Blue Ridge & Broken Bow Airbnbs

[00:00:02] Speaker A: This is Short term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Carl. There we go. There we go. Luke Karl, the shaman of short term. World's Greatest Landlord voted 14 Time World Greatest Landlord by whom? I have no idea, possibly myself. But regardless, we're here and we have as much fun as we can on this subject of rental real estate landlording and specifically overnight rentals on short term rental management. And today we've got my buddy Jack. He's become a buddy of mine. He's a great dude. He's got a job, a decent gig that he likes and he lives in New York City and we talk about baseball a little bit and I lived there for many years as well and he's getting married soon and it's just a, it's a great, great show today. We are a little bit all over the place with this thing. We do some screen shares at one point. His video was real choppy throughout the duration. So if you're watching on YouTube, I do apologize for that. But we are grateful that you are here on short term rental Management. This episode is brought to you by Short term Rental listing Advice. Join this Facebook group and post your listing to get advice from other hosts including, including myself on how you can improve your listing or just post your property so you can show off. Join us@str listingadvice.com that's str listing advice. Com. Short term rental Management, full effect. Grateful to be here. Very exciting stuff. And I've got a dude, Jack, who has become a buddy of mine and I'm very excited to have him on the show today and hear his story. He started out, I met him anyway because he bought a house or two with the short term shop. And Jack's a great dude living in the east village of New York City. So today I am wearing my Mets shirt. Go Mets. At the time of this recording, anyway, they are still in the playoffs. I have no idea when this is going to come out, but Jack is a little bit of a Met fan himself, so that's cool. Or baseball in general, anyway. But Jack, tell us about you, man. Like, you know, your family life. How old are you? How did you end up in New York? And then of course we'll, we'll slide into real estate. [00:02:30] Speaker B: Yeah, sounds good. Before I do that, thanks for having me on. Longtime listener, first time caller, friend of the program. Excited to be on. But yeah, name's Jack, originally born and raised in Sacramento, California. Lived all my life out in California until Moving to New York four years ago for a job. [00:02:51] Speaker A: Yeah. [00:02:51] Speaker B: I live here in. In Manhattan with my. My fiance and my two cats. And that's. That's me in a nutshell. I mean, I don't know what else. [00:03:00] Speaker A: Wait, wait, what town did we grow up in? [00:03:01] Speaker B: San Sacramento. [00:03:03] Speaker A: Sacramento. And moved to New York City for a. For a gig. A day job. [00:03:08] Speaker B: Day job. [00:03:08] Speaker A: At what age? [00:03:10] Speaker B: 26. I'm 20. 30 now. Four years ago. You're 30. [00:03:14] Speaker A: Okay, cool. So to have real real estate at 30 is a pretty decent accomplishment in itself. Of course, you're not. You don't own in New York or you do you own in New York? [00:03:25] Speaker B: No, no, I've been a lifelong, Lifelong renter. [00:03:28] Speaker A: Never owned a primary home ever. [00:03:31] Speaker B: No. [00:03:31] Speaker A: Okay, that's cool. [00:03:33] Speaker B: Yeah. [00:03:33] Speaker A: And what was this job that moved you there? [00:03:36] Speaker B: My career is in digital marketing in the. In the technology space. So when you know who's. Who's clicking on what. When brands send emails to customers about. About things, that's sort of the work I do of, you know, making sure that the end user of that product is getting value from it and, you know, having the best chance of success, which then ultimately translates to dollars for the business. [00:04:08] Speaker A: And you're doing that for a corporation. [00:04:10] Speaker B: Yeah. [00:04:12] Speaker A: And does this involve like a CRM? Like, that's the extent of my knowledge, really. Like, you know what I mean? [00:04:18] Speaker B: Like, it depends. It depends on the product. Not necessarily the folks that I market to use CRMs for their business. I do more so do marketing for, let's say, a technology company that has an advertising platform. And we market to small businesses to. For them to use, you know, our ad products or suite of tools to help them grow their business. So it's kind of like marketing to marketers, in a sense. When you're. When you're a small business, you wear a bunch of different hats. One of those being marketing. So we're sort of marketing to the small business to then market their business. That's a bit of a roundabout way of saying it, but that's. That's it in a nutshell. Okay. [00:05:01] Speaker A: Okay, cool. And wifey, or you're not married yet, you are married. [00:05:05] Speaker B: To be married. [00:05:06] Speaker A: Okay. To be married and to be married. Congratulations. That's wonderful. Exciting times ahead. It's going to be an amazing adventure. I can't wait. [00:05:15] Speaker B: Yeah, I'm excited. We're excited. [00:05:17] Speaker A: What does she do for a living? [00:05:19] Speaker B: She works in the tech space as well. [00:05:22] Speaker A: Okay. [00:05:22] Speaker B: More on the business side, you grew up. [00:05:24] Speaker A: Are you both from California? Moved to New York together. [00:05:27] Speaker B: Yes. So we're both from Sacramento, but different sides of town. I joke that up. You know, one of us is from the other side of the tracks, which never knew each other. Yeah, we had a meeting. We met at. We met in college. [00:05:42] Speaker A: I'm in college. [00:05:43] Speaker B: And it probably bonded over the fact that we're both from Sacramento. And usually when you go down to Southern California, other parts, they're like, oh, yeah, I'll pass through Sacramento, you know, on the way to Tahoe, or what goes on in that tiny town, you know, what. Bristol Bay Area. But it's not. [00:05:58] Speaker A: I mean, what school? [00:05:59] Speaker B: I went to ucla. [00:06:00] Speaker A: Oh, ucla. Oh, fancy. Cool. All right. And how did the real estate thing come about? How old were you and, like, what piqued your interest and then that whole thing. [00:06:11] Speaker B: Yeah, I'd say it kind of starts back to my childhood. Not of, you know, I'm five years old and I want to be a landlord, but sort of grew up in a. In a, you know, traditional family house. My parents, they bought a house when they were young, lived in it, they still live in it, paid off the mortgage in full, and sort of do that thing. So, you know, as I was coming into the real world, sort of out of school and started making income, they're very adamant on following that same path of find out where you're going to live, buy a house to, you know, all the benefits of real estate and building equity and appreciation and ownership and all that stuff. But like I said, I went to. I went to school in la, then work took me to San Francisco, and then it took me to New York. So three of, if not the most expensive markets for real estate are not really attainable in terms of a starter home. And so that unless I'm commuting two hours to get to work, which then that's a whole different conversation. Not saying that it's not possible, but sort of made the decision to rent where we're working and then look out of state. So that led me to bigger pockets and a company called Roofstock, which they had an education arm, sort of a. Okay, if I want to buy the quote, unquote, stardom out of state, I need to learn how investing in real estate works. So that's kind of the basics of investing 101, which then ultimately led me to buying first rental out of state. But the journey for me started in 2020 on the education piece of really sort of getting ready to save money, but also make gear up to make that purchase. [00:08:09] Speaker A: So the parents were encouraging real estate Investing or just buying real estate in general? Do your parents, in other words, do your parents have any real estate investing experience? [00:08:18] Speaker B: Not my. There's one, One rental that's literally on the other side of the main road in the town that I grew up in that has been a long term rental for the last 30 years. [00:08:28] Speaker A: That your parents own? [00:08:30] Speaker B: Yes. [00:08:31] Speaker A: And how did that come about? [00:08:32] Speaker B: They used to live in primary and their rental, they lived in it a while back and then moved out to the house that I grew up in that they still live in and they manage from a near, I guess, because it's like a five minute drive and. [00:08:45] Speaker A: So have you ever talked to them about that or is it. Can you talk to them about that? Like, do they, did they encourage you to do the same? Do they, Are they annoyed with that house? Do they like that house? [00:08:57] Speaker B: Yeah, they like it. I mean it's sort of. I think you were. Had Tim, on the pod a while back talking about, you know, buying one duplex or one rental and paying it off and having that as an income. That is the story of my, of my folks through and through, just buying something, living in it, moving out and just renting it out when they didn't live in it. They've had the same tenant for, gosh, 30 years. [00:09:25] Speaker A: So they did a house hack 30 years ago? [00:09:27] Speaker B: Effectively, yeah. [00:09:29] Speaker A: Back before anybody was smart enough to. Biggerpockets was smart enough to name it. Right, Cool, that's great. But they had no interest in expanding. They were comfortable with just the one rental house and that was it. [00:09:41] Speaker B: Correct. [00:09:42] Speaker A: Okay. And so you, you did your real estate journey, started doing some Google searches and eventually landed on the vacation thing, I guess. What does your portfolio look like right now? Which so on the smaller side, I. [00:09:57] Speaker B: Think, yeah, depending on who you ask. So it's my fiance and I brought her into the fold a couple of years back. We own some stuff individually, some stuff together. Really. The journey sort of started in long term, short term wasn't really on the radar as it was when I started. This was more of, okay, I want to sort of treat this investment as like an alternative investment class. And you get the benefits of real estate investing outside of continuing to work and sort of having that income. So