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

[00:00:03] 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 incredible listeners, who’s using our hashtag, #STRShareSunday. Annette, who are we sharing this week?

[00:00:15] Annette: This week we are sharing @thegoodhost.co. Again, that’s @thegoodhostco. That’s a good name, Host Co. No, I’m loving this name. This is a very disruptive Instagram page. And I’m going to tell you, I have not seen this done before, and at first I didn’t know how I felt about it, but now I actually like it.

[00:00:36] She has basically put together nine grids to be a full photo of the property, exterior and/or interior. I don’t know if you do it throughout your whole feed, but I think it’s interesting to disrupt it every now and then with a maybe hero image of your property. But check it out. You’d obviously have to be thoughtful in the way that you post to make sure that it’s lining up and you have the exact photos displayed.

[00:01:09] But it was interesting. And Jamie is a star. Went into her profile. She is hosting in multiple locations, and I like that. Again, it’s The Good Host Co, and she just has her separate cities, her separate properties in her highlights. I know a lot of hosts want to have a lot of different Instagram handles for all their properties, and I like that she’s making it succinct and just showing all of them underneath the one. So well done, Jamie.

[00:01:36] Annette: Sarah, I love when we get to meet our guests in person.

[00:01:40] Sarah: Yeah, we did. So we connected with today’s guest, Isaac French, on LinkedIn. I think, Annette, you are following him for some time because his story was all the rage and continues to be. He built a experiential, he calls it a micro resort in 2022 and then he sold it, what’d he say, eight months ago at this point?

[00:02:01] Annette: Mm-hmm. I think so.

[00:02:02] Sarah: At the end of 2023-ish, mid to end 2023. So very quick, launch, build and exit, but it was very successful for Isaac. We don’t want to give away all the details, but we also got to meet Isaac when we went to the IMN Short Term Rental conference this summer. I ended up in this really cool thing, Annette, which we should maybe do something like that for our next conference, where you got to sit in a room with someone who was leading a conversation about a specific topic and then ask them whatever questions you wanted.

[00:02:32] So instead of being on a stage with maybe 100 people around you, you are in a small workshop type room with maybe 15, 20 people around you so you could have more of a casual conversation with this person. And so Isaac was saying so many really cool things about building this experiential resort in Texas, what he learned, what went well, what didn’t, what was it like to sell it so fast? And I’m excited about this conversation today. His tip about landscape is one of my favorites. What was your favorite takeaway, Annette?

[00:03:04] Annette: That people crave experience. It’s not that that’s a new thing, but just being reminded of it over and over again, is, what type of experience are you offering your guests?

[00:03:15] Sarah: And we’re not going to lie, Annette and I obviously did more than put our toe in the water. We bought a lot of land, and we’re going to do a resort ourselves, and it’s a completely new adventure for us. And so we have a lot of questions that we have for Isaac that we have for our own property, and we’re excited for him to help us here on the episode today. Isaac, welcome to the show.

[00:03:37] Isaac: Sarah and Annette, thank you so much for having me. I’m pumped to be here.

[00:03:40] Sarah: Ha. So we’re spoiled because we follow you on LinkedIn. We actually got to sit on in a very intimate workshop with you at IMN this summer. That was a treat. But our audience may not know you and your story, so will you please take us back to pre awesome hosting days, pre resort days? And tell us how you got into this industry.

[00:04:02] Isaac: You bet. So I did not come from a hospitality background or real estate really, but I did grow up in a very industrious family, nine siblings. We were homeschooled, grew up on a farm. So we had chores and tree forts and trails and lemonade stands and just a wonderful childhood, very entrepreneurial, actually.

[00:04:23] And in high school, my dad actually was a plumber, but then he became a general contractor and I started working for him when I was 14, 15 during summers from the ground up as a general labor, learn the trades and construction, which was super valuable, I learned down the road.

[00:04:39] And so I spent six years eventually running projects, but again, working my way up. And alongside that also learned accounting, bookkeeping, which you don’t usually see accounting, bookkeeping mixed with art, but I’ve always been very artistic. My grandmother gave us art lessons when we were all kids and actually wanted to be an architect when I was younger, but then couldn’t quite bring myself to the discipline of four plus years of school.

[00:05:04] So long story short, three years ago, I was 24 years old. I had about 20,000 of savings. I was self-employed as a bookkeeper, but I did have a few years of construction under my belt. And I had this dream, and it’s really hard to pinpoint where it came from, but essentially, the dream was simple.

[00:05:23] Build a small, charming village of Nordic inspired cabins nestled around a lake right here in the heart of Texas, something that was totally unique for Texas, something that didn’t exist. It was something that would feel like you were going to a different world. And so I started looking for property because I knew finding the right place was going to be key.

[00:05:45] And anecdotally, I had a few friends that were in Airbnbs in the Waco market, and all of them told me, don’t get into Airbnbs. There’s way too much oversaturation. We’ve had hundreds and hundreds of new units come online in the last few years. And I kept trying to tell them, look, guys, I’m going to create something that is totally distinctive that will not compete even.

[00:06:06] It’s going to bring a new lane of traffic to Waco. It’s going to be a destination. And most of them didn’t get it, but one morning while scrolling Zillow, I stumbled across this five-acre piece of property, and it was $133,000. It was about seven minutes down the road from where I lived. I had driven past this place 100-plus times and never thought anything of it because it was just a jungle. All you could see was bramble and trees.

[00:06:31] But I saw one of the listing photos, a drone photo, and there was this little muddy cow pond right in the middle of the property. And I was like, that looks really interesting. Plus, it’s right down the road from me. So I called up the listing agent. An hour later, I was on site. And I kid you not, when I walked on the place for the first time, I got chills. I just knew whatever it was. I saw this little muddy cow pond. I saw these huge live oak trees, which were maybe the biggest deciding factor, these gentle rolling hills.

[00:07:00] And yes, there was tons of like scrubby, swampy brush, but I could just see this perfect hidden gem underneath all of it– a place to realize that dream that I’d had. And the land was just speaking to me built here. I know that sounds corny, but that’s literally what my experience was. And so really very less analytically and much more just following my heart, I was like, this is the place, and we’re going to build a vision that works for this property.

