98. What is the 1% rule? Does it work in Atlanta?!

We serve as a hub for connecting with fellow members during our sessions so you can share successes , ask questions and keep the momentum going .

And we're going to do it a little bit different tonight . Tonight we're going to have my co-host join , Leibon .

But what we're going to start doing during these open sessions is we're going to use the beginning portion to dive deep on a certain topic and really start to dig a little further into it , and then we're also going to open it up to the rest of the group . And so for tonight , first and foremost , Leibon , how are you doing , man ?

This is something that we talk about to a lot of clients and we help coach individuals on . And I like using rules of thumbs for the upfront right . We use rule of thumb for our long term rentals , for our short term rentals , but I don't know the last time we've actually had the full , long conversation . And OK , why do we use that ?

Is it even viable in Atlanta and why does that number kind of stick out ? And I personally wanted to jump in and kind of explain what the 1% rule is to begin with . And so the 1% rule is a rule of thumb and it basically says if you're buying a house for , call it , $100,000 .

If you can rent it for $1,000 or 1% of the purchase price per month , that's a deal that you should go after and it's a way to run through a bunch of deals quickly to understand hey , does this work ?

So you're not spending 15 , 20 , 30 minutes analyzing a bunch of deals and wasting your whole day and getting burnt out , and so the way that works practically is we try to find houses where it's getting close to that 1% rule . But one of the things I wanted to dive into even before we start allowing people on is whether it's viable in Atlanta .

And so leave on , before we dive into that piece , any comments on the 1% rule ?

So when you are calculating that and let's say properly , it does hit the 1% rule , would that then cover said mortgage ? It would .

If you're putting down less , it may not work as a 1% or for a long-term rental , and that's when you got to get a little bit creative . But no , that's a really good question and I wanted to while we still have people joining . I'm actually going to share my screen here and I wanted to dive into a live example , and so , leemon , can you see my screen ?

I can , ok , and you're seeing a property here for $250 ? Brand F , yes , ok , so this is an actual property that's out there in the market that we are , I believe , we just put under contract , and so the thing about this property is it's a duplex with a 1-1 on each side and it's for $250 because there's some deferred maintenance , things that nature .

This is not common . Let me just give that a clarity . You're not going to see a lot of these in Atlanta that look even semi-decent , all right . So we go into bigger pockets and we're just talking about the 1% rule Like , hey , is this viable ? Is this something that we can get to ?

And so when you look at the rent estimator , this is something that pulls in all the aggregated data for the area and it'll tell you , hey , what can this rent for , based on what other properties are renting for in that zip code and in that area .

And so it's a duplex , it's a 1-1 bath , and it's saying that with high confidence , based on these other comps that we're looking at in this area , that you could pull a median rent of $11.95 . This is not saying it's the highest in the market or the lowest . This is where the most of the properties fall within .

And so , at a median rent , which is what we use when we're helping our clients , you could pull $11.95 . Now , leibon , can you help me out ? What's $11.95 times 2 ?

If we actually have to do the numbers on that , right , you said $23.90 divided by $250,000 . This would equal 0.956 , right ? So it's pretty close to the 1% rule . Now question for you .

This is like hey , I like the outside and so you would probably be toward the top of the market . What I tend to do when I'm looking at OK , where should I list my rental at ? For my personal rentals , I look at what's out there . I'm going on apartmentscom as if I'm a renter . I'm saying , ok , for this price , what am I getting out here ?

And then I look at mine , and then I look at theirs , and if mine's a little bit better , it means you can charge a little bit more .

If yours is a little bit worse , it's where you got to come to grips with it and understand , hey , I'm going to be at the median or maybe a little bit lower , but this one , I would comfortably say , could probably go for a little bit more .

That being said , when we are working with our clients , we focus and just use the median price so that they can make that estimate if they want to go a little bit higher . But we're a little bit more conservative and so for this one we're going to use this price , even though I believe to your point , we could potentially get $1250 . You get $1250 , $1250 .

