Kirby Atwell: The 1% Net Rule That Changes How You Buy Short Term Rentals

Kirby Atwell runs Living Off Rentals and has coached nearly 400 students to build cash-flowing short term rental portfolios over the past five years, alongside his own 43-property portfolio. A profit-first practitioner who lives on a farm with his family, he applies the system to how he buys properties, not just how he manages the cash.This episode breaks down Kirby's unusual 1% net rule, why the highest-cash-flowing property beats the prettiest one, and how small multi-unit properties in secondary markets outperform luxury cabins. If you want to build a short term rental portfolio or squeeze more profit out of the one you have, this conversation is packed with tactical detail.Timeline Summary[1:24] – Kirby returns to the show with nearly 400 students coached over five years of short term rental teaching[2:18] – Why he'd rather buy the highest cash flowing rental than the prettiest one[3:03] – The 500 million Airbnb bookings most investors overlook beyond the luxury vacation cabin[4:21] – A real deal breakdown: a $234,000 two unit in Sioux Falls netting around $2,500 a month[5:32] – How the same property performs as a long term rental and why that matters as a backup[6:09] – Why all 43 of his properties could convert to long term tomorrow and still cash flow[7:38] – Kirby's 1% net rule and how it differs from the standard 1% gross rule for long term rentals[9:03] – Netting 1% of purchase price after every expense including maintenance set asides[10:39] – What his accounts looked like before Profit First when he had over $1 million and no clarity[11:42] – Using the free spreadsheet and the caps versus taps distinction every first and fifteenth[13:20] – His actual percentages across an active income LLC and a rental property entity[15:20] – How Profit First clarity coincided with outsourcing the day to day of the business[16:24] – Going from a stretch goal of 30 properties to listing his 43rd while working less[16:50] – Growing organically into four full time Philippines-based team members instead of a property manager[19:18] – The typical first goal for students: 10 to 15 thousand a month to escape a full time job[24:49] – The fastest Profit First move for an owner drowning in their own properties5 Key TakeawaysCash Flow Beats Curb Appeal — A $234,000 two unit in Sioux Falls nets $2,500 a month while a $700,000 luxury cabin grossing the same amount can lose money. Buy for profit, not looks.Use The 1% Net Rule — Instead of 1% gross like the long term standard, Kirby targets 1% of purchase price in net profit after every expense. Small multi-units in secondary markets make it possible.Profit First Starts At Purchase — The system isn't just for managing cash. Kirby applies it to his buying formula so a deal has to hit the net number before he ever underwrites it.Clarity Enables Hiring — With over $1 million in the bank and no idea what was profit, he couldn't grow. Seeing where every dollar was designated is what let him build a remote team and step out of the day to day.Ten Properties Can Free You — Four Sioux Falls style deals at $2,500 a month hits $10,000 monthly and buys back 40 plus hours a week. For most of his students, that's the real financial freedom goal.Links & ResourcesLiving Off Rentals Web Class — https://livingoffrentals.com/startSimple CFO — https://simplecfo.comProfit First for Real Estate Investing by David Richter — https://profitfirstrei.comProfit First by Mike Michalowicz — https://mikemichalowicz.com/profit-firstEnjoyed This Episode?If Kirby's 1% net rule made you rethink every short term rental deal you've looked at, don't keep buying the pretty cabin that loses money. Share this episode with an investor who's killing themselves cleaning their own properties, and follow the show and leave a rating and review so more real estate investors can build portfolios that actually pay them.