[00:00:05] Speaker A: Welcome to the Short Term Show. The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it in the vacation and short term rental space.
And here's your host, Avery Carle.
[00:00:28] Speaker B: Hey, y'.
[00:00:29] Speaker C: All.
[00:00:29] Speaker B: Welcome back to another episode of the Short Term Show. As always, I'm your host, Avery Carl. We have a really cool guest today. We've got Erica and John Larson. They own short term rentals in both the Smoky Mountains and Branson, Missouri, and they've got a lot of stuff going on with it. So I'm really interested to talk to them today. How's it going, guys?
[00:00:48] Speaker D: Good. Thanks for having us.
[00:00:50] Speaker B: Yeah, thanks for coming on.
Love it. Love it. Erica. I know Erica very well.
She's done different jobs here for us at the shop here and there.
But anyway, Erica and John, just introduce yourselves to our listeners and tell us a little bit about how you got into real estate and specifically short term rentals.
[00:01:10] Speaker D: Yeah, go ahead.
[00:01:11] Speaker C: Okay. Yeah, basically, I still have a W2. I've been at the same company for 30 years now. I'm vice president of sales and marketing.
And at the end of 2021, that company that was originally owned by two owners, very good friends of mine, sold off to private equity and kind of just made me open my eyes a little bit that, you know, don't get me wrong, love those guys still, but basically worked all those years to make them a lot of money and myself not as much. So just kind of change the mindset. And we wanted to build something ourselves.
We've always been Airbnb ers verbose before it even existed. The occasion a lot rent houses and things and kind of. We're always like, man, I'd love to have one. Love to do it ourselves. So my W2 job just kind of changing gears like that really pushed us into actually doing that.
[00:02:04] Speaker D: Then I really started pushing. Yeah, I didn't have a budget. But then when that, when that happened, I'm like, you see, that's what I'm talking about.
[00:02:12] Speaker C: And then go ahead with your.
[00:02:14] Speaker B: Yeah.
[00:02:14] Speaker D: So I was a teacher for a long time. Taught stem, science, technology, engineering, math, and loved teaching, but not a whole lot of free time in it. Like, you know, get a personal days and yes, everybody's like, oh, you get the summer off, but not really. You're. You're. You're still going into work and stuff. At least I was.
But for me it was more. I wanted to have some freedom and some flexibility and be able to do and go places. You Know as a family and with him, you know, before I retired was hopefully a goal. So did that and then started. We bought our first one. I was still a teacher during that time.
Bought our second one and after we got our second one, that's when kind of things started getting a little busy. And that's when I left my teaching position which you know, we, we can kind of dive more into how that was leaving since I know a lot of people always ask me that. They're like what was that like when you, you know, you guys actually did that? But it took, you know, before we got to that point there, there was a, a lot that we did to get to there. So it wasn't something that just like happened overnight.
[00:03:23] Speaker B: I think that is a very good call out. So first of all I just want to say thank you for teaching because you guys do not get paid enough now that my kids are in elementary school. And it's not just the teaching of the children but the managing of the parents. Parents are creating crazy and they beat you to death. And just I have, we haven't had any problems with any of our teachers but I see other parents and I'm like dude, why are you acting like this to her?
And it's crazy. Thank you for doing that.
[00:03:55] Speaker C: And to, to that point, that experience translates so well to guests in vacation properties dealing with neither 5 year olds or dealing with parents. And it's her skills from that have translated very well to occasion.
[00:04:14] Speaker B: Yeah, absolutely, absolutely. But I want to hear about the, the period leading up to leaving your job. Because everybody says I'm going to do X, Y or Z whether it's buying a short term rental, starting a business, doing all these things to quit my job. But many people skip the leading up to the quitting. So tell me about that.
[00:04:36] Speaker C: Yeah, yeah. So we bought our first one in the Small Keys and we closed in July of 2022 as a lot of your listeners know and you know that was a tough time to buy. Things are going quick but yeah, very hot market at that time.
But we did find something we liked. It's been successful. We love the property. So much so that we wanted to continue on and get another one.
