These Properties Make WAY More Than Rentals ($2,000+ Per Month!)

Don’t buy rental properties? What if there were investment properties that made way more cash flow than rentals (we’re talking $2,000 or more per month)? These unique properties are often cheaper than rentals but command higher income. You don’t need any special skills to run one, and you can own them while working a full-time job, accelerating your track to early retirement. Want to know what they are? We’re giving the exact property types (and profits) in today’s episode. Tony Robinson, host of the Real Estate Rookie podcast, and Nate Weintraub, head of Calico Content and copywriter for BiggerPockets, both ditched the long-term rental route years ago. The stress, low cash flow, and speed to scale weren’t worth it. Tony went one route, buying short-term rentals and eventually scaling into a money-making boutique hotel. Nate decided he'd had it with toilets, so he bought the ultimate toiletless investment—a self-storage facility. Today, they’re sharing their profit numbers, rents, and the cost of their investments (which are surprisingly affordable). Plus, how many hours do these take to run? When Tony isn’t hosting our sister podcast, and Nate isn’t doing podcast SEO, how do they handle the day-to-day operations? And finally, can they convince Dave that long-term rentals aren’t superior? In This Episode We Cover How much you can make with a boutique hotel or self-storage facility (it’s a lot) The surprisingly affordable prices of buying these “bigger” real estate deals Finding hotels, motels, and self-storage facilities for sale in your market How much time it takes to run a short-term rental or self-storage facility The risks you must know before trying either of these strategies And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1142 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  Don't buy long-term rentals? Question mark. On almost every episode of this podcast, I tell you to buy long-term rental properties to achieve financial freedom. But I have to admit, long-term buy and hold investing is not the only way to create passive income. Today, we're going to have an open mind. We're going to have an honest look at some of the alternatives and maybe it will change my mind and yours. I'm certainly open to it and I hope you are too.

• 0:32Dave Meyer?

  What's up, everyone? I'm Dave Meyer, Head of Real Estate Investing here at BiggerPockets, and I've been buying rental properties for 15 years. Today on the show, I'm talking with two of my colleagues at BiggerPockets who have tried investing in long-term rentals and actually didn't like it very much. But that doesn't mean they gave up on their dreams of passive income and eventually reaching financial independence. They just found different ways to invest that better fit their goals and lifestyle. So let's bring them on. Welcome back to the show, the co-host of the Real Estate Rookie Podcast, Tony Robinson. Tony, good to see you.

• 1:09Speaker 01

  Yeah, Dave, thanks for having me, brother. Excited to chat things up today.

• 1:12Dave Meyer?

  Absolutely. And we also have BiggerPockets Head of Copywriting and investor himself, Nate Weintraub. Nate, welcome to the show. First time on this show, right?

• 1:23Speaker 02

  Yep, first time. Real Estate Rookie and BiggerPockets Daily, but first time on this one.

• 1:26Dave Meyer?

  All right, Nate, you have earned your way onto the show. Let's start with you. What's your argument?

• 1:31Speaker 02

  All right, I think I can end this debate in about 45 seconds. Are you ready?

• 1:35Dave Meyer?

  No.

• 1:37Speaker 02

  Okay, let me ask you guys a couple of questions. Dave, how many rental properties do you own?

• 1:42Dave Meyer?

  Different properties, like eight or nine.

• 1:44Speaker 02

  Okay. Tony, how about you?

• 1:46Speaker 01

  We're just under 30 single-family homes plus the hotel.

• 1:49Speaker 02

  Okay, so let's take those as rough numbers. 30 single-family homes for Tony. Let's say eight rentals for Dave. So let's say on the low end, two toilets per property. So Dave is dealing with 16 toilets. Tony's dealing with 60 toilets. So every second of every hour of every day, they're just waiting for that call, for someone to say, it's clogged, we put something in it, we don't know why it stopped, it's overflowing, the sewer line's broken. I have 180 self-storage customers across two facilities and I only have one toilet in the office nobody uses. I rest my case, gentlemen. That's it.

• 2:25Dave Meyer?

  This, this concept of the toilet is just so ridiculous. Tony, how many toilets have you physically touched this year? Other than your own, that you're using for your own? How many tenant toilets have you touched?

• 2:37Speaker 01

  Not, not a single one.

• 2:39Dave Meyer?

  Yeah, me neither. And I am not worried about it.

• 2:42Speaker 01

  And I typically don't even know when they're clogged, you know, like, like it just kind of routes to the right person now. So.

• 2:47Dave Meyer?

  Yeah, we just have really good quality toilets, Nate. We buy the best stuff and we don't have to worry about it. But I do get your point, Nate. Maintenance on long-term rentals is a thing and you have to deal with that, right?

• 3:01Speaker 02

  Yeah. And a lot of, a lot of poopy water.

• 3:06Dave Meyer?

  All right. Well, Nate, how about, how about this? Tell me what your strategy is. It sounds like self-storage. I know that about you, but why did you pick that?

