[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.
[00:00:29] 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. Thank you so much for tuning in. I'm gonna apologize for, if you're watching on video, my background. I'm in the middle of redoing my office. So it looks, I mean, it looks fine. It's just a blank wall, but it's not cool like I want it to be. So anyway, should have that that handled and wrapped up by the next episode maybe. No, it won't. It'll be around sometime. Just don't look at me if you got a problem with it. Anyway, we have a very cool guest today, Rashmi Bot. Some of you may be familiar with her. She's been on a few of our market specific podcasts which, if you're not aware of those, we have a 10 episode podcast on every single market that we're in. So that is 200 hours of content on whatever market you're interested in buying in. So if you go to our website, the ShortTermshop.com, there's a link for podcasts and you'll be able to find all of those. You can get as nerdy as you want on any of the markets that we operate in. And you can hear more from Rashmi. Anyway, how's it going, Rashmi?
[00:01:28] Speaker C: I am so good. How are you, Avery?
[00:01:30] Speaker B: I'm so good too. I'm excellent. We had a great summer with the kids.
Went on lots of trips, spent a lot of time together. School starts back in two days. I'm both incredibly sad about that, but also ready to get back into a routine.
[00:01:46] Speaker C: I don't have kids, but I can imagine.
[00:01:49] Speaker B: Yeah, it's. There's no. You think like, oh, yeah, I'm good. I'll work in the morning and Luke will take the kids and then he can work in the afternoon and I'll take the kids. But no, there's always some kind of fire happening and everybody is, is juggling. But we had a really, really great summer. I hope you did too.
[00:02:03] Speaker C: I did too. We're incredibly blessed. We had a whole bunch of things happen. So I live out in Austin, Texas, and so we had the floods a few weeks back that was devastating for our community. But just seeing everyone's support and everybody come together was like, incredible to watch. But apart from that, we've had a Banger summer, it's been amazing. It's. It's still like over 100 in Texas right now. So I don't know if summer's over by any means at this point, but we're, we're rocking and rolling over here.
[00:02:30] Speaker B: Yeah, summer's not over till that first hurricane comes through.
[00:02:33] Speaker C: Right?
Here we go. Here we go.
[00:02:37] Speaker B: Hurricane season. But. So, Rashmi, tell us a little bit about yourself, where you started, how you got into real estate investing.
[00:02:43] Speaker C: Yeah, so I started in the hospitality space when I was 21. I turned down three job offers and opened my own restaurant. And my parents, who invested with me told me, you have one year to live your dream. And then we want you to go back to school, get your masters, and get a corporate job and do the grown up thing. And I was like, fair enough. That ended up becoming 11 years. I still have the same restaurant.
And I met my boyfriend back then, but husband now in 2018. And we started looking at real estate and, and we, we've always kind of heard the shows like, like, you have to buy real estate to become financially wealthy, like, passive income, like, all this stuff. And we could not make long term rentals work. We're like, how do we make $200 a month in net profit and make any money? Like, none of this makes any sense for us.
And so in 2020, hit Covid hit, my restaurant was shut down.
And I was like, I have all this time.
And in our restaurant, in our sandwich shop, we had a delivery business, so we would like, deliver sandwiches to Austin, San Antonio, to, like, airports, vending machines, that kind of stuff. And I started listening to your podcast, and I started listening to all of the other, like, bigger pockets, I think had you on, like, there were a whole bunch of, like, collabs. And I was like, airbnb sounds amazing. And that summer, I stayed in my first Airbnb, and it was in Fredericksburg, which is like the Napa Valley of Texas is what I like to call it. And I know you've been to Fredericksburg, Avery, and you guys operate out there.
And I. I fell in love with Airbnb. So, like, that weekend I was supposed to hang out with my friends, I literally called the first real estate agent I could find. And I was like, I want to buy an Airbnb without, like, having any numbers, any financials. Like, I just want to buy one. And so we ended up buying our first property. I partnered with my parents on that one.
Our friends were with us. Love that so much that we ended up buying property Number two and three with them.
And then we bought our first property through you guys in the Smokies.
And then we did some partnerships to buy two more cabins out in Broken Bow in Oklahoma. So I kind of had a portfolio about six. I was still running my restaurant full time. This is around, like, 2022. And I don't know if you remember this, avery, but in 22, in December 24, 2022, I'll never forget this. There was this ice storm that literally went through, like, the Smokies, Broken Boat, Texas. And I had this portfolio that was, like, in different states, like, we don't get hit, but, like, everybody got hit. Everybody. And I'm, like, putting ham in the oven, you know, hosting Christmas dinner, and I'm dealing with these. And I was like, this will never be me again. Like, I just. I just can't live like this. So the next month, I got my first. I'd hired VAS on and off, but anyway, I'm happy to talk about this, but I just couldn't get it to work. Like, you know, our schedule's crazy. Like, you don't really need them nine to four, but you never know. And, like, we're just getting back and forth on all the stuff.
