The School Of Cash Flow

The key to maximizing your income stream is ensuring that your property is maintained to preserve and grow. That is how the Coastal Vacation Property impacts your cash flow. Dale Corpus draws the curtains to welcome its CEO, Joshua Hatter. In this episode, Joshua shares how his management portfolio has continued to grow for the past three years at a rate of more than 100%. Joshua loves supporting his clients and growing their investments through his property management company. Tune in to this conversation and gain more insights into how he crushes it in his business.

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Coastal Vacation Properties: How To Grow Your Management Portfolio Annually With Joshua Hatter

Happy New Year, everybody. It’s 2023 and this is my first episode of the year. I’m jazzed to bring on my first great guest of the year. His name is Josh Hatter and he is crushing it in the short-term vacation rental space. A little more backstory on Josh is that, after spending nearly twenty years of his professional career growing businesses, primarily supporting the Navy, he decided to rent a single bedroom out of his home in 2016.

Since then, that single bedroom several years ago, he has grown a portfolio into several businesses owning investment, short-term rentals, and actual bed and breakfast properties, both alone and with partners. His management portfolio spans 8 cities in 2 states and continually grow annually at a rate of over 100% in the last few years. He loves supporting his clients, growing their investments, and hosting thousands of guests as they visit Charleston in the Smokies through his property management company, Coastal Vacation Properties. It’s an awesome bio. Welcome to the show, Josh. How are you?

I’m great. Thanks for having me. I appreciate the opportunity.

For my audience that doesn’t know you yet, where in the world are you based geographically? Where in the world is Carmen San Diego?

I am based out of Charleston, South Carolina.

It sounds like you were doing other businesses primarily supporting the Navy. I’m curious. How did you even get involved in real estate investing and the property management thing?

By chance, like a lot of good things in life. I was part of a corporate-wide layoff back in 2012 from a large Fortune 500 company that was splitting into two public companies and laid off 700 people. I was 1 of the 700, so it was something to try back in 2012 before the proliferation of Airbnb. I listed my one-bedroom condo downtown on Vrbo and got shut down almost immediately.

It was against the HOA, so I got shut down within 2 or 3 months. That was my first shot at it, and then I played with some other entrepreneurial ideas on the side for a couple of years before listing my first property that my bio mentions on Airbnb in 2016 and I have been doing it ever since. I’m playing real-life monopoly is what I like to say.

Were you primarily an investor first and then because of that experience you started the property management company or did the property management company come first?

No. The property management company came later. I’m a student of History and I am smart enough to recognize I got pretty lucky on timing as far as starting to heavily invest in real estate, coming out of the financial bubble that burst there in ‘08 and ‘09. I’m having some success with the Fed’s easy money policy for the last several years and how it was so cheap to get into real estate and made investment real estate a great asset class that had some great cash-on-cash return.

I was fortunate to experience that policy and got lucky on that very first condo in 2012. I made 31% in 30 months. I’ve lived in Charleston since 1999 by way of the Washington, DC area. It was crazy to me at the time how much a one-bedroom condo was going for. I sold that and traded it up for the three-bedroom house. That was when I started listing something on Airbnb. Eventually, moved out of there and sold that house. I bought a duplex and lived in the duplex while I was renovating it. Something I hope I never have to do again. I told myself, “I got to be out of here by March 1st, 2020,” which I was pretty close to.

We then had COVID, which came along within two weeks with a shutdown. I had been playing Monopoly ever since. I bought another duplex, which we sold a few months ago. I flipped that and did 1031 into our second bed and breakfast property. That’s a relatively new asset class for us. We bought the first one on April 7th, 2022. It’s a little bit of a strategy shift for us to get into actual BNBs, and then eventually boutique hotels in the next couple of years is the plan.

Initially, when you first rented out and got to not just renting rental properties, it sounds like you were house hacking, is that correct?

Yeah, definitely.

You were doing short-term rentals by room or whatnot. That’s a cool strategy.

It’s exhausting but it worked.

