Real Estate Creative Financing With Julie Gates
Real estate creative financing can give investors another path to acquiring properties when traditional financing or available cash does not fit the deal. In this episode of Lifetime Cash Flow Through Real Estate Investing, Rod Khleif sits down with Julie Gates, a Savannah, Georgia real estate investor, broker, and property management business owner, to discuss creative financing, short term rentals, property management, self-storage, and finding opportunities in changing real estate markets. Gates brings an owner’s perspective to the conversation because she invests in the same asset classes she manages for clients.
Who Is Julie Gates?
Julie Gates is a real estate investor and broker based in Savannah, Georgia. She founded Sid Was Here after becoming frustrated with the way her property manager was handling her portfolio and discovering maintenance markups that she had not fully understood. She eventually built her own property management company, which now manages single-family homes, small multifamily properties, long-term rentals, medium-term rentals, and short-term rentals. Gates also owns a self-storage facility and says she invests across multiple asset classes herself, giving her direct experience as an investor, agent, and property manager.
How Real Estate Creative Financing Can Create Opportunities
One of the most valuable parts of the conversation is Julie Gates’ experience with seller financing and other forms of real estate creative financing. Gates explains that she has purchased properties from another investor who has continued financing purchases for her by carrying the paper. Rather than receiving all of the sale proceeds immediately, the seller earns interest and receives payments over time. Gates emphasizes that trust and credibility are critical because sellers are taking a risk when they agree to finance a transaction.
Gates also shares a deal involving four duplexes listed for sale in Savannah. She wanted two of the properties but did not have enough cash to structure the purchase exactly as she wanted. After establishing a relationship with the seller, she offered to pay cash for one property while asking the seller to finance the other with 10% down. The relationship ultimately continued beyond that transaction, with the seller selling her additional properties later. Her experience illustrates an important principle of creative financing: the ability to communicate clearly, demonstrate competence, and build trust can be just as important as the numbers themselves.
Investors considering creative financing should focus on several areas:
- Build trust and credibility with the seller before asking for seller financing.
- Work with brokers and agents who understand creative financing transactions.
- Clearly explain how the seller benefits from receiving payments and interest over time.
- Have the transaction properly documented with qualified legal professionals.
Property Management Can Make or Break an Investment
Gates argues that investors often spend enormous amounts of time analyzing markets, deal structures, and acquisition strategies but fail to think seriously about property management until after closing. In her view, management is effectively part of asset management because poor operations can reduce the value of an otherwise good investment. Her own management model emphasizes transparent fees and avoiding additional markups on maintenance, after she discovered that a previous manager was repeatedly repairing the same item and charging a 30% markup.
For short-term rentals, Gates says operational speed is especially important. A broken HVAC system, for example, can cause a guest to leave and potentially result in lost revenue, so she maintains relationships with vendors who can respond quickly, including HVAC and pest-control providers. Her approach is to focus on solving problems rapidly rather than simply passing repair costs along to property owners.
What Investors Should Know About Short-Term Rentals
Short-term rentals have become much more competitive since Gates entered the industry in 2017. She explains that the market became heavily saturated after the growth that occurred around COVID, making it much more important for properties to stand out. In Savannah, Gates says investors should pay particular attention to amenities such as parking, pools or hot tubs where feasible, and distinctive decor because these improvements can potentially differentiate a property without requiring a major renovation.
Gates also stresses the importance of understanding local short-term rental regulations before purchasing a property. She describes Savannah as a market with restrictions that limit the number of short-term rentals in certain areas, while other markets have introduced regulations that can prevent investors from obtaining or maintaining short-term rental licenses. Her warning is straightforward: seeing a neighboring property operating as an Airbnb does not prove that the same strategy is legal for your property. Investors need to perform their own due diligence and work with professionals who understand the applicable regulations.
Finding Opportunity Through Gentrification and Value
Another theme in the conversation is identifying neighborhoods before major changes become obvious. Gates describes buying properties one or two streets behind nicer areas and looking for signs that investment and redevelopment are moving into the neighborhood. Rod Khleif adds that investors can watch for indicators such as new coffee shops, artists, and other early signs of neighborhood change. Both emphasize that this strategy requires patience and a willingness to invest in areas that may still have significant challenges.
Gates also discusses her preference for older properties, particularly because she believes many historic homes were constructed with durable materials and can offer opportunities that newer construction does not. Her experience demonstrates how investors can potentially create value not only through renovations, but also by identifying properties with desirable locations, distinctive characteristics, and long-term neighborhood potential.
Exploring Self-Storage as Another Real Estate Strategy
Gates also owns a 43-unit self-storage facility on approximately three acres and plans to expand it. She discusses using portable storage units as part of that expansion and describes them as equipment or temporary structures, rather than traditional permanent construction. She believes this approach could allow her to increase the facility’s capacity while reducing some of the complexity associated with conventional construction, although investors should independently verify zoning, permitting, tax, and legal requirements before pursuing a similar strategy.
The broader lesson for real estate investors is that opportunities can exist across multiple asset classes. Gates’ portfolio and experience span residential rentals, multifamily, short-term rentals, and self-storage, while her brokerage and property management businesses give her additional exposure to local market conditions.
Real Estate Investing in a Changing Market
Gates believes periods of uncertainty can create significant buying opportunities for investors who are prepared to act. She describes COVID as a period when she was initially concerned about the market but ultimately used available credit to acquire additional properties, including a city block, while other owners were fearful. The discussion reinforces a recurring theme in real estate investing: market downturns and periods of uncertainty can create opportunities for investors who have liquidity, knowledge, and the ability to execute.
For investors evaluating opportunities today, the conversation with Julie Gates highlights the importance of looking beyond the purchase price. Creative financing, professional property management, regulatory due diligence, operational efficiency, and neighborhood trends can all influence whether a real estate investment ultimately performs as expected.
If you want to hear the full conversation and detailed insights from Julie Gates, watch the podcast video or read the complete transcript below.
Real Estate Creative Financing FAQ
What Is Real Estate Creative Financing?
Real estate creative financing refers to alternative ways of structuring a real estate purchase when traditional financing may not be the best fit. One example discussed by Julie Gates is seller financing, where the property seller finances the purchase and receives payments and interest over time.
How Does Seller Financing Work in Real Estate?
With seller financing, the seller acts as the lender instead of receiving the full purchase price from a traditional mortgage lender at closing. The buyer typically makes a down payment and then makes agreed-upon payments to the seller over time. Julie Gates discusses using this strategy to acquire properties when she did not have enough cash to structure the entire purchase as a cash transaction.
Why Is Real Estate Creative Financing Useful for Investors?
Real estate creative financing can give investors additional flexibility when purchasing properties. It may allow an investor to structure a transaction around the needs of both the buyer and seller rather than relying entirely on conventional lending terms.
What Is Seller Financing in Real Estate Investing?
Seller financing is a form of real estate creative financing in which the property owner finances some or all of the purchase price. Instead of receiving all of the proceeds immediately, the seller receives payments from the buyer over an agreed period and can earn interest on the financing.
How Important Is Trust When Using Creative Financing?
