- 2 months ago
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00:00Have you ever wanted to own a ranch but actually make millions in profit off of it without really
00:05spending millions? That's what we're here to do. We're gonna go harass my friend Sam Parr. He built
00:10a company, sold it for millions and millions of dollars. It's called The Hustle. Now we decided
00:15to buy an Airbnb ranch and profit off of it. And he's hacking his way to his first $20,000 in
00:20revenue inside 10 days of owning the place. So if you want to hear the dirty details but not have a
00:26totally filthy dog like this guy, come along for the ride. This is going to be fun. We're
00:30going to figure out how do you profit off of having a huge piece of land like all of us
00:35millennials are into these days.
00:48I've always wanted to own a ranch but I hate the idea of it bleeding money nonstop. So I want to figure
00:54out how to own a ranch and have other people pay for it. Do you think we can do that? I think we
00:59can do that. Are we ready to harass this guy? Hello, what's going on man? Come on in. Let's check
01:07out what he's got going down.
01:12Sam, you started the hustle.
01:31Sam, you started The Hustle, a media company, millions of emails, you know a lot about
01:45online marketing and hustling, but then you decided to buy a ranch and turn it into an Airbnb
01:52and you've already made thousands of dollars in sales. What's the thought? Yeah, probably
01:5520 grand. The thought is I'm really good at starting stuff. Whenever I get energy with
02:02something and I get obsessed with something, I have to act right away. If I act right away,
02:06I get locked into it and I can usually make it pretty great because I get energy from doing this.
02:11I didn't really know too much about this. I used AirDNA. I built a really nice model to see if this
02:17could work and I thought I protected myself really nicely with the downside because this area is
02:21growing quickly. My upside, I'm like, man, I think this property can do like 25, maybe even one day,
02:2830% returns. Worst case, I'll just sell it and probably not even lose money. But if the best
02:36case happens or even the medium case happens, then I now, I think there's a world where I can just do
02:40this, but in loads of different locations and build up a hundred million dollar plus portfolio of these.
02:46Texas is growing like a weed. There's going to be more and more and more people coming here
02:50and this is kind of like the Napa Valley of Texas. It's called Hill Country and it's Texas Hill Country.
02:56It's where there's a ton of wineries and I just think that more wealthy people are going to want
02:59to spend more time out here. And so I was like, I'll just sell it if I suck at this.
03:04Right now, what are we doing? What is this thing?
03:06I bought this from the guy who built the house. He used to hunt on it. Around this area, I'm going to
03:13build cabins and I want to put them on a tower this high because the views are freaking awesome.
03:19And this is a thing that he would sit on top of and hunt, I guess. I don't know. I guess I'll do it.
03:25I don't even, I don't know anything. When's hunting season? I don't even know.
03:28Tech pro to hunter.
03:29Yeah, I don't even know. Whatever it is, I'll figure it out and I'll do it.
03:32I went and bought a gun the day I bought the place as a gift to myself.
03:35That sounds very techs of you.
03:36Yeah, I don't know. I'll figure it out.
03:41Let's talk about like some of the weird hacks you did for this place. So first of all,
03:45you didn't just buy the house you bought or the house or the land, you bought some other stuff
03:50with it. Like what?
03:51So when we bought the place, I gave them their asking price, but I also said, just take your
03:56clothes and leave. Leave everything here completely furnished because things are taking forever to
04:01ship. So then if I bought it empty, I was going to have to wait three months. So I was going to have
04:04to pay three months, four months of mortgages until I actually got the thing cash flowing. And then
04:09the second thing is I made them build a fourth bedroom, which is probably 30 or $50,000 worth
04:14of work. And then I also have a huge shipping container out there. I made them paint a Texas
04:18flag on there so people could take pictures in front of it.
04:21That's what we call your Instagram worthy moments. The other thing that I was, I thought was cool
04:25is you did some like testing basically of the Airbnb before you bought the Airbnb, which I've never
04:33heard of before we actually closed on the property. I had it on Airbnb and we were already getting
04:39bookings. And so I was like, all right, this is kind of interesting. Now my math on it is I think
04:44this property as is with, without improvements, we'll do around 200 to $250,000 a year in revenue.
04:52I went and found the growth rate and it was like 4% a year. So then if I do, if I do about a quarter
04:57of a million a year in revenue, that brings my IRR to like 25 or 30%. Then the way you really make
05:05money by a home on a big property that's already cash flowing. And then I build more units on there
05:12and that's going to require a large amount of capex, but that's where I'm going to make a lot of profit.
05:18I think you've hacked a bunch of different businesses and inside hustles, but you didn't
05:22know that much about Airbnb. So you did something that I've never seen anybody do that started
05:27an Airbnb with. Do you know what I'm talking about? No. The Facebook group. Oh yeah. Yeah.
05:34That was sick. I tweeted out like who follows me and is interested in short-term rentals. STRs is
05:42what they're called. That's Airbnbs. I just said like, who's interested in that and who owns a bunch
05:46and has a cool story. And I got like 3,000 replies. It went like crazy viral. And I created a Facebook
05:52group and I got like three or 2,000 people who joined it. And then as I was like learning about
05:59this thing, because I was the owner of the group, every time I posted, they got notifications.
06:05And so we had some guys in there that are doing $20 million a year in revenue with short-term rentals.
06:11And we've got other people that have like 50 to $100 million portfolio. And I would just post it.
06:15And they're like, here's what I'm thinking about doing. Is my math right? And they're like,
06:19yeah, your math sounds, it sounds good. That's brilliant.
06:24You bought the house for what? 1.7. Okay. And then you charge what per night?
