Markets and property types
Why I Bought a $5.4M Resort Instead of an Airbnb
A full tour of the Robin Hood Village Resort: 20 cabins, a wedding venue, a 90-year-old pub, and how we bought all $5.4 million of it with seller financing.
As a multifamily investor, I don't talk a whole lot about my hospitality business. But I want to walk you through it, because the question I get constantly is whether short-term rentals are worth doing, and my answer is that you should almost never buy an Airbnb when you could buy a boutique hotel instead.
Airbnbs are small, their income is highly variable, they're heavily regulated in a lot of markets, and they're genuinely hard to scale. A boutique hotel can still be listed on Airbnb, but it's built from the ground up to be run as hospitality. It can produce a crazy return if you run it correctly. And a lot of them are seller financeable, which means you can buy them low to no money down.
This is the Robin Hood Village Resort on the Hood Canal in Washington, plus the White House next door. All $5.4 million of it was seller financed. Here's what it looks like and how it came together.
Related reading: Inside My $4.5M Seller Financed Resort on the Hood Canal
The White House: Always Buy Bigger
Let's start with the expansion property, which we call the White House.
It's about a million-dollar house, and we bought it for $900,000. Seller financed, low interest, long-term debt: the normal things we do.
Here's the part I want you to notice. It's a single family house, and we converted it into a triplex. It also has two RV spots and storage on the lot. Even inside my hospitality business, I found a way to make it multifamily. It's kind of cheating, and I'm happy to do it that way.
Related reading: Why Single-Family Rentals Stopped Working (And What to Buy Instead)
The upper story runs as hospitality. We blacked out the kids' room and put in bunk beds, so three kids can sleep in there quite comfortably. During events we've also been known to stick Caleb Hommel in there. There's a queen bed and the master. The lower story is two full-time rentals.
If you have to stay somewhere while you're building your business, it's kind of nice to do it in your own place. I've stayed at my own resort many, many times, and this is usually where I stay. As a side effect of doing hospitality, I happen to have a million-dollar house on the water that I can use whenever I want.
Outside there's a spa with a hot tub right next to the sauna, and that sauna is unbelievable. Step off the back porch (I still owe it some landscaping, don't beat me up too hard) and you're in the woods, right off the water. That's the Hood Canal out there: salt water in the foothills of Washington State's Olympic Mountains, and one of the prettiest places in the country in the summer specifically.
I also own a yacht. All multi-millionaires have a boat, right? Mine has a lot of square footage and it happens to be a sunken ship that came with the property. Every business idea you can think of for it, the answer is no. There's no cost-effective way to do any of it.
Robin Hood: 20 Cabins, 15 Acres, and 90 Years of History
A little river runs through the property, and it takes you right up to Robin Hood Village Resort.
The historic main building turns 90 years old this year. We'd love to have Robin Hood on its 100th year, though we'll see whether we stay in hospitality: I live in Texas now and this is in Washington.
It's a 20-cabin resort, and every cabin has its own individual hot tub, mostly at the back or under a covered area, because we try to give each one some privacy. The whole campus sits on about 13 and a half acres, with another two on the other side. Call it a 15-acre adventure.
If you ever saw the video where we had a totally flooded cabin: that was cabin three, where the sink blew up right when we bought the place. It's one of my favorite cabins on the property: a two-story loft-style cabin tucked in the woods with its own patio and barbecues. Secluded and gorgeous.
Cabins one and two are historic and original to the resort. Simple shake roofs, simple design, beautiful little buildings, and the landscaping around them is a completely different animal from what we inherited. The word for what we bought was crusty. We turned it into something actually quite nice.
We've also added inventory out of things that weren't cabins. What was once a laundry room is now two more cabins. The old liquor store got converted into a giant cabin.
The property used to be a restaurant, so the old commercial kitchen is now an extension of our laundry room, and that's where we headquarter a lot of our operations.
The Pub, the Mural, and the Concert Business
Then there's the historic pub suite, which is where I spend most of my time when I'm at Robin Hood.
It's where a lot of the indoor concerts happen, where a lot of events are held, and where I do the catering when we run our Robin Hood real estate events. Big open space: you would be amazed how many people you can actually pack into it. There's a mural of the Hood Canal on the wall that's about 70 years old.
Out back is the wedding venue, and it's a significant part of our revenue stream. Couples book the entire campus and grounds for the whole weekend, and it pretty much runs all summer. The ceremony area holds about 100 people comfortably. I do want to replace the archway: it looks beautiful when it's decorated, but undecorated it reads a little cheap. The creek that runs through the back has a salmon run, usually in October.
The main reception area has a stage where we host concerts and an outdoor bar. Vendors set up, we get around 200 feet of usable space, and we run a few major concert series on the back lawn with some genuinely big artists, who typically stay in the cabins right there. Food trucks get delivered around back onto dedicated pads with hookups, so they pull in, power up, and you've got vendors, food trucks, live music and events all going at once.
That's the argument for hospitality over a single short-term rental unit in one sentence: a cabin rents for a night, but a campus rents for a weekend and sells drinks, food, tickets and weddings on top of it.