Trust is extremely important when negotiating creative financing. Julie Gates explains that sellers need confidence that the buyer is capable of completing the transaction and making the agreed-upon payments. Building relationships and demonstrating credibility can make sellers more comfortable with financing a real estate purchase.
Can Creative Financing Help Investors Buy Real Estate With Less Cash?
Creative financing can potentially allow investors to acquire properties without providing the entire purchase price in cash. In Julie Gates’ experience, seller financing helped her structure acquisitions when she wanted to purchase additional properties but did not have enough cash to complete every purchase conventionally.
What Should Real Estate Investors Consider Before Using Creative Financing?
Investors should understand the terms of the financing, payment obligations, interest rate, down payment, legal documentation, and risks involved in the transaction. Investors should also work with qualified legal and financial professionals to properly structure and document a creative financing arrangement.
Is Creative Financing Only Used for Multifamily Real Estate?
No. Real estate creative financing can potentially be used across different property types. Julie Gates discusses her experience with single-family properties, small multifamily properties, short-term rentals, and other real estate investments, demonstrating how investors can apply creative approaches across multiple asset classes.
How Can Real Estate Investors Find Creative Financing Opportunities?
Investors can look for property owners who may be open to receiving payments over time instead of requiring the entire purchase price at closing. Building relationships with sellers, brokers, and other real estate professionals can help investors identify opportunities where the transaction can be structured differently from a traditional purchase.
00;00;32;13 – 00;00;52;16
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Khleif and I’m thrilled you’re here. And I’m interviewing just a hoot dynamic woman today that I’m really looking forward to the interview and names Julie Gates. And she’s the founder of Sid was here in Savannah, Georgia, and she’s a big advocate for Savannah, Georgia, which I actually happen to love as well.
00;00;52;17 – 00;01;00;02
Rod Khleif
My niece got married there, so I you know what? I’m going to let her tell you her story because there’s so much stuff on here I don’t even know where to start. Welcome to the show.
00;01;00;03 – 00;01;01;14
Julie Gates
Thank you. It’s an honor.
00;01;01;15 – 00;01;18;06
Rod Khleif
Oh. Thank you. That’s kind of you to say. So you have. Okay, I have to start with this. So you have six businesses under the moniker Sid was here brand. And I asked you about it, and I was I cracked up on your. Why? It’s named Sid was here. So if you would please tell my audience that.
00;01;18;08 – 00;01;41;27
Julie Gates
Yes. You know, I prefer to be unique. I’d much rather be weird than be boring. Love it. And I come from a short term rental background, and if you’re going to stand out in short term rentals, you have to be unique. You cannot be bland or vanilla. So yes, my son years ago started rescuing baby squirrels, and the first squirrel he rescued, her name was Sid, and because of Sid, he rescued over 60 squirrels while he was doing it.
00;01;41;27 – 00;02;00;23
Julie Gates
Yes, he’s made a difference in the world. I’m so proud. And so we would see Sid and other squirrels. When I was looking at real estate. I was already a real estate investor at that point. And so back in 2017, I got really upset with my property manager because I saw how they were actually getting paid, and a lot of it was without me realizing that they were getting those fees on the back end.
00;02;00;23 – 00;02;15;13
Julie Gates
And so I fired them and I started my own property management company just for my own portfolio. I had a fairly decent sized portfolio by then. I started back in four and then, so I named it. Sid was here just for my own entertainment and also as an ode to my son, who I love and I’m so proud of.
00;02;15;13 – 00;02;19;17
Julie Gates
And now I’m one of the larger property management companies in Savannah.
00;02;19;18 – 00;02;20;14
Rod Khleif
And it’s called Sid Was.
00;02;20;14 – 00;02;23;06
Julie Gates
Here, called Sid was here, and it was named after a squirrel.
00;02;23;08 – 00;02;24;06
Rod Khleif
Oh that’s hilarious.
00;02;24;10 – 00;02;25;27
Julie Gates
Again, be unique and memorable.
00;02;25;28 – 00;02;26;16
Rod Khleif
Oh, yeah.
00;02;26;18 – 00;02;45;27
Julie Gates
It’s funny because I was at a property management convention years ago for short term rentals. I do both long term and short term rentals, but and they were making fun of the name. We all had placards and they were like, Sid was here. And I’m like, but your company is White Realty Group and you’re a W2 employee. They’re like, I own the place and I think it’s a great name.
00;02;46;03 – 00;03;02;29
Rod Khleif
That’s so funny. You know, you just give me give me a flashback because I remember when I was a realtor back in the day, you know, I’d go to a closing and I’d sit across from the realtor that had the fancy little folder that they gave their client, and they’d be all dressed up, and I’d be in. I’d be in jeans and a t shirt, and they’d be snooty down their nose.
00;03;02;29 – 00;03;21;14
Rod Khleif
And then we’d walk outside and I’d get my Rolls-Royce, and they got in their freaking Mazda. Okay. Yeah. So that just triggered a memory for me. Yeah, exactly. Oh. That’s hilarious. So. So you’re a big advocate. Oh, let’s. I want to circle back to something you said about the property management thing. So what what did what were they doing on the back end?
00;03;21;14 – 00;03;36;15
Rod Khleif
Because I will tell you, I’m suing a property management company right now. I hate it because they shit the bed so bad on an asset we have in San Antonio. I mean, it was so bad that the attorneys taking it on a contingency. That’s how bad it was. We don’t have to pay for it. It was egregious. And so what?
00;03;36;18 – 00;03;38;28
Rod Khleif
What did you see that pissed you off?
00;03;39;00 – 00;03;46;01
Julie Gates
Well, you know, they get you in the door. And I’m being very general saying they. So forgive me, but company.
00;03;46;02 – 00;03;46;11
Rod Khleif
Right?
00;03;46;11 – 00;04;05;07
Julie Gates
Right. Everyone calls around and asks what’s the percentage? Okay. And then the person goes with the lowest percentage or the lowest amount thinking that they’re the genius. But what they don’t realize is a you get what you pay for. So the less they’re making, the less they’re going to do. Like they have to stay in business. Okay. But the thing that upset me was that I chose the lowest guy.
00;04;05;09 – 00;04;23;01
Julie Gates
I think my guy was like 100 bucks a month, and I was like, what a deal. I’m a genius. I was an idiot. What I didn’t realize, and half of us don’t read the fine print and I it was probably in there and I didn’t catch. Correct. Yeah. And so when I started seeing that they were repairing the same item over and over, I said, why aren’t we fixing this to be done?
00;04;23;01 – 00;04;28;08
Julie Gates
Why am I repairing the same toilet three times? That’s crazy. And then I realized they were marking it up by 30%.
00;04;28;13 – 00;04;45;07
Rod Khleif
And that’s what they do. They’ll hire some kid at 15 bucks an hour and bring them out at 100. And I tell people, you know, if you, you know, maintenance is a huge profit center in management companies that manage smaller properties, you know, and the stuff that I deal in apartment complexes, you’ll have an on site maintenance man, you’ll have a maintenance team.
00;04;45;10 – 00;04;57;29
Rod Khleif
But if you’re if you’re relying on the property management companies maintenance infrastructure, you need to be really careful because I’ve been screwed too, you know, because they’ll upcharge the maintenance like crazy. Okay. I was wondering about that.
