Building a "Client's First" Short Term Property Management Business with Caleb Drake

Caleb Drake: [0:00] I think that the value proposition comes in, in my opinion, when you've got these larger companies that have, you know, 200 units and and they're charging 22 to 25%. And then these hosts or these owners are getting frustrated because one, they don't have good communication. Welcome

Speaker 2: [0:20] to the collecting keys podcast. The show where you'll learn how to use real estate to create massive income, not just passive income. Real estate doesn't have to be a get rich slogan. Listen to the country's top real estate operators, and you'll have all the tools you need to replace your w two income and go beyond beyond in under twelve months. Ready to take things to the next level? Let's jump in with our hosts, Mike DeHaan and Dan Austin for today's episode of the collecting keys podcast.

Mike DeHaan: [0:56] What's going on, guys? On today's episode of the collecting keys real estate investing podcast, we have Caleb Drake, who is a real estate entrepreneur who, I guess, lives in the Pensacola area. There's some business down there. He flips and rents properties in the Midwest. He has like a pretty big realtor team, and he is an all around just like an all inclusive real estate entrepreneur. Before the purpose of this show, we actually spend a ton of time talking about short term property management and that business that he has built there, which is a, you know, pretty interesting conversation because if you guys have listed us at all, you know how Dan and I feel about short term rentals in general. But I will say, Pensacola, Florida is probably one of the few markets where I'm like Short term Mecca. Absolutely. It's it's like the whole city's built to be a short term rental. Have ever been there?

Dan Austin: [1:44] Yes. The whole part of state is built to be short term rentals. Yeah. Yeah. I think it was fascinating too just hearing, he's another guy that has approached it and he even said that he started out with real estate as hobby Mhmm. And then he turned it and started focusing it on business, he talks about implementing traction, and those are the folks to really listen to when you're hearing them on podcasts. Get outside of the deals and like the big wins and all this stuff, and listen to the business that they're operating, and that's what you wanna be able to replicate. Yep. Definitely.

Mike DeHaan: [2:11] You know, and he's he's has a lot going on. I think that he probably if you have any, like, interest in any part of, like, real estate in general, this guy probably has, like, some level of guidance he can give you. Cause he said everything from, like, burs, flips, short term rentals. He's a realtor. He wholesales. It's funny. We didn't even touch on his wholesaling too much during

Caleb Drake: [2:32] the show.

Mike DeHaan: [2:32] We were just talking after the show, and he's doing a bunch of different stuff with that too. Didn't even realize. And he's an air force pilot.

Dan Austin: [2:37] And he's an air force somehow.

Mike DeHaan: [2:39] Yeah. Which he does full time, like, along with everything else. So so he's definitely a busy guy. So you should definitely reach out to him. And and if you are in the Pensacola area, he also runs a pints of properties down there that I'm sure you can get a ton of value for ten days. Head to that for sure. Yep. So anyways, guys, we appreciate you all listening. Please go and leave us a five star review wherever you listen to your podcast. You should also go to collectingkeyspodcast.com/free, and you get your free five step guide to start generating off market leads so that you can also have a million businesses just like Caleb does. But realistically, just pick one. Just find leads and make money. Exactly. So simpler simpler lifestyle. Anyways, guys, enjoy this episode with Caleb Drake. Alright. We are here today with Caleb Drake. And, man, I'm super excited to have you on the show. We gotta have a good little pre show conversation, and you are kinda like the epitome of a real estate entrepreneur, man. So I'm super excited to hear about everything that you have going on. I guess for like the quick fifty second, fifty second, five second view to give everyone a preview, you have a very successful real estate team, you have a short term rental company, you're doing fix and flips, you run a local meetup, you have what else do you have? You have some general rentals. You're just doing stuff all over the place. You're doing things virtually as well as in your own market. You're all over the place, man.

Mike DeHaan: [3:56] So I'm super, super excited to dive in. So for people who may have not heard of you before, give us the the rundown kind of where you came from, how you got into real estate, and who exactly is Caleb Drake.

Caleb Drake: [4:09] Yeah. So I'm originally from the Midwest, Terre Haute, Indiana, of a small college town. Left there when I was 18, joined the military, and then went back to school. And when I was back home, I kinda noticed, like, that there was a lot of rental properties that were really crappy. And so that would kinda we'll kinda transition into that later. But military officer, full time real estate agent as well, full time real estate investor. We've run a management company of about 20 assets for short term rentals, and then we got about 12 long term rentals as well. Nice.

Mike DeHaan: [4:40] Good girl. There we go. Perfect. So you went into the military route, and then what sort of led you into real estate after that? Was it, you know, family thing? Was it just like you when you got out of military, you're like, I don't wanna do anything, like, really in general, and real estate's what every burnout goes into? Like, what what sort of was that was that transition?

Caleb Drake: [5:02] Yeah. So I had a I had a kind of a pretty successful uncle. I come from a very blue collar family, but, you know, I had that uncle. Everybody has that rich uncle or everybody wants. Right? And he was invested in real estate. Fun fact, I actually bought a house that he owned, like, thirty years ago. Nice.