That's a 1% rule , but we're going to use $1195 , which is the high confidence median rent for the area for a one bed , one bath . And so now , keeping that number in mind , we would go over to the rental property calculator , and this is what I'm talking about . So we know , at a high level , this is pretty solid .

It's like , ok , that's pretty close to the 1% rule , but why ? And so this is where we pop it into the actual full report and we run the full numbers . And so when you go rental property report , I like using bigger pockets , because that's how I got started . We could put the purchase price at $250 . The closing costs are going to be about 3% , so $7,500 .

Now we're talking about a traditional investment . So 20% down for traditional . And the last 20% down we did a couple maybe , like two weeks ago they got about a 7.5% interest rate . This would be a 30-year term and for the gross monthly we're looking at $11.95 times two , which is $23.90 .

Taxes it pulls it in from county records and then for insurance for this property it's pretty small be about $100 a month .

So we're going to pop it into $88 , right for the insurance monthly . And to your point , leibon , these are pieces that you can start to tighten up once you get a deal under contract . We have insurance brokers that we work with and different partners that are able to get us pretty good deals , especially as you start to grow a portfolio .

And quick side note , and we'll come back to this , when I was first growing a portfolio , I was doing everybody else this right . I went to , you know , the state farms , I went to the progressives and I got like , okay , one insurance here , one insurance there , one insurance here for this particular house .

Once I got to about four or five homes or units , I talked to an insurance broker and he looked at it and he's like , dude , like you could save a heck of a lot if you did portfolio insurance . And so in one year he was able to get me basically like and this is , I had a bunch of units , I forget exactly how many when I actually went to him .

He was able to get me basically take my insurance costs from like 6,000 , right down to like 3,000 . He cut it in half . It was nuts because they looped it all together and it makes it less risky Cash flow by what ?

So so , long story short , this is one where you can start to utilize economy's scale as you get bigger , and this is huge when you look at insurance costs starting to rise across the country . Now , when you talk about repairs and maintenance , I typically put in about 5% for that . They can see I'll typically put in about 5% for that .

Again , you should check your local market and kind of pull those statistics and or check with a property manager in that area . And then for CapX , I usually put it at 3% because if there's major items initially , you should be taking care of those if there's a major item initially .

Your roof is going to last for a super long time 20 plus years and then one day it's going to go out right and that roof repair is going to cost 10K , and so the CapX is there to build over time and allow you to be able to pay for that piece . So if you look at the CapX monthly , right , we're saving 71 a month in a year .

That's close to $900 in a year over a 10 year period . That's multiple thousands of dollars . That will help cover a water heater going out , the roof furnace , hvac , things of that nature . Fair enough , yes , sir . Okay .

And then for management fees for this one , this individual is going to manage themselves , but we'll come back and show you what that could look like with management fees and kind of adjust that . And then this is a duplex that's separately metered , so the cool thing about that is the tenants pay these fees , right . So you're not paying those fees .

So we're going to finish this analysis . Again , this is not exactly at the 1% rule . It's a little bit below that , but let's see what we came up with . So , with this deal , right , you're looking at $277 a month in cash flow , which is about 130 or so per door , which is not bad for a one bed , one bath as long term rentals .

If you wanted to boost this , this is where you can get creative and start doing some strategies that we've implemented where you have , hey , one side be a short term rental , one side be a long term rental , but for not having to furnish this , just coming with 20% down , this one out of the box is going to work .

And then , to your point , leibon , if you were to boost the rents to like $1250 each , now you're really cooking , but your mortgage is looking at $1398 .

And the piece to remember when you're looking at deals is you're not looking at it for one year , literally the best example I can give and it's easier to see after you've gone through a full cycle of property . But the first property I bought was a Triplex and Louisville for $190k , and when I bought it I lived in one unit and ran the other two out .

When I lived there , my mortgage was $1350 , the other two units were bringing in $1400 . And so I essentially lived for free . It was amazing , like I was like , wow , this actually works right . And then when I moved out , I rented my spot out and I was getting $2200 a month in rent . So that's pretty good . I'm like , okay , this is awesome .

