[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'. All.
[00:00:29] Speaker C: Welcome back to another episode of the Short Term show. I'm your host, Avery Carl. You get me every week, but today you have a super cool guest named Robert Warren. He is a new ish short term rental investor, but not a new real estate investor. Going to hear his story today. How's it going, Robert?
[00:00:49] Speaker B: Going good? Going good. Yeah. First of all, let me just say I really appreciate all that you and Luke do for this industry, which I'll get into my story, but we bought our first STR a couple years ago and didn't know about you until we were already under contract and started looking. And you start popping up and got, you know, a lot of great information from you guys and continue to do so. I just want to plug that because really appreciate that.
[00:01:18] Speaker C: Well, thank you so much. I'm glad, glad it was helpful. And guys, if you. I feel like this is a really good place to mention this. So. So if you are listening to this and you're like, oh, this is so helpful, I think I'm going to buy a short term rental. Please look and see where the short term shop has real estate markets. Because I can't tell you how many times in the past year or two people have come up to me and said, oh my gosh, you've been so helpful. I just bought a property in Gulf Shores or I just bought a property in the Smokies or I just brought a property in Panama City Beach. We have agents in all those places and we want to help you. So plug, plug, plug. Go to the shorttermshop.com. we have about 20 markets that we operate in and if you find us helpful, we would love to continue to help you on your real estate journey by being your real estate agent. So thank you, Robert, for giving me the place to plug that.
[00:02:07] Speaker B: Yeah, we just had. We just had our neighbor at the condo.
He's right there side by side. And we both do short term rental. And the last time we were down there, we're telling how we really love the Smokies and he's an attorney in Oklahoma City or somewhere. And he called me over the weekend and says, we're gonna go ahead and buy something in Smokey's. Did you like your agent? Of course. We used Reagan Nathan up there and I told him, yeah, you need to use them because they specialize in short term rental. That's one thing I like about your concept. It's focusing on vacation neighborhoods and vacation areas.
Like, for example, we have a place at the lake down here.
It's just. Or we use it as a second home. Right. I don't. Short term rental, they don't really like that down there. You have some spots, but it's always coming up and. Yeah, it's always coming up. You're hearing about that.
So I like that you guys focus on areas that they were built on short term, like the Smokies, the beach, all those places. You're not going to have the issues with the local regulations and them trying to run you out, change your, your business plan once you started it. So
[00:03:16] Speaker C: I truly believe that. And you know, as time goes on and influencers that are trying to get you involved in their hotel deals post stuff about, well, short term rentals are being banned across the country.
Not in the right markets, they're not.
[00:03:30] Speaker B: So I was gonna say I've been, I've been doing real estate, you know, for years, over 30 years. And actually I was raised in construction and aviation. Right. I was a corporate pilot until the early 90s.
And so I've been around this almost my whole life.
Yeah, they sold the company in the early 90s and I just started building and developing and I've always been very entrepreneur, so did new houses and developed and stuff and then got into remodeling and really liked it better. Now we do primarily kitchens and baths all over the Atlanta area.
So, you know, I've been in this, I've done, I bought rehabs back when rehabs were popular.
Right. I did a house, remember 91 1. Are y' all old enough to remember when the, when the airplanes hit the towers?
[00:04:12] Speaker C: Oh, yeah, I was thinking about that like two or three days ago. Actually, there's a documentary, I think on Netflix right now. I was walking into seventh grade English and it was on the tv, but. Yeah, go ahead. That's weird. You brought it up.
[00:04:29] Speaker B: So here's the deal. Yeah, here's the deal. Back then my mother in law was a realtor in Atlanta. She called me and says, I have this couple, they're in their 60s, one lives in Texas, one lives in Virginia. And what happened was their dad died about 15 years ago and his girlfriend at the time was able to stay in the house until she died or moved out. Right. So finally, she must have been about 90, finally moved down. So here they are in the house full of Stuff, I mean, the whole house is like a hoarder, right? And so I meet him over there to see what we could help him with.
And I looked at it and they had a, they had a week. They were going to be there and do something. I said, well, here you have two options, right? Number one, I can rehab this for about a hundred grand so you can put it on the market, sell it, or I'll buy it just like it is right now and I'll do it. Well, guess what? I bought it for a dollar. You've heard that story before. I literally, I bought it for a dollar. And that's one thing I was going to recommend people is there's always deals out there. Get creative, right?
Here's the deal. I knew they didn't owe any money in the house.
I knew they were both retired, they didn't need the money. So I'm like, look, this is a great asset.
I'll buy it from you, I'll pay you a dollar and I'll cash you out in six months. I'll rehab it with my money.
That just kept me from having to go to the bank, do a rehab load and all these other things. And literally we're there working on it, cleaning it up, and my mom calls me and says, hey, did you see the airplane hit the Twin Towers? I said, no. They, we looked around, found this tv, found a cord, plugged it in and saw it in time to see the second airplane hit it. So that's where we were. And back, back then, right before that happened, houses in that neighborhood were selling like in three weeks. I mean, it was really, really hot market.