[00:07:28] And so I put in an offer that day, and we were accepted a cash offer to close in 30 days and I was like, well, now I got to figure out how to get some money. Again, I had 20,000 bucks. So I started calling up family members, friends, basically anyone I knew who I thought had some money that would potentially support this.

[00:07:46] And my hope was that I could borrow via a hard money loan, high interest rate, short-term, borrow enough money to, in addition to a construction loan, get a project completed, then refinance it at a much higher valuation. My family members liked the idea a little too much and they were like, okay, we’re going to loan you a little bit of money, but we need equity.

[00:08:04] So who ended up going into business together, which was great. I had spent, again, years working together with the family. So fast forward 10 and a half months from that first day I ever walked on the property, we opened the doors to Live Oak Lake, which is a seven unit micro resort. It’s these 500 square foot Scandinavian cabins all nestled around this beautiful lake, which we totally redid, dug out, totally enhanced the landscape and really created, again, that immersive transport of environment.

[00:08:38] We created this vibe really that it’s the culmination of thousands and thousands of these little tiny details. And when I get fixated on something, I go all in. And that’s what that year was. It was a crazy year. I was working 80-plus hour weeks, running the project. Of course, we got a construction loan through a local bank after being told, no, a bunch. There were roadblocks and pitfalls at every turn, but it was a team effort.

[00:09:02] I had amazing friends, amazing family, and we got the project over the finish line. It was a crazy year though because in order to do it, we went so far over budget, I just wasn’t willing to compromise on all these little details that I actually built a 750,000-dollar spec home five minutes down the road in four and a half months overlapping that project because market was really great in Texas.

[00:09:25] And sure enough, I made about $200,000 on that, was able to sell it live months after building it or after starting it while it was still in construction, rolled all the profit straight into the Live Oak Lake project because I had to. It was every penny we could scramble together.

[00:09:40] But yeah, we opened January 15th, 2022, and one other crazy part of that year was I actually, about two thirds of the way through the project, broke my pelvis. I jumped into one of the cabins one day to help out one of the contractors who was installing a spiral staircase and climbed up on a ladder to hold something for him with the ladder, fell out from underneath me and I fell about seven feet onto the concrete and was just shocked initially but all of a sudden realized I couldn’t really move.

[00:10:11] Breaking your pelvis is a much bigger deal than I ever thought it was. So I found myself from going 80 miles per hour and every sense in life to laying flat out on a hospital bed for a week with multiple surgeries. And honestly, looking back, I’m thankful for it because you have to slow down.

[00:10:28] There are times, there are seasons where you have to give everything, but then you also can never get so far ahead of yourself that you’re forgetting the most important things, which for me are faith and family and my friends. And having that opportunity actually allowed my church community and my family and people to pitch in a way that– I’m such a micromanager.

[00:10:49] I probably wouldn’t have just allowed it because I’m so OCD about all the details, but it was a wonderful experience actually. I was on crutches for about three months, but they stepped up in a big way and we got the project done. So we opened January, 2022. Two weeks later, one morning, it’s the phenomenal launch.

[00:11:07] We’ve got wonderful reviews coming in on Airbnb. Lots of folks are coming and experiencing it. It’s so rewarding to finally be able to take a breath. And I wake up one morning and my entire Airbnb account is grayed out. And there’s this little red triangle. I’ll never forget. It’s tattooed into my mind, that says suspended on all listings, my entire account, no warning, no explanation.

[00:11:30] And that’s every host’s nightmare. I had heard about this, but I never actually thought obviously, like, if nothing else, I would at least get some warning. I tried calling customer support. It was not very supportive. And it was like a punch in the gut. I can’t even begin to articulate. Again, I’m 24 years old. I’ve spent every penny. I’ve spent a bunch of other people’s money, spent over $2 million building this project, and our business is ground to a halt.

[00:12:00] That ended up being the biggest blessing of the entire journey because it forced me to think outside the box with direct bookings. Well, I got on the phone with a travel influencer after just trying to Google and talk to friends. I didn’t know anything about Instagram myself, but figure out like, what do I do to get eyeballs on Instagram? And this person told me you should partner with a travel influencer and do a giveaway.

[00:12:25] And so sure enough, I spent $900 for that first giveaway and we got around $42,000 of direct bookings in seven days and around 5,000 followers from scratch on our brand new Instagram account. And that was the eureka moment because I was like, we’re going all in on direct bookings on Instagram. By that point, Airbnb actually reinstated us.

[00:12:50] There had been a glitch in their algorithm. But again, it was the most amazing blessing in disguise because it set the course that the entire trajectory fast forward another 12 months, we grew around 100,000 followers that first year on Instagram, the first 50,000 or so we’re just piggybacking on these giveaways.

[00:13:08] Then we started creating our own content, which got virality, and telling our story that way. But we grew 100,000 followers, 95% occupancy every day of the year, every cabin, and 80% of all those bookings were direct, which again, making 15% extra profit because you’re cutting out the OTA fees.

[00:13:27] You can’t be deplatformed. You own the customer email, so you can retarget them through campaigns. Because the property was so beautiful, sure enough, we were creating these lifetime relationships with our guests. So they were coming back. I think I talked to one guest that had come back three times in a 12-month period, bringing friends and family each time, just because there was such a strong connection because of all these little details that added up.

[00:13:50] So it was an amazing journey and it all culminated about eight months ago. We actually sold the whole property to a private equity group for a million dollars a key after being approached by a bunch of other potential buyers. So it’s been a whirlwind. All that happened in less than two and a half years and couldn’t be more passionate about experiential hospitality, whether it’s micro resorts or individual one-off stays.

[00:14:15] My generation craves experiences over luxury, over possessions, over a lot of other things. And if you can figure out the cheat code for how to create something that is truly experiential, that is magical for your guests, then there won’t even be a competitive playing field.

[00:14:31] You will be a one of one property that is word of mouth worthy, that you’re able to build a following around, a brand around that then you could leverage to launch a micro resort or something else, but it can change your life. And I’m speaking from personal experience because it’s changed mine.

