Do you ever listen to this podcast or others and feel like the host or guest is throwing around all these technical terms and jargon and really wish they would just slow down and explain things in a step-by-step process that's easily understandable?
I understand that everyone who listens to this show is in a very different place in their investing journey.And I recognize that sometimes we can get a little bit overly technical or complex in certain episodes.
So I've decided that I'm going to deliver a live masterclass. specifically for beginners who want a simplified step-by-step process for buying their first really high cash-flowing short-term rental investment.
There isn't going to be a bunch of complicated terminology and formulas to sort through, just a down-to-earth process breaking down
You know, if I were going to start over today, if I was going to buy my first rental property today, here are the basic steps that I would use to do things like identify the perfect place to invest, what types of properties to target, the basics of running your numbers, and how to set up a simple system to manage your property and ensure it continues to be a great income producer for years to come.
This is a brand new masterclass that, as I said, is going to be live, so if this sounds appealing to you, you can join me for this free session.It's gonna be on October 17th at 3 p.m.
Central Time, and you can reserve a free spot at airbnbwithkirby.com.So again, that's airbnbwith, my first name, Kirby, K-I-R-B-Y, .com.So airbnbwithkirby.com.Now back to the show.
David, welcome back to Living Off Rentals.Well, thank you, sir.For anyone watching this, we literally just recorded on my show, so I'm like, oh, long time no see.Yeah.Kind of, except for that one thing 30 minutes ago.
Yeah, we might have to repeat some stuff, because I don't want to use all the good stuff on your show.We got to get some of it on here, too.
Lucky for you, I had plenty of caffeine this morning, so I am more than willing to ramble.
Awesome.Good.Well, it's excellent to have you back today.
David runs the awesome community called From Military to Millionaire, and it was crazy because it was three years ago that he was the last guest on this show, which was while I thought it was last year, but it's been a full three years.
A lot has happened in three years in the real estate market in general.Also, I know with you personally, with your community, since you were last on.
So I kind of want to just paint a picture for the listeners and for you, if you don't remember, last time you were on, you'd been investing for about six years.You were an active duty Marine just about to get out of the Marines.
You own 20 rentals, you said, and you were doing about five wholetail deals at the time.
the military to millionaire community was growing and you said it was kind of a difficult decision to get out of the military at the time after being in for over halfway to a pension.
So I'm just curious right off the bat after three years are you happy you pulled the trigger and got out of the military for real estate investing and then what would you advise to someone who's kind of
in that position wanting to leave their full-time gig and do real estate full-time.
And it's interesting because so three days ago would have been my 16-year mark on active duty and so I did some reflecting on that when I realized like probably the first year in as 16 years where I did not think about this is my anniversary in the Marine Corps going to boot camp like it didn't even like it was the end of the day and I was like oh shit it's the 18th and
Boy, I'd love to tell you it was a resounding yes.But there are some, I guess, caveats to that.And so I would say this, I made the right decision for me with the information that I had.I got divorced about two years later.
And we were having some struggles around when I decided to get out of the military.And I tend to see the best in people and very optimistic.I saw all of the things that I wasn't doing well enough and was like, man, surely if I
you know, am home more and all these things, like that'll all be a plus and this'll, you know, bump in the road, whatever.There were some, shall we say, undisclosed goings-ons or other things that prevented that from ever working itself out.
And so I often wonder, had I known that the marriage was going to fail, no matter how much effort I put into it, Would that have changed my decision?And I don't know.Because the main reason I got out wasn't monetary.It was a lack of fulfillment.
I was no longer – I got promoted fast enough and was good enough at my job that I got stuck in billets that were not fun anymore.It was not Afghanistan and deployments around the world and travel and adventure.It was
skiff life in the headquarters for the largest command on the West Coast, which is like, for anyone who doesn't know, that's no cell phone, no windows.You've been in 13 years and you're the youngest guy in the room, not a fun gig.
Like, hey, Staff Sergeant, hey, Gunny, go take out the trash.It's not exactly the environment anyone wants to be in.I waffle sometimes on the fact that had I known the divorce was going to happen,
I could have stayed active duty, and the only real downside would have been harder to see my kid.The custody plan would have been a little different.
But I would have been able to focus all my effort into the community and serving, and it probably would have been a lifestyle I could have maintained.
That being said, the growth in the community, the growth in my business, and the lifestyle in general that I have right now would not have been possible if I'd stayed in.
So really, the only reason I think I waffled onto this is because I actually loved being in the Marine Corps, and it wasn't just the money that was why.Everyone assumes, oh, Dave reached enough money, he didn't have to serve, so he left.
No, I loved it.There's still part of me like I stayed in the reserves for two years.I actually found out that I got booted from the reserves via a Tricare notice, because I was not an every week or every month guy.
I was the you have to do 30 days once a year.And my unit had just not had a need for me.And I didn't realize it had been such a long period of time of me trying to go and I'm not having anyway.
And so all of a sudden, they were like, Hey, you kind of lapsed.So like, And at that point, you know, I could have easily jumped into another billet.I just kind of realized I didn't care.I'm like, I'm good.Like, whatever.Yeah.Anyway, long answer.
But I mean, think, yeah, lots changed, right?I got out of the military.I got divorced.I moved into my own place.
