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The Real Estate Addicts (REA) podcast is for anyone interested in developing real estate. The podcast covers a comprehensive range of topics related to real estate and investing and features interviews with savvy and successful entrepreneurs who share their career path, failures, successes and the stories behind the incredible companies they built. Listen in for big personalities and great conversation.
Co-hosted by Ray Hurteau, Dan Rubin (Instagram @dan.and.ray) and Marc Savatsky (Instagram @choose_boston)
Follow Real Estate Addicts Podcast on Instagram: @Real_Estate_Addicts
00:00
Oh, I don't know if I want to lead in with that. You really want me to? We'll work it in. All right. What do you do when you have extra money laying around? You want to put it somewhere? Yeah. And go.
00:16
So for real, without sounding too pretentious, what do you do after you've had a couple really good projects and maybe you don't want to put the money into the stock market? here's the thing, it's like with real estate, it's so easy to go all in on real estate, right? Because you know it, you can control it the best you can outside external forces, but it's still more control than throwing your money into a random stock. And then all of sudden the CEO is found guilty of laundering money and the...
00:42
the company goes under, right? ExxonMobil or not ExxonMobil. What was it? It was, well, fuck it. doesn't matter. The companies that all, WorldCom, they remember that? And Ron, and and Ron. Well, WorldCom was the same thing, wasn't it? Was it? Either way, like these companies that just were lying through their teeth and then the auditor, the big five auditing firms couldn't figure it out. And then one of them went away because that billions and maybe even trillion dollars were lost. the fire festival next? Oh my God. can't, that guy. The poof cruise.
01:12
That guy's unbelievable. The, the fire fest guy tried to reboot it and do fire fest too. oh And he was lying through his teeth, I guess, about having the land secured in Mexico. Adam Newman from we work is has a new real estate fund, right? I thought he's coming back to rework now, or he's trying to start a competitor. No, I thought he was getting into apartments now. So, so what do do when you're not a failure and laundering money? What do you do when you've got things to invest in? Ray is trying to say, I think is let's talk about investment pro.
01:39
Because like, so the, the, genesis of this, we're just chatting offline. And I was mentioning that my wife and I bought a condo in Florida and was kind of, we're on the Gulf coast there near Sarasota. It's called Longboat Key, but it's tough for one to turn off the investor part of your brain. I've talked to Ricky about this for a while too, because he's got a place in Nantucket now and like, it's, it's not a home run. Like as an investment property, it's okay.
02:07
But like there is a whole part of the equation that you don't really put on a spreadsheet. That's like, how much do you enjoy it yourself? So the idea of this condo in Florida is in part, large part, just to go down there and have some time each year to chill out on the beach, bring family, bring friends and have fun. So, but, but if you asked me what the cap rate was and it's ROI, like right now it's like zero. It's like, has not rented.
02:33
Like, you feel that you want to have it available to you 50 % of the time? There's like an IRS standard, and I should look this up real quick, about how many days you have to- 183. Are you trying to get away from taxes? All I'm trying to keep it is that I want a write-off. This thing's going to lose money every year. I want to make sure it's not just a vacation rental, and they're pretty strict about how they view vacation versus this. So has to be available for a certain number of days. Oh, I see. But, uh...
03:01
I thought you were trying to claim Florida residents. that, that, that's a, don't fuck around with that either. They're real, that the States know and they will watch where you're spending on your credit card. When your flights were to and from, cause that's where, that's where they make their money. If you start playing with that, but lose us getting sidetracked here, guess a couple. So you have to make it available for a certain number of days of the year for you to qualify for investor. you, listed it on Airbnb, VRBO, all that stuff.
03:30
So I use this group called Goal. Is it VRBO or Verbo? I think it's Verbo. VRBO, it's 100 % VRBO. VRBO. Who knows? You know what? That's their marketing department's problem because... So, so... This episode is just going so well. No, no, no. So you listed it through... No, I used this guy from Gulfcoastvacationrentals.com. Okay, so do they basically manage it for you? lists it on all the things. I see. So you're paying him kind of a fee or a percentage.
