[00:00:05] Speaker A: Welcome to the Short Term Show.
[00:00:08] Speaker B: The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it.
[00:00:16] Speaker A: In the vacation and short term rental space.
[00:00:19] Speaker B: And here's your host, Avery Carle.
[00:00:29] Speaker C: Hey, y' all. Welcome back to another episode of the Short Term show. I'm your host, Avery Carle. Thank you so much for being here. Want to remind y' all that the more reviews we have, the more content we can bring you to hopefully help you down the path of your short term rental or long term rental just investment journey in general. So please leave this podcast a review. Wherever you listen to podcasts, Apple Podcasts, Spotify, YouTube, all these things, please leave us a review. Thank you so much. And now we will get into the show. Today we have Bobby Burch, super cool guest who's a real estate investor. He's got a few short term rentals and we're going to hear his story today. Bobby, thank you so much for coming.
[00:01:09] Speaker A: Yeah, thank you for having me, Avery. It's a pleasure to be here.
[00:01:12] Speaker C: Yeah, thank you so much. Well, will you start off by just telling us a little bit about yourself and what made you decide to start investing in real estate?
[00:01:20] Speaker A: Yeah. So for as long as I can remember, I've kind of had two jobs. You know, I did mortgage loans at one point, did bartending, you know, and these are on top of my normal 9 to 5 job.
My brother and I even owned vending machines at some point as well, and nothing really seemed to get me ahead.
And my wife and I, we took a trip up to Napa one time and we were staying at this really cute bed and breakfast place.
Felt very relaxed, had a really good time. And we're sitting there having breakfast one morning and was just like, we would like to do this.
How do we do this? Right? And so that kind of got us thinking about hospitality and just doing something like that for other people.
That thought and idea morphed into owning short term rentals.
And so in late 2023, we ended up purchasing our first rental in the Smokies.
So with. With you guys. So it's been, it's been a great journey so far.
[00:02:33] Speaker C: Well, thank you very much for choosing us to help you with this. So I want to hear about this property. So you bought well after. I love to interview people who bought after the big 2021, 2022 craze. So you bought after that, right?
[00:02:48] Speaker A: Yeah, we closed on our property November 15th of 2023 and got stuck with the highest interest rates. So we Were stuck with a mortgage at eight and a half percent interest.
And so my wife and I, we were looking at this going, well, if we can make this work, we can make anything work.
So yeah, we, we purchased the property, we got, you know, some money back to do some repairs and we, we ended up building some amenities on the property.
[00:03:25] Speaker C: Building amenities?
[00:03:26] Speaker A: Yeah, so our, our short term shop agent had recommended a movie theater. You know, the, there's a big craze with like a barn theater, right. You, you buy the barn shed converted into a theater and everything. And so we did that and we, we actually put a barrel sauna on the property as well. So those, I think, you know, the amenities have been a big hit.
Funny enough, when we were looking at the property, I, I almost skipped it.
You know, the, the listing didn't show the potential for the property that, you know, we talk about. You and Luke always talk about the hero picture, right?
The, the real estate listing had a terrible hero picture.
[00:04:17] Speaker C: Oh, this is my favorite, it's my favorite way to find deals is bad pictures on the mls.
[00:04:22] Speaker A: Yeah. And it was just a picture of, of the driveway with the front steps. And you know, if you're scrolling through looking at a bunch of properties, I passed right over this one and our agent was like, you know, hey, take a look at this. And I did. And I was like, I don't know about it.
But he ended up, you know, having me look at it again.
The cabin, it's only a one bedroom, one and a half cabin, but it's on almost two acres. It has a view and it has a pond.
And so, you know, the, once I actually started really looking at the listing, it became more apparent that, okay, this is a special property. You know, whoever gets this is, it's going to be a good one. So yeah, so we, after taking a second look at the property, we're like, okay, this, this is a little bit more than we want to spend, but you know, it, we can make it work.
[00:05:19] Speaker B: If you're looking to buy a beach house, a lake house, a mountain house, a vacation house, a short term rental, a vacation rental, a second home, please contact your friends at the short term shop. We are a family owned business and we operate in all of the best vacation rental markets in America including the Great Smoky Mountains, the Emerald coast with Destin, Panama City Beach, Orlando, Florida, the Disney Market, Gulf Shores, Blue Ridge, Outer Banks, Carolina Beach, Western North Carolina, Scottsdale, Arizona, Broken Bow, Oklahoma. The list goes on. We are the best in the biz and we want to earn your Trust. Please contact
[email protected].
