[00:00:02] Speaker A: This is short term rental management, the show that is all about short term rental property management with your hosts, yours truly, Luke Carl, showtime, short term rental management, the reverend of real estate preaching it today on short term rental management. I'm so excited that you're here. It is a great day. I love you. We're going to talk about cash flow. We're going to talk about how we can make our properties better, increase our income, and be total rock stars. Today's guest, Bobby Harrington. Awesome, dude. He's an ultra runner, which is one of my favorite things about him. I love running, man, and this guy's story is the craziest I've ever heard, quite frankly. So thanks for being here. I love you, and I look forward to the hang after a moment from this week's sponsor.
Join me live every Thursday for a weekly q a all about short term rental.
You like my vibe? If you're digging the long hair extraordinaire cash flow Carl and want to ask me questions in real time, join me at street street. We made it. It is great to be here, and it's going to be a heck of a show today, man. I'm very excited. I've got a lot in common with this gentleman, mostly just because he's really good looking. All right, I'm kidding. But ultra runner, massive, massive running resume and a spiritual leader with his church and also, obviously in real estate. Bobby, how you doing, budy? Where are you? What do you know?
[00:01:51] Speaker B: Good, man. Yeah. Thanks for having me. Super honored to be here. I don't know if I'm supposed to tell you that. You're really good looking, too. I don't know how we're supposed to do.
Super. Yes. Super stoked to be here. I'm in Greensboro, North Carolina, which is where I live. And then we invest and do kind of different stuff, kind of all over the place.
[00:02:14] Speaker A: Okay, cool. Greensboro, you're born and raised?
[00:02:17] Speaker B: No, actually I was born in Tampa, Florida. All right. And so grew up there.
Love being from Florida. And then actually, after I graduated from college, I went to school for business, business, marketing. And then after college, started getting involved in some nonprofit ministry stuff and wanted to go to seminary. Didn't know what. I had no idea what I was going to do with my life. And so moved to North Carolina for seminary. And then I've been here, my wife and I, we've been here for 16 years in either Raleigh Durham or Greensboro, North Carolina, where we live now.
[00:02:52] Speaker A: And how did you get involved with the church always your whole life been involved with the church?
[00:02:57] Speaker B: No, actually it didn't really even start going to church until I was a teenager.
Had some friends invite me to church and then kind of went through college. The normal kind of college thing that a lot of people do. A little bit of church, little bit of partying and just didn't kind of know what direction I was kind of going with my life. And then, I don't know, just had a moment at some point where I just felt like, man, I could go, just try to make money and be successful in my life. But I felt drawn to, I don't know, try to try to help people with a deeper purpose, deeper meaning in life. And so that's kind of what drew me to eventually starting a church, which I did with some friends of mine, kind of co founder of a church a little over eleven years ago.
[00:03:45] Speaker A: Okay. And it's grown pretty big, right? This is very successful organization.
[00:03:51] Speaker B: Yeah. So when we started, literally, I was 29.
Our other pastor, Pastor Andrew, he was the same age. And it was us, our wives and some college students. There's 30 people, moved to a brand new city. None of us lived in Greensboro, moved to a brand new city. And now over the last eleven years, the church, by God's grace, it's crazy. I mean, has grown to. We're 3000 people now and we have six locations and doing really awesome stuff all over the world. Our church has a huge adoption, foster care ministry and starting new churches all over the world. So, yeah, it's really awesome. I've been super honored to be a part of it.
[00:04:33] Speaker A: That's really awesome. I love that. That's great. So you would consider that, I guess, quote unquote, for lack of a better way to put it, the day job?
[00:04:41] Speaker B: Little bit.
[00:04:42] Speaker A: Yeah. Okay, cool. And your first investment in real estate was long term, was it not? You still have that? Where is it?
[00:04:50] Speaker B: Yeah, we do.
It's funny how the real estate cycles work. When I moved to a seminary, we bought a really nice townhouse in Raleigh Durham. And it was right before the real estate market crashed, literally. And so six months later, this was like seven, eight real estate market crashed. My wife and I, we were just newlyweds. And so once we caught the vision to move, to start another church, there was no way we can get out of it. We could have short sold it or whatever back then, but just because the value was like cut in half, that was kind of our entryway into real estate.
Which is cool though, because we learned to find a tenant and have somebody in there and manage it from a city that we're not living in. And it's so funny now, the value of that 16 years later is double than what we bought it for, which is really cool.
We bought it for, like, 150, wrote it down to 90. Now it's worth like 300, which is just cool the way real estate works. So that was our entry into real estate, really, just by accident, not by any sort of strategy.
[00:06:06] Speaker A: Are you noticing any resemblance in the current economy to what it was back then?
[00:06:12] Speaker B: Yeah, I don't know.
I feel like it's just different.
Obviously, when the market crashed, that was a deflationary crisis.
Obviously, all asset prices were going up then, too. But I don't know. It just feels like way more of, like, an inflationary crisis now. Like, it was in, like, the 80s where I read stuff back then. It's like as soon as they take the foot off the gas in terms of raising rates, prices would just continue to go back up. So, yeah, I don't know. It's hard to imagine, like, a massive deflationary, but who knows?
[00:06:47] Speaker A: Well, give me a one or two minute. What's your prediction on where this thing is going and what does it look like?
Are we going to be able to find some deals here anytime soon, or what do you think the next year or two looks like?
[00:07:01] Speaker B: Yeah, I mean, I'm not a macroeconomics. I love that stuff. This is just totally my guess to me. It just feels like it's going to just continue kind of what's been happening. I mean, it's an inflationary crisis.
