The Wisconsin Investor
Each week, we bring you interviews with some of Wisconsin's top real estate investors who share their tips, tricks, and strategies that you can implement right away. This show is dedicated to helping Wisconsin real estate investors elevate their game. Along with interviews, I'll also dive into hot topics in solo episodes and feature experts from various real estate sectors across Wisconsin.
The Wisconsin Investor
A Journey from Short Term Rentals to Boutique Hotels With Mitch and Katie Ehly
Curious about how to turn a single property investment into a thriving real estate empire? Join us as we sit down with Mitch and Katie Ehly, a dynamic couple who started their real estate journey in 2021 and have since transformed it into a scalable business. From their first property in Sister Bay, Door County, to managing a vast portfolio including a newly renovated motel, Mitch and Katie share the strategies behind their rapid success. Learn how they leveraged technology and creative financing to automate processes and expand their investments effectively.
Listen in as Mitch and Katie reveal the secrets to building a reliable property management team and navigating the complexities of expanding into new markets like Eagle River. They discuss the importance of strong partnerships, especially when it comes to maintaining operational harmony across multiple locations. Their candid insights into the challenges and triumphs of working together as a couple make this episode a must-listen for anyone interested in real estate investing.
Finally, we explore the Ely's ambitious project of renovating a historic motel into the modern Fresh Coast Motel. From overcoming renovation setbacks to experiencing overwhelming demand on their opening day, their story is packed with lessons on resilience and the power of taking action. As they transition from short-term rentals to boutique hotel investments, Mitch and Katie offer invaluable advice for those looking to embark on a similar journey. Don't miss their favorite spots in Door County and tips for connecting with other Wisconsin real estate investors.
Welcome to the Wisconsin Investor Podcast. I'm your host, Corey Raymond. Oh, hey there, guy. Each week, we bring you interviews with some of Wisconsin's top real estate investors, who share their tips, tricks and strategies that you can implement right away. Oh, crepes, this show is dedicated to helping Wisconsin real estate investors elevate their game. Along with interviews, I'll also dive into hot topics and solo episodes and feature experts from various real estate sectors across Wisconsin, you betcha. So sit back, relax and enjoy the show. Hey guys, welcome back to another episode of the Wisconsin Investor Podcast Show. I'm your host, Corey Raymond, and I'm super excited because today I've got a power couple here in real estate Mitch and Katie Ely. What's going on, guys?
mitch ehly:What's up, hi? Thanks for having us.
corey reyment:Yeah, appreciate you guys being here, so you guys are zooming in here or calling in for those of you guys listening from Milwaukee. Is that correct?
Katie Ehly:Yep, we live about 40 minutes North of Milwaukee in the West Bend area. For those who know their Wisconsin geography very well, so close but still far enough away to enjoy the non-cityscape.
corey reyment:Yeah, beautiful, beautiful, you got the best of both worlds right Closer to further out.
corey reyment:So well, I wanted to have you guys on because I'm really excited about you. Know, you guys and I met probably what about a year ago or something, as you guys made an acquisition that we're going to talk about here at our co-working space that we own up in Fish Creek, and we'll get into that in a little bit. But just give us a little background. Like, how did you guys get into real estate investing? Are you guys both working now? Are you retired from that and fully real estate investing?
Katie Ehly:Like both working now Are you retired from that and fully real estate investing? Like give us kind of give our audience, a little bit of the background on you guys. Yeah, so we so this the the birth of the real estate came from Mitch's brain, so Mitch actually came up with the idea in 2021, we were kind of looking at new ways to obviously like repurpose I don't want to say repurpose, but like add value to our money and not have it be in the stock market and K's et cetera. We're both millennials so we obviously have watched you know the economy, do many things over our lifetimes and so you know creative financing, I think, was one way we wanted to go, and Mitch had kind of started doing some background work into real estate investing and so we kind of made that move in October. So we acquired our.
Katie Ehly:I'm going to say we purchased our first home in Sister Bay, which is in beautiful Door County. For those who don't know, if you look at your left hand, if your thumb was a county, that's where Door County is, that's how it was. Tell people. And so from there, you know, we obviously fixed up the place, turned it into a short-term rental it's called Northwoods Farmstead. It's our baby.
Katie Ehly:And then from there, you know, Mitch had been part of, like, the Vodacy short-term rental group and we had met some other people who were interested in doing something similar as well in Wisconsin. And, long story short, we ended up starting our co-hosting business with somebody that he met through through Bodicey, and then it kind of grew from there. So we also now co-host five different houses homes, four of them being in three of them, sorry, being in Door County, one of them being in Eagle River, Wisconsin, so in the great North woods. And then this year, along with our amazing partners Luke and Katie, we purchased our first motel that also has a short-term rental on the property, and so we've kind of just started to steamroll ahead and moved into the space quickly, really strategically as well.
corey reyment:So wait? Your first acquisition was October of 2023?
Katie Ehly:2021.
corey reyment:Oh, 2021. Okay, I missed that part. Okay, I missed that part. So okay, I was like good Lord, you guys went from buying an STR to co-host so much places, a motel, and like rapid time, that would be like a new record.
