14 - One Fire at a Time: First-Time Operators Navigate Flooded Toilets, Funding Delays, and a $348K First Draw with Micah & Adam

In this episode, Adam and Micah navigate their first $348K construction draw, deal with four flooded hotel bathrooms, confront the reality of maxed-out credit cards versus outsider perceptions of wealth, and explore community partnerships that could transform Page, Arizona's hospitality landscape.

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Transcript

SPEAKER_01 0:00

There's not a day that goes by where there's not a hundred and twelve decisions that we have to make, and today is no different. So just taking it one decision at a time, putting out one fire at a time, and just keeping it going.

SPEAKER_02 0:12

Hey everybody, I'm Adam Walls, and I'm here with my co-host Micah Thomas. We're short-term rental operators who made the jump into boutique hotels. And we're in it right now. Raising capital, renovating a 50-room property. We're figuring it out as we go.

SPEAKER_00 0:26

This is the Boutique Hotel Secrets Podcast, and these are secrets.

SPEAKER_02 0:32

Welcome in, everyone, to another episode of the Boutique Hotel Secrets Podcast. I'm your host, Adam Walls, and on this show we explore all things making that leap of faith from short-term rentals into the world of commercial boutique hospitality. With me, as always, my mister from another sister, Micah Thomas. Micah, how are you doing live from the property?

SPEAKER_01 0:54

Man, I am, yeah, I'm on property. It's been a great experience. A lot of ups and downs. I'm doing great, just taking it one day at a time. Today we had our inspection, our first inspection with the GC and the bank's third-party company they use to come and make sure the work that the GC said they're doing is actually being done. There's not a day that goes by where there's not 112 decisions that we have to make, and today is no different. So just taking it one decision at a time, putting out one fire at a time, and just keeping it going.

SPEAKER_02 1:28

I like it. And did we get the A plus? That's an important one.

SPEAKER_01 1:31

We Yeah, that's uh that's exactly right. So we got the A plus 100%. So bank is gonna issue funding for not just asbestos, but the first round of demolition, some infrastructure plumbing that needed to be done, initial electric work that needed to be done. There's also like miscellaneous things, like we had to pay for a over, I don't even how big that dumpster is, but maybe like a 20-foot dumpster to be delivered and just knickk-nack supplies, like angle stops for all of the toilets, just random things that need to be reimbursed, as well as paying the contractors for labor. They haven't been paid for labor yet. Since we're getting funding through the bank, they only pay for services rendered. Work cannot be paid for ahead of time. So that's just one of those fun caveats we're dealing with as we use a SBA 7A loan with this particular lender. It'll be very nice for GCs and contractors to get paid and move forward, get more material and supplies so we can move right along with our renovation.

SPEAKER_02 2:33

Yeah. And this is a draw one for context again, just to remind people big picture. You know, we bought a $3.3 million property, looking to stick about $2 million into it. We signed a contract with our GC for around $1.3, $1.4. And again, he promised kind of not to gouge us with change orders, stay on budget on time. Let's see. That's part of why Micah is living on property right now, just to manage, negotiate, and keep things on task. But for context, Micah, how big is this first draw? And by the way, maybe you can even talk about a couple days before we closed. RGC almost walked, right? So these are very real things that first-time operators have to get creative, talk with mentors, want to be above board and do this the right way. But I feel like we've solved a couple problems. But just uh again, this is not, we're not looking for $20 or a gift card. This is a substantial amount of money in this first draw.

SPEAKER_01 3:26

Yeah, that's exactly right, Adam. There's a lot to unpack here. I'll try to stay as organized as possible, but I'll start with the amount for this first draw. So we're looking at $348,000.

SPEAKER_02 3:38

If you put that for people of the back, what was that again?

