Mike Watts: We thought we were gonna spend a $150,000 in renovations. That's what we set aside. And that whole thing costs almost as much as our house cost when we bought it. We ended up spending about on renovation.
Kate Northrup: Folks who are listening, just in case you did the quick math.
Mike Watts: We're on
Kate Northrup: Welcome to Plenty, a weekly recalibration of power, money, and safety for high capacity humans. I'm Kate Northrup, best selling author and creator of Relaxed Money, and this is where neuroscience meets ancient wisdom meets real wealth strategy. This is the sacred conversation at the intersection of money, the body, and the life you're truly here to live. If you're ready to reimagine what's possible for yourself and for the world, you're in the right place. Let's go.
Welcome back to Plenty.
Mike Watts: Hello.
Kate Northrup: You're my most frequent guest.
Mike Watts: Thanks for having me. Like, we're starting this one off better than part one? What do you think? Yeah. Yeah.
Kate Northrup: Today is part two of our two part series. We started a couple weeks ago with part one and exciting, unintentionally, part one of our Airbnb story short term rental business behind the scenes, part one and part two. This is part two. But part one of it unintentionally kicked off a multipart freedom based business series that we are now running on Plenty. I didn't even realize that all the topics of the shows were all related to this same concept, which is a freedom based business or, you know, creating I don't wanna call it freedom based business because my friend Natalie Ellis' new book is called that.
So whatever we'll call it. But, like Other business opportunities? What Anyway, whatever we're gonna call it. But it's about businesses that are oriented around having more freedom.
Mike Watts: It's a different perspective of businesses We'll call that you can get involved
Kate Northrup: in. Anyway, we started with part one of the STR Airbnb episode. Then there was Susie Ashworth talking about the way she has created freedom in her business. Now this is part two of the short term rental episode. And then next week, we have Natalie Ellis talking about her book, her new book, which is called, I think, Freedom Based Business.
She's the founder cofounder of Boss Babe. And then we're gonna tell some behind the scenes numbers of our recent Relax Money launch. We're gonna have our friend and mentor, James Wedmore, on, which he his whole philosophy is the more structure you have in your business, the more freedom you have in your life. And we have continued to follow his strategies, and it's been great. And then we have a few more other things before you.
But all this whole series is running up through June 23. It's a whole season unintentionally about freedom and business. So here we are. Surprise. We're in the middle of a series.
Anyway, so we had talked last time about why we bought an Airbnb, why we started a short term rental business, and what we're doing there. So that a lot of that episode was much more about the how do we choose the property, why do we go that route, all that stuff. And today, we're getting into the real numbers. So Mike showed up with documents to tell you about the actual numbers behind this deal and what has made great financial sense about it and what has not made great financial sense about it and what we've learned and what we're gonna do differently next time. So how do you wanna kick us off?
Mike Watts: Well, we should first by stating we talked about this in part one, but just to go back, you're making real estate purchases, at least Mike's theory or research has come up with these things. Right? It's like you buy a house because or apartment or condo or whatever is your primary residence. So these are all I'm learning about this real estate industry as we're going along here. And so you have your primary residence where you live most of the time.
You can live you could buy it. You can rent it. Whatever that is. Right? And of course, you can take in The United States for tax purposes.
You can take some of the stuff for tax deductions, home office deductions, etcetera. Then you can do investment properties, which you like what we did in Maine is we bought investment property and that we are using for we're using it as our family as a second place for us to go when we go visit people back there, and then we're also renting it out. So and then we're giving so that's kind of an investment property. You can contribute into a fund where we talked about this last time. It's a conglomerate of housing or commercial spaces, which we also invest in that.
It's a lot of manufacturing facilities down the middle the Midwest. And we gave money to a fund, and we get returns.
Kate Northrup: Give money to a fund.
Mike Watts: We invested money
Kate Northrup: money in the fund.
Mike Watts: We invested money into a fund, and then that's one way it's very passive. Right? That we don't make any decisions. We contributed cash. We get cash back.
When they sell those properties off, Hopefully. Right? That ideally, we'd like to get a return, a higher percentage than we put in, a return on investment. And then we could get that money and invest in something else. And then the other options are, obviously, you can buy land.
You could build. You could flip. There's a lot of different things that you can do inside of real estate. You can invest in apartment complexes. Actually, that's how Arnold Schwarzenegger made all of his money.
Kate Northrup: Oh, before he became a famous actor?
Mike Watts: Yeah. He was already, he already had a ton of money because he was investing in apartment building that was like a four unit when he first moved to Hollywood.
Kate Northrup: Interesting.
Mike Watts: So he started bodybuilding, and somebody said, when you get your winnings, go do this, and he did that. And then he invested in other things and and inside of real estate. And that's how he built his career and made majority of his money before he became an actor. Anyway, so you can start there. Right?
And then there's a variety of ways. You could put up your own capital. You can help people. We talked about this on part one. Time versus money Yeah.
Is do you have more time? Can you help other people? Or obviously, there was a there's a house that I like here in Nashville, and I had our agent call to see if they would do a seller financing deal. That way, we can just take it over, and we'll pay them back the mortgage, and they loan us the money instead of going to a bank to do that. So in terms of this property that we did, so to reiterate why when you're looking for investment properties, a lot of times you wanna make sure that the return on investment there's a lot of different terms, cash on cash return, when you're doing a short term rental, ADR, which is a average daily rate.
There's all these things that I don't really know what they mean so far. I'm learning as we go. And but for this property, one thing that we looked at was what's the purchase price? And I'll go over all these numbers. What's the purchase price or what is the their asking price?
What do we buy it for? And then how much money have we put into it, and what is the potential rental income for the year? We don't really know. We haven't been through a season. 2026 is much different than '23, '24 was, or even back in '22, people were traveling a lot more, and so '26 rentals, we don't know what it's going look like.
So that's what we'll end up covering today. That's how we'll just go over that. So if you want, I'll just dive in.
Kate Northrup: Just dive in. I'll ask you just go, and I'll interrupt you and ask questions if I have them.
Mike Watts: Okay. And then I've learned all these tax benefits that come from investing in something that's like this. So for us, this was not a true investment property. Because if we were just using it as an investment property, when I tell you these numbers, it doesn't make any sense. Right?
So we use this as a investment property slash a place for our family to go back to when we go visit our family friends and family in Maine.
Kate Northrup: There's a multiple ROI on this property, and one of the returns on investment for us is emotional.
Mike Watts: That is correct. And between this recording and our last recording, Kate actually saw the house.
Kate Northrup: And it's amazing. Just really wanna say, Mike, you knocked it out of the park. The house is so cute. It has incredible energy. In fact, I felt so good there that I said to Mike one night after we had put the kids to bed and we were sitting cozily on the couch.
