25 - 3 Days From Closing: The Chaos, the Contractor Standoff, and the Advice That Changes Everything with Joel Wiegle

In this episode, Adam and Micah share their journey of transitioning from short-term rentals to owning a hotel. They discuss the challenges faced during the closing process, the importance of understanding lender dynamics, and the necessity of effective communication with contractors. The conversation highlights the significance of teamwork, operational efficiency, and the emotional investment in the property and its staff. They also reflect on the lessons learned throughout their journey and the excitement of what lies ahead as they prepare to close on their first hotel.

Find him on Instagram: @joelweigle

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Transcript

SPEAKER_01 0:00

Don't let them bully you. Lenders, everyone, they say they're strict on timelines. I've pushed back many of times. It the world keeps moving. You still get the deal closed. Everybody at this point is three days away from closing. If it goes to four or five days, you're okay.

SPEAKER_02 0:15

Hey everybody, I'm Adam Walls, and I'm here with my co-host Micah Thomas.

SPEAKER_00 0:20

We're short-term rental operators who made the jump into boutique hotels.

SPEAKER_02 0:24

And we're in it right now. Raising capital, renovating a 50-room property. We're figuring it out as we go.

SPEAKER_00 0:30

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

SPEAKER_02 0:35

Welcome in, everyone, to another episode of the official Boutique Hotel Secrets Podcast. I'm your host, Adam Walls, and this is the show where we explore all the things making the jump from short-term rentals into the commercial hospitality space. We're chronicling our journey, going from zero to one, and we're also bringing some friends with us: our mentors, other students, other people in the game, just literally building out loud as we learn. So we're about a week away, less than a week away, from owning our first hotel. So let's bring in our co-host, my mister from another sister, Micah Thomas. Micah, how you doing?

SPEAKER_00 1:10

Man, we are three days to be precise from closing. And I have given everything except my unborn child to the lender to make sure we get this loan closed. I feel like I've lost hair, maybe even the shirt off my back in this process. But I'm excited. We're moving in the right direction. Everything indicates that we'll close very, very soon. Whether it's in three days or four days, it'll be happening very soon. So I'm excited. I'm stressed, I'm nervous, I'm anxious, all the things. But yeah, we're just gonna keep pushing forward. Believe the work that we've put in on the front end and we'll be good to go.

SPEAKER_02 1:49

Yeah, it's crazy to think this is months in the making. Commercial is just a different timeline, a different beast. You're dealing with millions of dollars. We syndicated and raised money for the first time. So we've learned a lot. And again, our goal is to really just shine a spotlight on our story. I think every story is unique. And we're lucky enough that again, we're in a great community where every week we get to join on calls. We've got office hours, and we get to talk with Professor Joel over here and many other intelligent people. So let's welcome in Joe Wiggle to the show. How are you doing, Joel?

SPEAKER_01 2:19

Good. I appreciate y'all having me on. This is the big right before you close. So I'm excited to chat with you guys and hear about y'all's journey and a couple days before the big countdown. So I'm excited.

SPEAKER_02 2:29

Exactly. Thank you, man. And you, Isaac, Rosh, me, a whole gang have been instrumental to give us the confidence to move forward to even attempt something like this and the clarity, quite frankly, right? The education, the coaching, the one-on-one support. So again, thank you to the community. Again, if there's anyone out there interested in this game, reach out. You don't have to do this alone. This is one of my favorite things about this space, it's a team sport, it's collaborative, and it's more than enough opportunities and capital out there for us to be successful. But, anyways, I couldn't think of a better person to have on this show. Uh, again, Mike and I are pausing for an hour in our frenetic day, sending off attachments to lenders and insurance people and like all the things, but you've done this before. You've gone through this rodeo. You own multiple hotels, you're looking to acquire and expand more. I guess opening question is does it get easier? And uh penny for your thoughts. Any advice that you can give some guys that are going through it right now?

SPEAKER_01 3:25

It it does get easier. My biggest penny for your thoughts is honestly don't let them bully you. Lenders, everyone, they say they're strict on timelines. I've pushed back many of times. It the world keeps moving, you still get the deal closed. Everybody at this point is three days away from closing. If it goes to four or five days, you're okay. And that's I was in your same situation, stressing, flying across the country to get docs signed. And we have to be realistic about what works for us. We still have to balance our family life too. So don't bend over completely backwards. We're here to put the plan together. So every single one's a learning lesson. It does get easier, but you just see the chaos at the last bit and let's proceduralize this for the next ones going forward, too.

