I am Adrienne Green, and in this episode I talk with Sandy Lee, who spent over 30 years in engineering and construction before buying her first short-term rental at 52. Within two years she had grown that single ski condo into a four-property portfolio spread across Colorado, Alabama, North Carolina, and Texas, all while spending just five to ten hours a week managing it. We get into the systems that made that possible: how she automated guest communication, how she chose markets before the growth was obvious, why she eventually hired a revenue manager, and the pricing mistake that cost her real money before she fixed it. If you are managing property in more than one market, or wondering whether it is too late to start, this conversation is worth your time.
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Hello everybody, welcome back. I’m Adrienne Green and today we’re here with Sandy Lee. As you know, here we focus on how real estate entrepreneurs break free of the grind and create the freedom they wanted at the start, and Sandy is a great example of that. Sandy, thank you for joining me.
Thank you so much for having me.
For our listeners who don’t know you yet, can you give a quick snapshot of your portfolio today? Properties, locations, what kind of investing you focus on?
I focus on short term rentals only. My vision was that I wanted some vacation homes that I could travel to during retirement and then also do something good in the world with some hospitality. So I have four homes in Steamboat, Colorado, in Orange Beach, Alabama, near Asheville in North Carolina, and then one in the Hill Country in Texas.
I’m excited for a few things here with you, Sandy. I’m excited to talk about going deep into that one niche for you, which is short term rentals. And I’m also excited to talk about how it is managing these properties in these four different markets. But we will get there over time. Let’s start with, I understand your background is decades in engineering and construction and you bought your first rental at fifty two. Talk to me about that. What made you start real estate at fifty two?
I love being the super old starter here. It’s interesting that I didn’t start until I was 52. I didn’t even have this thought. I spent all these decades in engineering and construction, really loved going to work every day. I really loved the idea of building something and seeing it finished, and that was a wonderful career. But as I entered my 50s, I could see the oil and gas world starting to shift a bit with everything that’s happening in the world.
I could see that maybe my 50s weren’t going to be the same kind of career that I’d had in other decades. And I felt like I’d done it. Meanwhile, my son was going to school in Colorado and kept joking about getting a ski condo. It sounded like a joke at the time, but it clunked around in my head in the background enough. Meanwhile, I was running our private equity group at the company and learning about long-term investments in a way that I hadn’t before. And it all just started to click, that maybe all of this could come together with some long term investments that really build wealth in the background.
There’s so much to dig into there. My husband is an engineer by training as well and engineers can be very comfortable with their day jobs.
Absolutely loved it. Loved it for so long.
You make good money, it’s safe, engineers like security. And yet sometimes we get that rude awakening, which thankfully for you wasn’t too drastic. It was just a little bit of an inkling that those jobs aren’t as safe as we thought they were.
Sure. And there’s a great thing about climbing the ranks in the company, and that goes great. But then what? As the reorgs keep happening and things keep shifting, it just wasn’t as fun as it used to be. And as wonderful as that private equity experience was for me at the end of my career, it just wasn’t who I am. But what it did give me was so much training in financial modeling and really understanding how investments work.
And it became clear that my great big 401k wasn’t doing what I wanted it to do. And these investments can do so much more. They provide me places to vacation. They provide me great wealth building tools in the background and cash flow to live on every day. I was like, okay, this is the big eye-opener that I just hadn’t seen before. I had been thinking about long-term rentals and they just weren’t clicking with me. I went and looked at a few properties and it just didn’t seem like what I wanted to do.
So this vision came over time, but now I travel to all of these properties. I really enjoy them in the off seasons when they’re not making money. And then they have this great business for me as well.
I love that. As somebody who is a full time traveler right now, I can totally relate. You get to have the houses set up the way you want them with the amenities you like in all these different locations.
Right. And you find that what you like is probably what other people like as well. So it does feel like going home when you’re running it for other people. There’s a thing to that. But after I go in for half a day, I generally do my own little deep clean and then it feels like my house again. And I get to enjoy it for a couple of weeks, make some upgrades while I’m there, do some work, make it better for the next guest. It is a life that I am really loving.