started on that route and then, you know, I'm on bigger pockets at this point, listening to podcasts, trying to just consume as much information as possible. Sort of similar story as some previous guests we had and reading all the books and doing all things. And that's how I found the shop, through Avery's book Short term rental, Long Term Wealth. If you haven't checked it out, give it a read. I mean, it's the blueprint. There's no other way to put it. And I'm not being paid to say this, but it is the blueprint. So I'm reading through it and I'm like, okay, this seems nice. The financing looks good. You're in a vacation town, you can, you know, there's different financing options and sort of that hospitality and marketing element attracted me. And not to mention you can get a better return. And being a digital marketer myself, it's like, okay, you're putting, I'm putting pictures on the Internet and words on the Internet for these companies and thinking through CRMs for these companies. This seems pretty similar. But the house is a hospitality business. And so that's what took me to the shop, started, you know, started purchasing, purchasing there. And you know, we've got a nice handful of stuff that we work on and manage together. [00:11:56] Speaker A: Okay, wait a minute, so you do have long term rentals? [00:11:58] Speaker B: Yes, a couple of single families. My fiancee owns a duplex out of state and then a couple of short term rentals in Blue Ridge and together own short term rentals in Broken Bow. So both short term shop, mountain markets. [00:12:17] Speaker A: Okay. Yes. And I do want to get to specifically Blue Ridge, but Broken Bow as well. But where are these long terms? [00:12:23] Speaker B: Mississippi. Jackson. [00:12:25] Speaker A: Yep, you told me that. I forgot about that. Outside of Jackson somewhere. [00:12:30] Speaker B: Yeah, North Madison County. [00:12:32] Speaker A: And these were. How did you. This was a roof stock deal or something like that. How did that become. Come about? [00:12:38] Speaker B: Yeah, again, started the education arm through roofsock and they teach you everything about buying, managing long term rental property, real estate, which that includes, you know, selecting markets. So sort of went through the curriculum, did all the diligence to pick where I wanted to go. And this was 2020, late 2020, early 2021, where interest rates had gone crazy low. The real estate market was super competitive. I was originally looking in the Birmingham area, but kept getting outbid, put in probably 10 to 20 offers, kept getting outbid, didn't want to waive appraisal contingencies, didn't have cash to pay, all cash. These are 20% down conventional finance homes with savings and investments that we've made, or I've made and she's made individually and us together that accrued over time and then just invest those investors in properties. [00:13:37] Speaker A: Would you do the roof stock thing again? It sounds like it worked out. [00:13:39] Speaker B: Yeah, I got the education arm through there and they were really Cutting edge about, you know, it's a marketplace for investment properties. So. And they allow you to, if you're part of the education arm, which I'm not sure the latest with that, but it allowed you to sort of export all the information about properties and rents and all that stuff. So then I just started. I kept getting outbid in Alabama and I'm like, okay, let me look somewhere else and sort of take more of a bottoms up approach of just looking at the numbers and seeing where the price to rent works and what makes sense in terms of that market. And that's what took me to the Jackson area specifically. Even though if you look at any population trends, there is a net outward migration to the city of Jackson. But what's going on is that folks are moving outside of the city limits into newer residential developments outside of that. So those. Even though the met the city area is shrinking, it's growing outside of those of the city limits. Pair that with the way that the school districts line up. Look specifically in a zip code in a school district where you talk to a realtor, you talk to a property manager. There you see every, you know, the tenant profile for a family that wants to rent is they want to be in this school district and there's a very, you know, there's premium for that in that market. [00:15:04] Speaker A: Do they. Do they manage the property? [00:15:06] Speaker B: There's a property management company. [00:15:07] Speaker A: Okay, so Roofstock doesn't do the management. [00:15:10] Speaker B: No, no, they. They have the marketplace. I did the education arm and then found the realtor and sort of the market and things through them. And then they have. They have properties on their marketplace that they are the broker. There's also ones that they have relationships with brokers in the markets they operate in who upload listings to their marketplace as sort of like a affiliate. So found it through that. And then Roofstock gets, I believe, gets a kickback for referring me to the realtor that they are partnered with. [00:15:45] Speaker A: I see. Okay. Interesting, interesting. Okay. And these properties, you said your wife has a duplex. Was that your fiance? Was that before you met her or was. [00:15:55] Speaker B: You know, we met. She's. We've been together over eight years. So she's seen the journey from zero all the way to where it is today and in bits and pieces. And so I've started this journey and I talked to her about it and that inspired her to. To look in the, you know, do her own diligence and do the same thing. But I. It was something that she did her own is her money that she earned her investments. She did the market selection decision. I was there to help, but other than, you know, other than that, I wasn't really that involved. [00:16:38] Speaker A: So you're spread out across the two of you in a lot of different markets? [00:16:42] Speaker B: Yeah, across four markets, two long term markets, two. Two short term markets. And then, you know, as we're getting married, we talked about, okay, like, what does this look like to do this together? And that's what, that's what took us to Broken Bow was something I was looking at. But just having somewhere that was sort of ours individually versus me being a Blue Ridge, that's not to say we wouldn't go back to Blue Ridge. Those are just the two spaces that we operate in. [00:17:12] Speaker A: Okay. And when you say together, meaning you, one of you needed the other one to qualify for the loan, I mean, why bother putting both parties on the loan? Or did you? [00:17:23] Speaker B: We've done the sort of, the back and forth of, you know, I, I used a vacation loan somewhere. I use a vacation loan in Blue Ridge. She used one in Broken Bow. So she's on one and then I'm on one in Broken Bow. But we're getting to the point now where we're starting to be on, on things to. Together. But we're. We Finance at 50. 50 and, but given that I was already doing sort of the management and the operations, I take those more on once we put the place into service. But as far as acquisitions, you know, setting it up, designing, we. We do that together. [00:18:00] Speaker A: And you are managing all the short terms, right? You personally? [00:18:05] Speaker B: Yes. [00:18:06] Speaker A: Okay. [00:18:06] Speaker B: Self managed. [00:18:08] Speaker A: Okay, great. Let's talk about Blue Ridge. Well, and Broken Mode. They in some ways are fairly similar, although they're nowhere near each other. But you know, here's, here's where I'm at with it. You do hear. And I, before I get into this, you are a numbers guy, right? You seem like you are very well versed in spreadsheets and things like that. Am I, Am I to assume that's correct? [00:18:29] Speaker B: Yeah. Um, to the point where in my day job I sort of had to take myself out of the numbers a bit and look a little bit more macro, but I still have that numbers background. [00:18:40] Speaker A: But take yourself out of it because you like are too into it or what. [00:18:45] Speaker B: Yeah, it's just one of the things that constantly comes up is analysis paralysis, which I knew just from my own how I'm wired that I could fall victim to that. So just like I still use an analytical mind to look at things, but try to check myself with sort of Is this a place I want a vacation when I'm thinking about, you know, the guest experience, what makes sense from a, you know, somebody staying there versus the expense of one rug versus the other, those kinds of things. So it's a, it's a, it's a balance of. It's a balance about. [00:19:21] Speaker A: So you do. I'm. You're what I would call a number junkie or a number ninja. [00:19:24] Speaker B: Yeah. But I do have the mark. I do have the marketing background and career. I do like. I do the math side of the marketing more in my day job, but I do like marketing because it blends the creative elements as well. I'm not a full creative person, but that's also what attracted me to short terms as well, is that you have the ability to be a little bit more creative on how you stage, how you photograph, how you market, how you build your, you know, CRM. Call it grm, Guest Relationship Management, you know, sort of the short term version of a CRM that's more of the messaging and, you know, the guidebook and things like that. I, I gravitate towards that a bit as well. [00:20:05] Speaker A: Right. Okay. So that brings me to really both markets, but let's start with Blue Ridge. [00:20:10] Speaker B: Sure. [00:20:11] Speaker A: Because you do occasionally hear, like if you're new to this whole thing and you're exploring vacation markets or whatever kind of markets, we do occasionally hear that. Blue Ridge is, you know, tough. It's. It's a gorgeous area. [00:20:24] Speaker B: Yeah. [00:20:24] Speaker A: It does not have like all the bells and whistles of say, a pigeon forge with the roller coasters and stuff like that. The, you know, the vacation, like the Titanic museum and all that kind of stuff and Ripley's Believe it or not, but it is absolutely just the cutest little place you've ever seen. [00:20:45] Speaker B: Yeah. That's great. I've been there a few times. I mean, we'll go out in person and set things up or I've been out there to do refreshes on, on some. But yeah. When I was looking at markets starting into short term, everybody and their mothers, you say Airbnb, say short term rental, Smoky Mountains with, with good reason. There's 