It’s a lot of work. It’s a good way to get started, though. You got started right around the last crash and whatnot. You were talking about Fed guidelines and being a little loose there and whatnot are easier back then. Are we talking about more so the mortgage types of guidelines that are there or what are we talking about?

It’s the terms. In 2022, we’ve doubling of interest rates effectively. You already had rising asset prices, which compressed returns, to begin with. Now you accompany that with interest rates that are twice as high and the popularity of Airbnb. When I first started doing this a few years ago, Airbnb certainly was not popular. My old college buddies quite literally laughed in my face like, “You’re doing what, renting your house out?

You can’t watch a YouTube video or Instagram Reel or listen to a podcast without hearing about somebody doing something with Airbnb as a side hustle. I got fortunate enough to get a little bit ahead of that wave when it was weird a few years ago and now shifting strategies as it’s become so much more common and rates of return for the asset class have gotten compressed.

In your short-term vacation rental property management company, Coastal Vacation Properties, what clients do you serve, and in what areas? What property types do you work with?

For one of my very first clients, I sent out a specific mail or two about 150 properties in Charleston that were hyper-targeted toward long-term rentals that were eligible to be short-term rentals at the time. I did rental arbitrage and a two-year lease. That property got three months into the lease, got an offer unsolicited on the building, so wound up getting paid $50,000 to get out of that lease several months into it.

I use that as a seed to start my property management company. Now we do the traditional model where we charge a percentage of revenue as our general business model. My very first client owned the two properties next to the first short-term rental that I owned. We had an attorney across the street that loved to harass short-term rentals in the neighborhood. That’s what got him and me talking.

I probably should find that person and thank them because this guy wound up being my first client. I managed those and he had those two and another property. This was 2017-ish and 2018-ish. He sold those two. I still manage his third one. I grew that a bit. I had 21 listings when I quit my corporate career on December 19th, ‘21. We have about 60 now. We’ve exploded. A lot of that is the couple of bed and breakfasts that I own. About a third of what my property management company manages, I own either all or a piece of.

Being a property management company catered to short-term rental space versus a regular long-term rental company requires more work and a lot of turnovers. I’m curious. What’s a minimum booking? Is it 2 or 3 days a minimum?

Yeah, so the BNBs are much more like regular hotels. You can stay one night. The one we sold to buy the second BNB was an 8-bedroom, 8-bath that slept 16. You do a one-night stay there that you’re asking for. We typically have a two-night minimum for most of our properties, except for the actual BNBs you can do one-night stays there.

Are most of your listings placed on Airbnb or is it something else?

As a result of how things unfolded, when we went into COVID, I was about 95% on Airbnb. There’s been a huge push in trying to get direct bookings over the last couple of years. There are a lot of companies that specifically cater to that niche. There’s a lot more control over that, a lot more ability to control the pricing and the relationship with the client and have that stay at the same property or others in your portfolio. We finished 2022 right at around 58% on Airbnb. We have properties on Vrbo, Booking.com, and then direct. In 2021, we had like 2% direct. In ‘22, it was about 13%. We have a goal of hitting 30% this 2023. We’re trying to keep shifting in that direction and own the customer relationship a little bit better.

I don’t own any short-term rentals now. I wanted to know how you make a short-term rental stand out against the competition like other short-term rentals and hotels. What do you guys do?

The biggest single shift over the last several years is the supply has grown so much now that if you don’t have a good property in a good popular area that is trying to strive to target a certain demographic, it’s not as successful. You saw for a long time there’d be random suburban properties. It’s not against the HOA or there is no HOA in the property, so you might see it listed on Airbnb or another OTA. Those are the people that are going to get squeezed out now as people have to be a little bit more careful as investors given the cost of capital rising.

Coastal Vacation Properties: The biggest single shift over the last several years is that the supply has grown so much now that if you don’t have a good property in a popular area trying to target a certain demographic, it’s just not as successful.