And. But the next VA who reached out to me, I was like, I will make it work with you. Like, I just can't be the front person for this. And so we brought her on. She brought on her team to kind of help me with. With guest communication stuff. And then my business partner at that time reached out, and he was like, hey, we're in the same market. How would you like for us to work together? I have 30 units at the moment. I think maybe at 35.
And I was like, I'd love to work together. So we partnered up, and we currently have 65 units under management on the Central Texas Hill Country.
[00:05:54] Speaker B: Wow.
[00:05:54] Speaker C: And then so later on, and then I also joined a mastermind with Mike Sjogren, because I was just like, I need systems, I need processes. We're just struggling here. It's like, my first time, like, joining a mastermind.
And so we did that, and then in October, I joined what is now like, boutique hotel Secrets for Mike Sjogren's Community. And I got my first hotel under management there. At last year's wealthcon, I picked up two more clients who each had two hotels to manage.
So that kind of got me to, like, five hotels to manage. And then currently we have eight hotels that we manage. We're just about to bring on hotel number Nine for management and we're looking at two deals to acquire along with that. And so like that got me from like from hospitality into real estate and then now from short term rentals into more boutique hotel stuff.
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[00:07:19] Speaker B: That's a lot of things. So you started, you were owning one restaurant so I assume that's very regular people income.
[00:07:26] Speaker C: Correct.
[00:07:26] Speaker B: So you, you took that one regular person income to 30 or 60 something short term rental management units and now nine hotels.
[00:07:36] Speaker C: Correct.
[00:07:37] Speaker B: Okay. I don't want to hear anyone on who's listening to this ever say that they don't have time to manage something or they don't have time to do something because that's a lot, that's a huge amount of, of things to do.
[00:07:49] Speaker C: Especially today like when I got started we didn't have like host Buddy AI but today with like host buddy AI, I'm like, you have no reason to tell me I can't, I don't have the time to hire people. I don't have time to do this, I don't have time to do that. Like if you lack a capital, talk to Pace Morbi's group. Like there is a solution for your lack of everything.
[00:08:05] Speaker B: Yeah, there is a solution for your lack of everything. And you know to me it's, nobody wants to hear this at all. Nobody wants to hear this. If you don't have money, there's two things. You have to either increase your income or decrease your spending or both.
And you know there's, there's private lenders out there, there's all kinds of different things you can do but at the end of the day that's only going to get you so far before you, you have to make big changes in your own life. I'm not trying to like Dave Ramsey it right now but you know, you can't just only focus on success it in one avenue of your life. If you want to be successful you kind of have to look at everything that you're doing and point everything that you're doing in the direction of the way that you want to go.
[00:08:53] Speaker C: I mean one thing I Did when I was 21 was I moved back in with my parents. I was like, I can't pay rent at this moment, opening a new restaurant. And like I moved in with them and I stayed with them for like seven years and I probably could have moved out of like year five. And I was like, why? Like, I was like, I'm gonna like prove to myself that I can make it or I could take the money and buy real estate and make a real change.
Well, you have to be willing and like just something I was like very embarrassed to talk about for a very long time.
But I was also like, if I hadn't made those moves, I could have never afforded to do all the other things.
[00:09:24] Speaker B: I think that that is a really looked down upon and, and not.
What's the word I'm looking for. It should not be looked down upon. I've known a few people who have lived with their parents, you know, from until they were 30, but they were. It's not like you, society wants to act like, oh, you're living with your parents, you're like living in your mom's basement. But really you're saving so much money if you're doing it right and you're saving the money that you would have been spending on rent and what have you, then you are able to really get once you start, whether it's buying real estate or starting businesses, if you do things right, it really can be a great stepping stone into being a successful person.
I know that's something I think about with my kids all the time is are they going to be able to afford houses the way things are going right now with the cost of housing and what are they going to be able to do and you know, the cost of education and all these things, living with your parents a little bit longer in order to. I think that is kind of maybe the solution that a lot of people are looking for. If you don't have that housing cost. Well, that absorbs a lot of the, a lot of the issue with, you know, getting started as a kid. And honestly, I mean every kid I struggled when I moved out of my parents house, you know, working, going to college, all that. And it's kind of a rite of passage too. But anyway, it's such a, I think a great hack that I think is underutilized and really condescended to inappropriately in my opinion.