Love it. Now you mentioned that when you were working within the private equity scope you were able to learn skills that transferred, which is amazing. And that’s what we tell people all the time. If somebody can pay you to build the skills that you are going to use in your entrepreneurial journey, go for it. What skills from your engineering career turned out to be surprising assets when you started investing?
My engineering career spanned engineering, but then project management for a lot of my career. And then I ran some of our services departments as well. I couldn’t have scripted it any better, but I think this is true for everybody. There was a time when I got to run IT, when I got to run HR, but then there were all these years of project management. When you think about that, every home you buy, no matter what kind of rental it is, is like a little project that you’re managing start to finish.
All of that translated beautifully. The leadership for sure, everybody has a team and what it looks like to lead those people. It was really valuable to understand how to relate to people and what that really matters in your business. But then the financial modeling part from the private equity, I got to go to Columbia and train for a while. All of these skills just sort of came together to be what felt like the perfect resume for this business. But again, I think everybody has that same thought when they’re 50. They’ve gathered a lot of life skills that they may not even be thinking about in their career.
And that’s where, if you’re out there doing something and you’re living life and you’re trying things, rather than just scrolling on your phone all the time or playing video games all the time, you’re going to be learning some skills that are going to be helpful. So I love your example of that.
Absolutely. My mom had this quote that she always said: make a decision, do something, do not be stagnant. She really taught me that from a young age. And it’s proving to be true. I’m retired, but I’m not retired. I keep starting businesses. I love it. I love all the activity. And certainly running short term rentals has given me a place to put some energy.
Well, and your mom’s quote leads perfectly into what I was going to ask you about next. When I was an active real estate agent I worked with a lot of engineers who wanted to get into real estate investing, and I love engineers. My husband’s an engineer, I can work well with engineers. The challenge was, engineers are notorious for analysis paralysis, for waiting for the right time to start. Or it needs to look on paper like a home run before we’re even going to make an offer. What would you say to a fellow engineer who is in that mindset or facing that challenge?
This is a great question. I get this all the time. Actually, my consulting clients, a lot of them are engineers because they’ve connected with me on that way. So I personally call myself an 80 percenter. If 80 percent of the deal looks great, and in this case it’s an asset that you can sell two years from now, get comfortable with that and decide whether you can go forward with the purchase. It does not have to be perfect, but one of the great things about this business is how those returns stack. You’re not just making money on the cash flow. It’s important that it cash flows. It’s important that you have the reserves to be able to handle anything that comes up. But it’s also making money on appreciation. It’s making money because your guests are paying down your mortgage. And then there’s some tax benefits. So for that person who’s still an engineer or whatever they’re still doing right now, take advantage of those tax benefits while you’re still working because it will multiply. That’s an important thing to do while you still have that big salary.
Very good points. I love it. And I love how you mentioned all the different benefits of real estate investing, which I agree, they all compound.
They all stack together beautifully. And I never knew that until I was 52. Until I really looked into all this. I was like, wait a minute, this is great.
Alright, so what I’d like to dive into now, Sandy, is your systems and delegation, because I understand you grew pretty quickly. Short-term rentals are a lot, as somebody who has a few of them, and you have them all in different markets. I’d love to hear how you figured this out. So we’ll go first with, you went from one property to four in two years, which is a pretty fast pace. What systems did you have to put in place to keep that growth manageable?
I think this is really important, especially for new investors who sometimes might have a tendency to just buy a property and throw it on Airbnb to see how it does. I think that’s a big mistake. I think even with your first property, if you set up your tech stack right from day one, including a property management system, something to handle the dynamic pricing for you, how you’re going to do your accounting, if you set these things up from day one, you’ll be set to scale in whatever way that’s right for you. I think it’s smart to do it even with one property because it saves you so much time in systems and operation. I kind of made my business a button click. A button click is obviously an exaggeration, but from day one, so many things were handled for me by the technology.