[00:06:14] Speaker C: Yeah, I think there's not really anything in the Smokies that has a pond. So that is definitely a unique feature.
So let's, let's hear about this deal. So how many bedrooms and bathrooms did you say it was?
[00:06:29] Speaker A: It's only one bedroom, one and a half bath, and it's around 860 square feet. Okay, so it's a small cabin.
[00:06:36] Speaker C: All right. And how many people does it sleep?
[00:06:39] Speaker A: It'll sleep four. We have a sleeper sofa.
Our cabin. We don't get a lot of, you know, people, you know, a group of four staying there. It's, it's, it's mainly couples. You know, people come there to spend their special occasions, honeymoons, birthdays, anniversaries, stuff like that.
So that's when we were purchasing and setting up this property. That's who we wanted to cater to is, you know, the, the couples looking to have a romantic getaway or a special getaway.
[00:07:10] Speaker C: Got it. I just love one bedroom properties. I have one in the Smokies, but I think they're just the most overlooked. Best investment in most vacation driven markets. Maybe not all. I can't speak for everything, but I think that they're so overlooked because everybody's always trying to get the biggest property that their budget will allow when sometimes those little one bedrooms are just the way to go. So. Okay, so we got, we've got us a one bedroom, it's got a pond, which is badass, and it sleeps four people. So how much did you pay for this?
[00:07:46] Speaker A: So it was, we, we ended up paying 710, but we got 50,000 back for it, you know, to help pay for closing costs and repairs and stuff. So, you know, you factor that in, it's. It was kind of like 660.
[00:08:04] Speaker C: Okay, and what type of loan did you use?
[00:08:08] Speaker A: We just did a regular, a regular, you know, 30 year conventional loan.
I have. I tried refinancing into a DSLR loan, but we needed to show a year's worth of rental income before we could actually do that.
So we did end up refinancing earlier this year because interest rates had dropped enough where we were able to cut out like almost $1,000 from our mortgage payment.
[00:08:42] Speaker C: Oh, wow. And they haven't even gone down that much. So I. Let's, let's hear about that really quick because everybody is like, oh, the rates are never going to go back down far enough to make a difference. We're not going to see 3 or 4%. Again, but we don't really need them to go down to 3% to get things moving. So I'd love to hear what that rate difference was and you know, what were you watching, what were you paying attention to so that you knew, okay, now's the time I want to go ahead and try and refinance this to get a lower rate.
[00:09:11] Speaker A: Yeah, like I said when we, when we bought the property, we got stuck with a 8 and a half percent interest loan. So you know, as, as high as it had gotten in years.
And honestly we were, we're checking out bigger pockets. We were, we, we had always been in, you know, contact with our short term shop agent as well and then just checking, you know, going on the Facebook group and kind of seeing what other people were saying. So we're, you know, we had our, you know, finger on or on the pulse of kind of what was going on. But once interest rates really started to kind of make a move at the end of 2024, you know, we, we went on to do, you know, like a mortgage calculator and just figured out, okay, real quick, hey, if with this interest rate, what would it be?
And we ended up refinancing at the end of 2024, down to 5, 5 and 3 quarter percent loan.
[00:10:09] Speaker C: Oh wow. So wait, whoa, wait a minute. So eight and a half, down to five and three quarters?
[00:10:13] Speaker A: Yeah. And we got a five, one arm because I figured. So our long term plan is to move everything into an llc. We haven't done that yet. So that's, that's kind of our long term plan. So eventually I do want to refinance again, but you know, move it into a DSLR loan.
[00:10:33] Speaker C: Okay. Yeah. And I think what made you decide to choose an arm? Because people get so freaked out about arms and I get that we don't know what rates are going to be, but you already had what I think is probably the highest we're going to see. So you've got five years now to, to watch and to see, you know, get into something like a 30 year fix. So I'd love to know what, what your thought process was when you were choosing that particular loan type.
[00:11:01] Speaker A: Yeah, a lot of it had to do with, you know, the lower interest rate, you know, having a lower monthly payment kind of meant a lot to us.
And just knowing that in five years I'm, I'm probably not going to be in this mortgage, mortgage product. You know, there's so many other options out there and we want, we're really wanting to grow our Business and expand and get all of the, you know, proper legal structures set up and everything. So choosing the arm, it wasn't about, you know, hey, you know, what's going to happen after five years? You know, am I going to be stuck with like a balloon payment or anything like that?
