Look Inside the Tiny Hotel’s Airbnb Tiny Houses That Made $500,000 This year

• Isaac French was born in the construction industry and grew up loving design.
• In 2020, he moved to Waco (Texas) and wanted to make the most of the opportunity. Hot real estate market there.
• French purchased a small piece of land and built a tiny hotel consisting of seven cabins.

Isaac French, a 25 year-old contractor and bookkeeper, owns and runs a tiny hotel in Waco, Texas with seven tiny homes. He opened it early this year.

French was the founder of a cloud-based accounting company in Waco before he entered short-term rentals. But around late 2020, he told Insider, he was itching to take advantage of the hot real-estate market in the area — Waco is within two hours’ driving distance of AustinFort Worth, Texas Dallas.

“I had these ideas of creating this. modern Scandinavian housing conceptFrench declared, “In Texas.”

French stated that he had always been entrepreneurial, but that he gained the necessary experience from his father’s business to help him execute his dream. French purchased a 5-acre plot of land in March 2021. Live Oak Lake. These seven cabins measure between 550 to 650 square feet. They were constructed in Scandinavian architectural style.

Live Oak Lake has generated over $500,000 in bookings ever since it opened, according to screenshots from Stripe and Airbnb dashboards reviewed by Insider. Here’s how French got his company off the ground.

French transformed a Waco 5-acre plot into a tiny luxury hotel in just 9 months

French spent $138,000 of his savings on the purchase of the land. He estimated that his small hotel would cost $1.6 million to build at the time. French’s father, his two brothers and father-in law joined him as minor partners to secure a construction loan of 80% of the estimated cost of the building.

French was able to use the credit line from his father’s construction company to pay for additional construction costs. He said that when he was starting out he was confident that the property would be appraised at a higher value than the cost, especially once he could prove it was a commercial success, and he planned to do a cash-out refinance — taking out a bigger mortgage against the value a property has gained since the owner acquired it — to pay off the cost of labor and materials.

Live Oak Lake took nine months to complete. French served as the general contractor and built the roads, utilities, and man-made lakes. The tiny hotel, which opened for business this January, ended up costing $2.5 million to construct — he said the price increased because of Manpower shortagesAnd Soaring lumber pricesYou can also add hot tubs or a pool to your home.

French said, “I was surrounded in lots of incredible people as far as contractors or landscapers.”

French and his family refinanced the property with 80% cash out, four months after it was opened. French received a loan for 80% of the property’s value, or $2.48million, as Insider examined appraisal reports and HUD-1 settlement documents.

French stated that it was crucial to secure the construction loan by showing Live Oak Lake’s “experience” and lots of drawings in the planning forms.

French was able pay off the original construction loan as well as the credit line he used for the project with a new round of funding.

French stated that he used YouTube and online resources to learn about the short-term rental industry. He described Robuilt,A channel managed by another short-term rental entrepreneur is particularly helpful. French also sought advice from friends who were owners of a Waco-based short-term rental management company. They introduced him the automated property-management system, which he stated was crucial to his success.

French wanted his guest to feel as if they were in a tranquil oasis.

Live Oak Lake also has seven identical cabins. It also features a common area that includes a small dock and picnic tables, paddleboards and kayaks.

Each CabinTwo floors have floor-to-ceiling windows, two bedrooms, one bath, an open-plan, kitchen and living areas. There is also a washer, dryer, private entrance, parking, an outdoor hot tub, hammock and a fire pit.

“It was very high cost per square foot because these are very high-end — we chose very nice finishes,” French said, adding that he took inspiration from Olson KundigSeattle architecture firm, whose sculptural buildings draw inspiration from nature.

French declared, “I’ve always loved designing.” “I always wanted to be an engineer when I was younger.”

He explained that he wanted the hotel feel like a village and to have a balance between being “completely lost” in nature and feeling “village-like”. Although the tiny houses are only a few hundred yards apart, they are surrounded by trees. However, the string lights that run between the buildings can be seen in the water.

Because they have identical aesthetics, the cabins are priced almost identically. While a night in a cabin costs $300 during the week, it can cost as high as $450 to $500 for weekends. French stated that the nightly fee for a cabin can increase to $1,200 during busy periods like Baylor graduation weekend or high school football games.

He uses an app called PriceSetter to set his prices WheelhouseThis software can automatically apply price increases and discounts to his Airbnb, Vrbo or Booking.com accounts, depending on the area’s demand.

The pricing software also allows French to add markups when customers book through a specific platform to reflect what that platform charges hosts — for example, Airbnb charges 15% of the booking price as a fee. This encourages customers to book directly through the Live Oak website. French can have more control and access more information about his guests, including their email.

French claimed that the occupancy rate is between 90% and 95%. The majority of bookings come directly from Live Oak’s site, with 30% coming from Airbnb, Vrbo, or Booking.com.

French market the hotel via social media. At first he partnered with travel influencers and did giveaways — he said this helped Live Oak’s Instagram AccountOver 50,000 people follow the hashtag #amazon.com.

He stated that Instagram is the main way to book bookings.

French stated that he believed Live Oak was well-positioned to weather the economic downturn. He stated that he saw a lot of middle-class or wealthy tourists traveling from Dallas and Austin, but choosing to spend shorter vacations closer to home.

French stated, “But we’re already tapping into it,” but he added that “I just think there’s so many more opportunities even here in Texas.”

Kiera Fields would love to hear from you if you are an Airbnb host, tiny home owner or want to share your experiences. kfields@insider.com.