Right. So you really approached and set this up from an engineering mindset of, we’re going to get the systems in place, we’re going to make it do it right the first time, not good enough is perfect, not slap it together, we’re going to make a system, and that’s what allowed you to then go boom, boom, boom, rinse and repeat.
Absolutely. And for one property, that looks like maybe $100 a month in software. Sure, there’s some work to piecing those softwares together and putting them together. I think it takes about 40 hours to really set up a good listing properly from everything that you have to do. And then there’s the time on site. So maybe 60 to 80 hours total when you consider the software, the setup, the furniture, everything, whether you’re doing that yourself or delegating some of it to other people.
There’s an investment of time at the beginning, but does that pay off. To your point about how this looks in the rest of my life, I spend about five to ten hours a week now on my four properties. It’s just not a lot. And I think that’s largely because of the systems I have in place.
Okay. So let’s get into those systems, because short-term rentals have more moving parts than long-term rentals. You’ve got turnovers, sometimes multiple times a week, you’ve got guest communication, you want to manage that pricing and keep it dynamic and appropriate for that season. So how do you delegate all of that without losing control? And if part of that is the tech stack, feel free to dive into that.
Sure. So the tech stack was the first most important thing. And I use Hospitable as my property management system. I think there are several great ones out there, but I love the fact that Hospitable, even when I set it up many years ago, already had some tools in their messaging that helped make that more automated than some of the others. So my messaging, all of the standard ones go out automatically. When I get a new reservation, it welcomes the guest with the new reservation.
When I get, for day of check-in, it’s like, hey, happy check-in day, and gives them all of the details, all the way down to asking for that five-star review at the end. Those five messages that guests get are automated, so I never touch a button. Turnovers usually happen without me even knowing that they’re happening, which is exactly the way I want that happening in my business. The next most important thing, of course, is the people on the ground. I’m far away from all four of my rental properties.
Right.
And I wanted it that way because I wanted them to be vacation homes for me and my extended family. But getting a good cleaner and a good handyman are absolutely paramount. And if you’re buying in a market that has a lot of short-term rentals around, you’re probably going to find a cleaning company that could maybe do the handyman work for you as well. A lot of them have been smart enough to set up their businesses to sort of have that monopoly on you. And that’s been great for me. I’m happy to push the easy button there and have people that I can text. You treat them well enough that they want your text when it comes in. That’s the leadership piece. And then they’ll work hard for you, give them great bonuses at the end of the year. I think it’s important to have a team you can count on and treat them like gold because they really are the most important part of your business.
That makes sense. Now, has any of your system changed as your portfolio grew or as you’ve evolved as a short term rental host? Is there anything you’re doing now that you didn’t even think about on day one?
Yeah, there are two big things and I would love to dive into both of them. The first one is when I bought my first place in Steamboat, I don’t think I knew on day one what a business this was going to be for me. So that one I actually started with a property manager. And by the next property, which was less than six months later, I set up my systems and handled it from there. That first property, I had to wait for that contract to be over to get out of that property management contract.
They took 29 percent of my revenue. And I’m sure that’s a lot of the stuff that you talk to your people about, that it’s not as hard as you think if you delegate all of the pieces properly. And that was the thing. This is the whole reason I teach now, that I don’t want someone making the same mistake I did and thinking that they can’t possibly do this in another state without a property management company. So that’s something I changed, absolutely.
Now the other thing I changed was that I’m using AI a lot more than I was even six months ago. Certainly years ago, it wasn’t really a thing. But I’m using AI in my tech stack, not for messaging. When there’s a problem or a question, I love to answer those myself, but I only have four properties. I’m using AI for all the data things that I did by hand before in spreadsheets. I’m using AI for pacing studies and for goals worksheets and for that three-month look ahead. I use it for calendar gaps. I use it to write some emails to past guests to see if they’d like to come back and stay with a discount. Some of my favorite things, I’m using it for guidebooks, and they’re so much better than the guidebooks I had before because frankly AI is brilliant. And then I’m using it for supplies. You’re talking about systems.
