He Makes $600K/Month Without Owning a Single Property | Airbnb Arbitrage Secrets with Colin Wright

What if you could build a six-figure income in real estate without ever buying a single property, getting a mortgage, or putting up hundreds of thousands of dollars? That is exactly what Colin Wright has done, and in this episode of the Official Success Formula, he breaks down every single step of the Airbnb arbitrage model that took him from a garbage man and furniture mover in Canada to controlling nearly 200 Airbnb units and generating $600,000 a month in revenue in the United States.

Colin shares how he stumbled onto the short-term rental arbitrage model in 2022 when he was looking for a way to legally immigrate to the US on an E2 investor visa. What started as a single three-bedroom house in Austin, Texas, which still makes him $2,000 to $2,500 in net profit every single month, turned into one of the most impressive Airbnb portfolios in North America. And the best part? He did it without ever owning a single piece of real estate in America.

In this episode, you will learn how to find landlords willing to let you sublet their property on Airbnb, the exact tools Colin uses to analyze markets and predict profitability before signing a lease, why starting with a studio or one-bedroom apartment is almost always the smartest move for beginners, how to negotiate free rent concessions and lower security deposits, the full tech stack including Price Labs, Hospitable, smart locks, and noise sensors that makes his operation nearly passive, and how the E2 investor visa works and why Airbnb arbitrage is one of the most viable legal pathways to moving to the United States.

Whether you are a complete beginner looking for a low-risk entry point into real estate, a business owner exploring passive income streams, or someone outside the US looking for a legal and profitable way to immigrate, this episode is genuinely one of the most valuable conversations we have ever had on the show.

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Website- https://www.bnblaunch.io

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Transcript

SPEAKER_02 0:00

What is the biggest month that you've had running Airbnb arbitrage?

SPEAKER_01 0:04

$600,000.

SPEAKER_02 0:05

By the end of this episode, you will have the exact blueprint that you need to make money with Airbnb without ever owning the property.

SPEAKER_01 0:11

My name is Colin Right. I have almost 200 unit Airbnb arbitrage portfolio. You're not putting up a lot of cash. You don't have to get a mortgage. You don't have to pay property taxes or maintenance.

SPEAKER_02 0:21

This is the exact method that Colin goes over in this podcast that allowed him to buy six supercars and to build the life that he never thought he could have.

SPEAKER_01 0:30

How hard is it to make a thousand bucks a month on Airbnb with a one-bedroom apartment? Like it's not tough. And on average, those apartments are making 10 to 20K net profit per year.

SPEAKER_02 0:39

And trust me, when I finish this conversation, and I've been a real estate investor for 26 years, and I couldn't believe how simple this was. So the Airbnb arbitrage model is super fascinating because you can actually make money on a home that you do not own. And then whenever I, you know, I grew up uh when I started real estate, it was all like super traditional stuff. And of course, Airbnb wasn't out at the time. But it I feel like it creates a better barrier to entry for someone that maybe is getting in the real estate industry and they don't have a lot of money or they don't know a lot about real estate. I feel like this model could work for a lot more beginners than like trying to go flip a house or something. Like it it makes more sense to me. So it's super cool. And um, yeah, before like we get into like the super tactical, you know, step by step, um, just introduce yourself, tell them who you are, tell them your background, what you do.

SPEAKER_01 1:37

Uh my name's Colin Wright. Um, I have an almost 200 unit Airbnb arbitrage portfolio. Um, started in real estate when I was 18, dropped out of high school, got my real estate license, started as a realtor, um, did commission sales for a few years while working other, you know, full-time jobs. I was, I was a garbage man, moved furniture, uh worked construction, basically all the hard, tough jobs that you could imagine. Um, so realized what I didn't want to do. Um, kind of saw a lot of you know successful people in real estate and was like, this is probably the route to go. So got into, you know, buying real estate, traditional long-term rentals, flipping, multifamily commercial, basically everything you could do in real estate, I did it. And then um in 2022, we decided we wanted to leave Canada and we were looking to move to the US and looking for a viable business model. And Airbnb arbitrage kind of stumbled uh, you know, in my Instagram feed, saw people that were making money with this model. It qualified for us getting an investor visa to move to the US and then just kind of went for it, started investing, pick up, picked up my first few properties and just realized the cash flow I was getting with the properties. I'm like, this is a really good business model. I can put up 10, 15, 20 grand and make a thousand to two thousand dollars a month net profit, where the properties I purchased in Canada weren't doing that. I was having to put out 50 hundred, 200 grand to purchase a property and it was barely cash flowing, or some of them were losing, losing money and I had tenants that weren't paying me and all these restrictions. So it just it wasn't, I wasn't expecting to grow it to the point it got, but it just I was like so happy with the cash flow and and the the like you said, the low barrier to entry. Um, it's a very non-risky real estate play, I think, because you're not putting up a lot of cash, right? You're you don't have to get a mortgage, you don't have to like pay property taxes or maintenance of these on the all these properties, right? So you just basically have your furniture investment. And if something does happen or goes wrong, like you can always relocate that furniture to another unit.

SPEAKER_02 3:42

Yeah. The the thing about it is it's almost like if you did a deal that's not performing as good as all your other deals, you just don't resign the lease.

SPEAKER_01 3:49

Exactly.

SPEAKER_02 3:49

And so you're not having to either sell it and lose money and pay real estate fees, or just get in a situation where it just doesn't cash flow and you're kind of stuck with it.

SPEAKER_01 3:57

And a lot of these times I've I've had deals that haven't worked out in the past, and I would go to the landlord, sometimes even before the leases up, and say, Listen, like I'm not profiting here, or there's these issues. I need you to fix them now, or I'm I'm cutting and running. And they'll be like, okay, we'll give you a free month, we'll lower rent, we'll do this for you, because they want you to stay because they don't want the unit to be vacant and they know maybe the market is shift shifted. Where with a mortgage, you can't just go to the bank and say, I'm not making money anymore. Can you, you know, can you can you let me pay less? Do you have buyout clauses like to where like, hey, if I need to get out of this lease, can we always an escape clause? It's usually like one to two months of rent.

SPEAKER_02 4:34

And that's super fair. I mean, yeah, super fair for the person that's actually running the like the user that's actually running the unit. Yep. I mean, that really decreases your risk a lot. Because if you don't have to stay and it's not really performing that well, it's like, hey, I'll just give you an extra month and 100%.

SPEAKER_01 4:48

And we're dealing with like a lot of like my portfolio. I built off like the apartment efficiency apartment model. So a lot of my rents are like a thousand to fifteen hundred dollars. Okay. So it's not like a crazy amount of money if you need to get out of it. And what you could do is say I had to pay a two-month rent, you know, to get out of uh a fifteen hundred dollar a month lease, and that's gonna cost me three grand. I could go to the next property and say, hey, I need a two-month commission or a two-month rental or sorry, two-month rent concession and get that covered. Do you know what I mean? And I can move my stuff to this new property and basically save myself that three grand.

SPEAKER_02 5:23

On the visa thing, how much do you have to spend to get a visa? Like when you said there, you know, it qualifies for an investor visa. Like how much what's the dollar amount that someone has to spend? Like, and is it the same? I know you're from Canada. Is it the same from Canada as it is everywhere or is it different?

SPEAKER_01 5:40

Yeah, so the E2 visa program, it's not just Canada. Like the USA has treaties with a whole bunch of different countries, um, like a bunch of countries in Europe, the UK. So it's not just Canada. I mostly help Canadians because I'm from Canada, but we do work with clients all over. Like I'm working with a client in Norway right now. We do have some in the UK. Um, Mexico has an E2 treaty as well. So lots of different countries can utilize this visa. And there's no like set number, but it's a significant investment. And most lawyers will tell you 100K or more is that significant investment for the E2 visa.

SPEAKER_02 6:16

So it's not black and white?

SPEAKER_01 6:18

Not black and white, unfortunately.

SPEAKER_02 6:19

So an attorney has to go argue it, or how does that work?

SPEAKER_01 6:21

Basically, they put together your case, but it has such a high approval rating. Like they just, I'm sure there's lawyers that get it done with different numbers, but most lawyers will recommend that that's like what the consulate, like based off of what they're approving, is around that number, right? Okay. Yeah. And then you have the EB5 visa as well, which is the next step up. That's a green card visa. Um, used to be half a million dollars, but I think it's now like 900 or 1.1 million that you have to invest. That's a straight shot to green card where the E2 visa isn't.

SPEAKER_02 6:49

Yeah, I know that in Houston, the how they were set starting all these condo projects, like they would all be international investors.

SPEAKER_01 6:58

Yeah, green card.

