Cold open

SPEAKER_00 0:00

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

SPEAKER_05 0:11

Hello, hello, hello, and welcome back to another exciting episode of Live Let Thrive. I'm your host, Stevie Stacks, coming at you from Fort Worth, Texas. And this is your favorite short-term, mid-term, long-term rental podcast in the world going strong for like forever now, like six or seven years. But, anyways, enough about the show, enough about me. We have a special guest today, and her name is Rachel Wagner. It's Wagner.

Rachel's $40 Tai Lopez course and the spare-bedroom test

SPEAKER_05 0:41

Wagner, not Wagner, right?

SPEAKER_02 0:42

Like the Yeah, it's it's Wagner, but if we were in Germany, that's how they would say it, I'm sure.

SPEAKER_05 0:49

You might be related to Wagner in a distant, distant, you know.

SPEAKER_02 0:54

Universe. Yeah.

SPEAKER_05 0:55

Universe. So there you go. Are you musical at all? You can do music?

SPEAKER_02 0:59

Um, no.

SPEAKER_05 1:00

Okay. Never mind. Well, uh, Rachel, yeah, Rachel Wagner is joining us today. And who is Rachel? Rachel is a full-time entrepreneur with a large presence in the STR space, getting her start by renting out the spare bedroom in her tiny Las Vegas apartment. Rachel has been able to scale up and sign 30 plus different leases over the last 4.5 years. With a passion for finding great deals and sharing the unique idea of arbitrage, she started a property locating agency just over a year ago where she helps investors and operators find deals to add to their portfolio. She's excited to get the opportunity to provide value and share insight on what got her to where she is. Welcome to the show, Rachel.

SPEAKER_02 1:50

Absolutely. Thank you so much. That was a great intro. It sounds like I wrote it myself.

SPEAKER_05 1:56

No, I wrote it, Rachel. I know you. I know you more than you know you.

SPEAKER_02 1:59

You did a great job.

SPEAKER_05 2:02

Just kidding. We always pass that on to the people coming on the show. Hey, hey, write a bio about

Grant Cardone's Young Hustlers ad that introduced arbitrage

SPEAKER_05 2:06

yourself. I don't want to go look you up or nothing. Um, anyways, so I'll ask you because um how did you why arbitrage? Why did you start an arbitrage? Who got you into it, your mentor, all that fun stuff?

SPEAKER_01 2:18

Yeah, that's a great question. So, how I kind of started my entrepreneurship journey, I was in community college right after high school. And I thought I actually wanted to be an actress because growing up, I always knew I wanted to make a lot of money, but I also wanted to be known by a lot of people in regards to just making a difference. And from how I grew up, the only type of people that I could see that were doing that were actresses, singers, musicians. And obviously, as I just mentioned, I'm not very musical, but I thought that maybe I had a shot at acting. So I was pursuing that. And like long story short, I hated it. It wasn't for me. Every time I would go and be an extra or be on set or read scripts, I just did not enjoy it. So I said, okay, there has to be something else. And then at that time I had gotten into sales. So I was doing a lot of direct sales, I was doing um gym sales, I was just doing anything I could to make money and kind of learn that space. And I really enjoyed it. It was a great time, but I also knew that I wanted to be my own boss. A lot of people told me to get into real estate. They told me to be a realtor, they told me that I need to be like trying to work towards investing. But at the time, now my mindset is a lot different

The illegal Vegas apartment and looking over your shoulder

SPEAKER_01 3:32

now. But at that time, I was like 18 or 19 years old. I'm like, real estate doesn't sound sexy. I don't want to be a realtor. Like it was just those were kind of the thoughts going through my head. So I remember in 2019, I was kind of vacationing a little bit. Um, I was with my boyfriend at the time, and I think we were getting like manny petties, and I had seen this ad on Instagram, and it was Grant Cardone for anyone that's in the real estate space. Of course, they know Grant Cardone. And there was a show that he has, a little segment called Young Hustlers. And there was this guy by the name of Brian Page that was on the show, and he had talked about how he Airbnb's homes without having to own them. And that kind of introduced me to the idea of rental arbitrage at that time, which I had no idea existed. I had heard about Airbnb, but I didn't really know anything clear and cut about it, right? Like people maybe were renting out their spare bedrooms or their single family home or their second investment prop investment property somewhere on the coast or something. But there wasn't anyone building a business off of going up to owners, asking them to rent the home, and then Airbnb on the back end. So that's where it really caught my eye because it was new, it sounded fun. I wouldn't say it sounded sexy, but it definitely sounded different opposed to what I was introduced to prior with a lot of the, I guess, OGs, as you could say, in the real estate space. This was new and fresh and exciting and something that I was interested in. So that's kind of where it all began was being introduced to that ad, really, and even being uh familiar with the concept.