I was like, it feels so nice in here. I'm scared that our house that we bought in Tennessee is gonna be too big and that I'm going to feel like it's too big because the house in Maine has enough space. It's a five bedroom, and it has enough space for everyone. We ended up having my dad, my bonus mom, my sibling and their partner over, and my sister over for dinner plus our two kids, while having rotated through multiple families during the day. And it felt great in that kitchen We to have that many filled up the dining table.
We had Thai takeout. We were laughing, and then my dad was putting the kids to bed and reading a story in the other room, and we were in the living room cleaning up. But if you need to go off on your own, there's still all the spaces for it. So it just feels amazing in there, and it is the perfect balance between cozy but also big enough to host a family. And we have now test driven it, filled it with love, and now I have also filled it with art and decor.
So now it has really cute throw pillows and really cute vintage art that we found at a local vintage resale place. Yes. So part one Some antique books.
Mike Watts: It was funny because Joey who edits our videos, he goes, you know, what's funny is that I know I know you he I've known him longer than I've known Kate. And he goes, I know you too so well for watching so much of the copy or the content. He goes, the funny part was is Kate talks about in part one, like, she did everything on the house. Like, she owns like, she took so much ownership of the home. And because we got back from Maine, I was like, yeah, Kate finally saw the house.
He goes, the funny part is is part one, Kate was like, the house and then it's this, but we bought the house in October '25, and you just saw the house May '26.
Kate Northrup: From the inside. I had driven by
Mike Watts: it And you saw the old pictures.
Kate Northrup: Last Yeah. July.
Mike Watts: Yeah. So but anyway, between all the renovations, what it actually looks like, what the walk through your first walk through was how our life works.
Kate Northrup: Mike did We're gonna get a 99, and I did throw pillows.
Mike Watts: This this goes into the conversation we had beforehand, which is funny. So our the purchase of this home, going back to it, was it was an emotional slash investment decision and a good thing for our family to do to be in a community that we go back to and have a place So to go back it was both. Okay.
Kate Northrup: Can I make a quick aside for people listening in? Because we have a resource for them.
Mike Watts: Okay.
Kate Northrup: When you're making money decisions, it is very rare that there's not an emotional factor. It is I I honestly I challenge someone to come to me with a financial decision that they're making that does not have an emotional thread. And so it
Mike Watts: Go ahead.
Kate Northrup: Because why else would we do things other than we want to make more money or keep more money or whatever? And the only reason we want that is because of our we think it's gonna make us feel a certain way.
Mike Watts: Correct.
Kate Northrup: I agree. So it is impossible to separate financial decisions from emotions, and anyone who tells you otherwise is mistaken and does not understand the way human behavior works. That being said, it's important to separate the math from the emotions. And I created something called the big money decision matrix, which I did actually create myself. This one is not a Mike actually did it.
I actually did this one. And you can get it for free over at katenorthrup.com/matrix, or you can just send me a DM on Instagram, matrix, and that's a really helpful tool to walk through sorting through the math versus the emotions so that you don't get into a situation where you thought the math worked, but it was because it was clouded by your feelings.
Mike Watts: So how what would you say about the investment that we made in the commercial properties? Because that was a decision we made. Yeah. So we Well Because we didn't see anything. We've never been to those buildings.
Kate Northrup: No. But it was emotional in that we want that money to grow
Mike Watts: Got it.
Kate Northrup: Without us touching
Mike Watts: it. I see what you're saying.
Kate Northrup: So so because we want the experience, which is an emotional experience, we want the feeling of being hands off and passive while our money grows. And I feel like investing in industrial properties diversified our investment portfolio because we didn't have anything that was in industrial. We had stuff that was connected to residential, but we didn't have anything in industrial. It was also emotional, quite frankly, because I have known Monique who is part of that partnership for twenty years. And I also know her husband.
And I know them well, and I trust them, and they have a track record. So it is also emotional.
Mike Watts: Okay. I see what you're saying. I wouldn't phrase it that way, but I'm going with you. Great. Just get the matrix, folks.
That's it.
Kate Northrup: Link will also be in the show notes. So if you're driving, you can just grab it in the show notes.
Mike Watts: Okay. So what we ended up doing for the first thing I did when we found this house is I'm gonna start with like a little bit of the back what I did for it. I don't know if this is right. I don't know if this is wrong. I'll learn more as I'll share more as things go along.
But what I did is I look obviously, with any if you've never purchased a house, we kinda talked about this in part one, but you're looking at what are the comps. Right? It's like what's the evaluation?
Kate Northrup: The comparative properties on the market in that local area.
Mike Watts: Correct. Like, are things know what comps means. Yes. Because comps change all the time. So I'll I'll explain here.
One of the comps that I pulled was houses in Yarmouth, Maine, which is where this house is purchased. On the water, that so there's waterfront homes that are in Yarmouth, Maine, and then there's homes on this a couple islands that are there. And then I said, what are those or have water views. So those those comps are going to be higher than homes that don't have any water views or or more inland from the ocean. Right?
So I pulled I forgot to put the number down, but probably 40 different homes that were either on the market or sold within the last six months to eight months in that time frame. I just went through Zillow and looked all these houses up, and you can pull the history from it. And I think all this stuff can be done automatic now. So when I do this in the future
Kate Northrup: I bet you could probably set up a project
Mike Watts: for it. Here's the tricky part around what I've noticed inside of the real estate listings because it'll say it's been on the market for twenty days, but they've been trying to sell the house for six months. So what happens is agents will pull pull it off the market and put it back on the market, and so that timing restarts. And so when you look at a house that's been on the market for, say, twenty days, but it's actually been trying to sell for six months, and then it'll show how much you've reduced the price of that home in the twenty days. So it'll go from I'm just gonna use round numbers.
1,000,000 to $9.50. So it said price reduction's 50,000. But six months ago, they started selling the house for 1,500,000. So actually, they brought it down $550,000 from what the original list price was. So I factored all of this in because the automatic stuff I was pulling up, it wasn't pulling in what the original list price was because they take it down, put it on, take it down, put it put it on.
So I don't know what. You
Kate Northrup: This is why it matters to have humans doing things because AI wouldn't notice that.
Mike Watts: Yeah. So it might. I don't know, but I there's just things that I know at that time. So like putting I think having AI and cloud projects and all that stuff are beneficial, but when I actually looked at what the what the information I was getting from the agent, I noticed that this was missing. So I put all this in a Excel spreadsheet, and it was very simple.