[00:10:48] Speaker C: Especially because I mean there's like the western philosophy like you move out when you're 18 and you're on your own and I think there's some merit to that, but I think there's also merit to the eastern philosophy. Like, I'm Indian, where like we do everything as a family. Like, it's very family oriented. And so like, moving back in with your parents in an Indian setting isn't seen as like, oh, wow. Like a lot of people move back and have great jobs. And then the other thing I did, you know, like, increase income is one decrease expenses. I just built partnerships. I all of my college friends have killer jobs. And I was like, I know you guys need partners. I know you guys need to buy real estate.
So can we work together? I will do anything. Just get me into the deal.
And so being willing to find those people and Pace Moreby talks about this, he's like, if you have a job that's a fantastic asset, like, use that. A lot of people are so determined to leave their W2, but you can get so many loans. Financing is so easy. Yeah. I'm like, use that. Maybe you can't manage it and that's fine. Find an operating partner. But that's such a great way to be able to get into deals, in my opinion.
[00:11:48] Speaker B: Yeah. I think we went so far in the real estate investing community of the quit your job thing that like, we people lost sight of the fact that you need that income to actually be able to buy deals.
We've had several people come to us over the years and be like, I just quit my job to do real estate full time. I need to get my first deal. And we're like, what? You did what?
[00:12:06] Speaker C: Crazy.
[00:12:06] Speaker B: Go back and get that back.
[00:12:09] Speaker C: It's crazy. Like, my husband still has a W2, right. And like the loans we get. I'm like, this is, this is amazing. I'm like, you can never quit.
[00:12:17] Speaker B: Yeah, yeah, it's. It's nice to have for sure. You need to look at real estate investing as like building a fortress around your W2. And eventually when that fortress gets big enough, you can leave it. But the goal should not be, I think so many people leave too early on like two or three properties. You know, they start seeing that cash flow roll in and you know, maybe they are netting 50, $75,000 a year. But all that takes, you know, one good ice storm and having to cancel $10,000 worth of bookings like that. Things can get eaten into really quickly. So you don't need to live as if that is going to be the case forever. Like you need to. To build that, that fortress before you quit that job. Now I want to get back to let's get back to your deals. So first I want to talk about, since you manage a ton of properties in the Texas Hill Country. So this is one of my favorite markets. I love the Texas Hill Country. I don't own anything there yet because we just, it's so easy to just add a property where you already own a bunch of stuff and have like I bought two in Santa Rosa beach and 38 this year. But I really do want and will eventually get several in the Texas Hill Country. I think there's a lot of reasons for that because it is such a, it's already such a busy weekend, like long weekend bachelorette party vacation for central Texans and even mean north and south Texans as well. But, you know, as Austin and San Antonio continue to grow with a bunch of people from, you know, higher, higher state income tax states moving in and industry continuing to grow in Austin, that's just building up that feeder market population of people who are going to continue going to the Hill Country. So the bigger Austin and San Antonio get, the more people you have coming to the Hill Country. But anyway, I'd love to hear what your experience has been with, you know, owning in the Hill country and what you've seen with, you know, since COVID During COVID or I guess maybe since.
[00:14:15] Speaker C: COVID Yeah, for me it's been all after Covid and it's been amazing, I think. So we own stuff out in the Smokies, right? And the Smokies, I love the demographic out there. They're just a very different demographic than the Texas demographic. And you just have to be aware of that when you're going in in Texas. Like, our market isn't as popular as say, like Orlando. Right. Like, our Airbnbs aren't that out there. But if you build the Airbnb that's out there, I think there's so much room to be able to just make so much money in the market because the demand is there. People have money. People in Houston, Dallas, San Antonio, Austin, like we're four major cities where there's high income earners who want to stay at really great places. And a lot of these just aren't built yet to look like that. The other thing is, I think can add very simple amenities like putting in a pool, putting in a hot tub. Like we put in a hot tub in mostly all of our properties and we're booked all the time. Right. And so again, it's a six grand investment.
And you're. I haven't even calculated. But it's stupid. Like it's so easy, right? And so I love saying the only thing I will say about taxes and you have to be very careful about, which I think a lot of people don't look at is the property tax. It's pretty pricey and so like you'll be like looking at like your mortgage statement, like $1,000 a month, $2,000 a month just goes to property tax. So like as long as you budget that in, you're going to be totally fine. Just make sure to budget that.
[00:15:36] Speaker B: And yeah, don't be, don't be surprised. And that's wherever you buy. You need to check property taxes. Like in the Smokies. Property taxes are nothing. So it's like no big deal. But in Florida, Texas, you got to pay attention to those property taxes for sure.
[00:15:52] Speaker A: Are you worried about your market being saturated?
Too much competition?