It's the first time in my adult life that I've actually been able to, like, do whatever the hell I want, because I I'm not in the military.I'm not married.I only have my kid, you know, halftime or whatever.
And so when I let my kid, I'm like, oh, yeah, I can go to that country. Oh, I can go there.I can do that. Yeah, I can, whatever.Oh, I can get high, whatever.Like, you know, it's weird.
So this has been a very, there's been a lot of growth over the last year or two as far as just really figuring out who I am.So, but yeah, it's been good, man.The community's exploded and real estate and 20 rentals back then.
I've got, I mean, it's probably like 30 properties, but it's like a hundred and something doors.And then I'm passively invested in another thousand and yeah, things have changed for sure.
Yeah.From a perspective standpoint, what do you think has been your biggest perspective shift since then?
Dude, all the things that come with building a team and like running an actual business are way harder than people think.
And I think part of that's because I'm like the high I personality on the disc who instinctively wants everybody to love him, doesn't want to cut things off when he should.Like I'm very like, worry.
I just I'm too much of a people person, people pleaser, however you want to take that.And so like, building the culture of a team, there's just a lot of things where it's been a learning curve.
Like I've had issues with, you know, I shut the wholesaling, wholetailing company down because I had a
Well, really, because you actually said it on our podcast when you were talking about flipping, you didn't say in the exact same words, but wholesaling and flipping are very similar in the fact that you have to feed the beast.
There's no getting off the damn treadmill.And that was just taking too much time away from building the community.So I, I shut it off, even though we were making, we were doing four or five deals a month and sold it to a friend and moved on.
And so really, it's been like trying to figure out how to like full time run, you know, a business with a team with whatever.
Yeah.So what does that business look like today?
We are at, I guess, two full-time employees, three, four part-time employees, and then me.So I guess I'm technically a full-time employee because I pay myself a salary.
And I mean, it's the main thing is just like free content, free value, free whatever, with a hope that the people who are like really serious about achieving financial freedom, or just having a community of vets that are crushing it in real estate, come into our mastermind, the war room.
And so we really kind of focus on building that community up, doing live events there.So we do two in person events a year and all that.And then just trying to really get my footing on what I want this to look like and, and strive towards it.
Yeah.Yeah.You put out some amazing content and, uh, you put out a lot of it too, which a lot more than most people, which is awesome.You know, I think a lot of people are like.
worried everything has to be perfect and you know you you just kind of hit record and go with it and it's your content has improved so much year over year because i think you just do it so often you know and you're not worried about oh everything has to be perfect before i hit record so i'm only going to do one video a week or something like that so so i give you a lot of credit there and i want to hear more about the war room too in a little bit here but
Going back to the the question about like what you would advise to people who are Considering leaving their full-time gig now that you're on the other side of that.What would your advice be?
Well, I mean the first piece of the advice would be don't be in such a rush that you overlook any issues and I mean basically mean that to say Like well, it's kind of a balancing act actually so I was gonna say like don't be in such a rush to get out that you leave before you are ready and
But simultaneously, if I say that, then I'm pushing the other side of the balance, which is don't be the knucklehead who stays way longer than they should out of fear.So there's like a balance, right?
Like when you see that you are consistently not needing to live on your paycheck, You're good.
I would say maybe a little bit of a buffer, but if push comes to shove, you'll be able to cut some expenses there and live a little bit less comfortably until you get back.
Simultaneously, depending on what your job is, the military, it's way harder to leave than you think, because it's not the money.It's the sense of purpose, the identity that you built in the military.
It's the people you're around, and then going to do your own thing. You're not around those people anymore.You don't have the same sense of purpose.
Your identity, for me, was tied to being a Marine for the longest time, and I had to work through I'm not that anymore.I am, but not really.There's all those issues.
I mean, looking back, the biggest thing is like, it's such a buzz to talk about quitting your W-2 and leaving your W-2 and financial freedom and like all the things.It's great.Do not get me wrong.But the greatest hack to get there is having a W-2.
Especially like, I'm a huge fan of the house hack, right?Like the buy a fourplex at the VA loan, live in one unit, rent the others, whether you
Rent them long-term or Airbnb them or however you do it live for free take all the money you would have been spending on housing put it in a index fund let it ride until you buy your next investment like that is the simplest way to get out of the rat race as humanly possible and Everybody's like yeah, well, you know But once I leave I can just buy another house back and move into it and live for free there and then that'll make it easy to stay financially free and I'm like, yeah, that's all well and good until you realize that no bank will lend to you because you
You can just bleep me out.I am the perfect example of this.I had to gift my ex-wife the 5% down to do a conventional loan on this house because they wouldn't lend to me.
I'm talking, this is my lender, the lender that I use for all my real estate out here.I'm like, bro, I have guaranteed $5 million worth of mortgage with you and three of that in the last 12 months. what do you mean I can't buy a $350,000 house?
And they're like, that doesn't matter because your taxes say you don't make any money.I'm like, that's because I'm good at this.And they're like, yeah, but you don't have a W-2.So I like literally like I'm trying to build my own house next year.
And like, oh, yeah, I have to hang on.Let me let me pay myself a salary and let me take my disability and all this.And I have like a separate bank account just to be like, that's what I make.
don't mind the million-dollar business over here that doesn't look like I do anything.This little 60k salary will get me a house.It's a whole different ballgame.
