Short Term Rentals & Mixed Use Real Estate Strategies

Austin Hair, a seasoned real estate investor, specializes in healthcare site selection, helping clients out-position competitors and achieve rapid scalability. With a background as a professional wakeboarder and American Ninja Warrior finalist, Austin combines discipline and calculated risk-taking in the real estate realm. Following a setback in 2013, he now guides others to find optimal locations, serving as the General Partner of a pioneering real estate fund that integrates blockchain technology. Featured on NBC’s American Ninja Warrior and CBS Sports, Austin shares his insights on the podcast Helping Healthcare Scale and speaks at events like the Association of Dental Support Organizations.

Here’s some of the topics we covered:

• Austins Backstory From House Hacking To Short Term Rentals
• The Explanation of “De Novo”
• Medical Retail Strategies For Urgent Care & Veterinarians
• Hidden Costs In The Medical Retail Industry
• The Insides Of Site Selection For Real Estate
• The Advantages of Short Term Rentals
• How To Make Your Short Term Rental Successful
• Making Sure Your Property Is Approved For Holding Events

To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com

For more about Rod and his real estate investing journey go to www.rodkhleif.com

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Full Transcript Below

00:00:00:00 – 00:00:14:07
Rod
I wonder I wonder if you should check, you know, age demographics. You know, I’ve had Harry Dent on the show and he he that he’s an economist that’s been doom and gloom in forever. But yeah right eventually just I will be I actually think the shit’s going to hit the fan at the end of the year. I really do have to.

00:00:14:13 – 00:00:16:08
Austin
So what do you think’s going to happen in real estate then?

00:00:16:09 – 00:00:27:28
Rod
Because I believe that we’re headed for a well, I know we’re headed for a crash in the office space environment. Office environment? I mean, how so? There’s some cities that are at 50% occupied. You mean you can’t I mean, those are those are going back to. But will that will that.

00:00:27:28 – 00:00:28:28
Austin
Affect the residential.

00:00:29:00 – 00:00:47:11
Rod
And multifamily? Because there’s a lot of bridge debt coming to is a lot of debt coming due and there’s operators in trouble. They have to sell or refinance. Sales are way down. Refinancing is almost impossible with rate caps, so you have to pay for it to get short term rates and adjustable. You know, we’ve got these guys with adjustable rate mortgages that are dying.

00:00:47:11 – 00:01:28:21
Rod
So there’s a lot of upset in the marketplace where we’re finding deals already and now here’s your host, Rod. Welcome to another edition of Lifetime Cash Flow through Real Estate Investing. I’m Rod Cliff and I am thrilled that you’re here and we are changing it up again today. So we’ve got a very cool guy here today. His name is Austin here and what he does now is is site selection for health care groups and he does short term rentals.

00:01:28:21 – 00:01:46:08
Rod
And we’re going to dig into site selection a little bit, also into the star space. But what’s cool is was a professional wake boarder and most recently he was an American Ninja Warrior finalist. Him and his wife, she was on as well. And she’s going to be on this year as well. And now he’s become a capitalist instead of having fun.

00:01:46:08 – 00:01:47:10
Rod
Right. Welcome to the show, bro.

00:01:47:15 – 00:01:48:21
Austin
Yeah, man. I appreciate that.

00:01:48:21 – 00:02:02:29
Rod
Yeah. So. So why don’t you do a much better job of talking about who you are than I just did? And, you know, kind of let us know why you’ve done some of the things you’ve done and. And. And then bring us current.

00:02:03:01 – 00:02:27:02
Austin
Yeah, sure. I feel like I’ve had, like, you know, my version 1.02.03.8 because it’s been like, kind of drastic career changes, but there’s a lot of overlap. So I’ll kind of give some context around it might help. So I started out wakeboarding when I was really young, around like 12 years old, and just focused on that, you know, like wanted to go pro like that was I mean, I still wanted to do good in school and I did college, but like, my primary focus was definitely like boring.

00:02:27:04 – 00:02:35:01
Austin
And so as I was getting older, I just kind of saw like, you know, like in your career, athletic wise, you kind of go like this and then your income starts to do this.

00:02:35:05 – 00:02:37:09
Rod
You go up and you go down, yeah, business.

00:02:37:09 – 00:02:53:05
Austin
You can kind of keep doing this and this and this keeps going up. Yeah. So because I had a passion for fitness, like I, you know, I had to stay fit and healthy to do this. I opened up some gyms in Orlando. cool. Yeah. And so, well, actually, if I back up a second when I was wakeboarding, I got into real estate by reading Rich Dad, Poor Dad, of course.

00:02:53:05 – 00:02:54:01
Rod
And did.

00:02:54:02 – 00:03:09:20
Austin
Yep. And found out about house hacking. So, you know, I was a single young guy, brought in other roommates to live with me and essentially pay my rent. That allowed me to save enough money to buy a house. And then I was kind of doing the same thing. Like I had a house where, you know, I rent out all the other rooms, like there’s a guesthouse on the property.

00:03:09:20 – 00:03:25:22
Austin
That sort of thing is like a house on the lake with a great view. Weightwatchers would come in and pay to live there and stuff like that. And so that kind of like, helped me get out of the rat race. So I was doing that. I was like obviously very passive. And then as I started to see the light at the end of the tunnel with wakeboarding, I started to open up some fitness centers.

00:03:25:22 – 00:03:28:08
Rod
Besides try to see the you start to see the end of the tunnel.

00:03:28:09 – 00:03:35:04
Austin
Yeah, right. Yeah. The end of the tunnel. Yeah. Yeah, it was. It was. I was getting old. Yeah.

00:03:35:04 – 00:03:39:27
Rod
It’s like all athletes, you know, I have that window of opportunity. Yeah. Anyway, continue.

00:03:39:29 – 00:03:52:18
Austin
Yeah. So, you know, I saw it as a platform. I tried it, which did help me get into real estate. And then it also did help me get into opening up the fitness centers. And so that I was essentially going around opening what you would call de novo and the health care role, which just means like a start up.

00:03:52:18 – 00:04:08:02
Austin
But, you know, you have acquisitions and you have to know those. And so I had done a couple of locations and then that’s when I met my partner and we started looking for the fourth one and where I was going to open it. And so in my head I had this idea of like, okay, you know, I want to go to Winter Park.

00:04:08:02 – 00:04:28:02
Austin
That’s like the cool, sexy area. I got to be there, but I want to be in Orlando. Yep. And I want to stay away from Kissimmee because I was Demographics are garbage or so I thought. So we ran an analysis. My partner went like a couple of hours deep with all of the demographics and stuff like that. And what we found was actually Winter Park is super saturated, rents are really high and there’s a ton of competition.

00:04:28:05 – 00:04:47:06
Austin
And Kissimmee was wide open interest and I had no idea because, you know, I learned that you can’t make good decisions without good data. Correct. So that was really insightful. I actually luckily ended up selling the gyms right before COVID, so I sold them in 2019, Dodge that bullet. Yeah. And then my my partner invited me to start working with him full time on the real estate side.

00:04:47:06 – 00:04:53:14
Austin
So a lot of like, you know, we’ll invest in properties for the groups, but that’s, I would say sorry.

00:04:53:14 – 00:04:53:24
Rod
For what.

00:04:53:24 – 00:04:54:29
Austin
Groups? Health care groups.

00:04:54:29 – 00:05:00:01
Rod
Gotcha. Okay. Yeah. So we’re going to dig into all that. But I don’t understand your de novo. What is that?

00:05:00:03 – 00:05:18:00
Austin
De novo is Latin for of nothing are from nothing. So like you can either like if you have I have an LLC that I have say I have one or two dental practices, I can either acquire other dental practice or I can start one de novo for from scratch. Okay. Okay. Just a startup startup might be a better word.

00:05:18:01 – 00:05:34:04
Rod
I know that lingo. Yeah. It’s like I learned more on these interviews than. Than I teach. All right, good. All right. So. So you’re now in the health care practice finding site locations for health care. Talk about talk about how that started and what you’ve done so far in that space.

00:05:34:09 – 00:05:55:09
Austin
Yeah. So, you know, my partner had been doing that for about 14 years and urgent care space. Well, 12 well, I guess maybe ten years when we started working together now now it’s been we’ve been together 14 years working together. And so, yeah, he was just up in Ohio working with the group and they decided to go health care focused because it was a little bit of a blue ocean and it’s still kind of is.

00:05:55:10 – 00:05:56:08
Rod
Urgent Care is.

00:05:56:09 – 00:05:57:12
Austin
Yeah, yeah, yeah.

00:05:57:12 – 00:05:58:16
Rod
So all over the place.

00:05:58:16 – 00:06:20:23
Austin
Yep Urgent care is and is a lot of the same strategies, whether it’s urgent care or dental or that or derm or behavioral health. You know, you’re kind of looking for the corner of Maine and Maine, right where you have great street signage and good visibility, high traffic, and then you want kind of be close to you, maybe like a Publix or a grocery anchor or anything like that, because you’re kind of piggybacking off of their traffic.

00:06:20:23 – 00:06:26:25
Austin
Off of their traffic, Exactly. So, you know, it used to be medical was like recess, couple roads. Sure.

00:06:26:27 – 00:06:27:27
Rod
You had to find it.

00:06:28:01 – 00:06:28:26
Austin
Got it. Yeah, exactly.

00:06:28:26 – 00:06:29:26
Rod
Now they want more visibility.

00:06:29:26 – 00:06:35:12
Austin
Now they want more visibility. So we call it we call it med tail medical, retail. Okay. But that’s the that’s the niche that we’re in now.

00:06:35:18 – 00:06:59:24
Rod
Well, you know, I know and I’ve been around this space, real estate space my whole life. And I know that, you know, very often, you know, a highly profitable practice medical, dental, whatever it is, will want their own space. They want their own location. And, you know, if you can provide that site selection and so on and so forth, you know, you’ve got a locked in tenant.

00:06:59:24 – 00:07:11:04
Rod
The financing is a slam dunk, you know, because you’ve already got the tenant. And especially if it’s a, you know, a medical practice that’s profitable, you know, then then it’s very salable. Would you as an academic.

00:07:11:05 – 00:07:31:10
Austin
Yeah, Yeah, 100%. Yeah. So it’s kind of funny because with medical there just hasn’t been a lot of distress, right? So like health care in general, it’s pandemic resistant, recession resistant, inflation resistant. Right. And so you’ve got a lot of these guys that have been paying their rents, right? So sellers who want to list it are like, well, I can get my price or I can hold it, right?

00:07:31:10 – 00:07:38:09
Austin
And so what that means, it’s a very, very secure asset, right? So you’re not going to be getting a lot of these like really distressed. They’ll come up.

00:07:38:09 – 00:07:45:03
Rod
It’s hard to find buildings you can buy. Yeah well you got to do the do own de novo piece is what you’re saying. Yeah, yeah, yeah.

00:07:45:03 – 00:08:13:02
Austin
So there’s because if you’re a private equity group there’s high probability that your backers and your, your LPN, your documents, your investor documents dictate that you only invest in certain the specific asset class. Right. And they prohibit you from investing in the real estate. So also like when it comes to a spreadsheet, math, truthfully, you can make more money operating a health care business, growing that, acquiring other buildings, starting buying real estate than buying real estate, right.

00:08:13:03 – 00:08:25:25
Austin
Just spreadsheet math. So that kind of leaves a vacancy. So that’s what we do. Like, our goal is to buy all the real estate, but I would say we have to do about five deals for every one opportunity that we get to buy. So it’s just like a numbers game.

00:08:25:25 – 00:08:30:23
Rod
Okay, now I’m confused. Okay? You have to do five deals for you or you want to buy your own practice.

00:08:30:23 – 00:08:47:20
Austin
No, no, no. Yeah. So it is confusing. So you’ve got the operations right, which are real estate. P like in general might be a big group. Our p e group, they’re buying the operations and you got the real estate and they’re two different buckets. But when it comes to real estate, there’s there’s a lot of times where we just broker meaning we help them find a place to where they going to rent for the landlord.

00:08:47:22 – 00:08:58:26
Austin
That’s probably 80, 90% of the time. But every one out of five or one out of ten times, there’s nothing available for them to lease. And and again, these guys have a specific.

00:08:58:28 – 00:09:03:16
Rod
Direction about the operators like these urgent care operators that they’re looking for sites.

00:09:03:16 – 00:09:04:13
Austin
They can’t buy, the real estate.

00:09:04:13 – 00:09:06:15
Rod
Sometimes they can’t. Interesting. Okay.

00:09:06:16 – 00:09:07:22
Austin
Sometimes every group is different.

00:09:07:22 – 00:09:15:04
Rod
Yeah, some of them do. I mean, you know, McDonalds became wealthy buying the land, but yeah, some of them don’t want to screw with the land. Yeah. And that’s where you come.

00:09:15:04 – 00:09:17:17
Austin
In and we’ll buy it on there and we’ll buy it, we’ll lease it back to.

00:09:17:17 – 00:09:25:06
Rod
Them and leaseback. Correct. God, that’s the end goal. I was wondering what the, where the profit was, if you could buy and sell or buy and lease. So it’s buy and lease buying lease.

00:09:25:06 – 00:09:25:12
Austin
Yeah.

00:09:25:12 – 00:09:43:16
Rod
Okay. Yeah. Is there, is there a market that you’re targeting for these? What so you’re doing what other types of verticals you’re doing? You’re doing urgent care. Who are your clients that you’re looking for. Yeah. And I think you mentioned before we started recording some of this you’re even willing to do on spec, so speak to that whole mix for me.

00:09:43:19 – 00:09:58:04
Austin
Yeah. So I’ll answer both those questions in order. Urgent care is one. Dental is actually a big one. So dental so with urgent care is they get hospital backed and then they kind of bring their all the real estate in-house and a lot of red tape and it can take years and years and years. So that’s good until it’s not.

00:09:58:04 – 00:10:14:25
Austin
But there’s still some opportunity but dental you know they’re backed or they’re backed by a large group, but it’s not like a hospital backing. Right. So there’s more flexibility in terms of who they work with. And, you know, they can bring on outside vendors like us. So we like dental a lot. Vet is like kind of similar to dental.

00:10:14:25 – 00:10:28:03
Austin
Interesting. You know, again, it’s like you’ve got these health care that they have good credit, they have good financials, right? They’re looking for good visibility. And it’s a real it’s a very, very, very stable and safe tenant. You know, it’s one of the central tenets of banks.

00:10:28:03 – 00:10:51:22
Rod
Very, very comfortable. Yeah. Especially with what’s happening economically right now with some of the other asset classes. We won’t even talk about office right now. Yeah. So your clients are the ultimate, whatever it is, less. These are people that come from you and in these different disciplines. Yeah, I vet with vets as well.

