Low cost, turn-key 2-unit with over $2,000 net cash flow

0:00by far the number one reason you know we we get bookings is for people attending some kind of event at the catalog Arena so for those who are are unaware Battle Creek is where catalogs was founded and also post as well so the nickname of of Battle Creek is serial City USA and so so one thing that cogg built there is the cogg arena it's just a multi-purpose arena for kind of honestly anything so we've had people show up because they're attending a pool tournament at the kog arena an arm wrestling championship religious events you name it I mean there's so many things that go on at that Arena and that's definitely the number one reason that people are are coming to our property so that's that's been great and there's events there year round too so that's also helpful

0:49number two was actually kind of a surprise I was not expecting this one is golfers so there's about 15 different golf courses in the Battle Creek area either directly in Battle Creek or like just outside of it and we get a ton of people coming to golf at Battle Creek so so unbeknownst to us you know it's a it's a golfers Paradise I suppose and some of them actually even come up for for professional tournaments as well and then I would say number three we get business Travelers so like I mentioned earlier you know Coggs is there so we get some people coming there we get some medical professionals as well we've had some contractors just doing work in the area so you know a decent number of of of traveling professionals and then I would say the third sorry fourth reason here would be weddings right now actually for the fall that's

1:38been our primary Drive of people coming in this month and also booking for next month in November attending weddings in the in the Battle Creek area and you know a few I want to say that this is yeah I would say this is definitely number five but I mean some people are just coming to Battle Creek for vacation right so we had some people actually come all the way from Ohio because they wanted to check out the biking and hiking trails in the Battle Creek area which there are a ton of and they're extremely beautiful you know my wife and I were were able to check them out when we were visiting there back in June we had some people that came over the summer because in the summertime there's a baseball league in in in well in several parts of Michigan but the team that's located in Battle Creek is the Battle Creek battle Jacks and people love to go watch the battle Jacks you

2:26Know come come from all over the place just to attend those games and so yeah there there actually are some people again it's not certainly not a majority but they're actually just trying to go to B Creek just to have a good time yeah yeah and it's so funny because I run into this same sentiment over and over again like with with people you know in the program or who kind of get into this this style of investing where they initially kind of a lot of people feel like with short-term rentals I need to be next to Disney World I need to be next to you know some you know huge National Park or next to the beach and you know my what I highly recommend to people is to invest in these lower cost areas just outside of the main attractions but still have

3:15local draws and so over and over again I hear people be like I never would have expected there'd be so many people coming for this reason or that reason but it's so affordable for just about anyone so you're going to get people who travel just for any random reason but then you have these local draws that you didn't expect like the arena and the the battle Jacks and you know these different things that are just local attractions that bring people in and work and stuff like that so I think you followed the model and picked a location that perfectly aligns with with that structure where it's super affordable but yet it increases your nightly rate and occupancy by having these local draws in a really you know a decent population it doesn't have to be a a massive City so I think that's that's fantastic

4:03Yeah and and to add to that you know I I would say cuz I fell into that same trap too so so like I mentioned you know earlier in our conversation you know investing in short-term rentals was nowhere on my radar initially because I had that initial same feeling that you have to be you know in those super competitive markets you know Joshua Tres and like that and I was just like I just don't want to do that it sounds super stressful it's super expensive and stuff like that and I think part of the of the Trap that people fall into to and is you know because they're they're referred to as vacation rentals and so when you hear like the word vacation your mind kind of automatically goes to a lavish vacation like a really big vacation right but you know people make small trips all time right year round and I would actually say there's more people making small trips than there are people making very large trips right and so there's this whole Market that you can

4:51serve that is out there and and most people are kind of ignoring it and it's it's an amazing opportunity yeah yeah that's a great point and you mentioned Joshua Tree you know if to your point like if if you are investing in in an area like that you better be on your game because there's thousands of of short-term rentals there and the average one has all the top amenities like it looks like a super luxury high-end vacation rental you know we'll post we I'll put links to your your listings in the show notes so if you're listening to this and you want to check out of our listings they're awesome they're I mean they're they they pop they stand out you did some I can tell you're a digital marketer you did some cool digital marketing

