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Starting from Scratch with Bailey Kramer
Bailey Kramer, a 21-year-old entrepreneur, shares how he got started in real estate with short-term rentals. He talks about his journey from reading Rich Dad Poor Dad to doing fix and flips, long-term rentals, and eventually landing a $779,000 property that pushed him toward short-term rentals as a more viable option. He explains how he took inspiration from a neighboring Airbnb property to make the decision and his approach to risk and learning in real estate.
Avery: Hey y’all, welcome back to the Short Term Show! Today we have a really cool guest; his name is Bailey Kramer, and he’s our second 21-year-old guest to have on the show in the past little while. So I find that really exciting that the kids—well, I feel so old saying ‘kids’—are doing such cool things. I’m 33, by the way! I’m not that old, but the kids are doing some great things.
Avery: I’m really excited to interview you, Bailey. How’s it going?
Bailey: Yeah, thanks, Avery. Really appreciate you having me on.
Avery: Yeah, no problem! Thanks so much. So tell us a little bit about yourself, who you are, where you come from, and how you got into real estate.
Bailey: Sure! Like you said, my name is Bailey Kramer. Right now, I live in Orlando, Florida, but I grew up in Milwaukee, Wisconsin. I got into short-term rentals as my first foray into real estate. I always knew I wanted to be an entrepreneur. My whole goal was to go to college and build a business. By the time I was ready for graduation, I wanted the business to support me so I wouldn’t have to get a W-2 job. That was the root of it all.
Bailey: When I was 19, a sophomore in college, I read the book Rich Dad Poor Dad, and it totally shifted my mindset. I learned about the concept of real estate investing, and I realized that was the path I wanted to take. My goal became to reach financial independence by the time I graduated, so I got into fix and flips. And when I say I fast-forwarded, it took a year of networking, learning, and meeting the right people.
Bailey: I finally did my first fix and flip, and then did a couple of long-term rentals and another fix and flip. Eventually, I found another property for sale, which we did direct-to-seller marketing for. The owner was really motivated to sell. It was a larger house, but it had health issues and was in rough shape.
Bailey: The houses I’d bought before were between $68,000 and $200,000, but this house in Illinois cost $779,000. That’s a lot of money, especially for one of my first couple of projects. We were initially thinking of doing another long-term rental, but the numbers just weren’t going to work out. We were too afraid to fix and flip it because it felt like a huge gamble. Rehab costs weren’t going to make sense either.
Avery: Yeah, I can see how a $779,000 house would feel like a big leap!
Bailey: Exactly! So we thought, “What else can we do?” We looked up Airbnb to see if short-term rental would be a good option. We knew it was happening in the area because our next-door neighbor had his house listed on Airbnb. Our house was bigger, with a better location and view, and it could accommodate more people. We thought, if our neighbor is making money from his, we could do even better.
Bailey: We ran the numbers, and if we could get $1,000 a night, it would be a solid deal. So that’s how we decided to go the short-term rental route with that property.