Cold open

SPEAKER_00 0:00

Welcome to Live Let Thrive, a podcast about the Airbnb life, the sharecy, and everything in between. Here are your hosts, Micah and Steve.

SPEAKER_01 0:11

Hello, hello, hello, and welcome back to another exciting episode of Live Let Thrive. This is Micah coming at you with episode 325 of your favorite short-term, midterm, all that good stuff podcasts, pad split, all that good stuff podcast in the world. Me and Steve will be back recording in the studio next Tuesday. But I'm coming at y'all real quick. As I just got back from Vegas, uh have some fun out there. By the way, if you're married, make some time to just travel with you and your partner, you and your wife, man. It's relaxing and refreshing

Deep-search AI pulls comps in public-disclosure states

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to the soul. But uh yeah, so since the last episode, you know, a couple things have dropped. You know, a lot of, you know, it's a buyer's market. I've talked about that. But uh one couple things I definitely wanted to touch on was the um the power of AI. I've been talking to a lot of like real estate investors. I've been because, you know, I I told you guys, I'm still in the bigger pockets for him. And I was just like shocked with the amount of skepticism or pessim the pessimism towards AI, like that people don't see the power in it. Um, because I was talking to a guy and he was talking about how he was using it to uh you know get insights of his market that he was investing in was a really smart idea because I've done the same thing. Um you can use like anyone who's uh if you if you pay for the $20 a month version of uh Chat GPT or OpenAI, you can get the um the deep search feature. And the deep search feature is really, really powerful. It can do like really deep research for like a subject you're looking at. Like if you're in a state like Arkansas, where it's like this it's like public disclosure. If you sell a house, you can actually use deep search to run comps on properties, and it'll tell you what's sold in the last X amount of days because it's just public information. A state like Texas, it probably won't work. You're gonna need MLS access because we're in a non-disclosure state. But there's so much power behind AI that I think a lot of people are getting left behind, especially like from the entrepreneur standpoint. Especially like I always taught people, like I remember when me and Steve first started talking about AI. The first thing I said, I'm like, this is an entrepreneur's paradise, you know. And there's a bunch, been a bunch of like pushback on it because I seen that MIT did write like a um a really, really good uh article, you know, saying that it can affect like a lot of people's like how they think if they're using it just for answers. And I just I I only use AI for like I use it for certain answers, but I use it a lot for ideas, and I also get it use it to compound on my own ideas and take it a step further, which is what you what I would tell anybody to do, especially if you want a business man, like AI, we have it answering guest messages at this point. We can like if we're having an issue, we can have it respond in a certain type of way, like in a friendly way or in a stern way, depending on the the mood of the guest. And it's just powerful. Like, I I don't know why people a lot of people are against it. Like people who I don't want to say people that work nine to fives, uh corporate people I could see, because there's like there's red tape in corporate, right? So I I can see those people being a yes to button. Entrepreneurs, like, man, if you ain't using it, you're gonna you're getting left behind. And I always tell people a lot of people say, Oh, well, AI is gonna replace humans. I don't think it's gonna replace humans, I think it's gonna replace the humans that don't know AI. And that that is gonna be a problem, but I don't know if it's gonna be a problem. But if you're in college right now, I was watching Mark Cuban on a video and he said, if I was 18 to 20, the only thing I'll be studying is AI. Like, I if I'm going to college, it's something to do with AI. I think definitely take advantage of it, especially if you're an entrepreneur, like or or like a real estate. Like I always tell people, I'm not an entrepreneur, I'm a real estate investor, and that's what I do. Take it full advantage of AI because man, it is it is powerful, you can catapult your business and you can really like grow fast, and it just helps you get past a lot of barriers that you used to have. But yeah, definitely take advantage of AI. And another thing I was talking about, because since we I don't think I talked about the big beautiful bill last time, I might have. I was talking to a CPA and he made he it it kind of touched on my point last week. So last week I discussed that if you're gonna do the um bonus depreciation, 100% bonus depreciation, make sure that it's actually worth it because a lot of people are finding, okay, I got this STR property, but we have slow months, we sometimes don't cash flow. I'm sick of like the guest, the dealing with guests and all that. And you can't have a property management company because you know you no longer qualify and you have to have a minimum stay, uh average stay of seven days. So what he was saying was he see CPA was like, he thinks that right now, with a bonus depreciation being 100% back at 100% again, that he's gonna see that we're gonna see a surge in short-term rentals. And I was like, I could see that, but I see the opposite side of okay, we're going to a surge of short-term rentals again. Like, let's say, like it was pre-pandemic, it is not as easy anymore. And you really can't depend upon one

