Uncovering Bold and Fearless Moves in Real Estate with Garrett Brown

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Matias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent. If you have the privilege of watching me right now on YouTube or Spotify, you will just be so delighted because we got new lights. I can’t keep a straight face with that, but no, we did get a new light and we are committed to continuing to improve the quality of this production with our guests, with our content, with our interview skills, with our production.

I mean, this light wasn’t super expensive. I was kind of surprised, but it does a huge, makes a huge difference in the video output. We have another one coming as well that will help even more.

But anyway, it’s just an idea that I think is important to understand about business is that if you’re not, if you’re not growing your business, if you’re not building your business, you are, it’s dying. The business is dying and that’s true for sales. I’m trying to continue to get better with the podcast.

I’m trying to continue to get better with my real estate job, with my sales, with my investing. And again, if you’re not increasing, if you’re not building, you’re dying. And I think that’s a really important thing to think about as you plan for next year.

If you haven’t planned for next year yet, here’s a really good time to start. Think about your quarterly and your annual goals for sales. If you do want to get an investment property, it’s a good time to start thinking about that and writing them down and then making sure that they’re attainable so that you can have actions that you can take regularly to achieve those goals.

And how to do that is a topic for another conversation. But I wanted to talk a little bit more about improving your skills and how that relates to real estate sales. A lot of people will go and get their GRI, get designations behind their name, they’ll get their associate broker’s license if they’re not already brokers.

And that’s all good, and I’m not saying there’s anything wrong with that. But I want to argue that being an investor or having experience as an investor is another really, really good thing to increase your business, increase the value you’re giving your clients. If you’ve worked in fixing up houses at all, if you’ve worked as a landlord, you have a different perspective on houses than somebody who hasn’t.

And you will understand what you can do with a lot of money, with a lot of money, with not as much money as one might think. I can’t tell you how many times I’ve seen a buyer go through a house that just needs a little bit of cosmetic work and thinks it’s going to take $100,000 to fix up. And I’m like, that’s just not true.

And now I have more backing to prove that. I have contractors I can help connect them with to get a reasonable job done. And so all these things are increasing my value I can give to sellers and buyers.

I can help get people ready for the market better because I have the contacts, I have an idea of what’s, I have a better idea of how these things come together. So like paint is so relatively cheap. It can make such a huge difference on a tired property or a property that looks just like it has weird colors like lime green and hot pink, no offense.

But a coat of paint can really make a big difference. And I’m probably preaching to the choir, but if you haven’t seen the transformation before from a house that is just ugly, horrible, just terrible. And like whenever that property that is, let’s say it’s a flip, gets painted, it’s just this huge transformation that you’re just like, oh, I can finally see that this place is gonna look nice.

And so that’s true too for a lot of listings, you just gotta paint them a little bit and then it’s gonna make a big difference. But anyway, like learning those skills are gonna help you in your sales for sure. And then also you can use them.

You can potentially buy a property every once in a while that needs to be flipped. If you have that knowledge and you’re ethical and how you explain and we’re gonna get into this in this podcast a little bit more, but if you’re ethical and how you go about buying property that you might come across that as an agent, there’s a great way to do that. You can tell them, hey, you’re not gonna make as much money, but you’re gonna have a smooth, easy, fast transaction.

And to some people, that’s what they want. And if you focus on what they want, you’d be good. Again, we’re gonna talk more about that here in a little bit.

But I would highly encourage people just to think about these things as a route to becoming a better agent. Having that team of people that can come in and get a place looking its best so it can get top dollar on the open market. We are super fortunate today to have Garrett Brown on the podcast.

Garrett is the short-term rental expert over at BiggerPockets. He was a great person to talk to because he’s also an agent. He’s been for eight years.

He’s in the Houston, Texas area. And so we started off like a normal agent episode and talked about agent-related things and moved into some investing and some short-term rental jargon. He has some great insights.

If you are in the short-term rental space and have any concerns about how you can continue if your numbers are not near as good as you hope they would when you first bought, I know a lot of people are in that position now, he has some pretty good insights about what you can do to improve your position. And also, if you are looking to get into the space, where how you can do it and have an effective method to be profitable, even though it’s harder now than it was. Anyway, without further ado, we have Garrett Brown.

Welcome back to the REI Agent. I have the honor and privilege of introducing Garrett Brown here. Garrett, thanks so much for joining us.

[Garrett Brown]
Appreciate you having me.

[Mattias]
Garrett, you are coming out of Houston, Texas. You are a perfect fit for the show. You’re a licensed agent and you are an Airbnb expert.

Actually, the Airbnb expert for BiggerPockets, right?

[Garrett Brown]
Yep, correct. The short-term rental expert is my title.

[Mattias]
Yeah, I should, sorry. Oh, you’re good. Yeah, no worries, no worries at all.

Airbnbs are not, it’s just one platform. Perfect, thanks so much for being on here. Tell me a little bit about your real estate journey.

So, what got you into real estate to start? Did you get your license first or were you an investor first?

[Garrett Brown]
Yep, I’ve been a realtor now for about eight years, I think. And that was the first introduction I had to real estate. My mom, maybe 20 years ago, used to be a commercial real estate agent.

And she ended up being a school teacher and doing a few other amazing things too. But she always said one thing she regretted was not staying, going further with real estate in general. She just saw how high the ceiling is compared to some other jobs and just where my personality kind of fit into those things.

So, got my license, didn’t know much about it. Started working residential sales and doing pretty good. It was a little more salesy than maybe I was ready to realize going into it.

