Episode 174 | Kyle Ellis | Military Millionaire

00:00 - 05:00

What's up Military Millionaires! I'm your host, David Pere. And today I am joined by Kyle Ellis of the Crystal Shoals, who is a corporate pilot in the Marine Corps. And while he's done a decent amount with real estate, he's now dabbling in slash investing in the short term rental game. And he's done that from afar and been able to automate a large portion of that, which I think is very applicable. Short term rentals are not an investing approach. This seems to be slowing down. It seems to be gaining a lot of speed. And I think there's still a lot of room to learn how to improve that process. And so this will be very beneficial. So that's gonna be fun.

Kyle, Thanks for Thanks for joining us on the show today.

Kyle:

Yeah, man, thanks for having me.

David:

Yeah, absolutely. Why don't you just have a two minute overview of you know how well, I guess who you are, and how you got into real estate.

Sponsor:

Hey, guys, if you're looking to take your investing, business, life, or just yourself to the next level, and I have something for you, the War Room Real Estate Military Mastermind group is a mastermind group that meets weekly in small groups of five to six people to help you hold yourself accountable and really experienced that growth. But we also have a monthly guest speaker that we bring in. And we've had guest speakers that talk about mindfulness, taxes, or bringing in somebody to talk about marketing. We bring in very specific topics that will adhere to very broad any kind of real estate investing, or investing or entrepreneurship that you want to do, and will really help you out. We let you ask the speakers questions and get very personal with them. And then back to the small groups, weekly accountability for what you're trying to achieve. And just being surrounded by like minded people, and they say your network is your net worth. I know that's an overused phrase. But I recommend that you check it out. So just shoot an email to [email protected]. Once again, that's W[email protected]. And we'll send you some more information.

Kyle:

Sure!

You said it, active duty Marine, I've been in for a little over 15 years now. So my kind of story was I graduated college in 2007. And the plan coming out of that took the amount of time we're talking about was to buy property everywhere I went right, the aviation training pipeline, you move a lot, and I'd heard hey man, wherever you can go buy a house, buy a house, buy a house. That was my plan. I didn't know anything. I didn't know how to do it, or how I was gonna do it. But that's what everybody was doing. And that's what I was going to do.

So I got to Pensacola, Florida and early 2008 realized how fluid the aviation pipeline really was. And was a little scared that my plan worked out well for me, because a couple of months later, we all know what happened in 2008. So some like some of the guys that gave me that advice were now upside down in some houses. Now, fast forward a decade or so they're still doing okay if they held onto it right but so made it through the training pipeline for a couple of years and then bought my first single family home when I got here North Carolina for my first duty station did not use a VA loan for that because I'd saved up a little bit of money. Mistake number one didn't understand rates of return or what else the opportunity cost I could use for that downpayment. So tally those up for me well as I went a few years in the fleet and got PCs orders that bought my second single family home with the VA loan this time. And my second duty station hired a property manager for my first six months later I fired them. And that became or started my hatred of property managers, which is also a recurring theme.

Few years later, PCs orders again, this time I was managing single family homes in two different states with no property managers. And that's really where I started to appreciate the importance of automating processes when you can and building teams when you can. And then during that, PCs actually go to business school. So I got to go to the school and Marine Corps dime and that really kicked the whole investing thing in the over overdrive right like I was really starting to understand a lot of the concepts and stuff that didn't understand when I was younger and really started to want to get aggressive so I bought my third single family home while in California using the brrrr method. So I'm sure you're familiar with, used that to buy another single family home and actually just a straight flip on that one. Until now four single family homes want to go bigger and I think that's usually a common journey a lot of people take right.

05:00 - 10:00

Kyle:

And so I just decided, hey, I read a book about triple net leases like man that's what I want to go when I go in that direction and so I started underwriting commercial properties, small type stuff and got really close to a couple of deals that didn't never happen. In the meantime, I got in with some syndication deals as an LP on those and did well and kind of pivoted from the small commercial, hadn't really done a deal and went to start going to multifamily. Just made a pivot one day, I was like, I'm gonna try this again, or try this this way. And it was during that kind of process was looking for these small commercial multifamily 6 to 12 units that I got just an email, I think of a of a duplex and topsail in North Carolina, if your East Coast Marine, you know, Topsail Island, I was almost going to delete the email I got I don't need this, but let's just look at it. And then you know, part of that when the lines in the description was, hey, he's got $100,000 of income last year. I was like, Man, that's pretty good. So I started looking more and more into it. I called a buddy of mine who I knew was in the short term real estate, or short term rentals, and talked to him a little bit. And I'm like, man, maybe this is where this is my pivot, maybe we go here. Didn't get that first deal, but got another deal. And that was in April of last year, we actually got a half duplex in Emerald Island, North Carolina, which is a little bit further north and topsail. So it's still in that Campbell, June Cherry Point area a little bit more of a resort type area there. We've had that place now for a year. And then just last month, we closed on a full duplex about a mile away. So we are now operating three units on Nimmer law that we own. And then we're now in the scaling phase of the business. And we've got verbals on three additional units this fall after the busy season. So we're looking to scale from there.

