Pool Financing Myths

In this episode of the Talking Pools podcast, Natalie Hood and Joe Garcia discuss the often misunderstood topic of pool financing. They debunk common myths surrounding financing, emphasizing its accessibility for all income levels and its strategic benefits for homeowners. The conversation highlights the importance of understanding the impact of inflation on pool costs, the value of pools in real estate, and the advantages of financing over cash purchases. Joe shares insights on how financing can empower consumers to create their dream backyards without the stress of financial burden.

takeaways

• Financing is a strategic tool for homeowners.
• Many myths exist about pool financing.
• Pools are accessible to all income levels.
• Inflation affects the cost of pool projects.
• Financing can lead to quicker pool installation.
• Pools can increase the resale value of homes.
• Cash isn't always the best option for financing.
• Financing allows for creative design options.
• Understanding monthly payments is crucial for budgeting.
• Educating consumers on financing options is essential.

Sound Bites

• "You can apply and get the loan."
• "Financing creates more buying power."
• "It's time to rethink pool financing."

Chapters

00:00
Understanding Pool Financing

07:55
The Importance of Supporting Veterans

19:35
Debunking Myths About Pool Ownership

28:35
Financing vs. Cash: What Builders Prefer

Transcript

Speaker 2 (00:00)
But again, that's what a 30 year note, it allows them to be creative. I mean, that's the perfect word that you just stated. It allows them to be creative and buy it now versus maybe two, three pulls later. Again, the flexibility of having a 30 year term allows a consumer to do that.

Speaker 1 (01:03)
Welcome back to the Talking Pools podcast, your go-to source for everything wet, wild, and wonderfully misunderstood in the pool world. I'm Natalie Hood, Director of Education Network Development for the Grit Game. And today we're tackling a topic that's often misunderstood, but absolutely essential, financing. Financing can feel intimidating. And there are plenty of myths out there from the idea that it's just another bank loan to the beliefs that pools are

really only for the wealthy or that financing means financial trouble. The truth is financing can be a smart strategic tool that helps homeowners build their dream backyards to bring life without unnecessary stress. Today I have the pleasure of sitting down with Joe Garcia, Director of National Sales for Lion Financial. Together we're going to bust some myths and clear up some misconceptions and give you the real story on how financing

empowers both homeowners and pool professionals. Joe, how are you today?

Speaker 2 (02:07)
Fantastic, a little full from Thanksgiving, but hey, I am doing great.

Speaker 1 (02:12)
Amen to that. We were just talking about how I was making a turkey soup. We got sick of the traditional servings. So we were like, let's do some soup. But Joe, tell us about yourself. How did you get with Lion Financial and how did you start in this industry?

Speaker 2 (02:28)
Yeah, know, weird story. ⁓ I have about 23 years in the finance world. Wow. A lot of it, I would say probably about 18 years on the bank side, the secure lending side. I ran out there at Bank of America and Chase. I ran a home lending product that started ⁓ geared towards the pool industry, which after doing that for a couple of years, once we introduced a new product,

One of my biggest builders started to recruit me. And I'm like, you know, I've never done anything outside of corporate America. So I finally said yes, I ventured out. I ran a pool company out here in Dallas where I live. A major pool company across the nation offered me a position as their director of sales. And so I did that for a couple of years. So I ran a sales team in a pool company. I did designs. I did the construction. A little bit of everything.

⁓ But then after two years, still, I got that little niche for the unsecured financing, which lead me to Lion. I've been out here approximately total of almost three years at Lion. So I got the secure lending experience, the unsecured lending experience, and the pull industry experience, which allows me to really ⁓ understand from a designer's point of view, from a pull point of view, what they actually go through on a daily basis.

⁓ you know, one of the things I really like to focus on, kind of what we're talking about today is educate on how we can use finance versus being intimidated by the, by the product. So, ⁓ that's kind of my little back story. have lending, secured, unsecured, and the pull industry experience.

Speaker 1 (04:07)
Lion Financial, they're veteran owned, aren't they?