Took us, you know, we, we didn't do any of the tax savings actually we still have it yet we're going to take tax savings on both our proper this year for the 2025 tax year. But yeah, so we were just, we, we kind of wanted to make sure this was going to work before we got too crazy with it and One point is, though, you do have to have a little bit of risk. I initially went into buying our first Smythe's property with a $350,000 budget, and in 2022, we were finding outhouses and sheds. I mean, it was, it, it was way too low. So it's like. And the reason I did that was I was like, oh, if we have no renters, I want to make sure we can make all the payments. You can't really go into it with that mindset. You have to take some risks to be able to do that. So we did that. We got that property. It's been working well. We saved some money from that property and then had enough for down payment again in 2024. So again, we didn't take out a, A different kind of loan. We actually saved some money to do our second down payment.
But that, at that time, we, it wasn't going to take up a lot of her time with doing the, you know, run pricing, answering guests. She was trying to teach a class and Ira guests was texting and stuff.
[00:06:20] Speaker D: Well, I got like 25 kindergarteners running around with scissors.
[00:06:26] Speaker C: So she lasted. She actually taught one year, you know, doing both, and then you can kind of take the rest. We kind of. We put the plan in place. Like, we need to have you stop teaching full time. So what are we going to do?
[00:06:39] Speaker D: Yeah, and I kind of want to backtrack a little bit before we, like, get to that point, though, because I want people to also know, like, again, there were things that happens before that, that time came that you, you have to roll with some of the punches, but you also have to have some grit and accept that sometimes things are going to be hard and not necessarily go the way you planned. When, when we first decided we were going to get an str, we made an appointment. We had been listening to your podcast. We had been. We read the book, the first book, and we made an appointment and we had to cancel that appointment. I forget what happened. For some reason we couldn't come. We were supposed to meet with you.
I was like, oh, no.
But we weren't able to do it. And John has a cousin who has long term rentals in Chicago.
And she was like, oh, well, let's. I know this, this other. You know how sometimes realtors have like, cohorts. Referral.
[00:07:38] Speaker B: Referral partners.
[00:07:40] Speaker D: Yeah, yeah. She's like, yeah, I. I know this, you know, person down in, in Tennessee. I'll hook you up with her. And she knows all about short term rentals and she'll help you out.
So we got hooked up with her and, you know, we learned the hard way why it is so important to start with the right people.
Like people who know the market, who know what works, what doesn't work, and who aren't just, you know, trying to push a property.
So you, what happened?
[00:08:14] Speaker C: Yeah, okay, we have, we have a list of stuff, but yeah, basically hire someone if you're doing an sdr, make sure they know how to do short term rentals. If it's long term rental, make sure they're experts in that. But basically the first, because it was 2022, the first property that we won under contract, she. Or we put it off her, and she basically said, you, you should just get the inspection. Don't. Don't even do a home inspection. The market's too hot, market's too high.
[00:08:43] Speaker D: If you do a home inspection, you're going to lose it like that. Oh, wow.
[00:08:46] Speaker C: Yeah.
And it seemed weird time, but we did it.
Went to visit the property. Still like the property, but in my head, I'm, I'm. I'm like, I'm not, not gonna do an inspection. Like, I don't care that we. We wrote it out of that. I'm gonna spend the $500. I want to figure out what's wrong.
[00:09:05] Speaker D: And there were even some things that were, like, just looking at it, I was like, why wouldn't you have that inspected? It was, it was on a downslope, and you could see that the construction that had put the road in there had put like a little concrete berm. So obviously there must be water runoff coming down the road towards the house. They're trying to redirect it. I'm like, why won't we do an inspection?
[00:09:25] Speaker C: But basically we did it. And it turned out the foundation was crap. Like, completely needed to be redone, probably. Yes.
[00:09:30] Speaker D: The inspector came to us and he goes, I'm not supposed to say this, but I'm telling you, do not buy this house.
Oh, wow.
[00:09:38] Speaker C: Luckily, we actually got our way out of there, even though his money needs.
That was good.
So then we found another property we really like. We also wrote an offer for that one. And I asked our realtor three different times, even in lfx, are you sure this is zoned properly for short term rentals? Because it kind of seemed too good to be true based on the prices. She answered me, yes, yes, it is.
And we were driving home, back to Chicago from Tennessee, and I still had that 2 million 2 feeling. So I did my own research, and it Actually was a lot easier than I thought.
Chalva county found out that what we just went under contract for was not zoned for short term rentals. Residential. Yeah. And we were, yeah. So we were about to, we, we wanted to withdraw our offer. They were going to sue us for the earnest money. Luckily we got out of that one as well.