[00:14:48] Sarah: First of all, your story is incredible and inspirational. And there are so many things that you just went through that I want to unpack with you on this episode. I know Annette was feverishly taking notes over here.

[00:15:01] I want to start with, Isaac, from day 1 to month 10, you were ready to go, the lake, all the units, everything was ready to go? What was that like?

[00:15:13] Isaac: Yeah, we went from a jungled piece of property to literally welcoming our first guests in the door nine and a half months after breaking ground on construction.

[00:15:23] Sarah: That is incredible.

[00:15:24] Isaac: I told you it was a crazy year.

[00:15:26] Annette: Well, we bought land. We’re like, we bought that how many months ago?

[00:15:29] Sarah: We need be ashamed of ourselves on that [Inaudible].

[00:15:31] Annette: Well, how much, work did you actually do, labor yourself, Isaac? Your hands hammering a nail. Did you do any of the work at all?

[00:15:43] Isaac: No. Definitely, I was out there, I think day one, with chainsaws and we were clearing, but because I was also designing the whole property and managing the lender relationship and managing, basically serving as the general contractor, hiring the subcontractors, firing, all that.

[00:16:01] Annette: Wait, you had to fire people? You fired people? We don’t have to do that when contracting, do you?

[00:16:06] Isaac: 80% of the subcontractors were great, and there were some doozies. Thankfully, with my experience as a general contractor, I was prepared for it, but we had a nightmare actually.

[00:16:17] Annette: I want to bring that up to everybody because I think it doesn’t matter how many projects you do or how hands on you are, you’re going to have to have some uncomfortable conversations with some contractors. And so I just want to offer that to everybody that it never ends. You’re always going to have those contractors that don’t maybe perform up to your standards, plus up to the standards they said they would.

[00:16:36] Isaac: All part of the process.

[00:16:38] Annette: I did take a lot of notes here. First of all, you said you were turned down a bunch of times. Can you offer up what’s a bunch? Is that 10? Is it 50? Is it 100? How many times are you turned down by the banks?

[00:16:53] Isaac: Okay, by the banks. I thought you were talking about the buyers at first. I approached three or four banks. So it wasn’t dozens. But I invested substantially. If I had to do it all over again, I think we got lucky, in other words, that number three gave us a shot because I have a friend who went to 20 banks to do a similar project and got turned down by 20 literal banks. Finally found one at number 21.

[00:17:20] But yeah, I think I actually got somewhat lucky. Again, just given I’m 24 years old, I don’t have deep financial backing. I did have family members that also helped me co-sign, which was huge because the personal guarantee is big for a project like that. But yeah, the moral of the story there is, and again, I’ll just use my friend, Ben, who you met as well.

[00:17:41] He’s, probably more of the benchmark. 20 banks, no. Flat out. So if I had to do it all over again, I’d approach more. I’d refine my pitch a little bit more because, again, I’d never pitched a bank. I’d never done a pro forma for a piece of property. I would prepare a nice, concise one pager pitch, and then actually send it out to way more banks instead of– again, it was just like inefficient.

[00:18:05] I had to draft up emails and scab together all these documents that I thought the banks were going to like. And I did that one at a time, three different times. And thankfully it worked in number three, but there’s a more efficient way.

[00:18:16] Annette: Okay. And then all seven of the cabins, you said they’re 500 square feet?

[00:18:21] Isaac: Yeah. So five of the seven are two-bedroom, two and the other two are one-bedroom, but they’re very similar floor plans. But yeah, the bigger ones are around 550 with the loft, and there’s a sleeping loft and then a bedroom downstairs, and then a smaller ones are around 475.

[00:18:39] Sarah: As you’re designing these, Isaac, first of all, between acquiring the property and hammers down day one of construction, did you have time to sit down and design all seven? And when you were designing them, how did you know and what did experiential mean to you when it came to the floor plan and where they are positioned on the property and just looking at it from a bird’s eye view?

[00:19:04] Isaac: Great question. So I mentioned that first time we ever walked on site, I ever walked on site, and I had that epiphany moment that this is where we’re supposed to build. We were under contract that day and literally from that moment on. Starting that day, the next three days, I was on the property almost for hours at a time, just by myself walking every square foot of the five acres, and it’s just fully immersing and trying to understand that property as intimately as possible.

[00:19:33] And of course, you had to look through the lens of what it could be because it was hard to see even just because of all the brush and stuff. But I spent 10 hours in those first three days just literally fully immersed on the property and understanding and then beginning to lay out, okay, where could we put units and literally thinking through from that moment, putting on my glasses of, okay, I’m the guest.

[00:19:58] I just stepped out of my cabin. I’ve got my cup of coffee. I’m walking down towards the water’s edge. That’s going to exist here by faith. And we’re going to have a hot tub over here. We’re going to have this tree right here as a screen. Where are we going to position this unit? Are we going to tweak it?

[00:20:11] Let’s tweak it five degrees this way, so we’re not looking head on into that one, all this of stuff. And so it’s a balancing act with a micro resort because you want an element of privacy. And I assume this applies even if it’s just a one-off unit. You want an element of privacy, but in that kind of property, there is a really cool communal village field that is also cool.

[00:20:32] So you got to find like, how can we screen each unit with trees and with views to where every cabin is framing a really beautiful view on the property? And every window too. You got windows on all sides, but the front view, they’re all glass if you look it up. That’s the main shoot through moment.

[00:20:51] And so even at the time, I didn’t have the experience that I have now, as far as Instagram, but I would call it a shoot through moment. So you’re walking in– we create a bunch of content off of this, but we just got lucky the first time. It’s perfect because you can film as you walk in the door, walking through the space. It’s a really efficient layout.

[00:21:11] There’s a kitchen on the first hallway wall. So we turned a hallway into a small kitchenette, which is perfect because a lot of people bring food to cook while they’re there. That’s part of the experience. Then as you’re walking through the living space, it’s all about this massive view and it’s literally framed like a picture, this perfect view that is, again, the inside, the outside, all coming together to create this magical moment for people.