You put all of this money into the system, it has nowhere else to go. All asset prices go up. There's a lot of people sitting on the sidelines with cash. They continue to raise rates to try to get things to kind of go back down. And I think houses are sitting on the market longer, but it doesn't seem to me like prices are going just, like, crazy, crazy down. And it just felt like if all of a sudden rates go back to 5% or whatever, I just feel like people are just going to be buying like crazy, and there's not much inventory. And it feels to me there's a bit of a building crisis. As somebody who's done different construction stuff, even with our church, it's just hard to imagine. Like it was in seven, eight, all of a sudden, 40%, 50% price cut.
It seems like it's a crisis, but it's a crisis on the other side. And when you print all that money, it's basically just a tax for the poor. If you don't own any assets, you're having to pay rent, your food prices are going up.
And I don't know, it's like, man, you do that over multiple years, that can't just be reversed simply without just absolutely crushing the economy. I mean, I guess they could let rates just go to 20% and hope things would just kind of crash and all the prices would correct, but it feels like that'd be bad for everybody.
[00:08:43] Speaker A: Well, let's not forget that the US government is paying more interest than anybody.
I heard a billion dollars a day right now is what they're paying. Because of the interest rates has doubled.
I think I agree, again, this is not a political or even an economical show in any way, but I think I agree. I think things are going to just kind of cruise the way they are right now. Where another thing, let's talk about auto industry. Same thing there. It was two, three years ago. You could go buy a car and sell it six months later for more than what you paid for it. And now all of a sudden real life is back. And I think people are forgetting that that was not real. And I think that people were being a little more kind of just like nonchalant with their money, just throwing stuff around a little bit, like, oh, no big deal, I can sell this thing for more money in six months. And now it's like everybody's got an extra car in their driveway that nobody cares about, nobody wants anything to do with it right now because every car lot in America is completely jam packed with know. And I think it's going to sit like that, know, maybe around Christmas time or early spring. And then I think finally you're gonna, I've got a car for sale. I'm guilty of it. I've got one in the driveway that I'm like, whatever, why did we get this thing? Let's get rid of it. And nobody is barking at me at all to get that thing. And I think that that's probably going to be like that for a little while and then I think we'll slide back into some sort of sense of normal. Maybe around March or April, but I don't know, man. Who knows?
Let's talk running real quick. And I know it's just between you and me, for the outside world, running is the most boring subject on the planet if you're not a runner. But that's tough crap because you got two really accomplished runners here, especially you, Bobby. I mean, you're basically a real deal, elite ultra runner. So talk to me about your career there. How did that get started and where is it? Lead me all the way through today.
[00:10:51] Speaker B: Yeah. So kind of going way back. I was always inspired growing up. My dad, in 1977, swam a mission across the English Channel as part of the special forces. It was actually the first team that ever swam across the English Channel together. So I grew up kind of hearing those stories, and he was just a mindset and endurance, just beast. And so I always knew I kind of had that in me a little bit. Just like almost what I would just say, like an endurance gene.
So I always ran after college and stuff, but it actually was a little bit later in life, when I was around like 30, that I really got into the ultra running stuff. I love to be outdoors, I love to be in the mountains, and I didn't even know it existed. I just did kind of like a lot of stuff you're doing, just running marathons and stuff. And then I connected with some guys one day that they're like, oh, yeah, we're training for 100 miler. And I was like, what?
I was like, a human being can't run 100 miles. I was like, there's no way. And so I signed up for a 50k race, which is 31 miles after I did that, I was like, there's no way I could run 100 miles. I was like, there's no way. I mean, I was popping ibuprofen afterwards and just practically crying. I was just in bad shape. But just like, life is, I don't know, one thing led to another and then started doing longer races. And at some point I realized I was like, man, I'm pretty good at this. Maybe I should like, I mean, I'm not going to go try to make money being an ultra runner or something. There's probably only a couple of people in the world that can do that. But I was like, I could run out of a pretty high national competitive level. And so it was more of a mental shift of like, I'm going to go see what I can do and I'm going to go try to train more like a professional runner and just kind of see what happens. So I've had some top three results at some big 100 miles races all across the country. So, yeah, fun stuff. Ultra running teaches you so much about life and business and really about mindset and elevating your mindset because you tell someone you run 100 miles and people are like, well, how many days does that take? And you're like, no less than a day. People can't even conceive so it's really an exercise in increasing what you believe you can actually do.
So that's really why I do it. Not for the competition, but just to see how much I can get out of myself.
[00:13:25] Speaker A: Yeah, well, most ultra people I have met are fairly awkward and hard to have a conversation with, so bravo for being a normal person. But how many hundreds have you done?
[00:13:37] Speaker B: I've done 700 miles races and then.
[00:13:41] Speaker A: I would assume there's many other ultras underneath there. 50 miles and 50 k's, et cetera. Too many to count.
[00:13:47] Speaker B: Yeah, a ton of them. Most of those are all mountain races. Like big time mountain races, like 25,000ft of gain. I've only done one flat race I did last October, Havalina 100. It's one of the biggest 100 miles races in the US. And I got 6th place. I ran 15 hours for 100 miles, which is nine minute mile pace, including all the brakes.
I'll tell you what, that hurt worse than any other. I've run 100 miles that took 29 hours. This took 15 hours and hurt way worse because basically ran every single step. No hiking, no walking.
And it's in the desert outside of Phoenix, Arizona.
[00:14:26] Speaker A: You change shoes during the event.
[00:14:29] Speaker B: I didn't know a lot of people will, but it's time.