David:

That's awesome. And I definitely want to dig into the short term rental stuff, especially in that area. I'm actually not familiar with Emerald island, but I'm definitely familiar with Topsail. You know, so you dodged a bullet, it sounds like in 2008. And so I wanted to just make sure that I point that out, because I personally, I hate the advice that you should always buy a house and every duty station no matter what, because it's like, well, if the market, if you bought at the right time, that's gonna be great advice. But if you bought at the wrong time, that's not going to be great advice. And I know both sides of the coin. So I always tell people, Hey, you should always buy at every duty station, if it makes sense as an investment that you can hold on to and you're okay with being stuck with it for a while, because you might get that way. As long as you buy the right way, then yeah, sure. Buy everywhere, but I'm definitely glad. I mean, if you had, if you had bought and it had tanked, you probably wouldn't be doing it anymore.

Kyle:

Yeah, you're right. And you know, and I agree with you. But you remember the advice I got was in 2007, right? When it was free money, you could get anything for any price, you know, anybody? And so yeah, there were several people that I know that did that, they bought, they bought, they bought, they bought, and then several months later, all of a sudden, they're 20 to 23 years old, they're upside down and buy, buy a lot. And maybe one or two, two properties. And like I said, you know, it may work, it worked out for him if they held. But if they got scared, they, you know, they lost and you're I think I dodged a bullet because that, you know, that would be scary as your first deal to be under underwater pretty soon after you do it.

David:

Yeah, I know, I know, a couple people who lost their shirt in 2008 and, you know, several of them are back in the game. You know, in fact, I almost appreciate that when I talk to somebody and it's like, oh, yeah, I lost. You know, I was talking to you the other day, lost a million dollars in 2007. And it's like, or 2008. And it's like, you know what, they're very successful now. And they didn't lose everything. And it's like, okay, well, like there's someone that I can have a conversation with about all this stuff, who genuinely understands, you know, the risk in the end of everything. And it's always very insightful, when you can talk to people who've been through a recession like that, because, you know, I mean, I've been investing since 2015. So things have been great. It's easy to look like I know what I'm doing.

Kyle:

Absolutely.

I think you're right. I think as long as you come out on the other side, then you still got something. Even if it's just a hard lesson learned. You'll know what to look out for the next time.

David:

Yeah, absolutely.

So you move from single families and you learn the property management lesson. I've been fortunate to have a good property manager, and she's still awesome. Are you still self managing those ones?

Kye:

I still, so I guess I skipped over this. I own one of them now. I have divested the first two I bought. And that's how we funded these last deals. What was from those you know, we sold in 2019, I'm sorry, 2020 and 2021. Sell those houses and move up.

10:00 - 15:00

David:

So the Emerald Island ran me through kind of what those types of numbers look like, because I remember looking at Topsail, back, I was out there in 2017-2018. And I remember looking at some of those prices and thinking, Man, this house is worth this much money. It's not, you know, overpriced or whatever. And I didn't realize the Airbnb income potential because some of those properties bring in a very substantial amount of money. Obviously, if you're talking about someone who made 100 grand through Airbnb on a property like, that's enough to justify a pretty solid mortgage. So I'm kind of curious, like, what your, you know, if you can walk us through some of those deals? What they look like?

Kyle:

Yeah, absolutely.

So the first one we did, again, kind of fell in a lap, we opened a little bit once we saw that first duplex over in Topsail and opened up a little bit. We had a pretty good team of people working with us, and this deal came through. It was I got no problem, give me the actual numbers, it was we got it for around eight. And then and so that is a beachfront unit, you know, your own private walkover the whole nine yards. It's about 2000 square feet. Really nice. Nicely finished. Just a nice, nice property. And then our first year, so we're, we're just over a year now. We did just over 100k in gross, right. So part of that was we were down for about a month, because we do some siding work in the wintertime. So we close the books completely on that. So that's the rough, I think that you know, I think that that number is a little inflated simply because, you know, the owner we bought it from has already had been running as a short term rental for a while. So some of those numbers we got, we got like, basically the entire booking whereas most of them somebody you pay, like 50% up front. And so if you paid in 2020, you booked in 2020, you paid 6% up front, and then you didn't actually stay until 2021. So because we bought it, you know, mid April, we got a little bit of a little bit of play in those numbers. But we also skipped out on a couple of months so I think it probably evens out that that's what we're projecting for this year for that property.

David:

I mean, that's solid. I mean, did you have to go? I'm assuming obviously an investment loan, but did you have to go full 25% down?

Kyle:

No.

So this is a good part about this. And it actually kind of ties into a couple of one of your other guests with asset protection. I bought this first one as a second home.

David:

Ah, nice. So was that 15%, 10% down?

Kyle:

I think I did 20.

David:

Okay.

