Fearless Investments: Acquiring Short-Term Rentals with Confidence

I was in a sales capacity. I wanted to work for myself. And so when I started early on I, that's when I started to dig into property management. Just because you know the cost of capital to get into that is nothing. You just have to find the tenant. You got to find, you know, your, your, your owner that would be willing to let you do that. Right. But then the, the second to kind of add gas to that growth was arbitrage. I was like, I really wanted to dive into the arbitrage model because of again just being, being able to scale.

Very quickly, having a blast. Gonna get it on the Bruce Lee podcast. Bruce Lee, like Bruce Lee. Cause it's so hard on the T is loose leaf making up those rhymes. Don't write it, just do it loosely. If you want my respect, you're better but direct. Here are the words in the podcast. That's what comes next.

Hi everyone. Welcome back to the Boostly podcast. This is the podcast that gives you the listener, the tools, the tactics, the training and most importantly the confidence so you can go out there and get more direct bookings with do a miniseries where we dive behind the host, where we pick interesting and exciting people from across the short term rental community and hospitality communities in general from all over the world to dive into their business to really find out what they're doing in their business, which is special that you can do in your business. We've got Lame and he is from the Fearless Investors, which is a kind of coaching community. He, he's also this sort of founder of Elkridge Management as well. So an STR company and management company. So we're going to dive into that. So welcome along. Thank you for joining me, Liam.

Thanks for having me. I, I'm a huge fan of the podcast and of the community, so I, I'm just thankful to have a seat at the table. Thanks for having me.

Well, it's awesome to have you here. So what is both the management company and the Fearless investors? Just give me the kind of elevator pitch of, of what you do.

Yeah. So Elkridge Management is where it kind of all started. So Elkridge Management started initially as a short term rental management company that I founded really back in 2018. And we started to vertically integrate that. We started to kind of start to bring everything in house. So everything from cleaning, servicing, design, all of that. We, we started to branch out into acquisitions. And so now Elkridge Management, I'd say is more appropriately identified as an investment firm because we now own most of what we manage and we have about 150 doors in our portfolio. So it's a decent sized portfolio and that's what Elkridge Management is. The fearless investor was born. It was essentially a community that I had joined on as a coach and as a member to teach specifically kind of what the strategies I use to build Oak Ridge Management from the ground up. Which is the caster method is what I like to call it, which is creative acquisitions into short term rentals. So caster. So, so they're, they're kind of married in the sense of my life. Like, you know, they both are very important pillars of kind of what I do day to day. But those, those are kind of of what we have in front of us. And I, I'm just thankful, I'm just thankful that I, I was able to be part of them. So. Yeah.

So tell me a little bit more about how did you find out about Creative Finance? Was this, you know, like, it doesn't sound like something you kind of wake up and go, hang on, I'm just going to try this and see if it works?

Yeah, no, that's a great question. And I feel like anybody that's in the short term rental space, especially if you start out in management or have a management company, you, you run into this problem often that I did, which is you have a business that's cash flowing, you have a huge portfolio that you're managing, but you hold no equity. Right? And that is what leads us all to how do I start buying? How do I start scaling where I own these doors? Now, when you ask yourself that question, another problem presents itself with, okay, well, I have to have the right debt to income ratio, I have to have credit, I have to have taxes, I have to have all these things in line for me to look good for a bank to be able to acquire a door. Right? And sometimes when you dive into that problem and the solutions that are traditional. Right, traditional financing, they sometimes are very daunting and very slow because it's like, how do I scale quickly when I have to go through this huge process of red tape and I can only buy so many doors a year before the DTI falls off the next year. Right. And that was the problem that I just worked relentlessly at solving, which led me to Creative Finance. And there's a lot of guys in the space that I would consider mentors that kind of helped me in it. Chris Prefontaine, Pace Morvi, these are all gentlemen that understand and are very deep in the Creative Finance space. But interesting enough, like, as I started to step into it by way of wanting to solve that problem of like how do I buy more houses right. Quickly and scale quickly. I also found that in my back pocket having, coming, having come from the short term rental side was that was a very strategic asset that most that are acquiring didn't have, which is I know how to do short term rentals. And so it allowed me to start acquiring and figuring out, okay, well now there's this seller finance model, now there's the subject to model, now there's this lease option, contract for deed. All of these creative acquisition strategies I started to find that allowed me to scale quickly but then more importantly allowed me to generate even more cash flow quickly because I was turning them all into short term rentals which as we know there's just a lot more velocity of money in that exit versus a long term rental. Right. And so that was kind of the birth of like what our community is now, the caster community. But that's how I came about and stumbled upon the strategy was just, just trying to solve the problem in front of me which was how do I scale quickly, how do I buy quickly given all of, you know, the, the obstacles in my way when I, when I go the traditional finance route. And it's turned out, it's turned out good for us. So we've, We've acquired about 100 doors in the last three years, which has been fun.

