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[00:00:00] Sarah: Hello. Welcome back for another great episode. My name is Sarah Karakaian.

[00:00:02] Annette: I am Annette Grant. And together we are–

[00:00:05] Both Annette & Sarah: Thanks for Visiting.

[00:00:06] Sarah: Let’s start this episode like we do every week, and that is sharing one of you, our listeners who’s using our hashtag, #STRShareSunday, on Instagram. If you use it on the gram, we’re finding you, and then we’re going through your website, we’re going through your pictures, and we share you here on the podcast, on Instagram on Sundays, to our entire email list. Annette, who are we sharing this week?

[00:00:25] Annette: This week we are sharing @timbercovehideaway. Again, that’s Timber Cove Hideaway. And I want to go hideaway in the Timber Cove. Their Instagram first spelled, their first three pinned post– let’s talk about a pinned post.

[00:00:40] They are pinned to the very top, and they have, I’m just going to call it– it’s like on your Airbnb listing, when you have your first five photos that are your bangers, these top three that they have pinned, these are their bangers, and it is just really showing off their home and where it is located. I am just digging their pinned posts there.

[00:01:02] So if you don’t have pinned posts, check out Timber Cove Hideaway. And they really are just leaning in to the atmosphere, the outdoors of this cabin. But the indoor is beautiful too. And one thing that I love is they have some action reels of opening the front door.

[00:01:20] If you don’t have a reel where you open the front door and give them that, oh, I just checked in feeling– because I think we all know that feeling. It’s like so exciting right there when you open up the door. So check out how well they have done that. Love their yellow door. And they’re just infusing themselves.

[00:01:38] They have a picture of them and their puppy and just letting people know who you are, why you’re doing what you’re doing. But check out Timber Cove, their pinned post, and then their open the door reels. I want you to garner inspiration from that.

[00:01:52] And today we have such a special guest on the show. Sarah and I have a new business partner. Shall I say business partners?

[00:02:04] Sarah: You shall because they’re a married couple, Mike and Ingrid Navarro. If you’ve been listening to Thanks for Visiting for a while now, you may have gotten our origin story. Annette and I met at a city council meeting. I had just moved to Columbus, Ohio from New York City. I had walked away from my dream life in New York City to really start investing in short-term rentals and focusing on that in a market that was more obtainable. And right when I moved here, they started talking about regulations.

[00:02:30] I know a lot of you can feel me on that. And I went to all three city council meetings where this one meeting truly changed my life. And it didn’t change it right in that moment. It took, what are we on? I’m on year seven now. But it really did. And so there is a takeaway for you all right there, is to go to that meeting, meet one person, and what can you take away from that? And nurture that relationship.

[00:02:54] I emailed Annette after meeting her that day. I gave her my number, but I think I got her email address. Girl didn’t email me back for months, because I remember– I’ll never forget it.

[00:03:04] Annette: Slow and steady wins the race.

[00:03:06] Sarah: I was living in my RV, and I was like, Nick, this girl won’t email me back. I have no friends. I don’t know anybody here. What did we do? But we all know how that story ended up. But I also met this other couple, Mike and Ingrid, and to give you a little snapshot of who Mike and Ingrid are, they currently have 14 short-term rentals here in Columbus, Ohio.

[00:03:28] And a lot of them are new builds, and they’re these big, beautiful homes downtown. They have nine properties in the works, meaning they own the property, they own a lot of it. They are lots because they really specialize in new builds now, nine of them waiting for their attention. And about two years ago, Mike Navarro texted my husband, Nick, and was like, hey, dude, what do you think of this property? And sent him a link to a bunch of land. 

[00:03:54] And Nick and I have always been metro investors from New York City to the downtown Columbus area. And it was exciting for us to think about, oh, I’ve helped people in rural areas get their short-term rental vacation rentals off the ground. Could I do that on my own? And then flash forward about a year, we went through one deal. It didn’t work out. They were endangered bats. It was a thing.

[00:04:17] Annette: Mm-hmm.

[00:04:18] Sarah: But I asked Annette, I was like, hey, would you want to get on this deal with us? it’s quite a bit of property, and it’s with another couple that you haven’t really met. And this interview is really sharing with you all. A lot of you ask us about partnerships.

[00:04:34] What does Annette and my partnership look like? We own a property with Annette’s sister, and Nick and I own a lot of property on our own. And so we have some experience with partnerships, but this is by far the biggest. Annette had some feelings about it.

[00:04:48] Annette: Yeah. We’ll share those in the episode, but this is the first of many episodes that we’re going to have with not only Mike. We’ll have his wife on, but we wanted to give you some foundation of who they are so you can follow along on our journey of this land purchase that we finally closed on. But let’s get to this episode with Mike Navarro.

[00:05:11] Sarah: Mike, welcome to the show. We are so excited to have you on the podcast.

[00:05:17] Annette: Can I say what I said before we started?

[00:05:19] Sarah: Yes, you can. I’m here for it.

[00:05:22] Annette: I’m actually really, really excited for this call because we were doing some pre-show work, and Sarah’s like, Mike, we’re going to dig into your story, you and Ingrid’s story. And in my head I’m thinking, oh, I’m really excited to hear this. And I’m like, he’s my business partner. Maybe I should have known this.

[00:05:38] Sarah: Listeners, do as we say, not as we do.

[00:05:40] Annette: I’m excited to hear the backstory, for sure.

[00:05:44] Sarah: Yeah. Mike, take us all the way back to pre-short-term rental empire, because listeners, spoil alert, Mike and Ingrid, his wife, have one. Before that, Mike, what were you doing before you bought your first rental?

[00:05:56] Mike: I was living in Toledo, which was an amazing experience. I’ll never ever forget it. just got out of active duty out of San Diego. And San Diego, the next best thing if not paying a lot of money and with more real estate was to move to Toledo, Ohio. So that was back in ’05. My plan was to just go to school and try to get my associates and my bachelor’s.