SPEAKER_01 3:42

That is first draw, not the entire amount. The first draw, $348,000. That is the price of a brand new home in most cities. So that is what's being paid to our general contractors. I understand why the bank is hesitant and why they have this entire process, and I'm very thankful for it, but it's important that things are done methodically in a certain way to make sure people aren't getting taken advantage of. The contractor's not just running off when they get paid. So the inspector came. The GC had to speak through all the work that was done to the inspector, and I was there as well to make sure he's not overstating or understating any work that was done. But that just takes care of the what they're going to get paid. But if we rewind a little bit to when we initially were about to close, maybe two or three days, like you said before close, the banks basically said, we're not going to front the contractors any money. We're only paying for services rendered, which means the contractors had to start their work with zero money in the bank. They had to front all of their own money with the promise, a verbal promise, more or less, that they were going to be paid on the back end. The bank made them sign lien waivers and liability waivers, all types of things that pretty much said the bank is not at fault and you can't put a lien on this property if you don't get paid. So it's a really unsettling position for a general contractor to be in, and especially this company, because they're used to having at least 25% as a down payment, which feels pretty standard, especially for a big project. And instead of them getting 25%, they weren't getting a single dollar. So, like you said, they were getting cold feet. They were almost about to walk away. And we had to think creatively, come up with a solution to get them going, get the ball rolling, and be able to cover some of their costs on the front end. And then they would be reimbursed on this first draw. So maybe you want to talk about how we managed to put a few things together, talk them off the ledge of leaving this project and allow them to get started on the work.

SPEAKER_02 5:47

Yeah, that's right. Yeah, we ended up coming up with something I think the bank called a mobilization fee. So obviously speak with your local lender, your attorneys, your CPAs, not financial advice. But this is what we ended up discussing a 50K kind of upfront fee that would help them get started. Because again, if they left, we would have to go back to the GCs, the other GCs that we had talked to. And many of them were more expensive. So again, for larger shops that are used to doing this kind of work, so they might have business credit cards, business lines of credit. Maybe they can float a million dollars quite easily. But the more you drop down from boutique to just a guy with a truck and some people, the less access that you have to some of that capital. And so I think we learned also that this is one of the first times, not that they've worked with the bank, but working through the like SBA lending program, which is much more rigid. So there's not a lot of room for negotiation. This is just how it is. But again, getting them kind of 50k up front to get them started and saying, hey, for if we renovate this entire thing in four months, like you've got $1.3 million in your pocket. So that should be, and I know you'd like it up front, but this is how the bank does it for safety, just to make sure no one's taking a truckload of cash and then riding off to Vegas and putting it all on black. So, anyways, that I just remember it was a yeah, we've had to deal with some kind of surprises. And then even to last week, like I don't want to say at the complete standstill, but again, thinking about these draws, the sizes of them, our contractors were great. They were willing to front some of it. Our 50K got us a little bit of good grace to move forward, but it's not indefinite. And at some point in time, the hours, the labor, the supplies just run out, and now we're in a little bit of a waiting game to get the inspection, get that documentation over to the bank, wire from A to B, wire from B to C, have checks cash and clear, right? It's not this overnight thing. So you end up losing days. And on a tight project, that could be the difference of us hitting peak season, having all 50 hotel rooms ready to go in May, uh, versus having 30 or 40, potentially missing out on some revenue. So every day potentially it's an opportunity cost in the future. But, anyways, I feel like we're we're trying to be attentive, we're trying to be empathetic to both sides, be the broker and the intermediary, oftentimes between the GCs and the banks. So, anyways, a great learning, and I'm sure there's gonna be more drama and fun and learnings as we go. What my dad would always say, experience is the thing that you get right after you needed it. And sometimes in this project, I feel like we're getting a lot of experience, but hopefully, us sharing this kind of candidly, transparently with you, we can save you some bumps and bruises. But let's maybe switch off of draws and all of that to talk about toilets because we had a little bit of an exciting event to happen here lately. And I'd love for you to bring your audience up to speed.

