Episode Transcript
[00:00:00] Speaker A: The first thing was that they found that our land was on wetlands.
So that was supposed to be a three to six month permit for that and it got lost in the shuffle and ended up becoming about a nine month permitting.
So that was terrible.
And then we went into our builder going bankrupt on us.
[00:00:37] Speaker B: Hey all, welcome back to another episode of the short term show. Today we're going to talk about building remotely, building a property remotely. And I'm in the middle of a build currently that is almost right next door to the place that I live and it is good going horribly.
So I can't imagine doing it from 800 miles away. Today we have Nick Houseman and he has built a property from 800 miles away and is going to tell us all about it. But he's now a successful short term rental investor. And Nick, how are you? Welcome to the show.
[00:01:12] Speaker A: I'm doing great. Thank you very much for having me. Avery.
[00:01:15] Speaker B: Yeah, thank you so much for coming on. So can you start off just by telling us a little bit about yourself and what got you into real estate investing?
[00:01:23] Speaker A: So I, I have a W2, I'm a nurse and about six years ago during COVID I was trying to find a way out of doing the nursing 9 to 5. Well not really 9 to 5, it's really 14 hour shifts really when it comes down to it. But I, I was getting tired of it, trying to find a way out and basically short term rentals. I found your podcasts and many others and I just kind of dove straight in and eventually I was looking over all kinds of markets and eventually looked along the panhandle of Florida, Alabama and came along Fort Morgan and started to look into building versus pre built homes and the equity, pre built in equity of doing a build kind of brought my fancy to that. So I decided to build a house from 800 miles away and actually had never been to Gulf Shores before, never been to Fort Morgan and with the help of Jonathan Lazzarino, he was spectacular. Did many walkthroughs with me on how far we were to the the beach from where we were at and it was amazing. So ended up putting in a contract on some land and did some research on multiple builders. Ended up building a house with a builder and then it went downhill from there.
Yeah, I hit every bump along the road with our build.
The first thing was that they found that our land was on wetlands.
So that was supposed to be a, I think it was supposed to be a three to six month permit for that and it got lost in the shuffle.
And ended up becoming about a nine month permitting.
So that was terrible.
And then we went into our builder going bankrupt on us.
So.
Yeah.
So with that had to find a new builder. The builder was slightly more expensive, so had to get new lending. And what was supposed to be a nine month project turned into a 22 month project.
So it was terrible. And then when we got to the setup portion, the are. It's funny now to me it was. It was terrible at the time.
[00:04:27] Speaker B: Yeah, I'm still in the. It's really not funny. Part of my build.
[00:04:31] Speaker A: Yeah. Yeah.
Our moving company that we had sent all the stuff. I live in St. Louis. And we bought all. Bought all of our setup supplies and had them shipped to our house. And we were just gonna get a moving truck and move everything down.
And the moving company never showed up with all of our stuff.
So had to get police involved. And the stuff eventually showed up. But I had to buy everything twice for our setup. So that really put us behind. It was terrible.
But in the long run our place is great and doing very well.
So it's been wonderful in the long run.
[00:05:24] Speaker B: So let's start at the end and work backwards. So what did you end up paying all in for the lot and the build? And what does this property make?
[00:05:33] Speaker A: Okay, so the lot was 235.
[00:05:37] Speaker B: Okay.
[00:05:38] Speaker A: And then the.
The house itself was 550.
And we're bringing in our first year we hit 150 gross. And then this year we're on pace to hit 190 gross.
[00:05:59] Speaker B: Okay. So those numbers did work out really well.
[00:06:02] Speaker A: Yes, yes.
Yeah.
[00:06:04] Speaker B: But let's talk about what it cost you emotionally.
[00:06:08] Speaker A: Yeah, it was a lot of emotions.
I had many angry phone calls along the way.
But it's all worked out. I found a builder down in Gulf Shores, Llama Cove. Shout out to Dustin with them. He has been spectacular. I talk with him all the time. Probably once or twice a month along the road even after the build. This is my second builder.
But he has been great overall. It's been a great experience. And to top it all off, when two years after or a year and a half after we finished the build, we were able to do a refinance and recaptured all of our down payment minus $3,000.
So it was a pretty much a.
I like to call it a Bildenberg.
But yeah, it's been a successful first project. And yeah, it's gotten me getting me the bug to do another one already.
[00:07:25] Speaker B: I will not have the bug after this.
So let's. How did you Find the first builder. Because I think a lot of people have heard this, heard up to now on the episode, and gone, oh, my God, what if I find a builder and they go bankrupt? Which guys, by the way? Builders go bankrupt all the time. They all do it. So how do we find somebody?
I guess they want to know how to avoid this. So let's start at the beginning. How did you find and research that first builder?