Mike DeHaan: [5:16] Oh,

Caleb Drake: [5:16] really? That's funny. Like, thirty years later as a as a rental of my own. But yeah. So I saw it kind of what he did is successful, and then it all actually came about when I bought my first house on a VA loan and I was in special operations, so I was deployed six months of the year. So I took in while I was deployed, I rented my house out on Airbnb. And I took the money from that, found a partner. It was a good friend of mine from college and who was also a military officer and we took that money and we bought another Airbnb. Took that money and then we just kind of continued to scale there. We bought a couple of multi families in the Midwest, another short term that we bird out and in the process of burning out another log cabin on Smith Lake in Alabama. And we just kinda grew that way. And then from there, I I got my real estate license in 2020, and I kinda started to scale that way, selling rentals using all the active income I was making to buy more passive rentals. And then I took and realized that I needed to kinda start a team in the Midwest to to be able to scale. And so we did that. And then as a new real estate agent, I was kinda tired of referring out all of my short term rental.

Caleb Drake: [6:26] I'm in a short term rental market in Pensacola, Florida. So I would get clients, someone to buy short terms, and then they would they would like, you know, who's your property manager? So I got tired of referring that out, and so I just created a property management short term rental co hosting company as well with a buddy of mine, Ben, and we got 20 assets that we manage between the team. I think that that is gonna continue to grow. Hopefully, by next year, we'll be having this conversation. We'll be like at 40. It's kind of

Dan Austin: [6:51] the goal of 40 assets under management. What's the, like, work that it takes to do 20 Airbnbs? Right? Because I have no context. Like, for long term rentals, a 100 units is kind of like a benchmark for a lot of property managers, but I have no idea what that means for short term rentals.

Caleb Drake: [7:05] Short term management, it really doesn't make sense in my opinion for, like, anything under 10 to 15 because of the amount of work that you have to do to create the team, right, with hiring virtual assistants to do your customer outreach, like, client outreach, creating the team of cleaners. And if you're if you're going in multiple markets, like setting that up in multiple markets, I would say right now with the systems that we have in place, we're probably dedicating ten to fifteen hours a week for the 20 units just because we're trying to optimize a few of those listing. Hopefully, by, you know, this time next year, we'll be at about five hours a week with our VAs kinda managing everything, but that this is a kind of a newer venture of mine. So I've only it's only been, like, three months that we've we've built this company up from, you know, zero units to 20. And so taking that and, you know, training the VAs and trying to to manage, like, the units while training the virtual assistants, while kind of setting up some of those systems, it's been a little more demanding, but I would say probably ten to fifteen hours a week as of right now that we're just dedicating to the to the short term rental company.

Caleb Drake: [8:12] Yeah.

Mike DeHaan: [8:12] And so, like, what kind of money can you even make doing that we charge or what 20% gross top line? I think that's what we've seen or seen as common from what people around here anyway.

Caleb Drake: [8:21] Yeah. So since we're more of a cohosting platform, we're just kinda doing the guest outreach, the cleaner coordination, some of the scheduled maintenance, and some of the deferred maintenance, and any kind of, you know, like emergencies that come up. We have a tier system where it's, you know, the lower tier is 10%, a middle tier is about 15%, which is probably your best value, and then there's a an upcharge for a few things at 18%. Since we don't handle the money, you don't have to have a specific license in Florida to do so. So that keeps us a little bit less on the overhead. We don't have to to necessarily, you know, have extra people to manage, like, accountants and stuff like that to manage the money. We invoice out monthly for our charges, and that keeps us legal on the state of Florida because if you manage properties in Florida, you require broker license.

Mike DeHaan: [9:08] Oh, really? Interesting. Yeah. I guess I guess like Washington state too.

Dan Austin: [9:11] Yeah. We're like that too.

Mike DeHaan: [9:12] I must assume that Florida being Republican state, they'd be more like open to that. I know like Idaho is kinda like that and same with like Texas, think you don't need to be brokered. You can just like

Dan Austin: [9:21] Idaho is like do what you want.

Mike DeHaan: [9:22] Yeah. Yeah. Right. Yeah. Yeah.

Caleb Drake: [9:24] Pretty sure Alabama is pretty similar to that in a lot of ways. Yeah. But we're Florida's a little more they have a little more regulation due, I think a lot too, because it's such a short term market and it's such a, you know, rental market down here.

Mike DeHaan: [9:38] Yeah. There's lots of old people too. You gotta have more rules than they're old people because a lot

Caleb Drake: [9:42] of people

Mike DeHaan: [9:42] just come and like take advantage of all of them.

Caleb Drake: [9:44] Yeah, dude. Yeah. They say, you know, they say Florida's where America goes to die.

Mike DeHaan: [9:47] Yeah.

Dan Austin: [9:48] For sure. Definitely is. So with a couple of those, I just wanna ask a couple more points on that just just for my advocation. Do you guys then like just have to upcharge your cleaning fees and stuff like that? Like, I'm curious because like I just think about the business side of things and the business model around this, and like, if you and Mike and I own a couple of Air BNBs and we manage them ourselves for a bit, and I was not good at it, didn't like it. So, if you're gonna hire a separate cleaner, they're gonna be building in their profit margins. So do you guys do the same thing? Right? You can hire it in and that profit margins goes to you and then you get the management fee or are you guys trying to do everything at cost? Because I know there's a few different ways you could do this.

