183. House Hacking Your Way To Success in Real Estate

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Sarah Karakaian:  [00:00:05] You’re listening to the Thanks for Visiting podcast. We believe hosting with heart is at the core of every short-term rental. With Annette’s background in business operation–

Annette Grant:  [00:00:15] And Sarah’s extensive hospitality management and interior design experience, we have welcomed thousands of guests from over 30 countries, earning us over a million dollars and garnering us thousands of five-star reviews. 

Sarah Karakaian: [00:00:29] We love sharing creative ways for your listing to stand out, serve your guests, and be profitable. Each episode, we will have knowledgeable guests who bring value to the short-term rental industry– 

Annette Grant: [00:00:40] Or we will share our stories of our own experiences so you can implement actionable improvements to your rentals. Whether you’re experienced, new, or nervous to start your own short-term rental, we promise you’ll feel right at home. Before we dive into the content, let’s hear a word from our sponsor.

Sarah Karakaian:  [00:01:01] Hello, welcome back for another great week. My name is Sarah Karakain.

Annette Grant:  [00:01:05] And I am Annette Grant. And together we are–

Both Sarah and Annette:  [00:01:07] Thanks for Visiting.

Sarah Karakaian:  [00:01:08] We are so pumped for today’s conversation, but first, first, first, first is celebrating you, our amazing listeners and viewers who are using our hashtag on Instagram #STRShareSunday. And I just looked, Annette, we have over 12,000 posts on the hashtag and–

Annette Grant:  [00:01:25] I know because I sorted through them. That’s a lot.

Sarah Karakaian:  [00:01:27] Tons of people are following it. And I’m saying that with a lot of enthusiasm. It’s overwhelmingly wonderful. But also as for listeners too, yes, use it so we can hopefully find you. But also there’s other people that are following this hashtag. So it’s a great way to get connected with other hosts who are like-minded. They also listen to Thanks for Visiting podcast. So anyway, Netty, who are we sharing this week?

Annette Grant:  [00:01:47] Today we are sharing @LodgeNoir, so @LodgeNoir, N-O-I-R. And I want to highlight a couple of things, three specific things in this property because Sarah and I are getting ready to speak this week at the Real Estate Staging Association conference in Las Vegas. I’m going to talk about three things that they’ve done really well that have to do with staging and their property. Number one, they have an amazing, dedicated workspace that overlooks the Blue Ridge Mountains. So they’ve got this little office nook with a lamp and a chair and an actual desk and a view. And you just don’t see that very often.

Second, they have a game room, which is outfitted with a foosball table, a pool table. And I think that’s just great because if people can’t get outdoors, they have something for them just in case on the indoors and plus really catches your eye in the photos. If you have a group traveling, they can participate in that. And then last but not least, I really want to talk about the lighting in this property. I think it’s a part of design that gets left out a lot. Sarah and I talk about it often, if it’s an upgrade that you can do. They have a ton of secondary lighting, overhead lighting fixtures that are amazing and lean to the design.

They also just have ceiling fans. So that can help your guests with– they have the light and the ceiling fan with the temperature control in there. You never know what kind of guests you’re going to get, so help them with that. But also the other thing that I see that’s huge is in every single one of their bedrooms, they do have bedside lamps. And a lot of times I see hosts leave these out. And they have bedside lamps at every single one of their beds. Even they have a camp room, a bunk room and each of those beds have a little lamp next to it. So well done LodgeNoir. And they have a ton of five-star reviews also. Oh, they have exterior lighting. I love they have bistro lighting outside. So help your guests if they are– They have a lot of exterior lighting. People don’t know the property as well as you do. So well done with all of those features. Sarah, let’s do it.

Sarah Karakaian:  [00:03:47] Yeah, so we have a wonderful rockstar of an entrepreneur who has been selling homes and real estate since she was in her diaper. And she said that it’s not a figure of speech. She really means that. So we are pumped to dig into that. Today we have Danielle Gillespie. But Danielle is a super host from Carolina Beach, North Carolina, where she also runs a top-producing real estate team called the Gillespie Group. Thank you, Annette. I know I had your back. Danielle, welcome to the show.

Danielle Gillespie:  [00:04:19] Thank you. Thank you so much for having me. I’m super excited to be here.

Annette Grant:  [00:04:23] Oh, and we forgot to say she’s also been featured on HGTV and the Island Life. We’ll dig into that. Yeah, so sure. All right. Well, let’s talk about you selling homes since basically you were born. Let’s get back into some of your history and how it parlayed into where you live now and the Gillespie Group and your short-term rentals.

Danielle Gillespie:  [00:04:42] Yeah, for sure. So no joke. I am a second-generation real estate agent. So my dad was a real estate agent my entire life, owned his own brokerage. And so I just got to see that whole side of things, the entrepreneurial side, which led me to never want to be in real estate. I was like, I’m not doing that. I am not working that hard. He was up and Ataman and coming home late at night and working every weekend. And I’m like, I don’t want to do this. So it was never my goal or intention to be in real estate, but I ended up stumbling upon it. And it has turned out to be such a rewarding career that I ended up becoming so, so passionate about.

And so what happened was, I was actually going to school to be a hairdresser. I wanted to open my own salon. My background is in business entrepreneurship and small business marketing, so definitely goes hand in hand. But I ended up acquiring a super severe allergy to all the products that I was using. So it was Christmas Eve of 2016, I lost all my hair, all my skin, and I’m like, I can’t do this anymore. So I literally just picked up, I quit. And I was like, I don’t know what the heck I’m going to do with my life right now. This is not what I was intending. And I am such a planner. So that completely put my rails off course.