Generally, there are certain features that we look for. Charleston gets super uncomfortably hot and humid in the summer, so if a place has a pool, that’s a big selling point. Location is huge for real estate. If you’ve got something that’s close to shopping points, and tourist attractions downtown, that’s huge as well too. A little like a data tip that our Airbnb manager and account manager gave us the stuff in the Smokies that we manage.

Supply is up 30% over the last twelve months and the number of booked nights is up only 5%. That’s the supply-demand imbalance that I’m talking about. There hasn’t been any real reckoning with that but the people that we’re stretching to get into this asset class initially will likely be the ones that are impacted and marginalized first. It’ll be interesting to watch things play out now that the cost of capital is doubled.

With the economy going through its next downturn as we speak, what’s the chatter about people taking potentially less vacations or the numbers getting affected for even your clients? What are your feelings and thoughts about all of that?

It’s interesting because I feel like we’ve heard that for a little bit here. 2022 rates were up 23% or 24% over 2021 rates. That will stabilize. Some of that is you lock up people for a certain time as we saw in 2020, and then they’re going to pay anything to get out of where they were to have their normal family vacation.

Rates will stabilize. I haven’t seen any significant pullback but I have heard people starting to complain about some of the rates decreases that they’ve seen. Frankly, those are the people that were making such great money several years ago but maybe they haven’t necessarily continually reinvested in that property. It is not an asset class where you can constantly extract value. You’ll always have to be looking at, “What else can I do better?” Otherwise, at some point, the ratings will start to deteriorate and it’s hard to bounce back from that once it happens.

Another side question that I have because again, this is a new space for me is, do you create experiences for the client? Do you have any concierge type of services almost like compete with hotels in this type of space with short-term rentals?

There are a couple of things. We’ve got a help desk set up. When I started this many years ago, the big differentiator that I saw was in the response time than in price. Nobody wants to differentiate on price. That’s a horrible business model. What I noticed early on is people have anywhere from 0 to 2 questions before they book.

If they have zero questions, they book instantly. It’s good to go. If they have 1 or 2 questions, the faster you can get a response to those questions, the more likely they are to book immediately. I had a 30-minute standard in response time back then, and we’ve maintained that. It’s something that we measure every single week. Anybody that has the ability to respond to guests, we can see how many messages they’ve responded to, and if they’ve met that metric. One little thing that we try to do is to make sure we’re not like Comcast.

Somebody calls the helpline, and then they don’t get a human being on the phone within a certain time. The cool thing about this asset class is with the proliferation of Airbnb in the last decade, there are so many companies that are attacking very niche problems within the space. I’ve talked to some guys that are called Ragin’ Raccoon. The only thing they do is collect trash. They plug in via your property management system software and will come to pick up the trash five days a week after a stay. Regardless of if you have three bachelor parties within that same week, these guys are picking up the trash so that way it doesn’t pile up outside.

There’s a company called Touch Stay that we use. You connect to the Wi-Fi through what’s called StayFi, and then the next link is a property-specific digital guidebook. It’s a very specific guidebook for your property that has recommendations, places to eat, the local tourist attractions within half a mile or things that are specific to your property.

You can say that to your phone during your stay and optimize the guest experience if you will. There are a lot of little things that have changed the space over the last five years. I’m always trying something. To me, the cool part is constant innovation. To your point, trying to make the guest experience better and more comparable to what you might see in a major hotel chain.

For folks that are considering doing short-term rentals, when they’re searching for areas for markets in general, what would you even look for or what do people look for to know whether a short-term rental market is a good one or not?

That’s another thing that, in hindsight, I got incredibly fortunate with. The weather is good here most of the year. Some of the places in the Northeast are more tourist attractions. You have much shorter peak seasons. You have a much shorter time to be able to make an excellent return. The reality is if you buy dirt and hold it over any 20 to 50-year cycle, it’s going to be very hard to lose money. There are so many different growing areas, especially with this asset class that is making a bunch of top lists. Charleston is one of those.

If you google best places to go, there’s a bunch of little tourist attraction lists that we’ve made over the last several years. Seasonality is a huge thing, making sure people want to go there throughout the course of the year as opposed to three months before the weather end. The ability to regulate what is there. The issue that data point I mentioned in the Smoykies, is if you can take any property and put it online as a short-term rental, almost immediately, there’s nothing that’s holding back the supply growth there anymore.

