REtipster does not provide tax, investment, or financial advice. Always seek the help of a licensed financial professional before taking action.


 

Earlier this year, I stumbled across another YouTuber who was putting out some fascinating videos about a topic that I’ve been interested in for a long time.

The channel is called Robuilt and it’s run by a guy named Rob. Rob runs an Airbnb business that allows visitors to stay in tiny houses and glamping sites that provide a unique experience.

This is a topic many land investors are interested in because it presents an opportunity to generate recurring income from their vacant lands.

If you’ve done more than a dozen land transactions, you’ve probably seen your share of vacant lots that are beautiful properties in great locations. Perhaps YOU would even enjoy spending time there, but as a land flipper, your goal is to simply flip the property, make a profit, and move on to the next one.

But what if you didn’t flip land? What if you kept some of these properties as a long-term investment and instead, invested a small amount of money in a tiny house, RV, or glamping unit, and turned it into a source of income?

What are the different ways this can be done? What does it take to manage this kind of business? How much time, effort, and energy are required to make this happen?

Today, we’re going to talk with Rob about how his business works and maybe, you’ll learn enough to decide whether this is something you want to pursue yourself.

Note: If you decide to pursue a unique rental business, be sure to do your own due diligence and run your unique rental businesses legally by getting your units permitted. Review your local planning and zoning codes or call your planning and zoning department so you are aware of what your zoning needs to be in order to use your land the way you want.

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Episode 114 Transcription

Seth: Hey everybody, how’s it going? This is Seth and Jaren here, and you’re listening to the REtipster podcast. Earlier this year, I came across another YouTuber who is posting some pretty amazing videos about a topic that I’ve always been really curious about. The channel is called Robuilt run by a guy named Rob. And Rob runs an Airbnb business where he gives people really unique experiences by staying in tiny houses and glamping sites.

This is a topic a lot of land investors are, for good reason, curious about because it presents an opportunity to create some recurring income from their vacant lots. And if you’ve done more than a dozen or so land deals, you’ve probably seen your share of vacant lots that are beautiful properties in great locations where a lot of people want to be. And maybe you would even love to spend time there.

But as a land flipper, your objective is just to flip the thing and make your money and move on to the next deal, which is all great. It creates this little influx of cash, but some of us want recurring income, kind of like the rental property thing.

I think what Rob does here is a really unique take on that because it’s not exactly a rental property like we would normally think of, it’s not like buying a house. You’re not like building a house. It’s kind of like a scaled-down version of that. And in some ways, I think you can even make more money, which we will get into here, but there are a lot of different ways this can be done.

Rob just seemed like a really good guy who could bring a lot of answers and information to the table. He’s an amazing YouTuber. Seriously. He’s got this quirky sense of humor that makes his videos really interesting. I’ve really enjoyed watching a lot of his stuff. I’ll link to his channel in the show notes. By the way, this is episode 114 – retipster.com/114. Without further ado, Rob, how are you doing? Welcome to the show.

Rob: Thanks for having me on. Very nice words. I really appreciate it. I am going to try to live up to being as cool as you just made me out to look.

Seth: Yeah. A lot of pressure here. So, don’t mess this up.

Rob: Oh, God.

Seth: Maybe you can just summarize in like a minute or two, who is Rob and what type of real estate business did you get started with? How did you get started on this? Tell us your backstory.

Rob: Man. Those are some deep questions for one to two minutes, but I’m going to do my best.

Seth: I know.

Rob: I started off as an advertising copywriter. A big part of my journey, I’ve been broke, man. I’ve been up until recently where I’m not broke anymore, but for the last 10 years, I would say eight and a half of those years, I was not doing the greatest financially, just because I was always putting all my money… Well, first of all, I was in like $100,000 of student debt. $80,000 was student debt, $20,000 was credit cards.

I was always just trying to hustle and figure out how I can pay that $100,000 student loan debt every month and how could I pay those credit cards? So, I paid off my credit cards, like maybe four years ago. I haven’t looked back since, but all of that was always motivating me to get into real estate. And so, I actually moved to LA about four and a half years ago now. Yeah, somewhere around there.

I don’t live there right now, but when I got started in LA, I actually was living in an apartment. It was about 600 square feet and it was $1,850 a month. And that was a lot. That was about $700 more than my house in Kansas City, Missouri, that is twice the size and very affordable.

So, I was living in this apartment and I was just like, “Man, I cannot bear to pay a landlord $1,800 – $1,900 every month. Let’s buy a house.” And my wife was like, “Well, can we afford that?” I was like, “No, no way. But I have a plan. I heard about this Airbnb thing, short-term rentals. And I heard that if you rent your place out to strangers, they’ll pay you every night to stay at your place.” And she was like, “Oh, boy.” And I was like, “No, I’m telling you, I think it’s going to work.”

And so, we bought this $624,000 house, which was about four times more than my $159,000 house that we had just sold in Kansas City. We weren’t making that much more money, but it had this 279 square foot studio apartment right under it.

And so, I was like, “All right, I think that if I rent this out on Airbnb, I can make like $2,000 to $3,000 a month.” And my mortgage on that was $4,400. I was like, I think if I can cover like 50% to 70% of my mortgage through this house hack, I think we’re going to be able to do this. And so, that’s exactly how it worked out.

Meanwhile, the apartment that I had just left, I had six months left on the lease and I told my wife, I was like, “Well, look, we can either break the lease and pay $1,850, or we just throw it up on Airbnb until the lease is over.” And my wife was like, “Are you sure that’s going to work?” And I was like, “No, I don’t think so.” But we did it anyway.

And that apartment was making $1,000 to $2,000 of profit every single month. So, the wheels were turning for me. And I was like, all right, $1,000 to $2,000 on my apartment, $2,000 to $3,000 on this little studio under the house that I had just bought. I’m mortgage free through a house hack and through rental arbitrage.

That’s kind of how I just started my Airbnb journey. And of course, that’s when a light bulb went off and I was like, “All right, if I had 10 of these, then I would be set. I could quit my job. My wife could quit the job. We could live off the rental income. Like it would be so great.”

Fast forward to four years later, and that’s exactly how everything panned out. My wife and I quit our jobs about 10 months ago. We’re full-time Airbnb hosts. Well, I’m a full-time Airbnb host. By association, she is as well, but we’re full-time real estate investors if you will.

I’m a full-time YouTube content creator. And I’m building houses all over the country at the moment and buying houses all over the country. And so, I’ve basically gone from zero units to 14 units in the last four years. And if everything goes the way that I want it to go, then hopefully I’ll have between 30 and 40 in a year’s time.

Jaren: To clarify, does that include your glamping and Airbnb land stuff? Or are you just specifically talking about houses at your Airbnb?

Rob: No, no, it’s everything. From a glamping perspective, I think I’m sitting at five units right now, but I have a tiny house village that I’m building here in Tennessee. That’s going to be less of a tiny house village and more of a treehouse glamping resort of sorts. And that will be another eight units that I’m adding to my portfolio, hopefully in the next couple of months.

And then between all of the different parcels that I own right now, I think I have over 150 acres that I own, which I’m sure is like small potatoes compared to a lot of the people in the audience, but 150 acres spread out around the country that I plan on turning into glamp sites throughout the next year or two.

Seth: Yeah. Maybe for those who are not familiar with glamping, a lot of people probably are, but if somebody is hearing this word and is like, what are you talking about? What is glamping or what’s a glamp site?

Rob: Super fair. Yeah. Glamping is basically glamorous camping, glamping. And camping is, we all know it, right? It’s like an American tradition. You go out, you pitch a vinyl tent, you dig a hole in the ground, you poop in the hole, you fill it back up and you freeze your butt off at night. Some people love it. Some people like myself don’t.

