Hotel Investing: The Best of Both Worlds | Mike & Nate E1

Michael Russell 0:00

Most investors think they have to choose between high cash flow or massive equity gains. What if I told you that you could have both? That's exactly what boutique hotels offer. It's the best kept secret in real estate investing. And today we'll tell you why. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate.

Unknown 0:27

Get in the game.

Michael Russell 0:45

I'm Michael Russell, and my partner, Nathan Saint-Seer, and I have been investing in real estate for over two decades. Together, we've scaled a $30 million real estate portfolio mostly focused on hospitality assets. Today, we're going to share with you why we believe boutique hotels are one of the best investments out there and how you can benefit from the same strategy. By the end of this episode, you'll understand why boutique hotels offer the fastest path to financial freedom, both with high cash flow like short-term rentals and significant equity gains like commercial properties. Plus, you'll learn the strategies we've utilized to help you scale your investments faster with less competition and fewer regulations than many other real estate asset types. But before we walk through this framework of how to get started investing in hospitality assets, let's start with a quick story about how we got started. Nathan and I, we have a background in real estate investing. We both independently were purchasing real estate properties, mostly single-family homes, and working our W-2 jobs. And we wanted to do something bigger. We wanted to invest into uh multifamily apartment buildings. We thought that might be a way where we could gain tremendous uh equity and be financially free. But as the story goes, let me walk you through how personally I got started, and then I'll have Nathan pipe in and he could share his story. But what occurred with us was like many folks, I started reading real estate books, Rich Dad, Poor Dad, the millionaire real estate investor, you name it, David Lindahles, multifamily millions. I was reading them all. And I knew that ultimately there was scalability in multifamily apartments, but it seemed like a big scary asset, and I wasn't sure how to get started. So I said, okay, well, let me start investing in single-family homes. And shortly after the Great Recession, there was an opportunity. I was able to buy a couple of homes right after bat for uh phenomenal value with the expectation that those would continue to increase and appreciate. And so I had a goal of buying five. I was able to buy two, and then my third that I purchased ended up going up by about 25% more than the first two. And that's kind of where I got capped out. But the market continued to appreciate, and I was no longer able to buy single-family homes. Um, and I will point out that those homes, from an investment perspective, sure they were appreciating, but there was like next to no cash flow. In fact, maybe even a little bit negative cash flow, a nominal amount. So when I moved to Maui, where both Nathan and I currently live, I saw an opportunity while working my W-2 job here to purchase a vacation rental home. And this was back in 2015. And back then, they weren't quite as well known. It was something that wasn't as well established. And so I stumbled across this ass and was like, wow, oh my gosh, this this might there's potential here. Let me check into this. I purchased a vacation rental home, uh, went through the process, got the permit. And from the time that we started operating it, I was blown away. The thing was a cash cow. And so it really excited me. I became very passionate. I started figuring out, like, okay, well, how else, how can I grow? How can I buy more of these? And in Maui, at least, there are regulations. So, in order to have a permit, they limit you to only one per person, which meant I had one, so we bought the next one and put in my wife's name. And between those two vacation rentals, I was able to walk away from my W-2 job. I thought this was amazing. And I was like, okay, great. How do we do more? And at the time, prior to leaving, I was working with Nathan, and you know, we have a lot of similar interests, so we knew that heck, it'll be great to partner up, but we'd like to do something big. And reflecting on these vacation rentals, the challenge was they weren't scalable, right? I was able to secure two of them. Ching, that's great, awesome, but how else could we continue to scale this? And it just did not seem like it was possible for us uh to do so, especially in Hawaii. And we had a big vision. So this led us to go back to the original concept of purchasing multifamily apartments. Nathan, during this experience, I don't know if you want to I'm you know, pipe in here, share your your insight to what was occurring during that time, but feel free.

