BiggerPockets Real Estate Podcast - 833: From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills w/Luke Carl

Episode Date: October 19, 2023

Luke Carl’s real estate “gateway drug” took him from one home to three hundred rental units in record time—and it can do the same for you. What started as a niche type of investing quickly took over the world, and Luke was able to use these mega high-cash flow properties to buy more rentals, build more wealth, and have enough real estate to do whatever he wanted, whenever he wanted. If you want that same type of financial freedom, you’ll want to copy Luke’s blueprint. Luke and his wife, Avery, bought their first short-term rental before the term “Airbnb” even existed. They got in the game so early that they currently have the longest-running Airbnb in the Smoky Mountains. One vacation rental turned into another and another until they eventually reached a breaking point, forcing them to pivot and turn their short-term profits into long-term rentals, a move that Luke would wholeheartedly do again. Now, with a massive rental property portfolio, Luke credits his passive income portfolio to short-term rentals. The high cash flow has allowed him to buy more passive properties that can be outsourced and don’t require constant attention. But can YOU still repeat Luke’s short-term rental strategy with the so-called “#Airbnbust” upon us? Surprisingly, yes. He'll show you how. In This Episode We Cover: How to use high-cash flow vacation rentals to build your real estate portfolio WAY faster Why Luke DIDN’T quit his job to invest in real estate EVEN when he had enough income Transitioning from short-term rentals to long-term rentals and when to STOP buying Airbnbs Luke’s financial “buckets” every short-term rental operator must set up Property management vs. self-management and why you DON’T need to outsource most vacation rentals And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Davids's BiggerPockets Profile David's Instagram Subscribe to David’s YouTube Channel Rob's BiggerPockets Profile Rob's Instagram Rob's TikTok Rob's Twitter Rob's YouTube Learn Directly From Luke with The BiggerPockets Short-Term Rental Bootcamp Hear Our Episode with Luke’s Wife, Avery Carl Books Mentioned in the Show: Long-Distance Real Estate Investing by David Greene Short-Term Rental, Long-Term Wealth by Avery Carl Profit First by Mike Michalowicz Connect with Luke: Luke's BiggerPockets Profile Luke's Podcast The Short-Term Shop Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-833 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 833. You know, for me it was like, dude, all I need to do is focus on 300 bucks a time. 300 bucks a time. Slow down. And now fast forward to today, 15 years later, all those $200, $300 chunks from 15 years ago, I mean, I've got debt pay down on top of that. You know what I mean? And rent raises and equity and whatever else goes along with exactly why we're here and what Bigger Pockets teaching.

So no-brainer. What's going on, everyone? This is David Green, your host of the Bigger Pockets, Real estate podcast, the biggest, the best, the baddest real estate podcast in the world. Every week, we are bringing you stories, how-toes, and the answers that you need to make smart decisions now in today's current real estate market. Today's show, Rob and I are going to be interviewing Luke Carl, the husband of Avery Carl, both of them are no strangers to the bigger pockets ecosystem.

They teach boot camps, they write books, they own short-term rentals, and they help other people to do the same. Rob, first off, good morning. Good morning. Top of the morning to you. Second off, let's get into it. What should listeners look for in today's show? So I think there's this whole thing where you do real estate, you become very good at it,

and you feel like that's the thing that you have to stick to because that's what you're good at. But today we're going to talk to Luke and we're going to find out when is the right moment to depart from the successful niches that you're in and when it's okay to break into other asset classes. He really gives us a master class on diversification, We even are going to talk to him a little bit about the banking side and the financial organization of owning over 300 doors. That's exactly right. A lot of stuff you don't get into very often. We also dispel quite a few myths that many of our listeners may have in their minds and we're going to set some of that straight. So there's some good stuff today. You don't want to miss it. Before we bring in, Luke, today's quick tip. Ask yourself, are you built for the type of asset class that you're pursuing? A lot of people get,

into a certain asset class or type of investing because they think it's quote unquote the best. Oh, this is the least work for the most money. I don't know that that's always wise. I think different personalities, strengths, and skill sets are better geared towards certain asset classes. Rob has an eye for design. He pays attention to detail and he likes to make people happy. He is engineered in a lab to be a great short-term rental host. That's was worked for him. it's not a surprise to me that he's elevated to where he has in that space. My friend Andrew Cushman is the most analytical person that I know, never makes a mistake on anything, incredibly cautious and smart.

He's a great multifamily investor. He's wired for that. You got to ask yourself the same question. Rather than saying what's the best, ask yourself, what are you the best at? Where would you be the most successful? Where would you find the most passion and then become the best in that space? Rob, anything you want to add? Yeah, basically just know when to pump your job.

And if you want to know why Rob just said something that sounds silly, listen to the end of today's show and you'll know exactly why. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.

The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio. check out historical returns and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise

Flagship Fund. Fundrise Fund fund funders' prospectus at fundrise.com slash flagship. This is a paid advertisement. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vakency periods, rehabs, short-term rentals, or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NREG.com slash BP pod. That's N-R-E-I-G.com slash B-P pod. If the new year means getting rentals back in order, listings are a good place to start.

Avail. Part of Realtor.com makes it simple to list a rental for free and get it in front of millions of renters. One listing, one click. Post it a couple. Post it. across 24 top rental sites. A Vale even helps generate listing titles and descriptions to save time. More visibility means fewer days sitting vacant and getting your property rented quickly. It's a fast, free way to find renters without the usual hassle. Get started at Avail.co slash bigger pockets. That's A-V-A-I-L dot CO slash bigger pockets. Luke Carl, welcome to the Bigger Pockets podcast. Nice to have you on today. A little about Luke's background. He is a short-term rental expert, but he does more than that. His portfolio includes

single-family homes and a mix of small and large multifamily buildings. And we're going to talk about that later in today's show. He's been investing for 12 years and is married to Avery Carl, who is featured on the Bigger Pockets podcast episode 364, snowballing six figures short-term rental profits into passive investments. Luke, welcome to the show. My pleasure. My pleasure.

It's a huge honor. I've been a big fan for a very long time, both of you gentlemen, of course, as well. and it is great to be here. All right, let's let's let the listeners get to know you a little bit. Tell us about the time that you went out to help your tenants during a storm. Well, actually, I mean, that's a long story. That's a good one, man. So that was back in the day when I was first starting, cutting my teeth.