So, there’s this new kind of trend in real estate right now, glamping, which is an elevated camping experience where, hey, instead of a vinyl tent, we’re talking about super-thick premium canvas. Sometimes there are insulated liners, their memory foam mattresses. If it’s like my glamping units, little mini-fridges, a masseuse that stays in there and gives you a massage. No, I’m just kidding. We don’t have a masseuse. We don’t have a masseuse in ours yet, but you get the idea, right?

It’s kind of like this really nice, beautiful Instagramable experience that it really is that common middle ground for a lot of those couples where one person is like, “Oh, I love camping.” And the other person’s like, “You’ll never catch me in a tent.” This glamping experience sort of allows people to compromise. And so, the person that’s used to camping will say in a glamping experience and be like, “Oh my goodness, this is so much nicer. It’s way more comfortable.”

There’s a cast-iron stove that can actually keep you warm. It’s kind of like living in a mansion for someone who’s used to camping. And then for someone that is not used to the great outdoors, then this is a really palatable experience for them to go out and enjoy mother nature.

Jaren: Yeah. It’s so funny that you mentioned that because my wife is originally from Kazakhstan. When she moved here, it was so funny because a lot of our friends are like, “Hey, you guys should come camping with us. This will be great.” And she literally, one day just finally told me how she really felt about it. She’s like Jaren, why would I pretend to be homeless for a weekend? That makes absolutely no sense to me. I do not want to sit there.”

She legit grew up that way. She was born in an Uzbek village, legit toilet is a hole in the backyard, like the whole thing. And so, she’s like, why would I pretend to be poor, like extremely poor or straight-up homeless for a weekend? Does not make any sense to me. I think if we ever did any version of camping, it would definitely have to be the glamping model for sure.

Rob: What’s so funny is that I had guests before the pandemic, about two years ago. They actually came and stayed at one of my belt tents. Like one of my premium safari tents, if you will. And they saw my yurts. A yurt is like a whole other structure and they lost it. They were like, “Oh my God.” They were from Kazakhstan too. And they’re like, “What? This is here. I wish we could have booked here. We love these.” And I was like, “Oh, okay. So, it’s kind of a popular structure.”

Jaren: She has tons of childhood memories of yurts. And yeah, it’s a huge piece of their culture out there. That’s I guess their version, right? Yeah. Yurts are like a big deal out there. For a long time, they used to be nomadic in the culture actually. That was like their main source of dwelling was yurts.

Rob: Yeah. As you can see, it’s got that cultural relevance and it’s a very striking visual too. You see a yurt out in the middle of mother nature and there’s thousands of stars and there’s no light pollution and you’re sitting by a toasty fire playing Jenga with your friends. It’s this experience that people really like. And not only that, but they’ll pay for it too.

Generally speaking, I’ll just give you some numbers here really fast. Basically, with a general Airbnb if you’re buying like a regular house, like let’s say a 1-1, 2-1, sometimes a 3-2. Just somewhere in between the one- and three-bedroom range, your booking prices can range anywhere from $150 to $300 a night.

And this is a house, right? So, let’s say it’s a 2-2, you go out and you buy it for $350,000. You got to put down 10% if you are doing a second home loan. So, it’s like 35,000 or 20% if you are doing an investment loan, which is $70,000.

Right there, your startup costs are very expensive. You’re in debt, six figures. And it’s now something that you have debt on. Whereas a glamping structure, a lot of the ones that I have ranged anywhere from, the actual structure itself is $3,500 all the way up to $20,000.

All in, you could be looking at, depending on some of the technicalities here, which we’ll get into in a little while, but you can start for anywhere from $10,000 to $50,000 to just put a unit up on your property and you can charge $150 to $300 a night. Like literally you can charge exactly what you charge for a house and your investment on that is obviously a lot lower.

Jaren: Yeah. It’s awesome.

Seth: It seems like this is probably the kind of thing where zoning or use codes is a big thing. Some townships and cities and counties are probably like, “No, we don’t want you to put up this weird tent and have people coming and going all the time.” What kind of things are you supposed to look for in terms of red flags to identify “Yes, I can do this here” versus “No, I cannot”?

Rob: Yeah. That’s a really good question. The bane of my existence in terms of trying to get a glamp site up and running, there are definitely a couple of ways that you can get started in glamping. A) You can if you own land, go toss a tent on your land and prove the concept, right? That’s going to cost you $10,000. To get a nice tent, a deck, water tank, a little outhouse, and some furnishings.

But where it really starts to get more difficult and where it starts to work its way up is if you do want to be totally by the book and you want to be totally permitted. A lot of the time these counties are going to require what are called conditional use permits. They’re basically permits that say you’re a conditional campground so long as you meet all their checkboxes.

Now some places have ways of getting that, but they don’t actually care necessarily. There are a lot of times where I’ve called the county of a lot of the places that I’ve invested. I’m like, “Hey, I want to put a yurt up. How would I go about doing that?” And they’re usually like, “A what?” And I’m like a yurt, it’s like the structure, here it is. They’re like, “Ask for forgiveness. I don’t know.”

A lot of the time these smaller cities and counties and rural areas, they’re not really going to care all that much. If I had a dollar for every time I had someone on the phone say, “I don’t know, we don’t care. Just don’t get any complaints,” I would have a lot of money because a lot of the time that’s how it is for some of these smaller towns.

However, some of these bigger touristy towns, some of the places like Gatlinburg, Arizona, Shenandoah, all those different types of places, do require some level of groundwork to establish yourself as a campground. And it can be hard work. It’s not hard. I don’t really think anything in real estate is hard, but I do think that everything in real estate is hard work if you want to be successful at it.

So, I’ll give you an example of the sort of process that I’m taking here in Gatlinburg. I have to apply for what’s called a PUD – Planned Unit Development. And it’s effectively like a neighborhood. I bought a house here on 52 acres and I wanted to build a bunch of glamp sites on those 52 acres.

So, in order for me to do that, I have to now apply as a neighborhood, effectively. And I have to work with a civil engineer to design a site plan, to make sure that we’re not messing with erosion, drainage courses. And that we’re ergonomically designing the glamp site that does not interfere with mother nature. So, that’s kind of like step one.

Then I’m also working with a soil scientist to come out and perk my ground so I can see what kind of septic tank I can have. Because if I have eight units out here, that’s a lot of people on this property that are going to be peeing and pooping. So, I got to figure out how to get rid of that waste. So, now I got a septic tank that I got to worry about. I also have a geotechnical engineer coming out who’s coming out and boring into the ground and telling me how condensed and how compact the soil is and what kind of footings I can do.

Then I got a structural engineer that’s coming out and telling me the structural rigidity of the different types of structures that I’m trying to put out here. So, it becomes a little bit more of a long-drawn-out process for me to go the fully permitted route. I haven’t even broken ground yet and I’m already at about $25,000 just on this glamp site, in terms of all that I’ve spent on the soft cost of getting this up and running.

Now, thankfully I’m getting closer to getting that permit and everything like that. But as you can imagine, it’s a pretty strenuous process and it is a little long-winded and convoluted.

And before you do all this, I’m a big firm believer in getting a rapid prototype out there and just testing the concept. Like what if you hate the business? What if you hate the people in the business? What if you don’t like glamping? I wouldn’t want you to go and spend $200,000 on all this stuff only to find that out the hard way, right?

For me, the best way you can test a concept is to go out and put a tent on your land, preferably your land if you already own it. But if you don’t, the way I actually got my start in this business was by leasing land from other people.

And so, I put out ads on Craigslist and I had a lot of people respond. They are like, “Oh, I’ve got land.” I’m like, “Hey, I’d like to put a tent on your property or an A-frame or an Airstream. And I’ll pay you a percentage of gross revenue.”

For a lot of property owners who have, let’s say 100 acres in Shenandoah, for example, they’re like, “Well, yeah, I’ve got this sitting here. I pay taxes on it. I don’t make any money from this. It’s just sitting there. I would love for you to occupy my property.”

Now I pay them a percentage of my gross revenue and I might even compensate them more if they’re willing to manage part of that operation. So, it can be a little bit of a symbiotic relationship there. And it’s no money down for me in terms of the actual buying of the land or anything like that.

