Short Term Rental Investing with Culin Tate

Unknown Speaker 0:15
Well, hello, this is George G. And the time is right. welcome today’s guest strong and powerful. Colin, take Colin, are you ready to do this? I’m ready to do it, George. All right, let’s go. Colin is a serial entrepreneur, owner of and host of eight Airbnb properties. He’s a short term rental coach. He’s the author of host coach. He’s a speaker. He’s a family man as well. Colin excited to have you on tell us a little about your personal life’s more about your work and why you do what you do. I do what I do. Hmm.

Unknown Speaker 0:48
I guess I can parlay from,

Unknown Speaker 0:51
you know, I am a short term rental investor, and educator. So I became good at.

Unknown Speaker 0:59
We’re talking about Airbnb type properties here. And I do that for the purpose of financial freedom and got excited about doing it for myself, helped some friends realize that my processes and systems were repeatable, and ended up writing a book about it.

Unknown Speaker 1:17
Love it fell forward about the personal life or

Unknown Speaker 1:21
personal life. So I am married of 18 years have a son who is in eighth grade. And he’s going through that fun process of applying for high schools, he was in a private school. So it’s, it’s kind of a solid gauntlet, like, very similar to applying to colleges without the travel. So we’ve been really focused this last couple of months on being present for him. And again, that’s kind of one of the nice things about being a real estate investor, is that we can, you know, stand up from the desks when we need to, and, you know, go help him with something or take him somewhere, be present in his life. You know, at eighth grade, we’ve only got a few more years left before he’s off to college. We’re to think about it like that. Right.

Unknown Speaker 2:09
Everybody’s getting older, Colin tapenade everybody. It’s funny, those people who are listening right now who have kids that are probably 18. and above, you probably have an edit for that, which is like, you really got to about 16. But delay I get in the car. Yeah, yeah. I don’t thought that for a second. All right. So so the promise, the desire was, I want a little bit of flexibility I want in determines financial freedom, that gives me flexibility to be able to give my time and attention to other places other than my work. Yes. So I’ve always been an entrepreneur, I’ve never had a W two job, I own several companies, startups,

Unknown Speaker 2:49
you know, in going through various levels of exit or acquisition with those, you know, and,

Unknown Speaker 2:56
you know, there was there was good money to be had. Right. So that’s nice exits,

Unknown Speaker 3:02
you know, had some nice distributions along the way. But I always had that, you know, busy feeling right, you’ll leave the office for 15 minutes to get lunch and, you know, felt anxious about it. And when I was 48, I sold a company was scratched my head thinking, you know, what am I going to do, I’m going to scale up another business. And I had some real estate that was doing well, some short term rentals to at the time, really.

Unknown Speaker 3:27
And I decided, maybe I switch gears a little bit, instead of going through the grind of another startup, maybe real estate investing could be a little bit more, you know, I always had flexibility. But really the difference between entrepreneurial flexibility and true financial freedom to really not be worried about the finances.

Unknown Speaker 3:48
So that sounds good, too. I think I imagine that that that that sounds good to just about everybody.

Unknown Speaker 3:57
And so the promise of that very, very attractive. What if you’ve been able to do it, and you’ve been able to successfully do it and you’re helping other people to successfully do it? What, what are the table stakes? What does a person have to have or be able to learn in order to effectively do this?

Unknown Speaker 4:20
That’s a really good question because

Unknown Speaker 4:24
it can be done a lot of different ways. I actually have a presentation on just this subject tomorrow for people in rural areas. So alright, let’s see. We’re gonna unpack this at the very top. What I do is purchase individual single family homes, cabin Type homes, and put those on Airbnb. But we usually are changing the use case of the home we’re taking it from being somebody’s sort of getaway weekend family home and putting it into a full service, you know, high occupancy, short term rental on Airbnb. So that is sort of the, you know, highest table stake out

Unknown Speaker 5:00
would imagine at highest return, there are a lot of things that people can do if they don’t have a home to buy or don’t have the capital at the moment to buy a home. There’s lots of other creative ways to get involved in the short term rental hospitality industry,

Unknown Speaker 5:14
including smaller types of properties, be it

Unknown Speaker 5:18
a geo dome, or a tiny house or an Airstream trailer, right. So less capital intensive, you can, some of those things can run from, you know, $30,000, down to $3,000. I know successful properties where there’s sort of like farm type, a little bit of land, or people have put up really interesting T piece.