Original list price, list price, that's like current, and then the sold price, and then I factored it all in what was the price per square foot. So I took the square footage, and there's above grade and below grade. And from my understanding and what I was told is usually in the price per square foot, they don't account for what's below grade.
Kate Northrup: And below grade
Mike Watts: means means Below basements. Yeah. Below ground. So like a finished basement, the price per square foot is less important than what's above grade. In Maine, there's a lot of basements.
Tennessee, not so much. Other places in the South, there's not a lot of basements that you interact with. So there's not a lot below grade stuff that's happening there. Anyway, the water price per square foot that I factored in, I found out in this time was $5.66 per square foot. Non water properties were $4.33 per square foot.
What was interesting about our property when it was first listed, it was about $3.00 5 per square foot. So it was on the market wildly less than things that were there. So almost a $120 less. At the end of the day, we paid $2.98 per square foot. So we had about $135 to work with to get it to the normal non waterfront properties to work with.
And if you're trying to compare that to a waterfront property, you're talking almost $230 per square foot less. Mhmm. So in Maine, the market is much older homes. So it's a wide variety of properties that you're looking at. There are brand new builds, and I factored in brand new builds into these pricings as well.
And there's houses that have been there since 1850.
Kate Northrup: Right? Obviously, are houses in Yarwick that have been there since the sixteen hundreds.
Mike Watts: The hundreds. This You could get super historical. Super historical. Depending on what you want. And so this strip of where the homes was were all built, and they were single family style ranches.
So single family home is a pretty single family home. That's not a townhouse, condo, or anything like that. And
Kate Northrup: Ranches and Capes.
Mike Watts: Ranches and Capes. So they're about 2,000 square feet, 1,500 square feet, and these were built around the 1957 in this little area, and they're all pretty much very similar layouts, very similar style, very solid lumber back in the day, the whole thing. When I walked into our house, I knew we needed a gut renovation. So now I'm gonna go into so we we bought the house. Right?
It was listed for 02/19. We or sorry. That's incorrect. It was listed for 06/19. So $619,000.
We paid $5.86 $1.01 0. We got a big reduction due to the inspection report that came back, and they also it was it was overly pry it was overpriced in the condition that the home was in. So we ended up getting a big price reduction from there. So we paid $5.86, which was $2.98 per square foot. And if I was to fix it up like we did, and let's just say I hit the minimum of the $4.33 a square foot, that means we could potentially so if I was to turn the house over right now, try to sell the house, we could potentially sell it at the $4.33 square foot at $8.52.
I'm just gonna say $8,852,000. So we paid $5.86. 586,000, we could sell it for 852,000 if we were to sell it at the average of what the market was at that time. So we have to compare what the market is now. Obviously, we go sell it.
So that would be a $266,000 difference
Kate Northrup: Mhmm.
Mike Watts: Gain could potentially happen. Okay. So that is the what we paid. Taxes were about $8,500 and homeowners insurance. So all in, our we took we put down 20% on the sale of the house.
So our monthly payment is around it's around for the mortgage, $2,900 because we got a 6.5% interest rate on the second column. And we with taxes and insurance, it's about $4,000 a month. So that's what we're all in for that place. It's our taxes are probably gonna go up because the tax guy showed up during one of the inspection walk throughs. Walked in, did his loop, and walked out.
So I'm waiting for that fun reassessment to come in. So then we started on the home. I'm not gonna go into every single detail because it's Kate's least favorite thing to do is to list out all of the items.
Kate Northrup: I will fall asleep if you go
Mike Watts: super fun. If you wanna know all the details, you reach out to
Kate Northrup: me anytime. 20% that got to 80%.
Mike Watts: Alright. So that was we bought the house, but I wanna back up a second because there's websites called AirDNA, and there's websites called BNB Calc. So not Airbnb. It's airdna.com and BNB calc. So when we are looking at properties, you want a comparable of what other houses are for rent on the market and what they are getting.
And they these AirDNA pulls all the data from any of these short term rental platforms or mid term rental platforms, and they collaborated collaborate? No. No. Co congregating?
Kate Northrup: No. I wanna say like coagulated. Coagulated? Coagulated.
Mike Watts: Coagulated. It gets all the data from all these places and pulls it in there and give you approximate of what the house will rent for.
Kate Northrup: Drive me nuts. What is the word?
Mike Watts: So we did a so then I started looking at what are submarket scores. Right? And so Yarmouth, actually, Maine submarket score is is below 50% because of the seasonality that exists in this area.
Kate Northrup: Understand what a submarket score is.
Mike Watts: So Boston. Big market. Uh-huh. Submarkets outside of Boston would be you kind of narrow it down
Kate Northrup: Understood.
Mike Watts: From there. Right? So because it's seasonal, it's not a three sixty five market. Maine is not really a three sixty five market versus, like, somebody coming to Nashville, somebody going Miami is more of a three sixty five market. Austin, Texas.
Chicago can be more hit and miss, like these type of markets. Some of the best places to invest right now that I on the AirDNA podcast I listen to, they're talking about they're pulling oil out of this place in Texas, and they can't get enough housing in these places based off of jobs and what and people where people go. When me and you went through North Dakota, because there's this huge oil refinery situation going on North Dakota, there's not enough housing inside North Dakota. So you can get a property and rent it out.
Kate Northrup: Well, remember all those guys were staying in the hotels?
Mike Watts: Right. That we were staying in
Kate Northrup: And working in the
Mike Watts: Yeah. Exactly. So there's just not enough housing. What we put this I put this in to see okay. If we when we bought it, it was a four bedroom house.
It was a four bed, three bath. And so I put that approximate you put all this information in. It gives you the square footage, and it'll give you approximate revenue you can expect based off of average daily rate in the area and other comps that it's pulling against. I knew there was space to convert it into a five bedroom, so we installed a wall with a door. We turned it into a five bedroom.
And so approximate projected revenue is we're looking at a 120,000. These are from two different websites. Like, $1.12 to one twenty is what they're projecting. And then
Kate Northrup: A year.
Mike Watts: Per year.
Kate Northrup: Revenue.
Mike Watts: Revenue. Mhmm. Expenses are around I mean, we can go into this whole thing much deeper, but I know you're not. It's around $45,000 for the year. So net income net profit we're looking at or net income is about 75 k for the year.
And this guy says one of these other sites say it would be around 40 so they their operating income is at 40 or $84,000. $8,084,000. But that does not include mortgage mortgage or taxes or anything. That's just operating expenses of the house. Does that make sense?
Are you following? Yes. So revenue minus expenses equals the the operating income from the property that does not include mortgage taxes or anything like that. Okay. Just cleaners, maintenance, all that stuff.
Kate Northrup: Yeah. I mean, the only piece of information I'm interested in is what's the profit.