I mean, yeah, 20% down on that. I mean, you know, 100k gross even if your net is half of that, that's an incredible return on investment. Yeah, that's awesome. So okay, so you were like wow, this works obviously because you just now bought another duplex. The duplex similar numbers or what have you seen in the market inflate?

Kyle:

This new duplex, the first one I bought, was a half which is like one year then the new one didn't get as good of a deal on a couple things. One, the market increase you know, like everything else the markets increasing it's a second row or second plus third row so it's not right on the water and so that's that's a whole whole different ball game that we had to learn a little bit about marking that but the good news about this property is it's a value add so it was a it was a long term rental for the last eight or nine years I think and so we came in the property we did we've done some work already just to get it we you know, Fast and Furious we bought we bought up we listed get it on all the all the all the channels and then we start making doing work little things right now like we're adding a putting green, we've we've put some really really nice outdoor showers and once the season's over, we're going to put a pool in the back. And so that's really, that's when we're going to see really the numbers that we're projecting is once we get that pool, because what I found, and again, this is this is very specific to beach resort type areas, if you're not on the water, the pool really, really helps that second and third row. And so that's what we're waiting on. Once we get through something in the summer book, the books are pretty much there for the summer. They're almost all booked out on both sides. So we've got to wait a little bit until it really kind of falls or slows down a little bit. So we get time to put the pool in and then we'll really see the return on that one.

15:00 - 20:00

David:

That's awesome. And I wouldn't have thought that would make a significant difference. But I guess that's I mean, that makes sense in Missouri that people don't really care about having swimming pools. So you know, it's all about knowing your market, knowing your area.

Kyle:

And you know, people in our market, they come mainly, the big season is obviously Memorial day through Labor Day, their week long bookings. And it's a lot of people out of state. So we get a lot of Midwesterners, a lot of people from like Virginia, Maryland area, and then even from like South Georgia, Alabama, Tennessee, right. So they're coming a long way to the beautiful North Carolina coast. And they want that kind of full experience so anything you can do to set your property apart from the rest, right. So we're in the process now of putting in a very large putting that we bought . It was very overgrown in the front, you can even see the house from the street. We went in, we ripped all that excess foliage out and left some stuff that looks good. And now we've got this big open area that we're going to put in the putting green so that when you drive past this, this property, you see this nice, large we're talking like 18, but my 12 foot putting green. You know, it's just something that sets it apart. And then you imagine going with your buddies and all like, Hey, we're out here and we're chipping the sand trap when we're putting green. We're having a couple of beers after being at the beach all day. It's just something that other properties around don't have. So it sets us apart.
David:

Yeah, most of them probably have cornholes but which is, which is great. But you know, having something additional is awesome. So that's super cool, obviously. Okay, and we kind of alluded to this earlier, but we're going to dive right in. You are an active duty Marine who is not exactly just all the time in the world, right? You're a busy human being. And I know what some of you all's aviation schedules can look like. So, you know, everyone always has swinging with the wing until you get a wing in your life, not nearly as much swinging as you'd like to think. So how are you? How are you managing this?

Kyle:

Yeah, so you know, it's kind of cute and a little bit earlier, it's about automation and doing as much as you can, and you know, I'm a southern man. So let's tell the story. Alright, let's, let's talk you through, let's say, let's say that you, you're out Missouri, or you're like, Man, I really missed eastern North Carolina, I want to go back and just take the wife and kids, we're going to have a good time. And you get on Airbnb, and, and you're like, you know what, I'm gonna go to Airbnb or VRBO or whatever, and you're like, and you search and you easily find five properties that or what you want in the property. Okay, and let's say that I'm one of those. And let's say you're like, Man, you got a question. Somebody emailed me a question that I don't know what it was, they had something like, Hey, do you love pets? So maybe I want to be my dog, right? I mean, buy me a bag. Oh, hey, man, I appreciate your interest, blah, blah, sorry, we don't allow pets in our properties because of this, right? And a couple weeks later, you hadn't booked yet, weeks later, you see the Hey, two of these properties are booked of the five that you saw. And two, there's three remaining, plus two others and those two others are priced the same. But my price went up, right? The markets changed obviously. So the price went up like oh man, he's kind of I'm kind of out of my price range now. So I'll wait a little bit longer if you procrastinate two or three weeks prior to your time, time of leave, right. And your wife's bugging your wife's bugging you like I'll get it I get it I guess you're on there and lo and behold you still see mine is the only one left but my price has now dropped back down into your range like sweet so you book it so you look at I'll get a notification I got an alert my my cleaning crew like hey, listen, David's coming this day to this day. You guys need to clean it here. All right. Now I'll send you an email. I'm gonna use you with my wife and me and Todd was talking about our business and talking about some of the stuff that's great about morale and all the things you can do. Two weeks out, I'll send you this welcome pack of this got everything you needed. You need to know about the property what to bring what to pack, where to eat, where to get the spa treatments, where to get appear all this kind of stuff, you know, everything you need to know, three days out, I'm gonna send you an email says, Hey, we don't do keys here we do all electric locks and this is your code, alright? It's only gonna work from this day on and I've already programmed all the locks on the property, it's ready for you. Alright? And then the big day comes, right? You go there, you get the you get the you get the property you get there, and what's the first thing you and your family got to do?