Having a W-2 and a steady income source, especially if it's a decent job, people are in such a rush to get out of it.They don't realize, at least for a while, that is the single most valuable way to reach financial freedom.
all the strategies be damned.Without that, life is harder.And so I guess I would just say, you'll know when you're ready.
There will come a day where your boss, this is literally what happened to me, where your boss is griping at you about something that does not matter.
And instead of going to your desk and griping and being like, ah, so dumb, you're going to go back to your desk and be like, screw that guy.I make more money than he does when I'm not at work.What am I doing here?And then you'll just leave.
And that's I mean, I don't know, maybe that's not the case for everyone.But like, that was literally it for me.
This guy was yelling at me and all I could and it was I can't even make this it was about something dumb, like the color on a PowerPoint, or why I couldn't find somebody who wouldn't answer their phone.
I mean, it was like, one of those things where you're just like, Normally, you'd be like, why the hell what what just happened?But instead, all I could think while he was talking to me was like, I was running in my head.
I was like, he makes this much.So what, what am I doing here?Like, I don't have to be here anymore.And then I went back to my desk.And I was like, I'm not happy here right now.And I don't have to be here.And that was it.
I went to the career planner was like, Hey, dude, I'm done.And he's like, Well, what about now? Like, sorry.And the greatest power move there is being able to look the guy in the face and say, I don't need this.
And unless I'm happy, I'm not going to stay here.
And the funny thing is, had I been at like running a normal motor pool where I had 30, 40 Marines under me and we were doing actual like convoys and deployments and training and stuff, there's a really good chance I'd still be in the Marine Corps.
I loved it.But I didn't like being a desk guy.
Yeah, no, there's so many good points in there.
And I think for people who maybe even aren't even in the military, but have a similar type of job, I agree with you, you carry yourself so much differently when you know that you've got that backup plan, you know, and you know that you've got all this cash flow coming in from another source.
whether it's risks.Yeah, exactly.Yeah.
Whether it's, you know, a boss that you, you know, before you had to kind of kiss his ass a little bit, or if it's doing something that, you know, you don't align with ethically that, you know, well, this is my only source of income for my kids.
So, you know, I got to do it, but you can make your own decisions, take risks and just be, you know, you just act very differently.I think when you step foot into a job that you're there because you want to be there as opposed to, you
you have to be there no matter what.So yeah, I think that's a great, great point.
When you think about the deals that you did in the beginning compared to what you do now, can you talk about how that's evolved a little bit and what your, your focus is on now?
Yeah, it's almost devolved.If anything, it's, it's funny, dude, here's the funniest thing ever.I gave a presentation.It was at Rubicon real estate wealth builders, Dustin Heiner's event in St.Louis last year.I gave a like 30 minute,
presentation to one of his breakout sessions about time management.And I got done with the presentation and the very first question I got was, you know, great presentation, all the normal, like whatever.
And then the real question was, when do you find time to do real estate?Because you didn't mention real estate once in this entire presentation.And I literally, I stopped and I was like, like, did I not?
And he's like, no, you just talked about your business the whole time.And I was like, odd.And then I paused for a minute.I started thinking and I was like, he's like, do you even buy real estate anymore?
Or are you just like, he didn't mean it like as a asshole, but he's like, but are you just like one of those guys who teaches now?And I was like, yeah, I was like, no, I,
I bought 130 unit hotel in December, I bought a duplex for zero down a week ago, and I just closed on a 13 single family, a vacant lot.So it's 13 single families in a vacant lot, 14 parcels, you know, like last week.
So like so far this year, those are the only three transactions I've made, right?I guess technically December is not this year, but whatever in the last 12 months.Yeah, well, I think about a couple more, whatever.
The last three transactions I did were over the last seven, eight months, but they were a hotel. duplex and a, you know, 13, so 15, 145 doors.And the duplex I own myself, zero down, I paid property taxes on it.
And that was an investment property that I just pulled some strings on to know what I needed to do for appraisals and whatever to make sure that it panned out was creative financing.And then the 13 single family homes with the vacant lot.
This is why I didn't even cross my mind to put it on the presentation.So I've gotten to a point where, like my buddy will call me and be like, Dave, I found this property.It's it's it's in the small town that I do business in.
It's 13 single families is vacant lot.They want 350.Yes, I know.It's rural Missouri.So it's like 25k house, right?And I'm like, cool, do you need he's like, we probably need 200k to take
the deal down, plus renovate all the homes, sell a few, refinance and have the portfolio, we'll probably have like eight of them left and they'll be at like 30% debt. And I'm like, Okay, let me make a few phone calls.
And so I go to lenders and investors and whatever, and I pull 200k together, then I sign on the debt, I provide the 200k, I get 35% of the deal.I didn't do diddly.I don't operate it.I don't manage it.
Last week, he called me he's like, Hey, just wanted to let you know the first house is renovated and on the market.I'm like,Like, and that's similar to the duplex.He called me the same guy actually.He's like, Hey, I got a private lender on this.
He actually needs the money back sooner than it was able to sell on the market.It's worth this.It's rented for this.So I guess I'll give you the real numbers.85 K is, or it's, it's rented for 1200.It's probably worth one 10.