When you first had your first few doors, what was they? How did you get those? And what was life like for those first few?

Yeah, so early on I, so I bought my first ever investment in 2018. And this investment was just a primary residence. I bought it on a normal FHA loan as a primary me living in it. And then nine months later I moved out and I started renting it out as a short term rental. And that was kind of my first taste into the short term rental space was my own property. So I couldn't even say I was a property manager at that point. It was just me managing my own portfolio around 2019. 2020 was when I decided to kind of jump into it at a bigger scale. And that's when I wanted to really professionalize it. And the reason it came about that, that those years was because I was looking to get out of my normal 9 to 5. I was in a sales capacity, I wanted to work for myself. And so when I started early on I, that's when I started to dig into property management. Just because you know the cost of capital to get into that is nothing. You just have to find the tenant, you got to find, you know, your, your, your owner that would be willing to let you do that. Right. But then the, the second to kind of add gas to that arbitrage was like I really wanted to dive into the arbitrage model because of again, just the being being able to scale very quickly. So my portfolio started early on with the mixture of those two strategies is, is the, the master lease, lease option, co host or arbitrage strategy and then the co host. And then I, I really developed that pretty quickly, a lot faster than I had thought. In the first eight months of operating that business professionally, we signed like 60 contracts. Wow. And so, and that was a very validating thing for me because in that process I learned how to get really good at the operation sides of the management that we all know, right. Which is, you know, the pricing strategy, the listing quality, the actual cleaners, maintenance, all that. And so that's how it started. And I, I appreciate all of that, of what I learned because I didn't know how valuable it would serve me. And later when I started buying, right. Because a lot of these investment firms that you see, they're third partying, they're third partying out all of these services, right. Typically an investment firm usually has a management company that's separate. They have a cleaning company, servicing company, H Vac, what have you. And my journey started with just doing my own building my own company, integrating all the services in house. So we're one stop shop. And then I started to buy, so I kind of backed into it unintentionally. But you know, for anybody that's at scale in the acquisition space of buying portfolios, you understand that like, you know, sometimes your biggest profitability margin isn't necessarily, you know, the cash flow as much as it is pushing down costs. Right. And me now being able to not have to take market costs of management fees, servicing fees, that has served me extremely well in my business today of being able to buy these things. And it's a one stop shop and I'm doing everything at cost because I know how to do it.

Is there any, anything that you'd want to give yourself advice back at the start? So if you could go back to those early days, what would you say to yourself now? And I think that'd be a nice way to bring it to an end.

Yeah. The one thing that I've learned, and this has been a lesson and a mantra that I now live by in my portfolio is that no matter the state of the market or whatever strategy you're implementing or what have you, good deals, the best deals, they are not found. They're always created. And so. And in that mindset, it puts on you as the operator, the you are the person that makes it happen. It's not the market, it's not the strategy, it's not the timing of the market. It's you. Once you understand your inherent ability to create deals and you figure that out, they all come to you. Because good deals, again, they're not found, they're always created.

I like that. What a great way to. To bring it to end. Was there anything we missed along the way?

No, I. More than anything, I just appreciate you having me. Like I said, I've been a fan of this podcast for a long time, so I. I just feel very thankful to have a seat at the table. So thank you. Thank you for having me.

Thank you for coming on and inspiring the listener. And thank you too for listening to this. There's lots of places we know you can put your attention. Really thank you for putting it with Boostly. If there's somebody you know who will get value out of this and feel inspired as you do, can you please share it with them? And if you want to carry on the conversation, you can always come and join us in the Facebook group, the hospitality community, and. Or you can even just tag Mark on. On Instagram Boostly at Boostly UK basically for that. So thank you very much. We'll see you on the next one. Bye for now.

Having a blast. Gonna get it on the Boost Lee podcast. Bruce Lee. Like Bruce Lee because it's so hard and the T is loose leaf making up those rhymes. Don't write in, just do it loosely.