Stocking supplies in four different markets is a whole complex thing. I use Minoan, but I also use Walmart. I also use Amazon. So I’ve set up a specific email that my AI has access to that gets all of those receipts. It has this great complex data set available of what’s been ordered for each property, what guests are arriving, because it connects to my Hospitable, how much the usage rate is for everything down to sponges, and then when I’m going to likely need to order again. So I get little reminders from AI: go order some white towels for this property, or some sponges for this property. I just find that amazing, frankly amazing.
Yeah, that is. Because that is rather complex, but it’s great because we can have that data of when did we do these things before, but without AI it’s so difficult to get, analyze, and utilize that data.
I think I was just super reactive before, which was okay, but it brings a little bit of a stress level into your life. The more you can be ahead of some of these things by having the data in front of you, the smoother your business will run.
And you mentioned part of the supplies issue is four different states, that’s a lot. Let’s talk about scaling across different markets. I understand there’s some personal use aspect, there’s probably also some market aspect. What does evaluating a new market look like for you before you decide that you want to buy in that market?
So I talk about the personal use a lot, but really it’s a business first and foremost. The numbers have to work. So when I think about going into a new market, I really try to look at not just where the numbers have been, because that’s everything that’s published out there, but I try to look forward and see where a market is going. What’s going to happen in the next three to five years in that market that’s going to make the curve of those revenues higher than it might be on paper?
Some examples of that, because I don’t think that translates without really talking about what I mean by that. My Steamboat property, the whole reason that we bought there in the first place, and that was my first one, we loved it. We had gone there forever. But Aspen had just purchased Steamboat a couple of years before. They were putting in a new gondola, they were adding a bunch of land on the top of the mountain. And at the same time, Steamboat was about to put in some strict regulations on short-term rentals.
So I knew that if I bought in the green zone, I’d be part of a shrinking supply of short-term rentals for an expanding mountain. And that was the best math that I could think of as a good reason to get into a market where the property value was definitely going to go up quite a bit. And it did, it rose 25 percent. This was way after COVID. This was 2022. So the prices had already doubled. It still went up another 25 percent after that.
To me, that’s what it’s all about, finding that market that’s on the rise. Same thing near Asheville. I bought on top of a mountain where there was a ski resort that was closed but being renovated. So I took the bet that it was actually going to open, and it did a year later. So things like that everywhere. My Alabama property, the Gulf Shores airport, had just gone commercial. So I bought a year before the airport went commercial down there and it finally opened. It was actually late on the schedule. But all of that is just going to make some of these markets grow a little faster than others. That’s always the thing that I’m looking for.
That makes a lot of sense. Now let’s get into the logistics, because kind of like what you talked about with supplies, managing properties across different regions creates real logistical challenges. You’ve got four different cleaners, four different handymen. So how do you keep standards consistent when you’re not physically present in each market?
To say that I keep standards consistent is pretty tough to do. You’re right. I started out thinking like an engineer that I could just have a checklist and a cleaning book and it would be the same everywhere. But what I’ve learned is that you have to flex to how your people work. If you let them do what they do best and you really work with them and get to know them, I think that works better. So I have two cleaners that really like to work in Turno, which is a fantastic system. I put all of my pictures in there of how I want it to work and that’s all automated. I have another cleaner that wants to be paid through Cash App. No problem. So maybe the answer is that I keep my quality standards up with great communication, but my actual standards for how I work with them, I flex to what they need. Now I only have four properties. Maybe somebody with 20, 50, 200 has to come up with a different way to do things. But with me only having four, it’s able to flex to what the group’s need is at each location.
That makes a lot of sense, because I feel like a lot of short term rental owners go in with a cleaning checklist and all of this, and they want to micromanage the cleaner, which I get, because we want to feel like we can control the quality by controlling the process. And yet some cleaners have their own process and it might be better than ours because they are professional cleaners, not us.
