Short-Term Rentals, Flips, & Student Housing:Kyle Stanley’s Real Estate Exit Strategy Playbook

Kyle (@fearlesskyle) (00:00)
It’s a conversation I have a lot with people. Most recently with a really close friend of mine who owns a business and I was like, okay, do you want to be a real estate professional or do you want to like view real estate as your safety net and what you are like building on the side? He’s like absolutely building on the side. I don’t have time. I was like, then you should not treat this like a hobby and you should not go do deals on your own. You should partner with people like me or

someone that you know is doing big deals and just get your guaranteed check every single month and know that your equity is building and just don’t don’t try to go learn real estate because that’s how people fall flat on their ass right like that’s it best advice I got treated like a hobby you’ll lose money treated like a business and you will change your life.

Cody Crabb (00:34)
Yeah.

Welcome back to the Real Estate Pros podcast. I’m Cody Crabb and joining me today is Kyle Stanley of the Fearless Investors. Kyle invests across several strategies with a big emphasis on short-term rentals. And today we’re going to be talking about out-of-state investing. We’re going to be talking about adapting to a changing market and building a business that actually lasts. Kyle, thanks for joining us today.

Kyle (@fearlesskyle) (02:38)
Yeah, excited to be on Cody, I appreciate you.

Cody Crabb (02:41)
Of course, yeah. just to start out, for people hearing your name for the first time, what’s the short version? How did you get into real estate in the first place?

Kyle (@fearlesskyle) (02:51)
Yeah, I mean, the the 5,000 foot overview was a sports anchor right out of college. Did that found out very quickly that I don’t like taking orders from other people, aka I was an entrepreneur at heart. So yeah. Yeah, so started and tried to build a few different businesses from the age of 22 all the way to 31. Best I ever did was 75,000 in a year.

Cody Crabb (03:02)
You’re, I was like, I’m already seeing it start to, yeah.

Kyle (@fearlesskyle) (03:17)
⁓ And so at one point I was just like man, I haven’t there’s something I haven’t figured out here There’s something that I’m just doing wrong. And so I started looking into real estate because that’s where I kept seeing When you use Google and you start asking how is real wealth built? How do you how do you get financial freedom real estate keeps popping up? I went to a couple seminal Yeah, exactly

Cody Crabb (03:35)
how did the richest people in the world get rich? it’s yeah,

that’s something we hear a lot on here is the origin story is like I wanted to know how to get rich and I just looked up what rich people do and that’s what they do. So there you go. Yeah. Yeah.

Kyle (@fearlesskyle) (03:44)
Yeah. Exactly. Yeah. Yep. Why? Why try to reinvent the wheel? So

I went to a couple seminars, decided to start flipping houses and on my second flip, decided to keep it as a short term rental. And man, the rest was history from there ended up finding that I was one of the first I was kind of the pioneer in my market in Fresno, California to do short term rentals. And I was able to then build a 5060 ish unit management portfolio.

of Airbnbs and short-term rentals was able to sell that for a big chunk of change in 2023. yeah, ⁓ since then I’ve been dad and new dad got two kids and now getting back really into heavy acquisitions and starting a new business in a new state. And ⁓ it’s fun, man. It’s a lot of fun. It’s so it’s pivoting every single day. That’s what I do.

Cody Crabb (04:34)
Yeah.

Yeah, I mean, I imagine so. Well, and I’d love to kind of chat about this out of state investing. So a lot of people live in these markets where, I mean, I’m one of them. I live in Salt Lake City, which is one of the, surprisingly one of the more expensive markets right now. But the thing that…

we hear a lot is like, well, we’re talking to people in rural Georgia and they’re like, I bought a house for a nickel. all these people are thinking, how do I do this out of state? I want to go out of state and do something. So I’d love to hear kind of what exactly are you doing out of state? Where are you doing it? And how could someone else maybe make it work for them?

Kyle (@fearlesskyle) (05:59)
Yeah, I mean, it happened really organically. So that’s the first thing is like a lot of people that I’ve talked to are like, how do you decide which market to get into out of state? And I was like, well, it just happened so organically for me. My business partner had long-term rentals in Indiana, little town, over there. And he was like, Hey, I got this one that could be a sick Airbnb. but I don’t know anything about Airbnb and you do, do you want to take this down and together? And I looked at the deal and I was like, yeah, this would be fun. So he already had realtors. He already had.

some cleaners, he already had a few different resources already. And then I just was able to kind of plug and play where my knowledge was at, which was how to make this the sickest short term rental possible. And we did, we killed it. Put $250,000 into that deal. That was a deal of a lifetime, bought it for 185, put 250 into it and refight at 734. So I mean, you know, do the numbers, we were able to put a nice chunk of change in our pocket as well as paying for the furniture, which is wild.

