\n<\/p>\n
Want to retire with rentals<\/strong> so you can buy back your time and travel the world<\/strong>? Despite a successful 35-year engineering career, today\u2019s guest was still financially dependent on her nine-to-five\u2014until<\/em> she pivoted to real estate investing<\/strong><\/a>. In just four years, she has bought four <\/strong>rental properties<\/strong><\/a> and left her W-2 job<\/strong> for good.<\/p>\n When Sandy Lee\u2019s <\/strong>50th birthday arrived, she realized she wasn\u2019t quite where she wanted to be in life<\/strong>. At a crossroads in her career and still needing at least another five years at her current job before retirement, Sandy was ready for a drastic change (and a new challenge!)<\/strong>.<\/p>\n Now, with four short-term rentals<\/strong><\/a> and a highly profitable real estate business<\/strong><\/a>, Sandy has officially retired<\/strong> and designed her dream lifestyle<\/strong>, where she gets to travel throughout the year while spending only a few hours per week on her real estate portfolio<\/strong><\/a>. Whether you\u2019re starting in your 20s or 50s<\/strong>, it\u2019s never too early or too late to invest in real estate, and Sandy is living proof!<\/p>\n Dave Meyer: Ashley Kehr: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Tony Robinson: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Sandy Lee: Tony Robinson: Ashley Kehr: Tony Robinson: Sandy Lee: Ashley Kehr: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Tony Robinson: Ashley Kehr: Tony Robinson: Ashley Kehr: Tony Robinson: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Tony Robinson: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: Sandy Lee: Ashley Kehr: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n
Hey everyone, Dave here. Today on the feed, we are publishing an episode that previously appeared on the BiggerPockets Rookie Show. It\u2019s the story of investors Sandy Lee from Houston, Texas. Sandy didn\u2019t start investing in real estate until she was already in her 50s, but she was still able to buy four properties in just four years and retire early from her day job. So here\u2019s rookie hosts, Ashley Kare and Tony Robinson with Sandy and we\u2019ll be back with a new episode of The BiggerPockets podcast in a couple of days.<\/p>\n
This is The Real Estate Rookie Podcast. I\u2019m Ashley Kerr.<\/p>\n
And I am Tony J. Robinson. And with that, let\u2019s give a big warm welcome to Sandy. Sandy, thank you for joining us on the Real Estate Rookie Podcast today.<\/p>\n
Thank you so much for having me. I\u2019m a fan girling over here. I\u2019ve been a big fan from the beginning.<\/p>\n
Well, we are so excited to hear your story today and the journey that you\u2019ve been on. And you actually started out with an engineering and construction degree working for two companies for 35 years. You had senior leadership roles and really a career that most people would call a success story. So what was actually happening inside the story around the time you turned 50? I<\/p>\n
Mean, I absolutely loved my career so you won\u2019t hear me speak too ill of it. I was so lucky to have it. I worked my way up from pipe stress engineering into some senior leadership roles and I loved all of those different experiences along the way. But I could see that I didn\u2019t want to live out the rest of my years in an office setting and keep doing the same exact thing that I was. So I was kind of just looking for more when I turned 50 and trying to figure out, like you said, how to get to retirement.<\/p>\n
So Sandy, I mean, 35 years is a good amount of time to invest into a career. Was there a moment at some point in that journey where a light bulb went off or was it more of a subtle shift or a subtle realization that you need to do something different? Just take us back to that moment where you realized that maybe a change was needed.<\/p>\n
It was very subtle and I think you hit on it with the long time that it was. By the time I was at the end of my career, I had had such great roles, but I was running our private equity division. I was still helping out a litle bit on the services side, but it wasn\u2019t a role that necessarily fit any of my background or really my skillsets. Fantastic education. I didn\u2019t even realize it at the time, but it wasn\u2019t really me. And so I was starting to just feel like, I wonder what else there could be. I longed for more travel. I grew up with a mom who was a travel agent. So travel was in my soul from a very early age and I was looking for flexibility.<\/p>\n
And what about from a financial perspective, Sandy? I mean, to work 35 years, do you feel like you had put yourself in a position to kind of coast into retirement or was there something from the financial perspective that motivated you a bit as well?<\/p>\n
I was in a position that I could have stayed in the same career company industry for another five years and then coasted into retirement. I wasn\u2019t quite there yet, but I certainly had more resources and I was very lucky to have been there. But no, I wasn\u2019t ready to just hit the button and be done. Even if I was, I don\u2019t think that would\u2019ve felt great to me. I think I\u2019m the kind of person who always needs something to focus on and I was trying to figure out what\u2019s that next thing going to be.<\/p>\n
Now what were you doing before you actually bought your first property as far as getting yourself ready and how long were you consuming content like BiggerPockets and reading and listening to podcasts before you actually pulled the trigger?<\/p>\n
I feel like I was doing all of those things and for at least two years I was thinking about how to diversify my portfolio. That\u2019s really how this started. I was all in stocks. I had a lot of stock in my actual company. I was thinking about, I don\u2019t want to be so invested in the stock market. So I started going to some, after listening to you guys forever and reading books, I started going and visiting some homes in Houston, Texas, which is where I live, thinking about long-term rentals. How could I just get a few long-term rentals, sort of the bigger pockets mentality and get something else in my portfolio, but it just wasn\u2019t feeling great. So that\u2019s what led to this big two-year time span where I was just listening to a bunch of content. It kind of started in COVID and trying to figure out what I wanted to do, but the long-term rentals just didn\u2019t feel like me.