Katie Ehly:We really committed.
corey reyment:Yeah, it's very committed. These guys are going to do something. They're going to do a quick right. That's awesome. But I love that, even even 2021, you said right. That's really you know three years ago, right.
mitch ehly:And it was, and it and it has, I would say, rapidly over the last year, because basically the first, that first full, I would say the first full year and a half, was mostly about us learning how to operate our own STR.
mitch ehly:You know, as we had the one property, um, and you know we, we did kind of take the approach from the beginning that we, we had a feeling we were going to want to expand Um, and so we took the approach from the very beginning which, I think you know, whether it's right or wrong, I think a lot of first time investors, at least in the short term, rental space, um, you know, kind of just ride the Airbnb um death and you know, obviously that's super powerful platform, we love working with it.
mitch ehly:But you know, we kind of took the approach from the beginning that we wanted to try to automate as much as we possibly could and we had, you know, a ton of softwares working for us even when we just had that one property. So it did make it so that when we did start to expand, it was a lot simpler for us to add on properties because we were fully experienced with all of the platforms that we knew we were going to need because we had been working with those softwares and platforms for ourselves, just for our one STR. So, you know, realistically, growing from one to six STRs in, you know, about a year really wasn't all that difficult in terms of, you know. It's basically just, you know, a slightly increased message volume, but really in terms of operations it wasn't a huge lift because we were already using all the softwares.
corey reyment:I think that's such a great point, mitch, because one of our earliest mentors when we started. We're mostly in the wholesale business. We have our long-terms and our short terms and stuff like that as well, but our main day-to-day focus is in wholesaling. But when we started we met with a local mentor and one of the first things he said is, build your company as if you're already making what you thought you were going to make and then you can. It's going to be very easy to plug in people or processes as you go. And that one of the things was bookkeeping. We were like we have like one or two rentals right now. Why do we want to book? We don't need to pay a bookkeeper. He's like trust me, you're going to want to get that bookkeeper now and get them set up and get them going.
Katie Ehly:We learned that lesson. Yeah, I mean the first, obviously, as you learn your first year, like you know, you take simple. You take simple accounting courses, like if you work in corporate. Like you learn about PNLs. And then when you've actually got to do like the day-to-day operations of a PNL and invoicing, like oh sweet Lord, Like there were so many weekends that were spent like Mitch and I just like trying not to get angry, like this is how we're spending our Saturday and we finally invested in a bookkeeper and it has been like it's, it's a game changer. Highly recommend that to everybody.
corey reyment:Yes, if you're, I think if you're an A type personality and you're a driver and you just are like more visionary, focused, doing books at least I'll speak for me is like nails on a chalkboard. It is like my stress and cortisol. I can like literally I could just see cortisol pumping through my veins as I'm like trying to figure out what was this transaction for six months ago and what was the receipt for this, and blah, blah, blah, blah. So that's a huge, huge lesson for those of you guys just getting started in real estate listening in just get a bookkeeper now if you think you're going to be successful Now and save yourself the trouble.
Katie Ehly:Well, and I think too, like, when you look at that strategy of like, you know you build your business of like where, where you want it to be and to keep going. You know my dad ran his own business for years and he's always like you got to work in the business and then you got to grow the business and so when you work in the business, it's the day to day things where it's it's value add for now but it's not value add for the future. And like, if you can find people or processes to like, let you focus more on the business of the future and the strategy and like growing it versus working in it. You know I also too long-term like a better, a better way that, like as an owner, like you can keep moving yourself forward and not just be constantly stuck. You know, working in the business versus like growing the business.
corey reyment:For sure, and you you got. You mentioned something, katie, it was very strategic, you said, of how you guys set this up, and Mitch, you're talking about these systems and processes and stuff like that. I assume you were both working full time when you started going down this path, right? Was that out of necessity that you had to build these processes because of your time was so limited, or was it truly like, hey, we want to grow to here and so we're going to? We're going to start with this longer term vision and work it backwards to today, or how did how did that decision come to be?
mitch ehly:I think it was a little of both. You know we're we were both working full-time at the time and that definitely played a role. But I think also in the back of my mind, like I was kind of looking at it as though I had a pretty good gut feeling that we were going to want to keep doing it. And I'm a very tech forward thinker, I would say and you know I was I was not taking on that first property in my mind, thinking like how do I, how do I do this where I have to do everything myself at all? Like I was thinking about it.
mitch ehly:How can I, how can I set this up so that we can create a really good guest experience, which is like step one? If you don't do that, nobody's gonna want to stay with you. But past that, how can then we automate as much as we possibly can behind the scenes to make it so that we're creating that positive guest experience? But trying to do it with you know as little, or as minimal you know, human interaction as possible. You know not that you don't have to answer the call when somebody calls, or you know not that you don't have to answer the call when somebody calls, or not, that you don't have to find a solution when there's a problem, but a lot of the additional work that goes into it can be automated to a degree.
