based off the 1% net rule of thumb. If I’m buying a property for $300,000, it

needs to generate $3,000 of net cash flow. After all my expenses, everything

$3,000 that I’m actually putting in my pocket. We realize if I could get to eight of these, that would would replace

my W2 income. Like that’s the freedom number.

[Music] Welcome back to the Hybrid Real Estate Professional Podcast, the show where we

help you build a life of abundance through real estate and small business investing without compromising what matters most. Today’s guest is Kirby

Atwell, an Army veteran, West Point grad, and the founder of Living Off Reynolds. After serving 11 years in the

military and earning his MBA in real estate finance, Kirby went on to flip and renovate over a 100 properties in

the Chicago area. But it was his pivot into high cash flow vacation rentals that changed everything for him. He now

lives on a 45acre farm in northern Indiana with his wife and kids, funded in part by a single 800 square ft barn

B&B, which we’ll ask him what that means in a minute, and helps others do the same through his vacation rental

investment blueprint program. We’ll talk about how Kirby left his day job to pursue real estate full-time on two

separate occasions and why the second time has been so much more successful than the first. We’ve got a lot to cover, so we’ll jump straight into it.

Kirby, welcome to the show. Erin, it’s uh awesome to be here, man. Thanks for having me. Yeah, you have a a very diverse range of

experience, and I’m excited to um you poke at a few different elements of it. But let’s kind of rewind the clock and

and start. Actually, one of the observations I’ve had with some of the most successful investors that I’ve met

are that a lot of people come out of the military and get into real estate. So, can you talk a little bit about kind of

like how you initially got exposed to the idea of real estate and and was it during your time in the military or or

how did this all kind of come to exist in the first place? Yeah, I was actually um kind of

surprised about this myself actually because I um I’ve noticed the same thing on my podcast and I’ve interviewed so

many other military uh or or veterans that had served in the military that are now in real estate and doing well. And

so, uh, you don’t think about those two skill sets as being similar, you know, like one’s more entrepreneurial and

one’s more like you follow orders and do what you’re told. And but but there is a lot of crossover. And so, uh, yeah, I

left the military in 2011. Um, I had I’d gone to West Point, like you mentioned, and I served uh, six years as as a as an

officer in the army. And while I was in the army, I picked up uh what I like to refer to as a gateway drug into real

estate investing, which is Rich Dad Poor Dad. And uh I read that book uh and like

so many others who have the same story, it’s there’s something about it that just kind of clicks in your mind and

you’re like, man, this this just makes a ton of sense. And um so at that point, I was a year out of college. This was

2006. And I read that book and I was like, this is something I can do the rest of my life, like regardless of

anything else that I’m doing. Kind of like, you know, your show, the hybrid investor, like I can hybrid this with

other activities. So, I know I’m going to be serving the army for at least the next 5 years. Um, and then after that,

you know, I can either do this full-time or or do it on the side until I’m 100 years old. You know, that’s not like uh

playing a sport or something where it’s like you have a very short window. So, I just fell in love with the idea of being

able to build cash flow and wealth over time. And so, uh, I bought a couple properties in the army, but then got out

in 2011 and I didn’t, uh, know, you know, what

direction I was going to go. I I just knew I wanted to do real estate. And I had these visions of like straight line

success, you know, like I was gonna get out of the military, just start flipping properties, doing deals, and and create

all this income and and have all this success. And that’s not how it went. Uh I can tell you it it was like many

others have experienced, it’s it it was kind of a longer road to figure out the

path, right? And so um I decided to flipping was going to be the way to go because I didn’t have a W2 job anymore.

And I went from being the commander of a homeland defense site in northern Japan. I uh had a a site where I had 100 guys

that worked for me and this billion dollar radar system and we monitored North Korea for missile activity. And I

went from that to moving into my parents’ basement and hanging up the uniform and just being some guy who’s

trying to start a a real estate investing company has never really done any deals. So, it was quite a transition

um of identity and at the same time trying to get this this this business started. And so, eventually I got one

deal going and I partnered with a couple friends of mine from high school and and then we did multiple deals at the same

time and we started to scale this flipping company and that was my first kind of fora into doing real estate

full-time. Yeah. No, that’s amazing. And you you talk about the crossover of military

skills and even in my mind discipline is probably the most translatable

characteristic of of the people that I’ve met that are um veterans that also invest because that actually and

leadership you mentioned you had 100 people reporting to you. So learning how to build culture around a team, how to

hold yourself to high standards and how to have the discipline to execute on a daily basis. Those are all skills to me

that map into real estate. even if you’re doing, you know, single family residential flips with a small team um

that aren’t coming out of the military. Um I can see how that would map over. But it’s really interesting what you said that, you know, you kind of had

this vision for a linear path and you were going to, you know, find things that fit maybe a certain buy box or

profile. I’m guessing you you you had a certain number of, hey, if I do X number of flips, it’ll give us the money we

need to maybe go buy rentals. What was like the original plan other than get out there and start doing deals?

