David:
This is the BiggerPockets Podcast Show 660.
Rob:
But one of the really hard lessons that we learned was that the transition of ownership was a little bit tricky. We hadn’t really hashed out a battle plan with the seller because we were so focused on closing the deal. There was always stuff happening. As you know, deals start to fall through and then everyone’s got to be like, hey, we’re all on the same team. You really want to sell it. We really want to buy it. Let’s renegotiate. How are we going to make this work? And so we had like five of those moments I felt like through that whole process. We were like, oh shoot.
David:
What’s going on everyone. This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with my partner in crime and partner in business, Robert Abasolo. Rob, so nice to see you today. And I can’t help but notice you’re a little dressed up. You got rid of the black pocket tee and you’re actually looking fit, trim, and sharp in a shirt with buttons and a collar.
Rob:
That’s true, man. I think I have mentioned this to you before, but I did this whole thing for two years where I saw a YouTube video of this guy that was like, why I only wear one shirt. And I was like, I like that. And so I decided to just rock the black pocket tee for the last two years on the channel. And I was like, you know what? I think I’m tired of looking like a schlub, like a minimalist schlub. So I decided to fork out some dough and buy a couple button downs that’s all.
David:
Well, and you can afford it based on the cash flow you should be getting from your new acquisition, which is what we are talking about on today’s show. This is a deep dive episode where we are getting deep into the details of Rob’s newest deal. It’s a lot of D’s right there. You bought a hotel. Well, you’ve actually bought a kind of boutique hotel. Tell us a little bit about what people are going to learn about as they listen to today’s episode.
Rob:
So I’m pretty open about this stuff. I’m a very transparent person. So we’ll be talking about the hotel, why I even went the hotel route after being such an accomplished short-term rental operator that’s so anti-hotels. You’ll get to hear my pivot on why I’m doing that.
And then some of the really big hardships and mistakes that I’ve made on this deal, which I just want to be honest about and put it out there because I think for me, I embrace mistakes because they make me better. And I just want everyone to know that it’s okay to make mistakes and to fail because that is how we get good at the thing that we call real estate.
David:
That is a great point. And if you listen to today’s show, you will learn about the mistakes Rob made, how he overcame them, how he found this deal, how he structured the deal, how he negotiated the deal, what he likes about the deal, how he’s designing the deal and how if everything goes well, he should make over $5 million when he exits this deal.
Fantastic episode, make sure you listen all the way to the end to get all the juicy deets. But before we get into those juicy deets, today’s Quick Tip is brought to you by Rob Abasolo himself.
Rob:
So if you’re ever going to buy any kind of property that’s outside of your typical asset class, ask yourself what is the battle plan as soon as I close on this property? I think a lot of people are like me and we jump in because we’re not scared to just tackle something head on, but at the end of the day, you’re going to sign those closing docs, and then you have to actually run that business or asset class that you just purchased, and you don’t know what you don’t know.
So before you get into a deal and you focus all your time on closing the deal, focus on everything that’s going to happen the month after you close that deal because it will save you a lot of headaches. Take it from your friend, Rob.
David:
Very nicely done. Great job there, Rob. All right, let’s get into the interview. All right there, Mr. Abasolo, let’s get into this thing. So first off, in your opinion, you’ve probably been investing in real estate for quite some time, but to an OG like me, I’m thinking you’re kind of new to this game.
So it seems like you’ve done pretty well since the time that you’ve been in real estate. Can you share with our audience how long you’ve been investing in real estate and what your journey was like to get to where you are right now?
Rob:
Yes, I do, I will. And let me just say it is an honor to be a guest on the BiggerPockets Podcast. It’s been a dream of mine for a long time. So thanks for having me on.
David:
I did make myself sound like an old man right there. Well, tell me about how you’re using computers to buy houses.
Rob:
What it is this Airbnb you speak of? All right, reeling this back in. So I’ve been doing this for about five years, probably just a little bit over now. And I have really, I’ve done a lot in the short-term rental space and it’s always been an interesting journey. I think for me, I’ve wanted to diversify as much as possible for just … I’m very curious.
And one of my favorite things really about BiggerPockets is how creative people can get in real estate and extrapolating that further into just the actual Airbnb space, I’ve always been very appreciative of how creative people can get with their spaces. What can you Airbnb? You can Airbnb at air mattress in your living room. You can Airbnb a potato in the middle of Idaho. You can Airbnb a cabin. It doesn’t really matter, it’s whatever your imagination is.
David:
You love that potato.
Rob:
I do. It’s so good. It makes like 70 grand a year. I’m jealous. I’m going to build a potato [inaudible 00:05:13]-
David:
I love how often you bring it up.
Rob:
I know. It’s just, I’m so jealous that I didn’t think of it first. But this is exactly what I’m talking about because someone would see that and they probably were selling it for 20 grand, and then everyone was like, no, I would never pay for that. That’s a stupid price. Then we have someone that comes on and they … Actually we should bring her on. We should bring her. I think her name is Kristen Wolfe. I’m going to make that an initiative here.
But effectively, I like how creative things can get. So for me, I started in the rental arbitrage space for, I think my first three or so listings. And then I bought my first house. In that house, I had a tiny 279 square foot studio that I rented that was making pretty good income on Airbnb.
And then I thought to myself, what if I built a tiny house in my backyard? And then I thought, what if I built a tiny house in Joshua Tree and then a small home in Joshua Tree? What if I put a tent out in a national park or an Airstream or a tiny A-frame?
And so I kept really leveling up as much as I could because every type of new listing I could come up with, I was like, this is great, this is fun. And it was so fun because no matter how wacky you get with your ideas or whatever you put out there, there is a target market for that. There’s a target market for a vintage Airstream. There’s a target market for a tiny A-frame, or a tiny house. And for me, I think I get a lot of joy out of fulfilling that bucket list item for people.
So in my five years, I went from zero to 15 units. For all of those 15 units, for the most part, I think I had partners on a lot of those because I was pretty broke when I was getting started out and I was doing pretty well. And I was putting myself out there on social media and people would reach out and say, hey, Rob, I’d say that you’re pretty good at this. Would you mind taking an investor? And I’d say, sure.
And so that’s how I was able to scale up pretty quickly. And I was pretty passionate about it and I still am, but I’ve started to realize as I was acquiring all these different units, the scalability was getting a little tougher because I was getting so engulfed in the actual A, the self-management, but B, the setup. Setting up an Airbnb takes a very long time. I don’t know, have you ever set up one of your Airbnbs, or no?