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[00:17:08] Speaker B: So let's hear. I want to hear the difference between because a lot of people, you know, they get into. I think that buying a short term rental is such a great and this is not a good term, but it's the term I'm going to use gateway drug into either commercial investing, commercial real estate investing or small business ownership. Because you're learning boat, you're learning real estate investing and how to, you know, the things that you deal with there. And then you're also learning the hospitality business. I think that's where a lot of people fail and is because the end of the day it does take adaptability and a certain personality type to want to deal with other people or not necessarily want to deal with them, but to be able to, to be able to detach, like whether they're irritating you or whether they're being mean and still being able to give good service.
And you know, I hate to pick on engineers but you know, somebody who's coming from the service industry World is typically going to be able to adapt to owning a hospitality business, which is what short term rentals are a lot better than like an engineer. And I think that's where a lot of people fall off is they're like oh great, I'm going to make all these great investments and the spreadsheets look amazing and pencil sharpener and then they have to deal with people's personalities and they're like wait a minute, this sucks. So anyway, I would would like to hear about because you kind of did this, you went hospitality business and then you went short term rentals. Okay. Now you're in to the real estate world and you went a little bit further to I guess the commercial hospitality world of investing in hotels and managing hotels. I think the biggest question that I have, and the listeners probably do too is like let's talk about the similarities and differences between managing a single family short term rental and a small boutique hotel.
[00:18:46] Speaker C: Yeah. And I think the first thing I'll say when you're kind of looking at the difference is it's so deal specific, right? Like I know people who run apartments like they run like it's a boutique hotel but they run a full SR model and you can be self check in and you can have rental agreements and that's great. And it's very deal specific. So I hate giving like general advice when I haven't seen your deal, right. Like if you have eight cabins, you know, all in the same spot and you run them as Airbnb, then like yeah, you have a boutique hotel, but it's not really like a boutique hotel. At least like what I consider one. Yeah. First, first thing I'll say like the big change is get ready for phone calls. Airbnb is so good about people not calling you, right. Like unless it's an emergency, you're probably not going to have your guest call call you. They usually just message on the app. They might text but like calls are really not a thing that is completely different for hotels. Like they will call you non stop and won't get off the phone. I'm just kidding. But you just have to get ready for, for the phone calls. It's a very big like drastic difference.
The second thing is I think we're changing the way hotels are moving kind of into this century. Right. Like we're bringing a lot of the Airbnb systems into hotels. Like most of our hotels have self check in, fill out the rental agreement, you upload your driver's license, we do your security deposit. Like we picked all of that up from Airbnb and then pushed it into hotels where traditional hotels like you go wait in line at front desk, give them your id, you give them your, you know, whatever, and then you get your room key and then you go up to your room.
So I think we're changing that. The other thing I'll say is your PMS is super important.
It, it almost doesn't matter who you go with, as long as you go with a good. We personally work with cloud beds and absolutely love them and I'm going to give them a big shout out. The, the only thing I will say about Cloudbeds is don't expect an STI level software like guest or owner, as in hotels like they don't exist yet.
Cloudbeds is working on it. Muse is working on it. They're just not there yet. And part of the reason they're not there yet is a lot of the other OTAs, like booking.com, agoda, Expedia, those guys just aren't there. I know people get frustrated with Airbnb, but they're. It's like driving a Ferrari versus driving whatever, you know, cheap. You bought for, you know, 3K off Facebook.
[00:20:51] Speaker B: Right.
[00:20:52] Speaker C: And they're just clunky softwares, but they get a lot of bookings. You have to be on it.
But Airbnb is like using an Apple product. It's smooth, it's easy. I agree with like they've made a whole bunch of changes. I get it. But they're still far superior to a lot of the other OTAs at the moment.
[00:21:08] Speaker B: Yeah, Airbnb gets a lot of hate because they're very guest centric. But you know, like a lot of us, this, this asset class is not new. It's been around since the 1800s. But the new thing is that VRBO and then Airbnb really kind of rev. Airbna. Airbnb really revolutionized it. It really kind of democratized being able to actually cash flow a vacation rental.
So, you know, they get a lot of hate, but I mean, we wouldn't be here without them. Even though verbo existed first, like they didn't quite like get it, but.
All right, so, so things to remember, it's, it's very similar to a short term rental. You know, it's, it's very subjective. So you know, a cluster of 8 cab, not the same as a true boutique hotel, which is not the same as somebody buying like an eight unit apartment building and running it as a hotel. So these are all different, slightly different models My, I have a question. You may not. You can be very general here. I'm not trying to ask you to, to dig into heavy numbers. The expenses on a short term rental versus a hotel.
You know, if you're buying a $1.5 million short term rental versus a $1.5 million boutique hotel, are we seeing higher expenses on hotels? Lower expenses, like what is, what's the difference in underwriting? I guess.