Caleb Drake: [10:23] Yeah. The nice thing about the way that we've got it is the the cleaners manage. Like, they're not on our payroll. Okay. So they invoice the the sellers directly. Gotcha. Then the sellers get a weekly invoice from the cleaners. We always agree with like, we always follow out our cleaners with, hey. You're gonna get you're gonna get paid on Friday. Mhmm. So send the invoice on Fridays. You'll get paid Friday or Saturday by our owners. Make sure the owners know that. Like, we wanna keep these cleaners happy. And Yeah. So you're gonna pay them when you get the invoice. Some are like, yeah. I'll pay them next week. No. You're gonna pay them now. That's it. And then we always send our invoices just monthly. And so they get a monthly invoice for for us. And so that keeps kind of the the amount of emails and the amount of invoices, you know, down. And then the VAs, if we have any like, my personal properties that we manage, my VAs pay my cleaners directly through. We just kinda use a a WhatsApp chat and go like, hey. We did, you know, four cleanings this week. Here's the numbers. I just kinda put a check mark, like, a thumbs up on on the chat, and then they kinda handle all of that.

Mike DeHaan: [11:24] So as like a short term management company like that, what is your, like, value proposition compared to your competitors to have people decide to work with you? You know, it's like with a long term property manager, they all kinda like race the bottom on price. And then, you know, there'll be ones that are like, you know, 8% instead of 10%, but then where they try to get you, it's like lease up fees and all these other things. Right? But with yours, I feel like you have a lot more flexibility. So how do you like, for someone that's trying to get into that, how do you, you know, set up that business model so you are competitive? How do you get customers? What does all that look like?

Caleb Drake: [11:58] Yeah. I think me being local and having kind of a real estate investor meetup and kind of my name locally as a short term manager guy or a short term rental guy, I kinda had an an in already with a lot of my clientele. You know, they trusted me. They knew me. You know, they say, like, people like to do business with what they do, but they, you know, like, know, and trust. I'm not a huge social media guy. I'm not gonna pretend like I'm this big social media guru or anything, but I have had people that have, you know, got to know me on social media that I've done everything from short term management to takes and flips for. You know, I've got a client that I met on social media that I I flipped the house for her as an agent. I managed the whole thing here, and she's never been down here. We just met on social media and became friends. That's awesome. She's amazing human being. But I think that the value proposition comes in, in my opinion, when you've got these larger companies that have, you know, 200 units and and they're charging 22 to 25%. And then these hosts or these owners are getting frustrated because, one, they don't have good communication. You know, they're upcharging everything.

Caleb Drake: [13:01] We just brought on a I just had a a intake call with a lady. She was like, yeah. I'm getting charged $20 here every time they do this. I'm getting $50 here. They have a technology fee. This and that. And and we're very transparent about our costs. Like, this is what you're going to pay. The only thing you're paying is about 15% on your gross. You got 18% on your gross plus the $50 technology fee, and the technology fee that we have is per cost. It's like, this is what PriceLabs and, you know, hospitable charges for us to manage this automatically and to do dynamic pricing if you want that. You know, we're not taking it out of ours. It's just gonna be this one fee, but we're not upcharging it because we don't really need to. Once you kinda have those systems in place and you've got VAs that you can you you can pay a good rate for them, but relatively low rate for The United States, you're able to to kind of outsource and train those guys up and and run a business that way. Now we've got two VAs that we use, and they're great. You know, they handle all the guest communication, all the any other pair stuff that we need, etcetera. And so it's just a matter of kind of managing the managers at that point.

Dan Austin: [14:07] Right. It's a good system.

Mike DeHaan: [14:09] There you go. Easy enough. So basically, you provide decent customer service. That's what customers actually want is what you're saying.

Caleb Drake: [14:15] Yeah, communication. And I don't ever want to be the guy that has, you know, 300 units and can't get a hold, you know, and his clients can't get ahold of him. Right? I wanna be a guy that we're like, hey, Caleb, you know, can you just drive by there today? Because one of the tenants said that the trash cans were not there. And I'm like, yeah. Sure. It's you know, I'm in the area. You know, these are you know, most of what we do is local. We have a couple that are outside of our local area, but we've got big we got good systems in place for that. Right? But if you can build those systems with, you know, like, lean, like, with, you know, lean cost, you're able to kinda keep those costs low, and you're able to to pass a lot of that back to your owners. Good. And if they're getting, you know, a better a better product or 3% less, they're gonna happily stay with you, and they're gonna recommend all their buddies that they know, and they're gonna make sure that everybody comes over to you. And I think that our number will probably be, you know, 40 to 60 units total. I think we'll be where we're comfortable to be able to still provide that, like, higher boutique experience versus that bigger feel of, like, the cost of selling and those larger maintenance that are in our area that, you know, evolved, they offer, like those guys offer a low price, but then you're also kinda getting what you pay for.

Dan Austin: [15:25] Right. Yeah. Yeah. I think there's a lot of value in being able to provide that, especially in the short term rental market, because everybody's kinda figuring that out still. Like the property management, like you said, Casa, or Bay Casa, whatever it's called, like these big companies that are national, there's a couple other ones, and I have struggled in the past to find good quality. We have a pretty good one now here locally, our units for us, And so, I just think that there's a great niche, especially in your market where you're at, where that is a very, like, it's probably not hard to bump into 20 short term rentals and throw them under management. If you could provide good quality service, people are gonna stick around.

Caleb Drake: [15:58] Yeah. And then, you know, as an agent, I've kinda got that in where I'm a bigger popular So those guys, like, I'm I'm getting short term rental leads all the time, and I'm able to provide them the analysis on the property, you know, what our management operations would look like, and then how how much I can't guarantee somebody what they're gonna make. It's all gonna be dependent on how they wanna, you know, optimize their property, but I can give them a good idea. And with the experience that we have in the markets that we're in, like, we know the numbers. And so I'm not in the business to lie to anybody. I don't wanna take on a troublesome property. So No. I'm gonna just be honest in that.