SPEAKER_02 6:59

They so whenever they start a condo building here, the banks won't let them start until it's 50% pre-sold. Um, like nine out of ten banks. And so they're having to pre-sell this condo. Well, a lot of it is overseas because they're like buying visas to get over here. I remember us moving into one of those buildings, like we were in between houses, and so we signed a year lease at one of these buildings, and it was brand new. And nobody lived there. And it was, I mean, it's beautiful in an amazing location. It's because the international people, we had he had bought it and then was leasing it out, but to get his visa. Yep. And uh the people that were there were like barely ever there. It was really it was awesome for us. Yeah, but most of the people they had like, why is nobody uh living here when most of the units are sold out? Yep. And he was like, Man, it's mostly international people.

SPEAKER_01 7:44

They're doing some of that in Florida with the same visa. And it was like, I I laugh when when Trump came out with the five million dollar gold visa or whatever it is, like you could just base five million.

SPEAKER_02 7:52

You could already do it for a million or something.

SPEAKER_01 7:54

You actually get a business, right? Like with the with the gold one, you pay five million to get nothing. So why not just do a million dollar business and and have some cash flow and get a green card that way?

SPEAKER_02 8:04

So I know we talked, I you know, I brought up Airbnb arbitrage. Explain it to people that don't know this program or don't understand it.

SPEAKER_01 8:13

Yeah, so it's super simple. Like we're basically renting other people's properties as if a normal tenant would, but we're getting pro per sorry, we're getting permission from the landlord to use it as a short-term rental. Yeah. So we're not doing it behind their back. We're going to like a homeowner like yourself and saying, hey, can we lease your property? We'll pay the rent, we'll do small maintenance, we'll we'll take care of the property, but and we'll pay you a rent every month. But we're going to sublet this and we're going to put it on Airbnb, vrbo booking.com, and we're going to host our you know corporate clients or whatever you want to say. I like to go with the the corporate leasing because it's kind of a little less intrusive than Airbnb. Airbnb has a bad rep to, you know, some people sometimes, depending like parties and this and that.

SPEAKER_02 8:54

Do apartment complexes kind of look down on that since there's a lot more traffic in and out, or do they not care? They just want to get the units.

SPEAKER_01 9:01

Some are very against it, but we work in a lot of big buildings and we have, you know, set procedures in place, background checks, noise sensors, ring cameras. We have a building in Cleveland where we actually have someone right at the front to greet people, check their IDs, make sure that like nothing happens. And these are like three, four hundred unit buildings with other tenants, and we only have 20 units in them.

SPEAKER_02 9:22

That's pretty awesome. Um so now you fast forward you have a hundred units. Walk um, go back to the first one. Like, how'd you get the first one? Yeah. You know, I know you were in Canada. Did you start in Canada or did you start in the US?

SPEAKER_01 9:35

I started in Austin actually. So first one was uh a little bit tough. It took me a few months to find. I did a mentorship in September of 2022 and I signed my first lease towards the end of 2022. Okay, and it was in Austin, Texas. It was a single family home, three bedroom, two bath. I still have it today. Still consistently makes me$2,000 to$2,500 a month in net profit. That's really good. Cost me$15,000 to furnish. I didn't get any free rent on that deal. It was the only deal I ever took that I didn't get a free rent concession. You also probably didn't know. I just wanted I wanted a deal so bad at that time, and I also paid a double security deposit.

SPEAKER_02 10:12

How did you find it though? Did you lose some of the things? Okay.

SPEAKER_01 10:15

Yeah, it was just a land, it was a it was a guy, he was actually uh he's actually um detective with the Austin PD.

SPEAKER_00 10:21

Okay.

SPEAKER_01 10:22

He bought the house to flip it. The market in Austin went backwards, yeah, and he had to hold it. So he was looking for a tenant. So I signed a two-year lease with them. He renewed my lease again. So I'm I've been over three years there now. But uh that was my very first deal, and it's been it's been great.

SPEAKER_02 10:38

How do you know when you were analyzing the very first deal and you didn't know anything about Airbnb? How'd you know it was gonna be profitable? How did you know what you know rent to expect from releasing it?

SPEAKER_01 10:48

So I'd like to tell you that the first mentor I hired kind of taught me how to do that, but not really. Like, I mean, very basic stuff that I probably could have got on YouTube for free. But um made you take action. Yeah, that's it. I just I said, you know what, I'm gonna take action, I'm not gonna let this go to waste. But there's sites like airDNA.co, um BNB Calcs, a new one that's popular, that's very user-friendly, where you can just pop in the address, put in your rent, bedrooms, and it will pull up the comparables in the market. So I can compare my potential property with other properties that are already operating as Airbnbs. So I can get the exact revenue of those properties, and then I compare my expenses to the revenue of the comparables, and then I kind of know how much we'll make.

SPEAKER_02 11:29

Yeah, which makes sense. It's almost like running comps in traditional real estate. Same exact. How do they get the data though? Where how is that public data to where you're getting like the actual Airbnb revenue?

SPEAKER_01 11:40

So they're scraping the the um short-term rental sites. Okay. So it's not a hundred percent accurate. Okay, but what they're doing is they're scraping, they're sending their their crawlers or whatever through these, uh, through like Airbnb and VRBO, and they're seeing when the count, they're seeing the pricing of the days, and then that then they go back and they see, oh, these days have been blocked. So it's so they know that they sold for those prices.

SPEAKER_02 12:00

Yeah, so it's it's close enough to very close. Yeah, to accurately um predict how much a unit is exactly.

SPEAKER_01 12:07

Yep.

SPEAKER_02 12:08

What about demand?

SPEAKER_01 12:09

I'm actually outperforming a lot of the data that we we see.

SPEAKER_02 12:13

What about demand? Like how even though you say, hey, I feel like that I can make money off this, I can profit$2,000,$3,000 a month, how do you know there's enough demand where when you get it, you're not gonna have to drop your price?

SPEAKER_01 12:25

Is that that's part of the data, obviously occupancy rate and like, you know, average daily rev like rates and stuff like that. So we're going off of these, you know, few factors, and then we can determine whether that property is gonna be viable and we're gonna be profitable.

SPEAKER_02 12:40

Okay.

SPEAKER_01 12:41

Yeah.

SPEAKER_02 12:41

When someone's starting out, what should they look out for? Like if it's a beginner, they're looking at their first unit, what expenses should they be aware of? Like what's the main thing they need to look for?

SPEAKER_01 12:50

I tell everyone to start small. Um, you know, some people tell you to jump right into a house because you can make more money, but it's gonna cost you a lot more to furnish. You're gonna pay a lot more in rent. So I tell everyone, you know, walk before you run with this business, right? Start off with a small one bedroom or studio apartment. Like you can't go wrong. You're gonna spend seven to 10 grand to get that furnished and set up. Maybe you can get a concession so you don't have to pay first month or a lower security. But all in all, you're gonna be like 10, 15k to get that unit going. And on average, those apartments are making 10 to 20k net profit per year, right? So there's not a lot of there's not a huge risk with a smaller unit, especially because you have if you get a good unit that has like a low, low, lower than market rent, you have flexibility to like drop your prices. How hard is it to make a thousand bucks a month on Airbnb with a one-bedroom apartment? Like it's not tough.

SPEAKER_02 13:38

Yeah, it's pretty.

SPEAKER_01 13:39

So like you there's not a huge risk. Whereas if you have a big house and your rent's like five, 10k a month, you could have a month where you you pay 6K because you only brought in four or five K. With apartments, that's not happening. Right? Okay. So that's why I kind of tell everyone starting to go small before you go big, build up like some steady, consistent cash flow with smaller units, and then jump into like higher end luxury stuff or bigger homes.

SPEAKER_02 14:02

What about the location? Like, if they're how do they even know where to pick a location?

SPEAKER_01 14:07

So the same thing, air DNA in these sites will give you like statistics for the entire market, right? So you can you can just type in your home city and and see kind of the data and and look at the rental properties. Then you go on Zillow and see kind of what the rentals are going for and compare it to how much the those properties are making in your area, and then just do some quick math, add up what your expenses would be and minus it from your revenue, and that'll give you an idea of like what you should make profit, right? There's a lot of markets that people don't realize that are are good. Like I have units in small cities like outside of Austin that just print me money every month consistently all year round. Like there's no there is a high season, they make more in the high season, but they're still crushing it in low season too, just because not a lot of people have thought about these markets and don't realize competition that there's people there that are needing needing units.

SPEAKER_02 14:57

Yeah, I'm sure in all the major cities, like it's pretty not gonna say saturated because there's always I mean, you're making money off almost everything. Yep. But I'm sure in these smaller towns, like you could probably, since if there is demand, you can probably be make a lot more potentially just because there's not so many, so much saturation.

