رونوشت کامل Ep 213 - Breaking Ground: The Challenges and Rewards of Real Estate Development with Isaac Oswalt

I can kind of go back. But 8 00:02:31.720 --> 00:02:57.910 Spillway Lodges is a 36-unit boutique resort in northern Michigan in a town called Bel Air. And we're sitting down and we're developers first. And then we built the construction company just basically out of need because it's so hard to find subcontractors, right? Especially in these more resort communities. And I'm sitting down with my main investor, Backer, a guy that really got us going in a huge way. 9 00:02:58.518 --> 00:03:20.202 And I'm like talking about property managers. Like, okay, like we're interviewing some vacation rental managers, property managers. Like, why don't you guys do it? So I'm like, oh, okay. Sure. All right. And I immediately went online and I hounded you, Mike. I was like, do you know how to do this? I got to learn how to do this kind of stuff. And that was the precipice of meeting you guys. But yeah. 10 00:03:20.202 --> 00:03:40.216 Um, which has been great. And that, that, uh, resort is operational now that's moving into a phase two, uh, in which we're building a pool pool house and, uh, you know, uh, finishing it up, make it even better, um, next year. Um, but yeah, it's been a, it's a great group to be a part of. Um, it's a great experience. I, my business partner is. Um. 11 00:03:40.216 --> 00:04:00.162 a wonderfully talented developer. And I saw that with what his skillset was, and then also what, what the Northern Michigan needed was just a more updated version of hospitality. There's some, there's great areas in Northern Michigan that just some of the product is tired. And so we thought the thesis was, 12 00:04:00.162 --> 00:04:27.128 a blend between an Airbnb and a hotel. We would have, we needed to have fast internet. We needed to have, we wanted a kitchen in every room. We wanted a desk in every room because we wanted to incentivize that longer term stay and kind of blend both worlds of hotel and Airbnb. And to this point, it actually worked out pretty well. So yeah, that's the topic on that. And then just being in development, we've gotten ourselves into other things that I can expand upon too. 13 00:04:27.128 --> 00:04:47.412 How'd you get into development like from the get go? Did you go to school to be a developer? No, no, no. I mean, that's the thing. It's a barrier to entry niche thing, right? And there are some courses and classes you can certainly take that maybe could have made it easier than my past. Yeah. 14 00:04:47.412 --> 00:05:11.257 But no, really, it was just I was I have a background in supply channel of the building industry. I always knew I wanted to build a portfolio of any type. I'm more of a financial asset management mind type of person. I love this. I love the idea of real estate. Food, water, shelter is something we say all the time. Like no matter what happens, you need food, water, shelter. So we like building a shelter piece. Right. Right. 15 00:05:11.257 --> 00:05:28.064 And it was really meeting my business partner, Derek Tapas, just being in the same town. And I had a small business myself. He was doing a ton of development and he did very well for a while. And then he struggled in some areas and we developed a friendship and... 16 00:05:28.064 --> 00:05:50.440 through all this is like, okay, you know, he taught me, you know, taught me the brass tacks development. And then when you think about building an engine around a specific talent, that's what I enjoy doing. I'm like, all right, well, if we recreated what you've already done really well here, like this, this makes a lot of sense. So I'm, I'm blessed to have like a partner that's a brother to me that we go back and forth and, 17 00:05:50.963 --> 00:06:03.721 I learned a little bit on my own. We learned by doing. We learned by making mistakes, getting on the wrong side of the market at times. And then we've also had some wins. And it's a 360-degree business, man. 18 00:06:03.991 --> 00:06:29.877 You brought a lot of the, I don't know if I want to say like numbers expertise, but like you said, like the asset management side, understanding like putting the deals together. And he brought more of like the actual development experience. Is that right? Yes. Okay. So he did it on his own with a team that he developed. And, you know, word, his strength is just an amazing visionary experience. 