Subscribe via:
Show Summary
In this conversation, Brian Steiner discusses his journey in scaling short-term rental businesses, particularly focusing on tiny homes. He shares insights on the challenges and strategies involved in building a successful rental business, the importance of team building, and the unique design elements that enhance guest experiences. Brian also outlines future expansion plans and innovations in the hospitality sector.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Brian Steiner (00:00)
one of the, in my normal day job, one of my account managers actuallyhad to go flood his house flood and he had to stay at an Airbnb and he was paying five times what I was getting on a long-term rental and for a house that was a decade older and it made me realize I was doing something wrong and I quickly made a shift and I couldn’t find anything that was a natural fit and since I had a history and kind of doing some construction things we started from there and built eight units from the ground up over last two and a half years.
Kristen (02:01)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Brian Steiner, who is the owner of Casitas at Sun Valley. We’re going to talk about a lot of stuff, short-term rentals, long-term rentals, but specifically we’re going to talk about tiny homes, which I’m really excited to talk about. So thanks for being here, Brian.Brian Steiner (02:17)
Thank you for having me.Kristen (02:19)
So you’ve been able to build this really cool portfolio, but I’d love for you to start at the beginning and kind of talk about what got you into real estate, what made you fall in love with it.Brian Steiner (02:29)
Yeah, absolutely. oddly enough, my father always likes to kind of push me on some random pieces. So in college, I didn’t want to live in the dorms and all that kind of fun stuff. my dad and I made an agreement. He would buy me a house, but I had to rent out all the rooms and act as the landlord. So he didn’t have to cover the mortgage. And I accepted that a long time ago. Feels like yesterday. Right. But ⁓ I accepted that. And for my four years through college, ⁓ I rented out.all the other rooms, learned all the pitfalls of long-term rentals and kind of got the bug because I had free capital to do things that normally I wouldn’t have to. didn’t have to work a crazy, you know, I did work a nine to five job while doing college, but I didn’t have to. And so that became some extra pieces. ⁓ And leaving college, I was able to kind of buy my own home from there. And every time I’ve kind of changed or needed to upgrade as my family, I got married and had kids and everything else. I followed that kind of ⁓
house hack mentality that you hear on bigger pockets and others. And I kept just renting out units and units as I did that and kind of accumulated a long-term rental portfolio over a series of years, which had its own challenges and fun and everything along those cycle. I ended up moving my family all the way to San Antonio and managing long-term rentals from four and a half hours away is not the easiest thing in the world, especially when you were the one doing a lot of the work and
and being the handyman and all those pieces. So learning systems was a huge priority. And then as we moved into the area, we kind of fell into a property for personal reasons. I wanted a woodworking workshop and my dad needed a place to come see his grandkids, we needed a place to stay. And so the casitas at Sun Valley started off as a personal place, but about a year into that whole excitement and everything that was going on, you know, we,
one of the, in my normal day job, one of my account managers actually
had to go flood his house flood and he had to stay at an Airbnb and he was paying five times what I was getting on a long-term rental and for a house that was a decade older and it made me realize I was doing something wrong and I quickly made a shift and I couldn’t find anything that was a natural fit and since I had a history and kind of doing some construction things we started from there and built eight units from the ground up over last two and a half years.
Kristen (04:48)
Wow, that’s so impressive. I would love for you to talk a little bit more about your long-term rental experience and some of the challenges that you had there.Brian Steiner (05:44)
Yeah, what I find really interesting about long term is ⁓ you get these beautiful places, you put your heart and soul into them. In my case, I’d lived into them and that kind of pulls at heartstrings and things go wrong or a tenant breaks something or something like that. Even if it’s not your furniture or whatever else, you still feel this connection to that building, right? And so if you’re building it like I was with house hacking, then that’s something you kind of have to deal with and something I’ve actually had to mentor people.after the fact on on how to kind of deal with and process those pieces and realize it is a business. Things are going to happen and you kind of have to kind of go with those turns. But not only from the landlord side, even from the tenant side, anything over three months and people feel this ownership. I know they they know they’re paying a landlord. They know they’re doing these pieces, but it almost feels anything whether you’re having to raise the rents because your costs went up or whether you’re having to deal with them moving out, even if it’s their choice or.
