A quick peek
[00:00:00] Lamè: I was in a sales capacity. I wanted to work for myself. And so when I started early on, I, that's when I began to dig into property management just because, you know, the cost of capital to get into that is nothing. You just have to find the tenant. You got to see, you know, You, the owner that would be willing to let you do that.
[00:00:19] Right. But then, the second to kind of add gas to that growth was arbitrage was like, I wanted to dive into the arbitrage model because of again, just the being, being able to scale very quickly.
[00:00:31] Liam: Having a blast. Can I get it on the Bruce Lee podcast? Bruce Lee is like Bruce Lee. Cause it's so hard on the T is loose leaf making up those rhymes.
[00:00:39] Don't write it. Just do it loosely. If you want my respect, you'd better put it directly. Um, here are the words in the podcast. That's what comes next. Hi everyone.
Welcome back
[00:00:48] Welcome back to the Boostly podcast. This is 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 more direct bookends.
[00:00:57] We do a mini-series where we dive behind the host, where we pick interesting and exciting people from across the short-term rental community and hospitality communities in general, from all over the world to dive into their business, to find out what they're doing in their business. Which is special that you can do in your business.
[00:01:16] We've got Lamè and he is from, uh, the Fearless Investors, uh, which is a kind of coaching community. He's also, uh, this sort of founder of Elk Ridge Management as well. So an STR. Company and management company. So we're going to dive into that. So welcome along. Thank you for joining me,
[00:01:35] Lamè: Liam. Thanks for having me.
[00:01:36] I, uh, I'm a huge fan of the podcast and, uh, of the community. So I'm just thankful to have a seat at the table. Thanks for having me.
The elevator pitch
[00:01:43] Liam: Well, I say it's awesome to have you here. So what are both the management company and the fearless investors? Just give me the kind of elevator pitch of what you do.
[00:01:52] Lamè: Yeah.
[00:01:52] So Elkridge management is where it kind of all started. So, uh, Elkridge Management started initially as a short-term rental management company that I founded, uh, really back in 2018. Um, and we started to vertically integrate that we started to, uh, Kind of start to bring everything in-house. So everything from cleaning, servicing, design, all of that, uh, we, we started to branch out into acquisitions.
[00:02:18] And so now Elkridge management, I'd say is more appropriately identified as an investment firm because we now own most of what we manage and we have about 150 doors in our portfolio. So it's a decent-sized portfolio. Um, and that's what Elkridge management is. The fearless investor was born. It was essentially a community that I had joined on, um, as a coach and as a member, uh, to teach specifically kind of what the strategies I use to build Oak Ridge management from the ground up, which is the caster method is what I like to call it, which is creative acquisitions.
[00:02:58] into short-term rentals. So caster. So, uh, so they're, they're kind of, uh, married, um, in the sense of my life. Like, you know, they both are, uh, very important pillars of kind of what I do day to day. Uh, but those, those are kind of what we have in front of us. And I, uh, I'm just thankful. I'm just thankful that I was able to be part of them.
[00:03:18] So, yeah.
How did you find out about creative finance?
[00:03:19] Liam: So tell me a little bit more about. How did you find out about creative finance? Was this, you know, like, it doesn't sound like something you kind of wake up and go, hang on, I'm just going to try this.
[00:03:30] Lamè: Yeah, no, that's a great question. And, um, I feel like anybody that's in the short-term rental space, especially if you start in management or have a management company, you run into this problem.
[00:03:41] Often that I did, which is you have a business that's cash flowing. You have a huge portfolio that you're managing, but you hold no equity, right? And that is what leads us all to how do I start buying? How do I start scaling where I own these doors? Now, when you ask yourself that question, another problem presents itself with, okay, well, I have to have the right debt-to-income ratio.
[00:04:06] I have to have credit. I have to have taxes. I have to have all these things in line. For me to look good for a bank to be able to acquire a door, right? And sometimes when you dive into that problem and the solutions that are traditional, right, traditional financing, they are very daunting and very slow because it's like, how do I scale quickly when I have to Go through this huge process of red tape?
[00:04:33] And I can only buy so many doors a year before the DTI falls off the next year. Right. And that was the problem that I just worked relentlessly at solving, which led me to create finance. Um, and there's a lot of guys in the space that I would consider mentors that kind of helped me in it. Uh, Chris Prefontaine.
[00:04:53] Pace Morby. These are all gentlemen who understand and are very deep in the creative finance space. But interesting enough, as I started to step into it by way of wanting to solve that problem of like, how do I buy more houses right quickly and scale quickly? I also found that in my back pocket, having coming, having come from the short-term rental side was a very strategic asset that most.
[00:05:20] that are acquiring didn't have, which is I know how to do short-term rentals. And so it allowed me to start acquiring and figuring out, okay, well now there's this seller finance model. Now there's the subject to model. Now there's this lease option contract for deed. All of these creative acquisition strategies I started to find that allowed me to scale quickly.