Everyone we walked into, I just couldn\u2019t picture it.<\/p>\n
So Sandy, when you say that it just didn\u2019t feel right or that it just wasn\u2019t clicking, was it mathematically like you look at the numbers and the numbers weren\u2019t working out, or was it like a fear that you had about actually pulling the trigger? When you say it wasn\u2019t working, what did that actually mean?<\/p>\n
I don\u2019t think it was a fear, though I am a single mom with one son, so there\u2019s always a fear of jumping out and doing something crazy that comes back to bite us. The numbers were fine, not fantastic. Long-term rentals are good, they\u2019re solid, but it just didn\u2019t feel exciting to me. And I\u2019m the kind of person that wants to feel excited, joyful. What\u2019s the next thing going to be and how\u2019s it going to benefit me, not just from a money perspective, but from a joy perspective.<\/p>\n
Now with this version of your story, most people decide that they\u2019re going to grind it out till 60, 65 and just work that safe career that they\u2019ve had. What made you decide that that wasn\u2019t the life, the path that you wanted to take?<\/p>\n
And for a long time, I thought that\u2019s exactly what I would do. So many of my friends have and are doing exactly that, more power to them. That\u2019s great, but I\u2019m kind of the crazy one, which doesn\u2019t sound like it when you hear about my career, but I\u2019m kind<\/p>\n
Of- Hey, you\u2019re among like- minded people. We would not do the same.<\/p>\n
Right.
Things were changing rather quickly in my industry. I don\u2019t know how much you guys knew about what was happening with oil and gas over the last 10 years, but things were shifting and it seemed like the right time to come up with a clear exit plan. So I wasn\u2019t panicking because like I said, I had resources, I had had this great career, but I started to wonder what could it look like if I didn\u2019t work in an office at all and started to just supplement that retirement by taking some of my money and putting it into real estate. Didn\u2019t know I\u2019d take all of my money in to put it into real estate, but hey, we\u2019re getting ahead of ourselves.<\/p>\n
But you talk about the safe piece, right? You said you have a son, you think about what\u2019s safe. Did you have to maybe redefine what safe looked like for you? Or how do you reconcile that desire for safety with maybe taking this bet on yourself?<\/p>\n
Well, to tell you the truth, I\u2019m not sure I\u2019ll ever reconcile that need for safety and I think that\u2019s okay. About two, three times a year, I still have to get deep into financial models and convince myself that, yep, the value\u2019s still there, the equity\u2019s still there. Yep, I still have money. It\u2019s just not in a big pile in the stock market that it used to be. So maybe it is about redefining safety and seeing it in other places, but I think it\u2019s also okay to go chase something as long as you have some sort of a backup plan, which could just mean turning a corner and doing something different, believe in yourself kind of<\/p>\n
Thing. So you said redefined safety. So how was your definition changed as someone who climbed the corporate ladder, checked all of the boxes of typical American dream, how has your definition of safety morphed as you\u2019ve gone on to do real estate full-time?<\/p>\n
Well, now I\u2019m counting on myself and that definitely took some inward looking and some deciding that I could do that on my own, but that\u2019s what\u2019s happening is now I\u2019m counting on myself. I get up every morning and I look at my own spreadsheets and my own things to do for the day. And I think about maybe how to grow my own businesses in a different way instead of going to an office, sitting down and seeing what\u2019s needed of me. They\u2019re just very different paths. I loved them both. I\u2019m having so much fun with this, but I also loved that too. It was very safe.<\/p>\n
Sandy had the career. She had the knowledge. What she didn\u2019t have was the right entry point until her son kept whispering the same two words over and over again. \u201cThat\u2019s right after this break, we\u2019ll be right back. \u201cOkay, so welcome back. We are here with Sandy and he son kept whispering ski condo, ski condo. And you know what? I hope my kids start whispering that in my ear and it manifests me to get a ski condo. But Sandy, you had spent years consuming every piece of knowledge of real estate education and you still couldn\u2019t find the right entry point that was perfect for you until COVID happened. And your son actually went off to college in Colorado. So what happened from there?<\/p>\n
Right. This is where everything changes, right? I certainly never thought I\u2019d be going to buy a ski condo, but it was about midway through my son\u2019s college career. Like I said, he was in Colorado and his friends and he were leaving Colorado to leaving their campus to go skiing every weekend. I don\u2019t know, side note, I don\u2019t know how they got mechanical engineering degrees and went skiing every weekend, but somehow they pulled that off. I guess they don\u2019t need a lot of<\/p>\n
Skiing. Or could afford to ski in Colorado while in college.<\/p>\n
Boy, do they find out cheap ways to do it. You can do that wherever you are. They figure out these college things they can do. But anyway, they had so much fun doing all of that. And meanwhile, Jackson and I had gone every year at that point for 20 years in a row to Steamboat. It was kind of our love. We did skiing every year. We skied as a mother and son. And so because we loved Steamboat so much, I laughed at him at that point though and said,\u201d No way, we\u2019re not doing that. We\u2019ll still be able to go every year. Don\u2019t worry about that. \u201cBut it didn\u2019t sound like an investment to me. It kind of sounded like a toy, but internally I hadn\u2019t really dismissed it. I started thinking more and more about it. I started going down those rabbit holes that we all do in the evenings where you\u2019re on your iPad or your phone thinking,\u201d I wonder what this could look like.
