33
===
[00:00:00] Welcome back to STR like the best. I'm your host, Michael Chang. It's my pleasure to welcome Hai Guang to the show. Hi, thank you for joining us today. Thank you for having me. Why don't I give you a second to introduce yourself to the audience? Yeah. Hey everybody. My name is Hai. I am a. Day job, W2, uh, work in tech type of person on the side.
I invest in real estates. My portfolio right now has a combination of short term rentals and long term rentals, and I've been doing this in a more serious side of the house for four and a half years. Awesome. Awesome. So you're not a newbie, but you've survived the initial like wave of. Real estate investing, I always feel like it's either you did it for two years or you did it for 20 years, right?
Like it's, once you pass that, once you cross that two year mark, it's all what you've developed the muscles to survive the game. So you have short term rentals. Tell us a kind of, tell us a memorable short term rental story. First one that comes to mind. Don't be afraid to scare the audience. If they get scared, then they're not cut out for this.
Uh, um, [00:01:00] the first short term rental story that comes to mind, I think is, so last year, a partner and I own a short term rental in Joshua tree. We have since sold it. And it was crazy. It's the moment that we listed on market. We were still hosting. And then we had a guest that basically called us at 2 a. m.
in the morning saying, Hey, we don't feel safe here. We smell gas. What can we do? And we're like, how is that possible? Like, that's crazy. And they were making a big deal out of it. Started calling the fire department. We started calling a propane tank company, trying to get them to go and help out. We asked them to leave.
Hey, it's not safe. Please go. They're like, no, we're just going to open the windows, open the doors, and we're going to stay. You got to help us out, like, we're not cool here. And. After 15 calls to the fire chief, which he was very annoyed by, he went to the wrong house and then called us back. Hey, your house is now red tagged because it's so unsafe.
The carbon monoxide alarm went off and stuff like that while we were there. And we were like, what on earth is happening? Did [00:02:00] you talk to the guest? And then he was like, there's no guest. What are you talking about? And ended up, he went to the wrong house. Another house actually having the exact same issue.
Long story short, at the very end, we figured it out. They stayed, the guests kept complaining throughout the night, never left the premise. The next day, when the propane tank guy actually went there, he was like, Hey, the tank is empty. I forgot to refill it because. I did not realize it was not normal to have used up the entire tank of propane in less than the duration of the winter time.
Yeah, absolutely unexpected. At the end, it was a nothing burger, but it was very stressful for sure. So how did it, so if the propane tank was empty, how did they? So, Apparently, this is how I come to learn about it. If when a propane tank, so for those who are connected to city gas and stuff like that, you don't never have this problem.
It's on demand, unlimited. But if you're on a big propane tank, in the more rural areas, from time to time, you have to fill it up and [00:03:00] if it's low, or if it goes almost empty, it will release the smell of gas inside when you try to use it to just fill it up. Alert you to check on it. That was the whole thing.
And yeah, we made a big deal out of it. Rightfully, both sides are. Yeah. So it was legit though. They really did smell, they really did smell something. Poor owner who got red tagged on their house. Yeah. Another house got red tagged. Uh, it's crazy. Sucks with that person. Hopefully, I guess if they had the carbon monoxide issue, then it's good for them to take care of it.
But tell us about your portfolio. You have a combo of short and long term rentals. Yes. Let's see. So I started in the, so I currently live, I I've always been in the Bay Area, San Francisco, Bay Area. And I started in the Bay Area as well. How I got started was actually 10 years ago as like the, the typical, Asian parents mentality of, Hey, you got to own a house.
And so I was like, okay, let me try to save as much as possible for like a down payment and just [00:04:00] buy something. This was 10 years ago, still to this day, the best investment of anything. And so that's how I got started. I got to buy something, tenants paid down and in 30 years I would have a house. Ring clear.
That's like the whole mentality at the very beginning. And from that on, you can imagine that becomes things appreciated. That became like a piggy bank for cash off refis and e logs and whatever else that serves as capital for the future houses, starting from that. And then every few years try to buy something.
And so a few long term rentals in the Bay area, and then pivoted out of state. When I got interested in the more seriously looking into real estate as a business, started. Doing out of state long term rental investing in Texas, in Dallas area. And then during the pandemic, as probably many of your listeners are got into kind of the short term rental game, like Airbnb was a big thing.
So started investing in that as well. Right now, the portfolio is a one short term rental in the Bay area and three short term rentals in the Great Smoky Mountain area. Awesome. Awesome. Okay. So let's put the numbers [00:05:00] around it. How many short term rentals, how many long term rentals do you have? I think a five, five.
Okay. And then mostly the Bay area and in Texas. Tell us about that first one. And it sounds like that first one was the one that like really gave you, gave you the running start. Like what'd you like? Is it your primary or is it actually an investment property? No, it was actually an investment property.
It's, it's just a vanilla single family home in an area that hasn't, it's like an emerging cities, like the more, more famous ones and just put 20 percent down and, and started picking up landlording. Like. I know nothing about what I'm, what I was doing and I would say got a bunch of like party animals in the house, ended up staying for seven years.