Nathan St Cyr 5:08

Yeah, well, I want to thank you. Yeah, good stuff, Mike. I want to just back up though, and just talk about number one, where we were aligned, right? So Mike and I were in sales and I was a sales leader. He came over, and I realized very, very quickly that Mike was extremely driven. Like he had a goal, and what his goal, what I realized very quickly that he valued most was time. I mean, Mike had a plan to create financial freedom where he could leave his W-2 because ultimately he values time more than anything and wanted to be able to spend it, you know, how he wants, when he wants. And I was on the same path, right? We were both on that same path looking for financial freedom, and we were both doing it through real estate. Uh, I had been investing here on Maui and funneling the money that I'd been making through sales into real estate here. Um, but again, we both started with, you know, with single-family homes and long-term rentals. And that's where the the difference in the path really started was when Mike veered off the path from standard investing in single-family homes, long-term rentals that were, we were both building wealth. But what we weren't doing is we weren't coming even close to capturing the amount of money that we were making in sales that would replace that W-2 income. And so when he went into and found short-term rentals and had the courage to step outside of the box, because back in 2015, this was isn't when everyone in their brother was, you know, investing in short-term rentals, Airbnb was just really hitting the scene and getting started. He had the foresight to recognize something. And what he recognized was that in short-term rentals, when you're in a high demand location, uh tourism-based location, that the highest and best use of the asset is not long-term, that it was short-term. And he could capitalize on that short-term rental. And he had the courage to do something that he'd never done before, that there weren't a lot of people doing at the time. And he went and made the investment. And that was a big moment. So, Mike, I want to go into that moment where you chose to do that because number one, that took some courage. But number two, I remember you sitting there in between our different sales calls and different things that we were doing. And I'd you'd be sitting there with a piece of paper and you'd be like, is this accurate? Is this right? You were assessing the situation and you were finding it hard to believe that you could actually make this level of cash flow or margins above what your debt service would be. So can you just go back and walk through like what you were finding as you were diving into this?

Michael Russell 7:58

Yeah, that's so funny. It reminds me of that movie, A Beautiful Mine, where the guy was just riding on the chalkboard or on papers, whatever. He's just riding over and over and over again. I felt like that character because I kept writing the numbers on the paper, like, wait a second, if I'm on this home and this pencils out, are these is this cash flow? Is this real? Do these vacation rails really have the potential to do this? Can I actually step out potentially of my W-2 job? I mean, I'm only at that time I was 36 years old. And I was like, oh, okay, this is amazing. So yeah, it it did take a bit of courage because it was relatively unproven, and there was a lot of regulation in the pipeline that made things uncertain. I told my wife, said, We gotta hop on this, we gotta get these vacation rentals because sooner or later they're gonna eliminate them. And sure enough, that's exactly what they did. So that was my perspective in that moment.

Nathan St Cyr 8:52

Yeah, I love it. And the fact that you number one, you did the first one, right? And then because of the regulations, you can only have one per name. So you put the second one under your wife Lauren's name, and and and that was it. That that's it was it was done. And by the time I got the courage, and I'm like, all right, oh man, okay, yes. Mike's Mike's on his way out the door. He's like, by the way, I'm done working for you. I have now created financial freedom. And I'm like, wait a minute, I want in. And it was, well, I'm sorry, you're too late. It's just one of those things in life that that's the reality is is sometimes when you when you when you take action, that you're you're rewarded for it. And when you the opposite side of that is when you don't take action, there's there's consequences on that side too. So finally, when I had the courage to do it, it was it was too late for me. But that didn't stop us because ultimately, throughout the years, Mike and I had a, you know, we we knew that we wanted to do something outside of our W-2s. We both had a passion in in wealth building, we both had a passion in real estate. And, you know, regardless of him leaving, we knew that we wanted to do something together. And and we we didn't want to do something small, we wanted to do something big. And that's one of the things that we've always had. We've had big visions and we've accomplished, you know, big things, and and we're always striving to to reach our full potential. So that really set us off into all right, well, look, we can't grow the short-term rentals here in Hawaii because of the challenges we're facing with regulations. So let's ultimately do what most people do when they want to scale up. And we started uh looking into and took a course on multifamily assets. So I'll kind of turn it over to there to you, Mike.