He's like, I'll give it to you for 85, which is basically five grand over what I owe on it.And we can do some creative stuff. I'm like, alright, cool.So I got into it for zero down, my debt on it is 85 or 86, I think.
And it's rented for 1200 and appraised at 115.
I'm like, sweet, you know, that was I mean, literally the time in that deal, 20 minutes, the time in the 13 single family houses, maybe an hour and a half, if you count sending an email or two, talking to a couple people doing a zoom call, maybe two and a half hours called two and a half hours.
The time in the 130-unit hotel, I'm a 12.5% owner of that, which is a larger stake than most of the big deals I do.I raised a million and some change for it, and then I found some other investors to raise money for it.
I'm a little bit more time invested in that, because I help with the Google business profile.I've been to the property twice.
I help with the marketing strategy, because I actually understand the hotel game, because I do own another hotel that takes way more time out of my life. But again, that was a, I can help you solve these specific problems.I'll sign on the debt.
I want a piece, you know, whatever.And so like for me now, like I almost, I joke, it's like a devolved because it used to be real estate was the only thing I did and it ate my whole life.
And then it was, I'm a wholesaler and I want to rip my hair out of my head because I'm on fire 24 seven, but I'm making really good money and doing four deals a month.And now it's like,
Hey, look, I'm going to just completely ignore real estate until someone tells me there's a problem or that they have a deal.And if the deal makes sense and I can put all the pieces together, like I'm in.
So some of these deals I'm putting money into, like we bought five tax liens last year.Two of them paid us back.We'll find out on Monday if any of the other three do. I'm 33% of that.
And so as a collective, we have 12,000 left in three homes, and we will find out we either get the 12,000 back plus interest, or we get the three homes on Monday.And then we're gonna throw another like 10 grand a piece at some new properties.
And so it's just kind of this weird, like, that'll basically be my only interaction with that this year.And then some of them might throw money out like that.But the majority of them are I know the people with money.I know the guy who needs money.
I can vouch for him.I can vouch for them.And I know the lender that'll put the loan together.I can get the LLC formed and I'll get a significant chunk of equity and have no operational commitments.And I love that.
Yeah, and if you think about like, for most people hearing that you're involved in 150 doors in that short a period of time, they would think that's going to require 150 times the work of one, you know, if they're just new to this.
And what you described there is probably, I would almost guarantee less effort than doing a single family, you know, gut rehab flip.So
It's just so interesting to think about that and how I've seen this quite a bit with the evolution of investors over time and myself included.
You start to look at return on time just as importantly as return on investment and the things that I was willing to do in the beginning or thought needed to be done by me is just totally different now as an evolved investor.
So yeah, I mean, it's less time and effort, but yet the rewards are better.It's kind of interesting how that works.Yeah, and the stress is very minimal.Yeah. Yeah.And that's the cool thing about real estate is, is it's cumulative knowledge.
So you get a, somebody calls you at the deal opportunity and you can tap into all the experience that you have and be like, Oh yeah, well, if we connect this person here and put it all together, all the pieces together, it still can make a ton of sense for you and you don't have to be doing all the heavy lifting on it.
So that's, uh, that's awesome.
I'm curious, you know, with the community that you have and all the people that you've interviewed on your podcast and interacted with over the years, what do you feel like the biggest lesson you've learned since 2015 when you first started?
Dude, honestly, I've probably said this on like 50 podcasts now, and this applies to so much more than just real estate.It's so simple.And yet I see it every damn day.I even I just recorded a video on this.I didn't post it to Instagram yet.
I need to do that when we get done talking.But Filter the advice you receive through the lens of whether or not the person you're talking to has achieved what you want to in that specific area.
The reason I say the specific area is because when I was struggling with my marriage, I actually realized, hey, if I talk to my friend who got divorced and is now happy, he will tell me, hey, red flags, move on.
If I talk to my dad, who just celebrated his 40th anniversary, he's going to tell me about how great marriage is if you stick it out and help me.
Of course, he was also a marriage counselor, but like, you know, you go talk to someone who's been married for 70 years.Like they're not going to tell you, you should get divorced.You know, they're going to be like, it's a bump in the road.
If you love her, stick it out, it's worth it.And so it's similarly, like what I find with the real estate space or anything with like people who chase goals is
Like, if you put this in the context of let's say, hey, Kirby, you want to go be a UFC world class MMA fighter, right?Your mom, I'm making an assumption here.
So if I'm striking a nerve, I mean, the general mom, you know, loves you and wants what's best for you.And she probably doesn't know anything about UFC.
And so you're not going to go to your mom who has your best interest at heart and loves you and has your back and supports you and everything and be like, teach me how to fight.
And you're not going to listen when she starts telling you when you go to like a professional MMA coach, like, you know, you're not gonna go to like Chris Weidman or whatever and Khabib and be like, Hey, I'm taking lessons with Khabib and your mom's like, Ah, you know, I really don't think you should.
throw that hook, and you're going to be like, hey, Khabib, sorry, my mom, she loves me.She said I shouldn't do that, so I'm just not going to do that.You're going to listen to Khabib, because he's the best freaking fighter ever.
Yet, for some damn reason, when we get into real estate investing, it's like, yo, Kirby, I'm super stoked about this real estate investing.Then your mom's like, I heard you have to deal with tenants and toilets.That's scary.