00;04;58;00 – 00;05;11;27
Julie Gates
Well, I developed it that way. I’m like, when people start asking me to manage for them, I said, we’re going to be honest and I’m going to manage for you the same way I manage for myself, which is I’m upfront about the percentage. It’s 10%. And no, I don’t cut that percentage, why would I? But I also don’t upcharge on the back end.
00;05;11;28 – 00;05;21;13
Julie Gates
And so when you really sit down and do the math over the years of having that rental property, we’re a huge value. But there will people go, oh, well, he’s 7%. I’ll just go. But you primarily.
00;05;21;14 – 00;05;23;05
Rod Khleif
Do smaller property than for sure.
00;05;23;06 – 00;05;48;01
Julie Gates
Yes, sir. We do. Single family, small multifamily, long term rentals. We do medium term rentals only if I like them. I turn away a lot these days because there’s a lot of poor products out there and they aren’t renting. And I do a lot of short term rentals. Savannah is a really great vacation rental market. Everything I manage, I also own that same exact asset class like I’m in it with them, so I understand it up one side and down the other, both from an owner perspective and as an agent and as the property manager.
00;05;48;01 – 00;05;56;04
Julie Gates
So I’m kind of a unique bird, but I really enjoy having my fingers and everything, and it means I’m very familiar with the market and what’s going on in the market, and I can help them pivot.
00;05;56;05 – 00;06;18;23
Rod Khleif
Sure. You know, I’ve owned 2000 houses that I’ve rented long term in three states. And, you know, I remember, you know, utilizing property management companies like in Memphis, for example, and it’d be a broker that was doing it on the side. And it was just horrible. I mean, and, and and just. Yeah. And my ex had a house in, in Belleville, Illinois, same situation property.
00;06;18;25 – 00;06;42;07
Rod Khleif
You know, most property management companies that manage these smaller assets, they suck. It’s going to be honest. And even the larger ones, like I’m suing a large one right now manages thousands of units because, you know, it’s it all relies on on on their integrity. And and candidly, in the case of larger properties, the on site staff, it will make or break you.
00;06;42;09 – 00;06;58;24
Rod Khleif
You could have a crappy management company. You’ve got a good onsite staff. You’ll be okay. You could have a great management company with a crappy onsite staff and you’re in trouble. So but that’s on a larger property. But on the smaller ones, I mean, everybody and their brother thinks they can be a property manager. And, you know, there’s just usually not very good.
00;06;58;25 – 00;07;05;21
Rod Khleif
It’s a challenge to find good property management companies for those smaller assets. Right? At least that’s been my experience.
00;07;05;22 – 00;07;19;18
Julie Gates
You’ve got to have someone that knows what they’re doing. And I’ll give you a great example on the short term rental side. Like, again, we’re not marking it up, but on the short term rental, if you can fix an issue within two hours, we don’t refund. And that actually saves the owner way more than the cost of the repair.
00;07;19;18 – 00;07;38;09
Julie Gates
It’s a great example, Savannah. You lose your HVAC, you’re dead, the guest is moving out and you aren’t getting paid for that entire stay, right? But guess what? I have a bug guy that’ll come on a Sunday. If you see a cockroach, I have an HVAC guy that’ll come 24 hours a day. I make sure we get them paid well, like they have all my contracts.
00;07;38;11 – 00;07;53;24
Julie Gates
I tell the owner we save them on the annual contract, but we also save them on the repairs and speed. You know, of course we take that into our long term rentals, too. If we have the same guy doing HVAC and a short term rental, he’s also going to go to a long term rental. Same thing. We have to refund 30% a day in the state of Georgia.
00;07;53;24 – 00;08;02;13
Julie Gates
If you have a big system out. We don’t do refunds. We fix it. We fix it right and we fix it really quick. And if you do the math, we’re actually saving them.
00;08;02;14 – 00;08;12;19
Rod Khleif
Oh sure, sure. That’s compelling. I mean, it’s a pretty straightforward, but it’s a compelling argument for sure. So why do you love Savannah.
00;08;12;21 – 00;08;14;04
Julie Gates
I the people.
00;08;14;09 – 00;08;14;26
Rod Khleif
Okay.
00;08;14;27 – 00;08;32;07
Julie Gates
Savannah has the best people in the world. Just really good humans. It’s not too big. It’s not too small. We went we moved there for a job. But I ended up in the best real estate market in the world. Savannah. Our sister city is New Orleans. New Orleans is double the price of our real estate. Okay, exactly. Double.
00;08;32;07 – 00;08;47;10
Julie Gates
But when you look at the numbers from a short term rental perspective, from a hotels perspective, I’m on two boards of tourism in Savannah. Like I’m not even tourism. Their average daily rate is $1 more per night than ours, and the real estate cost double. So which which property you think you’re going to cash flow?
00;08;47;12 – 00;08;53;04
Rod Khleif
I’ve got I’ve got warriors coaching students that own I think a few thousand units in Savannah actually.
00;08;53;05 – 00;08;54;27
Julie Gates
They’re big. It’s a great market.
00;08;54;28 – 00;09;14;07
Rod Khleif
Yeah. I looked at assets there. I didn’t pull the trigger, but I’ve got students that have done very, very well there and and so and so as it relates to short term management. Let’s just talk about that for a second. It’s obviously a lot more involved than just, you know, traditional property management where you evict a tenant, you get a new tenant in there.
00;09;14;08 – 00;09;36;19
Rod Khleif
You’re basically turning over that short term rental. You’ve got a cleaning people going in. You have to be totally on your game. If there’s a if there’s a, you know, access issue with the locks or if there’s a, like you say, a maintenance issue. So what’s that like? I mean, what what are what are some of the challenges that you encounter in that type of a management scenario?
00;09;36;21 – 00;09;41;06
Julie Gates
If short term rentals are a whole nother animal? I’ve evicted multiple Airbnb guests.
00;09;41;07 – 00;09;41;13
Rod Khleif
Oh.
00;09;41;13 – 00;09;42;25
Julie Gates
You have I have.
00;09;42;28 – 00;09;47;00
Rod Khleif
Cameras and you see them parading around with their drinks and you’re like, you’re out of here or what?
00;09;47;01 – 00;09;53;15
Julie Gates
Well, interestingly, both the two that I have done that were short term rental guests, they stopped payment.
00;09;53;16 – 00;09;54;04
Rod Khleif
Oh, okay.
00;09;54;06 – 00;10;09;29
Julie Gates
And that means that they have to leave their now a squatter. Okay. And I you know, he who knows the law usually wins. And so I show up with a sheriff and they have to go. We’re under hotel laws. So as long as they’ve been there less than 30 days, I have the right to go in with the sheriff and demand that they leave a meeting.
00;10;10;00 – 00;10;11;05
Rod Khleif
Can you get a sheriff quickly?
00;10;11;06 – 00;10;11;23
Julie Gates
Absolutely.
00;10;11;29 – 00;10;20;13
Rod Khleif
You can. Okay. Wow. That’s interesting. Oh, so that’s. So you got to get them out. Have you, have you had them, like, destroy a place or anything like that? Does that come up?