[00:21:34] That’s the most important moment that you have on the whole place. And each cabin has their own unique magical view like that. Then I literally screenshotted a Google image of the property, satellite image, and then just started playing. I used this app called Procreate with my iPad Pros where you can do like layers.

[00:21:51] It’s super simple, though. You don’t need to have a bunch of technical knowledge. And just started sketching different site plans with the roadways, with the trails, and it was really fun, again, over a week’s time. And then asked different friends and family. Hey, if you were staying here, would you think this is too close?

[00:22:07] And I got other people’s perspective, but mainly relied on my gut as far as like, what would I want? I want to design a property that I would love to be at. And so that’s how it went. And then for the actual unit designs, there’s a company called DEN Outdoors. that I had come across that has some really great designs.

[00:22:25] They sell plans, building plans. And I fell in love with two different designs and I was like, well, maybe I could buy these plans and merge the floor plan from this one with the elevations from that one. So that’s sure enough what I did. I spent $3,000, bought the two plans, and then hired somebody on Fiverr for $300 to redraw everything.

[00:22:47] And then I also incorporated the spiral staircase in the middle and some other small tweaks. And then yeah, voila, we had our building plans a few days later thanks to this freelance from Fiverr. We ended up mirroring a few of them, but in general, they’re very, very similar.

[00:23:05] So there’s a lot of scale economies. Of course, we built them all at the same time too just in terms of like furnishings. Okay, great. We went with like these really cool–all the couches and all the love seats and the accent chair, we chose the same manufacturer, but just customized the colors for each individual unit. Or like the art, I found on Etsy this really great pencil artist who did bird drawings.

[00:23:25] And so I just got 50 different of these bird drawings, same frame, same look, but different art. And that’s how we differentiated a lot of the interiors from each other. In addition to the naming of the cabins, which was also according to where they were, like Shadow Bend, or Lakeside North, or White Rock, or Cedar Brook, where they were on the property.

[00:23:44] Sarah: Okay. So many questions. You use the words micro, experiential, and resort. So when you have these seven experiential units that you’ve poured your heart and soul and thought about the angles at which they’re facing and how the guests are going to check into it and when they go to get their cup of coffee, what their view is, how did you decide on a micro resort, how you wouldn’t sacrifice experience while still having them be relatively– how close are they? And will they hear each other when they’re outside enjoying family time? And how much did that play into your overall site plan and design?

[00:24:20] Isaac: Good question. A lot of people probably would have taken that same piece of property and done about twice to three times the number of units just because it’s five acres. And I see a lot of people cutting whether it’s that corner or any other number of corners. They may seem small decisions in order to maximize profit, maximize building efficiency, whatever, but it would have made a night and day difference in terms of the overall result.

[00:24:44] I somehow had this ability the entire time to envision that final guest experience from the first moment I walked on. And I think that is a superpower. And I don’t think it’s that rare. I think a lot of people can cultivate this, be an intentional observer. And this applies to all kinds of design. And that’s how you build great taste, but also the ability to envision what’s not there.

[00:25:09] So I was able to, the entire time, feel exactly where we were trying to get to. So though we had a very bare bones design plan to start with, because I was there every single day making decisions on a granular level, we didn’t need an architect. We didn’t need a hundred-plus thousand dollars of like pre construction work done just to get the project off the ground.

[00:25:32] And it also allowed us to be nimble because as we went, we were able to adjust the plan because I didn’t have it all figured out. I just had that mental image of like, this is the design Bible of what I want the guests to feel.

[00:25:45] And I think it’s actually helpful, like a brand canvas or a design Bible. You could storyboard out the experience. Like, okay, what are the experiential aspects? Are we going to have kayaking or trails? Are we going to have a wood barrel sauna? Even on the digital footprint, what kind of typography and branding and signage are we going to have on the property?

[00:26:07] What kind of building units are we going to have? What are the colors? And lay all that stuff out and then figure out something very concise, like three or four or five main elements. For Live Oak Lake, that’s Scandinavian design, live oak trees and water, and a Pacific Northwest vibe, white oak finishes throughout.

[00:26:27] And maybe right about there let’s just cap it for now. Okay. Yes. There’s going to be layers of more details, but having that mental image, and it’s easier to do this visually, so Pinterest is really helpful for this. I created all kinds of boards and stuff. As we went, that dictated, that design Bible dictated every decision all the way down to what silverware is going to be in the drawers.

[00:26:47] Because, again, it was all pointing back to that cohesive mental model. And so as we went in terms of the layout that was very much in my mind, I wanted, again– one of the cabins is much more private. It’s more in the tree. So it’s more geared towards those that are just seeking privacy.

[00:27:04] But most of them, especially at night, I could picture these light reflections, which we did. So there’s really cool lighting at each of the cabins, and then 30 minutes before sunset, all the lights turn on through a smart home automation. And they’re on until 10:00 PM. And so you get these really cool reflections dancing in the water. That helps create that communal vibe.

[00:27:27] Then we did a commons area. So everyone could come together and we didn’t even consciously think this stuff through, but I feel like I got really lucky. We’re in the early innings of a huge trend towards small group experiences, not just small individual experiences, but micro weddings, small family reunions, small corporate retreat, startup retreats, and having this outdoor space with grilling area and patio seating and a dock.

[00:27:59] So it was like lakeside access for everyone. And all of this was this perfect little hub. We spent like 30, 40,000. Most of it was in the landscaping in that area to create this little oasis, this little vibe, like the whole property’s an oasis, but then this common series, like an oasis within an oasis. And it’s a place that just people gravitate towards, and so sure enough having that space allowed us all the more to be able to host these small events.

[00:28:23] So we had a lot of property buyouts. And if I had to do it all over, I would have even put more emphasis on that space because I didn’t realize how much hunger there would be for these small group events. But to answer the question, there’s screening. There’s natural screening through trees and bushes and shrubs for each cabin. There’s also roller shades on every window.

[00:28:43] So there’s maximum privacy at night and such. But again, you have to find that perfect balance between seclusion, immersion in nature, and feeling like you’re part of a village. And I think we were able to achieve it with that place.