SPEAKER_00 4:10

Yeah, yeah. And I want to give a little bit of background into our situation because it's quite peculiar. Our seller has already signed their close-in documents. He's actually in Australia right now. He called me today. It's it was like 7 a.m. the next day in Australia. They're, I think, 18 hours ahead of time. So that entire situation is crazy because he's let me know if you need me to do anything, but the bank wouldn't let him sign closing docs on DocuSign. He had to sign everything by paper via notary. And I guess loan docs are one of the only documents you can't sign with a mobile note or like an online notary. You have to sign in person with a notary. That just made the entire situation complex. And then Adam and I are in two separate locations, but we have to sign the same exact document. So either we need to be in the same location for closing, or we have to do this thing where one of us signs and then we overnight it to the other person so they can sign, and then we overnight it to the title company. So there's just a bunch of nobody, nobody tells you this. Like there's no way to prepare for this specific situation. And I guarantee you, when we go to do it again, it's going to be 112% different, totally different situation on our hands, and we just got to learn how to solve it. So just wanted to give a little bit of background on the peculiar the peculiarity of our situation, and then maybe throw it back to you, Joel. Any situation you can think of off the top of your head that just rings a bell. Oh, I remember when I had to fly across the country or when I had to do something out of the ordinary to make sure the deal got done.

SPEAKER_01 5:48

Yeah, definitely. I've flown across the country to because I didn't want very early on. I got bullied to say we had to get it done by this time. We literally just I had two other partners in this deal at the time that were both going to sign because they were guarantors. And I literally just did some basic math to be like, mail doesn't move as fast as I need it to. I have to move faster than the mail. So I literally had to just fly to sign it in person. So that was something early on that definitely happened. There was another time where I had two other partners in a different deal and they couldn't make it. So instead, we had our attorney give me power of attorney over their signatures. So I had to sign for everybody, but now I had to sign like it's already a lot of signatures. Now imagine doing that three times instead. My hand was cramped for the next three weeks, probably. I couldn't do anything, so I never had an injury of just like a hand cramp from so many signatures. But there are ways to work around it. And once again, my biggest thing is like closing date is great, but it's not the end of the world to push it back a couple days. Let's try to be within our time. And that's my biggest learning lesson now. Not everybody, even if they get upset, they're upset for two days, and then you're closed two years after that point. So, my biggest learning lesson, I've gone through what you guys are going through. It's stressful. You're trying to balance everything of insurance and getting money in, and then wiring money, and then signing, it's so much stuff, and then construction, it's so much stuff. But at the same time, we're the ones building the schedule. We're in power more than anything, and that's what I want you guys to know. Like you're in power right now, it's up to you guys.

SPEAKER_02 7:22

Yeah, I love this because in in high school, we learn about the speed of sound, we learn about the speed of light. But right here, Joe Weigel teaches about the speed of mail. There's a calculation in there somewhere, but this is this is stuff you just again, you don't think about on the front end. But again, we're problem solving, we're staying adaptive, but we're moving. And I love this advice of yeah, don't let them bully. Because I remember Micah, just even a couple weeks ago, when we said, hey, our PSA expires on December 20th, we got to get this done. Can we do this on December 15th? And it was like, Man, not really. Can we do it on the 60s? Like, we kept pushing back, but because we had that hard stop of our PSA expires on the 20th. Now, little did they know that the seller was totally open to extend and all of these things, but like you you keep that ace in your pocket, and you go, Man, we can fall out of contract. We lose our earnest money, you could blow up the whole deal if we don't stay on top of this thing. And lo and behold, a couple weeks ago is like this would be a crisp Christmas miracle if this gets done, and now we have willed our way to the finish line. Now, again, TBD, if we actually pull it off on Friday, or maybe like you say, Joel, even if it slips into a Monday or Tuesday, like on the macro level, 10 years from now, cute story, but it won't change the deal.