Airbnb's new chargeback rules shift refund risk to hosts

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platform. Uh, depending upon Airbnb is a dangerous game, especially. I don't know if I talked about this one, especially with Airbnb's new rules and policies, because you know, they're now allowing you, they're now chargebacks are now on you, and if like a guest doesn't pay, it's now on you. Like if they do any type of sketchy stuff, and that's always been the Airbnb superpower, was because like if you go to other platforms like booking.com, sometimes it's on you. You had left holding that bag. Now Airbnb is kind of doing the same thing. That's gonna be interesting to see. I don't like it, and I've always told people you need to get far away from Airbnb as possible, especially like people who do like midterms, like, and I'm gonna be honest with you. I've said before if you're getting your Airbnb, your midterm rental reservations through Airbnb, VRBO,

Midterm rental funnels should be B2B, not OTA-dependent

SPEAKER_01 5:21

you're not really in the midterm rental space, you're more or less getting people to book for 30 or more days on the platform. To me, midterm rentals is business to business. And I told my rental car story, like they cater to insurance companies because it's a business-to-business model, you're guaranteed to get paid. If something breaks, they know you have insurance. It's the same thing with midterm rentals. If you're depending upon Airbnb just to get those reservations or whatnot, and especially with these new change in law rules where you can be left holding a bag if they even if they get complain on something and they and you have to pay them back in full, that's you're gonna be left holding that bag. So I've always said midterm rentals, you ain't getting them. If you're getting them through the OTAs, you ain't in the midterm rental space yet. You're you're just getting reservations on uh Airbnb, VRBO, whatever it may be, you're not in that midterm rental space yet. Because you should be getting those people directly to you, and those people should be you should have a funnel of inbound leads. I don't care if it's from insurance companies, construction workers, uh, if you have a Sta Fi uh if anyone who doesn't know what a Stafi is, Stafi is basically a little when guests log into your Wi-Fi, they have to put their information in first name, last name, email, phone number, and you can make certain things mandatory, certain things they can bypass, but you're collecting guest information. What I've been saying is if you can't get clientele directly, just use those OTAs to build your clientele, but don't depend on it. That's been the problem, and I think that's why Airbnb continues to make these rules. And in Airbnb's defense, because I I will say this if I was Brian Cheskin and I own Airbnb, I would do a hundred percent everything I could do to cater to guests. Um, I wouldn't be that's where my money is, right? Um, cater to the guests, you hold no risk because you don't own the property and let the host take all the take all the risk. You know what I mean? You just play the middleman. Uh, a lot of people don't like that way of thinking, but I'm up your fear on their platform, that's the and you they own the market share, they can advertise a little bit better than you. I mean, I would do the same thing, but like I was saying, you got to build that funnel yourself. Man, it's just a lot of changes coming at short Airbnb. So I would tell y'all right now, be very, very careful with like taking those reservations because yeah, Airbnb, I don't I don't I don't I can't see what's gonna happen, but if it does turn into an issue, I don't know if Airbnb will turn back the wheels on you know, making this decision on the chargebacks and all that, um, and the and the cancellations, I don't and or the in the guest complaints. I don't know if they'll you know retract, you know, if they see it's a problem. I doubt they will because I think they're in favor of the of the of the guest, which makes sense. So y'all make sure y'all are uh on your P's and Q's when that that does happen. I think it starts in if it hasn't started already, I think it starts in like September or August, I think. So y'all make sure y'all go read those rules. And I'll I may I'm gonna put a link in the show notes to all the Airbnb's new payment policies and all that stuff. So uh yeah, so you can see you can't expect a surge of like short terminals, mid-terminals, short terminals like Airbnb, the short-terminal space. I'm gonna say mid-terminals with that big beautiful tax bill being passed. So with it being a buyer's market, too, make sure you're running your numbers on your deals. You know, I told you guys last week if the number if they don't cash flow long term, I understand if you're gonna get it and turn it into a short-term rental to produce your cash