⁓ or any of those pieces, everything becomes almost a life or death situation. It’s very personal and long-term mental because they feel that attachment to that building, that home, that’s where they’ve raised kids or suffered that medical emergency and they just have this of heart drawn piece to that building. And that piece is something that you have to articulate and deal with when you deal with long-term. And it’s not only the approach, ⁓ but also kind of the empathy that you have to realize.
As a landlord, right? ⁓ It’s easy to say, hey, my costs went up. I need to go raise my rents, right? But how do you justify that for that tenant in a way that makes sense and they don’t feel like you’re attacking them? And so it’s really about reframing and rephrasing and how you deal with those interactions from a day to day basis, from just that tenant perspective. So that tenant relationship is critical. The secondary piece is how do you deal with things as they come up, whether that’s finding new tenants or whether that’s.
you know, actually dealing with things that break in a home that is going to break. It’s it’s kind of accustomed to any kind of building and getting older in general. And so it’s really about what I had to learn over those decade plus that we were doing long terms was really how do I put in those systems? How do I put in those people? And how do I ensure that everybody has a job and knows what to do and everything’s documented well enough that all I have to do is pick up a phone and send somebody versus me having to spend hours and hours kind of trying to diagnose the issues or.
walking somebody where the the plunder is or any of those pieces you hear the nightmare stories around, right? And so really that documentation, that process that keeping organized becomes the next critical piece of that. And once you can do those pieces, scaling, whether it’s one, 10, 20 gets a whole lot easier. And once you know how to build those teams, gets a whole lot easier as you kind of go. I hope I answered that for you.
Kristen (08:29)
absolutely.You answered it really well, really thoroughly. Like, I feel like the team, that’s a really hard part of it, like hiring people that have a shared mindset as you shared goals and shared work ethic. How did you go about finding the right people to supplement, you know, yourself?
Brian Steiner (08:51)
first it was just ⁓ searching people on Google and that worked to a degree. ⁓ But you don’t get the buy in you don’t get the passion. You get those random people we’ve had cleaners in the short term that decided that it would be a great idea after they clean the place to show up at two o’clock in the morning to show their friends the next morning, which is not always the greatest thing in the world. ⁓ So luckily no no issues there but ⁓ but what ended up turning the corner for us was sharing the story.right? That story of why you’re doing these pieces on where the intentionality is on where you’re going and letting people buy in. And also I found not finding corporate conglomerates to kind of help you in your business because you’re just a number to those corporate conglomerates, right? But to a local business, they care deeply about that clientele, about their reputation. When you share with them the journey, whether you’re building, I mean, you’re excited. That’s why you got into it the first place. There’s some reason.
that’s driving you as an investor, whether you’re hands off or hands on, there’s a reason why you’re doing that. And a simple thing just as just sharing that story and bonding with them on those levels helps grant those excitement. And then we start bringing that local talent and those local reputations. Not only is it a way where you can quickly get real reviews because your local Facebook market is going to tell whether they’re amazing or terrible, but it’s also a great way to truly
to build people into the business almost like it’s a family-run business even though you have multiple different groups and agencies and entities all kind of working together.
Kristen (10:57)
Yeah, I mean, I think that’s a really good way to go about it. again, like hiring the people, that’s the hardest part is working with other people and making sure that you hire correctly and fire quickly. So then you moved into short term rentals, which based on the challenges from long term makes a lot of sense. What challenges are there in short term? Like what are you kind of still navigating within that?Brian Steiner (11:23)
Yeah, I would say when you’re first getting started and you’re on your one unit, you have a lot of questions and this is market going to be right. And it’s a lot about research and making sure you found the right property in the right location. Stack onto that what we did, which was actually real estate development, actually building them. Then then it’s all the permitting and all the regulation and pieces that you’re having to kind of get through. So that was kind of those first hurdles that we faced that, you know, really relying on some local talent, building that team like you just talked about.became really, really relevant that kind of taught us along the way. ⁓ Once you get past that first unit or two, what you find out is that when you start building the right team, things start clicking, but then having the organization, having the structures, having the pieces in place, because inevitably somebody’s gonna have to take vacation, inevitably somebody’s gonna get sick, ⁓ and you have to be able to kind of scale. It’s still a business, you’re still helping people, you can’t just shut down your doors because a part of your team.