[00:06:24] Moving to Toledo with Ingrid, she lived in a 1950 style, run of the mill Midwestern house. I think we’re like three months in, she had to go meet a big sisters because she was a part of the Big Sister Little Sister program. She dropped the shampoo bottle on the cold water side, and it broke.

[00:06:55] The water couldn’t turn off, so she’s like, hey, do you know how to do this? And I’m literally sitting at the computer doing homework, and I looked her, I’m like, don’t do it. Don’t do it. Just call the plumber. And was like, yeah, yeah, I’ll look at it. And her dad was there and he goes, hey, I’ll help you. I was like, oh, okay. We go to Anderson’s.

[00:07:22] Well, in her head, she’s like, oh, I see the potential now. I can use him for other things. And from that nozzle to putting in a screen door to putting in a sink to remodeling her bathroom, and she goes, hey, I can see where this is going. And I understood what I can do because that’s how I was brought up.

[00:07:53] My dad used to say, hey, we have to go air a roof off at our aunt’s house. And I’m like, dad, it’s 100 degrees out here. What are we doing? And we’re pale. We’re going to fry within five minutes. I think I had the biggest sore sombrero in California on the roof. And they’re probably like, what are these clown Mexican kids doing on the roof? But growing up, it was always about helping and trying to better, I want to say someone else’s living, but to show like, hey, you care. So that was in Toledo.

[00:08:33] Annette: Did Ingrid own that house, Mike? Did Ingrid buy that house?

[00:08:37] Mike: That was her grandfather’s house.

[00:08:38] Annette: Oh, okay. So you were actually doing some of the rehab on a family property of theirs? It wasn’t a rental.

[00:08:44] Mike: Yeah, yeah. So our first duplex in the university district in Columbus of January of 2009. And it took us 10 months of just scraping and sanding and painting a duplex that we remember, since this is March, we were actually scraping off seven layers of wallpaper, and we saw people walking down Denison, going to High Street for St. Patrick’s Day.

[00:09:17] I’m like, what are we doing? We should be those people. It was 15 years ago, so we were still in our 20s, but we understood what we were trying to do, what we’re trying to accomplish. And it was our first one.

[00:09:33] Annette: Well, what were you doing, though? I love that. You’re looking at each other. What were you doing? What was the behind the scenes of that duplex? Is it we are starting to invest now? Is it already the game plan 15 years ago?

[00:09:45] Sarah: Did you live on one side? Were you going to long-term rent the other? What was your plan?

[00:09:49] Mike: Yeah. So we did owner occupied, so we can have a lower rate. I think that was when we talked to other people in the area. We were part of the young professional. But yeah, our plan was to live there, let the upstairs unit pay for our mortgage, or most of it. We had a five-year plan where we bought a duplex every year, because I think that was part of the guidelines.

[00:10:21] You had to live in your house for a full year to have that owner occupied rate. So you can pay less in down payment, and then that’s what we did. We did for five years. We bought duplex, renovated it, stayed in it, and then moved on, 366.

[00:10:40] Annette: We were talking about you being active duty military. I don’t know if we mentioned that Ingrid was also. Could you take advantage of VA loans during this time? I’m not familiar with those at all. Was that part of your grand plan? Are those advantageous for active duty?

[00:10:58] Mike: Yeah, so if it’s your primary home and you’re staying there for a while, then I would say use it. I think the biggest thing for the VA back then was just a lot of closing costs. Some hitting costs that I didn’t know, especially if we’re already doing owner occupied, which we’re already getting a lower rate, and I think that was only 5% down.

[00:11:24] So the VA back then, I think it was as low as three to 5%, so it was the same ballpark. But the bank that we used back then had very low closing costs, which was, a union savings bank. I think it was, all together, 1,500 bucks. But the one thing with the VA is you can have a lower credit score versus going with a traditional bank.

[00:11:53] I think that’s the main reason why people go with that is because if you don’t meet all those criteria for a traditional bank, then the VA is the best second option.

[00:12:05] Annette: Can you use a VA loan for investment properties?

[00:12:10] Mike: No.

[00:12:10] Annette: It’s only for primary residents. Okay, great.

[00:12:14] Sarah: Okay, so you’ve been–

[00:12:16] Mike: I had suspicions like, can I do this now? Without reading the fine print.

[00:12:19] Sarah: No.

[00:12:20] Annette: Okay. And I’m just checking because I want to help anybody like, hey, I didn’t know these things. It’s like, is there something that investors could use the VA loan for?

[00:12:27] Sarah: There might be other ways that a single family primary for a couple years and then move out, that kind of house hacking. But Mike, okay, so five years you guys are house hacking your way through investing. Every time you move out, are you replacing them with long-term tenants?

[00:12:45] Mike: At that time we were. We did long term from ’09 to, I would say, was that July of ’16?

[00:12:55] Sarah: Oh wow. I didn’t know that. Okay.

[00:12:57] Annette: Well, what happened in ’16? What happened in July of ’16? Because you remember the month.

[00:13:02] Mike: Yeah. Let’s go back to ’15, November, or even October. So we got a new tenant on one of our duplex, and we looked at his application, and I was like, he just lives two blocks away. Why does he want this place? And I was like, wait, he’s a bank manager? What? I was like, okay.

[00:13:26] So there was already two red flags there, but he had a great credit score, everything looked great on paper. So it was like, for some people on this podcast, in the world, trust but verify.

[00:13:39] Annette: Love it.

[00:13:41] Mike: So we got him into a yearly lease. And on the other side I was doing maintenance, and I’m like, who are these four guys? Oversees contractors. I’m like, what is happening over here? So I’m thinking like, okay, he has a meeting, something, since he’s a bank manager. All this stuff is going my head.

[00:14:02] Annette: So essentially the people that you saw in the home did not match who the tenant had leased the home from you.