SPEAKER_05 5:11

Cool, cool. Because I I knew um that you were a big um Sean Rasij fan, right?

SPEAKER_01 5:17

Yeah, yeah, yeah. Airbnb automated, yeah, yeah. And at the time, he didn't have a course, he was just providing free content on YouTube. Now, Brian Page was like the only Airbnb arbitrage guy with a course that at least was known like pretty heavily. Sean Rocky Jeech ended up creating a course and has multiple courses now, and it's been like five years later, right? He has a ton of courses and opportunities, and he still creates a ton of free content, which is great. He was the main guy that I would watch when I was building um in the beginning stages of my Airbnb arbitrage business. So Brian was the one that introduced me to the concept, and I learned enough from this $40 course that I bought off of Ty Lopez, because Ty Lopez at the time was huge. Ty Lopez, Ty Lopez was the guy, right? And I I'm really, I'm not saying I'm against courses, but I do a lot of research before I invest into anything because a lot of the courses are like a thousand plus bucks. And at the time when I was a thousand plus, I was, I want to say like 21. So I wasn't trying to invest a ton of money. And I was trying to search for all these different ways that I could learn about this system and this business. So I went and I saw that Ty Lopez had this collaborative course with Brian Page and two other Airbnb arbitrage gurus at the time. And it was only 40 bucks. And it taught you everything you need to know. And of course, on the back end, all three of them tried to sell their own course, but it taught me enough to be able to know how to rent out my spare bedroom that I had at the time in my Las Vegas apartment. So I learned enough to where I was like, okay, if I really want to pursue this, before I sign a lease under my business name, or even if I decided to do a personal guarantee or whatever the case may be, before I go and I sign a lease, I want to know if I even enjoy this. If I even want to pursue it, if I'm if I'm gonna enjoy the process, if I like the systems, things like that. So that's why I went out and I bought a bunch of cheap furniture from like Bob's furniture, Amazon, Marshall's, things like that. I went and I furnished my spare bedroom. My living room was super sparse. So I went and I got a couple pieces of decor for my living room. And then I just rented out my spare bedroom for probably six months before I decided, okay, maybe sooner than that, maybe like three months. But then I went and I signed a lease. But I did all the cleaning, I did all the communication, I did all the pricing. I mean, at the time, there wasn't a lot of integrations or a lot of different resources that you could use, or like I said, a lot of different knowledge out there on how to even run a business by doing arbitrage. So I kind of had to figure it out and watch a lot of different YouTube videos that were hit or miss. But that's really how I got my start. And it taught me that okay, I do enjoy this and I do want to pursue it more.

Muse Coffee ad read

SPEAKER_01 8:11

And that's really where it all came from.

SPEAKER_05 8:14

Oh, hey, how y'all doing? Stevie Sacks here from Live Let Drive. And I thought I'd give a quick shout-out to my buddy Brian Wynn over at themusecoffee.co. Man, this is some good stuff. Brian's a longtime listener of the show, fellow entrepreneur, and he's been sending us coffee for a while now. And this is some really, really good coffee for the best places on earth, best beans on earth, freshly roasted, and sent to your front door in a couple days, and you'll know what I'm talking about. So my buddy Brian, Brian wins over at the Muse Coffee, hit him up, or he'll hook you up. You put in the code LLT, you get an extra 20% off your order. I mean, what do you got to lose, y'all? Help us keep the lights on, help a fellow entrepreneur and get you some good coffee in the process. The MuseCoffee.co.

SPEAKER_02 9:01

Yo.

SPEAKER_05 9:02

That's cool. So you follow the gurus.

SPEAKER_01 9:05

Exactly.

SPEAKER_05 9:06

Funny uh you mentioned uh Ty Lopez because uh our buddy uh came on the show a long time ago. Uh he was he was on CNBC and all this stuff uh spotlighted because he's a 30-year-old millionaire, whatever. He'd be self-made and all that stuff. Todd Baldwin. I don't know if you ever heard of him, but anyways, he he's a little he's out there in the space. He ain't trying to sell courses and take people's money like a lot of the gurus are. But he he had like a little beef with Ty

Tai Lopez controversy and fake-it-till-you-make-it Lamborghinis

SPEAKER_05 9:33

Lopez. He would always bring him up on the show, you know. Hey, you know, Ty would do the stand in front of the Lamborghinis and be uh in front of a mansion and all this stuff, and and it turned out he was all rented stuff until he was able to start making real money off selling courses, and then he was able to start investing and buying businesses and stuff like that. So he you know he faked it till he made till he made it, but anyways, I thought that was funny you mentioned Ty Lopez. He's a good talker, a lot of people.