14. What is it? It's always increasing, but, you know, 13 to 15 million people a year visit. It's been a cabin town since the 60s. Like that sounds great. It's your blue chip market. When I was looking, being new, I was thinking, okay, that would probably be a good place to start. But with how crazy competitive things were, it was the same scenario in the Smokies. As you have these big time investors and people that have been in the business longer than I and you have crazy low interest rates and race was being waived and all that stuff. Not to say it wasn't competitive in Blue Ridge as well, but I had the strategy of what is the mountain light, Mountain market light, if you will, that the shop offers. And that's what took me to Blue Ridge. Obviously know that Atlanta is a very big metro area and growing rapidly. Lots of institutional investors are in Atlanta and North Florida and those places are within a day's drive to there. So that's sort of where I started and picked. [00:22:03] Speaker A: So, you know, we hear these things like, oh, there's not enough business in Blue Ridge. It's, there's, you know, a little more occupancy than other areas. First of all, I guess for a guy that's a numbers ninja to explore that deeply in an area like that, that must have been. Took some guts. And have you found that to be true? [00:22:25] Speaker B: Sorry, I'm not sure I follow the question. [00:22:26] Speaker A: Are you happy with the occupancy of the area? [00:22:30] Speaker B: Yeah, my occupancy is great. I'm happy with it. I'm happy with the numbers. That's not to say there haven't been some bumps along the road in some of the projections that I made on the very first one. I look back and underestimated the cleaning fees by a few hundred bucks a month. But I would say with the interest rates being where they were at that time, you had that margin for error, which is different than in today's market and interest rate environment where there's still money to be made, there's deals to be had. But I will say that the margin for error is a little bit smaller because of the cost of financing. So it was sort of okay, this thing will cash flow certain amount. I miss, I miss projected this cost. But I was still in the black, in the green because of that sort of, that sort of buffer that's not said, that's not in today's market. It depends on the deal, of course, but that's just sort of my assessment. [00:23:30] Speaker A: Did you hear any of these rumors about Blue Ridge being, you know, slow and maybe a little more difficult and did you care heard them? [00:23:37] Speaker B: Yeah, I'm in the, I'm in the Facebook groups. I read, I don't, I don't care. Sure there's, you know, sentiment and things, but I, you know, short term shop published the airdna data and mentioned, okay, this is the range of the, you know, the percentiles of revenue. And that's sort of what I would use. And, okay, do I feel comfortable being in that range and found one where I was. And that's kind of how it went. [00:24:04] Speaker A: You mentioned data. Was there a data source that you used when you were analyzing or one that you use now? Is there one you like better than the others? Did you use any of them? [00:24:13] Speaker B: It was really whatever the shop published at that time, which is from air DNA of those ranges. And sort of. That was the guidance of, okay, when you're projecting numbers, that's where you look. Because there's so many different factors that house A and house B could be right next to each other, but it depends on the manager. It depends on how you price all those different kinds of things that can ultimately impact the performance. I think what I was reading or hearing was that if you know what you're doing, you'll be in that 75th percentile, assuming you have a place that has the amenities that people want. And. And those kinds of things. But these are, you know, they're not. They're. They're steady eddies. They're not like, I didn't put an aquarium. I didn't put a helicopter pad if I need to. Like that said, though, I did focus on things that you can kind of guess that people want when they go to that place. So the beach and the mountains are sort of the big two. Right. When I'm thinking about the mountains, like somebody wants. When they go to the mountains, they want to see nature. They want to sit outside, they want to use a fire pit. They want to feel that sort of cozy, rustic cabin. And that's what I, you know, strive to give them or to be. Or to be in, to be entertained. And the, you know, there is the lists and all those things of what to put in to get a good guest experience. And that's sort of what I followed. [00:25:45] Speaker A: And how big are your properties, your Blue Ridge properties? [00:25:49] Speaker B: One of them is. It's a four. Four, about 3,000 square feet, sleeps 10, and the other one is five beds, three and a half baths, a little over 3,000 square feet, sleeps 12. [00:26:03] Speaker A: Wow. Big houses. [00:26:04] Speaker B: Yeah. Again, going back to the numbers, that's sort of what the numbers were saying of it's either the really tiny ones or the big ones. In that market, Blue Ridge has a very big shortage of one bed. There's not really as many honeymoon cabins like there are in the Smokies or Broken Bow or similar mountain markets. So the ones that know what they're doing do really well, but there's not that many for sale. You typically got to go the new construction route if you want that one bedroom studio, tiny house type of deal. So yeah, that's sort of looking again, looking at the air DNA numbers sort of took me to, to those larger bedroom spaces. Also with the larger bedrooms you get the flexibility to sort of price down a bit on lower demand dates, sort of. And what I mean by that is okay, maybe you have a four or five bedroom and you're in the middle of May during the week, if you're not getting booked at the prices of a four or five bedroom, you can lower your prices down to a three or two and maybe you're taking less money. But if you know somebody's looking at options and they can have a three bedroom house for the price of a five bedroom house with a, you know, with a view or with amenities or things like that, I guess. Well, let me back up like for like would you, would you rather stay in a three bedroom house or a five bedroom house? Maybe in the five bedroom house you can. Everybody gets their own room versus people in bunk beds like that. So the larger ones you also get that flexibility, I think, to sort of meet demand. [00:27:35] Speaker A: No, I agree, I agree specifically with the, you know, pricing it where it needs to be to get rented aspect of things. I've been arguing that point for a number of years since day one and people still have a hard time getting on board. And I think that there is a great deal of people out there that just are for whatever reason that doesn't click in their brain and they are almost more okay with it sitting empty than lowering it to a number that they feel is, makes them somehow inferior or something. [00:28:07] Speaker B: Yeah, no, that's what I mean. That's ultimately what the pricing software does. It's trying to set a price that supply meets demand but then maximize it. However, I mean, I'm under the belief that for each day, for each price, like you will meet demand somewhere. I mean I'll price these four bedrooms like 75 bucks a night. If they're not getting booked and it's a week out, I go as low as it needs to go to get booked. And the reason that I do that is just the reviews really. You live and die by your reviews. That's your competitive advantage. And the more good experiences you can give and the more reviews that you could accrue the, I think, well one, you're more likely to get booked. But then also when those high seasons come again, going back to the comparison, right? When somebody's looking for a place to stay, like, for, like, do you want to stay with the one that's has a hundred Reviews that are 4.9, or do you want to stay with the one that's like 20 reviews in 4.9? I was just gonna say that's on the people, like on the person side making that decision. But I have a belief that the algorithms like to favor that as well. Because if you think about, and this is not inside information, I don't know how the search algorithm works. I can just guess based on my experience. Is that really in a marketplace, what the search is trying to do is it's trying to get. Trying to match a place with what you're looking for. And when a place has more good reviews, I think it shows to Airbnb that they, the algorithm feels more comfortable recommending that place to somebody because ultimately when somebody has a good experience, they book, Airbnb takes their cut and the cycle sort of continues. That makes sense. So it's, it's sort of a getting the reviews for people to see, okay, this place has 105 star reviews. You know, there's a good chance that I'm going to have a good vacation when I stay here. As well as sort of telling, and this is for verbo as well, sort of telling that search algorithm to match your place with people when they're looking for it. [00:30:21] Speaker A: This episode of the Short Term Management show is brought to you by Short Term Rental, Long Term Wealth. This is the book in the STR space written by my lovely wife, Avery Carl. It has hundreds of reviews on Amazon and it will teach you literally everything you need to know about str. Short Term Rental, Long Term wealth, the book wherever books are sold. Quickly, your thoughts on vrbo. Are you getting vrbo? Are you. Do you? [00:30:52] Speaker B: Yeah, I like vrbo. I like vrbo. I like it because it has. There's a network of people looking for a place to stay, using it as an owner. The platform's a little clunky. You sort of get around that. But there's people that use it and they want to book your place on it. So, yeah, I like it. In general, VRBO is longer stays booked further in advance, which usually means more revenue per booking. There's just a lot less of them. That makes sense. [00:31:27] Speaker A: Do you know what your percentage of per platform is of bookings? [00:31:31] Speaker B: Depends on the property. So one of them this year. That's the one. [00:31:37] Speaker A: I honestly just wanted to see if that was something you had memorized. [00:31:40] Speaker B: It Depends on the property. Yeah, I would say probably like 65 Airbnb, 25 Verbo, 10 direct. [00:31:47] Speaker A: Oh, 10 direct. [00:31:49] Speaker B: But it depends on the. The one that's. The one that's had. That I've had in service the longest is like 50. 