The Numbers, and the Part I'd Do Differently
When we put this together, it was early in my career. I had $20,000 in my bank account.
We purchased Robin Hood for $4.5 million. The White House was $900,000. So we're all-in at $5.4 million on the entire project.
All of it was seller financed. All of it was low interest. Robin Hood was an eight-year note: long-term debt, not hyper long-term, but certainly long term.
Related reading: How I Bought a $4 Million Resort With None of My Own Money
For context on where we were: we had just wrapped up year one of the business. We'd bought a 38-plex, a 12-plex, a 10-plex, a six-plex and another 12-plex. That was as far as the portfolio had gotten. This was the next deal we did, and we just went swinging for the fences.
Now the honest part. When I bought this, I had no money and no business being in the event space or the wedding venue business. We had to learn how to play the game at a different level, and it forced us to grow.
Going back in time, I would not recommend that someone with no hospitality experience spend $5.4 million assuming they're going to knock it out of the park. Not all members of my team knocked it out of the park either. We had to change around some of the ownership very early, because my multifamily team was not necessarily the team for this job.
Hospitality is a different business with a different operating team. The real estate is the easy part.
Key Takeaways
- Don't buy an Airbnb when you can buy a boutique hotel. Single units are small, variable, regulated and hard to scale. A hotel is built to be run as a business, and you can still list it on Airbnb.
- Boutique hospitality is frequently seller financeable. Robin Hood and the White House: $5.4 million together: were all seller financed at low interest, on an eight-year note for the resort.
- Always buy bigger. The White House was a single family home, and it became a triplex plus two RV spots and storage.
- Diversified revenue is the advantage: nightly cabins, a wedding venue that books the whole campus all summer, concerts, a bar, and food truck vendors.
- Unused square footage is inventory. A laundry room became two cabins, and an old liquor store became a large one.
- The real risk isn't the building, it's the team. My multifamily operators weren't the right operators for hospitality, and we changed ownership early to fix it.
If you want to actually see the cabins, the pub mural, the wedding venue and my sunken yacht, watch the full walkthrough above.
If you want help structuring deals like this one, you can learn about the mentorship at mentorship overview, grab the free course on getting started in multifamily investing, and join the free community where we break down seller-financed deals like Robin Hood.
Read the episode transcript
0:00 As a multif family investor, I don't talk a whole lot about my hospitality business, but this is the White House. 0:05 This is an expansion of the Robin Hood Builder Resort. This was also a seller finance transaction. I'm going to share how we did this deal, what these look together. We're going to walk over to 0:13 the Robin Hood. We'll talk about the Robin Hood Build Resort, but I'm going to talk about hospitality on this. While it is not my core business, I do believe that you always need to buy bigger. So, 0:21 while this is a single family house, we converted into a triplex. It also has an RV spot, two RV spots in fact, and storage. It's part of the Robin Hood 0:30 Village Resort, which is a much bigger project. So, I'll show you what this actually looks like. But when I do hospitality, here we go. By the way, welcome to Multi Family Strategy. All right, guys. This is the White House. 0:41 So, quality kitchens. This is about a million-doll house. We bought it for 900,000. Seller financed, low interest, 0:48 long-term debt, the normal things. This is what it looks like. We do hospitality. We blacked out this kids' room. We got bunk beds. Three kids can sleep in here. quite comfortably. 0:59 Occasionally in events, we also stick a Caleb Pommel in there. We got a queen bed over here. And we have the master 1:06 bed. Now, if you have to stay somewhere while you're building your business, it's kind of nice to do it in your own place. So, I've stayed at my own resort 1:14 many, many times. This is typically where I'll stay. As a side effect of doing hospitality, I happen to just have 1:22 a million-doll house on the water that I can stay at anytime I would like. But this is the white house, the upper story 1:30 of it. Lower story is two full-time rentals. So even my hospitality, I found a way to make them multif family. Kind 1:38 of cheating, but happy to do it that way. Coming outside, we have the 1:45 spa. We have a hot tub right here, right next to our 1:53 sauna. This sauna is freaking awesome. I guess probably too hot, but oh my gosh, it's amazing. Now, when you're buying 2:01 real estate, we're always looking location. Here we are. You come out the back porch. Yeah, I know. I still have to do a little landscaping. Don't don't don't 2:09 beat me up too hard about it, but come off the back porch. You're right there in the woods. You're right off the water. Tide's out right now, but that's 2:16 the Hood Canal right out there. And as an addition, guys, this is my yacht. You know, all multi-millionaires 2:24 have a boat. Look at that thing. There's some square footage on it, it just happens to be a sunken ship. That sunken ship that actually came with the property. So, I own that boat. There's 2:33 nothing really to do with it. All of the business ideas that you can think of, the answer is no. There is no cost effect way to do that. Out there, that 2:40 is the Hood Canal. Salt water right in the foothills of Washington State's Olympic Mountains. This is one of the prettiest places in the US in the summer 2:49 specifically. Uh we also have this little river that runs through Robin Hood, which by the way, we've just arrived at. Check it out. Boom. 2:58 This is walking up on Robin Hood Village Resort. This historic building here, this is 90 years old this year. We hope to have Robin Hood on its 100th year. 3:09 We'll see if uh we keep hospitality. I live in Texas. This is in Washington. 