SPEAKER_00 8:40

Correct. Yeah. I want to just piggyback on what you were saying really quick, Adam. When we told them that there were several people in our corner saying you need to make sure you stay the priority, especially as we get into holiday season, because if you don't make yourself the priority, somebody else with another deal will become the priority for the lenders, for the title company, and everything else. So I think that was really good that we like stayed in the front of their minds. We made sure that they were working on their side to help us get this loan done. And then the other part I wanted to mention is we started with 100 and either 16 or 117 documents three weeks ago. And we pretty much have been cranking away, getting all the documents. And I think that list is probably down to three or four documents, and they're not even documents that we have to submit, they're coming from like the insurance company and from the contractor. So I think those are two really good highlights that I wanted to mention. Since yeah, it was very, very hectic three weeks ago when they said complete all of these things and then you can close when you want to close.

SPEAKER_01 9:40

Yeah. And let's also let's put ourselves into the seller's perspective here. They've seen y'all doing work, they've seen you pushing. Even if we have to extend a little bit, what are they gonna do? Say no, get out of contract, and try finding another buyer here. We're so close. Once again, we have the power here. 99% of the sellers, I don't want anybody listening to this to think 100%. There's probably some jerk out there, but 99% of the sellers out here, like they're here to work with us. So if we say, look, we're so close, we're on the final, we're on the like the 90, the the one-yard line right here. Let's get it to completion. I need one more week. They're cool with that. What's the difference of one week, like Adam said, 10 years from now? What's the difference of one week? Let's put it into our guidelines, our plan, our perspective, and we're gonna be okay with it.

SPEAKER_02 10:25

Yeah, and let's maybe dive into one of the pain points or challenges uh certainly of the last two weeks has been kind of this back and forth. And Micah, you can speak more eloquently on this, but like with the GC and the SBA lender, very strict guidelines. And again, we've raised capital. So, again, in our case, we need to bring $1.2 million to the party, and then the bank's gonna give us roughly $4.7 million of money, split a couple in different buckets for different uses, etc. Um, but we need $1.2 to close. So again, we're on pace to do that. Now we're hearing from Joel, we should have done this weeks ago. Of course, like we'll do that for hotel two. But I didn't understand that, okay, cool. I thought we gave them our total project size, we've submitted all the bids, we're spending about $1.35 million with our GC. Uh, we've even got a contingency in there, we've got some soft costs. So, anyways, all this is accounted for. We're bringing money to the party, banks bringing some money, but we're running into the sequencing thing, Joel, right? Where again, the bank doesn't want to pay or release funds until the work's complete. And of course, the general contractor is going, yo, like I'm a small crew. This is a small town. I don't have hundreds of thousands of dollars to front your costs. And so I'm curious. Again, we can dive into this deeper, but have you run into issues like I I gotta believe that you've run into and overcame issues like this. So, do you have any kind of general guidance or any stories that you could tell about the sequencing issue? If the money is there, but we have to be really careful about how it goes from A to B to C to make sure that we're compliant.

SPEAKER_01 12:03

Yeah, yeah. So, understanding really from the lender standpoint, most lenders are gonna give money based off of what's called like a construction draw. So you need to understand the trigger points of what will allow them to give the draw. And there's different things that they might need permits that are gonna be approved, they might need electrical schematics that are gonna be stamped. So we have to understand where their guidelines are through different draw types. And that's something Isaac has helped out, and John St. Ledger has helped out with a lot as well, is understanding those draws that my communication with the lender is I want you to actually guide me. I can give you know what I would like. Here's my timeline. But what I really want to understand is a bank typically is gonna have some sort of quality check person to go in there and make sure the documents are properly assessed because there, that quality person is making sure that the insurance of their money is getting spent properly. And if you just say if you have nothing at all and you're just like, give me money, then essentially you could have no plans ready to go, you could have no GC ready to go, and you just have money sitting in your bank. And it's a huge risk and liability to the bank standpoint. So I need to truly understand from them is what are the trigger points that you'll allow for these draws? And I start reverse engineering and I build my timeline based off of those draws. And I say what I need is I need the permits pulled here before I can get a draw. Boom. Let me take that. That's my number one priority right now. Then I need my next one, is once we do trenching or once we do more electricity, the electrical side or the HVAC side or any MP MEP, I need that stamp of approval. Then I need my certificate of occupancy. What are the different triggers that the quality check person and a lot of the times the lender will allow you to have a conversation with them? So the biggest learning lesson for me is talk to them and let them guide you. It's their money right now. You're just borrowing it, you're the lender here. So it's their money. But what's the trigger points to allow to get some of those funds? And if you don't know, that's where this miscommunication and misalignment between you, the lender, and the construction company is going to cause a little bit of chaos that can come too because the construction guys, man, I just put all my guys out here and I'm not getting paid. And you're like, I don't have the money, I'm waiting for the lender. So you need to make sure you're properly in line all with each other, so you're not getting other people mad at you guys.