50 Airbnb in verbose year. And the other one just hasn't caught as much. I don't know why, but we'll see. Maybe it just takes more time. I really do not know. [00:32:05] Speaker A: Okay, I want to back up. You mentioned 75 a night on a five bedroom. That is a little much for me. I like to go low. [00:32:12] Speaker B: But that's the four on the five. [00:32:14] Speaker A: Four bedroom. What do you do on the five? [00:32:17] Speaker B: 99. [00:32:18] Speaker A: 99. Okay. [00:32:19] Speaker B: Plus the clean, plus. [00:32:20] Speaker A: Plus the cleaning fee that's ever gone. Is there a concern there? I mean, number one, I guess people always worry about, you know, terrible guests at that price point. Have you ever had that issue? [00:32:32] Speaker B: No, I mean, I've had terrible guests, but I don't. I haven't sat down and looked at which ones. [00:32:37] Speaker A: Which. [00:32:38] Speaker B: Yeah, I just kind of see it as par for the course and part of the business. I'm. And this is. These are, you know, nice. Where I'd be taking. I'd rather take 75 than zero. And how much is a review worth? I'll take the review. And not to mention you the guest, you get a kick ass house for a kick ass price. A better chance for a good review. [00:32:56] Speaker A: Let me get some perspective here. This four bedroom that you occasionally. I would assume it's very occasionally rent for $75 a night. What's your. You've had this for a while now. What was your gross income on this property last year? [00:33:09] Speaker B: About like 85. But I do want to back up. It's, you know, you got to factor in the cleaning fee as well. So once the cleaning fee is in, it's closer to like 175 a night. Right? I'm saying in Price Labs it's 75. Then you add your cleaning fee on top and try to keep it at the minimum, like 200 a night. [00:33:30] Speaker A: And you're making money on the cleaning fee right now or. No, no, no. [00:33:33] Speaker B: I actually, I don't set it to what the cleaning fee is. I sort of. I bake it into the. I bake it into the nightly rate I got you. [00:33:43] Speaker A: Okay, so 85 grand on this four bedroom. [00:33:46] Speaker B: Correct. [00:33:47] Speaker A: And. And are you expecting it to do about that this year in 24? [00:33:51] Speaker B: Better, worse, closer, like 105. [00:33:54] Speaker A: Whoa, whoa, whoa, wait a minute. Hold on. That's a huge difference. Where do we get this difference? This is $30,000. $20,000. Yeah, 20. [00:34:03] Speaker B: I just want to clarify. [00:34:07] Speaker A: That's 20. [00:34:10] Speaker B: Honestly, I kind of goofed on the demand factor in price labs. I was toying around with it in 2023 and forgot I changed it. And then all the holidays just booked. So I probably left and they all booked out. I'm like, what happened? And I saw that. So it's like, okay, learn to not do that again. [00:34:31] Speaker A: In 23. At the 85 grand you left money on the table. [00:34:34] Speaker B: I probably left like five, five grand or so, give or take, on the table. The one thing I did is I mentioned I visit from time to time. I went out there in January. It's a four bedroom. One of the bedrooms was a twin trundle, which I was new. I didn't really think anything else was like, okay, it's all furnished, great. I'll, you know, set it up for remote management and let it go. But then the more experience I got, I sort of was thinking, okay, let's, you know, maybe if I swap that out for the queen bed that's upstairs and put a king bed in, now I have three kings and a queen and a couple of twins. So there was that. And then also had a pretty, you know, an outdoor fire pit built. So there was outdoor fireplaces on the, on the property. But it didn't have sort of, you know, the Adirondacks and the, and the outside fire pit area, which again, that is something that people are looking for in that market. Again, it goes back to kind of what did guests want to do when they go to that type of location. I also kept kind of getting tips on inquiries of saying, okay, do you have a fire pit? Do you have a fire pit? Is it bring your own firewood for the fire pit? It wasn't so many that I was like, okay, I have to put this in. It was enough that it kind of gave me an inkling that this is something that people are looking for. And so when I was going there to do those upgrades, that was the decision to do that. And I think it's paid off. I'm not going to sit there and say it did this or that because. Exactly. But in terms of the increase, I would say it's a combination of those two. [00:36:14] Speaker A: Okay. Because I am adamantly, I do not like fire pits. I do not like drunk people making fires near my house. But I understand why people do it. And it seems like a lot of your enemies are probably doing it. And so what you're saying is that you lost five grand on pricing mistakes and then we were able to find another 15 grand based on possibly a combination of upgraded amenities and just more experience. [00:36:44] Speaker B: Yeah, and more experience. [00:36:46] Speaker A: Okay. [00:36:46] Speaker B: Slash. I don't know how much the market's gone up and changed. You know, it's like, I don't, I don't know how much things have changed. It's really those two things that I can say I did and something changed. [00:36:56] Speaker A: Now you. So in other words, you think the 115 is sustainable? We'll, we'll. Or I'm sorry, 105. We'll hit that again in that neighborhood next year or. That's the goal. The new goal. [00:37:04] Speaker B: That's the goal. I mean, cool. It's sort of. [00:37:07] Speaker A: Yeah, let's do the same thing on the five. What did we do last year? Five beds. [00:37:11] Speaker B: That one was put into. It's been about. [00:37:13] Speaker A: Not a full year. [00:37:15] Speaker B: Yeah, it's a full year. About in September of 2024 has been a full year. [00:37:19] Speaker A: Can you do the calendar year or the year trailing? [00:37:23] Speaker B: This is gross, not net. There's still expenses in mortgage, et cetera, off the top of my head. Probably like 140 to 150. Now. This one is bigger and it's private on 5 acres and it has panoramic mountain views. [00:37:41] Speaker A: Gorgeous view. [00:37:41] Speaker B: So, yeah. OMG views, as they say in the title. [00:37:45] Speaker A: OMG views. [00:37:47] Speaker B: Wow. Views. Oh, my God. Views. [00:37:49] Speaker A: Yes. Back to the Mets. You'd have to be a Met fan to get that. But. So I think you even texted this to me at one point. But. So you're, you're thinking 140 gross on this five bedroom with the view right? [00:38:02] Speaker B: Now that one was. That one was. That one was a four bedroom and it had extra space in the loft or not in the loft, sorry, in the basement. So part of the, you know, renovation, we stopped by vacuum straw. [00:38:17] Speaker A: So the five bedroom, we're sitting, we think around 140 gross on this thing. It does have a lot of wow factor. It sounds like it's a pretty, pretty good looking property here. I have so many questions on this. Number one, is the 140 sustainable? That's going to be our rolling goal for next year. [00:38:37] Speaker B: That's. That's the plan. [00:38:39] Speaker A: Are your neighbors getting. What does the air DNA put this thing at? Do you have any idea in terms. [00:38:43] Speaker B: Of projections or surrounding. Around the surrounding area? [00:38:46] Speaker A: I'm gonna pull it up right now. As a matter of fact, I'm gonna message you on the side, get the address and pull up what we can get some data on this thing. And I know my dad and my data junkies are gonna love that, so. [00:38:58] Speaker B: Sure. [00:38:58] Speaker A: Yeah. All right. So I was able to pull it up pretty quickly there. And the four bedroom on air DNA, which you are saying is hitting 105, give or take this year. Air DNA has got that thing at projected revenue of 38,000. Four beds, four baths, ten. Excellent point. [00:39:14] Speaker B: I just have a two bed. [00:39:16] Speaker A: So it's four, four, four, four, ten. Let me change that. Excellent point. You're right on 105 grand. Bam. Wow, look at that. Okay. And the five bedroom, how many baths? [00:39:30] Speaker B: Three and a half. [00:39:30] Speaker A: Twelve guests. [00:39:32] Speaker B: Correct. [00:39:32] Speaker A: Interesting. This one's got much lower. Even though it's a bigger property with more guests, it's showing 50% occupancy at 67 grand. That doesn't really make any sense. Why would the smaller property in the same market have a lower Air DNA score? What is your occupancy, give or take, for a year? Do you have any idea? [00:39:51] Speaker B: Between 90 and 95%. [00:39:54] Speaker A: Wow. That's not. [00:39:55] Speaker B: Like I said. I. Go ahead. We were kind of talking about this offline. There's at least in terms of how I'm thinking about the strategy is I'm still pricing the premium days and times of year to try to maximize, but then sort of that occupancy number is up and the price is lower than maybe some folks in the neighborhood because of those, you know, bottom of the barrel bargain types of prices. Again, goes back to getting that occupancy to get a better chance to get a review. And you sort of build. You build momentum based on that. [00:40:26] Speaker A: Yeah. I think traditionally on a property such as these that we're talking about, I would prefer to sit closer to 80% occupied and have none of those $75 nights. But this is an interesting strategy here. [00:40:40] Speaker B: I could play around with it. I'm going in on year three for the first one, the four bedroom. Yeah. I feel like now they've built a review base. It's like now I can sort of tinker with. [00:40:53] Speaker A: No, I like it. [00:40:55] Speaker B: Revenue, but I've never really heard of. [00:40:57] Speaker A: Anybody doing it like this. [00:40:58] Speaker B: I think that's. That's what you talk. Meeting the seats. [00:41:02] Speaker A: Meeting the seats. Yeah. I taught you how to do that. That's right. [00:41:05] Speaker B: Yes, sir. Yeah. [00:41:06] Speaker A: I've never really heard anybody going like this far above and beyond on the occupancy, but it seems to be working. I guess the downside may be that you're making your neighbors mad. I mean, I can't imagine that your enemies are so super psyched about you renting your house for $75 a night. But the truth is, is they probably don't even know or care, you know. [00:41:25] Speaker B: Or they can't because they have a property