Speaker 2 (04:11)
Yes, got 46 plus years. Our owner, Mr. Richard Lyon, former Army veteran, has a passion for the military. In fact, you know, one out of every four loans that we do is to a military veteran or active duty member.

Speaker 1 (04:12)
Tell us about it.

Speaker 2 (04:30)
We're very proud. We have programs. We sponsor a lot of veteran foundations. But again, Mr. Lyon is pro military and just the whole company, you know, the personnel we have, the people we have. We have a lot of veterans in our company. We have, you know, family members. It's just, it's a big, big veteran family that we have and we support them 110%.

Speaker 1 (04:55)
Well, I certainly love that. As I think all of our listeners know, my husband is currently active in the military. He's a combat medic. Thank you. Thank you. He's, gosh, I think he's hitting 17 years now. And so we're kind of starting to discuss what we're going to do next. mean, he's like, do I stay in? Do I get out? But do you know what his MOS is? Not my husband's, but the owner's.

Speaker 2 (05:21)
I do not. but you know, I Yes, he he was a dog handler. with that so which again some of the largest foundations we support is around that and assist veterans. You know with them and sponsor a lot of those canines out there to help out.

Speaker 1 (05:23)
But what he did in the military.

Nice, You know, I know the VA offers a lot of options for veterans, but this is just so exciting because, you know, I know we get, I think it's $250,000 towards a business that we want to open. But one thing that my husband and I have always talked about is getting a home with a really big backyard with a beautiful pool. And we've always discussed, okay, so we use the VA loan to buy a house, right? But

how can we kind of expand on that? so many pool service pros in the industry that are veterans and they're not highlighted enough.

hard to get that support as a veteran. You really have to go through a lot of channels. you know, again, we have the VA loan that we can use, but there's so many things that we want to do, you know, with our homes or with our, you know,

our businesses or projects that we want to start. And so it really sounds like more options outside of what the VA is giving.

Speaker 2 (06:39)
Well, and to your point, what happens there is, you know, when you do a VA loan, which is a great product for veterans, the opportunity is that when you do need that or you do want that pool or anything out in the backyard, you're limited on options just because if you go to a bank, the equity side, with a VA loan, they're going to down payment, so they're not equity started there. So you have to probably wait five, six, seven years before that happens. Yeah.

Speaker 1 (07:03)
Well, and they add on $20,000 typically to your VA loan. That's what they don't tell you.

Speaker 2 (07:09)
Yeah, exactly. But with us, guess what? You close on the house at 2 o'clock, by 2.30 on the phone with us, within a couple of weeks, you have your loan. Within a month and a half, two, three months, you have your pool. You don't have to wait all that time because our product is unsecured. You don't have to worry about any equity in the home. And so right off the bat, boom, you can apply and get the loan with the process, start to build.

And then by six months, guess what? You're swimming in your pool in your backyard of a new house you just moved in six months ago versus maybe having to wait four, five, six, seven years because of that and sometimes longer because there's no equity in the house. again, Catch 22, the VA perfect for you and getting a new home, but that's all you can do. You're limited.

Speaker 1 (07:55)
I want to bust the myths because that's what we do here on Wednesdays. And so the first one I want to bust is pool financing companies don't support military families. I think we've kind of busted this but let's kind of dive into it a little bit more.

Speaker 2 (08:08)
No, and you're exactly right. we're working with that brotherhood As Mr. Lyon says, we got we got your six. Yes, everybody six on this part.

Speaker 1 (08:17)
That is so awesome.

Speaker 2 (08:19)
It's great. And then again,

to your point, a lot of builders out there, a lot of designers and construction workers and owners are ex-military or veterans.

Speaker 1 (08:31)
Yeah, you know, think veterans are not praised enough in this day and age. think, you know, there's not an act of war right now, but people are still going across seas. They're still doing things. They still have families at home. I know my, my, one of my best friends, her husband, he's a Sergeant Major and he does logistics and there's not an act of war right now, but he is constantly gone and

Gosh, he was gone for I think four months earlier this year and he's going to deploy again next year for about 11 months. Yeah. Yeah. And they would love to have a pool in their backyard. They have three boys. They love swimming and they're just like, we don't know how we can afford it. This is, this is your key. know you bought your house with the VA loan as did I, we always do.