Unknown Speaker 5:43
There’s also there’s a couple other things.

Unknown Speaker 5:47
Peep

Unknown Speaker 5:49
there’s experiences on Airbnb. So if you let’s say you’re a person, let’s say you like craft beer, and art, you can take people on craft beer, art tours of your city. I lived in Athens, Greece a couple of years ago with my family and the those are wildly successful, very popular graffiti tour of the city. Yeah, and the tour guide knew what he was doing. And it was entertaining and educational. So there’s a lot of ways to get involved in this. Hospitality. So maybe people are out there thinking I’ve heard about Airbnb. And yeah, the table stakes was a great way to put that question. But I don’t have you know, a couple $100,000 to buy a house or, you know, I don’t have the downpayment, I know I can get a loan, I don’t need $200,000. But there’s a lot of other ways to get involved

Unknown Speaker 6:38
in it. And

Unknown Speaker 6:40
on top of that, certainly money is a massive part of this deal. But how do I know if I’m, if I’m wired for it, you’re somebody who started businesses and sold them and done that several times. And I think that it was in a very, very technical field, you can correct me if I’m wrong. So the way that you’re wired and the way that you’d like to work and process information? How do you think that somebody, is it essential to be wired in a certain way to be successful doing this? I have a clear thought on that. I believe that real estate investors are problem solvers.

Unknown Speaker 7:21
So if you’re the kind of person that’s out there that likes to solve problems that just use any example in your life, right? Or you the type of person that when you run across a problem, it becomes debilitating, right. So are you energized? Can you be a problem solver? Are you willing to be a problem solver? I have a My I think it’s my father in law has a wonderful expression. There’s two kinds of people in the world problem solvers and problem identifiers. And so you asked you to what does it take? I think anybody who can identify themselves as a problem solver can be successful in real estate.

Unknown Speaker 7:58
But that’s really funny. Problem identifiers. There’s not a lot of value there. But you can when you can, I’m sure you’ve heard it happen. There’s someone in your life

Unknown Speaker 8:10
1,000% Yeah. Yeah, there’s, there’s no doubt there. We’ve all met them a lot more problem identifiers than their actual problem solvers. I think that makes a ton of sense. Because I imagine when you were working to put systems and operations in place, and juggling lots of different parties,

Unknown Speaker 8:28
that problems are going to come up. Yes, you know, there’s a lot of software available to, you know, just maybe to point out to people, you know, Airbnb, in and of itself is about becoming this great hub for people who are looking for travel or experience to come and discover, you know, a unique property or experience like any one of us could offer.

Unknown Speaker 8:54
But that’s sort of the marketing piece and the financial collections piece. But then you’re right, there are other operational pieces. And there’s great software’s that we use to

Unknown Speaker 9:06
help us price our listings on an automated basis, we use something called price labs. There’s other people might be thinking also about, you know, the time interacting with the guests. And there’s some really great guest

Unknown Speaker 9:21
automation,

Unknown Speaker 9:23
automated messaging software that we use called hospitable, that really handles about 90% of the communication. So sometimes, I don’t know if I have time to talk to all these guests. Well, that 90% of that wrote, communication can be automated with software. So those are things that people you know, new to the industry might not be aware of. Yeah, I appreciate that. It always strikes me that when you’re moving people in and moving people out, need to make sure that the house is getting cleaned and the laundry is getting done. The dishes are getting washed and all that and well simple to know when things are moving around. Then things get dropped.

Unknown Speaker 10:00
Whatever. And that’s where the problem solving probably needs to come in.

Unknown Speaker 10:04
Yeah, perhaps, you know, again, there’s pretty simple solutions that we use a set of Google Sheets. And housekeepers gonna have it on their phone and they check it daily. You know, the problem solving is more like,

Unknown Speaker 10:16
you know,

Unknown Speaker 10:18
it’s not the operational stuff, it’s the things that come up outside the operational stuff like oh, there’s no hot water today where the power’s out today or there’s a leaky something or you know, we had a we have a padlock when on a back shed to a place of ours, you know, guest area lock guest or the padlock stopped working, padlock, stop working.