I was self-managing back then on my long-term rentals. And I was doing that from like three hours from where I lived, which was in middle, kind of East Tennessee area. And I still do. I had some duplexes in Chattanooga. And one of them got hit by tornado in the middle of the night, actually at like 1.30 in the morning. And there was seven people sleeping in it at the time.

And luckily everybody was just fine. And it was a terrible tragedy, really. But yeah, yeah, I got worse. I loaded up my truck the next day with a couple of chainsaws. And I called a couple knucklehead friends of mine. And we were to meet down there. You know, I was like, listen, I'll pick up a case of PBR and we're going to knock out these trees and get this thing.

done and I didn't make it. I did not make it. I put my car in a ditch on the way down there. So that story got worse and worse. But I mean, honestly, looking back on it, it was a good perspective. It was a good lesson to learn. And in my, quote, my self-managing early days, at least with the long terms and cutting my teeth on rental real estate. And yeah, fun, fun memories there of earning my stripes, if you will. So question for you, Luke, which disaster do you think in hindsight was worse? Putting your car in a ditch or combining PBR with chainsaws in a storm? Well, now, listen, for legal reasons, I never said we were going to combine them, but yeah, probably some, you know, some crazy decisions going on back in those days.

May have been an angel that pushed your car off the road that day into the ditch and narrowly avoided a larger catastrophe. Yeah, it's a very good point. So what would you say that big lesson was from that experience? Man, you know, I was honestly, I was too wrapped up in everything at the time. And I didn't know that because I was hungry and young and, and, and I couldn't afford a property manager. And at least I didn't think I could. And I think at this point, we built it up to maybe 15, 20 doors or so. And that was it, that was a good eye-opener for me. I'll guarantee you it was David Green that said one of the very best things I ever did in real estate was hiring a property manager. And I did shortly thereafter.

It just got to the point where I'm like, I can't do this anymore. You know, it's getting crazy. So I put a property manager on those properties. So that was the lesson learned. Someone told me today it was National Bald is Beautiful Day. I got a text message. And I replied with a bad day with a bald head is better than a good day with a man bun. And I was just thinking as Luke was talking there,

but like a bad property manager is much better than a good effort that you make at managing your own property. Yeah, it cost me a car. On that note, while the tenant's okay, did they know that you went out there to help them? Like, did they ever even know the kind, hearted gesture that you were trying to do? Man, excellent question. And be honest, at the time, I was self-managing, you know, this was years ago. And it's maybe 18 doors, 20 doors, or something like that.

And none of them knew I own the place. But, you know, so I would just tell my work for the property manager is all it was. And I was placing tenants and doing leases and the whole nine yards. But they all just knew me as like Lou, I called myself Mr. Furley, you know, like three's company. And they just knew me as a guy that quote unquote worked for the property manager. So I think they appreciated how hard I was working and how often I was around and that I actually cared. But nobody, nobody had any idea that I actually own the. They wouldn't even believe that I own the place.

I mean, look at me. I'm covered in tattoos. and the whole nine yards. So even if I told them, they'd be like, no, you don't. You know, so this is more common than you think. Someone who, one of my friends, she property manages for the owner of like this large commercial portfolio. And he always tells her he doesn't own it. He doesn't want her to know that she owns it. But she's like, I run all your errands. I get all the mail. I pay your bills. I know you own this. And you like, to this day, won't ever admit that he's the owner. So I think that's probably more common than you think, man. With that said, I know that you have such a real. You're

rich history in the rental world. But before we get into that, can you tell us a little bit about how you grew up in life before the rich history into rentals? Yeah, yeah. Proud of my upbringing. So I come from a little tiny town in the Midwest, Nebraska, to be exact. And it's a state that most people have never heard of. And 1,100 people in the town I grew up in. And, you know, real hardworking, awesome family. My dad was a mailman. He's very very very. Vietnam vet, great dude. But, you know, I learned early on the value of a dollar and working hard. And, you know, he had me underneath his truck when I was like five or six years old, learning how to change the brakes and stuff. And that's probably where that managing,

when I had no business to be managing came from. I almost was like too stubborn to give up on it, really. But yeah, you know, I mean, that's, it was awesome upbringing. I knew it wasn't for me, though. I actually moved away to the big city when I was 20 years old to kind of go take. over the world. But, you know, those Midwestern, you know, just blue-collar, humble beginnings, something I'm very proud of carrying through to this day. Now, my folks don't have any idea, quite frankly, that I own a bunch of real estate. It wasn't something that they could handle, which I think is pretty common. You know, the family can't really understand having mortgages and things like that. But, but, but man, they were wonderful people, absolutely wonderful people.

hardworking. I was one of the, I think maybe a second kid and the entire family to go to college. So that was, it was, you know, the American dream. Sure. So it's not like you were working hard. Did any of those skills, were you able to ever put any of those like, those character building skills, I suppose, to work once you actually got into real estate? Yeah, you know, I mean, to me, I was building the career, right? Like, I looked at it at one house at a time, one dollar at a time, one piece of freedom at a time. Always been a rock and roller and just kind of living my life that way, you know, like not not listening to the man kind of thing. Sure. Own my own business at the age of 25, a bar in New York City, believe it or not.

I've always just had just like a whole lot of get-go and been able to really make a lot of crazy stuff happen. And when I got into real estate, I actually had my dream job at the time. I was working and radio full-time, a big, a series X-em satellite radio nationwide, you know, huge radio company. And, but so I was looking at it more like basically like a 401k alternative. I didn't even know what that was, to be honest, but just like, you know, I knew that at some point, I was not in control of my own destiny and at some point somebody could take things away from me. And that's where real estate really clicked for me is exactly why I was drawn to it. and also the fact that, you know, I was looking at it like, this is going to be my new

second career, basically. I never really thought that I was going to get out of radio. But to me, it was just $1 at a time. You know, each house, if I can get $100 out of this damn thing, that's enough for me to be happy with, you know, moving a little bit. Because where I come from, $100 is a lot of money, you know. So two, three hundred bucks on a house or, of course, then the short-term thing, you know, happened years ago. And we're like, man, we've got a thousand bucks a month on this thing. This is really cool, you know, back then.