And so we went ahead and got done. It took us probably a couple months to sell it this time, but we made $100,000 on that job.
[00:06:21] Speaker C: Oh, wow.
[00:06:21] Speaker B: Still.
So, you know, you. I started my, you know, I started rehabbing back then. I, I had another one where the realtor called me, says, you need to bring a checkbook. And now remember, I'm doing remodeling and other things at the same time. I'm just doing this, you know, on the side. The realtor calls me and says, okay, I go out there and look at it.
It's a little house. Back then it was only, they were only asking like 40 grand. But it was a bank owned property at that point. They had taken it back, which meant mostly investors, right? And my theory has always been, I'm not going to try to buy one that just needs paint and carpet because anybody will do that and they'll Pay too much for it. I buy properties that the realtor doesn't want to walk in sometimes because I can look at it. I know about cost to rehab. So anyways, so I'm looking at this thing, I went and looked at the property. It was just like a little two bedroom, one bath, nothing big.
But I'm looking at. I already had a rental up the street from where it was. So my theory back then was I buy it, I rehab it, I either sell it or I keep it and rent it and do something with it later. You know, that's your typical. And I did, like I said, I did this back when that wasn't popular.
So I get it. I look at it, I think, okay, the only one that's going to bid on this thing is going to be somebody like me. So I let them, they were asking 40, I said, okay, I'm just going to bid 42,000 and go with it. I got it. And the first thing I did is I went down because I'm a builder. I went down to the local county code office and I knew the little girl down there. I said, okay, look, here's what I got. This thing has a ton of road front, but it's a weird shaped lot. Can I split it down the middle and get a second lot out of it? And she says, well it's what we call a non conforming lot but if you do what you're talking about, it'll be less non conforming. She signed off it, I signed off, I sold the lot for 40,000 and I still had the house.
[00:08:10] Speaker C: That's amazing.
[00:08:10] Speaker B: We have the house sold at 139. So that's the kind of stuff I've done through the years.
I bought property, you know, be 15 acres and I put, you know, seven, eight houses on it divided up and, and build new houses on selling, you know, I've done things like that. So I've been doing this for a long time. At one point I had 10 rentals residential. That's why I'm not really. I still got a few. I've done that for so long. I'm tired of having to bring the dump truck in when they move out in a year and empty the whole thing out and rehab it again.
You don't have that with short term rentals. I love short term. I love the fact that every three days the cleaners in there cleaning, you know, the people are paying top dollar, they're taking care of it. It's just a different, just different Now I do, I've had it. I'm on my second office building right now. The first one I had for years, we sold it. Now I built the one I've got right now. We built the land, bought the land, three acres, built the commercial building on it. It's a 6,000 square foot with a paint booth office and all that.
We did that about seven or eight years ago. So those are good investments. They're different. Commercial is very different than the residential side. But I love the short term rental. It's fun.
One thing I like about what we do, we do three home shows a year in Atlanta.
The thing I love about this home show cost me about $3,000 to do. It's a 10 by 20 booth, right. We set up literally a mini room, looks like a kitchen, right the way it's set up. And we talk one on one to clients.
And the nice thing about that is there's people, literally when they leave after we've met, I know I will do their job and I have no idea, you know, what it's going to cost or anything. I just know I've made a connection there and I will do their kitchen project or the bathroom project or whatever. That's the benefit of that one on one because they get a chance to see what I know I can share with them ideas, things like that.
You can't do that with just a Facebook ad or a, or you know, a page on a magazine or stuff like that. That is just not the same. Even on the phone I can't connect with them like I can one on one. So I love the home shows. It's a lot of work, but I'll make a million dollars sometimes off a $3,000 investment.
Other than our time, obviously there's a little bit of time, you know, you can't, you can't get those kind of returns on anything else I do, you know. So short term rental to me is a little bit like that.
You're dealing one on one with guests. That's where you know. And I just got super host, which I'm excited because we didn't start until Labor Day and we've been able to get 13, five star reviews out of 15 guests, which I felt like was really good.
Wow. But that's, it's the same thing with, with this, you're, as a host, it's really okay. What can you do to be a better host? You know, And I do things like, you know, it's funny, you read through these, these Facebook things and stuff that we're on with you Guys and people saying, well, I charge if they have an extra person, or I'm charging for early and late checkouts and all, that's fine. But you know what I do?
If I don't have anybody in there on Thursday and they're coming in on Friday, Thursday afternoon, I'm saying, hey, you know, this is Robert. Look, the cabin is ready, it's clean. If you want to get there early, just let me know. And I had one lady, she's like, oh, that would be great. Can we get there about 2 o' clock then I could put my son down for that before my grandmother, my parents get there. And I said, absolutely. I mean that's, it doesn't cost me anything. I get really huge credit for. And here's the thing I learned a long time ago. If I call and ask you to lunch and you can't go, I still get credit for it. You still like, man, he was going to take me to lunch. Even though it never happened. It's the same thing. I'm, I'm offering to let them stay in the house early or check in early and sometimes late, but if they can't, at least I offered it, I get credit for that. You know, it's just another one of those things are like, wow, he really, you know, he's really going over and above.