It is a clock to race when you're trying to compete. So on the mountain races where you're running through rivers and stuff. Yeah, probably will change the shoes a couple of times, but this was desert race.
[00:14:50] Speaker A: Wow. But no full marathons. That's not your thing?
[00:14:54] Speaker B: No, yeah, I will do some marathon stuff, but yeah, that's not really. I'll do a marathon in training. Go out and do like a training run.
[00:15:04] Speaker A: But is it going to be hard?
[00:15:06] Speaker B: I'd love to train and do a fast marathon at some point before I get too, too old. So I'm 40. I just turned 40, so I still got some decent speed in my legs. So I'd love to maybe see if I can go out and run. I don't know, under 230 or something. Would be really awesome.
[00:15:20] Speaker A: Very little road running at all. Or mostly trail.
[00:15:26] Speaker B: Yeah, I mean, it's mostly trail, but I have a running team, like a youth running team. My boys are, um, they run track and field and they run cross country. So I'll do stuff with. Know, we'll do track workouts and road workouts and that sort of thing. We're in cross country season. Right.
Uh, they did track this last season and went to the track and field national championships in Eugene, Oregon over the summer, so that was really awesome.
[00:15:52] Speaker A: Okay, great. Yeah. I'm definitely more of a full guy. I've done two ultras. I did qualify for western states at 50 miles. That I did.
In other words, I qualified to register for western states. Then you got to do the lotto, which I did not. I got real close to clicking that button. I'll never forget. I remember where I was when that was happening, and I said, you know what? I don't think I'm ready for this.
So never did it. But I've done 150 miles. Actually, Avery did the 50 miles with me.
[00:16:23] Speaker B: Oh, really?
[00:16:24] Speaker A: Yeah. She's done a 50, and I've also done 150k. So two ultras for me, but a whole crapload of. I got 27 full marathons under my belt.
[00:16:34] Speaker B: Wow.
Well, you should come hang out for 100 miler one time and just kind.
[00:16:39] Speaker A: Of suck me in.
[00:16:42] Speaker B: Pretty awesome environment, for sure.
[00:16:44] Speaker A: Yeah. Okay, cool. So let's talk about the short term thing.
You at some point, got hooked up with the shop and bought at least one or two with us. But I think you were involved before that, right? When did you get into short term? In what capacity?
[00:17:01] Speaker B: So I got into, I think, in 2021, I think, or maybe the end of 2020.
We've loved going to short term rentals. So I'm one of these people that, yeah, it's a business, but we love going to mountain towns. We love going to short term rentals. I don't know. It's just our thing. We've liked that for a long. Like, in the summer, we'll go to Colorado or Arizona and stay at a bunch of different short term rentals. And so I always kind of had it in me, like, man, I think I could do pretty good, like, buying these and managing them and designing and decorating and just kind of all this stuff just because we really like. Just. We really like the hospitality side and everything. So we bought one basically right across the street from our house where we live in Greensboro, North Carolina. It felt like, my wife's a little bit more risk averse than I am. I love. I love taking risks and stuff. She's a little bit more risk averse. So I was like, hey, let's just buy one right across the street. It feels, like, simple. We can manage.
Know, if it don't work out, we'll just put a long term renter there. And she already understood that because we already had a long term rental. And then eventually we decided.
I think I heard Avery on the Bigger Pockets podcast years ago, like many people did. On the one she did probably three years ago, maybe episode 364 on the Bigger Pocket podcast. Yeah, I've heard so many people reference that. I always had that in my back pocket. Hey, that'd be a great place to invest over there. And we love to go run over there in the Smoky Mountains National park. I've done a bunch of different loops over there and up to Mount Lacan, a bunch of different stuff. So I was like, this would just be super cool. So I think we went through you guys and bought, I think, the beginning of 2021.
[00:18:53] Speaker A: But you already had the one going in Greensboro.
[00:18:55] Speaker B: Yes.
[00:18:56] Speaker A: Okay. Is that more of a residential?
What does that look like there? Is it a town?
[00:19:03] Speaker B: Yeah, it's just outside of town, but it's weird. I didn't know how it would work, but I don't know any decent sized town. People just travel here for all sorts of stuff. It could be a midterm very easily, nurses and that sort of thing. But honestly, it's just a regular short term. Like, hey, I'm here to take care of my mom, who's in a nursing home. Hey, I'm here for a weding. Hey, I'm here for a graduation. Oh, my kid's got a soccer tournament down the street.
It's crazy. I mean, we'll have like 80% occupancy for the year through the winter and everything.
[00:19:36] Speaker A: I do feel that there is a need for more of exactly what you're doing in the world. The problem there is, I don't know if you agree, but there's too many people that stink at this. And what they'll do is they'll just put it on Airbnb or some landlord that'sick of being a landlord will rent it to somebody else who puts it on Airbnb. And there's just too many people that don't really care about the neighbors or the where. And again, I'm not saying that there's too many, but this is where in the news it gets a bad rap, right? This is where you get all these news articles about Airbnb this and Airbnb that. But a guy like you doing it the way you're doing it, even though you are kind of in a town there with that first one.
Man, I see a huge need for that in the world. I really do.
If this existed, like where my parents live, I would jump all over it. It doesn't exist there.
And I don't know if it's because a lot of it, I have to feel, is because somebody did it. Wrong. Got in trouble, the cops called on them and things like that.
Let's face it, there's a lot of crappy landlords out there. There really are.