Right. I’m getting all five star reviews. So I cannot complain about the work that they’re doing. I have to celebrate it. I have to tell them great job. I have to ask what they need from me. And then I have to kind of let it go a little bit.
Right, that’s a key part of leadership, realizing what we can control and what we trust others to handle.
What we shouldn’t, right.
So was there a property or a market that taught you something about what not to do?
Absolutely. I think any of us would be lying if we said otherwise, that it’s all been perfect. There have been a few great lessons. One was in Orange Beach. I bought a new build, first of all, maybe not the best investment, but it does pay for itself. So that home is doing just what I wanted it to do. But because I loved that home so much, I priced it like it was a beautiful home.
And I really learned some lessons around that. For one thing, I outsourced my revenue management about a year and a half ago. That’s one of the smartest things that I’ve ever done. It’s an investment for sure, but when I compare it to my yearly revenue, it’s nowhere close to what I’m bringing in more by having a revenue manager. What they do is they control price labs for me, they advise me, we meet once a month just to go over everything.
And I’m definitely making more money with a revenue manager in place who looks at it every single day in some detail. The specific lesson I learned in Orange Beach was I had a rule that I was never going to price a night less than the cleaning fee. Well, that was just silly. That was just pride over, I love this house and I’m never going to price it under this number. And my revenue manager was like, well, if you do, you’ll probably make 10 percent more.
And sure enough, my occupancy went from forty-three percent to seventy-one percent during that year that I made that shift. And my revenue went up ten percent. So you can see, I priced it much lower, filled up a lot more of it, and made ten percent more money, which for that market was significant.
Yeah, that’s a huge jump. That’s amazing. Now, what shifted in how you thought about your business once you retired from your engineering career and this became your full focus?
So all of that happened so quickly. I bought those four properties within two years, and that last property came right after I retired. I always say, and then I retired. It was all sort of at the same time. I took my last bit of stock from my company and I bought one more property. I did that very specifically because I wanted the cash flow to be able to support my life without pulling any money out of savings. So that was the goal. So what shifted really was just that I had more time and more flexibility. I think I always thought about this like a business, even when I was working and still running three properties. I just had less time. But now that I have more time, I’m doing so many other things. I’m releasing a book in a couple of weeks. I’m running this other business to help educate others because I found that there was a real gap in the short-term rental education market. And so I’m just finding more time to do more projects. That’s all it is.
When you take somebody who’s a type A hard worker, likes to help other people, and you take away their day job, what do they do? They give themselves more jobs on the side.
Absolutely. So many more jobs. I’m busier now than I have ever been, but I’m still traveling like crazy and I’m handling that busy from Steamboat and from North Carolina. I can run this business from anywhere. I went on a three week cruise to Australia and New Zealand at the beginning of the year. No problem. Ran it from there. No big deal. An hour a day, right, it just wasn’t a big deal.
Love it. As a big traveler, I’m like, yes, that is part of the joy of real estate investing. We can have these businesses that we can run from anywhere, even with something like short term rentals, which people may have this limiting belief that you have to be hands on, you have to be present. You can still run it from anywhere. It’s cool.
You really can. It’s not like the guests want to talk to you every day. They want a few questions answered, but they don’t need to have huge relationships with you while you’re there. It’s just another set of procedures that can run in the background. I will say it might be better for someone who doesn’t easily get super stressed out, who is able to let things roll off their back, because there will be issues. There’s always going to be issues.
That’s a good point. Now let’s shift to some of these other projects that you’ve started since you retired from engineering. Let’s talk about how you started teaching other investors through STR Jumpstart and what’s a big misconception you see new short-term rental investors walking in with?
I started at fifty two, but I really started researching at age fifty, and I listened to every podcast I could get my hands on, every book I could find. I ordered them all and I read everything. I tried to find training and I could not find what I’m doing now. And so that’s why I started it. It was years into it, just about a year and a half ago, that I even got this idea, and I didn’t put it into place until about eight months ago.
