Latest / Outdoor Hospitality Podcast: Glamping, STR, Resorts, Unique Stays, RV Parks, RV Resorts & Campgrounds / Selecting Your Unit & Unit Financing Options Pt. 2 with SandBox - Glamping, STR, Unique Stay, Outdoor Hospitality Unit Selection

Transcript

Selecting Your Unit & Unit Financing Options Pt. 2 with SandBox - Glamping, STR, Unique Stay, Outdoor Hospitality Unit Selection · Outdoor Hospitality Podcast: Glamping, STR, Resorts, Unique Stays, RV Parks, RV Resorts & Campgrounds

• 0:06
  Connor Schwab: Welcome back to another episode of the Outdoor Hospitality Podcast.
• 0:10
  Connor Schwab: I'm your host, Connor Schwab, joined today by my friend Evan Purcell.
• 0:15
  Connor Schwab: Welcome, Evan.
• 0:15
  SPEAKER_01: Hey, glad to be back, Connor.
• 0:17
  Connor Schwab: Yes.
• 0:18
  Connor Schwab: We had Evan on about six weeks ago to talk about Sandbox, his custom glamping unit, tiny home cabin company.
• 0:27
  Connor Schwab: And then in between those recordings, we actually got to go to the glamping show.
• 0:31
  Connor Schwab: I think, I think, Evan, I think it was your first glamping show.
• 0:34
  Connor Schwab: What'd you think?
• 0:35
  Connor Schwab: What'd you think?
• 0:35
  SPEAKER_01: First one.
• 0:36
  SPEAKER_01: It was an awesome experience.
• 0:37
  SPEAKER_01: It's definitely good learning as far as the just the people that we met out there.
• 0:41
  SPEAKER_01: I've been to a lot of trade shows.
• 0:43
  SPEAKER_01: This one was definitely smaller than I feel like most I attend, but the people that were there were the right people to be talking to.
• 0:49
  SPEAKER_01: It's all all the movers and shakers and people that are doing things in the industry.
• 0:52
  SPEAKER_01: So it was fantastic, and I'll be back next year.
• 0:55
  Connor Schwab: Nice.
• 0:56
  Connor Schwab: I love it.
• 0:56
  Connor Schwab: I love it.
• 0:57
  Connor Schwab: Well, in our last episode, you know, the goal of this podcast, because, and I guess to catch the listeners up, Evan and Sandbox helped us design six custom A-frame cabins for our project, Ponderosa Pines Resort and Flagstaff.
• 1:10
  Connor Schwab: And then also he helped us design our Desert Reef Hot Springs signature units, which are now on the way to the property.
• 1:17
  Connor Schwab: And so there were so many lessons and learnings that we've come through in both the design through engineering, through production, through QC, through shipping, through install, through all the different steps of this process.
• 1:31
  Connor Schwab: I just thought it was a really rich opportunity to share with the listeners kind of just to dive into all the things that came up and that we kind of worked through and distill that down to some different hints.
• 1:41
  Connor Schwab: So there is a part one of this episode.
• 1:43
  Connor Schwab: It's about three or four episodes before this.
• 1:45
  Connor Schwab: So go back and listen to that if you'd like, or you can just jump right in here in the middle.
• 1:50
  Connor Schwab: I know one of the things we wanted to talk a lot about is when you're choosing your unit, you have to start with the constraints.
• 1:56
  Connor Schwab: You know, what's your budget?
• 1:57
  Connor Schwab: What's allowed at the property?
• 1:59
  Connor Schwab: Do your units need to be on wheels and RVA certified or not?
• 2:03
  Connor Schwab: Do they need to be affixed on foundations?
• 2:06
  Connor Schwab: And of those are some of the biggest things to work with.
• 2:09
  Connor Schwab: And within that, one of your biggest constraints when you're doing your site design is going to be utilities.
• 2:14
  Connor Schwab: So what is the availability of your utilities?
• 2:18
  Connor Schwab: And you know, the biggest one is going to be are you on municipal power, water, and sewer?
• 2:23
  Connor Schwab: Or are you on a well?
• 2:25
  Connor Schwab: Are you on a septic system?
• 2:27
  Connor Schwab: Are you on solar?
• 2:28
  Connor Schwab: And those are going to affect things greatly.
• 2:30
  Connor Schwab: Like, for example, when we were designing our A-frames for Ponderosa, we had a very low power load capacity at our sites.
• 2:38
  Connor Schwab: We were our our power grid was very old and it was meant for RVs from 60 years ago that you know barely had power systems in them.
• 2:48
  Connor Schwab: So the R system needs to get upgraded, but we didn't have the budget to do that in phase one.
• 2:53
  Connor Schwab: So we designed kind of low, we had to be a lot more, I guess, picky with what we were designing.
• 2:59
  Connor Schwab: But maybe I'll maybe I'll turn it over to you, Evan.
• 3:02
  Connor Schwab: Like when you're when you're thinking about designing a unit, particularly as it pertains to utilities, like how are you thinking about that?
• 3:10
  Connor Schwab: And what are the trade-offs people need to make in terms of upfront costs versus operational costs and how you look at that?
• 3:17
  SPEAKER_01: Yeah.
• 3:17
  SPEAKER_01: So what you're seeing is the standard in the industry is now moving towards 50 ampestas.
• 3:22
  SPEAKER_01: So that's going to be everything modern that's being put in.
• 3:24
  SPEAKER_01: That's what you're going to see.
• 3:25
  SPEAKER_01: Now, what we had in the situation of Fondurosa Pines was where you guys exactly had the old utility grid, you only were able to pull so many amps.
• 3:35
  SPEAKER_01: So what we did is we went ahead and designed a unit that was a 30 amp unit but was 50 amp compatible.
• 3:42
  SPEAKER_01: So if in the future you guys end up making that investment to upgrade the overall utilities on the property, we can then have that unit be uh you know backwards compatible essential and bring that additional power into the unit, which will give us other options for running hot tubs and things like that.
• 3:57
  SPEAKER_01: But it was also a big constraint to make sure that it worked with that.
