346. Using Business Profits to Invest In Real Estate: How Thanks for Visiting Made $100K+ Revenue and Increased Property Value by 1M+ Before Opening Day

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Welcome to Cubicle to CEO, the podcast where we ask successful founders and CEOs the business questions you can't Google. I'm your host, Ellen Yin. Every Monday, go behind the business in a case study style interview with a leading entrepreneur who shares one specific growth strategy they've tested in their own business, exactly how they implemented it, and what the results and revenue were. You'll also hear financially transparent insights from my own journey bootstrapping our media company from a $300 freelance project into millions in revenue.

Hi, everyone. Welcome back to the show. I am bringing back two of my favorite people and returning guests to Cubicle, the CEO, Sarah Karakayan and Annette Grant, the co-founders of Thanks for Visiting. I'll give their official intro in just a second.

But Sarah and Annette, I'm so happy to have you back. We are thrilled and honored. We love it. We love talking with other women about business and numbers and investing and growing their wealth.

So we feel right at home with you. Thank you. And I was telling you, too, before we hit record, when we were thinking through this series and mapping it out, we knew we wanted, you know, a perspective on real estate as a means for divesting some of your business profits as a, like you said, a channel for growing your wealth or a money multiplier. And immediately you two were the first people who came to mind.

I was like, we have to get Sarah and Annette back. So very excited for you guys to join us. For those of you who haven't met Sarah and Annette before, first of all, listen to their previous episode on our show. We'll link it below in the show notes.

But Sarah and Annette, like I said, are the co-founders of thanks for visiting and the creators of strategic host a coaching program that has helped over 1000 short term rental hosts run their properties like real businesses with members collectively generating $4 million plus in monthly revenue. I actually had not heard that stat before from you guys. So I was blown away like seriously huge congrats to you all and your community. That's incredible.

That's like life changing business and and really fueling you know, local economies. And in addition, their podcast has over 3 million downloads. Their YouTube channel drives more than half of their new clients. And prior to launching Thanks for Visiting, Sarah built and sold a $5 million plus short-term rental property management business.

So very impressive resume. Clearly, you two know a thing or two about real estate and short-term rentals. I think today's case study, right, on how you guys have used some of your business revenue or profits from Thanks for visiting to open a glamping retreat called Rich Hallow Retreat and how that's generated six figures before you even open to guests. Just to provide an additional layer of context, I know you two have previously partnered on other short-term rental properties that you own as part of a portfolio.

I just want to make sure, is this glamping retreat, the Rich Hallow Retreat, is this just the newest STR addition to that portfolio? Or have you removed yourself from that previous portfolio and this is now your main SDR property. I mean, this one doesn't compare in size at all to our previous project. So it's a portfolio all its own.

It's 134 acres, 30 many phases. So this is in addition to what we've done together before. We still have our portfolio together. In this venture, we have, it's still Sarah and myself, but we've added some additional strategic partners on this project.

That makes sense. I think my initial question is, since you've already built a very successful STR portfolio, you kind of have your tried and true like Airbnb style properties, usually like single family residences and whatnot. Why make the drastic change into taking on, like you said, a huge undertaking, right? Like over 130 acres.

That is no small feat. Was this purely kind of like a personal challenge to kind of stretch beyond what you've done before? Or was a different motivational reason for why you decided to pursue this project? I'm actually excited to hear Annette's response.

This is probably something we should have, I don't even know if I could go back to a time and share with you, Ellen, that we've actually had this exact conversation So I just being honest with that For me I bet you it about a third like you said just a personal challenge There is a market about an hour south where our property is that is very popular for drivers to go to from Cincinnati Columbus Dayton Ohio and Cleveland And so drivable destinations thrived during COVID. and there are more studies and reports coming out that drivable destinations for the short-term rental asset class is one of the best ways to earn a return on investment and to also withstand the test of time.

And all of our properties are in metro settings. And so to diversify this asset class that Annette and I are experts in, it made sense to me to get out of the metro market, to go down an hour South, to really be a part of that growing economy. And people really want experiences, not that you can't get that at our metro properties, but obviously going into nature and being able to serve these other large metropolitan areas. I believe for Anatomy was a really smart wealth building move.

So for me, it was like challenge, but also a strategic next step into going into something a bit bigger, a little different. And I really believe in being a practitioner to what we teach. I understand that there are a lot of coaches out there that kind of did the thing and they coached for years. But for me, the real estate is always changing.

Hospitality is always changing. And so to be in the game still helps me be a better coach, too, and leader in this space. So that was important for me to always be learning and in it with our clients. So that's my reason.

