Episode Transcript
[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: Welcome back to another episode of the Short Term Show. I am your host, Avery Carl. We have a super cool guest here today, Taylor Jolly, who has a company called Roam Free Vacation Home Rentals. And he is going to tell us a little bit about his story. I think you're going to find it super cool and I guess we'll go ahead and get started. How's it going, Taylor?
[00:00:49] Speaker C: Great. Yeah. Thanks for the introduction.
So, yeah, once again, my name is Taylor Jolly.
I live in Austin, Texas, originally from Houston, not too far away. And how I got involved in investing is I actually found somebody in my neighborhood in Austin and at the time I was just looking for something a little bit more.
I worked in construction about six years, mostly in project management.
And one thing I think you'll hear a lot from investors or entrepreneurs is if you look at your boss's boss or even your boss and you look at what they do from day to day, if you don't like what they do, then that's where you're going to be in three to five years. And so I didn't exactly like that trajectory. So it made me think of how can I get there a different way.
And so since that time, me and my brother partnered up on investing in some more active real estate investing strategies such as co living, also known as rent by room, and most recently short term rentals around the Austin area. And so we all know that things don't cash flow, but they can if you, you know, really attack it with some more active investing strategies.
[00:02:06] Speaker B: Okay, so yeah, let's, let's jump on that, that last sentence. So what, what doesn't cash flow just.
[00:02:15] Speaker C: You're boring normal long term rentals in Austin? I don't know.
[00:02:18] Speaker B: Oh, gotcha, gotcha.
[00:02:20] Speaker C: I listen to bigger pockets. I, I listen to a lot of other people. I, I don't run the numbers there, but, but I know in Austin it's, it's a unique situation for sure. And it's just tough.
[00:02:30] Speaker B: Yes, I lived in Austin for seven years.
Back then you could get a house for 150,000. I'm old is what that means. So anyway, yes, I think that Austin has gotten tough, it's gotten expensive. So what did you do to kind of combat that and get out of that and into something that does cash flow? I assume your Properties are local to Austin, then?
[00:02:55] Speaker C: Yes, for the most part. I own some in Houston that I actually have a property manager manage. And that's a tip for everybody out there. Just because you are something doesn't mean you have to be it all the time.
Sometimes it's okay to have a team or like not do everything sometimes.
So, yeah, they're all around Austin. We've got an Airbnb in Dripping Springs, which is just west of Austin. Some in Round Rock, which is north, some in Kyle, which is south.
So yeah, just Austin and the surrounding areas.
[00:03:26] Speaker B: Okay, cool. So tell me a little bit about. I actually only hear about the co living first, so I find that very interesting. I've got a lot of single family long terms that we just rent, you know, to one tenant annually. But I would like to hear, you know, in bigger cities than like an Austin type city or like in New York places where it would be very expensive to rent an entire place. And actually when I lived in New York, I rented a furnished room, so. So I guess I have done that on the tenant side. But how does, how does that work? Is that. Would you say it's more tedious, more, more difficult to manage than just doing one lease on the whole property?
[00:04:02] Speaker C: Oh, for sure. It's more work, you know, but more risk, more reward.
[00:04:07] Speaker B: I will say I want to caveat that guys with, there's nothing wrong with it being more work. Let's get out of that, that mindset of, oh, I don't want to, I don't want to do any work. It's okay for it to be more work. It's still better than sitting in an office all day. Sorry, Taylor, continue.
[00:04:21] Speaker C: No, for sure. And I'll explain kind of why it's worth it.
And so, you know, I had a next door neighbor who got me into real estate and he was involved in co living. So that's why I chose co living to start with. And I actually worked in new multifamily construction. So new apartment building. So it naturally made sense. So we take these, you know, four or five bedroom houses and we turn them into 8, 9, 10, 11, 12 bedroom houses, maybe add a bathroom. And so essentially what you do is maybe this property can cash flow, or not even cash flow, just revenue, Maybe three grand a month, something like that. And we've been able to get gross revenue per month on these houses of around 8,000, $9,000 a month.
So when you think about it, that's like a 3x jump in revenue. Now there's expenses, but let's just say a long term rental, your water heater breaks, I mean you're out months of cash flow. I mean you're half your year's done with co living. I mean that, that's maybe one month that you're having to cover and if you have people move out, you're having people move in. It's very stable, you know. And so a lot of times I can cash flow on six or seven rooms filled. So even at 67% occupancy like it was maybe in the winter and just people weren't moving, I was still cash flowing. So there's a lot of advantages to that, more work, but it's maybe less risky in a lot of respects.