• 4:01
  SPEAKER_01: So we had to design all of the appliances in the unit to be able to work off of a 30-amp hookup.
• 4:07
  SPEAKER_01: As far as cost on that, it's it's so site dependent on what you're looking at as far as the cost, right?
• 4:12
  SPEAKER_01: Every additional foot that you're running those utilities, the costs go up significantly.
• 4:16
  SPEAKER_01: But I do know in in this particular situation, one of the big considerations that we were going back and forth on was do you do more units with lower power consumption or capacity or fewer units with higher power?
• 4:29
  SPEAKER_01: And that's going to be something that everyone's going to run into, right?
• 4:31
  SPEAKER_01: That's that'll end up being one of your big constraints.
• 4:33
  SPEAKER_01: And so much of it's gonna come down to what you're looking to do and utilize um on the property.
• 4:39
  SPEAKER_01: So with this one, we had to choose to not put hot tubs in with some of these individual units for the time being until that upgrade happens down the road, and then we'll be able to add more amenities.
• 4:51
  Connor Schwab: So let's maybe like go down the list.
• 4:54
  Connor Schwab: If you're thinking about if you have 30 amp power to work with or 30 amp power, let's just say it's 50 amp.
• 5:01
  Connor Schwab: How are you thinking about you know, the biggest items are gonna be your HVAC, which is, you know, most commonly probably gonna be a mini split, and then other big items would be microwave, fridge, oh, a stovetop.
• 5:15
  Connor Schwab: If you're going with an electric or induction stovetop.
• 5:19
  Connor Schwab: I guess how are you how are you thinking about your let's say you're a power, you're a really power-constrained unit.
• 5:28
  Connor Schwab: How are you thinking about it?
• 5:29
  Connor Schwab: And then if you have like all the power in the world, what's your unit gonna look like?
• 5:33
  SPEAKER_01: We'll we'll start out by breaking it down and understanding what really is the difference between 30 amp and 50 amp.
• 5:39
  SPEAKER_01: It's deceiving to think that, you know, all right, your your 50 amp is only you know a little bit more, you know, maybe just under twice as much power.
• 5:46
  SPEAKER_01: But the reality is 50 amp operates at 220 volt while your 30 amp operates at 110 volt.
• 5:53
  SPEAKER_01: So a 50 amp hookup is actually more than 3x the amount of power that you have on a on a 30 amp hookup.
• 6:00
  SPEAKER_01: Um so it's significantly different in terms of what you can operate off of that, but it also requires now making sure you're running different voltage and you got to have the utilities for that.
• 6:10
  SPEAKER_01: So when we go up to 50 amp, in having more than 3x the amount of power on that, I think it's just just under 4x amount, uh, we are able to run a whole lot more.
• 6:19
  SPEAKER_01: So as far as HVAC, I always prefer to intentionally oversize the HVAC a little bit more than what you need for the unit, because better to be able to handle extreme cold, extreme hot in the unit so that your guests are nice and comfortable.
• 6:30
  SPEAKER_01: So we'll end up doing that.
• 6:32
  SPEAKER_01: But if we're constrained on the power to to a 30 amp, then what we're gonna do is we're gonna pair that HVAC to be just what that amount of square footage in that environment is gonna require.
• 6:42
  Connor Schwab: And and so for I know the big things that I'm thinking about when I'm designing a unit like a kitchenette is super important for me.
• 6:50
  Connor Schwab: And so for me, that's mini fridge and stovetop and a microwave microwave, ideally.
• 6:56
  Connor Schwab: But for us on a 30 amp system, that's not really that's not really gonna be realistic, is it?
• 7:02
  Connor Schwab: To have that with a mini split.
• 7:03
  SPEAKER_01: Absolutely.
• 7:04
  SPEAKER_01: What you may run into is where you can't run everything at the same time on the 30 amp, but you absolutely can run all of those.
• 7:11
  SPEAKER_01: So for instance, in the the A-frames we did at Ponderosa, we did it on 30 amps.
• 7:16
  SPEAKER_01: We did a 12k BTU in that unit.
• 7:18
  SPEAKER_01: The interior space on that unit's just about 300 square foot, which is plenty to be able to keep that hot and cold.
• 7:25
  SPEAKER_01: We had a stovetop, induction cooktop in there, and then we have a mini fridge, and your mini mini fridges don't pull much power, so that's not a big constraint.
• 7:33
  SPEAKER_01: Your big ones are gonna be your HVAC, your micro microwave, and then if you do induction cooktops.
• 7:38
  SPEAKER_01: So in that particular unit, you're not gonna be able to run your microwave, your induction cooktop at full power, and your HVAC at the same time.
• 7:47
  SPEAKER_01: Um, and so that's gonna be something that's gonna take a little bit of education to the guests to make sure that they're not tripping breakers, but it's gonna happen.
• 7:54
  SPEAKER_01: Like without a doubt, somebody's gonna have all three of those things going at once, and yeah, all of a sudden your microwave is causing you to trip a breaker.
• 8:02
  SPEAKER_01: Um, it's also why we designed the systems where it's really easy and accessible uh utilities.
• 8:07
  SPEAKER_01: And we put all of ours in the the back of the unit so that if a guest ends up calling, hey, I tripped a breaker, you don't have to have a technician go in there and go into the unit, disturb the guests.
• 8:17
  SPEAKER_01: They can come around to the backside of the unit, flip that breaker, and get you back on off to the races quickly and easily.
• 8:22
  Connor Schwab: Hello, listeners.
• 8:23
  Connor Schwab: I wanted to share a quick story.
• 8:25
  Connor Schwab: I recently started to help a client set up their three properties, two RV resorts and one glamping resort.
• 8:31
  Connor Schwab: And they wanted me to help roll out their new tech stack.
• 8:35
  Connor Schwab: And at the center of that is the PMS or the property management software.
• 8:39
  Connor Schwab: These clients decided to go with storable new book, and thank goodness they did because the property management software is the nucleus of everything that you'll set up your website, your social media, your bookings, your cleanings, everything.