20:00 - 25:00

David:

I mean, obviously use the electronic key codes, but I don't know.

Kyle:

Come on, man, I look at your Instagram feed every day, I know exactly what you're gonna do. You're gonna log on the Wi Fi, and you're gonna post a selfie.

David:

Okay. Yeah, that works.

Kyle:

It's not, it's not gonna be just you, it's gonna be it's gonna be your wife and be the grandma and everybody else that you brought down with you, they're all gonna, they're gonna log in the Wi Fi, when they log on the Wi Fi, they're gonna get this target or Starbucks, like splash page. And this is our brand. And they're gonna put all their information in there, and I'm gonna let them get on the Wi Fi. Alright, and then we'll send an email to give them the welcome packet because I know daggone well, that you forgot to send everybody else the welcome packet. So they're going into it, right?

Yeah, right, and then the, so you're gonna have a great time there. Hopefully, you won't have any issues. And then the night free check out, I'll send you a quick little reminder, like, Hey, David. This is what you need to do for tomorrow for checkout, make sure you're out by 10am so we can get the cleaning crew and that kind of stuff, right? And then, you know, obviously, you'll leave in about three days. I'm gonna say I'm gonna write a nice review on Airbnb because you book with and I said, Hey, David was the greatest guest ever. So clean. Thank you so much for visiting us at Crystal Shoals vacation rentals, you know, please come back again, or something right.

After that, the marketing emails are gonna start, right? And so if you think about what we just talked about, right, that's the story from the first engagement with me all the way through the market engagements afterwards, right? That's a lot of work on my part, right. Lots of energy, lots of time, lots of coming home after a long flight and doing all this kind of stuff. Now, what if I told you that everything I just mentioned, I didn't do. Like I had the only time I spent on your booking? For a couple seconds, I looked at an email letting me know that you booked? Right. Everything else in that whole chain of events was automated.

Now, I put a lot of effort into the front side of that. But now it can repeat and repeat and repeat. So we're talking about that one guest in the summer, right? You know, I'm gonna have 43 at least 43 individual groups coming through just for the summer, it was three properties. I don't have the time to do what we just talked about every single guest.

David:

I have to do it on time.

Kyle:

Exactly.

But I have systems in place to do that for me. And that's really the key. To have the system in place. And you can't do it all yourself. And so, you know, I have, I pay. In some cases I pay for systems that allow me to do that.

David:

Yeah. That's awesome.

I'm curious. You mentioned marketing emails, what does that look like? Is that you just saying, hey, you know, if you guys are coming back out here next year, like how long does that sequence go on? I've not heard of somebody doing the back end like that. That's cool.

Kyle:

Okay. Let's start from the beginning. Alright, so let's talk about, let's talk about one finding the property. Okay. And so, you know, everybody talks about Airbnb, a lot of people know about VRBO, or I guess, or verbo now, right. But from what I've seen of a lot of the small-time, short term rental people, you choose one or the other, you're in one camp or the other. I'm in both. Alright, so we're on both and we have our own website. We're on Travelocity, we're on all these things, right. And in order to do that, you have to have a channel manager. It's, you know, that is right. And so, we use that one that we just transitioned to here recently from a different provider, it works really, really well a lot of those automation that talked about are through that. So basically anything pre booking, all those engagements that I have with our guests are all through my channel manager, you know, so they do the payment collecting, they do the lease agreements, they do the security deposit, do all that kind of stuff. And so it takes a lot of work on the front end to say, this is what I wanted to say. These aren't just form emails sent out you know, they're addressed to you by name, and there's a lot of thought and effort put into it. This is just prepared automatically. And so that's how we get all of our listings out on the different OTAs online travel agencies and that just increases your exposure, right? The more people that see what you offer, the more competition you have for your units, the higher price you can pay.

The other thing that we use as a dynamic pricing software. If you're familiar with that basically, that just says it's just one giant algorithm, it takes a lot of data. And it says, Hey, this is what you should price your unit based on the market. But it does it every single day, each day for all the properties right, and it pushes it out. And so that goes through our channel manager and then out. This is pretty common. I think if you talk to most STR people that they can, they can least have a conversation, those two things. But I think we're special. And what we do is that that Wi Fi, we use a company called stay fi, and I got no problem putting it out there if you don't, if you don't mind.

25:00 - 30:00

David:

No problem. I'm googling it right now.

