How he TURNED WASTELAND into $500k/YR with Tiny Cabins & Yurts

This one property makes nearly $500,000 every single year, and it has 11 total spaces up for rent. But it costs a lot less than you'd think to build this all out. And the family that lives here have five key things absolutely working in their favor that help them turn their not-so-special piece of land into literally millions of dollars. And I'll give you the exact number by the end of this video. Now, I stumbled across this little gem as I was researching and in the process of buying another property, this one that I'm walking on as we're speaking. And I had to dig into the numbers just because I knew it was successful, but I just couldn't explain why their occupancy rates and their nightly rates were so much higher than anybody else. And as of five days ago, I'm investing over a million dollars into the area, and I really need to know if my investment is worth it or not. It's kind of important and something I should probably have done before I put in that offer. Now, I want to take my camera guy, Eugene, and our drone out to the property and understand the lay of the land and see how they have things set up. Maybe some things I could even borrow for my next project. But looking at their calendar, it's insanely busy, and our travel window is extremely tight. I even found one of their cabins that would have been perfect for us and with the dates that we needed and was just about to book it, and it got snagged out from under me as I was in the app hitting book. Now, these places are going fast even during the off-season, which is really nice to see. Now, I currently have an offer in on a property nearby, and I really want to see what's successful in this area because it seems like there's a lot of places that are hit or miss, and these 11 listings definitely seem to be absolute hitters. You're a dead hitter, baby. You know what I'm saying? Okay, so I lost the booking with the two-bedroom cabin. So Eugene and I are dividing and conquering, and each of us are getting a different unit, which costs a lot more, but oh, well. Now, this actually works out really well because I just booked the Lux here, and I got Eugene the smart tiny cabin. So we can actually see the different types of structures, build types, and the design that they chose that's working so well for their property. Now, I need to get access to their numbers so I can figure out exactly how much this place actually makes and ultimately how much it's really worth. And of course, ideally get real numbers on how much it actually costs to buy the land and build everything. And the only way to do that is to reach out to the owner. Now, the problem is most owners don't like talking on camera or want their secrets out there on the interwebs, but our host actually seemed pretty open to the idea. Awesome. Now, this is critical because it makes it so much easier to figure out the numbers, and we actually have real-life accurate data until it was actually time to meet and talk with the owner. I got ghosted, just like the good old days of Tinder. Oh, fantastic. What that means is that I have to do it the good old fashioned way, having to actually research and dig into the numbers and run my projections. Okay, let's make the most of this. So I have found with my most successful properties and also helping hundreds of others do it too, that it boils down to five key things that makes a property super successful and can outperform all the neighbors. By the way, if this is something that interests you, set up a free call with me or someone on my team. If you're interested in joining our incredible community and land hacker program and do exactly what this video is talking about today. And actually, there's one extra thing that usually helps property owners squeeze out a lot more value, which can be in the millions of dollars. So right out of the gate, the first thing is the land itself. The land is almost perfect for this style of land hack because it has a few critical factors for their business to succeed. First, there are no neighbors to ruin what I call the three Cardinal S's, sight, sound, and smell. And second, the fact that the property is flat and buildable. Some of the most beautiful pieces of land that I've found have incredible views and amazing locations, but they're sloped like Mount Doom and covered in rocks and trees. So it makes building virtually impossible. Land like this one here has enough vegetation for privacy and views, but flat enough to easily accommodate multiple build sites, septic systems, and parking, which is sometimes very difficult to even get. There's even enough space on this property for a half mile running and walking trail around the whole place. Next is the right location. Now I can't show the exact location, but I can say it's near Austin, Texas, which is a great place because of how popular the city is, as well as all the major events like South by Southwest, ACL, and a bunch of others, along with the natural beauty of the land just around that place. If you haven't visited the area, it's totally worth seeing and checking out. With the live oaks, the cedar, flowers, and rolling hills, it's almost the opposite of what you think about when you think of Texas. Third is the right zoning. And in this case, it's unrestricted zoning, which means that landowners can essentially