Closing the duplex and the 40% Prime Day furnishing discount

SPEAKER_01 8:24

flow, but make sure you have the short-terminal laws already in place, man, because uh that's another big one. People are doing stuff with laws not in place and then they're they're left holding the bag. So another thing, and this is why I tell people, man, always push forward, always be in the middle of doing something or learning something. Because we uh so we closed on the duplex, we closed on the duplex on the first, and we got lucky because our budget to spend on this property was like 20,000, and that's about estimated about 10,000 per side, right? Because it's duplex, three bed, too bad, which was a pretty good, which was really good, you know. But we got lucky because after we closed, we realized it was prime day, so it's the 10th. Prime day stops tomorrow, I think at like maybe like 11.59. We got lucky because it was prime day, so we got to order all this stuff. Our cart took like a 40% price cut, so we're getting this stuff way cheaper than what we expected. So I was like, man, we got lucky. So man, I tell people luck is when what is it? Luck is when preparation meets opportunity. So we were prepared and an opportunity presented itself, so we were able to really, really get some good deals on Prime Day. Uh, by the way, I'm now starting to think maybe I need to start setting up my units and get my units ready, and so we can just start using Prime Day as a way to set up cheaper units because I think my next pickup will I'll probably start, I'm gonna start doing some flips in August, and then once I get some reserves built back up, I'm gonna probably start doing uh start getting another unit, another property. I like the small multifamily play, especially if we can get like a three-bed, two bath. I'm loving that play right now, like the duplexes that are three-bed, two bath. Um, I maybe look at something bigger just because you know it's a buyer's market and you can catch deals right now. And I tell people all the time if it's a buyer's market, negotiate, negotiate. You don't want to be stuck making bad deals in a buyer's market. You overpaying for something and you don't have to. Kind of, and I'll I'll actually relate like a uh uh a basketball story of this. So if you guys have been watching basketball, any

The Phoenix Suns overpaying for the worst house on the block

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basketball fans out there, Shay Gilgest Gilders Alexander, SGA, plays for the Oklahoma City Thunder. He just signed a four-year deal, I think for like 285 million. Now, mind you, he was the league MVP, finals MVP, Western Conference MVP, just won the NBA Finals, full, full blown, deserves it, right? So, seven days after that happened, so I think he signed his deal July 1st, like seven or eight days after that happened. It might have been yesterday. The Phoenix Suns go and give Devin Booker two years for like 280 something. Basically, they're overpaying for him. They're they're giving him more money than shake than SGA. And I'm like, why would you do that? And it's like, I'm gonna brought tie this back into real estate. It's like you're paying, you're overpaying for the worst house on the block. You're yeah, you're overpaying for the worst house on the block when the nicest house on the block just got appraised and you're paying more for the ugliest house on the block after the nicest one just got appraised. And it's like, it don't even make sense. But I that's one thing about that. I think that that's a mindset of scarcity. Like, if you look at the Oklahoma City Thunder, they built their team from the ground up, right? So they have an abundance mindset of what they can do, and that's why it's important to invest in yourself. Like the Phoenix Suns are operating from scarcity and not abundance. They're like, oh, we have we just lost Kevin Durant, Bradley Bill wants out, so we have to hold on instead of you know have being in good man, being being in good leadership and just rebuilding it, right? So I know people don't want to hear that, but you might have to just rebuild it because Devin Booker ain't getting you no championship. You've you've surrounded him with everything, he's not giving you a championship, so don't overpay for them. And I I that the same thing with the housing market, be very careful, run your numbers, and then you have all the leverage because it's a buyer's market, stuff sitting for a long time. I told you about the five-unit townhome that's like sitting at eight, that was sitting at 850, they went down to 800 and it's still sitting, and people, you know, people ain't gonna just pay overpay for these properties. They have all the leverage, and it's like the uh, I think the 12plex I told you guys about, you know, you make an offer, you'll learn something too, because you'll find out some of these people are just making these putting up these uh for sale signs with bogus numbers on them, just seeing who will bite. So be careful on that, you know. Uh Phoenix Suns bit the bullet. I don't know why they did it, but they did it. So yeah, definitely look at because it's a buyer's market,