SPEAKER_02 14:25

Yeah. Do you want to talk about that, Micah? I feel like you're on the front lines of this one.

SPEAKER_00 14:29

Yeah, I am I am massaging the situation as we speak. It's a very touchy situation, and I I wish I knew this on the front end. And I think having clarity on the loan type on the front end would help guide this because since we're going with an SBA 7A product, they don't allow any labor to be paid on the front end. They only pay based off of percent completed. So what that means is once that third-party company comes out and does the inspection, they send the approval to the lender, the lender wires the third-party company money, and then they overnight send the money to the general contractor. But what this means is until that first draw, that first inspection is done, probably about three to four weeks from the start of renovations, none of their guys get paid. And our construction company, they pay their guys on a weekly basis. So that means they're expecting a paycheck every week and it's just not coming, not from the lender. So, of course, this raised some red flags, especially from a general contracting company that's used to getting 25-35% as a down payment to even start any work. And now they're hearing for one of their bigger jobs, they're not going to get any money to start the work, which just feels like a really good risk. They've been burned in the past, especially during COVID. So they're very just scared, not scared, but like aware that there's a risk that they could lose money or have to come out of pocket for this, and that's what they don't want to do. So, yeah, knowing this on the front end, being able to talk to that third party and understanding what the loan product was would help us out so much more. And then moving forward, it would help us communicate with the general contractor saying, Look, we're gonna go with an SBA 7A product, which means you're gonna need financials, tax returns, a list of your subcontractors, we're gonna need scope of work, we're gonna need schedule of values, so many terms that I didn't even know existed a month ago, just because I'm constantly in communication with the general contractors and the lender. But if we knew this on the front end when we met the general contractors three months ago, it wouldn't be as big of a deal when we came time to introduce those those guys to the lender. So, yes, I am very delicately massaging this situation because we've gotten some verbiage that they were willing to walk away if they didn't get any money on the down payment, and that would materially change this entire deal. So I want to make sure they stay in a good place mentally, know that we support them, but this is just a government product, and we have to strictly abide by those rules.

SPEAKER_01 16:53

And so I'm curious, I'd love to hear where you're at as you're massaging this. Like, where are you at now? And then what's the solution you're coming up with now? Just to be transparent. I haven't gone through a construction with the 7A product like this. I have some thought, some initial thoughts, but I've been very curious your next route, your solution that you're going through with these guys of how we can still keep these guys on.

SPEAKER_00 17:14

Yep, that's a really good question. So we did some research via Chat GPT, and then we also talk with our mortgage broker as well, who has a pretty long history of doing SBA 7A loans. And if the lender allows it, we're able to pay money out of our personal funds to pretty much jumpstart the project and pay for labor until the first draw comes in. It has to be clear by the lender. So what I did on Monday was I contacted the lender, I let them know the plan. She asked me how much, I told her how much, and she was like, as long as they put it in their contract, and then when funds are paid out, we would be the first people to be paid before they receive a single dollar. So it's possible. And even that third-party company, they mentioned that they fronted money to general contractors on the front end, but it's at the discretion of the lender. Unfortunately, our lender won't let them front any of those loaned funds, but we can take money that are that's outside of SPA funding to jumpstart the project until that first draw comes in. So that's our way of circumventing this issue, but it's not nearly as much as the general contractors want. Just for transparency, we're given about $50,000. Initially, the general contractors wanted $461,000 to jumpstart the project. Just a little bit. The margin is a little bit different, but in in kind of that respect, it's about 35%.

SPEAKER_02 18:38

Oh, actually, SBA can make direct payments. So you show up with an invoice and go, hey, check it out. Here's 50 beds, or here's all the electrical, or whatever. SBA is saying we would much rather, there's far less risk of tampering and fraud if we just send it directly to the vendor. If you're getting value from this, follow the show and share it with one person who's ready to move beyond short-term rentals.