[00:07:52] Speaker A: So, a lot of Google searches and searches in Facebook groups of reputable builders.
I actually found somebody who has a house, who built a house down in Fort Morgan, two streets over from me, and I did at the time, not knowing what Airbnb's regulations were.
I messaged her personally and didn't know it at the time, but I messaged her and come to find out she lives 20 minutes from me in St. Louis. So she had had a home built by the original builder, said wonderful things about them.
And so I'm like, okay, I talked with a few other people that had used them, and, okay, I'll end up using this builder. And it went downhill from there.
But on the. On the second one, I kind of did a little bit more research and found Llama Cove, and they've been great.
[00:09:06] Speaker B: Okay, so what are the kinds of things that you started noticing during this build that started not adding up to eventually uncover the news that the builder had gone bankrupt?
[00:09:21] Speaker A: I had messaged a few other people in the Facebook groups down there, and a couple people said, just a little warning that I didn't have a great experience. And then a few months later, I had one that was.
Or communications were starting to slow down, and I couldn't get a hold of him. And we had this. The wetlands issue, and that was kind of the straw that broke the camel's back on it. And that's when we really found out. And so, yeah.
[00:10:01] Speaker B: Did he have a bunch of your money at that time that you had to try and get back?
[00:10:05] Speaker A: Yeah. And, uh, it's been lost.
[00:10:09] Speaker B: Oh, man.
[00:10:10] Speaker A: Yeah.
[00:10:11] Speaker B: So how far along in the build were you. Sounds like maybe you weren't quite to, like, foundation yet. If we're still.
[00:10:16] Speaker A: We weren't. Luckily we were still under permitting, but it was still my part of my down payment on the. The house was. Was lost.
[00:10:28] Speaker B: Gotcha.
That's really unfortunate.
[00:10:31] Speaker A: It was. It was.
[00:10:34] Speaker B: Well, I mean, I feel like it could have been worse, because if they'd started building, gotten halfway through the build and then this happened, then you get run into the situation of other contractors, don't want to mess with Previous contractors work. So that was a little bit of a blessing in disguise that it happened when it did.
[00:10:50] Speaker A: Yeah. And my lender, he had told me if we continued to use the builder, that he had had other contractors, that the builder wasn't paying the contractors. So he said that if we continue with this builder that we're going to have to.
Our lender was going to have to directly pay each contractor. I'm like, oh, this, this isn't good. So eventually we ended up not being able. He just ghosted us and nobody could get in touch with this builder. So, yeah, he's still mia.
[00:11:35] Speaker B: They all have a way of doing that, of disappearing.
[00:11:38] Speaker A: Yeah. Yeah.
[00:11:40] Speaker B: Okay. So you find the second builder, you get rolling. And what are some bumps in the road that people can expect on a. Not horror story on your builder number two, who you love. What are some things that if people are going to build remotely, maybe they've never done a build before that they need to pay attention to because we get people all the time that want to build something, but they've never. As a matter of fact, we had somebody get mad at us and never speak to us again a couple of weeks ago because she wanted to do this big crazy rehab on a property in Florida. They lived on the west coast. They never, they bought one property before ever. Never done a rehab project. And we said, I mean, we can, we can help you do this. We can get you connected with whoever you need to be connected with, contractor wise. But just, we really don't recommend trying to do this remotely, never having done it before, just because you have to stay on trades, you have to stay on subcontractors. And they can find ways to take advantage of you, knowing that you're out of state. And they. She was like, they're going to take advantage of me because of who I am?
Like, no, they're gonna take it because I'm not in Alabama. No, they're going to take advantage of you because you're not there on their asses all day to make sure they're doing stuff right. So anyway, I'm sorry, girl, wherever you are, but it's not what I meant. Yeah, has nothing to do with who you are. It just has to do with proximity to the job.
So anyway, that's something that I think about in the middle of the night sometimes now, the past couple weeks. But anyway, a lot of people want to do that because maybe they can't find what they're looking for.
And they want to build and I want them to have a realistic Picture of what that can look like. So what are some things that if everything goes really, really well, you still need to pay really good attention to?
[00:13:28] Speaker A: Permits are huge.
Every you're going to be looking around at permits and not only the ones for the build, but on the land is kind of where we found some hiccups. And even there's just so much regulation on.
Down in Fort Morgan. There's ITP permit that everybody has to have just to do anything down there. So that is the permit about the. The beach mouse down there.
[00:14:03] Speaker B: Oh, gosh. Yeah, I forgot about that. Over here on. On 38, we have the go for tortoises, but you all have the beach mice.