Kyle:

The guy started this name, a guy named Arthur Coker, he is a phenomenal individual, he found the niche and really is exploited and done really, really well. He offers a great service. And so what you do with them is we basically buy an access point, that hooks to a router, and it goes in the property. And what that allows us to do is one that restricts who can get on the internet. So you have to put in your data for the Internet, right? To access the Wi Fi. Everyone in the party wants to access the Wi Fi. So our units go from six to 14. And so when someone books your property, if they book it through Airbnb, Airbnb is gonna, first of all, everybody's gonna hide their email, right? Alright, so you don't get that you don't get to have that email from them. Unless you ask for it, I'm gonna give him a technique to do that, right? But that's just one contact for a group of 14. But when that person comes in that group, they come, they check in and every one of those 14 people try to get on the Wi Fi, I now get all of their contact information, not just one, but all 14. At that point. And then it's fully integrated with my channel manager. And it's fully integrated with my email marketing, which I'm sure you're familiar with as a real estate investor. So it's automated. So you put your email in, I will send you the welcome packet that the booker forgot to give everybody. At that point, now I can start sending other emails. It's not just just general spam email. It's very targeted. So I say we say hey, we thank them. We thank every guest, when they check out five days out, we say hey, listen, if you enjoyed it today, we'd really like a review. Alright, reviews drive traffic on the OTA, right.

So hey, you know, would you consider giving us a review? And if they did not have the book, or they can't give it through Airbnb, but they can give it to Google. And so that goes on our websites, we form those right. And then we introduce other properties, you know, they may have stayed in one property, and only sold that one property, but they don't know what else we offer. They know about the other property we have, or, you know, hopefully next week, next year, when we're offering six, or nine or 12 more properties, hey, listen, here's all the properties. One of the students introduced you to those we sent, we sent out an email saying hey, by the way you came to him or now in the summertime, but look at all the great things that happened during the fall, or during the winter or during the spring. And so it's just you're constantly keeping your brand at the top of their mind. So you know, every 30 days, every 60 days where you can check in with them, like hey, by the way, did you do, you know, this event happening next month, you know, that type of thing. Or if we when we add a new property, we'll send a mass email to Hey, by the way, we have a new property once you check it out, this is where our offering is. So it's just a way to keep your brand on their mind and keep it engaging with your guests.

David:

Well, and it's super cool that you're able to do it with everyone in the party. So the Airbnb that I have upstairs is a four bed two and a half bath with to pull out couches, the sleeps 12, right. So the amount of people that I have not been able to communicate with who I know have used my WiFi. That's super, super, super cool. And Okay, so just for clarity for everyone else who's listening. You might tell us which channel manager dynamic pricing and email marketing systems you use?

Kyle:

So I use owner reservations for my channel manager. Okay, I switched to a different one. I won't mention them. They were fine. But I would or I just got a lot more tools in the toolkit. One example of that is they allow me to integrate my electronic locks. So whereas when we first started, someone would book I'd get their phone number we use the last your digital phone number, right? So I got their phone number.

30:00 - 35:00

David:

I'm guessing you use the slog in code locks?

Kyle:

Yes, I do. I didn't at first, I bought a different brand, which was terrible. And I went just like in code, they're the best. But I would go from my channel manager on my computer, looking at my phone going into other other locks apps. And like having to put their codes in it was kind of a pain, right? So I use tied in with a company called remote lock. So basically, whenever you book, it automatically goes to my system, and it pushes your information out to the locks with your date and time. And so no one else can use your code during that time. No one else knows your code. And I don't have to mess with it on my phone. And what else. Oh, price, I use price labs for dynamic pricing, which is fairly becoming. I think they're fairly well known as well.

David:

Yeah, I think they're one of the two. So I use guest D for my channel manager for the same reason they do the lock integration thing for the last four, which I love because when I when I rocked I did to Airbnb’s for spare bedrooms at a house that I actually was renting in San Diego. So I got the landlord. I was like, hey, I'll sign a two year lease today, if you agree to let me sublet bedrooms when my family's out of town. And they were like, oh, yeah, that's totally fine. And then awesome, goes in the lease. And then I just never mentioned that my family had already moved back to Missouri. And I was going to be a bachelor and so 95% of the year they weren't going to be there.

And so I rented two rooms out on Airbnb, but one of the biggest gripes I had was, at the time, like I couldn't change the doorknob and stuff. I mean, I probably could have, but I didn't want to because it was a rental, yada, yada. And so they just had the garage code, which wasn't the end of the world. I only had issues once, but there were ones that I've never again, right. So I had a guest who booked on a Tuesday for a Wednesday, Thursday stay. And they were local, and one of the rules was like, Hey, if you're local, you have to send me a message. I don't accept local bookings. Because, you know, I had some trouble with you know, I always felt like, Man, if I got a single dude, who's trying to stay in my bedroom, for like, one or two nights, like the night of either, he's probably hooking up with someone who doesn't need you. He just got kicked out of his place. Like there's not really a good situation for that.

Kyle:

Yeah.