Coastal Vacation Properties: If you can take any property and put it online as a short-term rental, almost immediately, there’s nothing holding back the supply growth.

In Downtown Charleston, there are very specific regulations. Each municipality has its own rules, licensing process, and permitting process, both for managers, investor clients, and our owners. That’s something else to be wary of. You don’t want to be somewhere where you buy an asset that you think you can have as a short-term rental and then realize that you can’t be based on the regulatory environment. I want to have a more mature regulatory environment, otherwise, you’re taking unnecessary risk that the assets could get shut down for what your intent was.

In the areas, where you do your property management for your short-term rental listings, I’m not sure if you put thought into this, but if you have, if they were rented it out as a regular one-year type of listings, what would be that multiple? I know that short-term rental supercharges the rents but would it 2X or maybe even 3X the types of rents seen? What is that?

There is some seasonality for sure. All of these properties that you’re buying with the intent of being short-term rentals generally are not going to work as long-term rentals. You’re trying to buy them in a popular area, so you’re going to need that higher income depending on the season. For instance, Charleston is anywhere from 2 to 4 times depending on the time of year for what you might normally see in a long-term rental, and sometimes even higher than that if the property’s unique.

Coastal Vacation Properties: All of these properties you’re buying with the intent of being short-term rentals generally are not going to work as a long-term rental.

Like peak season for your areas, for example, is it more dead during the wintertime? Is it more popular in the summertime? What’s the seasonality like in the places that you’re renting?

Our peak season starts as a big wildlife festival in Charleston in mid-February. That’s the kick-off of peak season and then that last October. There is a little bit of a dip in August because it’s incredibly hot and humid here. The rates typically dip in August but then things pick up for September and October, and then you have a little bit of a lull in November, December, and January.

If somebody has a project, they need to get done that takes longer than a couple of days, that’s one we’ll suggest for them to do. Shut the property down in January and then the Smokies, very similarly, we have a lot of people that will come throughout the huge summer vacation, like being able to go hiking in the mountains.

Even the holidays are huge. People have multiple families come. It’s supposedly the most drivable vacation destination in the country. If you look at the percentage of people that can make it within an eight-hour drive, it’s something 70% of the US, can go to the Smokies within eight hours. Lots of people will stay there for holidays as well.

In terms of systems for your property management business, I want to know what your structure is with the people that you have because there are obviously a lot of turnovers. I’m curious. How big is your team? Even your staff internally and cleaners. I don’t even know if those are on staff or if you outsource that stuff. How much do you rely on technology? It’s because you’re managing a lot of properties.

Our average day is three days. You’re going through the whole process every single time. It’s something that you have to have systems and processes in place for. We have six employees. Now, we’re trying to hire for two additional positions here actively. One of the biggest mistakes I’ve made in this business as a manager is trying to hire cleaners.

I spent probably 6 to 9 months trying to do that and capturing that margin for myself. It’s a tough business. The turnover’s high. We have a few key contractors now that we have relationships with and we’re the majority of their business. We work with them on scheduling but the actual hiring and meeting our standards is up to them as far as the staffing piece.

What are the staff roles also out of curiosity, what is the breakdown?

I was fortunate enough to hire our guest services manager away from a higher-end hotel here in 2022. It’s amazing to bring that hospitality experience and have that type of background, bringing that high-end hotel hospitality experience in the short rental market. I’ve got a property operations manager, so she’s the boots on the ground as far as the day-to-day operations and maintenance. If there’s any annual licensing or permitting, she’s handling that. The guest services manager and then also our housekeeping manager. The housekeeping manager is one of our employees, so we have to check the checkers if you will.

We do have a housekeeping manager as well, and she helps manage the contractors, but then also obviously there are a lot of things that go into every single turnover as far as supplies, laundries, linens, all that type of stuff. She handles that. My right-hand person, the VP of Client Operations, will do the owner reports, and monthly payouts, interact with our clients if they have any questions, and has an HR and finance background.

