to make sure they're getting their money. Um, what I look for honestly, is that ARV, like what the after market is when you sell it afterwards. So for people that  don't know, what is ARV?  It is a after  Rental value for the property. And so what happens is that you buy for a certain price. So say you get it for 60, 000, the repairs are going to be 30, 000. So we'll say it's 90, 000 in total. Um, but you can see the Compson area and it shows that you can sell that for 150, 000. You're making right there, 60K right there. Um, and so, that's really what it is. It's just finding you the best deals to really pocket and save you much time, too. Because a lot of these flips are a lot of work, and sometimes it doesn't even make sense. Like, we were just talking about the foundation issues.  You know, those are the type of properties you don't really want to get into. Um, but, if you have some good people, like Justin Bethune here, he's got people that can take care of that. Um,  Shout out to   Crawlogic. That's right, you have Crawlogic, too. Yeah, um. I'm doing everything, man. Yeah, no, for sure. It's mixtapes coming out soon.  I don't know about all that. Right, and the only thing that I'm Right now educating myself a little bit more are the best hard money lenders right now Because I'm gonna start investing as well And I feel like you've that's kind of like what you've done is use hard money lenders just cuz like  The interest a little bit higher, you know how it  is. Yeah, I use fix and flip loans. So so the bank that we use  Basically, what we had to do was do three loans with them initially to where they would loan us the purchase price, but we had to pay for the rehab. So after we proved that we could be profitable after those three, now they give us the rehab budget on top of that. So if I'm purchasing a property for 100, 000 And I estimate that I need 50, 000, uh, to flip it. They'll loan me the 150, 000 with 20 percent down. And they give me payments, uh, weekly, or whenever I request them. Yeah. Based on that. So instead of having to have 20, 000 down, and then I have to supply the 50, 000 to fix the house, now I just have to have 30, 000 down up front, and then I can get everything done, and then we can sell it on the back end. That's huge. And that's the minimum? That helps a lot. Is it minimum 20, 000?   That's what we're working with right  now.  Nice, okay. I met this new one, Kiabi. Um, my buddy just finished using

them on his past rental, or his past flip, and it's 5 percent down right now.  So that, that's typically what we're looking at for new construction? For new construction. Um, so if, if  somebody's  doing that for fix and flip, I definitely would like to sit down with them. Yeah. Um, so new construction, it's um, which we're getting into this year, is 5%, uh, from, from what we're being told. Um, or, Sometimes you can get zero down if you own the property outright and you leverage the property. Gotcha. Um, so that's what we're going to be doing on the two that I've got coming up this year. Yeah.  What are some advice you would give to the new, someone who's just starting to be an investor? I know some of us are investors here. I think that would be a good, um   Figure out Mainly, what do you, do you want to fix and sell or are you trying to invest in, in a rental property? Because that's definitely going to determine what you're shopping for. If I'm, if I'm looking at a rental property or if I'm working with an investor and that I'm going to be doing the work for them. Um, also kind of come in as like a liaison, uh, they're like, Hey, we know, you know, the numbers on this stuff, like, tell me if this makes sense or not. Yeah. If it's a rental property and you're planning on keeping it for at least five years, you can invest more on the front end. Yeah. Uh, if, if it's a, a sell at the end, then obviously you want to, you want to invest a little bit less. Um, so that's the number one thing, figure out what you want to do. And then on top of that, figure out what your percentage that you want to make it. So. It the way that I look at it is if I'm investing a hundred  and it takes 50  To fix it up and we need to walk away as a business with 50, 000 in gross profit Okay So if if what I have to put into the renovation is what we can make in profit then it makes sense when it starts getting below that point Yeah, it makes more sense for me to work on other people's properties and just go work for clients. So that that 50 gross profit and up just based on the renovation cost not factoring in the initial investment of the property Okay, so that that's kind of numbers wise just a real rough ballpark. That's kind of what I look at if I can double my money Then then it's worth it. Obviously you want to factor in that that 20 percent because you never know what's gonna happen, right?  So we're we're running up on our time limit here. Give us one good piece of advice for a Contractor who's kind of looking to add this as like a side business What is the best thing that they can do to kind of get started from a realtors perspective? So  contractor as in starting to flip  Like me, like myself. Yes. Um,  honestly, come talk to me and we make the best out of it. There you go. That's nice of you to come  talk to me. Nice plug.   Thank you. Thank you. No, I mean, honestly,  for me,  it's just, what do you say, you say a little bit differently, but for me, I think like, location does play a huge role, cause like, we can get some really good deals right now in that downtown Chattanooga, Eastridge, Red Bank, or even North Georgia. North Georgia's huge right now. Yeah, that's,  that's where all of mine have been. And  um, oh really? All in, all in Catoosa County. Yeah. And honestly, not a lot of investors are even looking in that area right now. They're just focused on Chattanooga. So that's where I live. So there's a huge opportunity there. And so, I mean, what you're doing is right, you know, the right way,  keep investing in North Georgia, because what's going to happen is that Chattanooga is going to get so saturated that it's going to slowly  hit North Georgia. And then the best advice I can give to an investor who is not a contractor is align yourself with a good, trustworthy contractor that has experience. In flipping houses before you start looking. And licensed. And licensed. And insured. And insured. Exactly. Make sure they can pull those permits. Um, alright Jonathan. Hey man. It was fun bro. Plug yourself one more time. Where can people  find you? Oh yeah. You can find me on Facebook, Jonathan Gonzalez, uh, Jonathan Gonzalez Realtor on Instagram and then my podcast as well is, uh, the JG Podcast Show. Um, I also have a YouTube channel where I educate others about Chattanooga, Tennessee living. And so that's the channel actually, it's called Chattanooga, Tennessee Living. Alright,   Jonathan. Thanks for coming on, man. We really appreciate it. Yeah, man. I appreciate you guys. This is awesome.  I'm definitely looking forward to doing this  again.   There you  Good stuff, bro.   That was nice, man.  It sounded clean. That flowed well, bro. It did, right? It flowed really well.  Um. Was it recording?  It better be recording.