5:40stuff with it with like creating a logo for each property and and putting that on there but you didn't I mean you said you spent $30,000 to update these like it wasn't like you put in every amenity it's not like there's a laat pool in the backyard or you know pickle ball courts or something like that it's it's a two unit property but it it pops because you followed a system and you have some professional pictures and you did you check some boxes that made it look really nice but you're also top of the rankings on Airbnb because the comp the competition just nearly isn't as high as as you know all these mainstream areas that people flock to so that's another side benefit to investing in in an area that's that's a bit more affordable as well so

6:28Yeah and I don't I don't know if this is something specific to my area or the Midwest in general but for the competition that does exist I would say over 50% of them they're doing the bare minimum on their property right they they they they get like the cheapest Furniture possible and it's very extremely too minimalistic I would say and they're taking photos with their with their phone and and that's about it right and you know so if you just do a little bit more than that not only is there less competition you know in general but you're already just doing better than the competition that currently exists there yeah yeah and I think that is common in these smaller markets it's just yeah you just don't have that level of competition it's a lot of mom and pop people that kind of just wake up one day and they're like I want to try out Airbnb

7:18so the bar is not super high I I think a lot of people also are curious around how you finance a property like this so what what was your strategy for that so this one we just went the the conventional loan route you know we I I thought about you know maybe going you know the DSC route and using private money but that was all new to me and you know again you know first property long distance a lot of stress that is very overwhelming at the beginning and I was like you know what I'm just going to stick with what I know and and you know at a future date I can kind of learn some of those other methods so yeah we just went the conventional route we paid for the down payment you know we we paid for the rehab directly ourselves you know my wife and I we had saved up some money over the years and so that's that's the route we took for this one that's great yeah

8:06yeah and I just tell people that like if you're working a W2 job and you can qualify for a second loan conventional is going to be the best terms you can get so might as well go that route initially and then you can get into more creative strategies as you go how much did you pay for your Furnishings what does it cost to furnish a to unit property like this we paid just over $20,000 I want to say came out to like 20 $2,000 or something like that yeah so so it wasn't an overwhelming amount either okay cool cool yeah I mean that's I think that's right on par with what you would expect and how now now you mentioned you visited for the first time after it was already furnished and listed so I think a lot of people would probably wonder how the heck did you get it furnished yeah so I came in contact with

8:55someone who actually specializes in Furnishing short-term rentals I was introduced to her through the seller of the property so actually that's one thing I didn't make super clear so the person that was selling this property was also the the realtor so he was the listing agent he and he he was the owner as well so he bought it made some upgrades and and then he was selling it so so I asked him initially I'm like hey is there anyone that you happen to know that you know specializes in Furnishing short-term rentals and you know being a small town I'm like I'm he's probably going to say no but lo and behold he's actually yeah I actually do know someone so he introduced me to to her and she was really really fantastic to work with she has a great eye for design very simple to work with and she was able to handle everything I mean honestly I kind of just told her you know what what we were looking for

9:43we knew we knew we wanted the properties to be themed so our you know the themes that we came up with was that the downstairs unit is the the great leges Hideway and then the upstairs unit we call the Mediterranean Oasis and she worked with those themes and and she absolutely nailed it and when when you know people leave our reviews 95% of them like that's the main thing that they talk about is just how you know beautiful and well furnished the property is yeah yeah and for $22,000 like a lot of people feel like I don't know how to design so I can't get into this I I don't know I'm I'm not like a you know creative person or they're like I can't do it remotely you know because I I need to be there and I need to be the one assembling furniture and stuff I can tell you that part of the job sucks my wife likes a

10:31lot more than I do but you don't have to do that like lean into somebody who actually is trained experienc has done this before and they're probably going to be way faster the the product is going to be way better and it's going to alleviate a ton of your stress so I love that that you did that you know home stagers designers they're they're really good at this so I think that's a a really smart way to approach it and then so it's all set up and then you know your listings are going live what about managing it a lot of people will ask me about you know how do I manage a property you know they think they just assume that you need a professional manager that you pay 20 to 30% to to manage the property but you're actually managing it yourself correct that's