• 8:52
  Connor Schwab: And it really handles the entire process from both the front customer-facing side as well as the back end and coordinating cleaners and things like that.
• 8:59
  Connor Schwab: So it's, you know, setting up your photos and your pricing and your dynamic pricing and revenue management and your unit information and ensuring a smooth and customizable shopping cart experience to ensure high conversion rate with your customers.
• 9:15
  Connor Schwab: And then they have all these great automations.
• 9:17
  Connor Schwab: It can send texts and emails to your guests before they arrive on the day they arrived or after to get feedback and reviews, and you can track all your financial performance.
• 9:26
  Connor Schwab: And then it also helps with the back end and analyzing your data.
• 9:30
  Connor Schwab: I honestly couldn't be happier with the experience.
• 9:32
  Connor Schwab: If I called the new book helpline, I get an answer right away with someone who can help me with like three or four standing meetings each week with different members of their teams to set up the different capabilities and softwares.
• 9:43
  Connor Schwab: We're even using them to set up these property websites, we're using them for digital marketing services and SEO.
• 9:49
  Connor Schwab: And honestly, it has been excellent.
• 9:52
  Connor Schwab: I so I chased down Storable New Book to ask them if they would be sponsors of the podcast because I really believed in their product.
• 9:59
  Connor Schwab: Fortunately, they were willing.
• 10:00
  Connor Schwab: So they are today's sponsors.
• 10:02
  Connor Schwab: So if you're unhappy with your PMS or you're launching a product and shopping, definitely give them a call.
• 10:08
  Connor Schwab: They'll give you a free software demonstration.
• 10:10
  Connor Schwab: And if you let them know that you came from the Outdoor Hospitality Podcast, they'll give you 15% off your new book signature subscriptions.
• 10:18
  Connor Schwab: Can't recommend storable new book highly enough.
• 10:21
  Connor Schwab: Go check them out.
• 10:22
  Connor Schwab: Thanks.
• 10:23
  Connor Schwab: And what about if, you know, I know we kind of talked about this a little bit, but using propane or natural gas, like there's certain elements.
• 10:31
  Connor Schwab: If you are highly power constrained, maybe you have a unit that's running off solar or battery or something, or like you're off-grid.
• 10:39
  Connor Schwab: A couple things you could do is you could run a propane stovetop.
• 10:43
  Connor Schwab: And you could also, there is propane.
• 10:46
  Connor Schwab: I mean, there's definitely propane heaters, but and is there propane AC as well?
• 10:51
  SPEAKER_01: You can do your AC won't be propane, but you can do just about everything else, right?
• 10:55
  SPEAKER_01: You can run your heater, your hot water, cook top, your cooktops, your refrigerators, you can get propane refrigerators.
• 11:01
  SPEAKER_01: So there's a lot of ways to put that on propane if you have access to that.
• 11:05
  SPEAKER_01: It'll add a little bit of potential complex it, complexity, because now there's another utility that you have to run to it.
• 11:11
  SPEAKER_01: But I love propane.
• 11:12
  SPEAKER_01: So if that is something that you've got accessibility to, uh typically what we're gonna see on a property if you're running propane is you're gonna have the really large um propane tanks, and then you're gonna have to have a truck coming out and fill that for you.
• 11:24
  SPEAKER_01: Um, so just recognizing that you know, additional costs and additional things to make sure that you're on top of for maintenance.
• 11:31
  Connor Schwab: Yeah, and that is that's kind of an example of, you know, obviously it if you can run everything off electrical, that's pretty much always gonna be best.
• 11:38
  SPEAKER_01: It simplifies things, yeah.
• 11:40
  Connor Schwab: Yeah.
• 11:40
  Connor Schwab: But like, and then but if you had to run something off propane, that would take a, you know, it would be a longer operational expense.
• 11:47
  Connor Schwab: And you'd have to be replacing that and having having it be serviced more often and things like that.
• 11:52
  Connor Schwab: So it's kind of a trade-off.
• 11:53
  SPEAKER_01: And that's stuff that we can help out with too is you know, when we design a unit, we're gonna go through and we're gonna do all of the energy calculations uh and the needs for that particular unit.
• 12:02
  SPEAKER_01: And then we can break down and show you in your area, you know, here's what you're paying per kilowatt hour for electricity.
• 12:07
  SPEAKER_01: Here's our estimate of what we're gonna be using and operating, and then here's the cost.
• 12:11
  SPEAKER_01: So we can we can help with all of that and doing the math and figure out what makes the most sense.
• 12:16
  SPEAKER_01: And every place is different.
• 12:17
  SPEAKER_01: Again, it's like it's you're gonna hear this answer time and time again.
• 12:20
  SPEAKER_01: No two sites are gonna be the same.
• 12:22
  Connor Schwab: Mm-hmm.
• 12:23
  Connor Schwab: Yeah, definitely true.
• 12:25
  SPEAKER_01: Is there anything else in in terms of utilities we might have forgotten?
• 12:28
  SPEAKER_01: I think a big one is gonna be understanding septic.
• 12:30
  SPEAKER_01: So understanding what your septic requirements are gonna be.
• 12:34
  SPEAKER_01: Do you have to have a leech field?
• 12:35
  SPEAKER_01: What's the sizing of that per unit?
• 12:37
  SPEAKER_01: So there's a lot that's gonna go into that, and that is gonna be working directly with your city to understand what their expectations and requirements are for it.
• 12:45
  SPEAKER_01: But it's easy to look at a site and be, all right, we have this much acreage, we can put this much many units on it, and then not think about what dedicated space you're gonna have to have for a leech field for that.
• 12:55
  SPEAKER_01: Another thing that we've explored for special events, easy one you can do is, and that's when we were experiencing ponderosa, another one we were talking about doing weddings out there, and that all of a sudden increases the amount of septic needs that you would have.
• 13:09
  SPEAKER_01: So the county wasn't okay necessarily with us coming in and doing large events on the additional septic system.