Yeah. I wish I I I had a plan like you were kind of laying out there. Uh it

wasn’t it it wasn’t super detailed. Um and to your point too, just going back to the the the crossover or I think the

biggest um skill sets that I I developed in the military and that I see. I think

you’re right. Absolutely. The discipline to just cons consistent, you know, have consistency is a huge one. learned that

at West Point, like you know, there’s structure to every single hour, every minute of your day. Um, but then also

once I got into the military, being thrown into situations that you’re not prepared for, I think is so is such a

in at the moment it doesn’t feel like a a great thing. It doesn’t feel like it’s a benefit or something that is positive,

right? you feel like a fish out of water. But then looking back, that experience makes you so much more

prepared in the future to be able to do that. And so getting out of the military, I had gone through all these

situations where like, you know, I showed up in Japan and I was like, “All right, you’re the guy in charge here, you know, and it was like this ceremony

of like, you’re taking over as commander of this site and my boss went back to Hawaii and I had to just like figure it

out, you know, and and uh and so going getting out of the military then and

starting with real estate, I think I had an easier time like wrapping my head around this

new situation because I’d done that already and I’ I’d been exposed to those

situations in the past and I see this a lot with with um real estate investors. they kind of start in the flipping space

because it feels to to me it felt like well this is a way to generate income right like we I don’t qualify this back

2011 they didn’t have these DSCR loans that they have now which are great loans for single family to 4-unit properties

basically all that existed was conventional loans and you know a big part of that was was looking at your W2

income and I didn’t have W2 income so I was like well you know we can flip properties and so um you know my vision

was like we’ll just start turning these over quickly and we’ll just generate these big chunks of cash. And in the

beginning, you know, it actually we had success on the first few. Um, and and we

created some money, but the the problem is like you spend 6 months doing this,

going through the whole process from the buy to the rehab to the marketing and selling. And if you have some money at

the end and it does go as planned and you do make profit, which sometimes it doesn’t, uh then you you have to pay

taxes on that money and you’ve also accumulated expenses for the last 6 months that you got to pay now. And so

you’re kind of back to square one. And so we created this process of like

always just enough to get back to where we started, you know, and so we thought, well, we’ll just grow the volume and

then we’ll just grow the size of the deals. And it was, you know, we’re creating more and more overhead with it

as we were doing this. And it was always the same thing. It was like this big treadmill. And so after five years, so

so I guess to answer your question, the original goal was just to create a whole bunch of capital that we that I could

then use to um either live off of or or reinvest. And I didn’t really have a

clear plan at the time. It’s my my goal setting process has changed a lot over the years and I’ve gotten a lot more

clear on that. But um but it was after five years of doing this, I’d flipped 70

properties and I was kind of in the same place financially. You know, we had learned a lot. We had done a ton of deals. Um, but you know, it was just I

knew it was going to be this treadmill that I would never get off of if if I just stayed in the transactional space

instead of creating long-term cash flow. Yeah. You know, it’s really interesting.

Um, you mentioned that your your strategy and goal setting process has changed a lot over the years. I’m sure

it has. And I know you and I both work with new investors and kind of teach them how to get started in a couple

different strategies. I do think there is something to be said for just getting started, right? You don’t necessarily

have to have your 10-year thing figured out exactly perfectly crystal clear. Yes, that can help. And I think, you

know, um, as people who coach others, you probably encourage people to have an outcome in mind before they start, but

also like there’s a lot of people that spend their whole, you know, a year planning and and never sending a single

offer or never taking any action. So, there is something, you know, it goes back to the military characteristics. I

forget which branch in the military, so correct me if I’m wrong here, but improvise, adapt, and overcome is something I always heard. Um,

absolutely. And, uh, you know, that’s that mindset, I’m sure, serves you well. When you get started, you build, you

realize over time it’s a treadmill, but you at least are building the skills. You’re getting in the reps, you’re understanding. I’m sure every project

had its own lessons. There were some things that went really well. There’s probably some things that you wouldn’t repeat. and getting that experience gave

you the perspective to then go into the next chapter of of your your journey. And so even without, you know, a crystal

clear idea of where you’re heading, nobody can re retrace or or take away that experience that you got in that

first chapter. I don’t know if that’s how you kind of reflect on it or not, but um you that’s that’s what I hear when I when I when I tell that story.

Totally. Totally. And and I’ll Yeah. and and you know I was in the same place financially so really hadn’t created any

wealth or cash flow or anything in those five years you know we generated millions of dollars but put it all back

into the business um and so yeah financially I was in the same place but to your point I was in a much more

prepared place going forward having that perspective of all these deals and understanding you know the the

experience of going through all these different situations to where then moving forward into the next phase. I I

was so much better prepared. So, for sure, you don’t you’re never going to have it all figured out from day one. And everyone I talk to on my podcast,

it’s like they’re like, “Oh, if I just knew then what I know now.” But the only

way to know then is to go through the experience that gives you that knowledge now. Yeah. One of the things I always

encourage people to consider, uh, a lot of people want to jump straight into a specific strategy. they hear it on a

podcast or they hear other people doing it and people focus so much on the strategy before they even define like

what the outcome is that they’re looking for. I know you have four kids. I have three young kids. And um you know, for

me, a lot of what I’m trying to enable with my investing is the ability to spend time with my kids while they’re still young and in the house. And if I

built a a machine similar, like if I if I tried to do what you did and got, you

know, a high volume flipping business going, something tells me that probably wouldn’t line up with my actual goal of spending more time with my kids. So, I

think they’re all viable paths and you can build those machines. You can be profitable, but attaching it to the

actual outcome that you’re trying to enable, I think that’s that’s probably the most important mindset shift for me

around setting goals. Um, and I imagine you probably have a similar thought at this point.