• 3:14Speaker 02

  So I had a long-term rental that I bought in 2020 and I had it for about four years. The tenants were great. It was an older building in upstate New York. Dave knows about all this because he's had properties that are built in the 1800s. This one was like 1920.

• 3:28Dave Meyer?

  I do, still do. The toilets work too.

• 3:31Speaker 02

  The toilets work. Mine did work at my property. Actually, one had, they overflowed twice. So now I have like a PTSD and you could fit toilet in there somewhere. Yeah. So I have sewer PTSD from this. But basically what happened was I realized that even though I bought the property in cash, my cash flow was relatively low and the anxiety that it gave me to own a property that people were actively living in was like, what is it like a return? Do you have your return on investment? I kind of had like my return on emotion for these things. And owning one, one long-term rental, even though it was giving me passive cash flow, it did have appreciation. When I sold it after four years, I had a 75% return over that four-year time. So that's like, what? 17% annualized?

• 4:12Dave Meyer?

  It's pretty great.

• 4:13Speaker 02

  Pretty good. Yeah. Even then, I was just like, I don't like that feeling when I get a call from the plumber, from the electrician, from the tenant, from any of those things. Eventually I listened to a BiggerPockets podcast with a guy named AJ Osborne, who invests in self-storage. I had two friends who also invest in rentals and we both were in the same position and we went, maybe there's another type of real estate that we could do. Is not someone living in the property and that's how he found self-storage.

• 4:39Dave Meyer?

  Okay, I have so many things to say about this and questions, but Tony, what's your reaction to that?

• 4:45Speaker 01

  I mean, I think every investor has to pick the asset class that aligns best with not only their resources, but also what do I, what's going to help me sleep at night? And if for Nate, you know, the idea of someone living in one of his places didn't help him sleep at night, I get that. I think for me, it was a similar approach. Like I started off with long-term rentals, but I did that while being a W2 employee, knowing that my end goal was to hopefully replace my income. And my first long-term rental, I was making, I don't know, 150 bucks a month in cash flow. Now granted, you know, this is like post-COVID, so these numbers have come down a bit, but that first short-term rental, we netted over $80,000 in the first year on that property. And when we made that transition, I was like, okay, what am I, what am I doing?

• 5:29Speaker 01

  Why am I spending any time on these $150 properties? So that was the motivation for us to jump into, into short-term rentals.

• 5:35Dave Meyer?

  So it's less emotional for you. Yours was just like a little bit more dollars and cents.

• 5:40Speaker 01

  Very much tactical, like, hey, how do we expedite this path to, you know, quote unquote, financial freedom?

• 5:45Dave Meyer?

  Yeah, that, that makes a lot of sense. But Nate, I do get the emotional piece of it. When I first started buying rental properties and I was taking care of them myself, you do have this like fear that the shoe is going to drop every once in a while. I guess over time, it just kind of went away. Like you just learn how to deal with these situations and it's no longer as stressful when someone calls you with a problem. You build up your team of contractors and that sort of thing. But I also just asked, like, did you ever just think about hiring a property manager? Cause that's what I've done now and I never think about my rental properties.

• 6:18Speaker 02

  I think what happened was because I grew up with a father who invests in rental properties. Like he's retired off of that portfolio now. And I grew up with him dealing with property managers. And I kind of learned quite quickly with him in multiple areas with multiple property managers, that he was basically like, you're always still managing the manager. You're either managing the tenants or you're managing the manager. So for me, I only had one rental. I didn't think it was a big enough portfolio to get a manager. Cause it's like, I can still deal with these. Calls and kind of also to Tony's point real quick, it wasn't all an emotional choice to switch. Self-storage makes a lot of money. It makes a lot of money. So I also was like this in a scalable extent like because everyone here is listening to this because they want financial freedom. They want to retire early.

• 7:01Speaker 02

  They want something that's going to help fund either early or traditional retirement. For me, it's like I can scale up so much faster with three self-storage facilities versus 15 rental properties. And like acquisition wise, I'd rather go for three than 15.

• 7:14Dave Meyer?

  Right. I agree with that. And that's why I've sort of kept my own portfolio modest and I just use low leverage at this point in my career and just try and cash flow fewer properties that are super high quality. I'm totally on board with that. Tony, I'm curious with you on the time commitment element, like how much more time does it take you to run one short-term rental than it does to do that long-term rental that you had started with?

• 7:41Speaker 01

  A lot more, you know, and I think that's, that's part of the reason why short-term rentals may not be for everyone. I did have a property manager for that, for the long-term rentals that we owned. And you know, to Nate's point, yeah, I still had to manage the manager, but it was much more hands off. When we bought that first short-term, so I say we, it was me, my wife, most we had another partner as well. But my wife was one who like really managed most of the day to day. And that worked out great because I was still working my day job. She was at home. So she had the bandwidth in her life to kind of take on that responsibility. Now, as we've scaled, we'd have, you know, a team of cleaners that we've brought on. We have our virtual assistants that help a ton. So we've, we've got some layers now that insulate some of that. But yeah, I mean, if you look just apples to apples,

• 8:26Speaker 01

  management time on a long-term rental versus management time on a short-term rental, short-term is just going to take more time, point blank period.

