Ever been interested in making money with short-term rentals but feel there’s just too much you don’t know? Welcome to the club!
You’ll love her thoughts on self-management versus using a professional company, avoiding negative online reviews, and properly marketing your properties to maximize revenue. She also discusses how she diversifies risk in her portfolio, why she buys properties for 10% down, and what expenses she accounts for when analyzing deals that come across her desk.
Avery shares some fantastic insight into how to run a STR business with minimum time and intrusion, as well as some overall advice for knowing your market and minimizing your risk. Download this episode of the BiggerPockets Real Estate Podcast and see for yourself today!
Brandon: This is the Bigger Pockets podcast, show 364.
Brandon: What’s going on everyone, this is Brandon Turner, host of the Bigger Pockets podcast, here with my cohost, David Greene. David, what’s up man?
David: Not much, dude. It’s a really good day. I got to see Switchfoot in concert the other night. That was pretty cool.
Brandon: Oh, fancy. I saw them in concert once years ago.
David: Wow, just one more thing we have in common.
Brandon: Wow, we’re besties. This is great. Oh, man.
David: Yeah, we also got a cool interruption today on the show, which won’t be on the recording, but of your daughter, Rosie, with the reindeer she just bought. It was super-
Brandon: Well, it’s pretty fun.
David: [crosstalk 00:58:24] very nice to see her again.
Brandon: Yeah, she’s cute, man. Yeah, she is a talker now, which is a lot of fun. Anyway, speaking of talking, today we have a phenomenal interview with a really, really great communicator, a woman named Avery Carl. Avery is a short term rental specialist, and does a lot of vacation rental stuff, but also some traditional rental stuff as well. She’s got this phenomenal strategy, where she’s buying short term rentals in vacation areas, like Airbnb stuff, and then generating tons of profit. What did you say earlier, when your real estate-
David: When your houses buy you houses and your cash flow makes you cash flow.
Brandon: Yeah, that’s exactly what she’s doing. She’s building this empire, was able to quit her job. I think it was on her third deal, she was able to quit her job just from three deals. You’re going to love this stuff, everybody, so make sure you listen to this whole interview. Really, really good stuff. Yeah, awesome stuff. Now, without further ado, it’s time for the Quick Tip.
David: Quick Tip.
Brandon: You didn’t know where I was going there.
David: Wow, you threw me off. I like it. Keeping me on my toes.
Brandon: Yeah, usually the “ado” line goes later on in the intro, but-
David: That’s how we know who our loyal podcast listeners are, because they would have thought the same thing as me. “Oh, there’s no Quick Tip?” Oh, there is a Quick Tip, and we’re just fooling. All right.
Brandon: There you go. What’s your quick tip?
David: Today’s quick tip is, when you feel afraid, when you’re having a hard time taking action, when you get caught up in the “what if” blues, what if this happens, what if that happens, here is your way out of it. Don’t focus on what could go wrong only. You have to think about what could go wrong, and how you’re going to spread that risk, minimize that risk, diversify that risk, because that’s what smart business people do. Today’s guest, you’re going to hear about how she buys short term rentals to make more profit, and she buys long term rentals that are typically public housing that reduces her risk a lot, but also lowers her profit margins.
David: She has diversified the way she invests in real estate, so she makes money in big chunks from short term rentals, and she gets safety in big chunks from long term rentals. What I’ve found is that people who do this well tend to take action more often. As you know from Brandon talking all the time, people who take action are the ones who usually win. So, rather than thinking, “I’m afraid I can’t take action,” shift your thinking into, “What can I do so I will feel less afraid?” Find yourself taking action, and then you’ll be really well.
Brandon: Wow, that was good. That was good and deep.
David: Thank you, that’s my nickname.
Brandon: Good and Deep.
David: Good and Deep Greene.
Brandon: All right. All right, David Good and Deep Greene, it’s time to get to today’s show. Are you ready for this?
David: Let’s do it. Bring her in.
Brandon: All right, let’s get to the interview with Avery Carl.
Brandon: All right, Avery, welcome to the Bigger Pockets podcast. Good to have you here.
Avery: Thank you.
Brandon: Yeah, so let’s talk about your real estate investing, and how you got into that, because I heard you were born and raised in Mississippi, is that what I heard?
Avery: Yes, I’m actually here now visiting family.
Brandon: Oh, nice. All right, well how did you get from Mississippi? And, something about playing in a punk rock band?
Avery: [crosstalk 00:00:58] Oh, yeah. How much time do you have?
Brandon: I’ve got unlimited time.
Avery: Awesome. I grew up in Mississippi. I went to University of Texas on a soccer scholarship. I lived in LA for a little bit. I lived in New York for a little bit. In Nashville now, which is where we got started in real estate investing. I had no idea, absolutely nothing, had not found Bigger Pockets when we bought our first deal. Luckily, that has been our highest performing longterm rental yet. We started listening to the podcast religiously after that first deal, when we decided, “Okay, this is something that we want to get into heavily. We want to scale this thing.”
Brandon: Okay, that’s cool. By the way, what punk rock band did you play for?
Avery: Oh, nobody. Nobody [crosstalk 00:01:40]-
Brandon: Nobody famous?
Brandon: Okay. I was hoping you were going to say, I don’t know, Blink 182. That’s the only punk rock band apparently I could think of on short notice.
Brandon: Okay, so when you’re not playing for Blink 182, you decided “I’m going to get into real estate investing.”
Brandon: You started listening to the podcast.
Avery: I did.
Brandon: And then what happened next? What’d you do? You bought that one that you didn’t know what you were doing, but okay. What happened after that?
Avery: I was working in the music business in Nashville, and had my real estate license for us to do our own deals because my husband is a terrible client and I felt sorry for everyone who worked for us. I kind of started there. I started to the podcast, like I said. I started reading the forums, and we realized that Nashville is going to be really hard to cashflow for us, because as everyone knows, it started getting really, really expensive. So, we had to think of a way that we could, rather than scraping together another 20% down payment, scaling really slowly with a few hundred dollars per deal per month. So, we decided we wanted to buy something that we could Airbnb.
Avery: Nashville was kind of scary because the laws change all the time. It’s kind of unfavorable for short term rentals, so we said, “Well, why don’t we go down the street to the Smokey Mountains, to Gatlinburg/Pigeon Forge. That’s a market where people have been renting overnight in regular residences, not hotels, for decades. Let’s try that.” So, we did that, again, not knowing anyone who had ever done that before, just kind of on our own, research and a little bit of luck. We got the first one, scaled that into five pretty quickly, and now we take the cash flow from all of those, which short term rentals cash flow harder than long terms, but they require a little more work.
Avery: So we scaled that into buying more longterm rentals. Now we’ve got just under 20 doors. Hoping to have 20 by the end of the year. All that is because we’ve used this short term rental cash flow to go buy more long terms.
Brandon: That’s cool. So you’re basically cash flowing off of this business of renting on Airbnb, or something like that, and you’re using that to buy more and rentals, so it’s kind of like this snowball effect. Is that right?
Avery: Exactly. Exactly. We use Airbnb and VRBO, and we just take all that cash flow and go put it into more rentals.
Brandon: That’s cool. Okay, so let’s go back then and kind of dig into your journey as you got into this. First of all, are all of them in Gatlinburg? Did you start buying outside of that?