19 00:06:29.877 --> 00:06:52.203 be able to craft it. He grew up building houses with his dad and just being able to, obviously, you know, a lot of development is, is just getting the opportunity and being able to build the right relationships and get people on board. I think business and especially development is it's your job to reverse engineer a yes from everyone that's included. And there's a lot of different parties included when you're developing something. Yeah. 20 00:06:52.203 --> 00:07:14.562 And he is fantastic at that. We both have that piece to us. But if he's rooted more in the creation aspect, I'm more rooted in the financial structure and the systems to execute the creation. Does that make sense? It does. So I love that you brought up it's a relationship business because you were at our last boardroom event just now. 21 00:07:14.562 --> 00:07:39.706 And you said something, because again, guys, when I'm not, when Mike and I are not speaking and somebody else speaks, we always pay attention, right? We're always students of life. And you said something that piqued my interest the moment you said it. It's like, we have a lot of builders in America. We don't have enough real estate developers. And to me, something in my sub was like, hey, that's something, right? Yeah. 22 00:07:39.706 --> 00:07:58.285 wake up hi he pray attention i'm like okay great so i'm like we had dinner and i i literally moved the chair from the other corner of the room i'm like i'm sitting next to isaac and the waitress is like you cannot i'm like listen i am going to sit next to isaac you can either let me or you can let me 23

00:07:58.285 --> 00:08:27.479 And we started talking about this, and I find the idea of doing development absolutely fascinating for a variety of reasons, right? But I asked you specific questions of like, hey, which is my first question that comes to mind. It's like, how do you even start? So if somebody is listening to the show now, and they're like, dude, the idea of developer always intrigued me. Like, I have this idea of having kids and be like, hey, daddy built this. Daddy built this. This and this, right? As we go through town. 24 00:08:28.441 --> 00:08:45.923 Where would you start? And could we clarify, too, what's the difference between a developer and a builder? Yes. That's a good question. Yeah. Okay. Simply put, it's a good question. I'll get into that. But simply put, you know, and there are builders that get themselves in development and do some of those things. Yeah. 25 00:08:46.092 --> 00:09:10.544 Usually, if it's a simple put, the developer's creating the opportunity for everyone to come in and tie in. So let's just say it's a raw piece of land. And, you know, it turns out you just can't build whatever you want to build just because you go find a piece of land. Right. There's stipulations. There's things you need to get through from a zoning standpoint. You need to go through what's called like early feasibility, you know, getting some, you know, several different type of ports just to even have like the opportunity to build. 26 00:09:10.544 --> 00:09:29.748 to create it and then therefore maybe hire builders, plenty of developers that aren't their own builders and that stuff. So just think about the developer is the genesis of the origination of wherever that vision is and, and then whatever is going to be executed and then partnering with a ton of people to actually see through that vision. 27 00:09:29.748 --> 00:09:51.230 from where do you start? So I use the term reverse engineer quite a bit. And we, you know, developer, it's hard to meet a really good developer that cannot craft a vision, okay? Or as we say, like a really clear idea of what they're looking to do. And so let's just go back to Spillway. We had a thesis that, 28 00:09:52.158 --> 00:10:09.725 I had took the talents of our team and where would fit and we had a thesis that if we could find a piece of land that made sense. We could do a blend between a hotel and Airbnb. And that would work in the in the area needs that okay. Or at least from like a lodging aspect. 29 00:10:09.843 --> 00:10:27.443 Pretty much any area we go to needs workforce housing. That's another topic, right? But with that, you are going through some type of proverbial site selection. Okay, what's available out there? What land? Like, where would it happen? And I think sometimes you do, to be honest with you, I think you craft a full... 30 00:10:27.443 --> 00:10:55.591 written business plan, written business plan. It's what Derek does. And it's truly a vision statement of like, okay, I want to

build this. I want it to be here. Here's the amenities I want. Here's the stuff. And then you really go through a process of understanding are there available sites there? Where's the land? Where is this? Who owes the land? And then what is it zoned? And so on and so forth. So it's just like anything I think in life and especially with the education that you guys have provided and the sources you provided to me, 31 00:10:55.591 --> 00:11:25.578 it starts with a very clear vision and then you're reverse engineering the vision and you're going through the steps to be like, can I find the land? Can I get it into an area to where I can actually do what I want to do? Is it going to pencil? Who's the team? What's the strategy? And so on and so forth. So that's a, that's a general way to say it. But you know, the, the first part is one of the first parts is finding the proper piece of land because it's really hard to develop without the land. So, so that's, that's, that's kind of where I'd recommend. 