Scaling to 6 Short-Term Rentals in 13 Months Using Every Financing Trick in the Book

0:00So, there was a point I think I had the second property where I have a contractor that I work with now on every property and my cleaner turned project manager because she's like amazing at it. So, we were sitting in the courtyard and she turned to me and she said, "Hey, you know, insert Southern accent here. I can't do it. Don't have all these houses feel amazing." and she's like, "You know, when you go to these — — like I'm trying. But, you know, she said, "When you go to these houses, aren't you like, 'Wow, I have all these houses?'" and I somehow I said really quickly, "Well, these aren't my houses.

0:39Each one is a business that's decorated like a house." And then I had to stop and think about, why did I even say that? And I think why I said that and why that's important is because it really you have to look at each one as a business. So, not only does each one operate its own P&L, but you're removing the emotional attachment of having a house, like a domicile. You know, so that you can make data-driven decisions. And it allows you to test, pivot, optimize without getting attached to how it's always been in your houses, you know.

1:14So, you have to think of it as a business, but a business that is guest-centric, focused on the guest experience. You are not the house. You have the house or the business. And when you think of it that way, you can think, you know, very business-minded. How can you make these decisions without emotional paralysis? How can you even down to decorating, I I probably would never decorate my own house the way I do for these STRs. So, you know, what does that look like?

1:44And you know, basically, you know, you can receive criticism on, you know, the way that a particular house is set up or, you know, anything like that without it being criticism of your worth. So, you're separating yourself, identifying this as a business, and it's not your identity, basically. So, once I realized that I had separated myself emotionally because I you know, when I'm looking for primary residence, I've got kids, and I'm like, oh, I want this and this. This is totally different.

2:16So, you know, when deciding on what property and again, the first one was more like I told you, my husband's I I've been looking and then my husband's like, how about Augusta? And I'm like, how about this exact house? So, that one kind of worked out like that. But, you know, I One lesson I learned from corporate America and this answers your decision-making process question. You have to think about who are you and what do you stand for? So, same in any corporate job, I learned this from leadership training.

2:47It's, you know, what are your values and commitments as a person and an operator and just knowing that, you know, you are the leader of this organization and how you think about things and what you stand for and who you represent really affects the entire morale of the organization beneath you. So, your team and your guests. And so, I had to think about okay, who am I in this situation? And I came up with some like personal motto, like I'm an intentional entrepreneur who communicates consistently, committed to providing amazing experiences, you know, finding and supporting the right team of people.

3:28And I was thinking, okay, who do I who am I? I'm communicator. I am you know, committed to providing detailed and eclectic experiences, not generic properties. And I'm committed to finding people who see the vision with me and who have ideas as well. So, I came up with like, who am I? And then, when I saw the houses, I could rule them in or out because did they represent what I stood for and what I was looking for? And so for me I feel like Stansbury shapes those decisions.

4:01So I was intentionally looking for something that had or could with the right paint have a good curb appeal. I studied competitors like like I said relentlessly. So I wanted it to be very different. So I was looking at you know obviously bedroom count and actually I was looking for one level mainly because of the way it's so hot in Georgia that the air conditioning you know I started like pivoting on like you know I was looking for in terms of like plumbing and electrical and like roofs and all of that.

4:33But you know curb appeal what does it offer? Where is it? And then of course the numbers and is it is there an ADU? Is there opportunity for multiple income streams? There's one property that I have that recently I decided could also be marketed for events when it's not being rented. So it just has a two houses like main house and an ADU and a very very private courtyard where we put a bunch of games and a pergola.

5:04So that's just you know for events. So I was looking at it from the guest experience standpoint but also the numbers had to really make sense. — Yeah. That is that is awesome and I love how you described each one as a business which kind of takes takes that emotion out of it and I can't tell you how many times I hear people say well on my first one I'm okay if it just breaks even because I just want to get experience you know and and or you know I like they justify a bad deal and it you would never justify like I'm going to go and start a business that I know is not going to make any money but it's okay because you know I'm going to put all these hours into it do all this work, but it'll just be for experience, you know, while I starve to death, you know, it's like

5:53It needs to it needs to be profitable at the same time, and all those components that you thought through in terms of functionality, guest experience, and the numbers, they all they all play into the numbers, you know, and making sure that the numbers make sense, but I think that's such a good framework of of like each one has to you can't like have a bunch of bad like a lot of people are like, well, once I get to scale, then I'll make money, you know, once I have a whole bunch of them, and it's like if each one loses money or just breaks even, you're going to have a crappy portfolio once you get to scale.