[00:05:53] Speaker D: From the hardest working gal in real estate, Avery Carle. We now have a new book, Smarter Short Term Rentals available wherever books are sold.
Build a dynamic real estate business and out host the competition that's Smarter Short Term Rentals. The book.
[00:06:16] Speaker B: Interesting. I haven't, I've never met somebody who's actually done that strategy. I've read about it, I've watched you know, people's reels and stuff that do it, but never had the opportunity to ask questions about it. So is that something you're still actively doing in Austin? Are you also doing that in Houston or.
[00:06:32] Speaker C: Yes, I'm doing in Houston. I have a property manager there. Just because I. It's a little bit harder to manage from afar, you know, it's something I don't manage for other people for because it is so labor intensive.
It's just not like worth doing as a property manager.
That's why I shifted like property management towards short term rental. But great strategy. It's hard to scale. I will say like the great thing about short term rentals is you got like property management systems, you've got, you know, automated messages, AI and all this stuff to make your life easier and really scale with overhead. And it's really very manual with co living.
[00:07:12] Speaker B: Yeah, well I think a lot of people don't realize that about long term at all, that it's actually much harder to manage a long term remotely than manage a short term. People get that backwards. They're like, oh, I have to be there to clean it. No you don't. But with a long term it's really hard because people are going to want to come walk through the property before they decide to rent it. You're having to run credit checks, you're having to run background checks, you're having to call references and do all these things that you don't have to do with short term guests. And I think that I'm really glad that you mentioned that because you kind of have to, you don't have to have a property manager on a long term if you're not in that same area. But it is more difficult just because of the, the viewing factor. You know, people want to come walk through where they might potentially want to live before they see it.
[00:07:57] Speaker C: I mean before they move in 100%.
[00:08:01] Speaker B: All right, cool. So let's hear about your short term rentals. So what do you got there?
[00:08:06] Speaker C: Yeah, so you know, about a year ago I kind of took stock property management wise. I was like, okay, I now have two virtual assistants that helped me a lot at the time I had one. But I was like, hey, how can I scale this? How can I make the most revenue if I hire somebody? How many properties can they run? And what I started thinking about, I was like, well, the short term rental like, you know, kind of runs by itself. I own one in Dripping Springs. And I was like, well, you know, I have fun. My wife's great a design, it pays me on time every time. And the lovely thing about short term rentals, it hits your bank account immediately. It you get that email with the payout, you're like, you know, there it is. You know, long term is like into the month, they don't pay and then, you know, it's just not the same. So I was like, man, like this is really going well. We did a great job. Let's just do some more though. So since then we've, we've had another short term rental and I got my first property management client as well here in Austin.
[00:09:07] Speaker B: Okay, so I want to hear first about your Dripping Springs rental. So Dripping Springs, the wedding capital of Texas.
Actually back in my college days, I worked for a catering company. I would like cater weight and bartend and stuff. And I got to go quote, go to you know, be work at some gorgeous outdoor weddings out there in the hill country. So tell me a little bit about that.
[00:09:32] Speaker C: Yeah, for sure.
So I mean if you're wondering where it's located, if you know where Fitzhugh Brewing is, the area is gorgeous. I mean you've got a lot of breweries, wineries, wedding venues. But that's kind of a misnomer. We don't even get that many wedding parties. We do get some, but there's guys, golf trips, you know, just family vacations.
I think staycations are back, especially for Texans.
And so from how I underwrote it, I saw that.
More bedrooms, more bathrooms. If you get to 14, 15, 16 guests, your revenue doubles or triples. And so that's what we targeted.
And so we bought this place. It's right next to mobile homes, but it's on like an acre, has five bedrooms, three baths, can host 16 people. And so it's the perfect family getaway. And we love families. That's. That's the perfect guest for us.
[00:10:30] Speaker B: Okay.
[00:10:31] Speaker C: And.
[00:10:32] Speaker B: All right, so not necessarily a bunch of weddings. So families are the perfect guests for you there. And how. Where are your other short term rental units?
[00:10:40] Speaker C: Yeah, for sure. So one is in West Oak Hill, which is still in Austin. We tried to flip a house. I mean, it was burned down. Like we, we, we should have basically built new. But it looks great.
