Renting 1 Airbnb For $1500/ Night | Your Biggest Deal ep. 5

Bailey Kramer: 0:00

Yeah, I'm like I'm fully like Airbnb is I'm fully invested in the idea of short term rentals, I think that they are the best. Best, I guess the best way to maximize a single family investment.

Joseph Williams: 0:15

Welcome to your biggest deal podcast, with Joseph Williams, connecting you with top real estate professionals and entrepreneurs from around the country about the deals, strategies and motivation that made them successful and will help you reach the next level. This is your biggest deal with Joseph Williams. So let's welcome Bailey Kramer to the your biggest deal show. It's great having you today. And thank you for taking some time out of your schedule. To spread some knowledge on to our listeners. Let's kick it off with kind about who you are, where you're located, what you got going on, and then I'll lead us into to our stories.

Bailey Kramer: 1:00

Yeah, absolutely. Joseph, thanks again for having me on. Super excited to be here. So quick background about me. I'm 21 years old, and I go to school down in Florida, at University of Central Florida. I grew up in Milwaukee, Wisconsin, and now I'm doing my investing just out of Wisconsin in Illinois, right on the border. I've done fixing flips, short term rentals, long term rentals. We're working on a few wholesales right now, we have a exciting biggest deal to talk about. That's kind of the quick background on me, I got into real estate, reading Rich Dad Poor Dad just a year and a half ago. And nothing's overnight, it took about a year and two months from the day I read that book to close my first deal. But it's been a super fun journey. And I'm, I'm super excited to jump in.

Joseph Williams: 1:48

Yeah, for sure. Well, it sounds like even though it took some time you've, you've started early, which is good. One of the main things people say, you know, when they're in their 40s or 30s, and they've been investing for five years, they go, damn, I wish I would have started earlier, right. And you've done that, you know, hit the ground at 21. And kind of, you're going in a lot of different directions. Learn probably learning a ton. You know, I'm sure you learned a ton on your first fix and flip. But that kind of leads into wholesaling and how to generate, you know, motivated seller leads, things like that. And then you can pick and choose which wholesale deals you want to keep as a fix and flip or what you want to wholesale. And I think that's great. That's a perfect way to enter. And that's kind of what I'm doing right now. Or, you know, I'll flip some stuff here and wholesale stuff there. And I've got, I want to keep that as a rental over there. And I think all those different aspects can kind of, you know, make you a successful real estate investor for sure. So, so a couple of things your go to school with Florida, right? You're investing in Illinois, close to Wisconsin from Wisconsin. First off, when you're investing, do you have a partner in that area? Or family? Or how are you managing all that?

Bailey Kramer: 3:05

Yes, I do have a partner. That's been the probably that's the the biggest piece to it all. I met the partner, we actually funny enough, we met through a Facebook group. But then we ended up both joining the same mastermind, we got talking. And we just realized we had different skill sets. He's a little bit older than I am. But he's been in the business for a little bit longer. And he had like peak COVID, I guess. And he's like, Dude, I can't find any deals. And I don't really have time to find any deals, I have a family the whole thing. So I said, I have time my hands, I'm in college, let me see. Let's put our heads together, see what we can do. So we first got involved with each other through lead generation and trying to, you know, work at that front. And then after, you know, we just got to know each other more and more. We started let's do deals together. And then it kind of transitioned from there.

Joseph Williams: 3:58

Yeah, so you're more of lead generation, maybe some marketing this and that. And he's, I get the sense. He's more boots on the ground local, can make things happen and deal with contractors daily management of a project. Right, something along those lines. Yeah, I mean, that's pretty much it. Yeah. And that's, you know, you kind of realized that early on, I didn't, you know, don't to partner with people that are outside of your skill set, right. The partner with people that were the same as me, because we got along now hang out all the time, right. And then I was like, Well, yeah, maybe we shouldn't be doing the same exact thing. You know, we need someone to do this. And neither of us want to do this. To find someone that does something else. For sure. That's great. Um, so you're investing there. Do you plan on moving back to that area where you're investing after college? Are you planning on staying in Florida like everybody else?

Bailey Kramer: 4:50

That's a great question and something that I have about nine months to figure it out. The more that I you know, getting deeper and deeper For in real estate and buying more property, I realized that I could really do this from anywhere. It's just about systems and processes. So again, I have no idea what I'm going to be doing after college as far as location goes, but but I know I know for a fact that I can do it anywhere. With systems and processes.

Joseph Williams: 5:21

Yeah, you're gonna move from Central Florida to Fort Lauderdale and party hazard. You're gonna just fine. But what Well, that's great. Yeah. I mean, I've got rentals. I live in Richmond, Virginia, and I have rentals and Minneapolis, Minnesota, because I want to, like travel through there. And I'm still deciding they cashflow Well, they've appreciated like crazy. And I'm like, do I sell these and try to attend 31? Back to Virginia, just so they're closer to daddy? Or are they just let them let them go up there? You know where they are. It's just like, you have different you know, trials and tribulations where you're at in the country, I find like up there I have to deal with all that snow and ice and things like that. Florida, you know, whatever, you got termites of foundation or hurricanes. So you know, in everywhere is different. So it is what it is, you know, you'll you'll figure it out. So what are you going to college for?

Bailey Kramer: 6:17

So when I first decided, when I first got into college, I was like, alright, business, I want to be an entrepreneur. I don't know what I want to do. All I know is that I want to start my own company. I want to be the boss control my time, all that good stuff. So I just picked some random business major kind of hopped around a little bit. Finally, I was I was an accounting major. And then I realized when after I read Rich Dad, Poor Dad, I started looking into the majors a little bit more realized that there was a real estate program. So that's why I'm currently in now. But I gotta say, I'm not a I would say I'm a full time investor, like 99% of my time goes towards investing. And 1% of the time goes to actual schoolwork. So I don't do much of the education in school. I'd more do it outside of school. Real Estate. That's a long winded answer for real estate's my major.