SPEAKER_01 15:13

There's always gonna be saturation in this business at this point. Um, it's just about being better than the competition, and the bar is set so low with Airbnb hosts, like just when it comes to design and people actually understanding how to run a business, dynamic pricing, like doing everything properly. That's why I think I've been so successful because I just rinse and repeat my formula, but I make sure I check all the boxes. So I can I'm beating out my competition, no problem, because my units look good, they're priced properly, my Airbnb listings are done properly, I'm getting good reviews, I'm being a good host, right? Like all these things you need to do to be successful. Like years ago, you could just throw$2,000 worth of IKEA furniture in an apartment and it would make you two, three grand because there wasn't a lot of units. But now, like the set and there's more saturation.

SPEAKER_02 15:58

And people don't know it's saturated, I can't make money. Well, saturated bad hosts. Yeah, yeah. You actually have to step your game up.

SPEAKER_01 16:04

Exactly.

SPEAKER_02 16:05

What about how do you on your when you're when you're managing this or when you're looking through the software, how do you know something saturated? Like what should when they're searching for things, or what do you pull up on the software just to know? Like when it when they're a beginner, how do they know that it's too saturated or something not to go into a market?

SPEAKER_01 16:21

Yeah, so I don't it's it's I'm not really looking at like a saturation fact. There's no way to really determine that. I mean high occupancy, maybe? Or yeah, like I mean high, high vacancy. Yeah, like a lower occupancy would be one of those giveaways, but there's some like a vacation market is is sometimes going to have lower occupancy, but their rates are gonna be much higher. So they're gonna be making a lot more per night, but not hosting as many people, right? So it's like you've kind of got to look at the whole, the whole pie. I usually just take revenue, re I just look at my comps, see what they're bringing in, and then look at my potential property and see what my expenses are. Because ideally, that's all that really matters at the end of the year. A lot of people hang, they they they look at occupancy like it's the the key factor, like, oh, if I'm not 95% occupied, like anyone can be 95 or 100 occupied if you sell every night for 10 bucks. Your your goal is to balance occupancy and your rates. You want to book, be booked the most amount of nights you can for the highest rates possible.

SPEAKER_02 17:19

I was about to say if you're if you're if you're 98% occupied, you probably your rates are probably too low.

SPEAKER_01 17:24

You could still lose money, right? You've got to find that healthy balance, right? Like it's would you rather make the same amount of money at 50% occupancy than 100% occupancy? Of course, because there's gonna be less wear and tear on your property at 50% occupancy. So you've got to balance that.

SPEAKER_02 17:37

Less operations, less management.

SPEAKER_01 17:38

Exactly.

SPEAKER_02 17:39

On the regulation side, when somebody's starting out, what do they need to need to look for? Does it, does that software tell you, hey, there's HOA, there's regulations? Like, how do they find that?

SPEAKER_01 17:49

For sure. Like BNB Calc is starting to do that. Like they're starting to give a little bit of information about that specific city and like what permitting, you know, kind of requirements are are are needed. So definitely need to look into that. Go to the city's website, look up their STR or you know, order and ordinances and see if you need a permit or you can operate without it. Um, I stay completely away from HOAs. Like I don't have a single unit in an HOA. Yeah, that's they're usually against STRs, right? Yeah.

SPEAKER_02 18:17

And then even when it is approved, you run the risk of them going to vote at some point. Yes. Like I've seen stuff in neighborhoods and friends of mine too, where you know they're they there's too much traffic in our neighborhood, too many complaints, and then the HOA will try to vote on something and try to change it. Yeah, yep. So I just stay completely away from them. Um so as far as the regulations in a city, you're able just to look those up on city online or uh AI or something and just figure out if it's regulated or not.

SPEAKER_01 18:43

I've never done it with chat GTP, but it probably can do that.

SPEAKER_02 18:46

Yeah.

SPEAKER_01 18:46

Yeah.

SPEAKER_02 18:47

What property is the best size that performs the best? Like how many bedrooms or or does that matter? Again, like somebody starting out, they're looking at properties. Do they go with a five-bedroom apartment or a four-bedroom, or do they, you know, just do a two-bedroom or a one-bedroom? Like, what's the best?

SPEAKER_01 19:03

It's definitely going to be market dependent. Like there's no kind of one size fits all. Like I said earlier, I really think that people should, you know, walk before they run. You know, sometimes people jump in too quickly and bite off more they than they can chew and spend too much money and get into a bad deal and get wiped out right at the beginning. Because if you get into a bad deal with a huge house and you're spending like 40, 50 grand to furnish it and, you know, maybe first last in security and you have all this money tied up into it and it doesn't produce, and then you have to pay into it, that can ruin someone pretty quickly, right? But a small apartment that's a thousand dollars a month and spend 10 grand to get it going, like there's not a lot of risk there. Because it's not like you're gonna rent that apartment out for$500 a month if you, if you looked at the data correctly. It's only a matter of how much you're gonna make. Maybe, maybe it falls a little bit short of fit making$15,000 a year and makes$10, right? Or makes five. There's no real, there's not a lot of room for error there, if that makes sense.

SPEAKER_02 19:58

When you're when you're doing this model and when you're trying to negotiate with a landlord, what are the questions? Like, how do you present this case to actually get them to say yes to you re-renting the space on Airbnb? Because I'm sure that's a big hurdle, right? Like just trying to convince the landlord. Yep. I was a landlord for a long time and I didn't know anything about the Airbnb market. And if somebody came to me, I'd go, I don't know.

SPEAKER_01 20:20

Like that, I I I it we I would second guess it at first. Definitely. So we do run into that all the time. Um, thankfully, I mean, depending on how you look at this right now, there is a lot of vacancy across the country with rentals. So it is becoming a little bit easier to go to a landlord and say, hey, I want to do this because they just want rent. They're sick of their property sitting on the market and they just want to rent it out, right? So they don't need a lot of convincing. But what I do is I normally give them the same this, like I'm a landlord. So I understand what it I understand both sides. And to me, having an operator like myself in there taking care of the property, I'm cleaning it multiple times a week. The people that are coming to stay in a lot of our units are only there for a short term a lot of the time. They're out in the city, they're not like moving in, moving in furniture, having people over, right? They're there for business, a lot of these people. So the wear and tear and the damage on your actual property is gonna be minimal because a normal tenants that rent your place for a year, two, three years, ultimately they don't usually care about the property because it's not theirs. So they don't take care of it like theirs. They're not gonna put money into it, they're not gonna fix things, they're not gonna paint walls, they're not gonna do all these things, right? So I basically tell the landlord, hey, we're a business, we're gonna be making some money off this, which guarantees you your rent every month. We're taking care of the property, we're cleaning it multiple times a week, we're changing air filters, we're doing all this because our clients expect a certain expectation when they get to the unit of we're getting a high quality Airbnb that's clean and there's not going to be black marks all over the wall and stuff. So if I ever give the property back to you, it's gonna be in the same shape that you gave it to me. Right. So that's where I think landlords are like, oh, now that now that you said that, that that makes a lot of sense.

SPEAKER_02 22:00

You've been a landlord for a while, you know when you have a turnover after a year or two years, the whole thing's it costs a lot of money.

SPEAKER_01 22:05

Well you're screwed. Yeah, you're in the units for three to five years. So there's no turnover. There's no vacancy for you.

SPEAKER_02 22:10

But when you turn over a unit for somebody that's actually been living there with kids and dogs, like, man, you're replacing everything. Like you're repainting everything, like you're doing like a small rehab on the whole unit. So I that makes sense for sure. Um, you know, if it's explained that way, like that does make a lot of sense.

SPEAKER_01 22:26

100%. And like I've said, I've seen both sides of the coin, so I understand it. And I think that's why maybe I'm easy or I'm able to sell it to landlords, like the way, like, because I I own properties in Canada. Like I know what it's like when tenants don't pay rent or they destroy your unit. You have there's little little to no recourse.

SPEAKER_02 22:41

So when you get the landlord to say yes, what specifically should someone look for, like language in the lease? Yep. To make sure they're not going to get screwed or um don't get on the bad side of the deal.

SPEAKER_01 22:52

A specific sublease addendum in the con in the in the lease, you know, allowing you to sublet, allowing you to list it on those sites. Um, I haven't done too many of those over the years because I I found that at the beginning they provided a little friction with landlords wanting to sign something like that. So I would just get verbal or written permission. Depends on how risky you want to be, right?

SPEAKER_02 23:11

Like verbal seems like if a new owner takes over or court and I've had that happen.