00;10;20;14 – 00;10;37;21
Julie Gates
Not too bad. Luckily, you know, people that can afford a short term rental on average, you know, I don’t manage stuff that’s 20 bucks a night, right? You know, it’s quite a bit nicer, but it’s just all different things, you know, that they decide to. I have actually evicted medium term rental guests. So they are they’re on a three month to month.
00;10;37;22 – 00;10;39;03
Rod Khleif
Traveling nurse or something like that.
00;10;39;04 – 00;10;56;11
Julie Gates
But again, that’s a professional. And people get really scared. I get asked all the time at conferences, but what about evictions with the medium term rental? Okay. If you can afford a 3 to $5000 a month house, are you going to be okay with the sheriff showing up and causing you trouble? No. They run like especially someone with a lot to lose, which an executive does.
00;10;56;12 – 00;11;15;14
Julie Gates
They don’t. They don’t want to tangle with the law. Okay? So once they realize that they’re done, they aren’t. I can I can put them through a victim court. Eviction court. They don’t want that on the record. And it’s going to be on the record. And I’m very capable of doing that. So honestly, with the medium term rental stuff, usually the sheriff kind of handles it for me and the short term rental, but if I have to take it all the way, that’s what I’m going to do.
00;11;15;15 – 00;11;16;12
Julie Gates
Like, that’s my job.
00;11;16;12 – 00;11;22;01
Rod Khleif
That’s the job. Yeah. You know, I, I like to say property management is a thankless job.
00;11;22;03 – 00;11;22;10
Julie Gates
Oh.
00;11;22;10 – 00;11;36;03
Rod Khleif
It’s a very thing. Here’s why. Here’s why. You don’t get a call when somebody’s happy. Oh, my God, you’re the greatest property manager. Oh, my God, we love living in your place. No, you get a call when somebody’s pissed. Both a tenant and an owner, okay? They’re bitching about something, right? So there’s a lot of burnout in that.
00;11;36;05 – 00;11;52;13
Rod Khleif
I’ve owned a property management company for decades, so I’m very, very familiar with it. You know, when I had my 2000 houses, I had management company, my own management company manage them. And yeah, it’s a pretty thankless thing. You get, you can get, you know, you know, your staff can get burned out from all the negativity.
00;11;52;15 – 00;12;10;14
Julie Gates
True. But do you know what? What really kills me, though, rod, is that people spend hours studying markets, setting deal structure, studying the by process. They don’t even think about property management until they close and they go, Who’s going to manage this? You know, $6 million asset that I bought or even a $600,000 asset that they just bought.
00;12;10;15 – 00;12;25;12
Julie Gates
And I’m just like, that’s your asset manager right there. And I’m very proud to be that for multiple clients. I’m also that for myself, you know. And that’s if you’re buying an asset at one a price is good. But if you don’t manage it. Well that asset is going to go down in value.
00;12;25;14 – 00;12;42;20
Rod Khleif
You live or die by the management. And and you know, I’ll tell you that’s like in my boot camps. I’ve got one this weekend. Actually I, I it’s one of the first things I teach is start developing relationships with property management companies. I’ve got a book behind me on the floor. Here is the questions you ask when you hire a third party property management company.
00;12;42;23 – 00;12;47;06
Rod Khleif
Literally. I’ve got a free book of my resources. That’s the book.
00;12;47;08 – 00;12;49;21
Julie Gates
And can the subtitle be get you get what You Pay for?
00;12;49;22 – 00;12;50;01
Rod Khleif
Yeah.
00;12;50;02 – 00;12;52;28
It should probably should be. It is right here.
00;12;53;01 – 00;12;55;07
Rod Khleif
How to hire a third party property management company.
00;12;55;08 – 00;13;10;00
Julie Gates
It’s so funny that to me, that is the most crucial part of owning these assets is your property management. And yet people try to cut how much they get paid and hope they don’t make a profit all day. And I’m just like, why do I not deserve to get a profit when I’m the one dealing with all that mess?
00;13;10;03 – 00;13;32;23
Rod Khleif
No, I mean, you’re coming at it from that perspective, and I get it. And and I totally get it, you know? And in my world, we’re paying 3%, you know, and we’ve got onsite staff and, you know, property manager, assistant manager, leasing agent, maintenance team, porter, all of that. And and so we’re paying 3% in management fees. But but even then, you know, these big management companies can screw up big time.
00;13;32;23 – 00;13;41;13
Rod Khleif
So so you do short term rentals. You do long term rentals. Do you do any commercial management of any sort, any commercial assets?
00;13;41;13 – 00;13;59;16
Julie Gates
I do, and I’m a broker as well with. But yes, I own all asset classes in my portfolio. I don’t have any partners other than my husband. I really like running my own deals and having control, you know? So I love that I own a self storage facility. Oh you did was here manages that I it’s been a very.
00;13;59;18 – 00;14;03;16
Rod Khleif
Not much to manage. Well I guess you got to rent units. How many how many units do.
00;14;03;16 – 00;14;05;07
Julie Gates
You have? It’s 43 units. It’s not.
00;14;05;07 – 00;14;05;12
Rod Khleif
That.
00;14;05;12 – 00;14;10;05
Julie Gates
Big, but I have three acres and I’m going to expand it. And I’m really excited about that.
00;14;10;05 – 00;14;14;12
Rod Khleif
So you can actually build units. Are you going to do like like just parking storage. What are you going.
00;14;14;12 – 00;14;29;02
Julie Gates
To do. You know what the ROI on the parking is not as high as the building structure. And it actually gets it kind of jumped up and stuff like. Anyway, I’ve looked into it. I like the chevron design. I’ve kind of looked into it. I have all this. I’ll have to show you a video of my facility. It’s really pretty.
00;14;29;03 – 00;14;44;18
Julie Gates
Okay. But what I’m going to do, the thing I love about self-storage is that they have these temporary, units that they’ll bring in. You can order from China. They’re like 20 grand a piece. You can line them up, paint them. You can pick the colors of the doors, the exterior, everything. You can put your logos on it.
00;14;44;19 – 00;14;53;23
Julie Gates
When you line these suckers up, it looks like a self storage facility. And guess what? They are their equipment. So you don’t need permits. You don’t have setbacks.
00;14;53;24 – 00;15;06;18
Rod Khleif
Okay, so I just want to stop you. What she’s talking about here is they’re they’re portable. And when they’re portable, you don’t have to permit them. You don’t have to go through all that bullshit with the county of the city. Oh, that’s the love that.
00;15;06;19 – 00;15;22;25
Julie Gates
I love it. I will show you a video of my acreage. It’s going to be sexy as heck. I can’t wait. And they’re beautiful. And because it’s because you’re not building anything, okay? It’s technically a structure that you’re. It’s a temporary structure. I can write it off all year one. And I mean, who doesn’t.
00;15;22;25 – 00;15;33;29
Rod Khleif
Love the big benefit? The big the big benefit with that is you just don’t have to deal with the bullshit with the city. I mean, that’s such a pain to permit it and entitle it and all this other stuff, you’re just storing it. Storage.
