A Blueprint for Short-term Rental Success with Justin Mosley

Foreign bowling with Pivotal Real Estate Investments. And I have with me today Justin Moseley. Justin, thank you so much for coming.

Absolutely. Happy to be here.

Yes, appreciate it. So Justin lives down in my own home. Stomping grounds is where I would say for where my professional life took off. I was working in Fort Lauderdale and, and Palm beach and Martin counties and up and down through there. And you are in Jupiter.

Absolutely.

Favorite place. Favorite place.

Absolutely love it.

Yes. So Justin has served in the Navy and been a nuclear machinist, which is awesome sounding. It sounds dangerous too. And he's also got a economics degree. Financial. Well, did what. What was the actual name of the degree?

Yep. So undergrad, business economics and master's in financial economics. Don't worry, we're not going to go over any of that stuff. So I'm sure your audience doesn't want to hear anything about that.

I don't know about that. Do you enjoy underwriting?

Oh yeah, I enjoy underwriting. I love looking at kind of macro trends. I think that's kind of shaped my perspective on the assets I get into and why I like to invest the way I do.

Right, right. Well, and I'll share with you, underwriting is a term that I'm used to from my background as being title, land title or insurance. So that's one of those nomenclature type things in, in the multi family world because it's, it's basically analyzing the, the property. But anyway, so yes, please tell us about you. You do it in your words.

Yeah, absolutely. So like we discussed prior, from Baltimore, went into the Navy, had a really awesome experience and yeah, you said I was a nuclear machinist mate on George Washington. It sounds a lot sexier than it actually is just being working in a reactor department on one of the huge aircraft carriers to power the ship. Right. So it's kind of closed circuit. We don't use any kind of outside power and that's effectively what I did. So thought I wanted to be an engineer. Quickly realized I did not. So after my time in the military, going back to undergrad and grad school, really focused in on, you know, economics. Really want to understand kind of how money worked, how, you know, the economy worked. And ultimately that drew me to real estate as, you know, really a way to build wealth for myself and my family, but also help others that want to do something a little bit off the beaten path, but it allows you to kind of live the life that you want to live.

That's terrific. That is. And you have a wife and kids.

Do you I do. So I have a beautiful wife that I met actually when I was in Tampa, Florida. She's English, and then she had to go back. So I did whatever I could to get over to the country. I thought as a stupid American, the English would just be like, hey, come on over here. And that was not the case at all. So that's why I ended up in grad school and I did that in England. And then we stayed there for about two years and then came back and settled in Jupiter. And I have four beautiful kids. So 12 down to one. So I'm still very much in the thick of it.

Yeah, yeah. Oh, I'm sorry.

14 to 1. Always gonna kill me. So 14, 10, 5 and 1. There we go.

Boys, girls. Are they both oldest?

Oldest is a girl. The rest are boys from buckshot. Boys. Fun times. Fun times.

Wow. I had two. That was enough for me.

I would have as. I would have as many as we wanted to. So that's all my wife at this point now.

So she's done well. Very good. Well.

So.

And tell us about your business model.

Yeah, so I think I'm very much in a unique space in real estate. So it is effectively single family. So we buy single family homes in areas that we like. Right. So at the Southeast, very active in markets like, you know, South Carolina, particularly Florida, Mississippi is another market we're moving into. But we operate them as short term rentals. Right. So Airbnbs, like a lot of people like to say. So I always throw the caveat that Airbnb is just a platform, but the short term rental model is just, you know, renting your property out for less than 30 days. And really the value there in that is really increasing the amount of cash flow that that property can yield over time. And that's something that really piqued my interest. And it, it really is almost a hybrid of real estate and hospitality, but it really kind of fits my personality and that's what drew me to this kind of asset class.

So if you're in multi states and regions, then you. You have a big need for reliable help. How do you. How do you do that?

For sure. So we have our own team within Florida, but outside states, we have other veteran property management groups that we trust and we rely on to operate very efficiently. Like the military, you know, they cross every T and dot every I. But they are our partner in helping, making sure that guests have great experiences, that turnover works well. And really we have systems in place to make sure that everything is a very much smooth transition.