Avery: They’re all in Gatlinburg as of right now. We’ll probably buy one in Panama City Beach in the next few months. Now, I run a real estate team that connects investors with short term rentals in true vacation rental markets. We chose Gatlinburg and Pigeon Forge, because you don’t have to worry about… Well, to back up a little bit, there’s two kinds of markets when it comes to short term rentals. There’s metro markets, like your Austins, your Nashvilles. Then there’s vacation rental markets, which if you think about it, anybody can name a place that they’ve gone on vacation since they were a kid no matter where they live in the country, where people have rented on an overnight basis in condos and single families, and not hotels for decades.
Avery: That’s why we felt really good about scaling in these true vacation rental markets, because they’re what I would call a “mature” market for that. These cities and municipalities have figured out how to monetize that decades ago, whereas in the metro markets, now all of a sudden all these people are renting Airbnbs instead of hotels, and the city councils are like, “Whoa, whoa, wait a minute. We can’t be having this.” So, now it’s just a safer investment from my perspective, to do a true vacation rental market because you just don’t have to worry about that.
Brandon: Yeah, because this terrifies me about some people get into the vacation rental and short term rental market. They’re like, “Wow, this is making a lot of money right now,” so they jump in and they start buying these properties in Denver, Austin, Seattle, Nashville, or whatever, and it does, it works really, really well right now. But because it’s so early in that, one, eventually it’s going to level out at some point where enough people get into the game, and the big corporations get in, which is what you’re seeing in Nashville, I know that right now. A lot of these bigger companies are coming in, so they drop rates and things, and end up just leveling out to a more normal amount.
Brandon: Also, yeah the laws change constantly. I think people get into the Airbnb thing, they buy a property that would never cash flow otherwise, and they’re like, “Yeah, it’s going to make $1,000.00 a month in cash flow, and I’m just going to rent it to bachelor parties on the weekends.” That sound awesome until you realize, what if the market does change? I mean, not the market, but the laws change? That’s why you’re saying you focus on areas that have already been through that. They’ve already established what it can do and what it can’t do, and so there’s a lot more stability there.
Avery: Right, right. Take Gatlinburg/Pigeon Forge for example, there are about 10,000 short term rentals on the market there. Those have been there since the 70s when it became a destination. It’s really been a destination since the 30s, but everything that’s been built in these markets for the most part, has been specifically to be a short term rental. So, you don’t really have to worry about that saturation like you would in a metro market. People aren’t buying what used to be a primary home or a long term rental, and converting it. They’re just maybe taking one that was already a short term rental off of the local property manager and putting it on Airbnb.
Brandon: Yeah, that makes sense. A lot of people don’t live in… I live in a vacation area. I live in Maui, but most people don’t live in vacation areas. So, that means they’re out. They can’t invest in that. Is that what you’re saying?
Avery: No, not at all.
Brandon: No, okay. All right, explain. I know, I set you up for that one.
Brandon: How do people invest in real estate at a long distance in that type of… I’ve done the vacation rental thing once, and it was the worst thing I’ve ever done because I was getting middle of the night phone calls. It was hell, so I quit it, because having one was a lot of work. How do you do that at a distance?
Avery: Absolutely. You do it roughly the same way you would if the property was down the street from you. If I have a property down the street from me, and the toilet breaks in the middle of the night, I’m not going over to fix it. I’m making a phone call. Same thing when it’s far away from you. When you have a vacation rental that’s some distance away, not drivable, you really just need a good cleaner, a good handyman and a smartphone, and that’s about it. The rest of it is kind of like answering text messages. You get a notification, you handle it, you move on.
Brandon: That’s cool.
Brandon: That’s cool. You need a cleaner, you need a handyman. You’re right. That’s really about it. How do you find those people if you don’t live in the area? Any suggestions?
Avery: What we did, which worked out in some instances and didn’t work out in others, we went on the platforms on Airbnb and VRBO, and went to other owners and said, “Hey, who do you know? Would you be willing to share with me?” Some of them are going to tell you to buzz off, and some of them are going to be nice and help you. That’s how we started.
Brandon: That’s great.
Avery: Yeah. The more that we had, once you know one person, you have a little bit more of a network. Like if our cleaner didn’t work out, our handyman knew somebody else. It just kind of grew from there, to where you eventually have enough of a network that you know enough people that you can call and ask, and find people that way.
Brandon: Okay, yeah that’s cool. I know I’m just drilling you with these questions. I’m super interested in this. A quick background on why I’m so interested in this, is because I’ve got these two condos that I bought recently to flip here on Maui. I’m starting to look at this thinking, they’re both zoned. These are both in areas that have been 20, 30, 50 years ago already figured out the vacation rental thing, because it’s been happening for years here. I’m thinking, maybe instead of flipping them, maybe I should just them into vacation rentals. That’s why I’m super interested. This is good timing today.
Brandon: I was going somewhere with that, and now I don’t remember where I was going. I don’t know, go ahead David.
David: Can you give us an idea of what an average profit would look like on one of these deals?
Avery: It really depends on the market, and we’re going to kind of get into some tangents here with rental history and things like that. For a two bedroom property in my market, you’re looking at a purchase price of 275 to 300, and you will probably gross $45,000.00-$50,000.00 a year gross. We kind of have to go with short term rentals. You kind of have to base everything on yearly measurements rather than monthly, because it’s not going to be the same every month, because seasonality does play a part. It’s just going to look different every month, so you kind of have to measure it annually.
David: But when you’re analyzing a deal, and you’re trying to figure out if you should buy it, give me an idea what kind of numbers you’re looking for.
Avery: Okay, so a 20% cash on cash return would be ideal. This is where short term rental investing significantly differs from long term rental investing, because a lot of those numbers are going to be a little fuzzy, depending on a number of factors. There’s a lot of variables that go into investing in short terms that don’t with long terms. Management is a big one. Rental history is going to be a big one. If you’re going to buy an apartment building, the rent is going to be the same. The market rent is the market rent, right? But with these, two people could have the exact same property, and one person could be self managing and one person using a property manager, or they could be using two different property managers. They could be doing wildly different numbers.
Avery: That’s why there’s a lot of opportunity in these true vacation rental markets, because at the end of the day when all the tourists leave, a lot of them are still kind of small towns with mom and pop businesses. I know at least in my market, a lot of the property managers… Back in the 80s and 90s before there was the Internet and Airbnb, anyone who owned a vacation rental in these markets, which there were still tons of vacation rentals, it just wasn’t necessarily an investment vehicle at that time, they were forced to use these local property managers. They didn’t have to use these platforms like Airbnb and VRBO, but now, at least in the markets that I’m in, the local property managers, the vast majority don’t use those platforms because they didn’t have to do that 20 years ago, why should they have to do that now?
Avery: They’re kind of sticking to that, so their numbers are significantly less than what you’d be able to do if you are putting these properties on Airbnb and VBRO. Tourists aren’t going and Googling “Property manager in Gatlinburg where I can rent.” They’re just going on Airbnb and clicking. Like I said, there’s a lot of variables when you’re looking at these things. Your control group cannot be what the rental history is. Your control group has to be how it’s going to be managed. For example, I was looking at three different properties that were the exact same floor plan in the exact same neighborhood last month, and an investor said, “Well, I want to buy the one with the best rental history.”