manager in place or they have outside investors to sort of feed and pay their cut to get their cut. So I, we're, we're owner operators. And that's something that you teach as well, is that you can do this yourself, because you can. And it costs a lot to. You'll do a better job and it will save you money. But I feel like it also gives the owner operator a competitive advantage in terms of pricing because you can go that low and still get your cut, depending on what that is, because you don't have to shell out the 20 to 30% to a professional. [00:42:01] Speaker A: Extremely interesting strategy. You got me thinking, man, maybe some of those Mondays and Tuesdays on my bigger properties, maybe I could go a little lower. And I can't believe somebody is like going lower than me because everybody's always making fun of me or telling me, man, you go too low. [00:42:15] Speaker B: And again, these are just. I'm more focused on the review, not. [00:42:18] Speaker A: The revenue and the gross. Obviously the gross, you know, you chip away at X amount of number nights per year and that, that stuff adds up. And you know, you're hitting140,000 plus on a five bed. And I think that's probably right where. Right where you want to be. Let me ask you one more thing about the five bedroom before we move on. Sure. The five acres. What's the deal there? Do we have to manicure this? Is there a lawn guy involved or is it like, you know, hardscaped or what? [00:42:44] Speaker B: It's sort of kind of forest. I don't know how to say it. It's not like a five acre and a huge lawn. It's. It's on five acres. You drive up to the bottom of the driveway. There's a steep paved driveway. You drive up to the top and the house itself maybe sits on half an acre or maybe like half an acre to an acre. And then the rest is just sort of undeveloped forestry. So you have a lawn? [00:43:08] Speaker A: Do you have a lawn? Does it get m regularly? [00:43:10] Speaker B: No, there's no lawn. It's just. It's just trimming the trees that grow and the weeds that grow. Everything else is hardscape or it's trees. [00:43:19] Speaker A: Around a couple times a year you get a tree guy over There a. [00:43:22] Speaker B: Couple times a quarter. [00:43:23] Speaker A: Oh, pretty often. Okay. [00:43:25] Speaker B: Yeah, there's more. A couple trees, like couple year. It's more like. It's more weeds. Weeds and plants and things. Just trimming it and keeping it nice. [00:43:33] Speaker A: Okay, interesting. All right. You say five, five acres and I'm like, oh, that sounds like a management nightmare. Got a lot of. [00:43:37] Speaker B: No, no. If it was 5 acre lawn, then that's something I would, you know, that's what I would factor in. But you got to factor that into your costs as well. [00:43:46] Speaker A: All right, walk me through Blue Ridge here. Just briefly at least your experience with it and where I want to be. And can you give me an idea of certain areas? Obviously we have the town center here. Can you describe that? [00:43:56] Speaker B: Yeah, I'll, I'll try to do it as a description for, for the folks listening on Spotify or wherever you get your podcasts. [00:44:04] Speaker A: Yes, wonderful. [00:44:05] Speaker B: But I'll start at Blue Ridge. More macro than Blue Ridge itself. Right. This is. People drive to go to a cabin in the woods. They're from Atlanta, they're from north Florida, they're from central Florida. Some folks even drive up from south Florida and there's maybe occasional folks coming from Alabama, South Carolina. It's sort of, if you're driving up from Florida, you could go through it on the way to the Smoky Mountains. I wouldn't. I mean, that's not the fastest way, but it's sort of the first mountain town for, for Atlanta, for North Florida. [00:44:36] Speaker A: You're actually closer to Chattanooga than Atlanta, but it's not easy to get there from Chattanooga, is that correct? [00:44:41] Speaker B: It's about the same drive. [00:44:43] Speaker A: Okay. [00:44:43] Speaker B: From Atlanta and Chattanooga is about an hour and a half, two hours depending on. I haven't flown from Chattanooga, but yeah, it's about two hours from the Atlanta airport, depending and again depending on to get to the center of Blue Ridge. [00:44:53] Speaker A: Yes, I have plenty a bunch of real estate in Chattanooga. I'm very familiar with that area. More so than Atlanta. But anyway, go ahead. Blue Ridge, you know, this area here is just cute as could be. [00:45:04] Speaker B: Yep. It's your small town, small mountain town, sort of downtown type of area in terms of where to look. And this is what I was told and I think the agents would just shop there. Would continue to say you kind of want to be 15 to 20 minute drive from the center of town. There's. There's a McDonald's in the center of Blue Ridge. So if I'm looking at, looking at the map that some looking at a place that's one two, three, Main Street. I'm like, okay, is it 20 minutes or less to town? That's not to say that you can't have success further out. [00:45:37] Speaker A: You're just losing 20 minutes in any direction. [00:45:41] Speaker B: Yeah. [00:45:41] Speaker A: Your opinion? [00:45:42] Speaker B: Yeah. And this kind of gets deeper into topography and whatnot. I'll try to describe it, but different parts have different types of roads. Some are paved, some are not paved, some are on hills, some are not. For example, if you're looking at Blue Ridge, you're looking at a map right now and you go to the south east sort of that ASCA area south of Lake Blue Ridge, you could be really close to town, but it could be a 30 minute drive because of the roads. That's why it's important. There's not really like a mile radius. It's looking at each one saying, okay, how long is the drive? Now that's not to say there's not folks that want to be a suite cabin in the middle of nowhere and. But to drive 45 minutes to get into town, to get your groceries, to go to dinner and stuff could be, could be cumbersome. Okay, that's not a hard and fast rule. [00:46:28] Speaker A: But what about the lake in Morgantown? Is that desirable to you? [00:46:31] Speaker B: Yeah, I mean, I don't have the money at the price point to be on the lake, but that's a big attraction. People are going up there to hike, hike, bike, go to the lake, go to a vineyard, go to a brewery, those kinds of things. And when you're looking at the Blue Ridge area, again, if you're looking on a map, there's sort of a collection of smaller towns that make up the quote unquote, Blue Ridge area. Short term rentals are outlawed in the city limits of Blue Ridge. If you're looking at the map, that's the gray sort of rectangle. That's your, that's your downtown. Short term rentals are not allowed there. [00:47:06] Speaker A: Which is a very small area. Really. [00:47:08] Speaker B: Right. Yeah. This is a few streets. [00:47:10] Speaker A: Yeah. [00:47:10] Speaker B: And it's really the main. [00:47:12] Speaker A: Where are you on this? You know, give or take. Are they. Are your properties anywhere near each other. [00:47:17] Speaker B: Like 20 minutes apart? There's really kind of a few small towns. There's Cherry Log, there's asca, there's, there's Blue Ridge proper, but not the city limits. And that's sort of to the west of that gray rectangle. If you're looking at a map. And then if you go north of the lake, there's Mineral Bluff and Morganton. That's sort of The Circle. Got it. And there's some folks up in Epworth, and. But I'm not sure how they, you know, how it compares to the other ones. That is just sort of what I was told. [00:47:50] Speaker A: Are you happy with your location? You're good? You like where yours are? [00:47:55] Speaker B: Yeah, so far, so good. One of them is to the west of the town. It's in Blue Ridge proper, and the other one is in Morganton. [00:48:03] Speaker A: Okay. [00:48:03] Speaker B: The one thing I will say, and again, this is just a suspicion, I don't know anything about the algorithm. I don't have an inside person. But when you think about the guests and what they're searching on Airbnb or vrbo, they're searching for Blue Ridge to go. To go to Blue Ridge. Right. Which is a whole encompassing area, then the question becomes, you know, Does Airbnb or VRBO's algorithm know that when you're searching for Blue Ridge to recommend places in Morganton and Mineral Bluff, et cetera? Again, that's not a deal breaker, but just something to think about. [00:48:33] Speaker A: Do you have a. An area that you, you know, have a fin. You know, your heart is reaching out toward, you know, like an area you really like? Here you were to buy another one tomorrow. In other words, in Blue Ridge, I'm. [00:48:45] Speaker B: Looking at proximity to town and the more of the property itself and making sure that it's, you know, it's close to town. But then I'm looking at. Does it have square footage that you can add value in? Does it have, you know, space to put in a fire pit? Does it have the different kinds of things that I look forward to sort of put that in. Does it have a view? At the end of the day, those are things that you can't. You can't. You can sort of build a view by trimming some trees, but in terms of where the location is, that's something that you cannot change. So, okay, let's look at that. [00:49:21] Speaker A: Let's pivot a little bit into a broken boat. Now, here's another thing I find very interesting, is that you are such a numbers guy, but you went into what we hear oftentimes as areas that, you know, are a little less of a landslide, you know, like a little bit less of a guarantee. And so let's go Blue Ridge to Broken Bow, which, again, has a similar vibe, really completely different part of the world of the. Of the country. But let's talk about those properties. Are you at one? Two? How many do we have there? [00:49:57] Speaker B: Two. [00:49:57] Speaker A: Two properties. [00:49:59] Speaker B: One is live, one is. Is going to be up in a couple of weeks. [00:50:03] Speaker A: Oh, it's brand new. [00:50:04] Speaker B: Yep. Finishing up a few loose ends on some rehab and then it should be, it should be ready for rent. [00:50:10] Speaker A: So still buying and still buying in Broken Boat? [00:50:14] Speaker B: For now, Yeah. I think it's, I think now we're at a point where it's like, okay, we're kind of, let's take a break and, and focus on the managing and the system such and sort of see what happens in the interest rate environment. It's more like refinancing. [00:50:30] Speaker A: Right. Well, and also let's