So those are some of the little things that I do to try to be a great host. I think I got sidetracked on something.
[00:12:03] Speaker C: No, I love it. That was going to be. My next question was like, let's quit talking about me, let's talk about you.
[00:12:09] Speaker A: Thank you for listening. We sincerely hope that you find value in this podcast.
We would love it if you would use our team to purchase your next vacation home.
We sell houses in all of the best vacation markets in America and we want to earn your business.
Reach out to us
[email protected] stsconsultation.com that's theshortermshop.com okay, so you've got a lot
[00:12:43] Speaker C: of experience in real estate investing in different types in different ways. So you've done some flipping, you've done some subdividing, some developing office building. So what made you, with all of that experience and other types of real estate, say, I'm going to do a buy and hold short term rental.
[00:13:03] Speaker B: Okay. It's funny because, you know, We've been married 45 years. November was 45 years for US accomplishment.
Three kids, eight grandkids, and the ninth one due in April. And they, so they vary Our youngest one right now is about four. The oldest is about to turn 17. So, you know, we got married in 1980. I was 21, Laura was 20. And you know, neither one of our parents had a whole lot, you know, they were just typical middle class. So if we went anywhere, we went camping. And I grew up camping. I grew up, I was born in Nevada. We would go to the Redwoods and all that kind of stuff and camp out. So I love camping. I mean, I grew up, you know, I grew up on a, on a river. And we'd go across the street for a week, me and my brother and my friends, and just a tent, you know, it was fun. So that's the way. That's what, that's all we could afford to do. So our goal was always to have a place to where our kids could go, you know, when they're married and they don't have a lot of stuff, you know. So, I don't know, four or five, six years ago we decided to look around. We thought, okay, should we get a place at the beach? And we're in Atlanta, right? So there's Tybee Islands like four or five hours away, which I don't really like. I don't really like the east coast beaches as much as I do this Gulf coast because they're prettier down there. Typically we're six and a half hours to the Gulf. So we thought, well, let's just, let's find a lake property because we can get one. It's only an hour away. The kids will use it. We get something six hours away, they're not going to use it as much and we won't go as much. So we looked around, we found the lake house. It was funny at the time, I really complained about what I paid for it and literally within about two years it doubled the value. So it's like, okay, thank you Lord. That was the timing of the Lord. But so we bought that place and we made it a. Literally, it's a lake house, right? It had a master downstairs. I took the wall out.
We have a big 10 foot table in there with all the seating. And it's designed. And upstairs I actually did a during COVID I actually went off and when I bought the house, I looked and I said, man, I put a room up here. I added a room. I got about a 12 by 17 room on the third floor with a ship's ladder going up to it with a TV and a couch and all that. So it gives you a place to get away from Everybody if, you know, if the kids want to go up there, we put them out there. If we want to go up there and let the kids be downstairs. So I created as a. I took the. It had a big tub, jetted tub upstairs. Well, I got that at home. I don't need that at the lake. Took that out and we did double bunks right there for the kids. Yes. We made it a really cool lake house. And it's, it's right on a point. We have our own dock, you know, so we go down there almost every weekend. And that was specifically for us. The kids can go down there.
That's what we bought that place for. But at the time we wondered about a beach place. So here we are, you know, a couple years later or a couple years ago, we're thinking, okay, we've always done good with investment properties. Let's look around and, and see about another one. And you know, when Laura said that, I'm like, okay, now I'll consider a beach place. If we're talking about an investment, that's different. But if it's just going to sit down and cost us money, I don't want to be that far away.
So that's when we started our journey for, you know, looking and we always wanted to be, you know, somewhere, you know, Guff Shores. We lived in Alabama, right? That's where we got married in Birmingham. You go to Gulf Shores when you live there. Typically that's just a real popular place for Alabama people to go down to the Gulf Shores rather than Panama City and Destin, at least at the time. So I've always loved it. And there again, I flew back then and the guy I flew for, he had a place in Gulf Shores and actually my dad remodeled his condo. He took two penthouses and put them together during that time. So I was very familiar with Gulf Shores. So we decided, let's go down there, see what's available. Went down there, looked around, fell in love with a beach club, which is more in the Fort Morgan area. I heard Jonathan interviewed recently.
Unfortunately, we didn't know about you guys, so we couldn't use them. We, we met him later because we're thinking about a second one. But anyways, the beach club, it's like an 86 acre resort, four towers and a clubhouse is really cool. We end up buying a. We bought a one unit because it has a, it has the bumps in the wall. And then, and then what I did, I turned around, I added a really nice Murphy bed. Because since I do that kind of Work. And so it'll sleep eight comfortably for. Like I said with the grandkids, you go down there. I don't. If you take, if you take the two bedroom next door you got. All you got is two bedrooms.
