[Music]
Hello everyone and Welcome to another
episode here in the New Year
2021 Selling Greenville your favorite
real estate podcast here in Greenville
South Carolina and I am your host as
always Stan McCune I'm a realtor here in
Greenville I represent buyers I
represent sellers I'm happy to represent
you or anyone that know that might need
a realtor to represent them for a
transaction or to help them to buy a
house or to help them to value a
house or whatever the case may be I am
your guy for that all of my contact
information is in the show notes should
you need to reach me for anything and as
well as I always remind you guys please
go ahead and leave a rating leave me a
review we we need more reviews I've got
a few ratings I would love if you guys
could just take 15 seconds just to leave
me a quick little review if you haven't
already done that that helps me with
the podcast that encourages me to keep
going with this helps me to reach
more people with this and that helps all
of us as more people get educated about
real estate here in Greenville so
please go ahead and do that make sure
you're subscribed as well so you don't
miss any future episodes I'm hoping this
year that we can do some cool things
that we didn't get to do last year and
so I'm really excited about the
future of this show now today we are
going to be talking about as we look
ahead to the new year a lot of people
are going to be doing a lot of different
things this is this is a a weird year
this past year 2020 of real estate in a
lot of ways and I want to think ahead
towards all right what is going to be
happening in the year moving forwards
now that might sound like I'm going to
be projecting we're not going to be
doing that we've talked about some of
that in past episodes but today I want
to talk about something that's really
important to everyone as they determine
what they're going to do whether they're
investing whether they're looking to buy
or sell and that is your gut relying on
your gut and how your gut influences you
from a real estate standpoint and
this is really important because every
one of us relies on our gut you might
not realize it but everyone relies on
their gut to a certain extent even the
people that are the most data oriented
people that are out there at some point
they rely on their gut and what do I
mean when I say relying on your gut well
what is your gut when I think about that
I tried to break this down and I think
really your gut is your instincts
that you've developed over time right
it's like you look at at an animal like
say a dog they have instincts they have
learned that certain sounds are
associated with different things I had a
dog growing up shout out to to Buddy
my my childhood dog he had an
instinct he knew exactly what my
family's minivan sounded like and he
wasn't allowed to to be up on our
couches in our living room but we
started to notice that it seemed like he
was probably when we were leaving the
house he was probably getting up on the
couches and somehow he knew exactly when
to get down at just the right time
and we could we could tell you know he'd
leave indentions and in the couch
cushions and it'd be warm and you could
see dog fur you know there were some
telltale signs that he had been up on
the couch well I came up with the idea I
bet that he instinctively knows the
sound of our vehicle and knows to get
down when when he hears that sound and
so we tried an experiment we parked a
few blocks away and then walked to to
the condo we lived in a condo at the
time grown up we walked to the condo so
that he couldn't hear the normal process
of us either the car or the garage
whatever the case may be whatever it was
that he heard and it would throw off his
instincts of of waking up and getting
off the couch well lo and behold we go
up to the condo open the door and sure
enough there he is caught in the ax
sleeping on the couch and he woke up as
soon as we opened the door and just
looked just so confused everything was
off that he had never had that happen
before and and I'm sure it was really he
didn't even know how to process that
because just instinctively when we came
home it was always associated with a
certain sound and this time it wasn't
well in that case he had an instinct he
had a gut and he would rely on that but
he didn't account for the fact that that
we might actually figure out that
that he was misbehaving and that there
was a way that we could catch him in the
ACT that's a silly story but we all
similar to animals have instincts like
that that are running in the background
that that we're not even really thinking
about that we don't even necessarily
know are there and and are informing
honestly very major decisions that we
make and when it comes to real estate
when it comes to buying selling homes
land whatever the case may be you do
have a
gut not just related to real estate but
also related to other things that impact
that for instance money for instance
risk tolerance for instance your idea
about different areas and
construction and there's there's all
sorts of things is that you have a gut
about you and that gut that broad real
estate gut needs to be developed and
honed over time because at the end of
the day if you are looking to to buy
something or if you're looking to to
sell something to sell a house if your
gut is not calibrated correctly you're
