Tax Smart Real Estate Investors Podcast

259. Why Invest in Boutique Hotels Instead of STRs & The Power of Personal Branding with Rich Somers

12 snips
Feb 6, 2024
Guest
Rich Somers
An active real estate investor, Rich Somers, discusses why he transitioned from multifamily value-add and STRs to boutique hotels, STR regulations, tax strategies, and the power of personal branding for real estate investors. If you're considering starting a personal brand, this episode has some great tips!
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ANECDOTE

From Air Traffic Control To Value-Add Deals

  • Rich Somers started in real estate after reading Brandon Turner's book and listening to BiggerPockets while working as an air traffic controller.
  • He bought his first deals using a cashed-out 401(k), did renovations, and scaled from 11-unit and 32-unit value-add deals to larger apartments.
ANECDOTE

Pivoting To Boutique Hotels

  • Rich pivoted from multifamily and STRs into boutique hotels by combining apartment value-add with short-term rental management.
  • He bought a 10-unit beachfront hotel with seller financing, renovated it, and tripled its value within a year.
INSIGHT

Hotels Value Rises With NOI Improvements

  • Boutique hotels are commercial assets valued on income (NOI) rather than residential comps, so operational improvements directly increase value.
  • Eliminating onsite manager costs and monetizing the manager's suite can produce immediate NOI gains and higher valuations.
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