How do you find them?

Is it relationships? Yes, relationship. I we're really fortunate that I actually had a connection with. It's a patriot family home. So Joe Riley, he's a guy that was, you know, ex special forces, Cambridge guy, went over to England to get his PhD, actually worked in the White House and he just had a phenomenal organization and we hit it off well. So he's our go to property manager.

Nice, nice. Well that's, that's the magic as you know. Yeah. Especially in that hospitality part of it. That's terrific. Is there anything that you consider kind of your brand that makes you your place as yours?

I would love to say yes, but I think a part of our strategy, we are very much focused on the financials and analytics. Right. So we don't want to do anything. We're already kind of in a fringe asset class, so to speak. Right. A lot of people aren't really familiar with short term rentals, at least not from an investing standpoint. So you know, we try to be as conservative as we can be while, you know, having an asset that we think does phenomenally well, you know, better than multifamily, better than obviously single family rentals. But we like to stay in theme of what's going on in the market. So we're going to be at, you know, kind of what that top end or mid tier is and but try to just perform better than our competition. So that's really our strategy. It's not to stand out, it's not to be the most unique property, it's to operate the most efficiently and create the most value.

Is there a minimum number of bedrooms you're looking for?

Yep. So we started off actually very small. So condos near the beach which perform really well, you know, triplex small, multifamily in like urban areas like in West Palm Beach. Now we're starting to find that, you know, providing value in areas really it's having larger homes. And I think for us, you know, having buying a five bedroom house and being able to convert into six in having real experiences. So we have a property under contract in Cocoa beach, has access to the water, has a pool, Jacuzzi. So creating a place where families can come together and congregate and there isn't just as much inventory in those markets as well. And that's kind of our strategy now and that really protects our kind of down. In the event of any kind of market, you know, crash or even slowdown, we tend to see those properties perform just as well in downtimes.

Great, Great. Well, I'm about an hour from Coco. It's a little longer for you.

Yeah, yeah. The property will be up and running here soon, but it's a phenomenal asset.

I love that. Yeah, Coco's really coming around and. Yeah. Are you. Are you trying to seek out emerging markets or you do you. Primarily.

So we, we like to stay in markets that we know has, you know, strong growth while we're in Florida still. Right. So despite insurance and all these things, like, we like to be in markets where, you know, similar to multi family, you know, population's still growing, there's still industry in those areas. Now. Cocoa is a little bit of an extreme, but you know, how we look at it is Cocoa is the vacation destination for Orlando. Right. They don't have any real oceans of water, so we kind of take advantage of that. But we like to go into, like, mature markets where we know we can kind of tease out the risk that's there.

Okay. Okay. And your primary clientele is veterans, correct?

For hosting? What do you mean?

I'm not sure I'm asking you. I think veterans are your. Is that your limited partners are usually the veterans?

Oh, yeah, yeah. So most of our partners are veterans. A lot of our capital partners, our investors are veterans. So I think they feel comfortable in our operations. I think we can speak their language a lot of times. So that is something that, you know, we're really passionate about, helping veterans really bridge the gap. Right. So you get a lot of veterans to get out of the military. Some can do phenomenally well. Some can have some issues transitioning out and finding, you know, jobs that really pay them what their value is. And I think a lot of times veterans get a bad rap of, you know, you know, not necessarily seeing the value of what they did in the military, in the workforce, out in the civilian world. So we want to kind of bridge that gap to say, hey, you can continue to do what you're doing, but you also need to invest in. This is another stream of income to allow you to live the life that you want to live and to create that nest egg. So when you retire, you're not relying on your TSP or your 401k, like you're relying on actual assets that are paying you quarterly distributions, taking advantage of all the things that real estate has to offer.

Right, right. And that's such a common thing where someone in the service doesn't necessarily see the transferable skills, but they're analyzing the situation all the time.