[00:28:56] Annette: Your common area and these micro retreats, micro weddings. When you say you sell out the property, is that at a premium when you’re doing that? Are you increasing the nightly rate on each of the units? Was that even a plan of yours? And was pricing coming into play when you’re running your numbers and when you’re looking at these details? How early did you start thinking about your nightly rates?

[00:29:19] Isaac: Yeah. I penciled out some numbers that, in order to get the bank loan ended up being extremely conservative. And it was like I didn’t even use their AirDNA. I based it off of, well, this is the nicest unit in the area, which is a few miles down the road.

[00:29:35] I bet we could be 10% above that. And we ended up being three or four times that, because again, it was not a commodity to be compared to others. So we underwrote very conservatively, and we also designed, this is like an important note, each cabin to have closet space in each bedroom and a washer and dryer and a small kitchenette.

[00:30:03] This is all great for the overnight guests, but it’s also a fallback that in our minds, if this whole thing doesn’t work, if this whole tourism play is not going to work here, and our friends are all right that we’re oversaturated, this could be rented out as a long-term unit. And people would like, totally be cool staying here, and it wouldn’t be like one of those terrible apartments where you can’t do your laundry, and you can’t cook anything, and all that.

[00:30:27] So that extra 10% to 15% of expense and effort that we put into creating each base to be that enabled us to have that plan B, but also those ended up being really important amenities for the guests, because another trend that we saw, and this started post COVID, is in full force today, is people are taking these two or three or four-day staycations.

[00:30:51] Market and positioning in the market is really, really important to you even geographically because most of our guests, 98% of our guests are coming from Dallas, Fort Worth, or Austin or San Antonio. Those are all cities within the Texas Triangle, which were smack dab in the middle of there within hour and 45 minutes to two hours and 15 minutes from us. Perfect drivable distance. And they’re all coming for these two or three-day retreats.

[00:31:15] Annette: So the nightly rate you’d planned ahead, but these micro weddings, these startup retreats, was that even in your thought process, and how did you price those out? Because Sarah and I are very interested in that for our resort. How are you doing these sellouts pricing them?

[00:31:28] Isaac: Yeah. So we create a common space, but again, we weren’t even thinking in terms of these events. We never actually ended up charging an event fee. What we did is we did 10% premium on the buyout because you sacrifice a little bit on your calendar because you have a hard stop on both ends. And so that’s the one thing you got to be aware of.

[00:31:47] On the positive side, of course, you’re hitting 100% occupancy, but we found 10% as a premium was a good threshold. And then, of course, you couldn’t actually buy it out unless all the units were available. Through our property management software, Hostaway, we were able to do basically a parent listing.

[00:32:05] And so it automatically knew whenever we had availability across all the sub listings, and then that was an opening. And then with our pricing integration software, Wheelhouse, we were able to set that differential. So most of the time groups were buying out probably three to six months in advance just to try to find an opening for everything.

[00:32:25] One thing that we did play around with was allowing some of those events with a majority, say, three or four or five cabins. And that is a little bit of a mixed bag because the commons area became such a key part of the overarching experience that it didn’t feel fair to the other guests, if that was being hogged by the group.

[00:32:47] So we experimented with it. And yeah, you can try it, but I never felt perfectly right about it, and I think it just compromised the other guest’s experience. Some of them didn’t care, but going forward, especially for that size of property with seven units, that’s not that heavy of a lift, especially for a lot of these companies that are booking a retreat. And so we just made them do the full bio.

[00:33:10] Annette: Right. So what I’m hearing is even if they ask for four or five, you’re like, no, if you want to buy out, it has to be the full resort.

[00:33:16] Isaac: At that size. I think if you go a little bigger, then it would be okay to start compromising on that. Especially, again, given the layout too, I think it’s possible to do some units, depending on the property you’re working with, that are closer to that could be their own little deal and then have other stuff separate.

[00:33:32] Annette: Your common area, did you have that planned at the very beginning of thinking about the resort?

[00:33:40] Isaac: Yes, we didn’t have the full experience what it became, all the programming. I say programming, it’s all do it yourself, but as far as like all the amenities. But one thing we realized early on was that the property was not going to appeal only to couples which are a target demographic of a lot of unique stays today, romantic couples getaways. We knew there were a lot of small families that would love to come and experience this and bring their kids. So in order to cater to them, we did a little play area at the commons area, which was great.

[00:34:12] And the price point, some people might wonder, well, are you going to introduce an unwanted element? Which I just think is really wrong. And as a parent myself, by bringing in children, it’s not necessarily an unwanted element. It’s more of like, how can romantic couples getaways coexist with more of a family environment?

[00:34:33] And with a property that small, and the price point we were at, and the branding, and the story we were telling, we attracted the right guests. Yes, there were a few exceptions, like where we had somebody trying to do a party, and a couple of instances like that, but by and large, we just got the right guests by telling the right story, and by pricing at the level that we did.

[00:34:55] So we had a play area, and then we ended up adding this container pool. It’s a shipping container turned into a swimming pool with a big window cut in the side. That was a really cool feature. It dovetailed with the overall aesthetic. It’s black like metal. But it also is what I call an Instagrammable moment, which, again, is another way to think about designing the property and all these little details.

[00:35:18] So every trail through the woods, every cabin and the view that it’s framing especially the front entryway, because that’s a first impression, the container pool at the commons area, these are all opportunities, storytelling gold. They are opportunities for your guests to create content around and promote on their own, let alone the content you’re going to create.

[00:35:41] And word of mouth is the most valuable marketing channel there’s ever been and will ever be, and we knew that. But social media and influencers and guests creating their own content– but social media in general is the perfect vehicle to augment word of mouth. So sure enough, all of our guests go there and they take videos or selfies or whatever at these key places. And that’s what creates this FOMO with their friends, and they bring them back, and they bring their family, and it just creates this incredible snowball of demand.