But I learned all the tools. I was door knocking, I was calling. I was cold calling, doing open houses.

But then I one day got a kind of, I call it a magical email almost out of nowhere from, I’d probably been in the business maybe a year, year and a half. Got an email from, I’m in Houston, Texas. I got an email from someone.

They were a investor coming from Mexico City, I believe, coming to Houston. And they were looking, I don’t know, still to this day don’t know how they found me because I was not working with investors. They reached out and they were like, hey, do you ever do anything with investors?

And I was like, sure, knowing that I didn’t, and I just was gonna learn it as quickly as I could. And so he was like, do you wanna meet for coffee and just talk about it? And I was like, sure, let’s do it.

I did my research, found BiggerPockets, which is a crazy loophole story. That’s how I learned how investing even began with me. Met with him in person, had coffee.

We just talked. I never did a deal with him or anything. But it opened the door for me to see like, okay, this is how you find investor deals.

I was always thinking like, oh, somebody wants to sell their house, they come to me, I list it. Oh, somebody wants to buy a house, they come to me, we find a house. But seeing this side was a whole nother area of real estate that, especially being an agent, that I didn’t even know existed.

And so I started looking like, oh, how do I find these distressed properties? How do I use my network to figure out who maybe has this property? How do I just use my own personal network, not even being an agent, to find a property?

And so, and I was finding it for investors, and so I got really good at doing that from just going to different open houses. Driving for dollars was one of my big ones too, when I was first starting. And just going around, and when I say driving for dollars, basically what I mean is driving around your area and finding a house that has really high grass, maybe has a, you can see there’s like a, maybe a permit revoke or something like on their window from like the city, or they’ve been shut down.

Like all these things show a distressed asset. And so I’d figure out using my agent skills, I would figure out how to get in touch with the owners, and then say, how can I help you? That’s in the end, all I wanted to do was help people.

It was either I could take your distressed property and bring it to somebody that can buy it cash, or I can give you some tip, or we can list it on the market, or we can figure out how to renovate it some and maybe get you the highest amount. They all vary in degrees of difficulty. But as I started doing that and building up my network, I started realizing how much these investors were making on deals.

And I was like, well, after I was getting a decent amount of income coming in from working my network, it probably took me three, four years before I built up enough network and capital on my own, and just confidence, to be honest with you, that I decided like, okay, it’s time for me to try this. And I started flipping houses and using my driving for dollars technique. I was also converting a lot of for sale by owners at the time, that was kind of my niche within the agent side.

And so I was driving for dollars, found a for sale by owner, using my agent tactics of being able to figure out what the pain point is for them. I was able to find my own personal first flip. When I was out showing another client different things, I saw the for sale by owner was driving around, ended up, we purchased it for about 115, and it was worth probably about 155 at the time.

They just wanted to get rid of it. Sometimes that happens, it was ease of sale. We put about 45 into it and it ended up selling for about 240, I think, or 245.

So that was my first flip. Not all of them were that successful, but it took years to come through just working with different people and really building up my confidence and skillset that it made that first one really, made me go for the gusto and take it after, after I saw all these other investors doing so well with it that I think a lot of agents can do the same type of trajectory.

[Mattias]
Yeah, man, there’s a lot I want to talk to you about in that section you just talked about because I remember distinctly, too, and I think BiggerPockets was the gateway to that side of real estate, but I distinctly remember how different, two different worlds it was. It’s kind of like going to the grocery store to buy your food versus what the restaurants and the grocery stores source their foods from, right? They’re getting the wholesale deals and so that they can turn and sell it on the market.

And it’s a similar kind of thing. One of the things that I wanted to ask you about is how do you balance your fiduciary duty as an agent with also having those opportunities where there is a deal to be made, where it is, because, and I think that this is really important for people that don’t understand the real estate investing side to understand is that there are houses that will not just sell on the market and they are nasty, they have a huge problem, and investors are coming in and solving a problem.

But I do think that there is kind of like a line to be held there and I was curious your thoughts on that as far as how do you help them get the most for their money and then also at some points maybe get a deal that you can then flip and make money on.

[Garrett Brown]
So I think the main thing that, and it is why I’m not a, I’ve never been a massive agent. I probably close 10 to 12 years, 12 deals a year, but I’ve had consistently, just on my agent side, but I’ve had consistent word of mouth referrals for a lot of reasons because I always, I just try to figure out how I can help the person. Money isn’t always the end goal for some people.

Like it is, it’s at the top always. But sometimes it’s the ease of just getting their property gone. A lot of times people inherit a property.

Not long ago, we had a deal that somebody inherited. We always, I always present three options when I go to them, like from the agent side basically. I say, hey, I know investors or I’m an investor.

We can buy this house cash quickly. Nobody come and do an appointment. There’s no appraisals, inspections, anything like that.

But you’re gonna make probably the least money, but it’s gonna be the easiest. There’s the second option where we don’t do any work to this house and we put it on the market, which will have the biggest pool of buyers. It may not qualify for a lot of traditional financing.

It may, it may not. You’ll probably still will have the same type of buyers, but it’s a much bigger pool, but it’s also gonna be just a little more headache and you’ll probably, but you’ll probably get a little more money. Or we can do the ultimate way to get you the most money possible and help renovate some of these things that you need in place.

And there’s even companies now that I’ve never used them personally. So I can’t, I’m not even gonna announce them or attest to them or anything. But I know there’s companies now that will pay for these renovations to be done.

