HIP E80 Ashley LaRocque - Zillow BnB to 4M Treehouse Hotel

[Music] The Hotel Investor Playbook. Your guide to building wealth and freedom through hotel and hospitality ownership. [Music] Welcome back to the Hotel Investor Playbook. I am Michael Russell, founder of Melama Capital and your host. On this podcast, we talk story about everything you need to know to make money, investing in hotels and in hospitality assets. Today, I'm sitting down with Ashley the Rock. Ashley and her wife, Alia, did something that most people in hospitality investing would say is crazy. They bought a bed and breakfast on Zillow and they moved in the next day and they kept working their corporate jobs and spent six years turning it into Colorado's first luxury tree house hotel. And they did the whole thing without raising a single dollar of outside capital. Ashley, welcome to the show. Thanks so much. Thanks for having me on, Michael. I'm excited to be here. Yeah, so let's talk everything tree house and potato health because you've got a really neat project looking at it. I'd like to know what inspired you to want to invest in hospitality. From your background, I gather you didn't have much experience in real estate or hospitality. But back in 2019, you found this bed and breakfast on Zillow and you bought it and you dove right in. So walk me through what inspired you to want to get started in hospitality. Yeah, that's a great question. I think that's kind of at the heart of it for us. We really just became hospitality junkies and that is something that I would not have described myself probably 10 years ago. But my wife and I met in 2016 in Denver and she was working in, well, still is working in the airport industry and was doing a lot of restaurant scouting. And so I got the benefit of tagging along when she would get to scout different restaurants in Denver. And we got exposed to a lot of fantastic folks in the hospitality industry through the restaurant scene. So what's definitely at the heart of Juniper, our property here in Evergreen, is a love for hospitality. It didn't come from an initial financial interest. It definitely didn't come from an interesting real estate. All of those things came along later, which were awesome. And I love them now. But it really just started out with like, we need to create something really, really cool. The thing that we were seeking when we were traveling to all these other places. Like we can just do it here at home because we want to be in Colorado. So that initial love was kind of what kicking off, I think, which is probably good because had I done all the like research and the numbers and stuff out front, we probably wouldn't have done it. But that kind of that, that cash in that you say is probably what kicking off for us. Yeah. Well, I think you just delivered this main issue, I think, with hospitality, right? On the one hand, people are driven by the love for experiences and sharing that and curating that. But then towards then there, you just said, well, knowing what I know now, I may not have done it. So that's the part, the underlying part that I think most people are fearful of. I guess I'm curious. And I'm like, what was the motivating factor? Was it simply the passion for being an operator? Or was there like a financial interest that you expected or hoped that you could replace your income by operating this? What drove you to say, you know what? Let me dive in. Yeah. That's a great question. I think as we went towards it out of excitement, that love that I described, once we kind of got into it, it's all those romantic things, right? It's freedom. I mean, we have a deep, deep love for Colorado that we bonded over immediately. So we knew we wanted to build something here that could keep us here. And I think being an entrepreneur opens so many doors. And it gives you the freedom to kind of do what you want to do. I mean, I was living in California. It was a wonderful, wonderful time in my life. I was doing a television production thing and producing TV shows. And it was great. But like, I really wanted to not wake up in the dark and go home in the dark. I wanted to get outside. I wanted to kind of have that thing that everybody says, work life balance. I knew I could get it coming to Colorado. I didn't know what was on the other side of that move. But I was like, if I can just get out of the city, that'll probably show me the direction once I get there. And I think knowing that you can build something and grow into something, my wife and I believe very strongly. And so I think for me, the short answer is, I saw a different type of light at the end of the tunnel through this property, just being in this industry and owning something yourself and having complete control. I knew I could still work corporate life. I mean, look, I can still work. Like, my wife is still a full-time employee. But you're not working any longer in the corporate world, correct? I scaled back and resigned from corporate media production last summer. Right around the time the tree houses were almost complete so that I could be here full-time. Now, I would tell anybody, you know, my wife, like, at any point, we're always down to listen to new positions. Like, at any point, I could see myself going back to the corporate world and still doing Juniper and offsetting with employees as needed. But the nice thing is, I have the flexibility to choose. And like, in tough industries, like, had something different happened years ago, I would have had Juniper to fall back on. So it is, we do kind of have this kind of pendulum that swings that's really nice to have a growing business behind us that we can say, I'm just going to choose to do this for a while full-time or maybe in six months, I will want to, like, keep my production skill sharp and, like, choose to go do something different for her. So the amount of flexibility it provides now, don't get me wrong. It's the most work I've ever done. It's the hardest thing I've ever done. But the variety of my day is so different and so fulfilling and the financial freedom now that we're a few years into it allows me to