I wonder if it could pay for itself even partially with some short-term rentals because I just hadn\u2019t considered it at all before then. But boy, that rabbit hole works. And before you knew it, I was looking at properties.<\/p>\n
So you eventually end up buying a condo. Walk us through, how do you get from up late night, scrolling through on your iPhone to actually finding a property, turning it into an investment property? \u201cWhat happens in between those two steps?<\/p>\n
During this time in the market, everything was moving fast and furious. So we scheduled a short ski trip and I knew that on a couple of those days I would just walk the neighborhoods and really get familiar with what is where in the area so that I\u2019d be ready to pull the trigger when something came on the market. This was spring of 22. And so things were still really booming in the market back then. So found a couple, it took me a couple of offers to get the right one. Biggest purchase of my life, $1.3 million. I still can\u2019t say it without choking a little bit on it and I didn\u2019t see it until the morning of closing.<\/p>\n
Oh my God. Wow.<\/p>\n
So I went from safe that we just talked about to, \u201d Hey, let\u2019s buy the most expensive, most ridiculous condo and I\u2019ll see it the morning and closing. It\u2019ll all be fine. \u201cMy family thought I was ridiculous, but it all turned out just wonderfully. I had done enough research at that point to really believe in Steamboat. There were a few things happening at the resort that made me think this area is going to boom. Aspen had bought Steamboat a few years earlier. They were midway through a big expansion on the mountain where they were adding a second gondola, which was the longest, fastest one in the world, but it wasn\u2019t there yet. They were adding a bunch of land, but the ski area wasn\u2019t getting any bigger at the base. They also had just gone through all of that talk that so many towns are on the regulations and put in a bunch of new regulations in Steamboat.
So the opportunity to pick up a four bedroom in the green zone seemed a little bit infallible to me. How could this go wrong? At least I could sell it if this doesn\u2019t turn out to be our thing.<\/p>\n
Yeah. Sandy, well, you answered my first question, which was how did you build confidence in that decision? And you kind of walked through what you saw there, but if part of the initial tension that you were feeling was around this idea of safety and someone protecting your investment. And you even said it now, like saying that the purchase price, you still get caught up on saying 1.3 million. Why start so big? Why not go buy something maybe in a different market for half the price? What pushed you to such a big purchase price to begin with?<\/p>\n
Well, at this point, I really didn\u2019t know that this was going to become a business for me. I thought it was going to be one investment that would sit alongside the rest of my investments. I didn\u2019t realize you could get a mortgage that was for, in my case, I think I put 25% down on that property. So it was still a big cash investment for me, but it could sit alongside the rest of my portfolio. So I was able to convince myself I\u2019d be able to sell it. Things were still rising rapidly there. Sure enough, in the first year it went up another 25% in value. So it turned out to be a great decision even early, but I convinced myself that I could always just sell it. That\u2019s how.<\/p>\n
So you buy it for 1.3. What do you have to put into it? Well, I guess first, what strategy you\u2019re using on this? I\u2019m assuming because it\u2019s a ski town, this is a short-term rental, is that correct?<\/p>\n
That\u2019s right. It\u2019s a short-term rental. And we use it about two weeks a year, a little bit more sometimes in the off season if we want to go hiking and things, but we use it very little. It\u2019s definitely a rental. It\u2019s there to make<\/p>\n
Money. I just have two questions on the money piece here. The first one is how much are you making on average at this property?<\/p>\n
So right now, well, last year my revenues there were 135,000 gross. When I started out, they were about 80. So in that few years, it\u2019s gone up pretty material every year there and my expenses there are 72. So it started out just breaking even basically, but now it\u2019s my biggest money maker even with much more equity in some other places, Steamboat continues to be my big. If I could do it over again, I would.<\/p>\n
Your big cash cow.<\/p>\n
That\u2019s right.<\/p>\n
My second question is when you and your son would go on your yearly trip, how much were you paying to rent somewhere?<\/p>\n
Boy, that\u2019s a really good question. So this was a while back, but still cluster $1,000 a night. I mean, it\u2019s hard to get anything for less than $1,000 a night during ski season around these places. So certainly, now we get free ski trips, which is huge.<\/p>\n
You said two weeks you\u2019re going. I mean, that would be $14,000 you would be paying if you didn\u2019t have your own place. So really that\u2019s added on to the benefit, the bonus, I guess.<\/p>\n
Absolutely. So Tony asked how much I had to put into it. I did have to put some into it. We didn\u2019t talk about that. I put about $40,000 into a light remodel. I did some light remodeling on all three of the bathrooms, painted the whole thing, and then I completely refurnished it. So that was another 25,000 or<\/p>\n
So. It\u2019s actually not bad. 65 grand, you said it\u2019s a four bedroom?<\/p>\n
Yeah, it\u2019s a four bedroom. Yeah,<\/p>\n
That\u2019s a pretty good price. It was set up a four bedroom. And to be able to net, you said maybe like 60 grand a year, give or take on that same property, that\u2019s an amazing return.<\/p>\n
Yeah. I already paid that back in one year, just the rehab and the furnishing.<\/p>\n
I brought my own contractor from Texas. That was another thing. One of the things that I did really right was you can\u2019t find a contractor in a ski town, especially if you\u2019re from Texas, especially if you\u2019re from out of town. They don\u2019t want to work for you. They\u2019ve got so much work that they can do there locally. So I packed up my contractor from Texas and I asked him to drive to Colorado and do a remodel for me. And now he\u2019s done that at every single one of my properties. So I kind of love that story. It\u2019s like, find yourself somebody that\u2019ll travel for you.<\/p>\n
Does he just stay in the property then while he\u2019s working on it?<\/p>\n