God knows what happened in between because the house was completely destroyed by the end of it, but that was okay. I was building an ADU at the back when they left to maximize cash flows and all that kind of stuff. So yeah, very vanilla, single family investing, no crazy story with that whatsoever. So how much did you like, so how much was the house when you first bought it?
I think it was like five. 50 K something [00:06:00] like that ballpark. What is it now? One point. Yeah. Area real estate. Yeah. There you go. Double, double your 200 down and now you have 600 and F plus the paydown. Six, seven extra investment. That's great. And then end of cashflow and you build the ADU. How much does it cost to build the ADU?
Yeah. ADU was, I think all in absolutely every dollar, every cent all in was two 20. I think it's like an attached ADU. I built another, a two bedroom at the back of it. And now it's, it's a cashflow beast. Yeah. You can't, can you sell that separately? Or is that, is it deeded separately? It's part of the house, right?
Okay. But then like it's a separate cash, like that thing they put to 20, like what's the monthly rent on that? Yeah. That's crazy. Yeah, it's amazing. Yeah. 28 at the back. 30, 38 in the front. So you hit the 1% rule on the, you hit the 1% rule on the A DU 28, put two 20 down and then 2,800 in rent, uh, 2,800 in rent.
And then obviously the front end, your basis is so low and then and enabled. So let's talk about that enabled. You're obviously still working. And it, but it [00:07:00] enabled that equity appreciation, enabled you to expand your long term rental portfolio. Maybe you can just hit on that real quick. I don't talk about that much here, but we just walk us through that.
Cause I'm interested in the journey of, you had, you made a great investment, right? You seven extra equity, you built the AD. So you got a lot of cashflow and equity tied up there. What was the thought process to be like, okay, like. I want to do more here and then Texas, and then we'll, and then we'll talk about what you did in the Smokies.
So back in 2019, I hit a point of probably a lot of people did at some point of, Hey, what am I doing? Spending all my time working at W2. Like I want to do my own thing. I want to break out of the nine to five. Don't get me wrong. It's I'm very blessed to be in the profession that I'm at. Tech pays really well.
And in the grand scheme of things, like I'm not doing like heart labor or anything like that. So it's not physically challenging from any sort of perspective. Like that lens is still, it's never lost on me, but it's still at a point where I'm like, Hey, it feels like I'm just a hamster on a wheel, like just treading.
You know, kind of thing. So the whole thing back in 2019 was that, [00:08:00] Hey, I already have some experience, you know, landlording and long term rental real estates. And it seems to be, you know, one of those things where if I buy early, it's almost guaranteed. There's no, you can't go wrong with it. You can, but like time is very forgiving.
Yeah, real estate is very forgiving in general. So it's, Hey, when you have some knowledge here, let me see if I can expand a little bit more. So that's when I first started getting into the whole, Hey, out of state investing a lot cheaper. Was it like bigger, was it like bigger pockets or? It was pretty big influence I would say.
And I read a David Green's book, like the long distance real estate investment thing. Oh yeah. It's a, the whole blueprint is here. So let me try it out. So yeah. And then I do data on, on, as a day job, I'm pretty interested in crunching data and crunching. Numbers and stuff. So came up with a list of, Hey, 10 markets that I would be interested in investing, did not know any of them.
And then I think I randomly picked Dallas. Like I had some criterias for filtering and ranking and things like that, but like ultimately at the end, it's, you just got to pick something. So I'm just. Going to pick something. And [00:09:00] so Dallas, Texas was the thing. Did you replicate the strategies, go buy more single family homes and then do the ADU or just buy single family homes?
What was your metric? Maybe just talk a little bit about, I don't want you to share your secret sauce or anything, but just what did that list look like of good markets to invest in? Because ultimately that's going to, I'm sure that transferred into how you pick the smokey's as well. Yeah. So it's very simple.
It's okay. Some now I don't remember the detail anymore, but like some like. Uh, historical performance in job, populate job growth, population growth, employment growth, like things like that, very generic things. And then what I was looking for was what do you call that? Like a cash on cash return of over 6 percent in a highly.
Probable, uh, appreciating market. That's literally my, if I were to summarize it, that's my investment thesis. Got it. Okay. So basically somebody just tell me care, like basically just carry the mortgage and then let appreciation do its thing or inflation and, although sometimes you can say they're the same thing, let us do it, let it do its thing.
Okay, cool. Awesome. And then, so let's maybe transition. So you had. How [00:10:00] many long term rentals before you went to the Smokies? Five. Five. Okay. So five long term rentals. Okay. Decent portfolio. Yeah. Six. There's like a duplex in there. Okay. So six rentals, some out of state, some in your backyard. And then obviously the pandemic happened.
Were you worried about your long term rentals at the onset of the pandemic? I was worried about them in the Bay area, actually, because rent was dropping like crazy during pandemic because everybody flowed out of their homes. The, uh, California in general, that was actually the catalyst for short term rental because I couldn't rent out my, one of my units, which before pandemic was like highly desirable during pandemic.
Nobody was renting like, where was this in the city? Oh, wow. Yeah, no, that's, yeah, that's great. That'd be, that would be actually very concerning if you can't get a house in San Mateo, right? It was 30 percent lower than my previous lease and like still no bites. And then I was like, I'm not managing this thing for like 30 percent less revenue.