And once again, I underwrote it as an Airbnb, not the best flipper out there. So I knew to be cautious. So if anybody doesn't know, Austin values are stagnant, ARVs are stagnant or still decreasing a little bit. So the market wasn't right to flip it. So I returned to something I know how. So my wife did the design, we did all the contracting, and it turned out great. And, you know, we already have booked up, you know, several months out, so that's great.
[00:11:23] Speaker B: Awesome. Awesome. So talk to me a little bit about what is a mega Airbnb?
[00:11:30] Speaker C: Oh, I don't even, I don't even know how to define that. I would say, you know, where I specialize is definitely larger Airbnb. I think, you know, once you get to that 16 plus, you know, Airbnb kind of caps you at the guest count anyways. So anything probably above 16, you start to get into a different kind of setup.
[00:11:51] Speaker B: All right, and how many bedrooms are your. Your two Airbnbs?
[00:11:55] Speaker C: So one's only four bedrooms, but it can still host, you know, 12 people. The other two are closer to five or six bedrooms.
[00:12:04] Speaker B: Okay, and let's hear about when you got into the first one. So did you get the Oak Hill one or the Dripping Spring one?
[00:12:14] Speaker C: And where's the drifting springs? It's 3,000 square foot. It has two outbuildings. Like, one's a detached garage. One's like a little kind of shed that we transformed into a poker shed. It has a above ground pool, and so it's got all the amenities. I mean, this was a giant project for our first one, but I loved it and I loved how it turned out. So sometimes, you know, doing hard things is a good thing too.
[00:12:44] Speaker B: Okay, so does it still have an above ground pool or did you switch that to in ground?
[00:12:49] Speaker C: No. So it's on well and septic. So.
And also here's my, you know, if there's anybody listening as far as, you know, wanting to know more about getting your return on investment on these amenities, I don't like spending that much money or at least as any more money than I have to. So if you can get you know, just say 50 more grand a year revenue on a pool or maybe a little less because it's above ground, why would you spend 100k on an in ground pool where you can spend maybe 10 or 15k and above ground?
Is it the same? No, but you just have to compete, you know, with your competitors, not against yourself.
[00:13:26] Speaker B: Interesting, interesting. So I get what you're saying and I'm not doing an above ground pool if I have to do one, but I get what you're saying. If you, if you can make the money that you need to make on a cheaper amenity, then why bother with the more expensive one? And I do think that maybe not that particular example, but there is a lot of over amenitization out there like a lot of people think because it makes great content. You know, all of us are out here putting content out and it makes great content to show a before and after. People love a before and after with a bunch of cool stuff. And you have to think about though, what, not only what each amenity is going to make you an income. Because amenities will equal more income. They will, there's no disputing that. But just because you dump, you know, 100 grand of amenities or 200 or 300 or. I've seen people go up much higher than that.
Does not mean your house is automatically worth 100 or 200 or 300,000 more dollars just because that's what the amenity costs. So don't lose sight of that on the back end. Because you know, you could put in $150,000 pool, but it's not necessarily, it doesn't make your house worth 150,000 more on resale. It might make it worth 40. So you got to pay attention to the the entire picture.
[00:14:45] Speaker D: Are you having trouble trying to decide which market to buy in?
No problem.
That's just one of the many live sessions we offer in short term shop plus everything you need to know about buying and managing short term rentals from anywhere in the world right at your fingertips.
You'll also get early access to our world famous management Monday sessions.
Live each and every Monday.
Don't delay turbocharge your generational wealth today.
Join us at stsp.com or sdsconsultation.com for a live call with more info on Short Term Shop plus did you know there's actually a company that will help you find and purchase your first or next short term rental?
The Short Term Shop is the premier short term rental acquisition company.
They have a team of realtors with tons of experience and most of the of them actually own their own properties as well.
They are the best in the business and would be happy to help you with your next purchase.
You can find them@the shorttermshop.com brokered by exp the shorttermshop.com.
[00:16:04] Speaker B: So I want to hear about how you found this Dripping Springs house and then the Oak Hill house and and how you financed and how you underwrote those things for sure.
[00:16:13] Speaker C: So completely different strategies there. The first one I was pretty new to real estate investing and so we, it was boring. We went on the mls, found a real estate agent and you know, just got the deal.
We negotiated, you know, around that, but really simple in West Oak Hill.