Oh, for sure. Yeah. I think the veterans Understand that I think sometimes there's a disconnect from the corporate or just the civilian world. Right. It's hard to make that connection on with that valuable skill set you showed while you were in the military. Maybe putting your life on the line, how that can relate to the boardroom effect.

Right. Yeah, I think that's terrific. And do you end up buying houses from any of your. Your partners or has that come up even?

No, no, not yet. We have not bought from anyone yet, but we're always looking for deals. So.

Yeah, yeah.

Acquisition mode.

All right. Well, and I'm in Orlando too, so if you need some boots on the ground or want. Want to talk about a property, feel free to let me know.

Yeah, we like it.

So. So how long have you had your company?

So we've been operating for about six years. Starting off buying onesie twosies to now really starting to aggregate and grow. So we went from just purely a short term rental firm, investing in kind of these asset classes to now we're doing deals in Tacoma, Washington. We're looking at repositioning kind of office space into condos. We're doing some development stuff in Charleston. So we're starting to branch out as we kind of see different opportunities materialize. Generally has that short term rental twist to it. Not so much in the repositioning of the office building, but we like to really stay in our lane of what we do well. But we're looking for more opportunities as kind of the market changes and we see opportunities in different markets.

Right, right. Well, that's exciting. And so how did you fare through Covid?

We actually did phenomenally well. So I mean, all of our assets are in very much tourist destination, so in places that were still pretty wide open. So I don't know how a lot of people dealt with COVID but at least down in South Florida you had a choice of how you want to live your life. And regardless of how you feel about that. Yeah, I think everyone should have a choice. And if you want to stay locked up all day, you can. If you want to live your life, you could do that here. So, so where our properties a lot, you know, people were still able to travel in and take advantage of, you know, the sunshine that exists down here.

Yeah, when, when Disney and Universal closed, that was a big deal because I was living walking distance to Universal Studios and yeah, that was, that meant that it was serious when that happened.

Oh, for sure.

So glad it opened up again. And yeah, Florida is a great place for investing in property, for sure.

100%. 100%.

Yeah. Yeah. Well, so what are you planning to do in the next year? Say, is there any, any particular goal that you've got that you can share with us?

Yeah, absolutely. So we're just looking to grow and expand. We're always looking to acquire new properties, you know, bring on more investors and expose them to this kind of space. Kind of a passion project of mine is also building a community online. So we have a free Facebook group, it's called the Airbnb Millionaire. And then we actually have a paid platform called the Short Term Rental Millionaire Blueprint. And really that was built around the idea that you may be particularly a veteran or an entrepreneur, that maybe you don't have that 50 to $100,000 to invest in a deal, but you really want to get into this business. I wanted to provide a community of people that are go getters and are hungry to do it themselves. And we created a full module course of every single thing you need to do. So it's almost an sop, as you know, we would say in the military of, you know, how to identify a market, how to underwrite a property, what kind of debt you should get on it, how to put the systems in place. So really kind of growing that community and that platform is something that I'm passionate about because I want as many people to really get into this space and operate and find success for themselves and their families.

That's great. That's great. Now, for your acquisitions, are you using any one particular lender or shaking it up or what?

Yeah, we have partners, a few lenders that we really like. So Strong Hill out of Texas, we like lending one here in Boca Raton. So it just depends. Depends on kind of what the deal looks like, their kind of appetite, and we'll kind of go to our preferred lenders.

What kind of leverage are you looking at? Even the 60, 65?

No, we're still. Yeah, we're still in. The 65 is probably where we land most of the time. You know, the days of 80, 85 are long gone, but how we look at is the amount of cash flow we're generally able to get out of the property. Like we like to go in at a little bit lower leverage. So it's generally going to be around that 65 range, 6570 range.

So I'm not into short term rentals myself, but I do think I have heard that banks originally weren't allowing the appraisal to be based on short term rentals. Right. But now they do. Is that correct?

