183. The Secret Sauce That Made Us Viral and Secured Investors - Mike Sebastian & Jordan Holmes

24:48I very much can stand behind the front desk and just be any person that I ever want to be. Going to the bar, walking in and walking up to a woman is like the most terrifying thing in the world. Not a chance. I think I've done it once. And I was like, there's no way I'm ever going to meet anybody because I'm not going to walk up and introduce myself. so one day when I was 21 I was telling a story to somebody and he was like oh you just need to be a bartender and I was like why and he goes because then they come to you and I was like that doesn't make any sense so then I became a bartender and I was like now this makes a lot of sense

25:20Natalie Palmer:and it's how do you meet your wife was she did she come to the bar oh okay okay so the bartending on our wedding website I wrote a whole story about how we were at the airport and she needed a charger her phone died we're on the same plane it got canceled we went to another place and then And at the very end, I like walked up to her and I whispered, this was all a lie. We met on Hinch. So it was a really good story on Zola and our wedding website that everybody loves. But that being said, in bartending, it flipped everything around, right? Where all of a sudden it's my bar, even the customers, right?

25:50Not dating, but even the customers, like they come up to me and order. So it's a completely different like interaction where you walk up and you're like, hold on, I'm busy, right? And then I'll go over to them in a minute. Well, they love it, right? We built up this entire restaurant on Monday, Tuesday nights doing that strategy. that's kind of stuck with me for the rest of life. So now it's like, hey, let's reach out to people and do stuff as much as you want to in the beginning. But now that our portfolio is what it is, we typically get people that'll reach out to us. And in reaching out to us, it changes the entire conversation, right?

26:21Or we'll say, hey, we've got this opportunity or we've built up a performa. Do you guys know anything? Do you know anyone that's interested in an investment like this? And having the stats that we have, having the experience that we have, the case studies that we have, it makes it a whole lot easier. So when we go to existing clients, like the one that Jordan was telling you about, we did a 0 % interest credit card for 18 months. We put a payment plan back for a 12 month period that gave us a little buffer there. Executed that perfectly, paid it off. I think it was 12 or 13 months. Everyone was impressed.

26:53We refied the$20 ,000 investment on the hot tub, got us at 80 plus thousand dollar refi based on the revenue that we had. So we took that and then put that into the second hot tub, which has done even more than the first one did. So having case studies like that and being able to show this is our performa, this is the execution, and then we did the exact same thing again. It builds a lot of confidence. And I think now what we're learning is how to set the expectations on timeline because the day that you finish, you don't really see the results, right? Yes, it's live, but we haven't even taken photos, right?

27:25The day that you launch, it still takes, you know, if you see that stuff, really fine tuning the communication on, this is the build, this is the photos, this is the launch, This is when you'll see the results. And then over this time period, it's going to ramp up based on these percentages. It's really given us kind of the skill set and the knowledge that we need to have those conversations and just amplify the confidence that we can get people in them. Well, I think initially when we had, you know, because we didn't always have the unique hot tub on the boulder and the hot tub in the cliff and the cabinets, 102 steps up in the side of the cliff.

27:57We, we, we led a lot with excitement and passion. I think excitement and passion initially got us a long ways, right? Where people were like, these guys have never done this before. But like, I think we've even had a few investors come out and say like, hey, I'm willing to invest because I want to invest in you guys. You guys are excited about this. You're passionate about it. And I think that's at the very least going to get us over the hump and get this done. And that got us in the door to be able to prove what we're able to do. And then from there now, it's like, okay, we still have that excitement.

28:24We still have that passion. But now we have the case studies and the proof to say, hey, it's more than just a grand idea that Mike and I came up with. It's an idea that we have that has worked time and time again. Look at the case study one, case study two, case study three. If there's anybody that listens to your podcast that is concerned about financing or funding, just tell them to keep one foot in front of the other. We did in July 2024, I moved from, I was in Seattle in an RV for a year and then moved to a little four project here. During that process, I was trying to get a loan for two and a half million dollars for a six, a six cabin bill or like little micros or it that we're turning it into for, for those unique bills, basically all at the same time, simultaneous six houses, two and a half million bucks.