David:
Going through that right now. I was lucky enough that almost everything I purchased came furnished and was used as an Airbnb before. So those ones are going pretty quick, but the ones that I bought in Florida that were not used as an Airbnb, it’s definitely a log jam right now with ordering furnishings and getting the cable and the internet turned on and getting stuff fixed so we can take the pictures. I’ll actually let you go into everything that goes on to that because I’m just getting exposed to this now.
Rob:
Well yeah, and you saw a sneak peek of how I do things in Scottsdale, when we were setting up our 6,000 square foot spansion, our Spanish mansion. You saw a little bit of … I mean, that was a little bit of a different beast compared to your typical 2,000 square foot home, but that’s a pretty good indication of how I do it.
It’s not just coming in and putting couches here and hanging a picture frame. For me, it really is a process of where do things go? How do we get rid of boxes? Who’s going to do what? Are all the drawers filled? Do we have can openers? It’s a very analytical process, which is very odd because I am not necessarily the most analytical person.
David:
You appear that way in those environments. I thought I’m watching Banksy looking at a street corner and figuring out the mural that he’s going to paint here. That’s what it was like to watch you in action.
Rob:
Honestly, that is kind of how it felt walking into that house, but admittedly, that mural was very beautiful and I didn’t have to do much to it. It wasn’t much of an open canvas because it was already an architectural house that was just anything we would’ve done to that place would’ve been perfect.
But all to say, even that house took a little bit longer to set up than we thought. We thought we were going to set it up and say, let’s do this thing. And it took about a month to get all the furniture in and everything, due to the supply chain issues and everything.
David:
I think what short term rentals have done to real estate, real estate has traditionally been, especially commercial real estate because this is where investors used to operate. Commercial real estate was for investors. Residential real estate was for people that just want to live in their home.
Then we started buying rental property en masse after 2010, when there was all this opportunity and all of these foreclosures. And now it’s gone into this whole new stratosphere where we’re doing short term rentals and we’re competing with hospitality industries. And what I’ve noticed is real estate’s always been part art and part science.
It used to be much more heavily geared towards the science element. The spreadsheet would tell you almost everything you needed to know about that triple net property or that big commercial multifamily property you wanted to buy, while Airbnb has allowed the art side to play a much bigger role in what’s happening. How do I design the house? How do I market the house? How do I furnish the house?
These are all things that are not numbers you can put into a spreadsheet to determine a return, but the art will affect the return. Is that something that you think you’ve been able to harness to be so successful as a short term rental investor?
Rob:
For sure. I think short term rentals in general are a very visceral thing for me. I walk into a place and I know if it’s going to work or not. Or I see photos on Redfin or Zillow and I know if it’s a dud or not.
Now I do genuinely believe that any house in a good market can perform well, if you put a little bit of love and TLC and passion into the design side of things, but certainly some houses they make for better properties in general and they’re more Instagrammable.
So I’m always looking for something that has a bit of that potential in, I don’t know, the category sense. Airbnb just changed their website design and they have categories at the very top. So for me, I’m always looking at how can I best fit those categories.
And this is something I’ve really been doing over the past five years until somewhat recently, which is moving into where I am now and that is focusing a little less on the single family acquisition.
David:
All right. And so as you’re focusing less on the single family acquisition, where are you shifting that focus to?
Rob:
It’s a bittersweet moment for me because I cut my teeth on buying single family residences and doing that. Obviously I still will. I still work with a lot of investors and we partner up, they’ll fund the deal, they’ll finance the deal and I’ll go and find the property and set it up and everything with my team. But we just started to realize how quickly that started to gobble up our time, if you will, to source the deal, analyze the deal, overanalyze the deal, get in touch with the realtor.
In this crazy competitive market, you can do all that work and still not get it, even if you put in a really good offer. Then you got to go and do it again. And then traveling and doing all the remote setups as well, was really, really tough for us because we’re a pretty scrappy team. There’s only three of us really right now.
I mean, it’s expanding relatively quickly on a lot of different fronts, but for us, it’s just really tough because I think in a perfect case scenario, what I started to realize was if I find it, I can effectively set up at least one Airbnb a month, but if I was just really firing on all cylinders, I could probably do two with my current team, and that’s great. If you could do two every single month, that’s 24 in a year. That’s certainly not anything to walk away from, but that’s the max.
I can only do 24 short-term rentals in a year working with investors, and I’m also splitting it with those investors and I’m having to work with them and get info and analytics and answer questions. And really that side of it too has been very … And rightfully so they want the information.
So it does slow down the process to work with the one-off investor, because it can be a little tough to just get everyone on the same page and get money moved around. And in this market, you need to act very fast, make offers and think last kind of thing, which is terrible advice, don’t ever do that, but this market is crazy.
So I think honestly, this all started to come to a head when you and I were talking about partnering up and then I was like, “All right, man, let’s buy this campsite with 10 units on it or something.” And then you were like, “Dude, it’s a good return, but that’s a job. 10 units is crazy.” And you’re like, “What if we just started acquiring luxury properties? And that will cost the same as this 10 unit camp site you sent me.” And I was like, “Okay, sure.”
So I started giving a lot of thought to that and that was the beginning of you and I partnership where we bought that house in Scottsdale. And setting that up was a bear, but it wasn’t the work of setting up 10 properties that equal the same amount monetarily. And I think the moment that hit me, I was like, okay, I think it’s time to rethink how I approach short term rentals.
David:
Yeah, that’s awesome. I remember that conversation we had where we were fleshing out our options and you said, “Well look, we can get …” It was a ridiculous number, like 40, 50% ROI on these $400,000 houses, let’s just buy 10 of them. I was like, “Okay, we could do that, and then for the next year, this is all that we’re doing is we’re trying to manage these 10 properties we bought. What if we just bought one for 4 million that could do less, maybe cash flow right up front, but it had a bigger upside. And with that time we would make more than the cash flow that we were giving up.”
And it was, I almost remember seeing you freeze for a minute. The little Apple rainbow thing was spinning and you’re like, “Wait a minute. That’s not how I was ever thinking. Tell me more of this, how we would make more money with the time you speak of.”
And I remember when I had that first same epiphany that we often look at ROI, it’s very seductive to just find the highest ROI you can find, and it feels like progress to the human mind so we like to chase it. But in real estate, ROI is never pure unless you’re investing in a REIT or into someone else’s syndication.
With the money that you’re putting into the deal, you’re putting in time, effort, mental energy. You’re thinking about it. You’re having to go find people to do work. There’s some frustration that comes when things break or a guest isn’t happy. And there’s a cost outside of just your capital. It’s very easy to forget that because we tend to only look at the ROI when it comes to the capital.