[00:36:14] And if you keep your overall key count low enough, and I like to think that’s between 10 and 12 units, though, that totally depends on the property type, what your concept is, what your market is, if you keep that low enough, you’re never, ever going to struggle with filling all of your units just because, yes, you can build a brand around this incredible experience, and you can always sell out seven units.

[00:36:38] That’s what we found at least, if you’re in the right market too. And that’s a great feeling to hit 90, 95% occupancy. Some of that is the group stays, and that’s part of the appeal of our property. It can cater to such a wide spectrum of guests.

[00:36:53] Sarah: So you didn’t build any larger units, meaning more than two bedrooms. There were no three, four, five bedrooms. And it sounds like you still attract because you could sell all seven of the micro units and have the common space for them to get together that you really didn’t alienate the bigger families or the family reunions by doing the smaller units. Was that your thought all along? Or what was the reason why you didn’t build one big lodge to like, I don’t know, rule them all?

[00:37:21] Isaac: It’s not a bad idea. If I had to do it again, I probably would have, that’s the concept that worked for this property. So it’s really helpful to know the principles of what works. And then there’s so much customization depending on the property type and the market you’re in and the customer avatar you’re catering to, but no, that’s a very fair point.

[00:37:41] And us, especially maybe not that particular property, because what we had just works, we didn’t need bigger units. But on another property, especially if I had a little bit more space, because I care a lot about density and not creating units that are too big for the actual real estate they’re on, that has to do with the trees, the topography, the views, if there’s water, etc.

[00:38:04] But on the next one, I would definitely consider doing a three-bedroom. I don’t know that you’d even need a four bedroom. At a certain point, again, you start encouraging the wrong kind of parties and such, which we didn’t want.

[00:38:16] But a lot of families even that had more than, whatever, two or three kids, they’d buy two or three cabins out. And then their older kids would be in one cabin, which they absolutely loved, and the parents would be in this cabin over here, etc.

[00:38:30] Sarah: No, that makes that makes perfect sense. And I agree with you. The way it was supposed to be is obviously the way you did it. We heard a little tip from you at IMN that we wanted to dig in here on the podcast so that everyone could benefit from this piece of education from you. You mentioned how important two experiential stays is the landscaping. And I forget the exact way you said it, but it was brilliant.

[00:38:54] It really clicked for me about how much landscape actually appreciates and helps with the value of your property, but also that experience with the guests. Can you dig into landscaping a bit for us?

[00:39:05] Isaac: Yeah. So I like to say landscaping is the highest ROI dollars you’re going to spend on your project. So if you’re spending $1 on your unit type that it’s really cool and unique and the architecture is great, maybe you’re going to see a $1 increase in value, a 2x ROI. If you’re spending $1 on landscaping, this is, of course, just a general rule of thumb, but I like to think of that as at least a 5x ROI.

[00:39:33] So it’s like much more valuable the money that you’re spending. That doesn’t mean obviously you can’t just dump all your money into the landscape because you need a cool unit. But again, it’s all about creating a vibe. And to me, that’s the properties I’m the most passionate about, not to say it can’t work in more of an urban setting because even there you can invest heavily in landscaping and create a little oasis, but it’s all about creating sense of enclosure.

[00:39:59] Each unit needs to have some cool indoor space and some cool outdoor space. Maybe they even flow seamlessly together with a glass set of doors. But at Live Oak, that ended up looking like, I’ll take one unit, Lakeside North. It’s positioned about 30 feet from the water, up on a little knoll.

[00:40:18] And you open those front glass doors. There’s a small six-foot apron porch on the front of the unit with a couple of chairs and a smokeless fire pit. And so that’s great. That’s a perfect place to sit and drink your coffee. But then we have these stepping stones that are nestled into the landscape.

[00:40:37] As you’re walking down this little hill, there’s even these two boulders we positioned with a little stair step that you actually take steps down. The path winds slowly, and you can walk down to your own little point at the water’s edge underneath these huge cottonwood tree.

[00:40:53] And there’s the water flowing. There’s the rustling leaves of the tree. There’s looking back at the front of your cabin with your fire, whatever. There’s a hammock next to the cabin in the trees. The whole setting is magical, but those little moments even of that little micro journey down to the edge are huge because, again, it’s this shoot through Instagrammable moment.

[00:41:19] And what you’re referring to, I think that I said is, from a tax perspective, the IRS knows this, from a building perspective, buildings depreciate. So the day you build them, at least from a maintenance standpoint, doesn’t mean the real estate won’t appreciate, but the building itself, the structure, that’s the most valuable it’ll ever be.

[00:41:39] From that day on, it’s just going to start slowly depreciating, because that’s entropy. Landscapes are exactly the opposite. So from the day you plant a tree, that’s the least valuable it’s going to be. Going infinitely into the future, at least for the life of that tree, it’s going to get more and more valuable, as it grows up, as it matures. And so you take that, you spread that out on every component of the landscaping, the grass.

[00:42:00] When you first put down sod, it looks a little tacky. It looks like, okay, there’s an awkward edge over there, and you can see the squares here. Give it six months, it’s going to be beautiful. It’s going to start to fill in and be a mat. You take ivies on a wall. You take trees. You take bushes, and you take flowers, you name it, all of it.

[00:42:18] Whether it’s the hardscaping pieces or the plantings, or the water feature, over time, even that starts– depending on what it is, get a patina, or the water will stabilize and you won’t have algae problems. And you have a much more valuable landscape a year down the road.

[00:42:34] And that’s part of the reason you get such a higher ROI on the landscaping. But again, the most important part is that is creating that magical vibe and that feeling that you’re after for your guests. So even a fairly boring property– I’ve got a friend who has a house in a cool location, but the house isn’t anything spectacular.

[00:42:56] It’s great. It does the job. But we were brainstorming the other day and I was like, hey, you’ve got a perfect opportunity to create this small meditation space right outside, and you could do a little bird bath. You could plant these trees here and here. You could do some bushes here. You could do a little gravel pad.

[00:43:14] You could do a couple lights overhead, even some outdoor pendant lights that would help create this vibe. You’re getting sound in the water. You’re attracting birds. You could even do a little fountain if you wanted. You’re creating a sense of even privacy because you can see some of the neighbors.