So I was like, all right, I’m just going to go back to school. So I went back to school at the University of Toledo and I got my master’s in finance. And I was like, okay, I’m going to get into maybe some stocks and bonds, maybe mortgages, not quite sure yet, but something that I could make really good money, and just really deep dive and try to be the best that I can at it. So I went through school. I ended up getting a job as the financial director at a cosmetology school. So it was like, what I would love to do and then the financing part that I could be really good at.

So long story short, 9 to 5 was not for me. So I was like, I got to get out of here. So I ended up meeting my husband, and we could go anywhere with his job. He was graduating to be a physical therapist. So we’re like, well, let’s just figure out where we want to go and just uproot our life and plant it someplace else where we both know that we want to be long term. So we did a whole road trip along the whole east coast. And we were just stopping in all these different destinations and trying to figure out where we could see ourselves living.

So we ended up stumbling upon Wilmington, North Carolina, and we ended up canceling the rest of our trip. We were like, this is it. This is where we’re going to be. And at that time, I still hadn’t figured out exactly what I was going to do with my career path. I was like, maybe I can find an organic salon to work at or, what am I going to do? And I was like, at that time, I had flipped my first home in 2017 with my dad in Toledo. And so I was like, you know what, this can make some serious money. So maybe I’ll just dabble in real estate.

So we moved down here in 2018 and I shortly after I signed myself up for real estate school. And it was about a six-week course. And I ended up joining a team at that point. And I was just doing inside sale calling. I was just calling everybody because you can do that without a license, trying to generate some leads for the team, handing them over to the team so that they could convert them. And I was like, okay, this is some serious work, but I’m seeing the results that other people are getting. So I was like, I’m just going to try this for six months and see what happens.

So after I was licensed, I took off running. I think I closed my first deal 45 days after because I had been cold-calling and sending the leads to other people. So I knew what I was doing. So got my first sale, and then I had a couple more sales after that. And I was like, all right, I’m going to try to stick this out for another year. So a whole another year in real estate. I ended up being rookie of the year. I sold I think 24 homes my first year. And I was like, okay, this is awesome. So I’m like, Brett, we’re just going to keep rolling with this and see what happens. And every year since, I’ve just been doubling my business and just trying to grow and expand and sharpen my skills and learn new things. And it has just been nothing that I expected and everything that I was hoping for.

Sarah Karakaian:  [00:08:54] What does your dad think? He was like, I told yourself.

Danielle Gillespie:  [00:8:58] I know. He was actually like, Danielle, don’t get in real estate. He was like, be on the mortgage side. Work for a bank, do that, then you can have a set schedule and all that. And I was like, man, I never wanted to work for someone else, which is why I have a background in entrepreneurship and marketing. I was always going to open my own salon or I was always going to do my own thing and set my own hours. And it wasn’t necessarily that I needed the flexibility that I thought was going to come with it. It was just more so like, I know what I can do. And I am willing to put the work in to get the results that I want. And I’m not going to do that for someone else. That was just never my thing. But looking back now, it’s fun. We’ve definitely grown our relationship a lot. And I feel like every single day, we’re just calling each other, talking about deals because he still flips houses. And he’s always helping me problem solve and he’s such a natural at it. So yeah, we chat about real estate a lot.

Annette Grant:  [00:10:01] Before we dive into you getting started in the short-term rental world, can you give our listeners just some encouragement? Because I’m blown away that it sounded like you really didn’t have any network in this town when you moved. And I feel like a lot of times, and I can even say this, thinking about real estate agents, and I was like, oh, they have a huge network, they’ve been in the town for decades. That’s how they’re crushing it. So how did you come in with a thunder not having any family there, not having any network, not even being in the– it sounds like you’re starting like negative square. Give some encouragement to some of our listeners that are either maybe wanting to become an agent or just move and become an agent. What were your things that were like, this is what made it work for you?

Danielle Gillespie:  [00:10:48] Oh, yeah. I knew literally no one, not a single person here besides my husband’s boss. So that is when I realized, okay, I don’t know anybody here, I literally have nothing to lose. So it’s either I’m going to crush this and it’s going to be amazing or I’m going to have to pivot and do something else. So when I decided to dedicate this time in this six months, I’m like, I’m going to do everything that I possibly can to get my name out there, and to network with as many people as I could.

And thank God for social media because that has been such a huge platform for me. But I really didn’t deep dive into social media probably until 14 months into the business. So I was doing the cold calling. I was circle prospecting. I was getting hung up on every day and sworn out every single day. And I put the work in. I circle prospected Monday through Friday for four hours every single morning, and I was not allowed to leave the office until I did that.

Annette Grant:  [00:11:47] What is circle prospecting? I’m not in the real estate world.

Danielle Gillespie:  [00:11:51] Okay, so circle prospecting–

Annette Grant:  [00:11:52] Is it like you just draw circles because you’re all mad at people hanging up on you frantically?

Danielle Gillespie:  [00:11:55] Actually, it would be like, oh, God, it’s the worst form of telemarketing. You pull up a list of homes, like say, a home just was listed in a neighborhood and you can circle the neighborhood and get all of the phone numbers that are readily available, obviously, not the Do not contact people. But you can grab a list of those people and just cold call them, “Hey, there was a home that was just listed in your neighborhood and I was just calling to see if you or anyone you know, might be thinking about moving in to the neighborhood or maybe out of the neighborhood,” and trying to generate leads.

