In this interview, Pace Morby and Jeff Hurst dive into the growing momentum of monthly furnished rentals and why this strategy is increasingly attractive for real estate investors. They explore how this category is reshaping investment thinking.
Furnished Finder focuses exclusively on these longer stays and why that makes a difference: fewer regulatory pressures, less turnover, and a tenant base that values stability and community (corporate workers, relocating professionals, academics). Jeff highlights that the platform connects landlords with tenants who stay longer and treat the property with respect, rather than the constant “vacation rental” churn.
Pace and Jeff discuss the advantages for landlords—higher yields than typical long-term rentals, and significantly lower operational drain than short‑term rentals. They also address misconceptions: monthly furnished rentals aren’t just for traveling nurses anymore; the demographic is broadening. They talk about how the strategy fits communities, investment goals and aligns with macro‑trends of housing mobility and affordability.
They also cover “how to” on the investment side: identifying good markets, considering ADUs or “rent by the room” models, sourcing properties near hospitals, universities, commuter corridors, or growing industrial hubs (data‑centers etc.). They emphasize building for “what the tenant needs” — not just replicating vacation rental strategies.
Finally, Jeff shares how Furnished Finder is upgrading its technology—like improved messaging and data tools—to make things easier for landlords. He encourages both new and experienced investors to explore monthly rentals as a reliable way to build steady income while meeting the real-life housing needs of people in transition—such as those relocating for work, between homes, or seeking temporary stability.
As one of Pace's fans commented on YouTube, "One of your best episodes ever Pace. Jeff and Furnished Finder are legit and he's so good at speaking to the midterm market. Power user of FF here and love what he's doing and will continue to build there. Keep on hustling as always."
Watch the full episode here:
Why monthly rentals
Monthly rentals, which involve leases of 30 days or more, bridge the gap between short-term vacation rentals and long-term leases. They cater to a diverse demographic, including corporate clients, relocating professionals, and those seeking temporary living arrangements due to life changes. Industry leaders like Pace Morby and Jeff Hurst emphasize the appeal of monthly rentals for their ability to offer stability and reduced turnover, all while maintaining attractive yields for real estate investors.
Unlike the heavily regulated short-term rental market, monthly monthly rentals come with fewer restrictions and a broader potential tenant base. This makes them a compelling option for investors looking to maximize occupancy and earnings without the constant churn of short-term stays.
Furnished Finder: the game changer
Under the leadership of Jeff Hurst, Furnished Finder is at the forefront of the monthly rental revolution. With a user-friendly platform tailored specifically for 30+ day rentals, it stands out by offering landlords a cost-effective solution to connect with quality tenants. For just $199 a year, landlords gain access to a marketplace rich with opportunities to fill their properties with tenants who stay longer and are a great addition to the community compared to nightly guests in the short-term rental space.
Visit Furnished Finder (opens in new tab) to learn more about this innovative platform and how it can enhance your real estate strategy.
Understanding the tenant base
One of the most intriguing aspects of Furnished Finder is its diverse tenant demographic. While many initially associate monthly rentals primarily with traveling nurses, the reality is far broader. Tenants include corporate professionals, families in transition, academics, and more. These groups appreciate the "home away from home" experience, complete with the conveniences of a fully furnished living space.
Learn about current demographic trends and market demand by visiting FurnishedFinder.com/stats (opens in new tab).
Competitive edge over traditional models
Monthly rentals offer a unique advantage over both short-term and long-term rentals. For example, with monthly monthly rentals, investors enjoy the profitability associated with maintaining near-full occupancy without the high turnover and operational demands typical of short-term rentals. Meanwhile, long-term rental owners often miss out on the higher earnings potential offered by monthly leases.
By positioning themselves in this burgeoning market, landlords can effectively diversify their investment portfolios while enjoying consistent cash flow. Both Pace Morby and Jeff Hurst highlight these benefits, acknowledging monthly monthly rentals as a strategic move for any serious investor.
Real stories and insights
Furnished Finder’s Landlord Diaries, The Monthly Rentals Podcast (opens in new tab), provides an excellent resource for both novice and experienced investors looking to excel in the monthly monthly rental market. Hosted by experienced monthly rental landlords, the podcast offers first-hand insights into successful strategies, common pitfalls, and innovative solutions in the realm of monthly rentals.
Making the switch
For those already entrenched in the traditional short or long-term rental markets, shifting to a monthly furnished rental strategy can seem daunting. However, with platforms like Furnished Finder simplifying the process, this transition can be both seamless and rewarding. By leveraging tools and resources (opens in new tab) available on Furnished Finder, real estate investors can effectively mitigate risks and enhance their portfolio's performance.
Conclusion
The monthly rental market presents an exciting frontier for real estate investors. With the support of platforms like Furnished Finder and insights from leaders such as Pace Morby and Jeff Hurst, navigating this space becomes not just viable but also highly profitable. By embracing this model, investors can secure better returns and greater stability in an ever-competitive real estate environment.
Consider stepping into this promising territory where flexibility meets lucrative investment opportunities. Explore Furnished Finder (opens in new tab) today to unlock the potential of monthly monthly rentals.
The Pace Morby Show- Big Attack On AirBnb's Pivot Strategy (Transcript)
That I don't wanna have anything to do with that. The hustle for Furnished Finder really around can I go find clients that treat my home well? Stay a long time and come back or refer. Here's the other thought to this, is that $179 a year, I'm not married to you if you don't have $179 a year for marketing in the real estate business, get the, I've got Jeff Hurs with me from Furnished Finder, which is super interesting because Furnished Finder, you guys primarily focus on midterm rentals.
Correct? Exclusively, we only do 30 day plus rentals. 30 day plus rentals. Okay, so I got a lot of stuff we're gonna be learning today, guys, so stick around. My first question for you, Jeff, is midterm rentals ai, the world is coming to an end according to everybody. Regular rentals are having a hard time cash flowing, which is why midterm rentals are so powerful in a lot of ways for entrepreneurs.
People want to pick a path and stick with that path for 10, 15, 20 years is Furnished Finder and midterm rental going to be around in 10 years with the. New way the world is gonna be. Yeah, I think a hundred percent. This reminds me and a little bit of background. So I I started my career basically at HomeAway and vrbo.
So 2010 HomeAway was doing all the roll-ups, pre Airbnb and I had a career there where I was the head of strategy. When we sold to Expedia. I was then running VRBO as the president and then went on to be the chief operating officer of Expedia Group. So my career is short-term rental and my career is really technology.
I joined Furnished Finder a couple of years ago, and I couldn't, I honestly have no idea it existed. And so I'm running this, huge short term rental brand and I've never heard of it. And I'm like, there's no way these guys have got 200,000 properties and I've just never heard of it. But they had, and it's because they found this niche that was really benefiting from by what I call the the mountains on the sides of the valley.
And so on one side you've got Airbnb and Booking and vrbo, and they've got regulatory pressure. They've got a lot of demand pressures, and increasingly they've got some like quality control issues on the other side, you've got Zillow, you've got CoStar, and you've got long term. And they've got yield issues and they've got increasing multifamily pressure and they've got challenges in terms of how they deliver product.
And in the middle there's this niche. And the niche I think actually reminds me a lot of sub two of there's these riches and niches and this niche is monthly furnished plus, and it benefits from a ton of macro tailwinds. One of them's regulatory short term and most urban environments is at least regulated heavily, if not outright outlawed.
The other is that there's 5 million shorting. There's a five, 4.7 million housing shortage in the us. We're building 800,000 a year. You're at least six years, probably more like 10 or 15 away from having a housing. That's if the demand doesn't grow. Yeah that's not accounting for, we're gonna need more houses beyond what we already have.
So there's this howing, short housing shortage, there's an affordability crisis and there's interest rates. All of that's leading people to live differently. And when I was at vrbo, I thought Chesky at Airbnb was full of crap. Nah, it's not that different. This is like just some lipstick he's putting on how they describe it.
But I buy into it now. And interestingly what I see that's durable, I think older Americans are affluent and gonna live differently. So 90% of wealth in the US is Gen X and older. And the boomers in silent generation, and boomers in particular, like my mom travels four months outta the year. She's not rich.
She's found a way to go spend time in Maine when it's hot. In Texas, people are finding a way to spend time close to the grandparents, grandkids. There's this new category of travel that's really about being someplace months. Then the younger generation is actually living in these, and they're living in Furnished Finder because furniture's expensive.
Yeah, and it's a terrible investment. And so you've got the flexibility to go move around for your career, for your personal life by starting out renting for a longer period of time and not being tethered. And then in the middle, which really driving it is mobility. And so our travelers are about. About a third of them are corporate, think people building data centers that are more more of your skilled labor.
And then there's people who are like traveling for their corporate jobs. 25% healthcare. That's what we're known for, but it's not really most of what we do anymore. 20% I think is the most interesting. It's relocations and it's not just insurance. It's people who are moving from, Tempe to Austin.
They don't know where to live. They're gonna rent for six months before they buy because buying's more expensive than it used to be. A lot of them end up just living there. They hold onto the place in Phoenix 'cause it wasn't able to trade out. They rent that they rent in the new spot and they're making money on that trade.