Fast forward four years when I went to go sell that property . It now appreciated from being worth $190k to now it was worth $310k . So when I walked from that closing table I walked away with a six-figure check that I didn't necessarily work for and also the rents had appreciated from $2200 when I left to $2850k , right . And so my mortgage didn't change .

My mortgage is still $1350k . It might have been a little bit less right . So it's like okay , because your escrow and stuff and the insurance and things of that nature can take it lower .

And so , with that in mind , you got to keep the bigger picture and the long-term goals of hey , over time I can increase this by 3% to 5% a year , but this is a good starting point for a long-term 100% .

From a tenant standpoint , I'm not going to move completely out of the way for $50 extra a month .

So , for example , now , when you extrapolate that out to the deal that we have in Louisville with the storage , that's the piece I get excited about the most , because with storage it's really like minimal pieces . So we're charging you a hundred dollars , right , you've got all your stuff in here . How much is gonna cost you to move all that stuff ?

Time , money , effort to move it , and you got to put down payment somewhere else . So if we increase your rent by even 10 percent ten dollars , yeah , like you're more than likely not gonna move , and so now that we're getting this thing rented out , I'm super excited to start , it's $10 on 200 units of storage .

That's $2,000 , right , I do that man , you know I do that man , so it's good AJ .

Since you had such a pretty high spread between the mortgage and I'm sure you were getting a lot of cash flow , can you talk about why you didn't continue to choose the cash flow and you Essentially went with equity over cash ?

Louisville . So what I like about Louisville and this , even taking a step back , this goes back to kind of like a thing that we , by now , we're looking at before . Have you heard of or looked at the price to rent ratio ? Aj , I've heard of it .

Okay , so the price to rent ratio is basically the median price in a market Versus the median rent that you can bring in in that market , and that determines whether it's a quote-unquote cash flow market or appreciation market . And so I'm gonna give you a couple numbers here .

Right , cleveland , ohio , ohio , from a price to rent ratio is a point six , four percent , right , that means it's a huge cash flow market . It makes more sense to buy a home out there because it's it's super cheap , right , you can go get a home for 60,000 probably heard from some of the people that we've had in the podcast .

Yeah , but but your rents also cheap as well , right , it's like okay .

Whereas if you look at Los Angeles right , the other side of the spectrum their price to rent ratio is 39% , right , and so over there it actually makes more sense to rent , right , unless you have a super long-term view and you can house hack the heck out of that thing to where you're chapping it up and Ripping out a lot of portions of it .

Now , when you look at Louisville , kentucky , right , and before I even give you Louisville in Atlanta , when you look at price to rent ratio , if you are 15% or lower , it's more of a Buy market where it's like , hey , it makes a lot more sense to buy because the houses are so much cheaper that you renting makes no sense .

When you get to Between 16 and 20 , it's kind of even , it's you can buy , you can rent . Both of them are kind of gonna work out for you in the end . And then when you get to 20 plus , it makes more sense to rent Because the appreciation is going a lot higher on that market and so the cost of actually buying a property becomes less attainable .

And so what they're thinking about is not us as investors being able to hang on to a property and capture that appreciation , they're just thinking over this short period of time , are you gonna make a return on your , your money , right , if you're renting versus , versus buying ?

And so in Atlanta it's a 23.83 percent , which is right into that , it's right above getting into that buy the rent market , where it almost makes more sense to rent Right . And so that's why we want to own a bunch of these properties , because people are gonna rent and choose that piece , because it's starting to get Less attainable to buy a house .

When you talk about the median price being , you know , in the 400s , that's tough for people to afford right . Louisville , on the other hand , is 16.3 . So they just now are in that even threshold . And so when I look at the two markets , louisville was great for cash flow , right , but the houses were like 1920s , like there's no new product out there .

All those houses had some weird quirks , like that triplex . I didn't have duct work in one of the units I had to put like these mini ducks . Every winter it would freeze and I had to send guys down there with like Units , like you know , the mini ducks like the in Europe , like the , the heating cooling units that you would put .