Yeah. What do you think? Exactly. Oh, totally. And and it’s incredible to me too how many people

fall into a strategy and continue to do that strategy just because that’s what

they’ve always done. Even though like you said, the most important thing is identifying does this is this the

absolute best thing I can do to get to the outcome that I’m after the most

efficiently and the quickest way possible. And most of the time I see that it doesn’t line up. But people just

don’t think through that lens. are just like, well, either they they they fell into this strategy or it’s just like

something that maybe their parents did or somebody they saw do and so they they do that, but they don’t ask the question

of is there actually a better way? And I think that’s important, too. Yeah. And you can emulate people who

have success. There’s nothing wrong with that. But at some point, you have to contextualize it to your own life. I think sometimes people try and copy

paste other people’s life plans, other people’s business plans into their life, but you probably have different

circumstances. Nobody lives the same life. You know, um, variables and dynamics change over time. So, if you

try and put in a playbook that somebody used successfully in 2018, in 2025, there’s going to be differences. You’re

going to have to adapt. And that’s where having a mentor or a coach or somebody that can help you understand how to

frame that stuff and and, you know, help save you from mistakes, you know, can can really make a difference.

Totally. So before we leave the flipping chapter, I saw in your bio you you mentioned you kept some of them as

rentals. So over time, you said you did this about five years. What was the point at which you started looking, hey,

you know, I we’re going to keep this one, we’re going to sell this one. How did that thought process evolve? So I I

wish I was that smart to to have kept some of them as rentals because I look back and and I talked to

so many flippers that have the same perspective where it’s like man if I just kept one out of three right now.

Like I look at the prices that we bought them at and what we rehabbed them for and they’d be worth like triple right

now, you know. Um, but we were selling them. And the funny thing is, you know, Black Rockck was one of our ma main

buyers, you know, it was the hedge funds back at the time and and they were not doing inspections on them. Like they

were paying above what retail buyers would pay. And I’m thinking these guys,

everyone thinks they’re so smart and they’re these guys are idiots. Like they’re they’re buying these properties

that, you know, they’re not even inspect. they could like have all kinds of issues and they’re paying top dollar

and those are the guys that now are sitting on these properties that are worth three times as much. But um but

yeah, at the time we needed capital and so we we were flipping them. Um, and then in 2016 is when I kind of had this

epiphany where I was like, wait a second, like I could do this for the rest of my life and still be in the same

position or I can start buying rentals, which is what the whole reason

I got attracted to real estate. When I read Rich Dad Poor Dad, it was like you can build up these streams of income to

where at some point you don’t have to work an active job and you have so much

more flexibility. to your point, like be able to spend time with your family, which is huge uh for me as well and and

an important um uh aspect of my life and and just have a lot more flexibility and

autonomy. And so I knew that I needed to start creating those streams of income. And that’s when I kind of switched to

long-term rentals. It was after I’d flipped the 70 properties and started buying some long-term rentals at that

point. Gotcha. Yeah. You know, it’s um it is one of those things where it’s hard to

zoom out and think over a long-term time horizon. And this is another thing when

people get into real estate and they want to buy their first rental property, they get really excited about the idea and then you go buy a property and it

cash flows, you know, a net$1 or $150 a month after expenses and that excitement

wears off because you’re like, I can’t do anything with this. What am I supposed to do? And and what you have to do is keep the long

term in mind. you know, 10 years of rent growth, price appreciation, loan payown,

depreciation, all this stuff in aggregate, you know, over time is incredibly powerful. But in the moment,

the way human emotions are when we see $100 hit our bank account in 2025, it

feels insignificant. And um so yeah, I think even just coming to that realization, whatever you have to go

through to get to the point of being able to think like that, um you know, that that’s a powerful reframe I’m sure

that you know has since served you well. So you said that was about 2015. You started you getting into rentals. At

what point, you know, kind of fast forwarding did you turn on to the idea of vacation rentals?

Yeah. So there’s a few things that happened right around that time frame um that were really important and I think

changed the trajectory of our our future. Um number one was I got married uh in 2015

um to an incredible spouse. And I think that’s probably the most important

decision you can make in your entire life. Um, you know, it’s it just impacts every single component of your life and

can impact it positively or negatively. Um, and and fortunately, um, it was one

of the best decisions I ever made. I went from basically making decisions based off of myself and

more like based off of like what I saw other successful quote unquote gurus,

you know, saying success look like, you know, it was more of like the the things, you know, it was like the the

the trappings of success. And after I got married, we started talking together and

realizing what our actual version of success was. Um, and like you said, like it’s

different for everybody, but for us, like we didn’t really care about any of that stuff. Like I don’t care if I have

