[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.
[00:00:30] Speaker B: Hey all. Welcome back to another episode of the Short Term Show. I've got a super cool guest today, but first, couple housekeeping items. We are hiring in the Smoky Mountains, Orlando, Park City and the Poconos. So reach out to
[email protected] if you think, if you're an agent and you think that you might be a good fit for our team, we would love to interview you.
Also, please be sure to leave us a review on this podcast. Wherever you listen to podcasts, whether that's Apple podcasts or Spotify, etc. Every review we get helps us be able to put out more content to hopefully help you along your short term rental investing journey. But without further ado, we've got a very cool guest today, Very great story, and I'm really excited for y' all to hear about it. Her name is Jane Ng. How's it going, Jane?
[00:01:15] Speaker C: Good, how are you?
[00:01:17] Speaker B: I'm doing awesome. I was late to my podcast this morning. I made Jane have to sit here and wait for me. I had one of those, those situations where like one thing happens and it's like six things and you're like in the dream trying to run, but you can't. So apologize for that.
[00:01:31] Speaker C: No worries.
[00:01:33] Speaker B: So can you start off by just telling us a little bit about yourself and who you are and how you got into short term rental investing?
[00:01:39] Speaker C: Yeah, absolutely. So, hi, my name is Jane. I live in the Bay Area with my husband and our three kids. They are almost 13, 11 and 6.
I used to work in corporate America, happily climbing the corporate ladder until everything changed when my oldest daughter was diagnosed with leukemia.
And while I had every intention of returning to work once she was in remission and in school and healthy and fine, her journey took a different turn and she developed multiple life threatening complications and now lives with several disabilities. So I knew that I could never go back to a traditional job where I had to ask someone for permission to take time off to take her to her many doctor's appointments.
But like most real estate investors, I've always had that entrepreneurial itch.
And in late 2019, I was in New Orleans with the same daughter we were, or she was getting some medical treatment. I was parked in front of a house that was for sale and I looked it up on Zillow and it was a pretty nice three bedroom home listed for $200,000.
And coming from the Bay Area where everything is at least a million dollars, I was shocked. Like $200,000 was just, I was so surprised to see that. And that moment sparked my obsession into wanting to learn everything I could possibly learn about real estate investing. Because for the first time I thought, oh, we could afford this. Like, I could be a real estate investor if there are homes worth $200,000. And now in hindsight I'm like, that's expensive. But at that time I was just so shock how there were homes in, in that, in that price range. So I went down a rabbit hole listening to all the different podcasts and reading all the books and just learning as much as I, as I possibly could.
And just two months later, in February of 2020, we bought our first out of state long term rental for $50,000 from a wholesaler.
And fast forward to today, we now have three long term rentals out of state. 4. Four short term rentals in California.
I co host about 10 properties for other owners. And I also have a coasting course where I teach other busy parents how to do the same.
[00:04:06] Speaker B: Wow, okay, so that's a lot of things that you do.
[00:04:09] Speaker C: Yeah.
[00:04:12] Speaker B: So I, yeah, I don't even really know where to start. And I wish I had bought so much more real estate back then because those same houses in New Orleans are now like 7, 800,000.
[00:04:24] Speaker C: Oh, I'm sure. Yes, I'm sure.
Yeah.
[00:04:27] Speaker B: So, well, first let's talk about your long term rentals. So $50,000, that is cheap. Even from a wholesaler, that's cheap. So yeah. Where are your long term rentals and what, what does that look like? Let's talk about long term rentals for a minute. I love long term rentals, even though it's about short terms.
[00:04:44] Speaker C: Yeah, no, I do too. And I think it's, you know, like any investment portfolio, I think it's important to diversify. And you know, it's one of the reasons I love following you because I feel like I agree with your strategy and investing. I know you have tons of long term rentals and you also do short terms and I think it's just nice to have a healthy mix. And so this particular property we don't have any more.