The common area is smaller or so our common is larger, but we just don't have that second bedroom. But we have one and a half bath. So that works out. Anyways, bought that specifically with the go. Okay, that's going to be a rental. It's going to be an investment property. So we did that. And originally we kept it with the local spectrum rental which the rates were like 28%, which we knew was ridiculous. But we closed on it like in labor or Memorial Day right before the busy season. So they said leave it with who you're with until the busy season and then make a change. So what we did is we kept it with them and then we went to Vacasa after that because it went from 28 down to 18% because I didn't want to manage it myself yet. I knew I needed to learn it. So we kept it with them. And then.
Okay, now fast forward to.
And I guess that answered your question about how we got into short term rentals. So that was our first one. Now we had that for a little while. We're like, okay, let's go ahead and get another one. So we thought, well, let's get another place at the beach. So that's when we called Jonathan. He took us around and showed us things. And in the meantime what we did was I said, let me find a rehab I can buy. Rehab, sell. We'll take that money and use that to buy this next investment with. So that picture I sent you, I don't know if you've seen or not, but it's a before and after this, this house. So we call a local realtor that helped my daughter with her and actually they went to church because we knew him. And I said now I'm looking for a house I can rehab. He said if it's got a separate lot I can build a house on even better. And you know, he tells since 30 minutes tell me how he never sees those anymore because they're against. I used to do this when this wasn't popular. I mean it was, I did, I did a lot back then. Once it got popular, people were buying stuff and paying too much and you know, so I didn't do it so much during those years.
Anyway. So two days later he calls me with an off market deal and says, I think I found the perfect thing for you. So it's in. It's in a city called Jefferson, which is about 30 minutes from where I live. It used to be in the middle of nowhere, but Jefferson is a hot place. It's an older town. There's really cool stuff.
So I said, yeah, I love the area.
And literally, it was a house built in 1971, already had two lots. It was. I didn't have to split it. It was. This guy bought it and kept the second lot next to it. So never had air conditioner, central air conditioner, anything like that. So I bought that with. And I had to go. Literally, I had to go in, I had to do all new siding, all new windows, all new flooring, all new cabinetry inside. I added a bathroom inside, added a custom closet in the upstairs, all new flooring.
And they had a really cool thing in the back. It had what they call an adu, right. Additional dwelling unit. It was actually her little haircutting studio for 30 years, probably.
And I looked at. I said, man, I can make this in some. So it had a bathroom already. So I went in. I literally had to literally take the whole floor down to the foundation in it, rebuild that whole thing, put a nice little bathroom, made it like a little in law kind of suite, you know. So it already had metal, metal roofs. I painted all the metal black and you know, all new stuff on there.
The reason it was good to me was, you know, what we paid for it. I knew of that lot was worth 75,000.
Nobody else buying that property would give would have considered that. So I was able to buy the house, separate the 75,000 lot. I'm building a house on it right now, which we'll probably make about 100 on when we sell.
And then so together with the whole thing, we'll end up making probably 2:30 on the. Everything that I've done. We've already made the first part. We took that, did a 1031 exchange up into the mountains, which is exactly what we talked about, right? Bought the cabin. And Reagan helped us on that. And the coolest thing about that was we and I bought this rehab on November 5th, 24th.
I worked on it every single day for about four months, except for Thanksgiving Day, Christmas Day and New Year's Day. So I'm running my business, right? And I'm running up there and working on it too, every single day, all week long. I mean, it was crazy. I worked harder than that than I have anything in years, because I just felt like I was in a rush to get done because somebody wanted to buy it, right? And literally the minute I got it ready and it was so ugly, I couldn't do like a, you know, this is coming type of thing because it, I didn't want anybody to see it. So literally we were like 99% done. Then we brought the pictures out, then we put it on the market literally within two weeks. It was under contract. The reason we didn't buy a second one at the beach was number one. I thought, well, first of all, it's expensive down there, right? You're, you're not going to make as much because we have assessments, we have fees, hoas, there's a lot of stuff like that, but it's worth it because I love, I love what we get there.
But I mean our HOA in the mountains, $28 a month. Our hoa.
Hoa at the beach is about 520.
So just, just that alone, you know, it's just different. So we decided, well, and so what happened? I bought, I bought the rehab. I'm working on that. So within about two or three weeks we made the decision, well, rather than a place at the beach, let's look in the mountains, you know. So that's when we hooked up with Reagan. And then we went up there.
Once it went under contract, we finally had about a four day stretch. I said, let's run out there and look at these properties. In the meantime, like I said, we got probably 12 or 15 we set up, I think maybe we drive up on a Saturday, we're going to meet Reagan on Sunday.