Mike Watts: Okay. So so we're looking at, like, profit after all
Kate Northrup: that's Give me a headline.
Mike Watts: It's like $40,000 for the year of profit. Uh-huh. Okay.
Kate Northrup: But one of them said, like, 75,000.
Mike Watts: But that doesn't include mortgage and taxes, etcetera.
Kate Northrup: That's a huge expense.
Mike Watts: Right. So
Kate Northrup: that's what I'm expense. Yes. So we're looking at potential profit of about 40,000 a year.
Mike Watts: That is correct. Got it. Yep. And that is after all the bill all the expenses are paid, cleaning, taxes Mhmm. All that stuff.
Kate Northrup: Great.
Mike Watts: And maintenance, upkeep, all that But all those now because our house is newer, ongoing maintenance should be less.
Kate Northrup: Right. Because
Mike Watts: we just did everything. Buying a house that's 30 years old.
Kate Northrup: Right.
Mike Watts: Okay. So in turn, this year, we didn't get it on that we
Kate Northrup: got it on the market.
Mike Watts: It's been on the market a month. So we put it on one month ago as the recording of this. So April 13 is when the house went live, they say. And so far, we have $15,000 in revenue not coming in that has not entered the bank account.
Kate Northrup: That's booked, not banked.
Mike Watts: That's correct. So it's booked money of renters will be coming in June, July, etcetera. Mhmm. So that's $15 for this month. Great.
So that covers, if you think of the mortgage as four, that pretty much covers almost four months of the mortgage payments.
Kate Northrup: I'm gonna do a shameless plug right now. If you want a charming Maine vacation for your family, we still have availability
Mike Watts: Yeah. We have
Kate Northrup: a lot. Certain weeks over the summer. Yep. So you can go to the link in the show notes, and you can find the listing, and you can stay in our amazing energy, no to low toxin, organic sheets, organic bedding, nontoxic cleaning supplies, and ceramic pots and pans.
Mike Watts: Well, I haven't got there yet. For
Kate Northrup: okay. Well, I'm just letting folks know.
Mike Watts: Okay. Yes. There's Available. Yes. There is.
We cannot hold accountable what other people bring in, though. We have that's the thing. What we're providing folks
Kate Northrup: I know.
Mike Watts: Is a nice clean space.
Kate Northrup: But we have cleaners come in in between. It's not
Mike Watts: like we need to
Kate Northrup: stop it with your disclaimers.
Mike Watts: I'm just we gotta have disclaimers. You know? Just putting it out there. I've been doing a lot with lawyers around this, so everything is a disclaimer. That's what they say.
The debt shouldn't ruin your experience though. Okay? Alright. So what we ended up doing is we came in.
Kate Northrup: Good thing you're not head of the marketing department.
Mike Watts: It'd be so fun. We basically came in and we had to do a gut renovation. It turned into a gut renovation. When we bought the house, I knew we had mold. I knew we had water damage in the basement.
I knew we had water damage in the garage. So what this turned into a giant project that was a little bit this was our first one. It was a great learning experience. We've learned a lot in this process, and we had to get rid of get rid of mold in the garage. There was animals living in the in the garage that had to get.
So we gutted 75% of the home taken down to the studs. So the fun part was as it keeps going, then we removed I'll just give you the high level of what we did. Alright? Are you ready? Okay.
We removed 75% of the house down to the studs. Kitchen, bathrooms, drywall, insulation, flooring. We took down the chimney. We took up the baseboard heating. I got rid of the oil tank, asbestos tile in the basement.
There used to be a coal furnace that used to run down there, so there's still the coal box. That was gone. We cleaned out the basement. We ripped out most of the landscaping because it was wildly overgrown. We took down six trees, I think, because those were also wildly overgrown.
We reroofed the house. We added a generator. Because we gutted everything, we realized that the plumbing was so out of date because it was built in 1957. So we had to and they used like cast iron pipes in places that were corroding. So we replumbed the whole house.
We reran all electrical wires throughout the whole house. We moved the washer and dryer from the kitchen. We set up a spot in the garage, and we set up a spot in the basement. So we have two washer and dryer setups. Basement is not accessible to renters, so it's only for us in storage.
We put new doors in, new bathroom tile, new bathroom floor, new flooring throughout the whole house. We got rid of the asbestos tile in the basement, which I said. I put epoxy on the garage, which is sick I We have to added a heater in the garage. We also installed HVAC, so heating and air conditioning via air through we installed natural gas running to the house, and so we put in a natural gas HVAC system that was run throughout the whole house. So now the house has heating and cooling.
Most homes in Maine do not have air conditioning, and I'm like if we're redoing all this, we're gonna have air conditioning. And I didn't wanna do a heat pump system because those it's a newer technology to be installed in Maine in dealing with extreme colds. You're running on the electrical grid the whole time, and if the electrical grid goes down for some reason, that was just something I didn't wanna do. And it was wildly more expensive, about $30,000 more than doing a natural gas forced air system. We changed the sump pump, bought all new appliances.
We redid all of the insulation, drywall, and painting. So that sums up all the renovation that we did. Amazing. That took six months. Kate's asleep now.
She's just like, I bought the house. I moved into the house. I added artwork. And then we're redoing the final big things are the condenser unit for the HVAC system is going in shortly. So we're in there in summertime so people can now have air conditioning.
And I realized with the new insulation in a house that's this small because it's 1,900 square feet between multiple structures, the upstairs is relatively probably 500 square feet between the upstairs. It's so hot there already. So we're definitely gonna need some sort of air. We've replaced some windows. The whole shebang.
It has been amazing. It's been a lot of fun, and so that was the gut renovation. And that whole thing costs almost as much as our house costs when we bought it. So we ended up spending about $46,666,000 dollars on renovation. Furniture is about 50 k.
There's still a couple things I need to finalize in there, but the furniture to furnish the place is about 50,000. So we're like at 520,000 all in with rehab.
Kate Northrup: In your different researching about short term rentals, did anyone give you an estimate of how much it would cost to furnish a place that size?
Mike Watts: Yes. So there is a What did they estimate? Furnishing let me the furnishing is including toilets, hard so that also includes Okay. So the knobs Okay. The faucets Yeah.
I put all that in the furnishing part
Kate Northrup: Oh.
Mike Watts: Of that cost. So the renovation, I we have it in our I have it in a cell spreadsheet that is everything. But I and it has all the quotes. So if you're doing any type of work like this, I ended up getting almost two to three quotes with every single job that needed to happen. Drywaller, I only got one because they drywalled our house before, and I really liked them.