For a pretty low risk here, I can go and find someone that owns the land and say, “Hey, I’ll put a tent on there.” And then once I do that, I now have a prototype. And I can see, “Oh, people are booking. We’re making $5,000 – $6,000 – $7,000 a month on each unit. It’s profitable.”

And now that I’ve tested it and I’ve learned the model and I love the model, I’ve mastered the model and I’m profitable at the model, now that I’ve done all those things, I can then go and buy my own piece of land in Shenandoah and, soup to nuts, make it as awesome of a glamp site as possible and spend hundreds of thousands of dollars if that’s what I want to do. But I wouldn’t want to do any of that without really testing the location first.

Seth: Yeah. Man, so many questions are coming up as I hear you talk.

Rob: Yeah, I know. I was like, I probably should break here.

Seth: You kind of hit on this tiny home village that you’re building in Gatlinburg, Tennessee, which is about 50 acres. And maybe you could tell us why consolidate so many things into one parcel? Is it easier to manage it that way? Help us figure out how you came to the conclusion that was the next best move to take.

Rob: Yeah, sure. About red flags or what I should look for in a property. As you all know, there are a lot of different zoning and restrictions that can come along with any individual piece of property. So for me, what I’m typically looking for is anything that’s zoned agricultural.

When I can find something that’s zoned agricultural, typically those are going to be a lot more loose in terms of what I’m able to put on that property, just because it’s more flexible. There are a bunch of other types of zonings that you can find. There’s RV zoning, like RV trailer parks. Those are zoned a certain way. I know that timber and forestry have different zoning. Commercial campground, if you could land that, that would be super, super great.

So, there are all these different types of zonings. But for me, I’m always looking for agriculture just because I sort of know my way around agriculture these days. And what I’m doing specifically is what’s called the land hack. It’s a little term that I came up with. That’s like a play on a house hack, right?

A house hack is you buy a house and you subsidize the mortgage by renting out rooms in that house. That’s kind of like what we all know. A land hack is a little different. You’re hacking how you acquire the land. For me, it’s very difficult to go out and finance land. A lot of the lenders that I’ve worked with, a lot of the time, will require 35% to 50% down.

Is it possible to find someone that will do 20% down? Yeah. I just don’t find them all that often. Banks are typically 30% to 50%. Well, that’s a lot of money to put down on a property.

So, what I’m doing is I’m sort of hacking it a bit by buying a house that’s on land. And by doing that, I’m now able to underwrite the house itself. So, my house here in Gatlinburg, 52 acres, is about $500,000. And I’m not really buying the 52 acres, I’m buying the house. I’m able to run comps and appraisals, and I’m able to underwrite it based on all the characteristics of the house and the land is kind of a bonus.

Now I was able to get into this house for a lot less. Say you did a second home loan on this, that’s 10%, $50,000 versus had I gone and found the same piece of land for $200,000 – $300,000. If I had to put down 50% of that, it’s $100,000 minimum, right?

So, it’s very expensive to go out and acquire land traditionally, which I know this is like y’all’s specialty, but for us, normal land acquiring peeps, financing is a very difficult thing. For me, I saw this house and I was like, this is a great opportunity. It’s on 52 acres.

A lot of people are like, “Well, why?” I lived in California for four years. And a lot of people are like, “Why are you moving to Tennessee?” And I’m like, “Well, the number one most visited national park is the Smoky Mountains. And Gatlinburg is home to The Smokey Mountain.”

On average we have about 12.9 million people visit Gatlinburg every single year. It’s over a million people a month. During the pandemic, it was a small decrease. 12.3 million people visited Gatlinburg. So not a huge change considering the park was shut down for 40 days. So, still over about a million a month.

For me, I saw the data and I was like, “Well, looking at the data, I also see that there are only 3,000 Airbnb’s in Gatlinburg.” 3,000 Airbnb’s, 1 million people a month. There’s a little bit of a discrepancy in terms of who’s being served here. There are so many people that need housing out here for short-term rentals.

For me, I see this property. It’s a great deal. I can get into it for a low amount. It’s in a hotbed for Airbnb. It’s the number one Airbnb market. So, it kind of just makes a lot of sense to really invest in a property out here that it’s going to get me really, really great returns.

In terms of why I’ve decided to consolidate this tiny house village in one spot, it comes down to the logistics and the time that it takes to permit this head to toe. It’s not really feasible to have my soils engineer and all those engineers I talked you through, go and do that in five different parcels in the same city, because it’s five times the work.

Whereas if I just have one piece of land, I can consolidate all my time, effort, and resources into making that piece of land one entity with a bunch of units on it, the same set of vendors, same contractors. And if it’s super profitable and performing super well for me, then I can sell it as a business. If I’m making great cash here in this one property, then in 2, 3, 4 years after I have proven rental income, I can sell it to an investor for a really juicy return.

Seth: Yeah, it makes a lot of sense.

Jaren: I want to take a step back and ask you about when you mentioned that you do a test run of a particular market. I love the idea of leasing land from a landowner because I think there’s going to be tons of people that would be open to doing that. That just makes a lot of sense.

But can you walk through a time where you tested out a market and it didn’t pan out and what fell actors or metrics you kind of look for that determine a market being good versus bad?

Rob: Well, to answer the first question, I haven’t had any misses on my portfolio. Like there’s never been a moment in my four-year journey where I’ve ever posted a loss in any month. I’ve never posted a loss. I’ve had a bad month, really. I have months that are maybe not as great performing, but overall, you really got to consider the ROI that comes along with short-term rentals in glamping, right?

Generally speaking, if you’re an investor traditional, like long term or anything else, long-term people are a lot of the time right now in this market getting 6% to 12% cash-on-cash return. And then the really good ones are able to get cash on cash returns of 10% to 20%.

Well, that’s because the cost to get into these bigger properties is so expensive. Whereas glamping, if we’re just doing a rapid prototype here and let’s say that you spend $20,000. $20,000 to get a really nice tent, nice furnishings, a nice outhouse, just a very simple off grid property.

In order for you to break even on that, it doesn’t take a very long time. If you’re charging, let’s just say $100 a night, if you’re booked at an 80% occupancy with just 292 nights a month, that’s $29,000 a year that you’re grossing on that specific tent.

And so, if you’re able to get paid back in the first year, that right there, $29,000 versus a $20,000 investment, it’s a profit of $9,000. So, your cash-on-cash return is like 150% or something like that. Maybe it’s more, I’m not really good at math off the top of my head, but the returns on glamping are just ridiculous.

You can go into a lot of markets and in order for you to have something not work out, you really have to mess it up because it’s just not hard to meet returns when you’re spending such a small amount of money to get into those types of units.

But to answer your question more on the side of what is good, like how do I determine the market? The only way I can really say is, for me, I am targeting national parks, state parks, national forests, and state forests. Anywhere where people are traveling in a car. Or I always say national parks are mother nature’s Disneyland. They’re the original vacation destination.

For me, I’m like, well, as long as people are still visiting the Grand Canyon, Zion, Yosemite, Big Ben, Great Smoky Mountains, Shenandoah, Catskill, Arches, wherever. As long as people are still going there in the millions every single year, then I think it’s going to be pretty tough to have a miss in any of those different locations.

Because at the end of the day, during a pandemic or during a recession, people may not have $3,000, $4,000, $5,000 to fly to Disneyland with their family and buy all the tickets and do all the thousands of dollars that it takes to go on a family vacation. They may not be able to afford that or may not be able to do that because of closures.

But what we’ll always be around is a national park. And so, maybe they can’t afford Disneyland, but they can afford to jump in their van with their kids and spend $400 on gas to drive to the Great Smoky Mountains. That’s always going to be around.

For me, I’m just looking at those types of locations. Generally speaking, the competition is a little bit lower, not super high in terms of quality, especially in the glamping space. And so, it’s starting to get more competitive nowadays because certain YouTubers won’t shut up about how awesome glamping is.