[00:22:25] Speaker C: Yeah, I think when you buy a short term rental and like even me, I know in traditional commercial terms on an noi, you're not supposed to account for your mortgage, your property tax, that kind of stuff. Somebody who owns short term rentals, like I'm accounting for everything before I get to my net because at the end of the day, like I got to pay my mortgage, I got to pay all the bills, like I get, I'm building equity on all this. But like on a pure cash flow point of view, like I take that into account. Right. On hotels, we're typically seeing anywhere from 60 to 65% expense ratio, which is a little bit different that I don't think my Sierra's run that high.
[00:22:56] Speaker B: But you're also 60 to 65% expense ratio. That's before your debt service.
[00:23:02] Speaker C: Correct. Okay, got it. So your numbers are tighter, but the deal is larger. So your end number is going to be higher. The other thing you can sustain when you have, say you have 15 cabins and you actually run it like a boutique style hotel, say you lose two cabins for whatever reason, your deal would probably still pencil. You lose that one Airbnb, your deal is probably not going to pencil and you're probably going to insurance and talk to them about it. So I think there's more upside potential on the hotels.
You just have to buy the right deal. And we talk about in real estate all the time, you make money on the purchase of the deal. It's taken me years to actually understand that statement.
But in hotels it's 100% true. It's all about the deal you buy.
Right.
[00:23:43] Speaker B: And with hotels, the, the income determines how much the property is worth. Where that's. To me, that's the biggest piece of why you might choose a hotel over buying a single family short term rental is that I've seen a number of people post in our Facebook groups and say things like, okay, well how do I price my house as a business? Well, you don't because it's a house and it's still valued as a residential ass. Your house is still worth exactly what the sold comp is and I've, I'll have people call me and go as far. I had a conversation with somebody who was trying to sell something in Baton Rouge, Louisiana and I was just on the phone with them trying to help them figure out how to price it. And I was, they said, well, you know, our agent said that we just need to price it. You know, this is what houses are selling for in this area. I'm like, well, yeah, that's, that's what it is.
And they said, well, we think, you know, because it's a successful short term rental, that we could get 100, $250,000 more. And this is like, this is not a $2 million situation, it's like a $650,000 situation.
And they're like, you know, we just need, we need a savvy investor who's willing to pay cash for a deal that makes this much money. I'm like, okay, let's talk about this. A savvy investor who has the cash to invest in something like this in Baton Rouge, Louisiana is probably not somebody who's going to pay over market value for this. They're going to go buy the house next door that is exactly the same as yours for less money. And now they know because they've seen yours what that one is capable of making. So that's kind of both. It's a double edged sword. So your house isn't worth more because you've managed it well. But when you are able to look at, okay, well this house has done this much money, let me go buy this cheaper one, because now I know what the potential is. But with a, with a hotel, your, your hotel is absolutely worth more money because it's valued based on the income. So if you're somebody who wants to get into this, that's a, a pretty good reason to do that. Because if you get in there and manage really well, if managing is your strong suit and you are able to bring that income up, your asset is worth more now than what you paid for it. And you're able to, to control that yourself. Whereas the market controls what residential real estate is worth.
[00:25:58] Speaker C: Yep, a hundred percent.
[00:26:00] Speaker B: All right, let me hear about, about financing these. So it's extremely easy in my opinion. Again, people yell at me about this on the Internet all the time. It is easy to get financing for a short term rental. It is easy to go get a conventional investment loan.
Maybe you don't. Maybe, you know, you need to do some things to qualify for more money than what you're able to but you can walk into any mortgage brokerage in the country today and get a conventional loan to buy a short term rental property. With hotels, you probably have to go commercial or they're going to want to see some kind of business plan and experience. Can you talk a little bit about what financing one looks like?
[00:26:36] Speaker C: Yep. So I've not financed one yet. All of the ones we manage are traditional management deals for us.
On the ones we bought last year, we ended up just raising capital for it. Okay. And I think you just have to get comfortable raising capital because these deals are bigger. We're talking about several millions as opposed to, you know, like you said, like a 650k house you can finance pretty traditionally.
Typically the way financing works in boutique hotels is exactly what you said the bank's gonna. You probably have to go to a local bank. They're more likely than a national bank to be able to fund these. And honestly, your first question should be, do you guys do hospitality? Because a lot of banks don't. So just get very comfortable asking that question because if not, you're going to talk about your entire pitch deck. And they're like, this looks amazing. We just don't service hospitality industry.
So find a hospitality friendly blank. They will ask you for everything under the sun, including your firstborn. So make sure you have a killer personal financial statement. Make sure your, you know, all of your T's are dotted, your, your eyes are dotted. Sorry, air cost, whatever.
[00:27:36] Speaker B: Airbnb.
[00:27:37] Speaker C: Yeah, I think we both need coffee today.