Painting, ended up getting two. HVAC, I got four. Oh, I forgot about the indoor sprinkler system, our
Kate Northrup: favorite. I think you talked about
Mike Watts: I talked about that on part one. But that, it was also part of the renovation. I got four quotes for that. So I just kept seeing what was happening there. So going back to
Kate Northrup: I was just curious what the estimate was.
Mike Watts: So estimate was it depends on who you use. What I was told from the company that we worked with who just announced two days ago that they're going out of business, that they're shutting their operations down, is that to estimate 25 to $30,000 on a five bedroom.
Kate Northrup: So do you think we came in so much higher because of the hardware and toilets being added
Mike Watts: to that about 10 gram, and so furniture was actually about 40.
Kate Northrup: Wait. You just said furnishing was $10, so furniture was Sorry.
Mike Watts: Sorry. Fixtures. K. Okay. So furniture was about 50,000 total with fixtures that I'm gonna say fixtures as toilets, faucets, things like that.
Kate Northrup: Okay.
Mike Watts: Furniture Was 40. Was around $35.
Kate Northrup: Said to estimate 20 to 30?
Mike Watts: That's correct.
Kate Northrup: So we we came in twice as expensive?
Mike Watts: No. Because we spent 40 on furniture.
Kate Northrup: Right.
Mike Watts: They said 25 to 30, so that's not twice. It's like $10 more.
Kate Northrup: You just said 20 to 30, so that could have been twice as much because 20 times 20 is 4 or 20 plus 20
Mike Watts: is 4. I didn't expect we were gonna I thought we were gonna go over there, but that was one company.
Kate Northrup: It's interesting.
Mike Watts: Hold on. There's another woman who I follow who's an interior designer whose houses are banging.
Kate Northrup: Like really beautiful. Yeah.
Mike Watts: She estimates for five bedroom, $60,000.
Kate Northrup: Okay. So we came in because I'm just gonna say I don't know how you could furnish a five bedroom house for $20,000 if your furniture was going to be functional and look
Mike Watts: No. So You know? Like We did organic mattresses, more expensive.
Kate Northrup: Would be more expensive. And organic sheets and towels.
Mike Watts: We did organic sheets and towels, more expensive.
Kate Northrup: And ceramic pots and pans.
Mike Watts: We did ceramic. We did care Caraway pots and
Kate Northrup: So that
Mike Watts: We did a Smeg toaster.
Kate Northrup: Right.
Mike Watts: More expensive. Right? So, like, there was
Kate Northrup: we had some higher end
Mike Watts: Yes.
Kate Northrup: Choices because we are putting this Airbnb in the luxury category.
Mike Watts: Correct.
Kate Northrup: As opposed to this is not in the bargain category. Because because I mean, I'll just be perfectly honest. If I'm gonna go stay there, which we are periodically, I'm not gonna stay somewhere that doesn't feel nice.
Mike Watts: I also did I also wanted to spend the money that someone else so it's very neutral inside. So if let's say we did wanna turn around and sell it today, it's not styled to our taste we would get it. It could be a very easy turnover.
Kate Northrup: But I really like it.
Mike Watts: No. Agreed.
Kate Northrup: But there's nothing like loud or like, oh my gosh. Somebody would come in and be like, there's no way I can live with that backsplash.
Mike Watts: That's correct. Right. So I also We did not
Kate Northrup: make design risk choices.
Mike Watts: Right. The renovations are built for if we were to sell that, it was like to sell it if we wanna turn it on.
Kate Northrup: I understand. Okay. Great.
Mike Watts: So but it the the furnishings depend because I think our couch was, $800, but you can also buy a $7,000 couch depending on where you go. Right?
Kate Northrup: You could buy a $30,000 couch. I mean, there's a price point for every buyer.
Mike Watts: It's like the first apartment we had in Miami where the guy we had to put more money down on deposit because he spent, like, 25 k on a couch, which was so uncomfortable. And we had babies. That was terrible.
Kate Northrup: That was terrible. I was always so nervous around that my god.
Mike Watts: That's horrible. So but that is what so the to rehab the house was about $460,000.
Kate Northrup: And then to furnish it was another 50.
Mike Watts: Yeah. My biggest expense was carpentry because that included new trim, doors, just everything
Kate Northrup: really, really nice.
Mike Watts: Kitchen cabinets, all that
Kate Northrup: really was well done.
Mike Watts: It was really good.
Kate Northrup: So we're all in on the purchase price was $5.05
Mike Watts: 86.
Kate Northrup: And basically all in based on what you just told
Mike Watts: me on
Kate Northrup: all the updates about $5.10.
Mike Watts: Yeah. Give or take. So we're at like And we could
Kate Northrup: sell it for $8.50. So Maybe more. Folks who are listening, just in case you did the quick math.
Mike Watts: We're under one.
Kate Northrup: Good investment. However Here's where
Mike Watts: your money comes back.
Kate Northrup: Here's where the money comes.
Mike Watts: So I think based because there are one bedroom brand new condos selling in this town for $750,000.
Kate Northrup: Which freaking blows my So
Mike Watts: I think Because is gonna be this is gonna be really weird to say. I think we get over 900,000 if we were to sell it today at 2,000 square feet because everything's brand new.
Kate Northrup: So Right. It's And because so many families are looking to get into this town because it has the number one school system in the state.
Mike Watts: It does not, actually.
Kate Northrup: Oh, not in the top 10. Stop it.
Mike Watts: That's true. In New York. No. You left. Yes, it is.
Yes, it is. The new report just came out. Well, they did.
Kate Northrup: Who is above your head?
Mike Watts: Oh, look at her. She's going,
Kate Northrup: Now I feel So bad about this.
Mike Watts: It was Cumberland as number one. No. The report came out when I was in Maine. You left, and I saw the report. It came out.
Kate Northrup: Greeley came in as number one?
Mike Watts: Greeley's number one.
Kate Northrup: These are all Yarmouth is not even in the top Literally no one cares about this conversation, but these are all my rival high schools growing up.
Mike Watts: These are all the Yarmouth people don't care about this conversation.
Kate Northrup: Yes, we do.
Mike Watts: No. Because they're gonna be say we're number one.
Kate Northrup: Yeah. We're gonna stick with we're number one. Anyways, one of the top school systems and one of the most desirable towns to live in in the state for sure.
Mike Watts: Yeah. So a couple learnings that I had during this process before we kinda go into what the benefit of doing what we're doing is I we didn't take out a construction loan on this property, and in theory, we should have.
Kate Northrup: To us.
Mike Watts: I didn't know. I just went in. So this
Kate Northrup: was know that that was a thing.