Cody Crabb (06:42)
Wow.

Kyle (@fearlesskyle) (06:55)
And then this last year did 130 K on Airbnb and VRBO plus direct bookings. And, you know, we’ve got now three short-term rentals over there. We’ve done. We’re in the middle of our second flip. We’ve got a student rental over there. We’re also exploring, some student houses or not soon housing, sober living slash homeless. you know, the, transitional housing market, that’s something new for us too. but yeah, it just, it happened very organically and like, that’s what I would say. If someone’s looking to go out of state is.

Cody Crabb (07:13)
Hmm.

Hmm.

Kyle (@fearlesskyle) (07:23)
Yeah, you can have like the market with the most profit and then build a team around that. Or if you already know like, Hey, I, know someone in the market or I know other people in that market that would be resources to me. It’s always easier to, to like make the, do the numbers and find the profit after you find the people in my opinion. ⁓ so

Cody Crabb (07:43)
Yeah, that’s a really good

point. kind of maybe the networking part is just how you do that. And then if someone’s out of state, you just talk to them and how’s the market you live in? And yeah, there’s definitely some opportunity there. So another thing that you just said that was really interesting to me is it seems like you’re consistently not doing the same thing. Like it seems like you’re kind of, you said I pivot every day.

That’s your thing. So I’m curious, what drives that and what’s the thinking behind that? And is there ever gonna be a time where you don’t?

Kyle (@fearlesskyle) (08:06)
Yeah. Yeah.

Yeah, I mean, listen, five years ago, right, I could put a TP up on Airbnb and be a king, right? Like it was, it was just so easy to make money. And now it’s just not that way. Deals are thinner. Interest rates are higher. Competition is higher. And what I mean by competition, that could be on short-term rentals on Airbnb. And it could also be just buyers in the area. So, you know, I’m just always looking for like, what’s something that someone isn’t

Cody Crabb (08:25)
Yeah, yeah, yeah.

Kyle (@fearlesskyle) (08:46)
doing that we can do and be a pioneer again, right? Like that, that was the kind of key to the success that I found in 2020 was I was one of the first to do short term rentals in Fresno, California. I remember there was like 90 short term rentals. And now today, if you open it up, there’s like 700, right? And, and so when, when you’re a pioneer, when you’re in the beginning there, like it’s true what they say, like, you know, get down, get in on the bottom floor.

Cody Crabb (08:53)
Sure, yeah.

Kyle (@fearlesskyle) (09:15)
And so, ⁓ there’s still amazing short-term rental deals, right? Like I was talking to a friend the other day who’s like dealing with a lot of stresses of short-term rentals and bad reviews and not as great a profits. And we got to talking about the properties and they’re just really basic properties. And I’m like, well, mine has an Irish pub in the downstairs. It has a poker room. It has a massive TV, like theater style, type of setup. It has.

Cody Crabb (09:33)
Hmm.

Kyle (@fearlesskyle) (09:44)
4800 square feet and that’s why it did 13 or 130 thousand dollars last year on Airbnb I had another that I tried down the street. That’s 1300 square feet and it Died on Airbnb. And so that’s the one I turned into a student rental, right? So like that’s what I talk about with pivoting is like, okay We started we thought this would be a good short-term rental, but we bought it and that one we actually bought creatively So the mortgage on it, even though we bought it 355 we did seller finance and the mortgage is only 1100 bucks

So so we were like, okay, we can do a long-term rental on this or we can just post it on Zillow at a crazy high price and see if some students end up inquiring and they did and so now we rent it for $2,900 a month where the market rent was like $1,700, right? So those those are just when I talk about pivoting I’m always I’m just like I always say nothing’s never for sale I always all my properties if you look they’re all posted for sale at like a crazy high price on Zillow and I’ll get calls

Cody Crabb (10:28)
Hmm.

Kyle (@fearlesskyle) (10:40)
from agents all day long and be like, do you want to list with us? I’m like, no, I just want you to bring me a buyer at this price and then I might sell it because every I’m always looking for like, how can I either like find the next thing that’s going to make me a pioneer or how can I just sell this property at a crazy high price that I didn’t even think that I could get and then 1031 into something that’s going to be a little bit more like low key for me. You know, the ultimate goal, right? With anyone in, in real estate is to not be the operator and

For me, I’m still in the operation stage of like, if I can build up something that eventually leads to me owning a hundred unit apartment complex and having a manager take over the whole thing, that’s where I’m trying to eventually go to.