6:27It's not like all of a sudden, well, now I have 10 of them, so now they make a lot more money. It's each one individually has to do really well, and then eventually you have a portfolio that does really well. So — That's that's very true, and you have to also take into consideration something could go very wrong. — Yes. — Like I had plumbing, with one with a property, and so if you're just sort of like adding mediocre properties to your portfolio, per your point, and then something goes wrong with one of them, you know, it could be a disaster. So, each one has to be very intentionally decided upon, and removing the emotional attachment, like I feel it is so different from your primary residence, because you can be like, okay, well, I guess the kids could share a room in this case.

7:11You you can't make concessions like that. It has to really be you know, right on almost every level before you purchase an actual house for your portfolio. I I definitely agree with that. It can't just be like, oh, well, I hope enough of these will work out, you know. — Yeah. Yeah. And and well, and not to open up a old wound, but I'd love to hear more about the issue that you had, so that people can learn from that, and you know, again, to your point, like this is why you want to make sure that there's a lot of cash flow every month worked in because you will have issues that come up.

7:45— Yeah, so the property that actually generates the most amount of cash flow had kind of a significant problem. It's It was a 100-year-old house and you know, I didn't really yeah, I mean you you don't really anticipate kind of everything going wrong, but we had a plumbing issue that caused literally water to fall down from the ceiling and I was running around like, "Oh my god." So, [gasps] it was really crazy and destroyed a lot of, you know, the house. And so yeah, then it was sort of just a cascade of things as a result of that.

8:19And so, you know, we had to factor in the repairs. And it was a quite a big setback, you know, because again, you don't anticipate something this large happening, but luckily, because it does generate a lot of cash flow, you know, we were able to eventually recoup our our losses and make sure the plumbing is like rock solid moving forward. But we had to redo all of it, like the entire house. Yeah, and down to the sewer and the I learned a lot about plumbing.

8:53And the various things that can go wrong in a house. So, I would just say for your listeners to just, you know, don't be negative or something, but just, you know, make sure you're keeping that in mind that you either have an extremely good inspection or a secondary. You can actually get a secondary inspection on a property if it's an older house. And you just factor in that there's going to be potentially a few things that you have to repair, fix, modify, build, you know, from HVAC if it's in a really hot area to the roof if it's a rainy area.

9:28So, I mean just think about these things going in and make sure you're, you know, dissecting everything you can when you're looking at a property. — Yeah. Yeah, 100-year-old houses or 100-plus-year-old house. We We own most of ours are are that old. But it's always like I I either plan to gut the whole thing or we are doing a super thorough inspection because, you know, all that original stuff that was installed, if it's still remaining there, it's going to be a major nightmare. So, yeah, and then water, to your point, like I think water is the the most costly thing for any property owner.

10:06You know, it's like supply lines, drain lines, water in basements, water, you know, leaking through roof, like just water in It's so damaging. — Water, yeah. — Yeah, it can just happen like, I mean, if you own a property, there's so many different ways water can cause problems. So, it's like thinking about water and how, you know, all the different ways that it can cause damage and just making sure that you try to mitigate it as much as possible is a great lesson, I think. — Yeah, definitely. — so, one of the hardest parts, I think, for for most business owners, especially for for short-term rentals, is, you know, just managing people.

10:46And you've done such a good job with building your boots-on-the-ground team despite being remote, you know, across the country. I love listening when we had dinner together about how you manage this and some of the interesting experiences and stories that you have just working with people cuz everyone's got different personalities and different backgrounds. And so, what was your approach to creating a team from scratch in a new market? And I assume your recruiting background probably helped with this too. — Yeah. Yeah, it turns out it did because, well, recruiting is constantly, you know, identifying people's skill sets and where they are happiest being, you know, what they're happiest doing.

11:31And what a person's doing may not be what they could be doing. So, for instance, my cleaner is the most detail-oriented person ever, and she's amazing at response times and project management. So, I identified that, hopefully a little bit from my recruitment background, and said, "Hey, what if we pivoted to this role?" And so, my approach to building a team, I didn't even know I was going to build a team, to be honest. It was done in a I don't know.