But so many times in the military, you're constantly gone. You're far away from your family. So by bringing it back home and by providing that pool, it really brings the family together. So I absolutely love that.

Speaker 2 (09:37)
Well, and to your point, Ashley, A lot of the majority of people out there are, you know, it's a luxury item. It's not a luxury item. They need it to assist them with some disabilities they might have or some physically or other things. And the pull

allows them to do that. we're there to support them in more ways than one. Outside the lending, we understand the why. And I think we do that and we can understand that and talk to the client. That's when they realize, oh, wow, they really understand why we need this pool. It's not just.

you know, to go out there and jump on a Saturday afternoon, it's maybe I need to get in the pool on the Wednesday, eating at five o'clock because that's my therapy session. Get in there on the Friday afternoon because it's another session for me to relax and get my mind out of it.

Speaker 1 (10:29)
Yes, well and that kind of leads me to our next myth is that pools are really only for the wealthy and that financing makes projects really expensive.

Speaker 2 (10:40)
You know, I hear that a lot. It's, know, and the irony to that could be the farthest from the truth on that part. you know, when we hear that, you know, the one thing with the pool and financing, it allows customers from all income brackets to be able to afford the pool now more than ever. You know, that because of that low monthly payment, and that's what we remind them is that low monthly payment

Speaker 1 (11:06)
can someone can finance a pool for up to 30 years That is pretty freaking cool really

Speaker 2 (11:13)
Well,

and here's the reason why.

they say, hey, look, you know what? We're going to introduce a 30-year product to you. Let's go ahead and do it. it's a game changer. Now, the irony to all this, get this Natalie, the irony to all this, a customer can get a 20, 25, 30-year note, but do you know that the average that a customer keeps a loan is six years? So that's huge.

Speaker 1 (11:35)
Not,

it doesn't, I mean, as a military family, typically we have a note for three years. It doesn't horribly surprise me, but for the, the common civilian, if I can, I'm just going to say that it, that is surprising.

Speaker 2 (11:49)
But to your point, same, some of these are first time homeowners. So we are no first time owners. You can move out of the house for three, four, five years. that's the magic to the 30 year term for the length of time that you're in that house, three, four, five years or sometimes longer. You have that ability to have that low monthly payment, pay it off early with no prepayment penalties. So it's a win-win for the consumer in more ways than one.

⁓ So when we talked about, you know, again, that myth, it's only for the wealthy. heck no. It's for everybody, all kinds of people as far as income brackets. Now more than ever, they can go out and buy their dream pool, maybe add something they thought they couldn't add because they thought they couldn't afford it. I have many customers that say, you know, I just want to pull and I want my decking. When we provide them the turn of 30 years and low rates, let me add the spa or let me make the pool a bit bigger.

Because yes. ⁓

Speaker 1 (12:42)
You need a spa with that pool. You need a spa. I know when I was growing up, we had a pool and we had a spa, but that is so cool that you offer up to 30 years because I mean, right now my husband and I are talking about like a barn dominion, right? And we're, I want like four or five acres and I want tons of animals. And my husband's like, that's really cool, but I want a pool with a spa. I want to sit out in this massive land.

and just look up at the stars. And I'm like, I feel that I love it. Let's do it. But I mean, the amount of money it takes to put something like that together, it's not cheap. And so here you're saying, Hey, we offer up to 30 years. And that really allows families to kind of review what that project looks like. It allows them to go through the blueprints and allows them to really look at, what type of pool do I want? Do I want to

⁓ at the spa, but that is so cool. And so you're not, you're not cutting corners. You're allowing them to really expand and be creative.

Speaker 2 (13:46)
And you nailed it. It allows them to buy their dream oasis that they thought about. It allows them to be able to look at it say, you know what? I'm going to get that spa. I am going to get that water feature. I might even add a fire bowl here to give that nice look out there. Ooh, give me that. I know. Hey, if you anything, you let me know. I'm a former designer too, by the way. So.

