← Real Estate Rookie
Real Estate Rookie
$50K/Year Cash Flow from ONE Rental by Beating the Market to This Strategy
00:52:09
$50,000 cash flow from ONE rental!? Not many properties will give you this kind of return in today’s housing market, but this investor beat his competition to an innovative investing strategy, and it’s paying huge dividends. Want to find out what it is and how he did it? You don’t want to miss this one! Welcome back to the Real Estate Rookie podcast! Garrett Brown envisioned himself running restaurants or operating hotels before real estate investing took him down a different path. He got his real estate agent license, flipped a few houses, and then, in a full circle moment, put his background in hospitality to good use—buying three condos at a discount and converting them into short-term rentals. But when Houston, Texas, like many Airbnb markets, became oversaturated in 2021, Garrett landed on a new strategy that would allow him to stand out. It gives vacationers a taste of the great outdoors without sacrificing the luxuries and comfort of a cozy home! If you want to know how to...
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- [00:00]
Tony J. Robinson
Today's guest has mastered the art of blending wilderness with comfort, creating a truly unique and highly comfortable Airbnb business. By offering guests a taste of the great outdoors without sacrificing the luxuries of home, they've carved out a niche that's as innovative as it is successful. Get ready to hear how this strategy is changing the game in the short term rental market. Welcome back to the Real Estate Rookie Podcast. My name is Tony J. Robinson. I'm here solo, but Ashley will be back before you know it. This is the podcast where every week, three times a week, we bring you the inspiration, motivation and stories you need to hear to kickstart your investing journey. And today's guest is Garrett Brown. And if that name sounds familiar, it's because Garrett recently joined BP as a full time content creator. So you're likely seeing him across all of our various bigger pockets channels. So Garrett, welcome back to the Real Estate Rookie show.
- [00:50]
Garrett Brown
Glad to be back. Always fun when we're getting to top chop shop on some short term rentals.
- [00:54]
Tony J. Robinson
Let's start at the beginning. Garrett, I guess what, what were you doing when you first started your career in real estate?
- [00:59]
Garrett Brown
I actually was so when I first know kind of backtrack. I went to school for hotel and restaurant management but I thought I was going to work in restaurants. I was waiting tables. I had a little bit of hotel experience working front desk and things like that. But I always thought I was going to go further with restaurants and that kind of hospitality business. Fast forward a couple years. I ended up deciding to get my real estate license, became an agent in Houston. I was a real estate agent for I still have my license active but I've been active for about seven years. I realized that the agent side wasn't necessarily for me. I started working with a couple investors. I had one, I'll never forget this day. I got an email, I just started getting my license, got an email asking hey, do you work with real estate investors? And at the time I was just so happy that somebody was reaching out to me. I just say yes. Even though I had no idea what to do. I got online, found bigger pockets. I was so thankful for that because I dove in, learned so much and that email never led me to a deal directly with that investor. But that opened my eyes to see what are what other avenues are out there in real estate. I started working with a few investors, they were doing fix and flips, I was working with buy and holds. And then I started to realize like hey I, I'm using a Lot of the tools that I have and all the skill sets that I'm learning and I'm making these investors crazy returns and, and other things like that that, you know, kind of a typical story you may hear from a lot of agents that turn investors that I was like, I need to put my hand into this and start to see what I could actually do. And I ended up flipping my first house. And it was my most successful flip because then after that, a few of them didn't really work out as well. And that's, but that's the beauty of real estate is I was learning and I was kind of figuring out what strategies I really wanted to go into. And yeah, now I am here today and couldn't be more excited to actually be going down this investment journey instead of just a flat out real estate agent.
- [02:50]
Tony J. Robinson
Let me ask Eric, because as you mentioned, there's a lot of people who make that transition from agents to investor. But do you feel that it's a requirement for a rookie with no experience to go out and get their real estate license first?
- [03:02]
Garrett Brown
No, I don't. I actually, there's so many ways now to learn online and to just ingrain yourself working under other people or finding, you know, somebody in your community that's a mentor or going to meetups. There's so many other ways out there to get this type of knowledge. There are, you know, if you want to be in the real estate agent space, there's a lot of, there's a lot of great positives that come out of it and being an investor with it, but it is not something essential because a lot of the things I learned in real estate and real estate agent school have nothing to do with real life, real estate, real estate and, you know, in the real world. So, yeah, people can definitely skip that if they want to. But there are some positives to it, though. There's, there's pros and cons to everything in real estate.
- [03:41]
Tony J. Robinson
My wife recently got her, her license here in California and it's a very rigorous process here in California. And like, listening to some of the questions that she had to like, you know, like practice for this exam. I'm like, when are we ever going to use that? You know, I've never asked my agent that question before. So, yeah, that. I think there's definitely a lot that goes into it that maybe doesn't, doesn't translate. But you said that you were working with these investors, Garrett, and you're kind of seeing some of the deals that you're doing at what Point did you realize, okay, maybe it's time for me to take the leap and actually invest in myself?