• 8:32Dave Meyer?

  Do you think then, Tony, that it's feasible for people to scale to the level you have with short-term rentals while still working a full-time job?

• 8:46Speaker 01

  Here, here's what I'd say. If you've got a really dialed in management process for your short-term rental, it still really shouldn't take you more than a couple of hours a week per property. Like if you really do it the right way. So could someone scale to, you know, 30 single family homes and a hotel while working a day job and not lose their minds? Maybe not, but could you get to six or seven? Potentially, you know, and, and, and maybe that's all you need to reach your level of financial freedom or your goal of financial freedom. So, um, yeah, I think if you set it up the right way, you can automate and create systems for a lot of what it takes to run a short term rental effectively.

• 9:23Dave Meyer?

  All right, we do have to take a quick break, but I want to hear specifically the kinds of returns you guys are generating, just to make me as jealous as humanly possible. We do have to take a quick break though, so we'll be right back. They say real estate is passive income, but if you've spent a Sunday night buried in spreadsheets, you know better. We hear it from investors all the time, spending hours every month sorting through receipts and bank transactions, trying to guess if you're making any money. And when tax season hits, it's like trying to solve a Rubik's cube blindfolded. That's where Baseline comes in. BiggerPockets' official banking platform. It tags every rent payment and expense to the right property and Schedule E category as you bank. So you get tax ready financial reports

• 10:08Dave Meyer?

  in real time, not at the end of the year. You can instantly see how each unit is performing, where you're making money and losing money, and make changes while it still counts. Head over to baseline.com/biggerpockets to start protecting your profits. And you can get a special $100 bonus when you sign up. I just booked a backpacking trip through Olympic National Park. Two nights out on the trail, no cell service, nothing to do but eat trail mix and stare at mountains I'll never get tired of. That's the whole appeal. But while I'm off grid, my place doesn't need to sit empty. I can list my space on Airbnb and make a little extra income while I'm away. And with Airbnb's co-host network, I

• 10:52Dave Meyer?

  could partner with a vetted local co-host to help take care of the details, from guest communications to onsite support, so I can fully unplug and enjoy my time out in the backcountry. If you've got upcoming travel plans, you can find a co-host at Airbnb.com/host. Do you ever notice how every passive investment somehow turns into a very active lifestyle? Active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand new construction homes 10% below market value in the best markets across the country without making real estate your second job? That's exactly what rent to retirement does. They're a full-service turnkey investment company handling everything for you.

• 11:34Dave Meyer?

  In some cases, investors get 50 to 75% of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit biggerpockets.com/retirement to learn more. Most investors only think about insurance when something goes wrong. A tenant injury, storm damage, loss of rent. Then suddenly, the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance designed specifically for rental properties. Whether you own one property or a growing portfolio, they make it simple to get covered properly.

• 12:15Dave Meyer?

  And BiggerPockets Pro members get an extra 5% off their landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to get a quote today. Tax season reminder for all the real estate investors listening. If you own rental properties, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS-compliant strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost Segregation Guys is the go-to firm, having done over 12,000 of these studies with 500 million in total depreciation identified.

• 12:59Dave Meyer?

  Head to costsegregationguys.com/bp to get a free proposal and see your potential tax savings.

• 13:09Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm here with Tony Robinson and Nate Weintraub talking about non-long-term rental strategies, trying to see if Nate and Tony can convince me. And I honestly, I'm jokingly adversarial here, but like every time I host the show, I just get FOMO about what everyone else is doing. And then I just have to like remind myself that like my plan has worked very well for myself and I'm gonna, but see if you can sway me off of this. So Nate, tell me about self-storage. You said it wasn't just an emotional decision, it was a dollars and cents decision as well. Tell me about the financials of your self-storage, any of them, or just like what's the average return that you're getting?

• 13:45Speaker 02

  Sure. So I'll go through the first one because that one's been stabilized. I bought it in 2022. I currently own it now. I don't ever want to sell it. I love it. It's my little cash box baby.

• 13:57Dave Meyer?

  How big is it? Like, what does this thing look like?

• 13:59Speaker 02

  So there's 63 units in them. It's about a little bit over 10,000 square feet. This is in a small town in the south of around 10,000 people. So you might be used to seeing self-storage facilities when you drive, like big public storage, extra space, stuff like that. I'm in a place where none of those people would ever go, and that's on purpose, because I don't want them building next to me. We bought the property for $350,000. Okay? So this is less than many of the rentals that you would actually buy. The down payment was 20% because we were using commercial loan, and the closing costs were really, really low because we used a local bank. So all in, we were in for $73,000. When I say "we," I have two friends I bought this with. So $350,000 purchase price, $73,000 down. Last year, the cash flow loan on the property

• 14:42Speaker 02

  was $23,000. That doesn't include any tax benefits, any equity, anything like that. So just on a pure cash on cash return last year was 31.6% just cash flow.