And I don't know if you could fill any gaps there. But I agree with everything Sarah just said. And in addition, for both of us to truly develop something. So we are septic, you know, all of the things that the roadways, that's a layer deeper that we haven't had experience with.

And like Sarah said, to really, I guess, pun intended, get in the trenches and understand from the ground up. And quite truthfully, they're not making any more land. And it feels very solid. There is this feeling that comes with the amount of land that we purchased.

It sparks our creativity. It sparks this level of a different investment that we have. So it's stretching us. But it's interesting.

It's stretching us, but it feels very stable in that it's a purchase of land. And so interestingly enough, we're in the online space, but we made this really like old school purchase of acreage, of land, not just a smaller patch, you know, within a community. So the feeling that comes along with it is very, very different. And so we're excited about that portion of it too.

I love that for so many different reasons that you guys just shared. I think what's interesting too is, well, two things to consider here for our listeners. One, you do run a very successful coaching and media business, a very well-known brand in the short-term real estate industry and real estate at large. I know many of my friends who are not even in STR have heard of Thanks for visiting.

So huge kudos to what you two have built. I'm curious, for our listeners sake, when they're thinking about this conversation, if they're like, okay, you already have a really successful business that's, you know, returning great results. Why allocate the capital, let's say, for a big venture like this versus just pouring it back into the business for further growth? Do you have a specific reason for that?

Or is it more so just general diversification and like, and all the other reasons that you just listed for what appealed to you in this particular project? For me, wealth building has, it all comes down to owning a business. Real estate is a great wealth building vehicle, but you have to run it like a business for it to be, to have those returns that you set out to get from it, right? You can't just buy it and then all of a sudden you're wealthy, like you've got to run it like a business.

So to that point, Thanksgiving is a successful business. That being said, it's important for me to diversify. I think any business owner also has, whether they're in the stock market or they're lending their money out to other businesses that they believe in or buying real estate, whatever their chosen path is. That's what I've grown up aspiring to build for myself and my family.

And so I would absolutely have no problem putting all of my eggs in the thanks for visiting basket. And I would say 90% of them are, but having that diversity. And then of course, layering on, like I mentioned before, being able to report back to our clients what we are doing to be stewards of our education and to lead the way and to try new things out and be a part of all the developing aspects the short rental world is this benefit that is hard to get anywhere else So for me it diversification and real estate always been my chosen pathway And so it doesn feel like my time is taken away from the 40 hours that I put into things visiting, maybe even less because we're so tightly run.

And we're also doing this right from the beginning. Just today, we were talking about our first hire of a general manager for the property, right? We're not going to try to operate this thing ourselves. We are truly investors in this.

And I think people can get it twisted because you shouldn't be doing all the things if you want your business to succeed. But I do feel Annette and I are in the right spot with Thanks for Visiting. We have so many years, both of us over a decade, in operating short-term rentals along with our partners that this just feels like this wonderful, creative project. Don't get me wrong, a lot of ups and downs, but it doesn't feel like a heavy lift or it's holding me back from from thanks for visiting at all.

I think an important part too is to us this is compounding the profits from thanks for visiting so we would not Sarah and I've actually looked at a few other businesses that have come our way that were real estate adjacent yeah and and did some talks about acquiring them but then we were like wait, we're just buying ourselves another job there. This, however, it flows together because we've already been thinking about, Ellen, having thanks for visiting retreats potentially at the property.

You know, there are so many things where they go, they're lockstep, they're hand in hand, because we would encourage anyone, if you're going to diversify and purchase another business, do not make it. Some people want to be really diversified. They want something brand new. And we would say, stop.

We actually, when people tell us they run three or four businesses now, we say, no, you don't. Like, you don't do it well. You might own them or run them, but there's no way you do them well. So for us, these are lockstep.

They aren't big pivots into a completely different industry. And honestly, we can use every single one of our connections from Thanks for Visiting in Rich Hollow Retreat, from lending to our partners in our property management software to people that have sponsored our podcast, like they can work hand in hand together. So that's one of the things where it compounds the wealth of both of them together instead of being separate and trying to do their own thing. Right, no, that flywheel, like- That's the word I was looking for, right?

Yeah, ecosystem, it makes complete sense. I'm trying to remember who I was either listening to content from or talking. It doesn't matter. But like the point of it is it's kind of like expansion through acquisition of, like you said, feeder businesses, right?

Like if I were to buy a business that melted into my current business, it's like I could buy a podcast production agency. And then it's like one of my expenses in this media company is now being covered by that company. And so I see the synergy of what you're saying. And I think that's really smart.