And when I had that revelation, I realized, oh, I need to think way differently about how I’m investing. So as you’re newly born, you just got jacked out of the matrix and you’ve opened your eyes for the first time-
Rob:
I took the red pill, if you will.
David:
Yeah, exactly. Now you’re in Zion. Tell me what type of thoughts you’re thinking. What types of properties are starting to catch your attention? Where’s your mind going with your investing strategy at this point?
Rob:
So fast forward to about … I guess not fast forward, but let’s go back to about two months ago, and I get this very mysterious Instagram message from somebody. And they were like, “Hey, I don’t know if you’d be interested in this. I follow your channel, but I’m actually selling this hotel in New York. And it’s a split motel. It’s a seven unit motel, I think with 12 tiny home cabins and then two bedroom cabins and then full size, and then four RV spots.”
And then I was like, oh, I get a lot of messages like this all the time and it’s really hard to respond to all of them because when someone says, hey, I got this house, you interested? I’m like, maybe, but you didn’t give me much information to analyze if I want the house. So probably not.
But this person actually wrote it out and I was like, okay. Well this is sort of around the time where I’m like, okay, how do I scale? How do I scale? I’ve done the one to 15 units. I’ve proven I can do that. And sure, I could go out and continue to do that.
And as a matter of fact, I worked out a deal with an investor who wants to buy 100 houses with me and my business partner. And he runs a fund and he was like, “Hey, if you can get us a 10% return after your equity split and everything, we’re happy, we’re good to go.” And we were like, “Great.”
So I had to tell him, I was like, “By the way, from a scalability standpoint, this is really difficult and it’s going to take about two years to do that.” And he was like, “Yeah, that’s fine.” And we were like, “Okay, cool.”
So we worked out that deal with him, but that’s even scary to me because my partner brought that to me and he was like, “Dude, this is it. This is the holy grail.” And I was like, “Man, that’s 100 houses we have to buy. That is really hard.”
So when I got this Instagram message from the guy who was selling this hotel, I was like, this sounds interesting. It was a little scary because it’s a whole new asset class, motels and hotels. I know a lot of people have done them and they all say good things and they all do super well. We just had Heather Blankenship on the podcast and she just did the same thing. She buys these.
And I was like, okay, I know that a lot of people do these and everyone that I’ve talked to is always really scrappy and very savvy with this and I consider myself relatively scrappy and savvy, scravvy if you will. And I was like, okay, let’s pursue this. So I said, “Hey, sure. Let’s talk about it.” And he’s like, “Here’s my realtor/broker’s info. Give him a call and let’s see.” And I was like, “Great.”
So I shot this over to my partner, connected them and then we started just talking about all the different logistics and really figuring out if we wanted to do this because you have to also keep in mind as a real estate investor, I’m kind of anti-hotel as an Airbnb guy. All of my videos are about hotels are evil and Airbnb is the way of the future. So there’s a little bit of dissonance here with changing my investment strategy.
But ultimately we are going to renovate this hotel and we are going to still list it on Airbnb. It’ll still be an Airbnb property, but we’ll also be hosting direct bookings.
David:
All right, so I definitely want to ask you about some of the hurdles that you’ve encountered, because anytime you move into a new asset class, it’s guaranteed mistakes will get made, things will hit you, that you didn’t see coming. You just have to accept that.
But before I do, I want to ask about how you’re analyzing the property. So you have a large degree of comfort and confidence when it comes to analyzing a short term rental, but a hotel’s a little bit different. Was the process similar? Did you have to learn a completely new system? How did you figure out the revenue this thing was going to make?
Rob:
A few different ways. This was a little bit tough, definitely. The concepts are similar, but it’s a whole different animal because you’re analyzing 20 units at one time and deciding is there a taste for this, or is there a desire for this in the market.
And so we started looking around at all the different motels and hotels in the area. They weren’t really that great, but they seemed to be booking up very heavily. And the owner left us with his proforma and his books. The numbers looked pretty good and he said, “Hey, I’ve only been running it for this amount of time, but based on what I know in the area, it should make X and this much and it should be this kind of return.” And we were like, “Okay, well thank you. We appreciate your opinion here. We do have to verify this. Everyone can say a high number.”
So we started looking into the seasonality of hotels and we just had to get a little creative. So we started calling different motels and hotels in the area and asking like, “Hey, what’s your busiest season? What are the dead seasons? Is it true, I hear that this is a really great touristy spot. Are you usually booked up?”
And all of them were basically like, “Oh yeah, we are booked up for the next three, four months straight. Then it’s one or two months of a dead zone, and then it gets crazy after that.” Then we were like, “Oh, okay, good.” And so we had to get really sneaky with that and asking the different locals about the seasonality and really trying to figure that stuff out.
So basically we had to analyze that, and then of course I had to also do the Airbnb analysis as well. So I have my own way of doing this, but basically I had to go and see what’s my competition because whenever I’m buying in any market, I’m running several audits. I’m doing an audit on Redfin and Zillow just to see in general what things cost.
And then I also have to run an audit on Airbnb to see who my competition is and how good is my competition? Is my competition design-forward? Are they small? Are they big cabins? What’s the theme? Are they booking? And we found a couple of, not as great Airbnb listings that were booking like crazy. So I was just like, okay, all I have to do is figure out how to renovate and run a 20 unit motel, and when I do that, I should be successful.
David:
So when you were analyzing the revenue streams, are you looking at how it’s going to book on Airbnb? Is that where most people are booking this hotel? Or is it also something where SEO becomes a factor as people are looking for a place to stay in this area?
Rob:
It’s probably going to be a little bit more on the SEO side simply because right now it is completely direct bookings, they are not on Airbnb. And so actually, I like this because I know that based on the bookings … And we’re getting bookings now and they’re coming in. We were actually trying to stop the bookings, which we’ll get into in a little while because we wanted to renovate the place, but it’s booking right now.
And based on how much it’s booking, based off of this little dinky website that we inherited, I mean, it works and it books and everything, but it’s not the greatest and the SEO is okay, but there’s a lot of work to be done there, but somehow people find it.
We’re trying to figure out how the heck are people finding our motel. I have no idea. I’m thankful that they are, but for sure there’s an SEO component. I actually just think there’s not a lot of options in the area. And so when you type in motel in Tupper Lake, there’s just not a lot, ours pops up.
Oh, there was one other thing that we found when we were analyzing this market, there’s this other hotelier, that’s a fancy word for saying hotel investor, and they actually just bought a motel down the road at the same time or right before us and they were doing a full renovation of that property.
And so we looked into this person and basically everything they touch turns to gold kind of thing. And so we were like, oh, okay. So if this person bought a hotel and they want to renovate it, clearly they’ve already done the market research for us. They’ve figured out that this is a good spot to invest in.