say, like, hey, I want to go back to corporate life or I don't. What makes ever so fulfilling? Like, you're working super hard, right? You left a hard working job and you're not arguably, you're working more now. But what makes it worthwhile and so fulfilling with what you're doing in entrepreneurship and running a hospitality business? Why do you find that to be more fulfilling than what you were doing previously? I can't speak for my wife, but for me, it's two things. It's one thing, the reaction of guests. Like, I can walk out of the door and go talk to guests. And like, I'll hear anything from I'm grieving my mother that just passed to we just had a baby and it's our first getaway or we're on our honeymoon. Or I mean, you are experiencing and granted, we do all of our check-ins. We do 95% of our check-ins in person. So we meet all of these people and I get to see this range of emotion every day. And it's fantastic. I mean, the majority of them are thrilled because they're starting a vacation. And that's a great energy to be around. So that's very fulfilling to be able to interact like that when I came from a very technical you know, I was in a dark room all day. So that's a little bit different. The other side of it is physically seeing something that you've built. The treehouse is in particular. I mean, it was like SquarePack Groundhole. Like, they would not have happened if it wasn't for like sheer will and force and persistence and patience. So to see them and to see the lodge, and to see the things that we've built in it, what is a very challenging environment to construct in is one of the most fulfilling things I've ever experienced because I could like look out on our hillside and imagine them for so many years and to see them, you know, to see them up now is so fulfilling because I'm like, this is something that we did. Like, we did this with our brains and our hands and this was like, this was dinner conversations for 10 years probably. So that's how you said it looked. Your short-term mental was the on ramp. You got to taste the feeling and fulfillment of hospitality and then you built something amazing. And I've got short-term mental and I've got hospitality assets. And to your point, people save, they work hard and they save their money. And all year long, they look forward to doing something like spending time at your hotel or your lodge. And to be the one that's responsible for that, the opportunity that they're getting, there is a level of ownership that you take in making sure that that experience they've worked for all year long, they're looking forward to, that they're going to cherish that. It's rewarding in that sense. Let's take a minute and talk about what you built because what you bought was a bed and breakfast. And what you own currently is something significantly different. Walk us through what you purchased and what it has become. Yeah, so we purchased an existing business and a primary residence. Bed and breakfast in Colorado. Some states are like this, but they are a primary residence. We are considered a residential property. Now we're kind of considered commercial use, but this was our home. This was a person's home. It was always built as a bed and breakfast. It was a five-bedroom bed and breakfast. All the traditional B&B things that you can imagine. They serve breakfast, you know, like very classic. It just retired, like most retirees were running this before us. I think there were four owners were on ten acres. And they did, I think the owners before us did a few events, but it was more of a hobby. It wasn't full-time because the B&B industry traditionally was like his retirees, obviously. So I ended up shifting with Partico Tels, of course. But we had been looking at land because we wanted to build from the ground up. And then we got a lot of advice. And God said, don't go look at land and don't deal with zoning. You know, just buy something that's already has what you need. And then you can just grow from there. And we realized that this, well, my wife realized that this had what we need. I was terrified, but she was like, no, this is exactly what we need. Location was crucial. Obviously, the amount of land we have to build the tree houses, the kind of the topography of the land and the zoning types of zoning requirements we had or didn't have. So we were in the like early, early development stage with our county before we closed on the property to make sure that we could do what we wanted to do. I think that happens a lot with folks not just in hospitality, but in all industries. They're really excited about a piece of property or land or whatever. And they don't do their due diligence to find out what can I actually do on this property and what can't I do. Because that can like really change your business terms of timeline and financials as far as like what you're allowed to do on the property. So we did put in a lot of up front work to make sure that we could do this. And I think we did it as efficiently as we could with all of those barriers here. So you bought? a bed and breakfast. And what was the vision going into this purchase? You had looked at buying land with intent to build and you decided against that. You bought this bed and breakfast. What did you want to transform this into from the beginning? - We were really, really intentional about our vision and what it is right now is exactly, let me stock complete, but it is exactly what we envisioned. Our plan was remodel the lodge, remodel the bed and rebrand from a B&B to a boutique hotel, change the name, put our touch on it, remodel the entire lodge, build an events program, all the while developing our tree houses. We didn't know how many we wanted to have, we knew somewhere probably between five and 10, but that obviously had a lot to do with county restrictions. So we were doing all of that development going towards the tree houses like day one. And in the meantime, you know, rebrand aesthetic remodel, building up our events, building an event space, making it support the construction efforts. Every penny we ever made went back into juniper. But the