Make sure you have all of that. What's. What I've seen work really successfully for a lot of owners is go directly to the owner. A lot of these guys that own hotels want to get out of the deal. They're willing to make very creative finance deals. They're willing to sell or finance. They're willing to, you know, maybe they'll hold the note on the down payment, the bank will fund. The rest is very creative ways to get into it. This is not to say. And I feel like every time this comes up, I have to say this, this is not to say you can get in the deal with zero dollars. Okay. Just creating a deal like you need money for real estate. And I hate, like telling people that, but I'm like, this is not, this is not the time to be like strapping for cash.
Right. Especially on these bigger deals.
So owner financing is great. Them willing to hold a note is great. We've seen deals where we've taken them on for management and like, hey, we'll help you Boost your revenue so you can get a better noi, so you can exit. I've seen people buy the deal where they'll have the purchase price locked in today. They'll manage the hotel and you'll do a lease arbitrage for two years, and then they'll go refi out into two and a half years, pay out the original seller, and then own an asset they haven't really put that much into. So there's very creative ways to get into the deal. There's also more ways to get into the wrong deal.
So make sure your numbers are airtight on those deals, because these are just big numbers. And a lot of banks will ask you to PG these things. So if you're buying a $5 million hotel and your PG's on it, they will 100% come after you if you.
[00:29:05] Speaker B: PG means personal guarantee for the new.
[00:29:08] Speaker C: Yeah, yeah.
[00:29:09] Speaker B: So it's on you if you screw this up.
[00:29:11] Speaker C: Yeah.
[00:29:12] Speaker B: Raising other people's money.
[00:29:14] Speaker C: Exactly. And the investor will also come after you. So. And I hate saying that, but it is true.
[00:29:19] Speaker B: Yeah. I mean, people need to understand that these are serious things. This is not just, you know, watching a YouTube and, and calling it a day. It's not, you know, starting a Facebook ads campaign.
[00:29:30] Speaker C: It's. It's so true. And if you're like, soliciting for money on Facebook, like, be very careful. Careful. There's big regulations around there, so make sure you have the right lawyer that you can if you're syndicating a deal. And then I, I personally think it's a lot easier to raise capital for the hotels than it is for the short term rentals. Just because it's an asset class that's been around. People, like, understand conceptually what a hotel looks like. And again, like, if you're down a few doors, you can still make the deal. Pencil. You can still pay out your investors. Whereas in Airbnb, you kind of run the risk. Unless you have a property management company. You kind of run the risk of the single family door to be like, oh, something happened, now we're totally out.
[00:30:05] Speaker B: Yeah, yeah, I totally agree with that. So what. How do you find if I'm a new. Well, not a new investor, a new hotel investor. Maybe I got five or six short term rentals. Want to do something bigger?
Where do you find these? Are these just on Crexi? Are there special hotel Zillow websites? What. How do we find these deals?
[00:30:25] Speaker C: Yeah, so if you live in major cities and that's where your Airbnbs are like Crexy is great. LoopNet's great. Talking to a couple of commercial brokers who own hotels or, you know, buy and sell hotels. There's a lot of specialized commercial agents who buy and sell hotels. They're great. Just know if it's coming through a broker, it's going to be priced well. It's going to have like all the things. Right. If you get direct to seller, it's a lot easier to find a deal. The other part of this, and I find this a lot more in rural markets, which is kind of where like I follow your philosophy. Avery. I learned this business from your podcast and you and Luke. So like we always invest in like vacation, like regional markets. Right.
A lot of these markets, they don't have commercial brokers. You will literally see a nine room cabin on Zillow. And I'm just like, why is this on Zillow? And like the agent has no idea what to do with it, how to price it. Like they're literally calling me and they're like, do you think this is a good purchase price? I'm like, I don't know like anything about this deal. I was like, no idea. But just looking. On Zillow, Redfin, I found these deals on, you know, like the ReMax website. I found them on Facebook, Marketplace, like, like areas you would have been. I've seen people buy stuff off Craigslist. Like I think hotel owners just don't know where to listen. Yeah, I think is a big thing. So just depending on your market, you'd be surprised where the deals can be found. The other thing is a lot of these deals happen off market. You'll never hear them even make it to the mls.
So making sure you're part of that work. One of the ways we've grown our company is we're so strong in the Central Texas market that if there's a boutique hotel deal, it's likely just because we're picking up so many management clients. We'll hear about it and we'll go inquire and be like, hey, like we saw this deal and I think the short term rental management company gives you a lot of credibility.
And so I know a lot of them go check out our website because, I mean, no one wants to finance your hotels. Have like no idea who you are. Right, right.
I'm just being honest. Right.
[00:32:12] Speaker B: Yeah, it's true.