Had installed that , but it doesn't cover every area . I can't put it in every room , so I put it in like two rooms and try to cover , but the pipes would freeze those . A lot going on , aj .

And so , long story short , I traded up from 1900s houses , like 1920s things at nature , up to , you know , late 90s and 2000 houses , because I believe in this market and all the people moving here and I want to capture that appreciation .

Well , maybe you know , because it's such a low price entry , you could start entertaining that method or maybe doing a burr , you know , doing force appreciation , equity , just like that , because , like you mentioned , these are older homes that kind of need to be worked on , and then you can kind of like , like I said , force that appreciation .

So could you also , on the flip side , look at that as an opportunity as well ?

The piece that I was running into is and I think LeBon can attest it's hard to manage a flip and I know we talk about utilizing others things at nature . It's hard to manage from afar .

When I was there , I was oh , I remember that street , let's go by that right , we kind of just bought like a whole block , kind of like what Desmond's doing he's buying a whole block , hey , but but now that we're in Atlanta , for me it made more sense to move it over here . That being said , I still believe in the Louisville market .

I mean , it's amazing , got the derby things , that nature , and so you can see what I'm doing . I'm partnering with others , like that storage thing . If it was just me , believe me , I would not be doing it . But because I have my investor , friendly realtor , out there , who's my partner , like , we were able to get that thing going pretty quickly .

I can't tell you how many late night calls it's like hey , you know how was your day ? Well , this is what went wrong . But this is how we fixed it , right , and I had nothing to do with it . Right , and the same thing with the townhomes that we're getting ready to start .

But if you're gonna go out of state , I'd recommend like partnering up with someone , at least for the first one .

Right , your management costs go way down because you're using the same folks , and so the advantage that we have out here is that we're working with a lot of the same folks that we we use for our clients and things that nature , and so our costs go way down .

And when you talk about even management , I can take a unit on like that , like it's not that hard If I find a deal and take it down . We could take it on like that because we have a whole team ready to go , whereas if you're in an outside market , until you build up the scale , it's gonna cost like a Louisville .

It didn't start hitting the economies of scale till I got to about six , seven units and then all of a sudden , my my management fee went from 10% down to 6% and I'm like , okay , this is awesome , you know . And then all of a sudden my insurance costs start going down and it starts making a lot more sense .

But you got to get to that scale , desmond , how you doing man .

So , yeah , definitely , plus one to that and also plus one to , like , the cost , you know , being able to go down , definitely , negotiating with the cleaners . And it's funny because on this , you know , new short-term that I have set up , which actually went live just a few days ago . It kind of got delayed a few weeks .

My W2 is , you know , squeezing every little bit they could out of me , but that one live . I'm getting some bookings now , so that's cool .

But I'm actually using a different cleaning team , because the one I'm using for this building they weren't really willing to take on the rate that I was proposing and I'm like , hey , look , I know what the deal is now right , like previously I was green , right . So I was pretty much negotiating blind . So I didn't know what , you know , the worth was .

You know really what it was going for at all . But now you know , kind of just having an understanding and knowing . You know , okay , I have a two bedroom . The one bedroom is going for this much right . So the two bedroom really shouldn't go for more than this right .

And I was really able to negotiate based off that and get a favorable cleaning rate , I think . So , yeah , man , I'm optimistic , got some fires that I'm , you know , putting out , but that's how it goes . So , yeah , take it in stride , it's always fun . I'm too big . Hopefully he's not too big . Nah , never too big .

You know , I I think , especially with the multiple units , it makes it a bit easier to you know , fix a problem in one . So there's a water issue that I'm still dealing with from literally like Last year , damn near at this time . So , figuring that out , this is in the quad . This is in the quad .

Yeah , so it's in the airbnb downstairs on the other side and I had a friend strain installed previously . Didn't fix it . It might have fixed it actually for a couple of months , because it there was a period of time I was like , yeah , like you know , this might have worked , but no , I , you know , after that started getting complaints from guests again .

