I’ve been getting a ton of questions from you guys about investing in short term rentals, and how to start growing your business.
So, this month I decided to talk to a few Legends from our STR Legends Mastermind. I want to give you an inside look at what it's like to run a 7-figure business.
STR Legends is a group of short term rental operators with over 30+ units each. Each month, we share our experiences scaling our short term rental businesses. Eric Moeller (Co-Founder and CEO) and I started STR Legends in 2019. It has been an amazing experience to learn tips and tricks from STR experts from around the world.
I’ll be asking each Legend about their drivers to success, challenges, and plans for growth in the future.
Tim is the Co-Founder and CEO of MidTown Stays. He operates rentals in Sacramento, Memphis, and Oklahoma City. He's got an impressive 4.8-star rating and over 30+ vacation rentals. He's an expert on investing in short term rentals!
Starting out, Tim focused on properties in his hometown of Sacramento. He looked for properties that had a good investment foundation. As markets changed, he expanded into new areas.
Over the last 5 years, Tim's grown his portfolio to over 60 properties. About half of those are vacation rentals.
In this episode of Get Paid for Your Pad, Tim shares his story and tips for crushing it with the ownership model.
So, let’s dive right in!
I asked Tim what he would want from a mentor if he was just starting out investing in short term rentals. He said he would have liked to be pushed into new markets sooner.
There are thousands of markets in the US alone, and he’s learned that returns are different in every market. It’s a good reason to explore places outside of your neighborhood, and comfort zone!
You might think like I did, that you are at a disadvantage in new markets. Locals get all the good deals, right?
But Tim has a solution.
Start out with small studio apartments, and get clear about what you want in a property.
This will make it easier for your broker to find you exactly what you want, and you can close the deal. You’ll build trust, and soon enough you’ve got the local advantage.
Tim’s biggest challenge during his journey has been securing financing.
It is intimidating to speak with a lender, and it’s especially difficult when you’re just starting out.
Luckily, Tim has some advice for you guys on how to get over the financing hurdles.
Remember that every lender is different, and every market is different. Investing in short term rental markets is a process, but it gets way easier with time.
If you’re having trouble, it’s a good idea to talk to your broker, they’ll be able to refer you to local lenders they prefer.
The journey to 60+ units is not a short one. As you expand your short term rental business, you’ll run into obstacles that can get you off track.
Three things keep Tim focused on expanding his business:
Tim is a big believer in small studio apartments as investments. I own two studios myself, so I can see the appeal!
To start, they are cheaper to maintain and buy. And unlike long term rentals, guests don’t mind the small space on vacation. I’ve found that square footage is not an important factor in short stays. It’s much more about the experience.
Another idea is to find historic properties. Tim loves renovating historic properties as a value add. When you’re renovating smaller units there’s also less paint, flooring, and work to do!
You don't have to be a billionaire investor to get started, starting small is the best way to start sometimes.
I know you guys want the shortcuts and best ideas on how to grow your short term rental business.
So, to close this out here are Tim's top 3 recommendations on how to scale your business.
Hopefully, you enjoyed learning more about investing in short term rentals, Tim is a great guy and we're happy to have him as a Legend.
Next week, we have an STR Legends cohosting champ, Logan Humphrey, joining us to share his tips on property management!