Exactly. I just tell him what I need to done. He takes his son, he goes and has a vacation and works for a couple of weeks when I need him to do something. I love it.<\/p>\n
That\u2019s fantastic. Actually, we did the exact same thing for the hotel that we bought in Utah. We were having a very hard time finding contractors here locally. It\u2019s a smaller town outside of a national park. We took our crew from California and they didn\u2019t stay there the entire time because I think it took maybe three months to do or maybe four months to do that full rehab, but they would drive up from California. It was a six hour drive. They drive up every Sunday and then drive back every Friday and they would stay at the property in the meantime. But if you do have a connection to someone, I think it does help tremendously to kind of skip that part of finding someone to actually do the work for you.<\/p>\n
And lower the cost because there\u2019s that mutual trust on both sides. Absolutely.<\/p>\n
Now, given that this was your first one, Sandy, did you self-manage this? Because you were still working a full-time job at this time as well, right? Or had you left already?<\/p>\n
I was still working a full-time job and this was, if you were to ask me what my biggest mistake was, this is it. I did not self-manage at first. I hired a management company and so that cost me all kinds of money. And as soon as my contract let me get rid of that managed company, that\u2019s what I did. That was just a confidence piece and that\u2019s something that I haven\u2019t looked back on since then and try to educate other people on now of this is not as hard as you think it is. You can do this from afar that the tools will let you do it from afar these days.<\/p>\n
And you probably realize you could do it better too.<\/p>\n
For sure. And I don\u2019t like to say that too much out loud because these folks are doing their best. It was actually a fairly small company, but nobody cares about your property like you do. If you really want all five star reviews, you\u2019re the one that\u2019s going to get it there.<\/p>\n
That would be an interesting comparison to look at some of these bigger nationwide companies and gather all the reviews and see how many of them are actually five star reviews compared to individual owners.<\/p>\n
That data has actually been put together already and it is 100% verified that as your number of listings increases, there\u2019s like a direct relation to your review score decreasing. And the people who are one or two listings, they\u2019re the ones that are really at the top when it comes to review scores. When you see the people with tens of thousands of listings, the Vacasas, the evolves of the world, they\u2019re the ones that are really suffering when it comes to that. So you\u2019re absolutely right. As the portfolio gets bigger, it gets harder to maintain those review scores.<\/p>\n
Now from that first property, you went on to build distilled destination. So how did this plan evolve from one ski condo into four properties within two years?<\/p>\n
Right. So that ski condo, we branded it from the very beginning. We called it Whiskey Ridge. And like I said, about six months into it, I started to see, hey, this is doable and I enjoy this a lot. And that\u2019s when I started really thinking about actual retirement, what could this be? And then yes, in the next year and a half, I bought three more properties. Whiskey Sands is in Orange Beach, Alabama. I\u2019ve got Whiskey Hills just north of Asheville and Mars Hill and then Whiskey River in Texas and the Hill Country and Green. So have loved putting it together. It just started seeming like, how can I make this brand into something that we would enjoy? The theory was always the same vacation homes that the family could use. Both my son and I and our extended family were real close to my brother and sister-in-law and their three kids.
So how can we all go vacation together and enjoy some holidays, but also by the way, pay for my retirement along the way. So that\u2019s what this became. What\u2019s that minimum number of homes that I could do exactly that with?<\/p>\n
Now for each of these properties, did you do the same kind of financing where you put 25% down for each and where was this cash coming from for each of these down payments?<\/p>\n
For the second property, I did do 25% down and I have a really large mortgage on that one. That was the Orange Beach property. The third and the fourth were lower entry points. And just to be blatantly honest, really liquidated some investments and went all in cash on those last two. My long-term goal different than some, maybe different even than what\u2019s the smartest is to have no mortgages. So I\u2019m now in that case where I don\u2019t think I want a lot more properties. Scaling to me looks like getting rid of all mortgages in my life by a certain age. So that\u2019s the big goal.<\/p>\n
And I don\u2019t think we hear that enough on the podcast as like that as an option. It is consistently put into your brain, scale, scale, scale, grow, grow, grow, buy, buy, buy. The bigger the portfolio, the more successful you\u2019ll be. But really I think it\u2019s refreshing to hear that that\u2019s not the case. You don\u2019t need a ton of properties to retire or to cashflow or to build the life you want. And some cases you could have these four properties and make as much money as someone with 20 properties that\u2019s over leveraged on them. So I think it\u2019s very refreshing to hear that.<\/p>\n
Well, that\u2019s the goal.<\/p>\n
Well, the path would be on, yes.<\/p>\n
Right. And now in the market, as you guys know, short-term rentals have been seeing some struggles over the last couple of years and especially in some markets. The goal is going to be to stay with them, to make just enough money to get by, to keep my own personal expenses fairly low and not quit, not walk away because I have a lot of faith that in five years this is just going to be the greatest decision I\u2019ve ever made. I really do believe that. I think that sticking with it is the big key right now.<\/p>\n
And like you said, the worst case scenario is that you sell the properties.<\/p>\n
Absolutely. Go back into the market. I could even go back to work. Lord, help me. Who knows? But hopefully not. Hopefully we can just stick with what we\u2019re doing over here.<\/p>\n