[00:32:13] Speaker C: Yeah. And so, and then the last part I would say is say there's a crappy motel in your town.
Go there at, you know, 11 o' clock on Tuesday, more than likely the owner's working front desk. Like, this is very normal in this business. They're in the hospitality space, so they're going to be willing to talk to you and just be honest. Like, I want to get in the hotel game. How did you get into it? Can I just have 20 minutes of your time? Buy them a Starbucks. Like, be nice, be generous.
And then tell them, hey, if you're ever looking to sell, I'd love to have a chat and just see if we can be a good fit. Or if, you know, if any of your friends are selling, I'm looking to buy, please connect me.
Yep.
[00:32:48] Speaker B: It's always a relationship game. Every. Every single industry in the world is about who you know.
[00:32:53] Speaker C: A hundred percent. Yeah. And a lot of. And I think there's some great deals on the mls, don't get me wrong. But I think there's even more deals off market.
[00:33:00] Speaker B: Yeah, yeah. Relationships, 100%. That's how you find the off market ones. And relationships with people you have not been a jerk or disrespectful to.
Just because you know somebody does not mean they want to help you. How you treat people matters as well.
[00:33:17] Speaker C: And I won't get into the examples of that.
Yeah. And don't go like, if, if an agent, like sends you a deal and it doesn't work for you, like, write the email and be like, here's why it doesn't work for me. Like, here are the numbers I'm looking for. Here's why this doesn't work.
And you know, you can pitch a management if you want to manage hotels at that point. But just be very honest. I feel like a lot of these agents just get ghosted and they're not going to send you another deal if you ghost them.
[00:33:39] Speaker B: That's true. So true. I'm like, okay, this person is not interested. I'm going to take them off my list.
[00:33:44] Speaker C: Yeah.
Yeah.
[00:33:47] Speaker B: All right. So I think that is kind of it. On my questions about short term rentals versus hotels. Is there anything that you feel like people need to hear? Like a big, glaring question that I did not ask that you feel like people would benefit from hearing.
[00:34:01] Speaker C: Just. Just start taking action. Like, I think, you know, you and I could talk all day. We should. You share so much knowledge on Facebook, on podcasts, but unless you guys take action, like, nothing's gonna happen. So go do one thing today that's gonna move the needle. It's terrifying to make an offer. I get it. Like, I've been there. It's Even more terrifying to make a hotel offer. Like I understand but. But you got to do it. It's just a numbers game and you're going to find the right property and like lean on people when things aren't going well. I think that's the other part. Like I'm proud of a mastermind community. I know. Avery, Carl, you have an amazing group on that Facebook. But like lean on people when things aren't going well and they'll, they'll be there to help you.
[00:34:36] Speaker B: Yes, we are here to help. We actually have. We've moved it to a new platform. So we have short term shop plus, it's free and you can sign
[email protected] we've got an app and because Facebook to me has just gotten to be so full of garbage. Like even our own Facebook group just trying to moderate because we make it. We, we don't allow people to solicit in there and then it makes everyone extremely angry when they were soliciting and we delete their comment and then they're like, you're censoring us. And I'm like, no, people are asking, they're asking how to do something and you're like, hire me as your property manager. And. And like all the Facebook groups have gotten like that. It's just so full of garbage. So we've got short term Shop plus now you can just sign up free download and there is a paid version that's more like true mentorship. And on short term Shop plus you get access to a free Q and A with me and Luke every week if you want. It's. It happens every week whether you show up or not. Then we've got one on one coaching that you can schedule. Those are paid per but it's super cheap. Like you're not having to pay $45,000 to be able to schedule a one on one which with people. So we've got, you know, people who are coaches who are experienced with revenue management. We've got the design coaches, we've got all kinds of people. And then the paid version is more of like a true mentorship where you get x amount of 1 on ones per month for free, the whole thing. But I mean there's no reason like short term shot plus I think is super awesome. It doesn't make me any money. It just gives me a place to help you guys all in one place and links to all of our videos on everything and all that. Anyway, did not mean to go into a shameless plug. However, it is my podcast and I.
[00:36:13] Speaker C: I love it, girl.
Somebody like, I always listen to Luke's revenue management podcast. Like, I'm almost like, oh, I should go to this investment property. So I really appreciate that, pushing out all of this value.
And that's like the last thing I'll sign off with is always be hungry. Right? Like always be growing.
Like we have an amazing portfolio, but like we are always working on like, what could we do better? Like where we're missing the mark.
[00:36:35] Speaker B: Totally agree. And right now with the, the real estate market being so weird, it's a really easy time to be like, I'm not going to do anything. I'm going to wait, I'm going to. But we've actually done more growth in the last year on our portfolio than we did. Well, not than we did this.