isn’t functional, whether that’s yourself or anyone else. And you didn’t get into investments and things to work 24 seven, 365 as well. Generally, people left a nine to five day job or something that was taking their time to kind of go pursue these pieces. Right. So how do you start to build those those sections? And so we quickly realized as you know, we were building tiny homes. They didn’t have space for large linen closets and places to go store these things. We had great tips to like.
have three sets of linens. You have one clean on your bed and have one back up and have one in wash at all times. Those are all great pieces. But when you get to eight and 10 and 12 units, where do you put all that stuff? Right. And you can’t you can’t have your cleaners who are turning three and four and five units on a day between 10 a.m. Checkout, some three o’clock check ins. You can’t have them washing the laundry while you’re there. So your team kind of grows and you have to go find new people. And in certain areas, especially where short terms are really successful.
in those niche markets that may be close to, you know, touristy kind of places. You don’t have like a great laundromat that’s willing to go take in all of your laundry for eight units at a time. It doesn’t seem like it’d be that much, but the piles are stacked higher than your head and and wider than a car at times. Right. So really building in those processes, finding those companies who have unique models and can kind of take in those places becomes that key to success and and how you scale and how you kind of drive that that that success threshold.
And then, you I you look at a lot of the big influencers today, your Cody Sanchez is and even Rob Abbasolo and all these areas. And they talk about, you know, setting up the right teams and partners and places and and how that goes and letting yourself kind of work yourself out of the business. I’m a big fan of any time you’re working in your business and not on your business to figure out either a way to replace yourself either through automation or through through through a team member to kind of do that and making the financials work along those sides.
Kristen (14:15)
Yeah, I mean, that makes so much sense. You’ve broke it down really well. I would love to talk about the tiny homes. I think it’s such an interesting kind of new sector that’s being folded into the real estate model. Can you just talk about the importance of it and the opportunity that you’re seeing with it?Brian Steiner (14:33)
Yeah, well, we quickly realized we, like I said, bought three acres for personal use. And then we’re trying to figure out as we’re scaling the Airbnb practice or the short term rental practice, how that would look, whether we wanted to do like two big homes, whether we want to do a bunch of small ones. And as we kind of did the research and looked at the financials behind it, as well as what people were kind of facing, it quickly became apparent that being able to test and adapt quickly was was one of the big things we wanted to do.And especially in a market that wasn’t like we’re in Spring Branch Boulevardie. It’s not typically you don’t think of us on the map like there’s no national park or, you know, you don’t think of us in that kind of place. However, the local Hampton Inn is charging $250 a night, which is downtown Austin rates to go stay there. And so there’s obviously some demand and some pieces. So as we wanted to look at it, we wanted to be able to pivot and shift and make sure we could accommodate our end user experience that we were chasing after.
very quickly. And so what we wanted was we wanted you to have that five star luxury feel, but have the rustic nature of the Texas Hill Country. We wanted you to feel like you were walking into modern spaces that were almost off grid and potentially off grid in the future. ⁓ But having every minute that you would expect out of a five star experience. ⁓ In my previous life, I’ve traveled the world for major corporations, stayed in, you know, beautiful resorts in Vegas and Dubai and all through
different kind of areas. And one of the pieces that I wanted to bring back was that experience that you got from just a zero touch, just beautiful stay, just where you felt like you were actually escaping your home. ⁓ I didn’t want what you feel like when I go to a party Airbnb in Austin, which is, know, labels on everything and, and, every, I got to look at this, you know, 50,000 page guest book when I come in with all the rules and regulations and things.