00:10:51:24 – 00:10:53:03
Austin
You know, dog guy.

00:10:53:06 – 00:11:09:18
Rod
My, my, my ex’s. Yeah. So I, but you know, I yes, I like dogs, but not as much as she does Beth but yeah. So, so you know and then, and then of course dental I mean that’s hugely profitable if you Google highest margin businesses dental is right at the top.

00:11:09:20 – 00:11:24:15
Austin
Yeah and that’s one thing that’s kind of interesting too is it’s both considered I’ve heard people classify it as a growth sector because so many boomers are retiring and needing extra health care. And then, you know, it’s also safety because like it’s health care, right? Like you have to go it’s not like a like a luxury spending item.

00:11:24:15 – 00:11:35:19
Austin
You have to go there. So that’s why we like it. And then, you know, to answer your question about the multitenant thing, you know, most people prefer to go in and just like build a single building for their tenant.

00:11:35:19 – 00:11:36:13
Rod
Their own practice.

00:11:36:15 – 00:11:59:11
Austin
Yeah. Or it could be if you’re a developer, you would even if you have a client into like right now you’re a developer, you’ve got a PE backed dental group, they want to do a new de novo or new startup. You want to build them one single standalone location, right? Because that’s the safest, right? The problem is like we’re talking about earlier, you know, cost of land is up, cost of capital is up, cost of labor is up, cost of supplies are up.

00:11:59:11 – 00:12:17:20
Austin
And so to build a single freestanding tenant, I mean, the rents are just insane right now. And a lot of these guys can’t make it pencil a lot of the a lot of health care tenants. Interesting. So we’re doing multitenant which is like more risk on our part, but it helps us. What we do is like we’ll bring in a retail tenant to pay a retail rate and then we can kind of bring down the rents of the health care operator a little bit to help offset those costs.

00:12:17:23 – 00:12:28:00
Rod
So you might have a you might have a mixed use where you’ve got some retail with the with the practice inside of that retail C above it, behind it next to it, whatever. Okay.

00:12:28:00 – 00:12:41:01
Austin
Yeah. And I can, I can tell you a funny story about that if you want. So one of the first deals that we did, we found a, we had a health care group, urgent care group that gave us an assignment, which is where they tell us how we want to go here. Over we found out what Bank of America building that was vacant.

00:12:41:03 – 00:12:57:00
Austin
Got it for a pretty good cost. Our base basic cost was low. We started it was they only needed half. So we started looking for another half to occupy the space. And Starbucks came along. They wanted to do it, so we signed a lease with them. Great. Or the urgent care actually backed out of the deal completely.

00:12:57:00 – 00:12:57:18
Rod
They didn’t want to start.

00:12:57:18 – 00:13:18:12
Austin
They didn’t even well, they just it wasn’t because of that. It was because, like I said, there’s a lot of red tape, a lot of moving parts with their hospital back decision makers. And so we ended up getting a 90 unit physical therapist to come in and take their spot. Wow. So it ended up working out great. I mean, we had some stuff go really wrong, like we had to invest 300 grand into the parking lot that we had no idea we were going to have to do.

00:13:18:12 – 00:13:27:27
Austin
Right. Like, so that is a huge hit to the bottom line. But it was still profitable because the principles are there. Like there’s a lot of flexibility in there. So it was, you know what I mean? It was like a testament to the strategy.

00:13:27:27 – 00:13:53:20
Rod
So what he’s talking about here, guys, you know, when you’ve got a single tenant situation, it’s very safe. If it’s a high caliber, well-financed, tenured, profitable tenant. And it’s, you know, a lot a lot of people do this in the in the drugstore space like CVS and Walgreens. And these single tenants where where they very seldom own the land, but they’re on a prime location and it’s very safe asset.

00:13:53:20 – 00:14:20:27
Rod
But, you know, if if with costs of everything going up, what he’s talking about here is you basically build a much larger building or buy a larger building. And and you have you know, you have other tenants, which is definitely more risky because you’ve got to lease the space. You talked about that Bank of America building. Now, I’m guessing that retrofitting health care into a bank building is a big deal because you’ve got a ton of plumbing, a lot more plumbing, electrical.

00:14:20:27 – 00:14:26:05
Rod
You know, if you’ve got imaging equipment, whatever, speak to that a little bit. Yeah. How do you get around all that?

00:14:26:09 – 00:14:38:10
Austin
Yeah. So there is a distinction between when you start the building process and then when you hand it off to the operator. And so we build out to what’s called grace shell. So yes, well, the gray.

00:14:38:11 – 00:14:42:11
Rod
Shell has no plumbing at all. I mean it’s maybe, maybe some Stubbins or or.

00:14:42:15 – 00:14:56:22
Austin
Yeah, you’re right. Sometimes vanilla shell, right. So it’ll be like everybody it’ll be unfinished. And so they that’s usually factored under their build out. Right. And even with Starbucks is kind of the same thing. I mean, they have so much equipment, right? Right. But they’re bringing in a lot of their own equipment and they’re paying for that build out.

00:14:56:22 – 00:15:01:02
Austin
Now, of course, Ty is negotiable. Usually that’s factored in to whatever.

00:15:01:08 – 00:15:03:07
Rod
Improvements is, Ty, by the way. Okay.

00:15:03:08 – 00:15:14:22
Austin
Yep. Yeah. So well well, essentially what what happens with tenant improvements is they might say, Hey, I need extra grant, 200 grant to build this space out like I don’t have the cash right now. So it’s like, okay, we’ll give you that.

00:15:14:26 – 00:15:15:19
Rod
But, but the price.

00:15:15:19 – 00:15:23:13
Austin
Is an improvement, but the price is going up, goes up to account for that. Yeah. So it’s just, it’s just, it’s an off balance sheet loan, you know what I mean. For the, for the groups.

00:15:23:14 – 00:15:41:11
Rod
So you’re out there finding sites for whatever works at this point. So let’s talk about site selection for. Yeah. Okay. You talked about demographics and there’s some great websites, by the way, guys, if you haven’t heard me talk about this, one of my bootcamps are some great websites to study demographics. There’s city hyphen, datacom is a good one.

00:15:41:14 – 00:15:57:20
Rod
Best places dot net is a good one. Data USA dot I is a good one. Census dot gov is a good one. But you know when you’re you know we’re buying a multifamily asset of course we want to know what the median income is. We want to know what the you know, the make up of the demographic there is.

00:15:57:20 – 00:16:16:18
Rod
We want to know, you know, median home price in our case and make sure the median income, for example, is three times what the rent would be at our highest number. So these are all the things you do when you’re doing your research. So talk a little bit about what you do in your site selection. I’m sure it’s silo specific in some regard, right.

00:16:16:20 – 00:16:25:14
Rod
As it relates to who the end user might be or your do you do you look at sites for more than one type of end user or are they pretty much individual?

00:16:25:14 – 00:16:46:07
Austin
We’re kind of pivoting to where we are. We will be looking for holes like, well, where identifying land that there is, we’ll identify retail tenants, both health care and regular retail and then say, okay, there’s a there’s a gap here. But traditionally, yes, it’s been specific for that group. So what that means is like, I’ll meet a group or they’ll say, Hey, we want to open up a location over here.

00:16:46:13 – 00:16:50:22
Austin
Then we begin our process. You know, they might say, I wanna go to the northeast corner of Houston, right? Or I want to go.

00:16:50:28 – 00:16:51:29
Rod
So your nationwide?

00:16:51:29 – 00:16:52:21
Austin
Yeah, we’re nationwide.

00:16:52:21 – 00:16:55:22
Rod
Okay, guys, I forgot to as we passed.

00:16:55:25 – 00:17:17:00
Austin
Yeah, yeah, right, right. Now we’re doing deals. Yeah, we’re doing deals in Texas and Oregon and Maine. Yeah. All over. So but what the process then becomes is actually the grocery stores have a lot of the best data. So we have different subscription services that we pay for. Gotcha. We’ll go through and we’ll do the analysis. And so the idea is like, Hey, we’re going to go through and say, where are your ideal patients already going, right?

00:17:17:00 – 00:17:29:27
Austin
So we pull all groceries or anchor data and then we say, okay, now where is your existing competition? We essentially put those on. Two different maps will air over each other. All right, Now we’ve got the most ideal patients right here, right. And the least amount of competition right here. Right. So that’s what’s really.

00:17:29:29 – 00:17:47:06
Rod
What’s different between what he’s talking about and what I did. The websites I just gave you is we’re talking retail right now. We’re talking which they’re looking at traffic count. They’re looking at, you know, different things than we would look at in the multifamily space. But they’re relevant, frankly. I mean, if you get a a nice multifamily asset and a busy street, you’ll kill it.

00:17:47:06 – 00:18:08:24
Rod
But that’s typically not one of the biggest things you look for, like like that, which is critical for you. And and and of course grocery you know when you see a and that’s why when and let me digress for just a second from my peeps here for a second Austin so so you know when we look at an asset you know I want to see a bunch of national retailers around it because like you said, they do their freaking homework, right?

00:18:09:00 – 00:18:33:05
Rod
You know, so I don’t want to see Bob’s Burgers and Sushi. I want to see the Wal-Marts, the Home Depots, the Lowe’s, and, of course, you know, nice big anchor, Publix, Publix on all that. So that makes a lot of sense. So I imagine so. So you compile. I didn’t it’s been a while since I’ve even looked at retail, but I imagine that parking is an issue as well.

00:18:33:06 – 00:18:35:06
Rod
It is parking, so speak to that a little bit.

00:18:35:06 – 00:18:56:18
Austin
So that’s totally tenant dependent. But yeah, it’s a big it’s a big issue because in general, like health care doesn’t need as much as like your traditional retailers, like, you know, Starbucks and coffee shops and restaurants and things like that. But they do need enough parking because they’ve got quite big staff on hands at all time. And so, yeah, usually they’ll just tell us, Hey, I need 17 spots or I need 20 spots or whatever, 12 spots, right?

00:18:56:18 – 00:19:01:13
Austin
And so once they give us that number, then we can kind of start to be more granular.

00:19:01:15 – 00:19:25:17
Rod
But if you’re multitenant, that comes into play as well. Yeah. So you make you’re taking it, you’re doing some some guesswork and making sure you’ve got enough. Have you ever done a compilation where you’ve compiled pieces next to each other? I mean, I see. I know it’s a very long term play. Sometimes there’s a corner. my God, It’s the best fricking corner in probably the state in Sarasota here at Clark Road and 41.

00:19:25:23 – 00:19:37:19
Rod
My God, it’s primo location. It’s the bridge on two under Siesta Key. But I think they’ve been working it for a long time. So are you doing any of that or are you just looking for sites as sites you can move right on.

00:19:37:21 – 00:19:39:16
Austin
So are you are you asking?

00:19:39:16 – 00:19:40:01
Rod
The chain is.

00:19:40:06 – 00:19:41:13
Austin
Combining multiple acreage.

00:19:41:18 – 00:19:53:22
Rod
Multiple, multiple lot, multiple, multiple pieces of property, you know, and you know that that can be incredibly lucrative. If you put a couple together and you’ve got then you’ve got the space requirements that you need for something.

00:19:53:22 – 00:20:13:13
Austin
Yeah, no, absolutely. That’s the strategy, you know, especially when we’re looking at multi-tenant developments. I mean, because it really depends on the the environmental studies that come back because if you as a rule of thumb, you can kind of get about 10,000 square feet of retail space on about an acre, you know, maybe it’s eight. But if you need like a retention pond or something like that, that number starts to shrink.

00:20:13:15 – 00:20:27:28
Austin
And so if you’re looking at doing like, you know, you can you guys you this out. But one of the deals that we’re looking at that we’re doing right now is essentially it’s in Oregon. And so legislation is terrible, right? Like, it’s so hard to get anything approved.

00:20:27:28 – 00:20:29:24
Rod
I’ll go down that rabbit hole if you’d like.

00:20:29:26 – 00:20:53:12
Austin
Okay. Well, so we had to submit a two. We’re working with a dental tenant, pediatric tenant. They want 5000 square feet. So we got an acre, but they want the city wants 200 pages of documentation submitted to their report. And so it’s insane. And we’re having to spend so much money out of pocket before we even close. And and so but because it’s so hard to get approval, they’re like, that’s also the opportunity.

00:20:53:12 – 00:21:01:23
Austin
And so we’re actually are buying extra acres in that area like like looking at a on the project, the property next door. But we’re going to do that multitenant.

00:21:01:23 – 00:21:02:15
Rod
We phase two.

00:21:02:17 – 00:21:23:08
Austin
Or Yeah so like yeah phase one we get the tenant in there. Well it’s kind of, it’s kind of simultaneous, it just little bit split prong. So it’s like as soon as we get somebody, you know, we’ll develop for them. We’re, we’re in the process of combing through other tenants to be their neighbor tenant. But it could be it could be a standalone or it could be part of it because it’s like once you start kind of combing, you know, doing a horizontal costs, right?

00:21:23:13 – 00:21:28:00
Austin
Like, it’s not that much more whether you do five or 10,000 square feet like, so you might as well just maximize it.

00:21:28:00 – 00:21:29:03
Rod
You’re spending the money anyway.

00:21:29:03 – 00:21:30:04
Austin
Yeah.

00:21:30:07 – 00:21:43:06
Rod
You know, one thing you just said I want to flag when you know when and I tell this in my bootcamps around multifamily, when it’s hard to get information or get something done, get excited because everyone else quits. Right. Would you agree with that?

00:21:43:06 – 00:21:45:09
Austin
Yeah. So that’s what it seems like for sure. No, no.

00:21:45:09 – 00:22:08:23
Rod
Question. I mean, like, like, well, we’ll find a multifamily deal and there’s no information. And and I found one in Tampa once and there was nothing online. It was like and thousands of people had looked at it was on LoopNet, which is the big listing site for for you know, for commercial real estate. And and and it was these 90 year old owners that, that I plugged in and it was a screaming deal because.

00:22:08:26 – 00:22:09:15
Austin
They were marketing.

00:22:09:15 – 00:22:33:03
Rod
It. Exactly. Everybody else gave up you know, because though, you know if you’re if you’re in this business and you see it’s hard to get information, get excited, okay? Because that’s when sometimes you’ll find some of the best deals. So you’re doing dental, you’re doing medical, you’re doing vet. Are there any other verticals that you haven’t mentioned yet that you might consider doing?

00:22:33:06 – 00:22:39:07
Austin
So yeah, well, there’s dental that urgent care. Urgent care, yeah. About anything yet retail health.

00:22:39:07 – 00:22:41:05
Rod
Care centers, you know would that.

