Helping Build Maui's Top-Rated Hostel

Bryan welcomes Michael Russell, co-founder of Malama Capital and co-host of The Hotel Investor Playbook podcast, for a conversation that traces his path from flipping distressed homes after the Great Recession to buying up Maui vacation rentals to, almost by accident, hospitality. Michael walks through the numbers behind two pivotal home purchases — including one that had belonged to Fleetwood Mac's Mick Fleetwood — and how Maui's capped short-term-rental permit system turned those properties into a scarce, cash-flowing asset class.

The heart of the episode is how Michael and his business partner backed into the hostel business during COVID, buying a rundown, barely-operating 20-room property in Maui for $800,000 and investing $1.5 million to transform it. Rather than run it like a typical budget hostel, they built a design-forward common area, hired for culture the way a lifestyle brand would, and engineered the guest flow to force social connection — free daily group excursions, a funneled lobby, intentional close quarters. The result: recognition from Hostelworld as the #1 small hostel in North America within three years, on an asset that's now appraised at more than six times its purchase price.

They close on what's next: Michael and his partner are exploring a move into more traditional, branded hotel ownership, weighing the advantages of a proven flag system against the creative and operational lessons they learned building something from scratch. His advice for anyone making that leap without direct experience — lean hard on people who have it, and don't let pride get in the way of paying for expertise.