How Buying a Failing Business Turned Into a Short-Term Rental Empire

Summary

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Radical Wealth Plan – “How Buying a Failing Business Turned Into a Short-Term Rental Empire”

Podcast: Radical Wealth Plan
Host: Paul Morris
Guests: Josh Rudin & Patrick Swiatek
Date: February 24, 2025

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Episode Overview

This episode explores the inspiring journey of Josh Rudin and Patrick Swiatek, two young entrepreneurs who turned the acquisition of a failing property management company into a thriving short-term rental business in Joshua Tree and beyond. Host Paul Morris, himself an experienced investor, dives deep into how the duo’s unique backgrounds, willingness to take risks, and smart partnerships fueled their unconventional path to real estate success. The conversation ranges from first property buys to industry insights on market timing, valuation, regulation, the power of local knowledge, and actionable advice for budding real estate investors.

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Key Discussion Points & Insights

1. Backgrounds and Early Entrepreneurial Roots

• Josh Rudin’s journey: Began working at a deli at 19, mentored by investor Jed August who specialized in creative financing (“subject to” deals). He bought his first mobile home for $23,000, yielding $800/month (approx. 25% return), funded initial deals using college savings, then leveraged hard money and friends/family as he scaled up (03:47–08:13).
  • Quote: “Without this leverage, I’d be nowhere even close to where I am today.” – Josh Rudin (08:24)
• Patrick Swiatek’s experience: Started a tech company at 14, earning $40,000/year in high school by selling gaming server space. He describes his push-pull relationship with traditional success versus the call to entrepreneurship, building businesses and learning through failures before entering real estate (12:58–17:35).
  • Quote: “From a young age of 12, I was looking up employment documents online… it’s the entrepreneur.” – Patrick Swiatek (14:04)

2. Transition to Real Estate & Short-Term Rentals

• Patrick gained experience scaling an Airbnb-focused property management company in LA before starting his own investment in the Smoky Mountains, guided by local experts and analytics (17:17–24:13).
  • Quote: “I just found the experts … and I followed their advice.” – Patrick Swiatek (23:48)
• Josh became interested in Joshua Tree during COVID, noticing exceptional rental income potentials and eventually joining forces with Patrick: Josh brought capital and construction know-how; Patrick added analytical, operational, and tech skills (21:35–22:21).

3. Building the Business & Partnership Model

• First deals were 50/50: Patrick found deals, Josh funded renovations and mentored on-the-ground. They self-managed at first, realizing quickly the need for local teams for true scalability (22:29–28:08).
• They leveraged economies of scale by combining their resources and soon transitioned into property management via acquisition (27:34–29:05).

4. Buying a Failing Property Management Company – Lessons Learned

• Acquired a Joshua Tree-based property management company managing 15 Airbnbs (later scaling to 33+, with more in the pipeline) for $100k up front, $60-100k more pending performance (29:36–30:22).
  • Quote: “We realized to this day that we got ripped off bad because we didn’t understand how to value a company... we bought ourselves a job.” – Josh Rudin (29:36, 32:34)
• Key pitfalls: Underestimated the value of owner labor (the “7-Eleven effect”), hidden payroll/tax liabilities, and loss of staff after acquisition.
• Upside: Gained a foothold, a client network, and real-world expertise that accelerated future opportunities (36:59–39:10).

5. Scaling through Smart Systems

• Introduced virtual assistants (VAs) for support, freeing up founders to focus on business growth rather than day-to-day tasks (33:24).
• Emphasize “work on the business, not in the business,” as a critical transition for scaling up (33:53).
  • Quote: “We want to work on the business, not in the business.” – Josh Rudin (33:53)

6. Market Analysis – Timing, Regulations, & Strategic Investments

• Discussion on whether it’s a good time to buy: Divergent views, but agree that investors should buy under market value and create value, not just pay market price (09:30–12:19).
• Importance of buying in regulated markets: Too little regulation (e.g., Dallas, Houston) can mean abrupt bans, while stable ordinances with local support (like Joshua Tree, Yucca Valley) are safer investments (40:14–44:13).
  • Quote: “It’s actually more risky to go to a place with absence of regulations... safer to go to a place like Joshua Tree where not only do they support it, but they need it.” – Patrick Swiatek (41:27)

7. Value Creation – Stand Out or Fail

• Market is oversupplied in Joshua Tree, so differentiation via unique amenities (“Instagrammable” features) is key.
• High-ROI upgrades include pickleball courts, domes, game rooms, and hot tubs—things that drive bookings through photos, not just luxury finishes (44:37–48:36).
  • Quote: “Short term rentals are really all about what the photos look like.” – Paul Morris (46:48)
• Counterintuitive insight: One-bedroom homes on big lots and large “sleep-18” configurations dramatically outperform mid-sized homes due to lack of supply and unique group demand (50:55–52:22).
  • Quote: “A one-bedroom, boy, we rent them so fast, we turn them over so fast.” – Josh Rudin (50:55)

8. Actionable Advice for New Investors

• Find experienced, local experts to guide purchases—don’t just follow generic advice (23:48, 44:47).
• Invest for “value add,” not turn-key; buy under market and plan to enhance with unusual amenities.
• Leverage resources like STR Nation—Patrick’s networking group and educational platform (25:00–26:19).
• If single-property: Still need to invest in standing out; access Patrick & Josh for advice, referrals, or connections to the right agent.
  • Quote: “You won’t do well if you don’t put money in... you need to stand out, you need to have the right location.” – Josh Rudin (55:23)
• Abundance mindset: Success comes from sharing and acting on information, not hoarding it (57:13–57:44).

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Notable Quotes & Memorable Moments

• “Leverage is everything. Without this, I’d be nowhere even close to where I am today.” – Josh Rudin (08:24)
• “Buying a job... we bought ourselves a job.” – Josh Rudin (32:34)
• “You cannot learn how to ride a bicycle in a seminar. You’ve got to go and feel it, and that’s how you learn how to do it.” – Paul Morris (39:42)
• “Instagram, how does it photograph?” – Paul Morris on rental amenity priorities (56:27)
• “Abundance mentality... not everyone takes action.” – Josh Rudin (57:43)

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Timestamps of Key Segments

• 03:47–08:13: Josh’s real estate origin story, first deals, power of leverage
• 12:58–17:35: Patrick’s entrepreneurial journey, from tech to real estate
• 21:35–22:21: How Josh and Patrick partnered, combining skill sets
• 29:36–30:22: The acquisition of the failing property management company
• 33:24: The role of virtual assistants in scaling up
• 36:59–39:10: Lessons from overpaying for a business and finding silver linings
• 40:14–41:27: Why regulation in short-term rental markets can be your friend
• 44:37–48:36: How to stand out – amenity arms race and “Instagrammable” features
• 50:55–52:22: Hidden gems: maximizing returns with one-bedroom or sleep-18 setups
• 55:23: Advice for investors with less capital—focus on value add and guidance
• 57:13–57:44: Abundance mentality and the rewards of proactive learning

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Action Steps & Resources

• Connect with Josh (@joshrudin) and Patrick (@patryk_swi) on Instagram for advice and referrals.
• Join STR Nation (Short Term Rental Nation) via their Facebook group or yearly conference for networking and education.
• If investing: prioritize markets with thoughtful regulation, unique value-add opportunities, and leverage expert local knowledge.

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Closing Thoughts

This episode is densely packed with real-life lessons on leveraging partnerships, learning by doing, and adapting quickly in the evolving short-term rental landscape. Josh and Patrick’s story is a testament to action over analysis, turning setbacks into scalable systems, and building true wealth through collaboration and continuous learning. Whether you’re a first-time investor or a seasoned pro, the episode’s practical wisdom, candor, and entrepreneurial spirit deliver tremendous value for all listeners.