going to ultimately make a mistake I've
tried to address this in some of my
podcasts in the past for instance we
talked about overpricing a home how big
of a mistake it is to overprice your
home well some people their gut tells
them that you should just overprice your
home you know if you think it's worth
200,000 just list it for 250 you can
always drop the price well I showed
through the data that that gut feeling
that some people have that that's wrong
that those people actually on average
based on the the data set that I was
looking at are losing $12 a square foot
which can mean tens of thousands of
dollars in in an average
transaction you don't want to do that
you want to make sure that your gut is
calibrated so how do you calibrate your
gut when it comes to real estate well I
think you need to start and and you
might want to just write this down if
you're really serious about this
particularly if you're a first-time
investor start by thinking about the
parts of the process that confuse or
overwhelm you what is it that when you
think about purchasing a home or
purchasing an investment property or
selling your home or whatever the case
may be what is it that confuses or
overwhelms you for me when I think about
selling a home for instance the part
that always overwhelms me is just all
the things that need to go into getting
it ready getting it ready to
actually get on the market to be sold to
get Top Value obviously I know very well
what it takes to get that and so I know
that it's a lot of work so that's a bit
overwhelming to me well I have a my gut
tells me this is going to be a ton of
work just automatically right and that
might not be accurate it may actually be
you know what if I just hired a guy for
a few hundred bucks he could knock out a
bunch of these things that that that
I'm just overwhelmed by it it you
never know sometimes your gut oftentimes
your gut needs to be calibrated and and
again the first things that you start
with are the things that confuse or
overwhelm you and you need to educate
yourself about those things and then
building a team of experts to use my
example that I just used I've got a
team that I've developed over the years
a team of lenders of contractors
of surveyors a whole lot of different
people and if I have something like that
where it's like you know what I feel
overwhelmed by the prospect of of
getting this home ready to list
really it's it's not hard for me to just
go to one of those people and be like
hey can you help me think through this
can you give me a quote on what it would
cost to do these different things and
guess what sometimes in that process I
might get a quote from someone but they
might share with me a piece of
information that's like hey this is how
I would do this and this is a simpler
solution than the solution that you
thought and it it may end up being that
I I was overstating the work that need
to be done in some way or I didn't know
that there was a simpler way of doing
something and then it ends up that now
my gut understands okay this isn't as
bad as I thought
one of the things that I have learned
to you know calibrate my gut on is
structural things people automatically
assume structural problems with a home
are devastating a lot of people do a lot
of people
do well I've learned over the years that
not all structural issues are equal in
fact the vast majority of things that
are deemed structural issues are really
they they might it might cost a couple
thousand dollar but a lot of people
assume a structural issue with a house
it's going to be like 25 or
$30,000 and unless you're talking
about you know a million dollar house
it's very unlikely that it's going to
cost 20 or $30,000 it's it Mo in most
cases most structural things that
I've run into cost a maximof like
$2,000 now again that varies but my my
gut when I first started flipping houses
and whatnot I just thought you know I'm
not even going to deal with structural
issues and I've found that a lot of Real
Estate Investors are that way they just
won't even won't even deal with
it but I've learned that that's actually
There's an opportunity there with with
those homes because a lot of them don't
need as much work as you would think
when you first look at it it's simply
the fact that it's it's a scary unknown
to a lot of people but my gut has been
refined and and now structural things
most structural things don't concern me
I bought a house last year was it
last year maybe two years ago actually
wow 2020 went by quickly didn't it I
bought a house a couple of years ago
that had major major structural
issues and I ended up doing a a
basically a whail where I didn't do
any repairs to it I've got it cheap
enough that I didn't have to do any
repairs to it and I was able to just
dump it off to another investor that
investor took that house and completely
redid it and made a gorgeous house got
really top dollar for it I was honestly
jealous I was like man I should have
kept this house I just didn't want to
have to deal with all of that but again
someone else that was really
knowledgeable about how this would work
and I mean we're talking about floors
sinking in like one wall was higher than
the other because of how it was how it
was sinking it had a lot of things
that needed to be done to it and those
things were done to it and ended up