Michael Russell 10:50

Yeah. So even though I have these couple of occasional rentals under my belt, I mean, I had a bigger vision. I wanted to continue growing. And personally, I find it extremely fulfilling. I think a lot of our listeners are probably going to identify that what's really great about real estate is it's tangible. It's something that you can see, you can feel, it's, it's, it's fulfilling to go out there and and purchase real estate and make improvements and recognize and realize the gains. I think there's something psychologically about that is that if you if you can you can go and do something and then there's there's a result that you can quantify and you can measure it, it keeps you just wanting to work harder to do more of that. And so I wasn't just gonna just be done and just hang out and be, you know, be bored. I mean, I was 38 years old and I was technically, you know, retired, but I wanted to grow. And so we went and we were so impressed with this. We went to a multifamily. Well, we didn't go. It was a course that we took online. We live in Maui, so it's difficult to travel sometimes logistically. And we took this online course on the benefits of investing in multifamily apartments, and we were blown away with the potential because one of the biggest benefits of commercial real estate is the ability to force appreciation. And this is a concept that I was aware of, but hadn't really dug into to fully understand the significance of having high cash flow for my vacation rentals was fantastic, right? But when I thought about selling these properties in the future, there really was not, from a relative perspective, a huge amount that I could increase the value. It was basically, well, whatever the property is worth based on market conditions, comparable sales, so forth and so on. But this idea of being able to force appreciation with commercial real estate, because commercial real estate is based on the income valuation. So, you know, very, very basic here. If you're not familiar, there's something called cap rates. That the cap rates are a method for valuation, right? So a cap rate is the unleveraged return of income divided by the price of an asset. Okay, so what does that mean? Basically, if a property produces income, then you can take whatever that income is and you can take the price point, you take the income divided by the price point, and that's your cap rate.

Nathan St Cyr 13:11

So basically, in the most simple terms, what a cap rate says is it's using simple numbers, if you go and purchase a million-dollar property and it makes a hundred thousand dollars of net profit per year, the cap rate when you divide it is ten percent. Or opposite, if it's a million-dollar property and they say, and it's at a 10% capitalization rate, that means that property is gonna make a hundred thousand dollars.

Michael Russell 13:42

And this is what blew us away, right? So we're in this course, we're listening to this, and they're talking about, well, look, if you go ahead and you raise the properties earning $100,000, bottom line net income. And either by cutting expenses and being more efficient with your processes or raising revenue through advertising, marketing, what have you, if you can increase revenue. But if you can increase the bottom line of that net income by, in this example, from $100,000 to $150,000, that $50,000 increase with a 10% cap rate means that property is now worth $500,000 more. Now, if I go and raise $50,000 more for a short-term rental, it doesn't mean squat for the for the value of the property. It's based on, well, what would my property, what did my neighbor's property sell for? I could be doing $300,000 in revenue for my property, and it doesn't matter. It's still gonna be worth whatever the neighbor's property is, you know, the neighborhood is worth, what the properties are in that neighborhood. And so this concept of force depreciation, you can go buy these these assets where you can make some improvements to the bottom line, whether you you know rehab them, you increase occupancy, do some subtle things, and you can you can dramatically increase the value. We were blown away by. But the challenge we found was there weren't too many apartment buildings for us to to to look at purchasing here in the Wine Islands, and the supply was very limited. So, Nathan, back to you, why don't you walk walk them through the rest of our story?