Unknown Speaker 10:41
First of all, you know, let’s recheck the number, you know, you know, the the code, maybe the guests doing something incorrectly, you know, some handyman out known about locks not working. So we’re gonna maybe it seized up, it’s outside.

Unknown Speaker 10:54
But that’s the kind of problem like, okay, get am I going to freak out, or we’re going to make a plan and make a phone call or to to get somebody to replace a padlock and gain access to it for a guest amenity. That makes a ton of sense. Because the unanticipated things that are tricky, not just the regular things, got it. So if you’re the kind of person that can, you know, handle those things and pick up the phone and solve problems, then you’re, you’re you’re wired correctly, for the turnoff. And as interest rates are going up, and home values are going up, and then they’re gonna go down. And then interest rates will hopefully come down, which I have no idea what’s actually going to happen with the housing market and the financial markets and all that stuff. How do you think about that, as you look forward? I think about that, as from a long term perspective. So my pace is to acquire about two properties per year. That’s sort of the comfortable level for our family. Some people said, Well, gee, you’re doing really well at that. Why don’t you go out and do for a year, we did three one year, and it wasn’t fun. It, it was really unhealthy and fun, took the joy out of it detracted from financial freedom. So that’s our pace. And I know that, you know, I’ve bought some low, right, I’ve bought some high already.

Unknown Speaker 12:16
And I think, as you said, they’re coming back down. So as long as you are thinking about this in a longer term perspective, that things are gonna go up and things are gonna go down. I think they say that in the markets, right? The only way to lose is to not be in the markets, right? You can’t time it. So if you can, you know, have a cycle, you know, a pattern of in, you know, I’m just investing on the way up on the way down, and through the troughs, and peaks and valleys. Yeah. Going back to that opening, sort of conversation and joking about how we’re all getting older.

Unknown Speaker 12:46
You could certainly probably suffer from paralysis, if you were thinking about getting into real estate investing and doing this, and then all of a sudden interest rates go up, and it stops you from doing it like, well, I’m going to wait, I’m gonna wait, I’m gonna wait Well, the year five years, 10 years goes by, and then you haven’t done anything. Right? That what’s the cost to that? Right? You know, and if you look at interest rates,

Unknown Speaker 13:09
and particularly in the winter, we’re complete comparing in the short term rental model. So if we were running numbers about buying a condominium to rent out as a long term, our margins are pretty sitting there, right? So easy numbers, let’s say, you know, we’re gonna have $1,000 mortgage, and we’re gonna have $1,200 in, in rental cash flow, right, that’s, that’s kind of a thin margin. And the short term rental, the margins are much higher, right, it’s a little bit more like operating a business. So if that mortgage goes from, say, 1000 to $1,200,

Unknown Speaker 13:44
the $200 difference in interest difference isn’t really going to affect substantially our margins in the short term rental business.

Unknown Speaker 13:54
Got it? That’s, I think that that’s probably people don’t, maybe a second level thing that that people don’t necessarily take into consideration. So what are some of the big things that from your experience, personally, and then from your coaching, where you see, you know, people really aren’t looking at this or thinking about it the right way, or some of the bigger mistakes that people are making.

Unknown Speaker 14:20
Like you said, one of the biggest mistakes is the analysis paralysis, right? Where I’m just not going to get started. And I tell people, you don’t even have to buy anything, just, you know, go meet a real estate agent, right? Now look at a place online, if you like, instead of just sitting in your office in your basement, you know, looking at the computer screen, just go out and see one of them right things happen when you get you put yourself in motion. So go see a property if you’re interested if anybody listening to this is interested in real estate anyway, you know, and you can identify with what I said about sitting in front of the computer. Just hit the button and go see a real estate agent and tour a property. You know, start those wheels to rolling

Unknown Speaker 15:00
What other things do people get hung up on? I think a lot of time, when I coach people, and they’re getting started as hosts, it’s a little difficult to separate your emotional attachments

Unknown Speaker 15:14
to your property in it, because we do get emotionally invested, particularly when we’re picking over outfitting and decorating a place and we’re anticipating making it perfect for guests, right? There’s a lot of emotional energy that does and should probably go into that, right that process, I know we do it, my wife and I, we decorate, we get very excited, we’re putting in, you know, unique amenities. And so that’s an emotional thing.