Didn't have to pay the earnest money, got our check back. But that's when we decided, you know, two strikes, you're, you're done.
[00:10:44] Speaker D: Well, there's a third one too because then she started showing us condos like the small condos off the strip that have the, you know, water parks and everything. And this is a great deal. It's a great deal. But you know, not showing us the, that they're gonna, you have to be with their management company.
[00:11:02] Speaker C: I think they were taking, they take the wine. We looked at, they took 50% and you could not self manage. You had to go their, their company. So there's no way you're going to make the, the numbers work with that.
[00:11:12] Speaker B: So I had a listing in that condo building once and that was so tough to get sold because of that. Because people just want options even if they don't want to self manage. You want to at least be able to leverage. Okay, well I'm going to use another property manager. If you don't perform well and there's no in, in buildings like that or neighborhoods like that where you have to use a certain property manager, they have no incentive to do a good job. It's crazy.
[00:11:41] Speaker C: Yeah, yeah, yeah. So you know, so yeah, three strikes and then we were like, she's done, we're gonna fire her. So we did.
Then we had the meeting with you started with short term shop.
I mean went much smoother.
We found a place and kind of want to make this point too. Like just because we, you hire someone that's, you know, it is the right fit. It's working.
Remember that realtor is also working for a bunch of other people. So you still gotta do the work. Like we, we were up early every morning looking for new listings ourselves and that, you know, even if you have a realtor worker, Corey, remember they're working for other people too. So. Yeah, put in your own work as well. And that proved beneficial because we found the cabin we really liked in the Smokies on our own. But then once we found that, we turned it kind of over. You know, the help of the short term team and they were, yeah, it was night and day.
[00:12:35] Speaker D: The other realtor, same day, walk through, like, and just pointed out what was good. Like, what is going to make this place work. The potential for different things. Just so many tips along the way. Not just here, sign on the dotted line.
[00:12:50] Speaker C: And I asked the realtor like 10 times if it was the zone correctly for short term rentals. And she's like, why are you so worried about this? Like, believe me, yeah, I'm really good. But anyway, so that worked and then we were excited. We got started in it and probably three months later, we get a letter in the mail from our old realtor trying to collect her commission on the cabin we bought.
[00:13:12] Speaker B: Oh my gosh.
[00:13:13] Speaker C: Yeah, we didn't use her, but she's trying to collect $18,000 check from us. It's just like. So we had to hire a lawyer to back her off. It didn't cost us too much, it didn't take much.
[00:13:24] Speaker D: But it was awesome though, because our realtor called you and told you what was going on and you responded and I was like, like, this is so cool. Like, you actually, like, responded and you said something like, if I was paid for every deal I didn't close, I'd be.
Yeah, that was your response. And I'm like, I can play.
[00:13:47] Speaker C: Oh, my being the queen, any one of those could have turned someone away and said, why am I doing this? Forget it. Or hand up in there. But, um, your journey will never be. Like, there weren't chapters in your book about what we dealt with specifically. Everyone's gonna have their own kind of little journey and you have a bunch of bumps in the road. If, if we knew, know what we know now, going through, yeah, we would have saved tens of thousands of dollars difference. But you have to learn some of that as you go. And.
[00:14:15] Speaker B: And yeah, there's always gonna be bumps and, and you know, something's gonna break after closing. It'll be an air conditioner or a water heater or so. Or your first guest is going to have something really crazy that's never going to get. And that happened to us, our very first guest ever.
It's always something, and it's how you handle it and move through it that determines whether you're going to be successful or not.
[00:14:38] Speaker C: Yeah, my very first guess at the cabin was the worst guest we've had. Still today, four years later, like, what can we do?
[00:14:46] Speaker D: Yeah, they were throwing chairs off the balcony. We could see them off the driveway.
Like, but, you know, it was no serious damage done. Just like, just not, you know, you don't, you don't expect that right off the bat. But at the same time, the more we've had experiences like this, it really is true that the smarter you get the. And the more educated you are and the thicker skin you have. And you know, then when these things happen again, it's not a freak out anymore. It's okay. Here's what we do.
[00:15:20] Speaker C: Move forward. And it also made us market our property differently. Like right away we're like, okay, we don't want college kids. We don't want, you know, there's a college. University of Tennessee is closed. We had some of that traffic. We completely changed the marketing to families and kids.
And it's work, really. We don't have the party atmosphere at all.