Nathan St Cyr 15:05

Yeah, so we were most comfortable. Hey, it was short-term rentals weren't scalable, but we were pumped. We had this opportunity where we felt like, okay, we can go build wealth. It was not gonna give me out of my my W-2. That we we we realized that there wasn't gonna be enough cash flow because these multifamily assets they don't deliver the amount of cash flow needed. But hey, we're second to that, we're gonna go build wealth. It is what it is. We'll we'll we'll just keep going. And and so the first apartment building that we called on to look at as we looked up, because we we wanted to look here in our backyard first. We weren't comfortable as new investors and multifamily, you know, flying it all the way to the mainland and trying to find something in in Ohio or some of the different areas that they were using as examples. So in our backyard, there were a couple of apartment buildings that were for sale. And the first one that we called on, it actually went into contract. So we're we weren't able to look at it, but in the comments, it had made the comment that the property was part of the property was being run as a hostel. And we're like, huh? So when we started inquiring about what is this, what is this this hostel, it's because the real estate agent picked up on that that that it piqued our interest, the hostel part. And so he started sending us all of this information on what hostels were. And Mike and I, the light bulb kind of went off and we're like, well, time out. If there's an opportunity to purchase a commercial property that we could go and put, in essence, transient vacation rentals or short-term rental, is there is it really possible for us to go and have the best of both worlds? Like, could we go and leverage this thing where we go take it over and increase its value just like multifamily through bringing in more revenue, lowering expenses? Is this possible? And the reason that this was so important for us on Maui is look, we could go and purchase a hotel, but I think the cheapest hotel that's sold on Maui in the past 10 years is like $25 million. And so that wasn't approachable for us. So when we all of a sudden had the recognition that maybe there's an approachable way for us to go combine the best of both worlds that we could go leverage both cash flow and equity, we felt like we might be on to something. And I'll turn it over to Mike.

Michael Russell 17:41

Yeah, I think that's a that's an amazing point. We were looking for ways where we could gain equity, but we just we were frustrated with the concept of having to wait years and years of having limited cash flow. And you know, Nathan, you weren't gonna be able to walk away from your W-2 job. You wanted it out sooner. You saw what I had done. You said, Hey, I want the same. How do we do this quickly? What is the fastest path to financial freedom? And sure, short-term rentals, but it's missing the upside of the commercial real estate valuation. So when you say best of both worlds, it's absolutely correct. Obviously, here in Hawaii, the price points for hotels are significantly greater. But what we're observing now throughout the United States, that there's lots of opportunity in the boutique hotel space, whether that is hotels or in our case, hostels or experiential lodging, the principles apply to all three of these similar asset types. They're all within the boutique hospitality asset class. And we're just so bullish on this opportunity because the concept of being able to walk away from your W-2 job quickly and gain financial freedom and have the tremendous upside down the road, like you said, it is the best of both worlds. And in our case, what that means is look, we took a property that was had a lot of different maintenance, was distressed, we bought the thing and only put down around $400,000. And we've got now about $4 million of equity that we have created within three years, right? So this is just an example, whether it's here in Hawaii or if it's somewhere in the mainland. But what we're seeing is in our group, people in our network, people that we're networking with, that this is very common. This is not unheard of. And so when I look at multifamily and I look at short-term rentals, I just feel like, oh my gosh, this is it. This is the best of both worlds. This is the way to go.