a Bentley or a private jet, you know? Um, even if I I had all the money in the

world, I probably wouldn’t drive the pickup truck I drive now cuz I love it, you know? So, it’s like I that none of

that stuff is important. What was important was autonomy and making an impact on other people, too. Um, and so

we wanted to control our time and and we also wanted to live on a farm. Um, and so we got clear on this and then it gave

us a place to backwards plan from and and we realized that yeah, the the few hundred a month of net cash flow from

the long-term rentals probably wasn’t going to get us there in a time frame that that we wanted. And so we moved

from Chicago over to Northwest Indiana. And we bought this house that was like

1975 inside, all original, and we were going to rehab the the house. Um, and it

had this unfinished basement. And so we were talking like, you know, this is 2017 at the time and we’re like, you

know, we keep hearing about this Airbnb thing. Um, you know, what if we just try this? What if we turn the the basement

into a separate apartment and rent it out? And so we did that and we put it on Airbnb just before Memorial Day and uh

that whole summer started booking up like crazy. And we made $22,000 on this little dinky one-bedroom apartment with

no windows just over that first summer. And I was like, “Okay, I have long-term

rentals that don’t make 22 grand in a whole year, and I just made it on this tiny little apartment uh short-term

rental.” So, that was when the idea sparked, and we really were like, okay, if we can scale this, there’s something

to this. And then we did a few single family and then we realized, okay, if we buy these small multi-units with

multiple streams of high income coming in as short-term rentals and they’re in

areas that are relatively budget friendly, we can create some really significant cash flow. And so we started

doing that and that just just changed everything for us. Gotcha. Yeah. So what’s interesting and

the timing of when you started this was a bit ahead of what I would consider to be the wave where it got really really

popular. Yeah. Which is great. Right. So you you built again a lot of probably early experience as what it takes to be a good host. How

to, you know, manage listings, how to learn dynamic pricing, a lot of the skills that I’m sure you need to be even

way better at in today’s market to compete. Um now that I guess short-term rental is a more sophisticated strategy.

and um and it seems like there have been these waves of popularity and then there was pullbacks and now it’s a more common

thing. So I think I told you you know before I invest in residential assisted living and I feel like that’s kind of

like at the beginning of a wave right now. Short-term rentals like the wave started cresting in um you know 2018

2019 and especially in COVID that was kind of one of the things that people when people were first coming back out

they were staying at short-term rentals instead of hotels. Um, you know, so it

seems like there’s been a few mini cycles within the bigger cycle of short-term rentals, and you also

mentioned, you know, you’ve you’ve rented extra rooms, you had single families, you had multifamilies. There’s

so many options. And where I’m going with this is like how does somebody how is somebody supposed to especially if

they’re starting today starting at a very different time in that um maturity than than you did. How is somebody

supposed to pick what type of property to even think about considering before they get into this? Yeah, it’s such a

great question. And to your point, like a lot of people will say, “Well, Airbnb is this or Airb or short-term rentals

are that and they clump all of them together.” And just to give some context, there was over a half billion

bookings with a B on Airbnb alone last year. That doesn’t include Verbbo,

doesn’t include direct bookings, doesn’t include all the other sites that are out there. Um, a half billion. So to clump

all of them together and say they’re all acting in a certain way is like saying

Ferraris and minivans um act in the same way like you know it’s like the whole

auto industry like you know there’s there’s niches within this niche of short-term rentals and it is such a

massive niche now it does kind of get put all all in the same category but uh

I think it’s so important to focus on again go back to your specific goals and

and figure out what it is that’s going to get you to that goal the quickest. And I think the mistake that a lot of

people make when they get into short-term rentals is they Google where’s the best place to buy short-term

rental, right? And and what comes up? The most popular places. So, if you Google that now, it’ll show you some of

the top places are, you know, uh, uh, Los Angeles, California, and Rio de

Janeiro, Brazil, and like London, you know, England, and and these are Yeah, because there’s thousands of listings

there. But is that the best place for you specifically depending on your goal or it’ll be like top vacation areas like

the Smoky Mountains or Joshua Tree or Destin Beach, Florida? And that’s where everyone then tends to flock because

that’s where everyone else is doing it. And so everyone’s fighting over this like highanging fruit of these high-end

vacation rentals because it’s really expensive there. And meanwhile, there’s a massive amount of people who travel

just for general reasons. Like anywhere where there’s population, there’s going to be people traveling for weddings, for

funerals, for work, for um visiting family, for just any reason you can

think of. like hundreds upon hundreds of reasons people stay in hotels. And so if if you buy in these areas that are

relatively affordable but yet still close to population, so we typically buy just outside of cities, uh what we found

is that if you buy a a nice small multi-unit, you can have multiple streams of income coming in and we also

have a super listing where we list the whole building together. So in the summertime for us when it’s a busy season, big groups want to travel, big

families, friend groups, wedding parties, and they all want to stay together. And so you can charge a premium for this place that sleeps 20

people, but yet you can have four separate units in the slow season when it’s typically, you know, um uh the the

couples or the small families that want to, you know, weekend getaways and that sort of thing. So you got this great versatility as well as super high cash

flow. And I kind of fell into this a little bit based off of fear, you know,

because uh I wasn’t willing to go jump into the million-dollar price point um

places that were the the the mainstream vacation rental areas. And so I was like, well, what if I buy it in a place

like we’re we’re in Michigan City, Indiana, where it’s super affordable and I know worst case scenario, I can always

convert it back to a long-term rental. And I’ve I’ve kept that same strategy. Now, we have 39 short-term rental

listings, and every one of them could be converted back to a long-term rental at some point, and they still cash flow.

