From Legal Eagle to Business Owner: A Startup Journey in Hospitality

Okay, welcome to the Boostly podcast and thank you for listening in. This is the podcast that gives hosts the tools, the tactics, the trainings on how you can get more direct bookings. My name is Liam Carolan, I'm Mark Simpson's co host and today we're going behind the host we have a successful and interesting short term rental host and where we're going to ask questions about her business. We're going to extract some of that juicy information that you can learn from and you can action and implement into your hospitality business. So, so today I'm going to introduce to you Daya Liu. She's a former lawyer who now does short term rentals and actually buys hotels, which is amazing and something we're going to dive into. So welcome along Daya.

Thank you, thank you for having me on.

No worries, no worries. Thank you for, for joining us today. So in one sentence can you describe what you do at the moment? So if, if a stranger was sort of say, hey, what do you do? What do you say to them?

I my one sentence answer to that is I travel around the US and sometimes the world and hotels and vacation rentals.

I mean that's pretty cool. Straight away. That's pretty cool. So let's take me back to before hospitality. What did you do before hospitality and how did you lead into the world of hospitality?

I was trained as a chemical engineer and biochemistry a double major. And then I went into law school because I decided that law school was just a shorter route to success, in my opinion than PhD program. And, and so I practice patent litigation with representing Fortune 500 companies for about five years both in New York City and Austin, Texas. And basically I really wanted to get into real estate investing. So I moved back to my hometown of Austin, Texas before the real estate prices got too expensive and I started house hacking and just renting out on Airbnb really once I bought my first house. And that's really how I fell in love with the concept of hosting folks and creating really unique experiences. I really like interior design and so that just everything just fell into place.

And whereabouts is your hospitality business at the moment? Is it based in multiple locations, how many units? And what kind of guest avatar do you tend to host? Is it more people traveling for business, more people traveling for leisure?

It's mostly in vacation destinations, but I tend to diversify my holdings and so I have probably invested in six different markets at this point. I think I have holdings currently in four different markets between the hotels and short term bundles that I have. And so they're, they're both in Texas, North Carolina and Arkansas right now. And I did have stuff in Arizona as well. Oh and as well as New Mexico, but I just recently sold what I had in Arizona.

And I mean you've got quite a diverse portfolio across a lot of different markets and locations. Can you tell us how you track which locations work? Is there any websites or softwares that you use and how do you do that?

I look so it's different for short term rentals and hotels, but I of course use a lot of the stuff that everyone is familiar with. Air DNA, SCR insights, data, Rabu, etc. For hotels I look at costar and star reports, which is the industry standard. And then I look at a lot of non technical, non data driven sites such as just tourism websites or newspaper articles on what are the trending tourism destinations. And I also go by word of mouth. So from friends and family, just talking to folks when I'm traveling, I get to travel to probably 50 different destinations every single year. So just getting to talk to the locals and understanding where the locals are traveling to next is another crucial part of data collection.

That's really cool. That sounds like there's been a lot of data led decisions. And those websites that you mentioned, I know, I mean some are familiar but not all of those were familiar to me and I know there'll be people listening who will be able to go and check those out.

Out.

How do you do this then you mentioned that you're traveling. How do you do this while on the move? Who else is on your team to help you with the short term rentals in the hotels?

So I teach both a short term rental and hotel mastermind. So I do have one main business partner, he is, he has 20 years in tech and sales so he is usually focused on the operations and tech pieces when there's a lot of tech related pieces in the hospitality industry. Right. So he's really operations driven and I'm usually the acquisitions and fundraising person. And so I normally travel around the country to meet new investors and students and I teach at real estate conferences on hotel and short term rental investing. And then I fundraise for a lot of our deals that are bigger deals and then I analyze them too using my legal background and my engineering background to really understand the data as well as the legal framework around each of these acquisitions. But we do have different team members for different deals usually. But I am putting together a fund and it's a 506c fund so I can talk openly about it but I am putting together a short term rental and hotel fund and that is with four other folks so that those folks will be locked in for who they are for the next 10 years.