[00:15:41] Speaker B: That's good.
[00:15:43] Speaker D: So learn that. But it's due.
But then. Yeah, so that was our. Our first split and then got that up and running and really made it kind of a. And this is something I do tell people when I coach them too, is like, you gotta make your cabin or your property one of one. That doesn't mean we need slides coming out every window. No, we don't have to go crazy like that. But you. You have to have something unique within it. And I mean, these can be very simple things. And Anna talked about them or with Luke before in coaching, like the Nerf gun wall or, you know, our little rock painting station or these don't have to be giant, enormous things, but they create a vibe and an experience so that when we started getting ready to get our second one, we really kept that in mind. Like, okay, who's the avatar? Let's not just throw this thing out to everybody like we did the first time, because we learned from that. And how are we going to differentiate property? Because the second one we knew was going to be a condo in Branson.
[00:16:42] Speaker B: Well, how did you know that? Let's talk about that.
How did you. How did you go from a tap Smokies to a condo in Branson?
[00:16:51] Speaker C: Yeah, the biggest reason for the move was just the market in the Smokies was really out of control at that point. And just high price.
And then along with the higher interest rates at that time, we kind of. We were looking.
Branson was still very well traveled, you know, set up. I think it's 8 million tourists a year. So still a lot of travelers. Kind of a.
Yeah, tourist industry forever.
And it also allowed us to do a 10% vacation home loan in that market by moving market. So that was one of the deciding factors as well. So. So just. We love the Smokies. We would have done it Again, but the pricing is, at the time was. Was still out of control for what we felt Couldn't. Couldn't find a deal.
[00:17:41] Speaker D: Yeah.
[00:17:42] Speaker B: BR is one of the most affordable short term rental markets out there. I feel like it is so overlooked in terms of what it is. Like it really is great. And it's one of the few markets where you can still get stuff for under 300,000 and still do well with it. I don't know why more people aren't. Don't have Branson on their radar.
[00:18:02] Speaker D: Yeah, I, it's done really well for us. We were con. You know, we're consistently booked.
We don't have, we don't have problem guests. It's. And it's easy. It was an easy transition too because Branson is very much like the Smokies. I mean they got the same King Kong hanging off the building and the Titanic and like every. It's almost exactly, you know, so it was an easy transit.
[00:18:26] Speaker C: I think what people don't realize too, it stays pretty strong through the fall and winter seasons. They have their fall festivals, they have their winter festivals.
They have a lot of. They have. I heard a stat. I think they have the most live theater seats only second to only in New York City.
So there. Yeah, there's all these different theaters and shows that people come for. So yeah, it stays strong. It drops off a cliff in January, February, but a lot of markets do. April's terrible for Branson for whatever reason too, where it's a little stronger in the Smokies, but the summer is fantastic. We do better in the summer in Branson than we do in the Smokies. It's crazy.
[00:19:07] Speaker D: Oh, wow.
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[00:20:29] Speaker B: me about your Branson deal and what you paid for it and what it's doing.
[00:20:34] Speaker C: Yeah. So we bought a three bedroom, three bath condo out there.
It's actually, we have a loft that we kind of counted as a fourth bedroom even though it's not enclosed. So it sleeps 12. We bought it for 420 and we, we do about 65 to 70k out of that property.
[00:20:51] Speaker D: Wow.
[00:20:52] Speaker C: Yeah, that's great.
We are, we're in a established kind of. I don't. It's not a resort, but it's a neighborhood that's on. It has a golf course and it's right along the river, so there's fly fishing and things.
And again, our realtor helped us significantly with this location within the community is perfect. We're on hole one of the golf course, so you walk right up to the clubhouse and the pool and the pickleball courts and all that. And then it's also a five minute walk down to the river where you can fish and do things like that. So with not only location within Branson, but location within the community is like perfect. And I think we get a lot of traffic from that.
[00:21:34] Speaker D: And we had like three different properties on our radar. And I remember our agent was like, this is the best community. Like this, this. If I was going to. If I was choosing between these three, he, he was like, this is why. And he kind of laid it out and it's proven to be absolutely correct.
So. Because I've seen some of the other properties, you know, you got your enemies list up and you know, in the other areas and we consistently outperform the other ones that we had looked at. So I'm.
[00:22:02] Speaker C: Wow. And it's almost turnkey. All we did was rip out all the carpet and put in the vinyl flooring, which made it look good.