Midwest and Deep South cash-flowing at 7% interest

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a lot of opportunity out there. Um, like the people that stand there on the sidelines waiting to buy, I would say buy now if you can, because it buying is perspective of is a perspective of what kind of deal you're getting. Because a lot of people they get bad deals, so they're holding off. They're trying to get the really, really good deals when there's blood in the streets. But if you can't operate in a market like this, you can't operate when there's blood in the streets. The blood in the streets, the people that wolves, they're gonna gobble those deals up, you know what I'm saying? So buy now, I would say, but buy in a good market. Um, if you looked at my Instagram account, I showed the green places where I talked about this last week, and it backed up what I said. It's like the places that are green right now where there's affordable housing is the Midwest and the Deep South, and that's where all the cash flow is. So if you can get something out there, like Arkansas's Tennessee actually was actually above, it was actually in the red, and I could see why because so many people are moving to like Nashville, Gatlinburg, Tennessee's high, so you're not gonna get those really good deals out there. But like the Louisiana's, Arkansas's, Iowa's, I was looking like basically the Midwest and the South, man. You can get some really good deals right now. So if you're not afraid, if you live in those areas, you have the advantage. But if you like not afraid to get your hands dirty and do some like long-distance real estate investing, definitely look at uh those Midwest and Deep South markets because they're hot and they you can cash flow at like seven percent. I have a I have two unit properties at seven percent, and I'm cash flowing on both of them on long term. So if you look at like if the interest rates go down, which I think they're gonna go down, because they're they're projecting it to go to six point one percent by the end of next year, end of this year, I think end of next year. If you buy something at a seven percent right now and it goes, the interest rates drop and you're able to like refinance down to like a six-one, man, you're winning. So, yeah, I tell people the best time to buy real estate was yesterday. So definitely look at buying. Um, someone did ask me the other day.