SPEAKER_01 23:15

I've had it happen, but it's a very small percentage over. I've set up over 400 units and I've had maybe 15 units over three years that where a new owner came in and I didn't have something signed, and they were like, hey, we don't want to do STR anymore. Like, great, find a new place to move my stuff to. But I felt that for my for me able for me to scale to the amount of units I wanted to, I it caused less friction at the beginning of a negotiation. And I just I I operate and I operate a certain way that landlords loved me. They didn't have issues with my leave anyways. They love me. I'm taking 10, 20 units in their building. They're giving me free rent on renewals. They want me to stay, they're lowering my rent. So why start the deal off with like butting heads on like potential sublease addendum? Right. Yeah. So I'm I'm a little bit more risky on that sense, where some people are very by the book. They're like, no, I'm not taking this unit unless I have it written in the lease and and whatnot. And that's great too, but it's gonna make finding deals tougher.

SPEAKER_02 24:11

Any permits or licenses or anything? Permits, yeah. Depending on the city. Okay.

SPEAKER_01 24:16

Depending on the city. Yeah.

SPEAKER_02 24:17

Is it just a short-term rental permit?

SPEAKER_01 24:18

Usually like registering with the city, paying some sort of fee, or maybe like a hotel occupancy tax to some of these cities. Like Airbnb collects a lot of that on our behalf now, which is great and submits it. But like two years ago in Austin, we would have to manually submit those to the city. Does somebody have to have LLC when they start? Definitely not. Obviously, recommend it for like tax and liability purposes. You know what I mean? If someone was to ever sue you or whatnot, that's obviously a great point. But um, you don't need an LLC to start. Like I actually have leases that are in my personal name because landlords didn't want to put it in a company name. They want someone tied to it versus a company, right?

SPEAKER_02 24:55

Yeah, and I tell people a lot of times because I get a lot of messages like, hey, I need to set up an LLC to I can do this. I'm like, don't keep, don't let that keep you because that's just get going. Yeah, they'll just they'll they'll stay stuck inside. Oh, I need to do this and I need to do this. They won't ever start. Yes. It's like make sure it makes money. And then if you start making money, go get it. 100%. Yeah, go pay for your LLC.

SPEAKER_01 25:13

I find that people like come up with these excuses sometimes to like start like to talk themselves out of it.

SPEAKER_02 25:18

It's it it's to try to, it feels like they're doing something, it's like I'm gonna, but you're basically talking yourself out of it. Yeah. Hey everyone, real quick, I just want to let you know this podcast is 100% independent. No ads, no sponsors, just real. If you're finding value in whatever we're doing here, the biggest help that you can give us is hitting subscribe and sharing this with someone who you think needs to hear it or someone that it will provide value to. That's how we continue to grow. And if you did that, I would really appreciate it. Are there any kind of tax savings? I know on the traditional real estate side, you cost segregations and the there's all these other, you know, rental deductions. Um, is there any tax savings with Airbnb or is it just your net profit on the unit? Yeah, that's what it is.

SPEAKER_01 26:01

Obviously, you'd have your small investment up front of your furniture and stuff like that. And you can depreciate furniture too. Okay. Um, but obviously when you're purchasing real estate and do going the short-term rental route, you have the cost seg study and um, you know, depreciation and stuff like that. What what is the depreciation? Like what how many over how many years on furniture? You know what? I'm not a hundred percent on that. I think if I my accountant definitely knows, but I think it may be over four or five years. Okay. Like I don't think you can take it all up front, but I'm not a hundred percent on that.

SPEAKER_00 26:30

Okay.

SPEAKER_01 26:31

Yeah, I was I was curious.

SPEAKER_02 26:33

My accountant just does her thing, and I'm just like have you ever been in a city where um they did ban short terminals?

SPEAKER_01 26:41

No, there's only been a couple in the US that are like like New York's the most recent one. Really? New York City, yeah. They they brought in some brought in some pretty hefty restrictions and um it wiped a lot of the people that were doing arbitrage and even people that have bought properties there out there. Yeah.

SPEAKER_02 26:57

I want so many people travel there. You I think it was the hotel lobbyists. Yeah, yeah. That makes that makes sense for you. Yeah. Whenever you're whenever you get a unit, you get you sign the lease, you're buying furniture.

SPEAKER_01 27:09

Do you use a designer or you do do you do it? I used to do it myself in the beginning, and my units I thought I was pretty good at it. Um I had an eye for it, but probably after 40 or 50 units, I brought in a designer. Okay. And not only did my units look better, but the setup process was way more efficient because I wasn't having to do it myself. Right. So I would just send my designer floor plans for the unit. She would create me like a vision board with all the stuff where everything would go. She would order it all, it would all go to either the unit or sometimes we send it to a like a storage locker and make sure it's all there, and then we'll move it from the storage locker, bring it to the unit, set it up.

SPEAKER_02 27:46

I feel like when you're when you're when I'm if I was traveling and I'm looking at 20 different units, maybe all around the same price, you're probably gonna pick the one that just looks nicest in the pictures, right? Ah, that looks that looks a little nicer. They're both$200, whatever the number is.

SPEAKER_01 28:02

Yep. And I have a lot of efficiency units that like the apartments themselves aren't that. Almost have to make it look, but I've designed them so nice that like all the competition in my area, like that's why I'm saying it's so easy to beat that. A couch in it and right, the like IKEA furniture. Like, we're not ordering like high-end furniture in these units, but we're ordering from like there's a company called Saveya we use a lot. We use like Wayfair, but like this stuff is like picked specifically to look expensive and and and durable, but for like a cheaper price.

SPEAKER_02 28:33

Is there a horse is there a highest ROI on a specific design or furniture that that you could so I go with a very like minim minimalist design.

SPEAKER_01 28:42

Like I don't overcrowd the space. I put like the necessary stuff and obviously like bed, nightstands. Um, I always do a desk and like a uh like a workspace. Um they call it on it's a it's a big amenity on Airbnb. So all my Airbnbs have a desk and a chair, um, sofa, which is always a convertible sofa or a sleeper, so sleeper sofa, always. Um, I do always provide an extra air mattress, um, dining table or stools, depending if it's like an apartment that has like a especially in a island in a small unit.

SPEAKER_02 29:12

That makes a lot of sense.

SPEAKER_01 29:13

Yep. So sometimes we'll save money on buying a kitchen table if we have an island where we can just put a couple stools. Um, that usually doesn't make a huge difference because you're only those units are only housing usually one one to four people on average, right? So you don't need like a kitchen table and stuff like that. And I just try not to overspend. Like I'm very efficient with like setting up my units and getting like the minimal to like get the job done and like keep people happy.

SPEAKER_02 29:36

What is the average cost for um an apartment unit? Like, what is it? If it's a two-bed or a three-bedroom, two-bath, like what's the average cost of furniture and labor, everything?

SPEAKER_01 29:44

Yeah, all set up and done. Like, yeah, you'll be around eight to ten thousand, sometimes a little bit more, a little bit less, depending on how many, you know. Like, so I used to put air fryers in all my units. I don't really do that anymore, blenders and stuff like that. So you can go a little bit on the higher end and make sure your like units fully equipped, but I just wasn't seeing a lot of ROI on that.

SPEAKER_02 30:02

What about technology? I heard you earlier say something about like ring cameras and certain things. Like, what is all the tech that you put into a unit?

SPEAKER_01 30:09

So every one of our units gets a ring doorbell. Okay. Uh uh, a smart lock that we can it automatically will send every guest their own unique code. Okay. And our cleaners and our team will have their own unique codes. So every time someone goes in that door, we see what code was used and there's a timestamp and everything for security and just, you know, knowing if something happens, right? And then in a lot of our units will do uh minute noise sensors as well, just so we'll know they do smoking detection as well now, which is great. So not only will they alert us if like the DB's in the house, the DB level gets like a certain to avoid parties, but it will also detect smoking and crowd detection and does a few other things as well. So those are great for like apartments and homes where you may run the risk of like having a party or or people smoking, and then you have that, you have that like um concrete evidence to submit to get like um to the Airbnb claims to get your like smoking fee reimbursed and stuff like that.

SPEAKER_02 31:03

What about pictures? I know that I think when you talk about furniture and design, pictures are probably a big deal. And I think when people get into the real estate industry, you know, a lot of people just take pictures of a room with their iPhone. Yeah.

SPEAKER_01 31:17

And used to work, not anymore.

SPEAKER_02 31:19

Yeah, there's a huge difference. So do you use a professional photographer on always?

SPEAKER_01 31:22

Yeah, and we use specifically uh a lot of photographers photographers don't know how to shoot like for short-term rentals. So you need a photographer that's like knows how to do that, like specific angles. And what does it mean?

SPEAKER_02 31:36

And it's a is it a lens, is it a style?