goal was from the moment we started shopping on Zillow, Colorado's first tree house hotel. We had visited other hotels in the United States that we thought were cool but not cool enough. And that's literally that, that was it. We were like, we want to just build Colorado's first tree house hotel because we think this should be in this state based on a type of people better here and the people that travel here. And so what it is today is actually very, very close to our initial vision. Granted, we're not, we saw six more tree houses to build, but. - So you have a lodge, right? You operate it as a traditional hotel. And then currently you have two tree houses, is that correct? - That's right. And then what is the goal? How many tree houses do you ultimately hope to build? - So we're allowed to go up to eight. We, I don't know how we landed on eight, but I think anyway, eight is what we're allowed to do. We've got our next two, that should, will probably be up by next summer. We hope to break ground this fall on the next two. And we'll just kind of go at whatever cadence we can to be honest. We went ahead and did all of the infrastructure for all eight. So that's done. Lap 2025 was a huge year construction wise, but yeah, our first two are up now and our next two are really close to going to the building apartment and then the next two are in initial design phase. - So this is the classic bootstrap in case, right? You're taking all the money, all the profits, and you're putting it right back into the business. You've been out this now for six years. And up until this point, have you paid yourself anything? - We started paying yourself a tiny bit last fall. But no, not really. I mean, the short answer is not really, no. - Yeah. So that brings up the question then. And this is the dilemma many of us face. But why retain 100% control bootstrap does go through all the stress and the heartache and the bandwidth to be able to sell fun? Why not just go raise investor capital and compensate yourself a little bit for all the work you're putting in? - Fair. I think it's a lot of it is personality that goes into it. I mean, we've of course ran the numbers and we looked at long-term growth. But for us, we were like, okay, we've got these great jobs, like corporate jobs that we also really loved. Like, I mean, we weren't like, God, I gotta get out of this. We really loved that. So we were making money. And when you look at the long-term impacts, we're like, we're gonna own this for at least 20 years, if not forever. The numbers there were substantial. Even looking at like three, four years from now, they're substantial. So I think also think it's about control. I mean, a lot of new business owners, this was our first business other than little small things. But you wanna have control. I mean, that's not, I don't know if that's necessarily a good thing or a bad thing, but we wanted to live the lifestyle of creating this hospitality experience and we wanted to do it on our own terms. That's a choice we made in order to do the two things you mentioned. Reep the full benefits and have 100% control over our vision. And I'm grateful we did it, but don't get me wrong. Like, most people in our circle were like, hey, let us know when you guys aren't gonna be working every day and you wanna have friends again. So it was hard. These were choices. But we have seen things shift in the last year with the tree houses opening from travel to personal things. Like, we are realizing a lot of that stuff that we had planned for. I think we thought it only take three or four years instead of six or seven years, but that's okay. I mean, it's like now at this point, we love it so much that it's not as bad as it sounds. So. - Yeah, I mean, it's a sacrifice. And you know, you're making the case at the short term sacrifice for a long term gain. And there's truth to that, you know, you might keep it for 20 years. But you may not. The thing is, if you own 100% of it, then you're gonna get 100% of the equity. And I think this is an important point because the cash flow that you're describing, I think is really important. But if someone were simply motivated by wealth generation and not the lifestyle and not the fulfillment and not everything that you're describing is being an entrepreneur. They're just like, "Hey, what's the quickest way to wealth?" I would maybe argue that raising capital and going to this indication route is for someone that wants to build wealth faster because you can scale, you can get a large amount of projects done using other people's money. And then you get the equity upside. And that's where wealth is really made in real estate. Hospitality has an advantage over most real estate asset classes in the sense that there tends to be more cash flow than you would find in multifamily and industrial warehouse. You name it, maybe self-storage has a good cash flow, but hospitality is unique in that. But still, compared to the exit, that's when the money is really made. You know, I guess it's just a different approach. I can definitely relate to wanting to retain 100% control and not have to give out that equity. I'm in the same position. It is a personal choice. I wanna ask you, can you finance these things? You've got the lodge, you've got the tree houses. Well, banks, finance, the work, the construction. - I don't know if banks with an S will, but one bank did. And you only, well, we only needed one bank. So yeah, I mean, I think that was a tribute to our corporate relationships that we had. And, you know, I would say everything that we've done and will do is all about relationships, whether it's construction, operations, banking relationships, whatever that is. So yeah, we had a banking partner when we first started. Now it was hard, we got an SBA loan. I don't know if I would recommend that process, but we did do a 504. So now we had to adjust. We were gonna finance a lot more than we did, but then we didn't, we scaled back. We didn't wanna have that much debt. And we thought we can earn, we can earn the rest of them. Like, that's not gonna be a problem. So also timelines like