29:10But I had sold my agency in 2023. So I had zero dollars of income, a decent size and savings. And I had, I was also closing on another refi and buying my own personal house at the same time. I called 75 banks and they all said some variant of I'll give you a ridiculously high interest rate loan or no. And then I finally found one and exactly what Jordan said. She actually, we're good friends now, me and her. And she actually said, the only reason that we did this deal is because you were just so passionate about it. I didn't see it failing. She's like, so I just went to the president. There's a bank, a local bank.

29:50So when people say like, befriend your bank or find a local bank, that's a hundred percent true. And these types of situations now I have maxed out my ability to lend from them without having like those on and whatnot, because they have a cap on what they can give out. But that being said, she, she came out a year into that project and she's like, it was nowhere near done. Right. And it was, it's the silo houses that we have. So it was just silos on platforms. They weren't paid to, there was no landscaping. Like it was kind of a muddy mess. And she came out and she told me at the end when she saw the finished product, she's like, I'm not gonna lie.

30:24She's like, I thought I was gonna get fired the first time I came out here because I invested in your passion. And she's like, and then I saw a bunch of like grain bins on top of wood platforms. And I was like, this is not what I was expecting. And she's like, I just didn't say anything. Nope. She was like, okay, well, we're in. There's nothing she can do to get out of it then. So, but it was that. She said it is specifically the excitement, the passion, the like dedication. And then we had enough numbers put together to actually like show her what the plan was.

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31:30Natalie Palmer:I want to pivot into social media here. You guys said that that's like a big emphasis and that's kind of the one-two punch of adding these unique amenities, but then broadcasting them. I would love to know your process of how you decide what unique amenities and features to add. Are you coming at it from the approach of like, what's going to look good on social media? And that's dictating it at this point. Yeah, go ahead. I would say, yeah, that's a component of it is what's going to look good from a social media perspective, but also what's like, you know, sticking with the example of taking a hot tub and putting it on the boulder, right?

32:04We could have simply had the hot tub on the back of the cabin and still made it look good. And it would have done fine on social media. But now, again, if you can take it from the perspective of it looks good, you're focused on the details. And now you can take an amenity that everyone has and make it unique. That's where, again, Mike and I have time. We just make up terms. So we uniqueified the hot tub. We uniqueified it and made it different than all the other hot tubs in the gorge. And it allowed us to stand out. obviously that does well from a social media perspective whether it be facebook instagram or tiktok because it's that you know as people are you know swiping through whether you call it doom scrolling at night or whatever it may be right you're scrolling through set you know and you want to be it's mike what's the term is it interruption mark interruption marketing is what you call it to where interruption base yeah yes so with that with the style of hot tubs and the type of content we post it interrupts their their flow to where they stop and they go wait what you know what what's that and they hold on the video we can keep them there for three seconds it captures that attention gets them all the way to the end of the video and what we then from there is ensure they click through to our profile when they get to our profile it's optimized so they know everything about the hideaways what we offer and we drive all that traffic to a landing page in our bio so it's the you know looking good and it also being unique is what allows it to be a scroll stopper because there are a lot of brands and a lot of properties out that are there that are starting to figure out social media is a great platform to get guests and leverage and drive direct bookings.

33:33And now you're starting to see more and more people are doing, you know, panning shots of, of the bedroom, the living room, the deck, the hot tub, right? They all are now starting to mesh where that used to be unique and work before. Now it's like, okay, those are still valuable, but how can you now start to sprinkle in, you know, unique amenities, the details, or even experiences, right? Having people within the content allows that to stand out even more again to interrupt them as they're flowing through social media and get them to click over to our profile and ultimately book a stay. Have you, have you been, Natalie, have you been through interruption based or versus intent-based marketing in the past?

34:10We heard those.

34:11Natalie Palmer:Sorry, repeat that. Have I been through what marketing? Have you like just heard the terms interruption marketing versus intent-based marketing? No. So Airbnb, if you go on Airbnb to find us, You would go on Airbnb and then you would type in Red River Corp and then you would see our properties. And hopefully you'll love that. So that's the intent to go seek it out. It's the intent, but it's also in our specific industry, like Google search is a good one for that. So if I search for running shoes, I have an intent to look up something about running shoes, right? So I have to have that first. So for us, it's even worse in my opinion, because when you go there, you have another reason to be there.