corey reyment:Yeah, I love that because you did two things right you set yourself up for future success, but you also let real estate be as passive as you could make it in the short-term game, which is hard to do Right. Regular game is very active income in most cases. So I love that that you're taking something that's typically a super active business and you're saying, well, we're going to automate and use tech and leverage to free our time up, and then that also just allows you to scale so much quicker, like what you guys have done in the last couple of years. So I think that's fantastic. Talk to me quick as a husband and wife.
corey reyment:I'm going to be interviewing a lot of husband and wives on this podcast, I guess, but my wife and I started the business together, too, in 2016. She's now, in this last year, pretty much removed herself from all things business related, which has been quite a journey for her to get to this point where she feels like she can not be involved anymore. But talk to me about for you guys as a couple starting this, both working full-time, growing this business together what are some of the things that you guys compliment each other really well on, and then what are some of the challenges that you guys have had to sort of work through to get yourselves to where you are today, and maybe you're still experiencing those and still working through those. But what does that look like for the couples out there, listening of like getting started in this together, working together, those types of things?
Katie Ehly:Yeah, it's been. It's been a dynamic. I mean, you know, I think, when we first started and we were working full time in, you know, both of us having some pretty demanding jobs and hours, like, at least for me, I walked into it of like, oh man, it's like this is an opportunity for me to have, like on in, disrupt, undisrupted time with Mitch, like, so for me, it was like this was the time we get to spend together, because during the week, like, we are going each every direction and Mitch used to travel a lot for his job, so he would leave on a Monday and not come home till Friday. And so, like for us, like it was a really good way for us to be able to like spend time am not in, I don't even have a TikTok Like I'm, I'm just I'm not into, I'm not into technology, but my background is marketing and PR.
Katie Ehly:And so for me, like you know, he knows the systems and he works in an operations role, so he's like really left brained and I'm really right brained. And so for us, like, as much sometimes as that creates the friction with things like accounting, where I'm like why can you not do it this way? And he's like, because, katie, you, just you literally cannot do it that way. And I'm like, well, this is stupid, I want to move on and never do this again.
corey reyment:Um, and so the bookkeeper hence the bookkeeper, a marriage saver.
Katie Ehly:The book 100% amazing lover, um, but like it's just, it's it's those things where it's like I think we also, too, found out like where where our strengths are and where our weaknesses are, and it's just like really helping each other like grow those strengths and weaknesses. So it's, it's been fun and I think, like as stressful as it can be at times, where you're sometimes looking at your spouse and it's like why are you the way you are you, you really learn to grow together through it because, um, my biggest philosophy is you grow through what you go through. If you're going through this together, like it's just, it's been fun, like, to say the least. Um, and obviously we've had a lot of growth and change over the years. Um, I've, I've really enjoyed it. Um, it's, it's a great journey with him. That's kind of just been like our thing that you know, nobody else can really, I don't want to say touch, but it's just like our thing together. If that makes any.
corey reyment:Oh, that's awesome. Have you guys ever read rocket fuel? Okay, it's a great book. Uh, gino Wickman, the guy who wrote traction and made that whole thing famous. So he wrote another book called Rocket Fuel. And when we first started, karen had some struggles. Personality-wise, she's very like we need data and like behind the scenes operations, and I'm like let's just get sales, let's just talk to more people. She's like but how do you know who to talk to if you don't measure? And I'm like we don't need to measure, let's just do more action.
mitch ehly:Yeah, and I'm like we don't need to measure, let's just do more action. Yeah, and so we 10 extra action, that's all yeah.
corey reyment:It solves everything. And so her and I would have like these like clashes where it would get like really like we didn't understand each other. We're speaking two different languages and we read that book and it's visionary integrator. We've all heard that term. If you're here, it was in that book. They talked about it and I was like, oh, that's why she's that way. And then she's like, oh, that's why he's that way, and we actually need each other and that's how we're going to be successful. Wow, we're both valuable. This is crazy. Okay, and it helped us really like that, literally like propel. We still obviously had our challenges through the business, but it really helped us appreciate each other's strengths, I think more so than like why can't they be like me?
mitch ehly:It's like no.
Katie Ehly:I don't want them to be like me.
corey reyment:Cause, then we'd be like who knows? But, um, okay, so I want to get into a couple other things. You guys are doing something really cool. You guys are hosting and, um, running your own STRs and motel from a distance, so obviously that presents some challenges. Uh, you guys have alluded to some of the tech that you use and some of the other things. Like, talk to us about anything specific that helps you guys, either from the tech side or, you know, just from managing you know cleaners and finding cleaners and staff and those kinds of things. And like, if somebody else is listening to this in California and they're going, man, I would love to get an STR in Wisconsin, but how do I do that? What are some things that you guys could maybe offer them as advice or some tips or strategies or things to do to help?
mitch ehly:Yeah, the in terms of like cleaners. We're fortunate we have a really good partner that we work with on actually all the properties that we're involved in.
corey reyment:Okay, even the ones in the north.
