How They’re Transforming a Historic Ranch Into a Luxury Vacation Rental

Troy & Misti Petrie (00:00)
Short-term rentals, the benefit there is the lever is cashflow, right? Our short-term rentals are awesome cashflowers.

But what we did realize is at the end of the day when you’re exiting, you’re exiting, sadly, as you know, you’re a realtor, you’re exiting as a residential home, right? So you’re not really getting the equity that you put in from the business. So that’s what moved us to doing this guest ranch is it’s essentially a collection of short-term rentals, but now at the exit, we actually are gonna get the value that we put in from the renovations and creating that experience.

Dylan Silver (02:03)
Hey folks, welcome back to the show. Today we’re joined by Misti and Troy Petrie, investors who specialize in short-term cabin and ranch vacation rentals across Colorado, Florida, and Alaska. Thanks for joining us today, guys.

Troy & Misti Petrie (02:18)
Thanks so much for having us Dylan. Good to see you.

Dylan Silver (02:20)
Now how do we go about getting started buying cabins and guest ranches?

Troy & Misti Petrie (02:26)
Yeah, so that’s a great question. Our background is really in short-term rentals. And so the way that we got into, you know, kind of looking for that project in cabins and guest ranches is this just a, it’s an exponential job of what we’ve done before. So taking that experience of one STR and now just multiplying it. So what we did is we started with a market that we know and love, which is Colorado, where we live. And then we started to look for, okay, what projects actually fit.

our vision for what we want to create for guests. It had to have space, it had to have views, and it had to have something that was historically impeccable, which is what we’re doing, restoring and reimagining an old guest ranch. And I think, you know, when you take a look at markets, it’s so important to find the right markets, right? And so that’s just not, it’s not a luck thing, right? You look at hundreds of markets and you figure out where you want to be and what you want to do.

how you can compete within that market and make yourself the top 1%. Yeah, I think we probably looked it over, my gosh, we’re probably 50 plus projects in before we found this one deal.

Dylan Silver (03:24)
Now when we talk about the acquisition process for cabins, for folks who may not be aware, can you, you know, buy a cabin on the MLS? Is this being advertised in the same traditional channels?

Troy & Misti Petrie (03:34)
Yeah, so good question. So, Crexi does and like land.com are two really big websites for those, but I’ll say a lot of times they say things go on Crexi to die. So, it’s not necessarily always your best deals. What we found is we call them, and you can say that they’re off market, but really they’re just private listings is what the brokers want to call them. So, private listings getting with brokers. And one thing we would suggest is we didn’t just go down with one broker.

We actually centered in with multiples in different areas of the state because what we realized is if they do have private listings, you want to be with as many people as possible. So they bring us the deal, they get the commission, but we wanted to make sure we had an expansive amount of listings coming into us.

Dylan Silver (04:15)
Now are they making you know new guest ranches and cabins or are a lot of the ones that you know we see online on on short term rental platforms, have these been around for a while and maybe they were rehabbed or under new ownership?

Troy & Misti Petrie (04:29)
they’re certainly starting. It’s a populist thing, right? So people are starting to do it. Now, I think that really depends on your markets and the state you’re in. Like Colorado, as an example, is very difficult to buy land and build what we want to build, right? Water rights alone are almost impossible here in Colorado. So it’s, you know, but if you go to Tennessee, they might let you do whatever the heck you want, you know? I know that’s certainly the case in Alaska. You go to Alaska and build whatever you want, you know? But, and so that’s what

In Colorado, we’re trying to find a place that we can reimagine into something that people are gonna love. Yeah, and what we’ve found too is really it comes down to like zoning as Troy said, water, and then for here in our state fire, those were fire mitigation. Those were probably the top three things that nixed a lot of deals right out of the gate.

Dylan Silver (06:02)
Is there a a value add opportunity when purchasing these these cabins and guest ranches, or is it really more about finding the deal and you know, an owner who’s ready and willing to sell?

Troy & Misti Petrie (06:12)
Well, I think it’s a bit of both, but I think the value add is what we always look for, right? It’s important. I think you need to have a value add to really kind of reap the benefits of what you’re doing, right? And so every property we’ve bought has always been a reposition almost. You we bought a foreclosure in Florida. We bought a rental in Alaska that was not doing well and we repositioned it into the 1% of the market. You know, so those are the kinds of things we look for in this historic ranch is exactly what we’re looking for.

Dylan Silver (06:40)
Now, when folks have been owners of cabins and ranches for a long time, do you see that they’re using you know modern techniques to market them, or is it sometimes very antiquated?

Troy & Misti Petrie (06:51)
Very antiquated. So that’s actually another huge lever that you can pull when you’re looking at ranches or something to buy. And like you said, historic ones bringing them back to life. A lot of times like this one, they don’t even have their own website. A lot of them are definitely not doing dynamic pricing. So a lot of the basics that you learn in short-term rentals can absolutely be applied over to reliving these guest ranches.