But for the most part, for me, I’m just locating where people are going to, how many people are going there, and do hotels exist. And usually, I’m like, well, as long as hotels are being built, that means that they’ve already spent millions of dollars on the market research. I’ll just piggyback on that research.

Seth: Yeah. That’s smart. That makes me wonder a couple of things. First of all, I think you actually made a video about this in the past six months or so, but you mentioned how because of the pandemic a lot of people are flocking to national parks, like more so than they would’ve otherwise done because they have nothing else to do.

And I’m wondering, do you think that’s ever going to taper off and will that affect things? And also, kind of a similar thing here, but seasonality. When I think about Michigan, Wisconsin, Minnesota, some of those Northern states, where half the year it’s awesome. The other half of the year is horrible. And I don’t think many people go to parks because it’s just freezing and it’s just miserable out. Is there any seasonality to this like in Gatlinburg or out west where you are doing this? 

Rob: Yeah, there definitely is. To answer the first question, there is no doubt that we’re right now in the midst of a big surge with just how many people are antsy, how many people are getting cabin fever and want to travel more. So, it’s been a very good year for hosts, I will say. I was petrified when the pandemic first came about and I was like, “Oh my God, I’m an Airbnb host. This is not a good thing for me.” We had to refund $40,000 to $50,000 of reservations in that first month.

Now recall that I said, I’ve never lost money on Airbnb. Well, here’s the really beautiful thing about how I actually format a lot of these deals is I pay my landowner a percentage of revenue. So, I have no actual overhead. If my revenue is $0, well, 25% of $0 is zero. Even though we had to refund $40,000 to $50,000 worth of reservations, we didn’t have $40,000 to $50,000 of revenue. We had zero.

Glamping works out, it’s a very symbiotic relationship in that regard too. Well, I guess it’s not as symbiotic if we pay someone zero, but it works out for that. Whereas if we had owed our landowner, if we pay them $5,000 a month, for example, that would’ve hurt for like a month or two.

But effectively, yes, we’re a little bit in a bump right now with COVID. It is going to level out, but here’s the deal. Airbnb was awesome for me and glamping was great for me before the pandemic. It was great for me during the pandemic. It’s great for me now. Yeah, it may taper off a little bit, but I still think, as I said, in order for you not to get a good return, you got a lot of wiggle room.

As I said, if you’re used to making 6% to 12% traditionally and then glamping can get you like 100% to 200%. Well, if we drop you down to 30% or 40% cash on cash return, that’s still pretty good. That’s still like three or four times what most people are getting out in the markets. Things are going to level out here, but so far it hasn’t really.

And in terms of seasonality, it’s definitely something to consider. Especially if you are going the permitted route where you’re getting the conditional use permit, you’re working with the city, you’re playing ball and all that kind of stuff.

Yeah, seasonality is going to hurt because if you’re following the actual IRC and the international residential code and international building code for soft-sided membrane in structures like tents and stuff, you’re only allowed to operate those six months out of the year because presumably the other six months out of the year, it’s too cold and people will be too cold in those units.

What we’re moving to now, with the Treehouse designs that we’re working on and everything is, we’re doing hard-sided structures, I’m doing tiny A-frames. I’m doing things where I can actually put insulation in it so that I can actually permit these things as single-family residences for example. I bought a tiny A-frame for a den outdoors for like $25,000 or something like that. It’s 115 square feet. For some reason, it qualifies as a single-family residence, even though there’s nothing in it except for walls.

But I get permission to do that. And so, because I do that, it’s going to actually be able to run 365 days out of the year. Now let’s say that you’re like, “Oh, I’m just going to operate it anyways. I’m a prototype. I’m just rolling with it.” That’s fine. Keep in mind, there’s a lot of issues with not going the permitted route that I want to talk about. I don’t want to be so cavalier about it.

Big issue number one is if you’re running on unpermitted ground, for example, it presents a safety issue. If you’re just like winging it. If you don’t really know what you’re doing and you’re building dangerous decks and you’re just putting it out there, there’s a safety issue that might come along that may not come along had you gone through the inspection process and that’s a risk associated with going that route.

Another thing is if you decide to put a tent in your backyard or whatever, and you’re just like, “Oh, I’m going to ask for forgiveness.” Well, if you have a neighbor that doesn’t like you, or if you have a city that’s starting to crack down on this kind of thing, they could come and shut down your glamping structure because you didn’t want to get a permit for it. Now this $20,000 – $40,000 that you invested could be by the wayside because you didn’t get a permit. So that’s number two.

Number three, if you don’t have a permitted glamping operation, you’re not going to be able to sell that as a portfolio piece. If you were cash flowing a million dollars and you wanted to sell it for that, let’s say you want to sell it for a million dollars, no investor in their right mind is going to buy that from you because it could get shut down at any moment. It’s a safety issue.

So, these are things that I want people to consider before getting stars in their eyes and everything like that. When we first started, we were just kind of like, we’re going unpermitted. We were like, let’s figure this out, let’s test it out, and everything like that.

But now that we’ve learned and sort of mastered that, we’re now definitely going fully permanent on anything that we do moving forward, just because the amount of work it’s worth it because now I can sell my properties for millions of dollars if they have super high cash flowing glamp grounds on them. I’ve learned that over the years, like, “Yeah, unpermitted is great cash flow, but it’s not permanent.”

And so, I think people really need to understand that before saying things like, “Oh my God, I’m going to cash into a 401(k) and build a glamp site. When I say, “go out and test your prototype,” what I would really prefer for people to do is to go test out a prototype in a place where the county allows for it, where they don’t actually care. I wouldn’t go and do that outside of LA, because LA has super crazy regulations. So, it would not be a good idea to do it there.

But if you’re out in a rural area, like I am, for example. I’m in Shenandoah and the county there is super cooperative and they’re like, “Oh, I love this.” And I’m like, “Great. This is the kind of city that I want. This is what I want.”

I have another glamping student right now in one of my programs. He called his county and they laughed at him. Because he was like, “What would I need to do to get a conditional use permit?” And they’re like, “Ha-ha, you don’t need to do that for one tent. You’re fine. You’re fine.” And they send him away.

So, that’s kind of what I mean. If you’re going to do it, go out and make sure that your county is pretty flexible on it. And then also, make sure that you’re only doing it with one unit, two units max. Like I said, I’ve done it the wrong way several times before reaching where I’m at now.

I’m like, all right, here’s how to do it. I really don’t want people to go and spend their life savings on something that could backfire on them. If you’re interested in it and you want to prototype it, just keep those things in mind because I’ve seen a lot of things guys. Yeah, it changes. The things I’ve seen.

I definitely recommend thinking through the strategy on that point. But honestly, I’ve come full circle on all of this because now I’m so pro permitting and that’s like how I’m moving forward on all this, but I’m also working with investors. And so, when I’m dealing with anyone else’s money, it’s my responsibility to do it correctly and to do it the way that I would want someone to treat my money.

Seth: Yeah. I really like this idea you mentioned earlier about leasing land. Say if you’re a land flipper and you want to give this kind of business a try, imagine how many deals could possibly be done with people who are going to say absolutely not to your offer for 20% on the property, but hey, what if you could actually give them a source of income and utilize their unused land?

Granted, it is a completely different business and you’re signing and up for a lot, but you have interest in this kind of thing. And if you’re looking for land to do this with anyway, there’s a lot of great properties out there that you could use for this sort of thing that you’d otherwise just totally pass on because the person understandably is saying no to your really low offer.

Jaren: When you really think it through, Seth, yeah, you have to understand where do you get glamping tent material or how do you set it up and how do you market it? There’s a lot of unknowns, but the hard part of finding properties and stuff, there’s so much. I’m just sitting here thinking through the motivated seller calls that I’ve had.

