How he TURNED $100K into $2.5M with 4 Cabins

how is it that these cabins that were built with only an initial investment of a hundred thousand dollars and in less than a year later value as high as 2.55 million dollars now most people would assume that to build an entire home would cost significantly more than a hundred thousand dollars let alone for them with a view and they'd be right and in theory to reach that seven figure Mark in one year this property would have to generate over two hundred twelve thousand dollars a month or that's about seven thousand dollars a day every single day but I know that's not true there's another way now I've seen a lot of people invest in properties airbnbs and unique spaces and all twin fail and in this case it's not really about funding or location and it's not really about the structures either so I spent the last couple of weeks studying the area staying at the property and then even low-key interviewing the owner and Builder without him really knowing foreign and I did all this to learn the secrets behind the unlikely success of four cabins in the middle of nowhere to understand how two scheme buddies turned a hundred thousand dollars into millions there are five parts you have to understand each part unlocks another clue to how making millions is not about being lucky I started studying these cabins about a month ago when I was doing research for another video on unique rentals and spaces that made the most money on Airbnb and in that process I saw some pretty amazing relatively inexpensive spaces make like ten to twenty thousand dollars a month but then I stumbled across Brian's place which had not one nor two but four Scandinavian cabinets why would someone build these here as a fellow land hacker creating multiple income streams from one property is my ultimate goal but I don't get it why build four identical small cabins in a dead town of 400 people just 10 feet apart from each other these definitely won't have any if much resale value anytime in the future so you guys know me I gotta run some numbers and this is what one of those cabins is making each month and then for the year it doesn't really make much sense or does it [Music] so back when I was in Robo research mode I came across a news article from last year from a local newspaper and it's starting to make a lot more sense Brian the owner was making a big splash or is making Big Splash in the local community and was very transparent with this project to win over the people and Community now we can see this in old Facebook posts and local media Outlets he used the media to his Advantage by befriending the zoning department and building relationships with other local businesses which is really low-key brilliant since projects like this really do require community support but what's important about Partnerships are that they're mutually beneficial to everyone guess who come and stay the night they get a nice free treat and it's advertising for the local businesses which increases tourist spending and then thus local tax revenue W's all the way around it's brilliant [Music] man that smart business partnering is partially why this project is so different from most other short-term rentals there are two things that sets this project apart from what I can see anyways the land and the coffee shop next door let's start with that coffee shop now what makes this project different is that Brian owns this coffee shop too and there's not one Brian there's two twinsies except one is spelled with a Y so what appears to have happened here was that these were two friends decided to partner up and buy this 1918 Cafe back in 2019 for 460 000 they then converted it into a space where they could roast and grind their own beans and seems now to be a local favorite which is always a good thing now it also looks like the cafe they purchased came with some extra acreage behind it big bonus so they must have gotten approval to build on it or what's more likely is that they were able to split it off to create the short-term Rental Community [Music] let's take a look at their coffee shop now I obviously don't have exact numbers but having friends in the restaurant industry looking at National Data for cafes along with a few assumptions just from experience I can run some fairly accurate numbers real quick if you give me one second here okay so I think I got the numbers here they've got a pretty darn good cash flow each month with that coffee shop we can see here it's just over 2 000 a month in pre-tax profits okay now I want to take a look at those cabins let me pull up my rental analysis spreadsheet called myune economics and then give me a quick second to pull up all the other websites that I want to pull my data from like Airbnb airbn and my other sites the numbers at this property spitting out it's going to blow your mind but first we need to talk with Brian and get a few more details so I can firm up my numbers here and then they're gonna make a lot more sense but right now I I'm properly intrigued I need to book this place and check this all out for myself and booked [Music] okay so I did a bit more digging and this is really Genius of them splitting the lot gave them two separate businesses and allowed them flexible zoning they are going to be bringing more business into the area AKA tax dollars so the community was happy and they're giving an old abandoned area a facelift