And really my main strategy moving forward, especially just like right now where the market's at, you can get some good deals on the mls, but I really want to get deeper deals. So wholesalers are an investor's friend, especially around Austin. You just have to be a little bit more careful that is burned down houses of what you're doing and what you're getting into because there's not the same protections. But when you use a wholesaler and you use something like hard money, you don't have to come out of pocket so much as you can structure the deal a little bit more in your favor. If you buy it on the MLS, you've got to put probably 25% down if you're getting a DSCR depends on that. But you're going to have to come out for the renovations as well. A hard money loan. They're going to give you possibly up to 90% of everything and so it's more favorable if you're going to do value add real estate investing.
[00:17:31] Speaker B: Okay, few questions that. So DSCR minimum is 15.
I mean sorry is 20 and then conventional investment minimum is 15. But my question for I I the cool thing about this conversation is that there are a thousand ways to be successful in in real estate investing. There's no right way. There's no, there's a thousand right ways. There's no wrong way unless you lose money. And even then you learned something so with the hard money, how long is the term on that hard money loan?
[00:18:09] Speaker C: It's interest only. Typically, you know, they'll usually tell you, you know, if there's any beginners out there, they're going to tell you something like 10% plus one point or something like that. What that means is, you know, 10% interest rate plus, you know, 1% in the initial cost of the loan. That's their kind of like fee, you know, just to use them.
And the more you work with them, the better rates they'll give you and the better, you know, kind of structure they'll give you.
But that's kind of the deal. And typically it's for six months, a year, whatever is specified.
You kind of work with them on the front side. And I actually kind of like that because they'll tell you if it's a good deal or not because they're lending behind it.
They're good at running numbers probably better than you. And so if they either raise your interest rate higher than you thought it was going to be, make you keep reserves in your account or you know, pay a bunch down, what they're telling you is it's bad deal. So if you don't get favorable interest rates or kind of those kinds of things on hard money, you should definitely double check your deal.
[00:19:12] Speaker B: Gotcha. So you're going to wholesalers and hard money and then you're putting 10% down on the property and they're financing the rest of it as well as your renovation costs. So what's, when you get to, so let's say you get this hard money loan, you make all these renovations, are you then refinancing into like a DSCR or conventional and pulling that money back out, paying off the hard money?
[00:19:39] Speaker C: Yeah, everything's on the table. I mean, I think what you start with is the deal, is it a good deal? And then you have to make sure you have the exit. So is it a burr?
Can you turn into rental, get the equity out and still have a good cash flowing asset?
Do you flip it? You know, it's just all about, you know, where's the market at, where are your finances? And you know, do you want to move on to the next deal? Do you want to make the current deal more profitable? You can, you can do that by keeping equity in. Just depends, you know, what your strategy is.
[00:20:17] Speaker B: But for those who might be new to the term hard money, it's typically something that is a short term loan. You're not going to want to, to be paying 10% interest for a long period of time. So you need to have an end goal in mind for what you're going to use this for. So typically hard money loans are used a lot by like flippers, people who are doing the brrrr strategy, so things like that. So you need to have like a six month plan to either refinance it into a conventional or DSCR or flip it or what have you. But it's not something that you're getting into long term if you're not familiar with that phrase.
All right, so did you, did you do the same thing with the other short term rentals?
[00:20:59] Speaker C: So we've only done that once with the short term rental. I'm actually looking for more.
I'm looking definitely in places like Fredericksburg, Wimberley, still dripping, you know, Austin.
I, I love the hill country area. I think it's going to continue to grow for sure. So.
[00:21:19] Speaker B: All right, so. So you did the, the hard money on the Dripping Springs one. So you've got the two other ones. So how did you finance those?
[00:21:28] Speaker C: Yeah, for sure. So we, we just did the hard money for the West Oak Hill House conventional for the Dripping Springs one. That was, I actually landed that property while I still had my W2 job, you know, job.
So that was actually like the last thing I did before I quit was made sure I closed in that locked up that good conventional financing and then proceeded to leave my job. Sorry boss.
But yeah, the third one is just, I'm just property managing for my client with Rome Free bhr. That's a brand we created just for, you know, short term rentals with investors, especially if they're, you know, not in Austin.
We, we love trying to help people out that want to create these beautiful short term rentals but just don't have the time.
[00:22:17] Speaker B: All right, yeah. So tell me a little bit about Roam Free. So what is it exactly that you guys do? Are you managing properties or.