Your uncle had a bad tenant once, and he got divorced because of it and ruined his life. Oh, so this person who you don't own any real estate and you heard a story about a guy who bought one rental.
Yeah, I should listen to you instead of the guy who has 30 short term rentals and doesn't have to work unless he feels like it.That makes sense.Like, it's so weird to me.And so like, I always just tell people, I'm like, look,
it is totally okay to be like, Hey, Dan Bilzerian is great with women, maybe not relationships, but however you want to look at it, right?Like he is the man, but I probably shouldn't listen to him about marriage. because he don't know about it.
Or I don't know, take whatever extreme example you want.Like Donald Trump, great at building massive hotels and towers.Don't agree with him politically.
Maybe I won't ask him about politics, but I could probably still benefit from asking him about a hotel.Like,
whatever example you want to use, like, it's totally okay to go to somebody, get the advice that you want from that person who's living that life in that role.
And then not was like, I don't know, we'll just say you've got some billionaire friend who owns all the real estate in New York City or wherever, but is divorced.
Maybe you learn from him about real estate and don't ask him about relationships.There's nothing wrong with that.But for some reason we just think we should take advice from everyone about everything.
And it drives me nuts because I see it all the time.People are like, I'm going to get started.What do I do?And I'm like, I would do these things.And then they're like, well, my mom said, and I'm like, does your mom own rentals?
Yeah.So I guess that's the thing that I would say is like, I've, that just is a recurring truth in my life.
Yeah, yeah, no, it's so, so true.And I think on the other end of the spectrum, too, even people that seem like they have a lot of experience, you got to be careful with.
I think I fell into that trap in the beginning, you know, my partners and I paid to go to
Some seminars and stuff and some of them were great and others It's this used car salesman on stage with this picture in front of his private jet Never done a deal before and he's telling everyone how to you know that he's gonna teach him if they pay him You know enough money and you know, I realized after a while of that first off do I want my life to look like this guy's life who's on stage and then also
What is he actually doing when he's off stage?And so getting super clear on the outcome that you want, you know, for your life, your days to look like, does it align with the person that you're, you're getting advice from?That's such great advice.
Absolutely. Yeah.In terms of, I'm curious about the boutique hotels, cause I'm, I'm in the Airbnb space and we've talked on your show a little bit about the difference between typical Airbnb and a hotel.
What drove you to pursue a hotel and a pretty large hotel with multiple pools and, you know, really, really nice hotel.
Yeah.So, you know, interestingly enough, one of the last wholesale deals I did, and we didn't actually wholesale it, so I shouldn't call that off market deals, was a small town about 40 minutes from where I live.
And I bought, basically I got ahold of the guy, he had a house he wanted to offload, but he was like, look, I'm done with this whole real estate thing. You can have it if you want it, but you got to buy everything.I'm like, what's everything?
And he's like, well, I have a 15 unit apartment.I have a 23 unit apartment and I have a 40 unit hotel.And it used to be a, I don't know, courtesy in or something comforting.And, um, but it had no flag anymore.He had bought it.
From the bank, it had gone under bad management.When we bought it, somebody called the phone at one point and was like, do you guys still take a hit of heroin for a night's stay?I'm like, no.We are not that guy anymore.Sorry.
Probably shouldn't call public places and say that.It had really bad issues.The guy bought it. He was going to convert it into an assisted living facility.Basically, it was the only hotel in town.The town was like, nope, we need a hotel.
He didn't want to manage a hotel.I get that. I mean, that was pretty much the thing is he just was done.And so we went back and forth, we found a decent price, negotiated a bunch of stuff.Yeah, we made a ton of mistakes.
We actually we've been trying to sell that hotel for like a year now.And it's not that it won't sell.It's just that we're not going to take a haircut on it.We don't need to.
The biggest mistake with that was we didn't understand the location, the demographics.That city's just not trying to grow.They're not helping themselves.
They're a very old farmer, kind of, you're not with us, you're against us for any new, it's weird.All these issues with that hotel, I had two partners, and of the three of us, two have basically sworn off hotels for life.
I was like, realistically, when we bought this thing, it made like 180K in revenue.We're at like 330 right now. We put a bunch of CapEx into it, but if we hadn't, we would have cash flowed pretty well.
We've got all these issues, but we've also done all this.I just realized it's a lot of work, but if we did this on the right property in the right space, we could have made a freaking killing with this guy.We still can.
We're still profitable on the whole deal, by the way.We've all got our capital back plus probably 2x already, and we still own the hotel, so we'll see what happens when that sells. It was a learning curve.
When Blake, my partner on this other hotel, found it and was starting to talk through it, it had the location.It had the cool look.It had the amenities.It had the room to grow.
It had the terrible operations that we had seen when we first took over this one.I was able to go on Google, look at reviews, go on social media, look at the only video about it and a couple of other things and just basically go,
lot of room to grow on this bad boy, and it currently works.So what if we and he's like, we actually raised for a real renovation budget, and like that one's gonna be nice.
And so, you know, what kind of turned me towards it is like, I'm not a huge multifamily apartment guy, I think that got like a little over over watered or watered down or whatever.
Over the last few years, I think it'll take a few years till that comes around to where it's something I really want to pursue.