Avery: I said, “Okay,” and they’d all been managed by three different rental companies, and one was self managed. The self managed one was making $75,000.00 a year, and one was making $55,000.00 a year, one was making $65,000.00 a year. He said, “Well, I want the one with the best rental history.” But the one with the best rental history was the last one that I probably would have brought, because it had a really steep driveway, like terrifying. That’s what you deal with in mountain towns, is the driveways.
Brandon: Sure, yeah, yeah.
Avery: Normally, that doesn’t bother me. But this particular one, I have a Jeep Wrangler, and going up that driveway with the top off, I was worried I was going to fall out of my roof. All that to say, you can’t assume that all the properties have been managed the same. All you can control is how you will manage them. Rental history is not indicative of future potential, is what I’m trying to say.
David: It’s funny how realtors can make those driveways look so much less steep in the pictures. I’ve looked at a couple short term rentals in the mountains, just like you said. It was an area called Pine Mountain Lake. When I got there, I was shocked at how steep that driveway was. I don’t know if I could walk up it without slipping, if it was snowing outside, and rolling all the way down. In the pictures, it was like a gentle little slope. They do a really good job. It’s funny that you mentioned that. It just reminded me. How are you managing yours? Are you self managing, or are you using an assistant to kind of help you self manage?
Avery: We are currently self managing all of ours, and there’s definitely a time and place for property managers. For the investor whose really trying to get started and to scale quickly, we bought these at the beginning of our investment career. So, we were really trying to bootstrap and save every penny to scale, and scale, and scale. You’re going to maximize your cash flow by self managing. We’re self managing still. Maybe one day when we get to a point where we feel like, “Okay, we’re happy with the number of investments we have. We’re just going to chill,” maybe we’ll put ours with a property manager, but for now we’re still bootstrapping. That’s what we do.
Brandon: That’s cool.
David: I want to hear some crazy stories you’ve had of the self managing in short term rentals that you probably never thought was going to happen.
Avery: We had a guest not that long ago who… One of our properties, it’s in a neighborhood. You’re not looking into other people’s windows, but you can hear other people’s car start and stuff, so it’s not that remote. But he was from Miami, I think, and he was terrified. It’s got a wall of windows, cathedral windows like a lot of cabins have, and he was terrified that a bear was going to decide to just pick up and walk over and bust through these windows and get them.
Avery: He left us a horrible one star review, because he said, “You would have no chance of survival if a bear decided to [crosstalk 00:15:30].”
David: So, if a bear broke through a closed window and got into the house, at that point his chances of survival were slim because of the layout of your property?
Avery: Yeah, because it’s so remote. But it was five minutes from town.
David: Did you put bear pepper spray or something in the house for other people? We’ve since corrected this.
Avery: Right, that review was able to be taken down because it did violate the VRBO policies, because he used profanity in it. So, we were able to get that taken down.
David: That’s funny, like break in case of bear with a glass case, and an ax or something inside there.
Avery: Yeah. But I feel like if a bear breaks into the property you’re staying in, the last thing you need… The layout of the house and where it is, is not your concern. That’s not what’s going to make it [crosstalk 00:16:19].
David: Right. I just think that’s funny as I picture him laying there next to his wife like, “You know, I just don’t really feel safe here. The floor plan is not conducive to an escape in case of a bear attack. We’re really exposed with windows that are at ground level.”
Brandon: Doesn’t that sound like you were renting to Dwight Schrute from The Office there?
David: That totally sounds like a Dwight thing. You’re exactly right. “I give it a five for décor-”
Brandon: This is not a bear [crosstalk 00:16:41]… Yeah.
David: “Five for location, and a one for bear safety.”
Brandon: Yes. Oh, that’s funny. My actual thought goes to Liam Neeson. Remember the movie, The Grey? I think you mentioned that a couple of weeks ago, David.
Brandon: Like, I want to see The Grey part two, and it’s Liam Neeson just fighting bears that come into his vacation rental in Gatlinburg.
David: Yeah, they’ve been mixed The Grey with The Purge.
David: All these bears are converging on one cabin. I have no idea how this conversation [crosstalk 00:17:04]. Sorry, about that, Avery. But that was really funny.
Brandon: I do have a question on this end, how do you deal with these negative reviews? Because in vacation rentals, negative reviews can kill your business. That’s one thing I didn’t like about vacation rentals, is that I didn’t have all the power anymore. The power was shared, and I was like, “No, I like to be in control.” How do you deal with those negative?
Avery: That’s definitely something that you have to deal with. We manage our negative reviews by up front. We turn people away if we feel like they’re going to be obnoxious about things. For example, you can tell by things that are clearly listed in the listing, clearly described in the listing, “Hey, no steep roads,” is what we have to deal with here. If somebody’s asking really nit-picky questions up front before they even book, you can kind of tell, “Okay, this is going to be a high maintenance guest. This is going to be the kind of person that’s moving furniture to look for dust.”
Avery: So, maybe we’ll just tell them that they’ll be more comfortable elsewhere. Or tell them, “Yeah, the road is really steep. You’re probably not going to like it.” So, we manage our negative reviews before they happen by just kind of reading people, being a mind reader a little bit, like Paul [Sanwho 00:18:11] on the short term rental forums always says. You can tell if somebody’s going to be high maintenance by the questions they ask up front. We just tell them, “You’re not going to be comfortable.”
Brandon: Yeah, that’s smart.
Avery: That’s worked for us really well.
Brandon: I guess I never did that when I had my short term rental. I just kind of let anybody who came in, come in. Let’s talk about how you’re tracking people then, marketing-wise. Are you doing anything crazy, like Facebook or anything like that? Or are you really just relying on the platforms? And which platforms do you rely on?
Avery: We really just use the platforms. There’s a big movement in short term rental investors to try to get direct bookings, but we stay so booked on just Airbnb and VRBO, that we don’t bother with the other platforms, or doing anything extra. That’s another perk of it being a true vacation rental market, is that there’s documentable tourism for decades. People are coming. They’re going to book you. It’s something where you don’t really have to work too hard to get booked.
Brandon: That makes sense, okay. What about specifically on the listings? You got any tips or tricks where people make the listings stand out, make them pop, get more people wanting to book?
Avery: Photos are everything. You would think that that would be common knowledge, but I see a lot of owners who just have iPhone pictures that are dark, or grainy. Just spend the extra couple hundred bucks and get some nice photos. Some nice descriptions, make sure everything’s spelled correctly. You would think that would go without saying. That’s really it.
Brandon: Okay, that’s cool.
Avery: There’s no secret sauce, really.
Brandon: Yeah, are you typically looking for… Let’s go to some… Today, I hope you don’t mind just these fire question and answer stuff, but you obviously know what you’re doing here. What about the property type? You’re going to go in and buy a property. You’re like, “I’m in the market. I got a little bit of cash saved up now.” What are you looking for? A house with tons of bedrooms? Or something that’s unique? What catches your eye?
Avery: Depending on which market you’re in, you’re going to want to go for what historically rents well. Each market, obviously condos and big single families with pools, mountain towns, cabins are the way to go. You’ll have to do a little research on your market about has historically been successful. But past that, sleeping capacity is always going to be the biggest driver of cash flow. In amenities, you don’t have to go crazy.