Nathan St Cyr 19:28

Yeah. Well, and if I if we even look at, because I kind of I think of this sometimes, like people will say, well, why hostel? Or why why not boutique hotel? Or why boutique hotel, or why whatever hospitality asset it is. But what I've recognized in this journey is that what we're what what we're really about is we're looking at a specific asset and we're saying, what's its highest and best use? And I think for a lot of the listeners that That have either invested in short-term rentals, have considered a you know a short-term rental, that that's what the why are they not looking at a single family long-term rental? Why are they attracted to the short-term rental? And I think the answer to that is because when they look at that asset that's sitting there and they're like, yeah, I could rent this long-term. Or I could rent this as a short-term rental because ultimately the longer that you rent something for, it's like you get the bulk discount, right? The longer that that rental is, the less per night it costs. That's so good. Yeah, right. But on the opposite side of it, the shortest amount of time that you rent something for, the highest amount you can get for it. And so with a single family home, if you look at, well, what's the highest and best use for a single family home? Well, if it's in a high demand travel area, obviously the highest and best use for that is, man, if I can rent this thing by the night day, that's going to be the highest and best use. And then all of a sudden you have regulations because people start to recognize this, right? And everybody recognizes I'm in a high demand area, I'm in a travel destination, and the single family home I can buy it, and then the highest and best use I can get out of it is short-term rental. And that's what we've seen occur is that as people have recognized this, that we've seen regulations, because then it impacts communities and long-term rentals go away and it creates housing shortages and all of those things. So the government has to respond, they create regulations, and then now you're sitting there with an asset that that maybe you purchased for a specific reason and you no longer can. But what we what we recognize is that that's another very attractive piece to scaling through boutique hotels, hostels, experiential lodging, is that what we look for is hey, we can go and do this in properly zoned properties where it doesn't have that impact, it doesn't have that risk. So not only do we get the benefit, not only can we scale, but when people ask that, well, why the hospitality part? Why did you go with hostel? When we looked at the buildings that we looked at, those buildings didn't have bathrooms, kitchenettes in every single room, right? The structure of that building had shared bathrooms, it had shared kitchens, it was already set up to be community-centric. And so when we look at that, we go, okay, well, what's the highest and best use of this building? Right? It's currently zoned for hotel, but to turn it into a boutique hotel, there'd be a massive amount of cost in putting bathrooms in every room. You know, you have a boutique hotel and people aren't really interested in sharing bathrooms. And but that this hostel model, all of a sudden we started going, wait a minute, when there are these building structures out there that are already set up for more of a community setting, the very highest and best use of that space, it's not to turn it into offices. It's not to go and turn it into a some sort of long-term rental. The bottom line is if we can go in a high demand destination with this building asset type and turn it into short-term rental or transient vacation rental, we're gonna get the we're gonna be able to lever the very highest and best use of that asset. And and that's what we've found. And in in doing that, obviously, uh we'll we'll go into the operation side more as as time goes on, but learning to say, hey, there's a ton of levers that we can go and and hit here to do two things bring in more revenue, optimize and and all of our efficiencies. What we've done is not only have we been able to increase cash flow very significantly. I left a position then shortly after we got started because all of a sudden the cash started rolling in, right? Now all of a sudden we have an asset, unlike an apartment building that never would have afforded me the ability to do that to receive extremely high cash flow. And as we're receiving that high cash flow, we're leveraging also enforcing the equity of the property as well.

Michael Russell 24:28

Can we dig into that a little bit? Because I I think I'm assuming that some of our listeners are probably going, okay, this all sounds well and good, but gosh, hotels are so expensive. I mean, I I can just buy a home, you know, for relatively normal amount of money, I can start renting it out. And then, you know, I don't have this big overhead and this this big upfront cost. And I just I want to explain that, you know, in our situation, we use our situation as an example. We bought this hotel, this is essentially what it is, for 800 grand, just over 800 grand, right? These deals are out there. This this $800,000 asset, we had to make some improvements to you know bring it to where it's at now, and that that costs you know some additional funds. But it wasn't an extraordinary amount of money. I mean, there's homes right now in California that probably averages over a million dollars just for a single family home there. And if you can go buy an income-producing asset, whether it's in Hawaii, where we're very fortunate to live, or somewhere in your own local area, it's happening all the time. It's not unfathomable to go out and buy something at a reasonable price. And in our situation, we bought this thing for 800 grand and it was a year and a half later, it was appraised for $5.1 million. And of course, that didn't happen by accident. It's not like we just turned on the lights and all of a sudden it was worth that much. We had to go and put strategy and technique and all these things that were we're happy to share with you in the subsequent podcast episodes. We're gonna get into all the nitty-gritty details of exactly how we did this. But an $800,000 asset is really obtainable for a lot of people. And it is, again, the in my opinion, the fastest way to financial freedom is through immediate cash flow, which we obtained. You know, we're generating $40,000 to $50,000 a month in cash flow. And then ultimately the payoff down the road, whether that's five, 10, 15 years, is that big equity. But right now, 5.1 million, this formula is replicable. It can be done. And that's what we're excited about because of the scalability. We talked about this earlier with the short-term rental. One of the challenges, it isn't as scalable. It's much more hard to operate at scale independent individual rental homes. But once you figure out the formula, which again, we're going to walk through in subsequent episodes to show you exactly how to do this, then you know you can just drop this method and this plan and these operations into you know multiple assets throughout the country and operate them even remotely. So, from my observation, there is no better asset class than hospitality at this point in time.

