- Isaac French grew up working in his father’s construction company and has always loved design.
- He moved to Waco, Texas in 2020 and wanted to take advantage of the booming real estate market the.
- The French buy a small piece of land and build a “small hotel” there, consisting of seven cabins.
This story originally appeared on Business Intern.
Corey O’Connell (Lakeside South)
Isaac French, a 25-year-old accountant and entrepreneur, co-owns and operates a “tiny hotel” in Waco, Texas, with seven tiny houses he opened earlier this year.
Before getting into short-term leasing, French ran a cloud-based accounting business in Waco. But towards the end of 2020, he told Insider, he was eager to take advantage of the hot real estate market in the area – Waco is less than a two-hour drive from AustinFort Worth and dallas.
“I had had these ideas sort of shuffling to create this modern scandinavian housing concept in Texas,” French said.
French said that while he always had an entrepreneurial spirit, working in his father’s construction company growing up gave him the experience he needed to bring his idea to fruition. In March 2021, he buys 5 acres of land which will become living oak lake. The seven cabins measure between 550 and 650 square feet and were built in the Scandinavian architectural style.
Live Oak Lake has generated more than $500,000 in bookings since opening, as shown by screenshots of Airbnb and Stripe dashboards reviewed by Insider. Here’s how French started his business.
French transformed an empty 5-acre lot in Waco into a small luxury hotel in 9 months
French used $138,000 of his savings to purchase the land. At the time, he predicted the construction costs for his small hotel would be around $1.6 million. French’s father, two brothers, and father-in-law joined as minority partners so he could secure a construction loan worth 80% of the estimated construction cost.
This partnership meant that French could also use a line of credit from his father’s construction company to cover additional building costs. He said at first he was confident the property would be valued at more than cost, especially once he could prove it was a commercial success, and he planned to do a refinance. in cash – taking a larger mortgage on the value a property has acquired since the owner acquired it – to pay off the cost of labor and materials.
Live Oak Lake took about nine months to complete. French acted as general contractor for the project, which included building the roads, utilities, and a man-made lake. The small hotel, which opened in January, ended up costing $2.5million to build – he said the price went up due to labor shortages and soaring wood pricesplus add-ons like hot tubs and a pool.
“I was also surrounded by a lot of amazing people, as far as contractors and landscapers go,” French said.
Four months after opening, the property was appraised at $3.1 million, and French and his family completed an 80% refinance. French received a loan for 80% of the property’s value, or $2.48 million, according to appraisal reports and HUD-1 settlement statements reviewed by Insider.
French said that in order to secure the construction loan, it was crucial to show the selling point of Live Oak Lake as an “experience”, including numerous drawings and renderings in the planning forms.
With a new round of financing, French was able to repay his original construction loan and the line of credit he used to complete the project.
French said that to learn about the short-term rental industry, he relied on online resources and YouTube. He described rebuilt, a channel run by another short-term rental contractor, as particularly useful. French also sought advice from friends who owned a short-term rental management company in Waco. They introduced him to automated property management systems, which he says have been integral to his success.
French wanted his guests to feel like they were in an oasis
A map of Live Oak Lake.
Image credit: Isaac French via Business Insider
In addition to the seven identical cabins, Live Oak Lake has a common area with a small dock, picnic tables, paddle boards and kayaks.
Each cabin has floor to ceiling windows and two stories with two bedrooms, one bathroom, open kitchen and living room, as well as washer and dryer, private entrance, parking space, outdoor hot tub, a hammock, and a fire pit.
The White Rock hut. Each house has a private entrance and a parking space.
Image credit: Aaron Anz via Business Insider
The Cedar Brook Cabin. The forward cabins feature floor-to-ceiling glass windows.
Image Credit: John Kreye via Business Insider
“It was a very high cost per square foot because these are very high-end products – we chose very nice finishes,” French said, adding that he was inspired by Olson Kundiga Seattle architecture firm that designs sculptural buildings inspired by nature.
“I’ve always loved design,” French said. “I wanted to be an architect when I was younger.”
He said he wanted the hotel to strike a balance between being “completely lost in nature” and having a “village” feel. The small houses are a few hundred meters apart and surrounded by trees, but the string lights between the buildings are reflected in the water.
The Cedar Brook Cabin.
Image Credit: Jon Kreye via Business Insider
In the Shadow Bend cabin, an open living area leads to the galley and stairway to the bedroom.
Image Credit: Corey O’Connell via Business Insider
The Lakeside North cabin. All cabins are decorated the same, in a modern Scandinavian style.
Image credit: Paul Clarke via Business Insider
In the Shadow Bend cabin, the second bedroom and bathroom are across from the kitchen on the first floor.
Image Credit: Corey O’Connell via Business Insider
The cabins are nearly identically priced to reflect their identical aesthetics. A night in one during the week costs around $300, but it can go up to $450 to $500 on the weekends. During peak attendance times in Waco, such as graduation weekend at Baylor or local high school football games, overnight charges can reach $1,200 per stateroom, French said.
To set prices, he uses an app called Wheelhousewho can automatically apply price increases and discounts and standardize them across their accounts on Airbnb, Vrbo, and Booking.com based on demand in the region.
The pricing software also allows French to add markups when guests book through a specific platform to reflect what that platform charges hosts – for example, Airbnb charges 15% of the booking price as a costs. This encourages people to book directly from the Live Oak website, where French has more control and can access more information about his guest, such as his email.
The bathroom in one of the cabins.
Image credit: Isaac French via Business Insider
The White Rock hut. The master bedroom is on the top floor of each cabin.
Image Credit: Shelby Wilray via Business Insider
The exterior of the White Rock Hut.
Image Credit: Shelby Wilray via Business Insider
Each cabin has a Yellow Leaf hammock.
Image Credit: Corey O’Connell via Business Insider
The Water’s Edge Common dock is available to all guests.
Image Credit: Corey O’Connell via Business Insider
Kayaks are also available for guests.
Image Credit: Stephen Miller via Business Insider
French said occupancy is 90% to 95%, with nearly 70% of bookings coming directly from the Live Oak website and the remaining 30% from Airbnb, Vrbo and Booking.com.
The French market the hotel via social networks. He first joined forces with travel influencers and gave freebies – he said it helped Live Oak Instagram accountwhich now has more than 50,000 subscribers, is gaining traction.
“Instagram is our main funnel for bookings,” he said.
Each cabin has its own hot tub.
Image Credit: Shelby Wilray via Business Insider
The Lakeside South cabin.
Image Credit: Shelby Wilray via Business Insider
French said he thinks Live Oak is well positioned to weather the economic downturn. He said he’s seen an influx of wealthy or middle-class tourists from cities like Austin or Dallas who would normally take longer international vacations but choose to vacation closer to home for shorter periods.
“We’re already exploiting that,” French said, “but I just think there’s so much more opportunity, even here in Texas.”
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