- [04:12]
Garrett Brown
It actually kind of, you know, I. I started to tell myself, like, all right, I'm a. I'm a find a deal. I started kind of saving some cash. I was, I was. I probably had a little bit of analysis paralysis because I was trying to overanalyze everything. But then, you know, fate just kind of took over. One day I was showing a client of mine a house in a neighborhood that I knew kind of well. This one thing I always tell real estate investors is the areas, you know, you're probably going to have a lot more opportunities specifically for you because you're going to know people, you're going to know the neighborhoods better. And, you know, xyz. There I was showing a client a house in a neighborhood that I knew pretty well grew up near it. We're driving around, we're leaving. I see a for sale by owner sign outside. And that was one of my things that I always did as a real estate agent was if I saw it for sale by owner side, I was going to call them. I hate cold calling. It is not my. It is not my forte at all. But sometimes you have to make yourself a little uncomfortable to get to that level of comfortability that you're looking for. So I saw the for sale by owner side. I gave them a call right then pulled over. The owner was actually inside the house, answered the phone, and, you know, I'm like, I was asking, hey, I'm a local real estate agent. I saw your house for sale. Like, what are your plans? You know, kind of just diving into seeing what their pain points were. And he, you know, he was like, oh, you know, we have a few houses. We just kind of want to get rid of this one. And, you know, I'm in here right now if you want to come check it out. And so I was like, absolutely. We walked in. I knew then I knew the neighborhood very well because it was something that, you know, I grew up knowing and in my area of expertise. And then asked him what exactly he was looking to get out of it. He wanted the property to sell for 115, which I already knew at that price in that neighborhood as just putting it on the market, you could probably sell it for around 150. So I gave them both options. I said, hey, we can. I have a. You know, I didn't have the funds I got. You know, I kind of bluffed it a little bit. I was like, we can Buy this cash right now for your price, or we could list it and probably get closer to this. And I gave him both options, and he said, I don't want to deal with, you know, back and forth, and I just want to get rid of it. You know, we're trying to keep going into this. Next. They were trying to go on a vacation or something, and I ended up calling a buddy because I was networking with a lot of people. I had gone to a few meetups. I knew he dealt in the heart, money, hard money, space. I called him and I said, hey, I just got this deal. I don't really know much about it. I know it's a good deal, but I'm about to dive in and see. He goes, oh, awesome. I'll come meet you right now. Came and met me. We partnered on the deal. It was. It was the easiest flip because after that, they were not as easy. But we ended up selling it. We put about 50,000 into. We ended up selling it, I think, for 240. And that kind of really jumpstarted my investment career. That gave me the. You know, I was brave enough from then on to, like, really take myself serious when I saw something, an opportunity to come to me, like, sometimes I'm just going to figure it out. I became a very, like, don't dwell on the problem. Find the solution. And once I started really leaning into that in my investing journey, it kind of took off in a lot of good ways. But, you know, not every deal worked out great after that. But you learn from every single one. And those were just the stepping stones to really get me started and give me that fire in my belly to take on a lot bigger projects than I thought I could handle.
- [07:24]
Tony J. Robinson
Yeah, Garrett, you touched on a few things there that I want to circle back on for the rookie audience, because there's a lot of. A lot of little nuggets there. But one of the first things I want to focus on is you. You talked about the growth that happened on that first deal, and I think that's the piece that a lot of people fail to realize is that the. If you look at a few real estate investors and the first person has 0 deals done, the second person has 1 deal done, and the third person has maybe 10 deals done, the knowledge gap between 0 and 1 is so much bigger than the knowledge gap between 1 and 10. And although this. This first deal for you was. It was a pretty solid deal, really. The goal was just to give you that confidence, like you said, to be able to go on and Kind of proof of concept for yourself. So just an important point I want to call out for the rookies because I, I think we put so much pressure on this first deal that has to be this perfect home run of a deal, when really that's not the goal. The goal of that first deal is give me the confidence to do my second deal right.
- [08:23]
Garrett Brown
And that's why I always, like, get, when I give that story, I always tell people, like, not all the deals worked out that good. That was a, I got very, very lucky with that one working out well. I had put a lot of time in to, you know, have the opportunity to make that work well, but you're 100% right. The things I learned, just jumping into it and going forward with more deals. Now, the same mistakes that I made on that or other ones that may not have been as profitable or we lost a little money, I'll never make those mistakes again. And every single time that just if I can just get 1 to 2% better on every deal or every deal I analyze, that's the goal. Because then you're always going to be progressing forward and those incremental gains are eventually going to take over that. You know, when you're four or five years in those, those type of deals, you're not going to make those small mistakes again because you're, you're taking the time and just having the trust in yourself to just make it happen. And a lot of people, they sit on the sidelines waiting for that, oh, this is going to be the slam dunk deal of all time. And that, that very rarely happens, especially in today's climate. But you are starting to get those, you know, those singles and those base hits and they eventually add up that you've scored nine or ten runs and you didn't ever have to hit a home run. You know, you just kept, kept chucking away at it and just kept going along. And that's, I always like, try to tell people that, like, I got lucky on that first deal, but there were several deals after that I didn't and I just learned a lot. And now, now, you know, luck is nothing but preparation and opportunity. And that's, that's the things I've been trying to capitalize on.
- [09:50]
Tony J. Robinson
All right, guys, it's time for a quick break, but when we get back, Garrett will tell us how he transitioned into investing in short term rentals. This show is sponsored by Airbnb.
- [09:59]
Garrett Brown
Fall is here, and I've got a trip coming up soon. And while I'm enjoying the autumn vibes.
- [10:03]
Tony J. Robinson
My home will be earning me extra cash as an Airbn.
- [10:06]
Garrett Brown
And the best part? Everything's managed right from my phone so it doesn't mess with my vacation plans or my pumpkin spice lattes. Airbnb makes hosting easy and practical. Whether you're gone for a weekend or.
- [10:17]
Tony J. Robinson
A month, it fits right into your lifestyle.
- [10:20]
Garrett Brown
Your home might be worth more than you think. Find out how much@airbnb.com host hey, Henry.