Touch. Yeah. The furniture was terrible. Did some furniture.
[00:22:16] Speaker D: I was like, I'm pretty sure I had this in 1985.
[00:22:20] Speaker C: But yeah, I was a little skeptical on condo. But Branson market is a lot of condos, but man, now having one, it's like you don't have to worry about anything outside your walls.
So all the landscaping, things like that, the grounds are all taken care of by the hoa. So.
[00:22:36] Speaker D: Yeah. And I mean that's something to consider too if you know you're looking in the Branson Market.
Yes, we pay our HOA and it's not the most cheap thing, but I remember when we had a huge snow there last year and the snow got stuck in the grooves of our roof and Water started coming in through the roof into the master bedroom. And I didn't have to call anybody. Like, I. The maintenance noticed it coming in on different roofs like that. So they went in, knocked on, you know, the doors, called us. Anybody there? Nope. Went in and checked. Sure enough, there was a leak. They had it fixed the same day like that. There's. There is something to be said about. Yes, you're paying an hoa, but there's a lot of things then that are off your plate.
[00:23:16] Speaker B: Yeah. And. And with rehab, too, with condos. It's so easy when you're buying a condo, if you find a good building, because you don't want to buy a good condo in a building that looks like crap when people drive up. That happens a lot.
I've seen it in Panama City Beach. There's one that, like, one influencer is bought in, and that's telling everybody to buy, and the building is absolute garbage. But if you find the right building that looks nice when people drive up and you find the top performer in that building, well, you now know what a property, a good property in this building is capable of doing. So turn around and go buy the worst, cheapest unit and fix it up. Because you're not having to do any structural stuff. It's all cosmetic when you're updating a condo. So to me, that is the easiest way to kind of do the enemy method. If you're too scared, you know, if you're really nervous. Well, if you're in a building, you know, let's say you're on the same floor, same.
Let's call it beachfront or gulf front. Same view.
You already know what the top is, so buy the worst one and make it look like the one at the top.
[00:24:21] Speaker D: Yep. Yeah. And I mean, I love doing that stuff. So for me, when I see those, it's like, you know, I've got to get my hands on it.
We just saw one in the. In the Smokies that we both found online. It was a little honeymoon suite. Because we might round back to the Smokies this year and we'll look at. But, yeah, same idea. I'm like, look at, like, yeah, this is a great price. No, it's not a gem right now, but it could be.
[00:24:45] Speaker B: Yeah, yeah. As long as it has the. The fundamentals, you know, in the smokey, it's a cabin. It's in the right area.
I mean, with tongue and groove, there's only so much you have to update.
[00:24:57] Speaker D: Yeah. Yeah. So, yeah, so that was our. Then that was that was the point then where we kind of round back to, okay, now I can leave teaching. And the reason that that happened was because it did start to get difficult to manage classroom kids running around while I've got even a couple properties going.
You know, a guest will message you at noon. I can't wait until 3:30pm to message them.
And you know as a teacher you're not supposed to be on your phone, right, like watching that and like, no, sit down, be quiet. You know, it just doesn't work.
So then we had, we, we had like a serious discussion about okay, what are our goals?
And we, when we, when we, way back when we first started, we used to put post it notes on our mirror about okay, where do we want to be in six months, where do we want to be in a year? And we really followed that to the point when we got Branson and then we didn't have any more post it notes on the mirror.
It's like, okay, well what do we do now?
[00:26:01] Speaker B: And post it note when you hit the goal.
[00:26:05] Speaker D: Yeah, we would take it off.
[00:26:07] Speaker C: She's talking like bathroom morning mirrors. If you're seeing that morning night, you're seeing those set of goals right in
[00:26:14] Speaker D: front of me all the time.
[00:26:15] Speaker B: I love that we do it with, we do the glass chalk on the bathroom mirror. So we also do that.
[00:26:24] Speaker C: Our kids do that themselves.
So yeah, we hit those first two big goals which was first SDR in 22, second one in 24. Then we, we kind of like, wow, we need some new goals.
And one was to, to get you out of teaching full time.
And that kind of coincided with our neighbors in the Smokey saw what we were doing, saw our traffic and asked us to co host or basically manage their property. There was 70 plus, you know, older couple and just were, they had a cabin really we had a cabin rental company that wasn't taking care of them and they asked her, we said no a couple times, weren't interested. But then as, as the whole thing about replacing a teacher salary in a kind of more short, shorter time frame, we're like, you know what, let's, let's give us a whirl. And she got into it and it went well and she liked it.