David:

So that was one of my things. And sure enough, this guy books on a Tuesday for a Wednesday, Thursday, and I kid you not I come home Tuesday, the day, like 24 hours before the booking starts. He is making pancakes in the kitchen. And I'm like, buddy, like, you know, the house isn't being cleaned like I was. I did the cleaning myself because I lived in the house. So I didn't care. And it was a bedroom. So it was really easy to clean. And I'm like, he's like, you know, he ended up leaving, I got Airbnb to do whatever. But he tried to leave me a review. And I was like, no, no, because he was upset the place wasn't ready for him. And I'm like you showed up 24 hours early. So yeah, the electronic locks are a game changer. And then I use beyond pricing, which is that I think that in price labs are the two big enough so and they both I mean, man, the amount of money that those platforms make you by changing the price.

Kyle:

One, obviously, they're gonna stay on top of your pricing much more than you can, right, and I'm a nerd, I love going in there. And I'm playing with the algorithms and I'll change a little bit of what they're doing. And you can do that, or you can use what they do. But then another key thing that that gets, I don't know all the ins and outs, but I think it works. And that is it. Because they update your prices every day. Something in the OTA algorithm, you know, like your, your listings are more active, because you're making changes every single day. So I think you actually get better sorts of results by using those.

David:

I just increased my average in my minimum by 15% literally 30 minutes ago like right before we got on this call. On my last call. Someone mentioned something about short term and I was like oh, you know, I haven't tweaked the pricing. I haven't checked my pricing in a little bit. And I looked at it and sure enough, it was like Hey, you know, much more much higher traffic much higher bookings this far out in that far out than everyone else. You could probably increase your prices and be fine like Oh, thank you boop boop you know, extra 20 bucks a night or whatever. Probably a little bit more. But yeah, I love it and it makes things just so simple. But this WiFi thing is awesome.

Kyle:

I can't say enough about it. And you know, it's six bucks a month which is dirt cheap. I mean, I've got you know my email list is five hundred people long. For a year. And that is 500 people who have been in my unit?

35:00 - 40:00

David:

That's awesome.

Wow, that's so cool. I'm gonna like, man, if they have an affiliate, I'm gonna go blow their platform.

Kyle:

They do. And, as a matter of fact, I am one of their affiliates. So if you would like to get 20%, off of your, of your safe license for the podcast world, please, please see my website. I'll direct you.

David:

I'm all for it. Yeah, I'll definitely hit you up for that, rather than going through this, I'll use your link. But yeah, I mean, that's, you know, I'm admittedly, with the brand and everything. I'm a marketing guy, at least somewhat by force, right. And so, you know, leads and email. You know, building your list is not the easiest thing in the world, right. I'm at a spot now where I probably add, I mean, it's kind of crazy, where we're at, I probably add, on average, about 150 people a week to my email list through, actually, it's probably closer to 200, because I've got all the stuff on the website, but then people who are joining the Facebook group will manually input it so that we can add them to the list if they want to. It's an optional thing, but you have it all that took time and effort to build out. This is so organic, it's like they are paying you to stay there. And hey, by the way, we've got all this awesome free Wi Fi. It's all yours, as long as you're cool with me hitting you up about future properties.
Kyle:

And another thing is, you know, one, it's your branding, right? And you talk about marketing, branding is everything. And I've learned that especially when you start when you're at the point where it's scaling, right, and not only well, I want people. I'm gonna fill my properties, but pretty soon, I'm gonna start co hosting with other people. So I want to feel their properties, but they're still going to be under our brand. And so that brand recognition, right? I think when you log on, you see, you see our logo, right, you see the background, depending on what property it is. And then when you click submit, it takes you to our website. So it just familiarizes the guests with that. And you know, obviously, if you're in a short term rental game, you know, how much more flexibility you get when those bookings come direct, right? We're not rolling through the OTAs when they come to rescue, there's so much more, you know, flexibility and leverages, you can use for that. And so you introduce him to booking directly with you versus going back through the OTA.

No, by the way, the other OTAs did, they didn't want to give you the real email. Now I have the real email of the actual guests who booked as well.

David:

That's why they didn't want to give it to you and you know, whatever else.

And this is more a market thing. So when I lived in San Diego, and I Airbnb, you know, or short term rental, those two bedrooms. In the two years that I did that I had one VRBO booking and it was GARBAGE. And so after like a year, I just shut it down. It was like alright, all Airbnb. And so when I moved here, I was like an Airbnb. And then one of my buddies was like, Dude, it's market specific. Put it on both. And so I'm like, Alright, fine, I'll go and upload everything. And I'll try again. And I've only had three VRBO bookings since then. But I mean, granted, that was only like three months ago. And there were already a lot of Airbnb bookings. So not a whole lot of space. But for whatever reason, my average price per night is probably like 156 on Airbnb. All three of those bookings have been over $200 a night on VRBO, and I have no idea why but they are willing to pay substantially more. And they've all been longer stays. So those three bookings are probably encompassed like 25 days, you know, whatever. And they're probably the equivalent of two months worth of the Airbnb bookings I've been getting. And so I'm curious, like, do you see a difference in your market? Is there one that's clearly better? I'm trying to figure out if it's just market specific, or if there's a method to the madness.