Like it's just not worth it because it's not covering anything, [00:11:00] period. Even before it was barely covering just PITI, sorry, just PI and not even TI. And so that was, that was actually the first foray into a short term rental for me, I was like, Hey, I heard about this Airbnb thing. Let me see if I can maybe get some practice in this with this unit since it's vacant and I can't rent it out anyway.
Yeah. Turn that into a short term rental. And surprisingly it did really well. And so that's like. The trigger for, Hey, maybe I should do more. Yeah. Okay. Why not do more in San Mateo? Why not? And San Mateo for folks, it's a city in Silicon Valley. It's like in, in South of San Francisco it's by the airport.
It's, but it's a, it's a nice area where people, a lot of tech workers would find it a very desirable place to live, which is why I was like so surprised that that would be hard to rent. Cause that usually is very easy. It's literally a layup, but yeah. Why not just grow up? Why not just buy another house in San Mateo or rent a house in San Mateo?
Use the rental arbitrage strategy, especially when rents are so low. Yeah. So my whole thesis in real estate, if I were to go [00:12:00] back to the original, like why I even got started in the first place was I'm still attached to this thing of, Hey, after 30 years, I own this house free and clear, like tenants paid off and things like that.
So I actually own it. So ownership is like a, maybe like the number one principle for why I'm even, you know, doing this. Secondly, it's just. Way too expensive, like rental prices dropped like a rock during the pandemic. Housing prices did not move at all. In fact, like it, it shot way up after like the initial lockdown.
It was just cost prohibitive. It didn't make any sense. Okay. Got it. But your basis is low enough before that, like the math worked itself out. For that one. So I actually house hacked. So I lived in like half of it and then I, you always rented out the other half. And so that's like how, how that whole thing works.
And then the whole short term rental thing is just more like a necessity. How can I make it performing in this environment? And short term rental became like an option. Basically. I want to ask, do you, because you're house hacking with STRs. [00:13:00] Are you married? Do you have kids? No, I don't. Oh, okay. More, more, more for me.
Free from that perspective. Yeah. Yeah. I would give a partner or spouse. It's always like an interesting conversation. I've had, I've talked to people about that. They're like, I would do it, but my partner is not going to be so excited about that. I mean, obviously it depends on, Duplex is a lot easier. It's like a completely separate entrance and everything, but sharing walls with the STR is, some may not find it super, in your, in your.
Primary home. And I find it super interesting. We, after we've dabbled in a lot of these like house hacks and things like that, my partner and I were actually pretty aligned in that we can actually make, hopefully we can like any sort of primary homes to be, to also be house hackable, meaning like, Hey, we have the sense of how to design, for example, like ADUs, right?
Like we built an ADU. Um, think about, Hey, what are the criteria for buying a primary rent, uh, residence where there's a big enough of a. lot in the back where like we can section off like a very cute detached AD use for like for short term rentals, for example, that we can manage [00:14:00] and they pay for the mortgage and things like it's absolutely doable and could be very enjoyable for people who don't necessarily need every single inch of their, their space.
That's fair enough. Was it hard to build, and we'll talk about it in Smokies after this, but was it hard to build AD, like design and do the whole thing? It was, it was hard. To navigate like a new law. So back in 2020, this is when the ADU build started. California had just passed a law that's Hey, everybody, there's no crazy red tapes, anybody in the state can, can build an ADU without like local jurisdictions stepping in and be like, Hey, I don't like this.
I don't like they have a uniform set of rules, except the fact that when they wrote that out, the pandemic hit. And then I was one of the first who actually did it in, in, in my city. And like, they had no clue. Nobody has had a clue. Pandemic was hitting people. They can work or not. Like it's crazy. So it was hard from that perspective, but building the thing was not hard.
Okay. Yeah. I figured you were like entitled binder. It's a little more straightforward. Cool. Very cool. [00:15:00] Okay. So then five, six short, long term rentals. And then now you have. Tell us how you, the thought process of, I think you did already, but why don't you tell us the thought process of going to the Smokies?
Yeah. I think it was one of those moving with the herd kind of mentality. I think during the pandemic, everybody was touting the market. Everybody was trying to get in and everybody was, was, was basically saying, Hey, I'm getting life. 40, 50 percent cash on cash return. And so that's a no brainer for at least that's how they advertised it.
And at the time I had no clue what is the great smoky mountain national park. I didn't even realize there was a thing like that. Us too. But yeah, it was more of the YouTuber influence. Everybody's talking about it. Take a look. And we're like, wow, this kind of looks. Pretty interesting. And that's it. Yeah.
Okay. One of those times when those, yeah, it's somewhat, it was one of the best markets ever, our first deal, I think we like, we bought our first in September, 2020, first full year, I got to look back. I think it was like 80, 70 percent cashflow. We literally burned our money out by just [00:16:00] running as a short term rental.
We got our equity out. It was a 10 down 560 K was the house. Yeah. Like we got all the money out the first year, which is crazy. So yeah, it was crazy. Cause I hear your numbers was like one by the house for 500. And now it's worth 1. 2. Now this is probably worth 950. Probably ask Aaron close at 925, 925, 950 ish.