Nathan St Cyr 26:55

Well, Mike, and let's you just ended that sentence with at this point in time. And I really want to I want to highlight that. There is a there's a time frame here that none of us have experienced before that's occurring, right? So some people say, Oh, well, you just got lucky. But the reality is, you know, they call it the silver tsunami, right? We have the baby boomers that are retiring. And so if we really look at these assets, because people are like, are there any of these opportunities out there? Well, the reality is, yes, there are families that have been operating, you know, for the past 20 years, 25 years, 30 years, whatever it is. And now they're approaching the time in life where they're like, okay, look, it's getting extremely difficult to keep up with technology and social media and all of the things that that exist in today's world that when they went and purchased their hospitality asset and started running it that they never experienced before. The challenges with that that might be out there with different things just that they didn't face, whether it's marketing, whether it's clientele, just and they're they're done, they're ready, they're ready to enjoy life. And so there's these opportunities out there to create these win-win scenarios where these sellers that are done and ready to move on, and at the same time, they still want some income, they still want to have some, you know, some guaranteed cash flow, that there's these opportunities where you can go out there and secure an asset for an unbelievable value and don't even have to go to a bank to finance. And we'll go into the specific strategies of of how we've done this and what others can do to duplicate it. But I think it's really important for people to understand the mindset of the abundant mindset of really how much is out there. That there this is a timing situation that's never occurred before where this transfer of wealth is occurring. And also not just transfer of wealth, but transfer of assets. And all of these assets that have gotten tired and have been operated in a very different way than you can operate them today, uh, that there's just an abundant amount of opportunity out there. If you're willing to to learn and to dig in, there's a there's a there's a path for freedom here that's that's pretty special.

Michael Russell 29:18

Yeah, I I really like the fact that you brought up dollar financing is an opportunity specific to this asset class where there's there's a lot of opportunity. Because if you look at like a regular single-family home, most people you buy it from someone that's living in it, right? And maybe you convert it into a short-term rental or whatever, or it's just a long-term, you know, buy and hold. But a hotel is a business. It's a business and a piece of real estate. And more often than not, someone that owns that business, they want to continue to have the steady cash flow, which means there's more likely an opportunity to purchase a hotel from a seller and utilize seller financing, which makes it a hell of a lot easier to go and secure than trying to go through a bank. Not to say that it can't be done, but man, if this is your first or second or third deal and you're like, okay, I just I need to get get in the game and I need to build some credibility, it's a lot easier to secure financing from a seller than it would be going to a bank without that experience. It's it seems like you know, it there's a lot of opportunity there. In our in our experience, we bought two properties, two hotels so far, or in this case hostels, and both of them were seller financed. And like Nathan said, it was a win-win. So there are some additional benefits. I think that's a good segue into you know, pointing out that you know, Nathan walked through like less regulation, but scalability we talked about. Also, there's a heck of a lot less competition right now. So there is an abundance of opportunity in this time period right now. But if you look at some of the other asset classes like multifamily, it's so cutthroat. There's so many people that are trying to, you know, fight over the same little scrap, same deal, um, particularly out of those lower priced assets, that you know, to try to secure seller financing and try to try to you know find the right deal. You're just competing against so many other people. Well, currently, in this moment, right now, at this time, this is I won't say it's unknown, but it's just it's relatively untapped, and there's so much potential in this moment for boutique hotels in in that capacity.