Annette Grant:  [00:12:31] So the circle is around the current listing. So you circle, okay, so that’s your lead in is there’s a home in your neighborhood for sale. Okay, got it.

Danielle Gillespie:  [00:12:37] Or just sold, open houses, there’s many different reasons to call. But yeah, so it was like the coldest form of cold calling because people definitely didn’t want to hear from you. But ultimately, what that did was just help me build that backbone and it allowed me to hear no, that would also allow me to not feel discouraged when I heard no, because you have to get so many nos before you’re going to get a yes. And you have to deserve to get that yes. Once I get that, well, what am I going to do for that person? Where do I go next?

But yeah, so I just did that. I tried to go to as many networking events as I could. And then I started following people on social media that I wanted to be like and have the success like them. And I realized what I wasn’t doing was just showing people what I was doing on a daily basis. And that’s when I started showing up on social media and just literally taking videos of everything that I’m doing. If I’m sitting down here and cold calling today, I’m going to snap a video of me doing this and tell you what I’m doing or showings that I’m doing or home tours because honestly when you’re starting out, you probably don’t have a lot of clients that you’re actually showing homes to. 

So taking a day and scheduling homes that maybe are vacant that you could just go and preview and then share it on your socials and then just start generating just conversations and being seen and being in the industry because if I’m just sitting here and I’m not out there networking and seeing what’s hitting the market and seeing what’s going on, what they’re selling for, then I’m really not learning and sharpening my skills. So I was just talking to everybody and doing anything that I could in real estate for that first six months to just say that I actually put as much work in as I possibly could to see the results, and they showed up.

Sarah Karakaian:  [00:14:17] Love it. Cold calling works, everybody. It sounds like you actually like doing it. For you it was a challenge and it was this thing like, “I need to earn my yes.” I love that. But not everyone thinks that way. And we can circle cold calling around short-term rentals. So inside of our membership we talk about not using Airbnb as the be-all and end-all and taking your brand and making it your own and building your own network of potential guests. And a great place to start is cold calling some HR, offices, and some businesses, how can we build relationships to have your team members or guests stay in our places?

And it’s so funny how people just get immediately turned off by it, but there is a reason why the top producing agents and lenders and any business they’ll say that that marketing, that cold marketing is still a proven method to open up your circle to people. And so sorry if you don’t love doing it, but it work. And that’s what differentiate you from the other people and your competitors. So how did you get started, Danielle, in the short-term rental industry? How did you parlay your real estate, the sales side into investing?

Danielle Gillespie:  [00:15:27] Yes. So I did that flip in 2017, which got my feet wet in doing stuff like that. But then in 2018, when we decided to move here, buying a short-term rental was the number one thing that Brett and I wanted to do, we wanted to get into the space, we wanted to get into investing and do buy and hold and start growing our platform for generational wealth so that him and I could be both location independent and financially independent with time freedom. So we’re like, okay, well, I don’t have a career, so I can’t get a loan. So we’re going to depend on you, but starting out as just first-timers in their career, your budget isn’t the biggest. So we were looking for any opportunity that we could potentially house hack.

So I’m sure everybody knows, your listeners knows what house hacking is. But essentially, it’s finding a place that you can move into and rent out whether it’s another unit or a bedroom or something on the property that would allow you to get income while you’re living there. So I don’t know how but we found this townhouse literally at the beach that’s less than a mile from the beach on the island of Carolina Beach. And it was in our budget, and we had to put $90 down to secure the house. This is in 2018. You’ll never hear of this today. And Brett’s parents were like, you guys, just put the money down. I don’t care. If you back out, put the money down. We’re going to go down there and look at it.

So we found this townhouse that we were able to– it was three storeys so that we could convert the whole first floor into its own suite, essentially. And it had its own entrance. So we put our deposit down and came down here and was like, this is it. We have to buy this. So we went under contract on it. It was a super lengthy process and just crying and pulling hair out because it was a new construction. Anyways, we ended up purchasing that home, moving into it, turning the bottom space into its own unit, and then we just started house hacking. And it was pretty much covering our entire mortgage from the year which allowed us to save up, establish ourselves until we could buy our next rental.

So that by far was the best decision that we could have made as just young adults that really didn’t have savings. And I think we had $6,000 to our name, and just had young careers, which really couldn’t have a super huge budget. So then after that we had been saving up and then we got to our second unit, which is also here in Carolina Beach. And that one is technically a condo, but there’s no HOA so it’s more like half the duplex, and that one has been crushing it. So that’s how we got started.

Annette Grant:  [00:18:04] And when you were house hacking, was that a short-term rental?

Danielle Gillespie:  [00:18:07] Yeah, so it was on a nightly basis. And we were pretty much charging anywhere from $95 a night in the offseason up to $165 a night in season. And they didn’t have access to our kitchen and the living room or anything like that. It was totally private, but it was more so like a hotel room. They had their own mini fridge and microwave and their own private bathroom. But it was just a bedroom in our house. They literally walked around our backyard to our back door to get into their unit. 

And I think we were doing anywhere from 12 to $15,000 a year just doing that. And I was super descriptive in the listing like, hey, we live upstairs, we have dogs, this is our primary residence. So I would also screen people pretty heavily like hey, this is a space in our personal home like, who are you? What are you doing? What do you come in here for? And honestly, it was a great experience.

Annette Grant:  [00:19:05] I love that. We haven’t had too many guests on that have done just a room because basically, it was a room. You said they didn’t have a kitchen, but they had their own ensuite bathroom.