• 14:54Dave Meyer?

  Wow, that's awesome.

• 14:55Speaker 02

  That's all expenses. That's not phantom cash flow. That's every expense taken out.

• 14:58Dave Meyer?

  I believe you. You know what you're doing. Okay, that's pretty, that's pretty compelling. Just out of curiosity, I don't know that much about this, but like what is the loan like on a storage facility?

• 15:06Speaker 02

  So this one, we got a 15-year loan fixed rate. It's amortized over 25 years. So at the end of the 15 years, there's going to be a balloon payment for the rest. That loan deal.

• 15:18Dave Meyer?

  Okay.

• 15:18Speaker 02

  I got very, very lucky in getting this in the summer of 2022. I locked in a 4% interest rate.

• 15:24Dave Meyer?

  Whoa.

• 15:24Speaker 02

  For 15 years.

• 15:25Dave Meyer?

  Geez.

• 15:26Speaker 02

  On a commercial loan, but the next one I bought, which I bought this year was 7.25. So I don't get all that lucky. It's still cash flows.

• 15:33Dave Meyer?

  That's not that bad, actually.

• 15:34Speaker 02

  Yeah. So it's pretty good returns. I think I took all the returns we've had because we spent a lot of money at the start of the property, like fixing things and getting it fully stabilized. Even if I annualize the returns since we've owned it over the past three years, it's been a 15 and a half percent return just on cash flow every year for three years. That's not any other benefits. That's just cash flow. Stock market makes you seven. This makes you 15 and it's a little box. It's cool. Little money box.

• 16:03Dave Meyer?

  Are you convinced, Tony?

• 16:05Speaker 01

  I kind of am actually, you know, but it's interesting, Dave, because like I see, that's part of the reason why we transitioned over to small boutique hotels and motels is for that same reason. Like Nate said, purchase price was 350. You're absolutely right. That's a home in so many markets across the country.

• 16:21Speaker 02

  Yep.

• 16:22Speaker 01

  And as we were looking at, okay, what's next for us? It's like, do we buy these massive Airbnbs that are, you know, 5,000 square feet, eight bedrooms with all these crazy amenities, or do we go commercial? And for us, it made more sense to go commercial and that was our last acquisition. We, purchase price was a million bucks for this 13 room motel outside of Zion National Park. We have properties that we own. It's like single family homes in our portfolio that are worth that much, but I got 13 rooms here. So we bought it for, again, a million bucks. We got a seller finance note on it, which was great.

• 16:54Speaker 02

  Nice.

• 16:54Speaker 01

  And I think that's also part of the reason that we're so high on kind of the small mom and pop hotels and motels because almost none of them have good books. Almost none of them are like bankable in the traditional sense. So all the sellers know they have to offer seller financing. I was literally just talking to a broker yesterday for another property, very similar situation. But anyway, we got it seller financed. It was a, a 10 year note. First three years were interest only at seven, 7%. So even with that, I think our mortgage is like 4750 a month.

• 17:24Speaker 02

  Wow.

• 17:25Speaker 01

  So mortgage is super reasonable and this property last month, which was like part of our peak season, but we did like, I don't know, $30,000 in revenue in April, another 40,000 in May. It's going to slow down during the summer months. We'll probably do around, I don't know, 25 ish, somewhere in that ballpark. And it'll really peak come fall time. So anyway, we're probably on track to do close to 300 on that property this year on a million dollar purchase. So it's crazy, the amount of revenue that you can generate if you get the right asset, right? So that's what we're super high on, on this, this kind of model moving forward. And we're still renting it like an Airbnb.

• 18:01Dave Meyer?

  All right, Tony, Tony wins the debate.

• 18:03Speaker 01

  Yeah.

• 18:05Dave Meyer?

  I quit. I quit. I can't argue that.

• 18:08Speaker 02

  Ike, this is what I'm saying. It's, it's rental properties are very, very good. I need to take a second to say, everything Dave is doing is correct and he's going to be significantly wealthier than me in the long run, probably just because of how smart he is. The rental properties buying in the right market with the right tenants will always, always make you wealthier. But when you look in it, just on the basis of cost to rent, it's absolutely wild what Tony and I are getting. Like Tony said, 300,000 on a million purchase. I have 60,000 revenue on a $350,000 purchase.

• 18:35Dave Meyer?

  Yeah.

• 18:35Speaker 02

  And my expenses are low because of self-storage. It's a giant concrete box with no utilities. It's like, what do I have to pay for? You know? So it's, macro numbers are quite wild.

• 18:46Dave Meyer?

  Yeah. I would never argue that these kinds of strategies produce better cash flow. That is definitely true. And it's the part of it that gives me a lot of FOMO because I would love to earn those types of cash flow. My net worth, I divide into threes. A third of it I put into active real estate. So the rental properties, I do own a short-term rental in addition. I participate in some flips. So like, that's one third. I do a third in totally passive and I do invest in, in commercial that way. And then I keep everything else in the stock market and stuff like that. But I think the reason in my active part of my portfolio that I focus on long-term rentals is the risk of volatility. And I, you know,

• 19:26Dave Meyer?