So we go up and we eliminate about half of them on Saturday because some of them, the driveways are like this. And you know, it's a really cute cabin next to really junky cabins beside it, you know, you can't see that online, you know. So we finally would get up there, we spent a day doing that and then we spent a couple of days looking at a bunch of them. And the one that we really like, there's one that came on about the time that we decided in the smoke is I think it was like December 7th or something. The one that that actually ended up buying came on and we loved it. You know, built in 2018, hardy plank siding, metal roo. It was just built really, really well. And I'm a builder, so I knew these kind of things. I'm like, I really like that. But it was only a two bedroom and it was priced, it was overpriced, you know, so like all these others were watching them, you know, this one's dropping 20 and this one's dropping 30. And you know, we're looking at them, but this one's like nothing. It's like the same the whole time. So we're like, well, they're not serious about selling. Go up there. It's the first one we look at. And we were right. We loved it. And the only thing is I had to figure out how to add a bedroom and a bathroom and stuff like that. And I wasn't real thrilled with the ideas I had on how to do it. But in the meantime, we look at everything else and we found another one over on Jake's Ridge, which we really liked a lot too. Backed up to National Park, a great view, but it was older.
So literally after four days, we were about to make an offer on that Jake's Ridge house. And I'm downstairs, we were in a hotel. So I'm downstairs at the business center pricing up what I'm going to do, that house on Jake's Ridge. And my wife text me, says, hey, mountain time, we just dropped 40 grand.
I'm like, okay, we're still thinking about offering on the other one. But then she said, you know, that side porch is a waste of space on that house. As soon as she said that, I'm like, that's it, that's where I can put the bedroom and the bathroom. Because you're looking at the neighbor's house, you're not looking at a view. And you know, it's kind of like, it was kind of like an L shape. You walk up from the, from the driveway, go down and turn at the back right there. And they even had a bear come up and, and get on the back and destroy the grill and stuff like that. So anyways, I said, okay, we're going to make an offer on that one tomorrow then. So I felt like they were 50,000 too high the whole time, right? So they dropped at 40 and I'm thinking, okay, well let's, let's low ball it. So I offered them another, another 40 off of it.
Plus, plus like 3,000 and closing, right? And I'm thinking, okay, we'll, you know, we'll, we'll compromise. They'll come back up and we'll settle somewhere in there, you know, they accepted it except for the closing.
So they came down $80,000 in a day.
We got the house we wanted. It just, it was just really cool the way it all works. So.
Oh, and while we're up there, I get a call from my realtor on the Rehab house. He says, okay, they're. They're. Their due diligence expired, you know, so then we were able. We were actually able to make an offer while we're up there on it because of that. So then we go back, we close it. We do, you know, we do the 1031 exchange, do all that kind of stuff. That was a whole. That's a whole episode there. I could talk better on that. But that was really cool because we saved about $27,000 in taxes by doing the 1031 exchange, which was really cool.
[00:26:29] Speaker A: We're hiring realtors.
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[00:27:00] Speaker B: so one of the first things I said when I saw this was I said, we need a deck and a fire pit out here right beside the driveway that you see that when you drive up. So what I did was I spent the next four months after I closed on the house and closed on this one, I spent the next four months driving up there. I'd spend seven, eight days at a time up there. And I rehabbed that thing. I added a bedroom and a bathroom, and I added the foyer with a T bar and an arcade. And then I added a 12 by 16 deck with a fire pit and a grill cover and all that and the lights and all. And.
And what's cool about that is I did a. I did a project at the lake. My neighbor wanted me to do his. His kitchen because I'd done mine. And so I kind of did that as a side project. And the money I made from that, I used to do the rehab up there in the cabin. So the money I made from the rehab on the house and Jefferson bought it, and then the side project I did for him literally paid for. I spent about 30 grand on the. On the rehab up there because I did it all myself, practically.
So. And we increased the value, probably about $150,000 with what I put into that. And then, like I was saying earlier, we went live right before Labor Day, literally. Unfortunately, you know, this. Anybody's been through this. This is a real learning curve, right? You got all this stuff, all these moving parts. You're trying to figure out pricing and things like that. We did go ahead and sign up for Hospitable and Price Lab. So I had all that connected. But literally, we went Live. And in two days, I had. Labor Day was booked, and next thing, you know, and one thing I did was, you know, just kind of listen to Luke and some other people.
You know, I wasn't. I didn't have the advantage of being on there for a year like some people have. So, yeah, they got their whole fall booked. Right. They've got Thanksgiving. I didn't have anything booked because I was new. You know, they said, well, you do the 20% off on Airbnb, stuff like that. And I heard this one person talk about, she said, she said, no, don't do that. You're automatically going to get a bump in the algorithm because you're new. She said, just save your money. And so I did that. I didn't, I didn't discount mine. And then what I did on Price labs, I actually went in. There's the low, medium and high section you can do in there. They say start off in the lower third. Right. So I made sure my pricing was there. But then I went in the hospital when I had a 20% markup. So even though I was in the lower 1/3, I added 20% on top of it.
And we got booked up just fine. And even, even, like coming up to Thanksgiving, we weren't quite there. But then next to us, somebody calls us a five, six day booking. And then we went on through the end of the year. And I think I told you we've earned about three fourths of our annual budget from labor day through the January 4th or 6th or something like that.