And then the client can pay them back at closing without ever having to pull a dollar out of their pocket. It’s so much more work though. And there’s so much that goes into it and could go wrong.

So your reward is much higher, but your risk is much higher. And sometimes some people just wanna be done with the deal. They don’t, you know, or they don’t have the money to even put into the renovation or trust these companies to do it.

So it’s easy to balance, you know, your duties. Another part is when you’re also just talking, these are just conversations. Like you don’t really owe any fiduciary duty to them in that moment.

Cause you’re just giving them the options out there. But my main goal is, and I just found this in any facet of real estate and why, you know, we can talk all day like sales tactics and all these things too. But a lot of it comes down to, I think the best realtors, real estate agents, I think the best ones just try to help whoever is in front of them at that moment.

And it’d be a genuine thing. It may not even work out best for you, but it may work out best for them. And that is in the end gonna be a win for you, your brand.

And it’s just word of mouth has become in real estate. There’s so many agents. There’s so many investors.

There’s so many lenders. Like the word of mouth referral by far has been my biggest and cheapest way of acquiring new clients. And they already trust me.

I don’t have to give them. I’m not a salesperson. A lot of agents aren’t.

They get into this business and they’re like, dang, this is like, I’m selling, you know, like I’m like selling cars or something almost sometimes you feel like, you know? And it’s like, that doesn’t have to be that way. Like if you can get the word of mouth referrals, build your network, people can build the trust in you.

That’s why I’m such a big advocate of social media and, you know, focusing on your own content and putting things out there like that. Because if you’ve already established that trust with them, you don’t have to be salesy. They’re gonna want to work with you.

And then after that, it’s your job to use your skillset to give them the best, you know, experience possible. But then also like, it’s just gonna be an easier thing in the end for you. And I just, that’s why I’ve always been just, just find a way to help the client or the person that you’re talking to.

And it’s all gonna work out in the end. Don’t worry about yourself. Don’t worry about all the extra things.

That’s gonna fall in line. And it’s just gonna open doors for years to come. Cause it’s a long-term game.

Like if you’re in this for the short run, you’re gonna be out as quickly as all the other agents that are out there.

[Mattias]
No, I agree with you completely. And I think that’s the perfect answer to that question. I mean, cause it does fulfill a need and that somebody will be able to do that.

And so you might as well be that person or be a connector to the people that can help them just get that deal done and have that guarantee. Cause like, you know, we can say two weeks closing from now we can have this wrapped up compared to, you know, putting it on the market. It’s gonna go under contract.

They might have financing. They might wanna do a, have a due diligence period. We’d never know.

And yeah, so no, I agree with you completely. It’s kind of like a one-stop shop. You can get your house sold.

Choose your own adventure. I can suit your needs wherever you wanna go.

[Garrett Brown]
Even not long ago, I had a client I was helping and they weren’t planning on doing a major rehab to this property, but an owner, he wanted 579 or something. He was super firm on it. We went in at like, you know, tried to get it a lot lower.

We ended up figuring out just from finding out how, like what exactly they needed that. They actually just, they needed a certain amount but they also needed to close really quickly and have like a two-day lease back. And so sometimes the option isn’t only money, how you can help them.

We were able to be like, all right, we’ll come down, we’ll come up a little bit in our offer to meet that, but we still gotta stand here but we’ll give you your lease back and we will close as quickly as possible because we are cash and things like that. So that, and it worked out, we got the deal. And it was, you know, 545 or something like that.

And it’s perfect for my clients. But that just came because we solved the need that they had that wasn’t only monetary. And it’s not always, people always think it’s monetary but it doesn’t, you can find other ways to really sweeten the deal for them that will make it go through for you and work well on both sides.

[Mattias]
Yeah, 100%. And I tell all my clients, like, you know, I wanna try to lay out exactly how this process is gonna go, how we’re gonna be able to negotiate, but I can’t. And cause it’s gonna be different for each individual negotiation.

It’s gonna have nuances, it’s gonna be, we’re gonna have to tailor how we approach this differently. But that’s where my value is. Like, you know, if you wanna talk about, you know, trying to prove your value as a buyer’s agent, for example, which is a big hot topic right now.

You know, you gotta get that buyer broker’s agreement signed which, you know, in Virginia we have been doing for three years. But if you need to show up and prove your value, like, that is huge. Like, I have been through so many different negotiations that I know that, you know, I can’t just do the same thing for each, I know almost every agent in my market, for one thing.

I know how they operate. I can usually figure out what the sellers are worried about when we go through the house and what their fear, pain point is. Like, the other time I had, you know, a roof that needed to be replaced, it was obvious.

And so we knew roughly what that roof was gonna cost because, again, I have those skills. I’ve been doing flips. I know, kind of, it was a townhouse.

It wasn’t, you know, huge. So we overestimated that. We said it was as is, the roof, and we made an offer.

So we got a home inspection. We were able to, you know, get him, you know, about four to seven grand lower than the next other offer for that reason. Net, like, so after you factor in the roof.

So, like, I mean, like, that’s, you know, it was a small, small deal, but, like, that kind of thing is where you can really, yeah, exactly, it’s not all about the money. You gotta figure out each individual deal, how, what the angle is, and how we can make it a win-win for everybody because I don’t think the seller felt cheated at all by this opportunity. We got the deal done, and it solved his fears, solved his worries, and, yeah, it was perfect for us.