  I just think in self-storage and commercial, there is a lot of cyclicality to those industries, which is not bad. There's cycles in almost every industry. Except long-term rentals, like long-term rentals outside of 2008 are just incredibly stable. And I just value that. And I think for everyone's own perspective, you need to like value, do you want cash flow more than stability? Because you can do rent by the room like that of great cash flow perspective, it's probably going to take a little bit more management. And just for me, my personal preference is just like stable, steady, set it and forget it kind of thing. But I certainly can't argue with those kinds of numbers. Nate,

• 20:08Dave Meyer?

  I'll just go back to you. Like, do you think about or worry about the cyclicality of it? Because, you know, commercial real estate last three or four years has not been a bright spot of the economy. So like, how much does that weigh into your into your decision making?

• 20:24Speaker 02

  Very true. And I will say this, everyone who's taking those commercial numbers is looking at the big guys in the big buildings in the big cities. They're not looking at little guys like me and all the other guys I know, guys and girls who are investing in self-storage in small towns. We're talking towns that are five to 15,000 people. Public storage, extra space, they're never going to open up there. There's not enough money for them. There's not enough people. I can tell you this for a fact, because I've had my facility through 2022 through now, which are some of the worst years for self-storage and commercial real estate in the past like 15 years. I had a 95% occupancy rate, if not higher. That was my minimum the entire time. And this is with two other self-storage facilities a mile and a half from mine. It's like, you have to, and Dave talks about this all the time, you have to know your market, you have to know demand, because if you get

• 21:09Speaker 02

  demand wrong, you're just going to be ruined. And this is quadrupled when you're in commercial. It's not like a rental property where if you buy in a reg, you know, a relatively decent-sized city, you're always going to have demand. It's like if you buy smart in areas where there's population, the REITs, which are the big guys, public storage, extra space can build, you know, if you buy in a big market, you're, they're going to totally take you down. They're going to lower their rates, they're going to get the customers, and you're going to be out there. If you're in a small town where everyone else doesn't even have a Google My Business page, they barely have a website, they never pick up the phone, their reviews are terrible because they're never at the facility and everyone's complaining, you're doing great. And there are a million of those markets across America, I promise.

• 21:45Dave Meyer?

  Yeah. It's super interesting because that sort of Like competitive dynamic is something I don't really feel like exists in the kind of properties I buy and I like that. If someone builds a new duplex next to my duplex, I'm not really sweating it. If someone built a self-storage facility next to you, I'm sure that would like greatly impact your business. But obviously you're doing it well, like you you found a sweet spot. Same way, I kind of think two to four units, like no one's, it's less competitive. No institutional investors are really going after that in some like big sort of way. So like you've found a niche. How hard has it been for you to find deal flow in self-storage?

• 22:20Speaker 02

  Oh, it's incredibly hard. It's super hard. Like this is the worst part about investing in self-storage. I'm sure it's the same thing. I mean, potentially with Tony with buying larger buildings that are like motels and stuff like that where it's a you're like, this is literally a needle in a haystack type thing. Where if you might be a regular rental property investor like Dave, maybe you buy a rental every year, every two years. I've only bought two facilities in the past four years I've been trying. Now, obviously there's more cash flow with each of them, but it's like sellers are still stuck on these 2022 price peaks, which is completely off of what you can get for funding right now with banks. So the numbers just don't work out. And also it's like, there's only so many of these and this like these middle sized operator guys are buying up as many of them as you can. While you're in a city like, if you want to go and buy in Raleigh or Austin or Tampa, any of these strong fundamental markets that have high supply right now, like you're fine.

• 23:05Speaker 02

  You could buy a property every week if you wanted and you'd never run out. So that is the thing, you have to be like hardcore on acquisition and you really have to try and get these properties. And if you do, like they do really well, but man, it's a struggle getting them.

• 23:19Dave Meyer?

  It's a good business model because that's kind of what it takes, right? If you, you need to sort of find the inefficiencies in the market, but that takes a lot of work. And frankly, now I'm back off self-storage. I don't want to do any of the work.

• 23:32Dave Meyer?

  Do you have the same challenge with deal flows, Tony?

• 23:36Speaker 01

  I think it depends. On the single family side, I will say there's probably maybe more of a challenge there. To Nate's point, I think that there's sellers who are a little bit unrealistic around what property should be selling for, given where revenues are at. But honestly, on the commercial side, I almost feel like it's easier right now.

• 23:55Dave Meyer?

  Yeah.

• 23:56Speaker 01

  Because again, going To my point, there's this, there's a, an entire generation of mom and pop hotel and motel owners whose kids don't want to inherit the business. They want to go retire to spend time with their grandchildren. And they, they want to get rid of these assets and we probably could have purchased more. We're just like intentionally trying to scale in a little bit more of a controlled fashion. But yeah, single family side, I'd say there's some challenges. But it's honestly, I, I found it to be a little bit easier on looking for more boutique hotels and motels.