[00:14:09] Mike: No.

[00:14:10] Annette: Okay. All right.

[00:14:10] Mike: No. and they were there for a month.

[00:14:13] Annette: Ah, got you.

[00:14:14] Mike: So we were just monitoring it, so we can document as much as we can. And come November, I remember. It was Thanksgiving, and we just put up cameras, and it was like another–

[00:14:30] Annette: On the exterior. You put cameras exterior.

[00:14:31] Mike: On the exterior.

[00:14:32] Annette: Everyone, Airbnb’s biggest–

[00:14:34] Mike: Yeah, let’s be candid here [Inaudible]. But on the exterior, I’m like, this new people. So I was like, you know what? You broke the lease contract. I sent him a formal notice from our lawyer saying like, hey, you have– I think our contract is like, you have to evict, that you have to leave within, I think it was 48 hours. And so I go over there. I was like, hey, do you know this person? Oh no, I didn’t say that. It’s like, hey, who are you here with? The people who are staying there.

[00:15:10] And he goes, oh no, I’m renting this place. I was like, well, do you know who you’re renting it from? And he goes, oh, it’s this lady. I was like, I have no idea who this lady is. And so I called the tenant. I was like, hey, you’re subleasing this place. This is not part of our agreement. I was like, you have to vacate. And he was yelling, and I had her on recording since Ohio is one-person consent, the sole person. So I had her on recording, and he’s yelling, and he is like, why are you taking out my friend? This is ridiculous. You get paid on time. So he’s upset. I get it. I was like, look, this guy doesn’t even know you. I was like, I already know he’s subleasing since September. You have to go. But that kicked off what we are doing now, which Ingrid wants to send him flowers on our anniversary of kicking him out in November to thank him because in July, we started doing Airbnb or short-term rental.

[00:16:18] Sarah: So this tenant was–

[00:16:21] Annette: Broke the rules.

[00:16:22] Sarah: Arbitraging your rental and leasing out short-term stays on the platform known as Airbnb.

[00:16:31] Mike: I think it was like FlipKey. It was like other stuff that we were refining because I tried to look on Airbnb. It wasn’t. But yeah, he was doing it. I was like, man. Because I asked, he’s like, hey, you how much does he rent? He’s like, four grand a month. And I was only charging him 1,600.

[00:17:04] Sarah: Wow.

[00:17:04] Mike: Yeah. So he’s getting to it enough times. Just by doing the math back then, I was like, you know what? We can do this. You look at door wise, we already have seven doors. But yeah, so July of ’16, that was our first Airbnb that we opened up, and the rest is history.

[00:17:19] Annette: Yeah. I’m so interested. So when you and Ingrid started to turn the portfolio into short-term rentals, because I know there are so many people, this is a common thing, long-term rental to short-term rental to midterm rental. Real estate investors just want to mix it up.

[00:17:34] What are some of the conversations that you’re having about now having to buy furniture? You had to make that leap from, hey, we don’t have to furnish these things. There’s a lot of upfront costs where you like, let’s just try it in one, see what the return is. And then did you slowly just let lease. How did you, a, plan for it? And then b, you got to start moving people out, these long-term tenants. That probably can’t be an easy conversation too if they’re liking their space. So how did you start to plan the financials of furnishing these long-term rentals that you hadn’t made that investment in?

[00:18:07] Mike: So the first thing is all these places that we bought were either run down or share, so auction. We went in and say, you know what? To make this profitable or to even make sense, we have to buy this low to even consider a short-term rental. If you buy a little bit higher or even at market rate, then you, to me, even in this market, you can go on AirDNA and all that and see what the profit margins are.

[00:18:45] But back then we bought low where if our first instance was going back to the people who were staying there making four grand a month, look, that would cover four of our mortgages. So I really didn’t go into detail and say, all right, let’s do a spreadsheet. It was just trying to figure out when to stop 30 days out, like, hey, you’re month to month, or at this point make sure you are abiding by Ohio law.

[00:19:16] After the lease ends, I think it started 30 days anyways. But we still send notice. I was like, hey, once the lease ends, we’ll let you know 30 days before if you want to go another 30 days. Because we were trying to get this short-term, turnkey type places furnished.

[00:19:35] As far as furnishing, Ingrid has a good eye when it comes to this, where she, instead of just buying retail or wholesale, she just goes, hey, let’s go to the second or third market, either Facebook marketplace, the Salvation Army, their mercantile [Inaudible].

[00:19:54] I usually have to go there and hang with people on the phone. I was like, hey, it’s been on here for six weeks. We’ll take it at this. And I would say 80% of the time they would say, you know what? Take it. But not on the deals itself, like you’re buying real estate, but everything that you do from acquiring your products to your furnishings, there’s deals out there to maximize return and minimize capital. So from July of ’16 to now, we still do that. I was in Reynoldsburg two days ago picking up six–

[00:20:33] Sarah: What do we call them?

[00:20:33] Annette: Gypsy runs.

[00:20:34] Sarah: Gypsy runs.

[00:20:35] Annette: They’re gypsy runs.

[00:20:36] Mike: I know. I would rather pick up 100 pounds of Gypsy run versus the other stuff. But yeah, we look at everything, but at the same time, like if you’re short on time, Amazon a great place to go or deals, and I know this, you guys platform, you guys have some good–

[00:20:55] Sarah: We know. And in HostGPO.

[00:20:56] Mike: places that they can go other than Minoan and all that. So there’s places that you can go. It’s like, hey, I don’t have the time. Then you can go there. If you do have the time and then that’s going to be your full-time job, then hey Agle, do whatever you can because that’s your bottom dollar. And I’d rather see the returns, versus like, hey.

[00:21:21] Sarah: Right.

[00:21:21] Mike: I don’t see until like two years in a house, though. So there’s always upside to it.