And then, you know, the laundry list of things that we had to clean up afterwards to not get charged a fee or something as we left. So frictionless. have smart locks that let everybody in. It’s the last four digits of their phone number so that they don’t have to think about it or remember a code. Luxury. have spa showers in every facility. We treat everybody with coffee and creamers and everything else. All the bed linens are made to be nice. we do, you know, member foam mattresses and everything. So we want you to have a great night’s sleep and an experience.
Everything is focused around getting to build experience nature even in a modern kind of experience. And then we do nothing but courts or high end finishes, high end appliances so that you feel like if you want to cook and that’s the experience that you want to do, you can do that. If you want to do nothing and just relax, it can be delivered to your door. If you want to just have a do nothing weekend and just enjoy a spa shower for multiple jets, then that’s what you can do. And our next level will be adding on services such as.
you know, massages coming to you, personal chefs, things like that, where you can get those experiences that aren’t even offered in the area typically. But we’re working through local partnerships to kind of enhance that experience all in this frictional experience where to leave, you just leave the beds unmade, throw your towels on the floor and and head out the door on your way. ⁓ That way you kind of get that rustic experience, but you get the modern feel and you don’t feel like you’re walking into a 50 page encyclopedia of what you can and can’t do in those areas. Right.
Kristen (18:29)
Yeah, and I think maybe people who aren’t familiar with tiny homes might look at that and be like, I’m not going to stay there. It’s too small. But it’s the same size as a hotel room, which that’s an interesting thing to compare it against because it’s the exact same space. If not, you’re utilizing the space better. you have a lot more to work with. ⁓ I would love for you to talk about kind of like the design because your casitas are gorgeous. They’re beautifully designed. And I know you have domes as well. I would love for you to talk about kind of thedesign strategy behind it.
Brian Steiner (19:01)
Yeah, so we ⁓ we looked at a lot of things. There’s a lot of unique stays. There’s a lot of interesting pieces. And oddly enough, ⁓ we end up having to pay for the whole property out of cash, because as we went down the financing route, people heard tiny homes and ⁓ and thought, you know, two wheels and a trailer with ⁓ with like some things kind of stuck together or, you know, or just like really, you know, not really well done and really well designed. And that’s not what we wanted.And so the initial build cycle, you we had to kind of front load the cash on it, which was really interesting. But when we wanted to kind of pursue this, we started looking at what all was available and what quickly became kind of the, the, the crutch was and why we ended up building and designing ourselves was, know, we wanted this experience where you didn’t feel like you were cramped in these places, you know, our quote unquote larger units are only in a square feet, but you have two full-size bathrooms with two spa showers. You’ve got walk-in closets. You’ve got.
a dining area that can fit six people. got full sized kitchens with every amenity, full size refrigerators, everything’s here. Walking into a tiny home, but you get the experience of like a nice, nice full sized kitchen. We’ve had people actually stay for up to a year at a time at times because they it’s an easy place to go, but they may be building a house local in the area or whatever the case may be. And so they wanted to kind of continue to stay as we moved into kind of trialing the next phase of that, which was a 400 square foot unit.
Kristen (20:12)
up.Brian Steiner (20:26)
We wanted that studio feel. We still didn’t want to give up any of that experience, though. So things like the walk in closet had to go, but moving them into wardrobes that could also duel as places to kind of keep where the the TVs were going to come on and sort of a little between them. But we ended up mending the walls. You get this great space to kind of play board games or or do places. And we just had to get more unique with how we designed. So you still have a full king bed. You still get a studio place and it’s a great place to stay for even a week or so at a time.We can fit four people in a 400 square foot unit. That’s probably a little tight. ⁓ But but if you’re enjoying the outdoors like we want you to and you’re exploring those areas, it’s a great place to kind of unfold the couch into a bed, sleep, fold it back up. And that’s the kind of experience you’d be in a tiny home. But you still get that luxury feel. You still get high end finishes. You still get all those pieces that that that we want to deliver in those experiences. Then as we moved into the domes, that became a place we got a little bit more room to kind of stretch our our creative muscles a little bit. So
where you see in a lot of these, you see these like loft beds and you don’t really get to capture a lot of the greatness that comes with domes, which is this beautiful panoramic view, these giant skylights to see the stars. And that’s one of things we really loved about the property we’re on. We’re in this kind of dark skies area. And so there’s not a whole lot of lights that break out the stars. So I wanted you to be able to experience that, whether you were laying in bed, looking up through the skylight or whether you were taking a shower or whether you were cooking.