• 24:23Dave Meyer?

  Well, it's sort of the positive side of the cyclicality and volatility that we're talking about, right? Like commercial real estate has taken a hit in the last couple of years. And I think there's a strong argument that assets are the cheapest they're going to be for a while. That's right. Personally, I'm, I'm starting to look at larger multifamily and starting to acquire them. I don't think the market's there just yet, but Tony, you tell me is like, have like prices gone down, I assume in the hotel and motel industry of the last three years?

• 24:50Speaker 01

  The hotel that we bought, they'd initially listed for, I think, close to three million and we bought it for a million.

• 24:55Dave Meyer?

  Oh.

• 24:56Speaker 01

  Right?

• 24:56Dave Meyer?

  Oh, my God.

• 24:57Speaker 01

  Now, part of that was just them being unreasonable about what it was worth. And it sat for, for a long time. And then they were just like, you know, super motivated by the time we spoke to them. The broker that I was speaking with yesterday, I think they originally listed for 3.2. And he told my partner like, yeah, we, we could probably get them down to 2.2. So yeah, I think there, there's, but again, part of that is them just being unrealistic about their initial price. But I do think that there's motivation and there's more leverage that we have as buyers right now to negotiate, to try and get the price that makes the most sense for us.

• 25:31Dave Meyer?

  Well, you both make very, very compelling points, but I want to talk to you about how practical these two approaches are for just regular investors. And if you think that this is achievable for people listening to the podcast, we do need to take one more quick break. We'll be right back. I wanted to let you know about something really fun Henry and I are doing that I am really excited about. We are taking bigger pockets on the road this summer and we'll be driving around the Midwest to multiple different markets, looking for deals, meeting with agents, talking to the bigger pockets community, attending meetups. It's going to be a great time. We're calling it the Cash Flow Roadshow and it's happening this July from July 14th to 18th across three different markets in the Midwest.

• 26:15Dave Meyer?

  We're starting in Milwaukee, going to check out some markets around there. Then we're going down to Chicago, ultimately winding up in Indianapolis. And we're going to be doing all the stuff I said, looking for on-market deals and looking at projects that BP community members are actually doing even in this market. And we might even do a deal or two of our own along the way. So make sure to follow along to all the content we'll be putting out about the Cash Flow Roadshow. But I'm making this announcement because I want you all to join us. If you live in either the Chicago or Indianapolis area, we're going to be doing free meetups in those areas. The one in Chicago is on July 15th. The one in Indianapolis is the next night on July 16th. Henry and I are going to be there. We're going to be doing presentations.

• 26:59Dave Meyer?

  We're going to be talking about local market dynamics. There's going to be great networking and we even have a few cool surprises planned as well. So if you live in one of those cities, you want to hang out with us, get into the BiggerPockets community in real life, go to biggerpockets.com/roadshow to learn more. And these events, they are free, but I should call out that you do have to RSVP because there are limits to the venues and they will sell out. So make sure to go to biggerpockets.com/roadshow and reserve your spot today.

• 27:30Dave Meyer?

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• 28:15Dave Meyer?

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• 32:18Dave Meyer?

  Welcome back to the podcast. I'm here with Nate Weintraub and Tony Robinson, talking about non-long-term rental strategies. We're having a little bit of a debate. It's been very fun. These two have been very compelling, as I'm not surprised. But I'm curious about how achievable these things are, Tony. Like, you know, do you think the average person listening to this can go out and buy a small motel? Or is this kind of like something you have to build up to? Or just tell me about how people could potentially get into it and who it's right for.

• 32:47Speaker 01

  I think echoing what Nate said earlier, we bought our first one for a million bucks. And I guarantee there are people in this audience right now who have looked at other properties in that price point. But depending on what market you go to, you could definitely find something cheaper than that. You could find a motel or hotel for half a million bucks for $600,000, which is the purchase price for a lot of single family homes that people are buying. So I don't, I don't think it's a matter of, am I capable? It's just you have to choose markets that support your budget, that support your resources, that match with what it is you can deploy to go, to go buy an asset. So can anyone who's listening do this? Absolutely. You just gotta find the right market.

• 33:26Dave Meyer?

  Okay. Yeah. Good advice. What about you, Nate?

• 33:28Speaker 02

  I'll tell you a little story real quick. A few weeks ago, I had a friend of mine who was talking about the new self-storage facility we bought. And he was like, man, I just wish I could get into that. And I was like, what do you mean? You can do it right now. I work like 50 to 60 hours a week. I have a marketing business, calicocontent.com. I'm working a fair amount. Like, I don't have a ton of free time, but I've partnered up with two people who also work full-time. One is a teacher, one is another marketing professional. And it's like, we're doing this in our spare time. I probably spend 30 minutes a month on the first self-storage facility that brought in $23,000 last year. The acquisition is a pain. You're getting wholesaler emails and you're always analyzing deals. But it's like self-storage really is the most boring, unsexy, but repeatable and financially

• 34:12Speaker 02

  freeing asset class, I think, for regular people in real estate. And if you like running a business, you like doing like treating customers well, like getting good reviews. I mean, this is very similar to Tony's too. Like, we're running businesses, they're not just properties. Also, owning a bunch of rental properties is a business, whether you want to say it or not.