these are some old photos from Google street but most of these buildings were built in the early to mid 1900s and are now abandoned so the Bryants are actually creating a tremendous amount of value here not just for themselves but for the community and town as a whole it's pretty smart but here's the big brain tactic that I love they built two businesses that are symbiotic Simba what do you remember watching those Nature Documentaries and it shows sharks swimming with those smaller fish all over its body and even going inside its mouth and eating the parasites and leftovers that's a symbiotic relationship Brian squared did that here the cabin's drawing guests from out of town to stay in the area and then every morning they get up and new round of customers head to the coffee shop for breakfast and a drink win-win simply brilliant it's a fairly common strategy in business some call it owning your vertical I actually Implement a similar strategy here's my visual now I own and invest in real estate obviously so nashvilleite creative property management company I then started a Content creation business around real estate fancy way of me just starting YouTube which then turned into my program where I teach students how to do what Brian squared is doing basically so they can learn about real estate investing unique rentals and building multiple income streams from one property I call it my land hacker program and if you're interested in joining the community check out my website kyandra.com and you can see what we're doing you can even set up a free call with me or somebody on my team to see if it's a good fit for you but naturally my students my members who start buying real estate and generating a lot of income need tax guidance and strategies so I bought a tax business and a huge part of real estate investing is something called cost segregation where you can utilize your properties in a certain way and sigma significantly reduce your taxable income each and every year it's actually one of the huge bonuses of real estate investing so we added a cost segregation service to our business each business works with the other leading to a better experience and service to my members and allows me to expand upon my business where they feed each other and it's symbiotic we actually weren't planning on running into the owner at the property but we did when we first arrived and I completely failed to get my equipment and gear set up but this is essentially what we learned from this mad genius we started building right when construction prices were going up back in 2020. so I calculated everything that we needed Lumber nail screws everything and I ordered all of it it was literally stacked in piles all over the site and I saved a ton of money because within a few months things were completely gone and lumber has shot through the roof each cabin is roughly 600 square feet and it ended up costing us roughly only 175 dollars a square foot okay that's absolutely insane if you were to build these today it's going to be closer to 225 to 250 a square foot maybe even edging close to 300 a square foot now I know that you want the numbers but while we're here let's take a quick look around so you have some context of what's really going on I promise it'll be fast [Music] so this is what it's like when you first arrive everyone has their own designated parking space bam there are four cabins all identical Scandinavian design boom they're perched up on the hill that looks over the river sweet we go inside and there's a kitchen living area sleeping area super comfortable by the way and a Luxe bathroom with heated floors and a poop closet blammo speaking of the Partnerships from earlier the space comes with coffee duh they own a coffee shop Next Door beer from the local Distillery and wine from the local Vineyard which fun fact this whole area is known for its microbrews and wine they should just call this place the locals trademarked like hi Andrew The Banger part of the space that gets a lot of bookings are these floor-to-ceiling windows and private deck now we can go around back and we can check out the communal area that we can actually see from the private deck where each cabin has its own fire pit oops we sat in the wrong one and there you go communal hangout area with a fire pit wow now one thing I do want to note out is that Brian was very smart with his landscaping and used all native plants meaning that that after the first year he won't have to worry about watering or caring for them smart okay that's a quick tour as promised if you want to see more go and follow me on Instagram at Kai J Andrew I'm going to upload a bunch of photos and videos so you can see more of the space well actually we got back a little bit while ago but I've been working on my analysis of one of the cabins now I had to do a couple of estimates especially around the occupancy rates and the nightly rates by month because this area is actually pretty seasonal which is actually kind of nice because there's two peak Seasons but my research sites give me a pretty high confidence in my accuracy here take a look so I just ran this I'm sure you can see that you know what I don't think that's gonna work really well let me do this here you go by the way you can download this spreadsheet I use it literally probably thousands of times already it's just my analysis of short-term rentals and it's basically called youth