mitch ehly:Except for the one in Eagle River. Obviously that's a very different area, so we do have a separate cleaning team there, but all the rest of the properties that we're involved with are indoor county. And so we went through kind of a process when we first started with our very first STR, of kind of a due diligence process of sorts, of trying to find cleaners that not only did we feel we could trust but we felt like we could maintain a positive relationship with as we grew, and so we were fortunate that we interviewed a handful of people, which is what I would say If you're an in-state investor, out-of-state investor, whatever the situation might be, if you are looking for that STR in Wisconsin, I would definitely say it is worth time spent together in person. That's what we did. We did interviews in person together and we interviewed, I think, four or five different companies that were interested in working with us for our first one and ended up making the decision to partner with our, our current um cleaning partner Um, and we've had a really positive relationship with her and her team over the years. Cool, and you know it has. It has allowed us to scale um.
mitch ehly:You know, from that one STR to now we have 20 units total and, uh, you know it, it did work out pretty well for us too that we we purchased a motel in the same area, um, and so you know, our team, uh, through her and her team um, she was able to expand her team um to bring on the motel as a client, um, and you know, basically service our door County motel as if it were a traditional STR. Okay, and so we have, you know, with the motel which I know we haven't gotten, you know, too much in depth yet on that project, but you know, with that, we have 15 rooms there and you know there's a lot of laundry, there's a lot of things to be done, and so we have, you know, multiple people from her team there every day, turning rooms, getting ready for the next guests, taking care of any special requests we have, doing laundry, maintaining the outside of the property, things like that. That we're fortunate to have a good partner there. I would definitely say for us it was important for us to spend that time in person, to be able to get to know somebody and look somebody in the eye and, you know, get a feel for what it would be like to potentially do business with that person and what I've always said as it relates to distance, you know people ask you know when we talk to people about investing in properties that are.
mitch ehly:You know people ask you know when we talk to people about investing in properties that are, you know, not immediately in your backyard. To me it doesn't matter if the property is an hour away or if the property is a thousand miles away. You know, the way that we set our businesses up is that if something comes up, we have people that we call to take care of those things. And that means if, hey, if a toilet is broken and needs to be repaired, I'm not running there to go do that. And to me that's no different if the property was in Hawaii or here, it's three hours away from our house and I'm not going to drive three hours to fix the toilet, like. So it's.
mitch ehly:I think it's a. It's a definitely a critical thing to make sure you set up a very good team in the area that can help solve those problems. But again, that's you know. Whether, like you said, it's a, you know somebody that's in California or somebody that's in Southern Wisconsin, I don't. To me I don't think it really matters. It's about being there, spending some time with each of those people face-to-face, and kind of finding the people that you feel like you can really trust, and then trying to build a really strong relationship with them so that they trust you and you trust them and you can do a lot of business together.
Katie Ehly:Yeah, and I think the other thing too is like also because we were obviously able to scale so quickly and then when we went into Eagle River, it was like assuming that that market was going to be exactly like Door County. You know, we have an amazing cleaner, we have a handyman who can literally fix and do anything, and going into Eagle River having that same expectation was incredibly different, I mean. So I think it's also to like asking questions about like not only what you expect of like your cleaner, of your handyman, but also to like understanding the market as well, because in Eagle River, like our handyman won't do anything electrical and plumbing, he's like you got to call an electrician or you got to call a plumber, like it's. It's very much like you know, I'll fix a closet door, but like I I'm not going to screw with wiring. So I think it's also just like understanding the market and like what their expectations are, what of what they're going to bring from a service perspective, you know, or as a partner perspective, because it can be drastically different, and I think for us that was kind of like.
Katie Ehly:One of the challenges that I think we're still working through is because we've been in Door County for a long time, obviously now well, I'm saying a long time, you know 2021, so almost four years.
Katie Ehly:But because we've scaled so much there, we've got a team, we've got a nice Rolodex to really back. You know, we know who to call or like what you know our partners like can cover what they can't cover. And I think you know when we went to Eagle River and started that market, you know it was just drastically different and it's also too like a lot of small towns. You know, in Wisconsin at least it's oh, I know this person because their son went to school with my son, or so it's very much word of mouth. So I think it's also like knowing that you're not going to call an electrician and have the first one call you back, like asking your partners to be like hey, do you know a good electrician? Do they know you Can I? Would you be okay if I say you referred me, et cetera. So I think it's also kind of just like understanding those markets and then also like what you expect out of them as as one of your teammates.
corey reyment:Yeah, that's awesome stuff, guys. A couple of things I heard there is, you know, sounds like other than maybe Eagle River. You guys jumped in a little bit. But Door County it sounds like you spent some time really upfront on the systems, on the processes, on the people, right, building the team, getting comfortable with who you're going to go, and that just has allowed you guys to scale really quickly. And Eagle River. The other thing I heard there too, though, is like you guys just took action. And Eagle River, you got somebody, and now you know you just get there's just different challenges as you kind of learn it as you go, so it's not perfect always either. I think that's important for people to realize, too, when they're out there looking at, like, gosh, I'd love to do this, but I got to have everything perfect before I start, and I got to have a website and business cards and all these things, and it's like, just go do it and you'll figure it out, right, right.
Katie Ehly:Yeah, and I think like the biggest thing too is like is part of this journey as a type A perfectionist is, you can't be too hard on yourself.