32 00:11:25.578 --> 00:11:54.940 But even develop, that's a ground up development. There there's developers that will reap the do adaptive reuse and repurpose something and so on and so forth. So they certainly can be existing structures and we've done that too. So the developer is, is basically the quarterback behind the whole project, right? And then the builder or the general contractor takes those ideas and gets the subcontractors from, you know, the framers, the plumbers, the electricians, the HVAC specialists, and they manage those people and you guys oversee the whole thing. 33 00:11:55.480 --> 00:12:18.211 Yes, yes, the buck stops with you. So as a developer, I'm responsible. I'm responsible for the financing package. I'm responsible. So investors bank debt, if I get incentives, that kind of stuff, I'm responsible for, you know, making sure I put the right team in place for hiring, not only for the, you know, hiring all your due diligence team members and that stuff, your civil engineer, all those type of people. 34 00:12:18.211 --> 00:12:35.778 And then I go into, you know, hiring the contractor. So we are the contractor, but hiring the contractor and overseeing them and hearing them to a plan and a budget and so on and so forth. Right. And then you're transitioning into some types of management. All right. So are you going to manage it yourself or are you going to get a third party management? And then. 35 00:12:35.778 --> 00:12:54.931 I guess across all that, if you look at development first, construction, and then into management, and then blanket that all together is what we call asset management. So on behalf of your investor team, on behalf of the notes they have out there, however you built the capital stack, it's your responsibility to make sure that 36 00:12:54.931 --> 00:13:23.416 You know, you are, you know, you are managing the asset effectively. It's growing. You are reporting to the investors. You're sharing, you're paying out distributions. You're issuing K-1s. You're doing all that stuff. So it is, it is the, the developer is the epicenter of, of the project and putting it together. And really the buck stops with them. We talk about a lot about like the one thing in the 80-20. Do you feel like in all of the things that you shared right now? 37 00:13:23.855 --> 00:13:50.703 Where do you feel that in your experience, the 20% of time, the yields, the 80% of results has kind of been sitting? That might be a hard question. Answer your question. No, I think I know where you're going here. So let me answer this is, gosh, there are professional organizations or people that can plug into a development and they can help you with whatever you're not as strong at. 38 00:13:51.040 --> 00:14:14.969 If I'm shaping the ideal developer that is interested in doing this, it is what I call really like a social animal. People that have listened to this have probably heard that there's the big bag developers that come from out of state. They come in and they just bulldoze and do whatever they want to. Right? 39 00:14:14.969 --> 00:14:36.012 I do not adhere to that at all. I don't, I'm not going to develop anywhere that I don't truly care about. And then because I have, when you do this, you're really changing the landscape, you know, figuratively and physically of what this local town or what this local area is. And these people care about it and you better care about it. 40 00:14:36.215 --> 00:14:58.743 the Janets, the Steves, and all those people about that. You need to be able to build relationships with them. So the massive amount of impact is the ability to develop a relationship with the key people, and it's rooted in good. It's not just, I mean, yes, I truly believe this is a wonderful business because if you can reverse engineer what everyone else wants, for the most part, you're not going to please everyone. 41 00:14:58.743 --> 00:15:26.519 But you get rewarded for reverse engineering some type of creation that can help a ton of different people. So to me, the 20% that is the 80% is the impact that you can have with the key people that you need for the support and doing it for the right reasons. And then the doors, over time, the doors open and you get yourself more on an inside track because you are trusted. You are trusted and you care about the fabric of that community. 42 00:15:26.519 --> 00:15:48.001 Love that. So you would say that pretty much, if I understood that correctly, if I'm looking at the scope of everything that has to do with development, it's almost like putting together the Avengers on a lot of other areas, except the personal relationship aspect of it, which is what you would focus on. So if I was like, hey, Isaac, I'm going to start developing tomorrow. 43 00:15:48.490 --> 00:15:57.535 And you were like, we're on the sideline to continue using the QB analogy, right? You're on the sideline to show me the game plan. And you're like, okay. 44 00:15:58.008 -->