being sold for top dollar I'm sure that
they made quite a bit of money on that
house and I'm really happy for them
that that worked out that way and that's
part of where I'm going with this is
that you need to like I said we all have
our gut that we rely on for different
things people that are wise that have
wisdom in this that are going to be
successful in real estate they don't
just go off of their gut every single
time and just assume that it's always
right they actually check it they
actually make sure that their gut is
accurate and you need to find a way
to compare if you have a gut feeling on
something let's say you pass up on a
deal because your gut tells you that
that's just not going to work then
you need to to go back later and be able
to compare your gut feeling to the
actual data was that gut feeling
actually accurate or was it wrong I had
I had someone earlier in
20120 they were looking to get into
small multif family invest in and I
showed him a property and I was like hey
this this property it needs a a lot of
work but you're not going to find really
anything cheaper than this in an area
like this and his gut told him it was
too expensive and it was going to be
just too much work not enough you
know not enough profit it just wasn't
going to work out well guess what we I
look back now a year later and
that property was a great deal should
have been jumped on any of my investors
I would encourage them to to jump on a
property like that and we can go back
and just look at the data and look at
multif Family Properties that sold the
past year and say yeah that property
honestly he probably could have put
you know $40,000 into it and probably
could have sold the property flipped it
and made a lot of money doing that
even if he chose to not buy and hold it
so you need to be willing to do that and
be willing to look at the data and admit
that you made a
mistake maybe you estimated that a
project would be $50,000 but end up at
$75,000 now this is the bad the worst
case scenario if you make a purchase
or whatever the case may be and your gut
was wrong and you had to learn from your
own mistake but you need to in that
case okay what was I wrong I estimated
it would be 50,000 but it was 75,000
what was the reason for that go back and
actually analyze what mistakes you made
and make sure that you don't swing to
the other you know the pendulswing to
the other end of the spectrwhere next
time you're estimating that it's going
to be
$100,000 when it's really 75,000 well
that's not helpful either you need your
gut to be as accurate as possible and
and in in a case like that let's say
that you bought a bought a house you
thought the rehab would be 50,000 it was
75,000 that tells you that your gut
on construction costs and it might be a
very specific thing but I'm just talking
in general terms your your gut on
construction Cost needs to be
calibrated
if it's sold perhaps it sold for even
more than you thought it was worth or
for less than you thought it was worth
and that tells you that you're gut on
home prices is off and that needs to be
calibrated as well when you catch
yourself making mistakes it it's
important to when you're just getting
into this or you know when you're a
first-time home buyer whatever the case
may be that you identify as quickly as
possible where those gaps are in your
knowledge and that you try to educate
yourself and there's a lot of data out
there now and I can provide a lot of
data to people to to help educate you
without you having to make the mistake
to educate yourself but you need to to
educate yourself when you make those
mistakes pretty quickly one thing I
run into from time to time with
people looking to buy to buy a house
is they'll say Stan I'm looking for a
house that is you
know this price has all these features
is in this location etc
etc do you think that
that we can find a house like that well
if they're what they're looking for is
Pie in the Sky I'm going to be hesitant
I'm going to say you know I'm not sure
that we're going to be able to find that
and so there are some ways and and
maybe they're like well no I think we
should be able to find that their gut
tells them yeah we should be able to
find
that and my gut says I don't know
about that now I'm going to try to help
to to educate them not to prove my point
not to prove me wrong but to make sure
that we're both on on the same page
that's very very important and so
what I've done for some clients is I've
sent them okay let's look at the past 6
months all the homes that sold that fit
your criteria let's see if there are any
homes that that you would actually
have been interested in the past six
months if the past 6 months there are no
homes that fit your criteria that you
would have potentially been interested
in then probably there's not going to be
any the next six months either if there
were one or two then that tells me
that when one comes on the market here
in the future we're going to have to be
very aggressive and make sure that we
get that as soon as possible that
that we don't let it slip and go to
someone else if I send them that list
and there's a bunch of homes a bunch of
properties that fit that criteria then
it's like okay we're we're probably
going to see a bunch of homes in the
next six month mons that that you
could be interested in then that that
