Gideon Spencer is a dynamic entrepreneur who transitioned from tech to commercial real estate, scaling rapidly from automating a 4-plex short-term rental into owning and investing in five boutique hotels within just nine months. Leveraging his signature blend of tech automation, relationship-building, and creative financing, Gideon has developed powerful strategies for breaking into real estate without prior experience or traditional capital. Before entering real estate, he launched a tech company that generated $250,000 in its first year using the same value-driven approach.
Here’s some of the topics we covered:
- From Tech Hustler to Real Estate Disruptor
- Turning Family Struggles Into Massive Real Estate Growth
- The Secret Weapon of Cross-Functional Teams That Scale Fast
- Why A/B Testing Isn’t Just for Tech (and How It Explodes Business Results)
- The Fastest Way to Win? Deliver Value, Get Feedback, Repeat
- The “Mentor Loop” Hack That Skyrockets Growth
- Automate or Die: How Gideon Runs Real Estate Like a Tech Company
- What’s Coming Next in Gideon’s High-Speed Business Evolution
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
01:20:07:27 – 01:20:27:15
Rod
Welcome to another edition of Lifetime Cash Flow through Real Estate Investing, and I am thrilled that you’re here and you are going to get tremendous value from the dynamic guy I’ve got in my studio today. His name’s Gideon Spencer, and he’s got an awesome podcast called The Hunt for incredible, which I’m going to be on shortly, and we’re going to have a lot of fun today talking about tech.
01:20:27:17 – 01:20:35:04
Rod
We’re going to talk about building teams. We’re going to talk about boutique hotels and regular hotels. So strap on. Welcome, brother.
01:20:35:06 – 01:20:36:16
Gideon
Thanks, man. I’m stoked to be here.
01:20:36:17 – 01:20:52:25
Rod
Yeah. This is going to be a lot of fun. You’ve got your lovely bride here today. Yeah. And, so, let’s let’s get into it. So why don’t you talk a little bit about your background? I know you’ve got a lengthy tech background, and you’ve incorporated that knowledge base into what you’re doing now and what you’ve done.
01:20:52:25 – 01:21:13:14
Gideon
So yes. Yeah. So I spent about, a decade in the tech space and the models in terms of how you structure your team and how you approach problems in tech is very dynamic. So we leverage something called agile. It’s a methodology where you basically position yourself and your team in a way where you can make quick decisions.
01:21:13:14 – 01:21:34:14
Gideon
So the concept is that it’s difficult to anticipate when there are roadblocks and setbacks. And so it’s ideal to position your team in a way where you can quickly pivot to respond to those changes and setbacks. And so what I did when I pivoted into boutique hotels was I applied those same methodologies, and that’s what enabled me to jump into this space so quickly.
01:21:34:14 – 01:22:03:12
Gideon
So I acquired $6.5 million worth of real estate within the first two years of diving into the space, and I didn’t know a single person who even worked at a hotel, let alone owned a hotel. But by applying the these systems and techniques, we were able to quickly pivot and adjust and bring great people on our team, bring in mentors and create what are called asymmetric returns, where you reduce the downside risk and you increase that upside risk so that you can increase the odds of getting the returns that you’re looking for.
01:22:03:13 – 01:22:18:24
Rod
Interesting. Well said. Well, you know, the tech industry because they’ve got the print money, had the ability to hire the best advisors and consultants to come up with these strategies. I’ve heard of agile, actually. I’ve heard about that strategy before. It’s an acronym, isn’t it, as well.
01:22:18:26 – 01:22:22:06
Gideon
So there are acronyms within agile, but actual itself.
01:22:22:09 – 01:22:41:04
Rod
Gotcha. Okay. That reason that the, the, the growth in tech has been explosive is because of this team dynamic and why, you know, companies like Google and Meta and, and a lot of these other large tech companies have have just, you know, they, they put the they put the best people they can together. They cut them loose.
01:22:41:04 – 01:22:54:01
Rod
They give them a little bit of guidelines and, and, and so I’d love to hear more about your strategy as it relates to that and how you incorporated it. So you, you left tech. Why did you leave tech though? You’re probably making great money.
01:22:54:04 – 01:23:12:00
Gideon
Yeah. So I ended up leaving tech because so long story short, my wife and I were both from San Antonio, but neither of us lived there at the time, and we wanted to get a short term rental so we could stay in town for the holidays. With my tech background, I’m constantly thinking about economies of scale. So I said, If I’m going to buy a property, I know if it has many doors under one roof is possible.