Kyle:

I think it is and again, I'm talking about one very specific market but from what I've seen, if you just go on and you get out and you search emarald or either one of those platforms, there are a lot more properties on VRBO and I think because it's just it was the more well established longer running and then you know this is a vacation area. All right. And there are a lot of Airbnb at least I get the feeling that Airbnb is more marketed towards, you know, your younger weekend stays in the city type thing where this you know, generally our demographic is older, more well established, and they're looking for those longer stays. So a lot of the properties are users and their long term users. Maybe the person that bought our first property only advertised on VRBO, nothing else, not on their websites, not on Airbnb, nothing but VRBO.

40:00 - 45:00

Kyle:

I wouldn't say we're early adopters of Airbnb in our property. But there aren't a whole lot of Airbnb listings in Emerald. And because of that, a majority of my bookings are coming from Airbnb. Upwards of 50 to 60% of my OTA traffic comes from Airbnb, we're on booking.com as well. And I think booking.com and VRBO is about even.

David:

I haven't gone that route in the short term. So we have a hotel, and in the hotel, we are everywhere. Currently I'm occupied enough that I'm like, okay, whatever. But I think that's probably the next step is to build up the website and actually have everything in once you know, all the different booking platforms.

That’s cool. I still like staring like Man, I thought when you were like automation, I was like, okay, cool. This would be a conversation I've had before, you know, and some of it. Sure. But I don't know how I've never heard of this. Because, and you know it. I won't say what it probably is, in my head, it probably is that a lot of these guys are real estate investors, not marketers. And so they don't, they're not looking for the edge on the marketing side. They're like, Oh, yeah, I'm getting bookings, and Airbnb and VRBO. That's great. But where is this really going to shine for you? Like it's one thing for you to be Emerald Isle. I've got 12 properties, you're coming back here, you know, we'll stay on top of mind, if you come out, you're going to hit all those people who are annual guests, they're going to remember you instead of going out like, Oh, that's great. Where this is really going to get crazy for you is not that you need to do this. But like let's say all of a sudden you own a property in Miami and you own a property in San Diego and you own a property in the Rockies and whatever. And now these people who are on your list, know, hey, we're going to this place next, and he's got a place there. Well, we'll just do that rather than taking a risk on some other Airbnb hosts that we've never seen.

Kyle:

Exactly, exactly.

Except brand recognition, you know, and and, again, as we pivot in going into the co hosting thing, this is just something that I can I can use my deck when I'm when I'm pitching to a new owner, I like hey, listen, no one else on the island is doing this. And look at these people that I have that I can, that I can show them now. Now, my list becomes your list.

David:

You know what gets even crazier with this, not that you need to do this. But as the wheels are turning in my head, this isn't limited to hosting because you've got email access. So there is probably a spot here for you as this grows, once you get to where you've got to, you know, I mean, a couple 1000 people and you're wanting to play play the game on the email marketing, I could see a spot where you can send, you know, if you have a discount code for an airline's or a, you know, hey, if you're interested in getting started in hosting, I'd love to give you some tips on you know what we've done to achieve success, like, here's a whole bunch of affiliates that you could use to sign up for this. Like there's a lot of plays to make money through an email list that people don't think about to include the point that it probably wouldn't be hard for you to find some local businesses that would be willing to sponsor your newsletter on a recurring basis for you to plug Hey, this is my favorite restaurant in town, or here's a $5 coupon to your, you know, this awesome coffee shop right down the street.

I mean, this is exactly why platforms like Airbnb and VRBO and in online marketing, like the coaching world Udemy was this platform that blew up for like super basic courses. But they didn't let you maintain emails, because they wanted everyone to stay on the platform. And so the companies realize how infinitely valuable that information is. And so the fact that you found a way to get all that for every guest, not just the person who booked it is I mean, my wheels are turning, there's so much value that you could eventually get out of it as you play with it. And it's not just from bookings, which is cool. I'm like, Man, I'm gonna go reach out to my local coffee shop and be like, Yo, I'll give every single guest a $5 coupon if you pay me $200 a month to sponsor my email list.

Kyle:

I might do that this weekend when I go.

David:

I guarantee you. There's some companies out there that'll do something like that. And the cool thing with that is that's a win win. Because if you feed people into their business, they make money. But if you send all your guests a $5 coupon or whatever, they're all gonna be like, oh my goodness, especially if you've time it to where it's like the day they check out and it's like, oh, the last thing I remember before writing a review is he gifted me something like, I gotta give him five star.

Kyle:

I like it, yeah!

45:00 - 50:00

David:

Oh, man, that's awesome. Okay, so we've talked about a whole bunch of stuff here. And, you know, obviously I want to respect your time. I'm curious. You know, what's your goal for the next year or two with this?