But I feel that there is a bigger need for exactly what you're talking about in kind of urban or maybe slightly rural areas, just regular old towns, maybe not even tourist destinations for a house. Because I want a washer and dryer, damn it. You know what I mean? Can I get a washer and dryer? Do I have to stay in this little tiny box?
[00:21:07] Speaker B: Right?
[00:21:09] Speaker A: What's the big deal?
[00:21:12] Speaker B: Yeah, totally.
[00:21:14] Speaker A: Then things started to get exciting. You came to the shop, ended up buying. Well, I'm just going to let you tell the story because this is just like absolutely mind blowing. What happens next?
[00:21:24] Speaker B: Crazy. So I think we probably bought at the absolute heat of the market where people were just like crazy offers, man, I'll pay x amount over even if the appraisal don't come in. So I think we were going through that process.
End of 21.
End of 21. 1st couple of months of 21 rates were crazy low, which was cool, but it took a bunch of different offers to eventually. Yeah, it was end of 21. Beginning of 22 is when we were looking. And so we finally found something and that was just a crazy time. Just because we're like, oh, we'll pay whatever x amount over what it's going to appraise for. And I don't think it's crazy like that anymore.
[00:22:23] Speaker A: Let me slow you down. What brought that on? Why were there so many people? And I want to apologize on behalf of the short term shop. We were so busy at that time, we couldn't even sleep. I mean, it was insane. Hopefully you had an amazing experience.
But man, it was just nuts. What brought that on? Why were so many. And it wasn't just short term, okay, we're just super immersed in short term. It was everything. It was long term rentals, it was primary homes. Anything that had a front door was on fire.
What's your take on that?
[00:22:56] Speaker B: I mean, to me it just has to be the money printing, the rates and the asset and all the prices going up. So if I'm like one example.
[00:23:10] Speaker A: We.
[00:23:11] Speaker B: Love to be outdoors. So we had a camper and I had a truck. I pulled it with. Well, I started seeing the prices of that stuff. I'm like, I'm selling this thing now. I'm like, I'm selling the camper. I'm selling the truck now. So they're both three years old. I get more for them than what I bought them for, which, who buys a camper brand new three years later, sells it for more money? I'm like, I'm going to put this into real estate because that feels safer than having it in a camper. And so I just took that money. We got 2.7% on the interest rate, which is just wild. So I have to believe there was just so many people like me that just kind of.
[00:23:51] Speaker A: Yeah, I think so, too. I think so, too. You nailed it.
You're the wheelhouse, right? In that period of time, it was like, I bought this camper. Exactly what you just said. It's absolutely mind blowing that you could sell a camper for more than what you paid for it. I mean, how in the hell did that happen?
Okay, cool. Yeah. Well, what happens next?
[00:24:16] Speaker C: Hey, guys, if you're enjoying the content of our podcast but you have additional short term rental questions, we host a weekly live question session that you guys can join for free. It's at 01:00 p.m. Eastern on Thursdays, and if you head over to sprquestions.com, you can sign up. So not only am I the host of this show, but I also own and manage my own properties. And I'd be happy to answer any questions that you have about short term rental investing. So please join us anytime for a free weekly live q and a on Zoom sign
[email protected].
[00:24:54] Speaker B: Yeah, we get under contract.
I mean, everything went generally smooth with the purchase.
I even was able to connect with the seller after we bought it, and she was awesome.
The house had two previous owners, and it had been a short term rental for a long time, which that made me really comfortable.
[00:25:14] Speaker A: Where was this one?
[00:25:16] Speaker B: In pigeon Forge.
[00:25:17] Speaker A: Oh, pigeon forge. Okay.
[00:25:18] Speaker B: Yeah, just kind of the west side of pigeon Forge as you head towards, like, weirs Valley.
[00:25:22] Speaker A: I know exactly where it is, but I'm just creating a little illusion there for the listener. But, yeah, go ahead. I have one right down the street, but go ahead.
[00:25:30] Speaker B: Yeah, it was awesome.
Even though we hadn't seen it ahead of time except pictures and stuff, I felt like it had some of the intangible stuff. It has an unobstructed view.
It's kind of sitting on top of a mountain, kind of hanging over the mountain. Really cool house. So I just thought it was going to be really awesome.
Being our first one, we just invested a bunch of time and energy, kind of degrammaing the house, just removing some of the r. I mean, the house itself was fine, but just kind of making it feel a little bit more like a house we would want to go stay in, like a house that's going to have good pictures on Airbnb. So we probably spent a month kind of doing that. And when you're doing it yourself, it's such hard work to get one of those fully online.
That's not new construction. You're not paying someone to furnish it when you're just kind of doing it all yourself. So we busted our tails getting that thing ready and getting it online, and you almost can't make up what happens next.
So it was a stressful kind of period. We were busting our tails to get that online six months prior. I just think this is kind of applicable to the story.
My little brother passes away in, like, a very tragic, very tragic way.
He had dealt with addiction for many, many years. He's 30 years old.
That happened September, the year before. And we get this house online, and I was dealing with some health issues, I think just long term, not long term, just effects of grief. I was dealing with. I was super healthy, running and eating and all that. But I was just struggling just, like, could hardly stay awake, brain fog, all this stuff. So our board at the church, they're like, hey, why don't you take a couple of weeks off? Like, totally off.
Go somewhere you love.
Just try to just chill out.
And this corresponded with the first week that we were having the first renter in our house. So we went over to the mountains of North Carolina in Brevard, North Carolina, and we had our first renter over in pigeon Forge. And I'm just trying to know everything I've been dealing with. And we go into the mountains one day and run, and we didn't have a signal or whatever. And I get back to the house we were renting, and I have a text message, or maybe it was an Airbnb. No, I think it was actually a text message from the person that was renting it. And we actually have become friends now. A year and a half later, she's like, hey, we were at Dollywood for the day, and apparently there's a fire, and they've shut the neighborhood down. They shut the whole area down.