And then you've got academics and leisure in this long tail. But long-winded way of saying like none of those trends are going away in the next 10 years. Agree. Now, I think when a lot of us learn about midterm rental, maybe even you, before you understood the stats, we all assumed it was traveling. Nurses, airline pilots.
Maybe some insurance stuff. And I see a lot of my students, the sub two community, yep. They're doing a ton of insurance just because there's so much more money in it. They can take maybe an average rental, let's say a three bed, two bath house in an HO, a neighborhood, nice house. They can furnish it, do an Airbnb.
But Airbnb is unreliable, sadly seasonal in a lot of ways. And so people have gone away from Airbnb, at least in my community. People are starting to go away from it. However, they look at Furnished Finder, they go, man, I can go and literally have three months of a solid client that comes from an insurance company, then a month gap, and then another three months or two months or whatever.
And I can have month long gaps between these renters. Worst case scenario. And I can still make more money I can on Airbnb and definitely way more money I can make on a regular rental. Absolutely. And you're saying that it's not just insurance claims, it's relocations, which make a lot of sense. I think something that I just learned and just paid attention to for the first time is what you said was the ability to be mobile.
The ability for me to go, okay, during COVID we found that people can work from anywhere and more and more companies are allowing for work from home. Especially when you're like higher level. You, I'm gonna go work remote for two months in Columbia, I'm gonna go work in New York or what have you. I can go and rent a place that is already furnished, it's already decked out.
Or heck, like you said, if I want to go live in Austin, but I don't know where I wanna live in Austin, the worst thing you could do is buy a house in Austin before you understand the layout of Lost Austin. But you don't like the neighbors, don't like the school. Whatever it is, you're stuck, right? And you're like, man, I should have bought on this side of town.
And I have a lot of employees that have moved here and they go buy on the west side of Phoenix just to realize they wish they were on the east side of Phoenix. But you don't get that unless you're in the ambiance and the ecosystem of the entire valley, if that makes sense. And Furnished Finder checks that box.
Like you said, that's not going away anytime soon. No, and I think it's important to, when you think about that Airbnb customer, it's typically a leisure trip. And it's frankly what used to be about rooms in New York. 'cause you there wasn't a hotel or you couldn't afford the hotel.
That's not it anymore. No, they're not a room sport platform. They're a mass affluent to even just flat out affluent platform. We serve, I'd say a much more working class demographic. And the way I position what we do and why it's so valuable, if you take the take the nurse, she's traveling nine months out of the year, maybe more, she's on a stipend.
If she books on Airbnb, they're gonna take over a week of take home pay and platform fees. Furnished Finder doesn't have any platform fees. And so we're putting all that money in the landlord's pockets and we're doing it. Or ideally the landlord's splitting it with a nurse. And we're doing that in a way that just puts the control back with the landlords.
And so our model's classified, and I don't mean classified a secret, I mean it's literally a classified site. We put your phone number up, we let you talk to the guests. We let use your lease, your payment method and mechanism. And we don't take any commissions. And it's just I think that was the original promise of the internet, is how you help people get more out of their businesses, right?
As opposed to how you capture more of their businesses, which is the direction it's gone. How do you guys making money? We charge $179 a year subscription fee, so it feels like BRBO in 2005. And holy moly, that's it. And we make some extra money if you want to use our leases or if you want to use our tenant screening product.
But it's a really low rent way to help independent landlords make money. What's the side benefit to you only taking 1 79 a year? I imagine you don't have to deal with any of the knucklehead issues between the client and we're not in the transaction. Love that. Yep. I imagine Airbnb has to be, the arbiter of all sorts of things all the time, and they're always orbiting in one direction, which is gonna be the guest always.
The guest always wins. Guest makes a complaint. Airbnb host loses the money they have to fight Airbnb for that money. You guys aren't in any of those transactions? We're not. And a lot of it's because, somebody's coming here for 90 days. Yeah. They wanna FaceTime, they wanna talk to you.
They often want to come see the place before they actually sign the lease. Like it feels more like long that way. What are niche? Honestly, like so many of my students use Furnished Finder and I've never thought about it this way. And I think if you're, for any of your students, I think that, Furnished Finder can be all you need.
I don't think you should ever count on any platform to be all you need. And so if you're focusing on insurance, we supplement the relationships you build in insurance and you're likely to get an insurance booking from us. But you still need to go hustle a little more. And I think that's the difference.
Airbnb, the hustle's about can I make the best pickleball court? Can I design it the best? Can I, whatever the best f that, I don't wanna have anything to do with that. The hustle for Furnished Finder really around can I go find clients that treat my home well? Stay a long time and come back or refer.
Okay. But also, here's a, here's the other thought to this. Is that $179 a year, I'm not married to you. If you don't have $179 a year for marketing in the real estate business, get the hell out. Like you are you're running on a razor's edge. Yeah. What are you doing? Yeah. And the reality is if I'm doing Airbnb, the amount of money they take out of the pocket of the host, you feel like I'm investing all this money into this platform.
I've gotta make sure that my SE o's the best and I'm tickling the platform and I'm doing everything I possibly can. And you feel married to that platform to a certain degree, whereas with what you guys are charging 179 bucks. It's, I think it's about the best deal on the internet. That's crazy because, and you ask like, how does the math work?
It's a year, you get 300,000 listings. Like we can make some money and we can provide a good service, but it's $179 a year. Wow. That is crazy when you really think about it. But the model's beautiful. As the person who would own Furnished Finder, I would also say, I don't wanna be involved in this stuff.
I don't wanna be involved in this. I don't wanna have a massive staff. I imagine at VRBO when you were running that, you guys had 3000 employees. We had, you probably don't have anywhere near that here. I've got 40 in Austin and we've got about 270 total because we do have. We have a huge team in Columbia that all they do is out plan.
To answer your question, no, this is just customer service. Okay, cool. And so we do almost all of our engineering in the us. But we have, and it's actually 200 women. And so our chief operating officer only hired women trying to promote and empower women in Columbia. And that's the entire customer service and sales organization.
Women are just better customer service. Anyway, guys, just straight up and part what's been interesting about it for us our company's about 85% women. Leadership's about 50% women, but our customer base is actually predominantly women. And I think that's been unique to learn, is that the landlords on our platform are more frequently women and also more frequently Gen X and Boomer.
And so as you think about what this means for your students, the sub two dynamic, especially when you're working with boomers or maybe even the silent generation. You can solve different problems for them than just they need money, right? It doesn't have to just be a financial transaction. A lot of times they're actually incapable of upgrading a place or getting the financing because they need to live there.
Maybe they need an A DU and you just opens up a different set of problems you can go solve. In line with the heritage of sub two I would imagine with the client you guys have on your platform primarily being female, that might be because female, typically female group will typically wanna host people, take care of people, et cetera.
I see the same thing in Airbnb and like short term rental stuff. I see not predominantly women, but I would say 60, 65% of people I see are women. Every single one of my high performing sub two members that are using Furnished Finder are all women. I think the, a big difference between midterm and short term is that it is actually, it's not half the work, it's one 40th of the work.
You, if you're running an Airbnb you're turning over multiple times a week. You're cleaning, you're dealing with complaints you're constantly fixing something and a midterm, if you're running it well, who's the key when they left? It's all day, every day you're dealing with something, a well running midterm, you're turning it over four times a year, and it's also probably gonna work close to where you live.
This doesn't have to be that live in Austin, Texas, and your short terms are on the coast or in the hill country, like it can be by University of Texas, it can be by the hospitals, it can be by community corridor. So you can do all of this near your home in a way that's much more approachable for a stay at home mom or for someone who's doing this more of a side hustle than needing to commit to a full-time.
I'm a property manager for short term. Okay. I love this and I, I don't know if you watch any of my content, but I talk a lot of crap about short-term rentals. I've watched quite a bit of your content and people have talked a lot of crap to me about short-term rentals over the last 13 years. It's not, I, so here's what I think is going on with short-term rentals.
I think what happens is a lot of high income earn earning W2 employees go, man I need to get into real estate. Then they find out from their CPA or their tax advisor will get into Airbnb because you can get that tax deduction. Yep. Because you can't get it anywhere else and that's the upside.
And so what happens is all these people flood into the short term rental space and they have no chops to be able to make a super property with a super experience. And so what ends up happening is they either get de platformed or they don't make money long term, but they got that nice cost segregation in the first year.
And I'd say that nice cost eg does enough for them where it can justify that purchase for three or four years. But after that three or four years, they start looking at their Airbnb and they go, man, I got $150,000 sunk into this thing. Now I gotta turn over my furniture 'cause it's been beat up. Why the heck did I get into short term rental?
Meanwhile, I'd say the top 10% of Airbnb are short-term rental hosts. They're killing it because they went out and they did all the things. Yeah, they went after the affluent renter. Yep. And they made the pickleball court like Rob Abba, good friend of mine, like he has a property here. He spent $40,000 on a pickleball court and he goes, it doubled my revenue.