Luckily , no one has really Put it in the reviews and I think and I want to say this , I really think that that speaks to like I'm super quick . I think living here helps , but I'm super quick in the messages to to respond , but I'm also quick too to say hey , like I understand , let me give you half of the cleaning feedback .

Right , I don't hurt myself too much , let me give you , you know , half of the cleaning feedback . There was one guest that I don't know what happened , so I think the previous guest might have had left food and there were some like bugs in the unit .

I literally gave them a gift card of $25 After their stay , after having given them back , right , I think , the cleaning , the full cleaning fee , and they didn't leave review . I don't think that they're going to , and I was like thank God , because that could , like I don't think they'll leave one .

So I really think that , like , having good customer service and being willing to do that Speaks volumes . I think Leabos frozen with his hands up , it's pretty funny , it's pretty funny .

And there's a couple week-long bookings coming up soon for people coming from Europe and all this other .

But no , but bookingcom , I dude , there is definitely value there . I want to get to where you're at also and I'll give you your flowers for this right and having a full like direct site and like getting to having Direct bookings , because those , I think through hospitable , are shown on Google .

You know which people are still using right chat to be tease a thing , but I think people still use Google to , you know , find stuff . So I think that's valuable . But , yeah , man , bookingcom is . It can be gold for a long time and even still , I think a majority of my bookings Come from that and I think primarily because of the airport .

But , yeah , would recommend . That's amazing , that's amazing AJ .

I definitely know I'm coming into a full year being an Airbnb host , so I think in going through that you have to learn especially in Atlanta like what months , like figure out the cycle basically , and when I thought the winter time would be more of the drought season , it actually was like one of my best seasons for me because there were so many different events

going on . Atlanta , like October , november , december , and where I'm from is just really around . That time is just cold and boring . You know body , nobody wants to come to . You know Buffalo , that's where I'm from . But I had that mindset and then it was like I struck gold . You know , that's what at least I felt like .

So those are some of my best months . I think I'm realizing that January and February , those are definitely , for me at least , the drought months . It's pretty dry here in Atlanta , not too much going on , but then shortly after that , you know , march definitely picked up for me and I'm pretty sure April is gonna pick up on a rolling basis as well .

So Absolutely .

That forplex purchased up in snailville , right Turned two of those in the short-term rentals , two of those in the long-term rentals , and the numbers did not necessarily support a short-term rental in Snailville . I just was driving up the street I saw the little king does everything . I'm looking at the numbers doesn't match , but I think we can beat .

You know what a little king is offering right and extended stay , holiday , and . And so , long story short , we've had this guest that has stayed with us through Airbnb . Then they booked direct , as been Twice , and so it's been two months They've been with us and they finally reached out and said hey , you know , I think we're gonna need another six months .

What could we make that look like ? And so , long story short , they're gonna be paying thirty two hundred a month . We send out the agreement for them to sign and they're gonna be here for six months , because I think they're building out like a church or something , but they're gonna be here for six months paying thirty two hundred a month .

Cleaning fees go away and , and you know so , if you build it that will come , but that that's but roughly double what the tenant was paying that lived there before , and so that's incredible . And so if you just put yourself in the game long enough , you'll get some of these windfalls .

See , the weird thing about booking comms it's not like Airbnb , where you know the guests will Book the place and then you confirm and then it's all set . Booking comm they have to like basically send a request , a book . You have to Accept it or decline and if you accept it then it goes back to them and then they have to basically confirm the payment .

Correct me if I'm wrong , but I'm pretty sure that's how it works . Anyway , I say all that to say I've had , like numerous Bookings and then people never follow through with the entire booking so they'd never actually Book on booking comm .

And this has happened so many times to the point where I probably can come like I can't even come my two hands how many booking comm Bookings that I've had that they haven't followed through and then it gets canceled . So I'm just actually very curious how you guys are so hyped on booking comm because I still have yet to Source of booking comm booking .

I would say AJ .