It was having a plan for us and then knowing that, you know, this five one arm isn't going to be part of our long term plan.
[00:11:52] Speaker C: Gotcha. So the goal was let's get the cash flow right now and get this loan down right now. And in five years you have sometime over the next five years we can get into something for a better interest rate that is a 30 year fixed. Yeah, yeah, love that, love that. I love that you're, you know, using the financing tools available to you to be able to make things work.
So you bought end of 2023. So you've got a year and a half now of.
Or maybe a little not a year. Yeah, yeah, a year and a half. Sorry, I can't do math in my brain. So a year and a half of rental history. So let's, let's see, what did you gross your first full year? So 2024, what'd you have?
[00:12:35] Speaker A: Yeah, so we actually didn't go live. So we, we purchased property mid November 2023. We didn't actually go live until midnight mid February.
So we were doing, we had construction going on on the property for a couple of months and it was a little stressful because you know, the contractors, they always tell you, oh, we're going to be done at this time. And then, you know, contract construction twice as long, twice as much. Right. Is the rule.
[00:13:03] Speaker C: Right.
[00:13:04] Speaker A: So we missed all of the holidays.
We went live February and as you know, in the Smokies, that's, that's the slow season.
For 2024, we grossed $98,000.
[00:13:18] Speaker C: Okay.
[00:13:19] Speaker A: So that was, you know, ten and a half months.
[00:13:23] Speaker C: $98,000 on a one bedroom property.
That is pretty, it's pretty damn good. Especially for your first year.
[00:13:32] Speaker A: Yeah, yeah, we were, we, we were really happy about it.
[00:13:36] Speaker C: I would be too.
[00:13:37] Speaker A: Yeah.
But yeah, I do think the, the amenities helped quite a bit.
One of the things we did when we first went live, you know, we, we lowered our nightly rate quite a bit just to get, you know, people in the door traction.
And then it was, we really focused on building our five star reviews.
And so to date we have, I think we just got One today is 127, five star reviews. So our.
[00:14:16] Speaker C: Oh, congratulations.
[00:14:18] Speaker A: Yeah, thank you. Yeah, our goal was 50. And then we were like, okay, let's see if we can get to 100. And we got to 100. And it's kind of like, okay, let's see how far we can keep going with this. But, yeah, we've been pretty successful with it so far.
And I definitely think it. It. A lot of it boils down to, like, what you and Luke talk about is, you know, you're in the hospitality industry, right? And so you gotta, you gotta be hospitable.
So there's. There's been a lot of guests that we've had where, you know, you're kind of doing some weird things that you probably wouldn't do or why are they, why are they, you know, bugging me about this stuff? But know, the, the hospitality thing has, has taken us a long way as well.
[00:15:04] Speaker C: Yeah, yeah, it absolutely has. And it's very clear that in your numbers that you're doing everything right. I mean, I can't really. I haven't heard anything that you could improve on yet. So what I think our listeners need to pull from this conversation is there's a lot of people out there saying, you can't do it anymore. Short term rentals are dead. Which these people are not.
I went on the Mikey Taylor show a few weeks ago, and the. He's, you know, got a lot of, like, X. He was. Used to be a pro skateboarder, so he's got a lot of, like, skateboard bros that follow him. And every single person was like, oh, why are we still talking about Airbnbs? You're the scum of the earth. But, like, vacation rentals have been around for so much longer than Airbnb in the right markets. Like, I'm tired of calling things Airbnbs. Let's call them vacation rentals. And Airbnb is going into Indianapolis and buying something that could have been your grandmother's house that she can't buy now. Like, I get that. I am against that as well.
But vacation rentals and vacation markets, I think are, they've been here forever. They're going to be here forever. And there will always be demand in these types of markets. So people hear on the Internet, new investors, oh, you can't do this. So the Smokies is saturated. Oh, you can't make money there anymore. And I think you're a really great example of it. It's not the number of listings in the Smokies, it's the number of good listings in the Smokies. So, yeah, are there thousands? Of course but there's a thousand shitty ones. Like not everybody, not all of those properties are properties that you're actually competing with. So you bought at the height of the market, price wise, at the height of the market, interest rate wise and in a quote unquote saturated, tough market. And you appear to be crushing it. And am I incorrect in that finding?
[00:16:53] Speaker A: No, I mean, I would agree with that.