00:16:25.379 All I need to do is go talk to the town people, understand what the town needs, create a relationship with the town people, start creating a relationship with all the different players that we need. But I don't need you to worry about going into creating a construction company. I don't need to worry about anything else. Just stay up here. Town people, understand what the town needs, understand what's available, and then just create a relationship that is going to be the 20% that's going to give me the 80% results in getting a development off the ground. 45 00:16:26.037 --> 00:16:52.379 Yes, that is exactly right. There's pieces to plug in, and it is a business that has barrier to entry for the other pieces that you need to plug in. But if you can, I think as a general statement, more builders would develop if they enjoyed or had the patience of going through the local level items and the checklist and things that you have to do to actually create the opportunity. Yeah. 46 00:16:52.379 --> 00:17:18.822 So a lot of builders don't want to spend time on that because it takes their net. It's not revenue. It's got to be patient. And development takes patience. There's some, you know, you drive it, but there's still some things out of control. But yes, if I'm coaching someone right now, it's, it's, uh, you can have your thesis and idea of what you want to do in that area. That's cool. I would, I would carefully drip effect that out in very thoughtful one-on-one conversations. And I would, um, 47 00:17:18.822 --> 00:17:45.704 I would be the best at building the relationships at a local level and actually care. And I'd put my energy there and actually over index in that area because that loosens everything up. Yeah. And it's the right thing to do. I just think it's the right thing to do. To give a little more context, when you say talk to the town, are we talking about the economic development committee, the zoning board? Like who? Yes. That's a good question. Who would we be talking to? 48 00:17:45.704 --> 00:18:15.134 As you go through the challenge of development, I always relate to building iPhones and iPhones, like the same thing, factory, this kind of stuff. From township to township or local municipality or county, whatever, everything's different and the people are different. And and so, yes, there's usually some type of building commission. There's usually someone at a local township that is responsible for some kind of a planning planning commission that they that they created. That's a key person. 49 00:18:15.134 --> 00:18:40.666 Um, it's the small businesses, it's the local businesses there, right? What do they want? And that stuff. So it's those people there most of the time, especially now based on the, on the, the amount of creation this country needs versus where we're at, there's all kinds of nonprofit programs that are put together to kind of help the creation. And so they would be, um, you're going, going to a city level or

going to a County level 50 00:18:40.666 --> 00:19:03.278 ask the questions like who are, you know, who's working on this? Who's trying to grow this? Have you guys done, have you guys done like a five-year plan for this area and what you want it to be? Because they, like a local township or a city will go through and they'll master plan things. And then they need to find the partners to actually execute on it. But they will go through an exercise and master plan things. That's our opportunity to say, hey, 51 00:19:03.498 --> 00:19:27.680 okay, I see that you want this type of asset over here, but what if I did that down here and we switched to that? Or if you had to change, you know, you just start those conversations. So again, you're going back to the powers that be, and there is a zoning board. And, you know, when you go through this stuff, you will have a plan, you will have a site concept, and it will go for some type of vote in a couple different areas, right? It will go to a board. 52 00:19:27.680 --> 00:19:46.512 And we believe that you meet every single person on that board and the influencers that maybe aren't on that board well prior to that meeting, one-on-one. And Kat, you know, show your vision. You got any ideas on this? Feedback can go from there. So you just get out in front of it. 53 00:19:46.512 --> 00:20:15.993 Hopefully that answers it. It varies a little bit, but it usually starts at that local level and there's some type of planning commission. And then there's going to be other parties that are economic development drivers that are going to be interested and they might have tools for you to use that make it a little easier on your side. So one of the things that you said earlier, because one of the things that comes in my mind, if I'm thinking where our listeners are coming from listening to this, which is a common idea when it comes to real estate in general. 54 00:20:16.313 --> 00:20:43.212 is that's great, you need money. And one of the things you said earlier is like, well, there is certain barriers to entry when it comes to the development game that are there. Talk to me about realistically, is money a barrier to entry if you find an empty lot and you're trying to just understand? Because for me, this very beginning step of this is like understanding I have a lot. Is this possible? Can I actually do it? 55 00:20:44.393 --> 00:21:01.808 Is getting to that answer actually like really expensive money-wise or is that just a limiting belief that people have with the assumption like, hey, development must be expensive? Like, is it expensive to get in the game when it comes to something like that? And like, what's expensive if it is expensive? 56 00:21:02.753 --> 00:21:28.623 Okay. All right. Let's walk through it. Let's walk through a raw piece of land that, you know, guys to just visualize that. And let's say you have identified who the landowner is and you've had a conversation and they're open to different ideas. And the