34:49You're not going because you want to look up a cabin and stay in the cabin. happen, you would have seen that elsewhere, right? So you're going there for an event to go hiking because you have a vacation with your family and they want to meet in Kentucky or something like that. Interruption marketing is where it's like Instagram, right? So you click on that second tab and you sit there for three hours and you see what catches your fancy. That's what we want to do is like stop people there. So we measure the thumb stop, right? So you're scrolling, scrolling, scrolling, and you click that button.

35:15We want to be the one that you click that button on. The reason for that is because if we can interrupt you and get you excited about it, Whether you book that day or 10 days later or two years later, it doesn't really matter. If we can stop you there and get you excited about it, your ability to book farther out and pay more is significantly higher than somebody who's going to a wedding and needs a place to stay. You're only going there because of what we showed you and you find out that it's a cool hiking place versus I need to go visit Natalie Palmer in California and I need a place to stay.

35:48It just differentiates. It's kind of like the bartending analogy, right? Coming to you versus going to somebody else. Like it just reframes the exact same situation. So what we've been able to do is interrupt them, capture their attention, build enough of a relationship through our funnel, and then get them to both farther out. So instead of a 32, 33 day booking window, we're looking at 50, 60, 70 day booking window where our rates are already higher. So it depends on the cabin. It ranges all over the map because we have some crappy cabins and some nice ones. but we have a couple of cabinets that have one Airbnb reservation.

36:24That's it. The rest of them are direct. It's the one with them. Also want to point out. It's the one we looked yesterday. It's the one with the most revenue on the, for the calendar year for, for 2026. And it's the smallest. It's a studio. So, and that's, that's gross revenue.

36:41Natalie Palmer:So that doesn't include, there's no booking fees, right? Cause that one's direct. It's, it's got host away charges. you like the stripe fees are like two and a half percent it's not 15 much yeah so so there's you can charge whatever you want on there keep the stuff that you're not paying airbnb and verbo plus it's farther out plus we have occupancy based increases in our dynamic pricing so if you've got four reservations for july already well then every other reservation is going to go higher because the occupancy is higher so it gives you control over it but then what we utilize the OTAs for is as July approaches, if Tuesday night's still open and somebody needs to come to the gorge and they're like, oh, we're within the 30-day booking window, well, then they can fill all the last minute stuff that gets discounted.

37:26So that cabin right now, I think the average for the year right now is like a 98%. It's 98 % occupied for the months that it's booked. And we won't really increase it anymore because it's over like 2 ,500 bucks a night on certain weekends.

37:40Natalie Palmer:Okay, wait, let me make sure I had that right. Are you saying you don't even open OTA availability until you're within 30 days? It's there, but the average percent on the OTAs is our booking window on Airbnb is 33 days, right? By the time 33 days arrives, we're already booked. Okay, got it. Got it. So if they want to book further out than that, they are seeking you out direct. It's not that. You are correct in what you're saying, but it's not how they seek us. It's how we have strategically filled our calendar. So we've interrupted enough people, a couple million people at this point that have seen our stuff that they get excited about it.

38:21So they book farther out because the people that get interrupted and introduced to our stuff and come for the cabin, they're willing to book three months out, right? Which is awesome. So what happens is we've just introduced it to enough new people or enough of those people that they filled up the calendar before all the intent-based people. So everyone else that's like, oh shoot, I need a cabin next month for that thing. By the time they look, they don't even see us because Airbnb's downgraded our position so much because we don't show up. We're booked. You can't have 99 % occupancy and show up for searches on Airbnb.

38:57So we're there all the time. You could go to next year this time and you can find all the caverns if you want to on Airbnb or booking.com or Burbo, but nobody does that because they're not booking a year out on Airbnb traditionally, right? There's all these outliers, but yeah. And then we use it to fill up if there's a Tuesday, Wednesday, something like that, that is still available because we didn't fill those direct, then that's where Airbnb and Burbo comes in for us, for our specific strategy.