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Transcript

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[Paul Morris]

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We had a great conversation with Josh Ruden and Patrick Swiatek on short term rentals. This is of particular interest to me because I am now their clients in the homes that we own and have invested in. Joshua Tree. Short term rentals is an area that requires specific knowledge about that type of product and also very important to have great local knowledge. What these guys share today is a great insight in what it takes to be successful at short term rentals, which is a great product type for real estate investing, but one you definitely need to be careful with. Let's get right into it and hear from Patrick and Josh, what are the do's and don'ts of short term rentals?

Welcome you guys to Radical Wealth Plan podcast. I'm absolutely delighted to have you here. And I have the opportunity to have gone out and toured some of your properties in Joshua Tree where you're doing short term rentals and also showed you some of mine and these guys, Josh being 31 years old, Patrick being 27 years old, and here I am, you know, double your age at least. And the amount of wisdom and stuff that I learned from you guys, I immediately feel like, hey, I want to be in business with you guys. But first tell me a little bit about your background so we can figure out how you went from where you were into where you are now as great short term rental advocates.

[Josh Rudin]

Yeah, I mean, thanks for that introduction. I think we both are honored to be here. Thanks for having us in your life. And just to be here means a lot. So thanks for seeing, you know, the value in us. And my story is I didn't know what I was going to do working out of Deli at 19 years old. You know, finished high school, was at Moore Park College. And I met a mentor. My dad introduced me to a mentor that he met through his friend. They met through meetup.com which I don't think is around anymore. It's probably most people would be doubt to meet someone on a website back then, you know, it worked. And met this guy, his name was Jed August and he was doing a lot of subject to deals where he never put his money up or anything like that. And no one knows who he is. People need to know who this guy is. He is not your average person. Wore the same clothes every single day. Would preach a dollar saved is a dollar made. Don't ever spend any money. Would say things like don't eat and save money. Like he's a different type of dude. So this guy Jed, he was different and Jed August. Jed August.

[Paul Morris]

Okay, great.

[Josh Rudin]

And he would try to get a bunch of people to meet up. We would meet up first at Red Robin, then ended up being at ihop. We play this board game called Millionaire Maker.

[Paul Morris]

Wow.

[Josh Rudin]

This is before I knew about what a rental property was, why mailbox money was. And I'd play this game and he would kind of teach me that you can actually make money.

[Paul Morris]

And how old were you?

[Josh Rudin]

I was 19, 18 when I started. 19 was my first purchase. So I got really good at this board game and I was like, let's do this in real life. So One of my best friends and partner, Jonathan, we ended up wanting to do this together. And he's like, all right, be ready at 4:30am tomorrow. I'll pick you up.

[Paul Morris]

Wow.

[Josh Rudin]

And we did this for about six months. Every day he'd take us out to Barstow, Adelanto, Victor Belt, Apple Bell, all these areas about two, two and a half hours from la. Never have I ever seen this type of human being that would live there. I grew up in the suburbs of Los Angeles and Agore Hills, California. And this was the time where a lot of the foreclosures were happening.

[Paul Morris]

Sure.

[Josh Rudin]

So I saw graffiti all over houses, I saw broken windows, I saw boarded up houses. I didn't see that where I was living. So it was a whole nother experience. Types of people out there, not someone that I would want to be friends with.

[Paul Morris]

So it's cla bubble.

[Josh Rudin]

We talk about it, we're in a bubble. That's great, you know, So I had the opportunity to see houses for like houses 2007 built for 60,000, 80,000, 100,000 that were very nice houses that if they were in LA now would be worth million and a half to 2 million crazy more so depending on the location. So had that opportunity. We were trying to figure out where's the best place to find per dollar spent and how much you can get from rent. What's the highest return on your dollar? So I went on Craigslist and I found this house in this mobile home area where I ended up paying $23,000 for my first house. And that house brought in 800amonth. So it was like a 25% return, which you can't get on the market anymore. Ended up teaching me how to hire people and ended up at 19 years old, paying people 15 an hour to do my roof, fix the windows, all this. And we ended up doing it for like 30, 35.

[Paul Morris]

Uh huh. So this is roughly 10, 11 years ago.

[Josh Rudin]

This was 2010. Yeah, 13 years ago now.

[Paul Morris]

And 2010 was still tough, tough times in real estate. That's when people were running away from real estate. And here is the man, Josh, running to it.

[Josh Rudin]

Next time I would say to buy was around that time, 2010. I think by 2014, 15, you started to see a double and then by now it's more than tripled. So great time to buy. I learned the business there, ended up, you know, having one of my tenants as a project manager for me and he actually got me into flipping houses. He was like, I've done this a long time I lost everything during the stock market. I can teach you. So paid him $500 flat fee and he wanted to prove himself. So we started doing these deals together where I'd give him 15% of the profit, he'd run the show, I'd find the deals, he'd find the deals and started doing that.

[Paul Morris]

So you were able to finance them yourself?

[Josh Rudin]

At first it was my college money, and then it ended up being, oh, I can put 10% down and I can get a hard money loan. I learned that. So now I'm able to do 10 times more deals than I was before. So I was able to really, really leverage. Started borrowing. Kind of like what you were saying, Friends and family.

[Patrick Swiatek]

Right.

[Josh Rudin]

People that believed in me and.

[Paul Morris]

And there are wealth building people that tell you not to use credit at all, period, or leverage at all. So what do you say to that?

[Josh Rudin]

They should find a new career. I think without this leverage, I'd be nowhere even close to where I am today.

[Paul Morris]

And same with me, I'm very conservative with the leverage. But if I did not use leverage at all, I would have a threat of what I have.

[Josh Rudin]

Exactly. You got to be semi conservative. Right.

[Paul Morris]

There's a smart way to use leverage. And it's just like the national weather forecast. You can say, oh, interest rates are high, don't buy, or whatever it is. And you go, well, credit's bad. Why is credit bad? Credit's bad because the majority of people that are really in poverty are driven deeper into poverty by credit card debt and by lending. And so one way to handle that is go, no lending, period. Now I have a great house. I could afford to pay cash for it. There's no way I would pay cash for it. Why? Because I have a three and a half percent loan on it. I have two income properties in Culver City and I was able to get even on a commercial loan. 3%, 30 years. There's no way. Yeah, I'm not letting go of that.

[Josh Rudin]

Right. You can never sell it. And that's why in this market right now you're still paying top dollar, because people like you will never sell. So the inventory is very low right now. So people are still paying top dollar with high interest rates. Probably, in my opinion, the worst time of all time to buy.

[Paul Morris]

Interesting. Okay, we'll get back to you on that.

[Josh Rudin]

Okay.

[Paul Morris]

Because you're still buying.

[Josh Rudin]

Yeah. I'm curious.

[Patrick Swiatek]

I disagree.

[Josh Rudin]

Of all time, if you bought five years ago, you would have been paying less than half with 3,4% interest rates.

[Patrick Swiatek]

I think because there's less buyers. I think there's less competition for these homes. There's more room to make sure if.

[Josh Rudin]

You get a deal. But if you're paying market, it's the worst time to buy.

[Patrick Swiatek]

Yeah. If you're paying market.

[Josh Rudin]

Yeah.

[Paul Morris]

Josh, you're still buying.

[Josh Rudin]

I'm buying very low. I'm buying less than market value.

[Paul Morris]

Okay.

[Josh Rudin]

So in that case, sure, I can get better deals now because things are sitting on the market.

[Patrick Swiatek]

There you go. That's. That's what I'm saying.

[Josh Rudin]

There you go. If you're an average person buying a house to live in a recent. If you are an investor. Yeah, it's a very good time to sell some deals.