Joseph Williams: 7:06

Okay, nice. Yeah, I'll learn by doing as well. And, yeah, yeah, I just got a generic business degree generic MBA. And, and then I found a passion in real estate. It sounds like you've done that early on, and you're kind of diving in, you made some, you know, quick coin, and you're like, Oh, this is fun. So that's cool. That's cool. Yeah, I'm sure it'll pay off. For sure. Either way. So obviously, this podcast is called your biggest deal. So it sounds like you've done a lot of stuff out there. Why don't you take us down the road of what you consider your biggest deal? And we can kind of deep dive into that. And let us lead that into some more conversation around?

Bailey Kramer: 7:43

Yeah, absolutely. So my biggest deal, I call it or we as investors call it, the johnsburg estate. So it is a property right on the chain of lakes is Northern Illinois, super popular vacation spot for people in Chicago. And it's, we call the estate because it's pretty big. It's on to two and a half acres, eight, eight or nine bedrooms. Right on the waterfront has its own dock huge outdoor space. We're actually having sidenote we're having a wedding or two there next year. But it gets it gets sleep 2020 plus people. There was a lot that went into the deal. I know we're going to talk about it. But that's kind of the Quick, quick glimpse of the property. Yeah, so

Joseph Williams: 8:24

is it on; So the chain of lakes for people that don't know is in Northern Illinois, doesn't wrap into Wisconsin?

Bailey Kramer: 8:33

Yeah, so the chain of lakes, it's a it's called the chain because there's 15 lakes that are intertwined together. So you kind of have, you know, you're in one lake, and you want to go to the next one, there's just a little bridge you go under. So super cool. And it goes right up to the border of Wisconsin, but it doesn't actually go into Wisconsin, but attached to the chain. So it's almost like a long, oval shaped. South North and South runs a river called the Fox River. And I don't know how far that goes. But we've been down. It's a decent way. It goes down pretty south and it goes up pretty north. So it's just a cool body of water that feeds into each other from different places. And then the chain is kind of like the main hub where people like to go on and on.

Joseph Williams: 9:16

Yeah. And it's in between Chicago and Milwaukee and all rial, exactly. So those are probably the two biggest Metro. So yeah, I mean, you said you've already kind of figured dabbling into turning your estate into a wedding venue or an event venue. But the main thing is you're doing a short term rental weather Correct?

Bailey Kramer: 9:36

Exactly, exactly. Yeah. Short term rentals are the main thing. But once once you have it posted, people are like, wait, you have a great outdoor space. I live in the area. I want to you know, I want to have an outdoor wedding. There's nowhere on the chain that you could do it on. So like Yeah, he got so tell

Joseph Williams: 9:51

us a little bit about maybe your mindset First off, like what you were looking for, right? Because that's like, Oh, I'm looking for a rental property or You know, this and that. So what you were looking for and then where you found it and how you bought it and how you find it. Yeah.

Bailey Kramer: 10:07

Yeah, absolutely. So the the deal finding, so what we do is we do all off market lead generation. We basically pull this on Prop stream. We do high equity, low equity, free and clear. I'm probably missing a few

Joseph Williams: 10:24

vacant properties vacant non owner occupied outstay examiners. Yeah,

Bailey Kramer: 10:28

exactly. Some of those some of those buzz words that they're very good, though, and they're very good. Oh, yeah. So we use them, we basically put them through a system of texting them on a platform called Launch Control, and then follow them up with a phone call. We just call them on the phone. So what we were looking for at the time was properties that were either hit the criteria, vacant, high equity, wherever, and most of our deals had been between, we did one for $60,000. We did one for $250,000. So that was kind of our range. Pretty low price. If you're in like New York, you're probably like, is this a shack now these are like three bedroom houses, it just get up here. So when you said you did a deal

Joseph Williams: 11:09

with them, like you got those in like wholesaled them or like you fix them flip those?

Bailey Kramer: 11:13

Yeah, those were the ones that we had as rentals, we felt those were just kind of the past properties we gotcha went through. So then this one came about because it was an expired listing, or it was either on either expired or on the market for a crazy amount of time, I can't remember which one. But the price range of this, the price of this one was$779,000. So a lot bigger than what we've done. Yeah. And at the time, I was I was pretty scared. Because you know, every the first property I was nervous about, then we got we got went a little bit bigger, you kind of get nervous, nervous, nervous, with anything, I'm sure the next property I do, that's a million dollars, I'll still be nervous about it. But now I'm looking at the ones that I've done in the past. And I'm like, those are now a walk in the park. So it's definitely a learning experience, and you get more comfortable by just doing it. But kind of the terms of the deal. We bought it for $779,000 using seller financing. So for the listeners who don't know what that means, instead of us going to the bank and saying, Hey, can we get a mortgage on this property? The seller since he owned it free and clear, did not have a mortgage on it. We basically said hey, do you want to become the bank and you create the mortgage essentially. And he was he was he's an entrepreneur, he totally understands what that means how it works. So he said, Yeah, no problem. So the terms we got were again, purchase price 779. We had a 12% downpayment, or 12. And a few percentage points, he just wanted $100,000 down in his pocket, gotcha. 3% interest rate and a 30 year amortization. So those are kind of the the terms of the deal. Yeah.

Joseph Williams: 12:54

And was it a five year term? Or? Yep, what's the term?

Bailey Kramer: 12:57

It is it is a five year term, which means in five years, we either have to pay him back or we have to pay him back for sure. And we can either do that by refinancing or selling or taking the revenue we're receiving now and paying him more if we really wanted to, but refinancing or selling will be our strategy.

