Building Unique Short-Term Rentals with Alex Jarbo

Today's Guest: Alex Jarbo

Alex is the founder and CEO of Sargon Investments and has an MBA with a concentration in real estate development. He’s also a former Marine, a regular contributor to some of the world's top real estate investing podcasts, and the host of the YouTube channel Alex Builds, where he teaches how to build and manage short-term rentals properly. His company, Sargon Investments, is a short-term rental resort development firm whose mission is to provide above-average, double-digit returns to our accredited investors.

 

Highlights From The Show:

We begin the episode with Alex sharing his background story and how he ended up in real estate. Alex shares that he grew up in Michigan, and when he turned 18 and graduated from high school, he immediately went to the marine corps and served 4 ½ years. In his final year, Alex felt he wanted to do something more and started reading books on every topic in the business world, and real estate caught his eye. He loved the control and the appreciation of assets in the space. Alex joined a flipping mentorship group while he was still in the marine corps and realized long-term wealth was tied to short-term rentals. He left the military, got his real estate license, and started looking for short-term rentals, but he quickly realized that everything was way out of his price range, and if it was within his price range, it wouldn’t have done well. After looking for eight months, Alex decided to build his first property, a ground-up investment he still owns today. 

 

We then talk about market selection and where you should be investing. Alex shares that he doesn’t recommend investing in natural markets or moving to a brand-new city. According to him, you should start investing in your backyard, and the strategy works. Start by looking for an area where people like taking extended weekend vacations in your market. There are hundreds of these pocket markets throughout the country that nobody knows outside the people that live an hour or two away. Real estate will not only be cheaper but also have a built-in cash flow in those markets. Alex shares that right now, his focus is on doing 6 to 12 cabin cluster developments in the travel city market. He chooses how the property looks based on his research on Pinterest and Instagram, but the most effective way to do it is to search the city you’re considering on the Airbnb platform. The top operators will pop up on the home page, and you can model them.

 

Next, we talk about raising money and how a regular investor getting into real estate can finance their deals. Alex shares that there was almost no short-term rental financing when he started investing. He used a second home development loan, and you can still use it. The down payment requirements for this type of loan are very low. The second step is to talk to your local creditors. Don’t do it online, don’t call them, and don’t email them - walk in there. If you need financing, Alex recommends three lending institutions: VCU Lending, Center Street Lending, and Host Financials for short-term rentals. Based on raising capital, Alex shares that there is a difference between raising capital with and without experience. He recommends starting with people in your circle, such as friends and family, if you are just starting out. 

 

We then discuss Alex’s go-to high-level strategies for evaluating properties and opportunities in the short-term rental space. According to Alex, unique properties are way harder to evaluat