So, you know, even if there’s a financial meltdown or regulation change or any of these other things that could

come up, I’m still in a really good situation, I’m not going to lose my properties or anything like that.

Yeah. Having multiple exit strategies or at least available options to exit um or

hold, right? to your point, it’s not even an exit. It’s a multiple hold strategy that you could convert to long-term rental

and hopefully you would at least be breaking even after expenses if not making a little positive. But I guess so really important points

you’re making. It is. I think if you only examine short-term rentals at the surface level, you are going to kind of

gravitate towards those more popular destinations where you either have to buy an existing one that’s going to be priced at a premium or you have to be

really crafty and resourceful and find a good deal that you can get favorable financing on and set everything up

yourself and do it um and compete with people that already do have existing listings. Both of those sound like paths

of very high resistance and friction unless you have a you know steady hand guiding you. But there are all these

other options available. I had this misconception which I’m happy for you to correct right now that after that COVID

boom where people were all staying like every available Airbnb was pretty much booked because that’s where people were

comfortable staying. But then in 2022, 2023, some of the listings that were

those spare bedrooms, they were these not really competitive. There no real competitive amenities, they were

available, but they were no longer attractive as people started going back to the hotels. A, is that a real trend

or is that just me making that story line up in my head? and and B, you know, is there a um, you know, can you still

compete with those kind of like um, spare room or I guess entry level type

listings in in today’s market? Yeah. Yeah, it’s a great question. Um, I I’ve actually, so I’ve never done spare

spare room like we we’ve never rented out an individual room in our house. We we have done the separate I’ve house

hacked ever since that first basement apartment. Um, it it just worked really well. It was a separate apartment,

totally blocked off, so they had their own space, came and left and and didn’t impact our life whatsoever. And then we

moved to this farm where we have a barn B&B now, and that’s that’s our house hack here. Um, but uh to to answer your

question, I think you’re right um that there was a lot of just kind of garbage

listings that were getting, you know, the these hosts looked like geniuses cuz they just set up anything and it was

booking out. like after CO kind of settled a little bit, like summer of 2020,

all of a sudden just bookings just shot through the roof um because people were just wanting to get out of the cities

and and travel and there just wasn’t nearly enough of them to support the travel. And so everyone um did did great

no matter what. Competition is interesting with with short-term rentals, though. If you like today, now

that you know we kind of have more of a settled market, um if you look at any

market, there’s really like the goal is to be ranked on the first or second page

of Airbnb, right? It’s it’s very similar to Amazon. Like if you’re buy a product, you look at the first or second page and

you look for the highest ranked product and that’s what you buy. And that’s the same as how it works on Airbnb. like you

search for an area, you know, the top ones are going to come up. Airbnb wants

to show you the best ones or their most recommended ones based on a combination of reviews and pricing. And people just

book off the top ones. They’re not going to page 40 to look at your your property. And so, if you think about a

market like, for example, Scottsdale is a very popular short-term rental market. There’s one first page for Scottsdale.

So, if you put in Scottsdale, you want to stay there, there’s one first Airbnb page, and there’s also one first Airbnb

page for uh a place like uh someone in my program just finished a a property in

Sous St. Marie, Michigan, which is in Upper Peninsula, Michigan. Most people have never heard of it. Uh it’s right on

the border, but it’s it’s a great place to own a really affordable short-term rental because there’s a lot of stuff

going on, a lot of infrastructure being built, a lot of travel through there, and there’s one first page there. But

when you compare if just pull it up for for the fun of it and compare the first

page listings in both locations, it is unbelievable the difference. Like the

ones in Sous St. Marie, it’s like just like a random iPhone picture of just, you know, maybe the bed’s made, maybe

it’s not. Uh maybe they’re cats in the picture. Um it’s like just somebody who

decided I’m going to try this thing out and it’s not a business. Um it’s not something they’re taking very serious.

Scottsdale, it’s an arms race of amenities. Like you literally better have the top pool. Not just a pool, but

like the the waterfall, you know? You better have the pickle ball court. You better have like And next week

somebody’s going to one up yours. and and because there’s only so many people who can afford that high-end vacation

and you have to be the top one and so the the top page of the thousands of

listings in that market is extremely competitive, but then you can it’s easy

to dominate these smaller markets. So competition is is really interesting when you start to compare it locally and

with the type of property that you’re you’re renting out. Yeah, I think this is a really important conversation

because again, me not having focused on short-term rentals myself, but being very aware of or at least trying to pay

attention to the trends and also knowing a lot of people that have done this. The prevailing theory that I hear is that

it’s more of that arms race of amenities that you’re mentioning. But to your point, that’s if you try and go compete

in these very saturated markets, which you probably can do. It’s not that anybody wouldn’t be capable of doing it,

but it’s more capital. It’s more money on marketing uh and probably a lot more

stressful to try and because like you said, you could have the nicest listing today and then somebody you know in