Dylan Silver (07:12)
One of the things that I’ve heard, and I don’t know if this is true or not, is that if you have sometimes a short term rental that has some vacancy, you can potentially get like a very long booking. Do you see that in the cabin and guest rant space, or are most of these, you know, week to week? The

Troy & Misti Petrie (07:28)
They’re mostly short week to week. We’ve had a very few probably down in Florida more than anywhere else, but maybe like three weeks at a time for a season or something like that. But that’s not what we go after. We’re looking for people’s vacation experiences.

Dylan Silver (07:42)
Now I do want to ask about the hospitality side of this space. I had a guest tell me if you wanna be a short term rental host, you do have to actually be comfortable with hosting and like hosting. How do you manage that? The communications, the turnover, right and getting it ready for the next guest?

Troy & Misti Petrie (07:59)
Yeah, so with the short terminals, we have co-hosts is what we’ve always done. So we really believe in having a local person that really knows the market and can make sure that that guest experience is consistent with one guest to the thousands of guests, right? We want every single experience to be the same. And that’s going to be no different for this guest ranch that we’re doing. While Troy is going to be on site managing a lot of it, we’re also going to have a local staff there to make sure that that guest experience is consistent.

Dylan Silver (08:24)
For folks who are looking at an alternative investment opportunity and they’re they’re looking at cabins, I’ve seen tree houses, right, as well. I’m a Texas licensed realtor in Arkansas, they have a lot of tree houses. And they’re thinking about well, what is the maintenance and and the work required for this versus you know, a standard single family home? Is it more, is it less? Is it just different?

Troy & Misti Petrie (08:46)
Yeah, so when we run the numbers, we too have 40% NOI, 60% maintenance. So we do do a pretty hefty capital expenses on all of our operating costs. And the reason why is exactly what you said, right? You do need to have a little bit more on staff cleaning. You’re having a little bit more crew to do that. So it’s definitely something to look at. I think you have to be geared towards that.

Short-term rentals, the benefit there is the lever is cashflow, right? Our short-term rentals are awesome cashflowers.

But what we did realize is at the end of the day when you’re exiting, you’re exiting, sadly, as you know, you’re a realtor, you’re exiting as a residential home, right? So you’re not really getting the equity that you put in from the business. So that’s what moved us to doing this guest ranch is it’s essentially a collection of short-term rentals, but now at the exit, we actually are gonna get the value that we put in from the renovations and creating that experience.

Dylan Silver (10:14)
I know it’ll be a little tough to say on on without seeing the property in person, but what’s the vision look like for these cabins? Because I’ve seen all different types of of guest ranches and it’s really pretty amazing how you can take, you know, one property and the same one next door and just two different investors can have two totally different outcomes. Sure.

Troy & Misti Petrie (10:34)
And so this particular ranch we’re talking about is within the pines of the Colorado mountains, right? The back end of the property opens up. You have a view of a big mountain, you know, I think it’s 13,000 feet. So doesn’t hit quite the 14 to 14 years that we have, but it’s a beautiful snow capped mountain, you know, in a meadow. And so our vision for this is more of a luxury property. There’s an awesome lodge in place already. It’s just going to take some hard work, honestly, and some renovations to get it there. But we’re talking some saunas on site we’re talking some hot tubs in the public areas. Maybe some fireplaces a place to unwind to relax. You know, there’s a full kitchen commercial kitchen. Not going to go into big restaurant operations, but grab and go some coffee stuff like that for people. So it’s going to be a really great experience. Yeah, and then on the backside how Troy was saying where the meadow is we’re actually gonna have a starfall experience and so Starfall & Pine is the name of the resort and that starfall experience is that lounge where one of the great things about where this location is, is it’s very dark sky. So seeing the Milky Way is almost, know, sadly I grew up in Montana, so I grew up with that, but in a lot of the metro areas you just don’t get that anymore. So we’re a place where people can escape, actually see the stars, get out of the population, the density of people. So we’re going to have this epic lounge where they can actually enjoy the stars.

Dylan Silver (11:53)
Is it fair to call this like luxury cabins? Is that fair?

Troy & Misti Petrie (11:55)
Yeah.

Dylan Silver (11:58)
One of the things that I’ve seen, I’ve been to a couple of these now that now that I have a good idea of exactly what it would look like. In Texas I’ve been to a couple. And you go you pull up and then you you see the cabin, then you look inside and there’s a hot tub. It’s super nice and it’s like freshly polished and looks like they just finished, you know, flipping the place. They got the full kitchen. And you’re like, man, this cabin is nicer than a lot of the single family homes that I know over here. And it’s interesting because that’s kind of the bar now, isn’t it? Right. So if folks are going to be, you know, taking their hard earned dollars and going on a a vacation or even a staycation, these are the expectations that they now have for a getaway.

Troy & Misti Petrie (12:35)
Absolutely. And what we strive to do is just that when they come on vacation, you want it to be an experience that’s unforgettable. Something that they can just relax. They’re not nickel and dimed. All the amenities are included and they can just, you know, take that. It’s such a memory with their family and friends. And that experience is not the easiest to find. Like, as an example, in the Colorado mountains, you could go to lots of different resorts and stuff and you could see that they’re run by investors that maybe it’s good, but it’s not to the next level. And so that’s what we’re trying to create. Yeah. I don’t know if you know the book, Unreasonable Hospitality, but that’s kind of the foundation. Have you read that one? It’s so good. Highly recommend it. So Will Guidara is the author of it. He was a restaurateur, awesome chef. And that same concept is what our vision is for this. So he took restaurants where

Dylan Silver (13:12)
A great name for a book.