build and create anything they want without permits or inspections, which is both a nice and scary thing at the same time. If you want to see what it looks like in an unpermitted home, go watch my other video, my last one that I just did after you watch this one to see what I'm talking about. In this area, you do actually need to get a couple of permits. Those two are floodplain and septic system, like we're doing here with our current septic system that we're going to be upgrading. But it's not just that. You also want to make sure that you look at the deed restrictions and make sure that you understand everything that you can and can't do with the property as well. But no matter what state you're in, you must understand zoning and the permitting process. I think every few weeks I get a message or hear a story about someone who had their vacation rental, their property get shut down because they didn't look into zoning or permits. Please don't fall in this bucket and lose potentially hundreds of thousands of dollars. Now, the time consuming part is analyzing the structures and numbers, more specifically, building out a story around the numbers. We can see because it's obvious that the owner isn't willing to share, which is good and bad. Now, I need to recreate the numbers with some degree of accuracy without actually having access to the true financials of the property. Now, first, I always try to establish what I call a beachhead, meaning that I just need to get some real data to start from to build assumptions and projections around. So in my case, I like to use one of my rental analysis sites, and I'm able to hunt down the actual monthly numbers for each of the listings on the property. And if you want to see how I look at properties while I analyze them, go download my free analysis spreadsheet. It helps me project out the revenues and understand the monthly numbers. Just head over to my website, kayandrew.com, or click the link below. If you don't see it, check your spam folder, but I promise it's in there. Now, just like any other online platform, it's not perfect. So some of the listings such as the yurts are not found in their database, but that's okay. Remember, tier one sleuth right here. We'll use the numbers that we do have to create a baseline and then build off of that. And I broke it down into three steps. First, I wanted to record how much each one is making by month. Second, I wanted to find the average daily rate of each listing by month. And then lastly, and third, is to calculate a rough occupancy rate. Now, once I know that, I can then make an assumption based off of the performance of the other listings implied to my projections, which I always like to err on the conservative side. My assumptions here are everything that are in yellow. Now, the nice thing is when you create something like this, you can tweak your assumptions as you're researching and find new or better information and data. We just need to be in the ballpark within 15, 20% or so to get an idea of the bigger picture. And even though I was pretty conservative with my projections, when we put everything together, we can see that that 10 acres is creating nearly $500,000 each year, which is key to the next part. And when I saw how this place was basically printing money, the one thing that I hope they did was hire a great tax accountant and strategist like the sponsor of today's video, Kevin Smoot with Accountability Tax Services, who also happens to be my personal and business tax strategist and accountant. Now, this is absolutely critical in this business or even if you're starting out because it can literally save you hundreds of thousands to millions of dollars in taxes, such as using bonus depreciation and cost segregation if you're investing in real estate. And this is one of the key things that I learned very early on when I was building out my team. Work with a professional who understands tax strategy and law. It has and it will continue to help me save millions of dollars over the years. If you're involved with real estate at all or have a small business, I've yet to find a better accountant or accounting team. Reach out to my Kevin. Link and email down below. Tell him Kai sent you and he'll take good care of you. I promise, or else I'll take care of him. No, I'm just kidding. I love you, Kev. So I'm in the area now filming with Eugene because of this other property that I'm under contract with. And at the same time, we're also filming three other videos. So we literally only had a few hours of daylight when we got to the property to check everything out, do our analysis and get our footage. And at this point in time, we've been traveling nonstop for almost 48 hours and we're running on fumes. But I really needed to know the secrets of this place and why it's so financially successful when others around it were not. Now, when we booked our stay, the two bedroom cabin was snaked out from under us that one day that we needed it. And so we ended up having to sleep in separate listings across the property. But that actually turned into a great thing. And we got some epic footage of the two spaces. Now the smart cabin was roughly 250 square feet and designed very well with a kitchen and large lounge deck that was completely private. I can easily see why couples love this place. Now the yurt was definitely the nicest