This has been one of the most trying weeks that I’ve ever had in my 32-year career as an entrepreneur. I woke up early on Monday morning and embarked on a journey with eight other people to host a Mastermind group in Arizona, knowing that there was a tropical storm at the time that was hurtling towards the panhandle and could potentially do some damage.
What I didn’t know, as we went through the first day and a half of this Mastermind group, that two of my short term rentals in Fort Morgan, Alabama, which is about 15 miles west of Gulf Shores, would be in direct danger. That tropical storm was a minor threat, but you know what, not too much to worry about, would turn into a Category Two hurricane by 1:30 in the morning when it would make landfall. And it made landfall about seven miles from one of two of my homes there. It was the home if you’ve seen the case study that I’ve created on how I turned a $55,000 annual revenue home into a $90,000+ annual revenue home, what I called Bella Vista, which was a Tier II home. It’s 96 steps from the sand.
Needless to say, I didn’t get very much sleep that night. The house that I wasn’t worried about was a renovation property on the Bayside, about three-quarters of a mile from the ocean, but only about 50 to 75 yards from the Bay. I thought that would be okay. Lo and behold, that’s the one that took on the majority of the damage. Bella Vista, my house that’s right on the ocean, only sustained some cosmetic damage to some soffits, some deck railings. A little bit of paint, but nothing major by any means. It didn’t have any windows blown out.
There’s a reason that that house didn’t sustain much damage, and it’s because I’ve made investments into that property. As my revenues grew, I made more significant investments into that house. I prepared for the hurricane with that house as I evacuated my guests that were staying there, and most importantly, sent my maintenance crew down to deploy electronic storm shutters. Very significant investment with those storm shutters, but you know what’s happened? Making that investment upfront into those storm shutters protected me from something that I never thought would happen to me, and that’s a natural disaster.
But now, with the minimal damage, we’ll be able to be back up and running. So I’m not going to lose three, four, five, six weeks or months. Because what’s interesting is, every house around me, their windows were blown out, and they had internal water damage. Which, based on the devastation in that panhandle, in Fort Morgan, in Gulf Shores, in Pensacola, Orange Beach, all the way down to the east and Panama City, they’re going to be out of business for months.
Why do I bring this up? Because this has been one of the most trying times. And I’ve dealt with earthquakes. I’ve dealt with thunderstorms. I’ve been through that. I’ve been through a flood in Nashville, Tennessee, in other businesses. I never had to deal with a hurricane, and I’m lucky that I had great mentors that taught me how to prepare. I prepared with the storm shutters. I do have loss of income insurance on all of my STRs.
Most importantly, I have enough working capital to sustain if I was to lose all of my revenue for the next three, four, five, or six months.
What are you doing with your profits with your short term rental? Are you preparing for that rainy day? As someone that’s done over 20 startups in my career… And I still own four businesses today, have built multiple businesses over $30 million, have been somewhat successful. I’ve had plenty of failures, don’t get me wrong. I feel like I’ve stood on the shoulders of giants to be able to learn from them. But most importantly, I put what I learned into action.
So at least one of those two properties will still be thriving. I have not been able to get down there yet. I still can’t gain access. There’s still standing water, even 16 to 18 inches in front of my house, from what I’m told. I’m going down there in two days. I’m literally, right now, at another short term rental that I own, a Lakehouse in northern Alabama, just north of Birmingham, as we have our first guests arriving on Friday.
There are some essential lessons to learn. And I’ve learned this, having to deal with those other natural disasters, from earthquakes when
I lived in California, to the flood in Nashville, Tennessee, and now the hurricane in Gulf Shores, Alabama, is that we have to prepare for the unexpected. When I was in my twenties, 25 years ago, I didn’t do that. And that’s why I want to share with you my seven golden rules that every Airbnb host should be following. It’s what has led me, over the last half of a decade, to be able to build a multimillion-dollar portfolio that is extremely profitable because I maximize all of my profit.
But the first thing that I do with that profit is not to pay myself. I pay that individual property. I reinvest into it. I have retained earnings for a rainy day. I’m preparing for issues.
I’m standing on my boat dock right now, as you can see behind me. You see some Sea-Doos and paddleboards and kayaks and all that type of stuff. But if I flip around this way, you see behind me that the water level is down significantly. I’ve only owned this home for three weeks, but I’m here preparing, from what I learned from the hurricane, to prepare for the water to go down even farther.
So, one, I’ve had to educate myself on dock maintenance. Two, I had to find some mentors to help me understand when those levels go down, how tight my cables need to be to the trees, and how I manage the dock, so I don’t have any damage to it. We all have the same issues with HVACs, with paint, with deteriorating flooring, all of these things.
If you’re looking to build long-term wealth, you need to have a plan for your finances, a plan for your home, a contingency for when these disasters happen. And that disaster could be an out-of-control, raucous party inside of your short-term rental, or it could be a hurricane, like I’m dealing with right now. Most importantly, I believe in one thing that has made me a successful entrepreneur over the last 30+ years. And that’s that we all need a coach.
I want to be your coach. This is a long journey. We’re making significant investments. And I’m not here to talk about rev share or rental arbitrage. Not that there’s anything wrong with that. This is about investing in appreciating assets and building long-term wealth. When I make an investment into a property like this one right here in front of me, I’m a firm believer that I should never, ever have to make a payment on this house. Through my entire portfolio, from day number one, I can tell you that I’ve been able to live and uphold that promise to myself and my family through prudent decisions that are made based on data, financials, some gut instinct, but most importantly, that follow the seven golden rules that you can get right here. Happy hosting, everybody.