So we used that and then we took projections and we also took past data and then we looked at Airbnb comps and we called around and we got a sense from the different locals and the different motels in the area to find out when our hot season is and everything like that. So it was a little bit of what they call internet sleuthing, but also general Airbnb research as well.
And based off of that, there were a few things that were also working in our favor. The owner was willing to finance. It needed a lot. This is the ultimate BRRRR, man. I mean, it needs a full gut remodel on the whole thing. So based on the fact that it was actually doing pretty well in the current state that it’s in, which is not Robuilt standard, I’ll put it that way. I was like, okay, well, if we make this nice, it should book a lot more and we can also raise rents.
David:
I guess the person brought you the deal, so they said, “Hey, do you want to look at it?” So you probably weren’t looking at that area already, but now that you’re in that area, what do you like about that location that would cause you to buy more property there?
Rob:
I’m not sure that I would necessarily go the single family route out there and I’ll tell you why. That area is very rural. It’s not secluded, but it’s very rural and there’s a vendor shortage there. It’s tough to find people to hire. So for me, when I’m buying an Airbnb, I’m always looking for the Airbnb Avengers.
And so I’m looking for my cleaner, for my handyman, for my pool service guy, for my landscaper, for my pest control person and I need backups for all of those. And we have found that it is tough to find vendors in that market, just like a lot of the other markets I’m in, where we’re out in the middle of nowhere, basically.
So from a single family resident standpoint, I wouldn’t really do that, but because it’s a hotel and there are economies of scale, we have it in our budget to actually just hire a full-time onsite manager, very similar to mobile home parks or RV parks, or even storage facility units, where there’s someone that is dedicated and it’s their job to run that place.
So that alleviates some of that dream team that I need to hire because we now have a full-time staff. We provide that full-time staff housing and then a relatively, I think fair price to live there. And actually, funny enough, we were striking out left and right. We were not able to find people to help us. And we’re like, uh-oh, we just bought this hotel and no one can actually work on it.
And we had Heather Blankenship on the podcast and she talked about this group of people called work campers. And these are people that travel around and they’re effectively nomads, digital nomads, or they’re always just looking for places to park their trucks that have campers and basically camp at the place and make money and that kind of stuff. So I was like, okay, let me try that.
And we posted an ad on one of the Facebook groups and someone was like, “Oh my God, this sounds exactly like what I would love to do. I used to work in hospitality and I used to work in hotels for the Marriott and stuff. So I know exactly what you need for this job.” Me and my partner were like, “Yeah, it’s a little too good to be true. There’s no way.”
And we interviewed her and afterwards we got off the phone and I was like, “That’s too good to be true, right?” And he was like, “Yeah, I don’t believe it.” And I was like, “I don’t think so either. There’s no way that she’s perfect, our first candidate.” And we called all the references and all the references gave glowing reviews and we were like, “Man.” Sometimes I do get lucky on the first try, but it happens less and less at scale.
David:
This is a legit problem and I’ve run into this myself, not as often, because typically my investing strategy is usually to find the best market, the hottest market, where I see a lot of growth headed and try to get there early. But a handful of times I have bought in rural areas or maybe vacation destinations where the only people that are going there are going to vacation. There’s not a lot of people who live there as their primary residence, and so you don’t have a workforce.
And when there’s a problem, like you said, pest control or … I remember running into this on one of my properties actually in the Smoky Mountains that has a pool. And in the middle of escrow, the seller could not get the pool fixed before we closed, but I had to close because of a 10-31.
So I was in a situation where if I close, I’m inheriting a problem, if I don’t close, I’m inheriting a bigger problem, because I’m going to lose over seven figures in taxes here. And we close and there’s not a person that does pool repair for months. It’s really bad. I’m like, I’m going to have to find a person and fly them out to Tennessee to look at this. It’s that bad because there’s not a big workforce.
So it is absolutely something to take in mind when you see an area and it looks amazing, sometimes there’s reasons why that opportunity’s there. So if you’re listening to this and you are someone who’s willing to travel and do that kind of work, please message me, because I’d like to put together a system of traveling work campers, like you said, that could go to some of these remote areas and charge a premium to do stuff like fix roofs or fix pools, whatever the problem would be.
But until something like that is going on, make sure you put that in your underwriting because I’m sure … I mean, how much did your butt pucker when you realized, oh there’s not people around here that can do this work and I just bought a 20 unit hotel?
Rob:
I think the proverbial butt was puckered the entire process because we knew nothing going into this really about motels. We were just really leaning on the fact that we are a couple of smart guys that fail and learn from our mistakes and get smarter. That’s how I think of it. So we sort of expected it.
Every time we buy, it’s exactly what you just said, there’s this opportunity and you’re like, this is crazy, this is too good to be true. And then you find out that it’s smack-dab in the middle of South Dakota or something and then there’s not a civilization around for 50 miles, and you’re like, uh-oh, what have I done?
That was us this whole time because we were like, okay, New York is obviously a very populated state, but out here it really is, not a ghost town or anything like that, but it’s tough to find the work. So I think we were expecting it. We always find these houses.
There’s a lot of accounts that I follow like, Cheap Old Houses or Mid-Century Modern Hunt kind of thing and they have all these amazing, beautiful, character-driven homes or these amazing mid-century modern beauties, and then they’re like $200,000. I’m always like, oh, this would be the greatest Airbnb. And then it’s in a place where the population is negative three. So that’s always the tough part.
So we bought this knowing that the vendor shortage was real, but actually just like you said, we actually have a contractor who reached out to my buddy and I think he was a fan of the channel and he’s like, “Hey, I’d like to be involved in your projects.”
He was working for a construction company and he was just on salary and I think he wasn’t getting promoted in the way that he was hoping to. I can’t really recall off the top of my head, but basically he’s like, “I’ll come work for you guys. If you guys pay me to come and do the work, I want to prove myself, and then I’d like to start getting some equity on some of these projects.” And then we were like, “Are you willing to move to New York?” And he was like, “Absolutely.” And we were like, “Great. You’re in.” And he’s been really great.
So we actually flew our contractor out to New York and he’s living there right now. He’s cleaning everything. He’s maintaining everything. He’s meeting with contractors. He’s budgeting. He’s getting the timeline set for the next six months. And honestly, without him, it’d be pretty tough. And that’s why we were relatively confident going into this deal because we knew we had a contractor that could run the show for us while we were gone.