Katie Ehly:Like I have to tell myself that daily I think Mitch sometimes has this conversation like weekly of you know, if you're doing your best and you're putting your best foot forward, like you are doing, like you're doing a great job Like and you're putting your best foot forward like you are doing, like you're doing a great job, like you're doing the best that you can, like you know, progress over perfection is now like the new credo.
Katie Ehly:I feel like I need to live by, but it's just, it's true, like you, you go in and it's like nothing, nothing will always, ever be perfect, but that's okay, like I mean, as long as you know the guests are having a great experience.
Katie Ehly:You're not, you know, completely burning the midnight oil to yourself, like to get it done. You know you just kind of need to give yourself a pat on the back Because you know, even when we were doing the motel and obviously there were lots of frustrations that came with, you know, completely renovating a very old motel and buildings you know we one night we were standing in our mechanical room when we were having water come out of our sump pump because the piping ended up coming undone and there was water going everywhere and it was raining like two inches an hour and I wanted to start to cry and Mitch like looked at all of us. He's like just remember, if this was easy, everybody would do it, and so I think it's just also like giving yourself some grace, um, because you know you'll figure it out. So, and it's okay to not have everything be absolutely perfect.
corey reyment:For sure, and as long as you fail. But you learn from it.
Katie Ehly:It's not right Fail forward. Right Yep Fail forward 100%.
corey reyment:You're always going to learn. That's awesome. Well, let's get into. If you guys want to share the dirty details with everybody, I would love to hear some numbers on this motel. I want to hear the details. How did you find it? How did you get it? How did you finance it? Package, because what? What I think is really cool about this? So I'll give a little background on this motel.
corey reyment:This motel, as you guys said, was pretty old and run down. It was a traditional motel. I believe it was owned for like decades by the same folks, right, yep, and so it was the classic like you come in, you knock on the door, you go in, you check in with the innkeeper, they take you to the room. You know much more personal interaction happening there. But also, from a scalability standpoint, like really difficult to you know, do anything else because you have to be there or somebody has to be there, and so you guys kind of flip that model on its head a little bit. So tell us a little bit about what that thing looked like before, where is it at now, and the numbers and all the juicy details.
mitch ehly:Yeah, yeah, it's, uh, it's really been. Uh, I can confidently say it's been a fun project. It's been. It was a very stressful winter because, you know we were we're under a lot of tight timelines to be able to get this thing turned around. We ended up, uh, purchasing the motel in September of 2023.
mitch ehly:And we knew that we wanted to, you know, basically completely renovate and rebrand this property that's been around since the 1940s and, you know, completely turn it into a new brand, a new feel, obviously, new rooms, everything. And so we knew it was going to be a heavy lift. And on top of that, there's a five bedroom, four bath home on property that, when the previous owners owned it, it was their personal residence, they lived on site, they lived in that home and then they took care of the 15 motel rooms themselves, and so it was. You know, it was run as a very traditional old school motel, um, and and great worked fine for them, um, you know. But we had, we had kind of a different game plan, I would say, coming into it and I think, really, the the energy that we put in and that our partners, luke and Katie, shout out to them, um, that they put into their uh shout out to them that they put into their STR business as well, because they have a separate business as well with short-term rentals down in the Smoky Mountains and they had done a lot of the same things that we had done in terms of automation with their properties, knowing that their properties were a thousand miles away from where they live, because they live right by us here in the West Bend area. And so it was kind of the four of us putting our heads together and saying this is what we want to create, let's put our game plan together, as how do we get there?
mitch ehly:And so you know it definitely was a busy winter to keep things on schedule and trying to get everything done. As you well know, I was in the coworking space about every second day, but as we were up there trying to get everything done, as you well know, I was in the co-working space about every second day, but as we were up there trying to get everything done, so it yeah, it was a busy winter, but you know we were able to get it, get the project completed and get open for the beginning of this season 2024 season, which was May 17th was our opening day, our grand opening season, which was May 17th, was our opening day, or grand opening, um, and we, you know, we launched the, the newly branded fresh coast motel um earlier this spring and it's it's been super fun. Um, we've been honestly kind of wowed, amazed at the uh, the amount of demand for our product. We had obviously run all sorts of numbers before we ever purchased this property and run a lot of different scenarios and because this was a more commercial transaction, we did have previous years financials to work off of to be able to see what were these 15 motel rooms doing, how did they have their pricing structures set up, what were their expenses like? We were fortunate to be able to work through a lot of those and kind of try to game plan for on the expense side, what do we think the expenses are going to change, like you know, are we going to still incur this type of expense? Do we need to add for X, y and Z for how we're going to do business? And we tried to game plan that out as best we could in a lot of different scenarios, you know, but I think before you close on a transaction like this, there's things you just don't know and we ran into some big expenses that we didn't during the renovation, that we weren't expecting. Um, and we had to figure it out.