[00:29:47] Speaker C: So about what that annual budget is, so what, what did you end up paying for this property?
[00:29:54] Speaker B: So I think it was originally listed for.
Well, we paid 650.
So there was 730. Yeah, they were like 730. And at the time, comparing it to everything else, it was, it was just overpriced. So that's why I kept saying we were looking, we were really. Most of stuff we were looking at was going to be, you know, below 7 and 650 and up kind of thing.
[00:30:13] Speaker C: 650. And then you put 30 into it.
[00:30:18] Speaker B: And. Well,
[00:30:20] Speaker C: what are you.
[00:30:21] Speaker B: We put the money we made off the other house into as far as buying it. But we. Yeah, so our, our total cost for the year is about 30,000 with everything
[00:30:32] Speaker C: for about how much?
[00:30:35] Speaker B: For about 30, 30, 31,000. 31,000.
[00:30:39] Speaker C: Annual cost is your annual cost for your, your expenses.
[00:30:45] Speaker B: Yeah. Right. And we made about 24, 25,000 to this point, you know, during that time.
[00:30:51] Speaker C: Okay. So we paid 650. We put 30 in it. We got 30,000 in expenses. That's probably not including your mortgage. So what are you projecting you're going to gross on this property and what have you made so far in the time frame you've been open?
[00:31:05] Speaker B: Well, I mean, I'm thinking that based on everything I've seen that we might can get 90,000 a year in it.
You know, that's kind of all over the place when you're looking at that. But we're in a nice neighborhood that my neighbor, the house right next to us just sold for like a million five. So we have really nice houses and we have a great view. We're in Wares Valley, you know, we're like 12 minutes to Dollywood, five minutes from the little Wares Valley stuff down there, you know, so it's in a great location. So I think we can get up around the $90,000 income amount, which is, you know, you. 30,000 from that, you know, that's still 40, $50,000 clear.
[00:31:51] Speaker C: Okay, that's, that's pretty awesome.
So let's see. So you're so 650.
Put 30 into it. You're looking at grossing 90ish. And you've already made, you said your expenses and you've been open for how long?
[00:32:10] Speaker B: We went live Labor Day. So basically September, October, November, December. So four months.
[00:32:16] Speaker C: Okay, four months. That's not bad.
[00:32:18] Speaker B: We shouldn't have Smokies in the Smokies. That's a really popular time. But one thing I learned about the difference between the Smokies and the beach is the Smokies has a longer season.
So you can, you know, the, the beach young. You're. You're pretty much most your money's made between Memorial Day and Labor Day, it seems like. Right. And you got your shoulder seasons, which you still make some, but it's not the same where you got the Smokies, man schools out, they're headed to Dollywood, right. Dollywood's open, it's busy, you know, so it's. That's really cool. And then the fall is cool because that, you know, people want to be in the mountains and they want to enjoy the, the leaves changing and things like that. So. And I love the fact that in the mountains up there, you've got, you got the people that want to go to the attractions and you got the people that want to go up in the mountains and they got some that want to do both. So it just, it extends your, your season. That's one reason why we decided to go ahead and do the second one in the Smokies rather than the second one at the beach is. When I ran the numbers, I'm like, you know what? This will be a whole lot more profitable up there.
[00:33:17] Speaker C: Okay, love that. Love that. So what is next? I mean, you. You haven't had a high season yet, really? Well, a little bit of a high. We haven't been through the summer yet in the Smokies. So what's next for your investing plans? You planning to buy more or what are we doing here?
[00:33:34] Speaker B: Yeah, the goal is right now, I'm actually. We're going to start framing that second house on that lot in Jefferson tomorrow. So I want to get that built because I'm. I'll do.
I can do it. All right, so I'm. I'm actually going to do all the. The cabinets and the interior trim, the painting outside, painting the rear deck. I'll sub everything else out, and I may do the landscaping on the front, maybe. So I'll be busy for the next three months working on getting that fixed up and getting that sold. And then.
Yeah, the. The next idea we've thought about is. Is finding a piece of land that may be up in the Smokies that I could put maybe four or five on this one piece of property.
I've been toying with some ideas on that. I would really like to do that. Not, you know, not real big cabins, almost like cottages. Each one may be a little bit of a theme as far as the look goes and stuff. So we'll see.
Not. Not totally sure, but something like that. I don't know that I just want to get a bunch of cabins like we've got. Although I might.
It's just. I'm a builder and developer, so I'm thinking all the time and I'm like, okay, I really like this idea, Robert.
[00:34:45] Speaker C: We've made it to the final three questions of the show that we ask every single guest. Are you ready?
[00:34:51] Speaker B: I'm ready. I made some notes here. Hopefully I can remember.
[00:34:55] Speaker C: All right, so first question.
What advice would you give 20 year old Robert if you knew then what you know now?
[00:35:03] Speaker B: Okay. I came up with three different things and got to realize I've been married 45 years now, right? It took me 20 years, 15 years, 20 years to remember this. But your wife is usually right.