[Paul Morris]

And the guy that says, do not use leverage, and you're saying that's crazy. I wouldn't be where I am. I'm saying I wouldn't be where I am. He's saying to the average person, it's great advice. And so you're saying it's the worst time to buy a house. And yet I'm looking right now not just for buyers, because I don't generally represent just any buyer. I'm representing very good friends right now to buy. And I'm going to absolutely make sure that they get something, that they're crushing it over time.

[Josh Rudin]

Right.

[Paul Morris]

And that's because Josh and I are buying real estate right now. And Patrick.

[Josh Rudin]

Yes. And you're doing right by your friends by trying to get them a good deal and negotiate. If you were just going here, let's make a full price offer. When this house has been sitting for 60 days, you'd be selfish and you wouldn't be doing right by your friends. So you're doing both. You're making money and helping your friends get in at the right price.

[Paul Morris]

When friends of mine wanted to buy and the market was so hot, they would have to get in line with 10 buyers. I'd have to pull a rabbit out of a hat to get them toward the top of that list. And was very, very frustrating. Like, I can't wait until there's a time when it's more normal. Now you can really get the attention of a seller. I still think if you buy right now because inventory is low, so it's keeping prices high and you buy a really done done house, you're not going to be able to steal that house because there's still a lot of demand for it. And I'm not recommending that for my friends who I'm buying. But there are more deals. I've seen more deals lately. Than I have seen in a long time. So for me, it's like, let's go.

[Patrick Swiatek]

I agree.

[Josh Rudin]

Right. So to finish.

[Patrick Swiatek]

Go ahead.

[Josh Rudin]

My story now. I've gotten on flipping one on one with Tarek El Moussa. I had my own house, sold it with Heather, his wife got on selling Sunset. So, you know, small steps from buying my first mobile home to selling a $2.3 million house in studio City. It takes time. And then to the point where Patrick really respected me, wanted to work with me. I met him at a party. I was interested in short term rentals, and he had just been in escrow for his first one. So that's kind of how our storylines. He was interested in flipping, I was interested in short term rentals. And we'll get to how we now have a management company together.

[Paul Morris]

I love it.

[Patrick Swiatek]

So While Josh was 19 years old learning how to buy properties, I was in high school, so. But I was building my first tech company. So I started my first tech company at 14 years old. My background is very high tech. What we did is we sold server space to people worldwide on gaming servers.

[Paul Morris]

So the idea is you're competing with Amazon web services.

[Patrick Swiatek]

Before back then, they didn't have the best security and whatnot. So for me, I had a really good niche and I set everything up really quickly. I think back then, what was really interesting, I have crazy stories. In high school, I got swatted three times. I got FBI showing up to my school.

[Paul Morris]

Oh, wow.

[Patrick Swiatek]

I never got in trouble. I didn't do anything illegal. But I worked with people on the Internet, and the Internet is a crazy world. So that was my high school experiences from 14. 18. Sold it at 18. Made good money. I made $40,000 a year.

[Paul Morris]

Wow.

[Patrick Swiatek]

Doing this?

[Paul Morris]

Yeah.

[Patrick Swiatek]

Yeah. In high school. That's in high school.

Yeah. I was mowing lawns at 12 years old, and I realized I didn't want to do the work. I was really lazy. So I always just found people to do the work for me and I cash the difference. So from a young age of 12 years old, I was looking up employment documents online.

[Paul Morris]

Right.

[Patrick Swiatek]

To try to, like, you know, legally.

[Paul Morris]

Well, it's the entrepreneur.

[Patrick Swiatek]

It's the entrepreneur. Right. So I think my journey really is about that push and pull between the entrepreneurial urge that I had versus the conventional, hey, you should go to school and get good grades.

[Paul Morris]

Right.

[Patrick Swiatek]

So once 18 came about, I thought all the schools would want me. I mean, look, I solved real world problems like, why doesn't Cornell want me? Why doesn't no School wanted me. No average Joe. School wanted me. And I realized, crap like I gotta get good grades, I gotta get a good job, I gotta get my 401k, I gotta do that way. That's the way I gotta do it, right? And so I said, all right, well that's the case then. That's all I'm gonna do. I went to community college, got a 4.0 based all my classes, top of the school, was involved in student government, was the president. I did everything that they told me to do. And I got into a top 10 business school, graduated with 3.98, you know, one A minus, which screwed me.

[Paul Morris]

It shows you're human.

[Patrick Swiatek]

It shows I'm human, right? But at the time, while I was at school, it's like the lady with the red dress comes about, I'm like, I got to snatch it. It was the opportunity to do another startup. I couldn't say no to it. Even though I knew that I was on this path to get this good job, do this good thing. The entrepreneur urge was still there. And I thought to myself, you know what, let me just dabble in this. So I met my co founder and he built this high tech product at the time, very infant stages, where he put 3D models of food on the table in front of you and you can actually see portion size of what kind of food you're about to eat before you even get into it. And so me seeing this genius, 150 IQ kind of guy, I was like, I want to be working with that guy. And he looked at me as like, well, I'm not just going to work with you because you tell me you're good at business. Show me that you're good in business. So the first week I got our first client and that was like solidified our relationship. Since then, since then we got into the top educational accelerator, we raised venture capital, we did the whole nine yards while being in college. And I graduated college and I was doing menu three. I was on ABC7 News, did the whole nine yards. And I was, I thought I was in Cloud nine. This is the way to go. I love to do this. And we just couldn't make money in restaurants. Restaurants, it's tough, tough business. But we were doing QR codes before QR codes were a thing. This was 2018, 2019 before COVID Right. So we were very in front of our times. We were really good business partners. I still respect him to this day. Victoria, great guy, but it just didn't work out as a product. We had a team of 10 people. So imagine this going out four times a week at a big party school, getting a 3.98 GPA while, you know, trying to find myself and taking care of 10 people while building this high tech product. Right. It was a lot of work, but that's where I learned hard work is really like the way to go and not working harder, but just working smarter.

[Josh Rudin]

Sure, right.

[Patrick Swiatek]

But anyways, high tech world did that. Didn't work out. I was a product manager. So I said, let me use my skills to the test. Came out to la. I started working for a big company and I was a product manager. So I built all of their internal tools to help them scale from 200 Airbnbs to a thousand plus. Airbnb.

[Paul Morris]

Wow.

[Patrick Swiatek]

Okay, so that's an L A based company, by the way. And there I learned the value of real estate, but I also learned the value of Airbnbs. It was a time when Airbnb wasn't as popularized and I saw they were making this one story, sold it to me. Palm Springs, three weekends, right? Yeah. Coachella 1, Coachella 2 and Stagecoach. Those three weekends paid for the lease, the long term lease they had for the full year for the house. So everything else was just profit.

[Paul Morris]

And so they were leasing but not.

[Josh Rudin]

They started off doing arbitrage.

[Patrick Swiatek]

Exactly. So they started when I was there, they were doing lease arbitrage. So they took a long term lease on these properties and they made more money through short term rentals, right?

[Paul Morris]

Of course, yeah. Yeah.

[Patrick Swiatek]

Now they do a lot of things, but I learned the game and so I knew I wanted to do it. Got laid off during COVID and went through this tough period of time which, you know, I'll save the time for this, but went through this tough time where I tried to get jobs. Right. So tried three jobs and I got fired from three jobs in one year.

[Paul Morris]

And where were you living?

[Patrick Swiatek]

La.

[Paul Morris]

Were you living in your parents house?

[Patrick Swiatek]

No, I came out here on a whim and I was working off of the savings I had versus doing side jobs here and there.

[Josh Rudin]

So he's from Chicago.