She watches a lot of the pennies. She’s better at watching pennies than I am. When she came on board, we didn’t even have any W-2 employees. That was part of the value-add for her and her human resources background. That’s the skill breakdown. I have a sales background, so I’ve done all the sales to date by myself. That’s one of the positions we’re actively hiring for. It’s gotten to be too much for me to handle by myself. That’s the next piece.

Did you have a lot of mentors in the space to get you up and going? How’d you fill up your knowledge gaps along the way when these sales stumbled upon you?

I failed a lot.

I kept falling forward, at least.

That’s something you embrace as an entrepreneur. You’re not going to necessarily have the perfect solution right out of the gate for something. I’m okay with that. If we can get something that’s a 60% or 75% solution and build that to 95%, nothing is ever going to be perfect. There’s always room to improve. I’ve gotten staffing decisions wrong. That’s probably been the most costly. I read constantly. I read probably 25 to 35 books a year. I rely on recommendations a lot. I’m always trying to implement. I don’t have the ability to read fiction for whatever reason. I feel like time is too valuable, so I’m always reading personal development and entrepreneur books.

Have you always had this entrepreneurial spirit even as a kid?

I knew how soul-sucking Corporate America was. I didn’t want to die doing that. After making a good, stable salary for a long time, I knew that I wanted more control over my own destiny and wanted to take bigger risks too. We work with large Fortune 500 companies. They’re not built to do that. It’s a very measured risk in every decision for every contract they go after. I knew I always wanted to do something. I just didn’t know what. If you had told me years ago when I started doing this, that I’d be here, I probably would’ve laughed. This is one of those things that’s funny about how life works out.

Back then when you were listing and how you started renting out rooms, were you already listening to the podcasts or BiggerPockets?

No. I certainly have met people over the years like with COVID, a lot of the local managers kept in touch, “What are you seeing as far as demand?” Those types of things. I’m always trying to learn, so whether it’s through one of our existing vendors or software providers suggesting another vendor or me being on a bunch of mailing lists now and I get something in my inbox suggesting a new platform.

We’re always trying something new to see if it works. My pitch as a Property Manager is I always try new things out on my stuff, and that way if it breaks or it doesn’t work or there’s not enough value add, that I can it. I don’t roll it out to the rest of the management portfolio but we’re always trying something new to try to get better.

I want to switch topics to bed and breakfast because I don’t know anybody investing in them except you. Let’s talk about that as investments. Why do you like that asset class?

You hit the nail on the head. You don’t know anybody doing it. As I said, you can’t throw a ball without hitting somebody that has a short-term rental these days. That’s part of it. We fell into the first one. They were not even serving breakfast when we closed on April 7th, 2022 but they had the bed and breakfast permit. It allows you to be able to not have to live on-site. Again, permitting differs by locality but it allows you to rent out each individual room without living on-site. That’s the model that we were following there.

The only change that we made was we installed a breakfast bar and put in a breakfast partner that comes by every morning at 7:30 and delivers these delicious sausage, bacon, egg, and cheese sandwiches. They dropped that off for us every morning. We started that in July. We shut down for renovations. We’re putting a significant amount of money into it. We ran it for seven months. The only thing we did was optimized management and add breakfast back. We went from $165 ADR to $229. It’s a 39% increase in price from optimizing management since they weren’t using dynamic pricing previously.

The goal is to go up about another 70% with a significant amount of investment that we’re doing giving this entire property a facelift. We’ll launch that in mid-March. That’s two things that are hugely different. The ability to do one-night stays, which helps fill in occupancy gaps, and the ability to rent out room by room. Unless you have a special permit, that’s not typically something you can do. The returns are far higher than doing a normal short-term rental that has, for instance, nine bedrooms. That’s how our BNBs are.

It’s similar to house hacking but per room. I see that you’re bringing only that property management expertise you’ll have in the STR space and then bringing it in. You could make all of the systems that much more efficient, so you’re saving money out there. That sounds amazing. How did you even find that bed and breakfast property?