So that was true. I'm not sure if that's still true. I do know before COVID there were a lot of investment lenders. So not banks. I generally don't go to banks. They had a product where they actually underwrote to air DNA, which is kind of the gold standard of underwriting a short term rental property. They were using that data to allow for a loan. Our kind of strategy is like we always want to be super conservative. If that property doesn't cash flow as a long term rental, we won't purchase it. We just will always, you know, the main goal for us is always protecting investor capital. So operate. Oh, can you hear me?

You froze for just a second.

Yep. So, you know, if regulation comes down, we no longer operate. We want to know that we still get a long term renter in there and that property still cash flow. So we do not go that way.

That's great. That's great. So how many, how many people are normally investing with you on. You're doing it per property or you have a fund?

Yeah, so we started a fund. We're actually going to institutional route for that fund. So we're trying to raise a much larger dollar sign for, for that. So generally it's almost like a syndication model for the individual property. So we either do kind of a joint venture structure or syndication for individual properties. But the goal in the future is to have that capital partner and then grow and then grow exponentially. So good, good.

Now when you say joint venture, how is that different from a syndication?

So that would be someone, another group that wanted to participate in purchasing, purchasing a property, but they obviously would have roles and responsibilities in the governance of that property versus syndication.

Partnership.

Yeah. So partnership. Right, We've done that. Yeah.

Right, right.

Well, good.

Well, very good. Well, so I don't want to go too long here. Why don't you go ahead and tell people how they can reach you?

Oh, for sure. So I'm on all the social medias, so you can go ahead and look me up on LinkedIn. Justin C. Moseley. That's true for Facebook, Instagram and also you can always go to lessdemorecapital.com the spelling is always funky. Intentionally so. Just Google it and my company will come up and if you want to reach out, just shoot me a dm, shoot me an email and I'm always happy to chat.

So spell the company because some people are only listening.

Okay. Yep. So it's L, E, I, C, E, S, T, E, R, M, O, R E. And then capital all1word.com.

And explain how you got that. I don't think we were recording.

We didn't. Right. So my wife is, like I said, from, from England and she's from a place called Leicestershire. So when I was coming up with the company name, I'm from Baltimore, I put them two together and Lester Moore Capital was born. So Lisa, that might actually help your listeners remember. So that's always.

That's. Yeah, that's why I wanted you to explain it. Right, sure. Well, very good, very good. So if you are looking at a property in an area that you do not already know, how do you determine what the potential rent would be on a short term basis?

Yeah, absolutely. So we actually have some partners that we use for data. So just kind of give you your audience a heads up. So Air DNA is kind of the gold standard of kind of underwriting or looking at a market and then even properties. So what we do is we use our own software to pulling from Air DNA and then what we already kind of know of the area. And then we also have a partner called Revite who does kind of data analytics. And what they do is they do a deeper dive and they get really granular. And what happens is we do this simultaneously. So if, when they get done and we get done, if the numbers are similar or make sense, we move forward. So I mean, it's a bit proprietary, but you know, we have a system in place where if one party says, yeah, this is a screaming deal, but when we underwrite it, it doesn't, we won't move forward. So it needs to be consistent on all sides so we're all comfortable.

And the name of that company, it's aehr. What?

So the name of the company's air DNA, they are D. Like blood DNA? Yep, like blood DNA. So if you Google it, just air and then DNA. So that is what, that is the gold standard of looking at the value of not overland market, but of an actual individual property.

Good to know. And the other was remedy.

So Revitee. So they are a partner that we, that we pay R E V E D. Yeah, they have a phenomenal team over there to where they take that data and then they do their own proprietary kind of twist and make sure that all that information is correct. And also they give you a deep dive into the STR ordinances in the town, in the city, what the risk factors are. So they give you a much more insight into a market to make sure. Obviously you're dotting your eyes across your T's that's awesome.

Yeah. That can count for a lot of time.

Absolutely. Yeah.

Yeah. Well, great. Great. Anything else you might want to share that I didn't think of?

I think you covered it all, Jeannie.

All right. Again, thank you so much. Appreciate it.

Absolutely.