[00:14:10] Speaker A: Yeah. So it is. You can only touch so much of the land and then that with it you only. I think it's 50 or 75%, I don't remember. But you can only touch so much percentage of the land. And then I think we used up all of that percentage.
Minus 100 square feet. And so that our pool, we had minimal space to put in our pool. So it was. We have a tiny pool, but people love the pool.
And then another thing is be ready to the logistics of getting all your stuff down there.
That was a headache of the timing of when you can get stuff into the house and versus not getting in way of. In the way of the builder and letting them finish their job.
So that and timing when shipments are going to be made. That's a huge headache.
[00:15:21] Speaker B: Yeah, yeah, gotcha. So permitting and layout is definitely the biggest headache. Our lot was, to the eye, looked pretty flat, but apparently it was not flat at all. And we had to deal with retaining walls and all these things that I just never expected. So, yeah, that's a big one that people don't think about. They just see exactly how much space the lot is and then they start looking online for floor plans that will fit on that. And that is only a very small piece of the puzzle. The size of the lot.
[00:15:47] Speaker A: Yeah, the setbacks are huge.
I've found so many lots. Like I'm looking to do another one and the setbacks on where the house can be put.
A lot of houses aren't going to fit within those defined areas within the setback. So it's been hard to even find lot number two.
[00:16:12] Speaker B: Mm.
Yeah, it is tough out there. The real estate market is a weird place. When it's good, when it's bad, there's always something weird.
[00:16:23] Speaker A: Yeah. Yeah.
[00:16:25] Speaker B: Awesome. So you're looking to do your second one in Gulf Shores then, right?
[00:16:30] Speaker A: Yes, yes.
After getting the first one up and doing it for about a year, I got into co hosting.
We have four clients and all in
[00:16:43] Speaker B: the Gulf Shores area.
[00:16:44] Speaker A: Yes, I have two in Fort Morgan.
Well, two in Fort Morgan. I'm onboarding a third in Fort Morgan and then I have one in like Gulf Shores proper.
And then I'm using that and my, the funds from the, the Burr to fund another build. And we're going to just kind of repeat the process and do the build and then hopefully refinance and get the our down payment back and kind of keep the ball rolling.
[00:17:24] Speaker B: Awesome.
[00:17:24] Speaker A: Hopefully my, my goal with all this is to leave my W2 as a nurse.
[00:17:30] Speaker B: Okay, that's a good goal.
[00:17:32] Speaker A: Yeah.
[00:17:32] Speaker B: And so what year did you buy? Did you get the start the build and finish the build on that first one?
[00:17:38] Speaker A: The the house was or the line. The land was purchased in 2022 and we, our first guest was May of 24.
[00:17:49] Speaker B: Okay, so you've been up and running about two years. How are you feeling about the Gulf Shores market as a whole, bookings wise? Because what I see is in the markets that I own stuff in, which is the Smokies and 30A in Destin and Gulf Shores is a very, very similar market to Destin.
Is that everything? You know, we had the big, the big peak in 21, the big drop in 22, 23 and then now we're very stabilized is what I'm seeing in my market and at a much higher annual revenue than we were pre Covid.
So even though we had this huge uptick and then this big drop afterwards, we're still doing almost double what we were doing in 2019.
So obviously, you know, you start in 2022, you don't have all that history going back. But everybody's favorite thing to comment every time I post something online about short term rentals, the, the rentals are down. The rentals are down. And with insert market here, some local person who knows somebody who owns something somewhere who doesn't have any experience whatsoever.
Rentals are down.
What's been your experience from 2022 to now?
[00:19:07] Speaker A: So from 2022 we were at about 65% occupancy and now we're at. The past two years we've been hitting like right at 70, 72% occupancy.
So I don't see a big dip in occupancy.
Our year over year numbers are up.
About our growth is up. Maybe the last I looked was about 10%. So we're doing well.
It just depends. I Think that it depends on design and your separation from the rest of the market. You have to be, have, have a moat that kind of sets you apart.
[00:19:57] Speaker B: And guys, that moat doesn't have to be anything crazy. So if you. I have to go to Gulf Shores all the time for not for real estate but for my kids sports. So all of our soccer tournaments are in fully right outside of Gulf Shores. And if you look at the market as a whole, let's say you pull 100 random properties on Airbnb or whatever you're looking at 90 of them are going to be junk.
[00:20:21] Speaker A: Yeah.
[00:20:22] Speaker B: The 85 of them, you know, they're still going to have wicker furniture from the 80s or 90s that was popular back then for beach furniture. They're going to have, you know, mauve and peach colored stuff. There's still so much mama inventory in all the markets that it sounds really scary when you say something like we have to have a moat. You have to set yourself apart. You don't have to set yourself apart from a five star resort. You have to set yourself apart apart from Mama and Papa renting their property through the same property manager that they've been using for 20 years, 30 years now for sure.