- [10:27]
Tony J. Robinson
Washington here from the on the market pod. You ever get frustrated while hunting for off market properties? Well, you're not alone. Just ask Alex, a fellow real estate investor who was in the same boat struggling to find those hidden gems. Then he discovered Deal Machine. Now Alex effortlessly locates off market gems, leveraging Deal Machine's free unlimited contact data powered by the robust databases used by 911 call centers. And it automates mail campaigns seamlessly. So, you ready to revolutionize your real estate game? Like Alex, visit biggerpockets.com dealmachine Sign up for free and start transforming your property hunting today. You ever thought about diving into real estate but got kind of stuck on where to start? I mean, of course you have. You're listening to this podcast. Well, we've got something that might just kickstart your journey. Enter Propstream, your secret weapon in the world of off market properties. With over 155 million properties at your fingertips, Propstream lets you uncover hidden gems right from your phone, tablet or computer. Propstream's got over 120 search filters from pre foreclosures to bankruptcy, helping you find motivated sellers faster than ever. And with public record data and MLS sales estimate accuracy of over 99%, you'll nail those comps every single time. They're even throwing in a learning academy to get you started on the right foot. Dive in. With 50 free leads during their seven day free trial at propstream.com BP that's propstream.com BPLikeBiggerPockets alright guys, welcome back to our investor story with Gary Brown. Now one of the other things that you mentioned was this seller had a property and you told him, hey, we can list this and you'll get 150. Or we can, we can buy this today and I'll do it at 115. So he took a pretty significant cut on what he could have potentially received on the market because the overall price to him wasn't as important as the convenience of getting the deal done. And I think for Ricky's, that's a, that's a piece that's often Misunderstood as well is that we always just assume that sellers are motivated by getting the absolute best price. Now, while it's true that there are a lot of sellers who are right, there are some who are, who are maybe even unrealistic about what their property is worth. You only need to find the one that is maybe motivated by something other than the maximum price. And you have convenience. Like how much work do I actually need to put in to get this property sold? And you have speed, right? Like that's another one that people are very concerned about. It's like, hey, I just need to get this property sold by next Wednesday because a moving truck is taking me to my place clear across the country for my new job on Friday, right? So I gotta have this place sold, you know. So how did you uncover that? Was it, was it literally just presenting both options to him and then he said, here's what's important to me or were there some probing questions you asked to kind of uncover that information?
- [13:05]
Garrett Brown
So you hit it spot on as. So in that time I was still a little newer and I can't, you know, I was studying a lot of, you know, sales and different things like that. And one of the main things that I was taking away from it was you always just need to dive in to figure out what their pain point is. All sellers will have some reason they're selling and price is always in there. But there's other people always think like, oh, I just, I got, we got to get down on the price somehow. Like that's, that's the main thing we got to talk about. But sometimes you'll, if you can just figure out what exactly the seller really wants out of the deal along with the price, you can, you can have a slam dunk that actually happens even not long ago. Still, you know, I still run my agent business, but this is a great example. I had a client that was a buyer, she really wanted a property. We were talking to the seller, we found out and you know, as an agent, I would never let my sellers divulge this type of information if I'm an agent on the side. But the seller told us, he was like, hey, I have to, I have to get to Illinois for a new job by XYZ and I just, I need a three day leaseback, the whole thing. He wanted somebody that would give him the three day leaseback. And my client came in, you know, I think it was about $5,000 under, but she was fine with doing a three day lease back to the seller. And he took the lower deal just because they were more flexible on the terms that they were actually allowing. And so sometimes you just need to ask, like, hey, you know, like, what's your reason for moving? Or, you know, like, how can. Like, what. What is your biggest problem with this property? Or what are you. What's your biggest problem in general right now that we can help with? And sometimes it is like they need help on the. I've seen, you know, not me, but I've seen other people that I've worked with too. Or like, the seller was worried about, you know, if they were going to be able to clear trash out of the garage or something, and they were worried that they were gonna have to do all the extra work and pay somebody come do it. And I was like, no, we'll pay. We'll get the trash out. I'll. I'll bring a dumpster right now and get it. Like, that's the hold up, you know, like, done. So I, I always just. I always just tell people, like, get to the bottom of what exactly you can help them with, come from a helping perspective and figuring out what their pain points are, and you're going to be able to. It's a people business. In the end, we're dealing directly with people. A lot of times there's. There's some emotions involved, and if you can just figure out how you can make them feel more comfortable and help them in that situation, a lot of the times those scales are going to tip in your favor if you just pay attention to those small details.
- [15:31]
Tony J. Robinson
We interviewed Lee Thompson on the rookie podcast. And this, this was quite some time ago, but if you guys go check the archives, rookies look for, look for Lee Thompson. But, uh, she was doing some wholesaling work in Oklahoma, and she found this killer deal from this lady who had lived in this house pretty much her entire adult life. And the reason she went with Lili over some of the other sellers was because she needed someone to help her move. And she told Lily, she said, I've never moved before. And just the idea of, like, packing up all this stuff is, like, overwhelming for me. And Lila's like, look, I'll hire the moving company for you. And that's how she was able to secure that deal at a killer price. So everyone's motivated by different things. He's got to find that motivation. Garrett, you. You knock out this first deal with the flip, and it kind of gives you that confidence to move forward. I know you did some more flips afterwards to mixed success, but at some point in your investing journey, you make the transition over to the short term rents of the Airbnb industry. Walk us through kind of the decision point of like, hey, maybe let me try out this, this new strategy as opposed to continuing to grow your flipping in your agent business.