SBAs is hard, the paperwork process is challenging when it comes to construction. So that, we struggled with that because we were trying to get permits. It's like, checking out the egg. I mean, it was hard, but we got over the line. And like, because of it, we have a great, great banking partner that is like when we go shopping for other hotels, they're like, yeah, here you go. Here's all the information. Here's all the letters you need. Here's whatever. So I don't know if it was, I mean, I'm sure there are things like, you know, what's going on at the economy. Like, I mean, there were so many things that probably went into the fact that we were able to get that loan when we did for the amount that we did. But what I would recommend is be really intentional about who your banking partner is because there are banks that are geared towards small businesses. And we had an extremely different experience with a bank like that that understood what small businesses are going through, really understood this, B.A.M.L.M. process versus a bank that, yeah, they'll do one, but they're not specialists in it. So we have found that up front, a lot of conversations we had about the tree houses were met with, whether it was construction, banking, whatever. It was met with a lot of, I don't know if I'd say no right off the bat. I'm not sure if I'm going to get on board with this because I don't believe it's ever going to happen. And so that's what we spent a lot of, that's what I spent a lot of our first two, three years doing of like building a vendor team, a construction development vendor team that would be invested in this and be like, yeah, you're, we actually believe that you're going to do this and that you're going to have the funds to do it and you're going to do it to the quality that these huge companies want to commit to because a challenging part about some properties, Uniper in particular, is our project wasn't huge, right? Like it wasn't in scale, it wasn't very big, but in complexity, it was extremely, extremely difficult. So to find a vendor, you know what I mean? Like that has the expertise, but is willing to do a project that it would be smaller than like some huge development downtown Denver, that was hard. And I believe that we found the handful of ones that exist locally. - How many banks did you go to to try to get financing? - We did not have to. We had a great relationship with a banker who said, I want to work with you, no matter what you guys are doing. - Sweet. - Okay. - And that person was met through our corporate job. So my wife's, yeah. - Hey guys, if you're getting value out of this conversation, do me a favor and take 30 seconds right now and leave me a review on Apple Podcast or Spotify. It literally takes half a minute, but it makes a huge difference in helping other hotel investors find the show. Okay, now back to the episode. - Well, this sounds incredibly difficult, permitting, and all the heavy lifting. Why tree houses? Why go through all of this work to build tree houses? Why not just build additional dwellings or expand the lodge? What is it about a tree house that either provides more upside financially or just in alignment with your vision of what you're trying to build from a hospitality aspect? - Well, initially, Alia really loves, she's always love tree houses. I mean, who doesn't love tree houses? Like, come on, it's tied to this core memory. I think one thing that people say often and is a word that we described early on in our related to our vision was magic, magical, a magical experience. There aren't many things as an adult that you can tie back to that kind of like euphoric, childlike, magical thing that you remember. That doesn't really happen much anymore for adults, certainly not for adults with children. So we both really grasp onto that because we thought, hey, what's more magical than a core memory? It's like a sense of smell of your grandmother's cooking or whatever, like it's similar to that. And it just doesn't, it's not that prevalent. So we really thought, hey, we've had incredible hospitality. experiences in fantastic traditional hotels. Why can't you combine both? We know glamping is is glamping right? It's got the word camping in it. I love camping but I also love the four seasons. So why can't you do both? Like why can't you have the magic that's tied to something that's completely intangible? The luxury of something that everybody knows that they love if they can afford it and the outdoors. Like why can't you combine all of those things? I haven't experienced it that way. I know it exists. Like the places that we visited, they have like one or two of them but they don't have all three of those. So we knew we wanted to be an adult's only property and we thought hey we can make these tree houses like romantic and moody instead of like actual child like four kids. And we thought that that was a really beautiful hybrid of all the things that we love. And at the end of the day when you're in hospitality it's like the golden rule. Like I mean it's your your drawn to things that that you would do yourself. So that's kind of where we came up with that with that kind of mix of things. It was really tied to magic I think. Well I love this. I also want to ask you a question that maybe maybe people are too polite to ask. I'm just going to ask you you've poured six years of your life into this a ton of money into this all this mental bandwidth is Juniper Lodge actually profitable today? Or is this still like investment mode? We're not in investment mode. We do make money. We've always made money. So our SB we did something that not everybody would probably do but our SBA loan funded a lot of construction for treehouses yet to come. So today we are in a we're in a massive growth stage because we have water beautiful water lines and electric lines underground ready for six more treehouses those treehouses are not built. So our loan is much bigger than you would think when you look then when we have seven rooms. So we have a lot we have a lot of space to fill and we're not we're not rushing through it. I think Juniper pays