Sandy, you went into a few different markets, right? You\u2019re in Steamboat. You said Orange Beach just outside of Asheville and then Texas Hill Country. Walk me through your thought process on casting a wide net versus just buying all four in Steamboat where you started.<\/p>\n
Right. It definitely would\u2019ve been easier to buy all four in one place, but my vision of retirement was to travel during the off seasons at each property and spend even months there to where we could go and do some hiking or some other things, whatever was in the area, still have that vision. Boyfriend lives here and we try to get out to \u2026 In fact, we\u2019re going to Orange Beach this weekend. We tried us to see when things aren\u2019t booked and get there. Couldn\u2019t have really done that if we had four altogether. So I decided it was worth the operational headache to have four different states. I also did not want to invest much in Texas because the property taxes are so high here. So I\u2019ve been trying to get out of Texas in a way as much as I could.<\/p>\n
But Sandy, I love that so much of your approach is really centered on what kind of life do I want my portfolio to support? And you said, \u201cHey, I don\u2019t want a big portfolio because I want to take up too much time managing, so I\u2019m making different decisions there. I want to be able to use them myself so I\u2019m going to these different markets.\u201d I love that approach, but how did you actually choose the other markets, especially that\u2019s a pretty tight timeframe. Was it just places that you already knew and liked to vacation yourself where you felt the numbers made sense or some of these markets that maybe you hadn\u2019t considered before just how did you land on all those cities?<\/p>\n
Actually, not at all. I had never even been to Orange Beach or to Asheville when I started all of this. So that\u2019s kind of an interesting aside, but the approach was to try to replicate what I had found in Steamboat. Asheville\u2019s a good example of that. The property in Mars Hill is on a ski hill where it was actually shut down, but new owners had already bought this resort and they were turning it into Hatley Point and it was going to reopen within six months of when this house was for sale. So it was another one of these cases of, I can see that this thing is about to happen and I can see that in three to five years it\u2019s going to be amazing. I\u2019m willing to jump in now, maybe even take way less revenue than I\u2019d like right now. Orange Beach was kind of the same.
Some people will call it saturated, but I see something different. I see people coming from Florida and starting to vacation in some lesser expensive places. I see the airport and Gulf Shores just having gone public. I see some different things happening there with a beautiful beach town. So that\u2019s why Orange Beach. And then green and the hill country in Texas, we\u2019re on the river, we\u2019re walking distance to the oldest dance hall in Texas and there\u2019s great concerts there all the time. So that was just more of a money play. It\u2019s kind of close to a lakehouse that<\/p>\n
We have. But Sandy, I think even taking a step back, and I appreciate the insight there, but how did you go from 20,000 potential cities in the United States to even get Orange Beach and Asheville on the list of potential places?<\/p>\n
Well, I will say I\u2019m not much of an analysis paralysis kind of person. If I get an idea and then I think something looks cool, I\u2019ll go look at it and I\u2019ll pull the trigger very quickly. I realized that the first 10 minutes of this podcast did not sound like that, but once I\u2019m in on something, I\u2019m in. So we looked at Florida. I had gone to Destin quite a bit. I wanted to maybe invest there. I had concerns about the insurance costs there and everything that was happening in Florida, even taxes. So I said, \u201cI don\u2019t know anything about Florabama. Let\u2019s go take a quick trip for a couple days.\u201d Brought my son down to Orange Beach and we just fell in love with it. It\u2019s beautiful. It\u2019s more spread out. We back up to a Gulf State park that is hundreds of acres of just green area where there\u2019s all this hiking and biking.
I\u2019m not even much of a beach person and I love it there. So I just was really surprised by that. So it was kind of the same as Steamboat. We bought a house that we loved in an area that we loved and figured, okay, this\u2019ll at least break even. And if it pays for itself, then it\u2019s doing its job and if it makes more, even better.<\/p>\n
Just really quick, I\u2019ve never heard of the phrase Florabama before. I had to Google that to- Oh, really? For Abama.<\/p>\n
Wasn\u2019t there an MTV\/TV show that looked at it?<\/p>\n
There was. That was the first thing that popped up, MTV TV show, Florabama Shore. It\u2019s<\/p>\n
Definitely the redneck version of Florida and I am right there. I\u2019m from Texas. My dad\u2019s from Alabama. These are my people. This is where I should be.<\/p>\n
I actually went to a mastermind once and stayed in one of the houses right there on the beach and it was super nice house, great light layout. Every room had their own en suite and it was beautiful beach and it\u2019s like house, house, house, house. And there\u2019s like where we were, at least there was no hotels. So it was all just residential and super nice because it wasn\u2019t overly busy. Yeah.<\/p>\n
Alabama. There you go. Learn something new today.<\/p>\n
There you go. It\u2019s worth a visit. It\u2019s pretty neat.<\/p>\n
So even in this same market, there was actually a new build community that went up with 70 short-term rental units. So you knew the risk kind of going into this, but why did you decide to buy anyways and what ended up happening?<\/p>\n
Right. I knew the risks. Well, most of them I had lost some money on a personal new build, so I knew it wasn\u2019t the smartest purchase unless I was going to hold onto it for a really long time, which is our plan there. But with a new build community, we were able to really get a vision for what it would be, get in fairly early while pricing was still good. We were one of the first six or seven houses in the community. We could pick the best lot or the best lot for us anyway, has the most land. It backs up to the Gulf State Park. Like I said, it\u2019s got four en suites in there, which we can fit all king beds, no problem, and really just make it into something that would work great we thought for multiple generation families. We were looking for how can we support multifamilies, not just mine, but also other people who would want to go visit there.
