Real Estate Investing School Podcast: Episode 254. REAL DEAL: Inside Eric Gubler's Kanab Deal
Host: Eric Gubler
Release Date: April 17, 2025
1. Introduction to the Kanab Deal
In Episode 254 of the Real Estate Investing School Podcast, host Eric Gubler delves into a unique real estate investment opportunity located in Kanab, Utah. Gubler introduces the deal as a strategic combination of a primary residence and an Airbnb property, highlighting its uniqueness and feasibility even within the same city.
Notable Quote:
"This is a really cool deal, super unique, but still possible to do even in the same city."
— Eric Gubler [00:00]
2. Why Kanab, Utah?
Kanab stands out as an ideal location for Airbnb ventures due to its lenient regulations compared to other Southern Utah areas like St. George. The town's proximity to Zion National Park makes it a popular tourist destination, providing a steady stream of potential guests.
Insights:
- Airbnb-Friendly Regulations: Unlike surrounding cities, Kanab allows Airbnb operations with minimal restrictions.
- Tourism Hub: The scenic beauty and attractions like Zion National Park drive tourism, enhancing rental potential.
3. Finding the Perfect Property
Gubler recounts the process of identifying the ideal property through specific search criteria, focusing on rural settings with acreage. Collaborating with a successful client from California, he sought properties that offered both a primary residence and an income-generating Airbnb unit.
Notable Quote:
"We found it through this search portal and then as we dove into it more and more, we realized that there were two separate tax ID numbers that we could buy separately."
— Eric Gubler [02:30]
Key Points:
- Search Criteria: Properties over an acre in rural areas with potential for secondary income.
- Dual Property Advantage: The target property comprised two separate units under distinct tax ID numbers, allowing for strategic purchasing.
4. Innovative Financing Strategy
The crux of the deal lay in its financing. The client utilized a primary residence loan for the main property, benefiting from lower interest rates. Simultaneously, the second property was acquired for a nominal price, effectively minimizing additional costs.
Notable Quote:
"He was able to buy like the bigger house on the bigger parcels with a primary residence loan mortgage, which saved him a ton of money on interest."
— Eric Gubler [04:15]
Strategies Employed:
- Primary Residence Loan: Lower interest rates applied to the main property.
- Cash Purchase for Secondary Unit: Acquired the second property for just one dollar to avoid higher investment property rates.
- Overall Savings: This approach significantly reduced the overall mortgage payments, allowing the property to generate positive cash flow.
5. Overcoming Financial Hurdles
Despite the innovative financing, challenges emerged when the bank reclassified the loan. Initially approved as a primary residence loan, the lender later identified the property as an investment property, leading to higher interest rates and increased monthly payments.
Notable Quote:
"The bank... said that this looks like an investment property... we weren't able to provide any proof."
— Eric Gubler [08:45]
Issues Faced:
- Loan Reclassification: Lenders viewed the property as an investment, not a primary residence.
- Increased Costs: Higher interest rates and additional closing costs strained the deal’s financial viability.
- Client Frustration: The client was initially angry and considered abandoning the deal due to the unexpected financial burden.
6. Resilience and Resolution
Despite the setbacks, both Gubler and his client persevered. The client ultimately decided to proceed with the purchase, recognizing the long-term benefits outweighed the immediate financial challenges.
Notable Quote:
"He did go forward with it. He is slaying it. He is crushing it."
— Eric Gubler [14:30]
Key Takeaways:
- Adaptability: Adjusting to lender feedback and financial changes.
- Long-Term Perspective: Focusing on the property's potential for appreciation and cash flow over immediate hurdles.
- Client Commitment: The client's determination to proceed despite increased costs exemplified successful investor resilience.
7. Lessons Learned
Gubler emphasizes the importance of maintaining perspective in real estate deals. Small financial setbacks should not derail long-term investment goals. He advocates for evaluating the bigger picture, including principal growth, cash flow, appreciation, and depreciation over time.
Notable Quote:
"Don't let your pride get in the way of doing the deal."
— Eric Gubler [19:00]
Key Lessons:
- Big Picture Focus: Prioritize long-term gains over short-term financial strains.
- Emotional Management: Avoid letting frustration or anger impede investment decisions.
- Comprehensive Evaluation: Assess all financial aspects, including cash flow and appreciation, to determine a deal’s viability.
8. Encouragement for Fellow Investors
Gubler offers motivational insights for real estate investors facing similar challenges. He reassures listeners that fear and uncertainty are common but can be managed through proper guidance and support from experienced coaches.
Notable Quote:
"If you're open to living in a rural area, consider Kanab... it's a great way to go."
— Eric Gubler [24:00]
Advice for Investors:
- Seek Guidance: Consult with coaches or experienced mentors to navigate complex deals.
- Community Support: Engage with the Real Estate Investing School community for shared knowledge and support.
- Take Calculated Risks: Embrace opportunities that align with your investment strategy and financial goals.
9. Conclusion
Eric Gubler wraps up the episode by reiterating the success of the Kanab deal and encouraging listeners to pursue innovative real estate investments. He underscores the importance of creative problem-solving and resilience in achieving investment success.
Notable Quote:
"Go find those deals, go change your life, your family's life and be able to live the life that you want to live and be intentional about it."
— Eric Gubler [28:15]
Final Thoughts:
- Success Story: The Kanab deal serves as a testament to strategic planning and adaptability in real estate investing.
- Ongoing Support: Gubler invites listeners to connect via Instagram and stay engaged with the Real Estate Investing School community for continuous learning and success.
Follow Eric Gubler:
- Instagram: @Egobler
- Real Estate Investing School: [Instagram Handle: Real Estate Investing School]
Join the Conversation:
Engage with Eric and fellow investors on social media to share your own success stories, seek advice, and stay updated on the latest real estate strategies.
This episode of the Real Estate Investing School Podcast provides valuable insights into creative financing, strategic property selection, and overcoming unforeseen challenges in real estate deals. Eric Gubler’s detailed account of the Kanab deal serves as an inspiring guide for both novice and seasoned investors aiming to maximize their investment potential through innovative approaches.