Speaker 1 (14:04)
Yes.

Speaker 2 (14:10)
I can design you a poll with a roll tide theme if you like. So little things like that.

Speaker 1 (14:15)
Roll Tide,

Speaker 2 (14:19)
But again, that's what a 30 year note, it allows them to be creative. I mean, that's the perfect word that you just stated. It allows them to be creative and buy it now versus maybe two, three pulls later. Again, the flexibility of having a 30 year term allows a consumer to do that.

Speaker 1 (19:35)
rates are really high right now. And so I think one thing that people are thinking is, should I wait five to 10 years to buy because of inflation rates? And do I need cash before talking to a builder?

Speaker 2 (19:46)
You know what? This is my favorite one. And let me tell you why. Because when people tell me, man, the rates are high or, you know, that's this and that. And I'm like, wait, time out. Let's take a step back. One thing I always tell designers and builders is we want to give things to the consumer to think about that they were not thinking about. And this is one of those. When I talk to a consumer that might have a concern about the rate, I promise you by the time we finish, I will say seven, eight times out of ten, don't even bring out the rate after I talk to them because

What I do is advise them this, the concern, if you wait one year, two years, three years, what's going to happen every year that's guaranteed in any industry, in any product? It's inflation. And the pool, the average, they go up three to 5 % year over year. So if we're going to wait three, four or five years, you talking about a pool that might end up being 25 % more now than if you got the pool today. So what I advise is look,

Get the 30-year term, again, lower monthly payment. Buy today at today's price, and you can get the that you want now. You are able to get, let's say, $100,000 pool. You are able to get $100,000 pool in two years, three years, five years. But you can't. The difference is the amount of pool you're going to get. You can get the pool that you want today, or you can get a pool with a lot less features at the same price down the road. Five years from now, you probably just get the pool. Nothing else. Maybe a smaller pool because of inflation.

So once I provide that to the consumer and make them understand, know, the concern should be more about inflation, not the rate. And by the way, while you're working on your credit over the next 18 months or so, because again, the reason for the high rate is because of the customer's credit. So throw it back on them, say work on your credit for the next year, year and a half. And after that, maybe you can take out a loan on home equity. You have equity in your house, pay this down. Then you got a lower payment because you worked on your credit. But

The great thing about all this is you're getting the pull that you want today at today's price, not less pull down the road or pay a lot more for the pull that you want. that's the thing is whenever we able to talk about today, it's smart to buy it today. And the product that we have allows them, the customer to understand their budget today versus what it could be down the road.

Again, the main point here is let's give consumers things to think about that they were not thinking about. we're going to give them those ideas. We're going to plant the seed and say, hey, look, think about this first. And then when they do, it's like, oh, wow. It's like a little boat flat popped up, and they realize, yeah, you're right. And before you know it, that rate thing issue is out of the way.

So that's one of the myths that I enjoy talking to consumers because it's truly that a myth.

Speaker 1 (22:30)
Well, and I would say pools do add a lot of value at resale. I mean, I think a lot of buyers are concerned on buying a house with a pool. know, I'll be honest, when we bought this house here in Knoxville, Tennessee, we did look at a lot of houses that did have pools or lakes in the background, but my girls are little.

You know, they were three and four when we moved here. And so now they're four and almost six. God give me strength. But, know, I will say our next house, I definitely want to make sure we have a pool, but I think a lot of people are just scared to buy a house with a pool in the backyard and or what it will take to maintain that.

Speaker 2 (23:12)
You know, again, that's that's what customers are thinking and and trying to understand. OK, is it is it the right time to buy a pool day? Well, it is because now more than ever we have creative designers out there that are very artistic. They understand they can, again, design that dream oasis. They can go from a basic, you know, regular geometric 20 by 20 size pool.

into an Oasis backyard that includes fireball, water features, slides, things like that. as long, again, when we provide a 30-year note, instead of getting maybe that $85,000 pool, they can probably get $150,000 because, wow, that monthly payment, over 30 years. OK, and I can pay it off early without people? yes. So their minds start working that way. And again, right now, a lot of consumers

They have this tunnel vision of this is how it is expensive and it's this and that our job and the designer's job is to open up those blinders and provide them not just tools but plant the seed on how this can actually work.