Mike DeHaan: [16:34] Yeah. Nice. That's awesome.

Caleb Drake: [16:37] It all just came down to me. It just came down to, you know, I couldn't put my name on any of the local people. I I just I couldn't do it. Every time I did, there was somebody that was disappointed. I'm like, well, why don't I just fix this problem and just build this? And to me, it's all about partnerships, though. Right? I didn't have all the answers, but the guy that I partnered with, Ben, he's in a short term rental mastermind that I'm in. He's also a good friend of mine now, met through some of my buddies, and I'm like, Ben, like, Ben, why don't we just do this? Right? And so, like, yeah, sure. Like, they already had three units. I had five or five, or they had five. I had four. We took on another, you know, eleven, twelve. And then now we've got we just brought on another one today. We're gonna onboard next week.

Mike DeHaan: [17:18] So Nice.

Caleb Drake: [17:18] It's just a matter of being honest with people. And then if it's not something that I think I can do, I'm not gonna tell you I can. Mhmm. You know? And then fail at it because then that just gives me a bad name.

Dan Austin: [17:28] Yeah. Absolutely. So you're running this business, this short term rental business. I'm curious how you're doing nine flips as well. Like, what does that business look like?

Caleb Drake: [17:38] So we've done this year, a lot of those are other owners that we're managing the the remodels for. K. So I built a team of agents here and then kind of a a team and relationship to contractors. I don't have any contractors on my payroll per se, but Okay. I've got good relationships with a lot of contractors in the area. So we built a team around being able to find specifically for, like, out of state investor, but to find a property with either on or off market with wholesaler or on the MLF, negotiate it to where the numbers make sense, get the contractor in there during the inspection period to get the numbers right, and then we help manage that rehab, you know, picking out finishes for the for the owner based on the market that they're in, based on the neighborhoods that they're in, and then kind of following up with the contractors, making sure things are getting done, and doing that all the way to the point where we take the listing. At that point, you know, we either if it's like a BRRRR project, we'll charge $2,500 just to manage it, make sure that we're here, that everything's getting done. If they're gonna list it with us, we just take an extra percentage on the back end. And so it's, you know, it's really no skin off their back because they like I said, I've got people that have flipped houses that have never even been to Florida. So Yeah.

Caleb Drake: [18:47] Yeah. It's a good model. I built that around the fact that I was having issues because I I burr and flip in the Midwest, and I was having issues building that team there. And I kinda saw the struggles of being an out of state investor trying to start fresh, and I said, well, I can build that here. Mhmm.

Dan Austin: [19:03] You know,

Caleb Drake: [19:04] I just don't flip here right now just because the numbers for me didn't make sense personally. I'm kind of like a, you know, buy with cash and use private money to flip. And here, the numbers are, you know, 150, 200. Wherein where I'm at in the Midwest, they're, you know, 25 to 70 depending on the deal. Right? And so that's a lot easier to swallow if you make a mistake. So alright. So I've been I've been doing that, and that's and the the rental numbers for me on the properties I'm keeping are just better in the Midwest because insurance is a lot lower.

Mike DeHaan: [19:33] Yeah. I know the insurance situation in Florida, I've heard has

Caleb Drake: [19:37] been just gotten out of control. I could do a couple podcasts on it.

Mike DeHaan: [19:40] Yeah. Right. Thanks. Yeah. Yeah. No. So that's cool. So let's talk about your your agent team. So you built out your agent team and you said that I guess at beginning, you say they're investor agents specifically, so you focus on working with investors?

Caleb Drake: [19:54] Yep. So I started out kind of at a a small local brokerage of, like, literally, was the one I was the only guy under, like, 55. And I was the only guy, and I was the only person 55. There was a bunch of older ladies, and they were kinda like had, like, literally, like, I had, like, six grandmas. Right? I could ask them anything. Yeah. Amazing people, but I couldn't scale there. And so and my mentor that was one of the ladies, she was like, you'll outgrow us in a year or two. And but, you know, get your license. Come over here. And so I did and I did outgrow them. They're still great brands. They're still stopping the brokerage. But I joined Five Pillars team, and, you know, the EXT model, obviously, the downline mentioned money. That wasn't really my initial, like, plan was to create this, you know, massive downline for passive income or anything. It was more like I said, I'm active duty military, and I needed people to help me build it out because I just didn't have the time. And so I first brought on a friend of mine, Chip, and it was kinda like instead of Five Pillars team at that point, it was kinda like the Five Pillars duo. So it was like Chip and I, I'd pull on the client, we'd run the number, Chip would show the house while I was, you know, serving the military at work, and we put the house under contract and we just split. And we probably did that 20 times, know, twenty twenty one, twenty twenty two like that, you know, that crazy time frame of investor Franzili.