01:23:12:00 – 01:23:33:22
Gideon
So we went ahead and bought a fourplex. We fixed it in San Antonio and San Antonio and automated 95% of it. And throughout this process it began printing money. So I wanted to scale it up. But during that period, my wife ended up becoming very ill. So she started getting some brain fog. She had a hard time stringing sentences together.
01:23:33:22 – 01:23:59:26
Gideon
Her migraines were bad. We took her to the doctor and they ran all of her bloodwork and it came back negative. So the doctor said, everything looks normal. We don’t know what’s going on. Her health continued to decline, to the point where she was completely bedridden and, had a hard time forming words and sentences. And of course, we were terrified, and there were many nights where I just I held her and we were both crying because there was nothing that we could do, and again took her to ten more doctors.
01:23:59:26 – 01:24:23:22
Gideon
And they all said, we don’t know what’s wrong with her. Within that same four month period, my mom got a form of liver cancer that only had a 20% survival rate, and my dad was rushed to the ER with heart failure and they said he needed a heart transplant. Good. So literally within four months, all the closest people to me were at death’s door and I had to have a lot of long, hard conversations with God saying like, dude, there’s literally nothing I can do.
01:24:23:23 – 01:24:39:22
Gideon
Like, you know, just you experience those and you talk about this all the time. Also like the mindset that’s created from going through the pits. And while I would never want to go back to those moments and I never wish them upon anybody, I’m so thankful for the lessons that I was able to pull.
01:24:39:27 – 01:24:41:05
Rod
The strings you pull as well.
01:24:41:09 – 01:25:06:00
Gideon
100%. And one of those, one of those pieces of wisdom was we all map out against the average life expectancy, how much time we have left, but none of that’s actually guaranteed. And so from there, I realized that if anything happened to me with my wife being bedridden, she couldn’t work at the time I needed, like, if I got hit by a bus or anything happened to my health, her quality of life would plummet.
01:25:06:02 – 01:25:28:22
Gideon
And so I wanted to scale my portfolio and grow wealth in a way where I could put a team in place, and that those assets and wealth would appreciate without me even being involved, to make sure that she was taken care of. So then that in combination with, what we had done with our fourplex, I saw boutique hotels as a great vehicle to do that.
01:25:28:22 – 01:25:34:26
Gideon
So interesting. Pull the team together, started, targeting boutique hotels and scaled up from there.
01:25:35:02 – 01:25:39:04
Rod
So. Well, first of all, is is she okay?
01:25:39:09 – 01:25:41:02
Gideon
Yeah. No, she’s doing great now.
01:25:41:02 – 01:25:42:15
Rod
Yeah. You figured.
01:25:42:16 – 01:25:54:15
Gideon
Your recovery it out. Yeah. Okay. It it turned out that it was, she got long Covid and her nervous system was responding negatively to it, and none of that shows up on blood panel. So once we figured out, you.
01:25:54:15 – 01:25:57:05
Rod
Get this, you got the vaccine too, didn’t you? No. You didn’t.
01:25:57:05 – 01:25:57:22
Gideon
Oh, wow.
01:25:57:22 – 01:26:15:21
Rod
No, she she was vaccine generated. My ex my daughter got cancer after the vaccine. And I know for people that got cancer, it’s a vaccine. So we won’t go down that political rabbit hole. But but I thought maybe that was it. You know, I will tell you, just as an aside, just because you’re here and and and you’re you’re I can tell you’re a sweetheart and and you care about her so much.
01:26:15:24 – 01:26:23:28
Rod
I consider stem cells. I went down to Tijuana, got stem cells on my knees. There were people there for all kinds of things. And man, that some of the stuff has been miraculous.
01:26:23:28 – 01:26:31:20
Gideon
I have a friend who he, it’s more like a rotator cuff or something. And his shoulder was never the same for like five years. And then he got stem cells and he said it healed them.
01:26:31:20 – 01:26:49:26
Rod
Yeah. No, I my knees are much better. I went down to Taiwan and you know it’s Joe Rogan talks about it’s called CPI stem cells. It’s also in Panama as well. I saw Tony Robbins talk about it, but just as an aside, might be something to consider. But anyway, back to real estate. So, and I’m glad you’re okay, sweetheart.