They listed it as a real estate transaction for sale. I am incredibly fortunate. I met one of my first partners. I have a second one now on the investing side but my first partner owns his own short-term rental renovation home builder. Thanks, Cameron O’Connor. He also builds beautiful spec homes out on Kiawah Island. He specializes in historic home preservation and renovation.

The combination between the two of us, the first one that we bought is 150 years old. It has 150-year-old problems. The things that would’ve scared me from a renovation perspective don’t anymore because of this great partner that I have. To your point, I bring value add on the management side. Banks tend to like that as far as mitigating their own risk.

As it relates to your own personal investment portfolio, I’m not sure if you’re growing this bed and breakfast investment as a business, or if it’s just for yourself. Are you trying to go it even bigger and create a fund or anything like that?

Yeah. That’s the next step. The typical structure is you have the PropCo or Property Company that owns the real estate itself and then you have the OpCo or Operating Company, which is the bed and breakfast, and so then the bed and breakfast pays company rent every month. You operate the business out of the operating company. Both of our assets are set up that way, so there are two companies for each BNB.

We took on a third partner. The second one, a branding expert runs a media company that is partnered with Forbes on their publishing side. A branding expert, starting to brand each of these properties individually as part of a boutique hotel collection. That’s the next piece is acquiring another two properties in Charleston this 2023.

We’ve identified our next half a dozen markets outside of Charleston, in the Southeast, and we’ve prioritized those markets. I have an analyst going through and helping evaluate deals and create a deal pipeline. The thought is that we probably will buy the next two assets ourselves and then look at doing a capital raise sometime in 2024. I want to scale this collection.

In terms of the deal flow that you’re doing are you looking for stuff that’s off-market? Are you hitting up sellers directly or how are you going about finding these properties?

It’s boring. We’ve got a couple of virtual assistants that help out on the guest services side. As one of their projects was in the background the top half a dozen markets and they googled, “What are the top 50 to 100 boutique hotels in bed and breakfast?” It is looking at what those top ratings are, making a spreadsheet out of that, and using that as the initial target list if you will. The analyst will dig a little deeper, figure out who the owner is, the owner’s contact information, and how many suites, and reach out and contact the owner to figure out if the property is for sale or not.

That’s old-fashioned grinding, and reaching out to see if anybody is interested in selling. It’s a very specific asset class to your point. You’ve got hospitality groups that own lots of these, and then for lack of a better word, mom-and-pop owner-operators. This is generally their last gig before they retire. They’re there every day on-site and have a special relationship with their clients.

Some of them have been doing it for a long time and they’re tired. They haven’t been able to do any major renovations over the last several years. They’re more looking to retire, they’re not looking to invest in technology either. It’s a pretty simple value add thesis on both the operating side and the property side. It’s a matter of finding these deals the old-fashioned way, grinding it out.

What are some of the challenges that you see in your business in the short-term rental space now?

I am a little scared of short-term rentals, having been in it so long. My very first client that sold 2 of his 3 properties do anything for that guy. He took a chance on me to be a property manager before. Looking at the way that some people were analyzing those deals, I’d have somebody contact me, “I have my spreadsheet. Can you look at this? I want to know if it makes sense.” I’d look at it and it would show a 6.4% cash-on-cash return. Inflation, at the time, is at 8%. I’m like, “You’re making 6.4% cash-on-cash. Does this seem like a good deal to you?” That’s what’s a little scary to me. You have people that see it as an attractive asset class but maybe don’t understand the risks involved.

I worry that if there’s a 20% pullback in valuations, they won’t be able to sustain that and may get squeezed out, which you hate to see. That’s some of the more inexperienced folks that are trying to break into the asset class, and you’re generally reaching for your first one. Let’s be honest, anytime you do something for the first time, you’re taking a risk trying to understand the new asset class. That’s the biggest thing I worry about on the investor side. I have a soft spot for people that are trying to make something better out of their lives and taking those risks.

