Leveraging Other People's Money
[00:00:00] David: After mentorship, we learn, you know, a couple of things. One of those things is definitely the financing piece. So the 7 million portfolio that, uh, me and my team have been able to build has primarily been using other people's money. Um, like I said, I was an archeologist, man. Like I was, I was in the dirt, digging in the dirt, looking for ancient sites.
[00:00:20] David: I wasn't, I didn't come from a high paying job. I didn't come from having a high wage job. So learning how to leverage other people's money and raise millions of dollars was a skill that we learned again, from mentorship.
Introduction to the Boostly Podcast
[00:00:48] Liam: Hi. Welcome back to the Boostly Podcast, the podcast that gives you the listener, the tools, the tactics, the training, and most importantly, the confidence. So you can go out there and get yourselves.
[00:00:57] Liam: Lots of direct bookings, which is what, as hosts, we all want to do. Uh, we do a miniseries where we dive behind the host, where we interview interesting and successful hosts from all over the world. And today we are joined by David Elli. He's the co-founder. Of, uh, Nopali, uh, sorry, Nopali Properties. And, uh, he's done amazing work.
Meet David Elli: From Archaeologist to Real Estate Investor
[00:01:18] Liam: He's actually just been a guest on the, uh, bigger pockets podcast, and now he's coming onto the Boostly Podcast. So, um, I'm definitely going to go and listen to the bigger pockets version of his interview. He's done over 7 million worth of his portfolio in just three years. And he now has. Uh, 15 short term rental units.
[00:01:37] Liam: Um, we're going to be talking about boutique hotels. We're going to be talking about financing and you're going to learn from David's experience. So sit back, relax, and let's dive in. David, welcome along.
[00:01:47] David: Oh, thanks so much for having me, Liam. It's an honor to be on the show.
[00:01:50] Liam: Thank you for being here. So I know I've given a bit of, um, kind of like, I guess the juice of the show, but can you tell the listeners what they can expect from you?
David's Journey into Real Estate and Hospitality
[00:02:01] David: Definitely. Definitely. Um, so I actually didn't start off in real estate. Um, I, my entrance into real estate in the short term rental industry. Kind of happened through an Instagram ad, uh, but we started off as house flippers in the Los Angeles, California area that kind of led us into short term rentals, and then we eventually acquired a 10 key boutique hotel.
[00:02:23] David: And so that's kind of the compressed version of, uh, my story as a real estate investor and hospitality hosts as
[00:02:29] Liam: well. Why are you doing this? This business? Why hospitality?
[00:02:34] David: Yeah, we actually got into hospitality kind of by accident. If I'm being honest, Liam, um, we, like I said, we, we started off as house flippers, so we would renovate homes and we started off in.
[00:02:46] David: 2020, very early 2020. And Los Angeles is an extremely competitive house flipping market. And my wife actually had a brilliant idea, marketing idea to send out an email to her network, asking if anybody had a house that we can flip. Um, again, Los Angeles was very competitive and we were running leads and making offers, but it was just so difficult to actually get a deal done.
[00:03:07] David: One of her former friends and coworkers said, Hey, you know what? I have a house that you guys can flip in Joshua tree, California. Uh, And Joshua tree is about two and a half hours away from Los Angeles. And so we thought, okay, you know, it's far away, but let's try it out. Let's see what happens. So we purchased this home for 200, 000.
[00:03:25] David: Liam, we put about 55, 000 into it all in withholding costs and all that. It was about 265, 000 and we sold it for 5, 000. 410, 000. So we made 130, 000 profit. The person who we sold it to was a short term rental investor. And that's what got us looking into the idea of hospitality, short term rentals, Airbnb's because we thought, holy cow, if somebody, a short term rental investor is willing to pay this much over asking price, there must be something in this whole hospitality.
The Importance of Design and Guest Experience
[00:04:00] David: Short term rental industry that they know that I don't at this point. And so that really opened up our eyes to, you know, short term rentals. And at the time there was, I believe around six to 800, um, short term rentals in the Joshua tree area. And now there's about 3, 600, uh, a little over 3, 600, um, and just, you know, less than four years.
[00:04:23] David: Um, so that was really our entrance into the hospital. Vitality feel great. If people are able to make this much money, how can we be a part of that and offer some pretty cool experiences along the way,
[00:04:34] Liam: what kind of model you, you mentioned, you've got kind of a boutique hotel, what kind of model and what does your business look like?
[00:04:41] Liam: Give me the kind of like overview of it.
[00:04:43] David: So we're very big on design. Yeah. We're, we emphasize heavily on design and amenities. And ensuring that people have a positive experience as soon as they come on our properties. I like to say that we make properties that not only please the eye, but they appease the soul.
[00:04:59] David: Because when you step into a space, and it's beautifully designed, and it's thoughtfully curated, and has good colors, and it's neutral, organic, and there's textures in our Our opinion, it evokes a certain feel if you walk into a nightclub and there's lights blaring everywhere and there's loud music and there's flashing lights going on, you're going to feel a certain way.
[00:05:19] David: If you walk into a resort, you're going to feel a certain way. So we like people to feel certain way as soon as they come into our, through our doorsteps. And this is kind of something that we've learned from. Again, from the flipping world is like knowing who our target customer is. And we think that's extremely important.