[Garrett Brown]
I think that’s a great point to, like, hit home with, too. Like, one thing I noticed very early on as an agent, and, you know, you always have to be careful with this, but I didn’t know anything about construction costs. You know, I mean, you don’t wanna give, if you, you know, you don’t wanna give too many numbers and stuff to clients because you don’t wanna lead them down a path you may not know, but the more I learned about construction and flipping, the more valuable I am as an agent.

And as you talk about with all the changes that are going on, like, if you can build that trust instantly from, you know, your social media content and things, and then also have other skillsets that other agents just don’t typically have, that’s how you stand out in a, you can say, saturated or ever-changing landscape of being a real estate agent, is you need those type of tools that you will be more valuable to sellers and buyers, and most agents aren’t doing that type of work.

They, like I say, they think it’s buying a house. Hey, someone wanna sell your house? I’ll sell it.

You wanna buy it? There’s so many more nuances you can become, you know. I’ve heard, I know so many, and everything’s a slippery slope with, you know, doing multiple things, but I know a lot of agents that are also mortgage brokers, you know, and like all these different types of things too.

So there’s multiple ways to bring value to your client and really stand out with that, and all these types of things that we’re talking about are the exact pieces that agents really need to do.

[Mattias]
And it’s, yeah, it’s all about providing value and helping. I mean, if that’s your focus, providing excellent service, helping, giving sage advice, I mean, I think that’s what people want in one of the biggest transactions they’re gonna do in their lifetime. So now, somewhere along the way here, you started doing Airbnbs.

Let’s have that come along.

[Garrett Brown]
Yeah, so I kind of alluded to it that like not all my flips were successful. I really started flipping in like 2018, 2019. They’re all average.

I didn’t really lose, I never had a really bad one, but there was multiple in a row that would just fall through like we had one flip, it was gonna be a screaming good deal at the last second, the seller had a long lost brother come out of nowhere and like claim a piece of title, and then it clouded the title and became one of those things you don’t wanna mess with. And so, and then 2020, as everybody knows, that’s when the pandemic hit. And so we had a really like shift in a lot of things.

We were still, you know, figuring out what we wanted to do next. I had a client from being an agent that he, I would list it, he had three condos in one building. I would list them for rent for him every single year.

Finally, it was right before the pandemic. He was like, hey, I wanna sell these. And I was like, they were, you know, relatively cheap, but in a decent part of town that I knew I lived near it.

And so I was like, okay, you know, like maybe I wanna try this Airbnb thing. This was really when it was just getting bubbling, like 2019 or something. He gave me a deal on the three, he liked me, gave me a deal and I told him we can list them, same thing, I said, we can list them, or this is what I would buy them for.

And he was like, hey, I wanna give them, like, we’ll do that deal for you. I closed them, we were doing pretty well on those. They were just root, you know, regular, regular condos.

But then after the pandemic hit for a while, all the big money really started coming into Houston, especially in the Airbnb, like our short-term rental condo scene, for lack of better words. And people like BlackRock and all these others were just buying up all these condos and single family homes. And they had so much money that they could drop the prices.

And big management companies could drop prices so much that the only thing we could compete with at that point was price. And I was a one-person thing, you know, operation, and I couldn’t compete with price with these billionaire hedge funds and things like that. So it was going good, but I knew I needed to pivot.

And I was really checking into the market and how things were shifting. And I saw the opportunity was building unique stays. I actually, I have a hospitality management degree.

I went to hotel and restaurant management at the Hilton College here in Houston. And so I’ve always wanted to go further with my hotel management degree and figure out how I can do real estate and use my creative side. So I’m a very creative person.

I love making music and all those types of things like that. So that’s what I liked about short-term rentals is I saw a niche that if you build something unique, it can do, like it will do better than most people are doing right now in Airbnb. And we were looking into data projections and I was looking at different areas and I was trying to find something that was somewhat of a vacation town, which is near a lake that I used to travel to when I was young, which I always tell people like, think about where you would like to travel or where you continuously visit.

It doesn’t always have to be the Smoky Mountains or something like that. I went after this lake that nobody knows. The short-term rental sites were saying like, oh, you’re gonna make 25,000 a year.

And I was like, I think if I build something unique and with my just social media content background and just all these things like that and hotel operations, I think I can make it do pretty well. We bought a house with a bunch of land, like 10 acres, and I was the agent on the deal. I was able to, I looked for eight months for different properties.

And the one thing that was cool about that is I didn’t have to call an agent to go open doors for me or anything. I was the agent, like I handled everything. If I wanted to go see a place at 9 a.m. on a Saturday, I could just schedule the showing and go see it. I didn’t need to wait on somebody to do that. I was able to continuously see houses and really analyze my numbers. I eventually used an owner-occupied loan, so I paid 5% down to live in the house for a year.

But the main reason I did that was I knew I needed cash to build some of these other cabins back there, so I didn’t have to put 20% down or 15% down, like 25 in some cases for investment properties. I saved that cash, I built my first cabin. The house, we turned it into a short-term rental as well.

I moved out after a year. And then we also built another cabin, and we crushed the, I think, like I said, they said we were gonna make 25K a year, and both our cabins did 100K the first year. And the big house did like 80K, which is, honestly, the small cabins, they’re so much more unique, and it improves my point that unique is gonna win in this space.

Yeah, that’s kinda how I ended up here. It’s kind of a wild shot. But it all came from me being an agent, getting interested in real estate investing, and then I tried, the thing that’s cool about real estate investing is there’s so many avenues.