economics for um real estate essentially so after filling this all out and putting in my assumptions based off of what I know of the area just from my experience then obviously cross-referencing a couple different sites I got a whopping 1119 a year wait a second though that's actually really good our Mantra is the first door gets us to break even now the first cabin may only be profiting a thousand bucks a year but cabins two three and four are profiting 50 319 each year because cabin one took care of all the expenses for a grand total of a hundred and fifty two thousand and seventy six dollars each year in profits now I don't care who you are that is a handsome income for anybody off one property and one of the secrets to achieving that success is being the big fish in a small pond now the city has a population of like roughly 400 people and it relies on people stopping off the freeway for a coffee break or to fuel up now there's a handful like literally 30 or 40 other rentals very basic rentals in an area but nothing like this the deeper secret though is that there's a really popular town about 10 minutes down the freeway and popular spots on the river and mountain that are all super close now okay that it still doesn't make sense though right a hundred thousand dollars for four cabins and now worth 2.55 million well yeah yeah careful with the information that I'm about to share with you you'll know just enough to be dangerous there's a lot of other factors that we haven't gone into yet like zoning permits construction process financing and actually how to find a location like this so you are the big fish and you're not just entering a pond with a bunch of other big fish and then you're just a small fish I think I might have taken that metaphor a little bit too far but you guys get what I'm saying and that's why I created a land hacker Community program where there are literally hundreds of life-minded investors just like myself and I'm sure a lot of you are watching this right now who are building projects just like this seriously go to my website step a free call with me or my team to see if you're a good fit to join and work directly with us [Music] so we already know the cost of this build four cabins multiplied by 600 square feet per cabin multiplied by 175 dollars per square foot equals 420 000 in total add in furniture and artwork that's another 30 000 landscaping and miscellaneous that's maybe another 50 000 and we're all in at 500 000 now here's the real crazy secret because of zoning and permits these are not considered normal homes these are hotels therefore the Brians were able to get an SBA loan with 20 down which on five hundred thousand dollars is a hundred thousand dollars there's the financing in this case an SBA 504 loan for new construction of a business facility foreign let's talk about why these guys are so smart and pretty rich now too remember 151 000 in profit they make each year which is also backed up by my other estimates and me cross-referencing the data well the real number that we're interested in is noi or net operating income ebitda for you finance folks which is a higher number 178 476 dollars because we do not include loan payments now why is this number important well this number is incredibly important because this is how you value an income generating real estate investment this is the number investors care about they don't care about the sticks siding or Windows their primary concern is how much profit does an investment spit out each year then we apply something called a cap rate which we've talked about before in the past so current looking at comps on the market we are seeing that hotels and motels and Inns are selling in the seven to nine percent range or seven to nine percent cap or cap rate now we divide that out out and we see the value of this property is valued between drum roll here [Music] 0.55 million dollars it's that clean cut and dry when it comes to investment or commercial properties and that's why I preach Equity now if the Two Brians are able to keep this up they will have a valuation in the millions off of an initial investment of a hundred thousand dollars and the crazy absolute insane thing about all of this is that that doesn't even include the coffee business or the land that they've already split up they already have other businesses in the works right now to create even more income streams on the same property this is like the ultimate land hack like a food truck Hub sauna Rec area and even an event hall for live music now cash flow from Real Estate is q and it allows you to buy that Lamborghini Equity though that's the real game if you want generational wealth and that's what the real entrepreneurs and investors that's what they pursue and this is a prime example why but that requires strategy in a plan which is tough to get sometimes when you don't have the experience yet and that's what we focus on in the land hacker community and programs so seriously come schedule your free call if you want to learn more about projects just like this and how you can do it too if you thought this project was really cool you got to see how this blue collar worker retired early literally in his 50s with just one well-placed tree house [Music]

Channel: Kai Andrew

Views: 919,141

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Id: kLi26v-av4U

Length: 16min 0sec (960 seconds)

Published: Sat Oct 08 2022