next step on that is, you know, you're going to go back and you're going to just do your own research. You're not paying any money yet, but you're going to check what's this zoned. Okay. And then you're going to have a couple meetings here and there. Okay. 57 00:21:28.623 --> 00:21:53.227 And as you're doing this, we put it under something called an LOI, a letter of intent. It's a non-binding letter of intent. At least I've got like the landowner. I believe even if it's not the teetiest document in the world, I believe putting something on paper and that we both sign off on is like a human handshake type of deal that, hey, we're going to travel down this road. This is not a purchase agreement yet. Okay. Okay. 58 00:21:53.227 --> 00:22:23.112 But there's some type of lettering to kind of flush out the terms. You will then, as you move forward, you'll kind of agree on a land price, that kind of stuff. You'll want to create a window where you're doing some due diligence, which that does start to cost money. But by that time, you know, with the right help in that stuff, you're only spending a few bucks. By the right time, you could get something under contract and give yourself time to go through the due diligence and then have carve-outs to where, like, if this doesn't work or there's something wrong with the environmental, we can pull out from there. 59 00:22:23.112 --> 00:22:38.468 But during that time, like development is the classic business of running parallel paths. Okay, you're running parallel paths. So you bet, you know, at that same time, are you if you don't have the capital to take down the land yourself, or that landowner is not going to contribute land to the deal, and you don't know if you can get banked at, you know, 60 00:22:38.688 --> 00:23:04.253 you might start off by just crafting the opportunity and working then partnering with a developer and getting a small fee or small share to let them take over and ride with them to get in the game. So by the time, I guess I'll finish with this, by the time we go from LOI and then we actually purchase the land, which is we sometimes give ourselves six to nine months to go through that process, but we actually write the check for the land. 61 00:23:04.338 --> 00:23:30.595 You can get up to $100,000 at least in other due diligence costs with some civil work. You're doing environmental phase one, phase two. You're doing feasibility studies, your financial modeling, some of that stuff you do yourself. But our game is to look at it and look at the landmines in the deal, the proverbial landmines. Like, where does this go south? And do that as cost effective as possible before we start going hard on anything else. Hmm. 62 00:23:31.709 --> 00:23:53.005 So long story short, and it obviously depends on the size of the project, but to determine the feasibility of the project, we'll say you will incur some costs, right? This isn't like if you're dead broke, you're going to need a partner to do this. Yeah. Yes. Yes. No question. Yes, there is. So. 63 00:23:53.005 --> 00:24:13.289 And then there's there's people that do this every day, though. Let's say you got a piece of dirt that's a half a million bucks. And let's say you go ahead and you have someone behind you that's going to help you out with that or some kind of loan. And then and then and then. But you go through an entitlement process to make sure it gets, you know, the right structure around it, zoning, whatever it is. You make sure you get the right story where actually a builder could take it over. 64 00:24:13.289 --> 00:24:30.282 So you could do that. You could spend some money and then you could with under the purchase agreement. But even before you buy it, you could sell to someone else for seven fifty and you never came out of pocket on that cash. Like so that's we don't really do it that way. We see something and then we want to execute all the way through. But there's so many different ways to do development. 65 00:24:30.282 --> 00:24:49.975 The one thing where you get in trouble is, is going back to patients and, and patients requires capital. Okay. So if you're, if someone's getting into development because they want to make a development fee in three months, I would, I would highly, highly, I would highly push back on that because you don't know. It just, it takes longer time and that stuff, but. 66 00:24:50.330 --> 00:25:12.689 Patience requires capital. It's probably one of the things I've heard all week. So this is, but like this group, you have people in here that are managing, you know, they have a management portfolio and they're, you know, hopefully they're growing their cash flow of that. And I love the fact in this, for this network is like, you're getting cash flow, continue to build that cash flow business. 