SPEAKER_01 8:54

Oh my gosh, there's never a dull moment. I don't think I quite knew how much of a it's definitely a roller coaster ride. It's a little bit different than post or pre-acquisition, but there's always something. There's always a fire you have to put out. And this one in particular was four flooded bathrooms. A great guest of ours decided to flush a full roll of toilet paper down the drain at the same time, like all at once, pretty much. And a cigarette, by the way. I'm still, I don't understand. It just doesn't make logical sense to me why a cigarette goes down a drain. But hey, that's neither here nor there. What ended up happening was four bathrooms flooded. It basically messed up the sewage of the toilets and the tubs and the water overflowed. We had to snake the main line or the main clean out valve in the laundry area to rectify the situation. And as you can expect, water that comes up from a toilet or from the tub drain doesn't smell that good. So we had four bathrooms, four hotel rooms that didn't smell too nice. And we had to rectify that situation as well. Luckily for me, I'm staying in the room right next to those four rooms, and it pretty much missed my room. So I'm very happy for that. But I think one important note, yeah, that's a small win, a very small win. But one in one important thing to note is it's so important to have policies, cancellation policy, damage policy, pet policy, you name it, because we were able to go back and charge this guest for some of the damages they caused. If you think about flooded bathrooms, you think about a plumbing bill, the smell that needed to be gotten rid of. These are real life expenses that come out of our pocket. But we were able to get a little bit of recourse back, which helps soften the blow of having to deal with this. Luckily, we're also in slow season, so we didn't have to take any rooms offline because there was a guest wanting to check into these rooms. A blessing in disguise, but also something that you can't really avoid. You just hope that it doesn't happen again. Another note that I want to say, and I'll get your input on it, is right now in the hotel is not in the best shape, and we're not really charging the highest ADR because we don't really have that good of a product yet. But there's something to be said with the type of a guest that you attract for a cheap hotel. When a guest only pays $40 a night, you can expect a flooded toilet or you can expect cigarettes down the drain. This is a lot different than a guest that comes and spends $150 or $200 a night that treats your property with care the same way they would treat theirs. So I think there's just something to be said about that. We understand that right now, this is not the ideal guest we want to have, but we have to cater to them until we can get our property renovated. So just wanted to put that out there and maybe get your thoughts on our whole plunge plunger toilet situation.

SPEAKER_02 11:50

It's it's why it reminds me of in the Airbnb game, right? So if people listening have their own Airbnbs or maybe a portfolio, like this will happen. So I have not had a floor four toilets overflow because of cigarettes and toilet paper, but I have had an entire property flood, negative 50 degrees, Black Hills, South Dakota, February, pipes burst undetected for four to five days until basically the next guest or a cleaner went back in. It took a year to remediate that with between construction and insurance and lost revenue. And so, anyways, I've dealt with little stuff like oh, this window's broken, or this is creaky, or hey, there's out here in California, we live next to a creek, so there could be like rodents around pest control, that sort of stuff. So I'm a little bit immune to just I don't know, small stuff. But when stuff starts flooding or impacting multiple rooms, again, I this was not on my bingo card for something that we were gonna have to deal with this early, but I guess maybe back to you in terms of what would have happened if this were May. If this is May, let's imagine the hotel sold out and all of a sudden four rooms flood. What becomes the procedure or the mentality that you have as kind of property management, asset manager, as well as the guidance, right, for our GM and on-site property?

SPEAKER_01 13:16

Man, that is that's gotta be worst-case scenario. You think of May. So for reference, in Page, Arizona, the town sells out, not a hotel, the entire town. 25 hotels in town, they all sell out. So we're most definitely dealing with someone who wants to check into that room or those rooms, and we either have to rectify the situation before they check in, or we have to refund them their money. And this is peak season where we're looking to charge 200 to $300, if not more, per night. This is our money maker time of the year. So we would be losing a lot of money if this was to happen then. But yeah, if I think about like general manager operations, the goal would be to rectify the situation, try your best to remediate the smell as quickly as possible, explain what was happening to the guests, and then give them the option. Would you like to stay? Or do you want a refund so you can stay somewhere else? I think being open with communication, maybe we give them the room at a discount because of the situation. But you try your best to recover the guests from leaving and losing res revenue. If we can't remediate the situation quickly enough, then we just have to take a loss on that revenue. But again, devastating, especially during peak season when we really count on that money to come through.