Caleb Drake: [21:12] We probably did that twenty, thirty times just in that time frame and then I brought a couple other people on through. My Piedmont Properties Real Estate meetup. Some people were like, oh, you know, I'm an agent. So they built up and we had, like, five or six OGs on the team. And then my buddy Chris came over and kinda brought his downline and we formed, like, a new group. And we've got about 15 agents now. If you look, they're all part of part of our group, the Bmore Group here in Pensacola. Eight to nine of them are investors or want to be investors. We've got a full time flipper on the team. We we had a a girl that was the CFO of a of a, you know, a multimillion dollar company. She's now doing real estate full time, and she's managing, I think, three or four flips from one of our buyers, like, currently Yes. That are all gonna go. And she's doing a couple of her own flips as well. And they're all gonna go live around the same time. So that was kind of my my pain point was time and being able to build out people that I trust that I can throw these leads to that, you know, it's every agent wish they had that problem. Right? I had too many leads and not have time to work them. Mhmm. And so I just kinda built a team around around that and then just kind of, you know, lead gen and farm those types of buyers. I do work a lot of military and a lot of residential now as well, but I think at our core, we're still an investor type of, you know, group.

Caleb Drake: [22:32] Right?

Dan Austin: [22:33] Yeah. Does that take, like, a lot of effort? I mean, you kinda gave us the story to how that team was built. Once it's there to establish, like you have it, obviously it's always gonna be growing in a living organism, but like, is that a lot of effort to grow that and like manage it once you have the people, or is being part of five pillars in eXp kind of like help shape that box? So I just think about all the other stuff you have going on, like how can you take that workload on because it seems, like I said, kind of a big endeavor.

Caleb Drake: [23:00] Yeah. It was a lot. I wanted to get five agents in five years, that was kind of my goal, and I did. I think we brought on eight and eleven months or ten and eleven months, something like that. Had to look back. And so I didn't have any good systems in place, and so that's when I kinda had to start hiring out. You know, we brought a transaction coordinator on to kinda handle some of the transaction stuff. I brought in a full time VA to handle a lot of things in my businesses, but also to kinda help manage and pull comps for any kind of investor properties that we're looking at, any kind of wholesale deals to kinda take on some of that admin. And then I brought on another really experienced agent, like I said, minute ago, my friend Chris, who is is crushing it in the residential market. And so we kinda just formed the the team together to help with the training. So if I'm bringing somebody on on my downline, he'll be their mentor and then vice versa. And so, you know, we can throw leads and all of that to the person and then train them up. So if somebody wants to be an investor agent, we'll do they'll come over under me as a mentor. If somebody wants to, you know, be more residential, then they'll go to Chris. But it it's really to me, everything has been about partnerships and just creating those relationships because just my time is so packed with the military.

Mike DeHaan: [24:13] Yeah. Yeah. So it's funny. I guess I overlooked the fact that you were still active duty as well. It's funny. We we talked to a lot of guys that are, like, ex military, right, that never got out of that. So I guess that's like a a full time job for you doing that here locally. So you're doing all of this on the side outside of your w two, basically, as a at the military. Do you have plans to, like, leave the military and make that like, make real estate your full time thing, or are you gonna continue to just run this as basically your side gig and be a career military?

Caleb Drake: [24:45] Man, I wish it was a side gig, but it's they're full time jobs. I've got about four and a half, less than five years left until I can retire from the military. If you would've asked me this question about a year ago, would've said I'm probably gonna go on the reserves and do my time and then come back. That was when I was kind of vulnerable to, like, a PCS or, you know, like, a military move out of the area, I wasn't gonna leave the businesses. I do better in some of my businesses than I do with my military income. The benefits are what are keeping me here. Like, you know, we we built a house on the water here in Pensacola or Cold Breeze technically, but that was a big expense that if I didn't have that, then I would probably got out and went in reserves. Mhmm. But I also got orders from 1 Bay, Pearl Burt Field over to NAS Pensacola, where it I built my house, like, almost literally right in the middle of the two with the expectation that if I did get orders at Pensacola, would stay in. So that's why I started to kinda hire more BAs and and try to build partnerships versus doing everything on my own because, you know, half of something is better than, you know, zero or a 100% of nothing.

Caleb Drake: [25:54] Right? Yep. So I'm totally fine with creating these relationships with people to to build these teams and these partners and to bring the value that I have, but also the some of the limiting factors that I have of, like, my on our short term rental management company. The Ben is so much better when it comes to the operation side of things where I'm good with client outreach and all of that. So he kinda manages that stuff. I manage client outreach. I do the investors. I bring in anybody that wants to rent with us, and we and then he kinda handles operation, training the VA, and keeping all of that. And so it comes down to just, you know, knowing what you're capable of. And then I have pushed myself beyond where I should be many a times. I do a week, times a week. Otherwise, like, have you slept? And I'm like, I'm asleep. It's early.

Mike DeHaan: [26:46] That's perfect. Yeah. So that sounds like pretty a partnership. Did you guys establish those roles and responsibilities beforehand, or did that just kinda, like, come together as the business is built?

Caleb Drake: [26:56] No. With the short term rental partnership, the cohosting company, we we established those prior to ever doing it. I've got, you know, my partner, Josh, on some of our, like, my initial deals. We never really established anything. We just kinda went at it. We didn't know what we were doing. You know, we got lucky that we started doing short term rentals in 2018 where there wasn't a lot of competition, but we never really had those roles. And the book traction was really kind of pivotal to me, like, being able to to kinda take what I didn't know, like, on how to manage businesses and how to kinda use that. Like, if you're familiar with the book traction, like the VI construct, you know, the visionary integrator construct, I'm very much a visionary. But I when it comes to integration, I'm like, I just suck at it. Right? So, you know, to almost like a fault where I'm like, yeah. I can I'll I'll keep trying to build these businesses, but then I'm like, I don't really like the admin. You know? Shit blows. And so it was nice to to find those partnerships that make sense and building those the foundations that we built on the last kinda two partnerships that I've done have been built around the mistakes that I made in the beginning. And luckily, like, luckily, Josh and I are are really good friends. My, you know, my original kinda partner on our short term rentals. So we we kind of figured it out. You know?