So there's a lot of stuff that's happened in the last five years, but it's a little suburb outside of New Orleans and it's a wholesaler. We bought it from wholesaler that I never met, but she was recommended by a realtor that I met online.
And it was a three bed, two bath house in a little college town. And it was fine. It was kind of maybe like a C plus B minus neighborhood. But the reason we bought it is because my husband and I thought, okay, this is out of state, A property we've never seen, a property we are never going to see. And if for whatever reason the house blows up or this is somehow a fraud and the house doesn't even exist, we are okay, losing $50,000. Like that's worth an investment into this quote unquote startup. Right? Like into our little business. And that's a lot of money. But we, it was an amount we were comfortable with trying out this whole thing. And we rented it for 800 right away. And six months later I had to evict her because she stopped paying rent and she was doing a lot of things in the house she's not supposed to be doing in the house. And so we evicted her.
We spent about $30,000 fixing it up and then we rented it for a little bit more for eleven hundred dollars. And two hurricanes later, I decided I no longer wanted to be in a hurricane market. And so we sold the house. We actually started going back a little bit. We bought the two homes right next to it from the same wholesaler because it was the same original owner. And so we, the numbers are roughly the same with all three homes. So we purchased them for roughly 50, renovated them for roughly 30, and then sold them for about 115, 120.
[00:06:47] Speaker B: Okay.
[00:06:48] Speaker C: And then we did a 1031 exchange into two other long term rentals and then one short term rental. So currently our long term rentals are in Little Rock, in Little Rock, Arkansas, and our short term rentals are in California.
[00:07:04] Speaker B: Okay. So yeah, my, that's funny. My whole life is a hurricane zone.
[00:07:10] Speaker C: You know, you're in quite a few hurricane markets.
[00:07:13] Speaker B: Yeah, it's, you know, it just is what it is.
It's meant to happen. I've actually, knock on wood, haven't had anything damaged by a hurricane yet. I've had stuff burned down. I've had stuff get hit by a tornado.
[00:07:26] Speaker C: Wow.
[00:07:27] Speaker B: Not obviously these are not in hurricane markets. These are in safe markets, quote unquote.
So, you know, the weather just is going to be what it's going to be and to be something that I think about. But I totally get the anxiety of not wanting to deal with it.
[00:07:43] Speaker C: So. Yes. And I think it's because that what made me really want to sell is the second hurricane went through our street.
[00:07:51] Speaker B: Was that Ida?
[00:07:52] Speaker C: I don't remember which one it was.
I don't remember. But it was the. Because the three homes were right next to each other. If one's going to be damaged, the other three are probably also going to be damaged. And so thankfully the tenants were fine and there was no severe damage. But just with the amount of flooding, I think one of the homes like half the roof came off.
But with the amount of flooding, it just, just wasn't worth the investment anymore. So we sold.
[00:08:18] Speaker B: Yeah, I hear that. I hear that for sure.
[00:08:22] Speaker A: 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 us at the short term shop dot com.
[00:09:17] Speaker B: So where did you. So your, your long terms are in Little Rock. Your short terms are in California. Let's talk about that. Where in California are they?
[00:09:25] Speaker C: So there's two of them in Central California right off the 101 Freeway. And it's a little town in between Paso Robles and San Luis Obispo, which is.
Paso Robles is a wine country, a wine town. And San Luis Obispo is a really cute like college town. But anyone who's driving from LA to SF and vice versa will typically pass that area. And so a lot of times when people are doing road trips, they stop there to sleep. And that's one of the reasons we decided to invest in that area. And then our other two are in another smaller, lesser known wine region called Lodi. And it's a probably two hours east of San Francisco.
[00:10:09] Speaker B: Okay.
[00:10:10] Speaker C: And one is just in like a subdivision. There's to be honest, nothing really special about it. But the other one is pretty unique. It's on four acres. It's surrounded by about 80 acres of vineyards across the street from a winery and it sleeps like 16 plus. And we built like a pickleball court.