Joseph Williams: 13:17

Yeah, for sure. Get him out of this put in put in a 30 year term and keep writing and if it's working, yeah. Right. So now did he respond to a text or an actual call? Just curious. He

Bailey Kramer: 13:28

was he was, uh, so we text everybody first. And if they respond on text, then we'll give him a call. Gotcha. Okay. He Yeah, he he responded on text.

Joseph Williams: 13:37

Yeah. Yeah. So I know prop stream, and we'll show you active on market last times out uncheck active Oh, Mark, if I'm doing certain things, but it'll say failed, right. You know, like, you can look, it was a failed, and it will tell you when it was lifted? And when did we took it off and all that. So Right. So found it, you know, through Prop stream link in the show notes for that as well. It's a common tool that a lot that we use, you get a ton of data from it every month, three, in theory, I mean, you're paying or whatever is$100 a month, but it's a lot of data. And almost, you know, if you're just starting out, that's going to be too much data for you. And sometimes I'm like, Okay, well, I gotta calm down with all this data. So that's awesome owner finance. You know, he's gonna carry it for you. That means there's no banks involved or so appraisals, there's no inspections. The benefits to him for anyone new listening is it's easy. There's no banks involved. It doesn't have to embrace you know, these guys probably said, Hey, we're gonna walk through it, we might get an inspection but we're gonna buy it as is close on it, we can close as soon as title comes back on it. So you know, whatever, seven to 1014 days, whatever if need be. But for him looking at a $600,000 mortgage, I got 100 grand, it's down to 3% interest like he's earning 20 grand a year, just in his pocket. So it's another 100 grand over the next five years and ultimately at the end of He's still gonna get the same thing he would want to Ford, which was the 700 Grand. So he's ended up going to make another$100,000 on the property, where it's your responsibility to figure it out. And another thing that you can tee up when you're talking to people with owner financing is at the end of the day, if Bailey here disappears, he forecloses on the property takes it back, and he has his house back, and he gets to keep their 100 grand. So you know, it's a very good deal for someone, their house is paid off, and they don't need a huge chunk of money all at once. It also saves them on the tax benefits of not having to get a tax bill for $750,000. If it wasn't their primary residence, and odds are if it's vacant, you know, and it's been sitting for a while they're living somewhere else that wasn't the primary residence. So I've actually bought two or three owner finance deals. One I found right on the MLS as well, where it was a poll guy was paid off the other houses and I just presented it to him. He said, okay, yeah, that's up. So it's a great job there, especially kind of being a newer in the game. So it's an estate on the water, where Airbnb being now we might be getting into weddings. Was there any renovation involved? Or was it kind of like turnkey walk in or what?

Bailey Kramer: 16:18

Now? So there, there were renovations involved. And that's one of the biggest things of seller financing is, or at least with this situation, and kind of others we've dealt with is these people owned, you know, a lot of times they're older, they have these properties. This one was vacant, other ones that we bought seller finance are vacant, and they might be vacant for a couple of years. They don't use it anymore. The conditions not great. And, you know, that's why I said that's why I sat on the market too long. It wasn't in great condition. And he wanted too much money. Yeah. So the condition of this one, we put in$80,000. In the rehab foods, furniture costs, which we went on, I guess, the frugal end of finding great deals on Facebook marketplace and, and stuff like that. But the rehab. So we had a brand new roof put on it, which was $30,000. Yeah, because it's a lot of square footage there. It's an estate. It's an estate, exactly. We had we repave the driveway, because the driveway was shot. And they actually had a tennis court on the driveway is a nice big driveway. But it wasn't really practical to have the tennis court because if someone were to play, they would just hit the houses no matter what happened. So we're like, let's just, we're going to repave it anyways, let's just striped up a basketball court. And now we we did that and it looks super cool. And the houses aren't gonna get hit. We redid all the bathrooms. We like I said, we furnish the place we added a pier. We did a lot of those little things. We painted the entire inside. Yeah. So there you go. 80 grand later.

Joseph Williams: 18:01

Yeah, I mean, with knockin 30 off the ad, you're left with 50 Have you got some big ticket items in there, peers aren't cheap driveways aren't cheap. I'm assuming it's a good sized driveway, the roof. I mean, if it's got eight bedrooms Or so you say I'm sure paint wasn't cheap. I mean, so I mean, 80 sounds like a lot, but it sounds like it actually went kind of far because I know, I've put ad and arranger almost before the Yes, like a couple of 1000 square feet. So it's, uh, yeah,

Bailey Kramer: 18:29

we definitely, we definitely spread the budget and a lot of it to was we had to put it a lot of sweat, sweat, sweat, sweat equity. So one of the bathrooms, me my partner, we did them ourselves, which is not always fun. But this was our first biggest deal. And we wanted to make sure that you know, we had investors on the deal as well, which we can talk about, but we wanted to ensure that we stick with it our budget, you know, everything went smoothly. So we wanted to, especially on the first one getting it going we wanted to make sure that everything was perfect, because we had a lot a lot lot at stake.

Joseph Williams: 19:07

Yeah, for sure. There's a lot of a lot of money and downpayment there right off the bat. And obviously you have a looming mortgage payment every month that needs to needs to be paid a lot at stake, but that is advice that I always give, especially when you're starting out is go get a paintbrush. I mean this one's a little big, right? It would take you forever, you know you gotta have your papers. But I mean like I had a triplex right on my first deal was my first house hack was a triplex my first flip I painted it that my first moved my triplex I moved into one unit painted it cleaned it up when the people moved upstairs I moved up there painted it, you know just gave it like a little bit of a facelift. But I mean, I guess you can not get dirty but some of the easy things like you know, bathrooms and things like that, like if you don't want to learn a plumber which is not the hardest thing in the world now with PACs and all that, but hire your plumber, but then you know, both bathrooms aren't that big lay your own LVP floors or you know paint the place, you know, get a vanity, set it in there, get a plumber diploma, if you don't want to put a P trap them, but a teaches you a lot about how much effort is in those certain things. And then if you're in a bind, and you are going over budget, like you can bite the bullet, and like you and your partner can go in and like make some things happen if you need to. And obviously, as you scale and you have more money in the bank account, and you don't feel like doing anymore, that's a decision you can make. But early on, like get your hands dirty, right? Just a little bit.