00:22:41:05 – 00:23:01:28
Austin
Be we try and say like sub 10,000 square feet. So I don’t know exactly how big those are. Probably I will say the least favorite is like hospital back. yeah. So a lot of those are hospital backed but that being said, you know, we’re definitely I mean, by the nature of it, we’ve just built relationships with other retailers around the country because somebody’s got to fill, you know.

00:23:02:02 – 00:23:05:20
Rod
You go to ICSI. We do. Yeah, yeah, yeah. I went there. It was like intimidating.

00:23:05:20 – 00:23:06:25
Austin
In a lot.

00:23:06:27 – 00:23:13:05
Rod
Of people. And I went, I was very interested in retail a lifetime ago, like nine, ten years ago. So I went and I was in retail.

00:23:13:05 – 00:23:16:01
Austin
Live is in Orlando. is it in March? Okay.

00:23:16:03 – 00:23:25:09
Rod
Okay. Yeah, I you know, I’ve kind of stayed away from retail. I, I was worried about the whole Amazon dynamic or the online buying dynamic. You know, if I was.

00:23:25:15 – 00:23:25:25
Austin
So was.

00:23:25:25 – 00:23:34:20
Rod
I and buy it. But but it just the whole demographics shifting though it’s you know it’s fitness centers, it’s restaurants it’s things that that aren’t impacted by.

00:23:34:21 – 00:23:49:02
Austin
Well yeah it’s funny it’s like I mean I was wrong about so many things about the results of all the lockdowns right. And I don’t even want to say COVID anymore. It wasn’t like COVID as much as it was the lockdowns. Yeah, so I just got the lockdowns. But, you know, one of the things was, retail is dead, right?

00:23:49:02 – 00:23:59:28
Austin
That’s it. Everybody was saying. And then like, you look into it and it’s like actually e-commerce and dropshipping requires more real estate square footage than retail because like, it’s it’s different scale.

00:23:59:29 – 00:24:02:08
Rod
It is, but they require the square footage. Yeah, they need work.

00:24:02:08 – 00:24:14:26
Austin
And so we we saw warehouses, industrial space taking over balls that were traditionally retail because it was actually cheaper because malls were kind of going on the down and retail is going on the up. It was like cheaper Like there’s a deal in Orlando where they I think was like a Kohl’s or a Sears, like Amazon took it over their industrial center.

00:24:14:26 – 00:24:26:23
Austin
So that was just a prediction that was wrong. But yeah, I mean, and then also retail didn’t really end up dying because people, as soon as they could go out, they wanted to, you know. Sure. And I was listening to one of your other podcasts talking about they want an experience, right?

00:24:26:23 – 00:24:45:10
Rod
Yeah, that’s I was just going to bring that up. I remember that from a previous interview recently where, you know, it’s it’s like like here we’ve got the Universal UTC, it’s called University Town Center and it’s so frickin beautiful there. In Christmas time, you’ve got all these restaurants and shops. It’s like this giant area that you enjoy going to.

00:24:45:10 – 00:24:47:00
Rod
So that’s not going anywhere.

00:24:47:01 – 00:24:58:09
Austin
No, exactly. So and health care, you know, like we’re we’re a long ways away from like putting up your robotic arms in your house and like having your surgeon come in and take over. Like, I’m not that’s, you know.

00:24:58:11 – 00:25:18:14
Rod
No, no, definitely health care is not going anywhere, especially with 80 million baby boomers getting older. It’s not going away. But so love, love the site selection conversation. And it’s fascinating to me and it’s really I’m really enjoying, you know, triggering parts of my memory I haven’t thought about in a long time. But let’s talk about short term rental a little bit.

00:25:18:14 – 00:25:22:29
Rod
So talk talk about what you’re doing there, because, I mean, I know we’re completely shifting gears, but, you know.

00:25:23:01 – 00:25:38:11
Austin
Yeah, so short term rental is another space that I’m really excited about. I got into that like through the up that house acting thing. Like essentially I moved out all right. But I bought another place. I was doing that and then I was traveling a lot for wakeboarding and I was like my I had a duplex living a duplex.

00:25:38:11 – 00:25:39:22
Austin
I was like, this place just kind of sits.

00:25:39:28 – 00:25:40:19
Rod
Abandoned.

00:25:40:21 – 00:26:00:15
Austin
In Orlando. Yeah. When I’m living in Orlando, I like this place just kind of sits abandoned every single weekend when I go out of town for a competition like Let’s start on Airbnb and sure enough, booked every weekend. It booked and booked in bulk. And so essentially I ended up kicking out all the long term guidance that I had because I had the first house set about and I was living in a duplex renting out downstairs the long term tenants ended up converting, fixing them up, that sort of thing.

00:26:00:17 – 00:26:12:16
Austin
And the other thing that I was nice about short term rentals was like my house stayed a lot nicer because I didn’t have these long term people that were there for six months or a year where I couldn’t see what was going on and then it’s trashed and like I got maids coming in every three or four days to keep it nice.

00:26:12:16 – 00:26:30:28
Austin
So I liked how my properties made a lot more well-maintained. And then, of course, cash flow was crazy. Crazy better now of course, crazy amount of work. It’s a it’s a business, the hospitality business, right. But if you do it right, it can it can be really well. So like, I think Trump has a saying like there’s always an opportunity, there’s always a market for the best, right?

00:26:31:05 – 00:26:47:10
Austin
And so we always we try to make ours like luxury, like, you know, have on the lake with pools, hot tubs, basketball courts, putting greens, like everything like that, even like saunas and stuff. Wow. And so then we’ve recently acquired a place that was like, this is on like three acres, You know, it’s nice and private. This would be a great space to host events.

00:26:47:13 – 00:26:51:21
Austin
And sure enough, people love it. And so I really like the event space right now.

00:26:51:23 – 00:26:55:08
Rod
So, so so we’re talking short term rental for event space.

00:26:55:13 – 00:26:56:22
Austin
Well, okay, it’s both.

00:26:56:23 – 00:26:56:29
Rod
Okay.

00:26:57:02 – 00:27:15:28
Austin
So what we do is we have our minimum nightly stay, which could be 4 to 1 night depending on how far out you are. Okay. And then you charge an event fee on top of that. Okay. So if you have it, which means like usually we’re underwriting these properties to make sure that cash flow would just be the short term rental overnight, like nightly rates.

00:27:16:01 – 00:27:20:05
Austin
And then whatever we get as events fees is just gravy on top of that. So it creates really nice profits.

00:27:20:05 – 00:27:27:03
Rod
So give an example of do you have an asset already that you’re you describe to describe the asset.

00:27:27:05 – 00:27:55:01
Austin
So this was a unique home that was actually built in 1924. It was about 5000 square feet. So I can sleep 20 people, so on three acres on a small little lake and there’s a really nice pool deck area, stuff like that, and plenty of outdoor space and parking and that sort of thing. And so, you know what, just like I think if on average maybe we can get a thousand bucks a night for that place and then maybe you charge anywhere between 2 to 5000 for events on top of that.

00:27:55:04 – 00:28:12:27
Austin
So, you know, you have 150 person event that would be 7500 bucks for a weekend. Wow. So we’re looking we have another property under contract out in Ohio, but it’s a lot. This one is 12,000 square feet on 18 acres. Yeah. So you can do some more people there. But the same sort of thing is, you know, you you fit as many people as you can overnight.

00:28:12:27 – 00:28:34:11
Austin
You have your overnight rates and then whatever the event fee is, you just add on top of that. So you might have a two night minimum and then plus the event fee. And so with events it’s nice, but like the thing is, what I realize is I was going around looking at these things like after I kind of stumbled into this, it’s like a lot of these wedding venue events, space people like don’t do any overnight stays, right?

00:28:34:13 – 00:28:50:02
Austin
So they’ve got these assets a lot of times on their houses. You know, they’ve got these assets that like they’re charging the event fee and they everybody packs have been leaves right. And so it’s like nobody else can stay there. So you’re missing out on all this opportunity for the revenue. So our thought was like, let’s look at these houses maybe.

00:28:50:02 – 00:28:53:13
Austin
And then there’s a lot of mom and pops that are just like you mentioned earlier, like.

00:28:53:13 – 00:29:03:08
Rod
Yeah, I’ve got a buddy that owns a farm up in Tampa that he built. It’s on a lake and he built a barn and his big Barney has weddings in there. People freaking love it. He’s got a zoo there with animals.

00:29:03:10 – 00:29:04:03
Austin
that’s cool. Yeah.

00:29:04:04 – 00:29:21:15
Rod
Now he’s a cool guy. He he he does. I love him because he does this thing for orphans where he’ll bring no difference. I’m sorry. Yeah. Orphans, kid. Kids that don’t have a family. And. And he’ll be. And parents. People will come in and adopt these kids is beautiful. Beautiful. But anyway, I digress.

00:29:21:15 – 00:29:21:25
Austin
That’s nice.

00:29:21:25 – 00:29:37:11
Rod
So, yeah, it’s really cool. Really cool. And he does things for the military is was good guy is a good friend. But anyway so so now I love that idea. And so where do you market for the event piece. I understand Airbnb for that piece but how do you of market for the event.

00:29:37:15 – 00:29:53:13
Austin
Yeah. So there’s like wedding wire and the knot. You know we just have listings on there. Yeah. You can do so we haven’t done that at this location because we’re trying not to piss the neighbors off too much. So we’re just doing like one of in a month right now. But at the new one. Yeah, we’ll do more.

00:29:53:13 – 00:30:05:19
Austin
And then honestly, VRBO will be an Airbnb. Like we have pictures of our weddings and we have, you know, the reviews that they’ve said and we said like, Hey, messages reach out for details we say in the listing. And that’s been a great place to get inquiries.

00:30:05:22 – 00:30:22:07
Rod
You know something you just said I want to flag because he had a real problem with his neighbors there. I mean, it had it went all the way up the wire to county and everything else. And thank God he was doing, you know, adoption stuff. He was doing military. He had military for for wounded wet veterans and doing all kinds of things.

00:30:22:07 – 00:30:29:00
Rod
And, you know, they didn’t stand a chance against all of that. But I could see that being a potential issue with neighbors and.

00:30:29:03 – 00:30:53:13
Austin
yep, yeah, yeah. It is an interesting thing in the short term rentals. I mean, the zoning is very important. So if you I believe it’s like seven acres, you can then get the agricultural zoning, but it’s also dependent on where exactly the the house or the property is located. Sure. But yeah, I mean look, if you just if you just on a random spot of land and a house and it’s it’s got a bunch of acres but it’s got a bunch of neighbors.

00:30:53:13 – 00:31:06:16
Austin
Right. And you’re kind of close, like the further you get outside of the city, the less of a big deal it gets. But yeah, you know, they’re if you’re not zoned for it, they can shut you down for sure. So you want to make sure that you get your proper, proper zoning in place. And that’s a whole, whole other issue.

00:31:06:16 – 00:31:17:26
Austin
But you can get special event permits, but you got to pull those individually. That’s a real pain. Good luck doing more than five a year, you know. Right. And then you the other option is you can change your zoning.

00:31:17:28 – 00:31:19:12
Rod
But like do zoning variance.

00:31:19:12 – 00:31:20:23
Austin
But that’s really hard.

00:31:20:29 – 00:31:25:19
Rod
And the neighbors are going to be they’re screaming, Yes, your shit in the backyard, Right? Okay.

00:31:25:26 – 00:31:32:28
Austin
Yeah. So you want make sure either A, it’s already operating, doing events or B, it’s on enough. It’s on in like an agricultural zone, agricultural.

00:31:32:28 – 00:31:36:06
Rod
So then you can get a permit. You can get do it on that. Okay?

00:31:36:08 – 00:31:45:13
Austin
And you start to get you start to let the city know. But it’s allowed. It’s not it’s not even allowed on residential. You know, residential. You’re not allowed. If it’s residential, would you just have to check your individual property?

00:31:45:15 – 00:31:54:06
Rod
Interesting. Interesting. So what’s next? You got you got your site selection. You’re doing you’re doing that, which sounds like a lot of fun. You’re doing some some of this Airbnb event space.

00:31:54:06 – 00:31:59:16
Austin
What’s Well, yeah. So I mean, to harp on the Airbnb thing, you know, I, I really love it. I have a passion for it.

00:31:59:18 – 00:32:05:04
Rod
You know, one thing I’m sorry to interrupt. One thing is, is I’ve heard that it’s hurting right now. Airbnb’s been hurting. Is that.

00:32:05:04 – 00:32:09:28
Austin
Accurate? We did not get we’ve had we’ve continued to grow.

00:32:10:01 – 00:32:20:07
Rod
Because you’re you’re you get you described your properties which are unique You got sauna as you got all sorts of cool shit there which I’ve seen. Well they’ll have a whole row of game machines.

00:32:20:07 – 00:32:21:00
Austin
It’s expensive.

00:32:21:01 – 00:32:21:26
Rod
Yeah, it’s expensive.

00:32:21:26 – 00:32:22:22
Austin
But that’s what you have to do.

00:32:22:22 – 00:32:29:22
Rod
If you got the best you’ll, you’ll always be good. Like, you know, you can have the crappiest food, but if you’re on a waterfront location, you’re killing time, right? Yeah.

00:32:29:24 – 00:32:45:07
Austin
Okay, So it’s more competitive for yourself. Yeah, it’s more competitive. And so I think what happened was you just got a lot of people that got in the game because they thought they’re going to get passive income, but like, no, it’s a hospitality business. Yeah. And so and I was guilty of it too, because I was running the gyms.

00:32:45:07 – 00:33:04:16
Austin
I was wakeboarding, you know, I had this Airbnb in the background and but there’s been three iterations of Airbnb and expectations for the customer. One number is like you had stage one, which is just like, build it and they’ll come just throw it up, like leave your clothes in the closet. It doesn’t matter. Then he had said she was like, like we actually have to make this like kind of like a hotel, like, presentable for the guests.

00:33:04:16 – 00:33:20:07
Austin
And then now we’re on stage three, which is like, Good luck if you’re cookie cutter and it’s clean and you got all your sheets and beddings and like working furniture. No, you need to be unique. You need to make it instagrammable. You need to have amenities. You didn’t make it a destination in and of itself. Yeah. And so I think that everybody who got in thinking it was passive is getting crushed.

00:33:20:07 – 00:33:33:03
Austin
Yeah. And then you had a pivot, like I had to put a lot more time. I mean, luckily I, I sold my gems, you know, and I had more time to go and do this thing. But yeah, it was like a lot of intentionality behind that is, I mean, I’ve learned so much about design. Yeah, like painting murals on the walls.

00:33:33:06 – 00:33:36:29
Austin
We did a historic theme at our at our wedding venue because it was built in 1924.