So we made it beautiful. We took a chance on it. It\u2019s stayed level in revenue, which I think for that area is a win over the last couple of years.<\/p>\n
Now I know one of the other things too, Sam, that you focused on was improving the occupancy. So I think you went from 51% occupancy in 2024 up to 77% occupancy in 2025. And given that occupancy is only one metric, we also want to look at revenues, but that\u2019s a big jump, 51 to 77. What did you do that actually moved the needle?<\/p>\n
Right. That\u2019s a big jump and it tells you, since I just told you my revenue was stagnant there, that I had to make a huge pivot to make the property work. What I really did there was really just to take a huge, fresh look at my pricing. Well, I did a few things. Let me back up. I did a remodel on the backyard to make it beautiful, put in a bunch of new plants, put some stone in, made it really nice. I put in a new bar in the kitchen area in a closet that always should have been a bar, very low cost, but just some things to make the property show a little bit nicer. But then I also took a look at my pricing and decided some of my pricing was just too high compared to the market. Along with doing that, I realized that I wasn\u2019t paying enough attention to the pricing and I hired a revenue manager.
So that\u2019s something that I\u2019ve slurged on over the last six months or so to really take a closer look at my pricing, got rid of what I call ego pricing because I was like, \u201cOh, I\u2019m never going to have a night that would be less than the cleaning fee.\u201d Well, of course I am. So I\u2019m looking at it way differently right now. I\u2019m going to have the price that gets me the most overall revenue period. That\u2019s what the house is for. It\u2019s not for anything else. So yes, higher occupancy, which I\u2019m proud of, but the revenue has stayed right at $100,000 there for both of the full years that I\u2019ve had it.<\/p>\n
Tony, you had hired a revenue manager before, right?<\/p>\n
I did. Yeah, we have one right now for our entire portfolio.<\/p>\n
How for somebody like me that has two short-term rentals, what is the process to find and kind of vet a revenue manager?<\/p>\n
Yeah, I think my process was probably slightly more unique because he actually came to one of our events and we met there and I just kind of got to chatting with him, but my process for vetting him was I just asked him what his process was and I compared that to mine. And if I felt that everything that he was doing was maybe below the level of what I would be doing, would that be a red flag for me? But As we had conversations, a lot of his approach was similar to mine and there were even a lot of things that I\u2019ve learned from him about how to really put together the right pricing program. So when we talked through and he walked me through his process, I was like, \u201cOkay, this actually looks good.\u201d And we started off, I think, by just giving him, I want to say it was just a hotel first and then we started with a few listings, then we kind of scaled up to the whole portfolio from there.
So we dated first and then once I saw some initial results, that gave me the confidence to give them everything. And now basically our entire portfolio has been up year over year since we started working with them. So it\u2019s been great.<\/p>\n
And how does the pricing look like the cost to hire a rep manager? Is it a flat fee? Are they getting a percentage of how they grow the profits? How does that actually work?<\/p>\n
We pay on a per listing basis. I would be very, I think, against anyone that charges on a rev share type model because we handed over a bunch of listings at one time. I think we\u2019re somewhere around 100 bucks per listing. But I want to say if you\u2019ve got maybe one or two, maybe expect to spend a couple hundred bucks per month or 300 bucks per month for revenue management. So if you\u2019ve got a listing that\u2019s only doing 40K a year, maybe doesn\u2019t make a ton of sense. But if you have a listing doing 100K or 200K a year, spending 300 bucks per month to really optimize that revenue makes a lot of sense.<\/p>\n
Sandy, is that the same kind of for you?<\/p>\n
Yeah, that was exactly my thinking. I mean, if I\u2019m going to spend eight to $10,000 on a revenue manager a year, but my entire revenue for my four properties is about 350,000. Is it worth it? Well, yeah, I hope so. But that remains to be seen. I\u2019m kind of early in the process. What I know for sure is that I\u2019ve learned so much more about how price labs work and some of the things that \u2026 So it\u2019s been a good investment no matter what, because I\u2019ve learned a lot that I can take from this so I\u2019m not sorry that I did it. Price Labs is a really complex and simple tool. You can either set it and forget it and still get good value out of it, or you can really go into it and do a whole bunch of little tweaks that I think AI is going to make that a lot easier in the future.
But for now, it\u2019s a really complex tool with a lot of data science behind it.<\/p>\n
Couldn\u2019t agree more, Sandy. And kudos to you for making that decision and seeing that value. Now, Sandy just told us how she nearly left money on the table and then fixed it by kind of killing the one thing her pride wouldn\u2019t let go of. But what makes your story really different is what she brought into this business from her 30 plus years working in corporate America. We\u2019ll cover that right after a quick break to hear where from today\u2019s show sponsors. All right, we\u2019re back with Sandy. Now, Sandy, you went from, again, sold right at 50 to retired just a few years later, not by abandoning your career, but by really redeploying what you learned in your career into your real estate business. I mean, you were known at work as a fixer, right? You got put on the broken department or a broken project or a broken process and you\u2019d fix it, but it turns out short-term rentals are kind of full of broking things as well.