But that's the way I always looked at it. You know, there's a lot of TikTok and all this stuff going on with these folks are preaching that you can quit your job, like quickly with real estate. And I never looked at it like that. Because I'm like, okay, if I quit my job, where the hell am I going to get these down payments? You know, so. Yeah, man. That's very true. I think, I think that's the thing. It's like, I mean, I guess, If you really hustle for it and you really work hard, I guess theoretically you can replace your job, but the idea is not get rich quick, but get wealthy very slow. And if you can do that, it'll be worth it. So you're obviously developing a lot of skills at a young age. You own a bar or you own a business.

And then you go on to become a DJ, your dream job. And at some point, you're doing this and you're like, I think I want to do the real estate game. What actually was that first big jump for you? Yeah, yeah. So, you know, I mean, really what it was was I had a huge shift in my life. I met a girl, you know, it seems, it happens all of us, you know, and we were living in New York City, the biggest city in the world. I was a kid, you know, I mean, I moved there when I was 20 years old. But anyway, fast forward several years. I met a girl, and she was from the South. And I said, I never even heard of the South. You know what I mean? But she wanted to move closer to family. So we moved from New York to Middle Tennessee. and all the sudden, I mean, it was really as simple as that. All of a sudden we went from a place where it was $2 million for a tiny little box to somewhere where you could buy a house. And we both instantly got hooked.

It was really just as simple as that. It was almost like it wasn't, it just kind of happened. Lightning came out of this guy and said, you guys are going to do this. And so we sat down and, well, actually, we bought a house to move into, which ended up being a live-in flip house hack, if you will. That house ended up being a huge deal in our. history. We did everything with that house. We rehabbed it, live in flip. I ended up moving a tenant into it when we moved out. He locked it. Use that He lock for a down payment and then ended up paying

that off quickly, of course, because that's what you want to do with Heelocks. And then I ended up selling it to the tenant. And I did the two out of the last five year lived in it thing on that one. I mean, that was like every deal rolled into one. And it was a dream come true. But in that process, we got hooked. My wife and I got hooked on buying real estate. and which is easy to do. And we just said, you know what, let's save up some dough and buy a rental house. And we did that. We sat down and scratched down on a piece of paper.

How long is it going to take me to come up with this down payment for, you know, $150,000 house? And back then you could do that where we were living. And we lived on $25 a day, $30 a day for 18 months. And then we had enough money to go out and put our first down payment on our first rental house. and the rest was history. It was really just a shift in our environment

that opened up a whole new world to us. And then we discovered you guys, quite frankly. I discovered Rich Dad, and I discovered this was back in the early. I discovered bigger pockets, I think somewhere around podcast number 70. And it was absolutely life-changing for me. I mean, I remember vividly riding around on, I had a little broken-down old lawnmower that was a wedding gift. And I remember you guys.

It was a huge, I mean, I remember Dave Green's first podcast coming on and the whole nine yards and just got obsessed and almost all of my, all of my education for sure to what we're doing right now, which is bigger pockets. And I'm very grateful. Well, I vote that we change the terminology of W2 job, which everyone thinks is negative, to down payment generator, which sounds much cooler. I'm going to start referring to that. Like, what's your down payment generator so that everyone doesn't. and have this obsession with quitting their job and trying to jump into real estate. And also I wanna highlight what you're describing, Luke,

is what I tend to see the pattern of all the people that we've interviewed that have built really big portfolios. There's a combination of I kept working and making money and I lived beneath my means. We were saving money. That's what you were describing. We weren't just balling and taking on huge debt and buying properties with it.

You were saving money. You've respected money. You valued money. And so you're very careful about the way that you invest in and what you invested in and that grew a portfolio, which eventually allowed you to have the lifestyle you want, but I don't want that to get glossed over because a lot of people have big aspirations to build huge portfolios, but they kind of want to skip that whole step of having to live beneath

their means and be disciplined with their cash, which I think is why it doesn't happen or when it does, it's very short-lived. So speaking of that, what does your portfolio look like now? Can you kind of give us an overall snapshot of what it looks like? Yeah, so, you know, we bought that very first rental and then we quite frankly, we were living in Nashville at the time, which blew up, so we couldn't really repeat that one. It was like literally overnight that the house next door was twice as much as what we paid. It just, you know, so the next closest market was the smokies. And back in the day, you know, every, my wife, she, she grew up in the south and she said, you know, they got cabins out there that they ran out in the mountains. We could try that.

And I was like, what are you talking about? We've been sleeping in a tent. We go to the mountains of sleeping a tent. I'm like, well, let's run a cabin and see what that looks like. She's like, we can't afford it, you know, but, uh, so that's what, that was our next play. We went to the Smokies and bought a cabin. Um, and that cabin still to this day is the longest running Airbnb in the Smoky Mountains, which is Airbnb's biggest market in the world. Um, and we had no clue what was going to happen with that, you know, I mean, at the time, we were like shouting from the rooftops. This is real. We did this. You can do this. And everybody thought we were nuts. So we ended up getting into the vacation homes. Again, for me, it wasn't anything.

thing to do was short term. It was just my next vehicle, you know, my next, uh, cash flowing property, basically. Like, how do I get to the next property? And that was, it was quite frankly at the time, this is way before your book, David, uh, which I wish your book was out, because I would have been so much more comfortable, uh, you know, we were going to go do this thing from a distance. Uh, and it wasn't that far, a couple hours. Um, but, uh, fantastic book, by the way. Uh, thank you for that. Thank you for making people real hot. that you know what I mean it's like dude it's life changing but at the same time it's like you know I mean this can be done and that's why that book is so brilliant but anyway so we went into the

the vacation home thing and and didn't realize that what it was back then there was no such nobody else was doing this whole Airbnb thing of course tons of people on verbo you know verbo's been around for a million years 99 they started but at the time the whole thing you know the way it is today not even close There was literally like two other people out there doing it at the time on Airbnb. And so we scooped up as many of those as we could. Got a partner involved. It was a close friend of mine.

I was having a conversation with him one time. And it turned out he owned some beach rentals in Florida. And because it just kind of happened. We were at a bar talking about deadbolts. This is way back in the day. And I'm like, how the heck do you know all this stuff about these digital debt? He's like, I own a couple of vacation rentals. So we ended up partnering on a couple houses.

We grew that to five short terms in a year, which was, I mean, we couldn't even, I don't even know how we did it, to be honest. That's a lot. Yeah, it was a lot. And we were broke at the time, and we were just regular people, you know. And then at that point, my partner, we only did two with him. And he's still one of my best friends today. Great dude.