And a year later she's got 13, 13 properties under management for co host. So again we talked about detours and kind of things in the road that wasn't expected, but it was something that we could get to a goal quicker, you know, just based on doing that because of, because of the higher interest Rates still and, you know, not as many deals out there. So we, we went that path and she, she's making more now co hosting than her teacher salary in a 12 month time.
[00:27:57] Speaker D: And it's all, what I like is it's all like in one direction. So it makes, it makes it a lot easier than, you know. Yes, there were several months there where we were pretty hard on money because I didn't have, you know, any clients. We were trying to figure this out, trying to build something, but the bouncing back and forth between the two made it hard to do that. And that came back to sometimes you just got to take the risk.
So we decided we're going all in and no matter what, we're going to make it work. And you know, definitely scary at first, but the risk is worth the reward and you just, you've got to persevere and you've got to push through it. And it's so funny, I always think all the time I used to tell my students that like I've been teaching myself, you know, you know, sometimes you ask, what would you have told yourself, you know, 20 years ago, you know, when you started, you know, And I, I always think I should have been listening to what I was telling my students.
Yeah, should have been working on that.
[00:29:03] Speaker B: Well, I love that. And, and you're not getting yelled at by parents and kids aren't misbehaving all day and dealing with, oh, we could
[00:29:12] Speaker D: have a whole day on stories that I could tell you about some things that went down and sure.
[00:29:20] Speaker C: Say, do you have a sixth grader that was upset that you were married? No, he was six year old or six year old?
[00:29:26] Speaker D: Yeah, yeah, yeah. He came up to me and he asked me, he's like, Ms. Larson, are you married? And I said yes. And he kind of puts his head down, he looks back up, he goes, are you like really, really married?
I don't know. And I'm like, yes, I'm really, really married. And he goes, so you like love your husband and your kids?
I'm like, what are you talking about? And I'm like, yes, I'm really married. And he goes, okay, never mind, never mind.
I just thought it was the cutest thing. I'm like, no, honey, we're not.
[00:30:01] Speaker B: Oh, bless his heart, no.
[00:30:04] Speaker D: So sweet.
But, yeah, so that, but it's just funny how, you know, those things do correlate to where I am now and they do carry over with what I'm doing now.
So it's, it's been a great experience. But I Always go back to, you know, you have to surround yourself with the right people, not just who you're working with, but also, like, the group you're learning from.
So when. During this time, as I was leaving, Oak contacted me, and that was when he asked if I would like to do be a coach, and I absolutely wanted to do it. And I've learned so much from being a part of that group as well. So surrounding myself with people who are also within the same industry with the same, you know, positive, like, attitude. And yes, things might not work one time, but we can fix it and we can do it better the next time. I think that's just as important as surrounding yourself with the right business. Single.
[00:31:06] Speaker B: Yeah. Yeah, it definitely is.
And, yeah, it's just my friend group is totally different now.
I mean, probably for a lot of reasons, because I've been doing this for 10 years. So, you know, the five years of stranger rule that people you're friends with now will probably be strangers to you in five years, but it's the type of person that I'm friends with is so different now than it was when we first started. And I don't know if that's the same for you guys, but, you know, you find the people who also are not necessarily doing the exact same thing as you, but are building and working towards something, and it really. It really does make a difference who you surround yourself with.
[00:31:46] Speaker D: Yep. Yeah. And you're right. That hat we have noticed that within the past several years, it's a different, different flow of people.
It really is.
[00:31:57] Speaker B: Well, guys, we are coming to the last three questions of the show.
And before we do that, though, I do want to backtrack to one question that I had back to before you bought your first one. So a lot of people are like, how do I save up the money to do this? So were there any strategies that y' all used when you decided, okay, I think we want to invest in real estate? Did you, you know, pull stuff out of 401ks or did you save up? How did that work to find that first down payment and the second down payment?
[00:32:27] Speaker C: Yeah, so we did do a heloc. We took out a HELOC against our primary residence for the first down payment, and it worked well. It started at 4% at the time, which is great. That was adjustable, so it was increasing.
So I would just say if you do that, you want to make sure you're either accounting for that in your monthly payments or you do pay it off rather quick.