• 13:16
  SPEAKER_01: So that we were able to work with them to figure out, hey, for these events, we're gonna bring in trailers with bathrooms, and then that can get shipped out.
• 13:22
  SPEAKER_01: So there's different different things you can do based on what your your use case and needs are.
• 13:27
  SPEAKER_01: But that's a big consideration on definitely thinking about the septic and these fields.
• 13:31
  Connor Schwab: Yeah, definitely.
• 13:32
  Connor Schwab: Septic is probably the thing that is most common to the the most commonly like the complex things that comes up in in projects that that slows things down.
• 13:43
  Connor Schwab: So make sure you have a good consultant or expert in that department because it it's it's always a big consideration.
• 13:51
  Connor Schwab: And I know for Ponderosa, because our units were technically RVs and we had you know sewer line runs that were going out, you know, it was important for us that we had to get heated lines and things like that that would run in the winter during freezing temperatures was like a big important thing.
• 14:11
  Connor Schwab: So thinking about how these different utilities are gonna work at all different stages of the year, or making sure your pipes aren't exposed and those aren't gonna freeze and things of that nature.
• 14:20
  SPEAKER_01: And that's actually an interesting one too.
• 14:22
  SPEAKER_01: So for that project, because it's classified as an RV, it had to be temporary hookups.
• 14:27
  SPEAKER_01: So we weren't able to hard plumb into the septic system.
• 14:30
  SPEAKER_01: That was one of the requirements that the municipality and city had for us on that.
• 14:34
  SPEAKER_01: So that's why you're talking we had to have those heated lines.
• 14:37
  SPEAKER_01: So this is going to be running all through the year, and it had to be a temporary, easy to remove if you know we needed to move the units.
• 14:43
  SPEAKER_01: So again, kind of understanding what the city's expecting to see.
• 14:48
  SPEAKER_01: Yeah.
• 14:48
  SPEAKER_01: All right, I'm trying to think.
• 14:49
  SPEAKER_01: Is there anything else on the utility side?
• 14:51
  SPEAKER_01: There's there's so much more, but I think we can jump on to the next.
• 14:55
  SPEAKER_01: If anybody has utility questions about your site, honestly, it's a great opportunity.
• 15:00
  SPEAKER_01: Just reach out to us over at Sandbox and we can jump on and help work through that process with you.
• 15:04
  SPEAKER_01: But it really, like we said, it's going to be site defendant.
• 15:07
  SPEAKER_01: So just jump on a call and we'll we'll help share knowledge where we have it.
• 15:10
  Connor Schwab: Yeah, definitely.
• 15:11
  Connor Schwab: I think doing those load calcs and and doing going through all those different pieces are super important.
• 15:16
  Connor Schwab: Let's talk a little bit about financing.
• 15:18
  Connor Schwab: I know financing is massive for, you know.
• 15:22
  Connor Schwab: Talking my favorite part of this.
• 15:24
  Connor Schwab: Yeah.
• 15:24
  Connor Schwab: Maybe you could start by telling us what what you guys use, what you offer at Sandbox.
• 15:28
  Connor Schwab: I know you guys have some of the some of the best solutions available.
• 15:32
  Connor Schwab: And then we could talk about kind of more broadly what any other options might be as well.
• 15:36
  SPEAKER_01: So, what I get really excited about is creative financing options.
• 15:40
  SPEAKER_01: You know, with these units, a lot of times when people are coming in, you're putting a lot of investment dollars into getting the property.
• 15:46
  SPEAKER_01: And then all of a sudden we got to get these units out there.
• 15:48
  SPEAKER_01: And we've either gone and we've taken that SBA loan or we've already exhausted other financing options.
• 15:53
  SPEAKER_01: Um, so that's why Sandbox wanted to come up with some creative, different ways that may not have to take on additional debt.
• 16:00
  SPEAKER_01: And so one of the ways that we do that is through a lease structure.
• 16:04
  SPEAKER_01: So you can come in, you can lease the unit.
• 16:07
  SPEAKER_01: We still own the asset, but you're able to lease that.
• 16:10
  SPEAKER_01: Uh, and we're able to do that with minimal money down.
• 16:13
  SPEAKER_01: It gives a lot more flexibility.
• 16:15
  SPEAKER_01: And then the way that that's structured is that actually becomes an expense against the business.
• 16:19
  SPEAKER_01: So instead of if you take a loan out and finance traditional financing on a unit, you can take your bonus depreciation on it.
• 16:26
  SPEAKER_01: If it's a Park model RV and it's equipment, so you're able to take that depreciation.
• 16:32
  SPEAKER_01: But a lot of a lot of these properties, when you're starting out, you already have so many expenses, it's not as advantageous to take that depreciation.
• 16:40
  SPEAKER_01: So when you structure it as a lease, now that becomes an expense against the business, which you're able to have for the the entirety of the lease structure.
• 16:48
  SPEAKER_01: Um, and there's a lot of different ways that we can structure that.
• 16:51
  SPEAKER_01: Uh, but I think it gives the most flexibility and you don't have to take that asset on your books.
• 16:57
  SPEAKER_01: So you don't have to have any additional debt on that, which is nice.
• 17:01
  SPEAKER_01: Yeah, still a liability that you have, but it definitely, if you're trying to take loans out or you leverage loans for other parts of the property, it just frees that up a little bit.
• 17:09
  Connor Schwab: Yeah, and not having to come up with the capital for the upfront cost of your units, you know.
• 17:14
  Connor Schwab: Oftentimes the units will be half or over half the total construction cost.
• 17:18
  Connor Schwab: So if you can reduce your capital need by 50%.
• 17:21
  Connor Schwab: And a lot of times, you know, that's just the only choice people are gonna have is to go to go that route.
• 17:26
  Connor Schwab: So, and yeah, that's definitely a good way.
• 17:28
  SPEAKER_01: We do that as well.
• 17:29
  SPEAKER_01: So, what what we'll do is we'll sit down with a customer and we'll we'll walk through and try to understand from a holistic view what their situation is, and then come up with the best financing path for you.