Danielle Gillespie:  [00:19:15] Yes.

Annette Grant:  [00:19:15] Correct. Okay.

Sarah Karakaian:  [00:19:16] I was to say this is exactly how I got started, Danielle, too.

Danielle Gillespie:  [00:19:19] Oh, really?

Sarah Karakaian:  [00:19:19] Yeah, we had a basement in our New York City home, had its own entrance, but it was a bedroom in our basement. We just locked it off in the rest of the house and they had their own bedroom, their own bathroom, mini fridge, coffeemaker. Good luck. That was life-changing for us. And that really showed us number one, the house hacking component which, listeners, if you are quote-unquote “young” if you’re pivoting, house hacking is such a cool way to dip your toe in it and to see that actually, most humans, most guests are really amazing. I don’t know about you, Danielle, but we had a great experience. I don’t think we had any issues at all with the guests who stayed quote-unquote “in our home with us”. Same way for you?

Danielle Gillespie:  [00:20:01] Yeah, maybe just like a couple of random people that were a little questionable that we were like, maybe we should just go out tonight. 

Sarah Karakaian: [00:20:09] Let’s stay at home.

Danielle Gillespie: [00:20:11] Yeah, but for the most part, it was a really, really good experience. And I wouldn’t rent to anyone that was under the age of 21 just because I didn’t want any liability of underage drinking in my home. Overall, yeah, it was a really good turnout. We did that for three years. And then we ended up we just turned that one into its own space now. So now it’s a full house that we rent that out.

Annette Grant:  [00:20:36] And you still have that.

Danielle Gillespie:  [00:20:37] Yeah.

Annette Grant:  [00:20:38] Wonderful. And then I’m sure that equity in that from 2018 has grown too.

Danielle Gillespie:  [00:20:42] It’s pretty much doubled. My husband’s always like, Danielle, should we sell it and get something else? And I’m like, our mortgage payment is so low on that right now and it’s killing it. So I’m like, I just can’t sell that. And it just got us here.

Annette Grant:  [00:20:59] It’s your baby, right?

Danielle Gillespie:  [00:21:00] Sure.

Annette Grant:  [00:21:01] Okay, so you have that one. And you have is it two more right now or three?

Danielle Gillespie:  [00:21:06] So I have two total. So we just moved out of that one and turned it into a full house. And then we have another one here in Carolina Beach. And we’re trying to buy– the goal’s to get four more this year. So we just bought a house here. And that’s why we turned the other one into its full unit. So we moved out of that one. And I was like, with interest rates and everything going on, I was like, I’m not buying anything else until we get this house. And we built the house and it took a little bit longer than normal, which delayed us a little bit longer than we had hoped. But we just moved into that 30 days ago. So now we are looking for deals.

Annette Grant:  [00:21:42] Okay. And are you cold calling for deals?

Danielle Gillespie:  [00:21:44] Oh my gosh, I am not. Right now, no. I’m getting established with other agents in different areas, looking to expand my portfolio a little bit, have some different areas of revenue in just different areas because one hurricane right now could blow out my entire portfolio. So I’m just trying to diversify that a little bit.

Annette Grant:  [00:22:05] Okay, so your next one won’t be hopefully in Carolina Beach.

Danielle Gillespie:  [00:22:08] We’ll see. Yeah, if there’s a good deal, then I can manage it. I like that aspect of it. But yeah, I would prefer to maybe have something even in Wilmington would be fine, but just something where one, natural disaster isn’t going to wipe me out.

Sarah Karakaian:  [00:22:27] What does happen if that were to happen? What’s worst case scenario for you and your portfolio?

Danielle Gillespie:  [00:22:32] I mean, if our house gets destroyed, and then we’re out, so then we’re working with the insurance companies and trying to get it rebuilt, you’re losing all of that revenue. So now you’re paying for the mortgage yourself out of your savings. So it’s always good to have that reserve built up. I always have a reserve for each one of my properties, just in case something like that would happen. 

So yeah, worst case scenario is we’re completely out for, God knows how long until they rebuild it, or it is just minor flooding and it’s not a big issue. Or even if there is a hurricane coming, so many people, they’re going to cancel their trip depending on the cancellation policy you have, but because of COVID now, COVID has given such an easy out for Airbnb, specifically guests where they can cancel and try to fight it and say it’s COVID when it might not be. So it’s hard to have a lot of protection on your stays because there’s a lot of outs right now.

Sarah Karakaian:  [00:23:29] Yeah, I love that you’re thinking ahead.

Annette Grant:  [00:23:31] What have you seen in the length of time that you’ve been in Carolina Beach with hurricanes? We haven’t really chatted about this. How many have there been? What do you do with that loss of revenue? Talk us through what that interaction and even if it’s just on the radar, do you reach out to the guests proactively? Do you let them reach out to you? When those arise what’s your Danielle’s protocol for hurricane season?

Danielle Gillespie:  [00:23:56] Yeah, so I always in my business, no matter what, I always try to treat people the way that I would want to be treated. And if I know a hurricane is coming, typically, people are going to reach out because they’re so hyper-aware of, oh, my gosh, watching the weather. We’re going on vacation. Oh, my gosh, there’s a hurricane coming. We have our stay booked. So people will reach out to me before I have the opportunity to reach out to them because in my experience living here is there will be the hurricane warning, but it doesn’t necessarily mean it’s going to hit. 