00;15;33;29 – 00;15;42;26
Julie Gates
I’m going to put down a pad of gravel. I’m going to design it exactly how I want it. I’m going to make it beautiful, put in a new gate. And now I’ve got a storage facility that’s four times the size that I have right now.
00;15;42;27 – 00;15;49;04
Rod Khleif
I love it, love it, love it. And you know, what do you think your payback is going to be at 20 grand a unit? Any idea?
00;15;49;05 – 00;15;53;16
Julie Gates
I don’t know. The market’s gone a little soft right now. And this is nationwide.
00;15;53;20 – 00;15;54;28
Random for.
00;15;55;00 – 00;16;06;22
Julie Gates
Its they’re going to rent the same as my other unit which is right now a 2010 by 20 is running 170 and a ten by ten is running like 110. And then a five by ten is $60.
00;16;06;23 – 00;16;10;27
Rod Khleif
Okay. So 170 I’m just going to do the math here for a second just.
00;16;10;28 – 00;16;12;18
Julie Gates
To see more large units. So it’d probably.
00;16;12;18 – 00;16;23;03
Rod Khleif
Be the large to buy 170. So that’s 117 months divided by 12. So that’s about a ten year payback, ten year payback straight straight costs.
00;16;23;05 – 00;16;28;13
Julie Gates
It’s a tax free purchase right. So I’m going to get 30% of that purchase back year one in tax.
00;16;28;15 – 00;16;30;24
Rod Khleif
Benefits okay okay okay.
00;16;30;25 – 00;16;33;21
Julie Gates
I’m sorry but I love real estate because for the tax benefit.
00;16;33;22 – 00;16;53;16
Rod Khleif
Well I think you have to love real estate. I mean there’s a reason Trump didn’t want his tax return shown because he doesn’t pay taxes. I mean, there’s a reason the country set up the tax laws to stimulate property ownership. I mean. Hello. I haven’t paid taxes in decades. You know, it’s a beautiful thing. That’s why 90% of the world’s millionaires either made their money in real estate or invested in real estate.
00;16;53;18 – 00;17;13;08
Rod Khleif
So. So you’re also on the sales team at Remax and, you know, talk about, you know, I get a lot of newbies that are afraid to call a broker or call an agent because they’re, you know, they they don’t know what they’re doing yet. And so, you know, I tell them obviously learn the nomenclature, know what NOI is, know what the acronyms are.
00;17;13;09 – 00;17;36;23
Rod Khleif
And I’ve got a whole glossary with my boot camp that they get for that. But what advice would you give a newbie wet behind the ears hasn’t done hasn’t done anything yet in calling an agent or a broker to start developing a relationship and start getting ideally off market deals, which is the whole idea is to get, you know, get on the broker short list to get stuff before it actually gets marketed publicly.
00;17;36;24 – 00;17;59;02
Julie Gates
I get these calls all the time and I welcome them. Right. There’s no there’s nothing wrong with being a rookie. First off, you need to study which agent you want to work with. Okay? It’s not about how cute they are. I’m not the youngest in cutest, but I do have my own portfolio. So if you’re looking for rentals or something that you’re going to make money off of, find an agent that has some experience with that that owns in themselves.
00;17;59;03 – 00;18;14;27
Julie Gates
Okay, so there’s so many agents out there, they don’t even own their own house, right? It’s not about how many Instagram followers they are, what what they look like in heels. Right. It’s this right here that you need is. But when you call them, you need to sound competent. And the best way to sound competent is to be honest.
00;18;14;28 – 00;18;37;14
Julie Gates
If you’re fake, they’re going to know it. Okay, I talked to people that watch a couple Instagram videos about creative financing, and they’re trying to educate me and I’m going, I’ve been doing creative financing since pays more was in high school. Okay. Like don’t don’t try to educate me. Understand who I am before you call and say, hey, I want to work with you because you know about apartments, because you know about self-storage, because you’re an investor.
00;18;37;14 – 00;19;00;12
Julie Gates
So if you can really do your research on the front end, but also be honest and say, look, I don’t know what I’m doing, but I have $300,000 in cash. You know what I mean? They’re going to need to know how much cash you have. Not because they’re nosy. They’re not trying to get that money from you, but they want to understand if you can convince them that you’re honorable and you really are going to buy something, and you sincerely have some cash to do whatever it is that you’re wanting to do, they’re going to take you seriously.
00;19;00;18 – 00;19;05;13
Julie Gates
But if they think you’re an idiot with no money that’s trying to waste their time, they are going to ghost you and they’re going to.
00;19;05;14 – 00;19;21;04
Rod Khleif
Ask you to remember if you if you show them that you’re from YouTube University and you haven’t got a clue what you’re talking about, you know, I get that as well. It’s funny you say that about the high heels and the stuff. I see these TikTok videos where the realtor is, you know, showing a place in a bikini stuff.
00;19;21;05 – 00;19;40;14
Rod Khleif
Just hilarious. I mean, just funny. It’s just it’s just it’s just a laughing kind of a thing. But but I send my friend who’s a realtor, female realtor, but so. So let’s talk about creative financing for a minute. I love creative, so let’s talk talk about talk about what that means to you and what sorts of things you’ve seen, what sorts of things you’ve done.
00;19;40;19 – 00;19;42;22
Rod Khleif
Educate, educate my peeps about that.
00;19;42;23 – 00;19;52;20
Julie Gates
I’ve I’ve done a ton of creative financing deals for my own portfolio, and I have done a ton of creative financing deals for clients. Okay, so I’ve got the know how.
00;19;52;21 – 00;19;52;26
Rod Khleif
We’ll.
00;19;52;26 – 00;19;53;24
Julie Gates
Talk about doing this.
00;19;53;24 – 00;19;55;10
Rod Khleif
For specifics.
00;19;55;12 – 00;20;08;14
Julie Gates
Yeah, great. So this is one of my favorite things to talk about. The people that helped me launch Syd was here because I was already managing for myself. I met him at the closing table and they said, what are you going to do with the house? And I said, oh, I’m going to make it into a short term rental.
00;20;08;16 – 00;20;22;20
Julie Gates
At the time, I was into medium term rentals, but I called them long shorts and they said, oh, we’re we’re into that as well. Well, turns out when you buy from another investor, which I buy from all the time, you always say, what else do you have? What else do you have? Well, of course they had way more.
00;20;22;20 – 00;20;31;23
Julie Gates
And I’ve been slowly buying their portfolio for years, and ever since meeting them at the closing table, they have been financing it to them, to me, because they they’re sophisticated.
00;20;31;24 – 00;20;33;09
They’re just carrying the paper for you.
00;20;33;11 – 00;20;49;02
Julie Gates
They’re carrying the paper. They’re making interest off of me. They’re making payments. It’s really wonderful. And when you’re talking creative financing, someone with the know how and experience is going to get the deal done and someone that doesn’t know what they’re doing, no one’s going to believe you. They’re going to think you’re going to take their money and run, and they’re not going to sell it to you.