[00:22:24] Speaker C: Yeah, we're full turnkey.
So we will design, build, find, help you find a short term rental to invest in.
We love helping investors. With my six plus years of construction experience and you know, now property management experience, I have the team, the systems and the people to kind of make that vision come true. And the reason for Roam Free is, you know, we, we provide places for our guests to roam, to relax, to, you know, kind of find themselves again. And then roam free is, you know, the free portion is we're free from gimmicks, from markups, from all that kind of other stuff. You know, I don't have time to be kind of playing those games. And so what we provide to our investors is, you know, a very simple model of, you know, here's, here's how do we maximize your revenue and minimize expenses? And you know, if we, if you make more revenue, we're both going to, you know, win instead of, you know, charging you for a bunch of expenses.
[00:23:27] Speaker B: Gotcha. Gotcha. Rising tide raises all the ships.
All right, all right, so what, before we get to the final three questions of the show, is there anything about your story that you feel like our listeners would benefit from hearing that? I haven't asked.
[00:23:47] Speaker C: I would say, well, I know one of it is one of your questions, but I would just say focus on the deal.
If you find a good deal, and this is like repeated 100 times over in the real estate investing community, but find a good deal and then you'll figure it out after that. Because if it is a good enough deal, you'll find relationships that you need to, to make it possible and to go along with that, go to meetups, you know, get a mentor, you know, find people who, who can help you or will help you in the future because that's, that's how you're going to figure it out in real estate.
[00:24:28] Speaker B: Good advice. So now you have to come up with something different for the last three questions. So first question, what advice would you give 20 year old Taylor if you knew then what you know now?
[00:24:38] Speaker C: Man, I would say don't take things so seriously. I spent a lot of my twenties just trying to level up, trying to work hard, do the next thing, all that's important.
But I think a lot of the fun and the adventure is lost when you have tunnel vision. And so that's why I love short term rentals. It reminds you every time I go to a property with a pool or, you know, any kind of amenity, I'm like, okay, that's fun. Like all this is fun.
And so that's, that's super important. Don't, don't take things too seriously.
[00:25:15] Speaker B: Great advice. And second question, what advice do you have for a new investor who's looking to get started today?
[00:25:22] Speaker C: Yeah, I'm going to reiterate it. I'll kind of switch tacks though, but find a mentor.
I had a neighbor who taught me everything he, he knew for free. Anybody calls me, I'll tell them everything that I know for free.
Investors love sharing spreadsheets and so starting out can be rough. The learning curve is high. And so instead of making a bunch of mistakes, which you Will anyways, find a mentor that will help you.
It's really nice to have somebody answer your questions when you have them.
When it's midnight and you know, I always think about, this is when my first co living property that was nine rooms, you know, I, I was like, up at midnight, like, man, we're creating this house with nine rooms. There's like, you know, four toilets. Like all the toilets are going to get backed up. I'm just freaking out, you know, and to have somebody, you can text me like, hey, I'm, you know, I can't do this. You know, they're like, no, no, no, you're good, you're good. Just stick with it. Find that person who's going to help you stick with it.
And, and that's going to help you be successful.
[00:26:27] Speaker B: Great advice again. And last question. What is your favorite book that's impacted your mindset?
[00:26:35] Speaker C: Yeah. So, you know, once again, it's going to be kind of the same as everybody but Rich Dad, Poor Dad. But I'm going to be very specific. The line, the message that really captured me was for the longest time, my parents, everybody I knew said your primary household is an asset. And then to read Rich Dad, Poor dad, where he says, if it cash flows, it's an asset.
If you have to pay money to keep it every month, that's a liability. It blew my mind of my primary is a liability. Of course it is because if I can't pay, it gets taken away. So therefore it's a liability.
It changed everything for me. And that, that's really what set off my real estate investing journey.
[00:27:21] Speaker B: That's a great one. I mean, yes, everybody's read it, but there's a reason for that. It's, it's just a great one.
All right, Taylor, so if our listeners want to find you and follow you, how can they do that?
[00:27:34] Speaker C: For sure. So we, we've just kind of started our brand. So you can go to romefreevhr.com or go to Roam Free VHR on Instagram, Facebook and drop us a message.
[00:27:46] Speaker B: All right. And I'm at the Avery Carl and at the Short term shop. Thank you so much, Taylor, for coming on.
[00:27:53] Speaker C: Thanks for having me.