Kyle:

You know, like I said, we're in the scaling. I want to get, I think the short term in the next two years, I'm looking for 10 properties total. And then and I think in the long term, and I say, for long term, I'm saying five years, nothing, nothing beyond that. Part of that, because I will retire in five years. But I want to step away, I actually made a good buddy, actually a squadron buddy of mine, the other day, I hadn't seen in years, and he's doing well. And he's, he's in m&a type stuff now, and, and he said, Hey, listen, man, he goes. If you can't step away from your business for six months, and it's still profitable, you don't own a business, you're only self employed. And that's where I want to get to, I'm not there. I'm not there right now. But in the next five years, I want to get there, I want to build this thing up where I can hire hopefully, a newly separated Marine, come right here in Greenland, and get someone and teach them and then help them grow, and then grow this business.

David:

Yeah. I agree with your buddy's definition, right of the self employed piece. And, you know, it's interesting, because short term rentals by nature is a much more active version of real estate investing. And so a lot of people just kind of own that. And they get stuck in the trap, which is fine. The only thing I do, through my platform is, you know, if somebody asks me a question, I'll respond, but all my other stuff is automated, and my cleaning is automated, and all that other stuff. And so it's pretty easy to be, unless there's an issue and someone has to reach out, it's very hands off. But I only have one, but I think that you're, you're spot on, right? You just hire somebody once you get to a point where you can afford to hire him. But what I would say is, I don't know if you've looked into this yet, but if I was you, I would 100% look into getting some skill bridge insurance. While I mean, you're, you know, I've had four people intern with me on skill bridge in the last two years. And a lot of those are like friends. And they do a little bit here and a little bit there. And you know, it's a mutually beneficial thing where they're getting to EAS and so they get time to work on their own stuff. But I mean, that'd be a really solid way for you to find that.

Yeah, six months of them working for you for free, while the Marine Corps pays them. And then if they love it, you've done you love it. There's the job and if not, there's the door. You're welcome to help you EAS.

Well, I look forward to seeing where things grow and where things go. And I'm gonna make sure that if I ever stay at your place, I don't log on to your Wi Fi, so I'm gonna have to get no, I’m just kidding.

I mean, that's super cool. Like, I'm excited about exploring this, this venture as a bonus for what I'm doing already. So that's incredibly valuable to me, and I'm sure to the listeners as well. I guess I'd be curious to just know, you know, I don't ask this question enough. Is there a book that you recommend for anyone who's looking to, whether short term rentals or real estate or business in general that's been a game changer for you?

Kyle:

Yeah, I saw that on your prep sheet. And you know, to be honest with you, it always comes around the Rich Dad, Poor Dad. I know, everybody reads it, and it's always on the old books but the biggest thing to me about that book is it's about the mindset right like you know, when I when I was coming up man in 2005,2006, 2007 I was first learning stuff, the bigger pockets was just getting started. There wasn't the resources out there that there is now and so that one kid I’m absolutely murder his name. And I'm sorry. Jabbar Adezada, right I listened to that podcast and he blew me away and like, man, that kid is so much smarter than I ever was.

Right? And I was like, man, like, you know, I wish I'd known that then. But to me, the biggest thing is there's a mindset in Rich dad poor dad, it'll teach you that looking at things a little bit differently. And once you do that, then you can get in whatever your niche is, which is going to be the commercial triple net lease stuff, it's gonna be commercial multifamily. It's gonna be single family homes or it's going to be STR there. There's so many resources out there, but the first thing you need to do is, think about it in the correct way. And that I think, to me that's what I would go with first.

50:00 - 52:06

David:

Yeah, yeah, I'm a fan of that book for the exact same reasons I've read a few times. Okay, so I would imagine you're gonna get this a little bit, because you've provided some value on this. Where should people go if they'd like to reach out and touch base and ask some questions?

Kyle:

LinkedIn, obviously, is Kyle Ellis up there. And then thecrystalshoals.com is our website. And this is a mistake. Number three or four I've mentioned here, we created that name we thought was a Google Play or property was named that or famous shipwrecks around the area, Crystal coast, and it shows I thought was a ubiquitous term. Apparently, it's not. A lot of people know what that is. So we named our business after something that a lot of people don't know what it is, but thecrystalshoals.com.
David:

It's interesting to hear that that's not ubiquitous, I would have made the same assumption.

Kyle:

And then if you want to reach out to me directly, it's just [email protected].

David:

Awesome. Well, Kyle, thank you so much for joining us today. This has been a lot of fun. And I definitely appreciate when I learned something that's going to help me out on the show.

Kyle:

Man, I'm glad you took something away after the last few guests you've had man. They've all had some really unique things to talk about. Like man, I'm not of that caliber. Oh, this is gonna be a waste of his time. So I'm glad you're taking something away.

David:

Definitely not a waste of my time. So I really appreciate it. And thank you so much for joining us today.

Kyle:

Thanks for having me.

End:

Thank you for listening to another episode about my journey from military to millionaire. If you liked it, be sure to visit frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there. We'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.