Bailey Kramer: 20:39

I mean, I'm very not handy, but just my partner is Oh, that's his expertise. He's the construction guy. So I've already learned so many little things that I don't even like doing them. But I'm just glad I know them. And also, I can spot them too now that when I'm going to look at properties, or even for pictures, like we did the installation on one of our houses, the properties, which if the first time I did it, inspector came and said, This looks like this is awful. You gotta redo it, which is fine, because he told me what to read. You know how to redo it. I wasted a day of my life. But now I know exactly what it should look like I did it properly. He came out the next day and said it was good to go. So definitely good learning experiences. And if you have the time on your hands, it's definitely a good way to go is just get your hands dirty.

Joseph Williams: 21:30

Yeah. And if you're planning on flipping, it helps you even talk intelligently to contractors, you know, what you want, what you need, things like that. Where and, and the more. You know, you sound like you know what you're talking about, the less they're going to try to take advantage of you. Right, so yeah, and if so, okay, so you got this house owner finance, we've rehabbed it. We're at over 180 grand in right now. So what's the plan? Take pictures and put it on Airbnb or what?

Bailey Kramer: 21:56

Yeah, so literally, we were like, Okay, we have so much to do on this rehab. There were so many little things here and there. We're like, are we gonna put on Airbnb, or VRBO. So we're like, let's just pick a date. That's, you know, far enough out where we know we can get it done. But also keep us accountable, because we're gonna get bookings pretty fast. So we're like, Alright, let's do July 1, because we want that Fourth of July weekend. Yeah, we don't remember the summer. Yeah, yeah. And I don't remember the exact date. We actually bought it and started renovating. I want to say may sometime in May. But we would just we did not have any time at all basically to do it. The I was there the morning that the guests were actually checking in to finish just little things. It was It was wild. Yeah. But yeah, the plan. The plan was alright, let's Airbnb this thing, short term rental. Let's, we know that the summer is gonna be the great season, winter is gonna be the decent season. Not very good. There are some attractions nearby. But we said alright, summer is going to be our time this is we're gonna make our money. We put it on Airbnb, we took literally pictures with our phone, because like I said, we're literally working at it until the day that they're coming. So we actually have and we haven't had any free days to actually get a photographer in yet, which has been great. So we finally have found a free day in the bookings. We said, Let's just block it off. Let's get a professional photographer in there and get pictures taken. So we definitely got this one up and running pretty quickly.

Joseph Williams: 23:24

So for the summer, what is your like, average nightly rate?

Bailey Kramer: 23:29

Yeah, so we charge our project. So we projected our rents or nightly rate to be 1000 bucks a night. And the reason the way we were able to come up with that, we looked at comps in the area. We also kind of thought logically, okay, we could fit 20 people here, we're providing this much value. Where else can you Where else could you get this in the area for at what price? So we said 1000 bucks is conservative, because we knew our neighbor had a lot smaller house, but they're renting for 1299 tonight. So we're like, let's just say 1000 bucks a night and see how the numbers look, because why not? So we did that. Numbers were looking good. And we rented the first. The first like two bookings we had we kept it on 1000 bucks. I'm really sorry, we kind of know we're underpricing ourselves. But we just want to get reviews and people in regards. Really? What do you think we can get it out. So we did 1399 We kept booking like crazy. We kept it at 1399 for now. And that's kind of been our price for the for the summer. For the winter months. We're gonna probably be at 699 799 tonight. And next summer with kind of what we've seen from this summer already. Feedback from guests. We're going to be raising our price to probably 1499 A night and just adding a ton of value to make it more than worth it because obviously it's a big chunk of change. But again, it could fit 20 people and

Joseph Williams: 24:55

it's like family reunions. Mainly things like yeah, like bachelor parties bachelor parties like just massive groups of people.

Bailey Kramer: 25:02

Those are actually our next few bookings. We have someone checking in today. They are doing a family reunion next next week we have people checking in. They're doing a big bachelor party. Exactly. Wow.

Joseph Williams: 25:12

Yeah. So that's awesome. Yeah. 1500 bucks a night, whatever us aren't at 1000. What's your to put in perspective? Right. So you got you're in a colder climate of the country. So it probably starts in like May June July, August and in September really see like five months in the shoulder months, they are May and September probably slowing down a little bit. Extreme July. August is really when you're rockin, but 1000 bucks a night on the low end. What's your mortgage payment a month to dude, man?

Bailey Kramer: 25:44

Yeah, so I just want to point out taxes real quick are 27 grand a year? So there's deep Illinois, it's not fun for taxes. Yeah, not fun at all. But our principal interest, taxes and insurance is right around six grand a month. Okay. So it's a little bit less, but we'll call it six grand. So when we were figuring our numbers, we said, okay, for June, July and August, because those are really like the best summer months, obviously, you get some May you get some September, yeah, a little bit of October, believe it or not, but really were like 1000 bucks a night for those three months of summer. That'll be let's just call it 90 grand, because we knew we're gonna have some before some after. So he said, if we can do 90 grand in the summer, cool. And if we can do if we can just break even in the summer, which is our mortgage payments, really 5500 bucks. So if you said alright, if we can do 5500 bucks for the nine other remaining months, we're going to bring in a total of about $130,000. For the year. Now with our new projections at 1399. Tonight, what we've been doing, we're going to bring, we're gonna bring in that same$130,000 Just in the summer. So the winter is really going to be our you know, kind of a test, we know that will at least break even in the winter, which is cool. We talked to some other owners in the area who said we crushed it in the winter. So our projections could be a lot better. Could be I don't see them being much worse, because we are super conservative on the front end. But we're gonna have to kind of see what the winter holds.