Okay, cool. I don't wanna be in that game. For me, I wanna scale my business. But for the client that's jumping into midterm rental or short term rental, I look at the short term rental game and I go, it's amazing. You get that tax benefit. I get that. And I think that's the downfall to midterm rental is that you're not gonna get, that you are managing a hundred plus hours a year.
You are hitting that. The problem is the short, the cost segregation or the real estate professional delegation or certification basically comes when you have an average day of seven days or less. So midterm rental disqualifies you from that. So that's the only downfall I see. Versus like short term versus midterm.
So people are watching this going. Okay, I really want to get into this. I really like this. The downfall is you're not gonna get the tax benefits. You won't become a certified real estate professional, if that makes sense. But dude, you're only turning over a property four times a year. Yeah, it's really, it's a very different asset class.
And honestly it's really hard to compare honestly. You it's easy to compare. I think it's hard to wanna do both because they're so different. Yeah. Di yeah. Different teams, different understanding, different clientele, different way to market. Yeah. 'cause also on the midterm side, a lot of my students use Furnished Finder.
They love it. And then what they do is they go outside and they also are building relationships with insurance professionals and they're trying to get, a name for themselves to fill in the gaps where a Furnished Finder maybe has a month or two or whatever it may be. Yeah. And so you're not really doing that in short-term rental from my understanding.
For me, I've always delegated to a team. So from the very beginning I said, look, I have women that run my whole portfolio, 2000 rentals, and I had 75 short-term rentals at one point. Now I have zero. That shows you how much I hate short-term rental. And I looked at that game and it was constant turnover, constant.
This, the Karens are on the platform leaving their reviews. I had the day that I decided I was done with short-term rental was I had a bridal shower in one of my houses. Perfectly fine, but they were all plugging into the kitchen island with all their blow dryers. And it kept popping the breaker obviously it is.
You have seven curling irons and blow dryers in the kitchen. What are you doing? And so she, this le leaves a one star review. Oh, this guy has a bad electrical system. Like it's a brand new house, right? It doesn't, you are a knucklehead and you're not using, so I go, you know what? I don't want to own assets that have that ability that people can leave a bad review 'cause they're stupid.
And then I, it took my money and then I had to go and chase my money down. I go I don't like short-term rental. I just decided I didn't like it. And so my team started selling them off 10 30, wanting into larger assets. But now I'm thinking I've got about 15 rentals right now that are regular rentals that are making like three or 400 bucks a month.
And we're not happy with them. And we're about to get ready to sell 'em like. Why don't I just go put them unfurnished finder, like why wouldn't I go out, go that route, for the cost of furniture, you can be off to the races. You can also put 'em on unfurnished and tell someone who wants to rent a midterm that I'll furnish it as soon as you sign a lease.
And then they get the flexibility of maybe they need a bunk bed in the second bedroom. Interesting. Because they're gonna have their kids, maybe they want two king beds 'cause they're traveling couples that are gonna travel together. And that actually can be a selling point. And a lot of people don't realize you can do that.
The other thing is rent by the room strategy where whether you're using us or a customer of ours, like Pat Split some of these assets you can actually monetize differently and better as furnished, rent by the room, monthly rentals. Okay, so let's talk about co-living for a minute. I wanna come back to Furnished Finder.
But a lot of our community we talk about, the old Wayne Gretzky quote. He says, I don't wanna go where the puck is. I wanna go where the puck is going. And where the puck is going is affordable housing, right? We know that. Also the niches as well, like Furnished Finder. So tons. I'd say 30% of our single family community.
So I'm talking like 5,000 students are just focused on co-living. Right? Rent by the room pad split's one of our platforms. I love Pad split. Pad split and everything Atticus is doing. Really smart guy. You're saying Pad split is utilizing you guys? Are you guys collaborating to some degree? Pad split will put their rooms on furnished finds.
So Furnish finds for hundred 79 bucks a month or a year. Why wouldn't they? Yeah. And so you've got, we have 60,000 rooms on the platform. We have 250,000, single family homes in addition to that. And all of those are basically powered by independent landlords. Wait, what do mean by that?
What's the difference between the 60,000 and the two 60,000 rooms? So I'm renting a room in a house. Okay. 250,000 homes. So I'm renting the whole thing. You have 60,000 rooms? Yeah. And people, a lot of people think about midterm rental as what it was in the pandemic. What was it in 22? 22 when there were nurses, Jeff, I just learned something powerful.
This is rid, I gotta text my team. This is before I forget this, are you kidding me? This is crazy. And so people that I look, I love pad split. Yeah. But what you're telling me is that somebody like me who does a lot of co-living, or a lot of my students that do co-living, they can just pay the 1 79 a year and they can put their rent by the room houses on your platform.
For sure. The difference is now they're managing and communicating directly with them. Versus what Pad split does is they may do the management pad split, charges a commission and does it all for you. And pad split may or may not choose to advertise that room on our platform. Not everything on Pad split is on Furnished Finder.
We'd love for it to be that way. And I'll keep talking to Atticus and Cliff, but the the opportunity for an independent landlord is, you can still have it be on Furnished Finder, have it be on Zillow, have it be on Airbnb too. Just be sure they play nice together. Like you should charge more on Airbnb because you're more likely to have issues.
And you should, use Furnished Finder for the use cases you're trying to get out of it. And then have your own direct business too. You just blew my mind. People are, when I tell people we've got more 30 day plus rentals than Airbnb, they're shocked, but we've got twice as many. Airbnb has grown from don't wanna get the stats too wrong.
We're working on a report with Air DNA to help people understand the category. I think Airbnb has gone from like 110,030 day plus to 150,000. Since 2018, we've gone from 1500 to 300,000. And so there's this huge movement towards this inventory type and the tenants are following. And whereas it used to be 70% nurses, now it's 25% nurses.
So when you take a longer term view of this, until you're talking about what's happening in the next 10 years, let's talk about what's happened in the last seven. Oh yeah. That's where we are. We're up 200 and it's 250 times what it used to be. And basically, the same price, similar value proposition.
And what we're committed to is building a tech platform that makes it easy for people to do their business and do it in a way to where, I would love for us to always be like one to 2% of the amount of money you make is what you spend on marketing. Airbnb's gonna be more like 15%. And if we can do something at one to 2%, that's a lot of value.
Maybe not as much handholding as what you get for the 10 to 15. I want people to just tell their friends and it'll grow and be referral and the way we can do it. Is that it's a referral business. I don't have the money to go run national brand campaigns and win the Google battle. I've got count on a bunch of people being glad they spent 179 bucks.
My gosh. Okay, so you're down to, you used to be 70% nurses and that business, now you're at 25. What do, what accounts for the rest of your demographic again? Yeah, it's a third corporate, 25% relocations. Okay. Or sorry, 25% nursing, 20% relocations, about 10% academic. And so mainly grad students and professors, they move a ton.
Why is that? Professors, because they're chasing tenure, they've gotta move around to different universities or often their field of study requires they do a semester somewhere or a year somewhere. Got it. And then the rest I'd say is long tail. A lot of it's leisure, it's snowbirds, it's, the digital nomad scenario you were describing, but those big use cases are, corporates growing.
I think over 70% year on year. What? Gimme a description of corporate. Corporate's got two types. One type would be your skilled trade. We see like data centers are the biggest growth spurt right now. Monroe, Louisiana, and Abilene, Texas. But we're gonna be building more power in data centers than ever before.
And it's the same people that have to build 'em all. There's just not that number of skilled trade workers. So they move all around the country and they need this temporary housing. Same thing for Sky, skyscraper construction. Multifamily construction. Like you're moving a lot of tradespeople.
The other part of corporate is more white collar. It's your entrepreneur, it's your salesperson, it's a consultant, it's less likely to be somebody from Goldman Sachs, from McKinsey. It's more likely to be a small business owner. Interesting. So I satisfy this need right now in my RV park business.
We have, we go into parks or we go into areas that have heavy oil construction, right? Big Spring, Texas or Abilene or whatever. And I'll go buy a park there because these guys will rent 800 bucks a month on a piece of dirt. I have no management really whatsoever. I have one girl that runs two parks.
I pay her 2,400 bucks a month. And it satisfies this need because these oil workers can't be found in that town. Totally. And so they have to collect all these people. They don't, nobody's gonna go build houses for these people because that town wants, the oil dries up in 30 years, those houses will be obsolete.
So people are fearful of going out and building houses and gambling in that regard. RV parks become the thing, and now I'm looking at this, I'm like, man, alive, I should go buy Furnished Finder in some of these towns as well. Go buy existing houses and rent them out. Absolutely. I was talking to one of my RV park tenants.
I drove through the other day. I was three weeks ago in Big Spring, Texas, and I hadn't seen this park. I've owned it for half a year. So we flew out, I'm driving through the park and I'm just seeing who's out, hanging out in their little yard, and I'm saying, Hey, what do you like about the park?
What do you not like about the park? What made you decide to come here versus going somewhere else? Like, why aren't you staying in a hotel? Or why don't you buy a house like, you've been here five years in this same spot. Why are you here? And I'm just getting educated much like I'm getting, it's not very often I get educated on a podcast.