for Juniper Juniper is always paid for Juniper. We haven't put any money into it ourselves. So we it operates as two separate things. Ali and I live our lives as employees and then Juniper lives its life. Well let me dive into this specifics like so these rooms you eat the lodge the lodge is just under 250 bucks a night right and the tree house is from what I could tell they're they're what six hundred six fifty a night somewhere in that range. So how do the margins compare like when you look at which lodging type is more profitable you know you would assume well six hundred fifty dollars a night seems more profitable like occupancy and your cost to build maybe you could walk us through from a high level like what was the acquisition cost how much of you poured into developing the units that you have so far and like in general what kind of revenue does this property make yeah for sure so the when we purchased the building we moved into it it was our home so we we kept our Airbnb in Denver it's now a long-term rental and still kind of works for us in the background Juniper the the building was just over 1.2 I remember correctly 1.25 they were running 30% occupancy I think the last year they they did maybe 40 thousand dollars in revenue that was 2018 so we've dumped about since we purchased it we qualified for it as individuals because it was it was our home so it was a residential just traditional mortgage no business loan no nothing we are still employees or other jobs so we didn't really buy the business even it was like a bill of sale we probably put anywhere between five and six hundred thousand dollars into it both into the lodge and into the treehouse development and gering cost design cost all that good stuff our SBA loan is refinanced the building just bundled it all up right refied the building we did our first two tree houses and we did all of our infrastructure for all eight tree houses we did that because not a lot of people know this but we've never closed all through construction we stayed open and we had a healthy year last year so that was very hard I don't know if I'd recommend that but it was crucial we had to do it we had to do it no choice so we were like digging up the side of the mountain and also hosting weddings which was wild our SBA loans 3.3 million 3.3 million basically for the two tree houses in infrastructure for eight we do not plan to finance any other tree houses so 2026 is going to look like our highest our highest revenue to date because our our first two tree houses are open and they're rocking and rolling in our events are killing it were booked out through 2027 however we are in a vicious savings plan in order to pay for the remaining six tree houses not all at once as we get there so that our debt doesn't increase and we will be able to pocket more and more about each year because we don't take any money out of Juniper I mean our development costs have tanks so we're not doing any more engineering we're not doing any like any of those improvements so I mean we we have profitable years every year I think that's also just because we don't pay ourselves a lot of people a lot of small business owners they have to pay themselves they have to they have to make a living we chose not to do that so there are salaries in there that we just throw back in to construction and that's again that's a choice but we we're over here living corporate lives on the other side of it at least up until last summer for me yeah so so then real quickly what you're all in cost if you were to tabulate it real quickly for acquisition renovation and development of the tree houses well three probably just under four million I guess 3.3 plus what we had thrown into it as we went over the last six years somewhere around 600 to 700 maybe which was nice in that sense because for anybody that enters an SBA loan we didn't have to pay anything down because we had so much equity obviously I mean a lot of people put in 10% I would have had to come up with three during $50,000 at the time of closing our SBA loan we didn't have to do that because we had invested so much and with those loans they look at what did you spend to date on your business and Zid spent a lot so that was the account of that Georgia to equity and then typically the SBA 504 loan they have pretty pretty generous loan to value thresholds you know up to 90% if I'm not mistaken maybe it's 85% but either way it's up there and so yeah you play the you walk a little bit you know you you do want to use borrowing capital to to finance so you're not coming out of pocket but you don't want to be over leveraged and so you mentioned that you know you have a loan it's like $3.3 million and so that's a significant amount so you must be doing pretty well you know I can do the math on what you're doing and assuming look what's your occupancy we range trihouses open in November so we're still kind of figuring that out they really opened it in January we did soft opening so our lodge rooms that range from like one ninety five to three twenty five depending on the room we run anywhere from between 50 and 60% in the slow months which slow months would be like November and January and then the high months were in the 80 to 90% that's correct yeah it is well I mean we've only got five so yeah yeah that helps we got so and we don't like look at the industry like there's there's like this market there are not many hotels here and we have red rocks ten minutes away so I mean we have wait lists on wait lists and we only do about 30 to 35 weddings a year and we fill up our weddings in no time so now that those are choices like we could do I mean we could do a wedding every weekend of the warm months truly well the problem let's talk about that like what kind of ancillary income to the weddings provide like that that's just total bonus on top of your room revenue like what what are you charge for a weekend event for someone who wants to have a wedding our largest wedding package currently and our wedding packages most of them include all of the lodging which is a huge drawing point for one night our largest wedding