39:25Natalie Palmer:How much money are you guys spending on content? You add this new hot tub and then you bring out the videographer and the drone footage i'm sure and the photographer what like what's the approach there so what what are we i guess per cabin spending or do you have like an overall hideaways content budget it's i think it's around 2500 bucks maybe 3000 a year on content creation per cabin per cabin yeah yes yeah i'll say per cabin that we we have our leaders like you don't see 30 cabins on our Instagram. They don't all deserve to be on the Instagram. That's a strategy in itself. So we've got a couple of leaders that we repost quite a bit.

40:07And those are the ones that capture the attention. We've got a strategy that introduces us to new people through the paid side. So we see new eyeballs all the time. So it doesn't really matter if it's the same five cabins that we're posting because the new eyeballs continue to come in. But what's even better is like the studio. If someone, if you and Natalie are scrolling and you're like, oh, I really want to go here right and you click on it chances are it's not available for when you want to come and if it is it's a 50 50 shot as to whether or not you can afford it right because it is a very expensive cabin and it is very booked up what's cool about it is now you're on our website so when you're on the website and you're like oh man that one's not available but right below it there's 29 other cabins and 20 of those fit what i'm looking for there are other two ones or one ones.

40:53So the cabins that are not quite as scroll stopping, right? They don't have quite as high of a thumb stop rate. What happens to those is they come in for the other one. They're slightly disappointed, but then still impressed with the other stuff that's there. And they don't go to Airbnb now. They stay here and say, oh, this one fits. Let's do this cabin. So we see a lot of spillover from those leaders, which is good from a content perspective because we don't have to pay 25 or 3 ,000. Right.

41:20Natalie Palmer:Right. For sure. So that's my next question was going to be how, how many are you featuring? Like the entire portfolio right now, I guess is reliant on the marketing of how many listings are doing the heavy lifting for them. Six or seven. Uh, I think it's, it's for, for the most part, I would say, you know, six to six to eight, there's probably a in total because we sprinkle in others as well to, to test how the, how the audience will react to them. But I'd say probably in total 10 to 12 on our, our Instagram, that number is going to increase because we actually have a videographer out there right now, capturing fresh content at multiple cabins, which we're excited about.

41:58So yeah, blessed with that videographer. We found there were, there were three guys that we, we found, they all did do amazing work. They're the best in the industry, in my opinion. And one of them declined us because he wanted to shoot content for his church instead. And Jordan and I were like, that's the one we need. That's the one. and he is an amazing human being. He is bearing with us through all of the struggles of what we're putting him through right now. But he shoots amazing content, right? And it's high quality cinematic engaging, right? It's not someone going around with an iPhone or anything like that.

42:32And he understands the importance of color grading and the right angles, right? Because everyone can take the painting shot of a room, but he's shot multiple cabins before a lot of very nice properties out in Hocking Hills and he understands it and he gets it. And like Mike said, he's a great person. a genuine guy and he just, he's, he's top tier. And what we've seen is we've, we've worked with content creators. We've went down the influencers route. Like I think influencers do at times work for people. I did learn that there's a difference between influencers and creators. That was my naive thinking initially found out there's a difference there.

43:04I mean, we even worked with, you know, an influencer who had been on MTV before. And what we've seen works the best is high quality cinematic video content, doing it organically plus utilizing some, you know, a little bit of paid ads on the back end.

43:18Natalie Palmer:So right now, Mike, I think it was you, you said for you guys, scaling is not about number of doors. It's just about increasing revenue. So when you look at, there's, you know, about 10 or so properties that are like really showcaseable. And those are the ones that are, that are leading the marketing front for you. What's the conversation right now you guys are having with, with scaling? Are you looking at the other 20 and like focusing on improvements right now? Or are you guys looking to buy more or always looking at both and just see which opportunity comes up? Yes. I knew you could answer that way.