Joseph Williams: 27:17

So you owe him$66,000 A year roughly. And mortgage payments. Right? Yeah. 250 500 times 12. And you're saying that you think you're gonna make 130 Just in the summer next year?

Bailey Kramer: 27:29

Yeah. And to that payments with taxes and insurance. So that's it. Yeah.

Joseph Williams: 27:36

Then you have to do overhead repairs cleaning. Oh, actually air extras, Greg cutting the grass. Some stuff that's, you know, obviously not wrapped in there. Now what? sell a property like that, like it would scare scare the heck out of me, right? Like who's gonna rent this? So there's resources out there. I was actually always like trying to talk so literally, same exact deal. Chesapeake Bay, Virginia, old house, a $150,000 house, right. It was unique. It was Bayfront. Plus the guy there's a street in front of the house across the street here in the land there where you came in, out of Bay into like the inlet of the harbor or whatever you call it. He owned a lot across the street that had his private boat dock on it. So you come in park, your shed over there walk across the street hit a pier on the base side. And it was it had been inherited. I'm like, Look, I'll give you this for finance. I couldn't make it happen. Right. But I was trying to x is funny story. But that is almost same thing. I use some tools out there, Airbnb for one to like, look and see what other people in the area were how busy they seemed. And then a paid to get access to a DNA. Did you do any of that when you were kind of looking at this property?

Bailey Kramer: 28:49

Yeah. So I did do air DNA. And great, great software. It's only you know, you buy the subscription. It's 40 bucks a month. You only really need it for a month. If you

Joseph Williams: 29:00

really I just bought my zip code. Really? Yeah, I just I don't know if they still do that. But I paid like 25 bucks just for like, this is not it. And that was it.

Bailey Kramer: 29:07

Depending on the area, they have certain deals. But yeah, we threw the extra 2540 bucks, just to get a better idea. That definitely helped to just gain a little bit more confidence for sure. Yeah. And the other thing I didn't mention with the property is we have another revenue revenue stream I didn't even mention which is boat rentals, which is which is something that's gonna be implemented for next year, which is another revenue stream. But yeah, your question with the cost. So

Joseph Williams: 29:38

you looked at all that you What were you averaging your occupancy rates at like 10 days a month, and then what actually has been happening since like you got it up and running?

Bailey Kramer: 29:47

Got it? Yeah. So summer. We said, summer is going to be? We took we had we had a few vacancies in the summer months, but we knew we're going to be 80 plus percent. Then, in the summer, just you know, the days that we're gonna be empty, we're gonna be the days in between bookings. But after especially talking to different people, our next door neighbor actually does Airbnb with his property. We chatted with him. We also looked at reviews from past Airbnb ease for the past several months, it's okay, there's four views in October there. There's five, you know, there's three reviews in December. Clearly, they're getting bookings in the winter. And so we didn't I, I guess we didn't necessarily have a percentage, because it's so see, it's very seasonal. We just kind of said, okay, you know, can we bring in 30 grand per month in the summer? And can we do and, you know, how can we do? How can we break even in the winter? So we said, you know, 699, could we do 10 days? Can we do 30% occupancy in the winter? We said, Yeah, I mean, I'm not, I guess, depending on the property. I'm not too gung ho about occupancy percentage for this exact property. It was more of, you know, could we get someone in there for 10 days? Or even? Could we do a month a month rental for four grand for furniture like this? furnished? And also, there's two different units on the property? Could we rent this one for three grand and this one for two grand? Yeah, we think we can. So we knew that 4500 bucks was kind of just a safe number for us.

Joseph Williams: 31:28

I actually did that when I was moving, moving from Minnesota to Virginia. I was house hunting. And I was like, what, like, I don't want to move stuff twice. They'll just put it in a pod, had them store it. And then I found a vacation rental at the lake in the winter months. And like, rented a furnished house at the lake for four months spa house on it. And they wanted to back in May. It was like perfect timing. Working out. But yeah, I mean, you can get that and then you just get people that want to maybe go ice skating, I guess it freezes.

Bailey Kramer: 31:56

There's, there's actually there's there's a decent amount of things to do the ski hill 15 minutes away, people snowmobile, ice fish. And also people have family up there. So when family comes to visit, you know, it's sometimes a pain in the butt to have 15 people in in a smaller house, like you might as well just rent another another place nearby.

Joseph Williams: 32:19

So with all that said, it sounds like it's going great. Right? You're no longer scared. You're making your payments. You're paying down the equity on paying down the mortgage on the house building equity. What are your plans? Now? You mentioned a wedding? Like? Have you looked into like the legal logistics? Do you need to get a special use permit for Are you just gonna kind of wing a couple of them and see how it goes or what?

Bailey Kramer: 32:47

Yeah, so with the weddings, though, I mean, those, that's just something kind of fun we're doing for one or two of them. It's not like our thing that we're actually going after, the thing that that we're really looking for revenue is Boat Rentals. And I kind of talked about that a second. With the weddings, we pretty much we talked to our neighbors, the neighbors are all cool with it. It's also a smaller daytime wedding. So it's not a it's not some big bang or that you're thinking of where crazy type wedding. It's just a small 50 person gathering with a nice tent outside. Yeah, I mean, it's where you get is not it's we didn't include wedding rentals in our underwriting. We don't not banking on that for anything. It was more just a, you know, let's just try it out. It's just you know, it's a small enough wedding. It's daytime wedding, too, which is actually a lot better than having a nighttime DJ going crazy and waking up the neighbors. So that's what we're doing for weddings. Again, it's not going to be our main focus, though.