00:33:36:29 – 00:33:37:13
Rod
Yeah, it’s cool.

00:33:37:13 – 00:33:42:27
Austin
So seven bedrooms, each bedroom is a different decade. You know, we have like different stories of like from those decades in different that.

00:33:42:27 – 00:33:44:00
Rod
Makes a big difference. Yeah.

00:33:44:00 – 00:33:53:16
Austin
And people people really like that you know and so I that that’s the thing is just making yourself unique and so it is hard right Like you can make money, but you got to put a lot of effort. You just, you have to run the business as a business. Is it.

00:33:53:16 – 00:33:54:07
Rod
Worth it.

00:33:54:10 – 00:33:54:25
Austin
To me?

00:33:54:28 – 00:34:01:24
Rod
yes, worth it. Of course it is. I have nothing. Nothing that’s worth it. Anything is going to be easy. But is it worth it? Yeah, I can believe it’s worth it.

00:34:01:24 – 00:34:20:14
Austin
I mean, those like, cookie cutter, you know, condo units where it’s like a21 maybe, right by Universal, where you can just go get them anywhere. Yeah, I see those having a hard time because, like, labor costs are high. Like your, your machine like appliances and that and your margins are so much lower and those like, one thing going wrong can like totally cut into your margins for a whole month.

00:34:20:16 – 00:34:23:07
Austin
So those are the types of deals that I think are getting really high.

00:34:23:07 – 00:34:42:00
Rod
Mark My brother’s got some cabins up in the Blue Ridge Mountains and they’ve slowed down a little bit. My my ex, my best friend Tiffy is, has been looking into mid term rentals you’re renting to nurses and residents and things like that for hospitals and teachers, so on and so forth, which is interesting. And she’s been playing around with that.

00:34:42:00 – 00:34:43:28
Rod
So yeah, it’s cool on her a little bit with that.

00:34:43:28 – 00:35:03:09
Austin
Yeah, you know, and like, I think I know you guys like to talk macro sometimes on here. That’s always a factor because it was like since 2008 everybody’s kind of had to shift it to be a macro economists because we’ve seen it’s just so volatile all the time. So it’s like trying to predict like I mean, people have been saying that real estate going to crash for cash in season 16.

00:35:03:09 – 00:35:04:14
Austin
I first started hearing about it.

00:35:04:15 – 00:35:09:17
Rod
yeah, I said it when COVID hit. I did a YouTube video says the coming crash. Yeah.

00:35:09:19 – 00:35:09:29
Austin
I thought.

00:35:09:29 – 00:35:16:05
Rod
So too. I got so much freaking hate. It was the highest watched video I’ve ever done because, you know, negative shit sells. Yeah, but yeah.

00:35:16:10 – 00:35:32:24
Austin
Well, that’s the thing. And it’s like, so my thesis right now is like, if we haven’t seen a correction with residential real estate because interest rates are like we know they’re the highest that they are going to be right now, they’re only going to either stay flat or come down from here. Right. And I’m like, I do think that it is taking longer than anybody expected.

00:35:32:27 – 00:35:37:18
Austin
But if housing price hasn’t significantly corrected now, what makes you think it’s going to correct when?

00:35:37:21 – 00:35:40:06
Rod
I don’t think it’s going to correct. It’s going to go what is going to explode?

00:35:40:06 – 00:35:40:21
Austin
That’s what I think.

00:35:40:21 – 00:35:54:11
Rod
When when rates go down, it’s going to explode because there’s huge pent up demand. You know, there’s all these people that own a house at 3% interest. They want to they want to do a bigger house, but they they don’t want to pay 7% interest on their new place. Yeah, exactly. If the rates come down, watch out, man.

00:35:54:11 – 00:35:55:19
Rod
It’s going to go crazy.

00:35:55:22 – 00:36:14:10
Austin
Yeah. And it kind of rates so that the interest rates really obviously affect both our development projects and our and my short term rental projects. But it’s like the same thing, you know, if we get so we’re, we’re trying to acquire properties now residential because we think that once interest rates drop, the value will go up. So that’s one way to offset refi residential easily.

00:36:14:10 – 00:36:18:05
Rod
Yep. Not like commercial where you’ve got heavy, heavy prepayment penalties and things. Yeah.

00:36:18:06 – 00:36:35:03
Austin
Yep. It’s one way to offset the, you know, if you do have a little bit of slowdown in the revenue, at least if the building is appreciating, that can help a lot. And then also with development deals like if it underwrites right now, which it has to do to get financing right with the interest rates being as high as they have in decades, then you.

00:36:35:04 – 00:36:36:08
Rod
Know, it’s a home run when they come.

00:36:36:09 – 00:36:48:25
Austin
Yeah, exactly. Because when when interest rates come down, A you can refinance, get your capital back, but B, you might even still have the same monthly payment, you know, with rates down. So you might still be collecting the same cash flow. But now you’ve got almost all your investment back right?

00:36:48:25 – 00:36:59:16
Rod
Yeah. No that’s, that’s, that’s, that’s good. So you really love this event space business. You really think that there’s some real opportunity there? Why do you think you know, Why do you wait? Why are you loving it? Why are you excited about it?

00:36:59:19 – 00:37:15:16
Austin
Well, it started when my wife got married and we stayed in this beautiful place in Cleveland, North Carolina, right outside of Charlotte. Okay. And, you know, just seeing like, wow, they charged a lot of money. There’s there’s a lot of money to be made having here. And so far, it’s been on the back of my mind for a long time.

00:37:15:19 – 00:37:26:16
Austin
I’ve been actually diving into it. It’s like, yeah, there there is a good amount of money to be made. And now it’s a lot of work because if you got to maintain your property for a short term rental, multiply it our triple the amount of work that you need to maintain it for a wedding, right? So that’s.

00:37:26:16 – 00:37:30:01
Rod
Got to have flat space that doesn’t get muddy if you’ve got the.

00:37:30:01 – 00:37:30:24
Austin
Landscaping.

00:37:30:24 – 00:37:32:08
Rod
Warm the landscaping and.

00:37:32:10 – 00:37:52:12
Austin
All that stuff. Yeah, but you know, with all the circles that I travel, like, you know, I do like different capital raising groups and networking events and all that sort of thing, and nobody’s just talking about it. And so there’s not like groups chasing it, there’s not private equity chasing it. And so for some reason it’s just like to me seems like a big blue ocean where you can go acquire like a mom and pop.

00:37:52:15 – 00:38:11:07
Austin
They’re maybe they’re running a business out of there. They live in the unit, so they’re not renting out. That’s a huge amount of revenue that they’re missing out on because not doing overnight stays, they haven’t really figured out how to optimize their pricing for the events, get a loan for the overnight rentals. And so I think you know, there’s a market in like every metro to go out and like finding spaces where you can theme them out.

00:38:11:09 – 00:38:14:26
Austin
You know, you do some really cool, really creative like I’m from Atlanta.

00:38:15:00 – 00:38:19:11
Rod
Good idea to go in and think of a theme that’s a really good.

00:38:19:11 – 00:38:22:15
Austin
Idea and, and that draws people, right? Not everybody, but you just.

00:38:22:16 – 00:38:38:09
Rod
Man, if it’s cool, they want to see it, man. You see these Airbnbs and, you know, a tree house and a plane, They’ve converted all this crazy shit and and they’re I’m sure they’re full all the time. Just because people want to have a story to tell, you know? So and of course, you know, wedding is a big deal.

00:38:38:11 – 00:38:44:15
Rod
You know, I’ve watched that. What is that movie where the bride is like a Dracula butt bride, something.

00:38:44:15 – 00:38:45:16
Austin
That Brazil or.

00:38:45:16 – 00:39:06:29
Rod
Brazilians don’t like that. Yeah. Yeah. But anyway, yeah. So, you know, that wedding’s got to be. I mean, we got married on the top of a cliff in Puerto Rico, 600 foot cliff, which was spectacular. Well, it would cost a freaking fortune, I can tell you that at this hotel, but, yeah, no, I think that’s an actually an excellent idea where you where you go and see what the competition is, What’s what’s available.

00:39:07:02 – 00:39:10:25
Rod
You know, what don’t they have, you know, lakefront, whatever it is.

00:39:10:28 – 00:39:28:03
Austin
Yeah. And this particular one that we’re doing in Ohio, you know, I spent hours on the phone, they had an existing wedding caterer planner that was like managing some of their weddings. And I spent hours on the phone with them, just vetting the information, the area, all that kind of stuff. And the take away was like, man, we need we’re we’re booked all the time with all the places we have.

00:39:28:03 – 00:39:36:24
Austin
Like, we need more spaces here. Wow. And they’re like, you know, do this. If you do the things you want to do, fix it up. We’ll give you some tips of what we think We’ll have you guys booked out like year round.

00:39:36:25 – 00:39:51:04
Rod
I wonder I wonder if you should check, you know, age demographics. You know, I’ve had Harry Dent on the show and he he that’s he’s an economist that’s been doom and gloom in forever. But yeah, right eventually just like I will be I actually think the shit’s going to hit the fan at the end of the year. I really do have to.

00:39:51:10 – 00:39:53:05
Austin
So what do you think’s going to happen in real estate then?

00:39:53:05 – 00:40:04:18
Rod
Because I believe that we’re headed for a well, I know we’re headed for a crash in the office space environment. Office environment. I mean, how some there’s some cities that are at 50% occupied. You mean you can’t I mean, those are those are going back to business. Well, that will.

00:40:04:18 – 00:40:05:25
Austin
That affect the residential.

00:40:05:27 – 00:40:24:09
Rod
And multifamily because there’s a lot of bridge debt coming to us, a lot of debt coming due in this. Operators in trouble. They have to sell or refinance. Sales are way down. Refinancing almost impossible with rate caps. So you have to pay for to get short term rates and adjustable. You know, we’ve got these guys with adjustable rate mortgages that are dying.

00:40:24:09 – 00:40:34:25
Rod
So there’s a lot of upset in the marketplace where we’re finding deals already. Do I think it’s going to impact residential? No, I don’t. I think it’s I don’t think that I think the crash is going to be commercial. I don’t believe it’s going to be residential.

00:40:34:25 – 00:40:41:09
Austin
And then even with commercial, it’s so segmented, right? Like we talked about how retail was hurt, but industrial took it over.

00:40:41:10 – 00:40:58:13
Rod
Right, right, right. Yeah. I mean, retail is just shifting. I mean, there’s a mall here that’s going to be a different use for sure. It’s it’s practically empty. They built a Costco on the back of it. But, you know, it’s just shifting. But but no, I think there’s a lot of debt coming due. It’s held by small and regional banks.

00:40:58:13 – 00:41:21:28
Rod
And I think we’re going to see some some bank failures and some stuff happening this year. And then I will tell you, there’s a you know, I was just reading something today. I mean, there are a lot of countries in trouble right now, including China, including, you know, there’s recessions that are that are happening in Japan and other places that, you know, that it’s you know, we are pretty connected economically with other countries at this point.

00:41:21:28 – 00:41:37:09
Rod
Europe and so, you know, I think I think it’s likely we’re going to have a recession, how bad it’s going to be, who knows? But I know there’s going to be opportunity. I get excited. Okay. I was hiding under a rock the last time this happened and it was residentially driven, you know, But this one will not be residentially driven, I think.

00:41:37:12 – 00:41:52:26
Rod
I think, you know, there’s a huge pent up demand for housing. There’s a shortage of housing. So I think residential is going to be fine. But but there are companies laying off already. There’s a lot of layoffs that aren’t making the news. And these interest rates are killing a lot of different things. And so it’s gonna be interesting.

00:41:52:28 – 00:41:53:04
Rod
Yeah.

00:41:53:04 – 00:41:56:22
Austin
So you spillover like contagion from office.

00:41:56:28 – 00:42:15:09
Rod
Housing family issues other in your health care thing. I think you’re great there for sure but I think you know it could impact travel it could impact it could impact how much money people want to spend on a wedding. I mean, you know, if there’s if there’s unemployment and things like that, that that impacts everything. So it’ll be interesting to see I’m wrong all the time.

00:42:15:09 – 00:42:25:27
Rod
Yeah. No better time to. So, you know, I’m happy to admit it, but it’ll be interesting to see our all shakes out. I think there’s going to be incredible opportunity and, you know. So.

00:42:25:27 – 00:42:27:17
Austin
Are you buying anything right now? Yeah.

00:42:27:17 – 00:42:48:08
Rod
I’ve got a screaming deal under contract right now. Apartment complex in San Antonio, a mile away from another one that we own. And, you know, the one next door sold in 2022 for 137,000. A door same year. Everything ours we’re buying for 100,000 a door. Wow. Give me an idea. It’s huge. Like a 40% discount. I mean, it’s incredible.

00:42:48:13 – 00:43:06:24
Rod
Incredible deal. Very excited about it. By the way, if you are an accredited investor, text the word partner to seven two, three, four, five. But check it out it’s or go to see our capital dot com. There’s a webinar there you can watch in fact a great idea to watch it anyway even if you’re not accredited. See how we present a deal and what we look for.

00:43:06:24 – 00:43:18:13
Rod
It’s very educational as well, but we’ll. Austin I appreciate you coming down here, brother. I know you got caught up in Orlando traffic, but you made it and I appreciate you coming all the way over here. And there’s been a lot of fun talking to you, but.

00:43:18:13 – 00:43:23:13
Austin
It was absolutely. Yeah, it was my pleasure. I did not account for the holiday traffic, so I appreciate your patience with me.

00:43:23:14 – 00:43:46:21
Rod
No worries. No worries. Well, as a pleasure to meet you, Bud. Likewise. Thanks. So one other quick thing we encounter so many people that are frankly frustrated. You know, they’re looking in the mirror and they’re frustrated that they hadn’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families, You know, and maybe they see other people buying real estate and creating, you know, incredible cash flow.

00:43:46:25 – 00:44:06:11
Rod
And they think, well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our Warrior Mentorship program. There are coaching students and they’ve had extraordinary results. My students, I’ve been teaching about five years and upwards of 140,000 units now that we know of. Right. And we feel like it’s just getting going now.

00:44:06:11 – 00:44:23:29
Rod
We’re looking to grow this group and really take it to the next level and honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally step by step.

00:44:24:06 – 00:44:47:14
Rod
And then they’re able to leverage our systems and our incredible network to raise money and equity, to find deals and close those deals and build partnerships really nationwide. So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my Warrior Mentorship program by texting the word crush to 7234, five.

00:44:47:18 – 01:18:15:08
Rod
Or you can go to mentor with Broadcom. And what we’ll do is Will set up a call so you can check us out and we can check you out and see if it’s a fit. Now, again, you can go to mentor with Rocky or text the word crush to seven two, three, four, five to apply and we will speak soon.