SPEAKER_01 31:38

Is it I think it's a bit of both. Um, like a lot of like real estate photographers, they always shoot wide angle, like to try to get the whole room. Like if you're looking on MLS or realtor.com or whatnot, you'll see like just the whole like where it makes it look bigger. Yeah, short short-term rental photos are more like direct, straight, like they're not just the whole room. It's like you're like highlighting objects. Okay. And then also shooting an HDR in bracket and like blurring all like 10. They'll take like you know what shoot like bracket is where you like they take a picture and it's like 10 different images, all with different lighting, and then they like blend them together and edit. Oh wow, yeah. So it like really like like brightens up the f the room and and seems like like a lot of light. And and that I I find that that works really well.

SPEAKER_02 32:21

What's what's one amenity that you try to put in and everything? I mean, I know it's still an apartment unit and it's basic, but what's something that you can add that maybe all these other units don't have?

SPEAKER_01 32:31

Definitely right now, I like I said, add to all my units is the desk, the workspace, because a lot of people are remote now, right? So they want that workspace to like work.

SPEAKER_02 32:41

Yeah, where you can just like sitting on your coucher and your bed.

SPEAKER_01 32:43

Exactly. Or like even at the kitchen table, it's not as comfortable, right? So a nice chair and a nice desk, and and I would say that's probably the most popular amenity.

SPEAKER_02 32:52

Okay. Yeah. And then when you're actually preparing your listing, you know, I I've never done a listing on Airbnb, so I don't know what it's like, but how what things do you need to list to make sure people put in there? Or is there like best practices kind of thing that you need to do if somebody needs to be aware of?

SPEAKER_01 33:06

Yep. So I use a template and I use it for all my listings, and it's very SEO friendly, and it's basically just a it's a little description and then a breakdown of each room in the house and all the amenities in that room and sleeping arrangements. That's basically my description. And I do these little check marks as like check boxes like dishwasher, air fryer, blender in the kitchen, and then sleeping arrangements. How many people can sleep in each room? Like I have some homes where I have two bunk beds in the same room. So I break that down like full over full bunk bed, twin over twin bunk bed, right? And I really just give people an information or uh a breakdown of what they're getting.

SPEAKER_02 33:42

Yeah, I remember when air it's been so long, but one of the first ones I did, uh I was in it was in Austin, and it said it slept like 17, and then we got there, and there's all these like little weird crevices and stuff. I'm like, I don't know where they got the 17 from. I felt it was like bait and switch a little bit. They just put beds wherever they could. So you just want to be like super transparent on sleeps nine people, like really full nine people.

SPEAKER_01 34:08

I think that's why like I've I've done so well is I'm not trying to do the bait and switch with people, like I have really clear pictures, really clear descriptions. I feel like it's almost trying to sleep people comfortably too.

SPEAKER_02 34:17

It's almost almost worse because when you show up, then you're already like like I paid for this, and like you said it was gonna be X, and then you show up and it's Y. Yeah, it's almost like it would seem better. Like people would be more happy if like it's exactly what they expect when they show up.

SPEAKER_01 34:31

Yeah, like when I was running comps in Austin, I didn't see many, like a lot of the first few deals I did were three bedroom homes, and I did a king in the in the primary, and then I would do a queen in the guest bedroom, and then in the third bedroom, I would do two full, like a full, full over full bunk and a twin over twin bunk, and I would stuff them into a room and people are like, You're crazy, like no one's gonna want to sleep in that. But people book it, people come with their families, they shove the kids in that room, or or they're just they're in town for a major event and it's super expensive. So it's a big group of 10 people, and they just they're not even gonna be there just to sleep, so they don't care.

SPEAKER_02 35:03

Yeah. There's also as far as competition, when you have a three-bedroom house, there's only so much you can do with it, too. Exactly. Yeah, no, that makes sense. What about pricing? What tools are you using for pricing? Like, how do you manage it? I mean, I know it can fluctuate over time. Like, how do you keep up with the competition?

SPEAKER_01 35:18

Yep. So there's lots of great pricing programs out there, but I've always used price labs. I think they are the market leader. I've heard that before. Um, and then I also, after maybe a year ago, I hired an actual revenue management company. So they leverage price labs, but I also have a guy in the background that's manually going in and making small adjustments on top of price labs based off of the market. You know, maybe they're tweaking our prices a little bit further out because maybe occupancy is a bit down at that time or whatnot. So they're adjusting our rates to obviously get the most per night, but also keep us booked 100%.

SPEAKER_02 35:54

What do you pay that person?

SPEAKER_01 35:56

I'm paying them like 50 or 60 bucks a listing. Okay. But I feel like that's a good idea.

SPEAKER_02 36:01

You're you're making a vacuum beyond.

SPEAKER_01 36:03

And I and and when they have a couple hundred listings, like the time it takes to do that every day, it's just something I wanted to outsource and not I I did it from by myself for a while.

SPEAKER_02 36:12

Do the pricing tools ever make any mistakes? Like it in like in the back of my mind, it's like, you know, do you ever leave money on the table or do you ever does it get high and it it doesn't, you don't rent your units because it's like adjusting your price too high? Or is it pretty accurate?

SPEAKER_01 36:25

It's pretty good if you set the base price properly, right? Like uh uh you have to set like a uh a base price and then they'll adjust based off of like the market demand and whatnot, right? So you can set like parameters and you can go in and maybe add you know a bigger discount or a premium for a certain weekend, right? Like they know the the AI and the the pricing tools know all the big events, right? So like in Austin in October, we have ACL Fest for week one and week two, and then we have F1. And I'm sure it's like huge.

SPEAKER_02 36:54

Sure, you did great last week, too, or two last two weeks. Yeah, Southwest.

SPEAKER_01 36:57

By Southwest is a big March one, right? Yeah, so March is always amazing. April and May are usually pretty good in Austin, and then September, October are good. November and December are always good too for apartments. We really are two slowest months in Austin are January and February, and my apartments still make money in those months, they they just make a lot less.

SPEAKER_02 37:16

Yeah, it's not like a luxury rental where you're like seasonal or anything, right? It's just for travel.

SPEAKER_01 37:20

100%. And that's why I feel like my model works so well. Like it's a lot more on the management side because we have more units to manage, but it's a lot more diverse across more units and efficiency units where I'm paying low rent, but I'm bringing in two to four K a month on Airbnb and my rent's a thousand dollars. So it's like it's it's not like having 10 homes and you have so much fluctuation in slow season, you just get crushed.

SPEAKER_02 37:45

How many platforms are out there now? So I know you have Airbnb and BRBO. Where should somebody start? Should they list on every single platform? Should you list on one? Like, how does it work on the platform side?

SPEAKER_01 37:55

So I was loyal to Airbnb for a long time. They've changed a lot of things recently, especially with this 15% fee. It used to be 3% for the host, now it's 15%. So I've started listing on VRBO and Booking.com as well, but I priced those at a premium higher than Airbnb because Airbnb does have the best insurance coverage and it's the easiest platform to use, um, easiest to understand and to book guests and run them through there. So I only want to take a booking on Virgo or Booking.com if I'm catching a premium over Airbnb. Do they offer insurance or do you have a third-party insurer on Virgo and Booking.com have their own insurance programs as well. Too, you can pass that fee along to the guest. And then also, if you want to book direct, a lot of the property management software is now like hostaway and hospital and guestie and stuff, will have um the ability to to buy that as well or charge it to your guest, and they will insure you as well.

SPEAKER_02 38:47

Do you only use the insurance through the listing platforms, or do you have like some type of GL like general liability third?

SPEAKER_01 38:54

I have like a blanket policy just for my whole business, but I never ever go through it for any issues, and we don't have a lot of issues. You'd be surprised. Like with a couple hundred user, I'm I'm I'm filing very few claims.

SPEAKER_02 39:04

I feel like your stuff is like for the travel market, like I mean for the business, because it's just people are in for one or two nights and they're out. It's not like they're going to a luxury vacation rental and there's like a whole ton of people that are gonna be there or anything. It's like just a person that's like come showing up for a night trying to get a decent deal.

SPEAKER_01 39:20

That's it. Like honestly, we we have very few issues. I've had uh in the in three years, I've had my entire unit robbed once. Like people just took everything out of it. I had a unit burn down. Someone was smoking and flicked a cigarette and it caught something on fire. And then the odd time I have smoking or like lint damaged linens, damaged furniture.

SPEAKER_02 39:39

A unit burn down or the whole part, like how just one unit.

SPEAKER_01 39:43

It didn't didn't they caught it before it spread to all the other units? It was like in a large apartment complex, but yeah, that was uh it was like a$50,000,$60,000 claim. Airbnb paid it out.

SPEAKER_02 39:52

Did you did the landlord, did you get any pushback from the landlord after that with the rest of your units?