Joseph Williams: 33:52

Yeah, yeah. I mean, you're one it's like money's coming in. Let's Yeah, that's correct. And while we can, right, right, so did you just do a block off? Yeah. Did you block off the days and Airbnb and kind of just rent, rent it out for them?

Bailey Kramer: 34:06

Yeah. So actually, what we did is kind of interesting. So we said to them, because we kind of both wanted to make sure we were protected. And this is not legal advice or anything like that, but we were trying to be strategical about it. So we said okay, we want half of the deposit half of the payment the total upfront. So we said, you know, to secure the date, put a deposit up front half. And then we said okay, book the other and then book the date on Airbnb, and we'll give you a special offer, quote, unquote, and we'll just basically cut the half and the price. The the amount that you didn't put on the deposit, you'll just put on Airbnb. That way. We're all protected. We think in the way that if they cancel, we still you know, we haven't we have a cancellation policy on Airbnb. If there's damage done, we're hoping I mean, we have our own insurance. I'll see on the property but at least we'll have a little bit extra hopefully back in with Airbnb it was more comfortable for them to have it booked through the platform so it's kind of a win win through there. Like I said, it's not gonna be our main focus but it's just something fun that we decided we don't want

Joseph Williams: 35:15

yeah for sure because they haven't got an insurance policy to that they give the host right Yeah, so you're up and running you're doing well you're increasing your your nightly rate which is great. Whenever you can increase your rental rate whatever you're doing how did that change your mindset? Or how did that change your life like are now are you looking to just do more Airbnb is because the cashflow so good or are you or what?

Bailey Kramer: 35:41

Yeah, I'm like I'm fully like Airbnb is I'm fully invested in the idea of short term rentals. I think that they are the best. Best, I guess the best way to maximize a single family investment. I bought I have a I have a single family. I have a couple single families that were renting long term it's just to me it's not worth cashflow well 123 100 bucks a month you know something breaks there goes your cash flow this is a business and with a lot of income potential. And now my mind says like I Airbnb is what I got to do if I'm going to be acquired property, I might as well maximize the use of them. So that's what we're doing more of we have one we're setting up right now in a town called Lake Geneva in southern Wisconsin, another popular vacation spot and yeah, that's kind of the focus now is setting up more of these Airbnb S

Joseph Williams: 36:37

Yeah, yeah, no, I hear you Yeah, I've it's I've got a handful of flips going on right now and looking at the numbers as I'm going to beach house and renovating that I'm going to I'm going to Airbnb it and and use it for my beach house, but been looking all up and down in the mountains of Virginia and I want to take some of the profits from these flips. I can go on right now and roll it into some farm but like, like you said, they're they're not cheap because I want like 50 to 100 acres. I want a household. I want a barn. Yeah, give me a lot of options. And like so I'm looking, they're popping up. It's like low in 700. High end. I mean, there's some hidden money up in like the Charlottesville Albemarle County area, you got to put a filter on the high end because like $12 million estates popping up, you know, I'm like, Yeah, that's a little odd. They run a mill, maybe max. Yeah. But I thought about kind of creating like a tiny house village slash running the main house and like doing different experiences out there. Yeah.

Bailey Kramer: 37:39

Do you follow Rob built?

Joseph Williams: 37:41

Yeah, that's exactly what you're doing. But just a range, because the Smoky Mountains is the number one visited park and national park in the country. You basically have three towns that serve that between Gatlinburg, Seville Ville, and the other one is, I can't remember. But if you know, Smoky Mountains, you'll know. But just keep coming up the mountains, you know, into Virginia and Shenandoah National Parks up here, the Appalachian Trail. There's tons of Skyline drives all this and he actually talks about that area. thing is we're talking about that money, right, like in Albemarle County, which is beautiful around Charlottesville, Virginia. Well, you're not Airbnb in too much there because like and they've already passed bylaws that if you're going to Airbnb, you have to live you have to be on the property if you're renting, and it has to be on your primary residence. Same piece of property. So if you have a cabin on your there, you have to get the house there has to be your primary residence, and you have to be sleeping there while you're so it's county by county. So there's a lot of stuff you have to look at zoning and planning and kind of gets deeper in than just getting a house and everybody renting it when you're talking about building like multiple different rental units. Yeah, so I'm trying to try to figure all that out and come up with some cash to do so. Right? So you kind of dove in with your partner, you're 21 living in Florida. What tips would you give to someone that is thinking about doing this? Or you know, kind of looking to model not necessarily a state but kind of kick off their first Airbnb?

