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This 25-Year-Old’s ‘Tiny Hotel’ Generates $500,000 a Year

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  • Isaac French grew up working in his dad’s construction business and always loved design.
  • He moved to Waco, Texas, in 2020 and wanted to take advantage of the hot real-estate market there.
  • French bought a small plot of land and built a “tiny hotel” made up of seven cabins.

This story originally appeared on Business Insider.



Corey O’Connell (Lakeside South)

At left, Isaac French. At right, Lakeside South, one of the seven tiny-house cabins.

Isaac French, a 25-year-old bookkeeper and contractor, co-owns and operates a “tiny hotel” in Waco, Texas, with seven tiny homes that he opened early this year.

Before getting into short-term rentals, French ran a cloud-based accounting business in Waco. 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 Austin, Fort Worth, and Dallas.

“I’d had these ideas sort of brewing to create this modern Scandinavian housing concept in Texas,” French said.

French said that while he’d always had an entrepreneurial spirit, working in his father’s construction business as he grew up gave him the experience he needed to execute his idea. In March 2021, he bought a 5-acre plot that would become Live Oak Lake. The seven cabins are 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 its opening, as indicated by screenshots of Airbnb and Stripe dashboards reviewed by Insider. Here’s how French got his business off the ground.

French turned a 5-acre empty plot in Waco into a luxury tiny hotel in 9 months

French used $138,000 of his savings to purchase the land. At the time, he projected that the construction costs of building his tiny hotel would come to about $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 appraised cost of the build.

This partnership meant French could also use a line of credit from his father’s construction business to cover further 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 about nine months to finish. French acted as the general contractor for the project, which included building the roads, utilities, and a man-made lake. The tiny hotel, which opened for business this January, ended up costing $2.5 million to construct — he said the price increased because of labor shortages and soaring lumber prices, as well as additions like hot tubs and a pool.

“I was surrounded by lots of incredible people as well, as far as contractors and landscapers,” French said.

Four months after opening, the property was appraised at $3.1 million, and French and his family did an 80% cash-out refinance. French received a loan of 80% of the property value, or $2.48 million, appraisal reports and HUD-1 settlement statements reviewed by Insider indicated.

French said that crucial in securing the construction loan was showing Live Oak Lake’s selling point as an “experience,” including lots of drawings and renderings in the planning forms.

With a new batch of funding, French was able to pay off his original construction loan and the line of credit he used to complete the project.

French said that to get familiar with the short-term rental industry, he relied on online resources and YouTube. He described Robuilt, a channel run by another short-term rental entrepreneur, as particularly useful. French also asked friends who owned a short-term rental management company in Waco for advice. They introduced him to automated property-management systems, which he said had 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, paddleboards, and kayaks.

Each cabin has floor-to-ceiling windows and two floors with two bedrooms, one bathroom, an open-plan kitchen, and a living area, along with a washer and dryer, a private entrance, parking space, an outdoor hot tub, a hammock, and a firepit.

The White Rock Cabin. Each house has a private entrance and parking space.

Image Credit: Aaron Anz via Business Insider

The Cedar Brook cabin. The front of the cabins have floor-to-ceiling glass windows.

Image Credit: John Kreye via Business Insider

“It was very high cost per square foot because these are very high-end — we chose very nice finishes,” French said, adding that it took inspiration from Olson Kundig, a Seattle architecture firm that designs sculptural buildings that draw from 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 tiny houses are a couple of hundred yards apart and surrounded by trees, but the string lights between buildings can be seen 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 into the kitchen and the staircase to the bedroom.

Image Credit: Corey O’Connell via Business Insider

The Lakeside North cabin. All the cabins are decorated similarly, in a modern Scandinavian style.

Image Credit: Paul Clarke via Business Insider

In the Shadow Bend cabin, the second bedroom and bathroom are opposite the kitchen on the first floor.

Image Credit: Corey O’Connell via Business Insider

The cabins are priced nearly identically to reflect their identical aesthetics. A night in one during the week costs about $300, but that can jump to $450 to $500 on the weekends. During busy visitor periods in Waco, like graduation weekend at Baylor or local high-school football games, the nightly fee can rise to $1,200 per cabin, French said.

To set prices, he uses an app called Wheelhouse, which can automatically implement price increases and discounts and standardize them across his accounts on Airbnb, Vrbo, and Booking.com depending on demand in the area.

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 incentivizes people to book directly from the Live Oak website, where French has more control and can access more information about his guest, such as their email.

The bathroom in one of the cabins.

Image Credit: Isaac French via Business Insider

The White Rock Cabin. The master bedroom is on the top floor of each cabin.

Image Credit: Shelby Wilray via Business Insider

The exterior of the White Rock cabin.

Image Credit: Shelby Wilray via Business Insider

Each cabin has a Yellow Leaf hammock.

Image Credit: Corey O’Connell via Business Insider

The dock at the Water’s Edge Common is available for all guests to use.

Image Credit: Corey O’Connell via Business Insider

Kayaks are also available for guests.

Image Credit: Stephen Miller via Business Insider

French said the occupancy rate is 90% to 95%, with almost 70% of bookings coming directly from Live Oak’s website and the remaining 30% from Airbnb, Vrbo, and Booking.com.

French markets the hotel through social media. At first he partnered with travel influencers and did giveaways — he said this helped Live Oak’s Instagram account, which now has over 50,000 followers, gain 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 thought Live Oak was well-positioned to weather the economic downturn. He said he’d seen an influx of wealthy or middle-class tourists from cities like Austin or Dallas who normally would take longer international holidays but were choosing to vacation closer to home for short periods.

“We’re already tapping into that,” French said, “but I just think there’s so much more opportunity even just here in Texas.”

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