SPEAKER_01 39:57

No, no, no. We had 11 units there at the time. We just never replaced the one, we just kept the 10.

SPEAKER_02 40:02

What about the reviews? So somebody starting out from zero, what's the best way for them to like get reviews on their listings? Because I'm sure that drives a lot of the traffic, right?

SPEAKER_01 40:11

Yeah, for sure. So in the beginning, when you're listing a brand new listing, you can do a 20% like promotional discount for your first three bookings. I always suggest doing that. Okay, you know, keeping your rates down a little bit at the beginning to get some bookings right away. Um, try not to get a one-month or two-month booking right away. That's great money-wise, but it's really gonna hinder you on the reviews. Yeah, even if you get the one, right? They might not leave it.

SPEAKER_02 40:32

How how many do you think someone needs before they can raise their prices? Only two or three reviews?

SPEAKER_01 40:37

Like what's a like what's a trustworthy amount? Five to ten for sure. And and everybody has this guest favorite badge now. So if you can get like five to ten, five-star reviews right at the beginning, you'll get the guest favorite badge, which is more important now than superhost. Superhost used to be a big thing that everyone kind of leaned on. Oh, I'm a super host. And you would get maybe a 10-15% boost in the algorithm. What does a superhost mean? Do you have a certain time? Yeah, you have to maintain over a 4.8 rating. Um, over uh it's been so long. I've had it for so long. You have to have 10, 10 stays, 10 completed stays and 100% um response rate. Okay. And uh less than 1% cancellation rate. Okay. So you can't cancel guess basically. You cancel one guess, you're pretty much out of the running.

SPEAKER_02 41:23

So somebody gets started, they price everything. What's the day-to-day operations after that when you're turning over a unit or anything else that gets associated with it, like after you get started?

SPEAKER_01 41:32

Yeah. So if you're starting out, most likely not going to be using a property management software. Some people will spend the extra to use a property management software right away, but you can fully use just Airbnb. If you're listing on other platforms, I always recommend using a PMS because what a PMS will do is it will sync all your calendars. So if you get a booking on Verbo, it'll block Airbnb and booking.com as well. So you won't run into double bookings. Also, easier to manage your cleaners and stuff through the property management software. Like I use Hospitable now. I've used Hospitable in the beginning. I switched to hostaway, guesty, back to hostaway, back to hospitable now. And like I've been there for a bit and I'm I'm really happy with like all the automations and the tech that they come out with. So basically, these PMS softwares will connect all your tech together, right? So like I'll incorporate my door locks in there, my my noise sensors, everything will be in that PMS, my automated messages. So when a guest checks in, they'll get all the information. And um, that's it. You just really got to stay on top of your automations. Your cleaning team is gonna be like your, your, your, your lifeline to the business. So you need to make sure the unit's clean, right?

SPEAKER_02 42:37

I feel like that's gonna be one of the biggest operational struggles because from my experience, we've owned a bunch of different businesses, and you have a cleaning company and they do really good the first like three weeks, month, and then it's like it slowly starts, or they'll send different people, there's probably labor problems, whatever.

SPEAKER_01 42:52

And or you get or they just sent too, or they just don't stay on top of them as much as well.

SPEAKER_02 42:56

Or they just don't clean it. Yeah, or they don't show up, especially in like in in the business in the commercial world, because like you might not show up, you might not know if they don't show up for 100%. So, how do you stay on top of that?

SPEAKER_01 43:07

I've went through those struggles too. When I first started, I went through a ton of different cleaners, and it was just trial and error until I found one that I I vibed with and and and they were reliable is the biggest thing. Being able to show up for all these different check-ins, because we have checkouts on Christmas and and these different days.

SPEAKER_02 43:24

Does it notify you when I guess since you have the lock, the code entry for your cleaners, does it notify you if somebody doesn't show up? Or how do you manage how do you manage it? How do you stay on top of them?

SPEAKER_01 43:34

Yeah, so there are softwares that do that now, and I'm actually going to be moving to one soon for half of my portfolio where we'll know this information if the lock has been if like it it will notify us and let us know hey, maybe this guest checked out early, stuff like that. So we can give a heads up to our cleaners because obviously they appreciate that if they can get in earlier and get their job done versus waiting until like maybe 10 or 11 o'clock checkout time, right? Um, but yeah, the softwares where I'm basically adding my cleaners. Cleaners into my property management software and they're getting a full calendar of clean. So they know when a guest checks in, when a guest checks out, there it's all going into their calendars and they know to clean the unit. And then when they go to the unit, they're taking pictures of a before and video, and then they're also sending me an after. So I know and they send that to my VAs now. Like I'm not involved in this process at all. And then I know that the unit's clean.

SPEAKER_02 44:22

And if the next guest shows up and they have an issue, I have evidence of the unit that we can go through and look to see if this guest is making it up or or what I'm sure the worst thing ever, too, for your rating for anything is like if they just missed and forgot to clean the unit and all the sheets are dirty and they're we've had it happen. I've had it happen a bunch of times. It will happen to everyone. I was about to say, I it just as a business owner, I can like that's this problem that I foresee, especially if you're renting as many units that you are.

SPEAKER_01 44:48

100%. Definitely happens, still happens to me now, right? Like people make mistakes, right? So there's no way around it. It's just how do you handle that when it does happen, right? What do you do for the guests? Well, let the guests know that you know the unit's been missed. Well, I mean, sometimes they show up and and it hasn't been cleaned. We've had that happen too, right? So either straight refund, hey, go book somewhere else, or let us get the cleaning team over there now. Disc say they're maybe staying for a week. Tonight's free, go get dinner, it's on us, right? Like compensating them. And most guests are like pretty flexible and like that. Okay, we'll drop our bags, we'll go out for a bit because they're maybe want to see the town or whatnot. It's not a big inconvenience to them, and now they're getting some money back. So they're okay with it, right?

SPEAKER_02 45:26

On the review side, what about when a guest leaves like a bad review for you or a semi-bad review? How do you handle it? Like, what do you what's up?

SPEAKER_01 45:32

We're really trying to avoid those before they get left. We're we're coaching the guests through the whole review process the whole time they're with us, right? So it starts with obviously check-in instructions and then following up hey, have you checked in? How's everything? We we want to ensure that you're gonna leave a five-star review and you have an amazing stay. Please let us know if there's any issues now because we want to correct them now, right? Um, and then another kind of a message when when they're gonna check out, hey, we really rely on these reviews, it helps us build our business. Like Airbnb, it's very important. Anything less than five-star review is is is considered bad. So we kind of tell people like this is how Airbnb's rating system works. It's not like traditional hotels where people would assume a four-star is amazing. Airbnb, like getting a three or four star is like terrible, right? So it's like really strict. I even have these magnets I put on the fridge that say, like, how was your stay? And then it's like, it was good, like five stars or whatever. And then three stars might be like, oh, we had like a leak or something like that, or something bad happened, right? So it just really like enforces this to the guests. Like anything less than a five-star review is unacceptable, right?

SPEAKER_02 46:39

Can you explain co-hosting?

SPEAKER_01 46:41

Yep. Co-hosting is essentially like a property manager, okay. Like like with traditional real estate, like you would have someone else manage your Airbnb for you. So, say you had a property and I came to you and said, Hey, I'll run your property for you. You don't have to do anything. You're gonna be completely hands-off, and I'm gonna charge you anywhere from like 10 to 20% on your gross revenue to do that for you. So I'm gonna talk to all the cleaners, I'm gonna talk to your guests, I'm gonna do everything in your operation for your Airbnb, and you're just gonna get payment. Is it worth it? Depending on the property and depending on your lifestyle and how busy you are, for sure it is. I do it all myself because I've created the systems and I have all the people in place to do the management. So I don't, it's I'm not even managing it myself, but I've just put people in place to do it, and then I'm gonna save that 10, 20% versus hiring a big management company to do it for me. Yeah, which is a huge amount. Yes, it's a lot when it comes, especially when it comes off the gross. Yeah, right? Yeah, that's huge. But it's a great way to build an Airbnb business too. Like a lot of people talk about owning Airbnbs, and then you have arbitrage. Building a co-hosting and management business is really amazing now too a days or nowadays because it's all labor and no upfront. Well, think about the property, your property, like um how much is that gonna bring in every month? And um someone like even new to the business, or someone like myself who's already operated for a while, because you probably want to hire an experienced operator to manage a property like that, but I'm gonna come into that property with no none of my own money, no risk. And I'm gonna make 20 10 to 20 points, especially when it's a high gross revenue property. Yeah, that's what you're talking about. Exactly. So you're making a couple a hundred, two hundred grand a year on that property with no risk. Yeah, that's a pretty that's a pretty good thing.