[00:20:56] Speaker A: For sure. And some of the things can be super inexpensive. I shouldn't say super but we did in our living room we have murals or wallpaper murals and in our master bedroom we did wallpaper, wallpaper murals in there. And they're about between four and five hundred bucks to, to buy those. I installed them myself.
And you, you figure it out, how to do it and that I don't really think that there's. There might be 10 or 15 places that have murals like that down there. And it's an inexpensive way to set yourself apart.
[00:21:39] Speaker B: Yeah. You don't have to spend hundreds of thousands of dollars. As long as your property is updated, cute, clean and comfortable, you're going to be fine in most cases assuming that you manage it well because the income is really more of a reflection of the management than the property itself for sure.
[00:21:54] Speaker A: And treating. I always like to treat my guests like I want to be treated. It's just how, how I run my business, how I feel like everybody, any business should be be run. It's. We've all stayed it short term rentals before. We've all gone on vacation. We want an easy vacation and I don't need to communicate with my, with the hosts every day but I just want to set them up so they know what to expect.
All those things that will make their life easier while they're on vacation.
[00:22:33] Speaker B: Totally agree with that.
And what else? So what else have I not asked you about your journey, your experience as a co host in the Gulf Shores market that our listeners would benefit from hearing about?
[00:22:47] Speaker A: I think that the, the Gulf Shores Fort Morgan market is excellent.
It's the price point down there for purchases is great.
I've looked all over the Panhandle and the returns down there are amazing.
So I've kind of. When we were looking I looked all over the country and I was looking at Branson which is only three hours from my house and then I looked at Big Bear, California. I looked all along the panhandle and there was. The returns were why I chose the Fort Morgan and Gulf Shores. And it's only, I think that Gulf Shores is only going to get bigger with the airport coming and it's so much easier. It's already there but it's so much easier to get there now with the airport. And there's a hub in St. Louis that it makes it so easy. It's four hours from our house to the house down in Fort Morgan and I know that they have many market. The Allegiant airlines has so many markets that make it so easy to get down there.
[00:24:06] Speaker B: Yeah, it's getting a lot easier. It's not just a southeastern or destination anymore.
[00:24:11] Speaker A: Yeah, for sure. And even in I, I like the, like you said, the, the drivable markets is why we chose that area as Atlanta is huge.
Even New Orleans, we get a lot of people from New Orleans, people From Texas, Memphis, St. Louis, Indianapolis, all of them. That's we're one of the closest beaches to them. So it's a great market.
[00:24:43] Speaker B: I agree.
All right, Nick, we are to the last three questions of the show that we ask every single guest. Are you ready?
[00:24:51] Speaker A: Oh sure. Let's do it.
[00:24:52] Speaker B: All right. First, what advice would you give 20 year old Nick if you knew then what you know now I would get
[00:25:00] Speaker A: into real estate way sooner than I did.
I looked at many. When I bought my first house I bought a condo and it was a terrible purchase and I wish that I would have bought a, a duplex 4 family home that I could kind of stepping stone every two years buy something else and keep that as a rental and just keep the ball rolling. And I, I never did that but it's kind of something that I wish I would have done.
[00:25:36] Speaker B: Makes sense. And question number two, what advice would you give a new short term rental investor who's looking to get started today?
[00:25:44] Speaker A: I Kind of with my job.
I'm one of the older people. That is, lots of nurses are in their mid-20s and I tell them all the time, buy a house.
Buy something that you can afford.
Get. I really like to tell them to get a duplex or something like that. And just along the same lines, as I would tell myself, is just keep the ball rolling, keep getting new investment properties and it will be a great investment in the long run.
[00:26:22] Speaker B: Totally agree with that, too. And last, what's your favorite book that's impacted your mindset?
[00:26:28] Speaker A: I don't know. I've listened to your show for a while. I don't know if I've heard this one, but Eat that frog is.
It's a great one. Just quit procrastinating on doing stuff and just get it done.
[00:26:45] Speaker B: Yep, that is a great one. Love that one.
[00:26:47] Speaker A: Yeah.
[00:26:49] Speaker B: All right, so, Nick, if our listeners want to find you or your property management company, how can they do that?
[00:26:58] Speaker A: My co hosting company is called Bright House Stays. As you can see, my last name is Hausman and H A U s. So Bright House Stays is my. My company and that is bright house.com. i'm on Facebook, Nicholas Housman.
You can find me there.
And on Instagram, you can find me on any of those.
[00:27:25] Speaker B: All right, well, Nick, thank you so much for coming on. And listeners, we will see you next week.
[00:27:30] Speaker A: Thank you. Avery, Sam,