Avery: A lot of investors say, “Oh, I want my place to be an experience. I want it to be so special that everyone wants to come back.” Don’t worry about that. Nobody cares. Nobody’s going to thank you for your gift basket. They’re just going to stay there. They’re going to do what they’re going do, and they’re going to leave. As long as it’s a nice, cute place to stay, and it fits the description of what people normally rent there, then you’re going to be fine.
Avery: You don’t want to go into a place where people normally want to stay in cabins, and try to make a brick ranch home work. It might get rented here and there, but you don’t have to reinvent the wheel here.
Brandon: Okay, are you saying you don’t go the whole, “I’m going to give this person a gift basket, and chocolates when they come in.” Or do you? What do you do then, in a related question, how do you get people excited to leave you a review? Is there any tricks you know for that? We talked about the negative ones, but how do you get the positive ones?
Avery: Yeah, I think every investor, when they get their first short term rental, goes through that phase of wanting to really go above and beyond, and do the gift basket. I’m not saying don’t do gift baskets. I’m not anti-gift basket, but it’s an extra step in your process. If you’re not using your vacation rentals to go buy more long terms, if you just want to build a big vacation rental empire, that can really put a bottleneck in your process with having all these extra.
Avery: They’re always going to complain if you’ve put the wrong type of cookie or whatever, and they don’t like that kind. So, we just make sure our places are really nice and clean, that they smell good. We check in on guests. It’s automated. We use an app called IGMS, that sends on the platform an email during their stay that stays, “Hey, it’s Luke and Avery. How’s your stay? Do you need anything? Our favorite hike is Andrew’s [Bald 00:23:51]. Go check it out.”
Avery: So, as long as they feel like you care, then you’re going to be in good shape. But you don’t have to go crazy with that.
Brandon: That’s cool. IGS, is that what you said?
Avery: Mm-hmm (affirmative).
Brandon: All right, I’m going to look that up. That’s cool. IGMS, and that’s kind of an automation tool then?
Avery: Yeah, yeah. We have it set up to where it checks in on them after they check in. It automatically sends them their door code, and their directions, and the address of the property the day before they check in. It sends them checkout instructions the day before the check out. So, you can really automate a lot of this process to where people feel like they’re talking directly to you, but the only time you actually have to get on your phone and respond is if they ask something specific, like where your crock pot is or something.
Avery: For us, it takes maybe 30 minutes a week to manage all five, with all the automations.
Avery: Yeah, it’s-
David: So, what are some other systems other than the IGMS that you’re using to make that efficient?
Avery: IGMS is awesome. There’s an app called Turnover BNB that helps manage your cleaners. So, when somebody books on either app, it will send you both a notification, one to you, one to your cleaner, that says “You need to clean this day.” Then your cleaner will acknowledge the clean, and it will send you a notification saying, “Hey, the cleaner saw this.” So that way you don’t have to go back and forth-
Brandon: That’s cool.
Avery: With the cleaner. Yeah.
Brandon: That’s awesome.
Avery: There’s a lot of automated pricing tools too, that you can use, but we found that it’s better, at least for us, not to use the automated pricing, because we found that we can get more money if we kind of work on that ourselves.
Brandon: Interesting. Why is that? I’ve heard some people talk really good about the automated pricing. I don’t talk about it that often, but why does it not seem to work as well? Just because they don’t the market?
Avery: In some markets, in some instances, it probably does work better than doing it yourself. But with us, it just… I don’t know all the algorithms, but I know it’s a lot of averages. One of our properties is a studio, and one is a one bedroom, so there are some… It just averages properties that might not be the same caliper as ours, so our price ends up being lower than what we probably could get, because we have so many reviews.
Brandon: Okay. [crosstalk 00:25:59]
David: Now that does make sense. You’ve kind of figured out the algorithm and how it works.
David: Here’s a question. I like what you’re describing here. Let’s say that a guest books. Walk us through what will happen automatically, and what you have to do to ensure that everything goes smoothly all the way up to the end.
Avery: Okay, sure. It depends on if the guest is a big question asker up front. Some people will just book, they’ll check in, they’ll check out and you never hear from them, they never respond to you. Those are awesome guests, usually. But say somebody books and says, “Hey, I see that you say the property has a little bit of a steep road. How steep is it?” We’ll need to respond to that automatically. I mean, not automatically.
Avery: We’ll say, “Oh, you might need four wheel drive in the winter time. In the summer, you’ll be fine. You could do it in a Prius.” So they book. Then it’ll automatically send them their check in instructions two days before. It’ll automatically check in on them two days later, and then it’ll automatically send them their checkout instructions the day before checkout.
Avery: The only time we have to respond is maybe once or twice during their stay. They’ll ask something specific that we’ll need to respond to. We’ll just get a notification on our smartphone, “Airbnb so and so has sent you a message.” We just answer it and move on. It’s a pretty streamlined process. I think there are a lot of limiting beliefs with investors out there who just feel like it’s going to be too much work. And it is. It’s more work than long terms. Like, is it going to interrupt your dinner at some point? Probably, but to me, that extra cash flow is well worth it.
Brandon: What I kind of like in it too, and you have a lot more experience than I am with this, but I found it’s like T-shirt printing. If you go get a T-shirt printed, it costs you $20.00 to get a T-shirt printed. If you want to get 100 T-shirts printed, it’s like $22.00, or 1,000 T-shirts printed, it’s like $23.00. It’s like there’s a certain base price, and from there it’s gets a lot cheaper because it’s the setup time, and the hassle, and all the things. But the actual printing of a T-shirt is pretty low.
Brandon: That was an extreme example, but yeah, to print 10,000 T-shirts is not that much different price in printing 1,000 T-shirts. It’s the setup that costs a lot. It seems to be true with time involved with vacation rentals. When I had one, it was a lot of work, and I didn’t have the systems, and the process, and it was just a headache. I probably could have managed 10 of them easier than managing the one, if that makes sense-
Brandon: Because I would have been forced to have the systems in place that I didn’t.
Avery: Right, right. It’s not twice as much work to manage two properties as it is to manage one.
Brandon: Yeah. Yeah, so that’s a good indication of, “Hey, if I’m going to jump into this, then I’m going to jump into this.” Somebody can say, “Hey, I want financial freedom. I’m going to do it this way. I’m going to go out and buy a dozen,” or whatever… If you were making $500.00 a month, or $1,000.00 in month on cash flow on a property, and you had 10 of them, I mean that’s life changing, quit your job kind of money for a lot of people.
Brandon: It doesn’t take 100 units, like it does maybe with traditional long term rentals.
Avery: Right, I was actually able to quit my corporate gig after our second short term.
Brandon: Wow, that’s awesome. I know David asked earlier about the kind of profit. You said you were shooting for a 20% cash on cash. Is there a dollar amount in profit-per-year you want to make on property? After paying the mortgage, and taxes, and insurance, and everything, here’s how much we want to walk away with at the end of the year in profit from one single property.
Avery: Sure, yeah. A lot of that is going to depend on the size of the property. In my market, a five bedroom can easily gross $100,000.00, just a regular plain jane but nice place to stay. So, a lot of it’s going to depend on your financing and what you’re doing for management. With us, we used a 10% vacation home loan on our first two. We did one in my husband’s name, and then one on my name after that separately.
Avery: That’s a really good way to not have to come up with the full 20% like you would on a normal long term rental. The stipulations for that are you just can’t put a lease on it. If you’re self managing on those platforms, then you’re going to be in good shape. That being said, we put 10% down on our first two, and then 15-20% on the last three. I don’t love to give out net numbers, just because like I’ve said, two people can have the exact same property and have wildly different grosses.