• 17:40
  SPEAKER_01: And so what while I love the leasing option, it's not always the best structure to use.
• 17:45
  SPEAKER_01: Um, sometimes it may make more sense to do traditional financing, but we're gonna end up looking that at that from a, okay, what are your other liabilities that you have?
• 17:56
  SPEAKER_01: Where are you getting the cash from?
• 17:57
  SPEAKER_01: How can we best structure this to be tax advantaged?
• 18:00
  SPEAKER_01: Uh, just to make sure that we're we're pulling the levers that best help you for your situation.
• 18:04
  Connor Schwab: Yeah, and it is really, I think most, I mean, most unit suppliers aren't offering leases and offering that option.
• 18:11
  Connor Schwab: So it is a pretty, pretty cool thing that you guys do.
• 18:14
  Connor Schwab: And that I know you have a ton of experience with from Sandy Vans.
• 18:17
  Connor Schwab: I mean, you guys have been doing that at Sandy Vans since the very beginning, so it's kind of a good hack.
• 18:21
  SPEAKER_01: Yeah, and I think that's kind of what with why we wanted to bring that into uh you know into the clamping space, is it's a structure that has been really, really effective for us through Sandy Vans.
• 18:32
  SPEAKER_01: Uh, I would say probably 60% of the vehicles that we sell are utilizing that structure.
• 18:36
  SPEAKER_01: There's some even some other advantages that come with it when you're doing it on a on a vehicle as opposed to a unit.
• 18:42
  SPEAKER_01: Um, it is gonna depend a lot too, as far as how we classify these things.
• 18:46
  SPEAKER_01: So we did talk a little bit on the the first podcast we did about understanding whether we're doing park model RVs or if we're doing modular construction.
• 18:52
  SPEAKER_01: So depending on what path and permitting route you're going, it's going to change the options that are available within the financing.
• 18:59
  SPEAKER_01: So, what we're talking about right now is primarily gonna be what you'll see for park model RVs.
• 19:04
  SPEAKER_01: One of the reasons we love that so much is because it's typically gonna be the easiest to get permitted and it has the most creative financing solutions out there that we can utilize and some really great tax advantages.
• 19:15
  Connor Schwab: What are any other big financing options or routes?
• 19:18
  SPEAKER_01: There are some other things in the world that you again, if you you jump in and talk to us, we are looking at doing where there'd be some opportunities for Sandbox to come in as a partner with the business.
• 19:30
  SPEAKER_01: And so we could provide the unit and do what's called an a light kind exchange.
• 19:34
  SPEAKER_01: So we'd have a value for those units.
• 19:36
  SPEAKER_01: Um, we could provide those units or a portion of those units and then do that in a light-kind exchange for equity.
• 19:42
  SPEAKER_01: But this is definitely a case-by-case basis and is something that we're doing with only a very select number of properties.
• 19:48
  SPEAKER_01: Um, so it's not something that we're really advertising, but it is something that uh if you're interested in doing, that's a way that we're looking to come on uh as a bit more of a strategic partner with the right the right properties.
• 19:59
  Shari Heilala (Sponsor): Hello, listeners.
• 20:00
  Shari Heilala (Sponsor): This is Sherry Halala, founder of Sage Outdoor Advisory.
• 20:03
  Shari Heilala (Sponsor): If you're launching an outdoor hospitality project like Clamping, we can help.
• 20:07
  Shari Heilala (Sponsor): We offer feasibility studies and appraisals.
• 20:09
  Shari Heilala (Sponsor): What that means is we look at your specific market and proposed business offering and complete an in-depth analysis to make sure that your planned business will be profitable.
• 20:17
  Shari Heilala (Sponsor): Getting a second opinion on your proposal and forecasted financials is critical to understand before you spend years of your time and hundreds of thousands of dollars.
• 20:25
  Shari Heilala (Sponsor): This is particularly important if you are looking to raise money for your project from a bank or private investors.
• 20:30
  Shari Heilala (Sponsor): They are going to want to see this type of deep dive analysis from an independent third-party specialist in the industry.
• 20:36
  Shari Heilala (Sponsor): We at Sage have completed well over 250 feasibility studies and appraisals in outdoor hospitality in North America in the last four years.
• 20:45
  Shari Heilala (Sponsor): So we understand what it takes to bring a project from concept to reality.
• 20:48
  Shari Heilala (Sponsor): If this sounds like it could be helpful to you, you can go to our website, SageOutdoorAdvisory.com, and schedule a call with our team.
• 20:55
  Shari Heilala (Sponsor): While you're there, check out our proprietary glamping database map too.
• 20:59
  Shari Heilala (Sponsor): Thanks.
• 20:59
  Shari Heilala (Sponsor): Now back to the show.
• 21:00
  Connor Schwab: Yeah, and then there's potentially there's some routes as far as having the units be like a revenue share and like the revenue share model, and I'm trying to think.
• 21:14
  Connor Schwab: And then there's traditional financing, right?
• 21:15
  Connor Schwab: So there is equipment financing where you might have a lender come in specialize in equipment financing.
• 21:22
  Connor Schwab: Those are usually only five years, like five to ten years at that.
• 21:26
  Connor Schwab: And then and it's a much shorter amortization schedule.
• 21:30
  Connor Schwab: And then there is if you can get your units.
• 21:34
  Connor Schwab: One of the things I forget if we talked about on the original call, but it's probably worth diving into again is if you're going the route of your units being considered real property, that is a part of the of the land essentially, or part of the property value.
• 21:48
  Connor Schwab: They're affixed.
• 21:50
  Connor Schwab: They're they have real estate taxes associated with them, you know, that would be considered uh real property.
• 21:56
  Connor Schwab: The other route is kind of how it was for us at Ponderosa where our Units were park model cabins, park model RV cabins that have VIN numbers.
• 22:04
  Connor Schwab: And they're very those two paths have very distinct advantages and disadvantages.
• 22:09
  Connor Schwab: And it really is just going to come down to the specific property.
• 22:13
  Connor Schwab: So for Ponderosa, we had no issues getting financing on that property with the units being the park model RVs.