We let it go for A couple years, just because we were investing back into that cabin. We were making improvements and whatnot. So still basically taking the money that would have been a cash flow and investing it right back in the property and not paying down the heloc. But that HELOC is now gone. So I would just say, again, we talked a lot about this during this discussion. Have a plan if you're going to do a heloc, have a plan for what are you going to use it for when you're going to pay it off? Because if you don't, that could be basically another partial mortgage payment sitting there that you weren't accounting for.
And then the second loan we did save up for. I also invest in some stocks and things, so I would say it was about a half and half. We took some money from the cash flowing from the properties and then I also took some from my investments and made that down payment for the condo.
[00:33:46] Speaker B: Okay, so HELOC and then just saving, maybe pulling a little bit from investments. And I think it's what you said about paying the HELOC back immediately is so important. Most of the people who I saw get in trouble or people who will come to us and say, hey, I'm not making any money. And I look at what they paid and what their income is, I'm like, how are you not making money? This thing's doing great is almost always because they have a big HELOC on the side that they didn't budget. They're trying. Which a HELOC, if it's big enough, is almost like buying two houses. You know, people are taking $500,000 he locks and buying $750 million houses, and that becomes like an entire other property. So you're now basically asking one property's income to pay for two properties 100%. And that's just.
You might be able to squeak by, but I mean, you really have to make sure if you're going to get a HELOC that you are able to pay that HELOC out of your primary income. And you're not trying to get a property to pay for two mortgages, because that's just going to be really tight.
[00:34:51] Speaker C: Yep.
[00:34:52] Speaker D: Yeah. And we were, we had a lot of discussions about that.
As we knew it was.
We, I think ours was 40.
[00:35:00] Speaker C: No, we took, we took 75. So not a huge number. But.
[00:35:04] Speaker D: But yeah, we planned for it. So. Yeah. And then the second one once, once we really get like, we took those two years and really made the cabin unique like I talked about. And really made it stand out and different. And then we were really cash flow.
[00:35:20] Speaker B: So even investing Smokey's property actually only asked about Branson.
[00:35:25] Speaker C: Yeah. The purchase price for smokies was 590 and we do about 80 to 85,000 out of that property.
[00:35:33] Speaker B: Okay, that's great.
[00:35:34] Speaker D: Bedroom, two bath.
[00:35:35] Speaker C: Yeah, two bedroom, two baths.
[00:35:38] Speaker B: Okay.
[00:35:38] Speaker D: So good. Cool prop. We, we really liked it though because it was, it's on three acres and. But we're only about 18 minutes from the strip and it's up high. But it came with flat land so
[00:35:53] Speaker C: we were like, oh, we put this whole playground.
Yeah, yeah. Ninja tower and swing sets and that
[00:36:00] Speaker D: was our footback to make it different.
Yeah.
[00:36:04] Speaker C: So it does have a view, but it also has a lot of area for the kids that run around. Not just a drop off a cliff.
[00:36:11] Speaker B: Right. Because that
[00:36:14] Speaker D: there's a lot of people
[00:36:15] Speaker B: falling off cliffs lately. Like in the news. There's been two, three in Utah at different places in the last two or three weeks. So I don't know what that is, but I hope that the falling off cliffs trend stops about three weeks ago.
[00:36:28] Speaker C: Mount Mat trails up.
[00:36:30] Speaker B: What happened in the Smokey?
[00:36:31] Speaker D: Somebody fell off three weeks ago. An older lady.
A loom trail, I think it was. Yeah.
Heading up to Mount Lant.
Yeah.
[00:36:41] Speaker B: I just don't know about this. Let's, this is not a trend. Falling off cliffs.
[00:36:47] Speaker D: That needs to continue.
No. And I mean I, I've done that trail and I was trying to think in my head, I'm like, there's some, there are a couple where if you're, you know, doing a selfie and not really paying attention to what's behind you.
Yeah. You know, it's, it's still hiking. It's still a mountain.
Yeah.
[00:37:11] Speaker B: It's just situations. I'm not going to put my. I don't need to hike Angels Landing in Utah. I just don't. As I've seen all these videos now that that person fell off a few weeks ago and I'm like.
But people love it. People do it. It's the second most visited national park after the Smokies, so.
[00:37:27] Speaker D: Oh, I did not know that. Yeah, it is.