[00:21:26] Sarah: I want to stop you for a second, Mike. And I want to insert my side of the story now. So Nick and I are leaving New York City. We hop into an RV. We don’t care where we go in the United States. We just want to buy more real estate, and we want to do short-term rentals. It was 2017. And we also tried– we actually put an offer in on a beautiful Victorian in Portland, Oregon. Learned very fast that they are not even– I wasn’t looking for heavily landlord friendly.

[00:21:53] I was looking for a balanced, viewpoint on rentals. So that didn’t work out. We backed out. Our gut was like, no. We stopped in Columbus, Ohio to visit a friend, and we saw this fourplex. We put an offer in. It got accepted. Long story short, and not more than a few months later was the city of Columbus talking about regulating short-term rentals. And I was like, I just moved to Columbus, Ohio from New York City to like re-live out my short-term rental dreams. And now you’re going to tell me we can only rent these out. Essentially they were proposing weekends only, and that isn’t feasible for an entire rental that you don’t live in to be profitable.

[00:22:28] So Airbnb and other real estate groups emailed everyone, it seemed like in the city of Columbus. Every Facebook group that had host we got all together and we showed up at– we could go to three city councils meetings. Of course, the overachiever me, I went to all three. This is where I met Anette Grant.

[00:22:46] Annette: I only went to one, but I was there.

[00:22:49] Sarah: She sat next to me. I met Annette there. I gave her my number. It took her months to respond to my email for a coffee date. I also met the Navarros that day. So like this city council, the one that Annette showed up to was also the one that Navarros were at.

[00:23:02] I don’t know why we started talking at that meeting, but we did, and I’ll never forget, bright eye, bushy tilled, Sarah, moving to Columbus. I have a fourplex coming. I don’t know much else. We house hacked one home in New York City and thought we knew it all. And I meet the Navarros. Ingrid has a baby strapped to her, and I was blown away that you guys, I think at the time, had 10 short-term rentals.

[00:23:26] I thought you were the coolest humans in the world and that you owned them all. You weren’t co-hosting for anyone. You were self-managing. And I was like, I want to know this couple. We were all busy, and eventually we started to talk a little bit, and one day we met you at one of your new builds, and I want to get into that in just a moment.

[00:23:43] And then I thought that meeting went great, that hangout went great. And I’ll never forget going back to our apartment, and I was like, Nick, I don’t think they like us because we hadn’t–

[00:23:52] Annette: That’s so Sarah doomsday.

[00:23:52] Sarah: I don’t think anyone likes me. And COVID hit shortly thereafter, and we just lost touch with the Navarros. And we’ll pick up there a little bit later. But that’s how I got to know Mike and Ingrid, and then obviously, Annette, you and I started toying with the idea of a podcast and just getting obsessed with short-term rentals.

[00:24:18] But Mike, so you have that duplex. Yeah, it was a duplex that you started short term in July of 2016. When do new builds come into the picture? Because that’s how I know you and Ingrid– big, beautiful downtown new build properties.

[00:24:32] Mike: So we bought a house, and the house actually came with a vacant lot. I think we paid $19,000 for this lot.

[00:24:38] Sarah: I hate you guys.

[00:24:40] Annette: Score. That’s bragging. I hear bragging, Sarah. Do you hear bragging?

[00:24:43] Sarah: I’m okay with that. You’re allowed.

[00:24:45] Annette: I think we paid 19,000.

[00:24:46] Mike: The people just wanted to leave. They were tired of downtown loading. I’m like, what? But when you go in their house, it was particle board, outlet wood were outlet covers, flying green shank carpet on the floor and on the walls. So I don’t blame them trying to leave. It was a hot mess.

[00:25:08] But our family was growing. We just had another kid, so we’re on number two, and I was working with a, I don’t want to say a local builder, but he’s out of Carroll, and we talked about the contract. We went over everything. And by then, I already knew what cost went into things as far as materials, and a little bit of labor. 

[00:25:35] And we were talking for four months. I was like, hey, you have to go to commission. Do you know how to do that? I had to go to commission twice for removing stuff or painting something. I already knew the process. And he goes, oh, okay.

[00:25:50] So he revised his contract and almost doubled my contract from, I think it was 30% to almost 60% margins that he was trying to profit off. I was like, how is this possible? He like, oh, I didn’t know you in historic neighborhood, or I didn’t know where the place was at. So based on that, you’re literally in downtown zip code that he felt like he was undercharging and need to overcharge to do so. 

[00:26:24] So Ingrid and I just decided– I was like, you know what? I’ll take it on. I’ll see what happens. Plus, we were full-time, so I was taking PTO like two days a week where I was onsite 12-hour days just to get as much information, knowledge, of what each trade was doing. Because if I don’t know, then I’m going to know. For me personally, I learn everything by visual first, and then someone can write it up and like, okay, I understand.

[00:27:02] I’m usually backwards. Yeah, so I started talking, but I didn’t just do this by myself. I was talking to another person that we knew in the area that was building too. It was another Mike. so he goes, hey, if you need any guidance, just give me a call. I will help you.

[00:27:19] So I would say, people listening, if you’re going to take something on, just make sure you have someone, either a mentor or someone that you trust that is willing to lend their hand or their knowledge because you don’t want to just, hey, I’m just going to home hang it and just do it.

[00:27:41] I said it, but I already knew that the people that we knew had knowledge that was willing to lend a hand. I was scared. I was having dreams that the wall had collapsed, but everything that I was doing or I had a question, people were willing to answer it, even the subcontractors.

[00:28:02] I was like, hey, why are you putting the header right there? It was like, oh, that’s your load beam to transfer the load for your upstairs. I was like, oh, okay. He’s like, just make sure you put a hanger on for your LB out. So people were willing to have the discussion, so like, what is this pesky homeowner doing over here? But I was the homeowner and the contractor.

[00:28:20] Annette: Right. You were the one paying all the bills.