Bailey Kramer: 39:19

Yeah, so for Airbnb ease, and I say, you know, there's a lot of different ways you can go with it. I mean, for someone just getting started in real estate, I would say the two biggest pieces you need to focus on or the number one piece is your network. And then second piece, I like to always say, just have a baseline education. So real quick for the baseline education. That's really just listening to podcasts like this. Getting the understanding of okay you purchase a property for this much money, you rent it out how does understand that you don't need to be an expert, because the biggest piece is the networking side. You need to surround yourself with people who are farther ahead than you, whether it's another property out of you or You know, maybe older than you, whatever the case may be just ahead, they have something that you don't have, and seek them out whether it's social media, and see how you can add value. I mean, if anyone, if someone brought you about, excuse me, you have property that you're interested in buying a great deal, or someone like me, really anybody, that'd be that'd be one example of a great value and some something that would open the doors. Other things too, is a lot of people are tight on time and cash, finding properties. Adding value is the best way to network and get access to these eight players, as I call them. So I guess that's the first step. And just two quick tips on how to actually find these people. Number one, bigger pockets, there's, you know, just look up your your area on bigger pockets, tons of people will pop up, start hitting the phones, start messaging them, setting up calls, setting up, you know, networking sessions. The other way I like to do it, I did this heavy in the past was, you know, everyone who's listening right now they're listening to a podcast, okay, so they're gonna listen to the podcast, they gain some insight, maybe some entertainment, but then they either go on to the next podcast, or they just go and do something else. Take one minute, after every single podcast, you listen to reach out to the guest that was on the podcast, whether it's me or somebody else, because at the end of most podcasts, the you know, are in the shownotes, there's some information on how to contact that guest. That's like an open invitation to say, Hey, this is how I want to be contacted. Contact me. So do that you do that enough times, you're gonna find people, you'll get conversations rolling, by just having those conversations to that'll help with your with your education. And then you'll find opportunities. When I was first doing the podcast outreach, I met some people, I started writing blog articles for them. I started researching areas for them, underwriting deals for them. I was just learning I was networking, you do it enough time you'll get somewhere.

Joseph Williams: 42:01

Yeah, it's a, you know, it's like, every time I asked that question, or some time during the podcast, it comes up networking, whether it's with other investors, with financing partners, with, you know, deal or sources of deals, you know, like banks and attorneys, it you know, but it just comes up networking in general, not, you know, working within your own bubble within your own vacuum, and getting out and speaking to people. Because in all reality, that abundance mindset of there's enough for everybody out there, because it really is, you know, to a degree, I mean, right now, we're probably the most competitive market when it comes to not only on the retail market, but investing as well, with the access to information or that's occurred over the last, you know, whatever, 20 years, and in the access to, you know, information around real estate investing, the podcasts and YouTube and all these different sources. And it's allowed a lot of people you know, even younger than you jump in, with both feet by networking, even if they don't have the cash. I want to go deep, but like you said, you have investors on this deal, you know, I mean, we can say, you know, how'd you come up with the 100 Grand, you know, it nine times out of 10 It's OPM other people's money, right? Yeah, exactly. And there's, there's people that have money just sitting on the sidelines, that first of all, they think it's cool, I'm an investor in Airbnb, plus, they're getting some money off the top versus just leaving in a checking account, getting point hundreds of percentage on you know, what's in their, their savings account. And nowadays, you know, no one's making money, just having money sitting in the bank inflation is higher than, you know, what you're earning on that money sitting there. So getting that money out in the market out into the market and, you know, making it make a little bit of interest for you is key. And when you network, you're gonna find these people you're gonna find a realtors and financing partners and partners in your business. You know, we're, like you said at the very beginning, you know, they're better at other things you aren't so, you know, it's just it's so key to the whole the whole thing is just getting out and shaking hands and meeting people. So that's great advice, you know, right off the bat what uh, you know, what, books or podcasts or other influencers do you follow that? When you you're kind of new, right? You've done deals, but like when I started out, I would literally when I was painting that triplex I talk of I would just put on YouTube or and was listen, literally while I'm like painting, like just learning just and you get to hear the same things over and over. Right? But then also there's like this nugget that you haven't heard. Yeah, right. Right. So like, what do you listen to now and kind of what you know, did you find out Are you and start now?

Bailey Kramer: 45:01

Yeah, so number one resource. I have it right in my hand here. Rich Dad, Poor Dad. That's just you know, first and foremost, if you haven't read it, read it. First. It's it's, it's a great book. I'm sure a lot of people have heard of it. I've least heard of being mentioned. If you haven't read it, read it. The best resource that I like to recommend for all new investors is bigger pockets. Now, I haven't been on bigger pockets in a while. Because I've, I think a lot of people outgrow it, once they get a couple of deals, in my opinion is still valuable for a lot of things. I still listen to their podcast sometimes. But just starting out, this is the best place to be. So it's a website and going to biggerpockets.com. They have forums, they have a podcast, which is awesome. They have blog articles, they have calculators, any resource you need to start bigger pockets, I highly recommend. And then what I kind of did is I consumed all the BiggerPockets information. They all their guests talk about a wide variety of things. It is single family focused a little bit, but you'll learn about flipping, you'll learn about multifamily everything. What I did after that was I said okay, at the time, I said multifamily is what I'm most interested in now. I heard you guys in the podcast. So this is it. So then I said Okay, what's next? Then I looked up multifamily podcast. I was listening to the Jake and Gino is the rod cleaves the Michael Blanc. So I would say for when you're first starting out, if you don't know what you're if you don't know what you're doing and what you want to do start broad with BiggerPockets. Then when you want to circle, you know, get zoom in a little bit more. Do that. And there's tons of great podcasts in different niches. Mine's kind of broad as well. I've heard the podcast is kind of broad, like bigger pockets, because I think they're, I think there's geared a little bit more. I know that they've been crushing it for many years. Let's just say that. And then some other people I follow on social media, Ryan Penedo he's probably the number one guy that I'm following right now. As far as real estate and entrepreneurship goes one guy that I followed heavy in the beginning with Grant Cardone. But what I want to say and warn everybody not and this isn't just specifically Grant Cardone, there's something called gurus out there. And these are not the people that you want to be following, even if they have deals. It's like Grant Cardone, for example, because this is this something that I had a huge lesson from and it I spent like six months because I fell into this trap. So this will save you time. Grant Cardone preaches. Go big, go big 10x Buy a 30 unit or don't buy anything you buy 30 units or more. Don't buy anything at all you need big. First of all, his first property was one unit, it was it was a single family, so whatever. But what I want to say is don't just follow and fall into the guru trap. It's super easy to look back and say, Oh, I probably should have seen that. But when you're in it, and they are talking about how easy it is to buy something, there's no easy there's there's no strategy that's easy. None of that stuff there's no get rich quick, the fastest money you'll get is from wholesaling. But even that's going to take if you're just starting out at least a month or two, in my opinion. So long winded answer just be careful with the gurus. I Brian Penedo is one that's not a guru that I follow heavily gives a lot of good information. Who are the other ones? There's a lot of Michael elefante is a great one for Airbnbs. There's different people you'll find in different niches. I'd say the people that show more about them, like their personality in their family. I like them a little bit more because they're a lot more open than the people who are just like, I just woke up my pillow stuff with a million bucks like