So you said that your background in corporate, again, being thrown at something and fixing it directly translated into running your short-term rental business. Can you give us, what is an example of what that looks like in action?<\/p>\n
Sure. I think you hit the nail on the head. I\u2019d have to go into situations without a lot of information. Often it was taking over a department where I didn\u2019t have any background and go in and learn the processes and then try to make everybody happy on the customer service side and within the department while I\u2019m changing everything to make it work. So lots of different moving parts when you manage departments or come up with new operations. But with short-term rentals specifically, you\u2019ve got to have all the same skills. You need organized, clear, good operations, but you also need to be able to problem solve really quickly and efficiently in order to not let it take over your life or stress you out really badly. There was a really fun recent example. Everybody\u2019s got issues, but I had what I think is a fun one now because it came out so good.
In my Orange Beach place over Thanksgiving week, I had two families arrive on Tuesday of Thanksgiving week. They\u2019re clearly big football watchers. I\u2019ve got a big 85-inch TV, again, Florabama. So we\u2019ve got an 85-inch TV on the walls where everybody can watch their Southern football and they get there and the TV\u2019s broken. There\u2019s a big line down the middle of the TV. It\u2019s clearly just not okay. Tuesday, Thanksgiving week and they were definitely football watchers, like I said. So I learned this about 4:00 PM and I quickly went down a bunch of different paths to try to figure out what\u2019s the best way to get a TV into that house this evening and on the wall.That\u2019s hard. And I think a lot of people might just go, \u201cOh shoot, that\u2019s hard. What am I going to do? I\u2019ll fix it in the next week or two.\u201d You can\u2019t do that.
So everything I learned in my corporate business where problems don\u2019t wait and you have to solve them right away, if you\u2019re really going to be a great manager in a short-term rental world, you also need to solve problems right away. So between Costco, Walmart, Amazon, Best Buy, I found one at Walmart that worked. My handyman went and got it. He had it on the wall by 8:00 PM and everybody\u2019s cheering that this all worked out. But it\u2019s constant things like that. There\u2019s always a problem and it seems big and people can panic, let the guests know that you care and that you\u2019re working on it really hard and then do your best and then let it go emotionally. It\u2019s just work. You\u2019ve got to let it go. It\u2019s just work, right?<\/p>\n
I think one thing that I\u2019ve learned on that piece as far as the problem solving and trying to deliver customer service, and this is more coming from my long-term rental side, but that just the more you communicate, it seems like the better the issue doesn\u2019t escalate. You can keep it more controlled. And I feel like with at least long-term tenants and sometimes with short-term guests, I\u2019ve learned that keeping them updated as to what\u2019s happening, how you\u2019re solving the problem and update on, he\u2019s arrived at Walmart, he\u2019s got the TV, he\u2019s going to be there in 20 minutes. Those updating people and telling them goes such a long way. Every work order we receive, we are immediately acknowledging it that we have received it. We immediately acknowledge that it has been assigned to a contractor. They\u2019ve been called. We acknowledge, are they going to schedule it?
Will we schedule it? Every little step of the way also, it\u2019s great to have that documentation too, but it\u2019s just letting them know and keep them informed and updated because what is the most frustrating thing to anyone is when you have no idea what\u2019s going on.<\/p>\n
Right and you feel like no one cares. They need to know that you care. And so I got the best review from this guy. So it was fantastic. Everybody wins.<\/p>\n
Now you mentioned Ash, systems and processes and San Diego, that\u2019s been a big focus for you as well. Your portfolio for properties runs on just a few hours a week. I think a lot of the thing that maybe holds new rookies back from investing in Airbnbs is that they feel that it\u2019s maybe too labor intensive for them to try and take on. So you\u2019re a few hours a week on managing. You don\u2019t live near most of your properties and you\u2019re traveling constantly. So what does the actual operational reality look like and what did it take to build to that level?<\/p>\n
Yeah, absolutely. I think this is really important and I\u2019ve heard you guys talk about it so much. Having the right tech stack in place is the most key issue for me anywhere. And that\u2019s something that I did from day one. Some people might not. I think it\u2019s great if you go ahead and put that property management system in place right when you set up your property and then it does so much of the work for you in terms of messaging and controlling your locks and your thermostats and everything else. I knew I was trying for a large revenue for every property, so I just have never stressed about small software costs. Building automation into my processes has been a key for me from the very beginning. I think the software and the systems are the fun part for me also. So I\u2019ve had a lot of fun with that, but remote management to me is so much easier with the right tech stack in place.