We converted the garage into a pretty fun game room. And so that one, that one's been very interesting and fun. It's been really fun to build it out and also to operate it because you get a very different type of guest who wants to stay there.
But yeah, that's. Those are where they're located.
[00:10:48] Speaker B: Okay. So my first thought, and maybe other people's too, when I hear that you're invested in California, is are these particularly expensive properties? So what I mean, anything is going to be more expensive than $50,000. But what are, what'd you pay for these guys and what year did you buy them? Because I think what year is also very important context.
[00:11:08] Speaker C: Yeah. So the first two that are in the same city, what I think one was purchased 2021 and the other 2022 or at the very, very end of 2021, I think we closed like December 29th or 30th, and they were roughly $700,000. And so still cheaper than the Bay Area. But for. Compared to most of the country, not, you know, terribly cheap. But one of them has a pool, like an in ground pool and in ground hot tub. And I feel like I. It's very rare to see an in ground hot tub that can fit. We can fit like 12 people in there. It's a very, very large hot tub, like comfortably fit 12 people.
And so that's, that's the primary reason that one does well. But both of those homes are now easily worth probably a million dollars.
So just the equity that we've been able to build, Build couple years has been amazing.
[00:12:02] Speaker B: Yeah, that is amazing. So in that market. So this is the one that you said is the stopover market that people stopped.
[00:12:09] Speaker C: Yes.
[00:12:10] Speaker B: Okay.
[00:12:10] Speaker C: Yeah.
[00:12:11] Speaker B: So what do you, what did you underwrite these things to gross when you bought them for 700?
[00:12:18] Speaker C: Yeah. So back then, you know, short term, I think in 2021, people were just really getting into short term rentals. And as you probably remember, like every short term rental did really, really well.
I think Air DNA this home to do 112,000. And in our first year, we did 157,000.
And so I was hooked after that. I was like, oh, we're just going to keep buying these every year. And then, you know, the amount of tax savings you get from cost segregation studies and the depreciation, all of that, it was, it was really amazing. And so, yeah, we just kept purchasing the next three years. We bought one per year.
But yeah, I would say that, you know, the underwriting process is never perfect because you don't know, you know, there's not a lot of data out there in certain markets. So if you're going to invest in maybe like the Smokies or the Poconos or Joshua Tree, where there's tons and tons of vacation rentals, I think it's easier to get close to a realistic number. But we're not realistic. But the actual number. But for the markets that I invest in, they're not big vacation rental markets. And so you don't have a lot of comparisons. And so the, you know, the air DNA is the Rabu. These other sites that are out there to help with the analysis, they only get you maybe like 70% to the actual number. And the other 30%, I do what you refer to as the enemy method, which is time consuming, but I feel like that's really the only way to really figure out how well your property would do.
[00:13:54] Speaker B: Yeah, I totally agree with that, that you, you need the data sites because they can get you there part of the way, but you also have to look at the individual listings to really know what the difference is going to be.
And so a lot of people rely on the data sites to choose a market, but you chose this market without there being a lot of data. So I'm interested to hear what made you decide to choose this market when most people are like, oh, let me look at the data and then decide where to go.
[00:14:23] Speaker C: Yeah, that's a really good question. And it was totally by accident.
And what happened was in 2021, in April, during my kids spring break, so we live in the Bay Area and my, my brother and his now wife were in la. And so we wanted to meet in the middle and so we picked a little beach town in the middle. And because there's two families, I wanted to get an Airbnb. And all the properties I saw were really bad pictures, close to no listing description, and anything that we thought was remotely interesting was overpriced. And I was kind of appalled at how unprofessional like 95% of these listings were. And that's what sparked my interest. I said, hey, if I had an Airbnb in this market, I would do better than at least 70, 80% of other operators just by treating it as a real business. Not because I have any experience, but I would actually take this seriously and I'd have professional photos and all the things that we all talk about.