SPEAKER_02 14:39

Yeah. And this stuff's just, I guess it's gonna happen if you're in the Airbnb game. It's gonna happen probably with more frequency in a hotel game. The good news though is it probably goes from just you or your spouse dealing with this, or maybe your VAs dealing with this, to you've got a team of people that can mobilize. And again, if you throw bodies and money at a problem, you can pretty quickly rectify things. But yeah, I love that kind of mindset with guests. I'm always of that mind as well. If we can't make it right, if we can't deliver this five-star experience, then let's offer some sort of discount, give you your money back, or give you the choice. So that all checks out. And I think if I'm remembering right, I think Mike Shogun, when he was opening up his Salem property, maybe the cove or a second one, an opening day, the I think it was the main line or a sewer line, or they'd scoped everything out in the rooms, flooded the line, all that good, and then bam, like it flooded. And they'd converted a space to be like their club room, and it like filled, I mean, a couple inches of I'll say dirty water to be just in case anyone's eating while listening to this. And again, they they they called in kind of the SWAT team, they called in kind of emergency repair, they were able to rectify it, limit the guest damage or exposure. But it's just a reminder that, like you say, Mike, you put in the best procedures and systems and try and build a great product, but the name of the game in hospitality oftentimes is about recovery. When things do not go according to plan, what do you do? And that from my days in leadership development plays in something called learning agility, right? How do you know what to do when you don't know what to do? And that's actually a skill and a muscle that we can train with our staff. Because for as many SOPs as we're building out right now, tomorrow a new situation might unfold. And it's less about robotic responses, if this then that. And oftentimes this is a place where you build more trust, right, after something goes wrong versus just flawless perfect execution at the hospitality level.

SPEAKER_01 16:54

Yeah, that that's really a good point. And you're right, like maybe there's an SOP for plumbing or backup sewage, but you the level of experience that you want to give your guests, it lives in between the lines. You're not gonna find that in the SOP. And there's also systems of scale. I feel like we talk about short-term rentals. Maybe you're going to the toilet to plunge it or fix the clogged pipe, but we have a maintenance team. We have a maintenance man, we have a general manager. So, you know, what doesn't live in SOP is Roberta, our general manager, she already started the process. She's already tried flushing the toilets for several rooms. She's already started the process of snaking the main line with the maintenance man Jay before she even gave me a call. And then she's just reporting to me what she's dealing with after she's tried multiple things. So you're right. It's just training employees and having the mindset that, like, let's find out what it takes to make this right versus let me be very rigid and structured. And if I can't find out what to do in an SOP, then I'm stuck and nothing gets done. Really good point. And it's just the type of culture you foster. And this can be true for every business, not just short-term rentals, not just boutique hotels, but any and every business, whatever culture, whatever systems you want to implement, if you train the mind, if you train the individuals on how to think, how to operate, even if they aren't sure of a certain situation or it's new to them, it makes for a much better outcome every single time.

SPEAKER_02 18:23

Yeah. And I love that you mentioned culture. And again, people at the end of the day, this is a people business. This reminds me of a lot of the consulting work I did in Fortune 500 companies about fostering positive, productive, inclusive cultures where people can become better versions of themselves. So I think without going into too many details, I'd love for you to share. You had just shared something with me today about Roberta basically deciding to stay with our property. So again, great talent always has opportunities and options. And I thought this was an early indicator or a testament of I think what we're trying to build here, not just the product, but with the people. So do you mind sharing a little bit more about that?

SPEAKER_01 19:04

Yeah. So we're learning more and more about not just the property, what happened before we took over ownership. But needless to say, Roberta talked to the staff of the previous ownership today and pretty much was told that she is the most wanted GM and not in a bad way. They want her to come and work for them at a different property since they sold this property. And it was very fulfilling to hear from her that she said, absolutely not. She's very happy where she is. She likes the new owners, hint-hint, Adam and I. And she sees the vision and what we are implementing, and she wants to hang along for the ride. So that was really good to hear. And the other thing we heard was from one of the previous owners was they regretted selling the property because once they heard that we were renovating and repositioning and making this into the first boutique hotel in Page, Arizona, this was along the lines of what the old owner wanted to do, but with different investors. So again, just so happy to hear that. Know that we got this hotel for such a great deal and at such a good price, and what we're doing was in line with somebody who's been in this market and operated over 60 hotels, took a look at what we're doing, they heard what we were doing and regretted selling the property, not because we were bad people, because it's more so because we were doing what he had in mind to do. So just I guess confirmation that we're on the right page and we're doing the right thing. No pun intended, but we're doing the right thing and making this property what it deserves to be.