• 22:22
  Connor Schwab: But for the other property that we're working on, actually the lender, a different lender for that property wouldn't want to consider park model RVs part of the lending package.
• 22:31
  Connor Schwab: So for example, if it's a$9 million project,$4 million of that is the units, and the lender saying, hey, we're not going to finance your units over the 25 years as RVs, you know, that's a massive consideration for your financing.
• 22:48
  Connor Schwab: You know, if so what we actually did in that route was we did have the zoning flexibility to go a hotel route.
• 22:56
  Connor Schwab: So it's much more likely that they're going to be well, affixed to a foundation.
• 23:00
  Connor Schwab: So they might still they might actually still ship as R VIA certified.
• 23:05
  SPEAKER_01: No, it actually won't be.
• 23:07
  SPEAKER_01: So with that, what that's going to be is called uh factory built modular construction.
• 23:12
  SPEAKER_01: And so for that, what we're gonna do is we actually get the building plans.
• 23:16
  SPEAKER_01: Just like if you built traditional construction and you built on site, we're gonna take those building plans.
• 23:22
  SPEAKER_01: We're gonna have a licensed engineer, a structural engineer in that particular state.
• 23:26
  SPEAKER_01: Uh so in this one, we're doing a project in Arizona.
• 23:28
  SPEAKER_01: So we're working with an engineer there.
• 23:30
  SPEAKER_01: They're going to review those plans.
• 23:32
  SPEAKER_01: We're gonna get that reviewed by the municipality that's going in.
• 23:35
  SPEAKER_01: We're gonna get an engineering stamp on that.
• 23:37
  SPEAKER_01: And then just like if we built on site and we had an inspector come out for the state of California, which is where I'm at right now, there's seven inspections that are done on traditional construction.
• 23:49
  SPEAKER_01: We would have those same inspections done, but it's a third-party inspection agency that's licensed by the particular state to then come out and do all of those exact inspections.
• 23:59
  SPEAKER_01: So it's it's going to be far more similar to traditional on-site construction.
• 24:04
  SPEAKER_01: We're just doing it in a factory because we can take advantages of factory built and systems and having all of our machines right here.
• 24:10
  SPEAKER_01: And so we just pick up those efficiencies.
• 24:13
  SPEAKER_01: So that's what we're going to end up doing for that particular project.
• 24:16
  Connor Schwab: So kind of zooming out and and resummarizing that, if you're going to the park model cabin, R VIA certified, RV via Vin number route, there's big advantages of big advantages of that in terms of speed, affordability, factory built, ease of being able to move things around, taxes tend to be a lot lower versus going them, having them be permanently affixed and having them be a part of the property value and the real property where they will you'll get property taxes associated with those values.
• 24:51
  Connor Schwab: But depending on how you're structuring your financing, one might make more sense than the other.
• 24:57
  SPEAKER_01: Absolutely right.
• 24:58
  SPEAKER_01: So so much of that, the banks look at them completely differently, right?
• 25:02
  SPEAKER_01: What you're talking about for fixed, that you can get a traditional construction loan for, and then that's what you're you're able to put into that, and it's treated just like real estate versus the equipment route.
• 25:10
  SPEAKER_01: So we're going the park model RV, it's a structure, it has a VIN number, it has a title.
• 25:15
  SPEAKER_01: That what is you're doing equipment financing or what it's called is actually a shadow loan.
• 25:21
  SPEAKER_01: Um, yeah, all the way back from you're taking loans on cattle and things.
• 25:24
  SPEAKER_01: Don't ask me how we got to shadow from cattle, but um where you'll run into problems with that is it's easy for them to finance per unit, but when you're trying to group multiple together, so we're gonna talk about doing a large property here, um, where we're gonna do 10 plus units.
• 25:43
  SPEAKER_01: They can't do just a one big shadow loan for 10 units, it would have to be a loan for every single individual unit.
• 25:50
  SPEAKER_01: So it gets far more complex to do the equipment financing when you're doing a lot of them.
• 25:54
  SPEAKER_01: Um, we are starting to work with some of these financing companies that are figuring out how to how to batch all that together in single ones.
• 26:02
  SPEAKER_01: And that's a big reason why we brought this lease program together to keep it to where it's just one structured lease, it's on all the units and keep things really, really simple rather than having to do multiple different loans for these.
• 26:13
  SPEAKER_01: Um so that's gonna be where you'll find the bigger the property, the bank is typically gonna want to see that to start to be into a single construction loan or more traditional real estate loan.
• 26:26
  SPEAKER_01: But again, these are there's all the fun financing levers that we can start pulling.
• 26:30
  Connor Schwab: Yeah, yeah.
• 26:31
  Connor Schwab: So, and if if you're if you're kind of saying, like, wow, there's a lot to this, the all the more reason to, you know, give Evan a callant sandbox and and and start to go through it and have someone who can help guide you through it because there is a lot.
• 26:44
  Connor Schwab: You know, I've been in this for seven, eight years now, and I'm still learning new things and understanding the nuanced differences between all of them, and there's a lot of gray areas.
• 26:53
  Connor Schwab: Let's see, anything else on financing?
• 26:55
  SPEAKER_01: Once again, there's a lot, but really it's gonna be best to just have the conversation.
• 27:00
  SPEAKER_01: I think financing are probably the conversations I love having the most.
• 27:04
  SPEAKER_01: You know, I'm not not a tax strategist by any means, but I love trying to be efficient with dollars.
• 27:10
  SPEAKER_01: Um, and so that's what we want to kind of help help you do is figure out how can we be efficient, how can we be efficient on taxes with that, um, and best deploy the dollars we have to get the most out of it.
• 27:20
  Connor Schwab: Tell me a little bit more about maybe you could just tell us about a little bit more about Sandbox as a company, what you guys offer, what your strengths are, and you know, if there's anything else you're offering besides, you know, A-frame cabins and these really sick custom cabin units.
• 27:35
  SPEAKER_01: Well, custom cabin units is is really the name of the game for us.