I get entertained, but I'm getting educated right now, which is great. So thank you. So I asked this guy, what made you come here? What other options did you have? And he goes we were renting a hotel. It was less expensive for us to just rent a hotel because I'm two weeks on, two weeks off.
And if I'm renting your spot, I'm renting it for the whole month. Yep. So I've got two months where I'm not, or two weeks I'm not even here. And I go, so why'd you choose? He goes, convenience. I wanna be able to come to a place where I have my furniture and I have my stuff and I have and leave stuff in the fridge.
I leave stuff in the fridge, or I have stuff in the pantry or whatever. And I come home and there's creature comforts. I'm like, why don't you just get a house? And he goes I don't know where I'm gonna be in six months. Yep. And I'm like, okay, cool. Makes sense. So this park makes so much sense for you and what other options do you have?
And he says my brother and I had just thought about renting a room, a house in town, and just splitting out the rooms. I'm like, okay, so co-living type of thing. But really that's what Furnished Finder would satisfy is those types of workers that are transient to a certain degree that are going to these towns.
The worry I have is now as an investor, I start thinking, okay where are some big data centers that you're talking about? Louisiana, Monroe, Louisiana. Abilene's actually. Okay. So the biggest in the world. So as a massive like challenge that you're gonna have as a real estate investor is knowing that they're pulling permits for a data center and going, all right, I'm going to aim to buy properties in this area.
Do you have any advice for Furnished Finder investors that are like, Hey, these are areas that you should be buying in. Yeah, I think that the one we do, we recently, we publish a report every month that's got like, where's the most supply going, where's the most demand going? Where do I get that report?
So it's on the Furnished Finder blog. Okay. So come to our website, check out the blog, and then we'll do quarterly episodes on Landlord Diaries, which is two of our resident landlords interviewing people like you, but also all of our independent landlords to just learn how to do this better. So I do a quarterly episode about trends.
What I'd say about the data center boom is twofold. One, we're gonna be building these for the next 20 years. So getting to know it is a great strategy. The interesting thing about it is you basically have a five year buildup period where there are a ton of skilled trades coming through, and then it takes 15 people to run these things.
And so you really need to plan for your payback horizon to be pretty short. Or know that you can fall back into a long-term strategy or something else. And so something like RVs can make a ton of sense 'cause you've got a lot more mobility. What in these places is a lot of 'em, like they're actually building residence parks, container style housing, RV style housing.
Monroe has a huge one where they're contracting with people to go figure this out. The people are local and there's a great opportunity to go basically be the boots on the ground. I could put that unfurnished finder. Absolutely. Like I could go get a piece of dirt, throw tiny homes on these things, throw each one of those houses on Furnished Finder and fill those things up.
There's so much money to be made in this world. It's crazy. It says there's a lot of niches out there and they're big, like these are big niches. It's the same thing you said where like you're at VRBO and you're like, I didn't even know Furnished Finder existed. Meanwhile, there's hundreds of thousands of investors that are doing this.
Absolutely. And your original point on who are you competing with in short term, I think is an important. Anchor for how to think about midterm because I was one of those guys, high paying W2, I own three vacation rentals. They were as valuable for the tax write-offs, not just the first year, but every year.
Two of my three vacation rentals have never made money. But you make your money on appreciation, you get some value out of the usage, like there's a lot of benefits to it. But as an independent entrepreneur who's looking for a cash on cash return. You're competing with a bunch of people who don't care about a cash on cash return, it actually makes everything harder.
And so you're basically choosing to compete in an irrational market in many cases. And it gets more irrational the more you're chasing waterfront or ski and ski out or the the scarce amenities. In midterm, you're really competing with a lot of rational investors and you're often competing with people who are less skilled operators.
And so it feels more like 2008 and short term where you get in, you iron out your, operating procedures. You have a plan and you can really get durably ahead because there's not gonna be someone who just steps in and is willing to lose money forever. Yeah. Because they like having a place in Crested Butte.
That's what I did. What I did is I jumped into air Airbnb, primarily Atlanta. I just love the Atlanta market. I knew people were moving there. It's Hollywood of the South. It's just a cool spot. And I was buying a ton of sub two deals under 3%. I'm in the deal, like less than 5% of the acquisition price with, 10,000 to the seller agent.
Gets a little bit of money, closing costs. I'm putting in some furniture. I buy the house for $600,000, but I'm all in maybe 30, 40,000 bucks. And I put it on Airbnb. I do a cost segregation. I make five years of amazing ta. I basically pull five years forward and I'm like, dude, I'm not paying any taxes on $300,000 of other active income.
And they made sense for me. Then Airbnb becomes outlawed. Especially in Atlanta, Georgia, almost every major city, which is cra and I wanna know where that's coming from. Especially you were running on a massive part of VRBO. You guys call it vrbo, we call it V-R-B-O-I. I was there for both eras, was part of the rebranding to vrbo.
Okay. It worked. But yeah, I was the president of vrbo. Okay, cool. For me you're so right because I'm buying that not even necessarily for cash flow. I just go, I know Atlanta's going to appreciate. Yep. And if I break, hell, even if I lose 400 bucks a month, thing makes you gonna money. This makes sense.
Make totally, I'll hold it for five, seven years. I'll sell the thing, I'll 10 31 into a larger asset basically making $300,000 in appreciation over that time PA period. Plus my tax benefits. That's who you're competing with on short-term rental. You're so right. You're competing against me. Then you go into midterm rental.
I feel like you have to know that market just a little bit better than an Airbnb operator does. I think that's right. And I think it's also easier to know. And I think one of the biggest mantras I'd have is invest in what you know, and so like you had Ken McElroy on recently Love Ken. Yeah.
A great show. And really his origin story is one of necessity. Like he had to go get a job in multifamily 'cause he had to pay rent. And you can look at that as like a curse. So you can look at it as a gift, but people know who's coming to their neighborhoods, right? People know who's working in their neighborhoods.
And it's easier to it's more approachable in my mind to think about where do the nurses live? Where do the academics live? Where is the construction class living? And how do I serve them than it is necessarily? I wonder how people vacation from here. They Yeah. In the Smoky Mountains on the other side of the country.
Yeah. How do I serve somebody in Gatlinburg where people are coming from all over the world and it's totally different and I'm six hours away. And so if you think about what's the use case you can best serve? And one of the ones I really encourage people to think about, if you live in a neighborhood where people are remodeling or doing teardowns, where are your friends and family going when they remodel your tear down?
What does it look like to have a house in your community that's an asset that every time someone is doing a tear down or a remodel, they can live there and their kids can still walk and play with your kids and they can still walk to school and ride their bike and like they're willing to pay a lot of money that 'cause their alternative is probably to be in a multifamily that's a corporate rental.
Or to be on the other side of town, and it doesn't take many of those. But that's why I think this is so durable and that there's not gonna be a knot in my backyard movement when the house next door is actually helping your friend whose house burned down. Yeah. Or when the house next door is occupied by a professor who's there for six months with his young kids, or somebody who's working in building the town up rather than some party animal.
Yeah. It's not, it's never gonna be 12 curling irons, yeah. There may be a truck outside or there may be some great kids that your kids are gonna get to know. Gosh, okay. So you look at Furnished Finder versus Airbnb, do you feel like Airbnb's gonna say, holy crap, we're missing the boat and they're gonna try and steal some of your market share?
Airbnb's huge, and I'll always be thinking about what the big guys on other side of the valley do. I guess if my lasting legacy was that Airbnb dropped their annual price to $179 a year, I'd be a little bit a hero, but it'd be tough on the business. I think serving this market is incompatible.
With their business model, it's not incompatible for them to, maybe serve somebody wealthy who's trying to spend three months in Montana, like it's 12% fee. They've got money, they'll pay it. But it is incompatible if you're making $80,000 as a medical professional and you're on stipend. And the difference between booking on Furnished Finder and Airbnb is a week and a half take home pay.
It's not even the same model you're gonna work on furnish fund. They're so InDEEP in what they're doing. There's no way for them to pivot to what you guys doing. And I talk a lot with the team about comparisons to the thief of Joy. I was at HomeAway in 2010. We built a wonderful business from when I joined.
It was worth less than a billion dollars at the peak. It was probably worth close than $10 billion almost every week. Along that journey, I felt a little bit like a loser. 'cause I hadn't built Airbnb. Airbnb is worth $70 billion. Yeah. Everything was a little faster. We suck. We were trying to, we were trying to be something we weren't, and we were beating ourselves up over the inability to beat it.
And there's a lot I've taken with me from that chapter. Were you aware of it that at the time, or was it after the fact that you real will look back and go crap? There was seven or eight years of banging my head against the wall before I realized like, they've got a different model, they've got different customers, they've got a different brand.
We can't win that thing. And so when I became president, we pivoted into what we call complex families. Like we can be better at helping grandparents, parents, and kids plan a trip to Gatlinburg. We can nail that because it's more of a niche. And so we really refocused around these large private homes.