[00:28:23] Mike: Yeah. So partner up with subcontractors that are willing to just take a second to explain something, having people that are already in the trade that are willing to provide that information is priceless. So it’s a house, a three-level house, and then we built a carriage house in back, and it took 11 months to build.

[00:28:50] Sarah: That’s incredible.

[00:28:51] Annette: Yeah. That seems really fast.

[00:28:53] Mike: Oh, I know. Everyone’s like, oh my God. This house is done. I was like, there’s six weeks of delays. My brain just works a little bit different. Like, oh my God, delays, delays, delays. But for the outsiders, it’s like, this house was built fast. 

[00:29:08] Annette: Overnight. Yeah. That’s overnight.

[00:29:08] Mike: Yeah. Are you sure it’s going to stand? I was like, yeah. I was on site. I saw the nails go in.

[00:29:14] Annette: With that three-level and the carriage house, were the intentions for that to both be a short-term rental?

[00:29:21] Mike: No, that was our primary home.

[00:29:23] Annette: That’s your primary home. So you were the GC. You were trusting yourself with your whole–

[00:29:28] Mike: Yeah. So halfway through the build, my thinking was like, this is our forever home. So we’re going to put like nice finishes and do it right, because we’re going to live there forever. And six months into it, Ingrid’s like, this is not our forever home.

[00:29:41] Sarah: We got to go.

[00:29:42] Mike: We got to go. I was like, what? And we were working to acquire another house with a vacant lot, probably 500 feet away, off of Busy Street. And she agreed. And the house still looks nice. I won’t take away– it’s a really nice build, how we did it. But yeah, halfway through, I’m like, okay, now I have to go build something else, our forever home, three years later. But the house that Sarah and Nick came, that was the second build, which was back in ’17, and we finished back in ’18.

[00:30:27] Sarah: So I want sure we have enough time to talk about our partnership too. So real quick, Mike, tell everyone now– rapid fire questions– how many new builds have you done to date?

[00:30:40] Mike: I built seven.

[00:30:42] Sarah: Great. How many doors do you have that are short-term rentals right now?

[00:30:46] Mike: Fourteen.

[00:30:50] Annette: He just opened two new ones this week, so he’s counting in his head.

[00:30:54] Sarah: I’m not even stopping. You have 14 doors. How many doors, not including our project, are waiting for you?

[00:31:01] Mike: Waiting for me, there’s nine.

[00:31:03] Sarah: Yeah, I just want listeners to understand how incredible you and Ingrid are, because you are. I hope this is okay that I’m saying. If not, we can– you have four children. It’s a lot. And then we’re going to talk about this project that we’re about to embark on. You and Ingrid have created such an incredible empire. You manage all of these properties yourself. Correct?

[00:31:30] Mike: Yes.

[00:31:31] Sarah: And you are just one impressive crew. So let’s move on to the fact that you’ve got four children. You’ve got an amazing wife. You’ve got 14 active doors. You’ve got projects waiting for you, but you are itching for land.

[00:31:47] The way I remember it, Mike, you reached out to my husband Nick, and you sent him a picture of grass and trees. And that conversation started of buying land down in the Hocking Hills area. Talk to us about your mindset around a project like that, buying a bunch of land, about 45, 50 minutes south of Columbus.

[00:32:11] Mike: Yeah. So we went down there before the pandemic and then during the pandemic, where I was like, this is nice. This is nice to get away, take the kids, and do something different. I think I was on one of those land real estate websites. Anyways, I was constantly looking at places like, how are these places this much money?

[00:32:36] There were 60, 80 acres, and I was like, we already have stuff in the pipeline by buying something. We wouldn’t be able to build our house, our house that we’re staying in now, or the house that we built out at the lake. That was already in the pipeline.

[00:32:55] So it was in the back of my head like, hey, we have to do something, I don’t say like no one else has done, but to do something that– I was like, you know what? I already build homes. Let’s do something different. So I was constantly looking, trying to figure it out. And then I text Nick something about trees and stuff, and then he went on about his Buckeye. I like, okay, I get it.

[00:33:20] Sarah: Real quick on the side, Nick and I and Annette had been dreaming up doing something out in the Hocking Hills area, so we actually had an idea. Nick’s owns an architecture firm, so we had one of his drafters bring our idea to life on paper. And so Nick was just sharing that with Mike. We have ideas too. This would be so cool. Okay, continue.

[00:33:40] Mike: Yeah. So it started from there. Again, it had, I want to say I had traction, but in the back of my head, I was like, okay, I put a placeholder there. If I have the bandwidth, let’s continue the conversation there. So I reached out to a person that we’re friends, but they live across the street from the Highland build.

[00:34:02] The only reason why we became friends is because we’re at the same sheriff auction with her five sisters, bidding on the same lot. I won it, and then the whole family came over and were yelling at me like, are you one of those developers? Blah, blah, blah, blah. I was like, no, I’m just family business.

[00:34:22] It’s just me and Ingrid. They understood I wasn’t just like one of the bigger conglomerate in Columbus. They understood what I was trying to do. So we had known each other for like seven years now. She bought acres down there in Hocking, and she has her first short-term rental down there. And it turned out amazing. 

[00:34:45] I reached out to her. I was like, hey, who’s your contact? Because she was telling me this guy has 5,000 acres down there, and he’s been acquiring and selling since the ’80s. I was like, oh my God. He probably got it with dirt sheet. I was like, hey, how about a six pack for an acre type stuff?

[00:35:03] Yeah, so I reached out to her, and I started the conversation like, well, if I don’t have something, I have somebody else that I partner up, and he gave me his contact information. I think it was what October of ’22, where the conversation started, where it was almost a 18-month conversation.

[00:35:33] Sarah: Yes.

[00:35:33] Mike: There’s a lot of ups and downs during this process, but yeah, just having a conversation. Especially on the other side as a seller, they want to put their best foot forward and just sell their stuff.