- [16:33]
Garrett Brown
I had a few flips that did not go as well. Had one, I thought it was going to be a killer deal under contract where five or six days before closing and then a long lost brother comes out of nowhere and puts a claim on the title and we couldn't close. And there was another one where we had it under contract. And then I worked, I was working with a new hard money loan lender and they decided that my ARV wasn't actually correct. And they, then they ended up going from we'll give you 80% to like 60%. It just wasn't my personality. Like, I come back from the hospitality background and I was always a really good waiter because I was, I wanted to care about people. I cared about customer service and the guest experience. And so I just, I had an investor that this is like why, you know, stories always have like long tails to them because you never know where you're going to end up. I had an investor that I was working with, he owned three small condos in one particular building and I was doing long term rentals for him and he wanted 70,000, I think, for each one of them. And I go, hey, would you sell them to me if, like, if I bought all three and like we made a deal with it, he seller financed a few of them to me for 60,000 each. And then I started being like, all right, you know, Airbnb was just kind of getting going in short term rentals. And I was like, I'll maybe try that and see how it goes. You know, we were getting 120 a night, 130 a night, and it was going solidly. And then obviously the pandemic hit and things kind of took a curve. You know, a lot of people started to get onto the short term rental wave and condos were being bought up everywhere. And at that point it was just a race to the bottom of who had the lowest price.
- [18:08]
Tony J. Robinson
And Gary, let me, let me comment on that really quickly, right, Because I think you bring up a really important point specifically about the Airbnb industry. But I wrote a stat, and this was, gosh, maybe a year ago now, but at that point, about 50% of the listings on Airbnb have been created after the pandemic. So you're seeing a massive influx Nationwide of new listings coming into supply. Now, during that time, demand for Airbnb is significantly increased as well. And there are definitely markets where the rate of supply has outpaced the rate of increase of demand. And that's when you, you know, people talk about saturation. It's those markets where even though demand has increased, there's been more supply. Now, on the flip side, there are also markets where the rate of increase of demand has outpaced the rate of increase of supply. Now, usually those are markets that are maybe somewhat secondary. You're probably not seeing that in some of these, you know, super established, you know, vacation rental markets, like the, you know, Big Bear in California, the Smokies, Destiny. Like some of these markets, you're probably not going to see that kind of growth there. But in these secondary markets, I think that opportunity still arises. But the reason I bring all that up is to say that you said, like, hey, it's a race to the bottom. And I think it's super important to look at the underlying economics of these markets before you jump in. Because either a, you're going to have to invest an incredible amount of money to really try and find a way to make your property stand out, if it's even possible. Because, like, in a condo setting, there's only so much you can do, right, But a single family has more leverage, or you've got to go into a market where maybe the level of competition hasn't yet reached that point where everyone's kind of going gangbusters. So I just want to call that out because you mentioned that it's a very important point for people to understand.
- [19:54]
Garrett Brown
Absolutely. And it was, it kind of drove me into what I ended up doing with, you know, some of my glamping sites. And that's when I really noticed. I was like, all right, you know, I started, you know, researching on YouTube and really kind of diving in, like, what? How can I take this concept? And I'm a real creative person. You know, I, I made music for a long time. I've. I've always been very, very. I've wanted to showcase my creative side. And it was kind of tough in the real estate field because especially being an agent, you know, it was just so, you know, just kind of, I don't say vanilla, but it kind of was. For the most part, I was selling residential homes, new constructions. So I got into the short term rental space after, you know, I saw this decline coming, but I saw where the opportunity lie was lying. And that was in something very, very unique. And So I, you know, I'm from Houston, Texas, which is, you know, it goes back and forth between the third and fourth largest city in the United States. And I started researching and I was like, there's nothing very. There's no unique stays really in the area, which blew my mind. You know, this is 2021. And I was like, all right, I think I'm ready to, like, I think I'm ready to try something. And I was, I heard about, you know, land hacking and things like that. And I was like, all right, I think that's actually what I need. I need to do something different. But this mark, there's so. There's so much demand, but there's a lot of supply of just, you know, cookie cutter listings. So what could I do to stay?
- [21:18]
Tony J. Robinson
The same stuff, but define unique stays? Because for, for folks who maybe aren't familiar with that. What do you mean when you say unique stay?
- [21:24]
Garrett Brown
That's when I kind of dove into like, all right, there's, you know, in the glamping niche or any type, you know, unique stay I want to provide. And unique stays can mean different, can be different to a lot of people. But when I think of it, it's some. You're providing an experience that a guest is not going to be able to get in, you know, 99% of the other places that are there. And one of my, you know, unique stays that I have, my first one that I built, is called a geodesic dome. It's a very unique structure. It's something that if you're scrolling on Instagram, you're going to see it and you're instantly going to go, like, what is that? And then you're able to make those, you know, amenities within it. You don't even have to go above and beyond with your amenities. I always recommend having, you know, solid outdoor amenities. But if you can have somebody that is scrolling on Instagram and they see a property and they're like, what? Like, they stop because it's so unique to them. It's something that is, you know, you've got to think outside the lines. And there's a million different types of unique stays now. There's tree houses, mirror houses, yurts. There's, you know, you can build a unique cabin with just, you know, like all. There's all types of things. People put Airstream trailers and, you know, safari tents. There's so many things out there that could be a unique, unique stay. But when I think of it, it's something that people are scrolling and they they stop because they've never seen something like that particularly. And then the amenities and the, the design you add to it is what's going to make them book it. When they actually go into your listing and they're scrolling through the first few pictures and they're like, wow, this is, this is an experience that I cannot get pretty much anywhere else, you know, outside of this particular place. And if you're near, I have something that's called a 60, 30, 10 rule, is kind of what I call it, where it's, if you're 60 minutes from a major city, I say 500,000 people or more, 30 minutes from like a state, national or regional attraction, and you're 10 minutes from some type of civilization like a gas station or Dollar General or something along those lines, there's a good chance that that market will have a solid supply of people looking for some type of unique stay.
