Building Short-Term Rental Investment Properties

Alex Jarbo is a former Marine who turned into a short term rental investor and now developer, in the mountains of western North Carolina. He started in this area through self-education.?

“I just started reading up on a lot of different investing books, whether it be stock market, crypto, real estate,” said Alex. “Real estate really caught my eye because I just like the control that you could have over real estate, like with forced appreciation, all that fun stuff.”

He then joined a flipping mentorship program.?

“What I realized was the gentleman who ran that flipping mentorship, all of his long term wealth, even back then was tied into short-term rentals,” said Alex “So I got him on a separate one-on-one call.”

“He taught me how to choose a market. And then, obviously, how to underwrite a short-term rental. He also showed me his numbers and what his properties were making. And they were just blowing long-term rentals out of the water.”?

Alex found the market he wanted to invest in: the area surrounding Asheville, North Carolina. He moved there, got his real estate license,? and started looking for a short-term rental for himself.?

“After six to eight months of looking, we decided to develop,” said Alex. “My very first real estate investment was a new development, short-term rental. That was an 800-square foot frame that we own to this day. One turned into two really quickly. Two turned into four. And then today we're developing $10 million worth of short term rentals, and we're looking to triple that next year.”

Alex has been in this business for just over 6 years and has since brought on investors and partnered with GCs.?

“There was no difference in time between me driving out looking at a one acre parcel or looking at a 20-acre parcel,” said Alex. “It was the same time it was just a bigger number and more cabins to develop, which my current GC can handle.”

“We’re targeting bed and breakfast or small cabin communities that have some acreage attached to them, that we can then develop further properties on,” he said. :That way there's sort of a built-in cash flow that helps with our holding costs while we're developing the other cabins as well.”

“We'd like to stick to these themed type communities,” said Alex. “And with that, I'm pretty confident I can build out a portfolio of like 60 to 70 cabins in this market – with those themed communities. When I say themed, like A frame cottages, chalets, barn-like barndominium type properties.”

The investors he partners with usually get about a 5-6% return. That means the investor takes home about half of the earnings and Alex and his team take home the other half. When he is able to develop and invest in a property himself, his cash flow is usually off the charts.

Alex says that more people like himself, who have more than three to five properties, are building up their own websites – outside of using websites like Airbnb and VRBO. These websites allow them to bring people directly to them and showcase the variety of properties they have, including all the unique features that make staying there special.

One of his tactics is building properties people want to spend time at, outside of simply doing the things in the city they are visiting. He also makes them “Instagrammable,” properties that stand out and that a renter is proud to show off on social media.

Developing a rental property himself allows him to be able to find properties that not only stand out for those attracted to influencer marketing, but it also allows him to design a property with the entire guest experience in mind.

“When I say the entire guest experience, that means the experience driving to and from your property outside of just your property yourself,” said Alex. “You want to think of the access to the property. You don't want your guests to be driving 30 minutes up a gravel road, before they even get to your property. A lot of times they're driving in at night, a lot of times they're new to the area, and you don't want them to be pissed off or scared by the time they even get to your property. So access to the property is huge. We like to be off of some sort of paved road we develop so like we'll put in our own driveways if we need to.”

When it comes to buying existing properties, “we probably look at 40 different pieces of land before we find the right one,” said Alex.?

It takes a lot of up front work, but once that part of the work is done, it’s done.

With the knowledge and experience he has acquired, Alex has taught hundreds of people how to achieve high cash-on-cash returns through developing short term rental properties.?

He now has an online course with templates, workbooks, and videos so that others do not have to start from scratch like he did.

I sat down and I created the course that I wish I had when I started like six years ago,” said Alex. “There's like a group coaching aspect to it. There's templates, workbooks, there's over 120 videos, everything that you would need to do what I currently do.”?

You can find his free masterclass one his website at AlexJarbo.com.

To watch or listen to Dan Lesniak’s full conversation with Alex Jarbo, check out episode 403 of the HyperFast Agent podcast.