But all the multifamily like syndicator guys, their whole pitch has always been, you know, hey, it's like, long term rentals, but economies of scale, you get, you know, one roof for 60 rooms, instead of 60 roofs for 60 rooms, and you get, you know, all the things.
And that's Airbnb with hotels, like, you get one roof, or in our case, it's eight buildings.So eight roofs for 130 keys, instead of 130 roofs.But it's also eight roofs for I'll give you the whole perspective here.
It's 130 keys with a 150 person wedding venue, three pools, two hot tubs, we're putting a gym in and by the time we're done, we should have a like coffee shop with a restaurant. because we've got another building that we don't know what to do with.
And we're probably just gonna put food and beverage in.So it'll be eight roofs for that.And we're going to do a $3 million budget renovation so that it'll be nice.It's not actually like structurally, it's great.
It's just, you know, the guy hadn't updated it in 20 years.So it's, we're gonna make the rooms sexy.And then we'll update the operations a little bit.And it's gonna do very well.And like, When we bought it, the guy wasn't on Expedia.
The guy wasn't on Airbnb.The guy wasn't on looking.com.There's a lot of room to grow.The reviews will grow up.
I'll make social media content once it's really at that point, like YouTube and stuff, SEO and whatever, and I'll trump whatever's out there for it, and we'll start to see that revenue increase.
I think the real kicker is it's all the economies of scale, plus it's a commercially zoned asset that the city wanted there.You do not have to worry about them ever putting out a regulation that'll hurt you as an Airbnb.
If anything, if other Airbnb start popping up all over the place, we've seen this in big cities, and it starts hurting your business, you go, hey, city, you're going to lose this much in tax revenue from us if we go under, and the city's going to get it.
screw you little Airbnb guy.We don't want you.We want the hotel.And so like, you've actually got, you know, that was kind of what drew me to it.I'm like, look, the operation sucks.
So there's a barrier to entry, most people are not going to buy a damn hotel.And then you can buy them at a discount right now because of COVID.And then if you buy something that's poorly managed from a
the running joke in the hotel world is you buy from a Patel.Patel is a last name, an Indian last name.And that class or clan in India is like notoriously, that's what they do, hotels.
And anyone who's listening to this and thinks I'm racist, go to Facebook and type hotel, hotel, motel.There is a 60,000 person Facebook group full of people with the last name Patel who buy and sell hotels and want to manage them.
What they do, like this is their typical style, they go in, they buy a hotel that they can live in and manage themselves, they have the team and they run bare bones and they will basically, they don't run it into the dirt, like that makes me sound like I'm an asshole.
They bleed it.They run it for 20 years.They put as little as they possibly can into renovations, CapEx, making it sexy, making it pop.They basically run it as bare bones as humanly possible. and they capitalize on that as much as possible.
By the time they get ready to sell, 20 years down the road, the thing's doubled in value, so it doesn't really matter, they still make out.
And it's not, I'm not saying it's a bad model or a good model, but it provides us the opportunity to go in, we buy it at fair market value, but at fair market value for an underperforming asset, they make out, because that's still, they've got equity, so they're still happy, and then we go in and we're like, this dude hadn't updated anything, the wedding venue needs help, one of the pools is down,
You know, the operations are basically non-existent for the last 20 years of tech improvements.We're going to turn all that on. and we will be great.And so it's a win, win, win, win.And yeah, I guess that's kind of in a nutshell.
I'm like, dude, and for reference on this one, we are two miles outside Smoky Mountain National Park, but we're in a town called Townsend, which is about 25 minutes from Pigeon Forge and about 35 from Gatlinburg, but it's like South.
And so if anyone's familiar with that area, you've got the park and Gatlinburg, which is like the gross, dirty Vegas version of
Smoky mountains that everybody goes to and gambles and drinks and parties and then you know throws up on the sidewalk and it feels like honestly, New Orleans and Vegas are cleaner than
Then you got Pigeon Forge, which is way cleaner, but super overcrowded.That's where Dollywood is, and all the chaos.There's some beautiful, really cool stuff there.There's traffic, and it's a city.
Then you've got south, and between both of those in a V, is Townsend, which has doubled in population in the last 15 years. It's only like 10,000 people, so like I say that, it's not huge.
It's like a two-lane road that winds through Townsend, and there's like five restaurants, a distillery, a coffee house, and a couple hotels, and it just tracks into the back end of the park, and it's beautiful.It still has views.
You're not overcrowded.So in my head, I'm like, okay. over the next decade, this is going to be more crowded.And we're right outside the park.It's beautiful.
And so and so it's the whole hotel is like log cabins with like green metal roofs and like rustic theme.It's super cool.
That's awesome.Yeah.And I think people will overlook a lot of those fundamentals.
Like what you just went through is just so many fundamentals of just like, okay, just, it makes sense that the deal fundamentals, when you put them together, it makes sense.
So what's the increase that you think you'll get average nightly rate in terms of rooms?
So more important for more likely to be accurate when I speak for this.So let me at least give you this first because I'm not the daily operator.So we paid 7.7.We're putting 3 million and we've got a tentative post appraisal at 14.
So that's kind of the you know, metrics there. I want to say we're sitting around like 145 rev par.And I think we're looking at like 175 ish.Okay, so we'll kind of see, you know what that looks like.