SPEAKER_00 19:04

And if you want to learn more about the boutique hotel secrets community, the link is in the show notes.

SPEAKER_02 19:09

Buy the thing on your behalf. Then no one's marking it up, no one's doing shady stuff. And then all of a sudden they don't need 400k. Because if 200k of that is materials, okay, you're going to replace our roofs, cool. What do you need? Let us buy that for you. Yeah. And then what are the soft costs, labor costs, admin, etc.? But this was a very illuminating process to go, we can't use money that we've raised and the bank's not getting giving us money. But when we just reasoned it out first principles, right? It was like if our construction overruns its budget, like the bank's not giving us any more money, so we got to come up with money. So at the end of the day, like as GPs, it's on you to figure out how to pull this over across the finish line. And either that's with your own capital, it's by talking to more private investors. There's always a way, but I think this has been a great learning moment about boy, they're like, how do you get this tricky situation done in a compliant way for all parties and to make everyone feel whole? And at the same time, Mike and I have been sending out checks left and right. Our bank accounts are hot, overheated, almost empty. We're right, we're ready to turn this thing called a hotel on. It's like a vacuum cleaner. Like we've been on blow mode for half a year. We're ready to reverse it and get some suction again to have some money coming in. But this is very real. At the we're days away, and if all of a sudden you're short, 50k, 100k, whatever, like it might be coming out of your pocket as the GP or sponsor.

SPEAKER_01 20:43

Yeah, I was curious. I've ran a construction company before, and I will say if I have a contract as a construction company, it's actually very easy for me as a construction company to go get like a payroll loan of some sort. And it's fairly cost effective as long as I have contract in place of whenever I'm gonna get paid. So I'd actually be curious too if it would ever make sense where you said, Hey, rather than me coming out of my pocket right now, what I'm gonna do is I'll pay whatever that interest is on this construction or this payroll loan, but you go get the 50K from a from a payroll loan, cover the cost of your team. Then whenever you have to pay the bill and it's 55k, whenever I get it from the SBA, you're out five grand or something like that. Yep. Just trying to like think of a solution. But I've ran construction crews. And once again, if I had the contract in place, they love handing off money to people who have an actual contract signed that the money is going to become coming later. And it's very common for construction companies to be very heavy on the front end, and they can't cover all of that right away. That type of loan class is very common for a company like that. But I also don't want you already have an agreement with them. I don't want them coming more out of pocket on something they were not aware of at the beginning.

SPEAKER_00 21:54

Yeah, that's really good to note, and something that really keep in the back of our minds when we're working with contractors who. May run into this issue again if we were to use an SBA product, which I pray we never have to, but yeah, that's good to know. I would say the one good thing about SBA, and maybe about other loans, you may know better than us, Joel, but they're willing to count a lot of our upfront expenses towards equity injection. So we're talking about property inspection, survey, lawyer fees, a lot of that can be counted towards our our ex our equity. So that that comes as a relief because initially we thought that those funds were just upfront costs that you as a GP has to front to make sure the deal gets done. But now that we know that can be used as equity, that comes as a relief.

SPEAKER_01 22:37

Yeah, a lot of the government backed loans, the USDA will do something similar as well. The SBA will too. If you go traditional, though, it's it is a different story. So it is definitely like you said, it's one of the positives of going that route that a lot of commercial loans won't have that process, but USDA and SBA will.

SPEAKER_02 22:53

It's definitely a nice where do you want to take the conversation next, boys? We can talk about gosh, I feel like we've sat through a thousand demos. Joel, we're looking, we looked at a couple of the vendors that you'd send our ways for marketing, revenue management. Obviously, we're having weekly meetings with interior design folks. We're looking at value engineering. Okay, how do we get a great look in the room, but at a cheaper price? There's just a billion things, it feels like, that we're trying to consume that some of these things we need to do in a matter of days. Some of these activities, like Micah, again, we might be doing like an eight-week kind of marketing masterclass boot camp thing. Some of these are mid-term. And some of the and some of these are long-term, right? Hey, even if this doesn't work for this hotel, because we're going to be buying, acquiring, and renovating, repositioning three hotels over the next five years, it's still great to increase the Rolodex, plant some seeds, introduce yourself, and maybe for future projects we get to work together. But, anyways, I don't know. I'll open it up to either of you. I think there's a dozen different directions we could head in, but I personally am feeling a little overwhelmed on just like all the things and all the vectors of projects.