completely changes the dynamic so data
helps us to calibrate our gut and listen
me as a realtor I'm willing to admit if
my gut is off and I Rely heavily on
data that is for me the most important
way to make sure that my gut is not off
and so a lot of what I'm saying here is
you need to develop the skill
of being able to identify where your gut
is good and where it isn't if you start
to see
consistently that your gut is accurate
that tells you what you're good at this
is part of how I got into real estate
originally was when my wife and I we
were looking at homes back in
2010ish trying to trying to get
our first
home
we were we didn't have much of a
budget at all we didn't have much for
down payment I wasn't making a lot of
money back then and so we were in a
situation where we had a very limited
bandwidth for homes that we could
potentially buy a limited number of
homes that we were looking at well it
turns out that even though we were in
the worst part of the recession from a
real estate standpoint in 2010 we kept
finding ourselves getting into bidding
wars with people like major bidding wars
like 15 or 20 offers
on homes at a time when homes were
sitting for 10 or 11 months
normally why was that the case well what
I started to realize with that was that
I was actually good at identifying these
homes that
were under value that were basically
on the market below value these were
good deals these were homes that
investors were going after and as
well a a lot of owner occupants as well
and so I realized that my gut for
identifying good deals was actually
really good and that ended up being
something that
I ultimately used to kind of push me
into real estate investing it's like
well if I'm good at this maybe I should
see if I can actually make money from
this and it turns out that I can
and so my gut was good in that but I had
to learned to really educate my my gut
personally on construction that was I
was really backwards on construction
when I was first became a homeowner when
I first became a homeowner I didn't even
know what a drywall anchor was I mean I
was so green it was honestly
laughable extremely extremely laughable
I didn't know what tools to get I I
didn't know anything it was it was
honestly embarrassing I had a lot of
catching up to do and it's taken me
years to to get better at that but you
know what I feel a lot more confident
now than I did then and when I feel like
okay I'm not really sure about this like
I had this happen recently I went into a
home that was where a remodel had
been started but stopped and the home
was now down to the studs and I mean
there was not a single thing on the
inside and they had reframed everything
so everything was reframed so it it was
it didn't have electrical it didn't
have very much Plumbing in it it was
literally just framing but I didn't like
the framing I didn't like the way they
had framed it it it was going to end up
being a very non-open floor plan if
you just hung dry wall where all that
framing was and but I had never dealt
with something like that I wanted to
know well will it be super expensive for
me to open this up when it's just down
to the studs will this be
and there were some specific questions
that I had with regard to the
loadbearing walls and whatnot and so
that was something where you know what I
hadn't really run into this before at
least not in this way so I called one of
my contractor contacts face timed with
him showed it to him and he gave me some
really good thoughts on that and so I
educated my gut now I know more for next
time next time I run into that situation
I'll have a calibrated Instinct in
terms of how to how to evaluate that
situation and the con and the potential
construction costs
there now a common mistake people make
with their gut is in situations where
they are
uneducated and nervous to make a
decision all right that for instance
their gut on risk tolerance in general
is not calibrated they're they're not
willing to take risks they want
a property that is basically free of
risks and listen that is you might as
well just not even move or not even look
into getting investment properties if
you're not willing to take on risk there
is inherent risk to buying a house
whether you're a homeowner whether
you're an investor there are tons of
risks that are involved with that and if
you're not willing to take those risks
then you need to just come deter with
that
and a lot of this comes back to
having a good team and this is where as
a realtor I can help I can bring my team
along to supplement yours and this is
one of the the biggest values that a
good realtor brings is they they have a
quote unquote Rolodex obviously we don't
use Rolodex any rolodexes anymore but
we have a Rolodex of contacts in our
phone
of people that are specialists in a
lot of different areas and so if you are
uneducated or nervous about something
a potential investment or something that
you're you're looking to buy or to sell
then what is it think through what is it
that is making you feel nervous making
or that again that you feel overwhelmed
about it's good to write these things
down and to actually process it and then
you can address each thing
individually is it oh man this looks
like it needs all new wiring well your
your gut may tell you that it needs all
new wiring but it may not actually need
all new wiring and if it does it may not