But when you're, when I'm at Furnished Finder, like I just really have to remind ourselves the thing we're doing. S on average 2000, $2,500 a month, Airbnb is 2000, $2,500 a week. Yeah. And so like we're doing something different. I don't have any ambitions that it's ever gonna be as big as that or as global as that, but we're doing something valuable.
You solve a massive problem that nobody solving and we're helping solving 240,000 landlords and growing make money, create financial independence and serve a community in a way that I think is uniquely different than, yeah, I bought a place in Gatlinburg or Crested Butte or Aspen and, it's fun two weeks of the year.
This is a way better model. I, again, the only downfall to it is the lack of the tax benefits for sure. But it's the tax benefits are valuable because you're losing money, right? The benefit of this model is you're actually making money. I think that, man, that zero to one moment for people, it's and I check myself on this a lot, like I've got three second homes, like only two of them, only one of 'em makes money.
If you're going from zero to one, you don't usually have the luxury of, I'll just lose money on this for the next six years and hope it works out. You need something to make money. And I think what's great about the category, especially if you look at an arbitrage model or something, like you can be making money in a month.
Yeah. And then you can use that to do it again and make a little more money. And a little more money. And like maybe eventually you end up with, a place in Montana or a place on the coast. But it's because you made decisions that layered up to that. Not because, and good on you. If you had a W2 job that makes it possible, great.
But if you don't, this is a more, this is a faster path to cashflow. Positive. Okay. So why is VRBO or vrbo Yep. And Airbnb under attack locally, it's mainly hotels. Are they spending money? I've been subpoenaed, I testified, I've done this all through my tenure at vrbo. The hotel lobby spends an incredible amount of money to pressure and organize around short-term rental reg regulation.
And the biggest issue with short-term rental regulation is your use case because you own 60 properties in Atlanta. And you don't vote in Atlanta? No. And the hotel lobby has lots of people and unions who actually vote and can get out and influence city councilmen. But the reason the regulations aren't gonna roll back is it's actually good politics.
Like it's not just good politics in Atlanta, it's been good politics in every city in America, there's now some sort of ban, there's some sort of tightening regulation. And it's because most communities don't want the noise nuisance. They don't want the trash nuisance. And I do think it's gotten a bad rap and it's unfair, but I don't think it's unwinding.
And it's because there's a lot of powerful interest that lined up against it. That's what I assumed. I've never been like a big Airbnb person, meaning getting tied up in all the ethos of all the news stuff coming out about it. I just reacted to things happening to me. Yeah. I knew in Atlanta was going to, and they're working on it.
It took about two years and people told me, start selling your properties now. And I did. I luckily, before the band came in Atlanta, I had most of my stuff sold. But then Vegas, same thing. I had 17 in Vegas. I have none in Vegas. Are the regulations going to get worse? Number one question I get every day is how do I get everything done?
I have nine companies, 600 employees. We have customers all over the globe. We're doing fix and flips, we're doing buy and holds apartments, RV parks, all of those things. Everybody wonders how did I scale, how did I get to a higher level? And the answer is that go high level. I use a CRM that allows all of my customers to come into one database.
And instead of me hiring more employees to go and do all the follow up, go high level has systems and automations that does all of that for me. So not only can I have my employees focus on higher and tasks, money making tasks go high level, avoids all of the extra payroll When you're brand new, having go high level is like having five different employees doing all the work for you, just for a monthly fee.
Go to go high level.com/pace to learn how I'm using it, not only in my lending business, but my wholesale business. My fix and flip business literally go high level controls the entire backend of all nine of my companies. Go to go high level.com/pace to learn more. There's not a lot of worse left. Okay.
I think it's mainly happened. There will be, you may see some red state, blue state dynamics where there could be a few wins at a state level. Arizona used to have a stronger preemption for short-term rentals. It's been weakened over the years. Florida used to have it. It's been weakened.
Texas has tried for 15 years and not created one. I think if Texas and Florida aren't creating property, right? Preemptions for short-term rentals, I wouldn't have a lot of hope. Just because strict property rights, conservative states, like it's the type of place they should win, right? But I don't think it gets a lot worse because I'm not sure how much worse it can get.
Okay, so Phoenix just passed a law downtown Phoenix. They said if you have a property within four miles of city Center, we'll allow you to add an A DU in the back of your property, which is awesome. And I see this happening all over the country. It's good politics. How does this help you for Furnished Finder?
Can I go and put an A DU and rent that out? Yeah, absolutely. We have a ton of ADUs on the site. Whether they're marketed as a room or whether they're marketed as a single family home, it depends on the type of a DUI think they'd typically be single family. Does it benefit me to do it as a single family or as rent by the room?
You, you, there's a bigger market for single family but there's not, there is a market for each, because there's probably a stigma with rent by the room where people go, I don't wanna be like a wall away from somebody else. Yeah. I think in particular, if it's got a kitchenette, it's got its own bathroom, it's got its own entry, it doesn't have a shared entry with the rest of the house like.
You don't wanna, I would not rent it as a room like it is very much more of a single family type experience. The room rentals are much more around, I've got a shared living room, a shared kitchen, or even a shared bathroom, and there's plenty of those. And so I think you would want to be building that second type of product if you can do it at a price point that's more competitive with a room.
And I think great advice for people getting started, how close are you to an extended stay America? And how much does that hotel cost? And if you can provide a better value than the extended stay America price point, and it is not a high luxury price point, but it's, say it's 500 square foot room and they're gonna get $80 a night.
All of a sudden you're looking at, $2,500 from Extended Stay America to be there a month. You can provide a way better value with an A DU. Yeah. And make a ton of money if you're able to get $1,500 a month. And so there's a lot of opportunity there where I think ADUs and in particular maybe ADUs for what I was talking about, about like boomer generation where maybe you can actually add an A DU to someone's property without having to own it and partner with them.
And start making income or even provide an alternative for them to downsize, rent their house. So you're talking about essentially land arbitrage, but put my own unit there. Yeah. Is that what you're saying? Or imagine someone's, I was watching one of the triple digit flip episodes. Imagine someone has too much house, they can't keep track of it.
They actually move into the a DU, you rehab the home. Yep. That, and then you're renting it out and you're in a spot to where you don't have to come in for the land. You don't have to come in for the principal. You're just coming in to help basically partner with someone who's got the asset you need, but doesn't have either the capital or the expertise to turn it into a three bedroom Furnished Finder.
Gosh, there's so many use cases for Furnished Finder and no one's gonna pitch that. Like most, most people who are out shopping for real estate aren't thinking about, okay, what's the asset? What's the property? How can I partner with somebody? They're just thinking about, can I make a cash offer?
What does that look like? And I think those partnership opportunities are gonna expand because there is a lot of attachment for the boomer generation. They may have been in that house for 35 years. It's so smart. And now that's not my business model, right? I want to own the thing that I have and I wanna scale the ownership.
But when I'm starting out, what's cool is there's a DU companies that are coming out. I have a student that's building modular homes or ADUs and he's seller financing their units. They're building to buyers. So you starting brand new could go, I'm gonna find a seller that has a decent sized backyard and I'm going to place this IDU on their property.
I'm going to have the manufacturer place this, install this, finance it all in one place, seller, they'll sell or finance that payment to me, and then I go rent it out. Unfurnished finder on somebody else's land. Yep. And even in your use case, even if you want to own it, I think there's opportunity to partner with somebody where you buy the property and let them rent live low rent in a new a DU.
It's, oh my gosh, this is so good. Okay, so this is cool. So I don't know if you, you got in here a little bit early, but I have about 150 people here that are learning from me this week. They were all very disappointed that I got let in early and they didn't. Yeah. They weren't supposed to be here till 10:00 AM and they're all so excited about today's They were amped.
Yeah, they're amped. So they're here for me with me the whole week, which is great. And out of this group yesterday I had this girl they're 150 brand new people, right? And they're learning creative finance. They're learning, we do a lot of cash too. Last year our community did 10 billion in cash transac transactions, and 27 billion in creative finance transactions.
So we do a lot of cash too. But when a girl stands up and she goes, I just can't imagine a seller wanting to let somebody take over their payments. Can you guys help me? A story. Can you gimme a story? I've watched a lot of paces stuff, but is there any other person in this room that's done a deal? I need to be convinced that a seller will let you take over their payments.
So another student stands up, she goes, my name is Carol Leach and Pace saved me from foreclosure six years ago. And now I, here I am learning from pace how to do the same thing for other people. So she, I helped her six years ago and I used to go out in the living room and I would negotiate, I'd send postcards.
That's where I started in 2012, is I would send postcards to people. Okay. So my point of this is I run into people in the living room that go, I need to sell my house. This house is too much for me, but I have no idea where I'm gonna go. Yep. I have no idea where I'm gonna go. And there's so many sellers that all say the same thing.
I'm, and I would ask them in the living room, where are you gonna go? My first deal I ever did, 2012, I asked the lady, Janie Munson, I said, Janie, where are you gonna go when I sell your, when I buy your house, I'm gonna move in with my sister. I really don't want to, but I'm going to. With the money that you're gonna give me, I'll basically be able to pay her rent for the rest of my life.