Speaker 1 (24:20)
because I feel like pulls really do increase the resale value sometimes in some cases more than kitchens or bathrooms. I mean, a kitchen renovation, that's not cheap. I did that in Georgia. We did a bathroom renovation. Shoot, we did a basement renovation. That was like $40,000. We got quoted for 30. I think it actually came out to 60. And so you really have to look at your finances and go, okay, what do I want to kind of create here? But

From what you're saying, what I'm hearing is that putting a pool in the backyard, it's not gonna cost you an arm and a leg. It's not gonna be your firstborn, which granted when she acts out, take her, love her, take her. But it sounds like it's extremely affordable to have a pool in your backyard, which again, I feel like so many people have shied away from because of the cost, if there's issues, concerns, I mean.

but you guys are really kind of laying out the red carpet.

Speaker 2 (25:18)
Well, and we do that with the builders by educating the builders. having educational seminars or meetings or training sessions with the staffs, we provide them the information that they can understand why they can and be able to come some of those obstacles with the consumer. We have the tools out there online that we share with and teach them how to use those tools to their benefit to show the customer that they can afford and buy now.

But to your point, as far as the resale value, know, studies show that if you're looking for a house and your house has a pool, they're going to look at your house first before they look at a house without a pool. So your house can resale at a higher value, but at the same time, a lot faster as well. So again, if the myth that we can't afford a pool, throw it out. Let's talk because

⁓ we'll show you how you can do it. And another thing, get this now. What I told designers is this. how many times of the customer on an average go out to eat as a family on a weekly basis? The average is about three times a week. They'll go out and enjoy a nice dinner of a family of four, probably about a hundred, 150 bucks each time they go out to eat. So told consumers again.

Once you have a pull, your lifestyle changes. Yes, you still go out to eat, but instead of going out to eat three times a week, you go out to eat twice a week. So what happens to that, to those funds from that one time you're not going out to eat. So if you're spending 150 bucks each time and you're going out to one less day a week, that's $600 a month. And so what I teach the teams is take that $600 out of the food budget and move it to the pull budget. Yeah.

So guess what? That $700, $800 payment per month or $900 payment per month, take away $600 because you already have that from the other budget, the other bucket. So reality, you're only going to spend another $100 to $300 more a month on a new pool. Again, this is another tidbit of giving things a think about they were not thinking about. And that's a huge one, which then at that point, the customers are like, oh yeah, I didn't think about that. And guess what happens when I leave their house?

What if we come back in our sub-labs? What if we come back from going out to, know, getting my haircut every week to maybe it's twice a month? They start doing things like that, which I used to tell my people that's what you want to do. Because once you create that dialogue, they start having a dialogue, then that customer is going to sign with you. But we got to give them those little tidbits so they can think about those things.

Speaker 1 (27:53)
Where we put our money, there are things that we currently are doing where we could definitely scale back. We don't eat out very often, but we do a lot of activities with the girls where we could probably just go to the park that weekend versus spending, you know, a hundred to a hundred fifty dollars at a theme park or what have you. So there are definitely ways that you can kind of scale back. And again, you have people have so many streaming services that you can scale back on that, too. And so

If you really want that gorgeous pool and that beautiful spa in your backyard, there's definitely ways that you can do that. So the last thing that I want to touch on before we jump off is that builders prefer cash.

Speaker 2 (28:35)
Hmm. You know, I hear that all the time. And the reason why is, and again, being a designer myself, a running a pool company, for the first time, when I was listening to my designers, they're so focused on the sale that they hear cash.

wow, I got it. Let me let me go ahead and design a poll to that dollar amount. So again, what happens there is that tunnel vision. It comes back. There's a tunnel vision from the from the designer or the builder that the customer also has, but they don't recognize it. Neither one recognizes the fact, OK, well, being in myself, being in wealth management in the past and my banking experience.