SPEAKER_02 48:23

Nothing really talks about it. I think for mine, I'm gonna I wanted it big enough too to have that much revenue to where I can just hire my own concierge and just like have a couple people in place and like EA and and just manage it myself. Yeah. I had bad luck when I was really young with property management companies. Again, this is like also 20 years ago. Yep, and they're just like very loose and writing checks for things and do things that I wouldn't do. I'm like, it's not even worth it. I'm like paying to get worse service, get to give worse services.

SPEAKER_01 48:50

100%. Yeah. With a property like the that one that you're telling me about, like you have the budget to hire someone to go and greet your guests and walk them through the property, show them the amenities, make sure they're checked in properly. They're gonna love it and you're gonna get great ratings.

SPEAKER_02 49:05

I I have to because they're just like available if they need anything. Yeah, that's what I was gonna do. That was my like almost like a concierge. Yes. But I almost had to because there's like so many things, like they would there would be a thousand questions just in front of the show.

SPEAKER_01 49:18

Yeah, every right? Like are they gonna watch a 20, 20, 40 minute informational video when they get there? How do you turn on the radio? How do you do this?

SPEAKER_02 49:24

It's like there's so many things. How do you turn on the hot tub? Like it it's just so much. And then, hey, do you need anything? Like, this is where the grocery store, you know, like just somebody, especially when you're bringing that many guests in, or it is more of a luxury property. Yep, kind of used to that like four seasons experience. It's like, hey, do you need anything? Do you know you might be from out of town? It's like, where do we go? What do we do? Like, is there stuff to do for kids? So that was my yeah, that was my idea. Like, I was like, I don't I don't see it working any other way because number one, there's gonna be a thousand questions, and they're just not gonna get a great experience if I didn't have somebody like show up, meet them. If somebody texts at five o'clock, hey, I can't get the radio to work. Like somebody responds immediately and tells them how to work it.

SPEAKER_01 50:06

And with your property, I would even suggest going one step further and having a full lineup of like chef massage oh, if you need rentals, if you need third party service. Yeah, that's a good idea, right? Because a lot of people getting like when I went to Costa Rica, I would want it. I stayed in one of actually my students' Airbnbs. He built he built an Airbnb in Costa Rica and I and he he let me go there and just kind of give him feedback on it. He had a chef, they like anything you needed was like the massage, they would come bring the tables, like it was all ready to go, and it was so it was such a great experience.

SPEAKER_02 50:35

We rented a house in Costa Rica, this is like 15 years ago, and it had they had a chef and everything. I was like, it was so awesome. And it's like especially when you're somewhere and you don't know anybody or you don't know anything, it's like you just show up and like they're doing everything. And also the chef there like pretty much was our technically like our guide because we didn't know where to go, we didn't know and like he handled everything. Yeah, it's like a uh concierge slash chef. Yeah, it was great. I think a lot of th people think most stuff in real estate is passive. Do you think this is a passive way to make money?

SPEAKER_01 51:07

There's definitely more passive ways, right? We talked about it last night, like private lending, you know, traditional real estate, stuff like that. But this can be passive if you structure it properly. Right? Like I said, I have all I have almost 200 units and I probably spend a few hours a week just kind of overseeing the business, right? Like just because I've I've got all the people in place now, right? Like the cleaners know to talk to the VAs, the VAs know to talk to the guests, the automations tie it all together. Um, I have a VA that specifically does Airbnb claims. If stuff's broken, my cleaners put it in a Slack channel, tag my my maintenance and and uh claim VA. He files a tick, he files the claim, right? So it's like I have all the processes set up, so it's not that much of my time anymore. I'm not involved in it.

SPEAKER_02 51:54

Where does somebody go find a VA? Like what is there a certain country? Is there a certain website?

SPEAKER_01 51:57

Onlinejobs.ph is the main big one. It's basically Filipino VAs. They're gonna pay them three to five bucks an hour.

SPEAKER_02 52:04

I've heard that they were good also from from other real estate people and from other like call center stuff, like they say that they're real.

SPEAKER_01 52:10

Like you can specifically like pick a specific niche, like if you need a bookkeeper, you know, someone just to do that, or you want just someone to talk to guests, or whatever you need, like there's someone there that's qualified to do it.

SPEAKER_02 52:23

What's the biggest mistake out of all the 200 units that you think you made? Or the one that stands out the most, I guess.

SPEAKER_01 52:32

I don't know if I've made like any major mistakes along the way, to be honest. Like is I'm very I've I'm I'm very good at looking at the numbers and and looking at like the potential like of the deal and then running it. I'm I've like I said, I've stuck to the same thing over and over again and it works. Right? So like biggest mistake maybe not being on top of my VAs and and team as much as I should be and creating SOPs. One thing I always did was I always worked with my VAs and my team one-on-one with my time. So every time I had a new VA, I would train them myself. I didn't have like a library of like SOPs, like this is how you create an Airbnb listing, this is how you do this. I would just explain it to every new person, and that took a lot of my time. Where I'm just I'm just that type of person. I don't know. I'm not like a SOP type of guy, and I've just I've always been like that.

SPEAKER_02 53:27

I'm not great at that either.

SPEAKER_01 53:28

Yeah, like I could rather just work with the person one-on-one and tell them this is how I like to do everything and like learn as you go. Come to me when you have a question. If you don't understand and I'll answer it for you, right?

SPEAKER_02 53:37

What's the minimum amount of money somebody needs saved to start?

SPEAKER_01 53:41

Well, like you can go the co-hosting route, right? Yeah, where you but that's a little bit easier when you already understand the business and you have some, you know, some sort of portfolio under you. So I always say kind of start with arbitrage, get a few units, and then you know you have operations and you know what you're doing, and you can go to someone and say, Hey, I'm I can co-host your property efficiently, right? Um, but I would say you can rent furniture. I have a deal where we rent all of the furniture. We pay like$300 a month for all the furniture, but the numbers, it made sense. It didn't make sense to spend$10,000 a unit on furniture when we could rent for$300.

SPEAKER_02 54:17

Will they rent furniture to somebody that like how much deposit or down payment do they have to fit?

SPEAKER_01 54:22

For sure. Obviously, it's gonna depend on your credit and stuff, but there's a company called Court, which is probably the biggest one where they will design the unit for you, they'll deliver the furniture, they'll build it out for you, and they'll just charge you a monthly price. So if your numbers are good enough and you don't have I always prefer to buy the furniture because in the long run, you win with buying furniture. You're gonna move it to a different unit. If you're gonna be in the unit for like two, three years and you're paying that rental fee every year, you're eventually gonna be paying more than it would have cost you to furnish in the first place.

SPEAKER_02 54:49

I guess somebody could also put it on a credit card for the first month.

SPEAKER_01 54:52

A lot of people do. A lot of people get 0% APR credit cards for 12, 15 months.

SPEAKER_02 54:56

Or especially if you're trying to scale. Yeah. So if you maybe got two or three units and you don't have any more cash or you spent your first 30 grand on three units, you could probably just like once the model works, put it on a credit card. Yep, start paying off. Pay that down. Hey everyone, real quick, I just want to let you know this podcast is 100% independent. No ads, no sponsors, just real. If you're finding value in whatever we're doing here, the biggest help that you can give us is hitting subscribe and sharing this with someone who you think needs to hear it or someone that it will provide value to. That's how we continue to grow. And if you did that, I would really appreciate it. What are the I know we talked about a bunch of different softwares today or tools? What's the what's the main ones that you recommend somebody using? Like if they want to get into arbitrage?

SPEAKER_01 55:42

Yeah. So my tech stack right now is pro uh hospitable. That's my property management software. Um, using slunge and code locks, those are my the smart locks. I think those are the most popular in the space right now. They're they're most they're the most consistent with the least amount of problems. There's a lot of bad smart locks on on the market that have a lot of issues. Code locks, connectivities, yeah, connectivity issues and just you know, jamming and stuff like that. So those locks work on a lot of different doors, um, which is great too. Uh I have um the minute noise sensors. Okay. We have ring doorbells, and then we also have price labs for our dynamic pricing. We use Slack for our um, you know, team communication. And uh I think that's it. Um, if you want, at the beginning, you can use Turno, which is a cleaner marketplace that can you can find cleaners on, and you can also automate your cleaning through that if you're not using a property management software at the time. So you could just use like Airbnb mixed with turno, mixed with price labs. Is it cheaper or more expensive if you're like they just charge you a small fee, like if you're not um if you're using your own cleaners, but if you pick up a cleaner from the marketplace, they make like a percentage off that cleaner. But what you normally do is you work with that cleaner for a little bit and then pull them off of the marketplace and work direct, right? I was wondering how that worked, if it allows you to do that or not. They don't, but you do.