Before we get into the actual mechanics of this particular deal and the numbers, I am just curious, like in general with your investing thesis, do you have a certain percentage of thanks for visiting profits or personal profits allocated each year to invest in new real estate ventures and properties? Is it a certain percentage? Is it a certain dollar amount? Or is it like not every year you're necessarily looking at just kind of if the right opportunity comes across your plate?

I'm just curious, like, what percentage goes towards real estate? Well, we used to have these goals like that, Ellen. Sarah and I have gone back and forth like, okay, maybe we'll take a percentage and each month of our profits and at the end of the year we'll buy something. we've had thoughts of like maybe we take all of our youtube money and you know we we invest that but honestly we haven't it's more being ready when the opportunity crosses our desk and so we don't just want to deploy it for the purpose of like here's five percent we're going to make sure that we purchase something for the five percent each year it's it's more about the deal versus the percentage so we don't have that right now i love that.

Thank you for explaining that. Let's get into this particular deal then. So obviously, very exciting opportunity. You referenced that you have some outside partners or investors that are part of this project.

Could you maybe start there? And then we'll talk about like what the initial investment was, how that was funded, all that. But like, let's start with like maybe like the makeup of the team. Yeah, I'll jump in there.

And then Annette actually is our, she leads up our money for the project. So I'll let her talk about the money part. Annette and I met at a city council meeting prior to COVID when I just moved to Columbus from New York City. We started short term rentals in New York City I saw the red tape on the wall left New York found a market where there was a lot of room for growth And also short rentals were really there were some favorable rules around it However right when I moved they were suggesting some pretty stringent rules around operating short-term rentals.

So I showed up to city council and sat next to me was Annette Grant. In addition to that, a couple came also to the city council meetings, Mike and Ingrid. And I'll never forget, Ingrid had this baby strapped to her and Mike was chatting with everyone. He's very much a social butterfly.

And I started talking to them and they had 15 giant properties in downtown Columbus. And I just remember thinking like, these are the kind of people that I want to surround myself with because I had left New York City. We had just bought a four unit, but that's all we had at the time. And I came to Columbus for short-term rental development.

So I met them there and we just developed our relationship over the years. During COVID, Mike called Nick and was like, hey, I saw this piece of land on some website. Nick's my husband. He's like, would you be interested in looking at it with me?

And so, and that's, you know, the rest is history. It wasn't that piece of land that we ended up buying. But of course I was like, Annette, I don't want to do, I don't want to do this without you. Would you want to come on this journey with us?

And so we looked at a few different opportunities, but Mike and Ingrid, they are experts in their own right. They build their properties from the ground up. They operate their own properties and they have a construction company that very similar to like this, like the construction company feeds their own new builds, but also they have a few clients. It just works for them.

So I knew that this partnership would be great because it's not like we're bringing someone in from the long term world or multifamily world, right? Like they are right up our alley and they're just as driven as we are. So that's the team at hand. And then, Annette, I don't know if you want to chat about numbers at all.

Sure. I was just over here on my computer just making sure I'm right. The original land purchase was around 1.5 and we had to put around 20% down on that.

And so I want to share with everybody some business moves that we made that were new to us. We work with a farm credit bureau. So that is a very interesting, just we've never had a farm credit bureau at Linder. And it's been an excellent, excellent relationship because we did qualify with our amount of acreage to be a partner of theirs.

So that's something that has been excellent and a great relationship. And I will share, too, our land actually appraised for more than we even purchased it for. The gentleman that owned the land before us was a great, great steward of that property. So we actually had a couple hundred thousand dollars of equity literally the day that we closed on the property.

And that was an excellent, excellent feeling. And I will share the partnership. We just split the deposit that we needed to put down equally against what our operating agreement was. So we each have our percentages and we gave that exact percentage towards what was due for the closing.

So kept it super clean. And lessons learned, you know, we started with that operating agreement. Like our attorney was our first call in this business relationship. So we were making investments in this property before we closed on the specific one by just getting that operating agreement in place.

In the spirit of transparency, I do want to tell everyone, because this was a big deal to us, we actually walked away from this deal. and we didn't just walk away we'd actually put forty thousand dollars of non-refundable deposit down and we thought we were comfortable we put down our non-refundable deposit and once we really started to pencil the numbers i can just share we had some we weren't comfortable with it. And us giving up the $40,000 paled in comparison to what we could have.

It's not that we would have lost money, but we just, peace of mind is priceless. And I remember coming to Sarah and going, man, this monthly payment until we get open, I know I will lose sleep. And walking away from that money, I could sleep. Signing the deal, I could not sleep.

And it really came down to that. And I will share, we walked away from the deal because this deal was... To hear the rest of this episode and unlock weekly subscriber-only content and community access, join us as a premium subscriber at cubicle2ceo.co slash podcast.

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