And I don't know, I'm an entrepreneur. I'm such an know, like, man, it's probably going to be, you know, then, like, another day goes by. We still haven't found out what's going on. They can't get back to the neighborhood. It's a family of five from Michigan. They're down for spring break.
All their stuff is at the house.
[00:28:47] Speaker A: Where did they go?
[00:28:49] Speaker B: They were just at Dollywood for the day, and they had to go buy clothes and try to find a hotel.
[00:28:55] Speaker A: Oh, my.
[00:28:56] Speaker B: They didn't want to drive back to Michigan because all their kids had their devices and laptops, and they had a car carrier that they had taken off their van that was at the house.
So they're like, man, we're just going to hang out here for a couple of days.
Well, it takes almost three full days. And we finally find out, man, our house freaking burnt to the ground.
So in our neighborhood, I think around 55 houses burned down, but half the neighborhood was totally untouched by the fires.
The other half of the neighborhood, like my street, which is on top of this ridge, there's nothing but block foundations left.
I mean, nothing. I don't even know where the stuff went. I guess it just, like, evaporated into the sky. But it took us three days to find that out, that the house actually burned down. So you could just imagine, I mean, what a nightmare.
I had convinced my wife, hey, we're going to go invest over there. It's going to be awesome. Don't worry. It's going to be great. And then house burns down.
[00:30:03] Speaker A: Okay, a million questions. First of all, I'm so sorry for all of that stuff. This is a difficult period of time here in your life.
I am familiar with this scenario, not only because of you and other clients of the short term shop, but I had a house right down the street. I remember when this was going on, watching my ring camera, and the smoke was just getting worse and worse and worse and worse and worse. And then all of a sudden, my ring camera just was gone. So I had no reason to believe that I had a house left. Luckily, I got lucky. My house was just on the other side of what we would call a ridge in east Tennessee from where yours was.
And I found out later that they purposely turned the power off to keep things from getting worse.
[00:31:00] Speaker B: Right.
[00:31:01] Speaker A: And so that was my camera, and my house was fine. It was completely covered in ashes and such. But I was right next to you pretty much.
And so that was my experience with this situation.
Can you tell us, at least to your recollection, what started it and why this fire was even there?
[00:31:21] Speaker B: I think they ultimately said. I think they said a power line fell down. The one thing I do know, because we were right across the mountains, like in North Carolina, about an hour and a half away. It was crazy. High winds, like 50, 60 miles an hour winds, just like wild so I think somehow the power line or something started, and then with winds like that, it just was, like, uncontrollable for a full probably two days. So the fire was just, like, spreading like crazy. So in my neighborhood, I've kind of driven all around and you could see where it came into the neighborhood because it kind of came into the backside of the neighborhood and it would just get along these ridges and just kind of go right along the whole ridge. And then, like, in the valley, there wouldn't be any damage at all. So crazy.
[00:32:09] Speaker A: Let's say I'm completely unfamiliar with this area.
Would you suggest that this is a possibility of happening again or was this a fluke?
[00:32:21] Speaker B: Man, I don't really know.
I know some of the areas around there, they say with insurance and stuff, oh, this is high fire risk. But I don't know if that's because, man, there just was a fire or like the Gatlinburg fires, and for the next 50 years, this is high fire risk.
I don't know the likelihood of this continuing to happen or not. I really have no idea.
[00:32:48] Speaker A: Yeah. And again, we should bring that up. Bobby, thanks for bringing that up. In 2016, there was a huge fire in the area, much bigger than the one that Bobby had to deal with here. And it was bad. We lost lives.
I didn't. But there were lives lost. And thousands, a few thousand properties were burned down.
And that one was actually caused by humans. There were some kids playing with matches in the park, believe it or not. And it was a drought, which can definitely happen. It's not also really not common. Tennessee, I have actually looked it up. It's the number 6th most rain in the United States. So it is a very rainy state, but it can happen.
And it was just bad timing with that 2016 fire. That one was absolutely horrible. And then yours was a very similar situation where there was drought and the wells are going dry and then a fire starts and, man, you get a fire going, it's hard to put that out. But me personally, again, being in the area, a lot of roots in the area, I think that both of them were just kind of freak of nature situations where I don't think it's going to be repeated. But again, you're dealing with an area that has a tremendous amount of trees and firewood. It's all firewood, and if it doesn't rain, bad things can happen. But again, I think both of these scenarios, even though they were really in the grand scheme of things, not that far apart, not likely to happen again. But you never know. You mentioned insurance. How did that work? Man, I can't imagine how stressful that scenario was. I don't think we want to name names or anything. I mean, it's your story, you tell me what you want. But how did that whole thing play out?
[00:34:41] Speaker B: So honestly, I think that was much smoother than I thought it was going to be.