Cody Crabb (11:57)
Gotcha. Yeah, that’s awesome. So it sounds like you’ve got a really clear vision of what you wanna, kind of the future, where you wanna go with it. I think, I find it interesting that you kind of just use the data. So you’re like, let’s try a thing, and if it works, we keep doing it. If it doesn’t, we don’t, and we try something else until it does. Like, it seems very simple, but I’m sure there’s a lot of calculation and research and all kinds of things that go into that too.

Kyle (@fearlesskyle) (12:04)
Yeah.

Yeah. The biggest thing on that calculation is do I have three exit strategies on this property? Right. everyone got into massive trouble, especially those that bought properties in Florida and Phoenix and, you know, the Smokies in Tennessee in 2020 and 2021. Cause they were like, wow, I’m going to go buy this million dollar property. I’m going to have someone manage it for me as a short-term rental. I’m going to write off all these taxes and then I’m going to cashflow a thousand bucks a month.

Cody Crabb (12:30)
Hmm.

Kyle (@fearlesskyle) (12:54)
And then suddenly it got saturated and they were like, yeah, I saved taxes year one on my, purchase, but now I’m losing a thousand bucks a month. And then because so many properties happened to go through that, then everyone listed their properties all at once. Supply and demand. They’re not, they’re not making their money back. So they’re stuck with this property that they’re just eating these, these mortgages every single month. I don’t, I don’t do deals like that. Like I, if that, if the only option.

short-term rental, I’m not gonna touch it. So it needs to be able to have an opportunity to flip it. It needs to be able to be a long-term rental. needs to be able to be a midterm rental. Maybe it’s a student rental, right? Like I’ve got to have at least three of those things to know that if A doesn’t work, then at least I have B and C to try as well.

Cody Crabb (13:44)
That’s smart, yeah, I think that’s a really good way to look at it. It’s not just about the spreadsheet that says ding ding, the numbers add up, but also theoretically, the market shifts, you have nothing to do with that. Can you pivot and change what you’re doing? So when you evaluate a deal now, what are the exit strategies you wanna see? What are some of the options that you typically look for?

Kyle (@fearlesskyle) (14:06)
Yeah, I mean, number one is Airbnb. If it’s not going to cashflow at least $2,000 a month as a short-term rental, then it’s really just not worth the headache of managing that short-term rental. Then number two is if it’s not, then can it make me at least $50,000 on a flip? And if that’s going to work, great. And I mean, we got one right now that we’re supposed to make $80,000 on the flip as soon as it’s all done.

⁓ But if it sits, I know it’ll do great as a short-term rental or it also do great as a student rental ⁓ Because we can rent out room by room 900 bucks a pop It’s a five-bedroom. We could rent out for forty five hundred dollars and the mortgage on that is gonna be thirty seven hundred dollars So there’s my three options right there on that property in case any of those fall through ⁓ But that that’s kind of like two thousand on a short-term rental 50k on a on a flip

And then like right around a thousand dollars of cashflow as a like midterm slash, I call it like executive rental. And then at the very least as a long-term rental just needs to be able to break even.

Cody Crabb (15:13)
Hmm. That’s, I love hearing concrete numbers like that, because it’s very easy to kind of hear abstracts, you know, don’t do too much, too little, but like hearing literal numbers is like, that’s refreshing. Like, that’s helpful. ⁓ Yeah, yeah, so okay. Pulling back a little bit, you mentioned you were able to take some time off recently, ⁓ and I’m just curious, like,

Kyle (@fearlesskyle) (15:28)
Good. I’m happy to hear that.

Yeah, yeah, it was awesome.

Cody Crabb (15:40)
How is having kids changed the way you think about business this time around?

Kyle (@fearlesskyle) (15:44)
man. It’s made me more risk averse, if I’m being honest, you know, like, so I sold my my management business and I also had an education business sold those both for seven, a small seven figure number in 2023, which was fantastic. And kind of kicked my feet up for the last two years still bought some properties, but knew that at some point I was going to need to get back to work.