12:01I think part of it is I got lucky. But, I also failed a lot in the beginning. I tried to find, you know, good contractor. I tried to find a good interior decorator, and I met some, you know, interesting {slash} questionable individuals. But, once I met like the right person, you know, and you know, for me it was about identifying, well, what is this what motivates this individual? Like, why are they doing what they're doing?

12:33You know, what kind of person are they, and how can they benefit your endeavor while you, you know, are mutually, you know, giving them the business, and how can you make them part of it? So, I think I mentioned in the beginning my the way I do one thing is the way I do everything, or any that goes for anyone. And so, I always try to include people on the vision of the project, but get their input also, because there's ideas everywhere. So, when you're including people, you know, in the North Star, or in the vision, and asking them their opinions, and ask them, what do they see?

13:13You know, then they become more, typically, involved and passionate about it. And so, for me, after I met a few interior decorators, I finally landed on one. Her name is and I noticed her gift is taking 100 random ideas and whether it's inspiration from Airbnb or feedback from the guests or conceptual direction from me, and she can make it really cohesive. She doesn't really execute, she elevates.

13:46And so I might bring her very disconnected ideas and somehow she finds the thread that ties all together and she gives structure to inspiration. And she's just really, really good at it, but I went through a few people and the design part is very important to me and providing experiences. And so I needed someone who could get that and take my crazy ideas because I feel like sometimes I really have them and she needs to like translate that into, you know into something that is that, you know, communicates that vision or those ideas.

14:30And then I met Billy who is brilliant, high IQ, high EQ. He is a contractor. He he thinks about design, also flow, guest experience, and the why behind decisions. He asks great question. He's someone that I brainstorm with all the time. And he's also very funny, and that matters because you're constantly I mean, the amount I'm scaling, I'm working with these people all the time, like just going from one to the other to the other. So he Billy is genuinely interested in creating something excellent and not just getting paid and moving to the next job.

15:05Like he has amazing ideas. And I honestly I listen to like 80% of them because it they're really amazing. And then Aaron I mentioned, she was great at project management. So she's inherently motivated due to life circumstances and she's laser-focused on achieving success for herself and her two kids. And Billy and Aaron work really well together. So, we have I've all these text strings with everybody, and then there's an individual named Ryan. So, he works in cybersecurity. He loves to install ring cameras and lights of all kinds and TVs, door locks, and he's inherently motivated by verbal appreciation.

15:42So, he'll send me pictures, "Look, I just installed the camera, you know, at this angle." Like, "That's fantastic. You can really see everybody coming to the door." And, you know, all the TVs, and he has great ideas about all the IT things. So, you know, and he works well with everyone. And then there's Lawson, the handyman. He kind of reminds me of a character on a sitcom. Hard to explain. Really hard to explain. I really — — If you met him, you would think that that's very accurate. He loves getting into the weeds of whatever needs to be fixed.

16:15And so, plumbing is in that, you know, category. And he just goes in and yeah, shows up like like a character on a sitcom. And then there's Donnie the painter. I don't think he's ever said a word. He I've never actually spoken with him. We — — We kind of communicate telepathically. No, he just loves painting interiors and exteriors. That's he paints paints for I mean, ev- like loves painting. So, — with me. Just let me paint. — Paint, yeah. At like this point, and he'll paint. And so, I realized that I had this team, and you know, we would all kind of have team meetings, and you know, how does one what one person's doing affect the other?

16:57So, Billy will finish like building out a bar area, and you know, have ideas on the floors they should be acid stain, whatever that, you know. And then Lauren, who's the interior decorator, will collaborate with him and say, "No, no, no, I think it needs to be vi- you know, whatever that is." And so, how can everyone work together? But I do feel for me that I need all these people because you know, that's kind of the foundation for how this all works. So we just go from one to the other to the other to the other, which is why I've had all these houses in one market.

17:29Although I am considering moving to another market at some point, but I don't know because I have such a great team. So I'm like I don't know how that would work, but I'd have to rethink about that. But I think like identifying people's strengths and how do they collaborate with each other creating an a star and seeing what their visions are as well and then just like frequent communication and again, capitalizing on what they do best. So that's how I eventually formed a team and again, there were a lot of people in and out throughout the process, but these are the people that I landed on.

18:02— That's amazing.