[00:35:46] But I would say if you’re not willing to have those tough conversations, then find somebody that is willing to have those tough conversations where you trust they’re like-minded that are willing to have those conversations. Because if you’re not willing to have a conversation, then they’ll try to get one over you. I’m not going to say that this transaction wasn’t, because he tried to get over few times on some BS, but in the end, everything worked out.

[00:36:22] Annette: Why did you want to partner on this, though? Because you and Ingrid have done everything on your own, just you two. This is a big deal to bring in others, namely us. What was the motivation there? Because Sarah and I get that, probably one of our most asked questions from just folks around us of like, what’s it like having a partner? I can’t imagine having a partner, and we can’t imagine–

[00:36:44] Sarah: Don’t you guys fight?

[00:36:45] Annette: Yeah. So when you and Ingrid were chatting about this project, why even want partners? What’s the motivation there? And then also choosing your partners, I want to see behind the scenes on that.

[00:36:59] Mike: Yeah. So we had that talk. We’re very blunt. If you’re not willing to have those tough conversations with your partner or your significant other, then you already had a bypass, like, what are we doing? Sarah was like, hey, what’s in the pipeline?

[00:37:13] We knew what we were doing. I knew that personally, hey, I want land. I want to do something that I can have where I can just go down and be immersed in forest and can’t hear cars or whatever. But the conversation was like, how much bandwidth do I have, does Ingrid have that we can still be a functioning family? 

[00:37:44] And then Ingrid’s like, hey, do we have people in mind for projects like this that are like-minded, that are rational, that are willing to have those tough conversations to say, hey, you know what? This is my voice, this is what my concerns are, and just having those conversations with you guys, it was easy. 

[00:38:06] It was easy because of what you guys were already doing and were willing to do. I think the conversation lasted for like a week because we’re just– you have to have conversations. You have to say, okay, what are the worst-case scenarios? What are the best-case scenarios?

[00:38:24] So we were having those talks. We had pros and cons list. We were writing down, like left side, right side. But yeah, it just came down to having conversations, making sure that you’re partnering and building with like-minded people that are rational people. And what’s the goal in mind?

[00:38:47] If you don’t have a goal in mind and understand what a process is, then it’s just going to be harder. That’s the reason why we were looking at partnership, because, one, bandwidth; two, we wanted to do something with like-minded people, and then just do something fun.

[00:39:06] In this industry, it’s like, okay, let’s buy something, acquire, turnkey, and then just keep going. We’ve been doing it for over 15 years now, and it’s like, all right, what’s the next adventure? And the way you guys have your platform and what you’ve been doing, it’s like, you know what? They’re fun people. Let’s partner.

[00:39:28] Sarah: Not only did you and Ingrid I’m sure have difficult conversations, but between you and Ingrid, Annette, me, and my husband, Nick, we did have not difficult conversations in the way that we all hung up the phone and felt terrible.

[00:39:44] I love this question Ingrid asked, which I thought was amazing. When we were on the phone with our attorney drafting our first version of our operating agreement, because, and Ingrid and Mike are married, Nick and me are married, she was like, well, what happens if someone gets a divorce?

[00:40:02] And we’re all happily married. There haven’t been any signs of anything, but that is such a great question to ask. I actually was impressed by it, our attorney was impressed by it. And those are questions that we asked each other, we asked our attorney. 

[00:40:20] Also, I’ll just be vulnerable. Right now, Nick and I, we had just moved to Columbus, Ohio, and we’ve been putting a lot of cash into projects, into properties, and learning. And I was starting a staging business, and then I was doing an organizing business.

[00:40:32] Annette: And I suck my teeth into you.

[00:40:34] Sarah: I was a co-host. I was just all over the place for a couple of years. So was Nick. Nick was managing people’s renovations, and then he was trying to get this architecture business off the ground without any help from his partners who were still working for other firms. So Nick and I had a lot of years of just, I want to say throwing money away, just trying to decide what we were going to do with our lives.

[00:40:53] So our financial situation was also one of that. I was very honest with Mike and Ingrid about, I was like, here’s what we can give you. Here’s what we cannot give you. And I needed to make sure that my partners knew that. I feel like, Mike, every time you and I had a call, I’d be like, but you remember this is what I have to give. I just think the whole time we were all very open with each other.

[00:41:16] Annette: Yeah. And I can share. Mike, we’ve had a lot of conversations. I’d say my vulnerability in the purchase and my honest conversations with the team is my risk tolerance. And there was a certain point of time where the deal seemed too risky for me. And I share with everybody. There are points I was like losing sleep. Is this a smart thing?

[00:41:37] I make financial decisions on my own, so it’s me talking to my own head all the time. And that was something I was very open with the team about, of like, hey, at this–there was actually more land that we were going to purchase, and we’ve brought it down significantly since then.

[00:41:52] But I was very open. And those conversations were scary for me. They were, hey, should I be more risky? But no, I need to be honest about how I’m feeling. And so I appreciated the team listening to that. I was proud of myself for being honest and like, hey, this is where I can go up against risk-wise.

[00:42:14] And then after that, I’m not comfortable, and I don’t want to lose sleep, and I don’t want to put myself in a potential situation that wouldn’t be good for myself. But those conversations, we had those the beginning of the relationship. And I’m really thankful for them now. I know we talk about how much we appreciate our attorney, but our team of attorneys through this has been really– the deal was not a smooth deal. 

[00:42:37] We’ll have a follow up episode giving you guys all the behind the scenes on the actual deal and so much work that Mike put in there. But I think that’s something that people, they get into these business relationships, and they don’t want to get into them because they’re scared about how they could end.

[00:42:52] And I think you’d absolutely have to have the end in mind, and it makes it not a scary thing. And I want to share that because we did have those conversations. And again, you guys heard at the beginning of the episode, I’m like, I’ve had some really vulnerable conversations with Mike, more so than some of my friends and family because we are in a big business deal together.