3:13 But as you come into Washington, here it is. 3:27 So, it's a 20 cabin resort. Every cabin has an individual hot tub. I'll walk you guys through the wedding venue and the 3:34 uh the concert space. But, if you guys ever saw that video where we had a totally flooded out cabin, right, when we bought this, the sink blew up on this 3:41 one. So, this is cabin three. One of my favorite cabins on the whole thing. But, looks like this. It's a two-story cabin. 3:48 I'll scroll up here so you can see. Look at that. It's a loft style cabin right here in the woods. Your own secluded little spot. You got a patio. You got 3:55 barbecues. Absolutely gorgeous. When we put this together, this was early in my career. I had $20,000 in my bank account. We purchased this for $4.5 4:04 million. White House was 900,000. So, we're all in $5.4 million on this entire project. All of it was seller financed. 4:12 All of it was low interest. Robin Hood was an 8-year note. So long-term debt, not hyper long-term, but certainly 4:19 long-term. And you open up to the whole campus back here. We're sitting on about 13 1/2 acres over here and another two on the other side. It's about a 15 acre 4:28 adventure here. Now, it used to be a restaurant. So, what we're in right now 4:36 is the laundry room. And this used to be the commercial kitchen right here. It is now an extension of our laundry room. 4:41 This where we headquarter a whole bunch of our stuff. Now, we have a guest over in the Robin Hood suite. Otherwise, I'd show you. It's my favorite unit in the 4:48 whole building. But we will walk through to the historic pub. So, welcome to the pub suite. This 4:56 is where a lot of the indoor concerts are held. A lot of events are held. It's also where I do the catering when I run our Robin Hood real estate events. This 5:04 is where I spend a lot of my time when I'm at the Robin Hood. Just a big open space. We'll do concerts up in here. You 5:12 would be amazed how many humans you can actually pack into this space. It is absolutely unbelievable. We have this mural 5:19 mural that is about 70 years old of the Hood Canal, but really cool, extremely unique space. One thing that I do like 5:28 about this particular project is that it is a oneofone. It is an amazing location and there is nothing else quite like the 5:35 Robin Hood. Cabin 1, Cabin 2 are also historic and original to the resort. 5:40 These two shake roofs, real simple design, but gorgeous little cabins. And look at the landscaping that we ended up doing here. We took this thing from a 5:48 little bit uh crusty, I believe, is the word, and we turned it into something actually quite nice. That was once a 5:56 laundry room that is now two more cabins. This here used to be the old liquor store. We converted that also 6:03 into a giant cabin. Now, walking in the back here, I'm going to walk you guys over to the wedding venue. The wedding venue is a significant part of our 6:11 revenue stream. It books out to the entire weekend. They book the entire campus and the grounds. Pretty much runs all summer. If you were here and you're 6:19 a guest, this is what you get to stay in. When I say one of one, I meant one of one. A reminder, when I bought this, I had no money and I had no business in 6:28 the the event space or the wedding venues. So, when we did this, we learned how to play the game at a different level. This forced us to grow. Going 6:37 back in time, I would not recommend if you have no experience in hospitality, spending $5.4 million, assuming that you're going to knock it out of the 6:44 park. And in fact, not all members of my team did knock it out of the park. We had to change around some of the ownership of this very early because my 6:51 multif family team was not necessarily the team for the job. I've reached a little wedding venue that's going to 6:58 hold about 100 people, actually pretty comfortably. I do want to replace this archway. It looks beautiful decorated, but if you don't decorate it, it kind of 7:07 looks cheap. This river here has a little salmon that run up and through it. Uh salmon run, I think is in October 7:15 typically. Uh but just beautiful, beautiful little creek that runs through the 7:30 back. And now we get to the main area. 7:33 This is the actual reception area. This stage is where we host a lot of our concerts. Here's our outdoor door bar. 7:39 So, there'll be vendors here set up. You can buy drinks, sit here. We'll get 200 foot here. And on the back lawn, run a few major major concert series. Uh we 7:48 have some actual pretty big artists who come out here. They typically stay in those cabins right over there. Food trucks will get delivered into the back here. So, right there on those pads, 7:56 food trucks will line up in the back. We have hookups for each of them. So, they'll hook up, power up. You got vendors, you got food trucks, you got live music, you have events going on. 8:07 Each each and every one of these cabins, we try to give them some privacy, but each one has their own hot tub as well. 8:13 Mostly in the back of the cabins or under a covered area. But this is what we bought when we were in our first year of business. We just wrapped up year 1. 8:21 We had bought the 38 plex, a 12plex, a 10plex, a 6plex, and another 12plex. as far as we'd gotten in our portfolio. 8:30 This was the next deal we did. We just went swinging for the fences. $5.4 million. And here's what we ended up with. the absolutely unique seller financed Robin Hood Village Resort.
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