04:00
to kind of manage the whole listing stuff for. Does he coordinate cleaners and all that? He's a full service short-term rental company. And he takes 20 % of everything. But it's only 20 % of actual gross. Right now 20 % is zero. So there's that. But no, I'm still in like the, you know when you haven't like sold your product yet, but you really haven't quite started marketing it and you're still like kind of in la la land, like, ah, it's all good. haven't really.
04:28
put my foot. So that's all to say I, did all these different upgrades to the unit. got these cool like beach cruiser bikes. We changed all the furniture. Like everything's new and none of that is reflected on Gulf coast vacation rental.com at the moment. So I'm going to do a big reboot. know what you need to do? A rebrand. A rebrand. Yeah. I'm also being very serious here. I think you need to price below market so you can start to get reviews on all those platforms. Cause if you think about it from a renter's perspective or a vacationer's perspective, they're going to want to see.
04:59
what people think of the place. Whenever I go away and rent Airbnbs with my family, I will never rent an Airbnb that hasn't had a review yet. Well, do you guys need a vacation to Florida either of you? How many beds are on the house? Yeah, well, if you rent a good review. I did tell Caleb from Boston Photography, was like, do you want a free trip to Florida? Like, I want to do some baller marketing photos, some videos. Like, that's, that's how you're rent it. Yeah. No one's coming for a quick tour.
05:29
to decide if they're gonna put an application or not. It does take a while because you can be like a super host once you get that status. So it does take time, especially for short-term rental market. I would stick with it and consider pricing aggressively. Yeah, we kind of looked into that briefly when we were kind of trying to figure out what we wanted to do with our lives, right? were- Yeah, was like post COVID. COVID or whatever, were just, we kind of looked into some Airbnb potential stuff, but-
05:56
There's been so much, there's no regulations in the municipality or even the condo association that you own about Airbnb. Yeah. What's it like down there? Okay. So there's some definite qualifications here. One is that it's two month minimum. Oh, okay. So there's no Airbnb short-term rental. Oh, did you know that going into it? Yeah, I didn't know that. Okay. But, uh, two is a big, a lot of Canadians who come in vacation down there. Okay. Yeah.
06:26
And not this year. No, why? Why? Why? Why? wonder why. Yeah. The tariff or Trump's tariffs. Why did they boo the national anthem in Canada? That's a little rivalry, good rivalry. Yeah. I don't know. It's not good for me right now. So that's another thing. Do you think the two month thing is kind of throwing people off or? No, there's a strong, like, I did like a comparative market analysis for a lot of other units within the complex and saw what they rent for and how often.
06:54
And they rent and they're all good. think like the winter is the busy season. You're not really going to get big money for June, July and August in Florida, except for like people who live inland in Florida and want like the equivalent of a Cape house for, Oh, is that a thing? Yeah. So that's, that's your tenants come summer. Oh, interesting. I mean, they don't pay as much like real numbers June, July, August. I think I'll get 3,500 a month. I think high season it's like 10 to 11. What drew you to that area?
07:22
Two bed, two and a half bath. Wow. That's a lot of money. Right on the beach. Yeah. Maybe, maybe, um. I mean, Sarasota is a nice area, but like what drew you to that? Was that like your first choice? So the St. Regis just spent a billion dollars on a brand new facility. Wow. Construction. St. Regis opened up 150 feet away and it's absolutely incredible. And I think long-term it's a great investment for this area. I think it's going to pull a ton of people with a ton of money into this part of Florida and yeah.
07:51
So, but you don't get to use the amenities, do you? I do. I purr, yeah. So, Oh, do. So it's kind of, oh, you do? Yeah. This is, this is an interesting corollary. This, this thing is just me personally. My family owns a unit next door. And as part of the zoning approval process, the entire building negotiated membership to the St. Regis. Like lifetime. Lifetime membership for owners in that building to the St. Regis.
08:20
That's awesome. So I have that benefit, which is another reason that we thought to buy a unit down there because we hang out at the St. Regis for free. So they're not a bad perk. That works good. So if you guys want to come down. ah Okay. I did find the personal use test for tax purposes, right? right. if, if, if you don't use it at all, not one day a year for personal purposes, then no matter what it's, it's a business investment property. But if you go down so much as one day, now you have to look at two things.