Of course, when it happened, I'm on vacation so I'm just like all night on Google. How does insurance work when your house burns down and just like types of insurance and I'm going and reading the policies because we don't ever think about this stuff until it actually happens. And most people never have a house burned down, so they actually were great to work with. I mean, I got a check for contents right away, within a day or two, which was nice, thank God. I had like a loss of use kind of commercial policy, so it took about a month, but I actually worked with the seller and she was really great because she was able to go in and produce. Here's what the house did last year through rents over a twelve month period. And so I was able to take that to them and basically said, hey, the loss of use that I have as part of the insurance, I feel like I should get the max amount because look, here's what it did last year and a fair assumption is that it would do the same thing. So within about a month I was able to get a loss of use check, which was really great. We basically poured all that back into rebuilding the house and then the rest of it was just, if anybody's ever gone through this process, you get a full check, but because you have a mortgage, it doesn't go to you. You immediately sign it over to the bank. And then depending on the bank, they're going to depend how you basically get that money. It's going to be very similar to a new construction loan where you're getting draws. They're having someone go out to the property, inspect where it's at, and then they'll cut you another check. That was just more a pain to go through that process. Like I could have got the house rebuilt a lot faster if I just had that money in hand and I wasn't having to go through the bank for these inspections and them cutting the check. And I understand because they're trying to protect their investments. That's their security in the property or that's their security on the loan.
But all in all, the insurance process was fairly smooth. I will say on the back end now that I have a brand new cabin. It's not as smooth because I'm like, hey, I built a nicer cabin. I want to increase the insurance. And they're like, no, not interested. They're like, yeah, we're going to be dropping you at the end of this year. So I'm like, well, thanks, guys, that's great, but the process on the front end wasn't that bad.
[00:37:16] Speaker A: Okay, a few questions there.
What did you do to educate yourself during this process? In other words, if this happened to me, I would be watching every YouTube and every Google search I could possibly do on insurance claims. What did you do?
[00:37:32] Speaker B: Um, yeah, I did the same thing. I went and I tried to understand the policy I had. I was glad I had a pretty solid kind of loss of use part of the policy.
I had some sort of rider that enabled you to get another, like 15% or no, maybe 20% more, which was helpful. All in all, I was pretty well insured, so I ended up building a lot bigger cabin back. But if I were to build the exact same cabin back, I think I probably could have done it for around the amount I got from insurance. A lot of people were like drastically underinsured. I know that just from talking to different people that some of them even had their houses for sale when they actually burned down. And their insurance is covering like half of the cost just because where they're at.
The big education process was just figuring out, how the heck do I take this, burn down blocks and build another house. So that's really where I feel like the hard work started.
[00:38:35] Speaker A: And you got it done right.
Silver lining is you did rebuild. Hold on, before we get into that, I want to ask a couple more things about the insurance.
Are you harder to insure now? In other words, are you going to have to find another carrier, another broker, and are they turning you down because of this or what does that look like?
[00:38:54] Speaker B: So I think the area is harder to insure.
I don't know specifically if I'm harder to insure. Maybe I don't understand all the intricacies of that. So, like, one of my properties I have in North Carolina, I have a different insurance carrier with them. So I tried to go through them and would you all, I got another property over here. Would you insure this? And within about 2 hours, they got back to me and they said, hey, we ran our algorithm or whatever, and the fire risk is too high. We're not insuring anything right there.
And then my current carrier, they were going to let me stay on, but all of a sudden, my house was worth a good 40% more because of what I rebuilt. We did the pool in the basement, and we just built, like, the absolute ideal house for the lot and what we could. And so as soon as it was done, I was massively underinsured.
I probably had 70% of what I would actually get back if the thing burned down again.
So I was able to get another policy, but it was just a lot more expensive. It was probably at least double.
[00:40:09] Speaker A: Same carrier.
[00:40:11] Speaker B: Different carrier.
[00:40:12] Speaker A: Oh, different carrier. Okay, cool. Yeah. And again, double in this area. Insurance in this area is generally fairly, or at least traditionally been fairly inexpensive. So even double. Do you feel like it's breaking the bank there? I mean, is it a reasonable number today?
[00:40:30] Speaker B: I feel like it's fine because I have the same loan on the house, which is really low interest rate. The house is going to do a lot better than it did before because it's a brand new, really nice pool cabin with an unobstructed view. So I feel like the rents are not going to cover it. No problem. And I'm still going to have a lot of meat on the bone.
[00:40:51] Speaker A: Okay, so how the hell did you handle all this mentally? You're already dealing with some really hard times, and I'm sure the wife was freaking out, and the whole family is freaking out, and. Oh, my goodness, this is so crazy. How did you get through it?
Well.
[00:41:05] Speaker B: Oh, man. I mean, honestly, the first little bit was just like, I was in shock. I mean, I just was in shock. I was already away dealing with my own grief or my stuff with my brother, and I just was like, when something really crazy in life happens, it's like your brain just can't even calculate what's happening. I'm like, there's no way. The cabin burned down with our first renter in it. After we spent a month getting this thing ready, I'm like, there's no way that happened. But it did happen. So I don't know. In life, the way I see it is okay. We just had to deal with the grief of it. Like, this is horrible. This is horrible. This happened to us. This is not our fault. We had no control over this.
If there's any time in life to be a victim, this was, like, our time to be a victim, because I'm like, man, and it's total act of God. We just had no control over this.
So after about a week of that, I just flipped it completely.
Just try to take.
I know you like extreme ownership. I just try to take a real extreme ownership view of things because I'm like, that's all I can do. I could sit here for the next year and complain and whine and why this happened to me and I can't believe it. And what are the ods? And I just was like, man, I got over there to the neighborhood and it's just like a war zone, literally. I mean, my street, every single house burnt down, so all the metal roofs are up in the trees and on the ground.
And I just made a commitment to myself. And I told my wife later that day, I said, I'm going to be the very first person on the street to get our house rebuilt, set a goal.
I was just like, I'm committed to that.