STR Jumpstart is step-by-step lessons. It’s got a ton of downloads, it’s got a 12-year financial model that is really in-depth that you can use. You can put numbers in for 10 minutes and have yourself a quick evaluation of a property, but I use it for my long-term day-to-day financial modeling. Why I started that was really just because I think I get so much joy out of this business. I love it so much more than I ever thought I would.
And it’s that combination of getting to buy homes and decorate them and be hospitable to other people, be a part of their vacations in their lives. And then I get to share these homes with my kids, my brother and sister-in-law, their kids, their grandkids. We all get together for holidays together at these homes that I honestly never would have been able to afford on my own. It’s not like anybody can just go out and buy a bunch of houses.
So that’s why I started, really just because I wanted to share that joy and love that I have for this and help other people set it up like an engineer, maybe is a good way to say it. Biggest misconception, you asked me. I think the biggest misconception is maybe how hard it looks from the outside. It can certainly be overwhelming. Maybe even listening to this conversation between the two of us, someone might be a little overwhelmed. But when you get into it and see the step by step, take it one step at a time.
It’s just not as scary as people think it is. And the great thing about this kind of business is that you can always sell the home if it doesn’t work out. It’s not like starting a business that is a restaurant or something in a storefront or a bar. You can sell the home if it doesn’t work out. I find it to just be the most amazing investment ever.
There’s a lot of good points in that, Sandy. I love how you built what you wanted when you were starting. And I also love what you said about people being overwhelmed. I get that too. And I know in our family one of our sayings that we come back to a lot is, how do you eat an elephant, one bite at a time, because we can really break things down. And that’s what I want my kids to know so that they don’t get scared and overwhelmed and then just don’t take action.
Absolutely. It’s like we said at the beginning, move forward, do something, don’t be stagnant, don’t be scared.
Yes, exactly. Now if somebody is sitting where you were at, fifty to fifty two, doing this analysis, weighing whether to make the leap and get into short term rentals, what’s the one piece of strategic advice you’d want them to hear first?
Certainly to go in with their eyes open. I think it’s important to educate yourself on the business before you start. And I think it’s important to do a lot of analysis on different homes before you decide which one to buy. What you’ve heard from me so far is a whole bunch of joy, go do it, this is amazing, everybody should do this. And I definitely agree with that. But I also think people need to really be ready, educate themselves early, and do some analysis before they start.
I think some of the people who got in too quickly a few years ago are the ones that are maybe backing out of it now, which is great for the rest of us who still want to be here. But the number of short-term rentals went greatly up during COVID and now it’s coming back down again, which is, I think, good news, because the operators who stay should be the ones who care about the business, who care about putting out a good product.
I know I was in a women’s mastermind where, as real estate investing was all the rage post COVID, they were all getting into it and they didn’t realize. I’d ask them, what are your numbers? What are your projected returns, et cetera, because it’s an investment, it’s a business. And they wouldn’t have it. They were just doing it because it was a fad, and a lot of them have now since left the space. So I can say from personal experience, I see exactly what you’re saying there, Sandy.
My blood pressure just went up when you said that. You’ve got to know your returns. It’s so important to figure out whether your money is working harder for you in this business versus the stock market or wherever else you had your money before. I think that’s all about calculating those annual returns in a way that makes sense that you can compare to other places you’d put your money.
I love how you said that. Now, Sandy, as we wrap up, if somebody would like to connect with you or learn more about STR Jumpstart, what is the best way for them to do so?
Sure, they can find me at strjumpstart.com or on all socials at STR Jumpstart. You can find me on Insta. I’ve just started on TikTok, which is a whole new thing for me. I’ve got a book coming out September 15th called Building Joy. And it is just what you’re hearing from me today. It’s all the stories behind the business and how much I love it and how someone could get started.
I love all of that. Well thank you so much, Sandy, for joining me today. And thank you to our listeners for listening to another episode. If you got value from this conversation, make sure to subscribe wherever you’re listening, YouTube, Spotify, Apple, and then join me again next week for another great conversation.
Thank you so much.