Amazing. And three, three years, three years. Yeah. And not no work, right? No. And I got 3 percent interest rate too. I'm never selling a house cause that debt is worth more. Try to get a second or wrap around it. But yeah, like that, that was always there. And we weren't even that early. We were like September and there were people that got in like May, June, that were like even better numbers.
So we didn't buy any sticks there. We bought from September. 20 to last one close was August of 22. How long, what did you start buying? And what, yeah, maybe just walk us through your portfolio. What'd you, when'd you buy price and like how like layout, like three bedroom, four bedroom, so people can get their heads around like what [00:17:00] you actually own there.
Yeah, we only own two properties technically. We started late 2021. We actually started mid 2021 and then like everything was flying off the shelf, like immediately, like as it's listed, it's gone. Like it doesn't matter what it is. It's gone. It's insane. Nothing to buy. Everybody was bidding. We had a property that we put an offer on that has 60 offers.
And then we were like, nowhere close to anything, like literally not close to anything. They didn't even screen it. It was, it was that crazy. So it didn't, we didn't end up getting a property under contract until like late 2021. So that was a three bedroom, three bedroom property, like a very compact. Three bedroom in where's Valley in view.
Is there a view? Yes, there's a view. Okay. That's good. Yeah. I think we just got quote unquote lucky. It wasn't quite lucky afterwards when we maintenance issues and stuff, but like, I think we just slipped by. The owner was, how much did you pay for it? Six, six, six 50. It's not too bad. Three. How big is it?
2000 square feet. 18. [00:18:00] Oh, okay. So it's a small one. Yeah, it's a compact, uh, very compact three bedroom. Yeah. So that was the first one. And then the month after we were under contract for another one. That one is pretty interesting. It's got two one bedroom honeymoon cabins on one lot. Okay. And I think we paid like seven 70, something like that for it.
So. Less than 400 per cabin. Okay. And how have those done? You didn't buy the top of the market. It was close to probably six months out from the top was probably August of 22. Like mid kind of Q3 of 22 was like the peak we actually, so for us, we, so we bought the first one in September 20 and then we figured out how to do off market deals because just like you were getting shut out every single time.
It was like 60 offers. So I was like, we're not going to. We're just not competitive sort of thinking like, what other ways can we do it? So we figured out a way to just like market directly to owners. And I was like, lucky we did that. Just ask them, what do you want? And then if it made sense, we're like, okay, then we just get on a contract.
Cause I knew the market was just appreciating. So if I could lock it in, even like the [00:19:00] 45 days to close, like that's 10 percent appreciation right there. Just give me how crazy the market was. And the nice thing was we had time to actually inspect it too. Cause we were like, it was like owner to owner. So can we get a week to send an inspector over and I'll go in and take a look.
And they're generally, we're like really amenable to that. So it wasn't the crazy. stuff, right? So that was, we were really fortunate because we were at a, although it wasn't like the lowest price, but at least weren't chasing like a move. We weren't chasing a moving target and we had time to actually look at these things and they were all like pretty successful.
The one, my only problem, my problem one is the one that I bought in August of 2020. To we actually, that one, we actually were in contract on that in late or early 21. That was great. So that was actually like, I think I shared this with you. So it was through a broker and then it was a new built cabin that was supposed to be built in six months.
It's months of course, but it's 3, 000 though. That's it. That was the deposit. No construction loan, nothing. It's 3k to lock in the lock in the cabin, right. At that price. So 690 for a two bedroom. Three, it was supposed to be a four bedroom pool cabin. It ended up [00:20:00] being delivered as a three bedroom, but there was so much built into appreciation there.
Like it was 690, there was a cabinet sold like literally the week before. Very similar layout, like same HOA, like 850. So you're, you're walking, you're walking with a good amount of appreciation. And then the builder was like, yeah, take it or leave it. If you're not going to take it, then sue me. I'll sell it to someone else.
This is like you and then not safer, not safe for kids. I don't say it, but I was just like, but then he ended up giving you a little bit back. And now that Calvin's probably that was the top. Now it's probably like mid sevens. Probably. I haven't looked. We're not going to sell it mid sevens. So like basically net zero, basically like even cause you think if you sold it with a broker fee, it's, it basically is a break even.
So that, that's been my only problem one, but it really tells you how crazy that market was. Now that I hear. I haven't thought about it in a while, but now that I hear your experience there, like the 60 offers there, it was, it was a nutty time. Now it's now the prices have come down. Like from the top, it's probably down 10, depending on the type of inventory you're looking for 10, 15.
So it's [00:21:00] down, but it's not really down. It was, it's down from like the stratospheric level. Now it's like so frothy. Everything's like a 10 percent cash on cash there right now. Everything I look at is like, if you self manage 10%, Now, do you want to self, you can ride to your point that you can ride 30 years and self energy, you own it free and clear.
But then again, do you want to work for, I always ask myself, why do I want to work for 10%? And my question is, my answer is I'll, I want to keep looking because I feel like I can do a little better. I'm curious. Like how did you underwrite the deals? Like you're a data guy, right? Like how did you underwrite the deals?