11:20correct yeah cool what does that look like yeah it it's honestly pretty simple and and actually by the way you're you're right I I had the same feeling too I'm like oh is going to be so far away I'm just going to have to hire someone to do it but you teach right a lot of great systems and processes that you can Implement and after that you know it's actually pretty smooth saing so yeah there is a lot of initial upfront work but once that work is in place it's really smooth sailing so you know for for entries you know we use some digital locks that we can control with our phone so every single time someone new checks in then we can update the the the key codes for that all the messaging that we do is through the Airbnb platform and we have automated messaging in place there that way when someone books they get an automatic message when they check

12:09in they get an automatic message when they're about to check out they get an automatic message right so it's not like us manually sending messages you know all the time that probably would get super super overwhelming and you know of course then if they have any specific questions you know we'll we'll answer answer them directly in the app as well and then we have a handyman that we got in touch with with that you know anything that needs to be updated or addressed you know we give him a call and he's super fast and responsive so I just shoot him a text message I'm like hey can you take a look at this and you know he's like usually there the the very next day and then we have a cleaner that handles all the cleanings for us so the way we do it with her is that we just put all of the bookings on a Google Calendar that we share with her so where it's not like we're constantly sending her text messages like hey please clean this please clean that right she just knows when someone's coming

12:57in coming out and so all she has to do is then send us the the request to pay her which we which we do through cash app and so yeah it's it's very simple smooth saling when it comes to to managing it from a distance actually wow and how many additional ad how much additional software do you have to have for that what are you using to manage it I mean no no paid software so so like you know we're we're we're doing everything through through Airbnb and then you know like I said said with the I guess I guess when you can technically say a software like I said we're using Google Calendar with our cleaner which is which is free and then and then we're just contacting our handyman and our cleaner through text message and and and that's that's pretty much it so so nothing extra that we have to pay for you know obviously there

13:45Are a lot of you know short-term rental softwares out there that you can pay for and I'm sure they're fantastic and I'm sure that once you reach a certain level they actually kind of almost become a requirement but for your first property you don't need any of that right any everything can be done through free free software for sure I love that and I I think there as you said there's so many so much software out there like it's people will spend weeks comparing a back-end property management software that they feel they've been sold that you have to have if you're going to manage especially from a distance you know and the truth of the matter is I think it actually hurts you to go through the whole process of trying to set that all up and you know get real sophisticated and and try to

14:34Over complicate things from the start like you know I I've been a huge fan and this is how we grew is grow organically as needed you know every stage of your business is going to require something different so don't bury your head in the sand and say well I'll never use any paid software at some point it might make sense but for your first one like you're making three grand a month of of additional income with without a single bit of extra paid software on top of airbn just using the Airbnb app alone to automate 90% of it so that I love that that that makes so much sense so I guess I'm curious how investing in short-term rentals has impacted your life so far like is has it changed anything in in terms of your dayto day

15:23or your your life overall and then also I guess what's your what's your goal from here where you yeah I mean so it's it's it's it's really opened up my eyes you know to be to be 100% honest so so it just almost feels like the the possibilities are are Limitless and you know right now our main goal is to get to a point where we have enough short-term rentals that are covering all of our living expenses that way everything that my wife and I earn it's just you know the cherry on top right we can either spend that we can invest that you know that's kind of goal number one and you know with long-term rentals I don't I don't know how many long-term rentals you would have to own to to get to that point I mean I feel like you'd have to owe them like 30 40 50 I don't I don't know

16:12and so so you know initially I never thought that you know a year into my investing Journey that I would already be thinking about oh how can I how can I you know get enough real estate Investments to cover all of my living expenses but I'm already thinking about that and it's it's it feels possible feels very feasible you don't don't need a ton of properties I mean honestly you know we're working on our second one which we we can get into more details in just a second but you know I think after a third one if it has similar numbers like we'll be good in terms of hitting that goal and obviously then we can hit you know hit our next goal whatever whatever that might be beyond that but you know that freedom and flexibility and knowing that's all possible is just really empowering it's exciting and you know it's it's a journey that I'm so grateful that I've been able to to go one