SPEAKER_00 24:02

Yeah, I can start it off. I've signed Adam up for about 40 demos at this point. I literally geek out about operations, which I know sounds crazy, but I love learning about like different operating systems and what works best and what integrates better. And if I hear deep integration one more time, I'm gonna I don't know. But it's just it's interesting. So, what I will say is we met with the general manager who's on site for the first time last week. That was probably I don't think the conversation could have gone any better. Immediately bought into our vision. She's so happy that we were owners, she wasn't quite satisfied with the current owners. She loved them, but just I guess she had made suggestions and they didn't really take any of her suggestions that could have been beneficial for the property. She also mentioned that before the current owners, I guess the original owners maybe, they ran the property quite well and they had really good revenue. So that was reassuring to hear that the property can in fact support such a high amount of revenue and occupancy. But I think, and we have a meeting with her later this week. I think the first goal for B is to continue to get her to buy into the vision, allow her to understand what changes are gonna happen, not just from an operational standpoint, but also from like a renovation and construction standpoint. We're gonna be partially open. So it's important that we handle damage control and we understand what the property is gonna look like while we're gonna have contractors on site as well as guests. Is that gonna lead to a bad review? Is that gonna lead to us maybe doing more to accommodate guests while we're there? So I really want her to understand that. And then we get into the tech stack. And right now they're using a physical key to unlock each of their doors. We plan on going to pretty much fully keyless and autonomous for check-in, where you can get a code sent to your phone, you scan your ID, you enter your credit card information, and you get access to your room. Basically, the Airbnb model that the younger generations know quite well, but that's just something that this property has never seen. So getting her to buy into the new age of technology, getting her to buy into the new systems we're going to implement, being able to access a centralized location for her SOPs, her failsafes, what to do if this happens or that happens. Right now, she's glued to her phone 24-7. If something happens at the property, they call her cell phone. So she really doesn't get any sleep if something happens. And that's not necessarily how a property should be ran. So while she loves this property and she's put her heart into this property, we definitely want to implement some better systems and operations so she can get a good night's rest and pretty much take a break. She's been there for 11 years and doesn't seem like she's taken a break since she's been there. And that's just not how we want our employees to operate. So I'm wondering if you have anything else to add to that, Adam.

SPEAKER_02 26:45

Let's call our shot right here, as Joel would say, one of his favorite phrases. But I even sent this to you right after we talked to her. I text Joel and said, Man, lovely human being. This is gonna work. So much pride of ownership. She's so excited about where we're going. And she gets it. She said when she sells a room for over $100 now, she wants to go hide. She's literally embarrassed by the product that she's got. But 10 years ago, she used to proud, she it was like a little competition. Like, how much she can she get for a room? 200 bucks, 250, 300 bucks. Like she was doing this on the regular. By the way, the Hyatt place, the market leader, when the entire town sells out, like this hot air balloon regatta that I'll talk about in a moment, $700 a night is what the Hyatt's pushing. And again, we th when we pitched, hey, we're gonna go from a one-star budget economy hotel to like a three, maybe a four, her response. We're delivering five star baby. Like we're gonna be, we will be the number one hotel in Page, Arizona. Back to calling our shot. One of the things that I want to do, and I'm willing to go on record with this, and I don't know if it's this year or next year, but the dream is to send her and her fiance to Albuquerque for the hot air balloon regatta, right? She has not had a proper vacation forever, or Mike and I might dream about like a cruise for her. But like you talk about using real estate, not just to solve money problems, but to inspire and do crazy cool things to change someone's life in a tiny bit. If we can break her away and give her a vacation that she's needed to have for a decade, she's overdue on this thing, she's overworked, she's tired, and she just hasn't had somebody step in to create something like this. So the idea where this came from, by the way, is for 10 years at this property, she was very passionate about sponsoring hot air balloon pilots. She'd give them a free room. So, hey, here's kind of our pledge to you. And typically they bring friends and family. And every year for 10 years, they sold out their property. 50 rooms, all rooms occupied, because they gave 16 away. This year, under current management, they said, you know what, I'm losing money, the times are a little bit tight. I like the idea, but let's not do that. Let's tighten the belt. And this is there's two ways to win in business. You can either grow the top line and grow through revenue management or like cost reduction. This was a cost reduction strategy, and not like she was saying, I told you, but literally the big weekend came and went in Page, Arizona. Tens of thousands of tourists come here to check this out, but they were empty, they didn't sell a single room over the weekend. And so again, she loves this event. She has dear friends that are hot air balloon pilots. She knows their friends, their family. And guess what? It's like a little bit of a traveling circus where they go from town to area, like the community fair, right? I looked at the dates. They're gonna be in page one weekend, and then I think three weeks later they're in Albuquerque. New Mexico is your home turf. So we thought, and coming back to calling your shot, like I think Micah and I are gonna put Roberta and her fiance in Albuquerque with her phone off to enjoy a well-deserved overdue vacation. I didn't know that. I've done that one by the way. Have you done the Cappadocia, the turkey one? Holy I I was thinking about proposing to Mina, my wife there, but and ended up doing that in Italy. So less hot air balloons, but also magical. Okay. Do you know a guy with a property that we could put her up in in the Albuquerque area? Okay, I like it. All right, all right. Let's have your people talk to my people.