[00:42:48] Speaker A: That says a lot about you, man. That's huge. You know what I mean? Anybody else on the planet would go up there and just give up and say, man, this is dumb. I'm never doing this again. And you wrote down a goal. You were like, dude, forget it. I'm going to knock this thing out of the park. That's huge, dude. I mean, that's huge. We need to hang out more often. So then you decide, okay, we're going to build up a little bit here, maybe a little bit slightly nicer home. So then I assume you threw money in out of pocket. How did that look? And also, how did you find a builder? This is also probably the worst time in the world to find a builder.
So how did that whole process look?
[00:43:24] Speaker B: So it took a lot of no's before I kind of got to a yes. And that's a real principle for people. Like kind of holding that belief because I thought for sure, I'm like, okay, I'm going to get on the phone. I've dealt with construction and builders in lots of different places. I'm like, I'm going to get on the phone. People are going to feel bad for me because this buyers just happened and I'm going to find some builder that's going to be like, hey, man, I'm going to put you at the top of my list.
[00:43:52] Speaker A: That's awful.
[00:43:52] Speaker B: Your cap and burned down. But no people just for the most part, they were sorry, but they just didn't really seem to care that much. And so honestly, the first three or four people I talked to, they're like, I remember one guy, really nice guy, great reputation. He's like, yeah. He's like, I could probably get your started about 15 months from now. And I was like, no, that ain't going to work. And I had about three or four of those where they either said, yeah, I'll put you on my list to start in like a year. Or it was like way more than even I was getting for the insurance.
And so I don't know. One principle I think of from the book, like, the magic of thinking big, he's like the how to do it always comes to the person who believes they can do it.
And very easily. After about three of those no's, I think I could have just been like, man, this is literally impossible, what I'm trying to do. I want to get this rebuilt in like a year.
And this is just impossible to accept. I just didn't accept that. So I just started people I knew.
I had a good friend here from Greensboro, Mark McDaniel. I think Avery was actually recently on his podcast. He's invested over there for a long time.
[00:45:08] Speaker A: Great guy.
[00:45:09] Speaker B: I started calling him, who do you know who can connect me with? I would talk to those people if they couldn't do it, I would say, who can you connect me with? Who can you connect me with? And just eventually I just found somebody that was willing to do it.
Not someone who's doing a lot of single home builds, somebody that does a lot of more building with investors and stuff. And I just figured it out.
I had to go through like ten people, literally, to find somebody that said they can do it on a reasonable timeline and what I thought was like a reasonable price.
And then in that whole process, one of the guys I met with, because I had heard the pool cabins over there were doing better, and a lot of people doing new construction were doing pool cabins. And one of the guys I met with did some building, but he did more property management stuff. And he worked for a company that manages just hundreds and hundreds of homes over there. And so when I sat with him, I was like, hey, give me the straight. How are the pool cabins doing compared to other cabins without a pool? And kind of in that conversation, he just really convinced me, I've got to figure out anything I can to build this cabin back and make it be a pool cabin, because we have nothing right now, and if this is going to be a future investment for us, what do we got to do? So that was a tough pill to swallow because it was a lot more expensive than what I was getting for insurance.
And it felt like a huge risk. It's like I'm about to put a bunch of money into something that's not even going to be ready for more than a year from now. And if you talk to a lot of people over there. People are like, it took two years for this guy to build it. They said it was going to be a year. So I had no idea how long it was actually going to take.
And so now looking back, it's like, well, it was a risk that paid off because the house I have is going to do a lot better than the house that was there before.
[00:47:00] Speaker A: So did the builder you went with come in from somewhere else? Did you shipped him in?
[00:47:05] Speaker B: No, he works there.
[00:47:06] Speaker A: It was local?
[00:47:07] Speaker B: Yes.
[00:47:08] Speaker A: Okay, cool.
And you now have purchased another burn down lot on the same street.
[00:47:16] Speaker B: Yeah. Here's the crazy thing. I mean, after my house was finished, no one on my street has even started. Not one person.
[00:47:24] Speaker A: Because they're all relying on insurance and other people.
[00:47:27] Speaker B: I have no idea what is going on. I mean, some of the lots hadn't even been demoed until recently.
Now I think they've all been demoed, but not one other person has started a build. So after about one full year, that happened. One, I was like, man, I got to build some other houses just for the sake of my street here. That's like a war zone. I mean, luckily each of the houses is like. They're like 500ft apart. So it's not like you have a renter and then a burned down house. They're pretty spread out. It's a really cool neighborhood.
But yeah, about, I don't know, almost a year ago, even while ours wasn't even done, I started making offers on trying to buy other lots. Because once I understood the process of, okay, this is what you do on a burn down lot. This is what you do if the septic is still there and the well is still there and part of the foundation and the header wall. I just kind of understood a bit of the process of it all. So I was like, man, in an ideal scenario, it's actually, I think, easier to rebuild a house on a burn down lot than go to try to start from scratch somewhere else.
So I just started making offers on land. I mean, I think a lot of other people are doing that because a bunch of the original offers I've made, none of them got accepted. But yeah, we eventually were able to get one accepted. And literally, as you and I are talking right now, just starting on the new build two down from my house that I just rebuilt.
[00:48:59] Speaker A: A couple of questions on that and I assume this is what the neighbors did is why I bring this up. Could I have just taken the check from the insurance, paid off my mortgage and kept if there was anything left and kept that and then sell, I would assume that at that point the dirt is just the dirt and I could sell that. In other words, I'm basically just trying to recoup my losses and forget about this thing and move on. Was that an option and is that what you think your neighbors did?
[00:49:28] Speaker B: I think that's an option for some people.