I will add 20, 24. We had a lot of expenses, we had a number of things go wrong with the cabin and so we were at a paper loss for the year.
For example, our well pump went out and we had to replace that.
Our water softener system went out, we had to replace that. And then the property had a backup generator.
We had to get, get that replaced as well. So, you know, you're, you're talking tens of thousands of dollars just with those three things alone.
But yeah, I would agree with you. It's find the hero picture. Know who you want to cater to.
I think that was kind of a big thing for us as well.
And just, you know, do what needs to be done to make your guests happy, you know, because we've gotten a number of messages where guests are like, oh yeah, we're up here and we're loving it and we told our friends or our family, our mom and dad about this place and you know, so that, that word of mouth marketing I think is invaluable as well. And you're only really going to get that if, if you have a place and you, you're a, you know, a host. That's very, I don't know, I want to use the word hospitable again, but you know, you look after your guests, right?
[00:18:15] Speaker C: Yeah, totally, totally agree with that. You do have to, you can't just provide a service. You have to be a true hospitality business.
[00:18:24] Speaker A: Yeah.
[00:18:27] Speaker B: Are you worried about your market being saturated?
Too much competition.
Well, join us at Short Term Shop plus and we can teach you to be the best in your area.
Stsplus.com to sign up for on demand online courses, one on one live coaching, weekly group calls, everything you need to know about being the best in your field. In the world of vacation rental and short term rental, we say saturation, smatteration, sts plus dot com.
Are you looking for a change?
Well, the Short Term Shop is hiring realtors.
If you live in or want to move to one of the best vacation markets in the United States, we want you to join the team.
We are a small family owned business, but we are one of the biggest real estate teams in the world.
We are looking for new team members.
Please contact
[email protected] careers theshortermshop.com careers and.
[00:19:52] Speaker C: What would you say? What's some advice you would give to new investors who are listening on how they can separate themselves from being just a service business to a hospitality business?
[00:20:02] Speaker A: So I do think you want to make sure that your short term rental, your property has some sort of amenities.
To your point, having the crappy listings out there, you want something that's going to attract somebody to your property. And that's where knowing who you want to focus on, whether it's families or large groups or couples, having amenities that cater towards those people really help.
I do think bending over backwards a little bit to build that foundation of five star reviews is, is very important as well.
And so one of the tricks that my wife and I use is in the beginning, if we had a guest reach out to us and say, hey, there's this problem.
Something's, something's not working right in the cabin.
The thing we learned from our short term shop agent was automatically refund them the cleaning fee and, and just tell them, you know, send them a message, hey, I'm really sorry, such and such isn't working.
I'll have somebody look into that right away. In the meantime, I've refunded your cleaning fee.
You know, I hope you guys can go out and have a nice dinner or something, you know, on me with, with that refund.
You know that, that kind of stuff seems to go a long way with building those five star reviews. And it's, it hasn't really impacted our bottom line as much as you would think, especially with a smaller cabin.
[00:21:36] Speaker C: And you have 127. How many have you ever gotten? Not a five star review.
[00:21:42] Speaker A: Not yet. Not yet. Knock on wood, you know.
Yeah.
[00:21:46] Speaker C: Wow. Okay. Yeah, let's not talk about that too much. I don't want to jinx you, but yeah, that really does speak to the amount of effort that and thought that you guys are putting into being good hosts, which is really like the most important thing. More important than the property you buy even.
[00:22:03] Speaker A: Yeah, I would agree with that.
[00:22:06] Speaker C: All right, Bobby, so we are almost to the end of our time together, but before I ask you the final three questions of the show, I wanted to see if there's anything about your story that you want to make sure that we share that our listener listeners could benefit from hearing that we haven't talked about yet.
[00:22:24] Speaker A: Yeah, I would say the only thing thinking about our journey from you Know, even having an idea about a short term rental to actually owning one.
Back In August of 2023, we had seen some family members and friends kind of seeing their dreams come, come to reality. And it kind of lit a fire in me, you know, where I was like, hey, we've been thinking about this and talking about this for a long time, like, let's make it happen, right?
We signed the offer or the contract end of September and, and had purchased the property by middle of November. So it wasn't that long for us to find a property and actually take action on it.
So, you know, those of you who are, you know, other potential buyers who are thinking about getting in, you can do it and you know, don't, don't hesitate. When we bought the property, you know, a lot of times people are questioning second guessing, you know, is, was this the right decision?