A lot of the people that live out of state, they don’t want to lowball offers. It would be such an easy sell as a secondary plan. Like, “Well, hey, how about I put a 10 on there and I lease it from you?” Because all of a sudden, you’re talking about, “Hey, let me give you a low amount of money for your property to let me make you money every single month until kingdom come.”

It’s a huge, huge selling point. A lot of people unless say live right next door or actually utilizing or their children or relatives are utilizing the property if they’re out of state, it’s kind of like a no-brainer. So, I think there’s a huge opportunity here for a lot of land investors.

Rob: Definitely. If you really consider the numbers here, I’ll say the way that we approach. We usually pay our landowners 20% to 30% of gross revenue. And so, it’s not hard to pay someone pretty close to six figures a year to rent their land when you have a fully legit operation, you have five units on there. And if that owner wants to be a part of it and wants to manage it, you can also pay them cleaning fees and cleaning fees can come out to $5,000, $6,000, $7,000 a month on top of the 25%.

I think for me, one of the owners that I’ve worked with, he was making close to six figures just on this operation. So, it definitely works out for the landowner if they want to be involved.

Seth: Yeah. As I hear everything you’re saying, Rob, it kind of reminds me in some ways of the land flipping business in that the first time most of us have heard about land flipping. It’s like, man, this just sounds perfect. It’s too good to be true. And it sort of feels like that when I hear about this thing, but I’m sure there are catches and there are issues and things that make it miserable and hard.

Give us a reality check. What are the hard things? What’s the most challenging thing? I know with Airbnb you live and die by having a high rating on your unit. How do you make sure everybody’s happy and leave you a perfect rating? Get into all that stuff for us.

Rob: Yeah. Let’s talk about the realities. Let me put it this way. If you want to make six figures a year from glamping or let’s just say less. Let’s just say you want to make $50,000, like $4,000 or $5,000 a month. You can’t just do that easily. Everything requires some level of effort, an active effort to just make sure that it’s a good business.

And like I said, I just walked you through quickly, like a few minutes ago, what I’m doing in Tennessee. I’ve been here for 10 months and I’m about to get my permit 10 months later. Funny enough, the permit side of it was relatively quick. Actually, it didn’t take me that long. It took me like one to two months. What took me like seven, eight months was actually getting the soil engineer and the civil engineer, the structural engineer and the Treehouse, like getting them out to my property, first of all. But to converse with each other, everyone’s parallel pathing with each other and waiting.

It’s definitely like a little bit more of a project management game than anything else at the big beginning of it. Like I said, it’s not complicated. It’s not calculus or rocket science or anything like that, but it was really hard work for me to get to this point. And I say that because it’s like a lot of people want to get into glamping and say, “Oh man, $5,000 a month on this $2,000 tent? Count me in.”

And I’m like, “Well, there are some things. A) You got to automate your business as much as you can. B) There is the management side of it. As much as I would love to have amazing ratings on all my properties, I don’t.

I have anywhere from 4.6 to 4.8 on a lot of my glamping properties. Airbnb considers anything less than a 4.8 not ideal. I consider anything less than a 4.9 not ideal. I want to be over a 4.9 to have anything that’s like in the 4.5 to 4.8 range to me is always sad.

But you have to consider that people see these beautiful photos and they think they’re getting a Hilton experience. They think they’re getting a Marriot experience when they come and they’re like, “Oh, AC and heat and like a toilet.” No, that’s not what they’re getting at all.

And so, I attribute a lot of this to just people not reading my description. If you read through the reviews, half of them are more angry people who are like, “I had to poop in a composting toilet.”

And then other people are like, “Oh my God, what a magical experience that I got to encounter with my family. I got to reconnect with my kids. Nothing beats reading them bedtime stories in front of a fire.” People will write a seriously nice review. That’s like a life-changing moment for them. And I’m like, “Man, this is crazy.”

And then the next day someone will be like, “There was dust everywhere.” And I’m like, “Well, you’re in the desert.” So yeah, that’s how that works. We can clean a tent, but within two hours, if you haven’t checked into it, dust will blow in. That is how mother nature works.

And so, there’s some kind of reality checks and expectations that you want to set with your guests because yeah, it’s super important to be as honest about it as possible. So, reading our listing, it’s very thorough about pretty much everything that could go wrong.

Hey, it might be freezing. If it’s freezing, the water’s going to freeze. If the water’s frozen you can no longer take a shower. Hey, it might be gloomy outside. If it’s gloomy outside and there’s no sun, the solar panels may not charge. You may not have electricity tonight. Hey, it might be rainy. If it rains and you have a Camaro or a Mustang, you should not stay. We recommend that you book an all-wheel drive or a four by four for your trip or else you’ll get up in the mud.

And so, the idea is to be so over the top with our listing description, that it scares people away. I want someone to read my thing and be like, “Okay, all right, I think I can do this. I’m scared, but I’m going to do it” versus not reading it and then show up and be like “The horror, the horror.” Because that does happen for a lot of people because, at the end of the day, it’s not a luxury experience, but it’s an elevated camping experience.

So, if you’re a camper, it’s a really great upgrade. But if you’re expecting the Pinterest photos and a masseuse on-site, like I was joking earlier and full power and everything, it’s going to be a bit of a wake-up call. And so, you deal with disgruntled than angry guests who are like, “You didn’t tell me this and that.” And I’m like, “Well, actually it’s on the third line of the listing copy.” And then they’re like, “Well, you should have made it clearer.” And we’re like, “Well, actually we sent you check-in instructions that also told you that.”

We do deal with refunds significantly more than… I mean, I don’t really refund my regular homes, like stick-built homes. Very rarely. Whereas on glamping, man, you just never know what you’re going to get because at the end of the day, people don’t read. I’m a copywriter by trade in advertising. And my partner was an art director and we would spend so much time making the imagery look beautiful.

And I would spend all this time writing my headlines and stuff. And my boss would be like, “Hey, love that you did that. Here’s the hard reality. No one’s going to read it.” And so, that is the truth about being a writer. No one reads what you write. As thorough as we can be on a listing, people just kind of see the photos and say, “Boom, I’m booking this place.”

Jaren: Would you be able to overcome some of that by making a quick little intro video on the listing? Like, hey, so you are aware if you sign up to this, this is not a hotel. Do you think you would be able to prevent a lot of that from a video instead of text? 

Rob: The thing is you can’t really put a video. A video list is what I was going to say on your actual listing, but you can, once they book send them a video, I guess, in theory that walked him through it. You could. Yeah. I guess I hadn’t really considered that, but…

Seth: Some people don’t watch videos either.

Rob: Well, yeah, that’s the thing. Honestly, as a host, I’m really bad about it too, man. I’ll go and check into an Airbnb and my wife’s like, or we’re at the door. She’s like, “All right, what do we do?” And I’m like, “Oh, I have no idea.” And then she’s like, “You didn’t read the instructions. It says we had to go meet so and so on 34th street.” And I was like, “Oh.”

I totally understand the life of a busy person. Ultimately, I would rather not have to send a video. I’d rather people read the description copy. But generally speaking, we also point people to read the reviews. And I think the reviews give a pretty honest depiction. You get to basically see every experience. People who had a bad experience, who had a good experience, who had an amazing experience. And so, it’s on that guest to look into it and decide for themselves if that’s going to be the right thing.

Now I do want to say these are really more the “wows” that come along specifically with an off-grid glamp site. Whereas here, my tiny house village glamping Treehouse resort is going to be fully on the grid. I’m going to have electricity. I’m going to have working toilets. It’s going to be pretty luxurious. So, I think I’ll be able to really just get out of a lot of the issues that I have with my original off-grid stuff. Here it’s going to be pretty nice.

There is not really going to be much to complain about because they’re going to have electricity and water. And those are kind of like two things that if you were expecting electricity and water, which you shouldn’t if you read my listing, but if you were, and you show up and you find out what the actual situation is, this is going to be a little bit of a culture shock for you.