October opens a new one that has all the same amenities plus a couple more and all of a sudden you’re struggling to to

keep up with them. So in your program and like with the type of people that

you know you’re usually helping, are you trying to help uncover these areas of opportunity like these smaller markets

where the entry points are more affordable? you give them the systems to compete in a less crowded pool. Is that

like a common strategy or is it really all across the spectrum? No, that’s exactly it. Yeah, a lot of

people I work with are either just starting out for the first time or they’re people who own the the the Smoky

Mountains million-dollar cabin or the the Scottsdale, you know, desert oasis

property and they paid a million bucks for it. When I ask them, you know, what’s your what’s your cash flow on it?

Most of them default to, well, my gross income is 100,000 a year. I’m like, “Okay, what’s your cash flow?” You know, nobody

wants to talk about the bottom line on those properties. And they’re like, “Well, you know, I’m making like 500

bucks or a thousand bucks a month.” And, you know, and they justify it because they own this Instagrammable property

and they’re like, “Well, longterm it’s going to appreciate. So, I can justify this.” And meanwhile, in these really

affordable properties, I buy based off, and this is what I recommend to everyone I work with, buy based off the 1% net

rule of thumb. So, if I’m buying a property for $300,000, it needs to

generate $3,000 of net cash flow after all my expenses, mortgage set aside for

maintenance, utilities, lawn care, everything. $3,000 that I’m actually

putting in my pocket that I can pay my grocery bills with, can pay my personal mortgage with. Like, that’s the freedom

number at the end of the day. I don’t care about gross. But if you buy a $300,000 3 unit that’s relatively

turnkey, typically in the Midwest, you see this these price points, that could

bring in two grand a month per unit easily. So, that’s $6,000 of net cash

flow coming in. And then if you subtract out your expenses, you know, $3,000

worth of expenses, you’re left with $3,000 of net cash flow, you know, just as rough numbers. Um, and that’s very

doable. And and and so the ROI on these types of deals are just so much higher.

And so yeah, so that’s what I kind of take people through the the process of identifying for them because it can work

in a lot of areas, but for them based on their competit their uh competitive advantages and their um preferences and

their goals like what’s the perfect market for them and then you know we build economies of scale there.

It’s really fascinating because you know I I run a program where we teach people how to invest out of state and our primary focus is on long-term rentals

and we have similar fundamental ideas. It’s like you there are markets across the country where you can buy properties

at very, you know, great value. Um they’re still affordable. You can still

get decent cash flow and long term over a long time horizon. You can it’s a sustainable strategy that doesn’t

involve you having to put, you know, $200,000 down to buy down, you know, rates on a property

just to barely get it to break even in cash flow because you think, you know, you’re betting on long-term appreciation.

Some people do that and it absolutely can work especially if you can endure whatever ups and downs come in that

market. But it’s a stressful way to live and kind of the the approach that you’re taking is very similar to how I think

about these like kind of um more stable markets. It’s also I I sometimes draw the parallel between uh stock investing,

right? Like some people bet on the the Tesla and the the big growth stocks and

that can work really really well in the long run. But if you’re a 100% indexed on growth stocks, then you’re going to

be riding a roller coaster every day. There’s the idea of this kind of like dividend stock or these more stable

legacy companies, blue chips if you will. And um you know the the Midwest markets and the more stable, less

volatile markets are the ones I kind of think of as like the dividend stocks. You can buy a good value, you can create

good cash flow over a long time horizon. It’s going to work out probably to accomplish every financial goal that you

may ever have. And uh and it’ll probably be a lot less stressful than trying to play, you know, especially if you’re

doing this on the side, like while you’re working full-time or while you have kids, unless you’re going to make it your main main thing to be I’m going

to be the best competitive short-term rental owner in Scottsdale, like you’re competing against people who probably do

have more time and resources. So, that’s where that kind of goal setting and lifestyle stuff we were talking about

earlier, like what’s the end outcome you’re trying to enable? Is it to spend more have more time freedom and um you

know enjoy your life or is it to be super competitive and work 60 hours a week to to stay afloat? So I really like

the approach that that you’re taking and how you kind of um instead of trying to go straight, you know, upstream to the

the cream of the crop, which I’m sure you can help people with, too. You’re also providing this alternative

perspective that there are other markets where you don’t have to do that and um and you can still find success. Yeah.

So, yeah. Absolutely. Absolutely. So, what is the barn BNB and um and how

does a single 800 foot um listing potentially pay for I believe you said

your entire living expenses on a 45 acre property, but yeah, fill us in a bit. Yeah. Well, uh the entire mortgage and

that was as of before we just refinanced. So, I just pulled out a ton of um cash uh out of our property

because it’s appreciated so much since we bought it just in 2020. Um so, the mortgage is a little bit higher now. Um

we used a VA loan, which is a great terms and everything. Um so, it doesn’t the BMBB doesn’t quite cover the entire

mortgage anymore, but um but it’s pretty close. Uh and so we bought this pro. So,

our our you know, we wanted to we initially moved over to northwest Indiana and moved right on Lake Michigan

and had no yard and then we started having kids and realized this wasn’t the smartest uh setup for for a growing

family. Um right on the lake. Uh and so we we knew we wanted to move out more to

the country. We wanted to grow some of our own food, have animals. Um and so we moved about 20 minutes away from from

there to buy this farm. And it’s a 45acre farm. Um, and my parents actually ended up moving in next door to us, too.