Unknown Speaker 15:40
But when you get the property up and listing, we have to sort of detach ourselves a little bit, some guests will be grumpy, some guests might, you know, be insulting.

Unknown Speaker 15:51
And we just have to put on a Ritz Carlton service, you know, hat, and realize that we’re boutique hotel operators, and, you know, ask ourselves, what would the front desk do in this situation? Would they get emotionally upset about it? Or would they, you know, try to put on their hospitality, you know, hat, so to speak, and, and handle it that way. So I think

Unknown Speaker 16:15
detaching ourselves a little bit emotionally from our properties, and being professional and putting is the biggest

Unknown Speaker 16:25
see a lot of hosts that aren’t able to do that?

Unknown Speaker 16:28
Yeah, that’s really interesting.

Unknown Speaker 16:30
Do you think that, that you’d add that to the table stakes of this is something you need to be able to do is to handle the emotions that you will feel and experience when people are unhappy, and they’re going to be unhappy? Right? That’s a good point, you know, if

Unknown Speaker 16:50
you are trying to give people filters for is this a good opportunity for them? Right? You know, if you’re the kind of person that just honest with yourself to say, I just can’t I don’t take criticism, I don’t like when people don’t like my stuff, I don’t know that I could, you know, separate myself, then maybe we do real need to realize that there’s a hospitality component to short term rental investing, hosting, that’s a little different than, you know, when you’re a landlord, and you have a house and you sign a lease with somebody, and it’s kind of arm’s length, we are a little bit, we’re more close contact, and we’re vulnerable with our guests in the short term rental space.

Unknown Speaker 17:28
I imagine that the more experience you have, the better you get at upfront expectations, you can hopefully manage some of those out, not everything. Yeah. And hey, I will be honest, you know, I, it gets me every now and again, gets me every now and again. You know, I have to go I can’t believe this guy. Why is he doing?

Unknown Speaker 17:49
But as long as I can keep that conversation between her and I, as opposed to, you know, it’s okay to let it out. Right.

Unknown Speaker 17:57
But we try to not let it out

Unknown Speaker 18:00
to the guest.

Unknown Speaker 18:02
For sure. For sure.

Unknown Speaker 18:04
So also have a sounding board. So you don’t directly emotionally respond to the other human being. Because

Unknown Speaker 18:13
because we are yes, you can certainly get better at that. But at the end of the day, yes, we are. We are human and we have a responses. The Ritz Carlton guys go behind, you know, back behind the desk into the break room. This

Unknown Speaker 18:27
person

Unknown Speaker 18:31
somebody tried to book about that the back room of the Ritz Carlton

Unknown Speaker 18:36
horror stories, maybe get a listener out there that can reach out to you. Yeah, I’d be I’d be interested in hearing some horror stories there for sure. So I love it. Well, Kent, thank you so much for coming on. How can people learn more about you? Where can they learn more about you? How can they engage? Where can they get a copy of host coach, absolutely host coach the book, financial freedom through short term rental investing is available on Amazon. It’s an audible paperback and Kindle format. And if you want to learn more about me and what we do, we want to reach out its website is host coach.co.

Unknown Speaker 19:16
Excellent. If you enjoyed as much as I did, show collinear appreciation and share today’s show with a friend who also appreciates good ideas. Pick up a copy of hosted coach on Amazon, the actual physical copy the audible, the Kindle, copy, go to host coach.co and check out all the great resources like the Collins did a great job of organizing the site and laying out the different steps and all the different things that you need to be taken into consideration. And if you’ve been on the internet, staring at the computer screen thinking about doing this, take his advice and just get out there and see a property. Thanks again, Colin.

Unknown Speaker 19:56
And until next time, remember, do your part by doing your best

Transcribed by https://otter.ai