01:26:49:26 – 01:27:13:24
Rod
Yeah. So, so boutique hotels. So, Well, first of all, let’s back up for a minute. So you you let’s talk about agile. If you don’t mind. Talk about the. You know what what that how that team dynamic works, how you pick the team and then how you work through, I mean, with, you know, we don’t have to go total micro on this, but I just I’m curious for my own.
01:27:13:28 – 01:27:30:07
Rod
Right because I’ve got teams, you know, what, what that looks like and, how you deal with conflict, how you deal with, with bumping up against a wall, things like that. As your as the, as the team is growing and evolving and all that. So if you could speak to that.
01:27:30:07 – 01:27:47:28
Gideon
Yeah of course. So I’ll, I’ll tease out a few elements that apply directly to real estate and enabled me to move so quickly in this space. So number one is cross-functional teams. So you want people on a small team that have high levels of communication with each other, communicating every single day about what they did yesterday and what they’re doing that day.
01:27:47:28 – 01:28:00:22
Gideon
It’s a quick it’s called a stand up. It can be as short as five minutes where we all literally just hop on. We say, what did you do yesterday? What did you do today? And we have a board with all the things that need to be done. That’s the first thing. The second thing, touching on the cross-functional team.
01:28:00:27 – 01:28:23:22
Gideon
On my team, we had somebody who was an absolute wizard in finances who could run underwriting models like, incredibly well, and somebody with strong renovation experience. And then I was doing a lot of outreach and underwriting and creating content and just pushing out what we were doing. Additionally, something that’s leveraged heavily in software that we applied to this is what’s called AB testing.
01:28:23:29 – 01:28:45:11
Gideon
So basically we applied it to virtually everything. When we were looking for deals, we would say like, okay, we talked to brokers, we talked to bird dogs, and we talked to hotel owners. What gave us the the best form of leads. And we would touch base every week and say like, okay, we’re experimenting with new methods of increasing deal flow, what worked the best for us.
01:28:45:11 – 01:28:47:10
Gideon
And then we would lean heavily into that AB.
01:28:47:10 – 01:28:52:12
Rod
Testing in your in your outbound marketing relating on social or we.
01:28:52:12 – 01:29:12:07
Gideon
Did a b testing with everything. So basically to what AB testing is, is when you try two methods of something and then you see the results and you lean heavily into one method. So people do this a lot with newsletters for example, they’ll have two different headers for the newsletter and then they’ll see which one did best and then whichever one did best, that’s the one.
01:29:12:07 – 01:29:12:24
Rod
That’s ads.
01:29:12:24 – 01:29:13:13
Gideon
As well.
01:29:13:15 – 01:29:19:04
Rod
Headlines as that. We do the same thing on ads. AB test ads totals and headlines, different content, different colors, everything.
01:29:19:04 – 01:29:33:20
Gideon
Totally. Yeah. And so we would do that across the board of the virtually everything. Because my partners and I, we were new in the space. We had backgrounds in, in like mergers and acquisitions and building businesses and things like that. But we’d never bought boutique hotels together before, and so we applied it to.
01:29:33:21 – 01:29:36:02
Rod
So your finance guy had M&A experience as well?
01:29:36:06 – 01:29:51:24
Gideon
Yeah, the finance guy had M&A experience. We all had, experience in real estate in some form or another. All of us had short term rentals and things like that. So we did have momentum in the space, but we applied it to our buy box. So we take our buy box and say like, okay, what does a return profile look like?
01:29:51:24 – 01:29:57:21
Gideon
And what does the supply in the space look like for our buy box? And we’d go through look at geographically specific.
01:29:57:23 – 01:29:58:05
Rod
Yeah.
01:29:58:05 – 01:30:15:20
Gideon
Geographically specific. We did it with markets. We did it with deal flow. We did it with investors. What types of investors are more willing to open up their wallets? And we found engineers and lawyers were really difficult. And then people in tech space who are typically property, sorry.
01:30:15:22 – 01:30:16:25
Rod
It.
01:30:16:27 – 01:30:36:12
Gideon
Was no who were, like product managers or higher level management. They tended to be much more open with their wallets. Also people who had backgrounds in mergers and acquisitions, they understood investing and were well capitalized as well. So we basically, through our AB testing, would reflect and say like, okay, what types of investors do we want to target?