00;20;49;02 – 00;20;59;06
Julie Gates
So it’s incredibly important to get the trust of the seller if you want them to finance, because they’re going to see you as a risk. I know I’m an asset to this guy, right. And he gets it now. Right. But when they.
00;20;59;11 – 00;20;59;24
Initially.
00;20;59;26 – 00;21;00;18
Julie Gates
From Adam.
00;21;00;19 – 00;21;00;28
Right.
00;21;01;00 – 00;21;09;14
Rod Khleif
Initially and I’ll tell you something else. You got to work with brokers that are comfortable with it because a lot of brokers are afraid they’re not going to get a commission if there’s a right.
00;21;09;15 – 00;21;15;15
Julie Gates
And if they don’t understand it, they can’t explain it to the other broker. And you’ve got to have an agent that can get the other agent on board. Right. And I’ll.
00;21;15;15 – 00;21;16;14
Rod Khleif
Tell you on board.
00;21;16;15 – 00;21;31;10
Julie Gates
Yeah. That’s right. And I had this one deal. I did not know the guy from Adam. This is my first one I ever did like as a complete stranger. The other ones I worked the relationship for years. Sometimes up to you myself. Sorge. He finance it to me. Took me a year, but I got it. Wow. Anyway, so there was this one deal.
00;21;31;10 – 00;21;47;17
Julie Gates
I was with my agent. It was an on market property on the MLS. This guy had four duplexes in Savannah for sale, $150,000 each. And I walked all four. I hated two of them, and I liked to the others, so I wanted the other two. Well, guess who was in the duplex? Number two when I walked in? The owner.
00;21;47;19 – 00;22;01;07
Julie Gates
This is unheard of, right? When you’re looking. At living in it. No, no, no, he just happened to be there because there was an issue with the floor. And so I talked to him a little bit, and then I went back and I talked to him more. And so I made sure he knew who I was, what I wanted to do.
00;22;01;09 – 00;22;16;14
Julie Gates
You know, I made sure I made an impression. And then I went home crimped some numbers, and I was like, I don’t have the cash to do this the way I want to. I wanted to instead of one. And so I told the listing agent, I said, I really want to talk to him. And she’s like, no. And I said, look, you have a contract with him, okay?
00;22;16;15 – 00;22;29;27
Julie Gates
You’re I’m not coming for your feet. She got paid. And I said, I just need to I want to talk over the deals. Just you be on the phone, it doesn’t matter. Whatever. So I convinced her to let him talk to me. And I ended up saying, hey, I’ll pay cash for one, and I need you to finance the other one to me.
00;22;29;27 – 00;22;44;19
Julie Gates
And he finally agreed to do that if I paid 10% down on the second one, even though I was paying 100% in cash on the other. But he and I are now buddies and he has sold me more ever since then. But I gained his trust and I had met him once in person before. I saw him at the closing table and he financed it to me.
00;22;44;19 – 00;22;49;02
Julie Gates
But because I had the sophistication in the know how, and I had done it before, and I.
00;22;49;02 – 00;23;07;13
Rod Khleif
Had really because because you were congruent and you understood what to say, how to say it. That’s right. You know, I teach my students also to, you know, especially if they’re dealing with elderly sellers. Seller bonding is huge as well. Yeah. I mean, people, you know, when you’re older, the relationship is even more important than, than the than the deal.
00;23;07;13 – 00;23;22;20
Rod Khleif
And you focus on building the relationship before you talk about the deal. I’ve done deals nothing down right to sellers that just wanted the payments. I’ve done deals where I haven’t made a payment for a year because the property needs so much work. I said, I’ve got to put money into the property first. It was the truth, and I bonded with them.
00;23;22;26 – 00;23;41;27
Rod Khleif
And, and and that’s super important. And I’ll be candid, you know, if you’ve got an elderly seller and you don’t have this conversation, you’re making a big mistake. And that conversation is, you know, Mr. and Mrs. Smith, you know, I’m paying $1 million for your property. You know, you’re fully depreciated. So your Uncle Sam’s going to take, you know, 35% minimum, right?
00;23;42;00 – 00;23;55;18
Rod Khleif
So you can end up with, say, 650,000. You put that money in the bank, which because most elderly people aren’t going to put their money into another high risk investment, it’s going to go into the bank and draw whatever that interest rate is. So you put it in the bank, here’s what your payment will be and you work it out for them.
00;23;55;21 – 00;24;12;29
Rod Khleif
Now, if you work with me, I’ll give you enough of a down payment. You know I’m serious. And I’ll pay you five, six, seven, 8% interest if the numbers make sense. Who gives a shit? And? And you’re only going to pay taxes on the amount you get from me every year. And so your payment from me is 2 or 3 times what you get from the bank.
00;24;12;29 – 00;24;17;27
Rod Khleif
And that’s the truth. And if you don’t have that conversation with the elderly seller, you are screwing up. Yeah, right.
00;24;17;27 – 00;24;27;00
Julie Gates
Well, you’re sophisticated enough to explain that. And then I also tell them, guess what? It’s going to be drawn up by my attorney that I will pay for. You will have first lean position and enjoy the property.
00;24;27;00 – 00;24;28;26
Rod Khleif
On a property you know and love.
00;24;28;27 – 00;24;45;21
Julie Gates
Right? And if you don’t pay in Georgia, if I don’t pay you within 60 days, you can take the property back, right? Here’s all the stuff I plan to do to it. I had to put money into this property. Therefore, you get an even better property back, even though I’m not giving it back. Right? But yeah, if you can be sophisticated enough to convince them legally of what they’re going to get.
00;24;45;22 – 00;24;46;22
Julie Gates
Of course they’ll do it.
00;24;46;23 – 00;25;12;21
Rod Khleif
It’s a win. And that’s that’s just a that’s just a knowledge and confidence thing. Once you get into the business you need to learn it. But so property management, real estate broker, investor and you’ve got every asset class and you love Savannah. And I love Savannah to I remember jogging by that riverfront. It’s kind of elevated. You kind of go down down to go to the river.
00;25;12;27 – 00;25;18;11
Rod Khleif
And I remember walking jogging along that river got this crazy that what I forget what I had for breakfast.
00;25;18;14 – 00;25;20;07
Julie Gates
I also want to talk to you about the market, rod.
00;25;20;08 – 00;25;21;20
Rod Khleif
Okay. Talk about the market.
00;25;21;21 – 00;25;24;27
Julie Gates
It is such a good market right now. Okay. Have you been buying?
00;25;24;29 – 00;25;30;12
Rod Khleif
Oh, you mean market in general? Oh, good God, there’s so much distress right now. There’s incredible opportunities.
00;25;30;12 – 00;25;39;23
Julie Gates
I am amazed at the opportunities. And I’m also amazed at how many people are sitting on their hands right now, because they only want to jump in when everyone else is doing it.
00;25;39;25 – 00;25;50;16
Rod Khleif
It’s the Warren Buffett quote be fearful when others are greedy. There’s been a lot of greed these last couple of years, but be greedy when others are fearful. Now the fear is here. Nobody’s buying. It’s ridiculous. Now is the time to freaking buy.