• 34:29Dave Meyer?

  It is, absolutely.

• 34:30Speaker 02

  But it's a super doable, super repeatable strategy, strategy that any regular person with a W2 can do. I mean, I bought the first facility for 350. I bought the second facility for 660 and there's 200 units combined between those two. It's like, those are house prices we're talking about. And the cash flow is great and it's fun, man, because these owners, the mom, pop owners, they treat their old customers like dirt. They don't do anything. They never fix up the facility. They never respond to them as phone calls. And you have the chance to make A service better for someone and I really, really like that.

• 35:01Dave Meyer?

  Yeah, I totally buy that. Can you be honest, Nate? Tell me like, what are the risks of self-storage?

• 35:07Speaker 02

  The risk is you get addicted and then you eventually get super rich.

• 35:12Speaker 02

  I'd say the risk for this, you have to do serious market research. This is again, like a business and there may or may not be a bunch of other competitors in the market you're buying. You have to know there's more demand than supply and that means calling other facilities secretly and checking if they're full. Looking at their waiting lists online, like keeping track of this type of stuff. Cause if you buy a facility and I've seen people do this, like they're like, I bought a 200 unit facility in a thousand person town. I'm like, oh, that's great. 20% of the people have to rent from you for you to like, make a profit. Like that doesn't make any sense. Risk is buying an oversupplied, under-demand market where the rents are falling or population is low and people are moving out. That's a super big risk. And I'd also say the other risk is that you, and this isn't really a risk, but it's like, if you buy one of these, it's running a business. Someone has to be answering the phones. Someone has to be responding to the emails. Someone has to be taking care of the property.

• 35:57Speaker 02

  It's not a set and forget it is relatively passive, but it's definitely not passive income. You have to take care of it like a business.

• 36:04Dave Meyer?

  Yeah, see this, your, your toilet argument is falling apart here. Like you.

• 36:08Speaker 02

  I still don't want to deal with toilets. You can't convince me on toilets, Dave.

• 36:11Dave Meyer?

  This doesn't sound any more passive to me than hiring a property manager for a long-term rental. I'll give you the cash flow argument. That one I, I buy. But I, I don't know. I think hiring a property manager is similar to what you're doing. You're still going to have to manage someone. And I also want to introduce one other idea here, at least. And I moved from the US to Europe for five years. I was sort of like forced to become a more passive investor and it's, uh, you know, why now I have like about a third of my, my portfolio in passive investments. That's the other thing that you could do. Like if you want to be a buy and hold investor, you don't want to be doing the toilets. You can either be private money. You could be a partner for someone who wants to be an operator.

• 36:55Dave Meyer?

  You can invest in syndications or funds like I do. So there are definitely ways to buy long-term rentals that aren't, uh, as time intensive as it can be. If you buy highly distressed properties, uh, and are self-managing.

• 37:11Dave Meyer?

  Tony, what about you? Can you tell us a little bit about the risks in your approach?

• 37:14Speaker 01

  I think there's like the macro risk and then there's like the the micro risk that are individuals to each person, right? Like at a, at a macro level, when you're talking about buying an Airbnb or buying a small boutique hotel or motel, we're, we're talking about discretionary income, right? The people typically spend to, to go enjoy these assets that you own. And because of that, we are subject to where the economy is going and how much people want to spend on vacations and what that looks like. Now, I will say, even during like the depths of the recession, people were still going on vacation, right? Like it's not like vacation travel goes to zero even during a recession, but obviously people are tightening up their, their budgets and maybe spending a little bit less. So I think that's one piece is you've

• 37:57Speaker 01

  got to recognize that there is some, some ebb and flow with just the macro. The other thing, and this isn't necessarily like the entire economy, but more so to just like the short term rental market is supply and demand also influences how much you can charge. We saw nationally, supply levels increased pretty dramatically post COVID, like an insane amount of increase year over year in the number of people who are listing their properties for rent on Airbnb. That growth has tapered off pretty tremendously going into the last like 12 months or so. So I think we're starting to see supply and demand stabilize. But I think that was a challenge for a lot of operators is that they underwrote on these like post COVID numbers, not realizing that this kind of imbalance between supply and demand was

• 38:40Speaker 01

  going to pull those, those figures down. So I think those are the risks, right? You've got discretionary spending and you've got to be, keep a really, really close eye on supply versus demand in your specific market. The last thing that I'll add to you, Dave, is just on, on a personal level, I think a lot of people jumped into the Airbnb space hoping to strike gold, you know, like it was like the, the gold rush of the real estate investing industry. And much like the real gold rush, most people didn't make a lot of money, you know? I think a lot of people jumped in, underprepared, undereducated, buying bad deals. And you've got to ask yourself, do you actually have the skillset to be a good short term? Rental operator, can you put together the right design?