01:30:36:14 – 01:30:44:10
Gideon
And like, what is our pitch? Right. So then we’d split test or a pitch and say like, okay, what actually spikes emotion? You’re talking.
01:30:44:10 – 01:30:46:03
Rod
About a.
01:30:46:05 – 01:31:08:09
Gideon
A verbal pitch. We did the same thing with copy. So I created basically multiple one pagers for the video that we ended up raising capital for specific avatars. Right. You do that like avatars. So yeah, basically all across the board we were doing a B testing on everything to refine what types of deals do we want to go for?
01:31:08:09 – 01:31:33:26
Gideon
Who do we want to raise capital from? How do we want to approach this game as a whole and through that ended up really rapidly getting to the type of deal we wanted, the market we wanted, the team we wanted, and then that set us up nicely to be able to bring on mentors that could actually be a part of the deal, not just looking over the deal, but invested with us and going through, the challenges of an acquisition together.
01:31:33:26 – 01:31:34:06
Gideon
Okay.
01:31:34:09 – 01:31:38:23
Rod
So so you got a boutique hotel, where is it? Where’s it located?
01:31:38:24 – 01:32:02:10
Gideon
It’s in solving California, which is Solvang, California. It’s a little Danish esque town. They call it the, I think like the Denmark of America. It’s about an hour and a half away from LA, 45 minutes from Santa Barbara, and the reason we picked that market is because it’s a regional travel market, and it basically means there’s it’s a market where a lot of people travel.
01:32:02:10 – 01:32:17:01
Gideon
And because it’s within an hour and a half of a major metro, we find that during economic challenges, people don’t stop traveling. They just change their travel habits. So rather than flying to Europe for a week, they’ll drive down to Central California wine country for the weekend.
01:32:17:01 – 01:32:27:12
Rod
So so you’re you’re appealing to the LA crowd basically for for a weekend getaway or whatever. Yeah. Okay. Okay. So how many, how many how many doors in the hotel? I’m just.
01:32:27:12 – 01:32:29:23
Gideon
Curious. So this property is a 24 unit.
01:32:29:23 – 01:32:38:06
Rod
Hotel, 24 unit. Okay. And what what what defines a boutique? I mean, I want to hear your words. And what defines a boutique hotel. Yeah.
01:32:38:06 – 01:33:00:13
Gideon
So a boutique hotel is any hotel that typically has less than 50 units. Okay. That is not tied to what’s called the flag or a brand like Marriott. So it’s something that can be unique in its offering and differentiated in terms of style and experience and is smaller. And we find that those deals tend to be too big for the little guys and too small for the big guys.
01:33:00:13 – 01:33:11:12
Gideon
So we’re not competing with institutional investors, and we’re also not competing with people who are going for smaller short term rentals and things like that. So it’s a nice little sweet spot that we found we can maximize the return on.
01:33:11:12 – 01:33:15:12
Rod
Are you doing are you vertically integrated and that you’re doing the management as well.
01:33:15:15 – 01:33:19:27
Gideon
So we’re not doing the management, but we have somebody on our team with 25 years of of me okay.
01:33:20:04 – 01:33:26:19
Rod
So you’ve got you’ve got someone on the team that’s managing. And rather than a than using a hotel management company or.
01:33:26:19 – 01:33:27:05
Gideon
Correct.
01:33:27:06 – 01:33:49:27
Rod
Okay. You know, I heard I heard Joe Rogan talk about a boutique hotel in Austin and and how there used to be vagrants there and they turned it all around. I, I wish I could remember the name of the hotel, but I guess it’s really cool. They’ve got memorabilia there from different things and things like that. Is there anything unique in in, do you have plans to do anything that’s kind of set you apart or, you know, speak to that a little bit?
01:33:49:27 – 01:33:53:23
Rod
I assume you don’t have a restaurant or anything like that, but but is there anything unique?
01:33:53:23 – 01:34:16:23
Gideon
Correct. Yeah. We avoid restaurants, just because it’s added complexity and they, they’re very difficult for multiple reasons we could dive into. But our core differentiate here is we have the largest outdoor space of any other hotel in solving. Okay, not only that, but we have two of them. So we have a massive front garden and a massive back garden, which gives us a lot of flexibility with it being in Central California.
