Have you thought about buying a vacation property and putting it on the short-term rental market, but weren't quite sure how to manage the process?

Our guests, Bryan Marks and Jimmy Woodard, have known each other since 2010 when they met as students at UC Berkeley. Since then they’ve built over a decade of experience in the tech industry, and have put their tech know-how to good use in the launch of a short-term rental business. They bought their first short-term rental just 6 months ago at Lake Tahoe and are working on a second one across the country in Miami. In this interview, they join us with some tech tips on what they've learned, so far.

If you’d like to find out more about owning rental properties, including short-term rentals, join RealWealth for free by visiting RealWealthShow.com. As as a member, you'll have access to the Investor Portal where you can speak with one of our experienced investment counselors, view sample property pro formas, and connect with our network of resources, including property teams, CPAs, attorneys, lenders, 1031 exchange facilitators, and more.

Go to www.RealWealthShow.com for more information or to listen to past episodes.

TRANSCRIPT

[00:00:00]

[music]

Announcer: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investor's resource.

[music]

Kathy Fettke: Have you thought about buying a vacation property and putting it on the short-term rental market but aren't quite sure how to go about that? I'm Kathy Fettke, and welcome to the Real Wealth Show. Our guests today, Bryan Marks and Jimmy Woodard, bought their first short-term rental property just six months ago. It's been so successful that they're doing it again, but this time across the country in Miami. They're here to give us some tips on what they've learned. Hey, Jimmy and Bryan, welcome to the Real Wealth Show.

Jimmy Woodard: Thank you. Thank you for hosting us.

Kathy: Just first talk about the short-term rental business, a year ago, there was a lot of concern that Airbnb wasn't even going to make it, now I don't know if those were just scary headlines. Today, I think it's been busier than ever for Airbnbs and short-term rentals and Vrbos and everything else out there. How did you guys get started? Let's just start with that. How did you get started in short-term rentals?

Jimmy: Bryan, you want to take it away?

Bryan Marks: Yes, thank you, Kathy, for the question. Great to be on the show. Jimmy and I actually met a long time ago, 10 years ago in college. We actually started doing short-term rentals before Airbnb was a thing. I know some people don't remember that far back, but we went to Tahoe a lot, Lake Tahoe in California, and we loved it. We had a great experience. We always had aspirations to have our own that we could use in our spare time and, then ultimately, make that into a revenue vehicle for us to generate income, passive income, which is our opinion some of the best kinds of income. Ultimately, we talked about it for years, and then recently, we made the plunge late last year.

Kathy: Late last year? Okay.

Jimmy: Yes, we're still new. We started back in December of last year where everything came full circle and we got our first property in Tahoe to help other people also [00:02:00] invest in short-term rentals because we want to spread wealth as far as we can through our business model.

Kathy: You didn't exactly pick the cheapest market, and you also didn't exactly pick a down market. [laughs] I think that could've been the hardest time to buy vacation property in a place like Lake Tahoe. How did you get that first property?

Jimmy: Actually, it's funny you mentioned that because there were multiple properties that we bid on that we got outbid. It was a very frustrating process, but what ended up happening was we came across this company called Flyhomes. I don't know if your audience are familiar with them, but they help you convert your conventional offer into an all-cash offer. They at the time didn't even exist in the Tahoe market, so we had to cold email the CEO and beg him, "Can you help us get a property?" because we kept getting outbid.

It worked out where the very first time that we worked with Flyhomes, our offer, even though it wasn't the most money that was offered because it was an all-cash offer, we were able to purchase the property. I would definitely recommend them to all of your listeners. For anyone that going through that same frustrating process, keeps getting outbid, Flyhomes is a great partner that we worked with.

Kathy: Oh, that's wonderful. You had to have the downpayment, or they put up the rest of the money for you so that it's cash and then you finance it after?

Jimmy: Correct.

Kathy: Are you guys from the San Francisco Bay Area?

Jimmy: Yes.

Kathy: It's just like this tech hub of awesomeness where there's just something new happening, [chuckles] something coming online all the time. I don't know if you know, but I won this award with Goldman Sachs of top 100 most intriguing entrepreneurs, which was really cool.

Jimmy: Oh, nice.

Kathy: I sat at a table in 2012 with these two young guys [00:04:00] who were telling me about this new business they had. It was basically they were so tired of trying to get a taxi, and I think you know where I'm going. I don't know if you remember days before Uber. Fine, I do. In San Francisco, if you were at a bar at 2:00 AM and you needed a taxi because you did need a taxi because you shouldn't be driving from a bar at 2:00 AM after drinking, you'd wait hours. These guys were literally standing on the corner watching these cars go by thinking, "I just want to jump in one of those." As they were standing on the corner, they come up with the concept for Uber.

Jimmy: Got to love that.

Kathy: I got to meet them at the very beginning, I didn't even know what it was. It's just really cool to see that ridesharing, and now, house-sharing, which I think is what you guys are doing now. It's only been about six months, but how's that vacation rental performing?

Bryan: It's been doing great. Back to that tech story, we do have a lot of tech background, both Jimmy and I, myself being more on the engineering technical side and Jimmy being more on the sales. We did lean a lot into that. One thing that was really helpful and just for your listeners or viewers out there, there's plenty of tools called machine-learning tools where, basically, they're really good at predicting how much a home will do on these short-term rentals, whether it's Vrbo or Airbnb.

We knew pretty definitively that we can build a pro forma right out the gate and actually hit really good numbers and really feel confident that we're going to get a great ROI from the property. We jumped in there and did that initially. It's been doing great. It's actually exceeded it. We've added a lot of the amenities that have proven to improve the outcome of the home and have a great experience. Something ultimately that we wanted, two things that come to mind are, one, we added a hot tub to the property. It's always great to be in the snow and then just be in the hot tub. It's really nice to [00:06:00] have.

Kathy: It's a must.

Jimmy: [crosstalk] Oh, yes.

Bryan: It's a must. Then we added a little movie theater room, too, with very comfortable sitting and a bar area because I know, especially during COVID, people just want to be with their bubble and with their friends and family and they don't really necessarily want to go out, so we did have a bar, lounge area into the house so it felt like you could stay home and be safe while still having a good time. We added a lot of those amenities, and they paid off quite a bit.

Kathy: Do you think that's going to continue because I think a lot of people forgot there was a COVID? [laughs] It's crazy out there. My daughter was showing me pictures of San Diego, and there was no sign of anyone staying home.

Jimmy: Yes, they were binge spending, right? In full force right now.

Kathy: Yes, [chuckles] exactly. I imagine no matter what's going on, people like having hot tubs and bars in a vacation home. One of the sites you mentioned or one of the technologies, is it AirDNA? Is that the one you use?

Jimmy: Yes.

Kathy: You can become a member there and get a lot of