mitch ehly:Um, and you know there was a lot of bumps in the road but we figured it out, we made it through and, and you know we were fortunate that we had we had been doing a pretty consistent job of posting on social um with, uh, with everything that was going on with our renovation progress and things like that, and you know we were able to to to get a pretty decent email list going before we ever um, before we ever even launched our new website for the motel. Um, and I think the first turning point in our heads was we launched our new website towards the end of January of this year and with the, we kind of coincided the launch of the new website with the opening of our calendar. Okay, and so when we, when we launched our new website and opened our calendar, we sent an email out, um, and all of the people that had been following us on social and had seen what we were doing with this old motel renovating it, turning it into this new boutique motel experience Uh, you know, I think we, I think all of us, we, when we talked about it. When we sent that email out, I think we were.
mitch ehly:We were thinking like, man, if we got like five or 10 bookings today, like that would be, that'd be really cool to like see some people like really be interested in what we're doing. Yeah, we sent that email out. We got 70 bookings that day. We were blown away I mean the nonstop and and literally got seven bookings in the first 24 hours of opening our calendar and we were like completely thrown back. Oh my God, we're working off of renderings. At that time, you know, we had renderings of what we wanted the rooms to look like, so we weren't even selling on a completed product and it literally kind of shook us of like holy shit, I think we're onto something.
corey reyment:What did we get ourselves into here? This is awesome yeah.
mitch ehly:Yeah, and ever since then it has honestly been crazy how much people are kind of in love with the product that we have built now. That is awesome and you know, certainly it's not perfect. Nothing's perfect, you know we definitely. We received a little bit of criticism, I think, from a number of individuals that didn't like the fact that we were not, you know, handing someone a physical key anymore, and you know, that's fine, that's. You know, this experience is not going to be for everybody, Right.
corey reyment:But you want it to be.
mitch ehly:Yeah, more than we want it to be? Yeah, we want it, but yeah, from a numbers perspective, both our average daily rate has been significantly higher than what we projected and our occupancy rates are also significantly higher than we projected. That helps. Yeah, it helps, it helps.
Katie Ehly:It makes you know, and you know Mitch talked about a lot of the challenges.
Katie Ehly:Some of them were potholes that, I jokingly say, we had to crawl out of because I didn't know if we were going to be able to like we'd always figure it out but I think it was a point where it wasn't things that we were anticipating. And looking back at it, you know, we met somebody at a short-term rental conference that was like literally just videotape everything, like anything you're doing, like videotape it. And it was funny because a few days ago, like I literally videotaped myself crying after we were having some issues with like toilets, like getting toilets to fit in certain bathrooms, and all because it's old, so every room is not the same, and so we were hauling around three different sets of toilets to see, okay, does room nine get, you know, an elongated bowl, a round bowl, and then you know what what side is the um, I mean the rough in, because the rough ends were all different and so literally took a photo of myself sitting in one of the rooms, crying because I was like you know what you people want to see this.
Katie Ehly:I'll show you what this is like. And it's like 10 o'clock at night. But now it's like looking back at it, it's like you have to laugh. But I mean I laughed at it because it was like we, this has just gone. I think it's we knew it was going to go great. But I think, like now that we're up and we're running and we're hearing how happy like people are, like we're seeing the demand for it, I mean it made all of those moments of crying on toilets, like so that is awesome.
corey reyment:I love that. Not that you were crying on a toilet, but I think it was a long day, but like it was just yeah it's just the little things that you know can just get you. That's so awesome and that's the reality. That's the realness of it. Right, that's anybody who's sitting. You know you can watch social media a lot of times and everything else, and everybody's life looks perfect and it looks like so easy and, oh, look at how many units I have and all this stuff.
corey reyment:But I just posted something a couple of days ago about like everybody sees the glory but they don't know the story, right, and now they're going to look at you and go oh, you guys are so lucky because you have this motel and they don't know this whole risk that you had to take in a journey and everything that led up to that for the years prior, and I mean there's just so much that goes into that acquisition and now seeing the results and the fruits of the labor. But you had to plant a lot of seeds and then and then you had to, you had you. Now you're reaping what you sowed, but it takes a little bit. What were the? So when you guys were getting into this motel, were you seeking a motel? How did you find this opportunity? Was it just posted on LoopNet or like where? Where did this come to? How did you guys acquire so somebody out there looking like?
mitch ehly:gosh, I'd love to do that. How do you find one of these things? Yeah, I mean, there's, I'm sure, like like anything, and you're you're an expert in this. You know finding finding deals is is not always the easiest, and certainly finding deals that pencil out well is even more difficult.
mitch ehly:But we we actually we got the idea at a conference a couple of years ago. We were actually there with our now partners, Luke and Katie, and we were both invested in the short-term rental space, obviously, and the conference is called the SDR Wealth Conference Shout out to the SDR Wealth Conference. But that conference they had a presenter that talked about making a transition from traditional residential short-term rentals into a more commercial asset like a boutique hotel, and they talked through some of the numbers and, honestly, one of the biggest points that they drove home that really created interest for us was being able to control the value of the asset and being able to have the work that you put into both the property and the operations, and sales and P&L of the property itself have a direct reflection on the value of the business and the real estate, sure.
corey reyment:So it's valued more off of net income than it is a comparable sales. What you're saying? A piece of real estate.