I worry about those people. The companies themselves are not going anywhere as far as Airbnb, Expedia, and Vrbo. They’ve got so many tens of thousands of listings, millions of listings at this point. There’s always going to be a certain demographic that wants to stay in their properties and hotel chains. I don’t think either of those things is going away.

In terms of what we are looking at, I see risks, but for me, the biggest risk is deal flow. There’s such a huge opportunity if you can find the right properties. It’s just a matter of being able to find enough of the right deals that have similar returns to what we’ve seen on our first two, and then being able to bring those to more partners in the future. I’m more concerned about finding the right deals for deal flow in this new asset class that we’re in and I am going to raise money. That part will be the easy part. As you said, I don’t know a whole lot of people that are getting into this asset class at this point.

That’s less saturated. There’s probably less competition for you at the same time, which is probably one of the reasons why you’re also doing it. I’m curious about your portfolio. What’s been the best investment in your portfolio?

Probably betting on myself. My line is I took a $30,000 401(k) loan in 2012 to buy my very first downtown property. $30,000 is worth more than $5 million now. Every cent I ever made in Corporate America in many years is probably worth $400,000 or $450,000. Investing and betting on myself has paid off with 12 or 15 times what Corporate America did.

How’d you take that leap of faith to do that? I want to get to that. Did you read a book or something? Did somebody talk to you?

I seriously always like reading stuff. I’ve got three books going now, but it was a combination of things. I knew that wasn’t something I wanted to do forever. Part of the gentle lull of Corporate America is that you can make decent money without working 100 hours a week sometimes. People get lulled into that false sense of security making a halfway decent salary. It’s enough, but it’s never enough to do whatever you dream about doing. If you want to do what you dream about doing, you’ve got to take some level of additional risk.

I take it not everything’s been a home run. Can I ask you, what’s been the worst investment?

I’ve been lucky for the last several years. I probably had some bad individual stocks. I started investing in equities when I was eighteen. I graduated high school in 1999, and which dot-com bubble happened right after that. I promptly lost my $3,000 to $5,000 was now $200,000. That was the best investment that I could make in terms of losing so much so fast, and then being more careful to evaluate things in the future. It was a lot of money to me at the time. As far as real estate, I’ve been lucky to not experience any losses over the last several years and how crazy asset prices have risen. I’ve been fortunate to ride that wave. I’ve not experienced any significant losses, yet. Hopefully, I’ll knock on something.

A side note, I found out before we started recording that you’re also in GoBundance like I’ve been. In one sense, I’m not surprised. I wanted to ask you what have you gotten with GoBundance so far.

In the last few months since I quit my corporate job, which was with the encouragement of some of the guys in GoBundance. It’s people that want to experience the most of life in every area like health and wealth, and family. Being around that type of person all the time changes your thinking. In the last few months, I’ve realized how much I’ve stood in my way over the last many years.

People have a lot of self-limiting beliefs and hold themselves back. Generally, the people I had mentioned several years ago were my old college buddies that were laughing at me. Where do those laughs come from? “I don’t understand it. I wish I could give that a shot,” or jealousy even. In some areas with people close to you, I’ve been super fortunate to be in this group for the last few years.

I was feeling intellectually stagnant for a couple of years. It has opened my eyes to maybe I wasn’t dreaming big enough. I feel like in the years I’ve been in my dreams have multiplied exponentially. Any mastermind is so important. It’s important to be around like-minded people that have similar values and are striving to achieve similar goals in life. GoBundance has been a game changer for me for the last few years.

I’ve had a lot of a-ha moments in GoBundance. What I appreciate about the group is the diversity of everybody. Most of us invest in real estate, but the way everybody lives their lives people that are digital nomads like in the group sometimes, and they’re killing it by spending time with their family. It opened my mind to work on multiple aspects of my life.

For a lot of times before, meeting people with GoBundance, I was focused on working out and family, but it taught me that I could balance everything out a lot better. I haven’t been in this balance I have until joining the group. It’s because there’s now an awareness. I’m now friends with the same people that you’ve been meeting too. It gave me a new model. I could see how people are living and it’s like, “I didn’t know that you could live that way.”