That's the one thing I've learned.
Women have a sixth sense about things. I'm serious. In the beginning, my. You know, we'd be talking about doing some. My wife's talking about this. She has nothing, she knows nothing about the deal, nothing about people. And she say, I don't think this is a good idea. I'm like, you don't even know what you're talking about. What do you, what do you mean? Well, now I realize that she has a sixth sense. She picks up stuff that I don't, that I don't. So I've Learned after, after 20 years of marriage, I learned to trust that. So now we don't, we don't make a decision unless we're in agreement on it.
Even though she may not understand it the way I do, if she has a, if she's not comfortable with it, there's something there she's picking up on. And I got to figure out what it is. Now sometimes we can figure it out and make it work, but used to be I just blew it off and, you know, just said, no, you don't know what you're talking about. And that wasn't a good idea saying that either. But so that's a big thing. The second thing would be, and it's hard to do when you're young, right? But try to buy things that go up in value and make you money rather than things that don't. For example, toys, extra cars, the thousand, three thousand, four, $5,000 vacations you take every year.
All I can think about when I buy something is I think, okay, what could that thousand dollars do if I put it over here on investment property? You know, because businesses which, you know, short term rental, that's a business, right? What a business is, you're creating a money machine, right? You're, you're investing in it and then it, it's making a product or a service and it's multiplying your investment.
Whereas if you go buy, you know, like that's why I probably will never buy an rv. You know, my, both my, my dad, my father in law, they had one, they spent a hundred thousand dollars with it and a few years later it's worth 15,000. And they put money in it the whole time now. Yeah, they've used it and they've enjoyed it. That's fine. But I'm not going to do it. I'd rather buy a place at the beach or the mountains because it's going to go up in value, it's going to make me money. So try to do that when you're young, try to do things that will save you money that you can invest, not spend. That's a hard thing to learn. Sometimes it's like the same thing Young kids, they think they're bulletproof. Right. Well, you realize as you get older, you're not bulletproof. Right. Do things that are smart. The third thing was buy more real estate. I guess that would be the thing that we started off, we got engaged. It's funny, I met my wife in January of 1980. We were engaged in May, married in November 1980. But before we got, before we even got married in June, we bought a house together. The house was at least 50 or 60 years old. And I spent the next five months renovating. She helped me to renovate and getting it ready to work and move in. So we started our marriage on rehabs, which is, which was kind of funny.
[00:38:08] Speaker C: I love that.
[00:38:09] Speaker B: Yeah. So I would have bought more real estate. We've done some through the years. I've actually done a lot of real estate through the years and it's been really well. But you know, the thing that back when I used to build houses in the early 90s, I would tell people, I said, you got to realize this, you're. Because back then I could build a, I could sell a 2,000 square foot house for $120,000 and make a profit on it in the neighborhood, you know, 1992, 95. So. Right. So what I tell them, you got to realize you're, you're, you're buying this house today with today's prices, today's labor, today's inflation rates, today's regulation, and you're going to hold that house, you finance it for 30 years. Let's say that that 120,000 cost you $1,000 a month.
Thirty years from now, that house is going to be worth three or four hundred thousand.
Right. But you're still paying $1,000 a month. So that's the thing. You're locking it in. And it's the same thing with remodeling. I've got people that have called me from, I looked at their house four years ago for a kitchen and they decided not to do it. And they call me four years later and I go back, it's doubled in value. It was 30,000 then, it's $60,000 now. So if they'd have bought that four years ago with four years ago money, they would have, they would have locked it in at that. And that's, that's the benefit of doing that.
Even if, even if they're, whether you're investing your cash in or whether you're doing a mortgage. Right. You're locking it in at that because labor is going to go up Material is going to go up. Regulations, all that stuff's going to make things go up. And if you can lock it in today, it's a good investment. So that's, you know, buying more real estate for me would have been when I was younger, obviously, if I'd have known those kind of things would have been better.
[00:39:52] Speaker C: All right, so that's great advice. And next question, what advice would you give a new investor who's looking to get started today?
[00:40:02] Speaker B: Okay, a new investor.
One of the biggest things you want to remember is you make your money on the front end.
You can't, you cannot buy a property that's in a bad location.
And it'd be a great deal. If you get a bad deal up front, it's probably going to be a bad deal. The whole time I've had people come to me wanting to build a house and Aunt Susie gave them this lot, right? The lots worth $10,000 in this crappy neighborhood. And they're going to build a $300,000 house on this crappy lot in this crappy neighborhood. And when they're done, it's going to be worth 150,000.
That's not a good thing. I tell them, you know, just give the lot away. Go buy in a neighborhood where the value is going to be increasing. It'll be better investment.