Really good at real estate. I said, you know, I had a day job, and I was married. We were thinking about maybe starting a family at some point. and I couldn't do it anymore. This was way before, Rob, you know, as you know today, with all the technology, you know. I mean, you got- All the automations. So much easier today.

Back then, you got a booking on Airbnb. You had to go run to Verbo and block off the calendar and all this stuff. And I had a day job, so I kind of pumped the brakes there. And we got back into long-term, started buying that stuff in Chattanooga. Ended up, and let me just fast because I tend to talk a lot. I ended up with like 20-something in Chattanooga. And then it went on from there. Then we actually went back to vacation.

Wait, 20-something units? Doors, yeah. Over time, several years at this point, you know? Okay, okay. Definitely didn't happen overnight. And were they all short-term intels at that point, or were you starting to rebuild the long-term side of it? Yep, after those five in the mountains,

we went back to long-term because I was in charge of the management of things, and I said, you know, I can't deal with these reviews anymore. This is back before there was automation. And so we started getting back into long-terms. And I bought about 20 doors. Again, over many years. I don't want it to sound like it was, you know, we just had, we were regular people with regular jobs. But it goes to show that you were consistent with it and you were always putting whatever you had, whatever nest egg you had towards your portfolio.

So now, 2023, where are we sitting at door count, short term rental count, unit count? Give us a quick snapshot there. Yeah, so after that, we get back in the short term. I have eight of those now. I have eight what I would call vacation homes in beach and mountain markets. And I do have, I mean, I've got multifamily. I'm somewhere around 300 units, no partners, just my wife and I, and a lot of hard work and sweat. And, yeah, so I've got apartments in Omaha, which is where I'm from.

So big roots there and several apartment buildings in Omaha. And I also have a more, I still buy a single family home long-term rentals to this day. So I'm a little bit of everything, really. I got single-family long-term, deep-tex, long-term, multifamily, small-multifamily, medium multifamily. and of course the vacation homes, which have always been our kind of our flagship. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real,

tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought-after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals.

And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund. This and other information can be found in the fund's prospectus at Fundrise.com slash flagship. This is a paid advertisement.

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to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. Sure. Well, I think what's really interesting about your story is you started in the long-term side of things. You then get short-term rentals. And I'm sure you quickly realize like, oh, man, I'm making 100 or 200 or 200 bucks a month on long-term. On these short-term rentals, I'm making $1,000 or $2,000. And then you start rebuilding the long-term portfolio.

the multifamily stuff. So you're in this unique position where you've built up the short-term rental portfolio. You've come to the dark side, as we say. You've made a lot of money in the short-term rental space. So at what point does one start to decide, hey, I kind of want to, you know, cool my brakes a little bit, if you will, and go back into long. I think you mean pump your brakes or cool your jets? You said a combination of the two. Well, pump your jets. I just want to do to come back and look like a hero, David. That's all. Hey, can you pump your jets, please? So anyways, you're cooling your brakes here and you're like, I'm going to get back into multi-pan. And what was that thought process? Like, why kind of have a departure from

short-term rentals? Yeah, you know, I mean, well, for one thing, if you're doing vacation rentals, right, the way we do vacation rentals, they're big purchases, you know, and even back then when we first started, they weren't. I mean, they weren't, you know, a giant, like something that you're going to put on TikTok and impress people, but it was still way more than it would be to buy a long term. And so, you know, that's a pretty good way to run out of money quicker is to buy some vacation homes as far as down payments are concerned. But the cool thing about the vacation homes is that, man, and they're really the best, to me, they're the gateway drug. I love them. I still do to this day. I love every minute of it. And I enjoy all aspects of it.

showing these folks a good vacation and, you know, growing up where I come from, going on vacation was a huge deal. And we couldn't afford to fly. And you get in that car and it's just like, man, your whole two years of your family's money goes into that. So I do enjoy that aspect of showing my guests a good time, which doesn't get talked about enough, quite frankly. And then also, and it's a 30-year fixed on generally what can, you know, an average vacation home is going to be somewhere around like $800,000 in a actual real beach town or whatever. Sure. Yeah, nowadays, for sure. You know what I mean? So that's a great way to deploy some funds on a better loan that when you can get in a lot of cases, because it's a single family home, you can get a 30-year fixed. Talking about better loans in 2020 is not really all that, you know, good of a topic. But you know what I'm saying. But absolutely. Yeah, what was the question? Well, you know, at this point, I guess I'll make it even more clear. Like you're starting to kind of move back into the multifamily. How do you choose what to buy next? Are you still looking at, Oh, yes. You know, making your short-term rental portfolio larger, or do you want to just keep going, you know,

dead on into the, uh, dead on into the multifamily space? So yeah, I mean, multifamily at that point in my career was probably a pipe dream because, again, that's a lot of money. Uh, but I knew that I wanted to keep buying rental real estate. And I, uh, again, this, back when I first started buying short terms, um, you know, it was harder back then. Today, you know, I don't want to say it's easy. Nothing in real estate's easy, but it's definitely a lot simpler, more simple than it used to be.

So I was like, man, I can't handle the management of these guests and the reviews and the platforms and everything and my day job and my family. So I went back into long term. Had it been today, had I done this exact same thing today, I probably would have stuck with short term a little longer. But that being said, I'm happy with the eight. I really think there's a threshold there. You know, if you get to eight, ten, real deal vacation properties, you know, that's probably as high as you really want to go because, you know, you're talking about building out your own management company. Yeah. Which is awesome.

That's what I have. And I enjoy that very much, but it's not something I want to scale. Because, you know, the whole point in having a management company, I mean, to me would be to build it up big enough to sell it for, you know, a percentage of EBITA. And you can't really do that. You could do that with your own properties, but you'd have to have a lot of them, you know. So, yeah, I mean, for a couple of reasons. It was, I do the management, right? So my management stress load, I did, was getting too high for me.

And also down payments on vacation homes is, you know, it's a big burden. So we pivoted back to long terms and duplexes. And then eventually, you know, eventually everything just steamrolled. And it was just a natural evolution into commercial real estate or the multifamily in my case. And everybody stays in real estate is going to head down the commercial real estate road. Guarantee, you know, and it just was a natural progression. Absolutely. So I guess to, if I understanding it correctly, it's like you built a really great short-term rental portfolio.