not forget things, those down payments are expensive. So you know, there's the reality there. But, but Broken Bow, okay, how. The one that you have in service, when did you buy it? How many bedrooms? [00:50:44] Speaker B: This is where, this is where my fiance comes into the fold. We're like, hey, let's, you know, what is, does us doing this together look like? [00:50:53] Speaker A: And in other words, it's her property. [00:50:55] Speaker B: It's. Yeah, she's on the title. We do it together. The other one, I'm on the title. We do it together. [00:50:59] Speaker A: I got you. [00:51:00] Speaker B: Yeah. As far as Broken, before we get into the properties, it's like Broken Bow compared to Blue Ridge. I would say. [00:51:06] Speaker A: Yeah. [00:51:06] Speaker B: Like you mentioned, Broken Bow is a kind of totally different world. What's, what's different is there's, there's the town of Broken Bow, but then there's also Hochatown which is sort of the, the vacation area of Broken Bow. They both have Broken Bow addresses, but yeah, perfect. Looking at a map, there's I 70 crosses 259. That is the proper town of Broken Bow. If you go slightly north near where Broken or where the lake is, that's where Hochetown is. The one difference I would say comparing, they're both mountain towns. This one is sort of the, you know, people from Dallas, North Texas drive up to look at a cabin in the woods. And this one is vacation town. All cabins, the whole town, everything is. People are renting these for the weekend, for a week to go to the lake. No real full time residents. There's less of, you know, you have a short term rental in Blue Ridge, but your neighbors are, you know, retired and they just move from Florida to get out of the, you know, get out of the humidity and retire and have it, you know, good retirement in the mountains. This is more like. And it, it's newer so it's sort of, I don't know how it came to be, but someone looked at a map and just put their Finger down and said, here, vacation town. Here, of course there is the lake. There's hiking and stuff like that. But it's a spectacle just because everything is so new. And all the, you know, all the businesses are restaurants and they got, you know, punny names like the bowling alley is called Gutter Chaos. And there's a. There's a female owned and run winery called Girls Gone Wine, stuff like that. This one is like you're on vacation. My fiance and I enjoy going out there. It's a lot of fun. [00:52:50] Speaker A: It's a good time. [00:52:51] Speaker B: Yeah, totally. [00:52:52] Speaker A: Okay. And we want to be close to the lake or where's your desired area here? [00:52:57] Speaker B: Yeah. A lot of the town is built. So if you zoom in a Little Bit, Highway 259 runs through the town. What's different here also is that the lake and the areas around the lake are protected land. So there's no, there's no properties new to lake. There's no homes on lake. It's just the lake. If you scroll up on the map outside of Broken Bow, I think the neighborhoods sort of start. There's259 which runs north and south. And then if you see there's a loop to the east of it, that's 259A and that's where it takes you into the National Park, Mountain Fork River. You can go into the lake from there. That's where you dock your boat or, you know, set off. [00:53:37] Speaker A: And you learned all of this with the specific purpose of buying a property? [00:53:41] Speaker B: Yeah. How are you going to. Not. How are you going to invest in something if you don't know the details? [00:53:45] Speaker A: No, but I'm just saying you didn't know anything about this until you decided to. Very. [00:53:50] Speaker B: No, but, but again, and this isn't a paid ad. I mean, the shop does a great job of giving you the resources that you need to be successful. I will say that you got to take the time and go through it. You know, there you got to drink the water from the lake. The shop's going to lead you there. But you got to, you know, watch all the videos that, you know, talk about exactly what we're going through here of what, who are the people that come here. [00:54:16] Speaker A: Right. [00:54:16] Speaker B: What's the town like? What's it built around? But to answer your question, sort of being that there's sort of a few close to the lake is important, but also sort of close to town. And a lot of the town is built along 259. So if you're looking again at A map. The maze of Hochetown is sort of the north point. And then sort of just draw a circle in and around that area. There's a lot of development going on. [00:54:45] Speaker A: Above that for rental or for primary. [00:54:47] Speaker B: There are. There's like. Like I said, these are all built for rental. The. [00:54:51] Speaker A: Do I need to worry about too much supply coming on and wiping me out? [00:54:55] Speaker B: To be honest, if you don't feel confident that you can capture the demand, then yeah. I mean, I don't know. [00:55:01] Speaker A: Like, not your problem. You don't worry about that? [00:55:03] Speaker B: No, I. I don't. It is a concern, for sure. And this one, you notice there's a lot more new construction, things going up, but again, number one, rural real estate. Location, location, location. So they. They've built closer to the town. They're starting to expand out. That's just again, you know, close to town. [00:55:24] Speaker A: I agree. I do want to stop you there for a second and reiterate that point. Any area that is being built, we see it a lot in the Smokies, you know, they are having to go further out. So even. Yes. If there is a bunch of construction going on or new development, et cetera, you know, those people are not going to have as good a location as somebody that's been doing it for 10 years, or you go buy that house that's been there for 20 years, that kind of thing. So all these things are very valid points, you know. And of course, the government's talking about how we need another $10 million or 10 million houses just to catch up and all that, so who knows what's actually real and what's not. [00:56:03] Speaker B: But that's not. I mean, that's not in a vacation town, though. [00:56:06] Speaker A: No, true. [00:56:07] Speaker B: That's like places to live. And that's a very valid thing. [00:56:11] Speaker A: Yes. But long story short, what Jack's getting at is location is a huge deal and you're not going to pick that house up and move it. Right. So I do think that, you know, you need to be able to find a location that you're going to be happy with for the next foreseeable future. 20 years maybe, you know. Okay, so the. The property that you've had here, how many bedrooms is it Your wife? I guess it's your wife's property. [00:56:35] Speaker B: Technically, yes. Wife to be. [00:56:38] Speaker A: Yes. How many bedrooms? [00:56:40] Speaker B: It's a. Four bedrooms, three baths, sleeps 12. Okay. You like the one thing that's. [00:56:47] Speaker A: Go ahead. [00:56:47] Speaker B: One that's unique. There is that bunk rooms are pretty common. Almost. Almost. A table steak, arguably, which is. Goes against my personal preference. And the cleaning company that I work with in Blue Ridge and a lot of other cleaning companies that you hear is the, the camp sort of split on bug beds. I personally would rather not have them just because it's I think more just a hassle for the cleaners and. But what was I saying? This here is, this is family. Families come up here to vacation. It's like families. Some bachelor parties, some bachelorette parties. I mean I was talking about girls gone, wine. That is like purpose built bachelorette. Stop. Yeah, fiance. We went in. It's. It's cool. They make good wine. It's. It's fun time. [00:57:40] Speaker A: Okay, cool. Four, three sleeps, 12 with a bunk room. And any idea what the gross annual gross on that thing will hit? Give or take. [00:57:49] Speaker B: Put in a service in August. [00:57:51] Speaker A: So we underwrote as in this year. [00:57:55] Speaker B: Yeah. [00:57:56] Speaker A: Okay. What do you project it to? Gross? [00:57:58] Speaker B: We underwrote it at like 120 to 130 gross. [00:58:02] Speaker A: I want to say, what's a property like this cost me, if you don't mind, to purchase. [00:58:06] Speaker B: Yeah, no, I know this is the subject of the podcast that helps listeners. I'm. It's kind of interesting talking about the dollars and cents like this. I'll keep it in a range four bedroom, probably run you 750 to 9. [00:58:19] Speaker A: 750 to 9 for a 130 gross. 120 to 130 gross. Okay, cool. [00:58:24] Speaker B: Correct. [00:58:25] Speaker A: So we're a little too new in this market to, to have too much data. You personally. [00:58:30] Speaker B: Yeah, right. And that's, I mean that's where DNA comes in and you can sort of see what others are doing in the market and kind of make a. Again, this goes back to the, it's not just all dollars and cents of. Okay, like this, this place, you can tell when you look at a list and you look at hundreds and thousands of listings. Like you can look at a listing right away and see, okay, this person's sort of, they know what they're doing. They, they're booked. Well, their reviews are. Well, they're doing X amount. They sort of have the same things and they don't have something like a pickleball court or a resort style pool. You can sort of. Or they don't have in places like Blue Ridge or the Smokies, you have those, you know, wow. Views. You can start to kind of get an idea of a range of what it would do. Now I will say, given that I'm in this a little bit longer, different markets. So we're still learning through that market. But I sort of have experience of the other ones of okay, this is what I can do and sit within with this market based on that, how can you know where does that stack up? [00:59:34] Speaker A: I do think there's a slight correlation there. You know, like my four bedroom in one market and in my four bedroom in another market, they're gonna be pretty close. You know, I hate to say that because now I know the number ninjas their head's going to explode because it's a completely different state, time zone, area code. But I mean, you know, if I look at my four bedrooms in my portfolio, they, they are in the same ballpark regardless of their market. So that's something to consider too. Now we're getting way in the weeds. But do you think there's something to. [01:00:04] Speaker B: That in terms of the number of bedrooms across markets? [01:00:08] Speaker A: In terms of comparing the broken bow