So you have to make sure it's the same thing. When I start looking for these short term rentals, I'm looking for number one in the Smokies, all right? It had to have a view. It had to be easy to get to. I didn't want any of these. I left, I left some of the ones. You can get to the top of a bridge, but man, you got to be a mountain goat to climb it. And I don't want that phone call in the middle of night with people scared. They can't go up the, can't go up the hill, you know, so you have to consider all those things because all that can, can affect what you can make and how, how easy it's going to be to manage the property. So that's, that's a big thing, is making sure that they're making their money up front. Don't just buy any deals. Really, really important. The second thing was don't over leverage. I've seen too many people do that. You, you have? Oh, yeah, I've got, you know, I've got 100 houses. Yeah, I'm making $200 a piece on them. Really? We know how easy it'd be for you to lose $200 piece on those hundred houses and add that up, you know, you want to be very wise and that the, the other thing is, if you have more, more time than money, use that time. If look what I did on that house in Jefferson, that was my time I put into it. I know how to do a lot of that. But, you know, there's a lot of things you can do. Do what you can do, use that time when you don't have the money to create equity, and next thing you know, you know, you could turn that into 20, 30,000. That could be your next investment. You know, do that a couple of times. And you know, I know people that they've actually gone in, they bought a house, rehabbed it with the whole purpose of selling it and doing it again, and they do two or three or four of those, and next, you know, they have enough money to actually pay for their fifth house. You know, so that's something that I've done a lot of and it's worked real good. The next thing would be start a business.
A business is nothing more than a money making machine, right? It could be a small business, it could be a, a big business, whatever. Now, not everybody's, you know, equipped to do that, but, but if you are, that's always a good thing. You typically make more money working for yourself than you do for somebody else. And then the next thing is, you know, learn all you can spend time learning. Because knowledge is power. If you can learn about what you're doing, learn about investing. I've got, I've got books in my library about buying mobile home parks. You know, I've got, I've got books there on how to, how to do business in real estate. Because when I got in this, you know, 30 years ago, I wanted to learn all I can. You know, I used to go to the investor association in Atlanta. There'd be a hundred people there. And it was funny. There was a girl that had been there for five, six years, and the one of the guys told me says, yeah, see that lady, she's been there six years, she's never bought one property, but she comes every month. She, you know, you have to do something. You have to. You can't just read it, you have to do it. But learn, learn from people like Avery and Luke. Learn the things they've messed up on. Because you know that's one of the most expensive things out there is a book that's not read, right? Because for 20 bucks, I can get your lifetime of information and I can learn that and I can save money.
I actually wrote a book and I tell people, if you read my book, I'll guarantee it's going to save you money on your model. And one of the things I tell you real quick that's in my book is the seven most powerful words in the English language.
Laura and I were driving somewhere in the car one day and Suze Orman just happened to be on the radio and talking about business investing. And she says, okay, when I come back, we're going to talk about the seven most powerful words in the English language.
It goes to a commercial. And I thought that was intriguing. And I looked at her and I thought about, I said, she's going to come back and say, is that the best you can do? And that was a wild guess on my part, but that's exactly what she said.
So that's in my book. Because basically what that's saying is you want your builder, if you're building to make money, but you want to get the best price possible.
So if you just say, you know, he gives you a price and you say, hey, is that the best you can do? He can either say, yes or you can say, well, wait a minute, let me see if I can do better. You'd be surprised how many times I've used that and gotten a better deal.
Even at the checkout. I mean, I'm at, you know, Old Navy and I'm checking out. Right. And I says, is that the best you can do? Says, wait a minute, I think I got a coupon here. Scans a coupon, 10 bucks off. It's crazy. But that's, you know, using, using things like that. Be smart with your money and then use it to put it into things that will make you money. That's, that's the biggest key. And you do that by.
[00:45:11] Speaker C: All right, awesome. So we've got one more question, and that is what's your favorite book that's impacted your mindset?
[00:45:19] Speaker B: I've actually got three and they're all really, really similar.
They're all business type books. You've probably heard of every one of them, Profit First. I might. Michael Woods. That's a super one. Traction. That's a, that's a harder read. But Traction is really, really super. Yep. See, the third one is the E Myth, which I've got. I've got the E. Myth, but there's also an E Myth contractor version, which is really good for contractors.
That's super good to it. All these are about being better at business because so many people. And I've been in business for 35 years or something.
It's not easy to make money in business, right? I mean people are always trying to.
In fact, I think Mark Cuban has a book. We ever read his book the Game of Business.
That's interesting. Basically he's saying there's always somebody out there trying to beat your butt, right? And so you're always trying, you always have to get better. You always want to be better.
It's and it's the same thing, the short term rental thing. That's why you can't just read one book and be done.
Because things change, you know.
[00:46:24] Speaker C: All right, we got 30 seconds left. If our listeners want to find you, follow you, anything, how can they do that?
[00:46:32] Speaker B: Well, our remodeling business website is just detailed design biz.
My email is just detailed design77mail.com that's probably the easiest ways to get me. If somebody has a question, I don't mind helping. I love that. I love to interact with some of the people on some of your websites and stuff like that or platforms because we all need to help and it's helpful to get real time information.
[00:46:59] Speaker C: All right, Robert, thank you so much for coming on. And listeners, we will catch you next week. It.