And when it comes down to, there'll be a lot of people out there who are wondering how they go about finding a business partner. Is there any tips or any advice that you'd share about finding somebody who has that opposite role to what you do and to really, you know, create the cohesion to allow the business to work and grow?

I think that there really needs to be at least one person who's a lot more on social media and out there and just promoting the brand and understand and talking about what you do. And that's usually my role. There needs to be at least one person who is really good with numbers and contracts and et cetera and one person who is really good on the operations piece. And because hospitality is much, much more operations intensive than pretty much any other real estate investing that you can do, that is a very, very crucial piece. And they can be, these roles can be filled by different people. They can be filled by the same people. There could be overlaps, but I really suggest for folks to look for people with business and personality qualities that are different than their own. So if you're an introvert, maybe you should look for someone who is a little more extroverted. And if you are someone who is a visionary or you know, you're very big picture, then you might want to find someone who is going to understand the details and fill in those larger goal posts with the fencing, so to speak. And so I am a lot more big picture. I understand how to put together deals creatively, but I think in terms, in terms of day to day operations, in terms of hiring the firing employees, I always knew that that's probably not what I am strongest at. So when I was looking at business partners, that's really what I was looking for. And in terms of our fund, it just because that's more of just raising money that doesn't necessarily need the operations piece as much, but it does still benefit to have someone who does a lot of operations just in the initial acquisition phase to understand, hey, these might be trouble spots down the road. And for the fund, it's also important for others to people who are very much like let's buy everything and also for people to be very people on the team that are a lot more conservative just because you want kind of both to really. And it's healthy to disagree on a lot of these topics. Because different investors have different risk tolerances as well. So having a lot of different voices from people who are different than you is very important in building these teams.

It sounds like it's really talking about balancing, you know, the, the need in different areas of the business and in different personality types, isn't it? It's all about balance and you as the, the visionary and the, the person who's bringing the cohesion and everything together by doing that, which is really cool. So one question which I must ask. We don't get many people on the podcast who's actually buying hotels. A lot of the time we've got hosts who have bought short term rentals and they're moving perhaps from, you know, motel type thing towards more short term rentals, individual units. Why consider a hotel over a short term rental?

There's a lot of reasons why I personally gravitated towards hotels and motels. The biggest reason was because I was reselling some my short term rentals in 2021 and I was continuously running into the issue where both me and the buyer agreed on the price because it was making quite a bit of money. But because furniture does not count in appraisal, income does not count in an appraisal. The fact that we have a locked in cleaning crew and management system that's seamless does not reflect an appraisal. The apprais, it may not reflect what the property is worth. So in commercial real estate, what you make is going to reflect in the appraised value of the property. So when you sell a hotel that is doing 2.3x more revenue a year than your competitors then not necessarily. It's not necessarily going to be worth 2.3x but it's definitely going to be worth a lot more than your competitors hotel and motel. So. So that was reason number one. But two, operationally it's a lot easier to buy a hotel. From an acquisition perspective, it's easier to buy one 40 unit hotel and be done for the year versus trying to buy 40 different short term rentals because that's a lot of closings and a lot of mortgages, a lot of utility companies and et cetera. And it's also easier operationally because instead of hiring a short term rental management company and paying 20% to them for all of those deals, you can just have one or two really quality on site managers and it might actually be cheaper than having 20% of your revenue go towards a short term rental management company. And finally, and this is a big piece that is aha moment for a lot of my hotel mastermind folks is there's more and more short term rental regulations and a lot of folks are scared that their favorite investing destination where they already have short term rentals. It's going to be regulated away due to short term rental regulations. But if you own a hotel, those regulations benefit you. And in fact, it's a lot of these boutique hoteliers who are lobbying for these short term rental regulations to go into effect. So if you are going to be a hotelier and let's say you still want to rent it out on Airbnb, MBRBO, there's nothing stopping you from using those two as one of your many OTAs. Now you can also be on booking.com, expedia, hotels.com et cetera. And so it doesn't really hurt to also put it on Airbnb. It doesn't hurt to maybe only market the unique properties that you have in your hotel portfolio on Airbnb. And you just have a lot more options and flexibility.