Mike Watts: This was a Mike mistake of moving too fast. Is Mike we thought we were gonna spend a $150,000 in renovations. That's what we set aside. And that was like our number. And luckily, we've been able to pay for this with setting up different accounts that we have set up in the past with whole life policies, and we had our $4.00 1 k that we borrowed against just to pay the cash off, and then we're paying that stuff back.
Right?
Kate Northrup: So So just this I just want folks to know, this does not apply to all people. But if it applies to you, you can take loans against existing assets Yes. To invest in assets that are going to make you more than the loan interest, and then you pay yourself back. Right. And we have the payments in still growing back.
Correct. In the bank.
Mike Watts: So just We took business credit because I set this up as a business. So I we took business credit cards that are 0% over the course of fifteen months.
Kate Northrup: Yeah. Or eighteen months.
Mike Watts: We took my generator. The plumbing company had a thing where it's you put on the card, and it's 0% for eighteen months. So we're making payments on that. So I kinda leveraged as as much money as I possibly could in a way that was smart. So I didn't do this as a
Kate Northrup: Wait. We're not carrying, like, it on a 24% credit card.
Mike Watts: No. So that was not happening. Right? It was how can we leverage the system that exists that's there? In retrospect, I realized we could have taken a construction loan out, done all of this with the bank's money, paid interest on it, and then financed it all at the back end.
Kate Northrup: Next time we will.
Mike Watts: Next time we will. So, you know, learnings as If we
Kate Northrup: you're going to renovate a short term rental, consider a construction loan.
Mike Watts: Maybe. Right? So don't do what we did. I went to the bank in the middle of it. I was like, can I get that construction loan for the rest of it?
And she goes, how much more do you have? And then I said, and then I had to, like, fellas. Anyway, it was the whole thing. So that was a good learning for next time, and we're just paying ourselves back for this, which is awesome. And then we set ourselves up really well because your newsletter that went out today is because we rented over the past couple of years, we've been able to put more money aside versus the cost of owning a house to do it.
And so everybody has a different philosophy on it. For us at that point, renting also allows for flexibility. The other piece that I've learned during this process, because we bought this house in Maine, and then we just bought our primary house here in Tennessee, and we're renting this current house we're in now for a couple more weeks, there are so many different ways to get loans for a house. So I just wanna put this out there for folks that if you want if you wanna buy a house, but you think you need this, there are a lot of discounts for first time first time homebuyers Mhmm. Depending on the price of your house.
Right? If you're in a couple million dollar price range, like, lot of times you won't qualify for the certain things. But if it's under a certain amount, you could there's a lot of beneficial programs that do exist for people that wanna get into homeowners.
Kate Northrup: There's also seller financing.
Mike Watts: Yes. So that's what I'm talking about in this whole so Pace Morby is a guy, and he wrote a book that I can't remember the name off the top of my head, but talks lot about this. Your friends talks a lot about I can't remember her name either. Monica? Is it Monica?
She's in Monique? Doesn't Monique talk about this inside of Relaxed Money? No. No. In her book.
It's her book. Monique's book talks
Kate Northrup: about about seller financing. Then there's this We'll
Mike Watts: put all these links
Kate Northrup: in the on Instagram that I've been following Mel Mel somebody. I really like their stuff. We'll put their link in the show notes as well. And they talk about their whole thing is teaching people how to use seller financing, and their whole thing is very disruptive around getting more wealth in the hands of people who have traditionally been kept out of financial conversations.
Mike Watts: Yes.
Kate Northrup: So I wanna say it's Mel Dorman.
Mike Watts: Our friend is a mortgage broker here, and I had a whole conversation with him about the different options that people have. Like a lot of times we think we have to wait to save 20% to put down on a house, and that's not true. Right? He's even he can get people in at 0%. He can do things at 5%.
Kate Northrup: You gotta think outside the box, and you gotta ask.
Mike Watts: Yeah. Our house here, we put 15% down to make it happen, and Maine we did 20% down. Right? So there's just I just wanna state, like, if if this is a desire of yours to be able to do, there's most likely a way to make it happen. So you just have to ask.
Mhmm. And that's what I always do.
Kate Northrup: Ask. Research.
Mike Watts: Correct. So going back into the benefit of doing a short term rental property like we're doing or an investment property, you can file for tax purposes as a full time real estate professional, is an option, which the truth is at this point, what I'm about to the stuff I'm about to talk about, I don't fully have a full full blown understanding.
Kate Northrup: With a tax strategist. So please, this is simply education. This is not financial advice.
Mike Watts: Understanding at this moment how this plays out, I'll tell you in '27 because once we file our 26 tax purposes tax payments. So our tax accountant is Jasmine DeLucci, who we she's out of Dallas, Texas. She helps us her and her firm helps us with tax strategy. I am a big fan so far of them that we've used. I can't talk about her enough of just how helpful she is.
She has tons of YouTube videos on YouTube that explain a lot of the stuff I'm talking about now. What we're gonna talk about now is I'm still learning and understanding how it works. So there's a thing called cost segregation studies that you can do on a property. And so they do this on commercial properties, residential properties, investment properties. And then there's a part of the tax code that operates more like hotel because a short term rental property is essentially like a hotel.
Kate Northrup: We're right. Now
Mike Watts: we're in the hospitality business. We're in the hospitality in that category. And when it comes to one of the reasons that we wanted to be able to do this for people is to offer that it gives another option for people to have a place to go.
Kate Northrup: Yeah. Because a
Mike Watts: hotel room hotel I got it. I'll take it from you. The hotel rooms in Portland in the summer for a Courtyard by Marriott is $550 a night, or you get a Four Points hotel. These are prices that you would think at a Ritz Carlton, so the higher, more luxurious.
Kate Northrup: One time we looked at the Courtyard in the summer, and
Mike Watts: it was $12.
Kate Northrup: It was a thousand dollars
Mike Watts: a night for
Kate Northrup: Courtyard Marriott, like, by the airport.
Mike Watts: It's down no. It was in the one in Portland.
Kate Northrup: Oh, okay.
Mike Watts: Dot dot. So it had a water view, which was great. Okay. And then the nicest hotel is called the Press Hotel, and those nightly rooms get up to $1,500 a night. So for a family of four like us or other families in Tennessee that have, like, seven children, like everyone else down here, it's going on a trip is wildly expensive to go do this.
So one option that we were saying, okay, for us to go, but also be able to open up more affordable rental places for people to go, and that's more cost affordable for the summer for people. And so that's what we looked at, and when I took this project on, the woman that sold it, her name is Barbara, who I now have met a lot of our neighbors who still talk to Barbara, and she's a Zumba teacher in Maine, and so they take her Zumba class. But that house became too much for her to manage, and so she actually sold the house to us and then got a nice little one bedroom condo overlooking the water in Freeport. And so she was much much happier. I talked to the neighbor.