Seth: Yeah. I am curious because you started all this and I think had multiple units while you had a full-time job, as you mentioned earlier. How did you do that? How did you manage to outsource the messaging and the cleaning and all the other stuff that goes into the day-to-day of running these kinds of units? What can you outsource and automate and what is just hard work that you have to do yourself?

Rob: Preferably, all of it in terms of automating it. When I’m working with landowners and stuff, generally I’m looking for people who live on-site, kind of like me. I would be the perfect candidate for this type of thing. I’m not looking for this. So just a heads up. But I have this house, I’m on 52 acres. I live here right at the moment. And so, it’s a really great opportunity if I were not me and I was someone who was just living here, reach out to me and say, “Hey, can I use part of your acreage to put my glamping tent?” And if I lived here, I’d be like, “All right. Yeah. Why not? I’m not using my land for anything else. – Hey well, would you also clean it? – Well, yeah, sure. I don’t do anything else.”

Now I make the money. And so, that’s where it becomes that symbiotic relationship where the person that lives on-site can make more money by managing it. Whereas if they don’t want to manage it at all, typically I’m paying like 10% to 15% of gross revenue. But if they’re willing to be boots on the ground and restock supplies and clean everything and maintenance tents and if a steak comes out for a tent, pound it back into the ground. If they’re willing to do all that, then I’m willing to pay more. I’m willing to pay 25%, 30%.

And so, for me, the way I automate it is simply by finding owners who have a house on acreage and they’re willing to do a lot of the work for me and thus I’ll compensate them for it.

Whereas if I’m just finding someone’s land, that’s fine. It just becomes a lot harder because as you know, if you live out in the middle of nowhere, if I find this beautiful place out in the middle of Kansas and it’s on 40 sprawling acres with amazing mountains, but the nearest town is 40 miles away, it’s going to be pretty tough to convince a cleaner from that town 40 miles away to come and clean the unit for $40 – $50 because just drive time alone is two hours, more than the actual time that it takes to clean the unit.

That’s where it gets really tough and that’s where you have to be strategic. Yeah, I like national state parks a lot, but I also have to be able to hire people in those locations. Otherwise, I’m going to have a glamp site that I literally have no one to run it. And that’s where it gets pretty tough.

Out here in Gatlinburg, I’ve got my neighbor. I’ve become good friends with him. He helps me out. I hired him to help me a lot on the land. I may actually just hire him as a full-time employee to be my groundskeeper. His job every day will be to show up for a couple of hours, clean bushes and cut grass and do all that kind of stuff. And that makes sense for me because now I own it, I don’t need a property manager and I can pay him a salary to basically run my glamp site operation.

So that’s how I would automate it. It’s just by hiring a full-time employee if it’s my land. But if I’m leasing land from someone else then yeah, you just have to make sure that you can hire a handyman, a contractor, a cleaning crew, a plumber. People can actually come and repair things as they break. Otherwise, you don’t want to fly and fix it yourself. It doesn’t make economic sense.

Seth: So, you’re not finding a short-term rental property management company. You’re actually finding the individuals who can step in and take care of this stuff as needed. Am I understanding that correctly? 

Rob: I am. Yeah. I don’t really believe in property management companies, on the short-term rental side. My host camp, my Airbnb program. My whole thing is self-managed, automate, automate, automate, step in as needed. There’s definitely a value to property managers a hundred percent. But I think when you’re first getting started, it really behooves you to manage your own properties so that you at least learn and understand the business.

Seth: Yeah. So, if somebody says they’re leasing land or they own land and everything checks out, it’s a good market, good location. They can do whatever they want. How do you get started? Would you recommend people start with a year or get something from den outdoors or Pacific domes or just find literally any old tent and put that up? What do you think is the best place to start your experience?

Rob: Yeah. It sort of depends on your budget, of course. If you have a smaller budget, you can buy a Lotus Belle tent for $3,500 or something like that. Not very expensive. There is some heartache and heartbreaks that come along with just any tent, not just Lotus Belle tent. But any canvas tent it’s tough in the elements in those types of structures. So, like I said, I’m moving more towards hard-sided structures myself.

The den outdoors A-frame is going to be like $25,000. It’s effectively like a tiny house. It’s super cheap. It’s pre-cut, pre-measured. All you do is put things together and drill. It’s still hard work, but it takes two or three days. It’s a structure that protects you from the elements.

For me, a really homerun way to start is actually Airstreams. Because Airstreams are sort of this all-encompassing structure. They have a kitchen, they have a bathroom, they have lights and everything like that. And you can buy a renovated Airstream anywhere from $25,000 on the low end, but it’s probably going to still need some work all the way up to $50,000 or if it’s totally renovated and super nice, it could be $50,000 – $60,000 – $70,000. Or you can go out and finance an Airstream.

I had a neighbor who went and bought a $70,000 Airstream, got an RV loan on it over 20 years. And I think he was paying like $300 or $400 a month for it. Well, we’re moving into that strategy too, because we’re like, “All right, we’ll go and finance this Airstream. It is $70,000 but it’s $300 a month.” However, if we’re grossing $6,000 a month on it, that is a really, really nice cash flow on that type of unit.

I would say the best way to start is really going to depend on where you live. If you live somewhere like Wisconsin, I have a property out in Wisconsin and it’s on 18 acres and we’re looking at doing glamp sites out there.

If you have a property out there that you’re wanting to do a glamp site on, you probably don’t want to go with a tent. It’s not really going to do well for you whenever it starts to snow and get to Wisconsin temperatures. You may want to do a dead outdoors A-frame.

But if you live out kind of like in Temecula, California, right outside of San Diego where it’s super nice, cool weather all the time, then a Belle tent would be really great. A safari tent would be awesome because it’s perfect weather out there.

The best way to start is going to depend on where you can lock a land deal up. And then B), what’s the seasonality? What are the elements? What’s the weather volatility like in that market? And depending on that, we’ll sort of dictate if you’re going hard-sided or soft-sided. But if you’re like, “Man, I got $20,000,” you could probably make a safari tent work pretty easily.

Seth: Yeah. I’m just looking on the Airstream website. Man, I didn’t realize some Airstreams are $260,000 bucks. It looks pretty cool though.

Rob: Whoa, really? $260,000?

Seth: That’s like the high end, not the trailer, but the touring coach thing.

Rob: Oh, okay.

Seth: So, that’s probably not the one to start with though. Right?

Rob: Probably. If you’re fairly confident you want to go with it, more power to you. But yeah, generally I would say let’s get you started on something a little bit more palatable.

Jaren: You know what? It’d be interesting using underground bunkers in this strategy. I think that’d be really interesting.

Rob: I’ve considered that, man. I’ve considered doing the whole underground, like shipping container things and making it super cool and moody. But yeah, permitting that kind of thing is always tough to do.

Seth: I wonder what the cost is of installing one of those things because you got to excavate all the soil to get it out of there. But you can make networks of those storage things underground and it seems like a cool idea, but there wouldn’t be much scenery either because you’re underground.

Rob: Exactly.

Jaren: Yeah. But the scenery could be up above and I just think it’d be a really cool experience to stay in a bunker. That’d be really weird to literally be underground completely.

Seth: I’m going to link to a lot of these websites. I heard about these from Rob, like Den Outdoors and Pacific Domes.

Rob: Yeah. Hey, if you end up getting anything through them, tell them Rob sent you because I’m friends of the brand with them.

Seth: Yeah. Just like the Den Outdoors website. You go there, and at least I go there, and I just find myself getting lost daydreaming, imagining having my own little A-frame totally impractical. I don’t know why I would ever do this for myself, but still, I want one for some reason. It’s really funny.

Jaren: No, this strategy is extremely appealing for me. We’ve talked about Seth doing more vacation or experience-oriented real estate investing like buying property in Belize or what have you. This stuff, I’m like sitting here on the edge of my seat, like drooling and trying to contain myself. It just sounds like a lot of fun. It sounds way more fun than owning a hundred-unit apartment building.

