Real Estate Investing School Podcast
Episode 75: REAL DEAL — Million Dollar Airbnb With Brody Fausett
Release Date: July 27, 2023
Host: Brody Fausett (Solo Episode)
Episode Overview
In this special solo “Real Deal” episode, host Brody Fausett dives deep into the story of his very first Airbnb investment—a $49,000 mountain condo that became a major success and set the stage for his current project, a tiny home resort. Through a candid, step-by-step breakdown, Brody shares how he found, funded, and “forced” (improved) the value of the property, as well as the crucial investing and life lessons he gained from this foundational experience.
Key Discussion Points & Insights
1. The Power of the "Lifestyle Deal" (00:00–05:40)
- Brody introduces the concept of “lifestyle investing”—connecting personal dreams (like owning a mountain getaway) with smart financial moves.
- Quote: “For me, this deal was really cool because it allowed me to step into this lifestyle investing...” (03:09)
- He describes how, as a college student, he wanted a cabin experience without the high risk and mortgage of a $500k property.
- Emphasizes the importance of finding deals you can afford even if they don’t rent out, reducing stress and risk.
- Lesson: A “lifestyle property” can pay for itself and even propel your investing career if you’re thoughtful and strategic.
2. Deal Discovery: Finding an Overlooked Gem (05:41–07:18)
- Brody explains how he found his one-bedroom, 480 sq ft mountain condo by searching for the oldest listing in the area—over five years old and expired.
- Quote: “I looked up the oldest listing, and it was over five years...reached out and it was listed at $120,000.” (06:10)
- He offered $49,000—a fraction of the original list price—despite his agent’s hesitation.
- Memorable Moment: “The worst thing they can say is no…it’s been on the market for this long. Just tell them we’ll make it quick and easy. And sure enough, they said yes.” (06:55)
- Brody highlights that even had he paid full price, it still would have been a strong investment.
3. Value Creation: Forcing Appreciation Through Creative Rehab (07:19–13:00)
- Upon purchase, Brody and his father-in-law applied sweat equity by adding custom log-trim work and built-in bunk beds, helping the small condo accommodate more guests.
- Quote: “One of the biggest things I did to force this deal...the more that it sleeps, the more rent you can get out of it. It appeals to more people.” (07:32)
- Ingeniously turned a closet, adjacent to the living room, into spacious built-in bunk beds—large enough to fit queen mattresses.
- Quote: “We overbuilt these on accident...a queen bed fit perfectly...let’s make them queen over queen.” (09:00)
- Elevated aesthetic appeal with custom log bunk beds, which drew rave reviews and differentiated the listing on Airbnb.
- Review Highlight: “All about the bunk beds…our kids love the bunk bed…the bunk beds were awesome.” (09:32)
- Kept rehab costs low (~$12k) by: painting cabinets, using economical butcher block countertops, and DIY-installing flooring and tile.
4. Lessons in Sweat Equity & Cash Flow (13:01–15:00)
- Emphasizes doing what you can with limited funds, and how hands-on effort boosts ROI and future investing capacity.
- Quote: “Not only did I actually enjoy it, it was kind of therapeutic for me, but it was also fun just to be able to do it and not spend a lot of money so I can get a return...” (13:53)
- Experience of making “money while you sleep” was profoundly motivating.
- Memorable Moment: “I went to bed and I woke up in the morning and I made money…front loaded all that work and it paid me when I went to bed at night.” (14:37)
- The cash flow and margin from this deal helped him save for larger investments, compounding his wealth-building.
5. Funding the Deal & What He Would Do Differently (15:01–17:45)
- Brody shares various funding strategies: second home loans (10% down), investment property loans (20% down), cash.
- He paid cash for the condo using commissions from his sales job.
- Quote: “What I actually did was paid cash for it...I had some commission that I had saved up and worked hard for.” (15:38)
- In hindsight, he would have refinanced (the BRRRR strategy) after adding value, pulling out cash to invest in further deals.
- Quote: “Knowing what I know now, I would go back and I would have refinanced out of that…could have pulled out even $50k or $60k.” (16:31)
- Ultimately sold the condo for $165k, more than tripling his investment, after collecting significant Airbnb cash flow for 5–6 years.
6. The Long-Term Impact & Scaling Up the Model (17:46–19:00)
- Used proceeds from sale and his experience to 1031 exchange into a new project—a tiny home resort in the same location.
- Quote: “If I can get this much rent out of this consistently…maybe there’s a way to go multiply this process…” (18:10)
- Applied lessons learned—like maximizing bed count for rental income and DIY enhancements—to the new business model.
- Shared advice for listeners:
- Look for underappreciated deals.
- Do your homework—reach out to hosts, analyze rental data, understand HOA considerations.
- Protect your downside so you can sleep at night while building wealth and enjoying lifestyle upgrades.
Notable Quotes & Timestamp Highlights
- “For me, this deal was really cool because it allowed me to step into this lifestyle investing.” (03:09)
- “The worst thing they can say is no…just tell them we’ll make it quick and easy. And sure enough, they said yes.” (06:55)
- “The more that it sleeps, the more rent you can get out of it.” (07:32)
- “We overbuilt these on accident…let’s make them queen over queen.” (09:00)
- “Our kids love the bunk bed…the bunk beds were awesome.” (09:32)
- “It paid me when I went to bed at night.” (14:37)
- “Knowing what I know now, I would...have refinanced out of that.” (16:31)
- “Maybe there’s a way to go multiply this process…” (18:10)
Episode Structure & Segment Timestamps
- 00:00–05:40 — Introduction, Lifestyle Investing Concept, and Deal Backstory
- 05:41–07:18 — How the Deal Was Found (Oldest Listing Strategy and Offer)
- 07:19–13:00 — Forcing Value: Rehab Tactics & the “Bunk Bed Advantage”
- 13:01–15:00 — Sweat Equity, Cash Flow, and Compounding
- 15:01–17:45 — Funding Approaches, BRRRR Insights, and Sale/Exit
- 17:46–19:00 — Scaling up: Tiny Home Resort Vision & Final Takeaways
Final Takeaways
Brody's journey underscores how creative thinking, sweat equity, and well-researched risk-taking can transform a modest real estate deal into both lifestyle and financial freedom. His story invites listeners to:
- Start with what you can afford,
- Learn by doing,
- Leverage both personal goals and smart investing metrics,
- And always look for ways to maximize value within your budget.
“Go find something that is a good investment. It's gonna pay you when you go to bed at night, and it's also gonna increase your lifestyle and allow you to have some of that lifestyle investing that we're all after.” (18:50)