- [23:25]
Tony J. Robinson
All right, guys, we have to take a final ad break, but first, a quick note. If you're enjoying the show, we want to hear your opinion. Does a glamping short term rental sound like a fun vacation for you? Submit your answer in the Spotify or the YouTube app. All right, guys, we'll be right back after a quick word from today's show sponsors. Hey, Henry Washington here from the on the market pod. Ever feel stuck while searching for off market deals? Well, let me introduce you to Sarah, a savvy real estate investor who turned her fortunes around with Deal Machine. Sarah now taps into free unlimited contact data powered by the same databases used by 90% of US caller ID systems. She easily sends automated mail campaigns. And thanks to Deal Machine's new private investigator tool, Sarah can even track down those elusive corporate leads. This powerhouse combo keeps her steps ahead of the market. Want to invest like Sarah? Head to biggerpockets.com dealmachine and sign up for free. Start turning hidden opportunities into your investment success with just a few clicks. Hey, listen up, aspiring real estate moguls. I've got a secret weapon for you. Say goodbye to the traditional real estate grind and say hello to Propstream, the ultimate tool for finding off market properties. With a whopping 155 million properties in their database, Propstream opens doors you never even knew existed. Propstream also delivers public record data and MLS sales estimates with pinpoint accuracy, making comps a complete breeze. Ready to seal the deal, Propstream's got lead automation, skip tracing and top notch marketing tools to help you close deals like a pro. And the best part, they're throwing in a free learning Academy to help you level up your skills. Try it out with 50 free leads during their seven day free trial at www.propstream.com bp. That's www.propstream.com BP. Like BiggerPockets this podcast is sponsored by Laurel Road.
- [25:04]
Garrett Brown
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- [25:36]
Tony J. Robinson
Laurel Road, your partner on the road.
- [25:38]
Garrett Brown
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- [25:42]
Tony J. Robinson
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- [28:01]
Garrett Brown
It did. But, but it was, it was, it came from all those years of learning from, you know, well, not an overnight success at all, but it took me eight to 10 years to become an overnight success where I was learning all these things. And then I had the, I had the guts basically to take it on because I had seen these, these examples in the market that I could dominate if I just put something out there. And I think other people were scared to try it, but I knew that the, the population and the tourism was going to be there. And that's one of the main factors of when you're, when you're looking into a market is can it actually sustain tourists and the amount of travel that are going to come there to support these unique stays. You hear people putting them two or three hours away in the middle of nowhere, thinking, you know, getting cheap land and they think it's going to take off. But if you're not really near something that's has a pretty decent population, people traveling over there, you know, you're just not going to get that, that rate of tourism that you're looking for that is possible when you, when you pick the right market.
- [28:56]
Tony J. Robinson
How far are like was that land from Houston?
- [28:59]
Garrett Brown
About 45 minutes. That was one thing I made sure because the lake is massive and I was looking all over the lake and I took about seven or eight months before I picked my, the house and the land. And the one thing I noticed from, you know, that is one advantage to being a real estate agent is I could go up to that area and see Properties whenever I wanted. I didn't have to wait on a realtor. I didn't have to, you know, have. I didn't have to. I wasn't at anybody else's, you know, time that I had to rely on. So I was constantly going around to that area on weekends when I was not working and seeing different areas. And I was just, I was casually checking things off the list. I was. At first I thought I only needed 5 acres, but then as I saw a few of the properties, I was like, I think I actually need to find something with 10 acres. So my buy box started shrinking. Then I noticed, like, on one side of the lake, it took you an hour and a half, two hours to get to that side of the lake from Houston versus this one particular area that was only 45 minutes because of just how big the lake was and how the roads worked. And so I knew that I was like, that's something that's going to draw people in because you can, you can, you can market that as, hey, we're only, you know, an hour or 45 minutes away from Houston, as opposed to saying, you know, oh, we're two or three hours from Houston, even though it's on the same, you know, on one particular lake. So there was, there was little things that, that came to my realization as I didn't, I didn't move too fast, but I kept just gradually realizing, like, what are some small things that I, I know I need to take off my list so I don't keep wasting time looking at properties that are not going to fit what I'm looking for. And sometimes you can only do that from, you know, being diligent and, you know, doing your due diligence and going up to act actively check out different properties and seeing what you think as a, you know, how would you feel as a guest driving out there and, and driving on the road, that's something people don't think of There. You see reviews all the time that are bad for some places that are like, oh, the road was terrible. And another tip on top of that is I was going and staying in different yurts and geodomes, and I traveled to Arizona to stay in some places, and I traveled to Austin to stay in some unique places. And that's something because people ask me all the time, like, how did you decide on a geodome for your first one? And it was because I stayed in a lot of these different places. And I, I just took as my guest opinion, like, what did I think was the coolest? What Do I think does the best. And like, what did I like about certain things? And there were certain things I didn't like about yurts. There were certain things I didn't like about shipping containers and the pros and the cons out weighted on the geodesic domes. And I only knew that from going, staying in them. And that's, that's truly only the. One of the ways you can find out about some of these unique stays is to don't be afraid to go out. Yep. Go out and check out some of the competition basically.
- [31:32]
Tony J. Robinson
So if we kind of sequence this out a little bit, Garrett, it's like you, you had the idea first of the unique stay. From there you did a lot of, you know, call it market research where you're staying at different other types of unique stays to get a sense of what's working you kind of land on. This is the type of unique stay that I want. From there you narrow down on a market within a certain radius of a major city and you end up finding a piece of land. So a couple of things that I want to talk through here as we kind of think through these sequence of events. As you were shopping for land and you said that you realized you had to go from 5 to 10, but I guess what was it specifically that you were looking for in the land to say, okay, this would actually be a good candidate to build this type of unique stay.
- [32:13]
Garrett Brown
So one thing that's awesome about land hacking is people all the time will think, I'm just going to go buy raw land. And one of the hardest things when you're building anything, and I found this out from tons of research, is getting the utilities usually to the, to the property, getting permits for some of those utilities and then also the road infrastructure. People don't realize how much road infrastructure actually can cost during the build and how important it is to the guest experience and you know, your, your contractors and all these things like that. So I started visiting some of these properties and I was looking at raw land sometimes, but then I realized just how, how much those, those utilities would eat up my cost. And so I started going, okay, I have to have some type of house on it. And so that's when I started with, you know, a house and maybe five acres.