[00:05:34] David: And every time we go to design and launch, whether that's a short term rental, a flip or our boutique hotel, we know exactly who the target customer avatar is that we want to approach or that we want to attract, and we design the space according to that. So one thing that we really like to leverage is, you know, organic textures, um, neutral colors.
[00:05:56] David: So that when people come on, they feel. I feel very relaxed. They feel very eased. They feel like they're on vacation. And if we can supplement that with awesome amenities, like, you know, yoga rooms and, um, hot tubs and really cool, um, accent walls and really good, you know, hammock village, that's very serene, serene, and, uh, very beautiful.
[00:06:16] David: And it's overlooking, you know, scenic view. That's, that's who we want. That's who we want in our properties. A person who's looking for that type of experience, um, that combined The elevated sort of luxury feel of our properties. We like to, even though they're, they're primarily two and three bedroom houses.
[00:06:34] David: Um, we like the idea of less is more in that one of our homes, if it's about 1500 square feet, um, two bedrooms plus a den, but we capped the maximum occupants at six people. Far more than six people can fit in that home. But again, we didn't want to kind of shove a bunch of people in there. And this idea of beds and heads is kind of common within the short term rental space.
[00:06:58] David: And we wanted to kind of flip that idea on its head because we thought, Hey, can we do more with less? And so by executing on a fantastic design, putting, you know, the necessary and luxurious, uh, sofas and couches and linens, and all of that good stuff in there, We want to attract a certain guests.
[00:07:16] David: Hopefully that guest is a bit of an elevated traveler, a guest who has a little bit more money in their pocket, a guest who is looking for a top tier stay. And so long as we can supplement that with excellent customer service, immediate customer service, make sure that we have fully stocked homes, then it's a pretty good model for us.
[00:07:35] David: And it's worked for us, like I said, both, um, in the short term rental space and with our boutique hotel.
[00:07:40] Liam: What are some of the things that. took you from that first stage where you were flipping at the time to now where you're sitting by the pool at the boutique hotel you own. What were some of the kind of moments which got you there?
Key Factors in Scaling the Business
[00:07:55] Liam: So this is, is more around, is it the financing? Is it the, um, Is it just the ability to find good deals or is it the, um, the interior design? What, what are some of those kind of moments?
[00:08:07] David: Yeah, that's a great question is again. So I think the first one is definitely mentorship because in my opinion, mentorship compresses time.
[00:08:16] David: If we can learn from a mentor who's done it before. Or we don't necessarily have to be in the school of hard knocks for, for so long, because we can follow in the footsteps who, who have someone who's done it already, um, after mentorship, we learn, you know, a couple of things. One of those things is definitely the financing piece.
[00:08:35] David: So the 7 million portfolio that, uh, me and my team have been able to build has primarily been using other people's money. Um, like I said, I was an archeologist, man. Like I was, I was in the dirt, digging in the dirt, looking for ancient sites. I wasn't, I didn't come from a high paying job. I didn't come from having a high wage job.
[00:08:54] David: So learning how to leverage other people's money and raise millions of dollars was a skill that we learned again from mentorship. Um, and that has been instrumental in being able to scale to this, you know, 15 unit portfolio that we, we have now. The next piece of that is understanding that real estate, um, is a team sport.
[00:09:14] David: And so the reason why our properties look amazing is because we were able to hire professional designers. And it was, you know, that's not my skill set. My skill set is not within design, but I do know there are people out there who do have that skill set. So by teaming up with these folks who are far better at that kind of category than I am, that's been able to to be another really kind of, um.
[00:09:39] David: Kind of like a paradigm shift for another moment where I was like, holy cow. Like this is how people get far. They do it together. They don't, they don't go alone. So really those, those few moments of just continuing to invest in mentorship. We still, I still invest in a lot of mentorship. I believe in 2022.
[00:09:57] David: Uh, we had, at that point we had spent over a hundred thousand dollars in coaching and mentorship and just learning. I consider myself a lifelong learner. And then that kind of allowed us to be able to use and leverage other people's money, which was another huge paradigm shift because with leveraging other people's money, Liam, the biggest thing that I learned was.
[00:10:16] David: We're not asking anybody for anything when we're pitching the use of private money. We're providing an opportunity for individuals to be able to earn double digit returns passively, which is amazing because it's an opportunity that's backed by a real asset, which is real estate. It's not like stocks and crypto.
[00:10:34] David: That's another moment that I had where I was like, Oh, I get it now. Like there was a mindset shift where I felt confident in bringing these opportunities to individuals to be able to build their passive income stream. And then again, like I said, the last moment was really just like, realizing that real estate is a team sport.
[00:10:51] David: 1 of our properties. I love saying this. I love throwing this out. There is actually an international award, um, property based on its design. So, our designer, she submitted this, she designed a property, submitted it, and it won an international award. So that was another moment where I was like, Holy cow, like, we have a award winning property, which is a pretty cool, uh.
[00:11:13] David: Pretty cool mark to put on a resume.
[00:11:14] Liam: Thank you so much for coming on behind the host, uh, on the Boostly podcast. Um, thank you to you for listening to this on the Boostly podcast. We know there's lots of places you can put your attention. Really thank you for putting it with us here at Boostly. If you want to carry on the conversation, you can do so if you go on Facebook, search groups, and you can put the hospitality community.
[00:11:33] Liam: And there's a great big community on there where you can come and join for free and just talk about anything hospitality related. So thank you so much. That's it for me. And, um, yeah. Thank you, David. Um, feel free to say bye to everyone