That makes sense and it really diversifies the risk, doesn't it? Because like you say, depending what happens in the industry in terms of the local legislation and laws, well, hotels have been around a lot longer this much more established and that. So you're just much more de risked. And like you say, the operationally that just makes, that makes complete sense. I guess for me, one of the things which I think most people look at the short term rental industry as a good option is because these are entire units, you know, it makes sense where people are getting somewhere where they can cook, where they've got their own living space and that. But there's a, there's a huge market, isn't there, for switching hotels, motels and adding in the facilities where you can then have, you know, facilities to cook, facilities to relax in and things like that. Is that something that you think is a growing opportunity? Is that something that you're interested in?

Yes, absolutely. And I think a lot of people think of hotels as just these tiny little units that don't really have kitchens. But in fact, there are already hotels out there that have larger accommodations. So a lot of these hotels have larger residences already. You know, if you stay at some of these franchise brands, they might have larger two, three bedroom residences that you can also rent out, for example. There's also a lot of expansion extended stay hotels like Home2 Suites and you know, by Hilton. And there's a lot of, you know, courtyard, etc. That have kitchens or kitchenettes that are in the hotel rooms for extended stays. And then finally for a lot of the hotels that we're looking at, they're not franchises, but either they have land that we can build additional larger residences on the same parcel and they'll be zoned the same way as our hotels are and so they're insulated from short term regulations, or we're converting some of the smaller hotel rooms and combining two hotel rooms into larger residences as additional options for our guests. If they want something a little bit bigger, a little more private, with more cooking area, more dining space, they can do that. We can also just have connecting rooms. So I've seen some of my fellow hoteliers who have came up with the idea of having every other unit have a full kitchen and then those units that have connecting a full kitchen can connect to the one that doesn't have a full kitchen. And so you can rent them out as one bedroom plus studio units or you can rent them out as two bedrooms effectively. So what we're doing is we have a 48 room hotel that the front 32 rooms are small studio units. They're not going to have full kitchens, but we are going to have a shared communal kitchen for guests who want to use a kitchen. And we're also going to have grills outside as well. And then in the back where the rest of the residences are, we are combining a lot of those into two rooms into one for example, or three rooms into one to have larger Airbnb VRBO type residences. And then finally stage three is going to be my most exciting stage. It's going to be tree houses and a frames that we're going to build in the extra lake acre in the back. So there's a lot of different creative things that you can do with hotels and motels, but there's also a lot of resorts that you can buy right now that are 10, 20, 30 log cabins. So they are already lending themselves and to be operated closer to your short term rental model.

Hey, I'm excited for you. That does sound exciting. I love the ideas of those split units and having one kitchen amongst many and just having, you know, the, the, the option and you know, flexibility within that is, is amazing. The fact that you can build in the land and the grounds around it, like you say, for some of these more unique stays, which people are sought after at the moment, you know, they're very popular is, is, is just another fever in the cap of the whole strategy. So really amazing and excited for you. So I guess looking back, one of the things which is noticeable about your journey is Obviously you've gone from, you know, sort of a lawyer to into short term rental and buying hotels. Is there any steps, looking back that you could say, hey, these are defining moments which allowed me to transition and to grow and if so, what are they?

I think there's a lot of moments there, but I think the, the biggest goalpost was one when I pay off all my student loans were from law school. I did have a full ride to law school, but you know, living in New York City is not cheap. So just accelerating my financial independence was goal number one. So that meant paying off any loans. That meant moving back to Austin, Texas from New York City where there's less taxes and more real estate opportunities. That was step one. Step two was to buy as many short term rentals as possible as fast as possible to reach a state where my income way surpasses my living expenses and keep still, keeping living expenses relatively low. And then so I was able to quit in 2020, which probably was the worst year for anyone in the hospitality industry to quit. But regardless, and then at that point I had a lot more free time and brain space to really think about what I are my next steps. So that was another major goalpost when I quit my W2 job to focus on real estate investing full time. And, and then of course the last goalpost was really when I shipped it into hotel investing. And that really took a lot of tries. Really that wasn't so successful initially. I probably made about over a dozen offers and put many, many of those properties under contract before I closed my first one. So that was definitely also a major goalpost. And now because we already have hotels, it's easier for us to get funding for hotels, it's easier for us to get insurance for hotels, it's easier for owners who are for off market deals to take us seriously because now we know how to talk like a hotel investor.