She's much happier there, and she has far less to take care of when it comes to managing a house. So it was pretty cool to, like, hear the story of how she's doing. And once you sell a house to somebody, sometimes you know who it is, sometimes you don't. And it's cool. Like, the house we sold them in the first time, we still know those neighbors.
I just saw them when I was there last night. Got my nose is so itchy. Barbara, I haven't talked to her, but I I told her friend, I was like, if she wants to come see the transformation, she's welcome to come anytime. And we have a little I found a little lock that I was in the basement when we did our renos that I kept, so I have it here and little thing that I always carry from the house, which is cool. So in terms of the tax purposes of kind of what they call is a lot of times on the Internet, the tax strategist will call it the short term rental loophole, And it's not really a loophole.
It's in the as Jasmine explained to me, it's in the tax it's in the tax law. So it's something that you can market. The other piece about not market. You can leverage or use as you're building out these properties. So we've made this property better.
So because we're renting this out is we'll get a tax deduction for it, and same thing happens to commercial properties and commercial spaces when you improve the spaces. So I'll talk about the cost segregation study that's here. So what we got based off of this is an estimate. I hired the the gentleman, Isaac, and his last name is Dowling, just like Aiden. I was like, do you know this guy?
And he said no. But he the cost basis for the property is $5.86 $1.01 0. So the reason they do these cost segregation studies, it's what is gonna deteriorate over time.
Kate Northrup: Cost basis meaning that's what we paid for it.
Mike Watts: That's what we paid for it. So and this will be placed into service in 2026. So there's different ways of how they depreciate the property over time. So, like, a roof is going to depreciate faster than a countertop or a flooring floor. Right?
But because of the current tax code, you can take a 100% depreciation upfront depending on what qualifies for that. I'm not gonna go into much more detail around it because I'm still trying to figure all of this stuff out. Anyway, what they end up doing, and the purpose of doing this inside of a short term rental property is that it lowers your taxable income. So let's say you make your income is a million dollars. We'll just keep very round numbers.
If your income is a million dollars, you're gonna pay about, let's say you're at a 30 in the 30% tax bracket. We'll just say 37%. So you're gonna pay $370,000 in taxes. Okay? Off that because that's basically what you're earning.
Now in terms of the deduction off the cost segregation study that I'm here is right now the total depreciation 26 is a $113,000. So what that does is off the million bucks, it drops me down, we'll just say it's 100,000, down to $900,000. And then I'll pay taxes off the $900,000. So I've taken the depreciation of the property more in the one year. Now not everything that happens in that property is gonna qualify.
It's only the building assets that depreciate, land that is not depreciable in this scenario. And then because we spent what number did I say? $1,020,000, a lot of that stuff is also
Kate Northrup: Well, not the furniture and stuff. Or yes.
Mike Watts: I was told the furniture this is where I'm still figuring this out. Of what not everything like, a roof is not gonna qualify in front of this as everything else. So let's just say it's $500,000 on the reno. We are gonna be able to take that off of 26 as well. So if we just take a 100,000 plus 500,000, that's $600,000.
So if you have a million dollars, now we're paying taxes on $400,000. And so it's a far less so whatever 37 percent of $400,000 is is way less than $370,000. Mhmm. Does that make are you following me?
Kate Northrup: I'm completely following. I'm also I'm just aware that in my mind, I am thinking about the people who are thinking, is it ethical
Mike Watts: Yes.
Kate Northrup: To pay less taxes?
Mike Watts: Yes.
Kate Northrup: And the tax code is written this way, so I just wanna be super explicit. The tax code is written this way. A state now it's gonna be state by state state basis. A state like Maine depends heavily on tourism for its economy.
Mike Watts: Correct.
Kate Northrup: And if tourists cannot come because hotel rates are too expensive, the state economy
Mike Watts: Goes down.
Kate Northrup: Goes down. And that actually harms every family in Maine. I actually did some research, and I found out that the taxes that come into the state of Maine that are paid by tourists deduct an average of $2,400 annually from Maine taxpayers' tax bills. So vacationers coming into the state of Maine saves the average family in Maine $2,400 a year on their own taxes.
Mike Watts: Oh, that's great.
Kate Northrup: So I thought that was just an interesting listen. The economy is complicated, and there are many layers, and we are all absolutely connected. One of the things that I stand for is considering how our choices impact the collective, but also considering how we can use our money to spend in alignment with our values. And in full transparency, I don't always agree with what the government is doing. But I do know that I love the organizations that you and I support.
I love our employees and the ways we can invest in our company and in our local community and all these different ways that we can redirect our income I mean, ours not our income. Redirect our spending from taxes towards other things that make our community better. Well, it's it's funny. Mean to be overly defensive, but there was a whole crew of people on the Internet coming after me. So I wanna bring no.
Mike Watts: I wanna bring that up because it doesn't make people's argument was saying that it was like Airbnb is ruining communities, and short term rentals are ruining communities. That is a very generalized statement of what's what is actually in that is a such a localized conversation to be having.
Kate Northrup: It's really different regionally.
Mike Watts: Right? So it's like somebody just posts that on Instagram posts. It's like, okay.
Kate Northrup: Well I also are we talking about? Also wonder if those people I wanted to be like, have you ever stayed in an Airbnb?
Mike Watts: Well, it's just it's not even that. It's just it's that this is a Airbnb created now there could be issues. Right? There could be issues that we don't know about. Now I think it's a localized situation of where you're going and what is the what is going on.
And towns are regulating this. You know who pushes back more on Airbnb than anybody else?
Kate Northrup: Hotels. Hotels. Of course, they do.
Mike Watts: Right? Because it's competition. Exactly. So, yes, does it affect housing pricing in certain places? Probably.
Kate Northrup: I did look it up in Maine. It's a very small percentage. Less than
Mike Watts: Yes.
Kate Northrup: Less than 1%.
Mike Watts: But then also the argue the thing around the tax stuff, it would have made way more sense for us just to pay extra money in taxes. Like, the 100,000 your time a $200,000 that we saved on the cost segregation study makes no freaking sense. If you look
Kate Northrup: at the value of Mike's time, we are definitely in the red.
Mike Watts: So, like, the 100 k that I'm saving off this property of paying in taxes, we've just told you we spent over 500,000 to do it. Now where did that 500,000 go?
Kate Northrup: You too can spend 500,000 to save a 100,000.
Mike Watts: Now we're gonna get a lot of that back off of the cost of renovations, the capital improvements that took place in this property. And the truth is it is hard, and it not everyone is able to manage a construction project. Right? So, like, a new family coming in there trying to manage a construction project, if they're trying to live there with kids, all that stuff, like, is a nightmare and to be able to do that. And so my brain works really well on how to operate construction projects.