David:
Yeah, that’s huge. That’s why I was saying if I had a system of a traveling contractor that you could put a business together that they’re willing to do that and they could stay in the property and then they could work on it, man, that’d just be huge for the BP community, if there was people that we knew could do that, especially if you’re someone who lives in an area where wages aren’t as high.
If you live in Malibu, this probably doesn’t make sense to you, but if you’re in Louisiana, Mississippi, you don’t make as much money, but you can work on projects in Southern California, in New York and some of these more expensive areas. That could be a really good way to make some … It’s a business idea I’ve been tossing around for a while in my mind and you definitely are highlighting the need for it.
So let’s talk about renovations because that’s a huge, huge part of opportunity in today’s market, especially is the market’s been so hot, even fixer ups, you couldn’t find them. And then when you did find one, good luck finding a contractor, because they’re so busy working on the people that are putting their houses on the market and the people that just bought one that needs work, as well as all the investors that are flipping houses and doing BRRRRs. They’ve been in short supply, but as the market cools off, you actually have an opportunity to get a contractor.
So what’s your renovation model look like here? What’s your budget on this? What’s the strategy going forward? How much effort are you putting into the renovation to add value?
Rob:
So this is a tough one because you can’t really extrapolate your single family home knowledge to a 20 unit motel. Everything gets a lot more expensive on bigger properties, but luckily our contractor, he’s worked on these types of projects. He’s worked on every type of commercial development, and so it has been extremely helpful for us in budgeting all of this.
But effectively right now we’re looking at an entire gut renovation, there’s not much that we’re saving from this property, like the seven unit motel. It was painted this very bright aqua blue, which I don’t know why this color follows me around, but that was also the main central color in our Scottsdale house that I was like, no, we have to remove this color. Why does this color exist?
So the hotel is this very bright, vibrant blue, and then everything on the inside, it’s in disrepair, not every single unit, but a few of them. My business partner went to go for inspection and final walkthrough and he called me at midnight after he was done and he was like, “Bro, there is a hole in the ground.” And I was like, “What do you mean?” He’s like, “In the middle of this motel, there’s literally a hole in the ground.” And he shows me and I’m like, “How is it booking? How does anyone stay? This can’t be safe.”
So we have effectively gone into this knowing that there will be nothing really salvaged except for maybe a couple of wood walls that are currently in there. But yeah, this renovation is going to cost us in the neighborhood of about $800,000.
David:
Okay, $800,000. And then what did you purchase it for?
Rob:
We bought it for $825,000. So we’re spending just under the purchase price to get it flipped.
David:
There should be a title for that when your rehab is higher than your purchase price. That’s definitely a specific type of deal.
Rob:
Yeah.
David:
Is this a BRRRR situation? As far as hotels are valued, can you refinance it once the upgrades are done or do you have to wait until revenue is a certain point for a year or two before you can refinance to get that capital out?
Rob:
Yeah, because it’s seller financed, we actually worked it out to where we are going to be financing it on an amortized schedule over 20 years, but it’s going to balloon in three years. So we’re hoping that by the time it’s stabilized and rents are up and there’s a history of rents, exactly what you just said, we can go to a commercial lender.
Hopefully interest rates won’t be like 27% APR and basically refi, cash out, pay our investor back. This was a really opportune timing because we actually had an investor who had about, I think $800,000 set aside, I want to say and we had been trying to find a project for him. He wanted to build a treehouse village with us and we were like, okay, let’s do that, but it was hard to find land.
All the places that I wanted to build treehouses in, I have talked about them a lot on the channel in different places and I’m not going to say I ruined the market for myself because that’s not possible, but more attention has been brought to a lot of the different places. And so I was just like, okay, we were striking out trying to find-
David:
I believe it.
Rob:
It’s happened-
David:
That happened to me when I talked about Jacksonville five years ago, it was within a month, all of a sudden stuff was disappearing off the MLS very quickly.
Rob:
Yeah, I’m not going to say I’m that cool, but-
David:
BiggerPockets is a powerful entity.
Rob:
But there have been markets that I’m like, well, honestly, I haven’t even opened up Redfin in Gatlinburg in about six months, not because I’ve ruined it for myself, but because everyone has ruined it for ourselves. And so now it’s like impossible. I mean, you bought a bunch of stuff there. I’m honestly very impressed because it’s a tough market out there, although I do see some price cuts coming in every so often. But we were trying to find this land-
David:
As a side note, don’t lose your thought, it’s important to note that real estate investors, now that we have podcasts like this information that’s readily available, everyone’s talking on YouTube, the word spreads really fast.
I mean, imagine 60 years ago, first off long distance investing was not even a thing that you could do safely or that you would do. And second off, you would’ve never known about the markets you should be investing in. Everything had to be local. And now I’ve noticed this trend since I’ve been in this educational space, that real estate investors are like locusts that just move from area to area.
So when we had the crash, you noticed everyone moved into the Phoenix, Arizona and Las Vegas markets and started scooping up properties because they got hit really hard. And then that sort of dried up and they moved into Memphis, Memphis was the big thing. And then after Memphis, it was Atlanta. Everybody was in Atlanta. And then I got into North Florida, and so a lot of people moved into that space and there was a lot of cash flow opportunities.
And then they moved on from Atlanta and it became Huntsville, Alabama was really, really big, and then Austin, Seattle. So those tech hubs started to catch on and then it moved into the Idaho area and Nevada. And now we’re seeing the Smoky Mountains was super popular for the last several years. But there’s absolutely patterns where everyone hears that everyone else is buying and then they all go.
And the reason I want to highlight this is it’s very easy to be the last person to the party and you don’t know that you’re the last person to the party. You could be getting into a market that’s already sort of peaked thinking, oh, this is what everyone’s doing and you’re all happy. And right when you start the game of musical chairs, they turn off the music and you get left stuck.
Rob:
That’s true and it compounds. So it’s a compounding effect where everyone talks about it. More people talk about it. Oh, I heard this and I heard it’s a really good market. So all to say, this is actually a really great side note because I really like the term, real estate investors are locusts. We totally are. It’s not like I just find a market and I’m like, I have done it, I’m a genius. I’ve heard it from someone else. I’m one of those locusts.
David:
It’s human nature, we all want to cross the river at the same time as other gazelles. We don’t want to be the one out there crossing the river.
Rob:
We want to emulate success. And that’s what I always say, emulate the greats, go find someone that you really like and go emulate their strategy because there’s a reason they’re successful. And I think that happens a lot on BiggerPockets, where we have a lot of these titans come on and it’s like, whoa, I want to just do what they did. That’s sounds good to me. I don’t have to do anything else. And so a lot of my portfolio and a lot of what I’ve done is just come from listening to the success stories of a lot of other people.