You can do storage spaces, you can be a passive, you know, syndication and things like that. You can buy and hold, you can midterm rent. Like, I could go on for hours, RV parks, whatever.

That’s what’s so cool about real estate investing is you can try so many things, and you really just figure out what fits you and what you like. I have a little more free time, and I’m also able, I’m a little handier, I know operations. Running a short-term rental wasn’t daunting to me, and the returns matched the amount of work, but I wanted high cash flow.

But if you don’t have as much time, there’s options for you, too, within real estate investing. Syndication, easier buy and holds. That’s what’s so cool about real estate investing and why my journey has been so in and out, because that’s what I suggest people should do in real estate, to learn.

I’ve learned I didn’t like, I like elements of flipping houses, but I don’t like flipping houses. I like building creative things, which was a form of flipping houses, but just a little too nitty-gritty for me in a different way. But that’s what I do love about it is anybody can find their way within real estate investing and see what fits them.

[Mattias]
Yeah, yeah, great point there, that Airbnbs will get the most money on paper, right? But it is more work. I mean, you’re gonna be from the onset to running it on a day-to-day.

You’re gonna have to set it up. You’re gonna have to manage clients or people that come and stay, manage the cleaning, all that kind of stuff, or do it yourself, depending on what you wanna do. So yeah, it definitely can be more money.

Have you seen any, have you seen a downfall in the bookings since? So you’ve got a creative enough product that you haven’t really seen, because I think in a lot of areas there has been. There was a huge boom in creations of Airbnbs, more competition.

People were basing their numbers off of what was the case prior, right? I mean, you know more, you tell me more about that problem and how you can avoid it like you have successfully.

[Garrett Brown]
No, they’re all extremely valid points. I see a lot of pain points for people that bought in the most oversaturated markets in 2022, 2023, basing it off of the year that Airbnb had that was their historical best from a standpoint of just, I think, a percentage of revenues versus listings on the site. So my advice is, and other, you know, the thing about, there’s a lot of people that teach short-term rentals and Airbnbs and things, and everybody has different advice.

And I know a couple people that will always say, like, buy in the saturated markets, buy in the Smokies, like, those are proven ones. And it’s like, yeah, if you got a million dollars sitting to buy a Smoky rental cabin and you’re not worried for any little bit of return, then yeah, maybe so. But most people in this, especially getting their first few properties, are looking for something a little more reasonable, but still has a high projected cashflow rate.

And so I look into, and I have something that’s called a 60-30-10 rule. I kind of phrased it after how I found my lake where I’m near Lake Livingston, which is an hour north of Houston, Texas. So the 60-30-10 rule is, I wanna be 60 minutes away from a major city.

I say 500,000 residents, but the bigger, the better. I’m by Houston, I’m two hours away from Dallas, and I’m also two hours away from Austin. Those are all major, major metroplexes.

I’m also, the 30 is I’m 30 minutes away from two state regional attractions. Sometimes I say national attractions, but the national parks might’ve become so overpriced, it’s hard to find a deal there. They’re still there, but you need to do, you need to probably find a place that needs a little work to make those deals work.

So if you’re looking for something turnkey or something you can build, if you’re 30 minutes away from a state or regional attraction, like I’m near Lake Livingston and another place called the Sam Houston National Forest, people will visit those locations from, as I mentioned earlier, when I was living in Houston growing up, we used to go to Lake Livingston all the time during the summer. And it’s a thing that people do. You don’t have to be some big national attraction to get consistent visitors.

You just need to be by, AirDNA calls them feeder cities, but you need to be by cities that have massive populations that love to travel to smaller areas nearby. There’s a lot of places, and North Carolina is another one that has quite a few, and Georgia does as well. But, and then the 10 minutes is the 60, 30, 10, the 10 is you need to be 10 minutes from some type of gas station or Dollar General or something along those lines.

So that way you’re not completely out of the middle of nowhere from civilization, which makes it harder to find cleaners, harder to find contractors, harder to find even getting Home Depot supplies or something like that. So I think if people try to look for rising markets that are near bigger cities, another one that I proclaimed not long ago in bigger pockets is there’s a small town in Oklahoma called Lawton, Oklahoma. And I said, this might be the next best short-term rental place for investors.

Of course, I’m from Texas, so I have a, you know, my viewpoint is from there. Somebody from Maine may completely disagree, but my reasoning was because it’s 60 minutes from Oklahoma City and Dallas, which are two of the fastest rising metropolitan areas in the US. It’s 30 minutes from two of one national park and also another massive state park that they have there that gets a ton of visitors.

And then it’s 10 minutes from way bigger areas, but then the fallback that I also, I didn’t mention earlier, but the fallback is it also has really strong metrics for midterm rentals and long-term rentals. So say you get into the market and you hate short-term rentals, and you’re like, dang, what do I do now? Like, I do not like doing this.

For whatever reason, you don’t, you know, because it is just a different beast, way more cashflow. But a lot of these gurus, you know, quotations will lie to you and say like, oh, I can make Airbnb money passively. It is not far from, I don’t spend, like I said, I work a full-time job at BiggerPockets and do all the things I love to do, but that’s because I’ve built systems and automations and have a team in place.

And I still work within my business quite a bit, at least eight to 10 hours a week. But the thing about it is if the metrics are there that it would do okay as a midterm rental, it’s near a Goodyear tire factory and some army bases, if it will still do good at that, maybe you do midterm rental instead and you’re still gonna be profitable. Even the worst case is if you can buy a place that still will do okay as a long-term rental, then the worst case is you just go, you know what?