[00:43:30] You could do a little lattice wall right here, again, create this outdoor sense of enclosure. And I could just picture, and then sure enough, now he’s building it. Towards sunset at blue hour, the light’s starting to glow, this spectacular little spot full of vibe. And that has become the centerpiece of his property now. And so he can use that on all of his marketing. The guests love it. It’s opened up this whole opportunity where he’s catering to wellness-oriented guests a lot.

[00:44:01] And so this is a perfect meditation space for that. Again, it’s maybe not even proportionately a lot less money than it takes to actually invest in the structures, but it’s the 80/20 rule. You spend 20% of the money there instead of 5%, you’re going to see an 80% increase in the property value, in the guest satisfaction, and the overall experience and the marketability of it through especially an Instagram or other video channel than if you didn’t have it.

[00:44:30] Annette: I want all of our listeners, because I’m even thinking about one of our properties right now– what can you do on the exterior either when the guest walks up to your home or when the guest goes out on your back patio? There is stuff that you could make a small investment in today that could pay dividends moving forward.

[00:44:48] I want to ask, if you had to do it all over again, operationally, what is something that was a kink in the set? I don’t know where you were doing laundry. What is something that if you had to build these seven units again, you would absolutely, no brainer, change?

[00:45:04] Isaac: Operationally, I honestly can’t think of anything. Yes, there was learning. We thankfully were forethinking enough to do a laundry facility that ended up being super straightforward. This is a pro tip. If you have a micro resort, we bought a prefab shed for 8,000 bucks, set it on pads, then spend another 6,000 bucks bringing utilities to it and finishing it out.

[00:45:25] And then built two by four plywood, sturdy shelving. You need two or three X the space that you think you do for all of your overstock, but fill the walls with shelving and then invest it in a Speed Queen and Unimac washer and dryer. Highly recommend. Don’t go and buy residential grade because just the level of volume that you have– yes, it’s 10x the cost. Our washing machine is $15,000, more than 10x the cost of a residential.

[00:45:53] But that thing will be good to go with zero serviceability issues for 10 years, at least. And we only need one washer extractor and one dryer. so all in, we spent 30 grand on that, but that laundry facility is huge because it also enabled the cleaners to stay right on site. And that’s hugely attractive to them versus having to leave and such. You can attract better cleaner.

[00:46:14] Annette: Did they have a golf cart, or would they just walk back and forth?

[00:46:17] Isaac: We paved everything. So they drove. It’s all–

[00:46:20] Annette: Got you.

[00:46:21] Isaac: And then we hid the laundry facility in the trees in the back corner so you never see it from the rest of the units. But yeah, always make sure you have two or 3x overs. If I had to do anything different, I guess I’d get a bigger shed because we had so much. It’s operationally intensive business, and so you need to make sure you have room.

[00:46:39] I think one thing from a design perspective, two things actually, one, I should have done at least one of the cabins ADA accessible. I didn’t, and it would have not been that big of a deal. It just I totally skipped my mind. Second thing is, I should have expanded the floor plan six inches on one side, and I could have squeezed in a king bed versus a queen bed in the upstairs loft. That is huge. It ended up being fine for us just because there was so much else to make up for it, but so many guests want a king bed. I don’t know if it’s just a Texas thing.

[00:47:14] Sarah: No, it’s everywhere.

[00:47:15] Annette: That’s a good pro tip. Just get the king.

[00:47:18] Sarah: We advise someone to make the closet smaller so that you can fit a king bed. Because it was the only bed in the property and it was geared towards couples. It’s like, king beds are where it’s at, man.

[00:47:29] Isaac: I would totally agree.

[00:47:31] Annette: Next question, Isaac, you were speaking so passionately, and I’m fired up, but you sold this place. It’s gone. It’s no longer yours. The keys are gone.

[00:47:43] Isaac: It’s bitter sweet. Yeah.

[00:47:44] Annette: Yeah. Did you always have intentions to sell? How did this come about, and why were you so ready to just let it go so quickly, actually, pretty quickly.

[00:47:55] Isaac: Yeah, relatively pretty quickly. But it was tough. It was a hard decision. This may sound counterintuitive, but the best transaction in terms of selling, in terms of getting your value out, you want to be in a position where you’re never forced to sell.

[00:48:13] And we were not at all forced to sell. It made so much sense to keep it, and I think it would have been a good decision to keep it. I think it was an even better decision at that particular moment with that buyer to sell it. Everything in this world in terms of material things should have a price tag, is my opinion.

[00:48:28] And we had received several offers for 4 to $5 million for the whole place. It cost us 2.3 to build. And those were tempting, but they just didn’t quite do it for us. It was like, we’re cash flowing incredibly, everything has gone perfect, and yet, even in spite of that, it almost felt like, okay, we’ve received so much press. We’ve grown our following so quickly.

[00:48:51] We’ve hit such crazy occupancy numbers. Maybe these are all the right indicators and then mixed with a bigger market uncertainty of interest rates have gone crazy, which is just reduced the appetite to buy anything in terms of real estate. It was like this perfect stars aligning moment.

[00:49:10] We actually were under contract to sell it for 6.5 million, and then the day before we were supposed to close, that group fell through. And that was a great learning experience. We didn’t have nearly enough earnest money. They didn’t have nearly enough earnest money down. So I learned a bunch through that.

[00:49:26] And then three days after we backed out, we got this other ROI for 7 million for the whole place, so 500,000 more dollars. And so we got in contract with them again. There’s a saying birds fly, fish swim, and deals fall through, and that literally was happening. The entire thing, again, pretty much completely fell through.

[00:49:46] And this time we had a lot more earnest money at stake we could have walked away with, but the offer just felt so good. And the buyers also seemed like the right buyers. And so we went ahead and gave them more time. Sure enough, they were able to pull through and close just a lot later than expected. But it was an emotionally, turbulent decision and season because it’s like your baby. When you’ve invested that level of passion and time and energy and all of that into it, it literally– of, having a child–

[00:50:19] Annette: Not that much time though. Let’s celebrate that.