Caleb Drake: [28:14] Like, hey. You're good at this. I'm good at this. Let's let's figure it out. But it was definitely over time. And for newer guys, like, if you are getting into partnership, establish those roles early because you can lose friends or you can lose partners just even just based on this communications. Right? Yeah. Like, hey. I thought you were gonna do x y z, and it's like, no, dude. I never said that. And then you can go down this rabbit hole of height. You know, I feel fight. It'd be so You know, I'm doing 75% of the work and 50% of the pay. So there's just things that I think going into partnerships, having, like you said, that foundation and kind of those roles and responsibilities before you ever sign that LLC together, like, just have that figured out, and it just makes your life so

Dan Austin: [28:56] much better. Yeah. Absolutely. Yeah. You don't wanna hate your partner over that. Mike and I did not do any of that, but somehow we're still here. But we've had to we've had to figure all that stuff out. Honestly, as we've gone though, and I would not recommend those doing the way we did it.

Mike DeHaan: [29:10] Yeah. I mean, we had ways in the band anomaly. Everyone always asks about our our partnership and how we came together. I don't know. We almost like accidentally set expectations and standards when we started, but you know, should definitely do it more efficiently most of the time.

Dan Austin: [29:23] Yeah. When I coach people on that, because I I was actually just talking to somebody else about this, well, what do I do? And I'm like, just explain, just like you said, Caleb, like, explain in detail who is going to do what, and who's bringing what, and what you get from that when you're kinda come together in a venture, joint venture, or a business. And those things can change, those things can adapt, but if you don't at least line it out, like in being like open and honest about your goals and your visions upfront too, cause if those are misaligned, then everything's gonna be a problem for you. If you're running a business together and somebody's trying to go left and the other person's trying to go right, it's never going to succeed. And if that's the case, don't be in a partnership, go with a short term joint venture on a specific deal. Exactly.

Caleb Drake: [30:03] Yeah. Yeah. I've got with our face and flip stuff and our bird deals in Indiana, I brought in a partner recently that was originally just gonna be a private money investor of mine. He's a really good friend of mine, had a bunch of capital sitting for the Midwest. Like, I was needing $50,000 per deal. And so, originally, I was giving him 12% on his money, and we had a deal where it looked like if we sold it, you know, we were gonna be kind of in that weird market where it was starting to die. And I was like, you know what? Like, how about we keep this deal? I'll manage, you know, all of the rehab. If we leave any money in it after the bur, if you leave that money in it, I'll split the deal with you $50.50. You know, no money into the deal, all the work. He's a few thousand dollars into it after, you know, the burks. It just wasn't perfect. The gurus can tell you that they're all perfect. They're not. You know, you you may leave a few thousand dollars. And then right now, banks are requiring us to leave about 10% loan to COTS in these deals just because they're the feds are tightening. And so as he leaves, you know, that 10% in these deals, he's growing his portfolio. I'm doing all the work, and he's almost like a passing investor. But he when we went into that, like, he's like, dude, I don't have the time to to help with this.

Caleb Drake: [31:13] Like, if you can manage this stuff, then I'll do that. And that was something we agreed on from the beginning. And so now, like, we have, like, a every two or three weeks call, and he's like, hey, man. Where are we at? What do we own now? And I'm like, oh, we own these three, and this one's in the middle of remodel. He's like, so where's my money? And I'm like, oh, like, not in, like, that kind of way, but he's just like, where are we at? Why are we using it? And I'm like, like, oh, you're probably two weeks out from from that being back. And he's like, okay. Cool, man. Let me know if

Dan Austin: [31:38] you need anything. That's a that's a great partnership.

Caleb Drake: [31:41] Yeah. Because there's trust. Right? He knows that I had one that I told him what I saw that was gonna comp out at, and it comped out $10,000 less. And we were gonna be leaving a lot of his money in it. And I was like, dude, it's my bad. I honestly, we could have fought the appraisal, but I was like, we're in the time crunch. Like, I'll just leave you know, we're leaving 15 in it. I'll leave five. He leaves a 10 that we planned on, and we'll just split it fifty fifty that way. You know? I've got the capital to to kind of make those decisions in that way. I'm I'm not stretching myself thin on that stuff. So and everybody's happy. We're cash flowing. We've got a 50% appreciation in that property, forced appreciation. So I it's a good deal. Awesome.

Mike DeHaan: [32:21] Yeah. Yeah. That's good stuff. Very cool. So you got a lot going on actively right now. What does the future hold for you? Are there any of these different endeavors that you wanna focus on? Are you just gonna keep riding out with how things are, trying trying to optimize? What are your plans?