I will say my loan amount was a lot more than what I got back from the insurance company. So for me to do that, maybe I would have broken even after if I was able to sell the land for a decent price. So I think it just kind of depends on how well insured that the house was. Like my neighbor, I never got to meet them. My neighbor right next to me, the house was under contract when it burned down.
And I know they ended up selling the lot. And I think the lot has sold like twice since it burned down.
So I think if you have enough insurance money, you could have done that otherwise. Yeah, I don't know. Some people though, like one of my neighbors, it was a couple of partners owned it, an LLC. They couldn't agree what to do and it just was a mess. And only recently did they end up selling the lot. Probably like two months ago. Those fires were like 20 months ago or something.
[00:50:37] Speaker A: So you reused the septic system.
Oh, wow. No issues with that. Okay. And then what about the. Well, it was ready to go. Needed a new pump or anything.
[00:50:47] Speaker B: Yeah, we put a new pump in it and that was it.
I think we ran new wires and put a new pump aside from that. Yeah, it really wasn't, really wasn't. So in my house specifically, it's on a very steep slope. And so what we did, it had a really solid header wall. It's basically like, man, you go and park and there's this huge header wall. And then the house kind of goes over the mountain. Everything got demoed except that header wall. And then we built back on that header wall and went right back to the existing footers that were in the ground. But we added an extra story to the house because we put a pool in the basement.
[00:51:32] Speaker A: Well, it sounds like in the grand scheme of things, that's a pretty good lot to build on. Okay, so first of all, that lot would be expensive if you got a. Sounds like this is a really smoking good view, right? Yeah, I mean, this is probably like a top notch primo view.
[00:51:48] Speaker B: So that's every level has a view. So even the basement. The lot is so steep. Even the basement balcony is 25ft off the ground.
[00:51:59] Speaker A: Are you sitting in this home right now?
[00:52:01] Speaker B: No, but I do live in a log cabin, though.
[00:52:04] Speaker A: Okay, cool. Because it looks like maybe, especially with the mountain picture there.
So you got a primo view that's worth a lot of dough. A well could cost. It could cost 20 grand for sure. And then, of course, the septic system, which isn't all that pricey, but getting the permits and everything, is a massive pain in the rear end.
So to be able to reuse that, this sounds like a pretty good place to build, if you had to build. So, man, listen, what an incredible story.
Unbelievable what you've been through. And to take really probably the worst possible thing that could happen. Like, the day after you buy a vacation house, it's gone.
It's horrible. And you made lemonade with it, man. I mean, it's incredible. Absolutely. Says a million things about you and your family and the power that you had to rise above it, man. I don't think if there's a light at the end of this thing, it's like, who better for this to happen to? Because you crushed you. Like, really, absolutely crushed it.
And fantastic. What's next for you, Bobby? Where are we going next? I know you got a few other rentals.
What is your 2024? 2025 look like, man, tying one thing.
[00:53:27] Speaker B: Back to what you just said.
I learned this in ultra running. I think it's so true to life and business. There's a famous saying in ultra running, I think David Horton, famous ultra runner, he's in his seventy s now. He said, it doesn't always get worse.
You could be 70 miles into 100 miles race, and your mind is telling you, man, the way I feel right now, it's only going to get worse. Like, by the time I get done with this thing, there's no way I'm going to be able to finish. But the reality is, sometimes in these long races, by the time you get to the end, you have this euphoric feeling where you don't feel like you ran 90 miles.
And everything I've been through, I just kept that in mind. Like, when you're going through something hard in life, everything inside of you is going to tell you, man, it's only down from here.
And I just kept reminding myself, like, no, just like an altar running, it doesn't always get worse. It actually can actually get way better from here. And I would just offer that to anybody because it's just a true thing in life.
Yeah. For me, man, going forward, I coach running and do some leadership coaching and stuff. And I just love that. I love helping other people that have big dreams to just kind of try to give them courage to go after their dreams, whatever they may be, and take a risk on themselves, take a risk on life.
We hope to keep investing.
I hope to continue to maybe build some houses out there. And we love investing in areas that we like to go run in the mountains. So I've identified a bunch of places, I mean, a bunch of places that I would love to own, vacation rentals and just honestly just help other people too do the same thing. I just really have a heart for helping kind of give people courage to kind of go after whatever dreams it is they're trying to go after.
[00:55:22] Speaker A: I love, man. Huge, huge stuff, dude. Awesome stuff. You already mentioned a couple of books. One of which was of course, extreme ownership. Jaco Wilnick. What was the other one there that I missed the title of?
[00:55:34] Speaker B: The magic of thinking big magic.
[00:55:37] Speaker A: I'm not familiar with that one.
I'm going to write that down and read that. Finishing a book today, so I'll put it on the list. Where do I run if I want to run in the great Smoky Mountain national Park?
[00:55:51] Speaker B: Lots of places.
If you're willing to really do some awesome mountain running.
Cave Alam trail up to the top of Mount Lacante is probably the most epic run that you could do in the park. You get all the way up to Mount Lacante, almost 6000ft. Really amazing running on the appalachian trail through the park. Actually, there's a lot of ultra runners that will do the entire thing in one day. It's like 75 miles through Tennessee and North Carolina. The appalachian trail goes all the way through the Smoky Mountains National park. So tons of awesome trails.
[00:56:31] Speaker A: Okay. I've actually done Mount Lacante myself. It is incredible. All right, brother, listen, I can't thank you enough. Incredible, incredible story.
I'm speechless. It's incredible, man. Thank you so much for your time.
And on behalf of short term rental management and Bobby Harrington, don't overthink it.