Why Myka left arbitrage for ownership and equity

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Uh, this is on the bigger pockets forum. He asked about arbitrage, and you guys know I I got out of the arbitrage game. I got out of it because it's like you're rich one month net one month, broke the next, no equity behind it. Or you're making all this money and then you have to try to, you know, then you have you can invest it. You it's a great way to scale and invest, but it's just to me, the long-term play, I'm like, the risk ain't worth it because I have to pay all this rent. If I have a slow month, it's out of my pocket. So and and you can midterm some of them, but most most midterm arbitrages, like if you're gonna do a three-bed, two-bath house, I tell people this too. When you arbitrage in a three-bed, two-bath house, if the dude next door to you has been owning his house for 10 years and you're trying to arbitrage and he's owned his house for 10 years, and he's in the short-term rental game as well, they can price you out the market because you're paying well, your rent costs is way more than his mortgage. He can price you out the market. So that's another thing about like even arbitraging family homes because like the three beds, two baths, you're looking at sometimes that that midterm rental clientele is there. You can get it, but look at your costs, your costs are way higher. So, and then if you go to like the two beds, the one bed, one beds, two beds. I don't like midterms on those because my target clientele is my clarity clientele is families and construction workers, and they usually travel in groups. So I don't really like the midterm for like the ones and twos. Um, but it's still a great thing to do. Arbitrage is great, it's just for me or my suggestion, I was just like, because this guy already had money, right? He already has cash. His problem was he didn't have the credit, right? So he was afraid of, he's like, Oh, I can't get this because of credit. I'm like, Well, if you go to a good enough market, you could take the L on the credit, get like a high, you're gonna pay a higher interest rate, but if it still cash flows at the higher interest rate, get the property, short-term rent it, midterm rent it, learn the game, and then go into managing other people. So now you're producing cash while you're working on your credit. So now you're you're winning on all fronts. So that's why not and that's why I said I I've gotten into the I am more into owning and managing. I like that risk model better from owning if I have a slow month. And most of the time I can always cash flow on owning. If I have a slow month, I can usually cash flow, but I got equity behind it. You know what I mean? I it's something it's something in the long term that I I I wouldn't want to give up. So, and then if also not only equity, you're getting the depreciation because 100% depreciation is back. I'm not using that. I'll be honest with you, I'm not using that. But you got the depreciation, you get the tax write-offs, all that good stuff. So, yeah, definitely. Uh, if you're looking at arbitrage, just run your numbers really well. But me, I'm out of the arbitrage game, especially on apartments. I'm like out of that. Um, and it feels good because you guys know, and I talk about the the book pumpkin plan. I finally have my big pumpkins, the pumpkins that bring me joy, and the pumpkins that I can 20% of the work brings in 80% of the results. So those are the units I'm loving. The houses, the three-bed, two-bath, two-car garage, if possible, those are hits for me. This works for my business. And so arbitraging is not really my thing, but for people that are getting into it and want to arbitrage, I would say don't arbitrage if you already have like if you have the capital to buy, man, go get your find yourself a good deal. You don't even, I wouldn't, you know me. I don't always any anytime I don't suggest putting down 20% because that's just a lot of capital. But if you can go put like three and a half percent down on a small multifamily, you're winning. You're winning all day. Or if you do like a burr, if you can find a market where burr still works, that's a win all day too. You know, now you're you're offsetting everything up front, so you're getting everything brand new up front, and you can roll furniture costs in there. I've told you to talk to you guys about rolling furniture costs in the Burr project. Now you basically can get free furniture, get refinance that you refinance out, and you get everything back. But you got to run your numbers, but yeah, that's been my play right now. So I am actively buying as soon as I get these units set up. I got I'm going out of town this weekend. That's actually why I'm recording now because I'm gonna be out of town this weekend. Me and Steve were gonna try to record Sunday, but I'm like, man, I'm gonna I'm not coming back till Monday. So I'm heading out of town to uh uh help my cleaners a little bit with the setup, but also just getting certain things done, picking up certain things from stores, getting all that stuff done. Um, but yeah, everyone, if y'all take advantage of um Amazon Prime Day, man, especially if you have a business prime account. By the way, you've got to have a business prime account because you get all the discounts on top of Prime. Man, you can't lose. So yeah, we are still ticking. So I'm still ticking, still moving. Uh, y'all stay in tune on my um Instagram account because I'm definitely gonna be uh definitely gonna be posting what we're doing. Me and Mahogany. Mahogany's been doing all the ordering, and then I've been doing like the back end. I do like the tech stuff, like the stafies, the minute minute systems, all that. I get all that set up. That's like my jam. That's what I do. I'm a tech nerd. So yeah, man. See, y'all stay on the keep grinding, keep executing, stay hungry, stay humble. And uh yeah, um, y'all stay in touch, stay, stay in touch because I am gonna be um, I'm definitely gonna uh be posting about the setup and how that's going, the three-bed, two-bath duplex, let y'all know how that's going, let y'all know what the number's looking like. I mean, we already got it posted online, and I actually didn't have accidentally didn't have the dates blocked off, and someone already inquired about it. So I was like, dang, okay, this might be a hit. So, and by the way, I created three listings. So, if you do like a duplex or a triplex or something, so this duplex, I created three listings, one for both sides, one for uh up and down, and then one for each unit. So, I'm hopefully if I see how this works, I know I can get a construction company, construction workers to get the whole thing. That'll be easy to do. So, yeah, I'm excited about it. I'm getting excited about it. Then I'm more excited about the goals that we have after we get this thing launched. Vegas was our like pre not pre-vacation, but also our pre-celebration, like celebrating that we closed on the deal. So always remember to reward yourself because if you're just grinding and grinding, man, and you don't reward yourself, you forget to stop and smell the roses, as my wife would say. Uh, it just becomes starts beating yourself down mentally. So, yeah, always stop and have gratitude for where you've came from, what you're looking forward to, what you're manifesting. So, yeah, man, it's been really good. My Vegas trip was great. Um, so yeah, looking to hop back on with Steve on Tuesday. I know he is that he's always got some good stuff coming with his spat pad splits that I'm excited to hear about too. So yeah, thank y'all for uh tuning in. This is gonna be just a quick episode, man. Just giving y'all updates, keeping the podcast going. Um, yeah, just quick updates. So yeah, thank y'all for listening, continuing to listen. Send us an email, DM us. I'm all we're always on Instagram. Send us an email, DM us. Uh, and uh yeah, you can find us at email us at live let live let thrive at gmail.com. Send us an email, dm us on we're on Instagram, TikTok, we're always posting on it daily. And yeah, thank y'all for continuing to listen, and we are out.

SPEAKER_00 20:13

Thank you for tuning in to this week's episode of Live Let Thrive. Be sure to tune in next week for all the latest in the world of Airbnb and all that entails. Bye-bye.