Caleb Drake: [32:35] No. My wife's three months pregnant, so things are gonna change probably pretty drastically. So I've got a 14 year old, but she wanted it's it's her first. Okay. It was a previous relationship, but she wanted to to have a baby. And so we are May time frame that's gonna happen. Baby's gonna be born. Life's gonna change. The office I'm sitting in right now is gonna be a nursery. So I think things will change. Not naive to say they won't, but the goal next year is to bring on 20 long term rentals and then grow the property management company. I'm planning on eight of those being we've got three acres of land in Indiana that are zoned up to 11 units, and they only have three on them. So the goal is to build eight, you know, two quadplexes on that land and then just get 12 single families or a couple of multi families where we're at just to get to that goal. That's kind of the number that I need to get to to where I know that when I retire from the military that I I won't have to change my lifestyle, and I won't have to do anything else to keep the income that I that I have. And that's kind of important to me. I'm not a big, like, financial independence per se guy. Like, I'm not the guy that's got a goal to to sit in my house. I would go insane. I wanna continue flipping houses. I wanna continue working as an agent.

Caleb Drake: [33:54] I wanna continue building these businesses, but I also wanna be able to make some some riskier decisions and have that passive income to do so. Right? To be able to scale, I'd I'd like to learn commercial multifamily. As an agent, I've got a a 20 unit deal under contract for an investor right now. And I'm kind of seeing the way that those numbers work. And I'm like, you know, this is probably where I will end up, you know, down the road. But that's so foreign to me right now that if I just focused on that, I would put all all this stuff would have to be put aside. So I need to get the $20.24 Caleb is just gonna be tried to get everything on autopilot. And I've got the good systems built to, you know, to do the fix and flips in the in the bird deals in the Midwest. We're sending out the mailers. We're making the intake calls. We're doing the wholesale deals. If we can't take it down, I can buy a lot on the MLS up there as well. With cash, there's a lot of easy deals and foreclosures that you can buy. And so I've got the contractors. We just doubled the amount of contractors we have. They can now take too long at a time instead of just one. They're working, you know, solely for me, this contractor, and I have created a relationship that I promise that I'll get him a deal. You know, they've I bought a couple deals a little bit, not at the best numbers just to make sure that I didn't lose those contractor. You know, I can leave a couple thousand dollars in to make sure that those guys are eating so that they're not going out and finding other work and forgetting about, you know, the deals that I'm bringing.

Caleb Drake: [35:15] And so keeping that that train moving and just kinda those deals coming in and those flips and remodels are mostly bird deals right now because I'm trying to just build a portfolio. But building that portfolio with those bird deals and then picking up we've got a short term rental. I'm kinda transitioning a little bit. We've got a short term rental in on Smith Lake in Alabama that we're the middle of a remodel on. And the plan is to to build, like, five geodesic domes on the rest of the land. And so that'll that'll build up the the rental portfolio there, and then we'll kick those off under the management team. And so that's 2024 is probably more development, and then sit back and be in due data. Awesome. Good stuff.

Mike DeHaan: [36:00] Yeah. Well, great. Well, awesome, Cal. So it's cool to hear all you have going on. You're you're keeping a balance very well too. Sounds like So cool. So we're coming up on time. So we're gonna dive into our end of show questions here. So we ask the same three questions to every guest that comes on the show. So the first question is, what is your craziest real estate story? This can be a big win, a big loss, crazy tenant, you know, crazy seller, whatever you got.

Caleb Drake: [36:27] Yeah. So we kinda thinking about from the short term management side. This was a property that I own personally, and we had our cleaner had had to take some time off. She had a death in the family, and so we brought in a new cleaner for for that week or, you know, that couple weeks. And literally, like, the third time this poor lady's cleaned our house, there's a she opens up one of the drawers, and it's, like, a loaded nine millimeter gun. It's like sitting in the in the drawer.

Dan Austin: [36:53] Oh my god.

Caleb Drake: [36:53] So we get, like she, like, sends me a picture, and it's just like, you know, just see, like, my phone says, like, you know, image sent or whatever. Don't see the picture. So I look at it a couple minutes later, and it's like, is this normal? And it's like, you know, it's just, like, loaded Glock, and I'm like, no. And so at that point, I did not really have any idea what to do in these situations. I mean, if a guest leaves a shirt, it's like, cool. We'll ship it to you. If it's that important, we'll put it in owner's squad with it if you feel local or whatever. This was, like, a gun. Like, we don't know if this gun was from a crime. You know, this gun is just, you know, a guy that carries, like, you can, you know, carry in the state of Florida now if you breathe. You know, you don't need a permit or anything. And so we call the cops and, like, you know, just to see what they say. And in the process of getting ahold of the sheriff's office and then getting somebody over there, you know, the lady calls me and she's like, yeah, we left our gun whenever. I'm like, you know, we tell her and she's like, that's fine. Like, you can call the police. It's registered in our name. And she sends me a copy of, know, her gun permit. That was her, you know, her husband's gun permit or whatever, but sends us a copy of the gun permit, she's like, you know, we're a registered gun owner. It's like, we are legally allowed to have one.

Caleb Drake: [37:54] I'm like, that's fine. Go pick it up. You know? I'm like, but it looked at that point, it's like, there's so many things that are going through your mind. So it was an easy outcome. You know, we just kinda sorted it out, but I definitely was like, didn't know where to go with it, you know. I'm like Yeah. I'm an hour and a half away. Right.

Mike DeHaan: [38:10] Yeah. So they had vacated the property at that point, and that's why the cleaner found it. So they had, like, left it there. Yep. That's kinda fucked actually if you think about it. Because, like, what if the next people that come are like a family with kids.

Dan Austin: [38:19] Right.

Mike DeHaan: [38:20] Yeah. And they're like going through and like they find a gun in there. Yeah.