But yeah, I mean that basically all to say, I was trying to find land to build this treehouse village for our investor and he had the money lined up and we just couldn’t find land that fit from a zoning standpoint because we have to go legit, we have to get conditional use permits and engineering and all that stuff. And so it’s hard to find something for an investor at scale like that. So it was taking a little bit of time.
Then all of a sudden this deal popped up and I was like, well, it’s kind of in the same budget that the investor had. It’s not quite as wacky or cool as a treehouse village, but it is a tangible thing. Because I think when you’re working with investors, honestly, what it comes down to is how quickly can you deploy their money? I’ve had a lot of investors that they want a very specific kind of thing that they want us to execute and I’ll say, “Well, look, we can do that, but it can take five to 12 months to find that exact thing. And so are you okay with an alternative? What if I find this type of project, would you be okay with that?”
Most of the time they say sure, because no one likes to have a million bucks in their bank account for a year, you want to deploy money. If you’re a good investor, you’re trying to make yourself broke as often as possible by sending all that money out of your bank account into some new asset.
And so this investor had his money sitting and we were like, great. So we went in and we bought it and a few trials and tribulations along the way, if you will, if want to talk about that for a second, some of the hard lessons that we’ve learned.
David:
Well, you said it was 20 units, how are those 20 units actually broken up? I’m picturing a building that has a condo building type hotel, like the Hilton that you would go to and it’s just 20 different rooms. Or is this more of several different types of properties all on one location?
Rob:
Yeah, so it’s the latter. It’s a seven unit motel and those are all in the middle of the property. And it just looks like a very long mid-century modern cabin, a log cabin that’s painted that bright blue I was telling you about. And then all along the edge of the property, there are 12 tiny cabins that are, I mean, I can’t say off the top of my head, but I want to say like 200, 300 square feet. And then there are two, two bedroom cabins on the back of the property. I think it’s on four acres. And then there’s four RV spots. And so those four RV spots we’re going to eventually build out decks and put Airstreams on there.
And the reason I like this strategy, by the way, is because obviously I like glamping and I’m working on permitting a 60 unit glamp site in Arizona and I’m a big fan, but it takes a long time to permit this. We’ve been working on the permit for the Arizona glamp site now for about six months to about a year, depending on a few different variables there.
But basically, this place already has all the entitlements. So we don’t have to go and run permits for all these tiny homes or anything. It already came fully permitted. So the four RV spots are already permitted. We can just add our Airstreams on there. It’s not going to be a big deal. Or we’ll just open it up to the public to bring their RV and just make our lives a little bit easier probably.
But one of the really hard lessons that we learned was that the transition of ownership was a little bit tricky. We hadn’t really hashed out a battle plan with the seller because we were so focused on closing the deal. There was always stuff happening. As you know, deals start to fall through and then everyone’s got to be like, hey, we’re all on the same team. You really want to sell it. We really want to buy it. Let’s renegotiate. How are we going to make this work?
And so we had like five of those moments I felt like through that whole process. We were like, oh shoot, this is going to kill the deal. And then we would renegotiate and then the seller would actually give a little. And so we did that a lot and we never really formally said, hey, what’s the current schedule for guests? And when are they checking in? When are they checking out? Who are they? What’s their information? How do we get this information? What kind of CRMs are you using?
We closed and effectively the owner was like, “All right, well here’s all the logins, have fun.” And we were like, “Oh shoot, we didn’t even talk about this.” And now in retrospect, obviously this will never happen again because now anytime we negotiate this, we will negotiate that the owner of the hotel or motel that we buy stays on board for a month or two to help train the new staff and pass over everything.
This is not something I blame the seller for really, I think I blame equal parts here on both sides because I was kind of hoping that he would just want to help. This was his baby and I was like, “Hey, would you stay for a week or two and help us transition.” And he’s like, “Oh man, I really got to get back home to family.” And we’re like, “Are you sure? Because we could really use the help.” And he was like, “No. No, I’m sorry.” And we were like, “Okay.”
And so basically we did the worst thing you could do. And I hate saying this, but I am a honest and transparent person, but this was 4th of July weekend and days before we had to cancel on a few guests and they were not happy about it and I was not happy about it. And we did our best to reason with them and say, “Hey, I am so sorry. We just bought this. We didn’t even know this booking existed until we closed.” And it was that kind of thing.
And some of them took it okay. One lady was like, “Oh well, I’m going. I’m going anyways. Try to stop me.” And we were like, “Literally, no one is there.” And so basically we actually ended up working it out with her because the owner was like, “Well, hey, I keep an extra set of keys here. If you want to let her in, she can just stay.” And we were like, “All right.” I mean, even if she destroys the place because she’s not vetted or did not give us her information, we’re remodeling it anyways.
And so that was one kind of oopsie on our spot, it was just not having a battle plan for transition of ownership. This is something that’s not super clear or tangible, and so for anybody that’s working to do this, you definitely want to have a lot of conversations outside the negotiation with a seller on how to freaking run the property, because if you try to figure it out yourself, I’ve learned the hard way it’s going to be very difficult.
David:
Well, I’m really glad you’re bringing this up because, and really this is a trend in general with the hospitality industry becoming bigger in our space, hotels are a mix, just like an Airbnb is, of real estate and business. It’s not like you’re just buying a single family home and renting it out to someone with a year long lease. That’s still a form of a business, but it’s much more passive. When you’re buying a hotel, the revenue is higher because there’s more work that’s going to go into it.
So if you were buying a pure business, like you were buying a software company or you were buying a pool maintenance company, like I mentioned earlier, it would be customary to negotiate into the terms of that deal that management is staying on for this period of time to help with transition. You see this all the time.
Patrick Bet-David just sold his insurance company and part of that was he had to stay for a year to get the new people trained up that bought it because they don’t want it to immediately run into the ground. Imagine that you’re flying a plane and someone says, okay, I’m coming in to take over flying the plane, but they don’t know anything about how to fly that plane. You want the pilot sitting in the co-pilot seat for a while till they get it down.
And this is the first, from my understanding, legit business that you had bought, so I can understand it wouldn’t have occurred to you to even think about. Well, you think you’re buying real estate and you’re like, well, I’ll just have my team go out there and get it ready. This is all happening in your subconscious. And then you close and yay, and then, oh no, what do we do now? There’s no one there. I didn’t think about that. There’s no employee that’s on the property. How are we going to do any of this? Well, I need time to get it ready, then these bookings. So that’s probably a terrible feeling, just the pit of your stomach sink like, oh no.