house that you just went in service with to your, say, your Blue Ridge four bedroom, do you think that they'll be somewhat comparable? [01:00:19] Speaker B: There's about. Broken money can make about 20% more. However, the insurance is a little bit higher, the taxes are a little bit higher and the price of the homes are a little bit higher. So you're looking at it. It's all relative. Not to mention, are you self managing? Are you not? It's sort of. Now you're looking at, we're getting really deep here. But how does the, you know, the revenue versus expenses stack up for those different markets? I know Tennessee has low taxes. I'm not sure what the insurance is like. I'm not, I haven't really gone too far in that market. Excuse me, but I'm just comparing these two. You know, taxes and insurance are a little bit higher. You can make a little bit more, but they cost a little bit more. So what does that mean then? We'll see. [01:01:07] Speaker A: Got it. All right, let's pivot into management. Straight up management. What softwares are we using? [01:01:13] Speaker B: Yeah, let's see. Pms, hospitable. I feel like my brain's wired for owner res but I'm in too deep on hospitable per year wreck. [01:01:21] Speaker A: And would you prefer that it was a little more robust? [01:01:24] Speaker B: It wasn't on the metric side before, but me being the numbers, like I didn't, I didn't have a problem exporting the sheet and then making my own reporting for the time being. Now they do have metrics which is, which is good so that they have definitely listened there. But in terms of ease of use, you know, building out the automations and the. And the messaging, which is really what it's for. That's where I. That's where I went. Price labs. That's the pricing gold standard touchstay for guidebooks. I'm trying to think what else? Oh, I like brain freeze. That's a sword I'll die on. I know, I know. [01:02:03] Speaker A: All right, do tell. [01:02:04] Speaker B: Yeah, and this one might be a little controversial, but because it's sort of seen as, like, the shiny object, but especially as you start to scale, it's. It's. What it's doing is it's enemy methoding for you and giving you averages of where you're ranking based on number of guests and where you are in that. In that market. And the reason that I like it is because it. It pairs well with price labs. So when I'm looking at my pricing, maybe I'm six weeks out, and it's like, okay, I've usually booked by this time. You know, Rank Breeze says I'm on. On average. Again, this is an average because different searches yield different results based on who you are, where you are, etc. I'm not gonna go on how algorithms work, but then it takes an average but all that to say it sort of is a leading indicator that I might be overpriced. And so maybe I'll lower the prices a little bit. Or if it's, I'm looking out, I'm still not booked, but I'm still ranking high. Okay, maybe I'll leave the prices. Or if it's I'm ranking high and I'm not booking, maybe that's an issue with my listing, like something's not showing up or, you know, those different kinds of things. So I like it because it has actually helped me not only lower prices when I'm too high, but actually raise prices when I'm too low. If I look out and it's like, okay, I'm two months out and high season, and I'm ranking on page one already. I might want to raise my prices a little bit because I might be able to make a little bit more and still rank on that. On that page. So all that to say, I like Rank Breeze just because it pairs well with. With price labs and looking at pricing and, you know, seeing you're ranking because that's where you kind of. You kind of live and die by the reviews, but also where you're showing up in search. [01:03:46] Speaker A: Cool. All right. I mean, hey, Rank Breeze working for you. No problem, man. I mean, it's like a reverse enemy method, right? Like You're. [01:03:52] Speaker B: Yeah. Especially when you get to more. It's like you can do, you can do what Rank Breeze does yourself and you can enemy method. You can enemy method on the platforms. And this is only for Airbnb. It only does it for Airbnb. So VRBO is kind of, if you want to look at vrbo, you got to look at it yourself. But for me it's, it's, it's a time saver and it helps with the pricing. I can go and sort of look at, okay, where am I ranking for these dates? Do I like where I'm at? And then do I need to change or keep prices based on where that's at? [01:04:28] Speaker A: Wonderful, wonderful. Where's the future for, for, for you? It sounds like maybe we're going to chill a minute on buying another house, that kind of thing. Or, or you know, like, I mean you're just getting married, right? There's no hurry. You're young. [01:04:41] Speaker B: Exactly. [01:04:42] Speaker A: Yeah. [01:04:43] Speaker B: This sort of started as like, okay, it's side investment thing. Also forgotten. You know, I don't know, some of your, some or a lot of the audience sort of worked in the tech space, but it's been pretty rocky in terms of employment. I was not victim to that. So I sort of like I was doing this on the side and then in 2023 actually got laid off twice. So I had that sort of decision moment of like, okay, not only do. It's this sort of an alternative investment for me, but like could it go bigger to the point where it becomes the full time thing and we could do a whole other episode about, you know, keep your job, quit your job, whatever. But yeah, I was like, I like this. It's going well. I get, I get the warm and fuzzies for giving people a nice vacation. And I think it, I think it helps, I think it helps people out, like to just give them very good. Cute, clean. Was it cute? Clean, comfortable and then customer experience. And that's, that's how I do it. [01:05:40] Speaker A: Yeah, yeah, simple as that. And here's the deal. Everybody worries about saturation. Oh man. Don't talk about Blue Ridge on a podcast, Luke, because then everybody's going to go buy their bull crap first. First of all, you gotta, it's like Jack said, you gotta stop worrying about competition. You gotta stop, man. If you're listening to this podcast, people can't compete with you. They can. Have a little confidence in yourself, my friends. If you've gone so far as to go deep enough to find good old long hair, Luke's, podcast, Short Term Rental Management. You're the cream of the crop. Nobody can compete with you. All right, sorry I cut you off. Go ahead. [01:06:15] Speaker B: No, I would just say you want to keep a pulse on what's. What your competitors are doing, but I just prefer to be more focused on the customer. It's like, customer, customer focus. Like, look at what the competition is doing. But how do, how can I spend the time and things that I need to do to give someone the best experience possible? And when you do that, I'm under the belief that that translates into business success. [01:06:44] Speaker A: How do you handle with the analytical brain that you've got? How do you handle when a guest is complaining? You know, like, let's say they message you and they say the shower curtain's got mildew on it. Where does your brain go with that? Like, how do you handle that? That's case by case. [01:07:00] Speaker B: Yeah, case by case. But I sort of think about, like, what would I want? I was vacationing and you have the hospitality element. I mean, there's been instances where like a TV's needed to be replaced. I've known that. And someone's like, hey, the TV's not working. And I'll try to go a little bit above and beyond, especially if it's a, you know, a holiday book. Can I say, no problem, there'll be a TV in four hours and get that delivered from Walmart or something. So it's a case by case basis. But I would say, again, just how do I. What can I do to give people the smoothest, best vacation experience without, you know, the things. Of course someone's going to love that. There's a, you know, a resort pool and a pickleball court. So, like, you know, people are gonna love that. But it's more like I really focus on the basics, you know, thinking about, okay, what does an ideal location look like for someone that's driving up here? Right? They, and this is simple stuff, right? They have the directions to get to the house. If there's a steep road, they. They know that it's steep and they might need to, you know, bring a different car. They need to know that the check in is going to be easy. They need to know, you know, like, honestly, the most value probably is just literally sending a message the next morning and saying, hey, how's everything going? And people just want to be seen and heard and that you care about them and let that sort of fall where they may. I've also sort of used the experience from my own. Like, I stay in Airbnbs and stuff. And now it's like you have those thoughts of, you know, okay, it's like the. You know, it's the night before you check out, and maybe it's like, okay, well, what do I need to do? Are they going to send me this whole laundry list of things or. It's not much. Like, I just try to anticipate those things and then build either messages or things in the guidebook around those sorts of things, if that. If that makes sense. [01:08:45] Speaker A: No, I bring it up because a lot of times the analytical type people, the onerous type people, I don't take this as the wrong way. Not you, but anybody listening to this. If you're a numbers ninja, like we talk about, if you're, you know, an onerous spreadsheet type of a person, wonderful. It's great. It's a great way to have success in real estate. But a lot of times those. That type of a person will struggle with the mildew on the shower curtain, the drip in the kitchen sink, the ice machine not working. Oh, my goodness. This is not something I can put on a spreadsheet. It's a variable. And I don't know how to handle a personality, you know, which is very much exactly what we're doing here, at least with the management side of things. After acquisition, it's like you got to have two different brains in a way, right? You got to have the acquisition brain with the numbers. Numbers, numbers, numbers, numbers. Which people. Just listen, my opinion, people will go way overboard with that stuff. But then you got to have the hospitality, which is, to me, it's very similar to a creative brain. The creative and the hospitality seem to be hanging around in the same sphere in your brain. So it's wonderful that you've been able to make a go out of both aspects because, you