01:34:16:23 – 01:34:28:20
Gideon
The weather’s fantastic 90% out of the year and it being in wine country, we have a lot of partnerships set up with local vineyards so people can have wine outside, and then we can also host weddings in a way that no other property in the area can.
01:34:28:20 – 01:34:40:11
Rod
Oh very cool. Okay. Yeah, that’s that’s a different differentiator. So what’s next as far as boutique hotels go? Are you are you actively searching for others? I know you’ve it looks like you’ve invested in some other hotels.
01:34:40:14 – 01:35:00:20
Gideon
Yeah. So we’re invested across six hotels. One of them is is our own. Right. And and next is just scaling up the portfolio. But I’m fortunate that now I’m in a position where I only want to do deals with people I like and on deals that are interesting to me. So I love now, of course, like the cash flow and appreciation and all the other great things that come with real estate.
01:35:00:26 – 01:35:21:08
Gideon
But I really enjoy the creative process of providing an experience to people that have never been provided before. So I love working with people who bring me deals, and now I’m excited to be in a position where I can help people like the mentor that helped me. We brought him deals and he basically eventually said, like, yeah, I’ll go in on this with you.
01:35:21:10 – 01:35:26:17
Gideon
And now I’m enjoying getting to do that with other people and things like that.
01:35:26:19 – 01:35:36:11
Rod
And I’m sure you get a lot of, feedback with your podcast as well. You know, you’re, you’re meeting a lot of interesting people and developing relationships, just like I do with this one. Yeah, it’s pretty cool.
01:35:36:11 – 01:35:57:22
Gideon
Yeah, 100%. I mean, that’s one of my favorite things about the podcast, right? Is I have a selfish reason. And the selfless reason, the selfless reason is I love sharing information and knowledge of the world. If I’m going to capture information and it’s free to give out, I might as well give it out. But then also meeting great people like you, like a lot of my closest friends now are people that I’ve met from having on my podcast, and I’ve been on their podcast, so it’s a great opportunity.
01:35:57:22 – 01:36:15:00
Rod
Sure. Yeah. Same here. Before we started recording, we chatted about some topics we could get into besides building teams, which we started on. Which which was very interesting. You know, the tech background for teams is extraordinary. And but you also mentioned aligning incentives. Can you elaborate on that?
01:36:15:02 – 01:36:36:15
Gideon
Yeah. So there’s an expression that you should be cautious of advice that you receive from somebody who doesn’t have skin in the game. And so with that in mind, one of the best ways to create those asymmetric returns, like we talked about, is to bring somebody on your team who has a strong track record, because ultimately, what you want to do is you want to find someone who’s done the thing that you’re trying to do.
01:36:36:20 – 01:36:55:22
Gideon
You want to align incentives, and then you want to bring them on your team so that you can deliver the same value that they’ve done previously. And so I like employing what I called the mentor feedback loop or the mentor flywheel, which is effectively step number one is you conduct active listening with a mentor that you want to build relationships with.
01:36:55:24 – 01:37:02:03
Gideon
So you don’t want to ask them if you can pick their brain. Nobody worth having their brain picked once it’s.
01:37:02:04 – 01:37:04:00
Rod
Heard that so many, so many times you can’t even.
01:37:04:00 – 01:37:18:17
Gideon
Tell. It drives me nuts. The other thing that’s come and that drives me nuts is at the end of a conversation, when someone says, how can I add value to you? You never want to say that to a mentor, because of course, there are a million ways that you can add value to them, but you don’t want them to have to put on their HR hat.
01:37:18:18 – 01:37:35:21
Gideon
Now you’ve given them a job to do. Now they have to learn about you and see where you fit into what what they’re trying to do. So step number one is you conduct active listening. So you say things like, what are your goals? What are your biggest challenges, what are you working towards. And so my partners and I, we applied that with other experts in the space.
01:37:35:23 – 01:37:57:00
Gideon
And we effectively said, you know, what are you trying to do? What are you going for? What are your challenges? And conducting active listening to deeply understand them and their pain points. And then through us understanding ourselves went out and delivered value without them even asking. So a lot of a lot of our mentors that were interested in scaling their portfolios, what they were looking for was deal flow.
01:37:57:00 – 01:38:05:19
Gideon
So our my partners and I said, okay, cool. So we went out and we looked for deals and we brought them to the mentors. And then step number two of deliver that.