Rob:
It was because basically my business partner/COO who runs operations, he was running this and he was really spread thin also trying to learn how to buy a hotel. So it’s not his fault. Okay you know the phrase, you don’t know what you don’t know? It’s very true. You don’t know what you don’t know. We did not know. And I empowered my COO to do this and he did really crush it. He crushed the negotiations, most of the actual coordination of all this stuff, but this didn’t really translate for both of us. We were like, uh-oh, we dropped the ball here.
And for me with the way I’ve empowered my team, it’s like, you own this, you’re running it. But when something like that happens, it is ultimately a reflection of me and my management for not having been more involved and asking those types of questions. And so that’s just a management failure that I’m like, okay, cool, I get it now. I failed there. I’ll make it up on the next one and we’re going to crush this. So it’s not anything that’s detrimental to the bottom line, but it is detrimental to the bottom line of my heart. You know what I mean? No, I’m just kidding.
David:
Well, that’s how you know you’re the right person to be doing the deal because the reason it hurts your heart is you have a standard and you miss your own standard and high standards are the hallmark of success. That’s why you want to do business with people that have high standards. That’s what makes people good at anything. Tom Brady is a better quarterback than other quarterbacks, because he has a higher standard for what he expects.
So if you hold high standards and you push yourself, it is inevitable that you will feel the way that you’re feeling right now, Rob. So I’m not judging you for that. I totally understand. I think that it takes some courage to come up and share these are all the mistakes I made with our audience. So I just want to thank you for that.
And anybody who’s listening to this is like, oh see, that’s why I would never do whatever I’m going to do, that’s okay to make mistakes. You have to make these mistakes. It’s going to make you a better overall investor and business person in the long run.
Rob:
Well, that’s why I always say you don’t become a real estate pro by everything going right, you become a real estate pro by everything going wrong. So I recognize that. And I’m far enough along this where I’m like, okay, it’s not a big deal because I’m going to be better for it.
I will say though, the reason it affected me as much as it did was because my philosophy, what I teach to my Host Camp students and everybody out there is never cancel. No matter what it takes, you never cancel on a guest because these guests made reservations. They plan their life around this, and then if you cancel on them, everything’s booked and then you really end up putting them in a bad spot. And so this directly just breaks my number one non-negotiable, but we did everything we could.
We started looking at flights. The flights weren’t going to get in time. It’s out in the middle of nowhere, so it’s not like you could just fly to Tupper Lake. And so it was all this stuff where we were like, okay, all right, it will cost us four grand to get out there. We can rent a rental car. We’ll go to this airport. We’ll go here. And then we’ll get in at four o’clock. We’ll check them in, if they check in …
And so you know that Zach Galifianakis math meme? That was us. And ultimately, it was going to cost us money to go out there and it wasn’t even going to work. We put out ads on Craigslist, we need a one day worker to help us with this stuff and it didn’t work out. So that’s okay, lesson learned.
Another thing for us was that, I mentioned this earlier, we … Oh, and also want to say to the credit of the hotel owner, we did kind of hash things out a little bit on Instagram and he was like, “Look, here’s how I felt. I didn’t realize that this is what you needed, but I’m happy to actually go back out there and teach you the systems and teach whoever you hire, how to run this hotel.” And I was like, “Great. Okay, awesome. Sorry for making you mad.” All that kind of stuff. So we squashed that bug too, because I was a little miffed by the whole scenario or the whole situation myself.
So anyways, that’s that big one for us. The next one is we didn’t have the Airbnb Avengers. We were kind of hoping that the owner had a Rolodex of all the different vendors and he did not because A, it’s really hard to find the vendors out there. So what did he do? He did it all himself for six months. He was the cleaner, the pool guy, the pest guy, the plumber, the electrician and everything.
And so I think he burned himself out so much. I think he had intended to buy it, I don’t know for sure, and then say, okay, I’m going to clean it up, remodel it, I’m going to hire my teams, and then I’m out. He couldn’t do any of that. He couldn’t hire anybody. And so he said, “All right, I’ll just do it until I find someone.” He never found someone. And after six months, I think he was just like, I’m out. This is terrible.
And again, this is just speculation on my part, because this is how we’re feeling now where it’s like, oh, there are no vendors. He was the vendor. So that was our tough thing is now we’re having to hire a full-time property manager. All good there. Our contractor’s out there, all good there.
And the contractor, it’s his job to go out to supermarkets, hotels, motels, mom and pop shops and just start asking people, asking the cashier, asking the owners of those businesses, hey, do you know anybody that’s looking for work? Hey, do you happen to know any handymen in the area? Do you know any cleaners in the area. By any chance, do you know a pool guy?
A lot of these relationships and these vendors have to come creatively. And that’s what a lot of people don’t understand about Airbnb. They think you can just go to TaskRabbit and hire everybody, which I do. I hire a lot of TaskRabbit people, but sometimes you need a human touch that an app isn’t going to help you with, and so you have to take it to the streets, as they say, to go find the people that are going to be running your operation.
David:
Or the woods in this scenario for this project.
Rob:
Right, or the mountains really. It’s actually on a lake, so the woods, the lake, the streets, all of it. So no vendors, but we’re working on it.
David:
So we’ve got a couple hurdles you’ve already had to overcome in this deal. There’s the lack of vendors, like pest control people, handyman. Hey, there’s a big rat running around, what are we going to do? You have to figure out that problem.
You’ve got the renovation that you’re walking into that’s very significant. And the lack of local people, contractors, that can do some of that work. It sounds like you narrowly avoided a big problem there, but that’s still something that’s going to be popping up in the future.
You’ve got the management issue like, okay, I bought this place and now how am I going to run it? And you’ve had to overcome that. Any additional ones before we move on, that you can share of things that went wrong, that you just weren’t expecting?
Rob:
Yeah, just one big thing and that’s there’s no roof. No, I’m just kidding. There are no automations in place at this motel, which is really big for an Airbnb business. The reason I have no issue running 15 Airbnbs is because I’ve got automations. I’ve got automated messaging, automated check in, automated reviews, automated pricing. All that stuff is all automated, and so it helps chop out 80, 90% of the work involved with running those Airbnbs.
And there’s none of that for this hotel, and rightfully so, because typical hotels, you got someone behind the counter. They go and they check you in and boom, you’re good to go. But we are wanting to make this a very hybrid boutique hotel, Airbnb experience type of thing.
So, as I said, we hired a property manager and this actually goes back to the whole, oh, it’s a job. And the thing with that campsite was there wasn’t anyone living on site and I don’t even think that was really an option because it was so far out in the middle of nowhere, even more than this hotel. Whereas this, our automation is hiring a full-time staff member to run that motel for us.