67 00:25:12.689 --> 00:25:32.197 And if you have if you have the opportunity or the desire to develop, you know, step into it. Maybe you find the right partner. Maybe you can go. I mean, I mean, what what we're what I'm able to do five years from today is nowhere able of what I was able to do starting this off. Right. I had to make concessions and I had to get with people and I had to get earn the stripes just of the barrier to entry. Yeah. 68 00:25:32.332 --> 00:25:47.603 But I would look, I would highly encourage this group of people in here that is managing Airbnbs, it's able to cash flow or hotels, whatever you're doing, keep the cash flow, keep your day to day, that kind of stuff. And then look at development in a very patient, systematic manner to build your balance sheet. 69 00:25:47.603 --> 00:26:02.639 Build it from the asset column, right, is a way I look at it. So hopefully your core business gives you, could give you the patience to build the right partnership, to create the right opportunities. But I understand you do it well and you get through and you're patient and you execute a good development. It does hit the balance sheet pretty good. 70

00:26:03.128 --> 00:26:19.447 We talk a lot in the boardroom about active income versus passive income. So one of the analogies that we use for listeners, if you're a co-host, that can be your active income where you have a lever to pull to go out and get more deals, increase your monthly income, all of those things. 71 00:26:19.447 --> 00:26:48.050 This development world is amazing from a wealth generating and even some cash flow, but it's not consistent, right? So we like to have both. The recurring, consistent cash flow that you have a lever that you can pull to increase. And then you can use those funds to build your wealth in some other vehicle, whether it's development and then rolling it into ownership or whatever it is. But you really want to have both. And so, again, if it's there's some huge opportunities from. 72 00:26:48.050 --> 00:27:12.957 you know, an income and a wealth standpoint in development. But to your point, I just want to reiterate, it's a long game and it's a patience game where these deals can take two, three, four years. Sometimes, you know, we're working on a bunch of development deals in the boardroom right now. I was looking at, you know, Fernando's a couple of weeks ago, you know, it's a two year, two year plan and it's going to be an amazing project. But if you're trying to live off of 73 00:27:12.957 --> 00:27:36.886 The income from that, it's not going to be sustainable unless you have a nice stockpile of cash right now. Right, right. But that's the wonderful opportunity of the people in this group is building a cash flow business. And honestly, we came to this because we weren't managers, right? And so even that context, I mean, you can manage Airbnbs, you can manage anything that you develop too, right? Yeah. 74 00:27:36.886 --> 00:27:58.469 So, yes, that is the precipice of it. But, you know, again, on the more workforce housing side, you know, I have been spending – we created some new programs in the state of Michigan, and I think I'm 16 months into that, right? Just, you know, but it's all worth it. It just takes time and patience, and everyone's excited. But, like, you know – 75 00:27:58.469 --> 00:28:21.065 If you're an entrepreneur, no one's going to move as fast as you want to move and develop it. You know, it's your responsibility to, you know, throw out that date and try to rally everyone around that milestone and get it. But there's there's there's other factors at play. But it is a great business. It is. I enjoy the heck out of it. Just being able to create something out of nothing and legacy thing to where I think about my daughter and grandkids or, you know. 76 00:28:21.065 --> 00:28:36.792 Well, if we build it right, it's going to still be there. You know, it was kind of cool in a way and be able to impact the community. It's really got, you know, I love the term conscious capitalism and what it means to me is like, you know, go execute a really good business model, which everyone can win. 77 00:28:36.792 --> 00:29:01.261 And to me, it's been the best one I've found. But back to the day-to-day cash and that cash stuff like that, I mean, that's a reason why we've formed our offsite modular company. Not only for our vertical integration to like control our costs as much as humanly possible, but for us to have a revenue source for other developers and builders to tap into when they're struggling with labor and they want to have a quicker construction. So you do in your life need a mechanism. 