Did you use their DNA, talk to people? To get comms, walk us through your process. Yeah, let me see. What did I do? I didn't even use AirDNA. I think I talked to a lot of people about how much have you done and you're and things like that. And that was it. And like spreadsheets and stuff, like they're pretty intuitive to me.
So it's like building them out is that big of a deal. It's a list, every single expense item that you can ever get and pat a 10%. You'd be shocked how, you'd be shocked how rare. I do that too. And the bottoms up, you'd be how rare, you'd be shocked at how rare a bottoms up build is. What? [00:22:00] Oh, I might just put a percentage.
No, you don't. Yeah. Yeah, no, I get it. I like, it's not, it's not, everyone has the same affinity to numbers. Some people just literally, when they see it, they were like, Hey, I'm out. Like it's, it doesn't speak to me, that kind of stuff. I think underwriting might be a barrier for a lot of people. It certainly is not for me.
And it doesn't sound like it was for you probably because of, you know, Our backgrounds and our previous stuff. I imagine. Yeah. But again, that wasn't too bad of a process. And then like what ultimate, so do you think it was a little bit of FOMO when you got in? It was like, I just got to get in. Or do you, as you look back now, was it, did it set aside the intellectual rigor that, You sound like you're, you, you aspire to.
Yeah. Here's how I see it. I am a ultra conservative person, like super conservative when it comes to like spending money or investing or like predicting what's going to go up and down and put my money on it, place a bet on it. Like I don't go to a casino. I've never gambled or bet on anything. And even for like long term rentals, when [00:23:00] after 10 years, it looks like a fat cash flow.
That's appreciation. And I did nothing in between at the time. It was still like a unsure thing. Like I had to convince myself and like a ton of sleepless nights after acquisition that, Hey, am I, have I done something crazy here for me? It's not so much about, for example, Hey, did I hit my actual, my, my forecast with my, and things like that.
It is just taking action to. Do something. And as long as the outcome is not catastrophic, I think I'm fine. It's more of a problem solving phase once that's done. But for myself, getting to do something like getting to pull the trigger on a property, even after 10 previous acquisitions, I'm still not the most.
Okay. Yeah. I'll just sign my name here tomorrow. So I think like FOMO actually played a key role. Good part in me getting more comfortable with that in myself. And I value that a lot more than I would say, Hey, was it 19%? Was it 20%? Cash in cash. That's an excellent way to frame it. And thank you for sharing that.
I think it's hard to [00:24:00] talk about that because I think a lot of people do that. I'm similarly very conservative with money. We didn't grow up with a ton of money and it was barely nerve wracking to sign the mortgage papers on the first one that we bought, even though like I made good money and it was like, it was never going to be that catastrophic.
Okay. I've heard, I've heard it before, it's like, yeah, I need to know, because when you do you have to go like, Oh, well, it's a different product. You can't, you can't just like, I didn't know. Bang your head against a wall and spreadsheets like for a year and not do anything because ultimately it's just numbers.
You're never going to hit your projections. If you do that, you should be doing something else because like you're that good should be like buying million dollar rentals. You'd be buying like, you should be like, like really double down on that skill set. But I think that's the biggest thing where most people really never get off zero.
And they never do anything. And then it just invested like a random syndication because it's easier. And there's only my capital risk is like 50 [00:25:00] K or something like that. And those are the worst because you don't know the GP. You don't know the personal money together. You're just FOMO with someone else.
I've seen so many people lose money on bad syndications. Then I've seen people lose money actually on real estate, like buying real estate. And these are reason why it's like the bar is so much higher. Like you really got to get comfortable writing that mortgage, signing a mortgage paper versus a syndication.
So, oh, hi. Oh yeah. Hi. Made money on this. Oh, he's a smart guy. Here. I'll just, and he has the next one. I'll just, Hey, can I get in? I'll just put in 50 K. It's have I lose it. No big deal. But the 50 K really adds up all those things. That's that 50 K is like a half a million dollar house. It'd be a 10 percent down.
A hundred K is like a million dollar house. I think people don't actually realize that. They take the. I'll just lose this a little bit and then it's fine. Versus actually, why don't I just like actually take action and like really do the work because I feel like you're like that bar so much higher, like you probably aren't going to lose money on that.
Like you're going to like, to your point, problem solve. Okay. Like you're like, so you're salmon tail house. All right. This sucks. It's not covering my P 30 percent down. What do I do here? If it's a syndicator, they're just be like, sorry guys, we made a mistake here. And here's your K one and here's your tax [00:26:00] loss.
But for you, it's like, all right, Oh, what do we do here? All right, man, this short term rental thing. All right, let's, let's go Ikea, buy some furniture. Let's figure this out. And then you save that investment. It's doing well, I don't know. I've heard so many stories like that. It's just, it really resonated with me, your fight to get it right.
Yeah, exactly. I think that's a very underrated mentality, actually. A lot of people are, for example, Hey, I want to get into real estates. I want to actually do something in that space. Especially like a lot of my like tech colleagues, they want to break out. They're probably looking for financial independence or at least some sort of like passive income streams, maybe not even passive there, they don't mind doing a little bit more work if it means their wealth building kind of multiplies like the, but then the, the analysis paralysis is always, Hey, how do I get started?