SPEAKER_02 20:47

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SPEAKER_01 20:53

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SPEAKER_02 20:58

And it is maybe one more quick. I want to get to some of the community partnerships and some of the positives, but real quick, I thought this was interesting because wasn't it this past week one of your old buddies reached out and said, Micah, you like you bought a hotel, congratulations, you're rich. So again, like we're on the pathway to success, but I just think this is hilarious. Like the the gap between maybe expectations or what other people are perceiving as they're following along, with the reality of being an operator sitting in the chair with maxed out credit cards. So, do you want to share a little bit more about that?

SPEAKER_01 21:33

Yeah, absolutely. Man, where do I get started? You you talk about buying a $3.3 million asset, you talk about putting about $2 million into the property, and all of a sudden people are saying, You're rich, you have so much money. And you're like, No, wait, I'm having to pay this money. I don't have the money, not yet. Commercial real estate is likely a long term play. At least we'll see wealth and a lot of money come in later down the road if we can talk about waterfall. And payouts and things like that, but not when you buy the hotel. We're buying a very negative cash-flowing bad asset that we need to turn around and reposition. So, like you said, we're in recovery mode. We're waiting for revenue to turn around. We still have about 200K at the time of this recording and an allocation for our hotel. And that'll help to pay some bills as well. Yeah, the common misconception is you buy a very expensive asset and all of a sudden you're rich. But I can be the first to tell you as a first-time commercial real estate investor, it is quite the opposite. So maybe you want to fill in your experience on maybe you became rich when we bought this hotel, Adam. I don't know, but maybe you could share it with the class how you're feeling. Nope.

SPEAKER_02 22:44

I'm hopefully the brokest that will ever be. You're me. It's like you're every moment forward, I have an opportunity to be slightly less poor. But right now, again, we're personally guaranteeing this. I had to put up literally co-sign over my life insurance policy. Rentals come out of pocket not just for the hundred K down, but all the reimbursable costs before we've even set up these entities. So again, there's great power and scale in starting bigger, but there's a lot of our kind of classmates, for example, that are taking down a million-dollar property. Now, again, pros and cons to those. With a million-dollar property, your upside is capped, but also your downside is capped, right? So, anyways, I got this three to five million dollar range, partnering with people, building a team. It feels right. But yeah, personally, the impact on my financials has been more that of strain. Again, 70, 10 years from now, that Adam is gonna be very excited about this elementary discomfort. Uh, and then the idea of stacking multiple assets. So, again, we've got a game plan three hotels over five years. Or if you talk with our mentor, he'd say five hotels in five years. Shout out to Joel. I think he got under contract on three hotels last week. So we're hanging around like some exceptional people who are pushing us out of our comfort zone into new territories. But I will say that my bank account is sweating, my credit cards are tired, and we are, like you said, looking for that last bit of 200, 300k of equity kind of investment. Just to top off, replenish some of the funds, pay us back, get some of our asset management fees. Just to be clear, GPs get paid last, right? So everyone else is getting fed. Micah and Adam are over here tightening our belts. We're willing to sacrifice and move through, but GPs make their money after LPs make their money, or members and managing members if you're in an LLC type structure. Okay, anyways, I want to pivot to some of the fun stuff. Again, you're posting literally every day. Again, huge hat tip to you for continuing to tell the story of the Wesley transformation, where we're at, where we want to go, trying to get some attention, eyeballs, and just show people. Again, it's not all rainbows and unicorns. So sometimes you're dealing with toilets and dirty water. But I think there's been a couple of these videos that have really hit off, honestly, and like maybe struck a chord with people in the community, people on social media. And I I consistently see a lot of energy around community partnerships. So again, you've been spearheading a lot of these ideas. Love to just maybe open the floor. Maybe we can start with like the farmers market idea or something like that.