00;25;50;17 – 00;26;02;01
Julie Gates
This is my fourth down cycle since I’ve been an investor. Okay, you know what? My third was? Covid 19. And when Covid hit, I went to bed for three days. I thought I was done and you might have as well, I don’t know, but I.
00;26;02;03 – 00;26;24;08
Rod Khleif
Thought we were going to have a major crash, actually. And I was so pissed. But we did. Valentine. Well, not like not like 0809I mean, I’m very intimately familiar with major crashes, but I, I was in Miami for Valentine’s Day right before it hit, and I bought a boat, I bought jet skis, I bought a $50,000 watch. And then it hit and I’m like, you dumb ass, because, you know, cash is king in a crisis.
00;26;24;08 – 00;26;30;24
Rod Khleif
And I was sure that it was going to hit. And it didn’t hit in the least in the multifamily space. It was not significant back then.
00;26;30;25 – 00;26;47;03
Julie Gates
But yeah, but single family, when the shutdown happened, I went shopping. Yeah. And I doubled my portfolio just in those 30 to 60 days. I just went nuts. I happened to have a line of credit that I had just gotten perfect. Nothing on it. I bought a city block. Oh no kidding, I mean, I bought.
00;26;47;03 – 00;26;48;24
Rod Khleif
So yes.
00;26;48;26 – 00;27;05;02
Julie Gates
Well, yeah, it was fantastic. But you know what? I knew I could also go under, right? Like everyone was scared and I was scared. And I thought of that Warren Buffett quote at that time. And I said, wait a second, everyone’s freaking out, people. There were so many landlords with tenants inside. They just basically gave it to me.
00;27;05;02 – 00;27;05;19
Julie Gates
They’re just like.
00;27;05;20 – 00;27;14;25
Rod Khleif
Take it. They were afraid of it. Interesting. Yeah. Are you by? You know, I know there’s an older there’s a, there’s older properties in Savannah. Are you buying the real old ones too?
00;27;14;26 – 00;27;15;21
Julie Gates
I love old properties.
00;27;15;21 – 00;27;18;22
Rod Khleif
Yes. I mean, I bought a hundred year old properties in Denver. A ton of it.
00;27;18;23 – 00;27;22;25
Julie Gates
Do you know those things were built to last and they’re still here 150 years later.
00;27;23;01 – 00;27;26;04
Rod Khleif
You got the windows that have ropes, that. Have tons of.
00;27;26;07 – 00;27;40;25
Julie Gates
I don’t realize new builds are so cheaply done. Those guys are shaving costs everywhere they can. You get a house that was built in the 1900s? I mean, you’ve got real two by fours in that house. You’ve got heart pine floors that swell and shrink with the moisture. You like.
00;27;40;25 – 00;27;42;28
Rod Khleif
That house? Fireplaces with the pillar.
00;27;43;06 – 00;27;43;16
Julie Gates
Dozens.
00;27;43;16 – 00;28;00;20
Rod Khleif
Of them. I had so many of those houses in Denver. There were houses. I’ll just tell you something. So let me talk about gentrification for a minute, because when I was buying in Denver, there were blocks of these old houses you could buy for 20 grand apiece. Okay. They’re now worth a million apiece. Okay. And they were 20 grand a piece.
00;28;00;20 – 00;28;16;29
Rod Khleif
I remember I bought a fourplex for 80 grand. Side by side. Two story units, 1500 square foot each. Actually found a dead body in one of them. True story. But there were four of them for 80 grand. And each one of those is now $1 million. Each one of those units. I mean, that’s gentrification. But you got to have big cajones because that’s right.
00;28;17;02 – 00;28;34;04
Rod Khleif
You know, there’s a lot of crime. But here’s what you look for. And if you’re in one of these urban markets like that, you look for the coffee shops to come in. You look for the artists to come in, you look for, you know, the bohemian people that come in. That’s the start of the gentrification. And it could be a ten year cycle, but it’s big freaking money.
00;28;34;05 – 00;28;43;07
Julie Gates
You know what I look for? I’ve made tons off of gentrification. You got to have cajones again. You have to have guts. But if I see a nice street, I go 1 to 2 streets back.
00;28;43;08 – 00;28;43;14
Rod Khleif
Yeah.
00;28;43;15 – 00;28;45;25
Julie Gates
That’s it. And it made me considered the hood.
00;28;45;27 – 00;28;48;20
Rod Khleif
Going to the hood because, you know, it’s going that way. That’s right.
00;28;48;21 – 00;29;01;29
Julie Gates
Yeah. And I have multiple properties that I paid 50,000 for and they’re now worth 400,000. There you go. And guess what. The market did it for me. Did I did I make the house nice? Yes I did, but you buy that sucker and you sit on it and you make it cash flow while you’re.
00;29;02;01 – 00;29;06;09
Rod Khleif
Seeing people, you know, like every fifth house is being remodeled. You get.
00;29;06;12 – 00;29;07;02
Julie Gates
Excited, though.
00;29;07;04 – 00;29;33;02
Rod Khleif
Yeah, well, we get. Okay. Fair enough. Yes, I agree, I agree, but that’s when it’s really starting to happen. When you start seeing the, you know, some of those old houses are spectacular. Oh yeah. So beautiful. The, the, the the fireplaces like I said with the mirrors behind them. And you’ve got the posts in the front and, and you know, the front facades with all the, you know, the intricate woodwork up on the up on the eaves.
00;29;33;04 – 00;29;42;29
Julie Gates
Thick trim. Yeah. They don’t put that kind of money in houses. Right. And the thing I love I’m sorry to say this, but I love a sloping floor. I just love it because those old houses, they’re going to shift against.
00;29;43;01 – 00;29;44;07
Rod Khleif
Natural love. A sloping.
00;29;44;08 – 00;29;47;01
Julie Gates
I do because I use that to get a hell of a discount.
00;29;47;02 – 00;29;47;15
Rod Khleif
Okay. Well.
00;29;47;15 – 00;29;47;21
Julie Gates
That’s.
00;29;47;21 – 00;29;48;18
Rod Khleif
A good that’s a good call.
00;29;48;19 – 00;30;00;20
Julie Gates
I’ll go to the selling agent and I’ll say, oh, my client’s terrified. Oh, it’s got foundation. And she was, oh my gosh, we’re so scared, right? I have never had a tenant or a short term rental guest complain about a slope in the dining room.
00;30;00;20 – 00;30;20;06
Rod Khleif
So let’s go back to short term rentals for a minute. Yeah. I mean I’ve again I’ve got I’ve had a ton of those kinds of houses and I remember, you know, like the foundations are brick. They’re not concrete. They’re like bricks. And sometimes they do shift. I mean, if the water, if you’re not paying attention to the the gutters and downspouts and you get water in there, then you’re, you could be screwed.
00;30;20;06 – 00;30;32;27
Rod Khleif
And I’ve done, you know, tuck pointed bricks and rebuilt brick walls on some of these old houses. But but in the short term rentals, you know, they need to be unique. Yes, yes. Okay. So what do you do to make them unique?
00;30;33;01 – 00;30;52;15
Julie Gates
That’s a great question. So since Covid okay, keep in mind I got into short term rentals in 2017. When Covid hit in 2020, they went nuts. And the great thing about that is a lot of people used sort terminals that didn’t used to. But the bad thing is short term rentals got oversaturated. So that’s one of the huge opportunities right now in this market, because short term rentals are very hard work.