[Paul Morris]

From Chicago. Yeah, yeah, yeah. I mean, it's interesting to see the resilience that people have once they sort of hit that rock bottom. You had done all these amazing great things. Next thing you know, you're laid off. Now I'm looking for jobs.

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[Josh Rudin]

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[Patrick Swiatek]

Dude, nobody wanted me.

[Paul Morris]

Paul.

[Patrick Swiatek]

Yeah, I'm an entrepreneur. They would look at my resume and be like, screw this. I'm not dealing with this guy moving from company to company. Like, I couldn't do it. I was a horrible employee. I always worked on my businesses when I was working as an employee. I mean, granted, I was.

[Josh Rudin]

It takes another entrepreneur, I think, like, me to see the value in you and how hungry you were. Sure. And where it would take you and where we are now, it's insane.

[Patrick Swiatek]

Well, I was lacking what Josh had, which one was capital. That was huge. But also, like, I saw Josh had very similar values that I had. So when I met him at that party, I already had my first short term rental at the time in escrow. So I already had moved the needle in that direction. But that time period was meeting Josh and saying, you know what? We have the same values. We have the same vision of where we want to go. Let's make this happen. We have complimentary skill sets, so I know that we can make something of it. Right. And I saw Josh's whole thing, I was like, dude, this guy's so disorganized. I was like, I don't know how he made so much money doing what he does. Like, it was very, like, eye opening. I was like, dude, I can't imagine the amount of money you can make and the amount of value you can create if he's doing this just like, as a one man show. He was a one man show. Didn't use any crazy leverage. Well, obviously financial leverage, but you didn't have employees or anything like that. So I thought to myself, if I ran this like a business, I Know that we can make more money.

[Paul Morris]

Where were you in the Airbnb journey when the two of you met and what took you to Joshua Tree in particular for Airbnb?

[Josh Rudin]

I was just. This was 2021.

[Patrick Swiatek]

2021.

[Paul Morris]

Okay.

[Josh Rudin]

Yeah. So I was just in the interest stage. You know, you hear about. First of all, I was during COVID I wanted to get out. So I'm looking at Airbnb prices in Palm Springs, and then it would actually take you to Desert Hot Springs because Palm Springs was booked up. And I would see these prices and I was like, this makes no sense. And then I would look at the house prices and I was like, these returns are ridiculous. So I already knew, like, Joshua Trees near Palm Springs. One of my friends does this camping trip every single year in Joshua Tree. So I went to Joshua Tree. I fell in love with it, and I knew, like, this was a good market for Airbnb, but I was just in the interest stage. He was in his first property and I was like, you know, Airbnb, stuff like that. Let's partner. If you could find a deal, I'll put the money up. We'll go 50, 50. I'll give you a loan on your 50%. Let's do it. So that was our first four houses. Charge him 10%.

[Paul Morris]

We're 50.

[Josh Rudin]

50 partners. He found the deal and I brought the contractors and made it happen and taught him along the way. It was great for him to make money. Better than college. Sure. Make money and learn. So I think it was beneficial for both of us. And now I have the knowledge to do Airbnbs to the point where he came to me and was like, hey, I have this opportunity to buy 17 Airbnbs. How do you feel about that? And I was like, property management company that has 17 Airbnbs. And we're thinking about managing now.

[Paul Morris]

And how many did the property management company own? They just own like one or two.

[Josh Rudin]

And they let us manage it.

[Paul Morris]

And they still own two.

[Josh Rudin]

They still own two.

[Paul Morris]

So they had a total of 17 under management.

[Josh Rudin]

Correct. Two of them left before we started, so starting with 15.

[Paul Morris]

15. And that includes two of the original owners.

[Patrick Swiatek]

Okay, so at this point with the deal, how the deal really came about? At this point.

[Josh Rudin]

Right.

[Patrick Swiatek]

I started a little meetup group, so I wanted to meet more people that were in a short term rental space after I met my first one. So this is while we were doing business together.

[Paul Morris]

But you went to Joshua Tree and you bought your own.

[Patrick Swiatek]

No, not in Joshua Tree. It was in the Smoky Mountains of Tennessee.

[Paul Morris]

Oh, I see. That's the one you told me about. Yes.

[Patrick Swiatek]

So that was the first property I ever bought.

[Paul Morris]

How did you find. Why did you go Smoky Mountains, Tennessee. Did you do the analytics? And this is the place to go.

[Patrick Swiatek]

So I was like, I'm done trying to follow these people that are telling me what to do in the education space. And like corporate, I'm going to follow the people that are investing. And I saw where people were investing. I just found the experts that were doing the right things. And I told them, I asked them, how can I buy the same thing and what should I buy and where should I buy? And the experts told me, this is where you should buy, this is what you should do. And I just followed their advice.

[Josh Rudin]

That part was his advice, is go to the experts, right? Sure. That.

[Patrick Swiatek]

Sure.

[Josh Rudin]

The person that knows it. So if you just went and bought, you would have made a huge mistake, but you went through the number one agent out there that took you to.

[Patrick Swiatek]

A really good house. Exactly. That's what I did.

[Paul Morris]

And she went to the number one.

[Patrick Swiatek]

Realtor that does short term rentals, that.

[Paul Morris]

Does short term rentals in Smoky Mountain, Tennessee. How did you find that person?

[Patrick Swiatek]

Communities online.

[Paul Morris]

Right.

[Patrick Swiatek]

Being resourceful.

[Paul Morris]

Okay. And then you could get that. It's easy to interview. You find somebody does a bunch of business, you're like, hey, so how many short term rentals have you wrapped? And they go, well, seven. You go, okay, well you could even ask them who's the biggest person.

[Josh Rudin]

And she was a short term rental agent. So she.

[Patrick Swiatek]

That's all she did.

[Josh Rudin]

Yeah, full circle. She spoke at his conference last month.

[Patrick Swiatek]

Yeah, I love it.

[Josh Rudin]

Yeah.

[Paul Morris]

Does she own a bunch herself? Just.

[Patrick Swiatek]

Yeah.

[Paul Morris]

Curious side question. Okay, interesting.

[Patrick Swiatek]

So she's an investor and she only does short term rent.

[Paul Morris]

I love it.

[Patrick Swiatek]

So at this point I found the community online and the few of us were in la, so I was like, all right, let's just do a meetup. And that was the start of this company that I have now, STR Nation, where we do monthly meetups and we.

[Paul Morris]

Do call cuz I want everybody to hear this.

[Patrick Swiatek]

Oh yeah. So the meetup is called STR Nation.

[Paul Morris]

ST O Short Term.

[Patrick Swiatek]

Short Term Rental Nation.

[Paul Morris]

Okay. And we'll put this in the show notes. Okay.

[Patrick Swiatek]

There's a Facebook group, we have around 3,000 or so members and all we do is we help educate others how to get into short term rental space. We do monthly meetups and then we do an annual conference. My first conference was in Vegas. We had 150 people there shocked me. Honestly, I didn't know I was going to sell out. And I sold out my second conference at 250people in San Diego. And I just educate people on short term rentals. So naturally I'm in this space where I teach people how to do this. I'm always helping other people and bringing value to them. So I come across deals all the time. So one of these deals came to me and said, hey, Patrick, I heard you were looking for co hosting clients. And I was like, yeah, I'm trying to get into property management. He's like, well, I don't have one for you, but I have 17 co hosting clients.

[Josh Rudin]

That's.

[Patrick Swiatek]

Let me clarify.

[Josh Rudin]

Managing you co host for. So it's you co host for them managing their property? Yeah.

[Paul Morris]

Okay.

[Josh Rudin]

Yeah, they'll come on a co host on Airbnb.

[Paul Morris]

I see. Okay, okay, okay.