01:18:15:11 – 01:18:29:23
Rod
I wonder I wonder if you should check, you know, age demographics. You know, I’ve had Harry Dent on the show and he he that’s he’s an economist that’s been doom and gloom in forever but yeah right eventually just think I will be I actually think the shit’s going to hit the fan at the end of the year. I really do.

01:18:29:25 – 01:18:31:21
Austin
So what do you think’s going to happen in real estate then?

01:18:31:21 – 01:18:43:18
Rod
Because I believe that we’re headed for a Well, I know we’re headed for a crash in the office space environment, Office environment. I mean, hell, so there’s some cities that are at 50% occupied. You mean you can’t I mean, those are those are going back to business. Well, that will that.

01:18:43:20 – 01:18:44:10
Austin
The residential.

01:18:44:13 – 01:19:02:23
Rod
And multifamily because there’s a lot of bridge debt coming to us a lot of debt coming due and there’s operators in trouble. They have to sell or refinance. Sales are way down. Refinancing is almost impossible with rate caps. So you have to pay for to get short term rates and adjustable. You know, we’ve got these guys with adjustable rate mortgages that are dying.

01:19:02:27 – 01:19:07:14
Rod
There’s a lot of upset in the marketplace where we’re finding deals already welcome.

01:19:07:16 – 01:19:32:02

This is the lifetime cash flow through Real Estate Investing podcast. This is where you learn strategies to help you achieve lifetime financial freedom through real estate investment. Your host, Rod Cleave, has owned over 2000 homes and apartments, and he brings expertise in all aspects of real estate investment and management onto the show. Now here’s your host, Rod Cleave.

01:19:32:08 – 01:19:49:18
Rod
Welcome to another edition of Lifetime Cash Flow Through Real Estate Investing. I’m Rod Cliff and I am thrilled that you’re here and we are changing it up again today. So we’ve got a very cool here today. His name is Austin here, and what he does now is site selection for health care groups and he does short term rentals.

01:19:49:18 – 01:20:07:05
Rod
And we’re going to dig into site selection a little bit, also into the star space. But what’s cool is was a professional wake boarder and most recently he was an American Ninja Warrior finalist. Him and his wife, she born as well. And she’s going to be on this year as well. And now he’s become a capitalist instead of having fun.

01:20:07:05 – 01:20:08:07
Rod
Right. Welcome to the show, bro.

01:20:08:11 – 01:20:09:17
Austin
Yeah, man. I appreciate that.

01:20:09:17 – 01:20:23:25
Rod
Yeah. So so why don’t you do a much better job of talking about who you are than I just did? And, you know, kind of let us know why you’ve done some of the things you’ve done and. And then bring us current.

01:20:23:29 – 01:20:47:29
Austin
Yeah, sure. I feel like I’ve have, like, you know, my version 1.02.03.0 because it’s been like kind of drastic career changes, but there’s a lot of overlap. So I’ll kind of give some context around it might help. So I started out wakeboarding when I was really young, around like 12 years old and just focused on that, you know, like of to go pro like that was I mean, I still wanted to get in school and I did college, but like, my primary focus was definitely wakeboarding.

01:20:48:02 – 01:20:55:28
Austin
And so as I was getting older, I just kind of saw like, you know, like in your career, athletic wise, you kind of go like this and then your income and start to do this.

01:20:56:02 – 01:20:57:11
Rod
You go up and you go down.

01:20:57:11 – 01:21:14:02
Austin
Yeah, business. You can kind of keep doing this and this and that keeps going up. So because I had a passion for fitness, like I, you know, I had to stay fit and healthy to do this. I opened up some gyms in Orlando. cool. Yeah. And so well, actually, if I back up a second when I was wakeboarding, I got into real estate by reading Rich Dad, Poor Dad, of course.

01:21:14:02 – 01:21:14:28
Rod
And did.

01:21:15:00 – 01:21:30:17
Austin
Yep. And found out about house hacking. So, you know, I was a single young guy brought in other roommates to live with me and essentially pay my rent. That allowed me to save enough money to buy a house. And then I was kind of doing the same thing, like had a house where, you know, I rent out all the other rooms, like there’s a guest house on the property.

01:21:30:17 – 01:21:47:04
Austin
That sort of thing was like a house on a lake with a great view, whereas would come in and pay to live there and, and stuff like that. And so that kind of like helped me get out of the rat race. So I was doing that. I was like obviously very passive. And then as I started to see the light at the end of the tunnel with wakeboarding, I started to open up some fitness centers besides.

01:21:47:08 – 01:21:49:29
Rod
Try to see that you start to see the end of the tunnel. Yeah.

01:21:50:01 – 01:21:56:00
Austin
Right. Yeah, the end of the tunnel. Yeah. Yeah, it was. It was. It was. I was getting old. Yeah.

01:21:56:01 – 01:22:00:03
Rod
It’s like all athletes, you know, have that window of opportunity. Yeah.

01:22:00:03 – 01:22:13:15
Austin
Anyway, continue. Yeah. So, you know, I saw it as a platform. I tried it, which did help me get into real estate. And then it also did help me get into opening up the fitness centers. And so that I was essentially going around opening what you would call de novo and the health care role, which just means like a startup.

01:22:13:15 – 01:22:29:00
Austin
But you know, you have acquisitions and you have to know those. And so I had done a couple locations and then that’s when I met my partner and we started looking for the fourth one and where I was going to open it. And so in my head I had this idea of like, okay, you know, I want to go to Winter Park.

01:22:29:00 – 01:22:46:04
Austin
That’s like the cool, sexy area. I got to be there, but I want to go in Orlando. Yep. And I want to stay away from Kissimmee because I was demographics are garbage or so I thought. So we ran an analysis. My partner went like a couple of hours deep with all of the demographics and stuff like that. And what we found was actually Winter Park is super saturated.

01:22:46:10 – 01:22:50:08
Austin
Rents are really high and there’s a ton of competition. And Kissimmee was wide open.

01:22:50:11 – 01:22:50:23
Rod
Interest.

01:22:50:23 – 01:23:08:03
Austin
And I had no idea because, you know, I learned that you can’t make good decisions without good data. Correct. So that’s really insightful. I actually luckily ended up selling the gyms right before COVID, so I sold them in 2019. Dodged that bullet. Yeah. And then my my partner invited me to start working with him full on the real estate side.

01:23:08:03 – 01:23:14:12
Austin
So a lot of like, you know, we’ll invest in properties for the groups, but that’s, I would say sorry.

01:23:14:12 – 01:23:14:21
Rod
For what.

01:23:14:21 – 01:23:15:26
Austin
Groups? Health care groups.

01:23:15:26 – 01:23:20:28
Rod
Gotcha. Okay. Yep. So we’re going to dig into all that. But I don’t understand your de novo. What is that?

01:23:21:01 – 01:23:36:12
Austin
De novo is Latin for of nothing are from nothing. So like you can either like if you I have an, an LLC that I have say I have one or two dental practices, I can either acquire other dental practice or I can start one de novo from from scratch. Okay.

01:23:36:13 – 01:23:36:21
Rod
Okay.

01:23:36:28 – 01:23:38:27
Austin
Just a startup. Startup might be a better word.

01:23:38:27 – 01:23:55:16
Rod
I know that lingo. Okay. Yeah. It’s like I learned more on these interviews than. Than I teach. All right, good. All right. So. So you’re now in the health care practice finding site locations for health care. Talk about talk about how that started and what you’ve done so far in that space. Yeah.

01:23:55:16 – 01:24:16:07
Austin
So you, know, my partner had been doing that for about 14 years and urgent care space. Well, 12 well, I guess maybe ten years when we started working together now now it’s been we’ve been together 14 years working together and yeah, he was just up in Ohio working with the group and they decided to go health care focused because it was a little bit of a blue ocean and it’s still kind of it’s.

01:24:16:07 – 01:24:17:06
Rod
Urgent care is.

01:24:17:06 – 01:24:18:10
Austin
Yeah, yeah, yeah.

01:24:18:10 – 01:24:19:01
Rod
So up all.

01:24:19:01 – 01:24:41:20
Austin
Over the place. Yep urgent care is and is a lot of the same strategies, whether it’s urgent care or dental or that or derm or behavioral health. You know, you’re kind of looking for the corner of Maine in Maine, right, where you have great street signage and good visibility. High traffic. And then you want to of be close to you, maybe like a Publix or a grocery or anything like that, because you’re kind of piggybacking off of their traffic.

01:24:41:20 – 01:24:48:05
Austin
Off of their traffic. Exactly. So, you know, it used to be medical was like recess, couple roads. Sure. If the main drivers.

01:24:48:06 – 01:24:48:28
Rod
Had to find it.

01:24:48:28 – 01:24:49:24
Austin
Got it. Yeah, exactly.

01:24:49:24 – 01:24:50:23
Rod
Now they want more visibility.

01:24:50:23 – 01:24:56:09
Austin
Now they want more visibility. So we call it we call it med tail medical retail. Okay. But that’s the that’s the niche that we’re in now.

01:24:56:15 – 01:25:20:21
Rod
Well, you know, I know and I’ve been around this space, real estate space my whole life. And I know that, you know, very often know a highly profitable practice, medical, dental, whatever it is, will want their own space. They want their own location and, you know, if you can provide that site selection and so on and so forth, you know, you’ve got a locked in tenant.

01:25:20:21 – 01:25:31:29
Rod
The financing is a slam dunk, you know, because you’ve already got the tenant, especially if it’s a, you know, a medical practice that’s profitable, you know, then then it’s very salable. Would you as an academic.

01:25:32:01 – 01:25:52:00
Austin
Yeah, Yeah, 100%. Yeah. So it’s kind of funny because with medical there just hasn’t been a lot of distress. Right. So like health care in general, it’s pandemic resistant, recession resistant, resistant right. And so you’ve got a lot of these guys that have been paying their rents. Right. And so sellers who want to list it are like, well, I can get my price, I can hold it.

01:25:52:00 – 01:25:59:06
Austin
Right? And so what that means, it’s a very, very secure asset, right? So you’re not going to be getting a lot of these like really distressed. They’ll come up.

01:25:59:06 – 01:26:05:10
Rod
It’s hard to find buildings you can buy. Yeah, well you got to do the do own de novo piece is what you’re saying. Yeah.

01:26:05:10 – 01:26:34:20
Austin
Yeah, yeah. So there’s because if you’re a private equity group there’s a high probability that your backers and your, your LPN, your documents, your investor documents dictate that you only invest in certain this specific asset class. Right. And they prohibit you from investing in the real estate. So also, when it comes on a spreadsheet math, truthfully, you can make more money operating a health care business, growing that, acquiring other buildings, starting I mean, either buying real estate than buying real, right, is just spreadsheet math.

01:26:34:20 – 01:26:46:23
Austin
So that kind of leaves a vacancy. So that’s what we do. Like. Our goal is to buy all the real estate, but I would say we probably do about five deals for every one opportunity that we get to buy. So it’s just like a numbers game.

01:26:46:23 – 01:26:51:16
Rod
Okay, now I’m confused. Okay? You have to do five deals for you. You want to buy your own practice?

01:26:51:20 – 01:27:08:17
Austin
No, no, no. Yeah. So it is confusing. So you got the operations right, which are real estate. P like in general might be a big group. Our p e group, they’re buying the operations and you got the real estate. And there are two different buckets. But when it comes to real estate, there’s there’s a lot of times where we just broker, meaning we help them find a place to where they going to rent from the landlord.

01:27:08:18 – 01:27:19:22
Austin
That’s probably 80, 90% of the time. But every one out of five or one out ten times, there’s nothing available for them to lease. And and again, these guys have a specific.

01:27:19:25 – 01:27:24:13
Rod
Direction about the operators like these care operators that are looking for sites.

01:27:24:13 – 01:27:25:09
Austin
They can’t buy the real estate.

01:27:25:09 – 01:27:27:13
Rod
Sometimes they can’t. Interesting. Okay.

01:27:27:14 – 01:27:28:19
Austin
Sometimes every group is different.

01:27:28:19 – 01:27:36:05
Rod
Yeah, some of them do. I mean, you know, McDonalds became wealthy buying the land, but some of them don’t want to screw with the land. Yeah, and that’s where you come in.

01:27:36:05 – 01:27:38:11
Austin
And we’ll buy it on there and we’ll buy will lease it back.

01:27:38:11 – 01:27:46:03
Rod
To them and leaseback. Correct. God. That’s the end goal. I was wondering what the, where the profit was if you buy and sell or buy and lease. So it’s buy and lease by lease.

01:27:46:03 – 01:27:46:10
Austin
Yeah.

01:27:46:10 – 01:28:04:13
Rod
Okay. Yep. Is there is there a market that you’re targeting for these? What so you’re doing what other types of verticals you’re doing. You’re doing urgent care. Who are your clients that you’re looking for. Yeah. And I think you mentioned before we started recording some of this you’re even willing to do on spec, so speak to that whole mix for me.

01:28:04:16 – 01:28:19:01
Austin
Yeah. So I’ll answer both those questions in order. Urgent care is want dental is actually a big one, so Dental. So with urgent care as they get hospital backed and then they kind of bring out all the real estate and there’s a lot of red tape and it can take years and years and years. So that’s good until it’s not.

01:28:19:01 – 01:28:35:22
Austin
But there’s still some opportunity. But dental, you know, like they’re backed or they’re backed by a large group, but it’s not like a hospital backing, right? So there’s more flexibility in terms of who they work with. And, you know, they can bring on outside vendors like us. So we like dental a lot. Vet is like kind of similar to dental.

01:28:35:23 – 01:28:48:20
Austin
Interesting. You know, again, it’s like you’ve got these health care that have good credit, they have good financials, they’re looking for good visibility. And it’s a well, it’s a very, very, very stable and safe tenant. You know, one of the central tenets.

01:28:48:20 – 01:29:12:19
Rod
Of banks very, very comfortable. Yeah. Especially with what’s happening economically right now with some of the other asset classes. We won’t even talk about office right now. Yeah. So your clients are the ultimate, whatever it is, less. These are people that come from you and in these different disciplines. Yeah, I Vet thousands of dollars with vets as well.

01:29:12:22 – 01:29:14:00
Austin
You know, dog guy.

01:29:14:02 – 01:29:30:15
Rod
My, my, my ex’s. Yeah. So I, but you know, I. Yes, I like dogs but not as much as she does but yeah. So, so you know and then, and then of course dental I mean that’s hugely profitable if you Google highest margin dental is right at the top.

01:29:30:17 – 01:29:47:00
Austin
Yeah. And that’s one thing that’s kind of interesting too is it’s both considered I’ve heard people classified as a growth sector because so many boomers are retiring and needing extra health care. And then, you know, it’s also safety because like it’s health care, right? Like you have to go it’s not like a like a luxury spending item. You have to go there.