packages just under 17 thousand so it our events our events is there about fifty per fifty percent of our of our revenue that's incredible yeah for 30 did you go into this knowing that like when you bought this bed and breakfast you knew you wanted to convert it into something special did you have wedding events on your radar at the time is that part of the down-answer equation no we thought we were going to do events and then but I didn't think we would be a wedding venue and people love getting married here I understand I got married here so when we got married we built a little space in the woods for it was during covid I mean we we bought the property six months before covid hit so that's as a little perspective we got married in 2020 and then the photos from our wedding and what was happening in the wedding industry with covid going on we were like there's a pocket here like we only got to 50 people for our weddings people couldn't get married in 2020 wedding venues were canceling their events left and right people were losing deposits and we were just growing our business so we were like let's do outdoor weddings we built the space we were one of the first couples to get married here and then 2021 2022 2023 there was a backlog of folks that wanted to get married and I mean I remember one year it was that we usually open our wedding books in December for the like following following year so this December will open for 2028 we sold out like 90% of our wedding dates in one day and you said how many weddings annually is it around 30 30 to 35 kind of depending we started to scale back a little as we started to get more into like corporate retreats and like different types of events let me pause here let's just go you said your highest packages 17 grand I don't know what your lowest packages but let's just say your averages around 12,000 and you did 30 weddings a year that's 330 of yeah 30 of the big ones now we do allotments but yes yes for the sake of an example yeah I'm just trying to figure out how much it ants Larry income someone can make I mean you've got a lodge you've got tree houses and those are gorgeous and those provide revenue but the wedding is alone you know three four five hundred thousand dollars in potential I mean look at a capri let's say it to 10 cap because the math is easy that's five million dollars if you can do $500,000 in wedding dress. - Yeah. - Nothing credible. - Well, I mean, yeah, it is. I mean, it's, but it's also like your, those things that you're talking about that aren't like the ancillary stuff is why I'm now full time. It's so much work. I mean, weddings are a ton of work. They're a ton of wear and tear on the property. So we have to limit ourselves and really be strategic about how we use the space because, you know, we could book a hundred of them. - I just think about this as such a critical point here because, like, the math that I just said is, look, if you can go and bring in three, four and a grand additional revenue, or I should say, you know, I don't know what the NOI is on wedding. So maybe, maybe it's less, okay? But if we just said after expenses, call it 300 grand and of additional NOI, that's an additional $3 million lift in the valuation of your property from something that you didn't even anticipate going into this. If anyone is thinking about starting a tree house venue or a large venue or has a scenic piece of property that could potentially host weddings, like that is such a major detail. It's such a huge bonus that I think everyone should pay attention to when evaluating the profitability. Just last week, we had Tyler Cobble on that episode and I do what I do. I kind of look at the math and I'm like, all right, how does this thing pencil? 'Cause he has a hotel in Nashville. And, you know, listening to his revenue amounts, I quickly added up that he had invested $11 million in his NOI projections were closer to $9 million if he goes out and executes well. And I asked him about that and what he said was, well, we're not just banking on room revenue. It's bar revenue, wedding revenue, wedding revenue, events revenue. They're gonna sell membership passes to the pool. I think there's over 10 acres of land there. So there's a lot more. And that's just so beautiful about hospitality. There's these additional levers that you can pull. And sometimes they're not even, they're even recognizing them until you get started. And I was like, oh, this'll work. This is a good idea. So I know I'm just kind of like thinking out loud here, but this is such an important point because when underwriting deals for hospitality, I feel like you mentioned that the existing operator, old school bed and breakfast had something really magical and didn't even recognize it. And that is the incredible aspect of real estate investing is it's not an efficient investment like stocks where everyone has the same opportunity to go and buy a stock and wherever the stock does, it goes up, it goes down, but it's kind of out of your control. With this type of investing, there's tremendous risk. Let's face it, there's tremendous workload like you've described. But from a financial perspective, you just unlocked gold with the wedding and the events and the additional ancillary income. I'm just on the impressed. I think that's awesome for you. So Bravo. - Well, thank you. Yeah, I mean, that's what we kind of uncovered as we got into it. And I think that there's even like new things that we're finding now, I think having a little bit of land, get some flexibility, we're like, okay, do we get into a little bit of a spa situation? Like what other things can we add? I mean, lodging is what we are, but that's not what people just, that's not all that they need when they arrive to a property. - Can I talk to you about what scares me the most though about this endeavor? And you've seemed to tackle it. In fact, you dove head first, but this is the permitting and development process, particularly as it relates to working with planning commissions, right? For more and I understand, you went through this six year permitting development process and you