I think that\u2019s the biggest key. Certainly the right cleaner, the right handyman. It\u2019ll work well no matter where you are. If you have a couple boots on the ground and then you have a system in place that is set to work without you. It works while I sleep is what I like to say.<\/p>\n
Now a lot of rookies are actually trying to get out of their W2. They want to escape from it, but what you\u2019re saying is actually something you brought with you. What would you tell all the rookies listening who\u2019ve been dismissing their own resumes as an investing asset?<\/p>\n
I think there\u2019s a lot around this, right? Well, for one thing, it\u2019s never too late. If you would\u2019ve told me 10 years ago that you could be in your 50s and start a real estate investing career, I might\u2019ve thought you were nuts, right? But absolutely. It doesn\u2019t really matter when you start. It\u2019s just crafting this to look like what you want it to look like. But absolutely taking those skills from your W2 or from whatever your life is and translating them to the next part of life, I\u2019m going to sound a little book-like on you, but that\u2019s just learning and improving and adapting and finding what\u2019s next and taking everything you\u2019ve learned along the way. So the further you go along, don\u2019t leave behind anything that you might\u2019ve learned there. It always translates. The leadership translates, the people skills translate, the team building translates. Certainly the operational skills, the Excel, the analytics, Tableau, all of that stuff translates beautifully to this career.
You just have to sort of know where to deploy those skills and when.<\/p>\n
Now, looking back, if you could do this all over again and what would you have changed? Would you have started earlier? Would you have only focused on fewer properties, maybe more properties? For somebody that\u2019s listening to this, what does this path look like for somebody listening right now and what would you have done differently?<\/p>\n
I think the only two things I would\u2019ve done differently is started earlier, which I think is probably not a surprise answer. I bet most people you talk to say that. I definitely would\u2019ve started 10 years before I actually left work because it only takes a few hours a week, which really surprises me. I really wish I had bought two of these properties 10 years earlier and then just let them ride and had fun with them along the way. That said, love where I am, so it\u2019s totally fine, but I would\u2019ve done that differently and I wouldn\u2019t have hired a property management service from day one. I also think you guys have talked about this. If you really get into your own first property and understand how it works, even if you decide you\u2019d much rather have it managed by others, totally fine. But if you learn it yourself first, you\u2019re going to be a better owner in the long run.
I think all of that is just really important.<\/p>\n
Last question I have for you, Sandy. We\u2019ve been talking more about AI and how that\u2019s kind of seeping into the world of real estate investing. You said that you think guests will find their next Airbnb through a ChatGPT before they ever even open the app. What do you think Ricky\u2019s need to do right now to maybe stay ahead of that curve?<\/p>\n
Right. So whether that\u2019s right or wrong, it\u2019s definitely a curve that I want to stay ahead of. So you\u2019ll get lots of stories around AI, but I am so glad you asked this one. I actually just did two YouTube videos about AI and what I think the effects that we\u2019re already seeing in the industry and where it might go. What an incredible tool. For rookies that are already operating short-term rentals, there are a few things that they can do even right now I think to get ahead of what\u2019s happening in the industry, having your own direct website with some sort of branding and a really clear description of what your home is is really going to help AI find your home better. But Airbnb and VRBO are already using AI to overlap how we used to think they were showing homes to people and trying to show the home that will get the guests to book the fastest.
It used to be about keeping people in the scroll and now it\u2019s how can we get that person with a shorter attention span to book quickly and get off the site. So it\u2019s just different than it used to be. And what they\u2019re saying is that AI wants clarity. So having descriptor words like beautiful is not going to help AI at all. They want it to be quantifiable. It needs to be amenities, bed sizes, beds and bath. Be really clear about who this home is for and say that in your listing even several times who you\u2019re trying to attract with it. Try to call out a few specifics that makes your home better than your neighbors. All of this can be a game changer. I mean, I think we\u2019re all using AI in some ways, but keep in mind that the software products that we\u2019re using are probably all way ahead of us and using it in a lot of other ways that we need to be aware of as we go through this world.<\/p>\n
That\u2019s such a great point. I\u2019m thinking about if I were to ask ChatGPT about a property, I\u2019m going to this lake and I want to find a property that has this, this, and this. I\u2019m not going to say I want it to have a beautiful living room. I\u2019m not going to say I want it to look stunning. I need four bedrooms, four bathrooms. It needs to have a deck. It needs to have a dock to the lake. That makes complete sense.<\/p>\n
And then the other thing it can do is go through and compare pictures to words. So if you\u2019re overstating what your property is, you may not be able to get away with that in the future. I think it\u2019s going to be great for the industry. I think it\u2019s going to up everyone\u2019s game a little bit. I don\u2019t think it\u2019s bad, at least right now.<\/p>\n
Well, Sandy, thank you so much for joining us today and sharing your story and all of the knowledge that you have learned from your real estate experience. Where can people reach out to you and find out more information?<\/p>\n
Yeah, so I\u2019m so happy to have been here. It\u2019s really been a joy. You can find me. I\u2019ve started a new platform STR Jumpstart is what it\u2019s called. So you can find me at strjumpstart.com and on both Insta and Facebook as STR Jumpstart, it\u2019s really a step-by-step really manual for if you wanted to get your first property or second, how you could do that. It\u2019s something that I wasn\u2019t able to find when I got into this. When I got into this, I was a litle bit scared, as I told you guys. So having that step-by-step instruction, it\u2019s got 50 lessons in there and a lot of downloads. Financial modeling is really a key behind it. So if anybody wants to check that out, I\u2019d certainly love to tell you all about it. So reach out to me.<\/p>\n
Well, Sandy, thank you again so much for taking the time to join us today. I\u2019m Ashley, he\u2019s Tony, and thank you guys so much for listening to this episode of Real Estate Rookie. If you\u2019re not already, make sure you are subscribed to our YouTube channel @realestaterookie and you can find us on Instagram @BiggerPocketsRookie.<\/p>\n