[00:05:44] But then more importantly, allowed me to generate even more cash flow quickly because I was turning them all into short-term rentals, which as we know, there's just a lot more velocity of money in that exit versus a long-term rental. Right. Um, and so that was kind of the birth of like. What our community is now the caster community, but that's how I came about and stumbled upon the strategy was just, just trying to solve the problem in front of me, which was how do I scale quickly?
[00:06:10] How do I buy out quickly, given all of, you know, the, the obstacles in my way when I, when I go the traditional finance route, uh, and it's turned out, it's turned out good for us. So we've, we've acquired, about a hundred doors in the last three years, which has been fun.
How did you get your first few doors?
[00:06:24] Liam: When you first had your first few doors.
[00:06:27] How did you get those and what was life like for those first few?
[00:06:32] Lamè: Yeah. So early on, I, um, so I, I bought my first ever investment in 2018 and this investment was just a primary residence. I bought it on a normal FHA loan. As a primary me living in it. Um, and then nine months later, I moved out and I started renting it out as a short-term rental.
[00:06:53] And that was kind of my first taste into the short-term rental space was my property. So I couldn't even say I was a property manager at that point. It was just me managing my portfolio. Um, around 2019 and 2020, I decided to kind of jump into it at a bigger scale. Okay. Um, and that's when I wanted to professionalize it.
[00:07:15] And the reason it came about that, that those years was because I was looking to get out of my normal nine to five. I was in a sales capacity. I wanted to work for myself. And so when I started early on, I, that's when I started to dig into property management, just because, you know, the cost of capital to get into that is nothing.
[00:07:34] You just have to find the tenant. You got to find. You know, your, your, your owner that would be willing to let you do that. Right. But then, the second to kind of add gas to that growth was arbitrage. It was like, I wanted to dive into the arbitrage model because of, again, just the being, being able to scale very quickly.
[00:07:52] So my portfolio started early on with the mixture of those two strategies is, uh, is the, the master lease option. Co-host or arbitrage strategy. And then the co-host and then I, I developed that pretty quickly. Um, a lot faster than I had thought in the first eight months of operating that business professionally, we signed like 60 contracts and so, and that was a very, Validating thing for me, because in that process, I learned how to get good at the operation sides of the management that we all know, right.
[00:08:31] Which is, you know, the pricing strategy, the listing quality, uh, the actual cleaners, maintenance, all that. Um, and so that's how it started. And, I appreciate it. All of that of what I learned because I didn't know how valuable it would serve me Later when I started buying right because a lot of these investment firms that you see they're third partnering They're third partying out all of these services, right?
[00:08:58] Typically an investment firm usually has a separate management company uh, they have a cleaning company servicing company HVAC, what have you and My journey started with just doing my own and Building my own company, integrating all the services in house or one-stop shop. And then I started to buy.
[00:09:15] So I kind of backed into it unintentionally, but you know, for anybody that's at scale in the acquisition space of buying portfolios, you understand that like, you know, sometimes your biggest profitability margin isn't necessarily, you know, the cashflow as much as it is pushing down costs. Right. And I now being able to not have to take market costs of management fees.
[00:09:40] Servicing fees have served me extremely well in my business today of being able to buy these things. And it's a one-stop shop and I'm doing everything at cost because I know how to do it.
Advice for your younger self
[00:09:51] Liam: Is there any, um, anything that you'd want to give yourself advice back at the start? So if you could go back to those early days, what would you say to yourself now?
[00:10:01] And I think that'd be a nice way to bring it to an end.
[00:10:04] Lamè: Yeah, the, uh, one thing that I've learned and this has been a lesson and a mantra that I now live by in my portfolio is that no matter the state of the market or whatever strategy you're implementing or what have you good deals, the best deals, they are not found, they're always created.
[00:10:24] And so in that mindset, it puts on you as the operator, you are the person that makes it happen. It's not the market. Okay. It's not the strategy. It's not the timing of the market. It's you. Once you understand your inherent ability to create deals and you figure that out, they all come to you.
[00:10:42] Cause good deals, again, they're not found. They're always
[00:10:45] Liam: created.
[00:10:45] Lamè: I
[00:10:45] Liam: like that. What a great way to bring it. And was there anything we missed along the way?
[00:10:49] Lamè: No, I, uh, more than anything, I just appreciate you having me. As I said, I've been a fan of this podcast for a long time. So I. I just feel very thankful to have a seat at the table.
[00:10:59] So thank you. Thank you for having me.
[00:11:01] Liam: Thank you for coming on and inspiring the listener. And thank you too, for listening to this. Uh, there are lots of places we know you can put your attention to. I thank you for putting it with Boostly. If there's somebody, you know, who will get value out of this and feel inspired as you do, can you please share it with them?
[00:11:15] And if you want to carry on the conversation, you can always come and join us in the Facebook group, the hospitality community, and, uh, or you can even just, um, tag Mark on, uh, on. Instagram brucely at brucely uk uh, basically for that. So thank you very much. We'll see you on the next one. Bye for now. Having a blast.
[00:11:34] Gonna get it on the Brucely podcast, Bruce Lee. Let Bruce Lee 'cause it's so hard on the teas, loosely making up those rhymes. Don't write it, just do it loosely.