78 00:29:01.261 --> 00:29:26.320 Unless you just have a pile of money sent behind you, you do have a mechanism to kind of blend out the big spikes of development. I'd love to pivot to learn more about the hospitality project, Spillway Lodges. What is it? How many keys is it? Where is it? And then what were some of the lessons that you learned developing a hospitality project versus some of your standard workforce housing stuff that you've been doing for a while? 79 00:29:26.320 --> 00:29:51.582 Yeah, I don't know if we have enough time to get through all that. No, we'll take a shot. So it is Spillboy Lodges is a 36-unit boutique resort in Bel Air, Michigan. Bel Air, Michigan is in the heart of an area called the Chain of Lakes, which are very beautiful inland lakes. I think it's about 70 miles of lakes are connected. You can go through by boat and all of them. So it's about north. It's about... 80 00:29:52.544 --> 00:30:18.464 40 minutes northeast of Traverse City area. It was built on an eight-acre parcel. Our development's on about five, and it's along the river, and it's right downtown Bel Air. It's walkable in the town to shops, restaurants, the third largest brewery in the state, little movie theater. And then we have a very large 5,700-acre ski and golf resort five minutes from us. And the thesis was... 81 00:30:18.818 --> 00:30:41.465 You know, like that, that's a great property, but that resort's 50 years old and it's a little bit tired. So let's give a new application that's downtown. We have 24 studios. That's, you know, 420 square feet, 430 square feet per studio. It has a little desk in it. Every unit has a, it has a kitchen in it, a full kitchen. 82 00:30:41.465 --> 00:30:52.062 And then we have 12 two bedrooms, two master suites, kitchen area, living room. Those are about 1,200 square feet designed for families. We have 12 of those units. 83 00:30:52.433 --> 00:31:18.353 And it was built modular. So bringing in 58,000-pound boxes for Pennsylvania and setting them with a $1.5 million crane was quite an experience and sight to see. And we had an idea of with, you know, we executed pretty well on the idea. There's things that we're updating to just kind of bring more amenities to it. We did the cold plunge in the sauna. That's been very well received. The pool in the pool house is going to be 84 00:31:18.353 --> 00:31:29.980 up up at fantastic i did not build as much storage as i should have you know um i just you know so that's another

reason for the pool pool house uh 85 00:31:30.841 --> 00:31:58.465 But it was a lesson learned through the process of managing it. You know, I also own a marketing company. I understand the SaaS world. So, like, all these softwares promise, you know, hey, this is an all-in-one suite. This is all you need. And I think it's that way for every business. So just learning the interactions and what tools to fit in and what systems to fit in has been a learning curve to good. But then now we're just kind of – we've got a good basis now, and now we're going to start marketing it hard. Yeah. 86 00:31:58.465 --> 00:32:15.509 Yeah, we're proud of it. It's something that we want to hold on to for a long time. Our feedback has been, Derek and I always joke that we got to give ourselves a little bit of grace because we're the ones that like it the least. The people that go there love it, but we know it's your baby. It's like your baby. You see all the imperfections. 87 00:32:15.509 --> 00:32:30.022 So it's like, it's like, since you spent, you know, three years creating it, but really learning, learning how people use things and how people use things for hospitality versus like a traditional rental was a good learning experience. And we did pretty well, but there's some things that we're going to change too. 88 00:32:30.292 --> 00:32:57.730 It looks amazing. And we'll, we'll have the link down in the show notes because it's such a cool project that came out amazing. And, um, I do want to touch on, we're going to wrap here in a second, but I do want to just highlight what I thought you did a great job too, for like the launch and some of the marketing was doing some of that influencer marketing too. Cause people ask me all the time, you know, how do you, how do you launch your, your hotels or what are some of your marketing techniques? Could you take like two minutes to just walk through what you did? Cause I thought it was genius. 89 00:32:58.743 --> 00:33:15.483 Yeah, I appreciate that. It's, you know, it's still, I think, I think influencer marketing is still like the wild, wild west of marketing, right? It's, it's, it's, and it's just brass tacks, reach out to good people, you know, get them to come stay off for whatever it is. And then, 90 00:33:15.483 --> 00:33:37.977 So our team, like we just, we, they have a list and they pound through a list and they're getting people that have interest or they have like a channel that makes sense to this. It makes sense to our business or some of the people we had, uh, someone, uh, her blog is the lemon bowl. Her name is Liz Delacroix. And she came up for a weekend. She's fantastic. I've known her a long time in West Michigan. 