canvas tent or yurt that I've ever stayed in. It had air conditioning, a TV, and it felt a lot more like a hotel room than even a glam site. The only thing that was a little bit awkward was the showering because it only had a tub and a handle. So essentially I had to like stand up and rinse off. But still, it's very clear why this place was one of the most popular stays on the property. And during this time, I'm walking around the property, looking at these structures and calculating how much everything actually costs to build out. And it is astonishingly low. But what I really need to know is, can I replicate this success? We know how they're making close to half a million dollars each year, but I need more of a reason to justify my property under contract because I'll be spending way over a million. And I know the secret with any real estate deal is equity. Now the problem in Texas is that it's a non-disclosure state. So a lot of sales transactions don't have to be made public, which makes it very difficult to see what owners paid for their properties. But I also know that Texas's tax assessed value is the actual market value, unlike most other states who have a separate tax valuation. So looking in Zillow, I can quickly see how much the property was assessed for over the years. But there's another thing that's bothering me as I dig deeper into this place. The calendars on all the spaces look really strange. On 10 of the listings, these summer months were blocked out like this. Now it's very unlikely all these cabins in Europe are all blocked out that far in the future for the exact same dates. And it finally made sense once I clicked on the second page and saw that they were renting out the entire property at one time, which is if we jump back over my spreadsheet is this line item right here, which is genius. They blocked off those dates on the smaller cabins and yurts to give people time to book the entire property during peak season at $4,300 a night. That's one of the key parts of their secret to success is to create even additional revenues by booking out the whole property rather than just one at a time. Now there are also two other things that play into their success. Proximity to the wedding venues and vineyards in the area and also they're just located in a great golden triangle. Now this property caters to a very clear guess with their tiny homes and yurts. They're obviously not going after Gen X. It's very apparent with the design and structure choice they're going after millennials and maybe even Gen Zs, but primarily millennials because that's honestly where the money is at these days. And being tucked between several vineyards and wedding venues, they have their choice of millennials who may have partied a bit too hard or want to stay in a quaint cozy place nearby with all their friends on the same property. Now I define the golden triangle as three key nodes, a major city, major attraction, and a customer centric locale. And this property is right in the middle of a few of those triangles. But the key thing is to see how much they made in total and more importantly, can I replicate it with my new property? But we need to know how much this place is worth. And we know the owner isn't exactly the chatty type. So it's a good thing we can see the most recent year's tax assessment, which is $3.3 million. And looking back to 2016, we can see that assessment at that time was only $112,000, which is over $3 million of appreciation and equity creation, which is why I love equity. Now we know how much they're making each year along with the assessed value of the home, along with the assessed value of the property, but I still don't know how much they This is critical to any deal, especially to see if a property is worth pursuing or not. First, I've got to count out the structures and figure out the conditioned square footage, which I know there's a main house that's three bedroom, three bath at 1,344 square feet. There's two tiny homes, which were completed in 2016 with an estimated 350 square feet and five tiny cabins with an estimated 250 square feet. And then of course the two luxury yurts. That gives us an approximate total of 3,300 conditioned square feet. Now, knowing that these were built a few years ago, I'd assume that these were being built at about $150 a square foot, including the utility, which is probably a little bit on the high side for back in 2016, which gives us though a build cost of $500,000. That still leaves the yurts with their decks, which I'd overestimate at an additional $50,000 each. And then we add in another contingency just for the overall property of $100,000. That takes us to roughly $700,000 total build costs. It would not surprise me if it was even less than that though. Now, no matter how you cut it, that is an absolutely incredible return, especially if they were able to get that finance or they were using a HELOC. Now we don't know exactly what they paid for the property, but we can see that it was assessed for 112 in 2016. So let's run with that. That's an $812,000 investment for a property that is generating near $500,000 a year and currently has a valuation of 3.3 million. That makes me feel like I made the right choice investing in this area and what I have planned for a build out. And you can see what I'm going to do in my video here and why I bought this place.