08:50
14 days or 10 % of the total days it's rented. And whichever is higher and, and if, if you can respect those two things, then it's a investment property. So I'm trying to keep track of that and make sure. there's no cap. There's no limit. It's just saying if you use it one day, you just lose 14 days. Say again, said 14 day minimum or 10%, whichever is 10 % right. Yeah. So even if you went down one day. Yeah.
09:18
It's still 14 days. Yeah. Whatever. Yeah. That's not bad. That's a point. That's a great point. Yeah. That's not bad. Yeah. I mean, how often are you going down there? So far a lot because it's kind of like that new shiny toy, you know, but I'm sure that'll taper off. I don't know. think we're more into... We're still in the winter, right? Yeah. But let's... I think a lot of people talk about, love to talk about home runs. Like, you know, I walked out of the casino and I pulled the line. Like, no, you didn't. I know that doesn't happen like in the movies. Dan, you have a friend that...
09:47
has a similar kind of vacation property. Kind of similar. mean, he, oh he, he, he, mean, he had a house in on the Cape, Cape house, and they weren't going down there a lot because he lives up north, a more north. And so he wanted to kind of parlay that into a lake house. And so he sold the house in on the Cape and bought a house in Winnipeg, Winnipeg, Lake Winnipeg up in New Hampshire. And you know, he, it's not
10:16
It's probably not like you where you paid, you know, he has a pretty small mortgage. a trade-up. It a trade-up. So he paid more in Winnipeg, but long story short, he only has to rent it out for five weeks in the summer to pay for this mortgage for the entire year. It's awesome. So not a bad little gig. that's sick. So I mean, I don't know, the whole vacation rental thing, it also kind of...
10:45
It skis me out a little bit. I'm gonna buy a place and I'm gonna take my family there, but then I'm also gonna like strangers live there and stuff. like, kind of, I like sleeping in the same beds Maybe get a really deep clean before you I don't know, it just kind of weirds me out. But I guess I go to hotels all the time. Same thing. to say, you're staying in hotels and other Airbnbs, so. Jesse feels very similarly to you, Dan. Really? Yeah. Well, we also, have an owner's closet now that I put a lock on.
11:12
Right. We got all these cool like Tupperware things. So like everything, it's like very much like convertible. Like, Yeah. You take all like the cheap knives and all that stuff and leave it out for the tenants and like, but like, you know what I mean, right? Oh yeah. We have e-bikes and we're leaving out the cheap beach cruisers for everyone else. Right. So I don't know. It's the idea of sleeping on a mattress in your quote unquote vacation home when many others have been there, but again, it's no different than a hotel. So I think it's.
11:40
It's almost like a mental thing to get over. We have our own sheets. Well, even that. Well, yeah, but still. Full sheet protector. Yeah. Double it Plastic over the mattress. Plastic over the couch. Remember that? You couldn't actually sit on the couch at the grandparents' house. The plastic cover. I remember that. I remember that. think, yeah. It is a mental thing. Yeah. I have no, or know of no vacation rental properties, but I mean, I think if we kind of merged your two stories together, the idea is like,
12:11
try it out, And then it's almost like timeshares are the worst investment you could make. And so even if you're losing some money on it, if you've got the money to invest in it, this is probably a better answer because it's way more transferable in the long run. At any time, it's way more liquid versus timeshare. No one knows how to get rid of it. of those things are horrible.
12:32
and then you still have full control and you don't have to worry about the fees. You can manage your fees if there are any, like if it's part of an HOA or if it's just real estate taxes and insurance. I think it's really funny though that as a investor developer, no matter what type of property you buy for yourself, you're always thinking with that mentality. Oh yeah. Always. Can't turn it off. Can't turn it off. No. Even the place that I just bought, I haven't even moved in yet and I'm already telling my wife, hey Linda, like...