Uh, they moved out from Illinois. And, uh, it’s been a amazing setup, but it ca

it was it hadn’t been lived in for 15 years when we bought it. So, it was totally overgrown, totally outdated, but

it had these big outuildings on it. So, it had a couple garages and then this huge 40 uh 55x 65 ft pole barn. It was

built in the ’90s, and they were using it for animals. So, it was, you know, all unfinished and in rough shape. But

we we rehabbed the whole thing. And so that’s where I’m sitting right now. My my office/ studio is part of it. Um but

we had it’s so big that you could use it for so many different reasons. And so I

can work out of here um and run my business out of here. And uh we’ve got a a big gym um that our our guests can use

as well that we created so we could cancel our gym membership, you know, and and so my dad and I both use it

regularly. And then uh we built a barnbnb in the corner. So it’s a Airbnb that’s in this barn. It has a loft

upstairs. So it sleeps six people. Um and uh it just stays out stays booked

out like crazy. Uh we we have almost 200 all five star reviews. At this point we

have 190 reviews and every single one of them is five stars. And these are people who are literally sleeping in a barn.

You have to go. And so when we did it we’re like is this going to work? We didn’t really know again like you don’t

know all the um steps but but we looked at others and and we realized that sometimes these unique setups actually

perform the best and and people we actually thought it was going to be all city people wanting to come out to the

experience a farm. Ironically it’s a lot of farmers and a lot of people in the country that are like I have no desire

to be in the city when I travel so I want to be on a farm uh because they like that lifestyle. And so, um, you

know, we have our chicken coupe right outside the door of 50 chickens and there’s there’s roosters in the morning and stuff and so we’re clear with our

guests like this is a farm. Like, you know, you’re going to hear farm noises and, um, and so, uh, it’s just done

really well. And so, it stays year round. It stays pretty booked out. I mean, we probably have like 80%

occupancy rate. And, uh, in the summertime, we can charge quite a bit. Um, and it it’s paid for our whole

property. So, this is just like a kind of a creative house hack. And we’re we

feel like we would never not be in a house hack situation. Whether it’s renting out a barn, a basement, a

finished garage, it just when you eliminate your cost of living, whether

it’s rent or your mortgage, it’s not like a one-time, you know, I I eliminated my mortgage payment. It’s

like forever. Like the the what that does to your personal finances. I can’t like this is like one of the absolute

most impactful thing anyone can do to their personal finances is figure out a

a um house hack situation. Whatever that is for you, whether it’s renting a room in your house, buying a duplex, whatever

it is, where you can offset your cost of housing, it just changes your financial

picture in a perpetuity. Yeah. No, that’s amazing. And and I think too and this might just be a

limiting belief of of my own uh because obviously there are solutions but we had three kids in the last you know three

years and um it really changed I knowing what I know

now I wish I did a lot more house hacking before we did that but what you’re kind of sharing is that you know

even with you have four kids and um even with the fourth one will be here in a month so

okay yes soon to be four but you know uh definitely a consideration right and you

can’t just pick up and move into a new quadplex, you know, one-bedroom apartment every year

house hacking and building that snowball, but there are different creative ways to do it like what you’re what you’re sharing.

Um, that still are accessible for families. And so again, kind of my takeaway from a lot of your story, well,

a lot of takeaways, but one of them being that there are creative ways to still not only, you know, succeed in

short-term rentals in less competitive markets, but that there’s also creative ways to address your own personal financial situation that um and you’ve

done a really good job, it seems like, in responding to those signals as they present themselves over time. You started with flipping, you know, um you

learned a lot from that. You got your experience, but you also learned that that’s not what you wanted to do forever. you changed your frame, you

evolved, you got into rentals, and then you discovered this path of short-term rentals, and now it’s evolved into what

it is today. I mean, that’s a that’s a great example of um you know, an iterative uh real estate journey. And um

one topic I just want to make sure we hit on before the end, though, because you mentioned that the second time you left to go full-time into real estate

was more successful than the first. I just want to give you a second to kind of frame that and um and share what your

kind of takeaways were and and especially related to if people are considering leaving their job like what

is that kind of right time based on your experience? Yeah. Yeah. So I like you mentioned I’ve

had the um opportunity to leave my job twice uh for real estate and the first

time obviously wasn’t successful since I did it twice. Um I had to go back and get a job. So, the first time was

leaving the army. Um, and and like we kind of talked about, I didn’t have a super clear plan of what that was going

to look like. Um, I just knew I wanted to get into real estate and I kind of envisioned that I would figure it out as I went. And it was a painful way to do

it. Um, living on nothing. Like I said, my my parents were gracious enough to let me live in their basement for a year

while I got started and just was able to scrape together a little bit um to live off of, but um not the recommended way

to do it. And so then after I was done flipping and decided I’m going to build up a portfolio, I had to go back and get

a corporate job. So I got a job downtown Chicago, uh I was a CFO of this nonprofit that I was passionate about,

but um so I enjoyed the job, but I had to, you know, work to to feed myself and

my family at that point. Um with the goal then as as I mentioned, like we started talking about what our goal was

and we knew we wanted to get to a place where we could live off the the the real estate. And so while I was at my job,

then I started building up cash flow and started building up um rental properties and and so I once we discovered this the

strategy of these affordable short-term rentals that cash flow high, we realized if I could get to eight of these that

would would replace my W2 income or or at least be right around the W2 income.