43:56We analyze all of the opportunities. A lot of it's bandwidth-wise. One of the things that you asked earlier is like bootstrapping or how are we doing it with our team? And today we're training five new employees, right? So today we're not looking for new land because we're trying to onboard them. And so the bandwidth kind of changes around that. So we had the opportunity to do some upgrades, which we consider a little bit simpler. So it would be an internal perspective on the cabins that exist. So we just did a big new hot tub launch on a little cabin just up the road from the ones that we did previously and have high expectations for that.

44:30As we get them trained, onboarded, and take some of the work off of us, we're going to go back to a couple really, really unique properties. One of our philosophies though is like anybody can build anything, but mother nature will give you things that not anybody can get. So cliffs, caves, creeks, rocks, those kinds of things that you can buy, that'll give you an immediate competitive advantage and barrier to entry for a lot of other people are the things that really kind of strike our attention. I thought cliffs were a lot more unique. Apparently the Red River Gorge is like just all cliffs. So everyone has that out here now.

45:06So we're looking at waterfalls, ponds, like wish cliffs next to them, those kind of things, like anything that you can drive up to and just think like this would stop the scroll on Instagram. And then we're focused on what can we build in here to make it private, unique, fun, experiential and all that. So I think I think it really it is all of the above. And it really does depend on both like circumstances, bandwidth wise for the team, but also what's sitting in front of us. Cause I know for a fact that if someone shows us like an affordable, which is still possible in the gorge, super unique lot, Jordan and I are both going to be like, pause, like, let's go take a look at this thing.

45:46We need to see, see how it's there because it doesn't come around all the time. Yep.

45:51Natalie Palmer:What are your guys's roles? I feel like normally in the most successful partnerships, there's like the ideator and then the executor. And I kind of get the sense both of you are the idea people. So maybe I'm wrong, but what are your guys' individual roles? How do you work together? I would say we are both idea guys. I think we balance each other well to where we both have ideas. You know, Michael have an idea. And we've agreed to this where we keep each other honest on those ideas, right? Like we want to shoot for the stars and really challenge ourselves. But at the same point in time, we want to challenge those ideas and decisions and make they align with our core values and what we hold true to underneath the hideaways brand right so we are both the the idea guys but we have quickly learned what we're passionate about and what areas we like to focus on i do a lot from the guest experience the social media marketing side of things and then you know mike does a lot from the the paid ads marketing side as well because that was his world prior i'm not even gonna uh i'm not even gonna try to learn as much as mike knows about the paid ad space.

46:55That is his bread and butter. He knows that well. And then Mike, you know, does a lot on the finance side as well. But it's not like where it's so siloed that I'm oblivious to what Mike's doing and vice versa. We work very much in sync, but we have our areas of ownership that we own, but we still tap into our various team members to help out in these certain areas.

47:16Natalie Palmer:And then how have you guys built your team? What are you mostly using VAs or do you actually have like local people? How are you finding which jobs to fill? All of the above. We've got two VAs. You've got someone in Bulgaria, someone in Albania, someone in Hong Kong. So there's a lot of remote stuff. That's more so on the marketing side. Anything digital or remote, that kind of thing like the agency world is heavy over there. But we've got a really good onsite staff as well. So we've got six full-time cleaners, a few contractors, We've got a full-time handyman. There's a third partner that's onsite that doesn't do a lot of this stuff.

47:52That's like doing all the -

47:53Natalie Palmer:I was going to say, who's doing operations? Who's the one who's the best out there? There's a woman on our team named Debbie. She handles a lot of the onsite operations, training, consequences, all of onsite. The biggest struggle that we have, it's a, what do they call it? It's not six and one and a half dozen or another, but like there's the really good that there's no permit process. You can build whatever you want, right? But then there's the bad of like the risks of your house could fall down because there was no permits or engineers or anything else. One of the things about our space that I personally love is it was voted the poorest county in America in 2012.

48:34So it is not a flourishing industry. It is very much an impoverished area that has had a lot of hardships. So with this, this is the first time that there's been opportunity in this specific area in a very long time. So there's a lot of people that are really hungry to do good work. And I'm excited about that. I love providing that opportunity for people. I think what we're doing is really good in terms of the team we're building and the core values that we have and all that. But with that comes a lot of learning struggles, growth struggles, whatever you want to call them. getting people like to buy into the vision to understand what's expected to communicate clearly and all that so there it takes a lot of handholding out there so a lot of on-site a lot of continual training especially for us because we are living and breathing and go high level and asana right so if you don't know those two things it's going to be really hard for us to like constantly interact back and forth so so it does take a lot of handholding out there so there is person out there doing that as well, as well as the onsite team that does all of our like maintenance fixes and stuff like that.