01:29:47:03 – 01:29:56:16
Austin
So that’s why we like it and then, you know, to answer your question about the multitenant thing, you know, most people prefer to go in and just like build a single building for their tenant.

01:29:56:16 – 01:29:57:09
Rod
Their own practice.

01:29:57:12 – 01:30:20:07
Austin
Yeah. Or it could be if you’re a developer, you would even if you have a client into like, right, like you’re a developer, you’ve got a P backed dental group, they want to do a new de novo or new startup you want to build them one single standalone location, right? Because that’s the safest. Right? The problem is like we’re talking about earlier, you know, cost of land is up, cost of capital is up, cost of labor is up, cost of supplies are up.

01:30:20:07 – 01:30:38:17
Austin
And so to build a single freestanding tenant, I mean, the rents are just insane right now. And a lot of these guys can’t make it pencil. A lot of the a lot of the health care tenants. So we’re doing multitenant, which is like more risk on our part, but it helps us. What we do is like we’ll bring in a retail tenant to pay a retail rate and then we can kind of bring down the rents of the health care operator a little bit to help offset those costs.

01:30:38:17 – 01:30:48:27
Rod
And so you might have a you might have a mixed use where you’ve got some retail with the with the practice inside of that retail. So above it, behind it next to it, whatever. Right.

01:30:48:28 – 01:31:01:27
Austin
Yeah. And I can, I can tell you a funny story about that if you want. So one of the first deals that we did, we found a we had a health care group, urgent care group that gave us an assignments, which is where they tell us how we want to go here. But we found out with Bank of America building that was vacant.

01:31:02:00 – 01:31:17:27
Austin
Got it for a pretty good cost. Our base basic cost was low. We started it was they only needed half. So we started looking for another half to occupy the space. And Starbucks came along. They wanted to do it, so we signed a lease with them. Great. The urgent actually backed out of the deal completely.

01:31:17:27 – 01:31:18:15
Rod
They didn’t want to stay.

01:31:18:15 – 01:31:33:09
Austin
They didn’t even they Well, they just it wasn’t because of that. It was because, like I said, there’s lot of red tape, a lot of moving parts with their hospital back. Got decision makers. And so we ended up getting a 90 unit physical therapist to come in and take their spot. Wow. So it ended up working out great.

01:31:33:09 – 01:31:45:08
Austin
I mean, we had some stuff go really wrong, like we had to invest 300 grand into the parking lot that we had no idea we were going to have to do. Right. Like, so that was a huge hit to the bottom line. But it is still profitable because the principles are there. Like there’s a lot of flexibility there.

01:31:45:08 – 01:31:48:24
Austin
So it was, you know what I mean? It was like a testament to the strategy.

01:31:48:24 – 01:32:14:16
Rod
So what he’s talking about here, guys, you know, when you’ve got a single tenant situation as very safe, if it’s a high caliber or well-financed, tenured, profitable tenant, I mean, that’s, you know, a lot a lot of people do this in the in the drugstore space like CVS and Walgreens and these single tenants where where they very seldom own the land, but they’re on a prime location and it’s very safe asset.

01:32:14:16 – 01:32:45:10
Rod
But, you know, if if with costs of everything going up, what he’s talking about here is you basically build a much larger building or buy a larger building. And and you have you know, you have other tenants, which is definitely more risky because you’ve got to lease the space. You talked about that Bank of America building. Now, I’m guessing that retrofitting health care into a bank building is a big deal because you’ve got a ton of plumbing, a lot more plumbing, electrical, you know, if you’ve got imaging equipment, whatever speak to that a little bit.

01:32:45:13 – 01:32:47:02
Rod
Do. Yeah. How do you get around all that?

01:32:47:06 – 01:32:59:09
Austin
Yeah. So there is a distinction between when you start the building process and then when you hand it off to the operator. And so we build out of what’s called grace shell. So yes, well, the Grace.

01:32:59:09 – 01:33:03:08
Rod
Shell has no plumbing at all. I mean it’s maybe, maybe some Stubbins or, or.

01:33:03:12 – 01:33:17:19
Austin
Yeah, you’re right. Sometimes vanilla shell, right? So it’ll be like everybody, it’ll be unfinished. And so they that’s usually factored under their build out. Right. And even with Starbucks kind of the same thing, I mean, they have so much equipment, right? Right. But they’re bringing in a lot of their own equipment and they’re paying for that build out.

01:33:17:19 – 01:33:22:27
Austin
Now, of course, tie is negotiable. Usually that’s factored in to whatever improvements is.

01:33:22:27 – 01:33:24:03
Rod
Ty, by the way. Okay.

01:33:24:04 – 01:33:35:19
Austin
Yep. Yeah. So well well, essentially what what happens with tenant improvements is they might say, Hey, I need extra grant to own a grant to build this space out like I don’t have the cash right now. So it’s like, okay, we’ll give you that.

01:33:35:19 – 01:33:36:16
Rod
And, but the price.

01:33:36:16 – 01:33:44:11
Austin
Is it’s an improvement, but the price is going up, goes up to account for that. Yeah. So it’s just a it’s just, it’s an off balance sheet loan. You Know what I mean for the, for the groups.

01:33:44:11 – 01:34:02:09
Rod
So you’re out there finding sites for whatever works at this point. So let’s talk about site selection for. Yeah. Okay. You talked about demographics and there’s some great websites by the way, guys, if you haven’t heard me talk about this, one of my bootcamps are some great websites to study demographics. There’s city hyphen, Datacom is a good one.

01:34:02:11 – 01:34:18:18
Rod
Best places dot net is a good one. Data USA dot I is a good one. Census dot gov is a good one. But you know when you’re you know we’re buying a multifamily asset of course we want to know what the median income is. We want to know what the you know, the makeup of the demographic there is.

01:34:18:18 – 01:34:37:15
Rod
We want to know, you know, median home price in our case and make sure the median income, for example, is three times what the rent would be at our highest number. So these are all the things you do when you’re doing your research. So talk a little bit about what you do in your site selection. I’m sure it’s silo specific in some regard, right.

01:34:37:17 – 01:34:46:11
Rod
As it relates to who the end user might be, You’re you’re do you do you look at sites for more than one type of end user or are they pretty much individual?

01:34:46:11 – 01:35:07:03
Austin
We’re kind of pivoting to where we are. We will be looking for holes like, well, where identifying land that there is not well identified retail tenants, both health care and regular retail and then say, okay, there’s a there’s a gap here. But traditionally, yes, it’s been specific that group. So what that means is like, I’ll meet a group or they’ll say, Hey, we want to open up a location over here.

01:35:07:09 – 01:35:11:19
Austin
Then we begin our process. You know, they might say, I want go to the northeast corner of, Houston, right? Or I want to go.

01:35:11:25 – 01:35:12:25
Rod
So your nationwide?

01:35:12:26 – 01:35:13:19
Austin
Yeah, we’re nationwide.

01:35:13:19 – 01:35:16:03
Rod
Okay, guys, I forgot to ask. We passed.

01:35:16:04 – 01:35:37:28
Austin
But yeah, yeah, right. Right Now we’re doing deals. Yeah, we’re doing deals in Texas and Oregon and Maine. Yeah, all over. So but what the process then becomes is actually the grocery stores have a lot of the best data. So we have different subscription services that we pay for. Gotcha. We’ll go through, we’ll do the analysis. And so the idea is like, hey, we’re going to go through and say, where are your ideal patients already going, right?

01:35:37:28 – 01:35:50:20
Austin
So we pull all groceries or anchor data and then we say, okay, now where is your existing competition? We essentially put those on two different maps, William Over each other. All right, now we’ve got the most ideal patients right here, right? And the least amount of competition right here. Right? So that’s what’s.

01:35:50:26 – 01:36:08:03
Rod
What’s different between what he’s talking about and what I do. The websites I just gave you is we’re talking retail right now. We’re talking which they are looking at traffic count. They’re looking at, you know, different things than we would look at in the multifamily space. But they’re relevant, frankly. I mean, if you get a a nice multifamily asset and on a busy street, you’ll kill it.

01:36:08:03 – 01:36:29:21
Rod
But that’s typically not one of the biggest things you look for like like that, which is critical for you. And, and and of course grocery you know when you see a and that’s why when and let me digress for just a second from my peeps here for a second Austin so so you know when we look at an asset you know I want to see a bunch of national retailers around it because like you said, they do, they’re freaking homework, right?

01:36:29:27 – 01:36:54:02
Rod
You know, So I don’t want to see Bob’s Burgers and Sushi. I want to see the Wal-Marts, the Home Depots, the Lowe’s, and, of course, you know, nice big anchor pub like Publix and all that. So that makes a lot of sense. So I imagine so. So you compile. I didn’t it’s been a while since I’ve even looked at retail, but I imagine that parking is an issue as well.

01:36:54:03 – 01:36:56:04
Rod
It is parking, so speak to that a little bit.

01:36:56:04 – 01:37:11:11
Austin
So that’s totally tenant dependent. But yeah, it’s a big it’s a big issue because in general, like health care doesn’t you as much as like your traditional retailers like, you know, Starbucks and coffee shops and restaurants and things like that. But they do need enough parking because they’ve got quite a bit of staff on hands at all time.

01:37:11:14 – 01:37:22:11
Austin
And so, yeah, usually they’ll just tell us, Hey, I need 17 spots or I need 20 spots or whatever, 12 spots, right? And so once they give us that number, then we can kind of start to be more granular there.

01:37:22:13 – 01:37:45:08
Rod
But if you’re multitenant, that comes into play as well. Yeah. So you make you’ve taken it, you’re doing some guesswork and making sure you’ve got enough. Have you ever done a compilation where you’ve compiled pieces next to each other? I mean, I see, I know it’s a very long term place. Sometimes there’s a corner. my God, It’s the best fricking corner in probably the state in Sarasota here at Clark Road.

01:37:45:08 – 01:37:58:15
Rod
And 41. My God, it’s primo location. It’s the bridge on the on the siesta key. But I think they’ve been working it for a long time. So are you doing any of that or are you just looking for sites as sites you can move? Right on.

01:37:58:17 – 01:38:00:13
Austin
So are you are you asking?

01:38:00:13 – 01:38:00:27
Rod
The chain is.

01:38:01:04 – 01:38:02:11
Austin
Combining multiple acreage.

01:38:02:15 – 01:38:14:27
Rod
Multiple, multiple lot multiple, multiple pieces of property, you know, and you know that that can be incredibly lucrative. If you put a couple together and you’ve got then you’ve got the space requirements that you need for something. Yeah.

01:38:14:28 – 01:38:34:10
Austin
No, absolutely. That’s a strategy, you know, especially when we’re looking at multi-tenant developments. I mean, because it really depends on the the environmental studies that come back because if you as a rule of thumb, you can kind of get about 10,000 square feet of retail space on about an acre, you know, maybe it’s eight. But if you need like a retention pond or something like that, that number starts to shrink.

01:38:34:13 – 01:38:48:25
Austin
And so looking at doing like, you know, you can you guys take this out. But one of the deals that we’re looking at that we’re doing right now is essentially it’s an organ. And so legislation is terrible, right? Like, it’s so hard to get anything approved.

01:38:48:25 – 01:38:50:19
Rod
I’ll go down that rabbit hole if you’d like.

01:38:50:22 – 01:39:14:09
Austin
Okay. Well, so we had to submit a two. We’re working with a dental tenant, pediatric tenant. They want 5000 square feet. So we got an acre, but they want the city wants 200 pages of documentation submitted to their. And so it’s insane. And we’re having to spend so much money out of pocket before we even close. And and so but because it’s so hard to get approval, they’re like that’s also the opportunity.

01:39:14:09 – 01:39:22:24
Austin
And so we’re are actually are buying extra acres in that area like like looking at acquiring the project the property next door. But we’re going to do that multitenant we.

01:39:22:25 – 01:39:23:26
Rod
Phase two or.

01:39:23:26 – 01:39:44:04
Austin
Yeah so like yeah phase one we get the tenant in there. Well it’s kind of, it’s kind of simultaneous. It’s just little, it’s split prong. So it’s like as soon as we get somebody, you know, we’ll develop for them. We’re actually we’re in the process of combing through other tenants to be their neighbor tenant. But it could be it could be a standalone or it could be part of it because it’s like once you start kind of combing, you know, doing a horizontal costs, right?

01:39:44:10 – 01:39:48:27
Austin
Like, it’s not that much more whether you do five or 10,000 square feet. So you might as well just maximize it.

01:39:48:28 – 01:39:50:01
Rod
You’re spending the money anyway.

01:39:50:01 – 01:39:51:26
Austin
Yeah.

01:39:51:29 – 01:40:12:01
Rod
So let me ask you a, how do you operate in life? What do I mean by that? What principles or core values do you live by now? The number one core value in all of my businesses is integrity. For example, in my acquisition business, CRE Capital, we operate with complete transparency and integrity and this is what our investors deserve and expect now.

01:40:12:01 – 01:40:33:27
Rod
Integrity course is incredibly important in life in general, but especially in this multifamily business. You may not realize it, but multifamily business is a very small circle nationally, and just about everybody that’s doing it well knows everybody else. And if you don’t operate with integrity, it comes out pretty quickly. Now, integrity happens to be the topic of this week’s On Your Power clip because it’s so freaking important now.

01:40:33:27 – 01:40:55:07
Rod
By the way, on a side note, distressed assets are hitting the market right now. If you’re an accredited investor, we’ve got a beautiful asset in San Antonio under contract to 200 unit was listed for 28 million previously actually under contract for 26 million contract fell through. So it was under contract for 26 million. We’re only paying 20 million, we’re paying 100,000 a unit.

01:40:55:11 – 01:41:15:13
Rod
The property right next door to this one sold for 137,000 a unit. To give you an idea of the incredible value here, and then it’s about a mile away from another 296 unit asset that we already own. So we know this area well. We love it. And this new property, the units are larger, they have fireplace cases, washer dryer hookups, and this property actually sits on a beautiful lake.

01:41:15:13 – 01:41:35:22
Rod
The 38 of the units are lakefront. And so what’s even better is we’re assuming a low interest rate loan of 4%. So we’re assuming this loan we got great interest rates, only got seven years left. So if you’re accredited, get on a call with our team or register on our portal. Just text the word partner to seven two, three, four, five or go to see our capital ICOM.

01:41:35:29 – 01:41:57:01
Rod
Again, text the word partner to 72345 or go to see our capital dot and check it out. It is a screamer deal. All right, let’s get to it. You know, one thing you just said I want to flag when you know when and I tell this in my boot camp so run multifamily when it’s hard to get information or get something done, get excited because everyone else quits.