You're at this sort of inflection point where the management starts to get. get a lot crazier past eight to ten. And then your money goes a lot further, really being invested into commercial real estate multifamily buildings. Is that about right? Yeah. Yeah, pretty much. I mean, it was more of the single family long terms at that time because I could buy one

for 100 grand, 150 grand, and just keep picking them off. You know, for me, it was like, dude, all I need to do is focus on 300 bucks at a time. 300 bucks at a time. Slow down. Yeah. Take it easy. And all that, you know, and now fast forward to today, 15 years later, you know, all those $200, $300 chunks from 15 years ago, I mean, I've got debt paydown on top of that.

You know what I mean? And rent raises and equity and whatever else goes along with exactly why we're here and what bigger pockets teaches. So no-brainer. That's pretty impressive. And I think that's the interesting thing about short-term rentals that one feels, once you're making $2,000 or $3,000 a month on one or two, you're like, man, why wouldn't I do like a hundred of these? And it really is tough to scale the short-term rental. And so I kind of see people doing sort of what I'm trying to do oftentimes, which is you do the short-term rentals and then you go into boutique hotels or renovating hotels, because that's like the evil side, right? The dark side of short-term rentals, going the hotel route. Or what I'm really trying to crack right now, and I'm not sure if you've,

if you've gone down this rabbit hole, is buying multifamily, but really splitting up those units into three types of rentals, short-term rentals, mid-term rentals, and long-term rentals, so that I can at least stay true to it because I feel like that's a really great way to diversify and make your multifamily building a little bit more dynamic. It's kind of doing a hybrid of everything. Have you messed around or kind of ventured into that side of things with any of your multifamily units? I know, but I love where your head's at. And again, for me, I never really, it wasn't like I'm going to do short-term.

And I'm not saying it was for you, but to me it was just like they're two different animals and I kind of keep them separated. But I love it for you, man. Dude, because you're right. The next step for somebody who's got six, eight, you know, Airbnbs, if you will, vacation rentals, short-term rentals is going to be a hotel. It's just a natural progression. You're going to go that direction and you're going to start bringing in other people's money

because you're going to run out of money, guaranteed, you know? So, you know, you bring in other people's money and you, you, again, it goes back to the very early principles of bigger pockets. Somebody's got to be the sweat equity because a dude with all the money, you know what I mean? So it's just a natural progression. and we're seeing that a lot of fun. And Rob, I'm super excited for you, man. It's an awesome, it's an awesome situation to be in. And I can't wait for, you know, what's next for you. Get me in on it, man. Let's do a hotel. You know what I mean? So. Totally, man. Yeah, it's a, I'm kind of at those growing pains now. I've got 20 Airbnbs or so and then a 20 unit motel. And really,

that came from David because David was like, well, every time you buy a short term rental, you're buying another job. And I was like, yeah, that's true. So it does feel like the natural way to scale is kind of not necessarily increasing doors, but how far can you make your time go? So for anyone that's in the short-term rental world, the short-term rental market that wants to follow in your footsteps, what would you recommend to those investors who want to kind of venture out into multifamily from short-term rentals? Keep an eye on your money. 100%.

You got to know where your money's at. You know what I mean? So take your time, go slow. I build a bank account system. And basically, I just formed all these buckets in my – and I use a budget. virtual bank. There's several decent ones out there to pick from today. And you know, not a bank, you don't want a bank that you walk into the, you have to walk in there and fill out paperwork with somebody, you know, as all these people in line,

they're overdrawn and it takes forever and all this stuff. There's a bunch of virtual banks out there. And that's what, that's what did it for me. Really just changing my mindset, the way I look at money and creating buckets to pay myself for it. It's all comes from Mike McCallowitz, quite frankly. He's got a book called Profit First. Sure. And, and, and, and, And so that's where I stole most of that stuff from and that fantastic book. Can you like just quickly, what do you mean by buckets just for anyone at home that's not familiar with the profit first concept? Yeah. So in other words, you create buckets on your bank account on your virtual dashboard.

And each dollar that comes in from your rental properties is allocated to a specific purpose. Because I see it all the time where people come to me and this and that and then come to find out they're commingling their money that they were making on this property with the, the Amazon account where they buy their kids soccer shoes. And you can't do that. You're going to go broke. You're not even going to know you're broke until you're broke. And the way you're going to find out is because that mortgage is going to hit. And you don't have enough money in there to cover it because you were not paying attention.

You know, I create all these buckets. And there's percentages that go into each one based on, you know, how important they are, like CAPEX buckets. Now, of course, that probably should come from your day job if that's possible for you. But it wasn't for me in a lot of times. So I had to make sure I build that up. So I have enough money for a roof sitting around. And I just created a system around that. I thought of it as a career, man.

This is going to be my new career. I'm going to really do this. I'm going to knock it out of the park. I'm going to learn my trade. I'm not going to just buy three houses and rent an Audi and put it on TikTok, you know, which sounds awesome too. I'm not saying that's, you know what I mean? Go ahead.

Do that. That sounds like a lot of fun. But, you know, so a certain percentage goes towards CAPEX. A certain percentage goes towards, you know, regular old daily expenditures. like your OPEX account for your mortgage and your electric bill. If it's a short term, you got to pay your electric and your cable and all that. And then, you know, you have really the most important bucket would be your investment account. And that's where all your funds got to be thrown into because that's where you go buy your next property.

And if you, if you're separating all those funds and that account becomes like the most important thing in your life other than your family. And because that gets you to the next deal. We were, I mean, I was selling stuff, you know, in the early days selling. We sold a guitar or two Because we're you know We got all kinds of crazy rock and roll stuff I sold a car back in the day I sold I always had a really cool like

Crazy rock you know like Hot rods And I had when we when we first started doing this I sold I had a 66 Al Camino Believe it or not And threw that in the investment pile You know what I mean And then years later

By 40th birthday Wifey said you know what Let's get you another car And it was because all that hard work and busting our ass and paying attention. You know, so make sure the money's allocated where it needs to go. It kind of is dawning on me that you said you own 300 doors, and then I just heard you talk about this intricate banking system.

Do you have 300 bank accounts? Excellent question. Now, that's where it does get complicated, and it has actually, be honest, it's gotten more simple over the years. because in the early days when it was like 20, you know, 15, 20, 30 doors, each, maybe not each property, but each type of property had its own system. And I still kind of do that today. And I don't have as many buckets as I used to.