be as expensive as you think it will be
so there's a lot of different things
like that so bring an electrician and
have an electrician look at this what
does he think or maybe even just give
him a call there's a lot of different
things like this that you need to
consider and again having a team that is
able to supplement these gaps in your
knowledge that is that's extremely
crucial and so it's good for you to
assemble your own team but don't feel
bad to use mine if you're using me as
your realtor I'm happy to to share my
team with people that have an agreement
with me to use me as a realtor now if
you don't want to use me as your realtor
if you see me as simply a guy to to you
know one of many Realtors out there who
can maybe find you a deal but outside
of that you're not really interested in
working with me then no my roal Dex is
valuable that's that's a major value to
me I'm not going to share that with with
just anyone and I'm just G to I'm just
going to be honest about that we need to
have a an actual relationship here where
I'm working working with you you're
working with me and in that instance I'm
willing to be very transparent in terms
of here are the best guys that can
handle these different things and the
repeat clients that I have they they
understand that they see that
value
one thing I also run into that I
guess I I should mention here is and
and I try to be obviously I always try
to be patient with all of my clients we
all have
things that we have to to work through
in our minds and there's going to be
disagreements sometimes I understand
that not everything that I that I say to
a client that they're going to agree
with and so I always just try to be open
in my
communication and just try to be
honest and and focus on data I I tried
to to
Really if if my gut disagrees with my
clients I try to supplement that with
data rather and say no no no no no no
you're never going to sell this house
for that much don't even don't even
bother no I'm going to actually say
well here are the comps here's what
historically in the market your house
would sell for and here's what I believe
that that I can sell it for but
what will happen is sometimes people who
have very little real estate experience
will tell me that they would take a
different approach on selling or buying
real estate then I would they they they
have a gut that goes against mine to
for lack of of a better way of putting
it and that's
fine but I just want to be honest I I
live in this market I see every single
home that comes on the market I'm
constantly analyzing the market I'm
constantly looking at the data I'm
constantly working with Professionals in
this field and my gut is pretty educated
on real estate I'm not trying to be
cocky I'm just being honest if you
disagree with me I want to see why I
want to see the data I'm I'm not
going to work with people who are just
constantly disagreeing with me just on
the basis of well it just doesn't
feel right well why doesn't it feel
right it does it not feel right because
there's actual data supporting that it
doesn't feel right or does it not feel
right because you're just not really
sure you you haven't ever done this
before or you've only this is only
the second home you've ever bought and
so you don't know how it's supposed to
feel
and so I've I've had to fire clients
before over this I had you know that one
client that I mentioned before that I
presented that multifam property to and
he ended up not moving on it when
he should have I ended up having to part
ways with with that client because it
was like you know what this this is just
not going to be a good fit you're so far
your your mindset and mine are so far
in a different direction
we can't help each other I can't help
you I'm never going to be able to find a
property that fits what you're looking
for you're looking for a property that
that has no risk and that's a perfect
price point well guess what we'd all
love if unicorns existed but unicorns
don't exist you have to be willing to
look at data and Trust data and to hone
your gut based on that there is no
free lunch to use that cliche that
that I heard a lot
growing up and and the same is true
in real
estate and as you do refine your your
gut and as you become more educated in
different things with the market that
opens up more things for you and I've
already alluded to this that you know
whereas some people won't consider
consider homes that have structural
issues people that are willing to
consider them there's a huge Market out
there for them there's a huge
opportunity for them to then pounce on
those properties that have a lot less
people buying for them because those
people won't consider them people that
won't consider properties that have
water
damage from one thing or another you
know what water damage can come from a
lot of different things mold can be the
C can come from a lot of different
things if you find a property that has
mold in it well is the mold isolated is
it throughout out the house is it in the
duct work there there are so many things
to consider is it just in an isolated
part of the basement ises that part of
the basement have moisture in it right
now there are so many different things
to consider there and so as you start to
experience more and more of these things
and as you talk to more and more people