Avery: People who have the exact same gross can have wildly different nets, depending on a number of factors. But self managing, we net typically 40% of our gross after paying mortgages and everything, that’s all of it. That’s with a fairly lain streamlined system. If you’ve got a property manager, it’s going to be less. But if you pay cash, or you finance, you’ll leverage a little less then you’re going to make more. So, it just depends.
Brandon: Sure, okay. Yeah, that makes sense. Just a recap on that, that’s so cool. I never thought about it. You can get a 10% down vacation house loan.
Brandon: I didn’t know that was even a thing.
Avery: Yeah, and that’s the cool thing about short term rental investing, because that’s really the only area that you can utilize that. If you’re going to use a property manager, it gets a little hairy because then you’re putting a contract similar to a lease on a property. But the 10% is a really good way to kind of get the ball rolling, which is what we did. We didn’t have a lot of capital to invest at the time, so we did a 10% in my husband’s name and a 10% in my name, and then we’re out of 10%s.
Avery: We actually, on the third one, you’re only allowed to get one vacation home loan per market. Otherwise, it won’t make it through underwriting. They’re going to say, “You want a vacation home loan on this, but you have income from another property in this market. This is clearly not a vacation home. You can have an investment loan.” But on our third one, my husband wrote a letter to underwriting and said, “Hey-” there had actually been a fire in the area, and he said, “Hey, I think I would like to convert my second home to a rental,” and we did have some of the fire evacuees who lost their homes actually rent our place for a little while.
Avery: But they allowed us to do a third 10% down vacation home loan, because we converted one of ours to a traditional rental.
Brandon: Interesting, okay.
Avery: It’s some gray areas, and definitely I’m not a lender, but there’s some definite ways where you can get away with putting down less than you would on a traditional rental.
Brandon: Mm-hmm (affirmative), that’s cool. And just to throw this out there to people listening, one of the strategies I’m a big fan of, I talk about a lot, is that I do partner with people. I think there’s a lot of opportunity for somebody who maybe has some cash, but they don’t want to deal with the management, and the bookkeeping, and the smartphone stuff and responding. They don’t want to deal with that stuff.
Brandon: So if your somebody whose like, “Yeah, I want to deal with that stuff. I like that, but I don’t have the cash,” go find a partner, somebody whose got a little bit of money, that they can go get the 20% down payment loan, or the 25%, or whatever the bank requires. Then you just manage the thing, and just split it. JV it until you have enough money to do it on your own. Have you seen that work at all in your-
Avery: Yeah, we did that on two of ours to start.
Brandon: Oh, awesome. Yeah, I don’t know why more people don’t think that way. I think it’s funny on both sides. You have people who are like, “Well, I’m never going to find that person whose got money and just wants to split a deal, even though I’m not putting anything up.” Then on the other side you have people who are like, “Man, I’ve got all this capital right now. I don’t know what to do with it. I sure wish I had somebody I could trust. I could go put it to work.”
Brandon: So, I talk to those people all the time on both sides of that. So, I’m telling everybody out there, connect, network, talk to each other, because both sides exist in mass right now in this market in a tremendous way. Get out there and start talking with people, and provide your value. Hey, you’re going to get awesome vacation rentals in vacation rental areas. That’s what you do, so when you meet that person whose got an extra $30 or $40 grand lying around, you can be like, “Hey, let’s work together, and we’ll just split the profit 50/50,” and boom now you’re in the game with no money down.
Brandon: I love that idea.
Avery: Yeah, we met our partner on two of ours on an 80s rock cruise.
Brandon: No way, that’s awesome.
Avery: Yeah, so partners are everywhere.
Brandon: Partners are everywhere. What about if a recession happens? One thing that worries me a little bit, is when the recession hits again, less people are traveling to Maui, less people are traveling to Gatlinburg. Do you worry about that? Do you do anything to prevent against that? Or is that not a concern?
Avery: That’s a great question, and there is quantifiable data that you can look at on most vacation rental markets. Gatlinburg, for example, our big draw is the Smokey Mountain National Park. We get 12 million visitors a year for that. You can go on the National Park website and see the data over time. Actually, if you look at the recession in 2008, our tourism continued on an upward trend. It didn’t dip with the home prices. So, any vacation rental market is going to have a department of tourism.
Avery: Maybe you don’t have a national park where you can go look, but they’re going to have a Department of Tourism, where you can kind of look into that. That’s another thing to think about, is you don’t have to go buy the biggest, most expensive vacation home there is. You want to buy just a nice place with a little bit of class, a nice clean place to stay, but you don’t have to buy the biggest and nicest. I run into this with investors a lot, that they get caught up in wanting to be impressive with their vacation home rather than making the decision based on what is going to make them be the best financial choice.
Brandon: That happens in all areas of real estate, doesn’t it? When you get caught up in [crosstalk 00:35:20]-
David: That’s almost always the person doing it for the first time.
Avery: Oh, yes.
David: It’s the person flipping their first house that wants to put courts and chandeliers… Just yeah. The person buying their hotel first time, that it wants it to be the best hotel that’s ever been done. Yeah, it’s dangerous. You mentioned earlier that sleeping capacity is one of the big metrics that will determine how profitable you are. Have you found a sweet spot with about many people you should look for something that can… How many you should be able to sleep?
Avery: It’s going to depend on the short term rental laws in each market on what the sleeping capacity rules are. With the big vacation rental markets, there’s not as many rules, and they’re kind of loose. I would go with, from what I’ve seen, the four and five bedrooms and up tend to be the best return on investment. That being said, the smaller ones are still a great investment too. They still make great money. We own all smaller ones, and that’s not because we did that on purpose. That’s because we just had very little cash to start.
Avery: So, we bought what we could afford as soon as we could afford it to get the cash flow rolling. But if I had it to do over, knowing what I know now, I would have gone with two five bedrooms rather than five one and two bedrooms. Five bedrooms and up, in the data that I’ve looked at in most markets, and in the experience that I have in the markets that I’m in, five bedrooms and up seems to be the best return on investment.
Brandon: That’s cool. Where do you see yourself heading in the future? I mean, you’re buying these short term rentals, but you mentioned that you’re doing it to make cash flow so you can buy more. Some of those are long term rentals, right? Is that the plan to get into those?
Avery: Yeah. We’ve got the five vacation rentals, and then we have 12 long term doors, and we’re under contract on two, maybe three, I don’t know if we fell out of contract on one actually right now. With real estate investing, the goal is to not have to touch it, not have to deal with it. Our short term rental goal is to get more long terms. We’ve gotten nine doors in the past year because of that on long terms in another market. So yeah, it’s been awesome. Those, we don’t have to touch.
Brandon: What this perfectly illustrates at this point, that I’ve been making it a lot lately. I need to make a video for Bigger Pockets or something about this. This idea of in a crazy good economy like we find ourselves in today, where unemployment’s low, and people have money, and they’re spending it, make money in business right now. That could be flipping houses, that could whole selling, it could be short term rentals. It doesn’t matter. Make money now as much as you can possibly make, because now’s… You could run a dog walking business, I don’t care. Make money doing something that fires you up, and you can generate a lot of income.