[00:43:11] And you have to do that with your partners. And if you can’t do that with your partners, that’s a red flag to me. And so I can have the same conversation, honestly, that I would share with Sarah, but then I would immediately text Mike, and then we’d get on a call. There wasn’t something that I’d share with Sarah and then hold back.

[00:43:29] She would be like, okay, now we need an– I would vent it first, and then share it with the whole entire team. And that’s the part that I think everyone needs to be in alignment with. And that’s the lesson for everybody here of, there is money involved. There are feelings involved. 

[00:43:45] And I love what you were saying too. I think the money is the easy part to find. It’s who’s going to have that value add for you? So everyone out there, I feel like if the bank isn’t going to give you money, there’s someone that can partner with you on money. And I’ve been a part of a lot of organizations before. We could find the money, but they weren’t bringing any value. It’s like if you can find a value add partner, and that’s what we have here, you as the builder, Ingrid as design and operations too, and then obviously Sarah’s husband architect, Sarah and her operations expertise. But that is what I really want people to dig into, because the money is “the easy part.” And so that’s special. I tell people too. I would not have gotten into this deal if it was not with a builder, because I am learning, holy smokes, that is a whole other thing.

[00:44:33] I’ll share this too. Remember I was fighting you on why can’t we just find another piece of land. And you had to like bring in, Annette the time that we are going to save by this property already having a dwelling on it is going to be invaluable. And that’s where you’ve given me life lessons by saying, you’re wrong.

[00:44:51] There’s not just other land that’s less expensive. The time that we might have spent trying to get utilities, and I don’t even unknow all the things to say, but that was a huge lesson right there for me.

[00:45:02] Mike: But I was hearing you. I wasn’t like trying discount you in way. I heard you. I was having those fears myself because, to me, it was a very special property that everything’s already cleaned in the sense. We can go in there and start. Partnering with you guys, the whole thing, was like, hey, yes, can I find the money?

[00:45:28] I can. But those people are going to bring it full circle. And I was willing to do as much as I can, 18 months of just having those talks, going down there, tough talks. I think this deal could have went south multiple times, where I was texting you guys like, oh, hey, this is happening, this is happening.

[00:45:53] So I was very transparent on what I was trying to accomplish and trying to do. And the team knew what I was doing. I was not trying to hide it. So I think the moral is finding those people, building a relationship, and knowing what the end goal is.

[00:46:15] The end goal is to make sure everyone’s aware that they have a good operational agreement, they have a good lawyer, they have good teamwork. Everyone knows their place where it’s easy after that. Once you have those in place, understand what everyone needs to do, then project or where you’re trying to do is easy.

[00:46:35] Sarah: Going to have fun. Let’s wrap up this episode, but I want to make sure that everyone listening to this doesn’t feel like, well, I want to know more about it. So Mike, how many acres was the deal originally and how much did we close on?

[00:46:51] Mike: So the original deal was 174 acres. Well, I would say the last month of the deal it was going back and forth, and we closed on just around 134 acres.

[00:47:04] Sarah: And that difference–

[00:47:05] Mike: And it’s subject to change if we want to buy 15 additional acres. So it could go up. But we are deed for 134 right now.

[00:47:16] Sarah: So our plan now, everyone, it’s March of 2024, and so listeners, our goal is to be as open and transparent about this project with you as we can be. This is the first time that Nick and myself have done any sort of rural, vacation rental, specific type project.

[00:47:37] It’s the first time we’re working with Mike and Ingrid. I have helped people in this area, but I’ve always wanted to dig my teeth into this. I’m excited for the operational side. I cannot wait to hire a team and to get– I daydream about getting our employee handbook together and all of the branding. I’m just very excited. But Mike, what are you most excited about the next six months of us bringing this to reality?

[00:48:05] Mike: Ingrid doesn’t like this. I don’t get excited until stuff is done.

[00:48:10] Sarah: Okay.

[00:48:11] Mike: When this deal is done, I wasn’t excited. I was relieved. 

[00:48:18] Annette: Fair enough.

[00:48:18] Mike: But that’s who I am. Because I already know what the process is. It’s like you acquire, and then you go through surveyors, and you have all these talks, and then you start the build. So I don’t really get excited. I just know what it takes to get there. I already know the process. So once I know that the models that we’re going to get are transported, I was like, okay. There’s a little drum up, like energy and excitement.

[00:48:50] But for me personally, I don’t get excited until like, hey, we put the last electric, or water, or sewer in the last unit, for phase one, or whatever. So personally, I don’t really get excited. I used to in the past, but I just know what it takes to get to that stage. And once you’re almost done, like, okay. I can have a dream. I can relax for a little bit.

[00:49:21] But yeah, I am excited to get down there and talk about our concepts, having those conversations, having those unique conversations, like, hey, how do we drum a business? How do we get more out of what we already have?

[00:49:37] Annette: Let’s talk about what we have though. I want to lay some foundation for everyone as we continue to story tell. So we have 133 acres. Let’s talk about the structures that are on it. I want you to talk about them because you know them better than I do.

[00:49:52] Mike: Yeah, so I would say there’s four garages that are like farm garages, pretty big. I think one of them has a 1968 Jeep in there.

[00:50:06] Annette: Yeah, let’s go. I didn’t know that. Score. Okay.

[00:50:09] Mike: Yeah. So we have four garages there. We have 700 square foot, little cottage that the previous owner lived in. The acres down there, he lived there, so he literally took what he needed. And our tree [Inaudible], he took care of it because he used it as his fuel for– he manicured the place because he lived there. And going back to what Annette was saying, why are you on this place? I was like, because he took care of it.

[00:50:41] Annette: He took it in his care.