SPEAKER_01 25:28

Yeah, absolutely. You're exactly right. This it feels like part of, I feel like both of our purpose. Not coming in, not coming in a page and being just another beige box, not just being the out-of-town guys that make money hand over fist and you never hear from them. We want to be involved in the community. And I think that goes into being a boutique hotel. If we weren't boutique, then we'd probably just be another Radisson or something where nobody heard from us. We were just investors. But no, we really want to partner with the community. And we've got a lot of outreach, a lot of suggestions on what we could do to partner with the community. And one of those ideas, like you said, was a farmer's market where we showcased all the local businesses, all the local small businesses in town that people may not know about. So we're able to showcase the Wesley and what we have to offer, but also what the other businesses have in town and what they offer as well. So I really want to look further into that. Right now, there's not really any farmers markets in page, but there's a lot of small businesses. So the perfect setup to have this happen, but nobody's facilitating that being done. So even if it was once, I would love to just do it, have people meet each other, connect, collaborate. This is real where real partnerships start. And I believe that the Wesley can be the grounds to make that happen. So I would say that's probably the progress on the local business side. I've also been able to talk to Coco Nino Community College. Did you want to add anything before I uh talked about that?

SPEAKER_02 26:59

No, yeah, look, farmers market could literally be I need strawberries and eggs, or again, if we expand the definition or think about is it arts, is it artists, is it yeah, business focused, is it Girl Scout cookies? There are a thousand formats that are possible here, but the I the overarching idea of using our property is a platform for visibility and supporting local. Um, I think that's uh the enduring idea. And we'll probably have to play with it and experiment, and I'm sure we'll host events that suck and nobody shows up, and others that maybe sell out and people are super excited about. So we'll have to we'll have to pay attention. But I could absolutely imagine foster dogs or don't donation drives, toys for kids during Christmas or something like that. There's no dearth of ideas. We'll just need to map out what's possible and what makes sense. It takes effort and energy to mobilize some of these things. So maybe we start small, maybe it's like a quarterly event, and then maybe we can dial it up or down based on, again, other people's energy or inputs. But the goal is to use the property as a platform. But yeah, let's switch over to community college because again, this is an idea that we cribbed for from some good friends. They definitely inspired us here. You literally went to a community college. What on earth are you doing at a community college?

SPEAKER_01 28:20

Not going back to school. I'll start by saying that. This is not to further my education, but yeah, you're right. Some of our good friends pitched the idea, really not for us to do, but just talking in passing about the ability to partner with a local college, create a pipeline of interns that can come get the experience of working at the hotel. And then when they graduate from either high school or from college, they have the experience, the skills they need to either go run a hotel or work in a hotel. A lot of what people deal with is you need two years' experience for an entry-level job. So an internship is a great way to bridge the gap, give you the real-world hands-on experience while you're still in school. That way you have something to add to your resume once you graduate. So, yeah, I went to the local community college. This name is very hard to pronounce, but I do it every time. Coconino Community College is the name. Also the CCC Coconino. I went there and I was able to meet with the director of internships for not only the college, but also for Page High School. And they give me a ton of paperwork and a rubric, what they look for, what requirements need to be done, whether we want to offer a paid internship versus a free internship, some of the pros and the cons to both. But the idea is, like we said before, is just to start this pipeline, give them the training, give them the opportunity to work at the only boutique hotel in town. A lot of these students, they don't ever want to leave Page. They're from here, their family is here. So we're giving them the opportunity to develop a skill that's very much needed in this community. Like we said earlier in the episode, there's 25 hotels. So there's no lack of hospitality jobs that need filling. And if you're more qualified, you can either go work for them once you graduate. And the best case scenario, maybe you just become an employee of the Wesley once you graduate. You've already got the skills, the training, the knowledge base, and then you can stay on as an employee once you graduate. So I think this is a really good way to not only partner with the community, but also help the community. And we're in turn helping ourselves as well because we can have staffing that comes in. I mean, we can train them the exact way and the exact culture that we want to foster at our property. So you tell me. Yeah, what do you think? You think we're on to something here or what?