And so we ended up staying in a hotel because there really wasn't anything that was appealing based on photos. And the week after spring break, we got in contract on our first property.
[00:15:37] Speaker B: Okay, yeah, I love that. So it was somewhere, somewhere that you went as a tourist, you had experience as your target demographic and said, okay, how can I fill this hole? In the market. I love that. I think that that's such a wise way to choose things because data, you need it, but it can only get you so far. And a lot of times people when they start with data and don't use any, I don't want to say common sense, but any personal knowledge of an area, they can kind of end up like buying that $50,000 New Orleans house to try and short term rent because it's so cheap. And then they look at comps and they're like, oh well I can make this much and the house is only 50,000, so my margin is going to be a lot better than somebody who buys a more expensive one. And then they end up not being happy with that because it's either like not where it needs to be or you know, any number of things. So I love that you used your own personal experience and then went for the data.
[00:16:33] Speaker C: Yeah.
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[00:17:49] Speaker B: All right, so how do we choose? I, I am an east coast girl, so I don't know all these California markets literally at all. So how do we choose these other two markets?
[00:18:00] Speaker C: So after the first two and seeing how successful and profitable they were, I, I really wanted to get something a little bit closer to home, which I don't think is always necessary. But at that time that's what I, that's what I was looking for. And so these first two are about a three and a half hour from where we live. So I wanted something maybe within like a one or two hour drive and we used a second home loan.
And one of the criteria was the property had to be at least 60 miles from your primary resident. And so I just went on Google Maps and I drew a circle around what's roughly 60 miles from our home.
And this town we ended up picking. I actually went to high school there, and so I was a little bit familiar with it, Although back then in high school, I didn't realize there were wineries, and it was a little wine town because that's not what my family did. But now I realize it's also really popular for farming, for agriculture. They even have some of our guests come and they say they're almond engineers. I'm like, what's an almond engineer? They go. We go to these almond farms and we test the soil, and it has to happen, like, every six months. And so there's a lot I'm learning about the agricultural industry that I didn't. I actually wasn't aware at that time we. We purchased. But was the reason we went with that one, because it was a little bit closer to home. And it was. I was somewhat familiar because I lived there for a couple of years in high school.
And before we bought, my husband and I went to a couple local wineries. And we asked the owners, like, as we were, you know, being a guest there, we asked the owners, why people come and do you have. Is it mostly locals, or do you have people out of town coming? And they say, no, we have tons and tons of people out of town. And especially in the summer, a lot of people do road trips, I guess, all the way up from Washington state, all the way down to San Diego. Like, they just spend the whole summer going up and down the coast. And they're kind of sick of Napa and Sonoma because they've been there so many times. And yes, the wineries are wonderful, but they want to try something different, and they want a different experience. And so they're actively looking for these smaller wine towns in California. And Oregon has a bunch as well.
And so they kind of make that their destination as they're driving down. And so they pick the handful of wineries that they want to check out, and they'll go there. And so when we heard that, we're like, okay, okay, this is worth investing in because it has a little bit of everything. It has some leisure demand, some business demand.
And so we feel like if, you know, we had no more leisure bookings for some reason, then there'd be some business demand and vice versa. So that's why you pick that market.
[00:20:41] Speaker B: Okay, love that. And so how much is a property in that market and how much does it make?
[00:20:46] Speaker C: Yeah, it's roughly similar. So most homes are probably around, like, the 650 to 750 area. Like a typical home. The fourth one that we bought got the one in the middle of vineyards, was over a million dollars, but most homes are around like 650 or 700.
[00:21:02] Speaker B: Okay, awesome. And what, what is something like that? Gross.
[00:21:08] Speaker C: So this particular home that we bought, the, the first one we bought in the city doesn't have a pool in a hot tub. And I bought it more with the mindset that I might do like an MTR STR combo strategy because I knew there was some, a little, a little bit of business. Business demand there. And so it doesn't gross as much as our first two. It probably does anywhere from 70 to 90,000 a year.