Okay. What if I just put an A to U in the back? Same neighbors, same neighborhood. Yeah. She just has a down, maybe her payment goes from 1800 bucks to 300 bucks or whatever it solves. Literally, I'm telling you, Jeff, this solves thousands of sellers problems by putting an A to U in the back and partnering with your seller somehow, and you're not, I think you're not limited to the sub two of pickup their payments.
Of course. Course, most boomers own the house. Yes. And so you're in a position to say, how would you like to live in a more modern, smaller footprint? And I'm gonna pay you, it's like a reverse mortgage with outer reverse mortgage. It's exactly like a reverse mortgage, but there's no mortgage to take out. Oh, bro.
What an o What an amazing opportunity there is. And you're really solving a problem. Somebody has too much house. Someone you're making me wanna run, wants to be there. Someone run through a wall. I'm like, glad. Let's go get some deals done. This is cra That's a great freaking solution for people.
Find a way to put it on furnish fin and I'll keep providing the ideas. If you keep organizing the community, I will 100% do that. That is so smart. Oh my gosh. In reverse. Mortgages are actually toxic in a lot of cases. They're not good for the consumer. And we end up coming in and these elderly people are like, I've taken all the money off my mor my reverse mortgage.
I'm out of money and I don't know where I'm gonna go. And you're staring down a bank who's gonna take the property instead of I'm living on the property. I've got a partner, or I've got a, I'm thrilled. There's two nurses living in my old house while I'm in the A DU because I'm 74 years old and I love knowing there's someone nearby.
Oh my gosh. Wow. You talk, you got me pumped up today about Furnished Finder. Do you feel like there's gonna be regulation on what you guys are doing in the future? I I think at the HOA level, anything's possible. My perspective and certainly knock on wood, 30 day leases are pretty sacred. There's not, I don't think there's a lot of room to start saying instead of 30, it needs to be 90 or instead of 90, it has to be a year.
Yeah, you're gonna be exacerbating a housing problem. And we don't get complaints the same way we did with short term rentals about noise and nuisance and trash and too many cars and a party because it's the family from down the street who roof burned down, or it's a professor or, it's just such a different use case of professionals who need housing or people who are in trouble and need housing, that they're there to live.
They're not there to party. I'll be surprised if that tide turns. But at an HOA level, I think anything's possible. And so it's always good to know you're, you're less elected officials in what they might be able to do. Any other type of regulation besides HHOA anybody coming after you, like a lobby group, like a hotel company would be coming after an Airbnb?
I haven't I haven't experienced it yet. Our average length of stay is 94 days. There's not a hotel company that's got 94 day stay days. It is interesting, the top hotel investment right now is extended stays, and so all of the money in the hotel category is going into products that have the kitchenette, have the suite, are really serving this type of use case.
Yeah, I see it way more as validation than competition. Because I think that the more people realize that, hey, there's this type of hotel that's $140 a night, or I can stay in this awesome a DU in a neighborhood for the equivalent of $80 a night. What is the real benefit? It's a and so I, I think we've got a lot of runway on it.
My word. Okay. So next 10 years for you guys what's your roadmap? What are you releasing? What are you doing differently? Are you adding AI to the search? Are you, yeah. There's helping your customers come up with better markets. What are you doing over the next couple years? It's a I don't look 10 years out in terms of what we're building.
For anyone who's used Furnished Finder, it is a, we call it a natural beauty. And so it's a great value because we've got great landlords with great properties. The technology needed a massive upgrade when I arrived. And so what we're trying to do is make it an experience that feels just as good as any other modern platform.
So we just launched a new messaging features, and so now all the messaging is modern and fast, and we'll be able to help tenants and landlords know, Hey, pace usually responds within 15 minutes, but Jerry only responds every 24 hours. And so set expectations and start to improve the hygiene, which is huge because on Airbnb when they had those types of things, it's okay I don't have an expectation that Jill's gonna text me in four minutes.
It says Jill's usually within a couple of hours. So I send a message, I go, cool, I can wait three hours before I sound the alarms. Ver versus when you first show up at Furnished Finder, you got potential tenants pissed off going, why won't these people reply? Why doesn't it work like Airbnb? And the focus is to really catch up to Airbnb 10 years ago.
Yeah. We've gotta have better responsiveness, better calendar, better rates, better photos. But we built this at HomeAway, like of my team, 35 of us worked with me for five to 10 years At HomeAway, we know what to build. We're building it as fast as we can. What you can expect is a modern, fast mobile friendly experience that increasingly uses AI for things like the chat function because you having to reply, 15 times a year what types of cats you do or don't expect, like we can do that for you.
We can help people with a lot of the basic chat functions. And so we'll be building AI into that landlord tenant interaction at the landlord's discretion for how they use it. We've already launched AI for our help center and so really helping people with onboarding, with questions about how to use the product.
Eventually, I think it will be a powerful part of search, but I don't think it's that soon. And a little bit because of our economic model. We probably have a better opportunity to participate in, how the LLMs surface things and how people search our site because it may be trickier if you're trying to earn a 15% commission.
Where do you get introduced and how do you provide access? Us as a classified, if Chachi PT tells someone to go to Pace's Furnished Finder, great chat GT is helping me out and we wanna make that possible and we'll build more of that in. But right now it's very foundational. Make it fast, make it easy, make it intuitive.
I think we've got about, nine to 12 more months of getting to that modern experience and then we'll start to do what feels more of the innovation. But if you've been using us for three years, it already feels pretty innovative. 'cause it's fast and it works now. Yeah. And it frequently wasn't fast and often, had idiosyncrasies you wouldn't expect in the past.
What are some things that your landlords are doing that you wish they wouldn't do? Mistakes they made. Red flags, they create I'd say there's two types. I think the the number one complaint from tenants is landlords don't get back to 'em. And I think if you're a landlord who grew up on Zillow or http://apartments.com (opens in new tab) , you're used to, I've got this classified, I turned it on, I got my tenant, and I just forgot about it.
We don't want that dynamic. We want you to update your calendar. We want the tenants to be having a good experience, and we want to be able to better set the expectations of, ideally everybody's getting back to people within an hour. Ideally it's minutes, but right now almost a third of tenants don't get a response from a landlord.
They reach out to, it feels like herding cats. How do you force that landlord to do that better? It's it is a playbook like you would've experienced in early Airbnb of, we publish the response time, we'll publish how often they get back to you, and then we'll reward people in sort order who are just.
Doing the basic hygiene. There you go. I love that. You're rewarding them in so order so that they're rewarded with more tenants, more eyeballs, more whatever, by being that person actually does what they should be doing. Yeah. And I think we also have a dynamic where there are many of our more established landlords might put two properties on landlord, but have on unfurnished find, but half 15 and they use those two properties to move people around to save the $179 on the other properties.
And we need to you freaking cheap skates. Kidding. We need to find a better, we need to find a better approach there because the, the bait and switch does hurt the tenant experience. I'm happy they fi end up in a home that works for 'em. But I would rather see that inventory on the side.
It's really interesting to me. There's a, there's the 1% of investors I know that are like, spend the money. Yeah. Do the thing. Then the 99% are like, pace, how do I scale? I'm like first off, stop trying to save $179 per house when these guys are bringing tenants to you that are paying more money than your regular rental, whatever.
You're gonna pay it back in three days. What are you doing? Yeah. It's so crazy. To me, it's a mindset I think that I maybe even I was born with, which was save money, be frugal, do all those things. But then they're hurting their, yeah. They experience, they view it as a risk of losing money instead of investment.
Be five of these things to make money. Like not everything works out and not everything works out the way you want to, but you've gotta be trying things and learning. I honestly, I'm so different. I would never even think to do that. I would never think, oh, I have 12 properties. How do I just put two of them on there so I can do more work?
And bait and switch people and filter them over here. It's not, it is not serving them well, but it's a choice they're making and it's something we'd like to and some of it is we should have better integrations with your turbo tenant, your hostfully, your, rent ready. We should make it easier for people to manage 10 properties and we have to build that.
But in the interim, we want to be able to know our tenants are gonna see what they can book on the site. Now I can see exactly why Furnished Finder wanted you over there. You're freaking genius, man. We I'm gonna do something that's been done and hopefully we do it fast and well. Okay, so what if you did 1 79 a month for the first three houses and then houses after that?
You have a, that, that is what we do. Oh, you do that and people still don't you get a discount? The more inventory you add, you cheap skates. Are you freaking kidding me? People just will do anything to cut off their nose despite their face. And so what they're doing is they're bait and switching their client and go, oh, you know what?
That already booked, but I have these other six. Or what I hear the most is, I signed up for Furnished Finder, I got a booking, it's awesome. But now I don't really need that listing anymore, so I'm gonna try and transfer it to another house because I'm already booked. And it's let, that wasn't really the handshake, you gave me $179, you got an $8,000 rental, wait three months, turn it back on in three months and we'll find you another tenant.