I have all the tools to get started, but I can't because X, Y, and Z. If you just walk into something, Hey, if you underwrite something, if you've done your homework and it looks fine, remotely fine, just walk into it. And when your back is against the wall in the worst case scenario, actually, [00:27:00] that's a perfect learning experience, maybe painful.
And so if pain tolerance is not a thing that not that person's thing, then that may not, they may, they should probably walk away. But if any people are excited by, Hey, if my back is against the wall. And I have to figure things out. That's actually a pretty exciting time to, to learn a whole bunch of new skills in very short amount of time that especially perhaps like a W2 worker doesn't actually get the chance to do those.
And I always tell people, it's, Hey, if you walk into something, there's a bunch of resources out there that can help you. Like if you want to do real estate, I can help you. It just is that one last hurdle of whether you want to jump in or not. Um, Yeah, exactly. Like the resources are out there. And if you have, you know, even a slight kind of ability to problem solve and feel a little bit of pain and not just crumble and just, okay.
And like a little bit of resiliency feel like it's not that it's not that this isn't that hard either. Yeah. There's stuff to learn and [00:28:00] everything, but. Long term, like long term landlording is like pretty easy to be fair. If you can just make sure your tenant has a job, like we have, I managed some long term rentals for my father in law and like, they have a job, like they legit have a job, you're going to be okay.
Generally. The problem is like letting people that don't have a job, my cousin's paying it, my uncle's paying it, and it's short term rentals too. There's so many resources out there. You might not be like the A plus player in the beginning, but like, if you work at it, like you'll get there. There's a lot of.
There's a lot of resources out there. Um, and a lot of communities like hi, and I were in a Slack group that I was invited to from, uh, another guy that I met in a conference, uh, two years ago, no, sorry, a year ago, and I've even, I've learned so much from our Smokies channel, especially like the vendors, like who are the good vendors, who are the crappy vendors and just see people talk.
So I think just a long way of saying, if you do something and then you like, enjoy it and you have a little bit of problem solving skills, like it opens up all these different worlds to you. And what I like to term it, it's the unknown unknowns, cause it's, you know, you're W2, you know, your day [00:29:00] job and you know, okay, I don't know this thing, but I know someone else knows whatever, but it's the unknown unknowns that make life interesting when you walk into a situation and you didn't know even existed and you're like, Oh, wow, what's this?
Oh, this is really cool. And then you bring your own like experience and mindset into that. And like you develop your own solution. I find it also like the coolest situations for me, like I, that would. It's for rentals and like social media, like doing a podcast, like things I just never knew existed. And it just feels like it just, it's mixed your life.
Like, it actually makes your day like very interesting. Like, Oh, I didn't even know that. It's like, okay, let me dive in here. What's cool about it. What's not. Yeah. I highly encourage folks to, if you're listening to this and you're interested, like hi, and I are not anyone special. Like we're just took action and figured, not figure it out, but like just problem solved and waiting for the next problem to solve and.
Yeah, learning is definitely, at least for myself, learning is what kind of makes life interesting, I would say, just keep learning new things. Part of the reason why I even got into real estate in the beginning was like, Hey, like W2 is not, there's [00:30:00] not much learning. Like I've worked. You know, four different with four different companies, basically doing the same thing over and over again.
And it's like, I already know what the end is. And it's just, okay, I just have to redo this whole thing at a different company, hoping they would take off. By the end of the day, it's especially for the ones who are still like W2 doing a day job. Kind of stuff and feeling stuck it's doing real estate for me has actually had the reverse effect of making interesting again, because of all the problem solving skills that you have to figure out, for example.
So I just type in front of a computer, right? Like to my mom, that's all I do. I type in front of a computer, but in short term rental management, you have to deal with guests. You have to deal with cleaners. You have to deal with handyman. You have to deal with a whole bunch of like repairs, maintenance, uh, marketing, all that kind of stuff.
So you're like your CEO, CMO, CEO, everything. When you pivot that mindset back to the, I started to get miraculously, I started to get very opinionated about how, how my teams are run, how, if people are doing their job or not, or like how we can actually. [00:31:00] Help the company to be better. And it opened up so much things like that previously I was just confined to my function, like my, my, my functional profession, which is data and had a whole ton of opinions about like products, design, marketing, and things like that.
And then like, not probably not coincidentally, people start taking you more seriously. Hey, this guy knows what he's talking about. Let's invite him to more stuff. And so, yeah, it's got the reverse effects on like W2. That's cool. Actually, I never thought about that. You brought the owner, you brought the owner mindset to your job and you're being rewarded, like people, that people reward that when they see someone else thinking, helping them think through problems, like, Oh, okay, well, she thought through something that I had helped me do my thinking and pulled that, managers love that.
When they have something that works on their team, that helps them do their, helps them think, problem solve it's, Oh man, I love it. Yeah, that's great. I love it. And for those who manage a team, like there's a lot of parallels as well, that you can draw from managers to managing employees, cleaners and stuff.