Joseph Williams: 48:47

Dolla dolla bill. Yeah, exactly. Yeah, no, they uh, yeah, it's funny you said that because on the last podcast, literally said the same exact thing you know, when you start now don't get trapped in this guru funnel. Sales Funnel. Because guru they are they are very good marketers. That's what they're that's what they're doing right and they're selling something like at once again, like Grant Cardone he'll pop up because he's a great marketer. But if you follow his day to day stuff, he's not providing much value on his Instagram, right? There's like zero information about how to actively take action, like you provided more value today or b&b than he will provide, you know, he talks very big macro picture. I own a billion dollars with a real and this and that. Where is Ryan Penita people don't those podcasts, Henry Washington, they have courses that you can go by Ryan Payne has a whole education side of it. But on social media that's not first and foremost that he's just going to push down your throat and they try to provide they try to provide some value. And then if you go research them more and find their website you're going to find of course you can buy Hear this. And then of course, and that's your opinion, but we talked about in the last episode, don't go day one dropped $5,000 on a guru, like put into legwork. You know, if you need, like prop stream, YouTube University, if you need like some software, some data, you gotta pull here, the tripod, some motivated sellers. As you scale, if you want to pay for a mentor or a mastermind, where you can be around like minded people that are at a higher level than you to learn how they've systematized and grown their business, I think that's way more beneficial than trying to pay a guru early on, because a lot of those gurus $5,000, the entrance fee, and then it's like, oh, well, if you want to go further, you know, it's this, and then the fan, Merrill's or whatever, where they want 25 grand to be on their inner circle and and you're just you haven't done a deal yet. Right. Right. And so like you said, Learn first, and then you can make educated decisions about how you want to invest in your higher level education. For sure, so good advice.

Bailey Kramer: 51:02

Yeah, the one last thing I want to say about it last thing, a big trap I fell into, don't fall into unit count. It's not about unit count. If someone says they have a million 1000 units, it doesn't doesn't mean anything, I fell into the trap, I thought they were making gazillion dollars, because they own 1000 units, is that you're actually just made a tick tock about it, about kind of that thing. And it's starting to blow up now just that one post about talking about how, you know, it's not all about unit count. That's just kind of the bottom line or,

Joseph Williams: 51:35

or door count, right? Like I've got 400 doors, but you got 300 doors because you syndicated the deal. And you've got 25 investors that you owe dividends to every every month and this and that and, you know, like you said your your insurance on one house is$25,000 We'll go ahead and buy your, you know, whatever. 100 unit apartment complex and, and Milwaukee and see how much insurance on that. So, like you said, you know, don't get me wrong, like you scale with that, but there's a lot of a lot of overhead. And usually a lot of investors like you know, he's a 10x Well, you can't just go out and buy a $10 million apartment complex, you know, our family in our apartment complex. So maybe you get one owner finance that's that's the way a motivated seller owner finance, but there's tons of competition in that space as well. So it's very, it's very hard to just find some killer deal that's gonna set you up for life. Right? Like it's a it's a slow build, for sure. And kind of what we talked about getting some wholesaling here, some flipping here an Airbnb or to some long term holds that makes sense where their cash flow and well, you kind of built all those things. And I think it'll pay off at the end. And you can retire when you're, you're 40 if you want and, and probably 70 By the time you get to retirement age. Well, well perfect. We've covered a ton of information today. Bailey, I think you've provided some great insights and value around short term rentals. Education, taking your first big jump in with a with the proper knowledge and the proper partners. Where can people find out more about you? I know you I found you on Instagram. You're dancing on Tik Tok. Apparently, you share some info with our listeners.

Bailey Kramer: 53:20

Yeah, I mean, Instagram is probably the most central place you can find me I have a link in my bio, which is like my link tree a stamp with me. That'll link to all my other socials. But so I'm on YouTube, I'm on Tik Tok. I have a podcast all that good stuff. If you're on Instagram, easiest way to connect with me there think on V. Bailey Cramer. So yeah, connect with me there. Reach out. I love networking with others. So, you know, shoot me a DM. If you're just starting out, you're more experienced whatever the case is. I love chatting with people. I can do this literally all day long. So definitely reach out.

Joseph Williams: 53:51

Yeah, this isn't work right? As long as you got time to make some deals here and there. Right? Well, well, perfect. We'll put all that information in the show notes link into his link tree. And once again, thanks so much for taking your time today. We really appreciate the information. It's motivated me to chase my Airbnb dreams and find that next biggest state farm up in Virginia. And if you take anything from today, just remember, take action. That's the key, educate and take action. So we appreciate it. And thanks for joining us, Bailey.

Bailey Kramer: 54:27

Yeah, absolutely. Thanks again for having me on.

Joseph Williams: 54:31

Thank you for listening to another amazing episode of your biggest deal. Please like, subscribe and share with friends. And don't forget to tag your biggest deal on Facebook and Instagram to connect with Joseph Williams or for questions and feedback visit your biggest deal.com Thank you for listening and learning now it's time to take action