91 00:33:37.977 --> 00:34:04.538 but she's kind of like this food, like a, a definitely a health food person, travel blog combo. And so that was like great for her to be able to do her own cooking in our kitchens and then still experience the town and go on the lakes and go on downtown, that kind of stuff. So it's really just like kind of like a hand to hand combat, reaching out to people would love to have you stay. We'll offer in making the offer that makes sense for them and letting them create the content for you. I'm not huge. I'm just like, 92 00:34:04.538 --> 00:34:21.734 Hey, look at me marketing stuff. I'd rather edify everyone else and let them deliver that kind of stuff. And so that's where that strategy works. But, you know, we've done some of it to this point and we need to do even more moving forward. The one thing that I want to highlight is that you hired the videographer and the photographer. Yeah. 93 00:34:21.734 --> 00:34:36.955 That worked for you and they could get their own stuff, but you were able to retain some of the control over the shots and the content that you wanted to get by doing it that way, which I thought was such a small, but great tweak for like the influencer marketing strategy. Yeah. 94 00:34:36.955 --> 00:34:55.163 Yeah, so there's two aspects there. That's a good point. So that's a little lesson from the marketing company days is who owns the content, right? So having a camera there and then freeing that person up to actually experience it versus having to hold their phone the whole time is better. And you're going to get better shots, right? The other part of that is, you know, I... 95 00:34:55.163 --> 00:35:12.680 You know, I definitely believe in the search engine optimization side of it. And it's great when people are posting on social media and sharing that kind of stuff. But if they're just doing stories or one post like that, that energy is gone after a day or two. Right. So the one thing that we did with Liz and she's built her business on this with a look, 96 00:35:12.680 --> 00:35:39.697 is she offers the ability to, you know, I'll write a blog and she's got one heck of a website that drives a lot of traffic. And when she writes a blog that's narrating Spillway Lodges, we get a backlink there, which helps our overall search volume, right? So even having that content, you can repurpose the content, put in the different channels out there that automatically drive back to you above and beyond the social media stories that happen for just a day or two that are then gone. 97 00:35:40.102 --> 00:35:50.530 Love it. Love it. Well, Isaac, thank you again for coming on, man. Before we get into the last question, where can folks learn more about you and Spillway Lodge and all the cool stuff you guys have going on? 98 00:35:50.952 --> 00:36:20.534 Yeah, I appreciate that. So Spillway Lodges is spillwaylodges.com. And then you can reach out to me on Instagram. It's Isaac Oswald. I can spell that in there too. We can put that in there too. And then, yeah, I'm happy to talk to anyone. I thoroughly believe that anything I do, I want to be able to learn, systemize, and then help other people do it too. And it's a fun group to be a part of. I appreciate you both for having me on. If I can help anyone anyway, let me know. 99 00:36:21.327 --> 00:36:41.645 Love it. Love it. Yeah. And if you guys are interested in the boardroom, you know, we've got an amazing group. It's our highest level mastermind. I love spending time with these folks. You can learn more at boardroom.strsecrets.com. Check that out. But Isaac, the last question that we ask all of our guests is what is your number one secret to success? 100 00:36:41.645 --> 00:37:02.705 If I can create the environment that gets everyone around me what they want, I can get what I want. So good. Love it. Love it. That's amazing. Really appreciate you, man. Yeah. You've been a wealth of information for all of us. And it's been so valuable to have you. 101 00:37:02.705 --> 00:37:22.432 Because honestly, I don't know how many times I've come to you to ask you questions on development thing and how you think of things and how you think about the projects and everything else. And again, the rooms you're in really determine your life. And I know my life has gotten better since you've been in my life. So I appreciate it. 102 00:37:22.803 --> 00:37:35.341 Yeah, I appreciate that. Very kind. And then you both and then the boardroom in general, the people that we have in there is a special group that I've learned a ton from. So it's been a great experience and I'll see you both very soon. Take care, everybody. 103 00:37:35.510 --> 00:37:58.865 Hey, STR Nation. If you enjoyed this episode, please make sure to hit that subscribe button and leave us a review. And in the comments, let us know what topics you want us to cover on upcoming episodes. And we'll make sure to get that in the books for you. And if you really want to learn how to launch, automate, and scale your short-term rental business, if you want to go deeper, then check out our free masterclass at strsecrets.com.