[00:50:22] Isaac: True, but if you added up all the hours of the week, it’s like–

[00:50:25] Annette: Yeah, but overall, most people selling something, if you look at their timelines, it’s could be much longer than that.

[00:50:32] Isaac: Well, that’s the thing. I was 26 years old. I’m like, okay, I could theoretically go with all the lessons learned here and redo it all and do it better because I learned so much through the whole process. And so ultimately, yeah, it just felt like it was the right time and the right buy.

[00:50:49] Annette: Was it for sale though? Was it on the market? Were you low key on the sale, or were people coming to you? How did that go down? Because you said you had multiple offers.

[00:50:58] Isaac: Yeah. It was some of both. Just starting to tell the story and be transparent about it more from the behind-the-scenes perspective attracted a lot of investors and potential buyers. But then we’re like, if we’re going to be dealing with a bunch of tire kickers and just– because of course there’s some of that too.

[00:51:18] We may as well list this with an agent who can handle all of that for us and go through the work of figuring out and presenting exactly what we have. And so we ended up listing it with a broker, but we just listed at what we thought was a ridiculously high number relative to what we had put into it and such, and we were like, okay, this will filter out 99% of the riffraff that we don’t want. But if there’s somebody who’s willing to pay this, then, hey, we’ll consider it. And sure enough, it ended up that there were.

[00:51:47] Sarah: Are there any other real estate projects on your horizon?

[00:51:51] Isaac: I’ve looked at several recently, and I have a lot of ideas actually for the next resort, but it’s such an interesting time, and I think this is somewhat regional. It’s the case everywhere, but each region is going to be different.

[00:52:08] Basically, the local market, and I’ve had opportunities presented all over the country, the same concept, from other investors, from other real estate owners and such, I don’t want to do anything just anywhere because I care a lot about the quality of life that I currently live, and I want something hyperlocal if I’m going to do it.

[00:52:26] But in this, though, I think there’s a ton of other markets and opportunities, that’s why I’m so passionate, because I think other people should capitalize on that like you guys are. This particular market that we’re in, the real estate volume’s come to– well now it’s starting to pick back up, but it pretty much came to a halt in late 2023 because interest rates have gone really high, but property is not selling.

[00:52:48] Sellers are not budging on their prices. Especially in this market, we saw, post COVID, such a high ramp up in prices. We went from five to 10,000 an acre being normal to 40 to 50,000 an acre. So it’s like this incredible increase. And I think we went a little too fast, except that sellers just aren’t motivated to sell.

[00:53:09] So I don’t really feel like buying a property at 40,000 plus an acre right now when interest rates are so high. And so that’s naturally going to limit the potential as far as what you can build. So I’m looking for the right opportunity, looking for the right deal. I could do a lot of things, but right now I get a ton of energy just from helping others. And I’m probably involved in 20 to 30 other micro resort projects and unique stay projects throughout the country in a consulting capacity.

[00:53:36] Sarah: That’s incredible. Is there a question that we did not ask you, Isaac, about micro resorts and sharing it with our listeners that you want to make sure you share with them today before we ask you where they can find out more about you?

[00:53:48] Isaac: This might sound cheesy, but I really believe this with all my heart. You don’t need hospitality or hotel or STR experience. You don’t need generational wealth to do a project like this. You need a dream. You need a burning desire and passion to create this magical experience that you just believe with your heart and your head that other people cannot convince you away from.

[00:54:14] And if you have that passion and you have that dream, and I suggest you write it down, even if you have the beginnings of that, because writing it will help clarify your thinking and crystallize that into a conviction, if you have that, that is literally viral, the dream itself.

[00:54:29] And if you start telling your story, which is what I say is step one, before you even look for land, before you have money figured out and you use social media, who knows? Maybe that’s actually how your investors will come. That’s how lenders will come. That’s where contractors and designers and all the partners that you need and ultimately your guests are going to come.

[00:54:47] And I have friends who are doing this right now. I have a friend named Harrison Hyde. You should check him out on Instagram if you don’t follow him already. He’s got 165,000 followers, and he hasn’t even finished raising the money for his micro resort concept.

[00:54:59] He’s in the UK, but he’s just a master storyteller, and he has a dream, and people believe in it. And he believes in it more than they even do. And so start with a dream and then tell that story, and don’t be afraid to look stupid or make mistakes doing it publicly. Just put yourself out there and do it. I literally believe the universe will rearrange to somebody who’s will is set on creating this kind of experience for other people.

[00:55:25] And so that if there’s one thing I can leave people with it’s, you’ve got to believe in the dream. You got to believe in yourself. And I know it sounds like pie in the sky, but I really believed that’s the most important thing here. That’s what saw me through. Yes, I had an incredible family. I had friends. I had $20,000 of savings, but at the end of the day, everything aligned to that passion that you pointed out.

[00:55:48] And I just feel like it makes me so excited because I feel like that’s within everyone’s reach. And maybe you’re not the most design-oriented person, or maybe you’re not the visionary. Maybe you can partner with someone that is, and you just believe that the idea is good.

[00:56:04] That’s equally valuable. But everyone can create properties like this, even if it’s a single unit, a one of a kind of viral destination property. So that’s the one piece of advice I would leave with everyone.

[00:56:17] Sarah: That’s an incredible and important message, Isaac. If people wanted to learn more about you, if they wanted to work with you, how can they get ahold of you? Where do they follow you?

[00:56:27] Isaac: I just built a website, isaacjfrench.com I-S-A-A-C, that is, and you can subscribe to my newsletter there, which I spend two hours writing each week to give away value for free on breaking down my learnings and the step by step to create a property like this. And you can also follow me on Instagram or X at @isaacfrench_.

[00:56:50] Sarah: Perfect. Well, we cannot wait to share your story with our community because they’re going to eat this up. You’re so good. All right. With that, I am Sarah Karakaian.

[00:56:58] Annette: I’m Annette Grant. And together we are–

[00:57:00] Both Annette & Sarah: Thanks for Visiting.

[00:57:01] Sarah: Talk to you next time.