Like, for instance, there'll be one giant bucket for all of these entities that becomes the investment account as opposed to each, back in the day, each one of these entities may have had its own investment account. So I separate things. Well, everything's done, you know, I mean, you're going to need to get a lawyer involved. That's way over my head with all this corporate structure and disregarded entities, et cetera. But, you know, yeah, so each entity holds X amount of properties, and each entity, of course, has its own bank account because you can't co-mingle funds from entity to entity anyway, right? So, excellent question.

I do have a lot of bank accounts, but it's more streamlined than it used to be. Sure, sure. So going back to the short-term mental side of things, I mean, you have a very, yeah, It sounds like you've done everything. You're pretty much across the spectrum just nailing every single thing that you do. The short-term rental market has changed a lot in the last two years, really, from, you know, the past five years before that. But really in the last year, I feel like we're seeing a decent amount of changes. It looks very different, the entire market.

Do you have any recommendations or any tips for people that want to just break into short-term rentals in general? Yes, Rob, and I love you for asking that question. And, again, it's an honor to be here. But so, you know, it is a completely different thing. It's completely different. When we first started, and again, I didn't even know I was getting into short-term rental. You know, I didn't even know that that was like a term. I just was buying a house to rent out, and we were renting it at a different, we weren't renting it on Zillow.

We were renting it on Verbo, you know. And then, of course, Avery, my wife, let's not forget, I am married to probably one of the most successful real estate agents in history. Let's throw that out there. She's amazing. She, of course. She's awesome. Thank you. She did write the bigger pockets book on short-term rental, short-term rental long-term wealth,

huge fan of hers. Don't worry, Rob, I got you. I got you. Here it is. You got it. Nice. And everybody loves Avery. So she's like, I mean, she's my secret weapon.

You know, she's amazing. Everything she touches in real estate. She's just got this uncanny, natural ability to pick deals, you know. So let's not forget about that. My ace in the hole, she's fantastic. But when we first started and she started kind of getting bigger in her career with the sales and all that, man, it was literally like we were standing on the top of buildings like, hey, you can buy a house and rent it on Verbo and you don't need to pay a property manager because Verbo and Airbnb do all the dirty work for you and this and that and nobody believed us. And now it's like, I mean, maybe it's also because I'm slightly more immersed in it. And Rob, I'd love to hear your take on that.

But, man, it's, for one thing, it's way more common than it used to be. I think back in the day, especially in the Smokies, like, you could look at all your competition and still find, you know, pretty janky furniture and cell phone photos. Then we saw this adjustment where everyone's got nice design, nice furniture, professional photos. And now I think the people that are really winning right now are the people offering really unique or very experiential amenities, right? like the indoor pools or hot tubs or outdoor environments, game rooms, arcades.

Those are the people that I typically see being the top performers, really in most of the markets that I'm in. Yeah. And, you know, you hear a lot of this Airbnb busts and saturation and things like that and vacation rentals. And, I mean, all I can do is, man, is all I can do is say is my property's are booked. They're doing just as well as they ever have.

And, you know, it's like with any business. You get more people involved. Really, quite frankly, what you're doing is getting more people involved that probably aren't going to be all that great at it. And so I do see a lot of that. I mean, in my opinion, if you're going to get into renting a vacation home, you know, you're really only competing with like 3% of the market that's any good at it, quite frankly, you know, because most people, first of all, most people that can afford a

million dollar house are going to put it with a property manager, a third-party property manager. And there's nothing wrong with that. Let it break even, maybe even lose a couple of bucks and you get debt pay down and you enjoy it with your family. there's nothing wrong with that. That is the best reason, honestly, to get into vacation rentals is because you can use it. There's no lease on it.

It's empty whenever you block off those dates and you want to go there with your family, man, that is so cool. And honestly, when I first started, I didn't even care about that. I never even thought about that. But now, again, 15 years in, all those memories I've created with taking my family to these properties is priceless, you know. So, anyway, long story. You're absolutely right. The market share that is actually any good at doing what you do, Rob,

it's very slim, in my opinion. Yeah, yeah. But I mean, you know, I've seen, I've seen the bar get raised so much in the Smokies. And so that's what I've been combating. I don't know if you saw it, but I built like a treehouse deck in my backyard in the Smoky Mountains. I'm building a little tiny house village down there, too. That's still kind of happening and everything. But I'm really just trying to figure out like, okay, I'm a little bit farther, right? So I have to make up for it. And I'm overcompensating with amenities at this point because I do feel like that's the only real competitive edge I can offer over someone that's like dead into the location. So I think it's a little bit more, hosts have to be a little bit more defensive with keeping

their revenue these days. Oh, absolutely. Things have changed 100%. I think you're going to see a lot more sellers too, though, Rob. And I think you're going to see some folks that weren't really cut out for rental real estate in general. I mean, there's a lot of real estate sold in 21 and 22. And I think the market's going to shake out, man. I think you're going to, you know, you and I are going to come out the other side of this with a little bit more market share, to be honest, because we've got what it takes. Yeah, man, let's talk about that because I think I recently saw you post that you're seeing a lot of price cuts.

And I haven't really looked at the Gatlinburg market on Redfin because it was just so competitive for so long, like every offer, couldn't get it. I've noticed I'm getting now all my favorites from like the past couple of years showing up on Redfin getting price cuts. Are you seeing that happen regularly in that market, or is this just anecdotal for me? It's honestly a lot of markets. And you're a watch guy, right? So it's exactly like what you're talking about.

I've set up, you know, like back, you set up a in-stock notice on a watch you like, right, like three years ago. Yeah. No way you're getting that watch. No way. But now I'm getting those in-stock notices, you know. So the market's changing. The world is changing. The economy is changing?

And is it going to happen overnight again? No, real estate is a patience game, 100%. And I learned that. I learned, again, everything I know from you guys. So it's difficult for me to even give advice in front of you guys because you're all, you're such rock stars. But, you know, so to me, as time goes by, we're going to see some folks that just decided they weren't cut out for any. I mean, even even even talking about just rental real estate. Same thing's going on in motorhomes.

You know, same things going on in jewelry, a lot of different types of where people are just, you know, the whole world is changing. I'm not here to talk about the economy or politics or anything like that. I will. Things are changing really bad. Toughest market I've ever seen. A lot of it is because the expectations that were delivered through not this podcast, but other podcasts are frankly not accurate.