So it won’t really be like running 20 units, it’ll be like running a business that we’ve empowered someone to actually do most of the work for us. And we’ll be supporting with the bookkeeping. It’s our job, we told the property manager, we are going to do everything we can to automate as much as possible about this motel. We are going to try to automate check in. We’re going to try to automate cleaning schedules. We’re going to try to automate supply deliveries and inventory checks and all that stuff.
So you have to tell us, hey, this one thing, I keep doing it, it sucks up 40% of my time. Is there anything we can do about it? And then we will figure out what we can do to automate that. And so we told her we’re here. We don’t want it to feel like you’re managing 20 units. We want it to feel like you’re managing a couple at a time, because at the end of the day, my contractor, he’s out there right now and he had to clean 10 apartments or 10 units two days ago by himself. And I was like, dude, you are the man.
So I think with a little bit of automation with the check-ins and checkouts and with the cleaning scheduling and all that stuff, I think we’ll be in an okay spot.
David:
I appreciate you sharing that. That’s some really good stuff there. One of the cool things when you get into bigger real estate is that excess revenue that it generates can be used to hire the people to run it. You hit the sweet spot, where if it generates enough revenue, you can hire someone to do the work and make it more passive.
When you’re playing in the smaller spaces, it doesn’t make enough revenue for you to pay somebody to manage it, so you end up managing it yourself. So kudos to you for moving on that. Before we get you out of here, let’s talk about the numbers on this deal. So you said you bought it for, was it 825?
Rob:
We did. We bought it for 825 and it actually started, it was either 950 or 925. I’ll go 925 for now. And so those numbers didn’t really work for us when we first started. So we really went back and forth quite a bit. And so 825 at the end of the day. And I think I said this already, but it was amortized over …
Oh, the seller was willing to finance it, which is why we were down to do this because I think if we had to go and get commercial lending, it would’ve mucked up everything with the investor and trying to get everyone on the co-signing and everything. So seller financed and then 30% down, which was relatively hefty for us, but it was worth it. And here’s the cool part, oh man, I love this part, the interest rate is 2.75%.
David:
Yeah. That’s nice right now. That’ll make a deal work.
Rob:
It’s not like we got in right before the rise of interest rates, this was as it was all happening. So they originally, I think wanted 7 or 8%, which is, it’s not totally unfair. I actually think that’s-
David:
That’s where market rate is right now.
Rob:
And I think that’s actually pretty common for owner-financed things because it’s usually with the owner finance, you have to concede a little bit. You have to give them the price they want and the down payment they want and the interest they want, because they’re like, hey, I’m financing it, so you got to be on my terms.
So I think what it came down to the phrase that comes to mind here, it’s like, you can either have your price and my terms, but you can’t have your terms and your price. And so we went back and forth on this and effectively we bought this at an 11 cap, which is pretty good. We were really happy with that.
And after our budget of $800,000 to renovate this place, we’ll be all in from a cash standpoint, 1.1 million, but if you’re talking about the actual total price here, we’ll be all in at, I don’t know, like 1.7 for this whole property. And we’re hoping that rents will be in the neighborhood of about a million dollars gross with a net operating income of $750,000.
David:
Oh, that’s solid.
Rob:
Yeah, it’s really good. That’s best case scenario, pie in the sky. If I come out there and I do my thing and I hit my marks the way I usually do, that’s the best case scenario. And so obviously if we sold that at a 10 cap, it’s a pretty good deal.
David:
Appreciate you sharing the details. Is the plan to sell it? Is that what you think you’re going to do once you improve performance?
Rob:
It is hard to say. I mean, right now we have that balloon at three years. So it would make sense to either refinance it or resell it. I don’t know. I don’t know. If I sold it, let’s say we sell it for seven mill or something like that at just a 10 cap, then I got to figure out what to do with that seven mill, go into the next thing.
So I think I would like to maybe just ride out the cash flows on this. I think the $750,000 net operating income between me, my partner and the investor will actually be pretty good. It’s a nice little cash flow thing. So we’ll see. I mean, everyone always says, oh, I’m going to hold it and then they get a really juicy offer and it’s like, all right, I guess I’ll sell.
But for now, theoretically, I think I would like to add to the cash flow of my business because I have never paid myself from cash flow. I always reinvest it. So I’d like to think one of these days I’ll actually pay myself for all this stuff.
David:
Well, the cool thing with a property valued as a commercial deal, like this one will be is that you win in two ways with cash flow. A, you just get more money, which is always good and you increase your return, but B the property will be valued based on the improved performance of the cash flow. So if you decide you want to sell it, it’s not like you gave anything up. You actually made it worth more by focusing on improving the cash flow. So it’s kind of a win-win no matter how you look at it.
Rob:
Yeah, and then just the apocalyptic kind of nuclear scenario. And this would really just be, I mean, if we just really didn’t change much, it’s I think about a half a million dollar gross with the NOI of 250. And so we’re going to really design this. I mean, this is going to be a very boutique, aesthetically-driven, beautiful property.
We’ve met with our interior design designers on it. They’ve presented the mood boards. It’s going to be a whole different property by the end. So I’m pretty confident that we’ll hit our marks on the investment side. But honestly, any scenario from the 500 to the million dollar mark for us on the gross revenue, it’s a pretty good scenario for us.
David:
All right. Well, thank you for sharing that. Thank you for sharing some of the obstacles. Thank you for going into such amazing, beautiful depth on this deal. I learned a ton listening and I’m sure everyone else can say the same.
If you guys enjoyed this episode, or if you want to know more about this deal, first off, go to BiggerPockets’ YouTube channel and leave us a comment. Let us know what you’re thinking as you hear this. Rob, if people want to get more intricate detail about this, where can they find out more about you?
Rob:
So I did a YouTube video on this, on the Robuilt channel, it’s called, I Just Doubled My Airbnb Portfolio Overnight, which is another cool thing that I didn’t really talk about, but 15 units, bought a 20 unit motel, I got 35 just like that. Over the course of one month, I doubled my short term rental portfolio.
And that’s a really cool thing to be proud of. I think I’m like, okay, that’s cool, I did it. Because I worked so hard for five years, and then in one month it all changes. So you can go to YouTube and you can watch that video, give it a like, shoot me a comment. And then you can find me on Instagram @robuilt. What about you
David:
Follow me @davidgreene24. I have a very boring name, but that makes me easy to find. And let me know what you’re thinking. You can also message me through that BiggerPockets system. I do my best to try to keep up with that.
Rob, this has been fantastic. Really appreciate you sharing all this stuff. I’m going to let you get out of here. This is David Greene for Rob hotel, motel, Holiday Inn Abasolo, signing off.
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