49:43Natalie Palmer:Gotcha. I love talking to you guys. I literally took so many notes just for myself, but I love what you said about relentless dissatisfaction. That's going to stick with me for sure. Because yeah, every property you guys launch, probably just the naked eye out there, it's probably perfect and has blown them away. And you guys know like, oh, this is crap. We got to do this way better next time. But that's what keeps you improving. So I love that. And the bartender analogy, that's so good. You have to have them all start coming to you. Mike's got more of those. Mike is an open book. I'm going to put it out there to the world.

50:17If you just, people need to talk to Mike. People need a Mike in their world. And I have a Mike in my world and I'm appreciative of it. So he has a million and a half stories. I say he's lived 10 lives compared to my one. I've lived quite a few lives. That's for sure.

50:32Natalie Palmer:Well, I'm glad that those lives led you to this one because I think what you guys are doing for short term rentals and hospitality is amazing. So again, everything that if you guys want to go check out their portfolios, it'll all be linked below. That I guess is the way to book because Airbnb has nothing left by the time people open that up for you guys. So if you want to stay with them, make sure that you go check out those links. Anything to add you guys? I think I am thinking we might need to do part two. I don't offer that to every guest, but I feel like we barely scratched the surface. I would love to hear more about the paid ad strategy too.

51:04Natalie Palmer:That's always really interesting. And yeah, just the ups and downs of working in a rural market like this. It is a lot of opportunity, but it's very hard to find talent. So I hear you there. If we do that, I'll tell you right now, it'll be 90 % ups and downs of working in a rural market and 10 % paid ads because there's not a whole lot of genius behind the paid ads but oh don't sit you take it for granted because you think that world i think jordan would back this up too i just i hear what you're saying i agree that in a lot of circumstances what we do is it's like when you're painting right 90 is prep but what makes it look good is the paint right so what we've done we built the thing we've photographed the thing and we've posted the organic post that's the work right and the paid ads just push it to the right people.

51:52Okay.

51:53Natalie Palmer:That's a good way to think about it. There was one thing too, as you guys were speaking that really is sticking with me. I think a lot of people would see a portfolio like yours and don't take this as me downplaying what you've built. But I think a lot of people would see that and just think that's so unattainable. It would take me years to get there. But what you guys mentioned is only a third of the portfolio right now is doing the marketing for everything else. So if you have one gem of a property, you could have two more and have the one doing the heavy lifting marketing wise. So I actually find that very encouraging.

52:26Natalie Palmer:Again, not to discredit what you've built, but it's like 30 % needs to just be so exceptional. And then that can be enough to carry the torch for everything else. And start with one and then grow from there. right? Well, I'd say you only need the one. And by the time you finish the one, you'll be so dissatisfied with it. You'll build the second one and it'll do better than the first one. And you'll be at three in no time. By the time you get there, the first one you did will be your shitty one that you're embarrassed by. Yep, exactly. Thank you guys so much. It was so much fun talking to you guys.

52:59Natalie Palmer:Great to have the boys on. Mike repped his host behavior hat. Jordan, where's your hat? I, I, mine's in the closet. This is like my go-to hat. I need to get mine out. I should, I should have coordinated with Mike, but I was coming from preschool graduation for all this. So I had a very important obligation prior to this. So. Okay. Okay. That's a valid excuse. You finally graduated preschool. We'll take it. That's a good excuse. Thank you guys. And with that, it is now checkout time. Thanks for listening. And I'll see you back here next week. Lastly, as Airbnb hosts, we all can appreciate a good five-star review.

53:36Natalie Palmer:So you already know a great review on this podcast would mean so much to me. Please subscribe, review, share, and connect with me in the show notes below. Bye.

54:04We'll be right back.