01:38:05:19 – 01:38:08:13
Rod
How you got in those five other hotels.
01:38:08:15 – 01:38:36:11
Gideon
Yeah. Yeah. Exactly. So build their relationships with mentors and then ended up deploying capital into those properties. So step number one is conduct active listening. Step number two. Step number two is deliver value without them even asking. And then step number three is to get feedback on that value. And then you just continue the loop. So for perfect example what we do with our first acquisition is we brought the deal to a bunch of a bunch of people, one of them who ended up being our partner, his name is Neil Shaw.
01:38:36:17 – 01:38:44:22
Gideon
He has 25 years of experience, doubled the value of all 13 properties he’s had within just a couple of years. Insane track record in the space.
01:38:44:24 – 01:38:45:05
Rod
Hotel.
01:38:45:06 – 01:39:01:29
Gideon
Boutique hotels. Gotcha. Or both. Flagged and boutique hotel. So he has a wide range portfolio. So basically we’d bring deals to him and he would say, oh, I don’t like that deal because it has a restaurant. We’d say, cool, so we’d add no restaurant to our criteria. We’d go out, hunt more deals, we’d bring them back, and he’d say, what do you think about this one?
01:39:01:29 – 01:39:21:06
Gideon
He’d say, oh, I don’t like that one, because I’m looking for a minimum of a 20% internal rate of return. We’d say, okay. So through this process, we were doing multiple things. Number one, we’re building rapport with Neil. Number two, we were better understanding what we were looking for in the space and basically mind melding with him to undertake based on his what created his success.
01:39:21:14 – 01:39:35:06
Gideon
And through this process, over and over again, we eventually brought him a deal that fit all of his criteria. And we said, cool, you want to come in on it with us? And by that point we had built a relationship. He had seen our work ethic, he had seen how we approach things. And so he ended up coming in on the deal.
01:39:35:11 – 01:40:01:29
Gideon
And that makes everything easier, right? Makes raising capital easier. It makes lending easier. We had banks chasing us, begging us to give, to, to take their money. And this was, a year and a half ago when interest rates were much higher. We got incredible terms on everything. And so basically, like the general approach is if you cast a big enough vision and you bring the right mentors on, on the right, right rockstars on, it makes everything easier.
01:40:01:29 – 01:40:25:13
Rod
Yeah. No question. Yeah. I, you know, I’ve got a coaching mentorship program called My Warriors and they own, we count our counties, I think 265,000 units now under my tutelage. And that’s just multifamily doesn’t even count that we have hotels, boutique hotels as well. Nice. Yeah. Got one in Punta Cana that I know of off the top of my head, but, self-storage, thousands, thousands of units, senior housing.
01:40:25:13 – 01:40:47:15
Rod
So, which I’m getting into in a big way. Student housing, mobile home parks, you name it. All asset classes. And the same dynamic applies, you know, because they’re experts in the group now. And so, so that it’s kind of building on itself. You know, I’ve got dozens of sponsors in the group now that that the newbies can go to do a bring a deal and do do this mentor loop you’re describing.
01:40:47:18 – 01:41:00:08
Rod
So I love that I’m going to I’m going to share that, if you don’t mind, I’ll share that with my warriors, because I think it’s a great strategy for them to connect with successful warriors in the group and do it the right way. Yeah, rather than doing the way you described, you know, how can I add value to you?
01:41:00:08 – 01:41:02:03
Rod
Yeah, well, make me work, right?
01:41:02:05 – 01:41:02:25
Gideon
Yes, exactly.
01:41:02:25 – 01:41:13:18
Rod
So no, I love it. I absolutely love it. So I want to circle back to the tech. Okay. You said that you implemented tech in that in a four plex. What the hell can you what tech can you do in a fourplex to help me out here?
01:41:13:18 – 01:41:38:08
Gideon
Yeah. So surprisingly or not surprisingly, the short term rental space is a lot more advanced technologically than the hotel space. Okay, so now a lot of the tech that was in short term rentals are being applied to, hotels, door locks. Yeah. Which is interesting. So basically what we set up is we leveraged a tool called Gusti, which is basically like the central hub that everything integrates into.
01:41:38:10 – 01:41:41:05
Rod
This is this is off the shelf software for this SDR space.