Like, how do you, how do you make sure everybody is aligned and stuff like that? [00:32:00] It's, I think that's probably one of the areas that's, that's. The least talked about that. And I've actually never heard too much about because most people, when they get really successful at real estate, they pivot out and like w two is like the fastest thing that they run away from.
And I think for those who are like, I still like my w two, there's actually tangible benefits to help you do your job better. I love it. I love that, dude. That's a really great angle. I'm going to, yeah, that's a really great angle. I hadn't even thought about that. Actually. I probably wouldn't have better at mine.
Yeah, actually. Now I think about it, I probably wouldn't have better at mine. Actually. Yeah, I definitely wouldn't have better at my job. After going through this experience, you just, you learn to think as an owner. I think I would have been better actually with my clients, actually, because I was in finance.
I was working with clients in investment banking and they were like doing transit, doing deals and everything, but it was like now thinking more strategically about, I think for me, like just thinking more strategically about stuff versus like being in like a very finance, this is my swim lane. I'm just going to do this.
But now I think about business in a very different way. It's not about, is it, is it. And it's actually, it's funny, because if you're in banking, it's like very much, Oh, did we hit 20 percent or did we hit 19%? [00:33:00] And actually in the end, for business, it actually doesn't really matter. It actually doesn't matter.
Now you don't want to be that far off, but everyone knows this is not going to be right. It's just, okay. If we, if A, B and C happens, or if these are the levers and it didn't do this, then this is an outcome. But it really is like, how do you think? Think of how do you like strategically think about a problem and you really build those muscles when you're like doing it for yourself because you're forced to.
And then you, yeah, and you can really, I think, accelerate your career progress. If you like your job, accelerate your career progress. I actually really liked my, I actually liked, I didn't hate my job. I liked my job. I just didn't like the hours and they just owned my life. And I was like, Oh, your clients owned your life.
How's I just, you sound like a better work balance for me. That was. Just not, it's like a hundred hour weeks all the time. I was like, I just can't do this anymore. It's too much. That's pretty rough. Yeah, no, I think the mindset enables you to call your shots. Hey, if you don't like the company that you work at, that's fine.
Like you can walk away, but what they cannot take away from you is really, Hey, now you have the ownership mindsets. Now you are beyond what you're hired to do. And you can have a, for example, like I was nervous as hell. Like talking to [00:34:00] our chief product officer, for example, for a long time. Cause I'm like, Hey, I don't know product.
I just do data here now, not now because of all the changes and stuff. Like, but now going into any company, I don't care what their pedigree is. I don't care if they found it like billion dollar companies and stuff. I can have a true conversation. It's Hey, how do you, cause like in the whole short term rental space, right?
When you own six and you have many arbitrage properties and stuff, your net worth is tens and hundreds. Of mine, for example, and like, I should be nervous talking to you, but I don't because we're just like doing, we're just exchanging ideas and stuff. And I think at least for myself previously, that was a huge barrier to have a normal conversation with the higher ups or with the people with decision making power, because I'm always afraid that I don't know their stuff enough.
Or I don't know the business enough or the stuff enough now that quote, unquote, I own a business, it's just that that's, Hey, as long as you're curious, as long as you have a little bit more inquisitive problem solving mindset, like everything is [00:35:00] just, it's just normal. It's a story. Yeah, no, that's yeah, exactly.
That's I used to, it's funny. I used to be like very shy too, especially like when I first got my job, like. You sit around people who are more senior than you and be like, cause you're just like scared of saying the wrong thing. And actually this is like a really bad, it's really bad actually when you sit in a meeting and don't say anything, even no matter how junior you are.
So should be asked the question, like, you really had, should have a view? Cause they're like, everyone, they're judging you actually. If you just sit there like a wall, if you sit there just like wall art and then you'll be treated like wall art actually. You'll be like, Oh, take notes and send me a summary.
You don't want to be that guy. You don't want to be that man or woman. You want to be like, what's your opinion? What's your view on it? I think part of it is how to change that mindset of one, not being scared. Two is the emperor has no clothes. Generally speaking, they don't know anything either. Trust me, no matter what they generally, they probably don't know anything, but they're probably just focused on other things.
If you can bring value to people anyway, just bring value to people in a. Thoughtful way. Obviously don't say something stupid and ill, like ill conceived. Right. Oh, based on my experience, like I saw this, this is my view, whether you like it or not, or like, wow, you're like one out of a hundred people on [00:36:00] my team that actually had a view.
And it was like, not scared enough to tell me, like, you're automatically going to be in that 1 percent or that 5 percent and it just serves you well. Yeah, that's a great. That's a great, anyone listening to this, it's a really great mindset to have. Thanks for sharing that. That's yeah. So folks, cause we went on a conversation.
What has, what's your plan for 24? What are you still looking to buy? Prices are still relatively high rates. Call it six and a half, 7 percent right now. Structural rentals. I think. We had a dip last year. I think we'll be fairly solid like year over year. I think it'd be flattish plus or minus a point or two.