Brandon: Keep your expenses low so you can take all of that good profit now, and dump it into real estate. So, you’re taking active income at the best time in human history to make active income we’ve ever seen, and dump in that the passive income. So one, you can weather through a next recession when it does come, but two, you’ll be prepared when the next recession comes to be able to jump in even more and do even more, because you’ll have all the experience that you’re building up right now.
Brandon: That’s why David here is building his mortgage business, and his real estate agent thing, so he can generate lots of cash. That’s why I’m doing the same thing. I’m flipping houses in Maui so I can generate cash to dump into investments long term. It sounds like exactly what you’re doing as well.
Brandon: Yeah, make hay while the sun shines.
Avery: Yeah, yeah. And then our long terms are all low income. Somebody’s always going to need a $500.00 or $600.00 place to rent. So, that’s what our long terms are. [crosstalk 00:38:42]
David: Right, you’ve diversified your risk really good.
Avery: Well, thank you.
David: You’ve got, “Okay, these are not going to make as much money, but I’m always going to have a tenant.” Then you’ve got your short terms which are going to be a little bit more work, “Maybe a little risk here, but I’m going to make a lot more money.” You’ve put them together and really, that’s the secret to what successful people do to be able to action when they’re afraid.
David: But you don’t need to wait for your emotions to fall in line with what you’re doing, because you’re diversifying the risk. You’re spreading it out. Like what Brandon said, is the same thing. If you’re making really good money in a good economy, and you’re investing that money when the economy is bad, and it goes further, you’re never afraid. You’re not worried when the economy goes bad, because you’ve got a bunch of cash to play. You’re not worried when there’s no deals to be found, because the economy’s good, because you’re making a bunch of money in that economy.
David: You’re really kind of handling things from every perspective. So, I think you guys both make very good arguments for why playing the cards that you’re given is how you get ahead in wealth building, in real estate, in life in general. It’s not waiting for the perfect pair of cards and then saying, “Okay, now I’m going to play the game.”
David: I have one last question for you, Avery. Something I’ve been wondering, with a short term rental specifically, can you give me a list of expenses that I should be aware of, other than just property tax insurance and the mortgage?
Avery: Okay, yeah. Obviously with a short term rental, you’re paying your own utilities and not your tenant, because you don’t have a tenant. So, you’ve got utilities, you’ve got your cable and Internet, gas, water, things like that. In my market, we don’t have a lot of city water properties. Most of ours are on wells, so you kind of have to budget for that kind of maintenance. But it evens out to roughly what a water bill would be.
Avery: Then your cleaning fee. Cleaning fees are a big one. They’re passed through to the guests, and a lot of people, when they’re analyzing short term rental deals, they say, “Oh, are these gross number including cleaning fees?” They really hung up on what gross numbers are. A lot of people say that when you’re quoting your gross, you should say, “Not including cleaning fees,” but I don’t agree with that because the definition of gross is all monies coming in.
Avery: There is actually income in the cleaning fees. So, if your cleaner charges you $100.00 to clean, charge your guests $120.00. There’s income there, so you don’t need to throw that away as a pass through expense. There is a little income in there.
Brandon: All right.
Brandon: That’s great. Great. All right, well with that, I want to head over to the next segment of our show. It’s the Deal Deep Dive. This is the part of the show where we dive deep into one of your deals that you’ve done. Avery, do you got something in mind that we can pick apart?
Avery: I do.
Brandon: All right, so the first question I have is what kind of property is this, and where is it located?
Avery: It is a short term rental in Gatlinburg.
Brandon: All right.
David: And how did you find this property?
Avery: It was on the MLS, and we just found it on the MLS. We were looking for it. This one is really important to me, because it was the one that would determine if I could quit my job or not. So, this one is the one that really makes a difference for me in my mind.
Brandon: What were they asking? How much was it?
Avery: This is not a realistic number for the market now, but they were asking $159,000.00 for it. It’s a one bedroom with a second loft bedroom.
Brandon: All right, cool.
David: What price did you end up paying for it?
Avery: We were under contract on it for $165,000.00 because we wanted some closing costs, and there had just been a really big fire in the area, and the inventory was really low. Actually, while we were standing there doing our inspection, a guy came up in a truck and offered us cash. He thought we were the owners already, so we got a really good deal. It ended up only appraising for $155,000.00, and we got the owner down to $155,000.00
David: Using the appraisal. That was good. That was my question, how do you negotiate the price.
Brandon: That’s cool.
Brandon: All right, how did you fund it then?
Avery: We used a HELOC from our primary for the down payment on that one. [crosstalk 00:42:36]. We did a 10% vacation home loan on that.
Brandon: It’s the no money down thing, because you used the HELOC for the down payment, and then you got the loan on the rest.
Avery: Pretty much.
David: It’s beautiful when your houses buy you houses, and your cash flow buys you cash flow. That’s just the best part of real estate. Okay, so I already know what you did with it was was a short term rental. Tell us what the outcome of this deal was.
Avery: Sure. This property, it’s a really cute property. It had terrible rental history. It was doing $27,000.00 a year on the local property manager. It does $54,000.00 for us now.
Avery: I was very nervous about it, and this is a really good lesson for future short term rental investors as well. This property, the way that it is positioned on the mountain with trees, it can only get satellite, and it cannot get Internet whatsoever, not even satellite Internet. I was really nervous about it because I was worried that it wasn’t going to rent. It is on a little bit of a steep road. It’s not terrible, but it is something that needs to be mentioned to guests, and it doesn’t have Internet. So, to me I felt like this was a really big risk, even though it was a really cute property.
Avery: I was very worried about it. I lost a lot of sleep over the no Internet. My husband is the non-analysis paralysis guy, and he convinced me that it was going to be a good investment, because it really was just such a good deal. That’s such a low price for a nice property with a view like that. We went through with it, and we found that when something isn’t perfect about a property, if the rest of the property makes sense, then it can be okay.
Avery: Like the no Internet thing, we just make sure everybody’s very aware of it. It doesn’t have Internet well before they book. Same thing with the steep road, “Hey, the road’s kind of steep. You’re going to be scared the first time, but the second time you’re going to be a total pro.” As long as everybody’s aware of that several times before booking, we have not had one bad review on it not having Internet. It’s our highest performer.
Brandon: Oh, wow.
Brandon: That’s cool. That’s a good lesson too. There’s a lot of good stuff in there, but that’s interesting. Sometimes I think that your most afraid of, as long as you compensate for it-
David: Well, it’s the expectations, probably.
Brandon: That’s what it is, yeah.
David: I found that as an agent, when we’d avoid difficult conversations, we almost guarantee that people will be upset. When you do the thing you don’t want to do, which feels wrong. “I don’t want to make this person think there’s a problem by telling them about the steep road three times, because what if they weren’t going to think about it?” It’s the opposite. The more you explain it to them, the more they’re prepared for it. So when the steep road comes, they’re not ticked. They’re not cursing you out on the way up there, thinking they got duped.
David: They’re like, “Oh, yeah. This is what she told us, and this is how she said we should navigate it. Okay, that worked. That was fun.” Now they’re happy. The exact same scenario, if their expectations were that it was going to be not that bad, and then they felt some fear and some anxiety going up that road, they’re cursing you out the whole time, they’re planning that really bad online review, the gift basket is exactly what you said, “Oh, of course they put oatmeal raisin. They couldn’t give us chocolate chip, could they, because they’re steep.”