And so that’s what we did. And so that was about four four and a half years ago at this point when I we got to that

place and I I was able to leave the job. And so the peacefulness of that

situation compared to just I’m going to leave and figure it out uh is I mean it

was night and day different. And at that point we you know it still wasn’t quite

enough to where I would feel comfortable if I just stayed with those eight properties. Like I’d be you know really

comfortable. But what I didn’t realize is how much capacity it would free up once I went back to just, you know, um,

working on the real estate. You know, all of a sudden 48 plus hours a week is freed up. And we went from from eight at

that point. Now we have 39 short-term rental listings four and a half years later because we I just had so much more

capacity and I could focus on things that aligned with our goals and and live a more umh

aligned life, I guess. And so I guess I would say like my advice would be don’t

just jump into it, but at the same time don’t take too long either. I’ve seen people on the other end of the spectrum

and they’re like, “Well, I got to get to like this insane number to leave my job.” And I’m like, “Well, what’s the

worst?” Like you can always go back to your job and like you’re going to free up all this time and that’s the worst

income you can make from a tax perspective, too. So, like if you’re making $100,000 a year in your W2 job,

you’re actually keeping like 70,000. So, all you need to make is 70,000 to replace that. You might not even need to

replace it cuz you’re not commuting downtown and eating out and doing all this stuff that that costs a bunch of money. Um, so like when you really look

at it, you can probably do it quicker than you think, but I would encourage people build up some streams of income

first before you pull that trigger and then um, you know, prove it prove it as a as a model first.

Yeah, that’s that’s really good advice because I think sometimes people are waiting for the perfect moment and the

perfect moment might never present itself. Yeah. But but there’s also an opportunity cost and and value of your time. So for you

the number was eight, right? You you did some math to say this is this will get me to a comfortable enough spot that we

can make that cut over. But then like you said when you unlock that time that allowed you to accelerate and do

different things and and kind of use your time in a more valuable way. Yes. And that’s something where I feel like

people often underestimate the value of their time, right? Even if you have a

six-f figureure salary, there are potentially activities you could be doing or things you could be spending

your time on that are have higher dollar productive value. And um people maybe

have I think by default a general assumption that their their time is only worth X amount. But when you’re building

all these skills on the side, you’re learning all these strategies, different ways to accelerate not only your wealth building, but build cash flow,

then you have to start thinking about um you know, if I spend those 40 hours on on my job making $120,000 a year, uh is

that as as much as I could make and as much benefit for and value to my family and and you know, my own um increasing

my own value as it would be if I spent that um time separately on on building

my own thing. So, I really like that framing and I think that’s those are great takeaways. Yeah. Yeah. And just one follow up on

that too, like you you might have to take a little bit of a step back to step forward, but like at this point, I look

back at what I was thinking was like incredible salary, you know, in a W2 job, like if I would just have gotten a

raise to like a certain amount, like that was like a great great income. and and now like I make way more than that

doing something that I really enjoy and like have so much more flexibility and autonomy. And I didn’t realize that was

a reality or that it was possible, but I was willing to kind of take a step back a little bit in terms of income

initially to then be able to build up these streams of income that just accumulate over time.

Yeah. Yeah. It’s really good. Well, Kirby, I u I enjoy getting to know your story. Uh there’s a lot to unpack there

and but I honestly think that the people that have evolved over time and done

different things, gotten different types of experience are among the best people to learn from. Um so it’s great to hear

that you, you know, also are giving back and and teaching other people how to get started. But if people want to get in

touch with you or follow you on on your podcast, your coaching program, uh where where can they find you?

Yeah. Um, I’d say the best place is probably just go to uh um livingoff rentals.com/start.

Um, that’s that that I I’ve got a um web class that I just recently recorded and

delivered there um that you can watch that’s about an hour long that walks you through my entire strategy step by step

of how I think about things, example deals that we’re doing and other people I work with are doing. And so, um,

that’s probably the best place to really learn the most. And then there’s a link there. You can always book a call with me too if you if you want.

Awesome. We’ll make sure that’s all included in the show notes and uh hopefully we’ll do this again sometime soon, but uh thank you again for coming

on the show. Thanks for having me. Thank you for making it to the end of today’s episode. As you may know,

podcasts are very difficult to grow organically. If you’re getting value from today’s episode, I’d deeply

appreciate if you can take 30 seconds to leave my show a fivestar rating and review. This will go a long way to

helping me reach more listeners just like you. Thank you so much in advance.