- Isaac French grew up working in his father’s construction business and has always loved design.
- He moved to Waco, Texas in 2020, hot real estate market there.
- The French bought a small piece of land and built a “little hotel” consisting of seven cabins.
Isaac French, a 25-year-old bookkeeper and contractor, co-owns and operates “tiny hotels” in Waco, Texas, and opened seven tiny homes earlier this year.
Before entering the short-term rental business, French operated a cloud-based accounting operation in Waco. However, in late 2020, he told his Insider that he wanted to capitalize on the area’s hot real estate market. AustinFort Worth, and Dallas.
“I had these ideas brewing to create this modern scandinavian house concept in Texas,” French said.
French said he always had an entrepreneurial spirit, but working in his father’s construction business as he grew up gave him the experience he needed to implement his ideas. purchased 5 acres of land. live oak lakeThe seven cabins range from 550 to 650 square feet and are built in Scandinavian architectural style.
Live Oak Lake has generated more than $500,000 in bookings since opening, as shown by Airbnb and Stripe dashboard screenshots reviewed by Insider. Here’s how the French got their business off the ground.
French turned a 5-acre vacant lot in Waco into a luxury little hotel in nine months
The French used $138,000 of their savings to buy the land. At the time, he estimated that the small hotel would cost about $1.6 million to build. With French’s father, two brothers, and his father-in-law joining as minority partners, he was able to secure a construction loan worth his 80% of the valuation.
The partnership allowed the Frenchman to use a line of credit from his father’s construction business to finance further construction costs. When he started, he said he was convinced the property would be valued above cost, especially if it could prove to be a commercial success. Take a larger mortgage on the value the owner has earned since acquiring the property — to pay off labor and materials costs.
Live Oak Lake took about nine months to complete. French acted as general contractor for the project, which included building roads, utilities, and an artificial lake. The small hotel, which opened in January of this year, ended up costing $2.5 million to build. labor shortage When soaring wood pricesas well as additional features such as a hot tub and pool.
“I was surrounded by so many incredible people, contractors and landscapers,” French said.
Four months after opening, the property was valued at $3.1 million and French and his family refinanced 80% cash out. The Frenchman took out a loan of 80% of his property value, or $2.48 million, with a valuation report and his HUD-1 settlement statement confirmed by Insider.
French said the key to securing a construction loan was showing Live Oak Lake’s selling point as an “experience,” and including lots of drawings and renderings in the planning form.
The new funding allowed French to pay off the original construction loan as well as the line of credit it used to complete the project.
The Frenchman said he relied on online resources and YouTube to familiarize himself with the short-term rental industry.he explained Robilt, A channel run by another short-term rental entrepreneur is particularly helpful. French also asked a friend who runs a short-term rental management company in Waco for advice. They introduced him to an automated property management system. He said this was critical to his success.
The French wanted their guests to feel like they were in an oasis
In addition to seven identical cabins, Live Oak Lake has a common area with a small dock, picnic tables, paddleboards, and kayaks.
each cabin Two floors with floor-to-ceiling windows, two bedrooms, one bathroom, open-plan kitchen, living area, washer and dryer, private entrance, parking space, outdoor hot tub, hammock, and fire pit .
“These were very high end, so the cost per square foot was very high. We chose some very nice finishes,” French said. Olson Cundiga Seattle architecture firm that designs sculptural buildings drawn from nature.
“I’ve always loved design,” French said. “I wanted to be an architect when I was younger.”
He wants the hotel to strike a balance between being “totally lost in nature” and having a “village” feel. but you can see the string lights between the buildings reflecting in the water.
The cabins are priced roughly the same reflecting the same aesthetics. On weekdays, his nightly rate is around $300, but on weekends it can jump to $450-$500. During Waco’s busy visitor seasons, such as graduation weekends in Baylor and the local high school’s football game, the per-night room rate can go up to his $1,200 per cabin. said Mr. French.
To set the price, use an app called Wheelhousecan automatically implement price increases and discounts and standardize them across Airbnb, Vrbo, and Booking.com accounts according to local demand.
The pricing software also allows French to add markups to reflect how much that platform charges hosts when a customer books through a particular platform. For example, Airbnb charges a fee of 15% of the booking price. This will encourage people to book directly through the Live Oak website, giving the French more control and access to more information about their guests, such as emails.
French says occupancy is between 90% and 95%, with nearly 70% of bookings coming from Live Oak’s website and the remaining 30% coming from Airbnb, Vrbo and Booking.com.
The French market their hotels through social media. At first, he partnered with travel influencers to offer freebies. He said this helped. live oak instagram accountcurrently has over 50,000 followers and is gaining attention.
“Instagram is our main booking funnel,” he said.
French said he believes Live Oak is well positioned to weather the recession. He has seen an influx of wealthy and middle-class tourists from cities like Austin and Dallas.
“We’re already taking advantage of it,” French said.