Now, if they tell you to evacuate, you probably should listen to them. But a lot of times, it just a lot of hype, which gets people scared. And then it might be raining, but it doesn’t always hit us. So since 2018, since I’ve lived here we’ve had two legit hurricanes. The first one was Florence, which was definitely hurricane that hit here that caused damage. Thankfully, we didn’t have any damage to our units. But that was right when we were getting started. 

And then Dorian hit the year after that. And yeah, we definitely had some cancellations for that. So with that being said, I mean when do you We’ll reach out to me and they’re nervous about it, I’m like, hey, let’s just watch the weather, whatever and if it actually is going to be a hurricane like, oh, yeah, you can have a refund, because that’s what I would hope for it. I just really believe in good karma. 

I know, other people might have their strict cancellation policies. And they’re like, nope, you chose that. But also, in my experience being here is I feel like the month of September and October are pretty big, specifically, September, pretty big hurricane months. I feel like those are the months that really kind of booked up last, with a lot more of those last-minute stays from people that are locally within the state because they have that on their radar and they’re just see what happens and what the weather looks like.

Sarah Karakaian:  [00:25:47] Do you recommend that your guests, especially during those seasons travel, purchase travel insurance? Would that be something that happens a lot in your area? Making sure that guest– that way, it’s maybe a bit more win-win unless you’re not protected in some way.

Danielle Gillespie:  [00:26:01] And I wish everybody would. I think everybody no matter what their circumstance is, just purchase it even with COVID, and just anything can happen. There’s so much craziness going on right now that I feel like, it’s not that expensive to just add that on and you have peace of mind.

Sarah Karakaian:  [00:26:16] Yeah. So let’s talk about you are a busy, busy real estate agent. You’re a team lead, right? So all your team is looking to you for advice and asking questions and all those things, and then you’re self-managing, correct, your short-term rentals?

Danielle Gillespie:  [00:26:30] Yeah.

Sarah Karakaian:  [00:26:31] Okay, how does Danielle take a day off? And I really mean this because our listeners either that comes as a surprise to them, a whole 24/7, 365 aspect of short-term rentals or they know it, but they’re like, I’m here for it. I’m ready. I love working, I’ll figure it out. How have you figured out for you and your family?

Danielle Gillespie:  [00:26:49] Yeah, honestly, it’s definitely something that I have struggled with for a long time. Because you’re always on call. When you’re hungry, and you’re motivated, you’re always on call because if someone calls you at 8 o’clock at night, you look at your phone, and you’re like, okay, this is the difference between possibly $10,000 or not. So it’s like, do you answer the phone at 8 o’clock at night or do you trust and believe in your boundaries? And so that took a long time to get used to. And honestly, I really didn’t start implementing that until maybe 12 months ago.

So I have hired a full-time assistant. She is local. So I can meet with her and she can do things locally for me and running errands and all that kind of stuff so that I can spend my time focusing on the activities that truly push my business further and then spend less time on doing contracts and errands and back end work that are not necessarily making any money or growing the team. So it’s definitely taken time. But she has taken a huge load off of my plate that has allowed me to free up at least my nights.

So I really do try to silence my phone at 7 o’clock at night. And then I will check in again at 8 o’clock to see if there’s anything that’s pressing. And if there’s nothing that’s pressing that needs to be done and is time sensitive, I will wait until 7 am the next morning to take care of that. So that is a boundary that I tried to set six months ago, and I’m trying to be good about it. So far, so good. So we started the Gillespie Group pretty much in January. And we grew pretty quickly after that.

Right now we’re at a point where the agents are pretty self sufficient other than things that come up that they don’t know about, and they know how to contact me. And if I’m doing my lead gen time, I’m like, hey, I’ll give you a call after lead gen just to really set that boundary. Or if it is late at night, all my agents know that if you’re going to text me after 8 o’clock at night, it’s not getting answered. So either contact me beforehand or wait until the next day or just know that I’m not going to get to you till next day.

And then with my clients, just setting those boundaries as well. I do a lot of attraction-based marketing. So a lot of my clients are just really awesome, respectful people. And they know that if they text me at 8 o’clock at night, they’re probably not going to get a response because I do need that time as well. But it hasn’t been easy. It has not been easy. And if I were to go on vacation, I always have my assistant and I always have a backup. 

And I pretty much will prep all of my clients, whether it’s people that we’re under contract with or people that I know that might be actively looking right now. I will group chat us all together and I’m like, “Hey, going out of town these dates. I want you to have the contact of my assistant and she’ll be more than happy to help you out while I’m gone.” And that way everybody is fully prepared and there’s no surprises that when I am gone, nobody is contacting me unless it’s a fire that needs to be put out and only I can do.

Annette Grant:  [00:29:42] Does the assistant help you with your short-term rentals?

Danielle Gillespie:  [00:29:45] No, she does not. I am. That is all me. I have an amazing cleaner that is hands down. I feel like the only reason that I am successful at doing this– shout out Mandy. Not only does her crew makes sure my home is completely spotless, but she’s constantly looking out for anything that needs to be refilled, anything that’s broken. Her fiance is really handy. So if something is broken, they can easily fix it on-site and don’t even have to tell me about it or they’ll just tell me after the fact. Or if I’m missing something, she’ll buy it and just replace it and just add it to my tab. So she has been a serious game changer. I didn’t always have her and now that I do have her I am like–

Sarah Karakaian:  [00:30:32] Never let her go.