[Patrick Swiatek]

So naturally, I'm speaking in these communities. I have my own community. People know me as a short term rental guy. So they're coming to me for advice. I'm giving value. And naturally things come across your desk. So one of the things that came across my desk is my friend Amanda found somebody that was selling their property management company and they strictly did Airbnbs.

[Paul Morris]

And In Joshua Tree.

[Patrick Swiatek]

In Joshua Tree. And so I knew at this time Josh and I had four in Joshua Tree. So I thought this is four of your own. Exactly.

[Paul Morris]

And you're managing them.

[Josh Rudin]

We were managing self managed.

[Patrick Swiatek]

Self managing.

[Paul Morris]

Self managing. And that's a hassle because you live in la.

[Josh Rudin]

Yes, because we didn't have a team at the time, so Patrick was managing for us. But I was like, you need a team. You need someone that'll go out and fix things, which we didn't have yet. So those are things that you learn over time. Well, you need the local people.

[Paul Morris]

Well, one of the things that I did just from my, you know, I've been doing this a long time, not short term rentals, but when we decided to go to Joshua Tree, it wasn't like, hey, let's find a house. I'm like, we need to buy a certain number that's going to create an economy of scale so that we can manage ourselves so we can have our own people out there. Yeah. And so that's why we started with six houses.

[Patrick Swiatek]

So that's really interesting. You say that we did four houses, but we realized, well, why not spread across the resources across all the houses? However, it's easier to do that using other people's money. I'm all about, we're all about leverage. So I knew when bringing Josh in on this deal for property management, not only did I think that he would be a great partner because I trusted him already, but I think it aligned with our investing goals. We already had crews out there. We already had properties out there. So the economies of scale of getting a property management company, we can actually spread the resources across the whole portfolio.

[Paul Morris]

Of course.

[Patrick Swiatek]

So not now. It's so much easier for Josh and I to pick up a property in Joshua. We have the crew for it. We have the management company. We have the local area managers to take care of stuff. It's very hands off.

[Josh Rudin]

We had already mentioned to Patrick, I think I want to pivot to management. Would you want to do this?

[Paul Morris]

Sure.

[Josh Rudin]

He's like, no, I'm going to do this myself. Until this opportunity came, he needed cash and he was like, you know what? Maybe this would work with both of us. And thank God you did because we. We crush it out.

[Patrick Swiatek]

We do really well. I mean, that was our first one. We bought it March of 2023. So this year.

[Paul Morris]

Wow, that's very recent.

[Josh Rudin]

And just let's talk about how many clients we started with and what do we have? I was going to say, yeah, it's crazy.

[Patrick Swiatek]

We started with 15. Currently we're 33 live.

[Paul Morris]

Right.

[Patrick Swiatek]

And then we have another maybe six in the pipeline that we're going to launch.

[Josh Rudin]

Nine that have signed.

[Patrick Swiatek]

It'll be 42.

[Paul Morris]

42, yeah. Is there a certain number that you. Or can you do 420, or is.

[Josh Rudin]

There just like any business, you'd have to keep hiring in order to take care of those people. Because we would never scale too quickly. Right now we just hired someone who's basically taking care of everything that we're taking care of. So we have more time on our hands and that gives us the flexibility to now bring on probably 10 to 20 more properties without having to do another hire. So we decided to get ahead of it.

[Paul Morris]

Yeah.

[Josh Rudin]

So we don't ever fall behind 100%.

[Paul Morris]

What was the gross revenue of the company that you bought and what was their net?

[Josh Rudin]

Good question. So we realized to this day that we got ripped off bad because we didn't understand how to value a company.

[Patrick Swiatek]

Now we do as we never acquisition since.

[Josh Rudin]

Right.

[Paul Morris]

Totally makes sense.

[Josh Rudin]

It looked like a good deal on paper, but when you think about that, one of the owners was doing the accounting and the other owner was running the entire business with no help.

[Paul Morris]

Right.

[Josh Rudin]

It didn't make sense. At the time, they were making about 60,000 net 60,000. 60,000 net per year. Per year. Well, for the last year they were only doing it for not too long.

[Paul Morris]

Okay.

[Josh Rudin]

And then on top of that, the clients were not happy, which we didn't know until we got in and we had to turn it around for them.

[Paul Morris]

So they were doing 60,000 net. And then can I ask you what you paid for the business?

[Josh Rudin]

We paid a hundred thousand upfront. And then depending on who stayed and how much we make, it would be up to 100 and as low as 20 will probably be about 60, basically.

[Patrick Swiatek]

So seller finance. So 160, $200,000 purchase price.

[Paul Morris]

Right.

[Patrick Swiatek]

Seller finance, 50% down, 50% carry for one year, depending on how much they make, that's how much we take.

[Josh Rudin]

Well, there's no interest. I wouldn't even consider seller finance. It's just performance based what we pay for.

[Paul Morris]

Sure.

[Patrick Swiatek]

But either way it's two payments. So you know, they're still carrying that.

[Paul Morris]

But that second payment is going to be based on performance who stayed on.

[Josh Rudin]

Who stayed from what they brought, not from what we make.

[Paul Morris]

Right, okay.

[Patrick Swiatek]

Yeah.

[Paul Morris]

And one of the things, just for business sense, there's a thing that I call buying the 7 11, which are often family owned. Then you look at all the, you know, when you get to your net profit, you realize, okay, let's say that Seven Eleven has $200,000 in net profit, but mom and dad are working there full time and the two kids are working after school, so.

[Patrick Swiatek]

True.

[Josh Rudin]

Yeah.

[Paul Morris]

And so you have to take away. Well, if they weren't there, then I have to pay a manager, which is very expensive. And then I have to pay three employees, which by the way will never care as much as that family.

[Josh Rudin]

Right.

[Paul Morris]

And so that, that net 200 is really a net zero. And so that's the thing. And the other thing that goes in the other way on a deal, when you look at a deal is owner perks. So for example, if an owner were paying for their car or an owner were paying for whatever, that's something that would go in the other direction. Because when you buy the business, you're like, okay, well we're not going to pay for the owner. I mean we could, but that's a benefit. So you take out the, yeah, you take out the owner benefits. That makes the thing more valuable. And then you take out all of the owner effort. So I looked at buying a law firm, for example, and all the partners would stay, but the senior partner was doing this like massive amount of lion share of the work and keeping it together. Keeping it together. What do I have to pay to replace that senior partner. And that's got to come out of.

[Patrick Swiatek]

The p. L. So that's company valuations.

[Paul Morris]

And that's the thing that you did.

[Patrick Swiatek]

Yeah. You didn't do that.

[Josh Rudin]

So what we realized very quickly is we bought ourselves a job.

[Paul Morris]

Yeah, that's right. Sorry. That's exactly. That's the second piece to what I say.

Yeah, that's the second piece that I say. You got it right on this. Buying a 7 11. That is it.

[Josh Rudin]

Yes.

[Paul Morris]

You're buying a 7 11, which means you're buying a job.

[Patrick Swiatek]

Exactly. And we realize that.

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[Josh Rudin]

And thank God Patrick had, you know, experience with virtual assistants, because if we didn't bring in our six virtual assistants, we'd still be working our first couple months. We were working 18 hour days and without these virtual assistants responding to guests and now talking to owners if they have a quick question. We want to be in a place where we can now grow the business, talk to owners on a high level, do the pricing, and make sure that all the properties are making money. We don't want to be in the business. We want to work on the business.

[Patrick Swiatek]

So 16 hour days. I knew it was going to be a lot, but I didn't know that two area managers were going to both quit. So we were the only ones that knew anything about the company. And, well, nobody knew.

[Paul Morris]

Two area managers were the owners.