One of the questions I'd have for you is it sounds like you've, it sounds quite a smooth journey when you say it obviously wouldn't be when you're, when you live in it. But what would you say was the biggest challenge and how did you overcome it?

Biggest challenge with hotel investing is just to get your first deal because if you don't have hotel experience, even short term rental, even if you have, let's say 20 plus short term rentals, sometimes lenders are still not going to lend to you just because you don't have the requisite hotel operational experience. And so they don't count vacation rentals as the Same thing. Because honestly, from an operational perspective perspective, it can be very, very different. And so financing was hard, even getting insurance was hard. We had to delay the closing of our very first hotel deal by two weeks just because the insurance company was also not convinced that short term rentals, even multifamily short term rentals count as hotels. And so at the time I already had 8 unit that we were converting into 10 units short term rentals. And that then accounts for the insurance company. And so definitely buying your first hotel is the biggest challenge. And that's why I came up with our mastermind to really help folks who are already in the short term rental industry to get that very first deal because it can be very challenging.

That's really cool. And one of the things which we always like to talk about on here, there's going to be a lot of hosts who wonder what tech that you've used along the way. So is there been any pieces of tech either? I guess it's more on the operational side, but even on the either finance raising side or on the, you know, on, on the social media side, what pieces of tech has really helped you excel your journey?

So on the operational side, we use cloud beds for our hotels and I'm sure the reason that we use cloud beds is because they work a lot better for hotels rather than just short term rentals. But I hesitate to say that there's really been one piece of technology that has really helped us a lot because any tool is just as good, it's only as good as the operator using it. So for example, costar and Star reports are very, very helpful in understanding how to analyze the hotels or how to analyze hotels. But a lot of our mastermind folks initially used them incorrectly. So it is really helpful even in Air DNA or some of these other short term rental tools. They're also only as good as the operator using them and understanding how to use all the different tabs that the resources that the particular technology provides you, that makes sense.

It's not the tool, it's how it's used, isn't it? At the end of the day, if you're provided with any kind of tool, but if you don't know how to use it in the way that's meant to be used, then you're not going to get the best out of it. Which is why you go to people like yourself and you know, sort of, we always say that you're best to find somebody who's walked that path before, you know, sort of leverage their knowledge, you know, Pay them for the courses, their services, get that knowledge and then go and put it into practice because that'll save you so much time. One of the things which I'd love to ask is obviously you've been in and around hospitality for a long time and have you come across any. Is there been any funny stories or any sort of moments of hosting where you can look back and go, well, okay, that was a bit of a weird moment or a favorite guest or something like that.

I could do one for short term rentals and one for hotels for short term rentals. It was my first beach short term rental and it was just a really weird moment. So where a couple booked our property which has a shared hot tub because it's in a condo complex and basically they did honeymoon things in the hot tub area which is recorded. And the HOA manager not only flipped out and tried, of course wanted to charge for the cleaning of the hot tub, but she also demanded my short term rental management company and my cleaner and myself to watch the video. And I was just like, why?

Why?

Yeah. And so that was the weirdest moment. And they left us a glowing five star. They were like, it was so relaxing and I just could not contain my laughter when I read that review. And so romantic. I was like, oh, if only you knew the drama that I have already been through. So that was the most interesting. For short term rentals, it sounds like they enjoyed themselves. Yes, yes. I think they also put that in their review which was like, oh, that's, that's great. And then for hotels it was really. We were, we were remodeling our largest hotel asset, which is 48 doors. And the back building needed a roof that to be replaced. So we had this roofing contractor come out and at the time we're living in the hotel because it's just, you know, for something that's 48 keys, you really don't want just to manage the rehab remotely just because we're also renting out the rooms to the guests. So there's a lot of guests and you know, versus rehab, you know, considerations. So you really just have to be on site. So I was running a zoom meeting with some of my hotel mastermind folks analyzing hotels and all of a sudden someone fell from the roofing company in through the drop ceiling roof. I mean the drop ceiling in my room and onto my bed. And so I, I was going to record a zoom meeting and I really wish I had my camera facing the bed because that would have been the most viral reel ever.