learned so much that you actually became a planning commissioner for the county in which you operate, is that correct? - That's right. - What are some of the, I guess maybe some of the single biggest mistakes that hospitality developers make? What are some of the assumptions that they make that they maybe go wrong? Like now that you're sitting on the planning commission and you're evaluating a lot of these different projects, where do you think people make mistakes? - Well, man, I think the upfront stuff, understanding zoning, understanding land use, and you're not gonna just understand that. So it's meeting people that can help you basically and asking the right questions before you just dive in. There's so much excitement and so much energy and so much adrenaline associated with developing land, developing projects, whatever it is that people oftentimes wanna skip that phase. And I mean, it can really screw you financially and just like you're the kind of pace in like the timeline that you're going through if you do wanna build a business. So understanding zoning and a lot of developers think, I'll just rezone and like, I don't know about other municipalities, but like here, that's a lot easier said than done. And I would imagine it's getting harder and harder to do that in a lot of places. Neighbors really care about what's going up and they're in their air, you know, things about things related to affordable housing and water resources and even like power grid challenges. Like it's not as easy to just be like, "Oh, I'm gonna rezone, it'll be no big deal." I love this land. Let's just go ahead and dive in. I think that's a big, big thing and I see that happen often. Second to that would be once you get through that stage is having the right team of people with you. - Well, can we talk about your specific property then because prior to you becoming a planning commissioner, you had to go through this process. Like what were some of the challenges that you faced and how did you overcome them? - We were zoned plan development, which is a custom zone district. It's custom zoning that basically is based in a different, a certain zone and then it allows for additional uses. So I think our, I think our PD was based in either A2 or like mountain residential and then it allowed to have a bed and breakfast on it. Now, when we bought the property, we knew we would have to go through like what is cure called a rezone light or an abbreviated rezone in order to just allow for additional occupants. We were allowed to operate and run our business, but if we want to build new units, we were capped at our occupancy with just the five guest rooms. So we did do that. We went through a rezone light and we went through State Water Court, which was a huge deal in Colorado. It took about two years. That allows you to pump more water than you are allowed to just as a regular residential home, which we don't pump that much, but it is more than just a residential home does. And then we went through a site development plan, which is where you get into like the engineering and the nitty gritty of what is it that you're doing on the property because you're not just building these units. You have to actually bring the entire parcel up to speed and up to code, everything from water runoff to grading to water quality, all that stuff. So those three were the biggest. Now along there, you know, we did things like we got our liquor license, like we did some other little things, but those were the big buckets and those were the things that took six years. I mean, the rezone took one year, water court took two years in the site development plan, probably took three. And then you got to get your funding, right? And that's happening all around the state. All of them are overlapping and you're trying to just keep moving the needle. But yeah, I mean, I did not think it would take six years. - Well, let's circle back on the comment you made at the beginning of this episode. You suggested that maybe knowing what you know now, you would not have started. You wouldn't have dealt with what you've done. It would have been a little bit more intimidated, obviously, if I didn't own. I don't think it would have actually stopped me from doing it. It probably would have created a little bit more patience. Like I was so anxious of like we're just, we're almost there, we're almost there. And to feel like we were almost there for six years, I wasn't, we weren't almost there. We weren't almost there for many years. So I think I probably would have enjoyed the process a little more had I known, like it wasn't just a month away. And I try to tell other small business owners, like, "Hey, here's how long this process takes. "Do it, like do it. "You will likely, you know, "if you're persistent enough, it will happen." But that kind of anticipation will just like, wear you out. So I would definitely do this again, also the nice thing about it is knowing how long it takes and how hard it is, like I feel like the barrier to entry. And like, I'm not gonna see any other tree out, so it tells anytime soon. And if I do, then fantastic, good for them. We support, you know, we share all of our information and everything, but like, I know we always joke, like, this isn't gonna happen again, because Colorado's really hard to get this type of thing built due to water and fire. - Well, there's a moat there. There's a barrier to entry. I think that the Treehouse model is trending. It's been around now for years, but I think that like any new product that enters the market, it takes some time before it really becomes more mainstream. People become comfortable with it. If you look at something like, even something basic, like Airbnb as a product, initially, people were a little skeptical of like staying in a stranger's home or something like Uber, for example, getting in a stranger's car. Well, Treehouses are maybe not sure to call me, but the point is that it's a new product that people have to kind of get familiar with. And so it's becoming more and more popular. How do you think in five, 10 years that might affect your