When I was first starting in 2012, ’13, or ‘14, one of my neighbors had sold a company. It did well, and then that company was acquired all the way up to the ultimate acquirer that was Zillow. He rode that wave. I went to lunch with this guy one day. He looked me in the eye and goes, “I don’t think you understand how lonely this journey talking about entrepreneurship.” It’s funny you talk about a-ha moments. That’s 1 of my top 10.

One time, I’m up at 2:00 or 3:00 in the morning trying to figure something out or solve a problem on my own. I’m the only guy. He couldn’t have been more. That’s why it’s even more important to surround yourself with people that are going through similar things in terms of problem-solving and celebrating the wins. The normal stuff that we talk about, you can’t necessarily post in other places. Having the freedom to be yourself and both in the good, bad, and ugly is incredibly liberating.

Coastal Vacation Properties: Having the freedom to be yourself in the good, bad, and ugly is incredibly liberating.

What are you excited about in your business?

There’s so much opportunity with the asset class that we’re diving into now. The potential returns for the next ten years are what I saw several years ago in short-term rentals. It’s a little scary trying to switch to an asset class when the other one’s still riding high. These returns are twice as good as what I saw in short-term rentals several years ago. That’s the thing I’m most excited about. Not just that, but now I’m also in a position where I can bring other people along with me and help them be financially successful as a result of this venture. Also, genuinely impact other people’s lives and families as a result of that too.

That’s part of the fun, you, giving something back. What’s your superpower? What’s contributed to your success?

My wife. Everybody needs that stuff. I finally got married for the first time. I try, even when my hair is on fire, to not be in a panic and you need that as an entrepreneur. My wife balances me out. We bring out the best in each other and help each other maximize each other’s life.

Last question. Any final words OR advice for the audience that is reading now?

I’ll leave your readers with a quote that my first business partner gave to me. He went to the Austin event, the Champions event for GoBundance here. One of the speakers was talking about our relationship with time. This is something now, finally getting married, taking that next step in my life, trying to live with a sense of urgency, and realizing that you can’t live forever. It means a lot to me.

The quote is, “Operate with true urgency. Learn as you’ll live forever. Live like you’ll die tomorrow. Time is undefeated. It always wins. The one thing that time can’t take away from you is something that you’ve already completed.” I keep it on my desk. That’s not something that you presented me with before, but I keep it on my desk. It’s a poignant thing for me and top of my mind, as I start each day.

How could somebody get a hold of you?

I just launched a personal brand and the website is JoshHatter.com. All our social media is on there and people can schedule a time to chat through that website as well if they like.

That’s a wrap, folks. Josh, it was a pleasure meeting you and connecting with you virtually, another, “Go, bro.” As a side note, you’re going to be going on your honeymoon vacation soon. Have fun with that. Where are you going to, by the way?

In Aruba.

I’m going to be in Tahoe while you’re in Aruba, complete opposite weather. I picked up a lot of great nuggets about the short-term rental space and bed and breakfast from you. I know my audience has as well. To my readers, feel free to reach out to Josh directly if you have any questions for him and connect with him. Thank you all for checking out this episode. Remember to leave me a review on iTunes as it helps me attract even more great guests like Josh. Until next time, live life abundantly. Josh, thank you.

Thanks for having me.

Important Links

• Coastal Vacation Properties
• Booking.com
• Ragin’ Raccoon
• Touch Stay
• StayFi
• GoBundance
• JoshHatter.com
• iTunes – The School of Cash Flow

About Joshua Hatter

Persistent work in progress. Corporate America refugee. Data sponge. STR expert. Cash flow junkie. Balance sheet disciple. Technology forward. Automation obsessed. Build. Systematize. Scale. Repeat.

We are moving up the value chain from STRs to B&Bs and boutique hotels targeting Charleston, Savannah, Asheville, Greenville, Nashville, and Miami – in that order. Have a B&B or boutique hotel deal we should know about? Email me at josh@staycvp.com!