But it's consistent and we have, I would say, our average length of stay. Like our true short term properties, the average length of stay is probably three or four nights throughout the year. These are closer to two weeks.
And so it's, it's a little bit less of a headache because you have a lot less turnover.
[00:21:53] Speaker B: Okay, I like that. I like that a lot. So still kind of diversified across your short term rentals too?
[00:21:59] Speaker C: Yeah.
[00:22:00] Speaker B: All right. And so you did the, the winery one. That was the second home loan. So were the other ones, did you do conventional investment loans or DSCRs or how did you finance those?
[00:22:11] Speaker C: We did conventional loans on, on all of those. I think there was one other. We did a second home loan, but then the other two were, were conventional loans.
[00:22:23] Speaker B: Okay, love that. I love a good. Everybody wants to go so crazy with. I got to do all these crazy types of loans.
Look at what a cool investor I am. But man, I'm a fan of just a conventional. It's easy to find. The rates are always going to be better. I just, I'm a fan alone.
[00:22:43] Speaker C: Yes, absolutely. And you can get 10 of them. And so it's great. They.
Yeah, yeah. So yeah, our long terms are on conventional as well. So our long terms and short terms are all on conventional except for those, the two second home ones.
[00:22:57] Speaker B: Okay, love that. So as far as your investment journey is concerned, have you achieved the freedom that you are looking for or do you still feel like you need to buy a few more? Are you just going to buy, continue building your portfolio just to build it? You already have the freedom, but we're going to keep going. What's that look like?
[00:23:17] Speaker C: It's a good question. So this past tax year in 2024 is the first year we did not purchase the property and therefore we weren't, you know exactly what I'm gonna say.
We weren't able to benefit from a cost segregation study. And it was also what I mean, we knew because we've done so many cost segregation studies, we knew how powerful they were. But when you're on the opposite end of the stick where you have it hurts even more than, like being so excited that you don't have to pay. Right. Or that you're getting a refund. And so it really hurt this time. And so we, and I asked my CPA very specifically, I'm like, is there a specific reason we had to pay so much? She's like, yes, it's because you didn't do a cost segregation study.
So going forward, I'm going to need to maybe buy something every year.
And so that's always in the back of our mind, really, because it's such a powerful task tax tool for building wealth. And so I think ideally we'd like to purchase one per year at least going forward. Do we have to? No. But, you know, we may get to a point where we're. We're okay with not doing cost segregation studies, but I think I'm still getting over the shock of how much we had to pay because we didn't do a cost segment.
Yeah. So in terms of, I guess, owning properties, that's kind of currently our goal.
We are also kind of actively ramping up the co hosting side of things. And I have this new co hosting course because I've had so many moms ask, like, how can I get into real estate? I don't have any money and I don't have any experience, like, what can I do? And so I created the course kind of specifically for. For moms, but also for anybody.
And so those are the two things I'm focusing on this year. But before the end of the year, I'm going to have to spend a little bit of time figuring out what we're going to buy.
[00:25:24] Speaker B: Awesome. Awesome. Well, okay, we're coming towards the end of the time together where we're going to ask you three questions that we ask everyone that comes on the show. But before we do that, is there anything in particular about your story that we haven't covered that you feel like our audience would really benefit from hearing about?
[00:25:44] Speaker C: Let me see. Well, I guess, you know, my journey of how I got here to investing in real estate I think is different from most people out there. I think a lot of people are either, you know, they're not really happy in their W2 or they just really want to find a way to get out of the rat race. I was Forced to get out of it because my daughter was sick.