It sounds like it’s probably more work and it’s probably more headaches and stuff, but it just sounds like such an adventure. And just at the end of the day, everybody’s going to be wanting to hear about what you do at the cocktail party. Like “What do you do? – Oh yeah, I have a glamping site.” And they’re like, “What the heck? What is that?” It just sounds like a lot of fun.

Rob: A hundred percent, man. Ultimately, it’s a lot of work and I try to make my content on YouTube and stuff as digestible and friendly to anyone that’s looking to get into the space. And so, I get a lot of flak for oversimplifying it a lot of the time. But at the end of the day, we’ve been talking for about an hour right now and I gave you a lot of the nitty-gritty, but if I had put all this content on YouTube, no one would really want to watch it. I have to give as much information as I possibly can in 15 minutes.

These days, I like podcasts because I’m like, “All right, at least I get to talk about every aspect of it and not edit together 15 minutes of this.” Because yeah, we covered a lot in this hour, but there’s so much more. Like my programs are eight hours a piece because it’s a whole thing. It’s a real business. It’s just not the actual setting it up. There’s the business side of it. There’s the marketing side of it. There’s a lot to consider if you’re getting into it.

But for the 1% of us that are willing to put the work in, it’s totally worth it. It really is a worthwhile endeavor. It’s a super fun adventure, but you got to be willing to roll your sleeves up sometimes and make it happen.

Seth: Yeah. To kind of just distill this all down. I know this is going to be an open-ended question, but what kind of person do you think this is for and what kind of person is this not for? What would be a way a person can disqualify themselves and be like, “Yeah, I shouldn’t be doing this because I don’t want to do that?” Anything come to mind?

Rob: If you’re not a patient person with other people, this is not the business for you. And that really goes in regards to both Airbnb and glamping. But as I said, you’re going to deal with a lot of people who may not be the brightest or the nicest. You get kind of a little bit of everybody. I get calls, well, not anymore, because I now have an assistant that can help me out on all this stuff. But I used to get calls like two in the morning like, “Hey, I can’t get the stove to work. What do I do?” And I’m like, “Have you turned the propane on?” And they’re like, “Oh, brilliant. Thank you.” And I’m like, “Okay, good night.” Or “Hey, the remote isn’t working.” And I’m like, “Well, are you using the remote that’s like right next to the TV? – Oh no, I’m using the bedroom remote. – There you go.”

It’s a lot of stuff like that where you get people who ask how to start a fire. It’s very tough to explain how to start a fire via text. Well, you get kindling, you have to stack up wood and yeah, you put kindling underneath and you light it and then it’ll catch. And then once it catches… It’s like, you have to do that all the time. You have to explain how things work all the time when you’ve already given people all that information to begin with.

It’s super frustrating and tedious. Especially if you spend an hour cooking and you’re like, “Oh my God, this is the best steak I’ve ever seen.” And you sit down and then you make the first cut. And then (mobile phone ringing) and you’re like, “No!” That kind of stuff happens a lot, especially in glamping, way more than Airbnb.

If you’re the kind of person that is short with people, who may not be on the same page as you, this is not going to be for you. You’re going to be very, very annoyed having started a glamp site because people are going to be hitting you up all the time.

I think that’s the big one. It’s a hospitality service, it’s customer service. We’re in the business of serving people. At the end of the day, the customer is almost always right. I’m not going to say “always right.” But the customer is almost always right. So, if you’re not a people person, I don’t think that this is going to be the person for you.

On the flip side of this, if you’re not a super detailed oriented person, this may not be the business for you as well, because yeah, there are a lot of details that you have to sort through in terms of automation and you have to call 50 cleaners sometimes and 50 handyman and 50 contractors. And it’s very easy to lose track of all that stuff.

If you don’t like being on the phone, it’s also going to be another disqualifier for you because there are a lot of phone calls that you’re going to need to make this happen. It’s not just showing up and setting up a tent. That’s the easy part. I wish it was just like “Tent up. See ya.” No, it’s so much more work on the front and back end of that.

It’s very active. I guess I’ll say that. It’s not really a passive income on the front end of it. You have to put in a lot of work. And so, if you don’t have time to get this business started, I would also say it’s probably not going to be the best fit for you.

Seth: Yeah. What would it take or how many units would you need before you could go out and hire “Rob number 2” to do all of this headache-inducing stuff for you so that you can just live your life? Have you ever thought about that? Or what would it take to replace yourself? 

Rob: Well, I have. Like I said, for the first 14 units of my portfolio, which is what I have now, I was really self-managing all of those. And now I have an assistant, a full-time assistant just because of the channel and all the other things I got going on. She is kind of “Rob number 2.” She runs everything and then reports anything major to me.

Yeah, I think those economies of scale start to work after two or three units. The cash flow is really, really good. And so, I think you have to be able to recognize as early as you can, yeah, the faster you are to hire and empower other people, the more money it’ll make you in the long run. It might cost you more money to hire someone to go out and do this stuff for you right now. But also, you’re not the one doing it.

And so, it makes it a lot more passive than if you were out there building decks, putting together solar panels and water tanks and outhouses. It’s a lot of work. So, I think if you had two or three of these things, it’s profitable enough to where you could probably bring on a team member part-time to assist with some of that stuff.

Seth: Gotcha. Cool, Rob. Well, I appreciate you coming on the show and just sharing so much about this. This is really enlightening and informative and fascinating to hear about how this kind of business works.

If people want to find out more about you or subscribe to your channel, by the way, I’m going to include the links to all of Rob’s stuff in the show. Again, retipster.com/114. What would you say is the home base for you? Where should they go to follow along with what you’re doing? 

Rob: Yeah. Well, obviously, there is the YouTube channel. The Robuilt YouTube channel. Also on Instagram, feel free to follow me there. I’d post a lot more of my day-to-day stuff there. Robuilt there. If you want to get sassy, go to TikTok – Robuilto. Someone took Robuilt from me. So, I just added an “O” at the end of Robuilto.

And then if you’re interested, I have a Airbnb program right now that is more geared towards helping you start a short-term rental business. That’s robuilt.co. It’ll take you to my program page. We’ll leave more links down at the bottom for people to learn more about my programs, if that’s what they want.

Seth: Yeah, totally. And at a minimum, everybody should be following this guy on YouTube. You just got amazing videos. It’s a great job. I’m sure you spend hours and hours and hours on those things. I know how long it takes to make a solid video. So, from one YouTuber to another, I totally appreciate it, man. I know it’s a lot of work and you put in some great content.

Rob: I appreciate it, man.

Seth: It’s great content.

Rob: Yesterday’s video was a 24-hour edit.

Seth: Oh, man.

Rob: When you include the shoot time and all the other stuff. Yeah, that was about a 30-hour video. It hurts. It hurts to say that out loud, but it’s how it goes.

Seth: I know when you put your heart and soul into them and just nobody watches it, and you just get dislikes and all the stuff. Come on, man.

Rob: The laugh of a YouTuber, man. You never know what you’re going to get.

Seth: Awesome. Well, thanks again, Rob. Hopefully, we can talk again sometime and I wish you the best with everything you got going on.

Rob: Thank you so much.

Seth: Well, there you go folks. That was our conversation with Rob. It was a pleasure to talk with him. I feel like I’ve known him for months now since I’ve been following his YouTube channel. It’s just cool to finally get on a call and talk this stuff out.

I’ve had a lot of big takeaways just watching his videos, but was there anything for you that was news that you didn’t realize, that surprised you?

Jaren: Yeah. There wasn’t anything surprising, it just was a lot of affirmation that this is a really awesome strategy. And right now, inundated, I’m in the deep end neck-deep with scaling my land business and putting my attention there.

But over the next six months to a year, two years, whatever, as cash flow, as I’m building up revenue, I definitely think that this type of strategy is very much on my radar as a potential because I like Airbnb. And because I could utilize so much of my land skills, I think it would be a pretty easy segue.