And there’s two things that I’ve noticed in getting back into real estate right now. Brandon Turner talked about it the other day on a podcast and he was like, Hey, you know, in 2012, 2015, like real estate as a rental business was an actual business. Like you could rely on $2,000 of cashflow per property. It’s like today, if you’re trying to build a rental portfolio, it’s more of an investment strategy. Like you’re, you’re going, your money’s going to grow, but you’re not going to leave your job.

from a rental portfolio today with interest rates the way that they are with inflation plus like the the rental rates just have not kept up with the inflation and I totally yeah and I totally agree with that even this these ones that I have that you know cash flow two thousand three thousand dollars a month I mean you know we we just had massive rain in Indiana and we had to replace like one of the basement floors which was two thousand dollars there goes our cash flow for that month right like

Cody Crabb (17:29)
Yeah. Like best case scenario, they’re paying your mortgage, but that’s it. Yeah.

Kyle (@fearlesskyle) (17:52)
That that stuff just happens a lot these days. and so, you know, I’ve started to realize pivoting, right? Like I have to have an active real estate business. We have to be doing more flips, or we have to find better leases that are going to take the management off of our, our shoulders. and what I mean by that is like the, executive leases I was talking about, you know, student rentals, that one, that one does cashflow $1,500 a month and I don’t have any issues and I don’t

have to do any turnover and that’s been fantastic. Like, I just have to do a lot of pivoting to decide how is that active real estate portfolio going to actually become a business. And when you talk about adding kids into the mix, man, like now, you know, we got a property under contract that we’re trying to wholesale and we got under contract at $700,000. And that’s the biggest

deal I’ve ever gotten under contract in terms of a number. And I’m like, I don’t want to close on this deal. I need to wholesale this because I don’t want to have $700,000 plus $200,000 of rehab looming over me for six months. And then wondering if it’s going to sell at 1.1 or 1.2. Like that just, just terrifies me as, as a dad now, whereas like a single guy, I would have been like, whatever. I, my monthly costs are like close to nothing.

Cody Crabb (19:07)
Yeah.

Kyle (@fearlesskyle) (19:09)
You know, but now as a family and, know, living in a nice house and having kids and sending them to the best schools and everything. It’s like, you start to like, Hey, your, your kids start to make you really like, my gosh. ⁓ Am I ready to risk it all just for this deal? Right. And exactly, exactly. Nailed it.

Cody Crabb (19:28)
Yeah, that Disney Plus isn’t going to pay for itself. Yeah, I always

I always say like I’m I’m willing to eat ramen for a month. That’s fine. But I’m not making my kids do that. I’m not making my wife do that. So like it’s it’s very much like it’s it feels like my risk, but I don’t want them to have to pay the price for it. So that’s I often hear that as people become way more conservative or at the very least, like cautious when they’re ⁓ doing deals and things with once they have a family. So for

Kyle (@fearlesskyle) (19:38)
Yeah. Yeah.

Well said.

Mm-hmm.

Yep.

Cody Crabb (19:57)
Another thing you mentioned, we’re winding down here toward the end of our show, something else I wanted to ask you about is you said your long-term goal is not to be the operator. What does that future look like for you? Is it like you just kind of manage things from the sidelines? Do you completely kick back and never think about real estate ever again? I’d be curious to know what you’d love to do.

Kyle (@fearlesskyle) (20:19)
Yeah, that’s a great question because at the end of the day, entrepreneurs, there’s no such thing as like, with what I say is there’s no such thing as me going to the beach and just laying out to get a tan. Like I have to be doing something. I need to like, yeah, yeah. Like get me a football, get me, get me a game out on the beach. Like I got to do something. I’m not going to just sit down and read a book. and that’s the same way with business, right?

Cody Crabb (20:31)
I don’t even know how to do that, like relaxing is a hard thing.

Kyle (@fearlesskyle) (20:44)
What I found when I sold my businesses in 2023 and quote unquote kicked up my feet for last two years, I really didn’t. Like I was still extremely busy because, you know, right here I’ve, can see I got a Cubs logo right there. I’m, I’m a massive Cubs fan. I just decided to start a Cubs podcast and I grew that and I was like, this is it. Yeah.

Cody Crabb (20:57)
Haha

That is the classic entrepreneur mindset.

You’re like, I’m just not gonna work except for I’m gonna grow a big podcast about me. It’s so true, yeah.

Kyle (@fearlesskyle) (21:10)
Yeah. And,

and you know, that led to us, you know, doing a bunch of travel, going to games, meeting really cool people. And I, and I loved it, but I’m like, all right, that’s not making me money. So now I got to transfer that effort to something that is making me money. but yeah. So, I mean, even, even at the end of the day, if I was, let’s just assume cash flowing, right? Like I got, I got 50 K coming in every single month. I got a hunt, you know, million dollars in the bank and I got.

$10 million in assets that I could sell at any point. Like that, that’s great, but I still need to like have something that I’m working towards or progressing in or some sort of passion project. so, you know, ⁓ yeah, yeah, exactly.