Danielle Gillespie:  [00:30:33] Never. I like Mandy

Annette Grant:  [00:30:36] [Interposing voices 00:30:38] shout out, Mandy. We love you, Mandy.

Danielle Gillespie:  [00:30:40] I’m like, “If you need something, you let me know or if you ever get too busy and you have to raise your prices, please let me know. I will pay you, anything to keep you around.” That’s been a serious game-changer. And then obviously, I have my systems that automate everything. So I’m really not spending that much time managing the listings because I have everything automated.

Sarah Karakaian:  [00:31:04] That’s great. Let’s talk about then the vacation rental, short-term rental market in beach areas, whether that’s your specific market. I’m sure you have a pulse on it. And as you mentioned, rates are changing. And everyone’s saying that the vacation rental had its heyday last year and get ready for– some people are like, the sky is falling. But I think it’s more of just like a normalization because it was incredible last year. No one has a crystal ball, but what is your take on the immediate future with beachfront properties?

Danielle Gillespie:  [00:31:38] So I’ve definitely noticed a little bit of a slowdown in the market, which I’m sure almost everybody else has. But when just looking in our local market and the supply and demand, at the beginning of last year, there were about 1,000 properties that were Airbnbs here on the island. At the end of last year, it was about 1,500. And now we’re almost at 1,700 properties. So really people are still buying short-term rentals. And my take on it is I don’t care what the interest rate is and I don’t care how much the property is as long as at the end of the day the numbers work.

And just being able to work backwards from that and analyzing the property, seeing what it could do, and then being creative with the financing. Get a partner, if you can do a second home loan, the DSCR investment loans, there’s so many different types of loans out there right now, and so many ways to get creative with purchasing, syndication. There’s just so many ways. So at the end of the day, as long as the numbers make sense, that’s all that matters.

So I am noticing a little bit like I said, of the slowdown. So people who are buying properties right now, which there’s still tons of people that are buying properties, there are people who are just really serious and have a lot of cash to play with. It’s not so much like the people that were on the fence or being in our local market here, you pretty much have to have a budget of around 750,000 to get something that would be like a three bedroom, two bathroom, move-in ready. Otherwise, you’re going to either have to do a full remodel, or you’re probably going to be looking at a smaller condo of some sort.

So with that sort of budget, typically people will have the cash to play with. And a lot of first-time investors I think have fallen off the bandwagon a little bit because they can’t really afford to get into this market. I know there are some other beach towns locally just north and south of us that have a little bit lesser barrier to entry, so those markets might be starting to see an increase on some of the first-time investors, but here locally in Carolina Beach, we just have blown up since COVID, honestly. So the prices have gone up at pretty much 20% year over year appreciation. And there’s still a lot more competition for people who are buying them.

So yeah, I think we’re seeing a lot of people who are buying their second investments, or they are people who have been saving and trying to buy something for a while and they’re just now seeing how Airbnb has blown up and the short-term rental market has blown up. And I just feel like in general, this whole vacation rental space has just blown up in the past couple of years. And a lot of people are recognizing it and realizing that the everyday person can do this. You don’t have to own 15 properties to buy your first STR. I’ve worked with quite a few people recently who have never owned a rental property before and now are getting into the space and they’re coming back to me and they’re like, let’s buy another one. Yeah, it’s awesome.

Annette Grant:  [00:34:35] You just talked about a steep incline in competition. Is there anything that you’ve changed in your properties? Is there anything you’ve added, amenities? Have you felt the pressure from the amount increasing in your area?

Danielle Gillespie:  [00:34:49] Yeah. So on my more established property that has hundreds of reviews, I haven’t noticed as much of a decline because I have just that trust and credibility that my property is what it is, and people are definitely still booking that. But for a newer space with that competition, and if you don’t have reviews, it is very important to look at the modern trend and what people are looking for so that you can build up those reviews and get the highest price. I definitely want the highest ROI on my investments. So I do want them to look good, and I want to be able to charge the most amount of money for it. So that does come at a cost.

So I am looking at my competitors, I’m seeing what is trendy with furnishings, and aesthetics, and the pictures and the quality of the pictures and the aesthetic of the pictures to make sure that my listings look like that. So right now people love the whole boho chic vibe. So it’s like egg chairs and hammock chairs and greenery and something that you can Instagram while you’re there and make it look beautiful. Those are the properties that people are attracted to.

And it doesn’t necessarily mean that you have to spend so much money on the nicest furnishings. You just pick out a few cool pieces that are going to like when someone is looking at the listings online, it’s going to make them stop and click on yours because it’s different. It’s not what everybody else’s beach condo looks like. It’s like, oh, this has this, this has an outdoor tub, this one has a really, really cool fire pit outside with all these lights, something that is going to make them stop and look at my listing is what we’re going for, and also really nice professional pictures.

Sarah Karakaian:  [00:36:30] Yeah. As the cream rises to the top with short-term rentals, do you think people are going to bail on their short term? Are you seeing an uptick on people selling, calling like, what if I sold just because I think there’s a– and I have our own bubble, but it sounds like there’s a lot of people who are like, oh, gosh, this is more work than I thought it was going to be. Oh, gosh, I actually have to market my place and not let Airbnb do all the work for me. I actually have to, like you said at the beginning of your episode here, work for it, work for that, yes, or do you think now it’s still great, people are still killing it? And people bought their property at the top of the market, so they paid a lot too, and now there’s more competition. So what do you see with all that?