[00:50:41] Mike: Yeah, he already has those. So when you walk it one or even twice, you’re like, oh, I see it. You see the potential because it’s not just you’re looking on realtor.com or looking at places like– no, you need to go there, walk it.

[00:50:59] Why am I going to invest and put my time into something if I’m not will to go down there to actually look at it and to vision? Especially you’re partnering up now with multiple people. It’s okay. What are your visions? Can we align those visions? I think that’s part of the talk too. It’s, what’s your vision? Oh, my vision’s modern. Oh my God, I’m contemporary. Yeah, you go down there and you try to vision, it’s like, oh, okay. I see it now. Now I’m excited.

[00:51:30] Sarah: Mm-hmm.

[00:51:31] Mike: I’m excited for two minutes.

[00:51:32] Annette: Right. Well, we’ll have you on again, Mike, and we’ll talk about the cottage, we’ll talk about the garages. I want to have just some follow-up episodes, and we’ll make them almost like story form. The first one will be the deal. We can get into some of the nitty gritty on the actual financials of the deal and the partnership.

[00:51:52] And then next episode will be, what are the next steps for our planning for the land and what we’re going to build? And then we’ll bring your whole perspective on what are just the next steps for Mike Navarro? What’s already going through your head? You said it like, okay, I’ve got to have a surveyor out. I’ve got to have this out.

[00:52:09] And I just want to go through, because I want to learn alongside while we’re doing this project of that building process, what’s next? Now that we’ve got the land, okay, that’s hurdle number one. What’s next? So we’ll go through– those will all be follow up episodes so we can share the story, and it’s going to allow us as a team to dig in and just get the project even a more a sturdy foundation. And we’re just so excited.

[00:52:32] Sarah: I’ll give a little spoiler. So Mike and my husband are definitely taking care of the survey and figuring out utilities and things of that nature. Annette and I are spearheading our feasibility study to make sure that we are lendable by banks so we can start bringing our reality to life.

[00:52:50] And we’ve already got, and we’re very excited to share this with you once we have more details and it’s worth sharing, a marketing plan. That’s right. We’re already starting to talk about– we already have a videographer that’s starting to document the journey. We already are talking about how we’re going to get people excited in Ohio and in our Tri-state area about coming to check out our property.

[00:53:11] There is a lot of competition in Hocking Hills. A lot of our friends have incredible properties. I’ll list them here. We’ve got The Cliffs. We’ve got The Box Hop. We’ve got Dunlop Hollows. Who’s the woman who I stayed at Christmas? The Creative Cabins. I love her properties.

[00:53:28] Annette: Mm-hmm.

[00:53:29] Sarah: No, we have next level designers, builders. Idyll Reserve is out. Just amazing. So we have to level up, but I’m self-talking right now, making sure that as long as we put, Mike and Ingrid, Nick, and myself, and Annette, if we put a little bit of ourselves into this project, it’s going to be unique. It’s going to be incredible, and it’s going to be worth coming to and experiencing our hospitality.

[00:53:55] Annette: Wait, so every place is going to have a pizza bed?

[00:53:59] Sarah: And a gummy bear bed.

[00:54:00] Annette: Yeah. Mike, when I stay in hotels, I get two beds. One to eat pizza in, and then my other one to sleep in. Yes, I said it. I’m just going to keep it real. So all of our units will have a pizza bed.

[00:54:10] Mike: You can keep your shoes on.

[00:54:12] Annette: And a sleeping bed.

[00:54:13] Sarah: She’s not making this up, everyone. I’ve literally seen the paper plate with the pizza on it, and Annette in her other bed. Mike, if people want to check out your properties, and if they want to stay with you here in Columbus, Ohio, just learn more about you and Ingrid, where can they do that?

[00:54:29] Mike: Yeah, so we have a website. It’s rowehouserentals.com, R-O-W-E, houserentals, with an s at the end, .com. Figure out our Instagram.

[00:54:42] Sarah: We’ll put it in there for you, Mike. Don’t worry. I got it

[00:54:45] Annette: Okay. Sarah, we’ll have to take care of marketing on this project.

[00:54:50] Mike: I am not marketing. 

[00:54:51] Sarah: We got you, Mike.

[00:54:52] Annette: You just do what you do. You just do what you do.

[00:54:54] Mike: I know. You need to put up curtains on TVs, I’m your guy. 

[00:54:58] Annette: Hey, be careful.

[00:55:01] Mike: Yeah, yeah.

[00:55:02] Sarah: No. We’ll share your Instagram and your website in the show notes. Mike, thank you so much for your time today, for being vulnerable, and sharing with our listeners. Again, we don’t know how this is going to end up. We’re just getting started. We just closed the deal, what, three weeks ago, maybe a month ago.

[00:55:18] Mike: Yeah. So there’s follow-up episodes. We’re going to talk about the ups and downs even with the lender. I think I–

[00:55:26] Annette: Oh gosh.

[00:55:28] Sarah: That was not fun. You’re right.

[00:55:31] Mike: But yeah, definitely we have follow-up. But it’s the journey. It’s the journey that I feel like I was willing to do and was willing to, like you said, to be vulnerable and to have those tough conversations. I was like, I think this changed me in a sense to appreciate the, I wouldn’t say the game, but to appreciate the process, how everything worked out. But you know what? Ups and downs, they worked out for the better where now everyone’s on the page, everyone knows the goal, what’s in mind. So I wouldn’t change it, but yes, we definitely have follow-up.

[00:56:15] Annette: Yeah. So we’ll see you on our team meeting tomorrow because we already have weekly team meetings. So we’ll see you tomorrow, Mike.

[00:56:21] Mike: Yeah. Hopefully some happy hour.

[00:56:23] Sarah: Yes. All right. With that, I am Sarah Karakaian.

[00:56:26] Annette: I’m Annette Grant. And together we are–

[00:56:28] Both Annette & Sarah: Thanks for Visiting.

[00:56:29] Sarah: Talk to you next time.