01:41:57:03 – 01:41:58:20
Rod
Right. Would you agree with that? Yeah.

01:41:58:20 – 01:42:00:02
Austin
So that’s what it seems like for sure.

01:42:00:02 – 01:42:23:27
Rod
No, no question. Mean like like, well, we’ll find a multifamily deal and there’s no information and and I found one in Tampa once and there was nothing online It was like thousands of people had looked at. It was on LoopNet, which is the big listing site for for, you know, for commercial real estate. And and and it was these 90 year old owners that, that I plugged in and it was a screaming deal because.

01:42:24:00 – 01:42:24:19
Austin
They were marketing.

01:42:24:19 – 01:42:48:07
Rod
It. Exactly. Everybody else gave up you know, because though, you know if you’re if you’re in this business and you see it’s to get information, get excited, okay? Because that’s when sometimes you’ll find some of the best deals. So you’re doing dental, you’re doing medical, you’re vet. Are there any other verticals that you haven’t mentioned yet that you might consider doing?

01:42:48:10 – 01:42:54:11
Austin
So Yeah, Well there’s dental that urgent care. Urgent care, yeah. About anything yet retail health.

01:42:54:11 – 01:42:56:13
Rod
Care centers, you know would that be.

01:42:56:13 – 01:43:17:02
Austin
We try and say like sub 10,000 square feet so I don’t exactly how big those are. Probably I will say the least favorite is like hospital back. yeah. So a lot of those are hospital backed. But that being said, you know we’re definitely I mean, by the nature of it, we’ve just built relationships with other retailers around the country because somebody’s got to fill you know.

01:43:17:06 – 01:43:20:24
Rod
You go to ICSI. We do, Yeah, yeah, yeah. I went there. It was like intimidating.

01:43:20:24 – 01:43:21:29
Austin
In a lot.

01:43:22:01 – 01:43:28:00
Rod
Of people. And I went, I was very interested in retail a lifetime ago, like nine, ten years ago. So I went and I was in.

01:43:28:00 – 01:43:31:05
Austin
Retail life is in Orlando. is it in March? Okay.

01:43:31:07 – 01:43:40:13
Rod
Okay. Yeah, I you know, I’ve kind of stayed away from retail. I was, I was worried about the whole Amazon dynamic or the buying dynamic. You know, if I was.

01:43:40:19 – 01:43:40:29
Austin
So was.

01:43:40:29 – 01:43:49:24
Rod
Online and buy it but but it just the whole demographics shifting though it’s you know it’s fitness centers, it’s restaurants. It’s things that that aren’t impacted by.

01:43:49:25 – 01:44:04:29
Austin
Well yeah it’s funny it’s like I mean I was wrong about so many things about the results of all the lockdowns. Right. And I don’t even want to say COVID anymore. It wasn’t really COVID as much as it was the lockdowns. Yeah, so I just got the lockdowns. But, you know, one of the things was our retails did right, as everybody was saying.

01:44:04:29 – 01:44:15:02
Austin
And then like you look into it and it’s like actually e-commerce and dropshipping requires more real estate square footage than retail because like it’s it’s different scale.

01:44:15:03 – 01:44:17:11
Rod
It is, but they require the square footage. Yeah, they need work.

01:44:17:12 – 01:44:30:00
Austin
And so we, we saw warehouses, industrial space taking over balls that were traditionally retail because it was actually cheaper because malls were kind of going on the down and retail is going on the up. It was like cheaper Like there’s a deal in Orlando where they I think was like a Kohl’s or a Sears, like Amazon Target over there industrial center.

01:44:30:00 – 01:44:41:27
Austin
So that was just a prediction that was wrong. But yeah, I mean, and then also retail didn’t really end up dying because people, as soon as they could go out, they wanted to, you know. Sure. And I was listening to one of your other podcasts talking about they want an experience, right?

01:44:41:27 – 01:45:00:08
Rod
Yeah, that’s I was just going to bring that up. I remember that from a previous interview recently where, you know, it’s it’s like like here we’ve got the Universal UTC, it’s called University Town Center and it’s so fricking beautiful there. In Christmas time, you’ve got all these restaurants, shops. It’s like this giant area that you enjoy going to.

01:45:00:14 – 01:45:02:04
Rod
So that’s not going anywhere.

01:45:02:05 – 01:45:13:13
Austin
No, exactly. So and health care, you know, like we’re we’re a long ways away from like putting up your robotic arms in your house and like having your surgeon come in and take over. Like, I’m not that’s, you know.

01:45:13:15 – 01:45:33:18
Rod
No, no, definitely health care is not going anywhere, especially with 80 million baby boomers getting older. It’s not going away. But so I love love the site selection conversation. And it’s fascinating to me and it’s really I’m really enjoying, you know, triggering parts of my memory I haven’t thought about in a long time. But let’s talk about short term rental a little bit.

01:45:33:18 – 01:45:38:03
Rod
So talk talk about what you’re doing there because means I know we’re completely shifting gears, but, you know.

01:45:38:05 – 01:45:53:15
Austin
Yeah, so short term rental is another space that I’m really excited about. I got into that like through the up that house acting thing, like essentially I moved out all right, But I bought another place. I was doing that and then I was traveling a lot for wakeboarding and I was like my had a duplex living a duplex.

01:45:53:15 – 01:45:54:26
Austin
I was like, this place just kind of sits.

01:45:55:02 – 01:45:55:23
Rod
Abandoned.

01:45:55:25 – 01:46:11:08
Austin
In Orlando. Yeah. When I’m living in Orlando, I like this place just kind of sits abandoned every single weekend. When I go out of town for a competition, I listed on Airbnb and sure enough, I booked every weekend. It booked and booked in bulk and essentially I ended up kicking out all the long term didn’t that I had because I had the first house set about and I was living in a duplex renting out downstairs.

01:46:11:08 – 01:46:27:20
Austin
The long term tenants ended up converting, fixing them up, that sort of thing. And the other thing that I was nice about short term rentals was like my house stayed a lot nicer because I didn’t have these long term people that were there for six months or a year where I couldn’t see what was going on and then it’s trashed and like got maids coming in every three or four days to keep it nice.

01:46:27:20 – 01:46:46:02
Austin
So I liked how my properties made a lot more well-maintained. And then of course, cash flow was crazy, crazy, better. And of course crazy amount of work. It’s a it’s a business, the hospitality business, right? But if you do it right, it can it can be really well. So like, I think Trump has a saying like there’s always opportunity, there’s always a market for the best, right?

01:46:46:10 – 01:47:02:14
Austin
And so we always we try to make ours like luxury, like, you know, have on the lake with pools, hot tubs, basketball courts, putting greens, like everything like that. Even like saunas and stuff. Wow. And so then we’ve recently acquired a place that was like, this is on like three acres, you know, it’s nice and private. This be a great space to host events.

01:47:02:17 – 01:47:06:25
Austin
And sure enough, people love it. And so I really like the event space right now.

01:47:06:27 – 01:47:10:12
Rod
So, so so we’re talking short term rental for event space.

01:47:10:17 – 01:47:31:02
Austin
Well okay it’s both. So what we do is we have our minimum nightly stay, which could be 4 to 1 night depending on how far out you are. Okay. And then you charge an event fee on top of that. Okay. So you have it, which means like usually we’re underwriting these properties to make sure that cash flow would just be the short term rental overnight, like nightly rates.

01:47:31:05 – 01:47:35:07
Austin
And then whatever we get as events fees is just on top of that. So it creates really nice profit.

01:47:35:08 – 01:47:42:07
Rod
So give an example of do you have an asset already that like to describe, to describe the asset?

01:47:42:09 – 01:48:10:05
Austin
So This was a unique home that was actually built in 1924. It was about 5000 square feet. So I can sleep 20 people. So on three acres on a small little lake and there’s a really nice pool deck area, stuff like that, and plenty of outdoor space and parking and that sort of thing. And so, you know what, just like I think if average, maybe we can get a thousand bucks a night for that place and then maybe you charge anywhere between 2 to 5000 for events on top of that.

01:48:10:08 – 01:48:28:01
Austin
So, you know, you have a 50 person event that would be 7500 bucks for a weekend. Wow. So we’re looking we have another property under contract out in Ohio, but it’s a lot. This one is 12,000 square feet on 18 acres. Yeah. So you can do some more people there. But the same sort of thing is, you know, you you fit as many people as you can overnight.

01:48:28:01 – 01:48:49:15
Austin
You have your overnight rates and then whatever the event fee is, you just add on top of that. So you might have a two night minimum and then plus the event fee. And so with events it’s nice. But like the thing is, what I realize is I was going around at these things like after I kind of stumbled into this, it’s like a lot of these wedding venue space, people like, don’t do any overnight stays, right?

01:48:49:18 – 01:49:05:06
Austin
So they’ve got these assets. A lot of times they’re on their houses and, you know, they’ve got these assets that like they’re charging the event fee and they everybody packs have been leaps, right. And so it’s like nobody else can stay there. So you’re missing on all this opportunity for the revenue. So our our thought was like, let’s look at these houses maybe.

01:49:05:06 – 01:49:08:15
Austin
And then there’s a lot of mom and pops that are just like you mentioned earlier, like.

01:49:08:18 – 01:49:18:19
Rod
Yeah, I’ve got a buddy that owns a farm up in Tampa that he built. It’s on a lake and he built a barn and his big Barney has weddings in there. People freaking love it. He’s got a zoo there with animals. that’s.

01:49:18:19 – 01:49:18:26
Austin
Cool.

01:49:19:00 – 01:49:36:19
Rod
Yeah. And he’s a cool guy. He he he does. I love him because he does this thing for orphans where he’ll bring or not Friends. I’m sorry. Yeah. Orphans. Kids. Kids that don’t have a family. And. And he’ll be. And parents. People will come in and adopt these kids as beautiful. Beautiful. But anyway, I digress.

01:49:36:19 – 01:49:36:28
Austin
That’s nice.

01:49:36:29 – 01:49:52:15
Rod
So yeah, it’s really cool. Really cool. And he does things for the military is was good guy is a good friend. But anyway so so now I love that idea. And so where do you market for the event piece. I understand Airbnb for that piece but how do you of market for the event.

01:49:52:19 – 01:50:15:13
Austin
Yeah. So there’s like wedding wire and the knot. You know we just have listings on there. Yeah. You can do so we haven’t done that at this location because we’re trying not to piss the neighbors off too much. So we’re just doing like one of in a month right now. But at the new one. Yeah, we’ll do more and then honestly, VRBO, there be an Airbnb, like we have pictures of our weddings and we have, you know, the reviews that they’ve said.

01:50:15:13 – 01:50:20:18
Austin
And we said like, Hey, messages reach out for details. We say in the listing. And that’s been a great place to get increase.

01:50:20:25 – 01:50:37:11
Rod
You know something you just said I want to flag because he had a real problem with his neighbors there. I mean, it had it went all the way up the wire to county and everything else. And thank God he was doing, you know, adoption staff. He was doing military. He had military for for wounded wet veterans and doing all kinds of things.

01:50:37:11 – 01:50:44:04
Rod
And, you know, they didn’t stand a chance against all of that. But I could see that being a potential issue with neighbors and.

01:50:44:07 – 01:51:08:17
Austin
yep, yeah, yeah. It is an interesting thing in the short term rentals. I mean, the zoning is very important. So if you I believe it’s like seven acres, you can then get the agricultural zoning, but it’s also dependent on where exactly the the house or the property is located. Sure. But yeah, I mean look, if you just if you just on a random spot of land and a house and it’s it’s got a bunch of acres but it’s got a bunch of neighbors.

01:51:08:18 – 01:51:21:20
Austin
Right. And you’re kind of close, like the further you get outside of the city, the less of a big deal gets. But yeah, you know, there, if you’re not zoned for it, they can shut you down for sure. So you want to make sure that you get your proper, proper zoning in place. And that’s a whole, whole other issue.

01:51:21:20 – 01:51:33:00
Austin
But you can get special event permits, but you got to pull those individually. A real pain. Good luck doing more than five a year, you know. Right. And then you the other option is you can change your zoning.

01:51:33:02 – 01:51:34:16
Rod
But like do a zoning variance.

01:51:34:16 – 01:51:35:27
Austin
But that’s really hard.

01:51:36:03 – 01:51:40:23
Rod
And the neighbors are going to be they’re screaming, yes, you’re in the backyard, right? Okay.

01:51:41:00 – 01:51:48:14
Austin
Yeah. So you want make sure either A, it’s already operating, doing events or be on enough. It’s on in like an agricultural zone, agricultural. So then you can.

01:51:48:14 – 01:51:51:10
Rod
Get a permit. You can do it on that. Okay.

01:51:51:12 – 01:52:00:17
Austin
And you start to get you start to let the city know. But it’s allowed. It’s not it’s not even allowed on residential. You know, residential. You’re not allowed. If it’s own residential, would you just have to check your individual property.

01:52:00:19 – 01:52:09:10
Rod
Interesting. Interesting. So what’s next? You got you got your site selection. You’re doing you’re doing that, which sounds like a lot of fun. You’re doing some some of this Airbnb event space.

01:52:09:10 – 01:52:14:20
Austin
What’s Well, yeah. So I mean, to harp on the Airbnb thing, you know, I, I really love it. I have a passion for it.

01:52:14:22 – 01:52:20:08
Rod
You know, one thing I’m sorry to interrupt. One thing is, is I’ve heard that it’s hurting right now. Airbnb’s been hurting. Is that.

01:52:20:08 – 01:52:25:13
Austin
Accurate? We did not get we’ve had we’ve continued to grow because.

01:52:25:13 – 01:52:35:11
Rod
You’re you’re you get you described your properties which are unique you got sauna as you got all sorts of cool shit there which I’ve seen. Well they’ll have a whole row of game machines.

01:52:35:11 – 01:52:36:04
Austin
It’s expensive.

01:52:36:05 – 01:52:37:01
Rod
Yeah, it’s expensive.

01:52:37:01 – 01:52:37:26
Austin
But that’s what you have to do.

01:52:37:26 – 01:52:44:14
Rod
If you got the best you’ll, you’ll always be good. Like, you know, you can have the crappiest food, but if you’re on a waterfront location, you’ll kill time, right?

01:52:44:16 – 01:53:07:15
Austin
Yeah. Okay. So it’s more competitive for yourself. Yeah, it’s more competitive. And so I think what happened was you just got a lot of people that got in the game because. They thought they’re going to get passive income, but like, no, it’s a hospitality business. Yeah. And so and I was guilty of it too, because I was running the gyms, I was wakeboarding, you know, I had this Airbnb in the background and but there’s been three iterations of Airbnb and expectations for the customer number.