Danielle Gillespie:  [00:37:12] So backtrack, end of 2020 interest rates were super low, prices had gone up quite to where we are now, a lot of first-time investors buying these properties. And they’re just putting them on the rental property programs and they really haven’t done any updates or upgrading or made it trendy because they really didn’t have to, because there wasn’t as much competition. So they could throw a two bedroom, two bathroom condo up there, probably still might have carpet in the bedrooms, probably still has popcorn ceiling and outdated fixtures, maybe the furnishings is A, but they could throw it up there and probably made like 40 to $45,000 a year. Great.

Well, now there’s so many people that have purchased properties and there’s so much more competition in the market where you do have to stand out. And with Airbnb and their algorithm and just wanting to see more unique properties, and they are promoting those types of properties that are different than your average stay, people are getting lost in the algorithms. And it is so important to try to be competitive and to market yourself outside of these platforms so that you don’t disappear.

And so yeah, definitely more competition, which is resulting in more people making less money. So it is important to stay on top of that, look at what your competitors are doing, how are they changing their properties, what is trendy right now, and I do think that will start to see some homes sell as they did buy them before all this appreciation and realizing, yeah, this is a lot of work, or I’m not making as much money as I thought it was going to. And I look at those people and I’m like, let’s sit down and analyze your property first before you decide to sell it. Are there things that we can tweak inside that will allow you to make more money where it’s worthwhile for you and you have this great appreciating asset that you can also use? Or are you just like checked out, this is not what I thought it was, let me just cash out and make my money back plus some and just move on to something else.

One thing that I feel like I have seen a lot even over the last three or four months are people that purchased homes at the beginning of this year and then putting them back on the market for $100,000 more than they just bought them for. I’ve seen quite a few homes here in Carolina Beach that have done that. And I don’t really know why because the market hasn’t increased that much, especially with where rates are. If anything, it’s helped to plateau and normalize like you said. So I think we’re going to see more of that and I’m starting to get some pocket listings of Airbnb specifically. And they’re just getting the feelers out of they [Interposing voices 00:39:51].

Annette Grant:  [00:39:51] Hide the pocket.

Danielle Gillespie:  [00:39:56] They’re getting the feelers out and there are Airbnb that they’ve purchased and renovated and they don’t necessarily have great bookings yet. They’re actually pretty low performing. But they’re like, “Hey, do you have anyone that would be willing to pay this? We’re willing to sell it too for this.” So we’ve got a lot of those coming in. And it’s just interesting to see where people are trying to sell them on. So, yeah, I think we’re going to see some more inventory because of that.

Annette Grant:  [00:40:23] I have a question for you. So let’s say Sarah and I come down, we choose your to be a real estate agent. And we’re like, “Hey, we’re looking at properties.” And straight you know right out of the gate we want two short-term rental, whatever property bed. What process do you take your client through? Do you help them run the numbers on that and look at what their potential short-term rental income could be? How do you coach your clients that want to specifically do a short-term rental? What are the numbers that you are honing in on? Since it is your sweet spot there in Carolina Beach, what are some things that you know that Sarah and I, for instance, probably wouldn’t add into those equations? What are some of those intangibles? What are you looking at with your clients?

Danielle Gillespie:  [00:41:01] Yeah, 100%. So I always help my clients analyze the property because at the end of the day, I’m the professional, I do this. And this is why I’m marketing towards short-term rental clientele because I have the resources to help them to analyze them. So I use platforms like AirDNA, which I’m sure you guys have used. I don’t always just look specifically at the number that it puts out in the analyzer, but I actually look at the comparable properties and try to actually run a comparative market analysis as if it was just a normal resale property.

And then I also am really plugged into the different property managers around here and those companies too. And I’m always networking with them, and like, “Hey, What trends are you guys seeing? What numbers are you seeing here?” And I have a lot of friends that own property management companies. So it allows me to just keep my finger on the pulse of what’s going on.

So with that being said, I have a general rule of thumb for our areas specifically, according to what my properties are doing and what I know other properties are doing. So I try to find the gross revenue, and then I deduct 15– and this is if I’m managing the property myself, I deduct 15% of the gross revenue for cleaning costs, I deduct 5% for management and or unseen and manage it, I pay myself or unforeseen maintenance issues that need to be done and supplies and stuff like that, typically, it’s about 5% for utilities, unless you are in an HOA community where most of the utilities are covered. And then I’ll back that down to about 1%. 

And then if you are going to use a property manager, it’s about 20% gross revenue for a property management company. So all of those percentages comes off of the gross numbers specifically. And then you can deduct your mortgage payment, taxes, insurance, all that good stuff. And then that should leave you with your net revenue. So I will say in our market, currently, where interest rates are at it is definitely harder and harder to find a property that does actually cash flow. So that’s obviously hurting people. But that’s my general rule of thumb.

Annette Grant:  [00:43:05] I like that. No, it’s great. Did you find most of your clients are wanting to spend at least a little bit of time in Carolina Beach, or they want to full on just short-term rentals?

Danielle Gillespie:  [00:43:17] No, I am finding a lot of people that just want to get into the space. It’s a lot of people in North Carolina, a lot of people from Raleigh, from Charlotte. So yeah, they might want to use it a little bit in the offseason, and have a beach house that they can go to. But a lot of people are like, let’s just maximize the numbers first and go from there. So it depends, but it’s a lot of local people because I feel like Carolina Beach from those locations is only anywhere from two to four hours. So if something were to happen, they feel comfortable and confident that they could get here in a timely manner and put out the problem.