- [33:00]
Tony J. Robinson
So how many, how many units do you have on the property right now?
- [33:03]
Garrett Brown
Right now we have three. We're building a fourth pretty soon. And then we also already in the process of, of permitting for, you know, a bigger portion of data, fifth and sixth. But then at that Point we're going to cap that property out and then look into the next area that we're already. Already doing a lot of market research on, and pretty sure where we're going to go next with similar concepts. Now we can. Now that we've learned so many things with this, we can take that same concept and take it to other areas. Yep. And apply it and learn, you know, do some of the same things we did, Find our team, find our contractors, learn, you know, learn the permitting system and all those things that now we're going to be able to, you know, really, like, crank them out even. Even easier because I know all those steps, and I don't have to take two years to learn that same process, but it was a learning process while I was doing it.
- [33:48]
Tony J. Robinson
Let's go back to kind of the steps you talked about. Right. So you had an idea of what the property needed to look like because you had a business plan in mind. Once you identified the property, do you already have an idea of, like, what the permitting challenges are going to be like? Have you already maybe talked to the city or the county about, like, hey, can I build on that? Like, do you have plans that you've given them? Like, walk us through the sequence of actually understanding. Okay, I found a piece of land that looks good, but how do I know from, like, a code enforcement perspective that I can actually build here?
- [34:15]
Garrett Brown
Yeah, so that's exactly the. It was like an. I don't want to say it was an issue, but that was one of my dilemmas when I was going, because there's two counties in particular in the area that I was going to, that I was looking in, and I started calling those counties, you know, a lot of these smaller counties, especially if you're. If, you know, buying somewhere that's a little more rural. That's always a tough word to say, rural. There's usually only two or three people that are in the permitting department, and they're pretty simple to at least get in touch with somebody there. So I started sending out some emails and saying, like, you know, I would reach out to the counties and go, hey, like, this is. And I'm always honest. That's the one thing I've always told people is don't lie to them. Don't say, oh, I'm. I'm thinking about, you know, like, is it okay to have an Airbnb? And then you don't tell them you're, you know, you're building a yurt or something like that. I always was super honest. I go hey, this is. This is what I'm bringing. It's a geodesic dome, is what I want to do. The company that I bought the geodesic dome from has architecture plans that are stamped, you know, you pay a little extra for. That's one thing that I liked about the company I bought from. Then I brought them to these counties, and I go, hey, this is what I want to do. Is this possible? And both counties had no, you know, no glamping knowledge. And one county was like, nope, absolutely not. Like, that's not a permanent structure. Like, we can't do that. Like, you know, just didn't even try to think about it with me. The other county goes, you know, we've never done that, and I'm not sure, but we're open to, like, hearing, you know, hearing about it, like, tell us more. And so that I pretty much instantly knew, like, okay, I'm pretty sure I know what county I want to talk to. But then I even took it a step further, though, because I was also researching contractors at the same time, and there's not many contractors in these, you know, type of areas that are at least good. I was on local Facebook groups, and Google were two ways that I always find really good contractors from referrals and things. But I asked the contractors, I go, hey, like, county A versus county B, which one's more strict, like, on their permitting? Like, you know, you've built in both counties. Like, how do they go? Every single contractor was like, oh, go. Go to the other county. Like, that county's okay, but this one, you're. You've got a much better chance. And then the, oh, my county isn't watching this. I always have to say that. I feel like. But one of my contractors actually goes, yeah, my. My aunt works in the permitting department at this county. Like, you're good. Like, this is the county you should do it in, you know, but that's what happens in small towns. And so, yeah, so from doing my research up front, I figured out pretty quickly which county was going to be the most lenient. And then I also was just, like, I would call them once or twice a week and, you know, and I go, hey, if I had a question and if I didn't get the answer I wanted, I would call back and try to talk to somebody else and go, hey, this is. This is where we're going with this. Like, what do y'all think about this part? Is this okay? Or are there extra steps I need to take with the electrical? And they were very Very happy to do it. And I, and I always made sure to remind them like, hey, I'm going to bring, I'm going to employ a lot of local people. We're going to bring a lot of tourism to this area. You know, I said it in a much prettier way to that way. It also like you're like, hey, this isn't just a one way relationship. Like I'm hoping to build, you know, build something beautiful in your area. And also, you know, I'm able to develop what I want and we build a symbiotic relationship that y'all have really good tourism activism coming in from me, tourism dollars coming in and I'm able to operate in the way that I know and while I'm being safe with, you know, my regulations and how we're building. So it I, I'm just a big fan of always being super honest and don't be afraid to make relationships with that permitting department. I sent, I send the permitting department in my area the cookies at Christmas every year now because even after they pushed through my first geodome, I went and dropped off cookies. I was like, y'all are awesome. Like I really appreciate it. And now I can, I can pretty much get anything permitted that I want because they also know like I have systems in place and I'm working with reputable contractors and things like that too. So the permitting department is going to be some of your best friends if you pick the right county.
- [38:11]
Tony J. Robinson
How did you actually fund the purchase of the build out? I know you said you got a 5% down like owner financed or not owner finance, but owner occupied loan for the actual home in the acreage. But what was the, what was the cost to actually build out these zones and how did you finance that piece?