mitch ehly:Sure, exactly, yep, and the work that you put in to be able to create the numbers that you create has a direct impact on what the business is worth. Whereas you know, if, if we were to go sell our, our STR and sister Bay which we're not going to, but if we were going to, you know it would be sold based on market comps and even though our property there, I'm pretty confident in saying, outperforms any similar property in the area From a revenue standpoint, it would not theoretically really matter in terms of what that house gets listed for. And so that kind of really opened our eyes. I would say to like, okay, you know, that seems like something that would be really powerful in in the right hands, and you know, it really kind of opened our eyes to it. So we started to just kind of talk about it a little bit and at the time I think it was more just a pipe dream of like, okay, this, yeah, yeah, we're going to go directly from buying our very first STR to buying a motel, like that's what we're going to do. You know it seems very not realistic until you actually do it, but it, that's what kind of sparked the interest. And then you know we, we knew that after we started to do a little bit of research and look at price points you know what, what things are selling for being listed for um, we knew that we were probably going to want to take on, um, our first one with, uh, some sort of partners, um, and so it. It just it worked out that we have a great relationship with Luke and Katie and they were, you know, in the same boat, they live in the same area, they were interested in the same things, um, and so it just worked out that we started kind of talking together of like, hey, would we ever be interested in trying to do something together here?
mitch ehly:Um, and uh, after some time had passed, we we kind of grew more and more convinced, I would say, that we were really interested in, at least like, pursuing it and see what happens. And so we actually went and looked at a different property, um, also in Door County, um, last April, um, we went and looked at that together, all four of us um, and ran a bunch of numbers on it. You, about it in detail, decided it wasn't really what we were looking for. But it was the first time that we had the experience of going through a commercial process. Right Of going through, you know, luke and I probably called 30 different banks to figure out, okay, who would even lend to us and who's interested in this type of asset. You know, and, and even that process alone was a great learning experience because we ended up finding, finding our bank that was willing to finance for us, out of that process, that even and we didn't even buy that place, right, but we kept that relationship going with them so that the next time a property came up that we were interested in we could rekindle that conversation. And so we really, you know, I think it allowed us to learn a lot just by going through it.
mitch ehly:One time, getting a rep of you know, going and doing a tour on a commercial property and looking at, you know, looking at things that are maybe you don't maybe care quite as much about, um, on a much lower priced residential asset, yeah, and so it, uh, it definitely opened our eyes a little bit, taught us a lot, um, and I guess it was about two months later or three months later, this property hit the market and we had continued to talk amongst the four of us like, hey, well, you know, let's keep looking and if something pops up like let's go take a look, we were not actively doing any, you know outbound outreach to people trying to find properties. We were just kind of like passively, you know, looking on loop debt or um, mls feeds or whatever. And, uh, this property hit and I got an email alert that it had hit the market. And I saw it and I was like, oh man, I know that location, that location is like one of the best locations in Door County, yeah, and and so I was like I pulled up the listing, looked at it, looked at the price you know the price was kind of similar to what the other one we looked at was listed for, um, and looked at the photos and, you know, did my whole cringe thing at the photo, uh, but I was like, man, this location is so good, um, and so I immediately texted Luke, um and him, and I went up the next day, um, and went and looked at it. And you know I still have the.
mitch ehly:It's funny. It's funny how you remember things and you save things. I still have the videos saved on my phone of us, you know, walking from across the street. We're right across the street from the public beach. Yeah, Walking across the street and we're like man, look at this, the beach is here, the place is right here. This is crazy. Yeah, you know, at the time, obviously it's, it feels unrealistic, but uh, yeah, we, uh. We went and looked at it, luke, and I really liked it. We came back a little bit later and Luke's wife, katie, came and we did a second showing. My Katie here was not able to see it.
Katie Ehly:Don't be me, don't be me, don't be me. I couldn't make any of the showings because of my job, and so, like I literally did not physically get eyes on this place until after we were already like halfway through the process, oh my goodness, that is awesome.
Katie Ehly:So I mean blind. I'm going to say like just trust, Like when they were like this isn't like you know, obviously it needs some love, but like this, this is, this is kick ass, like we need to go through it. And I just I remember sitting in a conference room getting done with a conference call, just being like okay, like just full send, like if it doesn't work out, it doesn't work out. And then I remember I was in a conference room like a few, it was like a few days later when we submitted our offer and Mitch literally texted me. He's like are you sure you don't want to go see it before we go up? And I'm like it's fine, I totally trust you. And then I remember the first time we went up there and I went to go see it, it was probably like 30 days off from closing.