I’m just gonna make it a long-term rental and go to the next thing. And then you have at least a long-term rental that makes some sense. So that doesn’t always, isn’t always the case, but that’s, especially if you’re a newer short-term rental investor, I recommend like maybe trying to balance out some of those other things.

If you’re going really unique in the property like I did on a couple of mine, then they’re really, you know, it probably the long-term rental thing isn’t gonna make sense anyways for you. But that’s when you’re going full, you need to be ready to go full force into short-term rentals. And if you’re doing that, then you have all the power for you.

But if you’re a little hesitant and you’re like, I wanna give it a shot, but I don’t know if it’s gonna be for me and all these things like that, then just see if it would do okay as a midterm rental or a long-term rental. And you’ll feel better about your investment overall. Cause then you’re just, then you’re worried about the asset and the location and how it’s gonna appreciate over time mostly.

[Mattias]
I love the ABC like things. And if you’re finding a property that needs to be flipped essentially anyway, that’s always an option as well, right? I mean, you could just sell it.

So that could even be a D option there. I have a similar property right now that I really want to make as a long-term rental, love the location. Our city doesn’t allow short-term rentals, they allow midterm rentals.

Considering doing a midterm rental on it because the numbers just don’t work with what the interest rates are right now and wondering to see if I do the midterm, will that help it make sense? And I think at the end of the day, we are deciding just to sell it. But it’s an awesome location.

I mean, that’s the thing is like, if you have those fundamentals, like you just talked about the awesome location, that you had those three rules, which are awesome. I haven’t heard that before, that’s great. And if you have a great deal, which this one was, because it needed a lot of work, there’s just gonna be options to move forward.

And we’re probably just gonna opt to sell it, which we’ll make a nice little profit on it, we should. So that will work out. But I’m tempted still, every time I see it, I’m like, oh, I love this house.

[Garrett Brown]
Yeah, and you know, that’s what’s cool about real estate. Like, even as we were talking about, if you’re getting a place, it might need some work and you have all these options to look into. And if you’re an agent, the options even increase and your profit level can increase for different reasons within that.

So, they all just go hand in hand perfectly. And you know about these options, the more you educate yourself as an agent and as an investor to where, there’s so many exit routes with that. I’ve seen people buy a house or get a flip and then they end up deciding to turn into assisted living facilities.

You know, it’s like, you get mind blown at the like, dang, I could do that as a real estate investment. You know, there’s business sides to them too, but the ideas and the exit routes are just endless with this and you can just use it to what your skillset is. And that’s what makes smart investments.

[Mattias]
Yeah, and that’s a kudos to people who are always out there learning new things. Like, I mean, if you’re listening to the BiggerPockets podcast, you’ve listened to podcasts about different, you know, investing strategies, that’s helpful. If you’re part of masterminds where you’re learning from what other people have done in similar situations, it’s just, that knowledge is just so powerful.

So yeah, kudos to anybody who’s listening to this right now because you’re doing yourself a lot of favors. Now, that was a really good answer to what I’ve been kind of concerned about in this space. Cause I think in our local market, some of the Airbnb areas that, you know, from a resort kind of standpoint, were the only areas that I was like, oh, that could see that having some downward pressure on the prices if things turn a little bit.

And so far it’s held pretty steady. So, you know, I think that maybe I was a little overly concerned about it, to be honest. But yeah, making something unique is key.

One of the things that my wife and I have also noticed from our stays in Airbnbs is that it seems like sometimes people will do kind of a quick flip kind of thing. It feels cheap, it feels not well thought out. There’s a lot of things that don’t make sense when you go through it.

Like she just had an experience where there was a microwave that was on the refrigerator and to be able to use it, they had to either pick it up and take it down or they’d have to move the stove out to be able to plug the plug in behind the stove. And there wasn’t any way to like just kind of keep it plugged in. And so like every time they were like, oh, my coffee’s a little cold.

I don’t know if I want to go and move the microwave. And that’s as simple as, and you can probably imagine exactly what happened. They flipped this place and they had one of those little air vents above the stove where they have a bigger cabinet above the stove and they can’t put the microwave underneath it because it will make the distance between the stove and the microwave too short, right?

Instead of getting a new cabinet and just moving everything up through the microwave on the refrigerator. And it’s that kind of stuff that gives, sometimes it gives Airbnbs a bit of a bad name. Like what strategies do you have to kind of help think through like those nuances?

I mean, that one’s an obvious one. Yeah.

[Garrett Brown]
Yeah, I was going to say that, that is definitely like there’s flipping nuances. And then there’s also, there’s flipping nuances and there’s also like Airbnb design nuances. So I would say that’s a flipping nuance, but I see it all the time too.

It’s just in the short-term rental field of people, they’ll just, you know, they buy, they go to HomeGoods or whatever, buy the first Highland cow picture they see, the first, you know, gray couch they see with some pillows. And then they’re like, oh, you know, they get the first bed they see and like, oh, okay, that’s my, you know, short-term rental. But the ones that, if you can see the ones that stand out, they put real thought into the design.

So I design a lot of them too, with the help of my mom actually, who has a lot of design experience in her own, but I’ve learned design. I just have an eye for it personally. But if you don’t, then you need to like possibly hire someone or also like, don’t be afraid to like go on Instagram and social media and see what other, or even Airbnb, and see what the successful ones are doing in your area or in an area nearby and copy them.