David: That’s exactly a good lesson just to learn in business, is to have the very hard conversation up front. Be clear. Be direct. Let people know what they’re getting into, and nine times out of 10, it will go smooth.
Brandon: So good. So good. All right, well any other final lesson you learned from this deal, or anything that you want to pull out? Or is that kind of the gist?
Avery: As long as the numbers make sense, it’s a good deal. There’s going to be some things that you like better than other things, but there’s no way you can make everyone happy all the time. You can have the most beautiful property in the world, and somebody is going to have a complaint. As long as you’re not trying to please everybody all the time, your mental health is going to be good, and you’re going to be making money.
Brandon: All right. All right, perfect. All right, well that is the end of the Deal Deep Dive. Now, let’s head over to the world famous-
David: Fire Round.
Brandon: Fire Round. All right, this is the part of the show where we’re going to fire questions at you, that come direct from the Bigger Pockets forums. Let’s see what people got to ask, and most of these are related to short term rentals and vacation rentals.
Brandon: Daniella from Oak Park, Illinois, Illinois if you don’t know how to pronounce it right, said, “Have you compared the Airbnb earning estimate for your area with your actual? Do you earn significantly more or less than what they estimate? If the Airbnb estimate is true, I would not be making any money, which doesn’t make sense, as I know some hosts in the areas clearly are. Thank you.”
Avery: I don’t look at that. There’s a lot of ways, when you’re analyzing a deal that you can figure out what it might be able to make. AirDNA and Mashvisor are both really good tools. Their data is not perfect, but it’s getting better all the time. It is actually measuring properties that are on the RBO and Airbnb. So, when you’re looking at what you can make, those can be really good tools to utilize.
Avery: Also, a lot of the big national property managers, like Vacasa and Evolve will give you estimates of what they think you can make on it. All that to say, I’m totally not even answering the question.
Brandon: That’s all right.
Avery: I don’t look at that, but I know what I can make on a property now. It’s not really a quantifiable thing. I can kind of just look at it. I don’t even look at that stuff anymore.
Brandon: You know, I just thought of one more point to bring up here. This is another reason why I like your strategy a lot, this idea of picking a market that’s an actual vacation rental market, and then going all in, in that market. So, you have a number of them in that market, because now there’s a lot less risk of, “Well, what if? I don’t know what that can rent for.” I mean, if I go and do a vacation rental in some random city, I don’t really know what the rental rates are. But if they’ve been renting there for the last 80 years houses, you have a lot of history to go off, and a lot of averages, because there’s just a lot of people going there. That makes a lot of sense.
Brandon: All right, number to.
David: Next question from [Tato Corcorhan 00:48:23], “For those of you who operate Airbnbs, I’m curious what your cancellation policy is. Is it strict, or do you try to keep it moderate?
Avery: Super strict.
Brandon: All right.
Avery: Especially if you have a smaller property. The larger properties where you have 20 people coming, that takes a lot more for them to coordinate to everybody together to go on a vacation. So, you have less of a chance of them canceling. Especially with the smaller properties, we were pretty strict on it. If we can rebook their dates, then we’ll give them a refund. But if we can’t, and it’s not a truly extenuating circumstance, which Airbnb and VRBO have just come out with all these new things about extenuating circumstances that we don’t need to get into, but if they have a really legitimate reason, then we’ll let them out. But, what it says on our policies on both platforms is that we’re super strict.
Brandon: All right. Number three, “What do you think of the whole Airbnb arbitrage thing? Where you lease from a landlord, pay them that set rent, and then with their permission you rent it out short term, and make money on the difference.” What do you think of that?
Avery: I think that’s kind of to your point of making money while there’s money to be made in a great economy. I don’t think that’s real estate investing. I think that’s creating a job for yourself, and it’s not creating long term wealth, but it can be a good way to get some cash flow going in the meantime.
Brandon: Yeah, totally agreed.
David: Love it. Okay, from Joe Kim in my hood, the Bay area, “What do you think about niche marketing appealing to specific groups like couples, retirees, bachelor parties, et cetera?”
Avery: I think that’s overthinking it a little bit. If you’re in a market where there’re tons of tourists, there’s going to be a lot of different kind of people who need the size property that you have, so there’s no need to… In this instance, there’s no need to market that way.
Brandon: All right. All right, good answers. And now it is time for the Famous Four.
David: Famous Four.
Brandon: These are the same four questions we ask every guest, every week. Avery, we’re going to throw them at you. Avery, number one, what’s your favorite real estate-related book?
Avery: The one that has the most bearing on my business, and in my business as an agent, is the Long-Distance Real Estate Investing book.
Brandon: Ah, look at that.
David: Oh, that might be the first time we’ve had that one.
Brandon: David Greene’s own book. This is great.
David: Wait, you are talking about my book, right? There is another person that wrote another book with the same title, right?
Avery: [crosstalk 00:51:02]. I don’t think so.
Brandon: You can see David’s head just growing now. He feels really good about himself. [crosstalk 00:51:06]
Avery: I mean, you can’t always live in the best place to invest. In my agent business, none of my clients live in the market that they’re investing in, so that’s a good one.
David: It’s funny you say that. I’ve heard a lot of agents in a similar position as you, who are servicing clients. Like in my marketing in California, but they’re in the market with the properties, that are buying up and giving it to their clients to say, “Hey, look, this isn’t crazy. People actually do this.” Now the client knows what questions to ask, and what they should do. The agent knows what’s in the book that the person’s reading, so they say, “Well, the book says to do this, so you do it this way,” and it makes the whole relationship go a lot smoother. Have you found that to be the case at all? Do you agree?
Avery: I recommend it to my clients. Maybe I should buy it for them and send it. But yeah, yeah there’s a lot of… The FAQs definitely help. Almost everyone’s going to have roughly the same questions about doing things remotely when they don’t live there. So, it’s definitely been a help.
David: Well, you made my day. Thank you. I finally got one for one of my books. Brandon gets it like every three guests. [crosstalk 00:52:07] one his best sellers.
Brandon: I don’t think that’s true. I don’t think I’ve had one in like a year, so whatever.
David: That’s because you’re just humble, but trust me, we get [crosstalk 00:52:14]-
Brandon: That’s not true.
David: He’s so used to it, he doesn’t even recognize it anymore. He’s like, “Oh, yes, yes I know. Best selling, grossing in the market. Completely.”
Brandon: Move on. Move on.
David: All right, what is your favorite business book?
Avery: I am a Ryan Holiday super fan. I really love Obstacle is the Way. It’s not necessarily a business book, but I apply it to my business quite often. On the other end of that spectrum, way on the other end, I’m also a Grant Cardone super fan.
Brandon: All right.
David: [crosstalk 00:52:43]. Yeah, those are about as opposite of personalities that you can get.
Brandon: Yes, I think that. Yeah.
David: That’s hilarious.
Brandon: That’s great.
David: Okay, so when you’re not playing in a punk rock band, being a goalkeeper for a… Was it a Big 12 championship team? Is that right?
Avery: Oh, yeah. Yeah, when I was at Texas, we did win a Big 12 championship.
David: Or, buying a bunch of properties. What are some of your hobbies.
Avery: I collect guitars. I’ve got a lot of Gibsons. I don’t play so much anymore. Those days are done, but I play guitar, and then I’m a runner as well. I was a marathoner before I had a baby last year, so I’m trying to get back into the swing of that.