I was like , hey , I think I'm doing this wrong , and so I went to the resident expert and I actually , I actually not serious . This is . This is a true story . So I was like , hey , so I hire an expert and the expert is Desmond , this is my go-to and he helped set up all the properties . So I would .

I haven't gotten one secure booking yet , which is extremely weird . Now I'm not too upset because my Airbnb Business and booking that you know that's that it's taking care of things . However , obviously the goal is to have as much exposure as possible , so if I can get the booking calm Up and running the proper way , then I'll make me even a happier man .

should actually got kind of works . No , but that was cool because I was kind of like my first , like you know , like real client outside of me . So I'm like building this thing up . But , yeah , get with me if you , you know , really want to like look into it .

But I think one thing Kind of to your point , and the reason that we don't deal with that is just because we allow instant bookings . I know I allow that on my listings . Knee allows that on all of his and I would . I would ask you how many bookings Right , and on B&B as well , are you like , what percentage are you declining Right ?

And yeah , very low percent , none , right . So , like you know , at that point is like , why put folks through the Extra step of having a request and you having to go and look and see it ? And you know you look at that profile picture .

So it's like at that point , oh , I kind of decided from the beginning I'm still like I'm gonna open up the floodgates , like if you're I said this from the beginning like if your money's green , like you're going with me , like you can sleep here .

Like I was taking money through Cash App for the first few months , I know , which now sounds like crazy , but at first I'm like taking money through Cash App but at least I'm like sending people like the little contract , like one page thing to fill out . It was , you know , probably bogus but still right .

I would say that's one thing you could try out and just see what happens . Most likely . I've had it open for a full year and I've had one girl throw a party and to be honest , I think at that point I didn't have specifically on the listing it marked like no parties and I was like all right , like you got me there .

Like I'm like I can't even like fault you for that Cause like I didn't even .

But if you want to like really go in depth to it , like I'd definitely be down and sit with you and we can talk more about it . And I want to plug more into like other platforms too , cause right now I'm just kind of on BNB and booking and , yeah , I think to the point about direct .

And now , when somebody books with you once the way we have it , and I forget exactly how we have this set up when they book direct , when they book with us right Through Airbnb and things that nature , they also give an auto message afterwards and we put signage up in the house that says , hey , you know , next time book direct , save on fees .

And so that's how we get people off platform and they start booking with us and extending with us . And then now they're looking for our platform , right , they're like , okay , hey , if we're going to come stay here next time , we'll book with you . And we've had I keep coming back to this one musical guest that stayed with us .

He stayed with us six times right Same location . He didn't want any other house , just stayed there six times right Over a course of a year , which has been awesome .

And then also , just to make it really easy , if you don't have time or want to set all that automation up , just put posts around your house , like we put one that has a picture of maybe it's like a collage , we put it on Canva that has a picture of like three or four of our BNBs unique pictures that look cool .

Underneath that says , hey , scan this book direct , you know next time , and save on fees . And people will book through that even while they're staying and say , okay , I want to extend , let me go through your direct site .

One other strategy I've heard just on that point of like putting up signs is also and I was thinking about trying this out is like when people at like join the wifi , kind of doing it how like Starbucks , and they do it like oh , you gotta add your email to like join on , and they're like all right , like I'm gonna join the wifi , like here's my email and

then , you know , you can send it to them after , and I would try to automate it because I'm not trying to send out all the text messages . But yeah , definitely , I think that's those type of strategies I want to employ this year because it's useful . Sorry , I didn't mean to cut you off , though .

I know this , you're not supposed to be doing it , so I'm like , but I'm like yeah , like whatever .

But the signs , the signs is a nice subtle reminder as well . Right , just that's an easy one . You print it out , the same thing , put it up everywhere and kind of go from there . And we also have , like the no smoking on site signs . I think we've looked at all that stuff before . But , yeah , we put that on every , every house . Yeah , but what else ?

You guys got anything else top of mind ?

So , basically , if I'm looking at , say , a million dollar property , right , and is 15% with this property basically generate 15% in yearly revenue , so if we look at a million dollar property , right , 15% of that million dollars would be 150 grand for the entire year .