Real estate is often tied to passive income. They almost become synonymous. When you hear the word real estate, you hear passive income. It creates this idea that you're going to buy it, own it, and someone else is going to take care of all the stuff you don't like. Imagine if we talked about raising children. children like that. Like, hey, have a kid. It's passive fun. The nanny's going to do this. The chef's going to do that. All these other people are going to change diapers and you're just going to end up

with a fully adjusted, well-mannered adult that loves you dearly and takes care of you in your old age. It's not like that. Nobody has a kid expecting passive results, right? Well, real estate is not exactly a kid, but it sure feels like it when you own it. It's like this is your baby, right? You get emotionally attached to the things in your portfolio sometimes. If you want to own especially short-term like we're talking about. I love what you said earlier, Luke. You got to be good at it. There is a skill to managing these properties.

And if you choose to delegate that to other people, you could get lucky and happen to come across an amazing property manager that does a great job with your property. However, just like when you find an amazing contractor, they don't stay available for long. They start raising their rates. They start becoming harder and harder to get a hold of because the cream rises to the top.

And what I've seen is when you find that great property manager, they grow so fast. They can't take care of your property. They got to scale. They got to go hire people that are less than amazing that end up doing the job. Your performance goes down. You blame real estate. What each of you do is you've got your own in-house solution where you know the asset class,

but like you said, it limits your growth. You have to think smarter when you realize I recently had this epiphany in a sense that I hire a bookkeeper. I love the bookkeeper. Then the bookkeeper gets busy. They hire a W-2 worker. and then that person does not do a good job, my books start to suck. A higher poverty manager, they do great.

They delegate it to a worker. My performance goes down. Like every time someone grows, it becomes incredibly hard to keep the standard that's needed. And then that affects my wealth. And then I got to jump in and I got to take it over because we're losing money and things are going wrong and the books are a mess. It's like that with CPAs. It's like that with real estate teams.

It is like this in life. It is so hard to grow. So what I realize is I can only grow to me. manage so much, okay? Which means when you get to a hundred doors, you're going to have to sell a bunch of them and reinvest into a bigger asset, exactly like you said, Luke, because one person can manage a hundred unit apartment complex roughly the same as trying to manage one short-term rental, right? So what the solution is, is we just go bigger. You sell $10,000 property for $1 million property. Your workload goes down by 90%, but you own the same amount of real estate, you're getting

the same amount of revenue, hopefully a little bit more. And then you can scale to 10 of those, then you do the same thing again. This is the pattern of what successful real estate investing looks like. And I'm only bringing this up because so many people have heard these stories of, oh, yeah, I've got 700 doors or I've got all these properties and it's a mess. We see what happens behind the scenes when we talk to these people that have got all these properties and they're not doing well. So, Luke, I just, I wanted to kind of ask you, like, I understand you've recently sold a lot of short-term rentals. Is that why?

Were you trying to get into less overall work when you got into multifamily? Or is it the market itself got saturated and you just saw it's harder and harder to get these things to perform? No, it actually never did sell any. I did sell two years ago and traded them exactly what you just mentioned. But, and it was those two that I had with a partner. And I traded them for bigger vacation homes. Yeah.

And I had two little ones. I actually won. I traded two little ones for one big one and got the partner out of it at the time. And, of course, we had it long enough that we were able to, you know, I mean, I definitely came out of pocket. It wasn't even Steven because I had a partner in the whole nine yards. Sure, sure. But no, not selling any short terms currently. I mean, I still have, I have ones that I've had since the beginning and never even refinanced.

Now, maybe I should look into that. Maybe not today's climate, but, you know, I don't want to do that now. Hold on. I'm happy with where my equity's at versus, you know, leverage. But no, you're absolutely right. And I have, I did, though, David, I did do. One time I traded a long-term rental. This is actually a story that's dangerous to tell because it's like too good to be true.

That very first one that I bought, the long-term rental, I ended up trading that thing with some cash out of pocket, of course, for a 26-unit apartment building. And, again, I got so lucky on that. It's not repeatable. Get not repeatable. But now that 26 unit is rocking. It was a piece of junk. And I fixed it up. And it's exactly what you're talking about, David.

You know, and it has a lot to do with the fact that I did not just leave my kids at the park by themselves. Yeah, you fixed it up. You didn't buy it and hand it off to someone else and say, fix this up for me. Yeah, no, I was in the weeds. I mean, I was doing the hiring and firing and making sure that people showed up and all that stuff and project managing, if you will. I never really showed up on property all that much. that that property was in a different state? I was just saying far too humble.

I think it is repeatable. I mean, if you got to 300 units, right, if that's where your portfolio stands today, you've proven that conceptually it is repeatable. You've done it over and over again. Maybe you won't find that exact deal again. But I think for people that are in the game as long as you have, you're always going to find opportunities.

You're always going to find things that seem like too good to be true because you, it's not just luck. It's like you are present when the luck occurs. And I think that's half the battle is the consistency of always relating in it. So honestly, I think it's a great deal, but I'm sure you'll find even crazier deals than that the rest of your career. Stand that juju my way. Thank you.

Well, awesome. David. Any final questions from you, man, before we wrap up? Yeah, Luke, I want to ask for someone who wants to do what you've done, they want to buy a bunch of short-term rentals, maybe they want to get into multifamily. We didn't talk about portfolio architecture and my theory on that, but that's exactly what you're describing. You've got different asset classes within a portfolio that do different jobs that sort of round the

whole thing out just like an NBA team needs a center. They need a point guard. They need a shooting guard. You don't want five of the same thing in your portfolio. You want different asset classes with different strengths and witnesses that kind of complement each other. For someone that wants to grow a portfolio like you and they're starting with short-term rentals, that's obviously what you're known for. What advice do you have when it comes to the management of them? I would wonder if we're going to tell someone, hey, invest in the smokies or buy a short-term rental somewhere, should they go into that knowing they need to learn how to operate that asset, And maybe in three to five years when it's performing well, they've earned the right to

hire it out to property management. Or should people be thinking when they buy it, hand it over to a property manager right away and it'll still make a profit? You could go either way. It depends on the type of person you are. You know, again, like if you're rolling hard and you just want a house to share with your family, go ahead and throw it with a PM. But you're probably not going to, you know, that's the beauty of short term and also the downfall. There's no leases. There's no evictions. But, you know, you probably pretty much have to do it yourself.

here Rob's thoughts on that. But that's, I mean, again, Airbnb and Verbo, they've put millions and millions and millions of dollars into helping us be successful. In my opinion, again, maybe because I'm that guy or whatever, I do think that if you're going to do a vacation home, like do it up right. It needs to be something that you or somebody in your family takes an interest in. Now, the good thing is, it's fun, it's sexy. You can put it on your Insta and it looks cool.