Brandon: Yeah, cool.
David: You’re going to get a lot of follows after today’s show. There’s a whole lot of people that are like, “This chick is awesome.” [crosstalk 00:53:29]
Avery: Thank you.
Brandon: That’s so cool. All right, well before we ask people where they can connect with you at, I want to know what do you think separates successful real estate investors from those who give up, they fail, or they never get started?
Avery: I know for the fact that I’m not the first person that has said this, but analysis paralysis is a big one, especially… I mean, I deal with hundreds of investors a year, and getting caught up in what the other side of the transaction is doing or not doing can really kill people. I’ve seen people walk away from fantastic deals, because they were too caught up in what the seller paid for the property, or what they feel like the seller is doing to them psychologically, or what games they’re playing. You really just have to keep the emotions out of it, and just look at the numbers.
Avery: Same thing, I’ve seen people walk away from stuff because they didn’t like the condition of the coach, which is not even real estate, but just look at the numbers. Stay in the numbers area and not in the emotions area, and not worry about what everybody else is doing. Then that’s really what separates people, is the analysis paralysis.
Brandon: All right, yeah.
David: That’s a good throwback to another Ryan Holiday book, Ego is the Enemy, because you’re exactly right. I see this as a real estate agent, and you probably do too, constantly where this deal is $25,000.00 less than anything else that they could possibly buy. It’s going to rent for more than anything else they could get, and they’re hung up on, “Well, the seller isn’t going to change the door locks, and I think that they should change the door locks,” and they’re willing to let it go on principle. All those people, every time, they step back later and they say, “Why did I do that? That was so dumb.” But when you’re in the moment, yeah it feels real.
David: Okay, last question. This has been a fascinating interview, and I think you’ve been doing such a good job. I love the amount of content you actually gave us in a short period of time. For those that want to use you as an agent, or find out more about you, where can they find out more about you?
Avery: The name of my team is The Short Term Shop, and you can find me at TheShortTermShop.com. I’m also on Bigger Pockets several times throughout the date, on the forum, so you can find me there too.
Brandon: Awesome. Well, it’s been fantastic, Avery. Thank you so much for joining us today. Yeah, this is cool. I’m going to definitely reach back to you if I decide to go with this short term rental thing here in Maui. So, I appreciate you letting me pick your brain today.
Avery: Yeah, let me know. I’d be happy to help. Thank you guys. Thanks so much for having me.
Brandon: Thank you.
Brandon: All right, that was an interview with Avery Carl. Awesome show. It came at such a great time for me. I know a lot of people who have been thinking, “Should I? Should I try the whole short term rental thing? Should I try some engagement deals?” Well, I think she had some phenomenal strategies.
David: I think that’s the most straightforward meat and potatoes information we have ever gotten from someone about short term rentals.
Brandon: Yeah, that was awesome.
David: I mean, I was just fascinated with how much content she gave us, and how clear it was. I really feel like I could go start a business right now just on what Avery shared.
Brandon: I know. Let’s do it, David. Forget mobile home parks and mortgage companies. Let’s just go start a short term rental business together.
David: Okay, there it is. You guys have heard it.
Brandon: You heard it here.
David: If any of you have experience dealing with short term rentals, message Brandon or me. Tell us that you want to start the business for us. We will take care of all your needs. We’ll supply everything you need. You do the work, and we’ll see how that goes.
Brandon: That sounds like a great option right there. Good job, David. David likes to start businesses. It’s great.
David: I like to start businesses, and Brandon likes to buy T-shirts at Target.
Brandon: That’s true.
David: He’s wearing a $6.00 T-shirt on the recording today, and we were joking about how that’s how you know he’s married.
Brandon: It doesn’t look like a dad shirt. This looks like I just got back from the gym, and have you seen my beach ball.
David: When your shirt costs less than your coffee, that’s a dad shirt. Don’t bring the gym into this.
Brandon: I don’t even know where to go from that. Let’s get out of here.
David: All right.
Brandon: Before we do, before we do, this is where I wanted to go with that. I want to give a shout out to Scott [Pearson 01:02:31] from Hunlock Creek… I don’t know if I said that right, Hunlock Creek, Pennsylvania. He’s a Bigger Pockets pro member, recently had his first deal done. It is a duplex. That’s a lot of D’s. He got a deal done, he’s a duplex, bought it for about $60K. He makes like $500.00 a month in cash flow off his deal. You know, we love to see all of our members doing deals, and entering them into their profiles over on Bigger Pockets. It also helps other Bigger Pockets members see that you are like the local expert, and it motivates all of us to take action.
Brandon: So, make sure you do that. Enter it under your profile. Nice job, Scott. So, everybody else, if you are a Bigger Pockets pro member, and you want your deal featured here, email us [email protected] Put the word “pro deal” in the subject line. Tell us about one of your recent deals, and we might be talking about you next week. With that, now David, would you like to get us out of here?
David: Yeah, sounds great.
Brandon: Because I got a gym to get to, and I’m going to wear my $6.00 shirt to the gym right now, thank you very much.
David: Yeah, they’re like disposable shirts, like disposable diapers. You wear it to the gym, and it gets sweaty, you throw it away on your way out. You grab another one out of the 20 pack that you bought at Target.
Brandon: So, true story, I actually bought several of these shirts, the $6.00 ones at Target-
Brandon: But I wore the one the other day. And you’re right, sweaty, so this reminded me of the story. I want to brag about myself for a minute and pat myself on the back. For the last few years, for a long time… Not like year. I built this shed I live in. I’m in the shed. I had it built a year ago. On Saturday, I was going to go to the gym, because I was like, “I got to workout today a little bit.” Then I was like, “You know what I’m going to do instead? I have not yet dry walled the ceiling to my shed.” I need dry wall on the ceiling. So, you can’t not watch on YouTube right now, you can’t see this, but look whose got a dry walled ceiling now?
Brandon: I wore my $6.00 Target shirt, and it was like sopping wet. It was like wet from sweat. It was disgusting. But, I single handedly, by myself, dry walled my entire ceiling, and I was pretty proud of myself.
David: Congratulations, [crosstalk 01:04:27] $200.00 to dry wall a shed, when you could have made a video that would have enriched the masses and changed lives.
Brandon: You know what? No, it’s not about the saving money. It’s about the sense of accomplishment now. Every time I’m in this room, I look up and I go, “I did that.”
David: There you go.
Brandon: And, I worked out for basically three hours. You should have seen me. I was on a stool with one leg, with one hand holding a piece of eight foot dry wall, my head holding the other piece, and a screw going in the other one, screwing it up into studs and missing. It took me three hours to get four sheets of dry wall up there, but it was awesome.
David: Was it a stool that you put together yourself, and a gun that you drove to Target to buy yourself, and screws that you handmade-
Brandon: I forged-
David: From Hawaiian coconut?
Brandon: In the fires of Mordor, all right? Thank you very much.
David: I love it. Well, hey Jesus was a carpenter, right?
Brandon: There you go.
David: He worked with his hands too, so I’ll give you credit for that.
Brandon: He could have outsourced it to other people too, but he didn’t, thank you very much. You know why? Because there’s value in working with your hands, David Greene.
David: There it is. All right, this is David Greene for Brandon The Humble Holy Roller Turner, signing off.
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