Nathan St Cyr 31:17

Yeah, I think it's an exciting time. I I mean I I know that we're walking through our experience of you know, we've we've grown a portfolio valued at you know close to $30 million, and we've had success. We've been awarded with, you know, some some pretty cool hospitality awards. But in our journey, we're like, we're excited to learn. We're excited, excited to go. There's now there's there's starting to be education out there. There's, you know, there's there's people that are starting to say, hey, I can see this opportunity and I want to go and and and capitalize on it. So for us, I think it's really exciting in this journey to be like, okay, well, we know what we know, but man, is it excited to go and look at those that are further along in their path, further along in their journey, that may have expertise in asset categories in hospitality that are outside of ours that we can bring on the show and that we can say, okay, hey, teach us. Like we're this is what we want to know. And I'm sure the things that we want to know and that we want to learn along the way are going to be common threads with what others are gonna want to learn as well. So we got a ton to share, but we also have a lot to learn. And that makes this moment so exciting to really start this journey where we're like, all right, let's go and do this. We've got our vision, right? We've had the vision from the beginning. Hey, let's take a $400,000 down payment, let's turn it into a $400 million company. So, so that vision has we've never altered that. That that vision has been there. Uh, we're on the path, but we're a long way from that $400 million, but we're excited to get there and to share the journey along the way.

Michael Russell 32:55

I've got, I know one more thing. I I just it came to mind as we're sitting here talking, I'm thinking about this. It's like we've been talking a lot about the financial benefits, the this being the fastest path to financial freedom, the potential long-term equity game, but I think it's worth also pointing out that there's a lot of, from an artistic perspective, there's a lot of creativity here in this asset class. Whether it's hotels, hostels, you know, landscape hotels or, you know, experiential lodging, there's just so much creativity that can be applied. Where in other assets, you know, it's pretty cut and dry. You have an apartment building, you have a long-term rental, you know, you make it decent, you mow the lawn, you paint the fence every once in a while, and people live in it. That's great. But what with hotels, you get to do, you get to create an experience. You get to create these wow moments that people look forward to. They might not travel every day of the year, so it's a special moment. It could be, you know, a once-a-year trip that they get to enjoy. They come and they stay at your place and they enjoy this magical experience that that you curated, that you created. I mean, from a from a passion perspective, there is something incredibly fulfilling about being able to take a space that otherwise doesn't serve its full potential. It doesn't utilize a space to its full capacity, and you go in there and like an artist, you get to paint that picture however you want it to be and enjoy it. And and it's tangible, it's visual, and it's something that you can share with others, that you can you can show people. It's just, in my opinion, it is it's a undervalued advantage that is hard to quantify. It's not quantifiable from a financial perspective necessarily, but it is from a personal fulfillment perspective, it's incredible.

Nathan St Cyr 34:39

Yeah. I mean, just frankly, in the beginning, when I would go on to our Instagram page, the Housing Hostels Instagram page, I mean, I literally I literally would get tears. Because it was like seeing the experience that we were providing and the impact that we were having on the lives of our guests was like it was it's almost it's almost difficult. It's number one, it's difficult to describe, but it's it's just it's tough to put into words how fulfilling it is to provide these experiences. Like, yes, this is an asset and it's a building, and we're talking about getting its highest and best used financially, but at the on the other side of that, it's what it's delivering and why someone's willing to pay that. Because what we're really doing is we're serving the most important time in their life that it really is. It's their time away from the monotony of what they do and their experiences that they're gaining out in the world are the most valuable things to them. And and we get to take that and we get to shape that and we get to go and dig in and provide that, right? It's it's sometimes it's overwhelming to me how freaking cool this this this journey is, and and that our path has ended up investing in hospitality, is it's um it's really fulfilling. Cool.

Michael Russell 36:05

All right. Anything else before we wrap this up? No, let's go. All right. So listen, uh, in closing, if you're tired of choosing between cash flow or equity gains, it's you know, think differently. Boutique hotels give you the best of both worlds. I encourage you to explore this investment strategy further. It's worked for us, it can work for you too. So if you found this episode helpful, subscribe to our show, continue to follow along with us for more insights like this, and please share it with someone who needs to hear it. Aloha.