And obviously, you know, if I were to turn back time and she wouldn't be sick and I'd still be in corporate America, I would take that over anything. But since, you know, we are here now, I just feel like real estate investing and the amount of cash flow, like meaningful cash flow you can get from short term rentals, it's truly life changing. And I'm not talking about, you know, buying the fancy bag or the fancy car, not that kind of stuff. But I feel like for parents, especially moms, it's life changing because you get some time back. And that doesn't mean that you have to spend that time with your kids. And I'm not saying you shouldn't spend it with your kids, but sometimes, I mean, you're a mom as well. Sometimes you just want an hour to go to the gym in peace and quiet without having to worry about child care. And sometimes you want to get a massage and sometimes you want to meet a friend for coffee. It's just having time, freedom as a mom to do what you want to do. And maybe that also means you're finally able to, to be, I don't know, a chaperone for your kindergarten kids. Like field trip that's coming up. Like all of that stuff that happens during the day when most people are at work. It's just so powerful and meaningful to be able to have that option because you do have a little more time freedom than you did before.
[00:27:26] Speaker B: Yes. And I don't know about you, but I am a much better and more patient mom when I've had a little time to myself.
[00:27:33] Speaker C: Yes, absolutely.
[00:27:35] Speaker B: Yes, that's it. That makes such a, such a difference.
[00:27:38] Speaker C: Yeah.
[00:27:39] Speaker B: So. All right, we are to the last three questions of the show.
First question, what advice would you give 20 year old Jane if you knew then what you know now?
[00:27:50] Speaker C: Well, 20 year old Jane was a very long time ago. So I would say, you know, I would tell her to start investing in real estate now.
I started in my late 30s and so if I knew what I knew now back then I would start right away. And I think, you know, everyone at one point in their life, they hear about real estate and they hear like, oh, you know, people invest in real estate and it's, you know, it's the way to build wealth and you have this great asset. But I think back then I believed two myths. One was you needed a lot of money to invest in real estate. And then the second was that it was really risky and now that I've spent so much time learning about it, I know they're not true. Right. Like you can invest in real estate without any money and you can also there are lots of asset classes that that are, are not very risky. And so yeah, that's what I would tell my 20 year old self.
[00:28:46] Speaker B: That's a good one. I agree with that. Until mine the same.
And what advice would you give a new investor who's looking to get started in short term rentals today?
[00:28:59] Speaker C: I would say that you don't have to wait for the perfect time. And whether that's, you know, making sure you saved enough money or making sure your kids are a certain age, like let's say right now you have toddlers and you're so busy in the day to day, you want to wait till they're in high school or they've left home like they're in college and so you have more time.
I feel like there is no perfect time. And because there are so many different ways to invest in real estate, I would just encourage them to find the path that fits their lifestyle. Now, whether you have a lot of time or you don't have a lot of time, just pick whatever it fits, fits for you now and just go for it.
[00:29:39] Speaker B: Also, great advice. And last question. What's your favorite book that's impacted your mindset?
[00:29:46] Speaker C: My favorite book is Unreasonable Hospitality by Will. I think it's Gadara, his his last name.
There's so many reasons I love this book, but one of the reasons is because the author and I share similar routes. We both graduated from Cornell's hospitality management program and everything that he writes in his book, it just captures the heart of what the program is all about. So whether you are in hotels, restaurants, spas, STRs, whatever it is, it all comes down to hospitality and you are really creating an unforgettable experience and creating memories instead of just providing a service.
And so I think that mindset translates really well into the STR world. And so for anyone who's either currently an STR operator or interested in getting into it, I would highly, highly recommend the book.
[00:30:39] Speaker B: It's a great one.
So last question, if our listeners want to follow you and learn more about you, how can they do that?
[00:30:48] Speaker C: The best way to find me is on Instagram. I am at the InvestingMom. If you DM me there, I will respond back.
[00:30:57] Speaker B: All right. And I am at the Avery Carl and the short term shop is at the short term shop. Jane, thank you so much for coming on. And we will catch you next time.
[00:31:07] Speaker C: Thanks. Bye.