SPEAKER_02 57:03

Well, man, dude, that was really, really good information. I felt like if somebody's listening to this podcast, you have a step-by-step guide or a step-by-step formula to know exactly how to do the Airbnb arbitrage model model, which is still super fascinating to me. It's like you don't have to own the property. Yeah, especially coming from just like traditional real estate investment. Uh, I do feel like it it is a low risk way, especially if you're not doing luxury. Yes. Like I feel like this is a low risk way to like make pretty good return on your money. I mean, there's not too many places you can make a return like that.

SPEAKER_01 57:33

100%. Definitely low risk, low barrier to entry, good returns if you do it properly, right? If you get some concessions, like there's units that I've done where I've got my money back in three months, four months, because I had a two rent, two, three months of free rent, right? Um, most of my deals I'm getting back in in a year or less. I'm doubling my money in in two years or less.

SPEAKER_02 57:56

What per what percentage, like out of all the deals you do every month, what percentage of those deals are you getting free rent on? Just so somebody knows what to look for and like knows that it's possible.

SPEAKER_01 58:05

I'm getting free rent on all of my deals now because I don't take deals without.

SPEAKER_00 58:09

Okay.

SPEAKER_01 58:09

I literally go to the landlord and I'll say, I'll take 10 units. Here's my terms. You're also doing you're doing volume too, though. Yes. Like I'm at a point now where I'm being very specific with the deals I take. I don't want to just take any unit to take it right.

SPEAKER_02 58:21

If if somebody's not taking 10 units, can they still you think they can still get free rent? Of course.

SPEAKER_01 58:25

We're getting lots of free rent deals for our clients that come through our done with you, done for you program. Like most of them are getting one to two fruit months free on their deals and lower security deposits, no security deposits, those are great concessions too. When you don't have to tie up a full month's rent, I mean that's great when you're starting out.

SPEAKER_02 58:41

Yep.

SPEAKER_01 58:42

Where can people follow you and learn from you or work with you?

SPEAKER_02 58:46

How can't the content?

SPEAKER_01 58:47

I'm mainly on Instagram. I'm on TikTok and YouTube as well, but Instagram agent right. Um, my last name, W-R-I-G-H-T. That's my kind of go-to platform where I'm posting and uh whatnot. We have a community and a done for done with you, done for you program. So I do have the course and and the learning material and past calls and stuff. And the course is not, I don't really sell it, but it's included when people come through my program because it's gonna give you a lot of the information up front. So you're not gonna come to me for it, right? Yeah, that's a whole like a reference guide. Yeah, reference guide. You know, people can get kind of uh up to speed quickly on the business, the important things. And then we have ongoing, we have weekly calls in our community with myself and other coaches and uh past calls for the last two, three years, and then the ability to post your question and get it answered at any point in time. And then a lot of our clients work with us one-on-one through the Done With You Done for You program, like the E2 program I spoke with uh you about earlier, where we're helping people do the whole E2 visa process. They're coming through our program, we're getting them multiple units, they're using our immigration lawyer, our cross-border accountant, all of our contacts, and we're setting up the business for them and they're getting an E2 visa and moving on it.

SPEAKER_02 59:58

That is super unique.

SPEAKER_01 1:00:00

Yeah, I don't think anyone else is doing it.

SPEAKER_02 1:00:02

That's really cool.

SPEAKER_01 1:00:02

Yeah.

SPEAKER_02 1:00:03

Do you have, I mean, I guess with like the tightening up of the immigration laws with Trump, do you see like more business coming in? It's like, hey, this is a legal way to do it.

SPEAKER_01 1:00:11

Yeah, well, it's like really the people that I'm seeing now that want to come to the US are really like one-sided. Like the clientels we're getting, like, they're like, oh, we're done with Canada. Like it's just it's going in the wrong direction, this and that. Like on the US side, it's Trump is pro E2 visa. Like he's a businessman, like he sees the benefits of this visa because you're the people are bringing money from other countries, injecting it in the US and creating jobs. That makes sense, right? So that's the whole purpose of the visa. So I don't ever see them changing that visa process, right? Because for one, especially with the E2, like it's not a green card, right? So it's like how many years do you get over? Five years. It will renew indefinitely if the business is still operational.

SPEAKER_00 1:00:50

Okay.

SPEAKER_01 1:00:51

But it's it's not that big of a uh of a deal, I think, to them. Like they're gonna get that initial a capital injection, create more jobs with it, right? But it's like they're willing to take risk on smaller businesses because they could potentially turn into huge businesses, but they're not handing out a green card for a hundred grand, right? Yeah, makes sense. Yeah, and for the EB5 visa, you need to have 10 employees too, right away, too. So, like that's the million dollar one, like that when you're buying a business, like you need to have 10 full-time employees. Okay, yeah. And what's the minimum for this? For the E2 visa, there's not really a minimum, and you can use contractors. So, like with the Airbnb business, we can use cleaning contractors, like they don't have to be 1099s or whatever, right?

SPEAKER_02 1:01:33

Yeah, yeah. Yeah, which is a lot of small business. When you start, it's a lot of contractors that you are. It's not exactly.

SPEAKER_01 1:01:38

We're not having we don't have the money for full-time employees when we're first starting out, right?

SPEAKER_02 1:01:41

Is there a specific revenue they need to generate, or is it just the typical like the investment that they're bringing on over here?

SPEAKER_01 1:01:47

So, in the first, in this, in the first part of it, when they're doing the approval for the visa, there's a business plan that's gonna outline kind of future projections and what you expect to make. You need to at least make enough to sustain your lifestyle, of course, right? Yeah. Um, but the lawyers we use and the and the business plan that's created is very they're not like going crazy with the expectations of the business because they want to set it up for successful renewal too, right?

SPEAKER_02 1:02:15

What's the time frame? So, like if you somebody comes to you, they're like, hey, I I do want to invest, I have a plenty of money to invest. How what's the like process and then how fast can they get over here?

SPEAKER_01 1:02:24

Yeah, 100%. So four to six months is four to six months is our time frame right now. Like when we onboard you, let's say we do three units for you, which is what a lot of our E2 people do, because three units is what our lawyer recommends as a minimum to make it active enough. Like one unit's not going to cut it, right? So if we do three units, it's gonna take us two to like maybe 60 to 90 days to get those units live and operational. And in the background, the lawyer is gonna be building the business plan, collecting documents from the client and just getting that all prepared on their end.

SPEAKER_02 1:02:55

So you're actually handing them performing units.

SPEAKER_01 1:02:58

Yeah, the units are live before they submit their application. Okay. And then once they submit their application, another like one to two months from that, from like like submitting it to interview to approval. So it's all happening within like four to six months on average.

SPEAKER_02 1:03:12

That's really cool. I had no freaking idea about it.

SPEAKER_01 1:03:15

Yeah, we had such a hard time doing it when we did it. We went through bad lawyers. I didn't have someone to kind of lean off of and ask questions to. I didn't have a mentor that went through the process and actually moved. So I think that's why people are interested in doing it through us because I'm a Canadian who who got out and who did it and built this business model so they can come to me and I have all the answers for them already. And it's gonna be a you know smooth and efficient process, and they're not gonna lose money on trial and error starting up a business that they don't know how it's gonna go or they have no experience, right? What's the approval rating? It's like 90 something percent. It's like really high. Okay. And even if you don't get approved the first shot, like you can re appeal and like resubmit your case, and they'll tell you why it was denied, right? So unless you have like a criminal record or something, it's not really you're not gonna get denied based off of the business model.

SPEAKER_02 1:04:08

Gotcha.

SPEAKER_01 1:04:08

Yeah, it's gonna be something in your past or something like that's gonna mess you up.

SPEAKER_02 1:04:12

That makes sense. Okay. So I was wondering if it was just like how do they make that decision? Like, what's a decision that brings them over here or lets them get approved?

SPEAKER_01 1:04:19

Yeah, it's what I I'm I don't know like the exact specifics, like the immigration lawyer would they kind of know that, and the consulate has like their kind of what they want to see and whatnot, and the lawyers will present it in that way, right? Okay, yeah, sweet man.

SPEAKER_02 1:04:33

Thank you for coming on. Yeah, no, I really appreciate this.

SPEAKER_01 1:04:36

Thanks for everything, like the hospitality, and like this is a this is a first for me, like like like doing a podcast like this, and it was great meeting you and learning about you. And and I realize now I got a long way to go. Nah, you've you're killing it. Yeah, you've you've done super well, man.

SPEAKER_02 1:04:51

It's really cool what you built. So awesome. Thank you very much. I appreciate that. Yeah, thanks.