[00:37:31] Speaker B: So. All right, no more falling off cliffs. Now we are going to move on to the final three questions of the show. We ask everybody these questions. First one, what advice would you give 20 year old Erica and John if you knew then what you know now?
[00:37:48] Speaker C: Yeah, yeah. That's always from my standpoint too. Like have a plan.
I, I, I had a lot of fun. My 20s, but I just kind of wandered around aimlessly. I, I would go back and say, put together a plan with some goals and you're gonna enjoy your 30s and 40s much more.
[00:38:07] Speaker D: I totally agree with that. Like, we did, we had a great time in our 20s, no doubt. But looking back, had we thought about where we wanted to be 15 years from that point when we were, you know, 23, it would have been completely different.
So, yeah, a little more forward thinking, I think.
[00:38:26] Speaker B: Yeah, don't we all, don't we all wish we were more forward thinking at that point in time? All right, question number two. What advice would you give a new short term rental investor who's looking to get started today?
[00:38:38] Speaker C: I would say we talked a little bit about this, but you know, there's a lot of knowledge out there right now, a lot of information.
Get educated and then surround yourself with the right people too.
There is a lot of knowledge out there, but it could, you know.
Yeah, not all, it's great. Some of it's people just pumping their websites and things like that. But get educated, find the right people, surround yourself with those people and learn from them.
[00:39:06] Speaker D: Yep. And you know, once, spend some time. I, I actually say this a lot to the people I'm coaching. I'm like, you know, you don't have to buy the first thing you see. You know, take, take some time. It's a smart decision, it's a good decision, but you want to make sure that you're making the best decision.
So, you know, don't, don't rush into it. I don't, not talking, get like analysis paralysis. But I do see a lot of people who will come to coaching and they'll be like, oh, I'm going to buy like five in the next six months. And I'm like, okay, let's slow roll.
Let's make sure we get the first one right.
Oh, yeah, yeah.
[00:39:43] Speaker B: They get ahead of themselves.
[00:39:45] Speaker C: Yeah, yeah, yeah. You don't get the first one right, you're going to be stuck.
[00:39:49] Speaker B: Yeah, there's no second one if you don't do the first one right. Exactly one.
All right, and last question. What's your favorite book that's impacted your mindset?
[00:40:02] Speaker C: I'll take this.
The book I kind of read, it was Rich Dad Bordad after we decided to take this leap and it really just kind of confirmed what I was thinking, which was good. But really that transition from my, my W2 company selling off really affected my mindset more than anything.
But yeah, then I kind of, I read Rich Dad. Poor dad. After that. And it just confirmed a lot of the thoughts that I was thinking anyway.
[00:40:31] Speaker D: And for me, it goes back to teaching kids. It's a children's book.
Sorry, but it's Dr. Seuss. Oh, the places you'll go.
I would read that to my kindergarteners. I read it to my fifth graders, and I just. I think about it all the time because there's so many references in that story, you know? You know, sometimes things are good and sometimes they're not. And, you know, you have to keep climbing forward. You have to keep going to that mountain, have that grit, have that perseverance. And if you do those things, oh, the places you'll go, you know?
[00:41:07] Speaker B: Love that. Nobody said that one yet. I love that you. You referenced that one. That's a good one. My kids love that one.
[00:41:13] Speaker D: Yeah, I love that story.
[00:41:16] Speaker B: Awesome. So, last question. If our clients want to. I mean, our. Our listeners want to find you, follow you on social media. How do they do that?
[00:41:25] Speaker D: Yeah, our. Our little company is called the change your latitude properties.
And we have.
If that's our Instagram hashtag. And our company is, like, if you want to check out the whole thing, it's cylprentals.com and there you can see our properties. You can see properties we manage. You can see a little story about ourselves. Our Instagram has, you know, funny videos of us down in Pigeon Forge doing stupid things, too. So it's not all business. It's gotta be fun.
Yes.
[00:42:01] Speaker B: And if you want to be coached by Erica, you can join short term Shop plus, and you get to hang out with all of us, and you can have Erica as your coach. So definitely check that out. You can find it on the shorttermshop.com or sts plus.com to sign up. Thanks, y'.
[00:42:15] Speaker D: All.
[00:42:15] Speaker B: We'll catch everybody next week.
[00:42:18] Speaker D: Thanks, Avery.
[00:42:24] Speaker C: Sam.