• 39:23Speaker 01

  Can you manage guest expectations the right way? Can you manage pricing the right way? Maintenance, both, you know, your, your long-term maintenance and those short-term issues that pop up. So just asking yourself personally, can I actually do a good job managing this type of asset?

• 39:38Dave Meyer?

  Yeah, that's a good way to put it. Well, last question, do you think at any point in your career, Tony, you'll switch around? Would you ever go back to long-term rentals or try any strategies, self-storage or anything else?

• 39:49Speaker 01

  Absolutely. I know I've like earned this, this, you know, label of being the short-term rental guy. And it makes sense because we've been so heavy into that. But the backstory here, guys, is that I, I lost my W2 job in 2020. And one of the decisions that we made as we were figuring out what's, what's next for us was, okay, what are we going to focus on? Because what I didn't want to do during that time of being freshly unemployed was dabble in a lot of different things and do each one to 50% of what it's actually capable of achieving. So we made a very conscious choice of, hey, for the next five years, we're just going to focus on this one asset class. And we're going to try and get really, really good at that before we start dabbling in, in other areas. And it's actually five years now, right?

• 40:32Speaker 01

  And, and me and my wife are having these conversations around, well, what do we do next? And I think more hotels are, are on the horizon, but we definitely want to try other things as well. I love the idea of co-living because I think you get the, the, the blend of both traditional, stable, long-term, but also kind of that element of like, hey, you've got people that you're catering to in a slightly higher way, like you would with an Airbnb. I do love the idea of self-storage. We actually have a self-storage facility attached to our hotel. I didn't even mention that.

• 40:59Dave Meyer?

  Really?

• 41:00Speaker 01

  We do.

• 41:01Speaker 02

  He's doing both.

• 41:02Dave Meyer?

  You're doing the hybrid. Oh, my God, you win.

• 41:06Speaker 01

  It, it doesn't make a ton of money, right? But we're, we're kind of dipping our toes and we're learning, learning some of that as well. So, yeah, I, I definitely want to expand, but I think it'll be the same thing. Like whatever I choose next, it'll be a, you know, a five-year roadmap of saying, hey, let's go really deep on this strategy. So we can get really, really good at it. And now I've got two strategies that we're super confident in.

• 41:23Dave Meyer?

  What about you, Nate? Self-storage for life?

• 41:26Speaker 02

  As of right now, it's like the three points. There's also a part of the return I didn't mention. Before the first facility we bought in 2022, we bought it for 350. It's now up $150,000 in equity. It's worth 500,000 just because we ran it well. For me right now, it's like the cash flow is great. The equity upside is great and they're just fun to run. I don't like, this is a podcast. We're talking about money, but at some point you have to enjoy the things that you're investing in. And I legitimately enjoy self-storage. I enjoy running a business. I feel, because I've talked to Tony before, I feel like he legitimately loves what he's doing and the assets he's investing in. It's just, it's fun. At some point, listen, the goal for all of us is parking lots. No utilities, no structures, just asphalt. That's it. So.

• 42:09Dave Meyer?

  Thank you, Nate, for bringing up the liking the business too, because yes, that is super important. And being passionate about what you're investing in is going to give you longevity and it's going to actually get you what you want. Like financial freedom is sort of meaningless if you're miserable while you're doing it. It kind of defeats the point. I will just say, last thing Nate, to give you credit is right now, literally as we speak, my wife is meeting a mover, getting all of our stuff out of a self-storage facility. And I am so glad to stop paying the ridiculous cost, but I needed it and I paid so much money for it. So I do understand why you make a lot of money because man, when there is a need, you are willing to spend the money on it.

• 42:49Speaker 02

  Dave's a customer. Dave can't even talk. He's paying my industry. Thank you so much, Dave. Thank you for your service.

• 42:55Dave Meyer?

  Yeah, you are very welcome and I am so glad to cut it off, even though I still have to keep paying them for the end, for the end of the lot. Of course. All right. Well, thank you guys so much for being here. This was a lot of fun. I enjoyed it. And hopefully y'all learned a little bit about the differences, different pros and cons and trade-offs between a couple of different strategies, whether that's short-term rentals, buying boutique hotels, self-storage, or any of the other things we got into today. Tony, thanks for being here.

• 43:23Speaker 01

  Yeah, thanks for having me, Dave and Nate. Great job defending self-storage, man. I'm thinking more about it myself now.

• 43:29Dave Meyer?

  Yes, thank you, Nate. You did very well on the, on the other side of the camera here. Well, we might have to have you back just because you're comfortable giving me [BLEEP] and that makes the podcast more fun.

• 43:38Speaker 02

  I still love you, Dave. I still love you. Calico content.com.

• 43:42Dave Meyer?

  All right. And thank you all so much for listening to this episode of the BiggerPockets Podcast. We'll see you next time.

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