Tiny hotel = $550k your first year

Today in < 10 minutes or less we’re serving up:

• A gent who made $1M+ his first year as a rental property owner at age 25.
• How said dude ADDED an extra million and automated the property mgmt +1 year later.
• A partnership with an influencer that banked a quarter milly.
• How you can get in on this kinda cash flow, even if you’re out in the sticks.

TINY HOTEL, NOT SO TINY PROFITS

So there was this guy, who loved the Pacific Northwest and wanted to bring a little of that luster to small-town Central Texas.

But it’s so dry down there, that there’s a perpetual fireworks ban and it hasn’t rained in weeks.

Not my idea of an oasis, but he says he still made a million in bookings his first year and it’s automated AF.

Okay, I’ll bite.

I can’t say no to a sexy software stack, but I’m still apprehensive and think it might be a little too good to be true.

Most people stay away from rental properties and complexes in smaller cities because they think…

• There’s a sh*tload of competition and you’ve got to sink thousands to see the return on bookings
• People are only interested in the BIG ticket vacation destinations—LA, NYC, Disney World…you get the idea
• There’s the “R” word on the horizon (ahem recession) and nobody is going to want to take a vacay when that’s rearing its ugly head

Consider this one debunked, my friend. Meet Isaac.

Grew up in a family of ten. Had the entrepreneurial itch since six. Never spent a day in a college classroom.

Isaac wasn’t into the idea of owning a bunch of apartment buildings in a big city—he wanted to keep it small, simple, and streamlined, all while stacking some major cash.

So he built a five-acre property with seven A-frame cabins a few miles off of IH-35 in Central Texas.

And if you’ve never been to small(-ish) Waco, Texas…spoiler alert for ya…you won’t see architecture like this in these here parts.

Smack dab in the middle of Austin and Dallas, Waco isn’t really a vacation destination, but it’s a nice weekend getaway for the Central Texans, parents visiting their college kiddos at Baylor University, or anyone road tripping out to Chip & Joanna’s Magnolia Market.

Isaac bought the land for $140k in cash and made $550k net in the first year, $1M plus in total sales.

He also did something…honestly kind of extreme…even for me.

He cut out the property management service and kept management in-house. His costs for managing his A-frame empire are only 5% cost of sales (the industry average runs closer to 20%).

So 15% saved on management fees comes out to…carry the one…add in the five…$150k in cash back in Isaac’s pocket, just for outsmarting the property management process.

More of this, please. K thx bye.

Intentional design is EVERYTHING. Here’s the move:

Remember Waco isn’t exactly the culture capital of the world.

For years, it was a speed trap town, until the trifecta of Baylor University + Magnolia + staycation central created a kind of perfect storm in the area that’s great for cash flow.

Here’s the thought process that went into the property design strategy:

1. Create the vibe: Scandinavian-inspired design, Instagram-worthy photo ops, once-in-a-lifetime experience, thoughtful and cohesive design concepts across the property
2. Every event space imaginable: swoon-worthy lodging, common areas, and enough space for group events and weddings (the property is an all-inclusive destination in itself)
3. Control the ambiance: removed 200 dump trucks worth of “jungle” and got rid of the swamp vibe (and the mosquitoes)
4. Mother Nature is your selling point: built + leveraged local hike and bike trails, added hammocks and fire pits, and was close to ponds for ~the aesthetic~

The best part about it is that this strategy could work in pretty much any city, as long as you’re building somewhere that’s outside of a major metropolitan area.

Sounds great, Codie. But what about the recession?

I get it, but also…hear me out, ‘kay?

Recessions cause changes in day-to-day budgeting (think groceries, car financing, local services, etc.), but…

During a recession, local vacationing increases by 7X or more.

No pricey flights to Europe or foreign exchange fees. Just a tank of gas and a little R&R in a nearby town.

This is why your design strategy is so important.

Let’s say your property only offers guests somewhere to stay.

Sounds great in theory, but when your listing is up against Bob from next door who has fire pits, and hammocks, you’re probably gonna lose out on some business. Them’s the breaks.

Have enough space on the property for bigger groups (weddings, events, team off-sites and retreats)…then you’ll unlock the flexibility to host more people.

You become a full-stack destination, not just some place to chill overnight.

Last stop: here’s how I’d sell your property empire out with less than $1000 bucks in ad spend.

Enter: The Influencers.

1. Make a list of influencers in the big cities next to your property. The sweet spot is travel or lifestyle bloggers. (Pro tip: head to Pinterest and search for “where to stay in [your nearest big city],” head to their website, then cross-check their audience size on Instagram and TikTok to see if it’s a match.)
2. I’d reach out to a few of the influencers on your list who you think have people in their audience that would be into your accommodations.
3. If they pass the sniff test, I’d offer a weekend stay (two nights free will do) in exchange for content posted about your place (i.e. an Instagram post, a TikTok video, a blog post, and email newsletter, etc.) showing off their trip.
4. Then I’d offer them an affiliate code—a certain $ or % payout for any customers that book using their code—for when they post about our property.

P.S. Isaac followed something similar to this approach and offered ~140 nights of free stays to ‘ze influencers which turned into $250k in revenue and 50k followers for him on Instagram.

TLDR

Rental properties can be…kind of a lot…but design with an aesthetic that’s unique to the area, cut out the property management, and enlist the help of influencers, and you’re on a whole different planet.

It’s a little creative with a lot of cash flow.

And if that’s the case, sign me the f*ck up.

***Do you want us to do a deeper dive with Isaac if so respond YES to this email and we’ll go film there.***

CONTRARIAN EXTRAS

The Not So Boring Section:

• Terr(Think)ific! – If you want to monetize your expertise, then you need to have the best tools and resources.
• Contrarian Reading List – On the hunt for great new book recommendations? Our friend over at Alex & Books curates the best-of-the-best reading lists to turn you into a voracious reader.
• Fractional Franchising – It’s now easier than ever to invest in a franchise and cashflow passively.

Businesses that Never Fail? 6 Businesses with Amazingly Low Failure Rates [Backed by Data]

Most businesses fail. In fact, 2/3 of all businesses go under within 10 years. This video goes over the 6 types of businesses with the highest success rate, so you don’t have to guess!

This week’s YouTube is brought to you by our friends over at Flippa, where you can get a free valuation on your business in just minutes.

Stack that cash my fellow contrarians,

Codie & the Contrarian Team