Definitely is a whole new world, but this is the type of stuff that if I’m going to do anything real estate-wise, this just sounds like a lot of fun. I know it’s a challenge and all that stuff, but I’m a people person. And I just think that it would be super cool to actually just have a property that is like a little village of awesomeness. It just sounds way cool compared to other types of real estate.

Seth: Yeah. I think the thing for me, or the enlightenment that I got from it was sort of a hassle behind it, which I feel I just didn’t really hear a whole lot about, but just hearing the reality of dealing with people and having patience and dealing with problems.

There have been times in my life where I definitely had the capacity and the patience to do that, but right now I don’t have it. I just have too many other things on my plate and kids and family and a few other businesses that I’m trying to run, and to think about adding that into the mix and having the patience to deal with it all the time. Because I’m sure it’s just neverending. Every tenant you have has some issue like that. And it was just good to have that reality check and know that because I hadn’t heard that before, but it makes total sense.

But it seems if you could find an assistant like what he’s got that could shoulder a lot of that for you, like if you had the scale to financially support that, that would be pretty sweet.

Jaren: Yeah. I did like the idea of leasing and partnering with the landowner. It reminds me of what a lot of billboard companies do. I just never thought about that, but I knew about buying the property that has a house on it so that you could get residential financing. I think that’s a super-smart route to go, but if you were to bootstrap and you only had the money let’s say $25,000 or something to put up the structure and cover any gotchas, leasing, and partnering with a landowner could be huge. It could be awesome.

So, I don’t know. I like this strategy a lot. I definitely don’t have the capacity to pursue it super hard at the moment, but maybe as things streamline in my land business and things level out, this might be something that I heavily consider in the future. Because I like this stuff, man. I’ve said it multiple times throughout the different podcast episodes. I would much rather buy a property in Belize or do something that’s short-term rental. Or if I had a choice to be a part of a syndication of a large apartment facility or a resort or a hotel, I would just rather go towards the hotel or a resort because it just sounds much more fun.

Seth: Yeah. For a lot of people, appropriately so, their land flipping business is kind of like their stage one cash-generating machine that then enables them to go onto stage two and do something that requires cash, like buying up whatever commercial or residential or glamp sites and that kind of thing.

So, if a person has an interest in this kind of thing, it seems like a good place to put the cash to work, assuming you’re willing to deal with the challenges that come with this kind of business model. But in terms of the fun factor, I think this is way up there just in terms of, it would be really fun to do this, to put together these tiny houses and just the idea seems fascinating.

Jaren: Yeah. Even getting into retreat centers or something, man, this would be such an awesome model for all that stuff. It would just be really cool. I don’t know. I really like it. It’s playing Jaren Barnes’s heartstrings.

Seth: Yeah. Sometimes, I want to get somebody on the show who has a lot of experience with hip camp where you basically just lease out just the land, like nothing’s on it. A person can just come and park their RV there and do whatever they want within reason of course. But I know of a couple of people who have done it and succeeded at it on a small scale.

Anybody out there who is listening, if you know of somebody or if you yourself have experience with hip camp to the point that you’ve made a pretty sizable amount of recurring income, let me know. It’d be awesome to talk to you about how that works. Because it’s almost like what Rob is talking about, but even simpler, because there is no structure of yours. It’s just a piece of land. So that’d be interesting too.

Jaren: Yeah. There’s so much, so much opportunity and little sub niches within the land space. Another one that I don’t think we’ve ever had a guest on is about harvesting timber. That’s a whole another world where if you could find a motivated seller, that doesn’t understand the timber value that they have on their property.

And when you could buy it, harvest the tender and then turn around and sell it, you could selectively harvest it or even completely clear cut the thing and then sell it for whatever because it’s just icing on the cake at that point. You can make hundreds of thousands of dollars doing that. It’s like a whole other strategy, but it’s pretty cool. There’s a lot that you can do.

Seth: Yeah. I’m actually talking to a few different sawmills right now about one of my properties that is going to be cleared completely. And it’s going to cost me a lot to do that, but a sawmill would actually pay money for some of it. Not all of it, because it’s not all mature trees, but I’m doing a little bit of that myself.

My problem is my property’s not really big enough to be worth it for most sawmills. It’s six and a half acres and probably 60% of it is wooded. So, it’s just that huge. But I think they usually want to see 10 plus acres with mature trees and the right kind of timber and it’s got to be within a reasonable distance from the sawmill so it doesn’t cost a fortune just to truck the timber back and forth. But yeah, that’s a good one though. It would be interesting to talk about.

I don’t know if we would want to talk to somebody from a sawmill or a forestry consultant. That’s probably the person, they could tell us because they understand the whole industry and how to value timber. And that’s a good idea. We’ll have to write that one down.

Jaren: Yeah. We went and interviewed the farmer guy on the YouTube channel and that was a good one for farmland.

Seth: You mean the AcreTrader? Is that what you were referring to? 

Jaren: Yeah. AcreTrader. There’s so much, man. There’s so much. Who would’ve thought about putting fancy tents on your land and making $4,000 to $6,000 a month on it? There are so many different versions of this. It’s great.

Seth: Yeah. I saw a documentary once about just tiny houses in general. I remember seeing that. This was probably like five years ago. That just that search keyword “tiny houses” or “tiny homes” or that whole niche gets a ton of search traffic. Like lots of people are looking for that kind of thing. So, if you do anything notable talking about that, you’re going to get a lot of attention if you’re doing a good job of it.

What Rob is doing about tiny houses and glamp sites with Airbnb, it’s kind of like combining a few really hot items. But it’s also sort of unique. I don’t know many people talking specifically about what he’s doing and doing it with the quality that he is. So, it makes sense why he’s kind of blowing up and doing a good job on YouTube.

Jaren: Yeah. I feel like YouTube, at least in today’s world, the name of the game is figuring out the right topic. If you can hit something that has a lot of demand, but not a lot of content, I think that’s really what’s going to help you blow up on YouTube. Like a female who does van living, like a single female or something like that.

There was a girl that blew up about a year or two ago and I think she made three videos and then had millions and millions of views just because she hit a lot of the intersection of demand.

Seth: I just wanted to point out one thing that kind of hit me. I don’t know why it suddenly occurred to me because this is nothing new, it’s been around for years now. But our Facebook group is really cool. I’ve just been noticing because I’m part of a lot of different Facebook groups and a lot of them are kind of just dead. Like nobody really pays attention, nobody goes there. There are no real lively conversations. And even if somebody posts something, nobody responds.

And I just noticed in our Facebook group pretty much every day, people post really good questions and a lot of people reply. There is stuff happening there and there are real people being helped in a very real way. I just think that’s so cool. And I never really knew what to expect from having a Facebook group. It was just like, “Hey, this is something we ought to do. So, let’s make one.” Which we did a few years ago.

It’s just really cool to see organically how many people are participating and just going in there with a good heart, trying to help others and not being all spammy and self-promotional. And I just really appreciate that.

So, if you’re out there and part of our Facebook group, thank you for being part of that. If you’re not part of the Facebook group, join it. I’ll include a link to it in the show notes. It’s retipster.com/facebookgroup, all one word and you can get there as well.

But I just want to take a moment and just point that out. I don’t mean to say this in an arrogant way, like “I’m so awesome. I made this Facebook group.” It has very little to do with me. It has everything to do with the people that choose to spend their time there and just really help others. So, thanks to everybody out there who is being part of that.

Jaren: Yes. It’s probably my favorite Facebook group I’m a part of.

Seth: You better be. I’m just kidding. Well again, if you guys want to see the show notes, there’s going to be lots of relevant, helpful links to stuff that we talked about. retipster.com/114 because this is episode 114.

And if you guys listen to this on your phone, feel free to text the word “FREE” to the number 33777, and you can stay up to date on all the stuff we got going on. So, thanks again for listening or watching and talk to you guys next time.

About the author

Seth Williams is the Founder of REtipster.com - an online community that offers real-world guidance for real estate investors.

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