Katie Ehly:I was like oh my God, what did we just do Like I? I just remember like the room, like just with you know, it was amazing location, but the rooms just were, they were just really outdated, like it just it needed a lot of love. And I just remember thinking like, oh my God, like what did like, what did I just do Like I? So yeah, I mean, and it worked out in the end, but don't don't be me.
corey reyment:Oh my God, I love that you guys. This is so awesome. There is so much more that I would love to unpack with you guys. Just going back to this transact, this one transaction. There's so much there and our hopefully our listeners took away here today from this because there's a lot of lessons in that and I appreciate all the gold nuggets. We're going to switch gears here, guys, and wrap it, because we're cut, we're up against time and I don't want I don't want to take up too much of your guys's time. Kind Kind of a fun question. I'm going to make this more relevant to Door County. Do you guys have a favorite date night spot in Door County or activity you love to do in Door County or someplace? For our listeners who are like, hey, I'm going to go to Door County, where should they go, or where do you guys love to go? What's the favorite go-to?
mitch ehly:Man, we have a lot. We have a lot.
Katie Ehly:So this is this is really hard for us.
mitch ehly:Yeah, we have. We have a lot of spots that you know. We're fortunate. We have a lot of friends in the area now too, and a lot of those friends own own businesses, own restaurants and you know activities and things to do. But yeah, I mean, some of our favorites are, you know, our, our, our friends Mike and Megan, from the boathouse in Sister River Bay. It's one of our favorite spots. If you like lobster, go get their lobster roll. It's fantastic. Our neighbors at the motel, at Blue Horse Beach Cafe we ate breakfast there every single day for six months straight.
Katie Ehly:And I also brushed my teeth there when we had no water. So shout out for them, letting me brush my teeth there.
mitch ehly:We stayed there with no running water for for feeding us for six months while we were doing this project. But, um, that place is amazing. Um, for for dinner. You know, we've always been in love with alexander's it's, it's our favorite place around up there. Yeah, um, alexander's is amazing time. Yep, time up the street in sister bay. Yep, tonda time is amazing. Um, and uh, beringers and fish creek is awesome. Um, activity wise, you got to go putt at the red putter very important um that's how you earn your.
corey reyment:That's how you earn your. I visited door county sticker right, yeah, they've gone and got to the putter.
mitch ehly:Yep, a hundred percent. And you know we've we've grown a good relationship now with the folks at door County by water, which they do, boat tours and boat rentals, which is a great way to experience door County. So certainly, yep, yeah, eagle trail go and hike at Eagle trail at peninsula state park.
corey reyment:I thought you were going to say your favorite spot to visit is Door County Coworking.
mitch ehly:I mean we do see a lot of it's maybe our most frequented place. Yeah, that might be, we might earn it.
corey reyment:Besides Blue Horse, besides Blue.
mitch ehly:Horse. Yeah, yeah. No, we do love Door County Coworking and it's the perfect spot to spend a day. If you need to work, if you need to have a quiet spot, we do love it and we do also recommend it to all of our guests at the motel as well.
corey reyment:They need a space to shameless plug here. For me, I appreciate it.
Katie Ehly:And one last thing Wine Indoor County, you know, shout out to 1211. That is by far my favorite winery in Sister Bay, right next to Time. We know one of the owners, tim, and just their wine is just, it's unreal, it's my favorite.
corey reyment:I haven't been, but that might be date night this weekend. Oh do it, do it.
Katie Ehly:Their wine is phenomenal. I mean, if you're a red drinker like, love their Pinot Noir. They have a dry rosé Barbera that's not super sweet but like still really crisp and delightful when it's hot out and they're they're savvy B? Um to throw out the entitled housewife. Um, the savvy there is amazing. So yeah, 11 also two for one.
corey reyment:I love it, guys. Well, thank you guys. You guys brought so much value today. This is an awesome episode. I think people are going to take a ton away from this. If anybody wants to get ahold of you guys, are you guys open to them reaching out to you? And what would be the best way to get ahold of you guys.
Katie Ehly:Yeah, so I mean, obviously, our handle for the motel is at Fresh Coast Motel, wisco Host, which is our co-hosting company slash. Our rental is at Wisco W-I-S-C-O hosts on Instagram and you can follow along on my personal one. I'm Kate the innkeeper.
corey reyment:Is that where they'll see you on the toilet crying? No, I haven't seen that video but I feel like now I need to try moving toilets.
Katie Ehly:So, and then you can follow along with Mitch at Mitch Ely, so super easy.
corey reyment:Awesome guys. Thank you guys so much for being on here. Guys, thanks for listening to this podcast. If you've got some value out of this, please subscribe, like, share, do all that stuff. The more people that listen to this, the more guests we can continue to get and, hopefully, the more value we can bring to all of you. And if you guys are looking for off-market deals, go to wisconsindiscountpropertiescom, sign up for the buyers list and get deals hitting your inbox every Monday morning.
corey reyment:And this has been another episode of the Wisconsin Investor Podcast. Thanks for listening and we'll see you on the next show. Hey, this has been another episode of the Wisconsin Investor. Thanks for tuning in. If you got some value out of the show, please go like, rate, subscribe, share, do all that fun stuff. And if you're new to investing in Wisconsin and you want to have a conversation with somebody from our team, we would love to have that conversation with you. To do that, just go to our website, wisconsindiscountpropertiescom, hit the contact us form, put a little bit of your info in there and somebody from our team will reach out and have a conversation, hopefully help you start moving forward in your investing journey here in Wisconsin. Thanks for tuning in. We'll see you on the next episode.