all those pieces. So having it so that all of those areas could actually look up and see this guy became part of the crucial design. And then we didn’t want to take away from that experience of like, I want to go cook and I want to do that. I want that experience. We still have full kitchens and even in the domes. And then we were trying to figure out with no real walls, where do I put a TV in this place? Cause some people still want to watch TV when they go out places. And so we, custom fabricated footboards that the TV is actually
lift out of the footboard so you get a beautiful view or you can have the TV with just the click of a button and and it also seems like magic is kind fun to play with too. So.
Kristen (22:25)
Yeah, I mean there’s so many ways to maximize your space. It’s, I mean really when you get into it, it’s really mind-blowing how you can put so much into such a small area. Well what you’ve built is really impressive and I really encourage everyone to check out Casitas at Sun Valley. Talk about kind of where you guys are headed and what you see for the future.Brian Steiner (22:47)
Yeah, absolutely. Thank you for asking. we’re looking at, we’re going to scale out ⁓ to a couple more properties. This whole multi-unit piece where we can focus on those experiences has ⁓ been an enlightening journey that we’re kind of doubling down on. ⁓ One, in the current location, we’re going to start to add those amenities, both from the services perspective, like we talked about, but also add on amenities. We’re going to kind of segregate out the three sections. So we’ve got two of the larger ones.larger being 800 square feet for those 400 square feet and the domes. And so we’re going to be kind of segregating those out into like family style pieces by potentially adding on a little movie theater and some tree climbing kind of exercises on the quad, as I call it, which is our four 400 square feet units. Those are going to kind of add some Instagram where the areas where we can take pictures, maybe add on some hot tubs, kind get that experience where if you want to take a wedding party or a bachelor party or anything else like those, you can actually still come out and enjoy those, take your fun pictures and.
and really enjoy the space while still going out to the venues. And then the domes are far enough away from everything where they can stay away from those noises. But they get these beautiful views of Guadalupe River Valley that’s here locally. And so we are adding on a kind of a secondary deck there to add on plunge pools and saunas added to those. So you get that a true experience in that spa filled with those. But then over the next couple of years, we’re also looking at expanding to two more properties.
Adding on again, we want to go resort style amenities when we go with those, whether that be pickleball courts or chef experiences or whatever kind of makes sense from those perspectives. We’re finding that area when you go somewhere you don’t want to go jump around. You’re coming for an area, but you’re also wanting to kind of experience those those places without having to drive and be in the mix of five million people. And so bringing some of those to to the guests is going to be kind of paramount and kind of how we expand.
And then also adding on chapters now that we figured out these scaling areas, these ways to kind of make this efficient. are working on doing some consulting for a couple of areas in Fredericksburg and even outside the state. We working with some groups in Tennessee already as well.
Kristen (24:54)
Amazing! Well, it all sounds really exciting and you know I can’t wait to see how it grows. What you’ve been able to do, I mean thus far, is really impressive. So tell everyone where to find you and how to you know book a stay with you.Brian Steiner (25:07)
Yeah, so we are at www.casitasatsunvalley.com. We’re live and on there every day. We check those and we’re willing to get everybody kind of checked in. We do kind of separate out so you can book the whole place at once, a section of once or in any individual unit. We’d love to host anybody.Kristen (25:26)
Amazing. Well, thank you so much for being here, Brian.Brian Steiner (25:30)
Thank you so much for having me, Kristen.Kristen (25:32)
Yes, and I hope everybody, I hope you learned a lot, got some inspiration for your own business and we’ll see you back next time. So thanks for tuning in. Bye.Brian Steiner (25:40)
Thank you.