You know, and you put $100,000 long term on your Insta, and people are like, okay, you know, they don't care. So, Rob, what do you think about that, man, about whether it has to be self-managed or not? I think that you should self-manage. I mean, I don't know. I just think it's so expensive to hire a property manager in the short-term rental space. It's like 20 to 30 percent. I think it's pretty significant, right? Especially if you've got a high earning property that makes $100,000 a year.

$20,000, that's a lot. That's a lot to be paying to someone that I think until you have like five, I think you can handle it. I mean, I managed 10 to 14 somewhere in there when I had a full-time job. Granted, I was an awful employee. Like I was always leaving meetings to go handle my short-term rental portfolio. But I certainly think that three to five is something that most people can do before really opening up that conversation. I think you got to master it before you can hand it over to a manager. So you know that if they're good or not.

A lot of people buy rentals, give it to a property. manager. Property manager is not good. Property fails. And then they say, oh, short-term rentals don't work. And this has all been a scam. I hate it. And it's like, well, you didn't really do the work. And that's again why I call it the gateway drug, because, you know, if you get to the point where you're at Rob's level where you've got 14 of these things, there's a pretty good chance. You can put the next one with a property manager. And if it breaks even, you've got the tax advantages and the debt paydown. And you're cool with that. Yep. So it just all evolves. That's exactly where I'm at. Yeah, like my cash flow goals are nil now. Like, I don't care. If it breaks even and I get an amazing tax deduction

debt pay down, I'm good with it. I've making the cash flow in the first 40 units. Everything else can break even. That's portfolio architecture. Because cash flow is necessary. You need it. If you don't have it, you'll lose your properties. But I still in my life have not met the person that built wealth off of cash flow. I bet you both that you guys would agree. I don't know the person who, like you said, Luke, get the next 300. Get the next 300 a month on these long-term, Like you need to have so many stinking properties at $300 a month to build up big wealth. You could not manage them all. You don't, it's like you can't hold them all in your arms.

They'll be spilling out. It doesn't work. What builds wealth over time is buying in the right locations, building up the equity, watching the rents go up, watching the value go up, but you need cash flow in order to get there. So they kind of work together in this harmony where cash flow keeps you alive. But equity builds long-term wealth. And as you're constructing a portfolio, what we've all sort of done is been like,

all right, like Rob said, here's my baseline, these properties cash flow. The next ones I'm going to build on top of that don't need to, but I need to have a big value add component. They need to be in the best location. They need to be something like the property he and I bought in Scottsdale. That's a 20 year property, right? That's going to make millions and millions and millions of dollars over a long period of time. It's not a property that's just going to crush it coming right out the gates,

which we couldn't have earned the right to do if we didn't spend all the years grinding to build up a baseline. And I just love Luke your story here. And the other part I want to add on is you didn't get a little bit of cash flow and just quit. Say, ha-ha, my tie, here I come. I'm heading to the beach and I'm not going to work and I'm going to insta all of my beach photos. You went and build a business. Avery's still selling houses.

You guys are still working, creating additional streams of income that protect you on the downside that everyone worries about. Well, he doesn't have to go to the beach. We do live at the beach. But you're right. And hey, listen, make an excellent point, David. if you get obsessed with real estate to the point where you want it to be your whole life, there are other ways to make money in real estate besides cash flow and holding rental real estate, you know, like my wife, perfect example, or own a mortgage company, you know.

Yeah. And again, back to your, back to your Phoenix property. You guys can use that thing. That's the beauty of vacation homes, man. You guys can go there, have a retreat with your family, your friends, your church, whatever the case may be, and use it whenever you want, create memories. Man, that's priceless, you know. So, and you're doing the right thing there with that long-term play.

That's a big, that's a big house. You know, I mean, that's a big play. And quite frankly, who cares if it cash flows, man? Think of how much equity you're going to have paid off by the, you know? Oh, dude, the tax savings on that are, I texted David the tax savings on that. And I was like, not bad, right? And that's what you see when you get into the higher levels. That cash flow is a very simplistic way of looking at real estate.

Please don't go screaming and come after me with pitchforks. Shrek in the swamp. I'm not saying it doesn't matter. The purpose it serves, I've always said, is defensive. It keeps you alive. Thank you, Luke. If people want to reach out and find out more about you, where can they go? Yeah, the short-term shop.com. I'm not really all that active on socials, but yeah, the short-term shop.com and, of course, Avery's book, Bigger Pockets. And by the way, guys, I am one of the instructors on the Bigger Pockets short-term rental boot camp. So you can come party with me on the boot camp, which is a lot of fun. We would love to have you over there. And yeah, guys, I can't thank you enough.

I'm such a huge fan. And Bigger Pockets, 100% completely changed the landscape of my life. So thank you so much. Rob, you said so many insightful things today. I am sure that everybody's going to want to follow up with you to learn more about what goes on in that brain. Where's the best place for them to go? Find me on YouTube. That's going to be the number one place.

Rob-B-U-I-L-T. I talk about short-termittals, life liberty, the pursuit of real estate and everything in between. What about you? You can find me by looking up at David Green 24 on all your favorite social medias or on YouTube as well, or David Green24.com. Luke, thanks for being here, man. Great to get to meet you and super cool to hear that you've been a fan with bigger pockets

this whole time, that you even remember hearing me the first time that I showed up on the show, little of us knowing that we would end up where we are today. So if you're listening to this now and you're wondering if it's ever going to happen for you. Trust me, I had no idea this was going to happen to me. Luke had no idea this was going to happen to him. We're still trying to figure out how Rob ended up with the microphone on this show, but I'm sure he would say the same thing. I had no idea. Keep on dreaming, even if it breaks your heart. This is David Green for Rob the No Idea Wonder, Abas Solo, signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new

episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoke content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own.

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