Like, it’s not your, you know, like people, they’re so afraid to be like, oh, like this idea, I saw that. And it’s like, I don’t think this Airbnb invented LED signs. You can do one too.

You know, like, I don’t think this Airbnb, like you can take some of these ideas from places and enhance them and make them your own. But, and that’s kind of what I’ve done. I’ve had my own design theories, but then I see ideas and I go, oh, that’d be cool.

And then I constantly enhancing the space. But I go in from the beginning, knowing that the furnishing and design and the amenities, even when I say creating a unique stay, I think I should have paraphrased that too with, I don’t even necessarily mean like it has to be a tree house or an A-frame or a geodome. I’m talking like I’ve seen regular condos get turned into, or a house get turned into an oasis because they spend money on the outside.

They spend money on the indoor amenities and they figure out the design. You know, it doesn’t have to be some insane theme, but there’s just a lot of design elements that go into it. Pops of color, wallpaper, all these things that wouldn’t be normal interior design tips probably at this moment, you know, should be in place for, you know, some of these places.

It doesn’t need to look so sterile, like white walls with a white couch, like I say, with one fake plant and some white, you know, dishes from Walmart. Like that’s not gonna cut it in today’s age. Maybe in 2018, when people were, you know, putting up an air mattress or something like that and being successful in Airbnb, but nowadays it takes a lot more.

And that’s why, and that’s where people don’t care. And Airbnb has noticed this. This is why they’ve done so many categories now of unique houses.

Airbnb knows that most people don’t care about the location. You need to be near a big city so you can draw these guests in. People don’t know the city that my unique stays are in.

They see the amenity. They see how cool it is. They see everything I provide and they just wanna go to it because it’s an experience.

And so kind of to go back into the question of like, you know, the saturated markets and all these things that you don’t have, like you just need to build a cool experience, whether it’s a single family. I’ve seen, I saw not too long ago, a place that it was somewhere in California. I forgot the name.

I’ve told this story once or twice already. He had a house, just a singular house, and it wasn’t performing that well on Airbnb. He changed it to like a, I can’t remember if it was the Shining or like a horror theme or something.

And he’s crushing it, like millions of views on social media, bookings are flying, and it was the same house. And it wasn’t, he probably, I don’t know how much he spent, $10,000 I’m guessing, you know, and it was nothing crazy. And it’s crushing it now.

And like, that’s just a prime example of you build something that people want to experience and you know some marketing skills or work with somebody that does that, you’re gonna, the sky’s the limit for you in that type of field there. And then, you know, having that house, if he decides one day he doesn’t want to do it, you can take out the design and go back to a regular house. It’s, you know, it’s, and you still have a performing asset and short-term rentals, like people think that they’re more wear and tear on those than there is long-term, but it’s actually the opposite from my experience.

I’ve walked into places that have been rented out for four years and it costs $40,000, $50,000 to fix. Like if a drywall hole gets, you know, punched in during a short-term rental stay, that’s 400 bucks and we’re fixing it that day. You know, the plumbing leak we’re catching and the, you know, we’re doing yearly maintenance and all these other things.

And so our costs are actually more minimal than my LTRs I’ve have and have. So that’s just another perspective too for people when they’re thinking about, cause I hear a lot of times like, oh, you’re gonna have so much damages on short-term rentals. And it’s like, the damages I have are very minimal.

I have insurance, but Airbnb, they get a bad rap, but they actually cover quite a bit of things that like, they’re not bad. Like I, for some reason, everybody hates Airbnb and you know, Airbnb, if you’re watching this, like remember me saying this, but I actually think like, I actually think they’re pretty good. They’ve, I’ve had a couple instances where things were not great, but they’ve always, you know, they’ve done exactly what they’ve said.

And I, you know, provided the right documentation and they, you know, I have a lot of direct bookings, but Airbnb is a great market, the biggest marketplace for this. So you don’t need direct bookings and all these things. If you’re just one listing and you wanna put it on Airbnb and give it a shot, they handle a lot of things.

You need your own insurance and all that, but I have had great experiences. I had somebody break some stair rails not long ago and Airbnb is gonna pay for my new stair rails. So yeah, improving my house equity at the same time and appraisal value and I’m not paying for it.

So, okay, it’s a win. Do that with a long-term rental.

[Mattias]
So it sounds like, yeah, for real. It sounds like you wanna really go after like the first impression kind of from when people are scrolling through, like the pictures obviously are huge. Like you wanna have like, you know, something that sticks out and is different than everybody else.

Like you have that unique thing that you’re talking about. But how important is that compared to like when somebody actually gets there and how it feels like from like kind of what I’m talking about, like, you know, you might have great pictures then you find out the microwave is on the refrigerator. Like how much repeat business do you get and how much are you concerned about that?

I mean, I imagine you want the high ratings and all that kind of stuff, but.

[Garrett Brown]
Yeah, and to kind of touch on the microwave thing too as well is I went and stayed, you know, I’ve stayed in tons of Airbnbs and before I built my specific ones, I went and stayed in a lot of them. So I could see like, oh, okay, I don’t like this. I need to note this.

I don’t like this part. And then after your place is done, you need to stay in your place a few times and you need to have friends stay in your place a few times. And that will really help mitigate some of that like action that’s happening right there.

And then as far as the pictures versus, you know, the experience, I mean, you need both. So it’s like the pictures need to be stunning. I tell people all the time, like you need, you know, the pictures will stop them from scrolling, but then your amenities and your ratings and all those things like that will make people book the place.

