Sav bought 15 rental units in two years, then a motel, starting with duplexes and using private money on undervalued properties. He and Cody explain the cash-flow math of resort ownership and why house-hacking with an FHA loan is the real first step, not trying to time the market.
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If you want to play this game, it revolves around cash flow. And when it comes to buying a resort, buying a hospitality business, it's not always the most stable of asset. Today we're talking about how to actually go out and acquire multiple resorts in your 20s. Welcome back to the channel. My name is Cody. I am here with Investor Sav, my resort buddy. If you want to join that club, make sure to go buy a seller-financed resort. But today we're talking about how we actually bought the resorts. Because we both picked these up, hospitality business, in our 20s. You're 26, I'm 23. Yours is in Packwood, mine's in Union. So the most highest booming areas in the world.
Yeah, right.
But you didn't start with that, right? No. Tell us a little bit about your journey, because for folks who are watching, I'm not going to recommend you start with a resort. I don't, I don't know that you would either.
No, too much going on there. It's not only real estate, it's a full business. So it's definitely the next step up after you have a lot of some good real estate experience. Yeah, not the first one.
So how did you get started? Because people that are watching this know my background. I got started with multifamily. What did you do to get into the game?
I started with a lot of like small multifamily, so duplexes, triplexes, quadplexes. Eventually worked up to 15 units in about 2 years. Just doing a lot of finding markets, even just online and just looking for the mistake listings to find good deals and things like that. Things that, you know, have no pictures. No one's looking at those, you know, go out and see those things. And was able to get a lot of good properties for undervalue under my belt in 2 years. And, you know, using that to lever knowledge and finances into a bigger motel deal.
And so you built your portfolio up, you've done a little bit of short-term, you've done a little bit of long-term. You mentioned in a previous episode on the channel that you had a paid-for rental. At what point did you do that? Did you pay in cash? Did you go the conventional route and just get a bank loan? Did you do seller financing? How, how did you actually do this?
Yeah, so that was a private money acquisition. So I found this on the MLS. It was two separate MLS listings, two separate houses, but they were actually being sold together for the price that it was showing them each being sold out separately. So when you do a little fact-finding, you find like they each seemed a little bit overpriced, but if, if people knew they were being sold together for that price, then it's a really good deal. But it was just, you couldn't really tell that by how it was listed. Really weird. So, um, we scooped it right off the market real quick with some hard money. And, um, by then we did renovations. We put about $50,000 into the Craftsman, and that was one of my first ones. So I did a lot of work myself. So it reflects like more than $50,000 worth of work because I did a lot of it myself. Um, so that was a, a, a large value add. And then the other one was a small house and it was not salvageable. Uh, it was terrible actually. So we— you tear it down? We tore it down and we rebuilt, um, a new tiny house. So then by the end of it, I had these two properties that were neighboring each other that the money that I had financed on both of them was now worth what— it was now the amount that one of them was worth. So then the private money person allowed me to just put all of the money that I had loaned out on just the one property. So then the other one was technically free and clear and I was able to lever that to the motel deal.
That's awesome.
Yeah.
So for someone who wants to repeat what you did, and you did 15 rentals in 2 years. Where should they start?
I would say start with a house hack. I know that's like so over-said, but it's like you don't have to learn every real estate trick on your first one. Like, do— go the simple way, get the FHA loan. A lot of people don't have a ton of money saved up. That's fine. Go FHA, get a small multifamily, live in one unit for a year. Rent out the other ones, maybe do Airbnb to increase your cash flow, not only break even, maybe you'll make some money. And then move out after a year, rent that unit out, and then you're making good money. I just, I, my first deal was a duplex, new construction. And people said, "Don't buy new construction. You're not able to force any appreciation. It's not a good deal." But I just figure I don't have to learn how to force appreciation on my first deal. I can just learn how to buy and manage real estate on my first deal. And I was fine with that. And it worked out really well.
I'll say it worked out pretty well. I'll do a resort. So I guess that's really just the base of how to play the game. You figure out how do I buy it? And then in your case, you were able to cash flow everything other than your newest acquisition. You might be a little negative.
But that's why I'm allowed to bleed a little bit and go into something a little bit more risky is because I built a portfolio of 15 cash flowing assets that can carry me through a little bit of a bleed on a maybe more risky acquisition that's going to have a larger, way more substantial payout in the end. And I'm able to afford myself that kind of bleed for a few months.
So if you're watching this and you're in your teens, 20s, 30s, and you don't have a phenomenal job, and even if you're older than that, I'm just— we're in our 20s, so we're speaking to that crowd. But if you want to play this game, it revolves around cash flow. And when it comes to buying a resort, buying a hospitality business, it's not always the most stable of asset. It comes and goes. For here in Union, winter's kind of dead. We're going to change that. But this year it was a little bit difficult. In Packwood, it might not be. It's kind of year-round, right? Because you got skiing and—
Yeah, so it has skiing and summer hiking. So we're lucky in that way.
So make sure to visit her resort when she's all done decking it out.
Go to Mount Rainier.
Yeah, Mount Rainier. But that said, you have to build your business off of cash flow because in your case, you were negative day one, which is right now.
Yeah, about $5,000 money currently. Yeah.
You spent $30,000 to lose $5,000 a month.
Yeah.
What's the ROI? But no, in all seriousness, she couldn't do that. We couldn't afford to do this resort, the Robin Hood, had we not built the apartment portfolio first. And you didn't do it with a whole bunch of seller-financed apartments, but you did it with cash-flowing assets. So if you're watching this, which you are, make sure to build a cash-flowing portfolio so then you can lever that into a resort or a bigger opportunity that may not work day one. Do you have anything else you want to share for folks that are trying to get started and want to get into the Resort Buddy Club?
Resort Buddy Club. Ooh. Well, I would say just in buying real estate in general, like don't try to time the market. I hear every day people saying 2023 is a terrible time to invest. Don't invest. Wait for interest rates to come down or whatever the reason is. But there's always a reason that you're going to hear not to invest. There's no point ever trying to time the market. People who don't understand real estate will try to tell you you should try to time the market and it doesn't work. So just the best day to invest is today. Don't wait till tomorrow. I would say just if, as long as it cash flows and it makes sense, you should just jump right into it and don't try to just, don't try to time the market.
Love that. Awesome. Thanks for joining. Where should people follow your journey on YouTube? What's your channel name?
It will most likely be the Packwood Resort on YouTube, but TBD. You can find me on Instagram @investorsav. And once the YouTube channel is up and running, you will find a direct link there as well.
Phenomenal. We'll drop that down below because we are filming a little bit early. But Sav, thanks for joining on, and, uh, we'll see everybody next time.