01:41:41:05 – 01:41:54:01
Gideon
Correct? Okay. Yeah. And that tool specifically makes sense for hotels for reasons we could talk about for a while. But for the short term rental specifically, since you asked, we’ve automated everything and we’re applying those automations to our hotel currently. So, so.
01:41:54:04 – 01:41:59:04
Rod
So just to be clear, I was assuming long term rental on the fourplex. This is a short term rental for.
01:41:59:08 – 01:41:59:29
Gideon
This is a short term.
01:42:00:02 – 01:42:00:23
Rod
Gotcha okay.
01:42:00:29 – 01:42:18:07
Gideon
And yeah. So that’s that’s actually what caused me to make that leap was okay. We turned we basically operated the fourplex like a small boutique hotel. And I mean, it was such a no brainer. And I like the fast pace of things because it was more like tech. And so, okay, from there, I said we should just blow this thing up and scale as big as possible.
01:42:18:07 – 01:42:20:04
Gideon
So that’s why we ended up scaling up.
01:42:20:04 – 01:42:20:18
Rod
Gotcha.
01:42:20:18 – 01:42:21:07
Gideon
Tech hotels.
01:42:21:07 – 01:42:41:08
Rod
So, so just just so that people understand what we’re talking about here. You I know you can, you can use tech for the door lock, entry system, exit system, camera system, I’m guessing Hvac. What else? Is there anything else to use it? Well, yeah. So the ordering, reservation piece.
01:42:41:08 – 01:43:07:08
Gideon
Yeah. So the the biggest thing in terms of hospitality is automating everything from the guest booking, right, to the guest checking out and leaving. So there are a lot of guests that we literally do zero work on. Wow. That they make the booking it automatically. We automatically send them the checking information. We automatically program the locks so that when they arrive they can get in.
01:43:07:08 – 01:43:07:12
Gideon
They have.
01:43:07:12 – 01:43:07:21
Rod
Their own.
01:43:07:21 – 01:43:28:04
Gideon
Special code to automatically schedule the cleaners so that they get their notifications. Wow. The cleaners code automatically works when the guest checks out and turns off when the guest checks back in. Wow. And so basically we have this full cycle. The only time we engage with our guests is if, you know they can’t find something or they have a one off or okay, okay.
01:43:28:04 – 01:43:31:03
Rod
Very cool. And you’re doing the same thing with the boutique hotel.
01:43:31:03 – 01:43:47:09
Gideon
We are. Yeah, we’re doing the same thing with a boutique hotel. The boutique hotel with, our approach for this specific asset is a little bit different because it’s, it’s more high touch. So it is an upscale hotel. So we do have somebody at the front desk to make sure that people are there because we want that human touch for that property specifically.
01:43:47:11 – 01:43:59:14
Gideon
But we do leverage what’s called a staff light model, which is effectively we operate the hotel with less staff than a traditional hotel, which is another great area of value add which we could dive into also.
01:43:59:16 – 01:44:01:27
Rod
Shrink because it improves the bottom line.
01:44:01:27 – 01:44:02:16
Gideon
Totally.
01:44:02:16 – 01:44:27:13
Rod
So you know that when you when you when you didn’t pick up a hotel, introduced tech and and minimize the employee base, I mean, hello. It’s a no brainer, by the way. Just literally just started article today in one of the one of the one of the news channels that I don’t like. I won’t go there, but, talking about how a lot of hotels don’t know how they’re going to do business in California because of the $30 minimum wage that I think is about to pass.
01:44:27:13 – 01:44:28:10
Rod
Are you familiar with that?
01:44:28:15 – 01:44:36:15
Gideon
I am, yeah, yeah. And so like, we’re we’re seeing a lot of the older school operators get impacted by that. Of course everybody’s.
01:44:36:15 – 01:44:43:22
Rod
Impacted. It ties into what you’re just talking about though. What what a great segue to to incorporate what you’re doing.
01:44:43:25 – 01:45:04:07
Gideon
Yeah, yeah. And there are multiple opportunities like that. So I’ll just, I can list off a couple quick ones. Okay. So one of the biggest differentiators that I like pointing out between short term rentals and hotels is that in commercial real estate, as you know, assets are based on the value that they generate, right. So you can add tremendous value without swinging a single hammer.
01:45:04:13 – 01:45:34:15
Gideon
Perfect example is when we acquired the property, half of the units did not have hot water. And so of the guests that didn’t have hot water, about half of them requested refunds. So our property was losing about $46,000 a year. We spent $300 on a plumber to go swap out a single valve. We got all the hot water running again, and because our property, it runs off of a 7.5% cap rate, cap rates are higher in hospitality.