- [38:27]
Garrett Brown
That is one of the toughest pieces that I tell people when you're building glamp sites is there's not a whole lot of financing out there for you. Especially for something really unique like a geodesic dome, which I've learned a lot going forward. I funded it with cash I saved up. And so that was. And you know, I have, my mom was my business partner basically where she went 5050 with me. I did all the work. I put up a lot of cash myself too and for about a hundred thousand dollars. And people think I'm crazy when I say this number. We developed the geodome and the other big tip that I always give to people too is don't like even when I was, I wanted to build like a 800900 square foot geodome. But then I sat there and I was like, I probably shouldn't go that big on my very, very first one because anything I screw up is going to be, you know, double the cost or like. So I went, I was like, actually we just need a 426 square foot geodome. We, you know, we, we changed our plan some and it was one of the smartest things we did because we made some mistakes on our geodome, but they weren't super costly because, you know, like, if we, you know, I'm trying to think of like what's a specific one, but even just how we built our deck, like, I wish we'd have done it a little differently, but I didn't spend a ton of money on a massive deck that I didn't necessarily fully love because I didn't go, you know, just all out on my first property. You're going to learn it was kind of what you touched on earlier, that 0 to 1 I learned so much. But then 1 to 10, like now I have so many steps in place that I'll never make those same mistakes. And I can go bigger now. I can really like, really kind of max out my vision because I've taken those small lumps in the beginning to now set myself up going forward to doing bigger things with that. And the geodome itself, I love it. I'm so happy to have built it. I'm so happy to. It's one of the most profitable ones we have. But I also learned now a lot more about like, oh, banks aren't going to lend on that. I probably need to find stuff next time that maybe banks actually might want to lend on to help with the equitable side of it. But you don't know these things when you're first starting. So if I would have built a 200,000 geodesic, $200,000 geodesic dome, I don't know if I would have been able to fund the next things I wanted to do. Because then after that, now I've been able to, now that I have proof of concept, I've been able to bring on partners. I've been able to have all types of investors like, wanting to work with me because I've proven a lot of different concepts. But at, when you're starting out, it's very hard. And there, there are some, like, you might be able to get some USDA financing those. That's an option that a lot of people use in this kind of route. There are some local banks are great in this I actually work with a local bank for our, we're building an A frame right now and that's who's helping work with us on that. But it all came from proof of concept. And also an A frame is much more equitable than a geodome. So I personally would never build another geodome but it did, it was a good way to get started. So I would never tell another person to build one. I would build like a cabin, a very unique one. But I love my geodome and it is, it's already paid for itself in a year and a half.
- [41:25]
Tony J. Robinson
So that's what I was going to ask. What kind of profits do you actually see on that $100,000 investment like you know, in year one or year two? What does that look like for you?
- [41:33]
Garrett Brown
So I always tell this to people to just remind them that I love air DNA, I love mash, Pfizer, all those places give great data. They said we were going to make 30,000 a year and if we put a one bedroom, one bath in the area that we did, I think we did 96000 our first year in the geodome. And I think this year we're gonna definitely pass on a hundred thousand. I haven't, I can't even, I haven't looked at the exact numbers but it paid and that's, and that's, we deprived 50 income on that too. I think we made $50,000 the first year so we had a 50% cash on cash return just in the first year alone. And so these, these, these, these data sites, they're great for a lot of, a lot of things but sometimes when you build a really unique property and you understand some marketing things to it, you're going to be able to crush those numbers. And that's exactly what we did. And even our next place became even more profitable than that. So each one we've just, you know, dwindled down on it and now it's all in one piece of property too. So my insurance is lower, my taxes are lower, my cleaning team is much easier to deal with. My handyman is he can show up to one place and doesn't have to, you know, drive all around the town to come fix properties. For me it's all in one airport area and it says just, it's just operations wise is so much, so much smoother for me especially you know, working full time and things like that with it.
- [42:49]
Tony J. Robinson
One last question on the finance and peace care, could you potentially, you know, I don't know what the zoning of the land Is. But could you potentially go out and get like, a commercial loan and kind of maybe get this appraised based on the net operating income as opposed to like a. Like a comparable sales approach? Is that an option on that property?
- [43:06]
Garrett Brown
So going forward. I didn't explore that when I was first doing it because I was. I kind of talked to a few people, like, especially, like, banks and stuff, and they were kind of like, no way. Like, we're not lending on a geodome and all these things. I was like, okay, I'll. I'll figure it out myself. But now that I've proven concept, I've learned a lot with the equitable side. There's, you know, I can get an SBA loan if I wanted to, and we're working on things like that. The usda, like, they kind of have a commercial side of it as well, too. And now that I've proven my numbers, it's much easier to get a commercial lender involved with me if I wanted to. It would depend on the structure. And then also, you know, your expertise, probably, and, you know, the. I don't want to say proof of concept, because the concept has been proven, but there's a lot of numbers. They're going to dive into more. But you could easily get commercial lending on some of these, and it's some of the things we're exploring going forward with what we're doing.
- [43:55]
Tony J. Robinson
So you knocked out the park, obviously, Garrett, with this, with this first one. You did, did an amazing job, man. And I'll be curious to see kind of how the. The finance and piece shakes out for you. But I think one of the things that's unique about you and your journey is that you also decided to document this process on social media. I guess first, what led to that decision to kind of document and share.