[Josh Rudin]

No, they had two managers. They had two managers who they didn't tell us. One of them was gonna leave already. The other one was pregnant, which we knew. And once she had the baby, she said, I'm gonna work. After two weeks, which she did, she realized what she didn't know going in. Yeah, I want to watch my baby grow up. I want to see every single part of this.

[Paul Morris]

Sure.

[Patrick Swiatek]

That's a variable we didn't know. But the other area manager took our clients. So that was like a whole nother Thing we didn't even understand a few.

[Josh Rudin]

Of them that we saw we would maybe be able to save because they said, oh, maybe you should fire these ones. We're like, like maybe not like we're buying this company. I'd like to save at least for now, have that income.

[Patrick Swiatek]

So, and keep in mind the previous owners weren't doing this intentionally. Like, nobody knew how to value the company. We were just kind of like working.

[Paul Morris]

With, doing the best you could do best you can.

[Patrick Swiatek]

So we're not blaming them. They had a baby, they were really working really hard. It just the circumstances came to that.

[Paul Morris]

Right.

[Josh Rudin]

We are hoping on the second payment that they are willing to work with us because sure, they should understand we got ripped off.

[Paul Morris]

Yeah, sure, I understand that. And I, you know, if you had known me before, I would have definitely advised, advised you differently. Now here's the thing, here's the weird thing. If you had known me before, if you had known me before, I would have taken you through this and go like, okay, wait a second, you're buying a job. That was the term I was looking for. It's only 60,000 of net income. But these owners are working something that's equal to or more than 60,000. So really you're buying a business with a net negative income. It doesn't mean that the business has zero value just because it makes zero or less. There's still some value because you've got the name, you've got the website, you've got the whatever, you've got the machine that's working, you've got a thing of clients. And one of the things I'd be interested in is if I had given you that advice, maybe you would have gone back and driven such a hard bargain to them that they wouldn't have taken the deal. And sometimes when you get into this deal, which is really sort of a crappy deal, but the deal is only this big and you get into this deal, it's only this big. It's not a deal that's this big that you get into a lousy deal. It's this big, it swallows. You get into a lousy at this big and you're like, okay, well, we're going to add some more clients or we lost this. We're going to do that. And it gives you the opportunity to really create something giant that if you had proper advice going in there you go, you know, maybe you wouldn't have. Now, I would say so.

[Patrick Swiatek]

Ignorance is bliss in this situation.

[Paul Morris]

Well, hopefully the way that I would do it Is I would say, hey, look, you're buying a job. And then you guys would go back and negotiate like we're not willing to. You would have probably gotten a lesser price, but not small enough to make it worthwhile. And then come back to me and I'd be like, all right, well, look it, you're still buying a network. You're still buying, you know, a foothold into this area so you don't have to start from scratch, right? And therefore, when you go for your next home, you already have something to show them. And that does have value.

[Patrick Swiatek]

That has a lot of value to.

[Josh Rudin]

Add to why this was such a bad deal. They were 99 in their employees, right? So they should have been W2. We didn't have in the numbers, the payroll taxes. We didn't have a numbers paying for mileage, you know, health insurance, any of that, which we're now paying. We started a couple of days ago. We're now doing that right the correct way because we expect to be really big and we want to do everything legal.

[Paul Morris]

Correct.

[Josh Rudin]

So on top of that, they were making even less. So that's part of our argument going into the renegotiation.

[Paul Morris]

Sure.

[Josh Rudin]

Is you didn't even W2 your employees.

[Paul Morris]

And don't feel bad because every single business, including giant corporations that have professional massive due diligence teams, they never are able to uncover all of the stuff. And so you really have to kind of build that. When you're buying a working business, you have to build that into it. And one of the ways to assure that so you can do as much due diligence as you want. But one of the ways to assure that, and this is the way the big companies do it, is they do give a certain amount of money upfront and then they give the rest on performance base. And they never meet their performance base because all this other crazy stuff becomes uncovered, which is very normal. So the big guys, the way the big guys do it is, yes, they do a lot more due diligence than you did, but they cover themselves on the second and third payments.

[Patrick Swiatek]

But, Paul, I think a common theme here, just in general, if some entrepreneurs are listening to this, the common theme here is, yes, we knew very little coming into acquisition, but we're not going to let an opportunity pass. Obviously, we were going to consult with people and we didn't have like the right network to consult with, but we took the dive to do it anyways. Same with our first real estate deals, with the first company we've done. We did this on Purpose. Because an entrepreneur sometimes is by trial you learn the game.

[Josh Rudin]

We learned for Stage and it was worth it.

[Patrick Swiatek]

We were further than we would have ever been if we went Analysis paralysis. Never did it for sure.

[Josh Rudin]

I think we can both strongly say we're happy we did it. We skipped all the steps of creating a brand and a website and all that. We got right into the sales for sure. So. Well, I still did a lot of hiring.

[Patrick Swiatek]

And.

[Josh Rudin]

But because of this brand, you know, we signed an NDA. We can't talk about it, but we have another huge opportunity coming.

That wouldn't possibly happen if we didn't take the steps. So I think the best.

[Paul Morris]

Another. It's another huge property management brand.

[Patrick Swiatek]

We cannot say anything.

[Josh Rudin]

Yeah. The area or anything like that.

[Patrick Swiatek]

But basically, now we know what to do with the second one. It's a lot more kosher. Things are.

[Josh Rudin]

And they did it all kosher. And that's how we know so strongly that this first one was such a bad deal because we went into another negotiation.

[Paul Morris]

Yeah. The other thing, I'll say it again, I say it on many of these episodes is you cannot learn how to ride a bicycle in a seminar. You can go to the seminar, but it's like there's the physics of the riding the bicycle. You could teach them a lot, but it's like at the end of the day, you've got to, like, go and feel it, and that's how you learn how to do it. Take action and taking action. Getting into it is really the piece. So somebody wants to get into airbnb. Well, first, let me say this. Laws are changing all the time, everywhere. It's one of the things that scares me.

[Patrick Swiatek]

Right.

[Paul Morris]

So how do I know that Joshua Tree is safe? I own really six houses in Joshua Tree. How do I know that Joshua Tree is safe for my seventh home? Or should I really look for somewhere else?

[Josh Rudin]

So you'll never really 100% know, but we could say. Say that Joshua Trees. Safer. And Patrick, you. You can talk about.

[Patrick Swiatek]

Yeah.

[Josh Rudin]

Military base and all that.

[Patrick Swiatek]

I think. Let me kind of take it at a national level. Right. So a lot of people talk about Houston. Right. Houston had that huge banning of all shorts. Sorry. Oh, my God.

[Paul Morris]

Also Hawaii.

[Josh Rudin]

Hawaii, too.

[Paul Morris]

Yeah.

[Patrick Swiatek]

So Dallas.

[Josh Rudin]

It's because there's no regulations. Yeah. So because there is no regulations, Dallas couldn't really say, oh, you can keep your. You can keep it. They didn't have anyone's info, so their only option was ban it.

[Patrick Swiatek]

So they set regulations in place and people that were not complying didn't know that they were not complying. So that's why it's actually more risky to go to a place with absence of regulations. And it's actually more safe to go a place like Joshua Tree where not only do they support it, but they need it. The tourism, that, that's the difference. It's like LA doesn't need it. LA has a lot of industry and so housing is more important to them. Not to say housing isn't important in Joshua Tree, but they need the tourism because that's how their whole economy.

[Josh Rudin]

They were the poorest county, county. I think they filed bankruptcy and what saved them was these short term rental taxes that they're getting the permits and all.

[Patrick Swiatek]

So they get taxed every time somebody stays. So they. I think the town of Yucca Valley made a million dollars.