So for a short term rental , if I wanted it as a short term rental , right , I would want that million dollar property , if I'm purchasing a million dollars , to basically bring in 150 grand on a yearly basis . If it's not , then maybe I wouldn't want to consider it .

But if it is , or maybe if it's greater , then yeah , let's , like you know , continue to look into this deal . So that's basically what the premise of the 15% rule is , and I know a lot of other investors that use it and I just kind of want to know you guys' opinion on it . Do you use the 15% rule ? Does it not work as much ?

Can it work in the Atlantic market , so I kind of want to piggyback on that discussion from earlier . Yeah , Leighbaw .

But yeah , it's just 100% a rule we use . Gayly , I literally did it today . So okay , yeah .

And , for example , this is a house that we have under contract for a client . It's going to close the end of the month , and this is one where it's like , okay , does this actually work right ? Because when you look at the purchase price , it's a heck of a lot . This is getting close to that million . So it's like this needs to work out .

The cool thing about this is we have history with the mansion that we manage . That alludes to this fact that , hey , that 15% rule is real , it actually works . And so this is what I mean when I say that the snail bill property didn't hit the 15% rule . That's why I'm saying the numbers didn't really make sense from a short-term rental standpoint .

But I was like , hey , man , if we build it , they will come , because we've done enough of them . But for clients , we typically especially for the first one are like hey , you need to hit your 15% rule and kind of go from there . But this property doesn't Like us .

We know you can put more guests , but for this one we just put two guests per bedroom and this one is definitely hitting at the 15% rule , maybe a little bit more . It's because of a couple of these that are around here on the Northwest side , and so if you truly believe in it , which we do , it works .

The only thing with this is the furnishing costs are going to be pretty extensive . This is going to be about 50 to 75 to do it right , but when you get this furnished , there's nothing like it . When you look at the mansion , people are paying an absolute amount .

You can kind of factor in the furnishing costs into that because you're already getting much more than the projected 15% of that purchase price .

And when I look at the mansion , the reason people are paying minimum 13.50 , and that doesn't include cleaning that's just for the night , right , and then cleaning another 800 to minimum two grand a night is because there's nothing like it , right . Like there's people that are coming and doing their whole family events .

We had somebody stay this past weekend that paid , I think , like eight grand for three days . Right , and you don't need as many stays , you only need , like , the weekends , and the weekends are always booked . And then you get movie producers coming and all that stuff . Like we had a TV show that we were trying to get booked in there .

They didn't choose us because parking was tough , but it was down to us and one other and that was going to be potentially a 90K payday for five weeks . Right , they didn't choose us because parking . So it made me like man . We can figure out parking for 90 , but it's a different landscape that you're playing in when you start getting those bigger properties .

Right Like , if it's one you know group or one person , like that's not even a play someone at this level is really considering , right Like I just want to kind of understand , like , is that something I should be thinking about ? Like I'll be , so this is something to build to .

You know , buy the little greenhouses so you can trade it in for the red house and Louisville . I bought all these small apartments that are 1920 so we can trade it in for a brand new storage and a brand new you know , 105 town home units . Now that's zero maintenance . This is going to be the newest thing in the block .

We don't got to worry about anything , right ? And then out here we're buying all these houses and acquiring all this with the hopes to one day sell them kind of in a collage and go get one of these , because this makes a heck of a lot of sense .

If you're going to make , you know , 35k in a month off of this , just managing one property and you know maybe four or five guests in a month , I'd much rather do that than 20 .

But you've got to use the 20 , starting where we started before you can get to that point to trade it all in , but that's why you keep staying consistent and buying good properties and getting the highest and best out of it . It's not necessarily for the cash flow right now .

You want to drive that equity up so you can transform that into something else , and that's kind of the way I look at it . Reach Guys , this is going to awesome session and , aj , you kind of preempted one that we're going to do at some point the 15% roll .

We're definitely going to dive deeper into that , but we appreciate the foreshadowing and I look forward to seeing you guys next week .