I remember at the time my wife and I just talking and saying, I don't feel nervous at all. Like, I feel excited. This is the right thing for us and, you know, our family. So when you feel that, you know, you're in a good place, I love that.
[00:23:47] Speaker C: That's very good advice. So now I'm going to ask you some more advice. Last three questions. You ready?
[00:23:52] Speaker A: I'm ready. Let's go.
[00:23:54] Speaker C: Okay. What advice would you give 20 year old Bobby if you knew then what you know now?
[00:24:00] Speaker A: Yeah, so I, I would definitely tell myself, get the financial education that you need to plan your life out long term.
The one piece of advice that I got when I was 20 years old was start a 401k early and contribute to it. Right.
But there's a lot more to financial success than that. And so like with my kids, I'm having them read Rich Dad, Poor Dad.
And so I just think people need to educate themselves in order to know how to get ahead.
And that's, that's something that I wish I would have done earlier on.
[00:24:42] Speaker C: Yeah, I think we all do. For sure.
Somebody. So when I was a bartender and I was like probably 20, I was bartending at this super touristy barbecue restaurant in Austin called the County Line in Bee Cave. And a guy, a regular, I think he was a judge, gave me a copy of Rich Dad, Poor dad. And I did not read it.
I didn't read it until, you know, five or six years later because I thought I knew, I was like, no, my dad taught me about saving. I'm not going to read that.
[00:25:14] Speaker A: Yeah, yeah. It's like, you know, sometimes your younger self, you just can't, you Just can't tell yourself the right thing to do.
[00:25:21] Speaker C: No. No.
Okay, so question number two. What advice would you give a new short term rental investor who's looking to get started today?
[00:25:30] Speaker A: Yeah, so I would actually say two things. One, don't be afraid to visit your property often and get your hands dirty.
So I live down in North Carolina. Our property's up in the Smokies, so it's only, it's like a three and a half hour drive for me.
I try to get up there once a month at least. And I'm doing, you know, the regular maintenance, the changing the water filters, you know, I got to put the stuff in the pond.
But get to know your property because one, it'll save you on cost. You know, you don't have to pay somebody else to do it.
Two, you'll be able to address any issues ahead of time. I know Luke's big on that, you know.
And then three, when guests do reach out to you and they're like, hey, how does this work? Where's the light switch for this?
It's going to be much easier for you to answer those questions.
The second piece of advice I would give, you know, someone who's looking to get into this or new to short term rentals is don't feel like you need to do everything all at once.
You know, when, when we got into this, we were two months into having purchased our first property and I was ready to buy a second one. I'm like, this is great, let's go get another one.
We actually spent the first year, like I mentioned, getting used to our property, building our team. You know, that was a big one, is figuring out who are all the contractors or people that you can trust.
Year three or year two for me is really going to be focused on kind of getting all of the legal stuff in place and, you know, look, starting to build out our portfolio. So don't feel like you need to do everything all at once. You know, focus on the one property right now.
Make sure that that's success and then you can build off of, off of that going forward.
[00:27:20] Speaker C: Also, very good advice. And last, can't say rich dad, poor dad, we already talked about it. What's your favorite book that's impacted your mindset?
[00:27:29] Speaker A: So I'm a product manager in the tech industry by trade, and I've read this book called Inspired by Marty Kagan.
It's focused more around creating tech products that people love.
And so it talks a lot about design and stuff like that.
And so from my mindset, I've been able to take a lot of the concepts in that book and apply them towards the short term rental. It's designing a space or an area or a rental that really caters towards people and, you know, get once they want to come back. So.
So that book's been. Been very helpful for me.
[00:28:18] Speaker C: All right, great recommendation.
And last but certainly not least, if our listeners want to follow you and learn more about you, where can they do that?
[00:28:27] Speaker A: Yeah, I'm in the short term shop, you know, group. Group channels. Both of them. Bobby Burch.
They can find me there.
[00:28:35] Speaker C: All right, and those are our Facebook groups, guys. It's called Smarter Short Term Rentals. Sorry we changed the name recently. SM Term Rentals is where you can find him in the group. Bobby, thank you so much for coming on, y' all. You can find me at the Avery Carl on Instagram or at the short term shop on Instagram and of course in our Facebook groups as well. And we'll see you next week.
[00:28:57] Speaker A: Thank you every. Appreciate the time.
[00:29:10] Speaker C: Sa.