SPEAKER_00 30:29

Yeah, yeah. And I think I even told her she's our biggest asset. She's been with the property for 11 years, she's been through two different owners, she's seen it at the height, and she's seen it at the lowest. She's seen all the damage and the repairs and the traffic that comes through page. So if anybody knows the property, it's going to be her. And she's very passionate about it. So it's interesting. We had that call and we asked, What are your biggest bottlenecks? What are your biggest issues? And she just named, she liked went down the list and named everything we planned on doing in renovation. She was like, You gotta repair the roofs. We already knew roofs are at end of life, and we're gonna repair all or pretty much replace all the roofs. She was like, The bathrooms are ugly.

SPEAKER_02 31:07

She literally since you guys were here's a picture of the ceiling falling.

SPEAKER_00 31:13

Yeah, that's where we'll get that on camera. You can tune into one of our Instagram stories, you'll be able to find that soon. But yeah, and then she said the bathrooms were ugly, and we were like, Yeah, we plan on remodeling the bathrooms. She's like, they got carpet that's probably older than me. She's like in her mid-40s, and we're like, Yeah, we plan on getting rid of all the carpeting going with LVP. So it was just interesting to hear. She's, I just need the property needs a facelift, and the infrastructure just needs to be more sound. And then I wouldn't have to hide under the desk to sell a room for $100 a night. I can go back to selling these rooms for $200, $250, maybe even $300 during peak season because I'm proud of the product that I have. And right now she just can't do that. So it was very nice and reassuring to hear a lot of what she was already mentioning. We should change. We had already budgeted and underwrote to get that those things done to make this a much better property. So just wanted to highlight that as well.

SPEAKER_02 32:06

Yep. And let's I think for the final chapter, I'd like to know. So let's fast forward, Joel. It's Friday. We close on the hotel. First 30 days or first three things. What's on your mind first when you get the keys to a property? And again, what's a significant transformation? It's going to take some time, but what are you focused on first?

SPEAKER_00 32:26

Yeah.

SPEAKER_02 32:27

Yeah, that's great. That's great.

SPEAKER_00 32:28

Adam, you got anything you want to add, anything you're looking forward to, or any thoughts going into closing three days away. We have come quite a long way. Um we're in pretty much the end of December, and this whole journey for me started in June. And for you, slightly after like late June, early July. And we have been pounding this hard for five or six months. So we've had our share of ups and downs even before we got the deal done. So I just wanted to hear if you had any thoughts going into closing three days away.