Realistically, you know, Blake would I actually missed the last GP call because I was in Costa Rica getting drunk. It was actually just the time zone.I was sitting at the computer and I'm like logged on.
And then they were like, popped in and they were like, Hey, we just ended.I'm like, Oh, shoot.I'm an hour further than I thought.But yeah, he's definitely more on the ball for that.
But it's about a $30 ref bar increase that we anticipate, but also an occupancy increase.That's the kick is like,
I guess I should say so average daily night would be $30 increase rev par will will go up because we were operating around like 55 60% occupancy, depending on the season, obviously worse in low season.Not bad.
But when we turned all the bookings on in December, we actually had to like give people money back for like 12 rooms because we overbooked.We're like, Oh, wow.Like our systems just broke the system.
So we need to like, so we still haven't like fully cranked your third party booking Airbnb advertising.And we're not running any ads right now.So we're like, we need to wait till we're renovated and nice before we really turn that on.
Yeah.Yeah.And then additional income streams of the better wedding venue and you know, the coffee shop and food, all that stuff, it all plays into it as well.So that's amazing.Very cool.
So one thing I always get pushback on, or I guess questions around about, and then questions on, um, when I put out content too.
So like, I'll, I'll put out a video and you know, a strategy on how to do something like you just talked about and inevitably underneath the video, the comments, people are like, yeah, that's great.
If I was a millionaire to start with, you know, everyone always says like, oh yeah, you gotta have all this money to start with.And I try to remind people,
Everyone starts with their first deal for sure, but most of those people don't have money to start with.
And so can you talk a little bit about where you get financing for deals now and then also where you recommend for people who are new to look to get financing for their first deal?
Yes, I will, after I make my funny point about bringing Donald Trump back up for a non-political reason.
I love when I see online everybody tries to discredit his success because they're like, yeah, but his dad gave him a million dollars for his first property. do the math on that.That would be like saying, hey, Kirby, here's a thousand bucks.
Get 20 years to turn it into a million dollars without taking any of our money.People are like, well, that's not the same thing.Yes, it is.That's exactly the mathematical equivalent.
And like actually it'd be turning into $4 million because I think he's worth like four bill, whatever.So I'm like, Most people, the problem here is like everybody has that mentality.
95% of the people that have that mentality, if I gave them a million dollars, would be broke two years later.
So like, shut up.Like you're just making excuses for yourself.You're not helping yourself.
I've never asked how it could be possible.But you know, right off the bat, it can never work.
Yeah.And to that point, like I bought my first duplex with an FHA loan, three and a half percent down.The only reason I had the three and a half percent down, which by the way, this was an $80,000 duplex.
I'm all into this property for like 4,500 bucks for closing costs, fees, down payment, and like the LVP I had to put down at one of the rooms.I'm like 4,500 bucks all in, call it, on this property.
The only reason I had $4,500 to buy that is because somebody drunk totaled my motorcycle and cut me a check under the table for it.I didn't have 4,500 bucks to my name.I would have had to sell my rifle, my truck.I didn't.I was broke.
I was a dumb ass.When I hear those excuses, I'm just like, dude, there's a million reasons to not be able to buy real estate. It just takes one for you to start and you can figure the rest out.
I don't use my own capital to invest in most of my deals right now.Everyone's like, well, yeah, that's because of, yeah, because I did the thing.It's not because of anything other than I figured out what I'm good at and I do it.
Like, you can raise money for your first deal if you're a good sales guy or you have good networks.You can get into creative financing, you can seller finance, you can lease option, you can sub to, you can, like, there's a million different ways.
You can create equity out of thin air to get a bank to lend on something if the deal's good enough.Like, there are so many ways to do that.If you're a freaking veteran, I don't even want to hear it because you got the VA loan.Like, shut up.
You're good.We'll take care of you.Come talk to me.I'll tell you you're an idiot and point you in the right direction.If you're not a veteran, Same thing, FHA loan, shut up, total your motorcycle, I don't know, you're an idiot, figure it out.
I hate all those excuses because that's all they are and nobody will ever admit it to themselves.But the real answer is like, FHA loan, 5% down, conventional loan, VA loan, house hack, boom, now you can save your money for the next one.
Or find a hyper local lender that holds their own loans in-house, we call them portfolio lenders, and work with them.
I have made over 100 transactions, I don't even know, we'll say over 60 transactions, that way I'm not lying, I think it's over 100 now.I've never put more than 15% down on a property.Most people just look and they're like, I can't afford 20% down.
I never have. I can't afford 25% down.I never would.I don't have to because I leverage networks, knowledge.To that point, I bought a 10 unit once where it was going to be 15% down and I got the seller to give me 10% of it as an owner carry.
$10,990 to buy a tenure.There's always a way.You just have to start looking for the way.Learn creative financing.Learn basics of financials.Don't be an asshole and meet people and just network.You'll figure everything out.
It's just get around people who are doing it and the type of people who will say exactly what you just said, which is, how can you make this happen?That's not possible.Get around those people and you'll be fine.
And speaking of getting around those people, can you share a little bit about the War Room and how that works, who it's for and what the goal is for it?