And so you’ve got to win on, you know, the pictures in your listing from their eyeball visual, but then your ratings are gonna come from good guest experiences, which you provide. And then the amenities you provide, which are scrolling through your listing is gonna add to both. People will book instantly and they’ll just have a better time because they have more to do.

I’m just a big, like I said, I’m a big fan of the guest experience overall. So I’ve spent a ton of money on my outdoor spaces and being unique, like I’m in Houston, Texas. I put a sauna in both of my bigger rentals and people were like, why are you doing that?

Like, you’re in a sauna. And I was like, I want to be different. I want to stand out.

And of course it stood out. No one else has a sauna. People come all the time and they go, I was so glad to have the sauna.

I booked it for the sauna. You know, it’s, and it was, my sauna was $3,000. My, I’m sure I’ve made that back within a month, you know, so yeah.

So it’s all about, I think the guest experience is gonna always trump like, you know, I always say professional photos, but I would rather over-deliver at the experience and under-deliver in the photos. But, you know, the best option is, you know, don’t under-deliver in either one and then sell them on both. So that’s kind of the way I’d play it.

[Mattias]
So real quick parallel to real estate sales is I’ve definitely had properties that have been over-marketed. And in the sense that people show up and they feel disappointed when I get there. And I feel like that’s always the worst.

You could have the exact same price. You could have, and here’s an example. So I had a ranch house that had a basement.

They had finished, they had two extra bedrooms down there. But it was, it was just kind of didn’t feel, like I think maybe it was painted center block walls, ceiling tiles, it just didn’t, it felt a little bit, it wasn’t blowing anybody away when they went down there, right? So simply changing it to a three bedroom, which is counterintuitive, and taking away that finished square footage and saying it’s unfinished, it switched the mindset of people when they got there.

They thought, oh, what a bonus. Like there’s actually more square footage, there’s more bedrooms, there’s more to this property than what is listed. But on the other hand, they were like getting to the basement and disappointed.

And so that speaks volumes to that psychology behind, I think, when you show up to a place, being, having it continue your excitement instead of like, like lowering it. Like that’s key in sales in general.

[Garrett Brown]
Absolutely, 100% agree on that. And yeah, I would rather have that scenario than the opposite of people getting somewhere and being like, oh yeah, this isn’t what I thought it was gonna be. Because that you can’t, it’s hard to recover from.

The other one, like you’re only starting off on a good foot.

[Mattias]
Yeah. Well, I do wanna pivot a little bit. I wanna ask you about if you have a fundamental book that you love to read over and over that got you kind of going or the one that you’re kind of enjoying right now, is there one that comes to mind?

[Garrett Brown]
So my favorite book at the time or right now is from Dan Martell. It’s called, Buy Back Your Time. And it’s a great introduct, especially for as an agent or investor and everything, like you’re always gonna be an entrepreneur and a business owner of sorts, no matter what kind of capacity you work in.

And this is a great way, especially when you’re an entrepreneur in this aspect, you have 24 hours a day, seven days a week, you could possibly be working. There’s always a million things you wanna do. And this book really drives home of how to set up your time so it’s spent in the right thing.

You’re not wasting your time on unproductive items that you don’t need to be doing. And then also, it buys back the time for the things you wanna do. So I really do like that book a lot.

And then, plug, just cause I work for them as well, but it has changed me is all the bigger pockets, bookstore books are amazing. There’s Brandon Turner is an amazing writer. He’s wrote some amazing books.

Short-term rental, there’s Avery Carl has some books. There’s one called Short-Term Rental, Long-Term Success that I highly recommend for people to check out if they’re interested in the short-term rental world. She’s like one of the queens of Airbnb and short-term rentals and has came up with some amazing methods.

So those would be the two areas I would look. But I do love the Buy Back My Time book right now from Dan Martell. And then I’ve been reading Avery’s new book is coming out pretty soon and it’s great as well.

[Mattias]
Cool, yeah, that’s awesome. That’s one of the ones that I’ve been working through myself. And I have, especially from this podcast, I have like six to 10.

I feel like you just started. I can imagine. I need to get to the finish line on those.

But no, that is a great book. And if anybody’s listening to this that isn’t familiar with bigger pockets, like if you’re an agent coming to this and wanting to learn more about the investing world, I mean, that is the resource. That’s like, it just, yeah.

If you don’t know where to start that, go there. Like podcasts, online forum, any book topic that you wanna learn about, it’s great. Yeah, and Brandon Turner.

Yeah, read, I think, all of his books by now.

[Garrett Brown]
Yeah, I think so. I think I have too. And he’s great and he really laid the foundation for a lot of things that have came from there and we’re developing over there now.

It’s gonna be a lot of amazing agent resources and anybody interested in the investment world to check out.

[Mattias]
Cool. Well, if anybody wants to follow you, is there a good place to do so? Or do you have any anywhere else for people to reach out to you?

[Garrett Brown]
Yeah, so Instagram, it’s GarrettBrownRE is my Instagram handle. And then you can, GarrettBrown at biggerpockets.com. If anyone wants to email me, ask me any questions and you can always find me in the forums on BiggerPockets.

[Mattias]
Perfect, thank you so much for being here. This was a super fun conversation. And yeah, just, we went through all the things.

[Garrett Brown]
Yeah, we definitely got through a few. We still could have went for hours longer, so.

[Mattias]
I’m sure.

[Garrett Brown]
That’s what’s crazy about real estate. But yeah, I appreciate you having me on and I look forward to talking more and hearing everything you’ve got going on as well.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.