SPEAKER_02 30:39

Yeah, I I think so. Again, when we chatted with Pete and Eric, so shout out Air Butler in dominating Ohio cleaning businesses. Now they're getting into the commercial hospitality game in Port Clinton. But Eric found one of his best talents coming out of a hospitality program. And lo and behold, right rather than looking right and left or in your immediate circle, it's like there are people getting educated every single day uh in this asset class, in this field. This is a craft. Again, I went to school with a master's degree in adult and human development, educational psychology. You've got a master's degree in occupational therapy, right? These are disciplines with frameworks, with research, but then some practicum paths. Like, how do you get involved and take that theory and put it into practice? Yeah, I could imagine there's an 18-year-old out there right now in page who thinks they're gonna be, he or she's gonna be the next general manager of a hotel in Arizona. Generally, it's not a straight shot. You might need to move around. You need to sit in different chairs and learn different things. But I just love the fact that again, we're fostering or thinking about if we can quite frankly, we'll be lifting everyone's boats if all of a sudden this Coco Nino didn't have a hospitality program, or if we can make it cool or interesting to get real experiences and get some real pay, that that's valuable. And I would love three years from now, if we're shifting the conversation rat like right now, our GM basically lays off people in the offseason and then rehires them. And even if you worked at a new at a different hotel and had five or 10 years of experience, typically she starts you at minimum wage, and then we can work up from there with loyalty, value add, contribution, etc. So, how cool would it be if three years from now, five years from now, like we don't have anyone that's minimum wage? Because again, we're delivering more value, we're creating more value. And again, we're not just five, 10 bucks more than the best western. Maybe we're 50 bucks more because it's just that much better of a product, both in terms of the physical product, it's interesting, it's got a sense of place, it's grounded in the local area, tells part of the story about John Wesley Powell and Lake Powell and Antelope Canyon, but also the service and hospitality and the spirit of the people that work there. Again, there's value in that. So I would love to see where this goes, but man, I would consider it a massive success, even if we could help out a couple kids. But how amazing would it be if all of a sudden this if we created a new a new funnel where you know a 14-year-old 10 years from now decides that they want to do this and then has a pathway and role models and examples, real people in the community that did it. They were able to land maybe a salaried position to be compensated very well, to deliver great service and again participate in the hospitality ecosystem, not just at minimum wage.

SPEAKER_01 33:36

I definitely agree. And I think that's what we're on to. Where this will go. I don't think we have the perfect goal and idea, but we definitely know this is something that can be used and taken advantage of for not just us, but also the students and the community of Page. So very excited to keep the conversations going, community partnerships. And again, it just goes back to us wanting to be boutique, wanting to be involved in the community and be more than just a profit maker that makes money out of this tourist town but doesn't give back to the community. I don't think that's what either of us want to do. That's so just excited. Yep, just excited to see how we can make this great.

SPEAKER_02 34:17

Yeah, I love it. And we're probably out of time for today, but on a future episode, if we can certainly continue to explore like FB, so Food and Bev, and how we're thinking about that, partnering again with locals, other people who are experts there that already have employees and SOPs and brands and inventory and all the goods. So rather than us try and learn a completely new space, and this feels like another obvious place to partner with local communities. So again, let's we'll put a pin in that for the future. But any any last, I guess, words, commentary. Half the reason I feel like we're doing this is just almost a journal or a love letter to ourselves in the future. I would love to clip these or hear what we were thinking. So it's January 2026. Like we own a hotel, we're still talking with investors. 20 rooms are demoed, like we're on our way to building model rooms. I'm coming to see you in a couple weeks. Like you're creating daily contents. A lot's happening, but let's maybe go back to that question of like, how are you feeling in this moment? Because that'll be tough to remember or replicate once you're you got a hundred million dollars in the bank account, Micah.

SPEAKER_01 35:26

One of these days I'll get there. But yeah, right now I feel great. I'm happy with our progress. At times it can be overwhelming. I think I said it before, but I wouldn't want it any other way. This is what I signed up for. I'm happy to be doing what I signed up for, and it's been very fulfilling, even with the bad stories, just the connections and the experiences, and honestly, some new things that I didn't expect to have, like me being on social media every single day. That was something that when I first said I wanted a hotel, that was not in my vision, but things have transpired, and I'm just very happy to be along for the journey. Wouldn't want to do it with anybody else other than you. I think you've been able to compliment me and vice versa very well. So I'm just excited to see where this takes us. You you got any other thoughts or ideas? How about your feelings? How are you feeling these days?