Yeah, absolutely.So the War Room is a mastermind group I run.We've got about 370 members right now.It is only open to service members and vets.So if you're not that, I'm sorry.
And I love that, actually, because it means that, you know, if you've been in other masterminds, like some of them are great, some of them are not.The culture is like the most important part.And right off the bat, anybody who joins our group,
fits into the culture, I'd say, should fit into the culture, because they're a veteran, like we all speak that same language.Now, if you're Air Force, I'm going to make fun of you, and you're going to make fun of me, but like, whatever.
We all did the same thing, right?Everybody knows the interservice rivalry.I'm not a like coaching program.I'm not the guy that's going to charge you $15,000 to learn about multifamily.And I'm the expert on multifamily.
I'm the guy who's going to say, if you want to be in this community, we're badasses.We're all crushing it, and we'll help you with accountability and achieving your goals and whatever.
We have masterclasses on just about anything and everything you could want.I've got members who've taught masterclasses on wholesaling, syndications, capital raising.I did one on house hacking.I did one on creative financing.
I did one on social media, branding, content, raising capital, all these different educational things, plus 200 recorded calls. all that's great, but the real value is 350 plus people that you can go and say, Hey, I've got this problem.
And they will give you real advice.They're not going to try to sell you anything because they know I'll kick them out of the group.And they're genuinely there to help you succeed.And they will hold you accountable to it too.
Like we'll put you in a small group, you'll meet every week. We do two calls a week, plus you get your small group call.And the goal is really like, so you get an hour with me as like, ask me anything every week.
And then you get a guest speaker every week or almost every week.Sometimes we just do like networking.And then you get your small group, like accountability.And then we do two in-person events a year.
And so, you know, I tell people, I'm like, look, if you're looking for a one-stop shop, I'm going to hold your hand and teach you how to be the best wholesaler in the world. I can make an introduction to who I think that coach should be.
I've got two people that I would trust.If you're looking for the same with multifamily, I got someone I recommend.If you're looking for the same with short term rentals, I've got like two or three people I know.
If you're looking for the same, like whatever.But if you're looking for the place that's not going to hold your hand per se, but will give you the answers for like,
People are doing literally any niche in real estate or buying businesses that you can possibly think of, and they genuinely care about your success and won't try to upsell you.We're the best military community there is for finance.
It's not super specific.It's not as expensive, and we're not going to hold your hand. for like this, but we'll give you the opportunities for anything and everything to help you achieve financial freedom.
So really it started as, man, I want a place where I can talk to vets who are serious about this and that like have a little skin in the game so they actually show up to stuff and it's not like full of bullshit, you know, sales pitches.
And so I charged, I think originally it was like 50 bucks a month and I got like 20 people in.And then literally the growth from that was those 20 people pulling friends in.And then it was like, oh shit, now I have a business.I have to pay people.
And eventually like, you know, cost went up a little bit, but it's cool, man.It's crazy.The amount of like, it's funny because people are always like, Dave, you must make a killing with this.
I'm like, dude, the members of like, some of these people doing deals together have made 10, 15, 20 times what I ever have out of the group.There's guys in that group that I can point to and be like, his first deal, he cleared a million dollars.
Nuts, you know, and I'm like, I've never done that.I wish but not yet.
Yeah.So is there a trend of like a certain strategy right now that you're seeing? people are really doing well with within the group.
Honestly, the thing that I'm seeing more and more and more common is people talking about mergers and acquisitions of businesses.But those are people who have been in the game a little while and have the capital to go kind of play in that space.
Other than that, like house hacking will never go away as a very successful way to get started.And then I'd say trend There's kind of like everything, but I guess I would say I've seen an uptick in the unique stuff.
Whether that's RV parks, mobile home parks, we've got a couple guys in the group who buy parking lots for semi trucks.
So like the, the kind of like one-off, like more niche residential assisted living, those kinds of things is where I've kind of started to see like more of an uptick in the real estate space.
Then you've got all the tried and trues, like the apartment stuff is a little bit quieter.The boutique hotel stuff's a little bit more vocal, but it's just a lot of it just kind of yin and yang, you know?
Yeah, that's awesome.Congrats on all the success and the growth of that.It speaks volumes to it if there's that many people who continue to be a part of it.
So if people are interested in learning about that, what's the best way to reach out or find out more?
Yeah, the best place to find really anything is to go to thebestpodcastguest.com and you can download a free PDF copy of my book there and find all my socials.
And I would say my Instagram, which is on that page or from military to millionaire is the place that I actually respond to people.So if you want to ping me with a question or whatever, Instagram is where I'll get back to you.
Awesome.Awesome.Well, we'll put that link in the show notes as well.Hopefully it doesn't offend all my other podcast guests, but just tell them it's not that he actually thinks he's the best.
He just bought the domain and you weren't fast.Yeah, that's right. It's easy to remember.
It is, man.That's great.Cool.We'll link that up.So if you're listening to this and you want to find out more, just go to the show notes and you can click on it there.Dave, thanks for spending the time today.Really appreciate it.
Dude, Kirby, appreciate you having me on.Take care. Hey, thanks again for joining us.
If you enjoyed this episode, make sure you leave a positive review on iTunes and also head over to Facebook and join the Living Off Rentals Facebook group where the conversation will continue.Thanks again.See you next time.
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