know, that's. That's hard to do sometimes. [01:09:57] Speaker B: Yeah, that's where. That's where the kind of. The marketing brain sort of comes in. It's the same thing as doing in the day job is how do you give people a smooth, frictionless, easy experience. Experience, sorry. Because they're trying. Like someone's trying to enjoy your house, they're trying to have a nice vacation. So all I'm trying to do is to give them the tools that give them the best chance to have a good vacation. That could be amenities, right? That could also be how to use the fireplace, how to use the gaming console. Like, sure, you could put in a. Like you could put in a gaming console. But if you don't give them the instructions of how to turn it on and what they can do with it. It doesn't really mean anything to them. Or, you know, like, you sort of go back also on things like, okay, I'm in this new town, I don't know where I am. You talk about this as well. It's like, I just want to be told, like, what's a good restaurant? Like, I don't want to think about where to go eat. I don't want to think about what to do. Like, I want to be served options. And that's just hospitality. And that's what we try to do. And I think touched, it is a really good job of that. You know, the places and the recommendations and stuff like that. And, you know, it helps to. You don't have to physically go there. But I think it does help. I think it does help tremendously. Not only for you staying in the house of, like, things like, oh, the, you know, we just. It's on our rehabilitation one. One, for example, like, you walk into the bathroom and the door swings one way, but that's going to hit the shower and it. Or it. It swings one way, but that goes over the wall switch. That's just kind of a weird thing. But I would never know that looking at it on Zillow or whatever. So it's like, okay, then now, you know, it's like, okay, that's part of an item of like, let's slip the door so that it's easy to, like, you walk in the door and the light switch is right there. Or you. That's just an example that came up recently. But those kinds of things where you just like, it's literally just sleeping, living, doing that. So not only are you setting it up for remote, but it's like you living in it. You kind of learn those things of, oh, does it. Does the house have this? Does it have that? Like, how do I cook? Where do I go to the grocery store? And then you sort of reverse engineer that into your guidebook and your messages to help guide people on that path that you want them to have with that vacation. [01:12:10] Speaker A: Yeah. What we're getting at here is the acquisition is only going to last so long. And then you're a property manager, so that's where you need to focus your energy. And you are so right about that damn swing on the door, going to the light switch, stuff like that. [01:12:22] Speaker B: You would never know. [01:12:23] Speaker A: You never know. [01:12:24] Speaker B: But it's like. And no one would probably ever say it in a review or anything. It's just one of those things of. It's like you got to just. You live it and do, you know, and then it's okay. How do I create. Correct that so that, again, everything is smooth and smooth and seamless. That's. [01:12:41] Speaker A: That's really what. [01:12:41] Speaker B: That's really what I go for. Is that the most. Now, is that the most scalable? If you think about, like, having multiple going on at once, I don't know. I'm not sure if I'm trying to get to that point, but it's. It's something that. That I've gone back and forth on is okay. Do I really need to go there? You know, it's like you gotta do the flights and the time and the cars, but it's like in for that. I think it's those little things that do go a long way. [01:13:06] Speaker A: Yeah, absolutely. Absolutely. Well, let's wrap it up, brother. Taking enough of your time. Appreciate you. Always a pleasure talking to you. And that's how, you know, this whole thing started. We've had many great conversations. I like having you around. Do you have a book for me? Are you. You have any books recently that have been knocking your socks off that you could throw at me? Because I need a new, good, good book right now. [01:13:28] Speaker B: Yeah, let me look it up. And this is beyond, you know, rich dad, poor dad and things. [01:13:35] Speaker A: No, no. We want just, you know, something you're reading right now. Something random, whatever you got. [01:13:40] Speaker B: This isn't something I've read recently, but it's definitely a book. You, you know, you read those books and you're just like, whoa. That totally just changed how I think about things. And it's valuable. And I think this applies to a lot of things. It's called Pyramid Principle. [01:13:55] Speaker A: I'm sorry, what? [01:13:56] Speaker B: Pyramid Principle. [01:13:57] Speaker A: Really? I like the title. Never heard of it. [01:14:00] Speaker B: Yeah, it's logic and writing and thinking. And basically, the premise of the book is the way that we're taught to write and communicate and think in school is different than how things are in business in the real world. So it sort of reframes how you write and how you communicate things, which is immensely helpful when you're a manager or you're acquiring things. Like you're communicating constantly with guests, with realtors, with handy people, et cetera. And that one sort of turned. Turned the tables a little bit for me that I highly recommend. An example I'll give that's relevant for short terms is you, for example, you preach the sort of the bullet points. Right. And the sort of the Listing. Right. The way they were taught to write in school is because of A, because of B, because of C. Then D is true. Right. Because I have a fire pit and I'm close to town and I have a pool. You should stay at my Airbnb. What this book says is when you're writing for business or clarity of communication is to put that at the front. So it's like instead of, you know, because of these things, you should stay at my place on your listing. It's you should stay at my place because of these things. Such that when somebody reads it, they know that it feeds back to the main point, which is you should stay at my place. If that makes sense. [01:15:15] Speaker A: Yes. Unfortunately, this book is not available. This is a very. It's got a lot of reviews. 4000 on Goodreads. Not. [01:15:24] Speaker B: It's a little neat. It's a little niche. [01:15:25] Speaker A: Niche. Yeah. Yeah. This is not on Audible, which is a deal breaker for me, unfortunately, because I can't read a book. [01:15:32] Speaker B: I'm on a more accessible one. If you're just. [01:15:35] Speaker A: No, no, this is great. I love this. I'm, I'm, I'm. I'm upset that I can't get this on Audible, which is weird with the amount of reviews it has. The hardcover is $100 for that book. [01:15:46] Speaker B: I think there's a paperback or if you go on ebay or something. [01:15:48] Speaker A: Yeah, there is a paperback for. Maybe I'm on the wrong here. Pyramid principle. Oh, here's another one. No, this is a Barbara Minto. [01:15:56] Speaker B: It's more so about like business communication and things like building presentations and such, which isn't. It's of course not relevant for short term rental management, but the principles of writing emails, talking to realtors, talking to handy people, writing listings and copying things for your guests definitely applies. [01:16:13] Speaker A: Got it. All right, well, and I did want to clarify one thing. You mentioned the shop a few times. Just in case nobody knows what he's talking about. I am going to go throw a commercial in there. The short term shop is how you found and sourced these properties. And did you find value? I obviously I probably taught you a few things as far as management along the way. You found value in yours truly. You got any grades? Absolutely. Give me. [01:16:39] Speaker B: Absolutely. I apologize for. This isn't like me out of the woodwork when I'm going back to telling you what to do and how to do it for that guest experience. The short term shop does that for buying and setting up a vacation. Here's what to look for. Here's how you manage it. I have management fun days. Here's the class. Here's the messages you send. Here's the tools that we use. It is right to the finish line. And then you can take it and apply it. You apply it in addition to the things that you know or believe to be true and have a lot of success. And again, it's not paid ads. I wasn't, you know, wasn't forced to say that. That's just the truth. And that's what I actually appreciate. Because it. Yeah, because correct me if I'm wrong, Avery has a marketing background too, right? [01:17:25] Speaker A: She has an MBA in marketing. Yes. [01:17:27] Speaker B: There you go. Yeah, I sort of see it show up in things of that. Of sort of guiding people through that process. And I'll never forget when I was on that management Monday call the very first time. I think that was the thing that also helped me the most, is I'm sitting on this call and I'm like, how did I get here? What am I doing here? This is insane. But at the same time, you guys, you know, made at least me personally feel. Feel good, like, comfortable that I was going along with this and that there would be guidance along the way. But that's not to say, you know, Luke's not going to sit down and do it all for you. [01:18:03] Speaker A: No. [01:18:04] Speaker B: He and Avery offer their help and advice if you seek it out and give you the tools that if you want to run with it, you can. But there is an element of you doing it as well. But they take you so far and farther than anyone. [01:18:16] Speaker A: Listen, thank you. Thank you so much. But there is a mutual respect here and there's a reason that I sought you out because you, you know, you're doing well and you listen, you know, and. And I appreciate that because it is hard. It's hard to give all the time, and you took it and ran with it, man. And I appreciate that. That's why I do it, you know? So thank you for that, but. [01:18:40] Speaker B: Yeah. [01:18:40] Speaker A: All right. [01:18:41] Speaker B: Thank you to you and the rest of the folks at the short term shop. I do. I do appreciate it. [01:18:46] Speaker A: No, listen, there's so much love in the air. I can feel it. It's wonderful. I appreciate it and I thank you so much for your time. Well, we'll wrap it up short term. Short term rental management with Jack and Luke. Don't overthink it.