SPEAKER_02 36:17

I'm good. Again, I think I underestimated just the volume, the velocity of the work, the multitasking. Again, like we've got you were just talking right before we turned on the podcast. We have four different types of insurance, and like we we forgot to set a bottle pay on one of them. So it's just there's just a deluge of things. I'm halfway through my Muse University or Academy training. I've got to finish that by tomorrow. I'm working with my dad on kind of the design of the luxe suites. Do we add a kitchenette or not? We're making branding decisions right now. You talk to five people, you get five completely different ideas. So I would say I'm still a little bit in the world of overwhelm, but again, I feel I'm so grateful to have you as a partner. Again, you are Mr. Execution, getting stuff done every day. So I would be I would be way more anxious and worried if I were doing this solo.

unknown 37:10

Yeah.

SPEAKER_02 37:11

So, anyways, I'm grateful to be in it. I can I think now being on the other side of acquiring the hotel and starting to see the work unfold and people's positive reactions. This is the path, man. This is the way, as the Mandalorian would say. So, anyways, and then maybe one last final footnote because hopefully after this week, I'll never be able to say again that I don't know or haven't met Soli Cayetano. Uh, but this Sunday she's hosting a meetup, and I'm gonna drive a couple hours just to go see her. This is somebody that I've been following online for a while, somebody that's in the boutique hotel space in Palm Springs. She's actively raising and working on her second hotel. And she's what, 28? Again, you can learn from anybody out there, but I just love the fact that we're getting in circles, we're finding new peers, we're connecting. I don't know, we're just growing, man. I guess at the end of the day, like I'm excited that we're growing as people and professionals. And I gotta believe, I don't know, a year from now, it'll be pretty cool to see who's on this podcast and who's sharing their story and where our story is at. Maybe the wrestling construction's behind us, and we're working on hotel number two. I'm sure that's gonna happen. I can't quite see that far. But, anyways, I would say overwhelmed with a touch of gratitude and then just super excited, man, to meet Soli and others that that are in this space actively.

SPEAKER_01 38:37

Surely. For anybody who's interested, what do you have to say to them? Anyone who's maybe thinking about getting into boutique hotels, maybe have a few short-term rentals. What's next? What step do you take to get around people who are doing things like this and to learn more about the commercial real estate space?

SPEAKER_02 38:53

It's not even a question, man. Look, I shop five or six different masterminds, mentorships, groups. Like, look, there's value in if you're gonna put money on the line and invest in yourself, I think generally that is great. I ended up searching and talking to and feeling out different communities. But look, if you're vibing at all with our story, you want to learn from a guy who is gonna be a future billionaire, you're getting around people doing it for the right reasons that are about creating time freedom, financial independence, more time with loved ones to live life. If we get one shot at this, do extraordinary things with cool people. And for me, there's no better place than the boutique hotel secrets community. So again, we'll drop a link in the show notes. But again, if you're following along, we hope this is educational. We hope we're slightly entertaining that you're following along. So thank you, appreciate it. But if you're serious, if again, we're our goal really is to create this podcast series to try and help people like we were just six months ago. We were stuck with W-2s, we had short-term rental, kind of side hustle income. And the question was could real estate, could boutique hotels be the thing that changes our lives? And so far, it's conditional, there's an asterisk, but the answer is yes. And if this sounds interesting to you, uh again, click the link down below to learn more about the BHKS community. Can't say enough good things about the mentors, the quality of people in this community, and it's growing every single day. So what are you waiting for? Would be the last thing I would say. But all right, enough with that. I know we're long.

SPEAKER_01 40:28

Any last words from your side, brother? No, no. I'll be I'm sure we'll have tons of updates on our next episode, but no other words.

SPEAKER_00 40:36

Amazing.

SPEAKER_01 40:37

All right, that's it. Thanks again for tuning in. Hope you have a great day. That's the pod.