01:53:07:16 – 01:53:26:09
Austin
It was like you had stage one, which is just like, build it and they’ll come just throw it up like leave your clothes in the closet it doesn’t matter. Then he had said she was like, like we actually have to make this like kind of, like a hotel, like presentable for the guests. And then now we’re on stage three, which is like, good luck if you’re cookie cutter and it’s and you got all your sheets and beddings and like working furniture.

01:53:26:09 – 01:53:41:17
Austin
No, you need to be unique. You need to make it instagrammable. You need to have amenities. You need to make it a destination in and of itself. Yeah. And so I think everybody who got in thinking it was passive is getting crushed. And then you had to pivot like I had to put a lot more time. I mean, luckily I, I sold my gems, you know, and I had more time to go and do this thing.

01:53:41:17 – 01:53:52:03
Austin
But yeah, it was like a lot of intentionality behind that is I mean, I’ve learned so much about design. Yeah, like painting murals on the walls. We did a historic theme at our at our wedding venue because it was built in 1924.

01:53:52:03 – 01:53:52:17
Rod
Yeah, it’s cool.

01:53:52:17 – 01:53:58:01
Austin
So seven bedrooms, each bedroom is a different decade. You know, we have like different stories of like from those decades in different that.

01:53:58:01 – 01:53:59:03
Rod
Makes a big difference. Yeah.

01:53:59:03 – 01:54:08:20
Austin
And people people really like that, you know and so that that’s the thing is just making yourself unique and so it is hard right Like you can make money but you got to put a lot of effort. You just you have to run the business as a business. Is it.

01:54:08:20 – 01:54:09:11
Rod
Worth it.

01:54:09:14 – 01:54:09:29
Austin
To me?

01:54:10:02 – 01:54:16:28
Rod
yes, worth it, of course it is. I have nothing. Nothing that’s worth it. Anything is going to be easy. But is it worth it? Yeah, I can believe it’s worth it.

01:54:16:28 – 01:54:35:18
Austin
I mean, those like, cookie cutter, you know, condo units where it’s like a21 maybe. Right by Universal, where you can just go get them anywhere. Yeah, I see those having a hard time because, like, you know, labor costs are high, like your, your machine like appliances and that and your are so much lower and those like one thing going wrong can like totally cut into your margins for a whole month.

01:54:35:20 – 01:54:38:11
Austin
So those are the types of deals that I think are getting really high.

01:54:38:11 – 01:54:57:04
Rod
Mark My brother’s got some cabins up in the Blue Ridge Mountains and they’ve slowed down a little bit. My my ex, my best friend Tiffy is, has been looking into mid-term rentals where you’re renting to nurses and residents and things like that for hospitals and teachers, so on and so forth, which is interesting. And she’s been playing around with that.

01:54:57:04 – 01:54:59:03
Rod
So yeah, that’s cool on her a little bit with that.

01:54:59:03 – 01:55:18:13
Austin
Yeah. You know, and I think I know you guys like to talk macro sometimes on here. That’s always a factor because it was like since 2008 everybody’s kind of had to shifted to be macro economists because we’ve seen it’s just so volatile all the time. So it’s like trying to predict like, I mean, people have been saying that real estate going to crash for cash in season 16.

01:55:18:13 – 01:55:19:18
Austin
I first started hearing about it.

01:55:19:19 – 01:55:24:21
Rod
yeah, I said it when COVID hit. I did a YouTube video says the coming crash. Yeah.

01:55:24:23 – 01:55:25:03
Austin
I thought.

01:55:25:03 – 01:55:31:09
Rod
So too. I got so much freaking hate. It was the highest watched video I’ve ever done because, you know, negative shit sells. Yeah, but yeah.

01:55:31:14 – 01:55:47:23
Austin
Well, that’s the thing. And it’s like, so my thesis right now is like if we haven’t seen a correction with residential real estate because interest rates are like we know they’re the highest that they are going to be right now, they’re only going to either stay flat or come down from here. Right. And I’m like, I do think that it is taking longer than anybody expected.

01:55:48:00 – 01:55:52:22
Austin
But if housing price hasn’t significantly affected now, what makes you think it’s going to correct when?

01:55:52:26 – 01:55:55:10
Rod
I don’t think it’s going to correct. It’s going to go what’s going to explode?

01:55:55:10 – 01:55:55:25
Austin
That’s what I think.

01:55:55:25 – 01:56:10:23
Rod
When when rates go down, it’s going to explode because there’s huge pent up demand. You know there’s all these people that own a house at 3% interest. They want to they want to do a bigger house, but they they don’t want to pay 7% interest on their new place. Yeah, exactly. If the rates come down, watch, man, it’s going to go crazy.

01:56:10:26 – 01:56:29:15
Austin
Yeah. And it kind of rates so that the interest rates really obviously affect both our development projects and our and my short term rental projects. But it’s like the same thing, you know, if we get so we’re, we’re trying to acquire properties now residential because we think that once interest rates drop, the value will go up. So that’s one way to offset refi residential easily.

01:56:29:15 – 01:56:33:09
Rod
Yeah, not like commercial where you’ve got heavy, heavy prepayment penalties and things. Yeah.

01:56:33:10 – 01:56:49:27
Austin
Yep. It’s one way to offset the, you know, if you do have a little bit of slow down in the revenue, at least if the building is appreciating that that can help a lot. And then also with development deals like if it underwrites right now which it has to do to get financing right with the interest rates as high as they have in decades.

01:56:50:01 – 01:56:51:12
Rod
Then you know, it’s a home run when they come.

01:56:51:13 – 01:57:03:08
Austin
Yeah, exactly. Because when when interest rates come down, A, you can refinance, get your capital back, but B, you might even still have the same monthly payment, you know, with rates down. So you might still be collecting the same cash flow. But now you’ve got almost all your investment.

01:57:03:08 – 01:57:14:20
Rod
Back, right? Yeah. No that’s, that’s, that’s, that’s good. So you really love this event space business. You really think that there’s some real opportunity there. Why do you think you know, why do you wait? Why are you loving it? Why are you excited about it?

01:57:14:23 – 01:57:31:22
Austin
Well, it started when my wife got married and we stayed in this beautiful place in Cleveland, North Carolina, right outside of Charlotte. Okay. And, you know, just seeing like, wow, they charge a lot of money. There’s there’s a lot of money to be made having here. And so for it has been on the back of my mind for a long time, I’ve been actually diving into it.

01:57:31:22 – 01:57:41:20
Austin
It’s like, yeah, there there is a good amount of money to be made. And now it’s a lot of work because if you got maintain your property for a short term rental, multiply it our triple the amount of work that you need to maintain it for a wedding. Right. So that’s.

01:57:41:20 – 01:57:45:05
Rod
Got to have flat space that doesn’t get muddy if you’ve got the.

01:57:45:05 – 01:57:45:28
Austin
Landscaping.

01:57:46:05 – 01:57:47:04
Rod
The landscaping.

01:57:47:04 – 01:58:07:16
Austin
And all, all that stuff. But you know, with all the circles that I travel, like, you know, I do like different capital raising groups and networking events and all that sort of thing, and nobody’s just talking about it. And so there’s not like groups chasing it, there’s not private equity chasing it. And so for some reason it’s just like to me seems like a big blue ocean where you can go acquire like a mom and pop.

01:58:07:19 – 01:58:30:00
Austin
They’re maybe they’re running a business out of there. They live in the unit, so they’re not renting out. That’s a huge amount of revenue that they’re missing out on because not doing overnight stays, they haven’t figured out how to optimize their pricing for the events, get a loan for the overnight rentals. And so I think, you know, there’s a market in like every metro to go out and like these spaces where you can theme them out, you know, you do some really cool, really creative like I’m from Atlanta.

01:58:30:04 – 01:58:34:28
Rod
Good idea to go and think of a theme that’s a really good idea.

01:58:34:28 – 01:58:37:16
Austin
And and that draws people right Not everybody but you your.

01:58:37:19 – 01:58:53:12
Rod
Man If it’s cool, they want to see it, man. You see these Airbnbs and, you know, a tree house and a plane. They’ve converted all this crazy shit and and they’re I’m sure they’re full all the time. Just because people want to have a story to tell, you know? So and of course, you know, wedding is a big deal.

01:58:53:14 – 01:59:00:00
Rod
You know, I’ve watched that. What is that movie where the bride is like a Dracula butt bride, Something that.

01:59:00:01 – 01:59:00:17
Austin
Brazil.

01:59:00:20 – 01:59:22:03
Rod
Brazilians don’t like that. Yeah. Yeah. But anyway, yeah. So, you know, that wedding’s got to be. I mean, we got married on the top of a cliff in Puerto Rico, 600 foot cliff, which was spectacular. Well, it would cost a freaking fortune, I can tell you that at this hotel, but. Yeah, no, I think that’s an actually an excellent idea where you where you go and see what the competition is, what’s what’s available.

01:59:22:06 – 01:59:25:28
Rod
You know, what don’t they have, you know, lakefront, whatever it is.

01:59:26:01 – 01:59:43:07
Austin
Yeah. And this particular one that we’re doing in Ohio, you know, I spent hours on the phone, they had an existing wedding caterer planner that was like managing some of their weddings. And I spent hours on the phone with them, just vetting the information, the area, all that kind of stuff. And the take away was like, man, we need we’re we’re booked all the time with all the places we have.

01:59:43:07 – 01:59:51:27
Austin
Like, we need more spaces here. Wow. And they’re like, you know, do this. If you do the things you want to do, fix it up. We’ll give you some tips of what we think we’ll have you guys booked out like year round.

01:59:51:29 – 02:00:06:08
Rod
I wonder, I wonder if you should check, you know, age demographics. You know, I’ve had Harry Dent on the show and he he that’s he’s an economist that’s been doom and gloom in forever. But yeah right eventually just I will be I actually think the shit’s going to hit the fan at the end of the year. I really do have to.

02:00:06:14 – 02:00:08:09
Austin
So what do you think’s going to happen in real estate then?

02:00:08:09 – 02:00:19:29
Rod
Because I believe that we’re headed for a well, I know we’re headed for a crash. The office space environment, Office environment. I mean, how some there’s some cities that are at 50% occupied. You mean you can’t I mean, those are those are going back to. But will that will that.

02:00:19:29 – 02:00:20:29
Austin
Affect the residential.

02:00:21:02 – 02:00:39:13
Rod
And multifamily because there’s a lot of bridge debt coming to us, a lot of debt coming due in this operators in trouble they have to sell or refinance sales are way down. Refinancing is almost impossible with rate caps you have to pay for to get short term rates and adjustable. You know, we’ve got these guys with adjustable rate mortgages that are dying.

02:00:39:13 – 02:00:49:29
Rod
So there’s a lot of upset in the marketplace where we’re finding already. Do I think it’s going to impact residential? No, I don’t. I think it’s I don’t know that I think the crash is going to be commercial. I don’t believe it’s going to be residential.

02:00:49:29 – 02:00:56:13
Austin
And then even with commercial, it’s so segmented, right? Like we talked about how retail was hurt, but industrial took it over.

02:00:56:14 – 02:01:16:29
Rod
Right, right, right. Yeah. I mean, retail is just shifting. I mean, there’s a mall here going to be a different use for sure. It’s it’s practically empty. They built a Costco on the back of it. But, you know, it’s just shifting. But but no, I think there’s a lot of debt coming due. It’s held by small and regional banks and I think we’re going to see some some bank failures and some stuff happening in this year.

02:01:16:29 – 02:01:37:14
Rod
And then I will tell you, there’s a you know, I was just reading something today. I mean, there are a lot of countries in trouble right now, including China, including, you know, there’s recessions that are that are happening in Japan and other places. You know, that impacts it’s you know, we are pretty connected economically with other countries at this point, Europe.

02:01:37:14 – 02:01:52:13
Rod
And so, you know, I think I think it’s likely we’re going to have a recession, how bad it’s going to be, who knows? But I know there’s going to be opportunity. I get excited. Okay. I was hiding under a rock the last time this happened and it was residentially driven, you know, But this one will not be residentially driven, I think.

02:01:52:16 – 02:02:08:00
Rod
I think, you know, there’s a huge pent up demand for housing. There’s a shortage of housing. So I think residential is going to be fine. But but there are companies laying off. There’s a lot of layoffs that aren’t making the news. And these interest rates are killing a lot of different things. And so it’s gonna be interesting.

02:02:08:02 – 02:02:11:26
Austin
Yeah. So you spillover like contagion from office.

02:02:12:02 – 02:02:30:13
Rod
Multifamily to other in your health care thing. I think you’re great there for sure but I think you know it could impact travel it could impact it it could impact how much people want to spend on a wedding. I mean, you know, if there’s if there’s unemployment and things like that, that that impacts everything. So it’ll be interesting to see I’m wrong all the time.

02:02:30:17 – 02:02:40:23
Rod
No better time to. So, you know, I’m happy to admit it, but it’ll be interesting to see how it all shakes out. I think there’s going to be incredible opportunity and, you know.

02:02:40:27 – 02:02:42:21
Austin
So are you buying anything right now? Yeah.

02:02:42:21 – 02:03:03:13
Rod
I’ve got a screaming deal under contract right now. Apartment complex in San Antonio, a mile away from another one that we own. And, you know, the one next door sold in 2022 for 137,000 a door same year. Everything ours we’re buying for 100,000 a door. Wow. Me an idea that’s huge, like a 40% discount. I mean, it’s incredible.

02:03:03:17 – 02:03:21:28
Rod
Incredible deal. Very excited about it. By the way, if you are an accredited investor, text the word partner to seven two, three, four or five, but check it out. It’s or go to see our capital dot com. There’s a webinar there you can watch in fact a great idea to watch it anyway, even if you’re not accredited. See how we present a deal and what we look for.

02:03:21:28 – 02:03:33:08
Rod
It’s very educational as well, but we’ll. Austin I appreciate you coming down here, brother. I know you got caught up in Orlando. Traffic, but you made it and I appreciate you coming all the way over here. And there’s been a lot of fun talking to you.

02:03:33:08 – 02:03:38:18
Austin
But it was absolutely. Yeah, it was my pleasure. I did not account for the holiday traffic, so I appreciate your patience with me.

02:03:38:18 – 02:03:42:11
Rod
No worries. No worries. Well, as a pleasure to meet you, Bud. Likewise. Thanks.

02:03:42:14 – 02:04:02:29

Thank you for listening to the lifetime cash flow through Real Estate Investing podcast. If you’ve enjoyed the show, please take a minute to visit iTunes and leave your comments for more resources or to connect with us further, please visit our website at Rod Cleave dot com. Tune in next week for our next show.