[Josh Rudin]

And there's no, there's no hotels in. There's a few, like two or three. They don't have any giant hotels. So people need somewhere to stay when they're going to the national park, which has 3 million plus visitors and growing every single year. More people are learning about this beautiful, incredible place that I went camping last weekend. It's out of control beautiful and it has an aura to it that you can't really find.

[Patrick Swiatek]

I will say on a national level, because this is a national podcast, I want to be more broad. I think a good area to really invest in is like, do they have regulations? Are they, you know, making sure that.

[Paul Morris]

You'Re saying the regulations is better?

[Patrick Swiatek]

Light regulations is good when they have some sort of structure in place that supports short term, makes it so the.

[Josh Rudin]

Neighbors don't freak out. If every neighbor is complaining, there's going to be an issue. But they've regulated to the point where the neighbors are okay.

[Patrick Swiatek]

Yeah.

[Paul Morris]

And you guys know this better than I do, but I had exactly the same concept and I do own a big piece of property in Yucca. And Yucca is just one town down from Joshua Tree. And Joshua Tree really is seen as completely overrun by short term rentals. And I don't know where they are in terms of the regulation. I'm interested in hearing that for sure. But Yucca had no regulations. And this is again about knowing your area. I knew enough people in Yucca they put a moratorium on no more short term rental licenses. I'm like, no. Oh my gosh, that's freaking me out. Right. But they were doing it while they were trying to figure out what the regulations were going to be. And now I'm going to have to make this up a little bit because it's by memory, but I believe that they have 8,000 homes in their housing stock, meaning all of Yucca has 8,000 homes. And what they decided to do was we're going to do 10% will be short term rental, and that means out of 8,000, they're going to issue 800 permits. And at the time, which is a while ago, they had issued 400. So now all of a sudden I'm looking at Yakko, which was. I was really afraid to do anything. And now I'm like, oh, wow, now I know there's going to be 800. There's only 400 sold.

Let me run. Let me run and grab some before the 800, because once you get to the 800, then it's totally saturated. Now's really this magnificent opportunity.

[Josh Rudin]

Exactly.

[Paul Morris]

Created by the regulation.

[Patrick Swiatek]

Want to know something crazy?

[Paul Morris]

Yes.

[Patrick Swiatek]

So sorry to cut you off, I was gonna say with the regulations. Also, it's funny because we always see how many permits are left and available for people to use, and it kind of, you would think that people wouldn't want to give up their permits, but people give up their permits more than they acquire their permits. Like we're still not.

[Josh Rudin]

Because your average Airbnb is failing.

[Paul Morris]

Yes.

[Patrick Swiatek]

Right now.

[Josh Rudin]

And that's why we gave you that advice to add a pickleball court and a dome and a yoga deck and fire pits and all that, because now you're gonna stand out, out, you're going to make money because you're better than all these average Airbnbs.

[Paul Morris]

So let me give our listeners perspective because they're tuning into Radical Wealth Plan because they want to hear like, oh, Paul Morris knows what he's doing. And I'm going to say this. I have six houses and the six houses are in Joshua Tree. And I used my ability that I've gained over years to figure out how to buy. So I was buying things that really had great value add. So I bought at the height of the market. I didn't know the market was going to crash because I cannot predict it. And then the market crashes and a lot of people got crushed. I didn't get crushed because I'm still adding. I add value add. By the time I add all this value, I'm definitely haven't lost anything and in a lot of cases have some equity built in. Now I know all this stuff and I bump into two guys, 31 years old and 27 years old, and they are looking, these two gentlemen to be very specific. And a lot of people try to sell me a lot of stuff and I can tell immediately. And one of the things they're saying to me is, first thing they say to me, which is something I already know to be true, so it's validated. And they're like, look at, there are so many short term rentals out in Joshua Tree right now that the supply is overblown. And we're watching because they have the data to watch. They can watch the data of their 31 that they personally day to day manage. They can also watch what are other ones renting at. So they have really, really solid market knowledge. And they're saying to me, well, you know, geez, you have these houses that look like this and if you put them in the middle of the pack, you're going to suffer with the middle of the pack. And one way is to really distinguish yourself. And I'm like, great, how do you distinguish yourself? And they know what people search for and what's important to people. And so for a small amount of money, I can make a kitchen much nicer, I can make a bathroom much nicer. And they're saying, don't do that. Because short term rentals are really all about what the photos look like. You know, people want photo ops. Look, you don't want to go to a dump, but if you go to a place and it has a $10,000 bathroom versus a $25,000 bathroom, they really don't care. The $10,000 bathroom is still nice. It works. It's not embarrassing, it's all good. But one of the things now which I would have never thought of is pickleball courts. And so it's not that expensive. About $15,000 to put in a pickleball court. You don't need a permit for it. Is that right?

[Josh Rudin]

Correct?

[Paul Morris]

Yeah. Okay, so you don't need a permit for it. And so that makes a big difference. And it's also not that expensive. I sort of took next level, you know, because of my own thing and playing table tennis and I had it, you know, like creating stadium lighting I know is not nearly as expensive as it sounds. So I'm like, hey, that's plus that, that's get it. So after dark you can still play pickleball. Then there are other things. Like a game room is so valuable. A hot tub is something you must have. A lot of people can't afford a pool and pool permits are limited. But we were ahead of the game, we knew that, so we got pool permits. That's fine. But there's so much knowledge. Oh, I'll give you another piece. What's interesting to me is I knew before I met them that it's hot out there and many, many of these houses do not have swimming pools. So I'm going to invest in a swimming pool. I knew that before I met them.

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[Paul Morris]

They validated it. That's great. Swimming pools are also very, very expensive and it's hard to get. But I figured all that out fine. What's interesting to me are the things that I would have never guessed. As soon as they tell me it's not like it clicked. Yeah, it's not like, oh, geez, not only did I not know that, but now they told me. It makes no sense, they tell me, and now it makes this amazing sense. So for example, I have two houses on one lot and I was absolutely, without, without a doubt, the architecture on them is different. It's on a giant piece of land. It's five acres, you know, so it's a big piece of land. And I bought two for the price of one. So I'm, it was a great buy. I did great. Okay, so I bought two for the price of one and I fixed them up. They even have a different design aesthetic. I'm definitely going to separate these. And what they told me, which makes perfect sense, is because I look at all the houses when I'm buying. The majority of houses out there are three bedroom, two bath. And so that three bedroom, two bath market is flooded and they're telling me a one bedroom, boy, we rent them so fast, we turn them over so fast. In a million years. I, with all of the knowledge that I have, I am not looking at one bedrooms. But once they explain to me the math of the one bedroom and you know, people are, you know, they come.

[Josh Rudin]

Out of Couples, they'll come last minute easy.

[Paul Morris]

And guess what? A one bedroom in a neighborhood, no good. You need that one bedroom. This little one bedroom on a giant piece of land. Land out there is a lot less expensive. So if I'm buying a one bedroom on a giant piece of land, I'm like, well, how am I going to make it a three two? You make it a three, two, you lose that opportunity. And so that's very counterintuitive until they explain it to me. The other thing is the two houses, the areas that are the sweet spots. The sweet spots are the spots where there isn't massive inventory. And that's the one bedroom on a nice large piece of land. Now as I'm doing my searches, I'm like, well, where's the one bedroom? They're going to also be less expensive.

[Patrick Swiatek]

Exactly.

[Josh Rudin]

And they'll furnish more. And the cleaning fee is less, so the end user is spending less. And then, you know, the five plus bedrooms, the county will only allow you to sleep 12. So five bedroom, there's the five bedrooms, there's a living room. You could sleep 12. But in your case, you have two houses, so you have two permits. So now your three bedroom now sleeps eight. And your five bedroom, because you're going to add that other bedroom, right? And close up, the wall is going to now sleep 12. Now you sleep 18. There's not more than five, I would say probably less than that, that can legally sleep 18. So now you're going to be getting 2,000 a night on weekends if you do everything we're saying versus, you know, both of them combine, maybe 600, 700.