Hot tip for all of you that are doing that is you just follow-up with people every single day. That's how you keep construction projects going. Anyway, so you basically so what we ended up doing is yes. It's like, are we paying gonna pay less on taxes ourselves for right now because of these deductions? Yes.
But where did all this money go?
Kate Northrup: Into the house.
Mike Watts: This money well, no. It went into the house, correct, which is why the deductions take place.
Kate Northrup: Which also increases the property values of everyone else on the block.
Mike Watts: Bingo. So everybody else that lives around there is increasing their property value. They will get more for the property when they go and sell it. Many of these people in living there forty years, they paid $40,000 for their house. So now they're gonna sell it for half $1,000,000 just like Barbara did, and Barbara inherited it from her parents.
And so now all of a sudden, because her house
Kate Northrup: of the money we invested in our property.
Mike Watts: Right. So her house cost I don't know what it cost her to go from her parents down to her, but now she just got a half $1,000,000 or $586,000, and she went and bought a new new place on the water. And we I spent six months redoing her house, but then all that money for rehab, where did that go? That went into the local that was all small economy. It was all the small business.
And guess what those small businesses are doing? They're making more revenue, they're gonna pay more money. Right?
Kate Northrup: So they're earning more taxes. Hire more people,
Mike Watts: so it's
Kate Northrup: better for the main state economy.
Mike Watts: So it's like when you are Yeah. We pay plenty of taxes. We pay our taxes. We pay real estate taxes. We pay our employees' taxes.
Like, we are paying taxes here and there, and so there are deductions that exist. This is not about, like, paying no taxes. That is not this conversation. It's having a conversation of how the system that is set in stone can work for people like me and you. And people that are w two employees actually pay a higher tax rate than you and I who are running businesses.
So if they can get one Airbnb project and get a tax deduction from it on a yearly basis, that's a good good gig to be able to do. So this is not just set this is not just a thing that's set just for us. It's actually open to a lot of other people.
Kate Northrup: So over time, high big picture.
Mike Watts: Yeah.
Kate Northrup: We did this for the emotional reason it feels good to have a place in Maine that is down the block from our old neighborhood so our kids can go play with their friends. I mean, that's just true. Yes. We did it because we knew that the income each year over time could become meaningful if we add multiple properties to our portfolio.
Mike Watts: Yes.
Kate Northrup: And we did it because we were curious about some of the tax advantages for this particular asset class. And you and I are just also passionate about real estate. We've always been interested in this, and so it built our net worth. It's great for our family. It's great for the community.
It's great for a lot of different reasons. It's great for tax savings. In the end, give us giving us a few years, it will end up being profitable. It's just this particular property was not a quick turnaround profitability. It's a long
Mike Watts: game. And that's okay. The thing I've learned in the last six months more than any other asset that exists that I it's like the high super high wealthy can borrow against their assets more than, like, people like us can. And because their assets are, you know, they're Yeah. So much bigger.
And what you can do with real estate that I didn't realize until we got into this was how it's funny. It's, like, kind of made up where I can take now that our if our value let's say the property that we just did in Newell Road comes back at a So let's say I get a cash out of a 120,000. I can take that 120,000 of money that's not mine and go buy something else, and I can turn that
Kate Northrup: into cash that's yours. It's it's added value that you added to the property. Correct.
Mike Watts: But in theory, it's the bank's money
Kate Northrup: made up.
Mike Watts: And I'm paying so my mortgage my monthly mortgage would go up, but now I have a higher chunk of cash to go buy something else, and we just do it again. Yep. Right? So the next
Kate Northrup: Do it again without the gut renovation.
Mike Watts: Yeah. Gut renovation.
Kate Northrup: The next property will at new tile involved with facelift
Mike Watts: situation that we're looking at doing. Right?
Kate Northrup: New tile, new light fixtures.
Mike Watts: Yes. Looking at a commercial property to do as well. And so I could take the money from the refinance, or you can do a refinance, or I could do a cash out, or and take that money and go get a second location of a commercial space that I don't have to take any other money out of our, like, let's say our pocket and borrow against ourselves in So that it just allows real estate allows this kind of Well, it's a fun thing.
Kate Northrup: It's the game of monopoly. The game of monopoly is correct.
Mike Watts: Yes. And then you do another cost segregation study on the commercial property, and then you get
Kate Northrup: And you have tax savings on that.
Mike Watts: Exactly. But you're gonna do capital improvements to it, etcetera.
Kate Northrup: And then you are also helping helping increase the property values of the properties around it
Mike Watts: That's correct.
Kate Northrup: And etcetera, etcetera, etcetera.
Mike Watts: And at the end of the day, Kate and I are trying to do something that diversifies what she just talked about, our income from our business. Yeah. Because our business
Kate Northrup: is great. Very profitable What and
Mike Watts: is the plan for the next five years or ten years? So is there a way for us to bring other things in house that would help us pay for at the minimum for me now is like, how do we get our personal expenses of what it costs for us to live that we don't have to pull from the business anymore? So if real estate allows that to take place, then that's awesome. Yep. Right?
That would be goal in the business that allows other cushion in the business to allow that we could hire more people. We could do something else. It's like paying
Kate Northrup: Finger investments and possible software, all that
Mike Watts: stuff. All these other ideas that come if we are able to diversify our income from something else.
Kate Northrup: Amazing. So So thank you for listening to part two of our Airbnb story. Yes. And if you wanna book the property, go to the link in the show notes. If you are inspired, send us a DM and let us know.
And we'll keep you posted on how it's going as we add properties, as we learn. We're new, obviously, but I think you did an extraordinary job, Mike.
Mike Watts: Thank you.
Kate Northrup: And I appreciate that. I'm really excited about this.
Mike Watts: Thanks.
Kate Northrup: Thanks for coming.
Mike Watts: Thanks for listening. Are we gonna end it? Or just we should just stare at each other.
Kate Northrup: Yes. Folks like you who keep things moving for themselves and other people in their world can often be the bottleneck when it comes to big money decisions. They can send us into stress, old patterning, constriction, and procrastination and delay. And when we delay big money decisions, it's expensive. Not only with our time and with our energy, but actually, literally, we lose money.
But there is a beautiful, proven, solid framework for making any big money decision. So it's grounded in soul. It's grounded in strategy. It's grounded in real numbers, and it's based in your vision and where you are going, not where you have been. It's called the big money decision matrix, and today, you can download it absolutely free and run it on a big money decision you have in your life right now.
Go to katenorthrup.com/matrix and download it and use it today. The link is also in the show notes.