Yeah, you'd be able to get money for that just on the basis of, you know, that would go viral like you're saying.

Yeah, exactly. So I really wish I had my camera turned towards the bed, but basically it went from just me in my pajamas, you know, my room to about 10 roof contractors and handyman, all in my room in about under five minutes. And it was just, it was the craziest thing ever. And luckily the guy was not hurt. And this is the other piece that was really funny about it because nobody was hurt and because if he fell a little bit to the right or the left, it would not have been as funny because he would not have had 12 inch memory foam mattress breaking his fall. But instead he just bounced the mattress and rolled off and was really confused and that was about it. So it was just a really funny moment. But it's also like, what are we going to do with this hole in our ceiling moment as well.

I can imagine, I can imagine. Whatever did the people say on your zoom call? Hang on, I've just got to go. A guy just dropped through from a ceiling. How did you explain that one?

Yeah, I think I just said, oh my gosh, someone just fell through my ceiling. And on zoom I show the hole, but you know, and then I told had to reschedule a meeting but just because people were just knocking on my door trying to get in and understand what happened and stuff like that, it was just.

Yeah, I don't blame you for needing to reschedule, that is. They're great. Do you know that we asked that question from time to time and I, I would say that you've got the award for the best stories for the guest side of things because I just haven't. We've not come across that. Certainly not somebody dropping in through the ceiling. Obviously a bit hanky panky in the hot tub does happen from time to time, but not usually in that way. So yeah, that's an interesting couple of stories. Thank you for those. So as we come towards the end, we'd like to do a couple of quick fire, just fun questions. But before we do, I'd love to ask, as you've shared so much knowledge with us, what advice would you have for somebody looking to get started in hospitality, either short term rental or even considering the hotel and motel route.

I think the biggest thing is to don't be afraid to take action and potentially have the risk of failure. I think that is, that's always been my model. Don't also don't be afraid to pivot if something is not working for you, even if you have invested a lot of time or energy into, let's say a whole career such as law school, don't be afraid to just pivot and you know, go in a different direction that makes you happy. That is going to be more fulfilling for you. And then specifically with hospitality is that it's probably going to be a lot longer hours and more commitment than you initially thought it was going to be, especially in the realm of hotel investing. So definitely, if you are just looking to make money faster, yes, hotels and short term rentals make a ton more money than the comparative long term rentals and multifamily assets. But the people who are truly successful in hospitality are the people who love it for one reason or another. Maybe you love to travel and you love to share that joy of traveling with others. Or maybe you love to host people and you love that feeling of hosting people. Whatever that reason is, make sure that you love it because there are going to be days where contractors fall through your roof and you know, stuff like that. There's just gonna be a lot of stuff that you can't anticipate and those are gonna be really long days if you're only in it for the money.

Fantastic advice. So we go on to the quick fire section now which these questions and you know, there's just a bit of fun. Find out a little bit more about you. So you travel a lot of the time. Where would you say that everybody listening should go and check out what is the top travel destination that you've been to?

My favorite personal favorite is probably either Chamline, Thailand or Northern B here in the US One of my favorite markets and it's not necessarily for investing, it's just where I love, love, love to travel to is Sedona, Arizona. It's one of my favorite towns. I love hippie mountain towns. That's one of my favorite things. So any hippie mountain town is probably going to be one of my among my top in the U.S. i love it.

So you teach people and you can coach people. One of the things which I'd ask is what entrepreneur or coach would you most like to have coaching call with and what would be your first question for them?

Can you so can you elaborate that a little bit more? So other person than other than me. Right.

So, so out of the famous entrepreneurs, the Gary Vee's, the, you know, the grant card, all of those types of people, is there anybody in particular you'd love to have a coaching call with and if so, what would be your first question, if any?