I don't think it'll be a step change. What do you, like, how are you looking at the world right now? Yeah, I just did this exercise like maybe a couple of weeks ago. Effectively in the whole short term rental space, I want to own. Let's call it like a portfolio of four or five short term rentals. I'm not interested in scaling beyond that.
I have no interest in building an empire or anything like that, but I am interested in, for example, owning four or five that's that like that, that can make some money and that we're pretty proud of. In terms of the [00:37:00] properties themselves across different markets. And so like right now I would say like the Smoky Mountain properties, we got it because of the fact that the return seems good on paper and we were in it for the money, but at the end of the day, like we don't care about the Smoky Mountain area.
Like my, my, my joke to people is that, Hey, there's a lot of mountains in California that looks more impressive than that place. Like, I think it's just one of those things that the market doesn't, doesn't Truly resonate with us. And right now we're doing it for the fact that I like the cleaners that we work with and the professionals around there, but not nothing else.
I don't think we would ever go back to stay there or vacation there ourselves. You can imagine a portfolio of things that we really care about. And then the strategy. Really is a, we're going to swap some of these properties into those things or start acquiring properties in, in, in those different markets that, uh, that we want to be like spending time in, for example, and then we'll just work our way to that one, one, one rental at a time, one swap at a [00:38:00] time until we get to four, maybe five.
And that, that would be it. That's great. Lake Tahoe. Be careful. Yeah, we're, we're not, yeah, we're okay from that perspective. No, that's great. No, I think, I think that's another, that's good. That's good to point out like the other considerations besides cash and cash, like something that you'd be proud of, something that we can show your family, friends.
There is a social aspect to real estate too, right? Like when someone walks into your, when you go on vacation and you can invite someone to your second home that you very proud of, location that you're very proud of, there's a lot of benefits to that too. Especially when you're working, especially when you're still, that matters, right?
Like how you're perceived at work, what you own, how people perceive you, how they, how successful they perceive you, your business document, all that stuff. All that matters. So there's definitely other considerations besides cash on cash, especially when you're not. Like a full time short term rental investors.
Me personally, like I'm a short, I'm a full time STR investor. So like those are important. Cash on cash is still paramount cash on cash. And when we buy appreciation, those, those, those are paramount. That's your business. So yeah, there you go. You're [00:39:00] you're doing what's needed or I guess what you signed up to do.
Exactly. What are you, what are you optimizing for? I was. That's always my default, like question to myself, what am I optimizing for here? Because you can do things in like a bunch of different ways, but like fundamentally, what's the key problem you're trying to solve here? And then I think that drives like the execution plan of what you want to do.
So my traditional closing question I always ask everyone is, business is a team sport and we wouldn't be where we are without. Others helping us along the way. What's one of the kindest things that someone's done for you to get you to where you are today in your real estate investing career? Yeah, it's, it's, so I had a business partner, like initially I didn't bring her up in, in this whole, in this whole show.
We actually partner on the, like the guest story at the very beginning, uh, the Joshua tree property. She was the one that got me into real estate. Sorry. Short term rentals. Actually, she was the one that's, Hey, you can't rent your house out. Why don't you think about short term rentals? Like I built an ADU and I did a short term rental with it.
She helped me design the thing. And like lots of like gratitude to her for, for kind of just showing me the path. She was new herself [00:40:00] to short term rentals. But I think together we were pushing each other to be like, Hey, You want to really go into this space. You're really good at design. And then she was like, you're really good at numbers.
You're really good at operate operations. Want to partner up. And so I think now we all have our own portfolios and stuff, but without her, I don't think I would have started the space. But shout out to her. You should share the episode when this comes out. You share the episode with her. I think it's always nice to hear you talked about and a person talked about in a certain way.
And just to pull one point from that powerful story is having a partner with you. Whether it doesn't have to be your spouse or partner or life partner, but just like someone, a family member or someone you meet on BiggerPockets, there's something, a community around you that is doing something similar.
And I think it really, one, you don't feel like you're alone. Entrepreneurship can be lonely that you have someone that you can talk to, that understands your problems. If you talk to someone that is just a good listener, it's great to have someone to like offload to, but they don't really understand what you're going through, like it's helpful.
It [00:41:00] might be cathartic, but it's not like super helpful because they can't give you any feedback. I think it's really helpful to find people around you, find a community around you, whether it's Facebook, BiggerPockets, whatever community that you can find that can help you along the journey, because that accountability is really going to get you, help push you along and seeing other people successful.
Not FOMO, but just knowing that like, Hey, hi, is this like me? We all, we have the same job, same situation. Like he can do it. Like I can do it. And a lot of it is just like believing in yourself. They're having someone to believe in you and to help people get off zero and do something. Thank you for sharing your story today.
I really appreciate it. If, if folks want to reach out to you, someone wants to reach out to you. What's the best way to reach you? Yeah, they can find me on Instagram. It's just my name. Hi, Guan, H A I G U A N. And yeah, I'll be there. Perfect. I'll put it in the show notes. Hi's Instagram handle. So definitely follow him and send him a DM.
I'm sure he'll be happy to make some new connections around the Bay Area, other investors. Hi, thank you very much for joining. Really appreciate you sharing your story. I don't know. Thank you so much for having me on.[00:42:00]