If a customer has cash fluid, especially that amount of cash, 50, 80, $100,000, and they usually have it somewhere where it's making money for them in the market. And there's no better time to have that being done than today's economic environment. Today's time is the perfect time to have that fluid of cash still in the market because they can make more money than if they use it so

What I advise the designers is that one, always offer finance to every customer, be it cash buying customers, be it renovations, pull buying, anything outside of pulls that we can do. Offer finance because what it does, it creates more buying power. What's going to happen is you're going to increase your average invoice. So if you're doing remodels at 50,000 on the average,

A lot of those guys, they do, okay, I'll design you a remodel based on 50,000 because that's all they know. But if you come back and say, hey, you know, we have a partner and then they get approved for 75,000 for a low monthly payment, well, that 50 turned to 75, you just had another 50 % increase in profit. That's what it does for you. But the customer is able to get what they thought they couldn't get. They're able to get

again, the water feature, maybe the grotto, maybe the two firebows on each end of the pool where the gas lines pop up. mean, again, a lot more than what they thought. Maybe they can get their decking in a stone finish versus just concrete finish at the same cost. So that's what it does whenever you have financing and people say cash. Yeah, it's easy to say yes.

but you're limiting yourself, limiting the customers. And our job as a designer is being able to provide them an idea that, hey, I can get that upgrade tile. I can get that pole built a little bit bigger. Maybe I can add the barnum medium or that fence that's seated around that one acre lot. There's a lot of things they can do with cash.

My favorite is when the customer is buying a $200,000 pull, $300,000 pull, and the guy says, OK, we don't need financing. They don't take financing. Then what have you offered? Because again, maybe the consumer can finance part of that project, or even better, take that $300,000 and add another $200,000 to that project and get a $500,000. I was talking to somebody earlier today that had an $800,000 project.

200,000 of it. So guess what he went? He went up to 925,000 because he's going to finance some of it. So it's those little things like that. That myth we should only take cash? No. That's an easy way out. It is. But if you provide the customer buy power, you're going to see your average invoice increase by at least 20, 30%. So that's great.

Speaker 1 (32:10)
Well, I certainly appreciate you. appreciate all the information. This is definitely given me. I've added things to my list for my, my dream house, my dream house, my barn dominion, if you will. So, you know, if you've been holding back because of these myths, it's definitely time to rethink pool financing. But before we jump off, is there anything you want to leave our listeners with?

Speaker 2 (32:35)
You know, the one thing is now it's let's let's look at things now, the projects, let's look at buying them now, the builders and clients. Now is a perfect time. Inflation kicks in every single year. That's that's always going to have an upward trend as the rates or the terms allows you to be able to afford it today.

Speaker 1 (32:47)
It's not going to go away.

Speaker 2 (32:57)
go out and educate.

teach your teams out there and how to use these tools to increase your lead to sell ratio, increase your average invoice. So yeah, that's my quick minute in the has spill

Hey, thank you so much Natalie and the team

Speaker 1 (33:11)
Well, Joe, it's been an absolute pleasure having you here. I loved all of the information you shared. Again, I've taken notes. Future Pool, Barnum Minion coming soon. But if anyone has any questions,

what email would they use to contact you?

Speaker 2 (33:26)
Yeah, for me it's again Joe at lionfinancial.net.

Speaker 1 (33:31)
And that's L-Y-O-N, not L-I-O-N.

Speaker 2 (33:34)
L-Y-O-N correct. At lionfinancial.net.

Speaker 1 (33:39)
what is the best number to contact you

Speaker 2 (33:41)
Yeah, the great number is 877-754-5966. It's a direct line Any builder wants to talk to us, again, my number and my email address, joe at lionfinancial.net. And then, again, my number personal will be 704-246-3394. ⁓

Speaker 1 (34:06)
⁓ Well, Joe, cannot tell you how much I appreciate you. I appreciate all that you're doing. I appreciate the veterans support and of course, it's been an absolute pleasure, sir.

Speaker 2 (34:16)
Hey, thank you so much. You enjoy.

Speaker 1 (34:18)
you.