Troy & Misti Petrie (13:26)
his servers would take people out and their guests, they would just run out and fill their meter with money to make sure that they didn’t get a parking ticket. Just that little tiny extra effort that went so far. So that’s kind of our same vision when it comes to hospitality. Yeah, it’s not stuff that costs you a ton of money. It’s just stuff that makes it intentional with the guests to kind of bring it to that next level.

Dylan Silver (13:46)
For folks who may not be doing cabin specifically or or guest ranches, but they want to have a hospitality first mindset to a short term rental, is this something that they can do, you know, without having the the hot tubs and the saunas? Or do you really you you think at this point you need these types of things in order to have guests feel like it’s worth their dollar?

Troy & Misti Petrie (14:06)
I think there’s other ways to make people feel special, especially in today’s day and age of AI coming about, right? People still want that human connection. And so I think like in our cabins, one of the simplest things we do is we have the little throwaway toothbrushes, right? So that way if somebody forgets their toothbrush, they’re not having to drive 10 to 15 minutes back into town to get one. That probably costs 20 cents. things don’t have to be expensive to actually create that experience that shows that you.

Dylan Silver (14:33)
One of the things that I’ve seen on some of the platforms is they’ll have whole sections of similar properties. And so when you’re effectively, you know, competing against other similar, you know, cabins and and guest ranches, what is it that helps you stand out? Is it the track record? Is it, you know, prior bookings, is it, you know, reviews and ratings, or is it something else entirely?

Troy & Misti Petrie (14:55)
Well, I think it’s all of the above, but you know, the big thing it starts with is the design, right? You know, we have a professional designer go in, we make it look a certain way. You know, you take a look at your market and you see the way things are designed and the way people do things and then you try to make it different from that. You know, as a good example, we had two houses in Helen, Georgia. I don’t know if you’ve ever been to Helen, Georgia. It’s like a German town. Like you walk in, it’s like little Germany. Like that’s what their deal is. And so, but nobody was leaning into Germany. When we went into it, we created our design. It looked like you walked into Oktoberfest when you went into the game room and stuff like that. So it was definitely like a thing that people connected with. And it helped us get to the 1% of that market in a very simple home.

Dylan Silver (16:19)
pivoting here, you’re active in several different markets, right? Colorado, Florida, Alaska. You mentioned Alaska in some ways has you know a little bit less regulations than some of the other markets, and then Colorado and Florida, right? When you’re looking at acquisitions as a whole, are you focused in your business and any one specific area? Are you looking more so currently in the Colorado market or is it wherever the the deal comes?

Troy & Misti Petrie (16:45)
Yeah, it’s depending wherever the deal comes. There’s usually certain parameters that we’re looking for. We love to be in states that obviously, like you said, the regulation is a little bit easier, or at least it’s laid down. I think that’s the first step. You have to make sure that your investment is protected long term. So that’s definitely the first box that we check. But outside of that, we pick the places we love and that we can start from the experience that we like to share. So that’s what I would suggest for people who are getting into it is pick something that you love because it’s easiest to start with that. Maybe their first one close to home, right? So you can kind of really figure it out and hammer it down and then you can kind of expand from there. Rinse and repeat.

Dylan Silver (17:22)
Florida seems like a challenging market only from the standpoint of there’s probably a lot of competition. Is that something that that you’ve seen or am I off there?

Troy & Misti Petrie (17:30)
Well, we don’t, we actually enjoy competition. We don’t think it’s a zero sum game. I think that there’s money in the business for everybody. And it’s all about what Troy said before is just raising your game. So you have to look at the market and see, okay, what amenities, what is the norm there? And then what can you do differently? So for us in Florida, the way I look at it too is you go back to occupancy. Occupancy in Florida is great. But let’s say, let’s say on average, you even picked a market and it was 50% in the slow season, even last 30%. You just have to be in the top 30%. And when we go into market, we expect to be in that. So even in the slow season, by doing the right things, you’re still going to convey that experience that gets you the occupancy. And if you go to these markets and you do things differently, people start to take notice, right? So they start doing things differently, right? So you just have to keep up with it. Yeah. You know, have to make sure to go and you reimagine your property every now and again, you know, and, you know, a high tide lifts all boats, right? So I guess the market would go up in terms of that.

Dylan Silver (18:26)
We are actually coming up on time here. anything you’d like to mention directly to our audience?

Troy & Misti Petrie (18:31)
my gosh, if you, yeah, we just would love to hear from you. If you love the story, follow us at starfallandpine.com or on Instagram @starfallandpine. So I’m just excited to, yeah, to be on this next journey and see where it takes us.

Dylan Silver (18:45)
Misti and Troy, thank you so much for joining us today. Thanks for your time.

Troy & Misti Petrie (18:48)
Thanks, Dylan. Thank you.