01:45:34:15 – 01:45:46:16
Gideon
They’re multifamily. We added over $600,000 in value to that property, literally by paying somebody 300 bucks to swap out the valve. Yeah. So there’s opportunities like that. There’s opportunities of.
01:45:46:18 – 01:45:56:04
Rod
Well, that’s that’s kind of an unusual one. I mean, I think they’re probably, you know, to talk about something that might be more common. Okay. So give an example if you’ve got one.
01:45:56:04 – 01:46:14:20
Gideon
Yeah I do. So another one is dynamic pricing. So hotels the prices fluctuate between busy season, slow season weekends weekdays. Gotcha. Our hotel was run off of static pricing, so it was run by a 90 year old lady who was ready to retire. And she ran it the way you would imagine a nine year old lady would.
01:46:14:26 – 01:46:32:06
Gideon
It had static pricing. The units were not online at all. So it’s just direct bookings through Google. And so we probably added about a quarter million dollars in value just from hiring somebody at 20 bucks an hour to put everything online into, to integrate our dynamic pricing.
01:46:32:06 – 01:46:57:25
Rod
So yeah, so dynamic pricing guys means the pricing adjusts based on, based on, the, you know, what’s happening in that marketplace. Yeah, based on occupancy, all sorts of things. And in fact, I’m pretty sure California is suing dynamic pricing in the multifamily space because. Yeah, because people get together on the pricing and, and, yeah, there’s some lawsuits in California right now for dynamic pricing for rentals.
01:46:57:27 – 01:47:13:28
Rod
But, okay, that that’s a great example again, because any improvements, the bottom line is an exponential improvement in the value, you know, and the higher the cap rate, the more that, that, that, value increases. Yeah. In fact, in the senior housing space that I’m getting into are like, it’s ten and a half cap. Yeah.
01:47:14:02 – 01:47:16:26
Rod
So what’s next? You’re going to find some more boutique hotels.
01:47:16:29 – 01:47:36:11
Gideon
Yeah. Next is so I’m beginning to dump out content as much as I can. That’s why podcasts, social media, as much as I can and really just get the story out there and pour as much value into people as possible. Like, nothing that I talk about is like, there’s no secret sauce in any of it, right?
01:47:36:11 – 01:47:57:13
Gideon
Like, you can find it on YouTube and, and books and everything else. What I’m trying to do is synthesize the best strategies that I have found for someone who’s trying to jump into the space and jump start as quickly as possible. Without, you know, like, I didn’t have a lot of capital getting into the space. We just poured all of our capital into the four plex.
01:47:57:16 – 01:48:14:12
Gideon
So I had about $20,000 that I put down on earnest money. And then my partners put down, for earnest money as well. And then when we closed the hotel, we distributed about just under a quarter million dollars in acquisition fees to all of us. And I ended up putting that money into the hotel for for that one.
01:48:14:14 – 01:48:15:15
Rod
That was your skin in the game?
01:48:15:15 – 01:48:37:05
Gideon
Yeah, that was my skin in the game. So basically, like leveraging things like that where I dm a lot of people who ask me questions and it’s typically they can’t find deals or they can’t find capital. And both of those are very solvable problems, leveraging what you talk a lot about, which is like the mindset like ask yourself, how do I solve this problem rather than like, I can’t solve this problem or why can’t.
01:48:37:05 – 01:48:54:23
Rod
Howard is is the exactly that’s the exact you start the sentence. Yeah. Love it, love it. Well, I really appreciate you coming on the show, brother. You and your lovely bride. And, guys, check out his podcast, The Hunt for incredible. I love that title, by the way. Yeah, I think, and, Yeah. So I really appreciate you coming down.
01:48:54:24 – 01:49:09:13
Rod
I’m looking forward to, actually being a guest on your show. Yeah. Of course. All right, well, thank you. So, guys, if you want to reach out to Gideon, his Instagram is Gideon Spencer. Underscore, and, so make sure you check that out as well. Thanks for being on the show, brother.
01:49:09:13 – 01:49:09:28
Gideon
Thanks, man.
01:49:09:29 – 01:49:11:29
Rod
Thank you for listening to the lifetime catch.
