Live Oak Lake: How Isaac French Built a $7 Million Micro Resort in 2.5 Years
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Now let’s get into it!
My First Million had a great interview today with Isaac French who created a micro resort of seven cabins with $19,000 a line of credit and a bank loan.
Isaac was 24 and had the dream of creating a little cohesive group of tiny homes. He started looking for land and three months in a five acre plot with a cow pond showed up. He had passed it by hundreds of times and never noticed it, but when he was there he got goosebumps.
Live Oak Lake after clearing the land
It was $133,000. He had $19,000. He put a deposit of $2,000 to put it under contract for 30 days and went to his dad and brothers who had a general contracting business with a line of credit.
They liked the idea. They agreed to help out for 40% equity.
Isaac started hitting up the banks and with an embarrassing proforma, drone pics with sketches of where the cabins would go he finally had a local bank agree to lend 80% of the value if his dad and brother co-guaranteed the loan.
The bank thought it would cost $1.8 million. Isaac thought they needed $2 million so he put another plot of land under contract and built a spec home in four months. He rolled that $200,000 profit into his cabin project.
Aerial view of Live Oak Lake in the early days
That’s crazy, this kid’s intense.
The build out took 9.5 months for all seven cabins.Isaac acted as general contractor and subcontracted most of the work. He tried to help where he could until he fell off a ladder seven months in and broke his pelvis. In the end it cost $2.3 million.
January 2022 they opened!
And two weeks later the business was killed when Airbnb banned them. There was no apparent reason and Isaac couldn’t get any help from customer service. He created a website for direct bookings, found a travel influencer and paid them $950 to do a giveaway post.
A week later they had $40,000 in direct bookings, five thousand Instagram followers and Airbnb was back up (it was a glitch).
But Isaac had learned the beauty of direct bookings. Approx. 15% more margin as you’re not paying an online travel agency like Airbnb and you get the customers email so you can retarget them. It worked. Some guests come back 3-4 times a year.
The first year they had 95% occupancy for the cabins at $600 a night, made $1.1 million with a net profit of approximately $500,000 (excluding debt servicing based on some other interviews).
But Isaac believes “every material thing should have a price tag” so they put it up with a broker and ended up selling it to a small private equity firm 2.5 years from the start of construction for $7 million.
He thinks it would have been $3-4 million if they didn’t have the land, managing company and brand all as one business. By then they had 150k instagram followers and 30-40k emails. The deal closed October 2023.
Isaac’s thoughts on how to build a successful Short Term rental business:
Choose red states over blue, speed to market is everything and you want a location where it’s easy to build.
Be within two hours within a major metro area (at least 1 million people) which is staycation distance.
Be within 15-20 minutes of a town with a coffee shop and good restaurant (or you could perhaps arrange local meal delivery).
Find land with natural potential, trees are a must and people love water.
Find a mediocre property that has potential with our vision to be one of a kind.
Make the architecture beautiful.
Infuse unreasonable hospitality. You don’t need on site concierge. Just great touch points. Isaac would have a handwritten note to each guest with their name and a fresh batch of chocolate cookies from a local bakery delivered by his cleaners. He even had the bakery access the guest list each morning on their own so he didn’t have to be involved in the ordering.
You need a story.
Some other great examples Isaac gave in the pod.
Brian started Flohom and with $200,000 changed the way people think about houseboats.
Devon, 24, was an engineer who had a dream of creating a home out of five shipping containers. With an iPhone and a $20 tripod he documented him building the project. After a year his project Pacific Bin was complete, he had 1.5 million followers and the first year pre-sold.
Kimball and Christine in rural Ohio found a property with a small seasonal stream. They damned it off, recirculated the water and turned it into a waterfall swimming pool. The Cliffs at Hocking Hills now has 600k followers and is booked two years in advance.
There’s money everywhere!
Additional Sources for Live Oak Lake
Business Idea(s) of the Week
Based on the above story I think there’s an interesting opportunity to be the un-Airbnb. I would use the playbook from 180 sites and approach unique properties to create a website for a monthly fee for them.
The sales pitch would be the 15% savings, the email list and the increase in property value when you sell as shown by the Live Oak Lake case study. onlydoors (.) com is for sale…
Want something a bit easier. Still think this idea for an Airbnb Amenities newsletter is an interesting idea.
Other Ideas!
Electronic insect bite treatment devices are apparently amazing
Mini outdoor theaters are new
Business Success Stories of the Week:
Craftd (men’s jewelry) hit’s £100 million in total revenue in six years
Alpaca apparel brand hits $10+ million in revenue in two years
Ghost, an open source blog and newsletter platform, hits $7 million in ARR