00;30;52;15 – 00;31;11;03
Julie Gates
And if you’re not paying for professional management, the owner gets burned out really quickly. So nowadays you really have to stand out. Back when I started in short term rentals, you could buy a cheap house, paint it, use goodwill furniture and it would make you 20 to $50,000 a year. Well, nowadays you’re paying top dollar and you’ve got to have it really nice.
00;31;11;03 – 00;31;18;04
Julie Gates
So that’s with my clients in Savannah. I’m always looking. I know exactly what amenities are the most desirable in Savannah. I know my market.
00;31;18;08 – 00;31;21;05
Rod Khleif
No, no, no, don’t go past that. What are the amenities that are desirable?
00;31;21;06 – 00;31;37;02
Julie Gates
Parking. The historic district which you’re familiar with was built before there were cars. Okay, okay. So there’s no parking. Most places don’t have parking. So if you have a unit with parking, that’s a win. It’s very hard to find. The other thing is amenities like pools and hot tubs. Most of them don’t have yards, like in the historic district.
00;31;37;02 – 00;31;57;29
Julie Gates
They build all the way to the property line, but so you may or may not be able to work with one of those. The third thing that you have is decor. Now, decorating a home is so much cheaper than rehabbing a home. So what I’m always looking for with my clients is a home in the right location, because I know where those are, where we can add amenities or make them better, or we can just solve it with the core.
00;31;58;00 – 00;32;18;05
Julie Gates
I have units that I’ve helped owners by when I we took the guy closed it in December. These are technically, you know, typically high net worth people looking for tax savings. They want a short term rental. They can write it off against active income. The House made $23,000 in 2025. And this year we’re managing it for him. He’s going to gross over 120.
00;32;18;08 – 00;32;37;00
Julie Gates
That’s just with the core. We did not rehab it. We painted it. We decorated it with the guests in mind. You have to be unique. It has to be gorgeous and has to be well managed. We’re super host at scale. Unheard of for property managers, you know. So we’re doing all the right things. And the guess he’s still getting bookings for this year and he’s already booking into April of 2027.
00;32;37;00 – 00;32;40;13
Julie Gates
That’s how well the house has been received. So you just got.
00;32;40;13 – 00;32;53;08
Rod Khleif
To be better. I was telling you, I was telling you this before we started, that my brother has some up in the Blue Ridge Mountains of Georgia. He had to sell because it wasn’t going well because I think it got saturated. So you’re you’re saying it’s come back or it’s coming back?
00;32;53;09 – 00;33;16;09
Julie Gates
Okay. Great question. I appreciate you saying that. So one thing was short term rentals before Covid. You know, it was kind of the Wild West for short term rentals. Everything was okay until it wasn’t. And at the time everything was okay. But long before Covid, Savannah, Georgia had restrictions and a cap, so you can only have 20% of the residential homes in the historic district can only 20% can be short term rentals.
00;33;16;09 – 00;33;17;15
Julie Gates
Okay. And that’s 30.
00;33;17;15 – 00;33;19;07
Rod Khleif
Years older that.
00;33;19;09 – 00;33;23;01
Julie Gates
They know there’s not that many properties. It’s two miles. It’s like two miles long.
00;33;23;01 – 00;33;25;20
Rod Khleif
And I was going to say, good Lord, that’s an interesting.
00;33;25;22 – 00;33;26;29
Julie Gates
Everywhere else it’s illegal.
00;33;27;01 – 00;33;27;16
Rod Khleif
Oh wow.
00;33;27;17 – 00;33;47;21
Julie Gates
So that cuts out your competition okay. But now the ancillary markets. That’s not Savannah they had been putting in. But now they’re all getting regulations. So investors have to get out. Can’t keep going because they can’t get a license. So regulations are changing. This is not Savannah. This is nationwide. But Savannah Georgia was on air. It’s one of our big sites that give us revenue.
00;33;47;24 – 00;33;50;28
Julie Gates
Was like the number one a grade market in the US because.
00;33;51;00 – 00;33;52;15
Rod Khleif
So there’s a limited thing.
00;33;52;17 – 00;33;55;25
Julie Gates
You can’t get over saturated. But other towns are putting in regulations.
00;33;56;00 – 00;34;09;05
Rod Khleif
Here in Sarasota. I mean, here to lobby is so strong. They don’t want Airbnb. They don’t want competition. So they, they they, they lobby to get the restrictions. And so it’s no, no less than 30 day rentals. You know which screws short term rentals.
00;34;09;06 – 00;34;24;25
Julie Gates
Long term rentals. You don’t have to worry about regulations. They want you to do long term rentals. But short term rentals you want to be careful. And again, that’s working with an agent that understands because as a property manager, I’ve had so many people buy a short term rental, furnish it and then call me to manage it, and I’m going, but you can’t do a short term rental there.
00;34;24;25 – 00;34;41;21
Julie Gates
It’s illegal. And they tell me this is what they tell me. They go, it’s legal. The neighbor is doing it. I’m like, that’s not due diligence. You don’t. Just because the neighbors has an Airbnb does not mean it’s legal for you. And guess what? The neighbor is not doing anymore either, because they’re going to catch them. So you have to work with an agent that understands the laws.
00;34;41;21 – 00;34;48;06
Julie Gates
I don’t care what market you’re in. You don’t just willy nilly by an asset, right? You don’t buy an apartment complex without a significant.
00;34;48;06 – 00;35;05;03
Rod Khleif
Amount of diligence. You got to do your due diligence on anything that you’re going to buy. Yes and and yes. And I’ll tell you, you know, I met somebody that was big in the short term market, and he wouldn’t buy one unless he had a second, unless he could break even with long term. If he couldn’t break even long term, then he wouldn’t do it.
00;35;05;03 – 00;35;09;04
Rod Khleif
Because what happens to the regs? Change. Just like you said. You’re dead. You’re going to lose the asset.
00;35;09;05 – 00;35;09;10
Julie Gates
And.
00;35;09;10 – 00;35;25;19
Rod Khleif
I agree. Yeah. So very very important. Well listen this has been a hoot I really enjoyed this conversation. You’re a lot of fun. I appreciate you bringing some wisdom. And if somebody wants to get Ahold of you. How do they. Is it? Sid was here.
00;35;25;21 – 00;35;40;11
Julie Gates
Sid was here. That’s my property management, okay? My real estate team. I run an all investor real estate team right now will soon be a brokerage. It’s called team one two, but I called. What? Team 912912 is our area code. Got it. Yeah. Team 912. If they want to buy in Savannah. And then Sid was here.
00;35;40;15 – 00;35;55;14
Rod Khleif
Team 912. If they want to buy some banner. And if they want if they need management, it’s. Sid was here. Yes. Love it, love it, love it. Well, I’ve really enjoyed this. Thank you. It’s been a lot of fun. You’re a hoot. So. Yeah. But yeah, we’re good. So thank you.
00;35;55;16 – 00;35;56;02
Julie Gates
Thank you.