SPEAKER_02 32:59

Yeah, I would say I think this is classic for an optimist, but or also maybe has some similar traits to a procrastinate procrastinator. Like you overestimate how much you can accomplish in a given period of time. Look, I've been, I haven't had a W-2 this year. And literally every day I'm sitting down and my plate is overflowing with tasks and things to do on this. So I would say one of the big learning lessons is my wife and I successfully bolted on an Airbnb business with our W-2. But it's been really impressive, Micah, to watch you juggle and handle like a job plus this. But I know that with a hotel, even knowing what I know now, uh, there's no way I could have done this without you. There's no way I could have done this on my own. So for those people bootstrapping smaller deals by themselves, like sure, you can probably gut it out and figure it out. It might take you longer, but again, we've got pretty aggressive goals, pretty ambitious plans, pretty ambitious timelines. So this is only made possible because we've given it space. Because I don't have a W 2, I'm betting on myself, I'm betting on this endeavor, like personally guaranteeing the loan, collateralizing rental properties, collateralizing my life insurance, right? I mean, like our chips are in on this thing. And beyond just joining a mentorship, which is very powerful, again, we're our actions day after day are constant reminders that like this will work. This has to work. So, anyways, I think I six months ago probably underestimated what it meant to go from adding an Airbnb or acquiring another property. This is very different in the commercial world. There's just so many things that need to happen that it truly is a team sport. And so, anyways, that's like a major, I think, learning and reflection. A lot of our skills and experiences translate from residential hospitality to commercial hospitality. But I think I grossly underestimated what needed to happen from A to B. It's a lot of steps, a thousand chapters. And my God, like my eyes glaze over when it's more than 13 tests. So I love having a partner like you that gets fired up when somebody mentions APIs and deep integrations and tell me about this protocol versus that protocol. And so again, like we're reading attraction right now and thinking about implementing EOS, and it takes visionaries, it takes integrators. So I think I've learned a lot about myself. I think we're gonna be far from perfect. We got a lot of book knowledge at this point, but now it's time to go get some street knowledge. We're gonna make mistakes, we're gonna learn. We're also gonna win though. Why? Because we give a shit, like we care, we're intentional, and we're working with people who do this professionally. So I love our chances. I a month ago I was more terrified than excited. Today, it is 90% excitement, 10% terror. Anyways, that's where I'm at.

SPEAKER_00 35:54

Very well said. I don't want to hold you guys too long. I think that pretty much wraps up the pod. If anybody's got questions, thoughts, Adam, you could put them to the right place to go. We definitely uh recommend you guys be in a community. I don't think any of this could have been possible without boutique hotel secrets, our coaches, mentors, kind of guidance along the way, what to do, what not to do, save us from some early-on pitfalls and really just getting ourselves in trouble. Anything you want to add to that?

SPEAKER_02 36:18

And look, yeah, we'll put links below in like the show notes to go check that stuff out. Find us at BHS. Come join us. Don't just sit on the couch and watch YouTube. Come join us. I am literally meeting people that I was watching on YouTube a couple months ago. So the gap from where you are at to where you could be is actually a lot closer than you think. Takes a little courage, takes a little conviction, takes some community, though, I think is a great first step. So I'd love to see anyone that's interested in this space. Again, we've got folks that can meet you where you're at and see if this is a good fit. But I thoroughly have enjoyed the journey. There's no way I would be where I'm at today without BHS's support. With your help, Micah, with your help, Joel, Rajmi, Isaac, Shogren, McDonald. I mean, like it truly is a wonderful group of people who are aligned on values, aligned on mission, aligned on purpose. So again, I know Adam, 10 years from now, is going to be a great position, but it's what is what do they say? Like the swan, right? We're paddling like hell underneath the water, but we want to be smooth sailing, deliver just a great guest experience right out of the gates for our team and ultimately the people stay at our hotels. So, anyways, reach reach out, don't be a stranger, get connected with us. This could be you. And our goal, by the way, is not to Mike and Adam go start up our own coaching circle. Like we've got a great community here. So come join us with this group where you can learn from Joel Weigel, from Isaac, Rashmi, others. And, anyways, we'll continue telling our story. We'll continue shining spotlights on other students' stories and getting lessons learned, right, from people who've been around the block like Joel. All right, that's the pod. All right, that's it for today on the official Book Eco Tell Secrets Podcast.

SPEAKER_00 37:59

If this helps, be sure to follow or subscribe and send it to someone who needs that bigger push. And if you want the community or the resource and playbook to find what we're learning, the link is just a quick note we're BHS community members sharing our own experience. And if you have questions or topics you want us to cover, reach out and let us know. We're building this channel for operators just like you at Delphex.