• 27:39
  SPEAKER_01: We do have some pre-engineered offerings, but what we're trying to do at Sandbox is partner with resorts that have an overall experience, right?
• 27:49
  SPEAKER_01: We're just all experiential hospitality.
• 27:52
  SPEAKER_01: We want to make sure that that experience of the property is carried through into the units.
• 27:56
  SPEAKER_01: Uh, and so with that, what we want to be doing is building units that are specific to the property.
• 28:01
  SPEAKER_01: So we want to work with you to come up with the unique and custom design.
• 28:05
  SPEAKER_01: What I feel like I've seen so much in the industry is where you know there's a few key unit providers out there and they're selling to everybody.
• 28:13
  SPEAKER_01: And then you have two properties next to each other that have the same unit that people are staying in.
• 28:17
  SPEAKER_01: And even if the property experience is very different, when a customer is looking at that and coming in, they see it as a very similar, oh, I've already stayed in this type of unit, I've had that experience, even if the property is completely different.
• 28:30
  SPEAKER_01: So we want to make sure that we're maintaining the essence of that property and bringing that through the unit.
• 28:36
  SPEAKER_01: So our vision is doing custom.
• 28:39
  SPEAKER_01: Um now to do that, we got to make sure that we're doing it scale.
• 28:41
  SPEAKER_01: So that's why we're working with properties that are doing typically five or more units.
• 28:46
  SPEAKER_01: If you are looking to do, you know, maybe for a personal property or things like that, and you're looking to add one or two units there, that's where we have our pre-engineered designs.
• 28:53
  SPEAKER_01: And so we have something that you can come in, you can customize, you can pick your cabinetry color and your flooring color and and you know, wall panels, and have something that feels unique uh coming out of that, but it's going to be pre-engineered, it's the same structure.
• 29:06
  SPEAKER_01: So we do have both offerings, but really what Standbox is is looking to do and what we're focused on is building high-end custom luxury units for properties.
• 29:16
  Connor Schwab: Yeah.
• 29:17
  Connor Schwab: And I can't attest that they're awesome.
• 29:20
  Connor Schwab: At least the ones, the ones that we've gotten to design and build together are awesome.
• 29:24
  Connor Schwab: And and they're actually, even though they were custom, actually, they were some of the most affordable from a value perspective, cost per square foot.
• 29:34
  Connor Schwab: Just because they're custom, they definitely didn't break the bank for us.
• 29:38
  Connor Schwab: Actually, sandbox was some of our most affordable options.
• 29:41
  Connor Schwab: So we didn't necessarily have to pay the premium prices for the for the premium product in this case.
• 29:47
  Connor Schwab: So it's awesome for us.
• 29:48
  SPEAKER_01: That's where we want to, yeah.
• 29:50
  SPEAKER_01: We also want to make sure we're trying to be.
• 29:52
  SPEAKER_01: We we look at everything.
• 29:53
  SPEAKER_01: These are cash-flowing assets that we're building, and so we want to try to build the unit that's going to maximize how much your revenue you're able to get.
• 30:01
  SPEAKER_01: So we're trying to build it at the best, the best price point, but get you the highest you know, NOI on the property.
• 30:07
  Connor Schwab: Is there anything else that you guys are offering?
• 30:09
  Connor Schwab: Like saunas, hot tubs, any other add-ons, anything like that?
• 30:13
  SPEAKER_01: You you teed me up for that because Connor Connor just asked when we were at the glamping show, they're like, Hey, we need a couple saunas.
• 30:19
  SPEAKER_01: I was like, hold on, let me let me see what I can do.
• 30:21
  SPEAKER_01: And so, yeah, we put the engineering team on designing out of sauna, and I am so excited for it.
• 30:27
  SPEAKER_01: Connor and I both big fans of Contrast Therapies, a little sauna cold plunge.
• 30:31
  SPEAKER_01: So we built a really cool unit that is yeah, that's it's like this arch roof kind of dome, almost cave feeling when you get into it, all micro cement interior.
• 30:40
  SPEAKER_01: But you have right in the entryway where the cold plunge is, you've got this circular skylight, just a small area of beam and light down, and then back into that you step into uh into the the sauna with similar kind of having those porthole style windows.
• 30:54
  SPEAKER_01: Um so that's one that I'm really, really excited about, and we're we're pumped to get that into production here in a little bit.
• 31:00
  Connor Schwab: Heck yeah.
• 31:01
  Connor Schwab: Heck yeah.
• 31:02
  Connor Schwab: And then I know one of the things that you did with us was you helped us actually with all of our linens and our bedding and pillows and stuff.
• 31:11
  Connor Schwab: Is that something you're offering to the public, or do you just offer that us that because we're homies?
• 31:15
  SPEAKER_01: Yeah, we did that for you guys, but so yeah, here at Sandy Vans, we not only do we do the van builds, but we have the full rental fleet.
• 31:23
  SPEAKER_01: And so with that, we've we've done quite a bit in terms of what's needed for right turnover of hospitality, so buy-in, cheats, lens, things like that.
• 31:30
  SPEAKER_01: And and we've we've found some really good good partners for that.
• 31:32
  SPEAKER_01: So we've extended that out to you guys and happy to do that for anyone.
• 31:36
  SPEAKER_01: So again, working with with us, we want to understand what your needs are and where we can jump in and help you.
• 31:41
  SPEAKER_01: You know, our goal and focus is doing that on on units.
• 31:45
  SPEAKER_01: But tell us what your other needs are and and we'll see if we can can help out in that area.
• 31:49
  SPEAKER_01: And we'll do what we can.
• 31:51
  SPEAKER_01: And some areas we might be, you know, be able to help out and be the right price, and other areas we we won't, but we'll do our best.
• 31:57
  Connor Schwab: I love it.
• 31:58
  Connor Schwab: I know it was massive for us.
• 31:59
  Connor Schwab: I got to wear one of our custom embroidered robes a couple weeks ago, and it was pretty, pretty bougie.
• 32:05
  SPEAKER_01: I've still only seen the photos of them.