Dan Austin: [38:23] You gotta have a little bit more, you know, care for your weapon. But one thing I am thinking is like, you coulda easily had a good throwaway gun, Caleb. Just saying.

Mike DeHaan: [38:31] Yeah. Right. You never know.

Caleb Drake: [38:34] Coulda been a millionaire. Right? You have to go to Vegas on I'm going to Vegas tomorrow, like, I couldn't Yeah. Right. Send them like that cop, they rob those nine casinos or whatever.

Dan Austin: [38:41] Exactly. Yeah.

Caleb Drake: [38:42] Now that is that

Dan Austin: [38:43] is a bad situation. Now that's crazy to think about. Like, I don't know what I would do. I guess I I guess, I don't even know if I would have thought about calling the cops right away. I would have just been like, kinda like, oh shit, there's a freaking gun in my house.

Caleb Drake: [38:54] Mhmm. Yeah. It's like, and then at the top one, it's like, don't touch it because now your fingerprints are on it. Yeah. Never know. Was involved in a crime. She was kinda like kinda like a newborn baby, right? Just sitting there looking at it like, what do we do? Like, what do we do tonight?

Mike DeHaan: [39:05] So, yeah. No, that's a good one. Alright, second question. What is the number one tip you would give to a small time real estate operator looking to take their business to the next level?

Caleb Drake: [39:14] Yeah, I would say, first, I don't get any kickbacks from this, but the book traction changed kind of the way that I thought about real estate. And then I never got through the whole book because I had already kind of started implementing the strategies, but the four hour work week was another one that was kind of I had already started bringing VAs into my into my business and and hiring out. So that's probably the theme that I would go with for somebody wanting to scale is hire out the things that aren't making you a ton of money. As a real estate agent, I hire out all of my admin. As a small business owner, I hire out my admin running comps. I did spend hours a day running comps on properties, but I didn't pay someone $7 an hour to do that so that my $300 an hour income isn't wasted on that. You know, figure out the number that you're making per hour and then start figuring out how you can take that that you know, if you're working sixty hours, how you can take that sixty hours and make it forty hours for the cheapest way possible or the most effective way. Right? Like, the cheapest way might not be the most effective. I have found that hiring virtual assistants and using virtual assistants as long as you train them is going to to help you scale and help you kind of build your business and and take that workload off of you.

Caleb Drake: [40:27] So dive into what you're doing, figure out exactly where you need to scale or what you need to scale and then start hiring.

Mike DeHaan: [40:34] Yeah. There you go. You say no.

Dan Austin: [40:35] I like it. Yeah. Heck yeah, dude. That's great. I like it from a business owner approach too. Right? I mean, you have that some really good skill set stuff that you can apply to actually scale in your real estate business. Yeah. And pro tip, if

Caleb Drake: [40:47] you start Yeah. Treat it like a business, right?

Dan Austin: [40:49] Yeah. Exactly. Like, I

Caleb Drake: [40:50] treated real estate like a hobby for probably five years. And, like, if you would've asked me in 2020 what we were making in our short term rental company, I I had no clue because we were just using all the any money we were making, we were dumping back into the company. We didn't go I mean, I still don't really abide by, like, the profit first, you know, mantra, but, like we weren't keeping any money back for ourselves. We were continually scaling. We were wasting money on, you know, anything. Like I spent $10,000 last year on cold callers and never got a deal just because I saw some guru on Instagram that was like, oh, this will be great. Right? Because I didn't have time to train them. I wasn't using the site link. I thought it was a turnkey process. Like, you know, I didn't treat things like a business. I just had a ton of disposable income coming in. Good to And I could have probably 10 x that money if I would've, you know, just done it the right way.

Mike DeHaan: [41:35] Yeah. Absolutely. Yeah. And pro tip, if you start reading traction, know, like, is really freaking boring, just hire someone to read it and do it for you. That's what Dan and I did. We did do that. Yeah. You kidding? Yes. Yeah. Awesome. Alright. Last question, Caleb. Where can people find you, follow you, and reach out to you?

Caleb Drake: [41:51] Yeah. So you can find me on Instagram personally as drake, which is my last name, d r a k e underscore o h, draco. It's kind of a play on the airplane I used to fly for special operations, E 28 Draco. And then if you wanna find the the real estate company like our real estate sales, our realtor team, that's Be More Group underscore on Instagram. And so you can find us there. You can reach out to any of us on there. Probably the best way

Dan Austin: [42:20] to get ahold of us. Right on.

Mike DeHaan: [42:21] Easy now. Right on. Well, thanks so much, Caleb. We really appreciate you coming on, and congrats on all you have going on. And I'm excited to hear what the next little bit goes for you as well because you got a lot of momentum, it sounds like. Right on, guys. Well, if you are in the Penn School area or you like what Caleb has going on, definitely reach out to him on Instagram. People come on to these shows so that they get in front of other people and they do want you to engage them, believe it or not. Otherwise, you could have just been like, nah, I don't wanna go on the show. I'm just gonna sit at home. So don't be shy. But on the same lines, we appreciate you all, and you should leave us a five star review. We're listening to your show. We really appreciate that. And I'll see guys next week. Thanks

Speaker 2: [43:02] for listening to collecting keys. Drop us a five star review on iTunes and send us a screenshot to Mike@collectingkeys.com for your chance to receive a free collecting keys t shirt.