[Paul Morris]

So if I have them separate, just as nice, by the way. Absolutely as nice. And I rent them separately, I'm getting somewhere between 600 and tops, $1,000 a night for the two combined. But when I have the sleep 18, I can get 2,000 a night.

[Josh Rudin]

I'm doing it right now for my seven bedroom.

[Paul Morris]

This is something I'm just never, no matter how many times I look at it, I'm not going to know that.

[Josh Rudin]

And guess what? There's no statistics out there that will show that except for what we've done.

[Paul Morris]

Right? And that's because they have the local knowledge. And if you think about like, what exactly are you talking about? Let me explain to you what we're talking about, okay? On a one bedroom, on a large piece of land, it's like my fiance and I were like, hey, let's go out and like, like look under the stars. And, and you look, in a one bedroom is going to be less expensive. It's going to cost us less. We just drive straight out there. We've got this huge piece of land. You're still going to have to have some sort of a water feature. You're gonna have a hot tub or.

[Josh Rudin]

A pool or something. It's cheap but you know somewhere to go on when you're hot.

[Paul Morris]

Yeah. And now I've got this really beautiful small place. It's way better than a hotel. It's a romantic retreat. It's the da da da da and it's very inexpensive of boom, I'm out there. Makes sense now. You go to the sleep 18 thing and I'm like, okay, I've done retreats for my company. Or you get like I was just at this birthday party in New York for my friend. You know, if I'm having my next birthday party.

[Josh Rudin]

Yep. It's always birthdays.

[Paul Morris]

Sleep 18. Yep. Birthday Bachelor party, bachelor party, bachelorette party.

[Josh Rudin]

Some sort of work celebration, family reunions.

[Paul Morris]

Or you could even do a company retreat.

[Patrick Swiatek]

And it's legal. That's the big part. Because the county is cracking down on those places. Are five bedrooms, you know, six bedrooms, like six bedrooms. Have to only do 12. Seven bedroom.

[Josh Rudin]

It's just thinking outside the box.

[Paul Morris]

Yeah. Six bedrooms which sleep 12. And then you're making noise or whatever, the neighbors or whatever. The municipality is really cracking down now they find out you're sleeping, sleeping 14, you're in a lot of trouble.

[Josh Rudin]

Correct.

[Patrick Swiatek]

But keep this in mind. If you get a just one house with one permit, that's a six, seven bedroom, you can only do 12. The unique thing about you is you have two houses with two different permits.

[Paul Morris]

Right.

[Patrick Swiatek]

You can combine them because they're right next to each other. That center ground.

[Josh Rudin]

Maybe we'll come back, we'll talk about that company that we're going to buy. We'll talk about the numbers you're doing now just to show your viewers, like, yeah, we were able to do it. I think that would be great.

[Paul Morris]

This is the before.

[Josh Rudin]

This is the before podcast. We'll come back with a lot of new news.

[Paul Morris]

I love it.

[Josh Rudin]

And some actual statistics.

[Paul Morris]

And what do we do for someone who's interested in getting into the short term rental market?

[Patrick Swiatek]

Yeah, I think you know my Instagram where is some.

[Paul Morris]

And I'm definitely gonna do your. Your info but where do you look and just say hey, you know, I don't have the money to do six. I just wanted to do one. I want to try one.

[Josh Rudin]

I Mean, you have to put money in. You won't do well if you don't put money in.

[Paul Morris]

And what that means is if you buy one that's done done, you're going to overpay.

[Josh Rudin]

Correct. And if you buy one isn't enough either.

[Simplisafe Advertiser]

Right.

[Josh Rudin]

Done. Done would mean amenities too. If you're just buying a fixed house, doesn't matter.

[Paul Morris]

Yeah.

[Josh Rudin]

You need to stand out. You need to have the right location. So I would say reach out to us who are experts or someone else who's expert in fbs. We can guide you in the right direction on what to buy. Reach out to us on Instagram. We have our Realtor's license as well. We may pass it off if we don't have the time, but to someone we trust. And my Instagram is Josh Rudin and Patrick.

[Patrick Swiatek]

And I'm Patrick. P A T R Y K underscore S W I. You'll find it if you spell it that way. There's not many people spelling.

[Paul Morris]

And we'll put it in the show notes.

[Patrick Swiatek]

Yeah.

[Paul Morris]

And then one of the other things that I want to put in the show notes is some of the features that you guys have that totally sold me because the Sky Dome thing is like so cool.

[Josh Rudin]

It's not that exp.

[Paul Morris]

To sort of glass dome.

[Patrick Swiatek]

Yeah.

[Paul Morris]

Short term rental still very much unique experiences. Unique experiences. And we're sharing some ideas on some new unique experiences. And then also Instagram, how does it photograph? What does it look like?

[Josh Rudin]

You got to get the best photographer. And we've gone through probably six or seven. Yeah, we have the right one now. It's such a difference.

[Patrick Swiatek]

And here's the thing. I'm just. Because this is nationwide podcast, I keep wanting to go a little bit more macro.

[Josh Rudin]

Right.

[Patrick Swiatek]

If anybody's looking even in their own backyards or wherever they're looking at vacation rental markets. Like, keep in mind, like, I have a pretty good network of people because I'm in the short term rental space. I'll connect you with the best realtors to find the place or, you know, we'll figure something out where we look at the numbers. Like, I have really good resources on that. So just like hit me up. Totally happy to help.

[Paul Morris]

And one of the things I love about you guys is you have developed this information and you really know. Like, I know and believe the more you share the information, the more opportunity.

[Josh Rudin]

Exactly.

[Paul Morris]

Hey, I have. Have this, you know, I have this bit of info and you know, I learned it. I'm not going to share it. But you share that info and you end up expanding your. Your information.

[Patrick Swiatek]

You just gave out your the biggest secret on what you're doing with the duplex and it's going to the world.

[Josh Rudin]

No one's gonna do it. So it's the not everyone takes action.

[Paul Morris]

That's right.

[Josh Rudin]

That's the thing.

[Patrick Swiatek]

Abundance mentality.

[Josh Rudin]

You know, how many people did I mentor before I met Patrick? And Patrick took action, so I saw that in him.

[Paul Morris]

I love it. So thanks so much for spending the time with me and sharing all of your wisdom. I know this is going to be phenomenal for our audience. Lots of great stuff. Not just on how to do Airbnb, but also how to take that giant step into going from non entrepreneur to the world of entrepreneurs. How to create great partnerships. Really appreciate your time.

[Patrick Swiatek]

Thank you for having us.

[Josh Rudin]

I appreciate it, man. Thank you.

[Paul Morris]

Yeah.

[Josh Rudin]

Excited to do work.

With you. Yeah.

[Patrick Swiatek]

Whoever wants to stay in one of Paul's houses, hit us up. We'll get bookings in 2025.

[Josh Rudin]

You just gotta follow small little discount.

[Paul Morris]

Yeah. Radical wealth plan.

[Patrick Swiatek]

Radical wealth plan discount.

[Paul Morris]

Thank you very much for joining us today. I hope you got a lot out of today's episode. Our intention is to bring on great guests that tell captivating stories and relatable stories and at the same time give us phenomenal education and things we can act on right away to start building wealth in real estate. Now. See below for our show notes, notes, more about the guests where you can find and follow me on social media. And also a great way to support the podcast is to go to YouTube and whatever other platforms you listen to the podcast on and make sure you follow and subscribe. We'd love to have comments. I'll definitely review the comments and add as much as I possibly can to what we've done on the episode today. In addition to that, if you found this podcast podcast useful, we would love to have a great review from you.