operations? Do you think that as more and more people build these things that it's gonna become less a novelty and have less demand? Have you even considered that? - Yeah, I think for most properties, it will become less in demand. We are hospitality first, hospitality forward. Our structures, our design, our whatever, all of that is secondary. So for us, it's less about how do we keep, how do we keep the novelty? And it's more about how do we train our employees to be as hospitality forward as we are so that we don't, we're not changing to the business because what people will tell you when they stayed here or they know about us. And you can see it if you're looking for it in all of our comments on like any of our recent PR. You can see it in the comments that people are, people are, they rave about the experience and the feelings that they have when they're here. The beautiful tree houses are just what gets them here. So for us, and this is a little bit of ego, but also a lot of pride. For us, it's not about the tree houses. It's a, I mean, we could put them intense. We would never put them intense, but we could put them intense. And they would still say, this is an extremely magical experience and I can't wait to come back from my next anniversary. Now, we're very lucky that we worked hard enough to be able to build something as beautiful as the tree houses. But I do not think that Juniper will be impacted by any type of wave of novelty or, because we're different in the sense that a lot of what we do is actually pretty traditional. We don't do a lot of self-check-in. We don't do a lot of like automations in rooms. Like, if you need something, we're just gonna walk up there and knock on the door and like help you, whatever it is. So that stuff is what blows away the novelty of other tree house hotels. So I encourage, I'm like, hey, look, something wants to build a tree. I don't think Juniper will be impacted by any sort of curve that would exist in the experiential lodging industry. Yeah. It's tough to encapsulate the hospitality experience you're describing or that you provide in a conversation. You really have to feel it. And when you walk in the door, you know, it's what you see, what you feel, what you touch, who you interact with. And all of that, those are the magic moments. I'm thinking about that experience and in preparing for this podcast, I research that you have this postcard station, right? So guests can sit down like an old school postcard. They can write letters and you'll mail them for the guests, right? Walk me through this scenario here. Let me end on this. If you hypothetically, right? Like you could sit down at your own postcard station and write a letter back to yourself when you started this in August of what 2019? Before you moved into this lodge, what would you say to yourself? What would you write on that postcard about the journey that you're about to encounter? Oh, man. Everybody says like, oh, enjoy the ride. And it's so hard to do that when you care so deeply about something. So I don't know if I would say that. I think I would say like, I knew there was an inevitability to the triouses. I knew that we would get there. I think I would just say like, more patience is going to create more humility. And this is just for me. My wife would write something totally different. If I could have been a little bit more patient in the process, whether or not I enjoyed it or not, I was so excited to get to it. You know, enjoyment was probably third or fourth on the list. But if I could be a little bit more patient in the process, I think I would have just been more humble about it and not quite as like fighting, fighting the small business fight and feeling like this disadvantaged. Because every call I ever made, it was with a big developer. And it's hard to hear like, you want to do what? It's hard to hear that. And I got to a point where I was like, I'm so tired of hearing that. So I think what I would say is like, remember why you're doing this. You're doing this because you love working with your wife and you love Colorado. And you've uncovered this magical thing that is basically connecting with other humans. And if you can do that, whether you're talking to developers or you're welcoming guests or whatever that is, the enjoyment will come because that's basically what the last six years really was for us. It was remembering those things, you know, when we don't want to check somebody and late and we're already in our PJs and whatever, like remembering what was at the core of why I wanted to do it to begin with. Because now I get, I see that a little bit more. I'm not as clouded with like, we got to hurry up and get, we got to hurry up and get to hear here, here, here. Now that we're kind of starting to get there. I see that more often and they see people come back and they check in and they're like, we've been here four times and like you've talked about your three houses for the last six years and we're finally we're so excited to see them and they're just as excited as we are to build them. So I think I would just I would encourage myself to try to keep those things top of mind of what got me in it in the first place because they're very real and they're they're always there. Yeah, know your why this business is not easy, but it could be very rewarding. So actually this has been incredible. Thanks for being on the show. It's inspiring. So if our listeners want to follow your journey, maybe check out your property or book a stay at Juniper. How can they do so? Yeah, Instagram stay at Juniper is our handle. Our URL is day at Juniper.com and then you can always email us. It'll likely be either my wife or myself on the other side of it. And yeah, happy to, happy to host, happy to help for students as well. So love that. Sweet. Well, for our listeners, look, if you took something away from this conversation, go ahead and share this episode with someone who needs to hear it. And until next time, I am Michael Russell. She is Ashley the rock. This is another episode of the hotel investor playbook and we will catch you again next week. Aloha.