And then I also always encourage people, try to manage it yourself first. And I will help you. I will sit down this actually something that I just started, advertising and marketing for if you purchase your short-term rental through me, after we close, I will sit down with you and help you get your listings up and running and show you how to automate your property so that you can manage it on your own as long as you have a really good cleaner in place. And so I always encourage people to try it on their own first. Save yourself that 20% if you can. As long as you’ve got the systems in place, anybody can do it from anywhere. And that’s why people are able to co-host, so yeah.

Annette Grant:  [00:44:29] Love it. That’s great, but don’t give them Mandy’s number. Mandy’s number does not come with the automation.

Danielle Gillespie:  [00:44:39] I give Mandy’s phone number to everybody. She called me the other day and she’s like I had seven people cancel on me. Can you tell your guests that we’re going to be late and I was like, oh my gosh, I need it. I’m like I love supporting her business, but I’m like, I’m creating my own competition.

Annette Grant:  [00:44:53] I know, it’s one of those things you’re like he’s trying to have an abundance mindset, but you’re like, not with Mandy.

Sarah Karakaian:  [00:45:01] Hash tag Mandy. Okay, so tell us about– we all want to know, how can we catch you on Island Life? What’s that about?

Danielle Gillespie:  [00:45:09] Yes. So we didn’t have some bio on life when we moved here to purchase the house that we house hacked. So, unfortunately, I think the only way that you can actually watch it is if you have some cable subscription or some sort of subscription, but if you just go to HGTV, you can look through all of their episodes. Oh, gosh, let me see. I can tell you.

Annette Grant:  [00:45:31] Wait, so you were the person actually purchasing. You weren’t the real estate agent yet. Oh, that’s cool. Okay, that’s fun. That is awesome. Is the episode about the property that you purchased to house hack?

Danielle Gillespie:  [00:45:42] Mh-hmm.

Annette Grant:  [00:45:42] Love it. Okay, cool.

Danielle Gillespie:  [00:45:42] So I was the buyer. And it was cool because they had insured me as just getting up into real estate and I’m buying this property. So yeah, it was a really cool experience. We were actually supposed to film another episode in February where I was the agent and one of my agents was the buyer. But we had some things come up and we had to, unfortunately, cancel that one. But it was fun. It was really interesting.

Annette Grant:  [00:45:44] Yeah. Do you get leads from that now that you’re an agent? You can at least say that though. It’s probably a couple of things that I have a question because I’m sure our listeners want to know. What if our listeners are there shopping for Island property? Did you reach out to HGTV to get on the show?

Danielle Gillespie:  [00:46:24] Yes.

Annette Grant:  [00:46:25] Okay. So you threw your eye.

Danielle Gillespie:  [00:46:27] I did. You got to put yourself out there.

Annette Grant:  [00:46:30] Yeah, I want our listeners to know.

Danielle Gillespie:  [00:46:33] I don’t want to give away the HGTV secrets. But yeah, I reached out to them. And I was like, “Hey, I’m buying a beach house,” gave them my story. And I told Brett. I was like, we’re probably never going to hear from these people. And they reached out to us 24 hours later and was like, we want to set up a Zoom interview call with you this week. And I was like, oh my gosh, this is happening. 

And then we ended up filming two months after that. So it was a quick turnaround. It was super fun. I’ve got it on my business cards. But I do share that. It’s a cool thing. Yeah, it was really cool experience. And I’m always reaching out to the producers like hey, do you want to do a where are we now? We’re like, hey, I’ve got this client buying this really cool property. Do you want to film us? Just I’m always keeping in contact with them.

Annette Grant:  [00:47:20] Fortune is going to follow up. That’s one thing real estate you get. When you said circle listing, that was circle calling. That’s what you’re going to say some like half the people around the circle. You got to circle back and circle back. All right, Danielle, so if anybody is listening and they want to purchase a home, of course, using the Gillespie Group on Wilmington beach, where can they reach out to you? What’s the best way to get in contact with you or to find more out about you and your group?

Danielle Gillespie:  [00:47:44] So I am huge on Instagram. My handle is wilmingtonncbroker. You can also go to my website daniellegillespiehomes.com or you can shoot me an email danielle@carolina1properties.com. I am always available and I love networking whether you want to buy a property or not. Let’s just connect and I’m always looking to chat with other like-minded individuals and property owners agents and all that.

Annette Grant:  [00:48:11] I love that. And we’ll make sure to link to all that. And, listeners, if you’re in the Wilmington beach area like Carolina Beach, reach out to Danielle. This is why we do the show. You guys can probably hang out and talk about those property listings. Help each other out. If someone’s booked, you can swap listings. But anyways, thank you so much for your time today, Danielle. We appreciate it. Keep us in the loop when you buy a new place we’ll have to know and we want to know about your pocket listings.

Sarah Karakaian:  [00:48:41] Listeners, we’ll make sure all that information about Mandy is in– sorry, about Danielle [Interposing voices 00:48:50] no, Danielle’s info is in our show notes. As always, I am Sarah Karakaian.

Annette Grant:  [00:48:56] I am Annette Grant and together we are–

Both Sarah and Annette:  [00:48:58] Thanks for Visiting.

Annette Grant:  [00:48:59] We’ll talk to you next week.

Sarah Karakaian:  [00:49:03] Thanks for listening to the Thanks for Visiting podcast. Head on over to the show notes for additional information about today’s episode. And please hit that Subscribe button and leave us a review. Awesome reviews help us bring you awesome content. Thanks for tuning in, and we look forward to hanging out with you next week.