06:30And how does that vary based on season? So right now we're getting into the high season
06:34and that will go until maybe October. The prices change depending on the day of the week. So
06:40Thursday to Sunday, it ranges from 1,000 to 1,200. And then the weekdays are going to be,
06:47are I think four to 500. What's like the average occupancy that you think you're going to have?
06:52When I made my numbers, I assumed 60%, which is basically just about every Friday to Sunday.
06:59And then with the occasional, which has already happened, someone books like 10 days.
07:04I like it. The other thing you did that I thought was fascinating is the Yelp situation.
07:08Yeah. So how did that work? Did that actually work? Was that a good idea? Shitty idea?
07:12Yeah. So basically I've created a Google listing, a Yelp page. This is why I named it.
07:18So yeah, it's marathon ranch. Wait till we show you guys the sign called marathon ranch.
07:22When people take pictures and post on it on Instagram or whatever, I want it to say like,
07:27we are at marathon ranch and I'm trying to get more traffic that way. And then we also have a
07:31website, marathon ranch.com. I don't know if this is real or it's just stuff all of our friends are
07:35talking about, but basically myself included, we've all bought land, like all over the place. And we
07:40basically have no business buying rural land. Most of us, like we don't know anything about it.
07:44And it's like this gentleman farmer idea. What's the deal? Like what, like are a bunch of your tech
07:49bro friends buying stuff everywhere? Well, a lot of, so here I tweeted out that I just did this,
07:54that tweet was viewed by 2 million people. So many people reached out because I think
07:58I can only speak from a man's perspective, but every man, I think like wants this, they want like a piece
08:03of property that they can like do whatever. And so I do actually think that this is what a lot of people
08:08want. I don't think it's getting as popular, but what's happening is that with COVID the B, C and D
08:14level cities like Austin, Denver, New Orleans, other places like that, I think that they're getting
08:20more popular. And then the outside areas of those cities are getting more expensive and more desirable.
08:32How to know where to buy? You were looking all over the place. I looked all over the country. So
08:36a lot of people are like, Oh, you know, um, right outside New York city, that's a great place.
08:42Uh, but there's like so many laws, uh, around what you can and cannot do. And you got to look at two
08:49things. I think you got to look at what the actual laws are. And then you have to look at the second
08:53thing, which is like, what's the government in that area like, and are they like maybe going to ban
08:59this? Or are they going to make it harder to have short term rentals? And so Republicans versus Democrats
09:04a little bit. So typically you could, that's not the only way, but that is a correlation. And so
09:10in Texas, I'm going to eventually buy these all over the country. I'm definitely going to get them
09:14in New York as well. And I'm going to get, I'm looking in Pennsylvania all over the place. Uh,
09:18but Texas, like it's known for like, you don't touch our land. Let us operate how we want to operate.
09:24Yeah.
09:24And so I was like, well, that's a great first place to do it. And so that's why I did it here.
09:28You're also close enough. You're like two hours from this.
09:31So, which is actually a feature if the economy goes south and let's say that people would be
09:35flying for travel and they're not flying anymore, then they need to take their family to like a
09:39three hour vacation. That's like a quote, getaway being about two to three hours. That's the perfect
09:44getaway. And so in my opinion, because this home is so big and the price per head could be potentially
09:50cheap, like a hundred dollars a night, potentially. I think that I was trying to look out for the
09:54recession as well.
09:55Yeah. It's smart because I think, well, two things, one thing that makes me nervous about Airbnb is all of the
10:00like math proper properties probably are going to get murdered during a recessionary period.
10:05There's way too many of them. And then the hyper, hyper, hyper luxury places probably won't get hurt
10:11because rich people are still going to have money regardless. And I think that like second tier,
10:17you know, it's nice. It's got something unique, but it's not out of range. We'll also probably do
10:22pretty well too.
10:23Yeah. I think unique is the most important thing.
10:25Yeah. If you bought this place for $1.7 million and you put a couple hundred thousand dollars into
10:30it, but you get 250 to a million dollars in revenue a year, once you have the other locations,
10:36I mean, your, your break even point is ridiculous.
10:39Yeah. It's awesome.
10:40You could have a break even in three to five years, basically.
10:42Your equity would be paid off. And now you own something that,
10:45I mean, there's, I think there's a world where you own this for 20 years and you're sitting at
10:49something worth tens of millions of dollars. What are like the downside risks? Anything keep you up at
10:57night? Is there a way I can lose all my money? I think the chances are incredibly low. I think
11:02it's a pretty low, low risk thing though. That's my thing. The upside I think is like, I think like
11:08two or three X and like five or 10 years maybe. So over there is basically where you're going to do
11:14these crazy. Oh, you can see it. These high rise houses and they're going to look out over. This is
11:19like painted rock. Enchanted rock. So that's a pretty famous state park. So we're about four miles
11:25from that and being able to see that a lot of people like that. So we're right by enchanted,
11:30enchanted rock state park. Do a lot of people go there? Yeah. Yeah. Yeah. Like you need a reservation
11:35and it's always sold out. Interesting. And there's probably no lodging right around it. No, it's this.
11:40Oh, that's so smart. Could you, could you just allow camping from like that other road access?
11:46Yes. I also had to build a road. We went through here in a golf cart that has thick tires.
11:51Your Jeep could maybe do it, but I don't know if it's wide enough and a Camry definitely cannot do
11:57that. So I got to build a road. Yeah. You got to build a road. You got some work to do, man.
12:01I know like get to it. I don't know what he's doing around here with us, but I hope you guys
12:04appreciate that. We're going to link a bunch of the notes in the bottom and a bunch of these stuff
12:08that he talked about, like air DNA, how to do this whole deal. Uh, and maybe you can compete
12:12with this guy, uh, with your own ranch that makes a couple million dollars a year for you. That sounds
12:15pretty good. Bring it on. This is good.
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