that have experience with them that
helps you to become better educated and
to to take advantage of more
opportunities as they're there and I
always with my clients I try to be very
forthcoming if I go into a property and
I'm like oh man this is going to be a
ton of work you know what this I have
experience with this specific issue and
this is going to cost you a lot of money
I'm GNA be honest with that I just got a
review from Chris thank you Chris
that for not for my podcast but for
me personally as a realtor who said
said that I will give advice that
sometimes means that I will miss out
on getting a client under contract
because my reputation and making sure
that my clients get what they want is
more important to me than simply getting
another property under contract getting
another closing that my
reputation is going to get me more
closings and more clients in the future
so I have to maintain that and so so the
way I maintain that I'm just brutally
honest and I spend more time talking
people out of purchasing something or
out of doing a real estate
transaction oftentimes and I do talking
them into it now if I do try to talk
them into it it's because I believe in
it it's because I believe that it's
truly something worth investigating that
it's truly going to be a good
deal but at the end of the day you will
have to take particularly if you're
investing you will have to take a leap
of faith an educated leap of faith you
want to educate yourself as much as
possible but a leap of faith you cannot
isolate every single variable and
account for every single variable you
will have to rely on your gut and I've
had some clients in the past where they
tried to isolate every variable and try
to get to a point where nothing is
unaccounted for everything is accounted
for that's impossible you can't do that
you have to be willing to educate
yourself to the point to a reasonable
point and then take a leap of faith now
what I always encourage everyone to and
if you've listened to this podcast a lot
you've heard this before you need to
have Protections in place don't use all
your cash reserves don't do not do that
if you if you
purchase this is investment property or
for your for yourself for your own home
do not deplete your savings make sure
that you have cash in reserves for the
worst case
scenario make sure if you're investing
that you have multiple exit strategies
and what I mean by that is maybe this
home well this home could be a good flip
it could be a good long-term rental it
could be a good short-term rental
there's a lot of different options here
and if that's the case we've got
multiple exit strategies and and part of
that that's built in is remember if
you're looking to flip a home let's say
that you buy a house to
flip but it turns out that you can't get
for that house what you really hoped you
could get you part of having a multiple
exit strategy approach is that then
you have a backup plan that you can
actually hold on to that property for
maybe one two three or more years and
now rent it out so you have to make sure
that you can actually afford that
maybe part of that is is that you're
assuming that you can refinance that
property and get cash out do a Cash out
refinance and use some of that Equity
rather than selling it well part of that
assumes that you can actually get
pre-qualified to do that refinance so
that's part of educating yourself and
making sure that your your gut is
accurate as well is is making sure
you've got all those eyes dotted and
teas crossed that you can actually
follow through with that
strategy and so at the end of the day
here is the point of this whole podcast
as I wrap it up here is that we all have
things that we know or don't know when
it comes to real estate transaction you
need to educate yourself as much as
possible on what you don't
know and part of that is actually
reflecting on what you're knowledgeable
about what you're not knowledgeable
about and and demonstrating to yourself
through data of some sort that you
actually are knowledgeable in the areas
that you think you're knowledgeable in
you may not be knowledgeable in those
areas but then you also need to have
a good team to help you to help fill in
those gaps and that's where a good
realtor comes into play whether me
whether someone else the realtor himself
or herself is a crucial asset just
because we have knowledge of so many
different parts of the transaction but
also the team that they have is a big
part of it as well and as I said
before that's something with my clients
I am more than happy to share my team
with them you know what I have clients
that they share their team with me an
we go back and forth and we each get
better as we go along and that's that's
a really cool part of this I love that I
have clients that I've worked with for
years and years I've been a realtor now
for 5 years and you know what it's it's
a rewarding experience to have someone
come back to you after after all these
years and to say you know what there's a
gazillion Realtors out there but you're
the guy that I want to work with and
and I appreciate that and I appreciate
all my clients if you or someone else
needs a realtor you just want to talk
real estate you just want to talk about
this podcast my contact information is
in the show notes and here's to a
wonderful and prosperous 2021
[Music]