13:01
You know, maybe two years like trade this up. It like, just got it appraised. It didn't really did. We're doing really well here. Let's like, maybe we can like, parlay this into something. She's like, don't even talk to me about it. Just to just let her know when we bought our two family in Manchester, Jamie said she'd never paint again after we had to paint the first floor unit in the two fam. And then when she and I moved out and we sold it so she could go back to school, she was like, yeah, that was kind of worth it. And I said, don't you think that was worth it? You know, eyebrows raising up.
13:31
Yeah. So little, little pain, but it is good if you're able to financially come out ahead. I thought you were going to say, Dan, that the thing that holds you back on properties like that is that you like to travel and try all new places. And so you get locked into this one spot and it can become kind of boring. That's really interesting. Cause we taught, ski a lot. So we talked about buying either a ski house or a beach house. And one of the things that really tipped the scale was that I really enjoy going to different mountains and like.
13:59
I don't know, just a large extent of beach is a beach, like exclude the incredible ones. Uh, so that's where we landed there. And I think also political risks should, we shouldn't go an episode without mentioning that. Like lots of cities and municipalities are really hampering down on short-term rentals. So if your property sings as a short-term rental, but it doesn't really look good as a leased asset, be careful. Yeah. If, if that's kind of the Boston did it.
14:29
Spain, they're like riding and throwing water balloons at tourists because they think that they're all driving up the housing costs because everybody's Airbnb-ing like, how do think that's going to end? No VRBOs for sure. Linda and I had talked about if we were to buy a second place, where would it be? And that first, before Kids, it was probably going to be like we would love something on the West Coast because I have family out there.
14:57
But then, you know, it's obviously very expensive and- A lot of travel time. lot of travel time. And well, the more we thought about it too, it's like, all right, well, we love to explore. So it's like, well, like maybe a place in Europe. Like the travel time is the same. Yeah, really. So six hours to California, six hours to like Lisbon. Interesting. it's like, but then once you're in Europe, it's so easy to get around. Yeah. So you can take a train everywhere. can, you know.
15:23
So it's like you have your base, but then you can explore the rest of Europe, know, in their spare time. So it's like, I don't know. I would love a place in Europe. Yeah. So let's pick somewhere central Europe. There you go. cosmopolitan and worldly. Thank you. Yeah. Do you like museums and culture? Depends. Oh, I do. I like, yeah. I don't, I'm not a big like art gallery guy, but I like- Dan likes the Lego museum. I love the He loves Legos. Big air and space guy.
15:53
Nice. Are you going to cut us off soon? No, no, I think we should let this one awkwardly end. No music, no outro music. you want me Would you ever buy a second home? I think I would. mean, well, you know, I don't know if I would. For the reason I mentioned, because it could be boring. no, I I would just probably do by, Ray doesn't get on planes. With my children at this age. You don't get on planes without your children. I can't leave my family. I'm a family man.
16:23
I'm a man of the family right now. You're a of the people. So eventually it'll If you were to buy a second home, where would you buy it? I might actually, I wouldn't do Southeast just because the humidity is absurd. I might do Southwest, Arizona, California, as crazy as it sounds. Sounds crazy. Or maybe Colorado. Oh yeah, Colorado's Yeah, Colorado's awesome because it's great all year round. Like go out there in the winter and ski and you'd see me better in the spring and summer. Yeah.
16:52
So, mean, maybe. been to where? Not Wyoming. Wyoming? Montana? Montana. Yeah. Montana's like the new hotspot I heard for Californians in second homes. Justin Timberlake and Jessica Beale live there. Oh, really? Yeah, oh yeah. mean, we should just be, all right, let's start a travel blog soon and become travel micro-influencers. Guys, this has been an awesome episode. Let's the points. Right hit it. Yeah, thank you for listening, rating, subscribing. Catch you on the next one. Cheers.
17:21
Give it to us. That's the wrong music. Outro, bro. Guys, you don't understand. I had to make one file to fit on these four buttons. So the outro music is going to come in right as I stopped talking, which I am doing to stall to show you how the outro music works.
17:43
So amateur guy. Such an amateur. Well, hope you all had fun. See ya. Bye, vacation home.