And so did you see this kind of crap at VRBO too? Yes, I did. Yeah. There's plenty of this out there in the world. You cheap skates. Oh my word. Wow. I'll be more diplomatic of make the investments to grow your business. I'm less diplomatic. I'm just like, spend the freaking money, idiot.
It doesn't make any sense to me why you would try and save 179 bucks and you would go outta your way. And the reality is, a scaled real estate investor would look back at his time and his energy, or her time and her energy and say. That is not worth my time. Yeah. To save $179 a year and to start by, Hey, pace, I know you wanted this house, but I'm gonna put you on another one that's not on.
You're getting the entire relationship off to a strange, trust deficit for a landlord and a tenant, and you're asking these people to stay with you for an average of 94 days when the beginning of the relationship and over half of 'em extend. Interesting. And, and I think that's the coming from short term world, you, you think of your calendar like this unsolvable Tetris game, right?
How am I gonna connect all these dots to maximize occupancy, midterm, get a booking, assume it's gonna extend, have a lease that's got terms for notification and now you can know when to lease up again. But then you literally don't have to be doing any leasing work because it's booked. And then 30 days before they depart, they're more than half the time gonna extend.
And then, or they're gonna say, Hey, I'm leaving in 30 days. Advertise the unit. And that's where you're taking your life back. Wow. Over half of them renew. That's genius. You never really think about that. Now you guys really do have, how often as a re your remodels might be on time. Most people's are not on time.
And so if you're remodeling, you're building or you're building a data center or you're building a skyscraper, like construction is often extended. Yeah. Often. So you're extending, it's twice as long as you think. Three times as much as you plan for. And my, like my neighbor, I've got a I'm in, I live in a nar, like a pretty very small little 10 home little neighborhood.
And one of my neighbors, his house burned down last year and they're rebuilding it. And I'm sitting there going, oh, they'll be done in a year and a half. Okay, we're on four years and they're barely stuc going this thing. Four years later. And he asked the guy, what are you doing? He goes, oh I'm in a Furnished finder, like like two neighborhoods over.
Alright. For four years. Yeah. And the insurance company just keeps paying for this fricking thing. And he goes, I almost forgot that I even own that house. Like I feel like this is my house. I've been there for four years. I'm emotionally attached to my Furnished Finder now. Interesting. Okay, so let's think I'm new.
I go to FurnishedFinder.com today. I go to the blog. I find some of the areas that you guys see, hotspots and data centers and all of those types of things. What I would do is somebody brand new I'd go, okay I know the areas that are hot, I know the areas that are growing. I'm gonna go on creative Listing.com | Homes for Sale, Apartments for Rent, and Home Values or I'm gonna go on, which is where you can get sub to and seller finance deals.
And I'm gonna go on there and buy a property there. How do I know what it would make? Yeah. That is a place we need to do more work. Okay. I'd say there's a calibration on it. And 'cause most people are using Air DA, air DNA is a good place to start and that's even good for Furnished Finder.
It is good for Furnished Finder because there's so many more short-term rentals to help benchmark. Got it. And what I would say is when you think about those giants on the opposite ends, Zillow has an estimator tool that is your long term. And think about that as your floor. You're typically gonna be able to do 30 to 50% better than long term.
Okay. Think about what's happening on short term as being instructive for, you shouldn't be pricing that high on a nightly basis, and you may be able to make as much money. It really depends on the market dynamics. Yeah. 12 different, yeah. But I would usually think of that as either, like your goal is to make as much as the short term, or you understand the market better to where you can have some nuances on that.
I think long-term is the better starting point. Go assume a hundred percent occupancy on a long-term rent. And then add 30 to 50% and have that be your target. And when you're thinking about the competitive dynamics, you're pricing against Airbnb, which good news, they've got a 15% extra charge that's gonna be built in.
You're looking at Zillow. Zillow has about 70,000 furnished flexible lease options. In the US we have 300,000 of their 70,000, or maybe it's 80, only 10,000 are single family. It's almost all multifamily. But you've got an idea of what they're charging. And then you look at the extended stay Americas in the hotels.
And then I would plan on 90, 95% occupancy if you're doing your research right. And know you've got a property that's got the dynamics of one of those target personas. So at some point you guys will release, again, this goes back to what you were talking about, is that you're gonna spend the next nine to 12 months cleaning up and speeding up the tech the, and then you'll start doing innovative stuff like that.
You'll have your own underwriting tool. We have a product right now that we just, it's furnished finder, backs slash stats. You can look up any city in the US and it'll tell you how much inventory is there are, what are the price points, how many people are coming. It is not a experience I'm proud of.
So we're rebuilding that right now so that in the future you won't have to rely on a blog post. You'll be able to come in and say what's the market in Tempe? What's the market in Big Spring? Yeah. And we'll tell you what's happening on our platform, and it'll help inform it over time. I can see how that evolves into something that's more address specific.
What can I expect for this unit type Oh, as what a powerful tool, and air DNA and Price Labs, they've built great businesses that we do not intend to compete with, but I think a lot of investors would pay us $2 a month if we were able to tell them everything that's going on with your market.
And we'll obviously include it with our subscriptions and just power more data to make smarter decisions. Because that 10 year future vision, it does rely on us to provide more transparency and data so people can make smarter investments and help grow the category. And so we're committed to figuring that out soon so that more people are making smarter investments.
Gosh, I love this game of real estate. Like I imagine this tool, you guys, it's so much fun. It's so fun and it's endless amount of o opportunity. It's the biggest problem with real estate, I tell people, is that there's too many ways to make money. There's too many it's endless. And where you guys are going and what you're doing, the need that you're satisfying is magical.
But imagine a tool that, Furnished finder, FurnishedFinder.com/stats (opens in new tab). You go there. Let's say I pay an extra bump on top of my 1 79 a year. I pay an extra 30 bucks a year, or whatever it is. That's too cheap. Raise your price. But let's say you, you aggregate the data from the Census Bureau, right?
You aggregate the data of, I don't know that this could be done, but if you could pull permit data in local counties saying, Hey, 85 permits got pulled. One of them's a data center. Here's X, Y, and Z. Here's the heat map of things that are being built. Oh my gosh. Like maybe that's a couple years out for you guys.
Yeah. Maybe we can build agents that are open source using LLM to go do this work for people. And then you, my word, plug into the Furnished Finder agent network and we're helping you with research. It's not the core of what we're trying to do, but, the mission of what we're trying to do is help independent landlords be financially independent and, whatever we can do to make that mission more viable with the data, the resources we have, we wanna prioritize and go as fast as possible.
I'm so glad I talked to you today because I literally, I did an ad yesterday where I'm writing out all the different exit strategies, right? And it's oh, Airbnb, multifamily RV parks, mobile home parks, and I'm going through all the asset types. Then I'm going through the exit strategies. Airbnb is an exit strategy, but I like throw midterm rental on the side.
I'm like, yeah, and there's this thing called midterm rental. Now I have thousands of students doing it, but it just hasn't been something I'm excited about talking about all the time. But I look at my stupid little brain was thinking, nurses insurance, this is so much more than that. This is the future.
Nurses will always be a core thing we do. The future is about much more than nurses in terms of who needs this type of housing and how fast it's gonna grow. Do you have any idea of, your demographic breakdown, let's say five years from now, where things are moving? Right now you've got 30% corporate on the tenant side.
If the growth rates we have now keep going, we will still, we will have more nurses on the platform in 10 years than we do today. But percentage there need that smaller percentage? Yeah, it would probably be more like 15%. I expect the relocations and then the category that's basically, I live in a furnished finder to be the ones that grow the fastest for the longest period of time.
I agree with that. And I think there, this, there's this really hot thing on social media where people are arguing, should I rent a home or should I buy a home? And in today's price environment, interest rate environment for people that are using traditional real estate. I agree. Renting is actually a better case, right?
For us in creative finance, our average interest rate is 3%. I'm basically paying half of what anybody else would be on the same purchase of a house. So I tell people, buy a sub two deal. Buy a seller finance deal. We've got 10,000 of 'em on creative Listing.com | Homes for Sale, Apartments for Rent, and Home Values . Go buy those deals and you, whatever.
But that's not 99% of the population. 99% of the population thinks traditionally and they go, I gotta put 20% down. I need to get a six and a half percent interest rate. The prices are super high anywhere you go. Yep. Why would I go buy a house when I could just go get something fully furnished? In fact, if I furnish my house, it would've been the same cost as my freaking down payment.
And the beautiful thing is I can move in six months to a different city. And I think that, that question as it gets framed in the media is almost always about should I or shouldn't I rent own primary? And I think the more interesting question is should I own or rent primary is actually separate from should I be buying real estate?
Correct. And and I think that the opportunity to buy a duplex and maybe have one unit be your primary for a while, but always know if you get a better job opportunity or end up getting married or have a different opportunity, like you're not emotionally attached to the other half of the duplex.
You can get out of that and go somewhere else and rent, it's a different mindset than, certainly Gen I think Gen X most of my generation, and certainly the boomers, the emotional attachment they had to housing. And if you start to treat that emotional tax as tax, you make different decisions on, I'm gonna actually build wealth with a midterm rental that I might use part of the year or never use.