Cody Crabb (21:47)
Yeah.

So you don’t really see yourself slowing down completely. You just wanna change your focus maybe a little bit.

Yeah, it makes sense. So okay, let’s say somebody wants to build toward that kind of future where they’re like, because I think a lot of people that are listening to this tend to be people that are adjacent to real estate and real estate investors and things get kind of itchy and kind of antsy and they don’t wanna just like you said, they wanna be doing something. a lot of people, to a lot of people, what you just described is like the ideal.

life for the rest of their lives like retirement and things. So what would you recommend to people that want to build toward that? Like what should they be paying attention to now?

Kyle (@fearlesskyle) (22:28)
It’s a conversation I have a lot with people. Most recently with a really close friend of mine who owns a business and I was like, okay, do you want to be a real estate professional or do you want to like view real estate as your safety net and what you are like building on the side? He’s like absolutely building on the side. I don’t have time. I was like, then you should not treat this like a hobby and you should not go do deals on your own. You should partner with people like me or

someone that you know is doing big deals and just get your guaranteed check every single month and know that your equity is building and just don’t don’t try to go learn real estate because that’s how people fall flat on their ass right like that’s it best advice I got treated like a hobby you’ll lose money treated like a business and you will change your life.

Cody Crabb (23:03)
Yeah.

Kyle (@fearlesskyle) (23:14)
⁓ So yeah so I mean getting really clear with what your goal is first if if you want it to be passive.

Cody Crabb (23:16)
That’s a good quote.

Kyle (@fearlesskyle) (23:24)
invest with people like me, invest with the operators. But if you’re like, Hey, I hate my job and I need to do this or else I’m going to completely lose my mind. just like where I was when I was 31 years old. Then yeah, I mean, you should not do it on your own. You should get a mentor. You should watch tons of YouTube videos, however you do it, whether you want to like pay the $30,000 like I did and just get straight to the answer and do your first deal in your first six weeks, which is what I did or

Do the long game and go down to YouTube University and learn as much as possible and a year later you’re doing your first deal. No matter what it is, just don’t do it on your own because then, once again, you can fall flat on your ass. ⁓ So, exactly. Yeah. Exactly. Exactly. Yeah.

Cody Crabb (24:05)
Yeah, you have to make the mistakes yourself instead of someone else going, ⁓ no, no, no, I tried that my first year. That’ll never work. Yeah.

So let’s say just that one last question here. Let’s say somebody does want to partner with somebody. What would you say a good way to find somebody like that would be?

Kyle (@fearlesskyle) (24:24)
listening to podcasts like these, most of the time guys like myself are coming on your show or coming on real estate podcasts. They’re doing the deals, DM them on Instagram and say, what are your deals look like? What would I make as a return? and typically the people like me who are having those conversations are going to say, Hey, this isn’t actually a good fit for you, but my buddy who’s doing multifamily, right? I can connect you with him. So networking, right? Just, just

Cody Crabb (24:47)
Hmm, yeah, yeah.

It all comes back to networking. Yeah.

Kyle (@fearlesskyle) (24:49)
Don’t be afraid to DM people like me on. Yeah.

Listen, listen to podcasts. Don’t be afraid to DM people on Instagram. The ones that you jive with the ones that are doing the deals that you feel like you want to and you might not know what those deals look like in the beginning because you’re just like brand new. ⁓ But just have conversations with them.

Cody Crabb (25:05)
Hmm.

Awesome. Well, this has been a really great episode, Kyle. If someone wants to find you online, how can they do that?

Kyle (@fearlesskyle) (25:15)
Yeah, best way is just my Instagram like I was talking about at fearless Kyle. It’s actually if you’re watching I guess on YouTube right there. Yeah, yeah, yep. Yep, I feel as Kyle and I’m always having fun posting content every day

Cody Crabb (25:21)
yeah, it’s true. Yeah, it’s on there.

Every day, wow, that’s pretty impressive. Yeah, that’s a lot though, that’s a lot. Well, Kyle, thanks again for joining us today. It’s been a real pleasure. And listeners, thank you for joining us as well. If you got something out of today’s episode, and I know you did, go ahead and hit a like, hit a subscribe.

Kyle (@fearlesskyle) (25:29)
Just about Monday through Friday. Yeah,

Cody Crabb (25:45)
Leave us a comment, do all the things, and make sure you don’t miss another episode. And Kyle, thanks again, we’ll see you next time.

Kyle (@fearlesskyle) (25:52)
Thanks, Cody.