The most growth since the 2 and 3% mortgages were on the table. So it's a, it's a great time to buy because there's no competition. I'm not saying it's a great time to buy because prices are great or because interest rates are great, but because there's no competition. So rash me, we got three questions for you that we ask everybody at the end of the show. First one, what advice would you give 20 year old rash me if you knew then what you know now?
[00:37:16] Speaker C: Buy more real estate. Figure it out.
[00:37:19] Speaker B: Yes.
Oh, especially in Austin, man.
When I was bartending in college, people were buying properties in East Austin for $70,000 and I was like, why would.
[00:37:32] Speaker C: I buy a house if I'm not.
[00:37:33] Speaker B: Getting married and having to get like, so dumb. I could have bought one. I could have bought one every year for three or four years. Those houses are worth over a million now.
[00:37:42] Speaker C: Girl.
I feel like it's always expensive when you buy it. You always feel like this is expensive when you buy it. And then five years down the road you're like, why did I not buy more?
[00:37:52] Speaker B: Yeah, you know, always feel like that. Always.
All right, second question. What advice do you have for a new short term rental or hotel investor who's getting started today? It's 2025.
Real weird time in the universe again.
[00:38:09] Speaker C: Get started. Right? So listen to all the podcasts. There's so much, there's so much free resources and there's so much AI today. Like there's no reason for you not to take action. So. And pick a lane. Like, I think that's the other people buying. I don't know if I want to do short term rentals. I don't know if I want to buy boutique hotels. I don't know if I should buy an Amazon store. I don't know if I should buy a Laundromat. I don't care what you buy. Just pick a lane and go all in. I think that's the other. People are so afraid to go all in on anything.
[00:38:34] Speaker B: It's.
[00:38:35] Speaker C: It's just like a relationship. Right? Like, when you're dating, you can be casual, but, like, once you're like, hey, I'm gonna marry this person, you start getting serious about it, then you're going all in. Right?
[00:38:43] Speaker B: Right.
[00:38:43] Speaker C: And once you get married, you're like, now I'm committed. I'm gonna stay here.
So learn to get all in with your decisions.
[00:38:50] Speaker B: Totally agree. And last but not least, what's your favorite book that's impacted your mindset?
[00:38:56] Speaker C: Oh, I love Shoe Dog.
Yeah.
[00:39:01] Speaker B: I don't have my bookshelf behind me because I'm in a weird spot, but in my other office where my bookshelf is, it's on there. I love that one.
[00:39:08] Speaker C: I read that one a few years ago, and it's still like, my go to. I just. It's so well written and it's funny, and I think I just wasn't expecting it to be funny, but such an incredible entrepreneur. And that's the other thing is I want people to have that identity shift. Like, I'm not a W2 employee who owns a couple of SDRs. I'm an entrepreneur now. Like, I think, and I act like an entrepreneur. And so, like, I want people to start reading books that focus on entrepreneurship.
[00:39:34] Speaker B: Yeah, you're not not an entrepreneur because one of your income streams is still W2.
[00:39:40] Speaker C: Yeah. And that was. That was the biggest shift for me. I was like, oh, like, I'm not just a real estate investor. I'm an entrepreneur. We have multiple businesses. But all of those came when I decided to change that about myself.
[00:39:51] Speaker B: Love that. Great advice.
All right, thank you so much for coming on. If you guys want to follow her or find her on the Internet.
[00:40:00] Speaker C: How.
[00:40:00] Speaker B: How can they do that?
[00:40:01] Speaker C: Rashmi. Yeah. I'm on Toasty Indian on Instagram, TikTok, YouTube. I share a lot of behind the scenes of my restaurant. Our property management business also hang out on LinkedIn, though. It's so boring to be on LinkedIn.
[00:40:11] Speaker B: It's so boring. It is. It is boring over there.
[00:40:15] Speaker C: So Instagram, YouTube, Facebook, come hang out and it's.
[00:40:19] Speaker B: What is it? Toasty Indian.
[00:40:20] Speaker C: Yeah, Toasty Indian.
[00:40:22] Speaker B: Toasty Indian. Is that a reference to your restaurant?
[00:40:25] Speaker C: I just wanted, like, a fun name. I was like, I just want to share, like, my Indian culture with the rest of the world.
[00:40:29] Speaker B: Love it.
[00:40:29] Speaker C: So we talk about our Indian restaurant, we talk about the sandwich shop. And then, of course, I share a lot of, like, property management, behind the scenes stuff.
[00:40:36] Speaker B: Love it. Toasty Indian. That's cute.
[00:40:39] Speaker C: Thank you.
[00:40:40] Speaker B: All right. Thank you so much again for coming on, guys. We will catch you on the next episode.
[00:40:45] Speaker A: Sa.