- [44:15]
Garrett Brown
It goes back to me just being. I like being creative. It was. I've always been in the. I've always made content. I've always liked, you know, explaining things to people. And the one thing I think I saw in this space when I was watching a lot of content is some people were actively doing. And those are the people I really, really appreciated a lot that I was doing. But a lot of people weren't, you know, showing the. The journey as it's happening. They would, you know, some people were claiming, you know, their gurus in the space, and they didn't even own a property, you know, or never have done the journey before. And so I think the one thing and why my content was resonating so well, with people is I was documenting my mistakes. I was documenting the things I was. I, you know, I think I was doing right, but then people online were telling me I'm doing them wrong and I was learning small things. And you take it all with a grain of salt. But that not only led me to, you know, start, start getting some progress in the social media landscape, but then it built a connection with guests too, that even when I launched the property on social, you know, on Instagram and things, we got a ton of followers pretty much overnight from the first time, because I'd already built that relationship with a lot of people that wanted to see, you know, how progress had came out. A lot of people want to be involved in the journey. There's, there's a million different things people can feel invested in. And if somebody is going to, you know, consistently come back to your place and book it year over year and feel like there's a reason to give you their hard earned money for a unique stay, they also want to feel like they're behind something that they can support. You know, like, we're a family owned operation, we support mental health awareness and those are the things that we really tried to push out. And at the same time, I was showing people that this is not a perfect journey. We've made a lot of mistakes and you can, you can make this happen too. And it's not always going to be sunshine and rainbows, but in the end it can work out for any investor if they just stay patient and they're able to not dwell on the problem and figure out solutions as they happen. So people like seeing that, the documentation of being in real time, and I noticed that and I just kept, kept constantly learning from them and seeing what content people really wanted to see and just double down on that going forward.
- [46:20]
Tony J. Robinson
It's a great strategy and I think we are in the age right now where everyone has the ability to build a platform for themselves. And you already mentioned, like, you have people now reaching out to you, wanting to partner with you on the next version of this. And I would assume that maybe a lot of those people found you through the content that you shared online. So there's a massive benefit if you're looking to scale your business beyond your own financial means to share your journey and start building a connection with other folks who may have an interest in working with you. So, dude, I absolutely love hearing that, Garrett. Now, last thing I want to ask you, man, is when people hear short term rental, I think they immediately associate that with airbnb and while Airbnb is the dominant player in the space, I'm just curious, what if you have an idea of like, what percentage of your bookings come from the various sources that are out there?
- [47:07]
Garrett Brown
So Airbnb is definitely pretty dominant, but we actually do about 65% direct bookings on most of our site. From a lot of in, yeah, from a lot of Instagram, a lot of TikTok, like all those things. It comes from documenting it and just constantly making content around it and knowing what people want to see with the unique state. But we also have a pretty big influx and they're not my favorite platform. But even like booking.com has probably taken about 10 or 15% of our bookings recently. And I even, you know, doing research, bigger pockets a couple days ago, I didn't even realize this, that booking.com I think they have five, close to 500 million visitors to their website a year versus Airbnb has 82 million and Verbo has 40. And so booking.com isn't obviously only, you know, unique stays and things, but when you have 500 million eyeballs on a plat on a platform versus, you know, 80 and 40 there the, the odd. You need to be on everything you can. So that's the kind of what I get into the end is there's some platforms out there that people are like, oh, I'll just be on Airbnb. You need to be on as many platforms as you can. And then the direct booking is, is kind of our sweet spot because then from there on we can market to guest. We can, we control the guest experience from start to finish. You know, like, there's no extra fees added on and, and all these things like that. And then once they actually leave our property, we have their data to remarket to them and send emails and send discounts and coupons. And you can do that on Airbnb as a sort. But if you really, really want to like, have the best guest experience possible, you need to be able to curate that guest experience from start to finish. And so I'm always, I'm a major advocate of direct booking, but a lot of that comes from social media is social media and Google are two of the most powerful searches. Probably way more people on those than booking. Airbnb and Verbo probably combined too. So that's a thought for that.
- [48:57]
Tony J. Robinson
Yeah, dude. Dude, fantastic. 60% is amazing. Our single family portfolio definitely very reliant on Airbnb. And Vrbo, our hotel, we're about 50% direct right now. And booking I think is the second biggest one. Or maybe it's like, you know, 40, 40 and then there's like the other 20% is all those other websites. But yeah, direct is definitely a big thing and I think there's a bigger focus on that moving forward. Good, dude. Amazing conversations that I'm sure you've inspired a lot of Ricky's who are listening to this that maybe want to get in, but don't want to follow the traditional path of just buying like a condo in Houston, but maybe want something a bit more unique. But before I let you go, man, you mentioned you were doing some research for BiggerPockets. Just quickly let the audience know like what, what exactly is it that you're doing in the, in the BP world these days?
- [49:39]
Garrett Brown
So I joined Bigger Pockets, which was a complete honor back in July. I am their short term rental expert in the area. We put out a weekly newsletter called Bigger Stays on Wednesdays that's is free for subscribers that dives into all the short term rental news for the week and data dives. And then we're really building out the space in the, in the STR community over here to really empower a lot of people to, you know, take the steps that they need to be successful host and win on the real estate front and the hospitality front. So we're super excited and we have some really, really big things coming. So it's, it's definitely an honor to be over here and working with some amazing minds that are all over at the company.
- [50:15]
Tony J. Robinson
Yeah, dude, you're, you're doing a fantastic job over there, man. And I'm, I'm sure that the folks are enjoying that content. Well, Garrett, dude, I very much appreciate you jumping on the rookie podcast with me today and Ashley's abstinence and getting to dig into your story a little bit there, man. And I'll be sure to put Garrett's contact information, the show notes for today's episode. We'll link out to his social. We'll link out to the content he's writing for BiggerPockets, so be sure to check that out. But guys, that is it for today's episode. I appreciate all of you hanging out with us today and looking if you're a fan of the Ricky podcast, if you're getting some value from it. I've got two quick asks. Ask number one, be sure to subscribe on whatever platform it is you're listening to. If you're on Apple podcast, Spotify, wherever, if you're on YouTube. And we've also got a goal of getting to 100,000 subscribers on YouTube. So if you haven't subscribed there, please take a quick second, subscribe, turn on those, you know, hit the bell for notifications. And, guys, we will see you in the next episode of Real Estate. Ricky.