So I think out of the super well known ones, I think really I would love to do a course with Heather Blankenship, which she does at RV program. Just because a lot of the folks that are in my hotel mastermind also have questions about RVs, and then I think vice versa as well. So I guess my biggest, the question that I would ask them or just be really RV park related, just, you know, outdoor hospital, hospitality, glamping, et cetera, just because that's something we're also going to do in the near future.

That's cool. That's cool. What is the worst piece of advice you've ever been given?

I've been given a lot of worst pieces of advice. So just pretty much any advice from anyone who's already not, who's not already investing in short term rentals or hotels. When I was buying my first short term rental, I had folks who were like, I can't, I don't fathom how that could possibly make that much money. That's a horrible idea. When I started buying hotels, people thought that that was also a crazy idea. So just really, you know, and I must meet a lot of money to buy my own hotel. Yeah. So really just a naysayers really have been collectively the worst advice.

Flipping that round, the best advice you've ever been given.

So this is not really real estate related, it's really just business related. So when I was working as a junior law firm associate, one of the law firm partners that I really looked up to, she really pulled me aside one day and she said, you don't have to qualify yourself. And the reason that she was saying that is because I would say like, well, I don't have a PhD or organic chemistry, but. And then I would give my opinion. And she said, you know, you have, you have an engineering background, you have a science background. You don't have to qualify your answers by saying you don't have what you don't have first before giving your opinion. Just go ahead and give your opinion. And she just said that. I think because females, we tend to qualify our answers a lot more before we go ahead and give our answers. And so that's one of those pieces of advice I give to a lot of folks when I teach them to talk to hotel owners more confidently and et cetera. Don't focus on what you don't have. Focus on what skills you already have and really highlight those in those kind of conversations.

I love that. That's fantastic advice. Like you Say, don't doubt yourself on that. And is there a motto or a mantra that in general you just like to live by or that you really agree with what really resonates with you?

I think I touched on this point in that I like to fail faster and I also like to pivot faster. I, at this point I have a really good system of vetting hotel deals, but I didn't have a good system when I started. And really to seek those people who have more knowledge than I did and also pay for education and also just take action. Those are things that you just have to do. I know a lot of folks are saying scared of the market right now. They were scared of the market six months ago as well, just because it was so hot. And now they're scared because we're potentially heading into a recession. There's always going to be opportunities, but there's always going to be reasons that you should fear. Fear the market, but just run more conservative numbers. Pay for education, pay for networking, attend a lot more conferences, listen to more podcasts like this and run your numbers conservatively. So I guess to sum that up is really to take massive action and, and just really be specific in your goals and create a really great network, whether paid or free, to accelerate your success.

Thank you for that. That is really fantastic advice. And there's going to be people listening to this who want to find out how they can get in touch with you. What's the best way to do so.

They can find me and talk to me on Instagram. It's @diasq or d I, Y, A, E, S, Q. They can also learn more about a lot of the offerings that we have, whether it's a short term rental and hotel fund, whether it's upcoming hotel mastermind opportunities and et cetera. By reaching out to me via Direct Me dlu, which has all these links, including social media links.

Thank you, Diya. That's fantastic. And I know we didn't touch on it or have time to touch on it, but it's so worth following you. You've got a lot of followers, you've got a lot of, you've got a big audience, you've got, you've got Facebook group as well. So you know, certainly people, if you are listening to this, go and check out DIA's sort of groups and really get involved. And if you're interested in any of the hotel stuff, any of the training, you can certainly reach out to her, which is cool. So is there anything that I've missed, Dia? Is there any other questions or final thoughts before we before we sign things off?

Um, no, but I just want to highlight that I did forget to mention my Facebook group. It is Airbnb Professional host. There's no additional dash USA or whatever after that. It's 46,000 members strong and I also have a hotel investing group as well. You can definitely find information and direct links to both. Plus a lot of my trainings, both free and paid at direct me/DLU.

Thank you so much, Dio. This has been fantastic. I've learned a lot and I'm sure everybody else has. And thank you too. If you're listening in on the Boostly podcast, we hope that you've got some tips and some trainings from this podcast. We know there's a lot of places you can put your attention and we really thank you for spending it with Boostly. So thank you very much. That's bye from Adia and that's bye from me. We'll see you on the next one. Tara. For now.