• 32:07
  SPEAKER_01: I'm hoping you send me one of something.
• 32:09
  SPEAKER_01: Oh man, shit.
• 32:10
  SPEAKER_01: No, I saw them when we were out there doing the deployment.
• 32:13
  SPEAKER_01: They it was all in these massive bags.
• 32:15
  SPEAKER_01: Uh, and so I just saw the bags and we were so busy doing so many things.
• 32:18
  SPEAKER_01: I was like, God, I want to see what all the robes and towels and and how that came out.
• 32:22
  SPEAKER_01: Um, but I I've only seen the photos.
• 32:24
  SPEAKER_01: I never actually looked at them.
• 32:26
  Connor Schwab: The last time over your driving through, I was driving through with Eric, and then we we kept going and we were like pulling up to San Diego, and I went to the back in his camper, and I opened a drawer and just found like 10 of the towels and robes and stuff.
• 32:39
  Connor Schwab: And he's like, dude, they're so nice.
• 32:41
  Connor Schwab: I was like, Oh, you just stole them, and he's like, Yeah, dude, I still they're so nice.
• 32:45
  SPEAKER_01: So yeah, he just swiped a bunch.
• 32:47
  SPEAKER_01: That that was when I was happy.
• 32:49
  SPEAKER_01: So, you know, Elijah, who's who's managing that property now, doing doing the operations, he is incredible.
• 32:56
  SPEAKER_01: Just having the the the eye for detail and refinement and and understanding the customer experience and making sure that everything from you know the fit, feel, finish, touch, the way things open, you know, the the drawers, the utensils, everything.
• 33:11
  SPEAKER_01: And and he was fired up on all the linen.
• 33:13
  SPEAKER_01: So that I was I was happy, uh, happy to hear that past Elijah's uh test and we're we're doing good.
• 33:18
  SPEAKER_02: Anything else that maybe I haven't touched on that would be worth diving into?
• 33:25
  SPEAKER_01: I mean, there's there's a lot to it, but I think I think it's been really incredible for me is is working with with you, who's such a knowledgeable person in this space.
• 33:34
  SPEAKER_01: And so I think no matter what somebody is is looking to do, you know, I you are over there willing to help share and lend a guiding hand.
• 33:43
  SPEAKER_01: And that's also what we're looking to do here at Sandbox.
• 33:46
  SPEAKER_01: So whether there's opportunity to work together or we can just you know hang out and and have a good conversation and try to share some some knowledge.
• 33:53
  SPEAKER_01: I'm really excited to see where this industry's going.
• 33:55
  SPEAKER_01: I know you're you've been a huge part in this industry for the last, man, what's it been, seven years?
• 34:00
  Connor Schwab: Yeah, I guess since 2018, I guess.
• 34:05
  Connor Schwab: Yeah, so eight years, something like that?
• 34:07
  SPEAKER_01: Eight years, yeah.
• 34:08
  SPEAKER_01: Yeah.
• 34:09
  SPEAKER_01: So it's it's been cool seeing, yeah, just seeing how connected and plugged in you are in the in the uh in the world and excited to help bring a little bit of my expertise from the production, construction um side of things as well.
• 34:22
  Connor Schwab: Yeah, and and I think getting the chance to work with you and design something really unique, I'm starting to realize the value in that, especially in these last this last year of operating all these properties, looking at a lot of different deals, looking at a lot of people who are really successful in the space is trying to be in that top 10%, that top 5%, that top 1% of your market is really a good place to be.
• 34:46
  Connor Schwab: It's it's so much easier from an operational standpoint.
• 34:49
  Connor Schwab: You know, if you spend a little bit more on your unit to make it really unique or have these viral touch points, like having a really unique exterior or big windows, or you know, these really cool designs or or amenities, you know, that does a lot of the heavy lifting for you.
• 35:06
  Connor Schwab: And, you know, whether your unit's making 200 bucks a night or 300 bucks a night, your your cost to clean and launder that room is going to be relatively similar.
• 35:15
  Connor Schwab: You know, it might be 25 bucks for labor, labor, and it might be 25 bucks for laundry, give or take, depending on your situation.
• 35:22
  Connor Schwab: And but if you're three, if you know, if you're at 300 bucks a night, that percentage of that laundry cost is way, way lower.
• 35:29
  Connor Schwab: And so, you know, having a nicer unit and having something that does your marketing for you is is a makes your life so much easier on the operational side, on the back end, on the stabilization.
• 35:41
  Connor Schwab: And I think that's one of the things you've really helped us with, Evan.
• 35:43
  Connor Schwab: So thank you.
• 35:45
  SPEAKER_01: Well, happy to happy to be able to help there.
• 35:47
  SPEAKER_01: I'm happy you're the one guiding that side of things.
• 35:49
  SPEAKER_01: I'm just here to design cool stuff.
• 35:51
  SPEAKER_01: That's what I love to do.
• 35:52
  SPEAKER_01: And it's what gets me excited to get out of bed in the morning.
• 35:54
  SPEAKER_01: And I want to continue to do that with more people.
• 35:56
  SPEAKER_01: So if you got unique and cool ideas.
• 35:58
  Connor Schwab: If people want to get in touch with you to, you know, get a quote, consult, get some ideas going, like what's the best way for them to do that?
• 36:06
  SPEAKER_01: Best way is to reach out to us via our website, which is sandboxstay.com.
• 36:12
  Connor Schwab: Awesome.
• 36:13
  Connor Schwab: Awesome.
• 36:13
  Connor Schwab: Thanks so much, Evan.
• 36:14
  Connor Schwab: Always a pleasure having you on the show.
• 36:15
  Connor Schwab: And I can't wait to see what other crazy things we've cooked up and made six months from now.
• 36:20
  SPEAKER_01: Oh man, there's some cool things in the pipeline.
• 36:23
  SPEAKER_01: I don't know if you've you've even seen yet, but we got some fun things coming.
• 36:27
  SPEAKER_01: All right.
• 36:28
  SPEAKER_01: Cheers.
• 36:28
  SPEAKER_01: Thanks so much.