And I'm gonna use that wealth to live a better life, renting wherever I'm gonna be. And eventually I might be able to buy a primary house that I do have more attachment to because I've built wealth in midterm and it's just a I see a lot of this with millennials in that there many people on the east coast, their first home was an Airbnb.
Their first housing purchase was a short term rental, and then they were renting their primary, and I think you're gonna start to see a more sophisticated version of that, where the first purchase is actually a midterm rental and they're not living in it, but they've got the opportunity to use it two months outta the year.
But they're really just building wealth so that they can, create the opportunity to have a different primary residence if they ever choose to buy one, which they might not convince me why I should stay away from Airbnb as my first strategy and why I should go after midterm rental. I think there's the Airbnb as a platform.
I'm not talking people out of, I think people should be on Airbnb, but they should be charging more on Airbnb. They should have stricter terms on Airbnb and they should be using it selectively so that they're not beholden to Airbnb. Short term versus midterm. The reason I would start with the midterm.
The price points are more approachable. You're talking about a bur urban, suburban inventory as opposed to typically leisure inventory. You're not competing with, the wealthy anesthesiologist. You're competing with other rational investors. You're more likely to be able to manage from home and you're doing four turnovers a year instead of 45 turnovers a year.
And so I think you get a way better return on investment when part of your equation is keeping the investment of your own time and money lower and that's the most compelling reason to be playing in the category. My gosh, I had so many different beliefs, you shattered them. Anything that our audience needs to hear in terms of maybe mo common misconceptions with midterm rentals?
Nursing is the most common misconception that it's all about being close to hospitals. It's about hospitals, but it's also about commuter corridors, neighborhoods that have a lot of remodel relocation. And then certainly it's about academic. If you find a place that's close to a commuter corridor with a university nearby and a hospital.
It's gonna work. You've just gotta go find the right property. I think the second thing, the misconception that any short-term rental could fall back to a midterm rental is just not true. If you've got a portfolio on 30 A in the Gulf Coast, it's a leisure portfolio, you can't fall back a four bedroom beach front house to something that you're hoping to attract nurses to.
The economics just don't work. Or even a transient worker. Yeah. It's just, that's in the oil field. He's not gonna go rent the beach house. Yeah. It's just a different use case. And so I think you've really gotta be focused on what tenant am I serving and can I serve them better than the local offer?
And that's different than who might be coming to Austin for a bachelor party. It's just different. And I think if you approach it as something that's bigger than nursing and approach it as something that's different than short term, you can really build something to where most people have a knowledge base already.
Of who's coming to their town near where they live, that they can go serve. And if not, you can always build that skill pretty cheaply because it's 170. Like start with house hacking. Start with an a, DU, start with a rent by the room and just dip your toe in the water and see, this is not a massive commitment, especially if you are running an arbitrage model.
It's such a creative solution. I'm, I literally, I cannot wait for people watching the audience. If you're in the sub two community, we're gonna go and do a whole 12 part class on this, and I'll bring in a bunch of high level students that are doing these things, but it actually is very creative in solving problems that nobody else can solve.
Like the a DU in a backyard, let the lady live in the backyard. You pay her even, Hey, I'll pay you monthly and you can have this free place. Like depending on the deal structure, there's so many people that will be helped in this situation. And also governments are getting behind this, right?
Yeah. I just had a large gr, the largest grant writer in the country yesterday says. She goes, yeah, there's new grants coming out right now in the federal, state, county, local levels that are wanting to help fund people's ADUs because they want to double. It's huge in California. Huge. It's the only way to solve the problem with the capital available and the land and all, proximity to work and all that kind stuff.
And the politics. And the politics. So you look at Sacramento, for example. Sacramento just came out with a grant program for people that are doing co-living. And in Denver, Colorado, same thing. They're coming out with things saying, Hey, we, we don't care. There was a law saying that if you have X amount of people, you probably know this better than me.
X amount of people on a property, they have to be related. Right now. They just abolish that. They said, we don't care if they're related or not. Oh my gosh. That opens up so much opportunity. So you see the government getting behind the midterm rental business model to a certain degree, and it's the same government that's anti the short-term rental business model.
Correct. Because you're solving actual housing. You're not you're not solving leisure housing, you're solving durable housing. 90 days stays. It's crazy to me. The reason or four years. Days, right? And I look at why does the government give us this beautiful thing called depreciation? Why do they give that to us?
In my mind, it was to solve affordability, right? Hey, us, the government wanna reward and incentivize you as the real estate investor to go solve a problem we'll never be able to solve. Here's money, here's tax benefits. Okay? Why the hell did they only make it available to people doing short-term rental?
Because you are not solving a single problem other than leisure. Yep. It doesn't make sense to me. I feel like there has to be new legislation that comes out saying we will allow bonus depreciation on all asset types as a, as an investment vehicle, because this will, that will triple what you guys are doing in midterm rental because everybody will leave short term and go out.
Not everybody a significant course. It'll open up the investor base, it'll open up the investor base where people go, wait, I can get depreciation and cash flow. I don't just have to go after depreciation, appre and appreciation. I can get all of the beautiful things. That's gotta, that's gonna change.
There's no way. It doesn't change. You have to incentivize people. And it's, we're not gonna build houses fast enough. Materials are not gonna come down. Labor's not gonna come down. It's gonna still, it's gonna be as competitive as it always is, if not worse. The only way to solve that affordability issue is to double the inventory.
How do you do that? You could do it with ADUs or Tiny Home Encamp, not encampments, but tiny home communities. All Fe Finder solves all those problems. Yeah. Oh my gosh. You educated me today. I've really enjoyed chatting my gosh. Like your wealth of knowledge and how deep you've been in this world.
It just goes to show you, when you double down on something your whole life, like you become the master of the information. I have. I've been looking, I've been staring at the data for a very long time, and I know I've got a pretty good appreciation for the pattern and where we're headed. Is there a company that will come into the world that we don't know about yet?
Vrbo, Airbnb, Furnished Finder. You guys all fit a niche. Solve a problem. Is there a company that you think will come out, like a pad split, right? They came out and they focused only on rent by the room. Is there a company you think that somebody's gonna come out and solve a different problem that you guys don't solve?
I'm not betting against it. Any ideas out there that what it could be? Do you see any niches or anything that hasn't been solved? I think that the I have heard a lot of people talk about the niche, which is how do we do room placements or help with assisted living for the boomers?
And I think that, it's a different plan, what we were riffing on earlier, but I do think there'll be something interesting there, which is, a marketplace that's combining some of the elements that a Care.com: Find Child Care, Babysitters, Senior Care, Pet Care and Housekeeping types provides with some of the elements that a Furnished Finder or, a Zillow or an Airbnb provides, and, potentially some of the elements of just social network would be going too far, but it is community. And so I think there's still endless niches out there depending on how hyper-focused you want to be on a specific, persona target. And that's one that I'm really just like societally curious about. Yeah. I think we're gonna have to have a better solution there than building more extended.
Yeah. 'cause you've got a lot of people that can't afford to go into a $6,000 a month assisted living facility. Nobody in their family can afford it. Where do those people go? Okay, they have to go live with mom and dad or, the son or the daughter, what have you. And then son, daughter might not have space for that person.
And so I see a lot of my community going and doing co-living and they're trying to do Golden Girls co-living is what they're calling it. Yep. And like the challenging thing there is finding you don't have the distribution or the awareness around finding enough of those people to keep your model going.
There needs to be a platform that's way more sophisticated than an individual investor could ever be. Like, you guys are hyper sophisticated. You have money, you have cashflow, you have investors, you have all these things that an individual investor going out and building a platform. Just won't have the eyeballs to get enough golden girls into their co-living.
So there I agree with that a hundred percent. There has to be a massive solution around the retirees that maybe are a widow or a widower, and they are wondering, where do I go live? I'm not ready. I'm not 85 and incapable of walking and I, and I don't wanna sell this house distressed, i'm living in it.
I like my neighborhood, I like my neighbors. What are the opportunities to help alleviate the oh my gosh. So interesting. Thank you so much. What do anything that you have as a call to action for the audience. I think that if you're like I was two years ago, you may not even know Furnished Finder existed.
My encouragement would just be, come to the homepage, learn about us. Landlord Diaries is an excellent podcast we do every other week that just interviews individual landlords, like people in your community on how they got started and who's their target and what are they doing. So I'd encourage people to just learn more and for $179, like if you've got property, try it.
And if you don't have property, try it. Go out there and think about how you source a rental with a sublet option or something that gives you an a, a space to play in real estate without having to own right away. And I think we've got some creative opportunities for that. Do you have anybody on your team that I could utilize to teach my audience Absolutely.
Privately in our and build a course outfit? Yeah. Her name's Katie Lyon and she's the host of the landlord Diaries. Alright. Katie Lyon, you're in for a treat. Our average zoom in sub two is like 2000 people that show up. They take action like crazy. We'd love to have thousands more houses on your guys' platform.
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