SPEAKER_01 9:58

Yeah, he was very controversial when he first kind of got his start and blew up and everything. A lot of people either kind of loved or hated him, or you know, whatever the case may be. But um, I he's come out a little bit more now in the media and he's doing a lot more interviews because he was traveling a lot and investing in all those bigger companies. But I always enjoy listening to him because he's just so knowledgeable, he's read so many books, he can quote things like that. It's pretty cool, but yeah, he definitely is a controversial character for sure.

SPEAKER_05 10:27

He's got a friendly face, through a friendly face, yeah.

SPEAKER_02 10:32

For sure.

SPEAKER_05 10:34

That's cool. You started getting some arbitrages under your belt, and and um so how how were you going and and pitching to these places to let you do arbitrage?

SPEAKER_01 10:44

Yeah, so that was another one um that I had to kind of learn and fall straight on my face for. So I learned scripts from Sean Rocky Jeech, who was the arbitrage guru, you know, like the person that I would follow and watch all I probably watched all his videos from 2016 and up.

SPEAKER_05 11:05

He's been on our show before. He's been on our show. Oh, really?

SPEAKER_01 11:08

That's awesome.

SPEAKER_05 11:09

We we part, we had a we partied at his uh penthouse over there in Dallas. Really nice. Overlook at the AAC, really cool.

SPEAKER_01 11:15

Very cool. Definitely missed Dallas. Dallas was a great city. Um, but yeah, so I ended up watching his scripts and I don't remember exactly how they went, but basically it's asking one of the first things I remember him saying is ask them if they're open to a corporate lease, if they offer corporate leases and then shut up. Like if they don't, then move on. If they do, then you go in and you kind of start your pitch. Um, and there's a couple different ones that I've used off of him before, but he does do a lot of apartment arbitrages. And now with it being so popular, I think that single-family homes to start are better for a newbie, only because apartments you have to go through a chain of commands. So you usually have to contact agents and then the leasing agent has to ask the supervisor, the manager, then they have to ask the regional, then the regional has to sometimes take it up to the owner. So there's a lot of different steps to get an apartment building to say yes if it is a large complex that's managed by a professional company. And then on top of that, they usually want you to have two years of business credit. They want you to have experience with other landlords and other management companies, things like that. So at the time, it was a, I wouldn't say it was a lot easier to get into apartments, but it wasn't as hard as it is now. Um, but what I would do is I would basically pitch owners is I would say, hey, are do you guys offer corporate leases? Are you guys open to a corporate lease? And then from there, I would make my pitch and say something along the lines of, uh, yeah, my business is expanding in the area. We're looking to pick up the 10 units within the next six months. Uh, are you guys open to something like that? And then usually they'll say, Oh, of course, yeah, absolutely. We can accommodate. And then from there, we kind of have to say, okay, well, a lot of our uh clients are going to be coming from our professional website. They're gonna be traveling nurses, they're gonna be staying for, you know, one to three months. But then whenever we can't fill the gaps, we'd be looking to promote it on sites besides our own, such as Airbnb, Verbo, you know, booking.com, things like that. And then usually from there we'll get shut down. And then we'll have to move on to the next one and the next one and the next one. Um, so it's a lot of no's. I remember going through a ton of no's before I could get a yes. Um, even my first, what I thought was a yes, was actually a no. Um, the first ever apartment that I got outside of my own and and renting that. By the way, I did rent my spare bedroom on Airbnb. And probably after about three weeks, my apartment building said, Hey, we we see that your apartment's listed on Airbnb.

Renting the spare bedroom until the complex caught on

SPEAKER_01 13:47

We have a strict no no renting on Airbnb policy, which was kind of interesting at the time with 2019, um, because it wasn't as popular. But I ended up uh renting it for like a couple more weeks and then I stopped. And then when I went to go pitch um a complex, and I lived in Vegas at the time, so I pitched a complex in Henderson, which isn't it's kind of a suburb on the outskirts. I went to go pitch them and they basically agreed. They said yes to a corporate lease, like yes, you can rent it out to other people. But then when I looked at the lease verbiage, it said no renting on Airbnb, no renting on VRBO. But I was so eager to get my first unit and I had gone through so many no's, and I felt like I was so close to this yes, and I really thought that the location of where the apartment was in the complex, it wouldn't be noticed or it wouldn't be obvious that it's an Airbnb or I wouldn't get caught. So I signed the lease anyway. And big mistake, like big mistake. I never had to, I never had any fines or fees. The apartment building did find out, but I ended up kind of just carrying out the lease. It was like an 18-month lease. And I would still run it out on Airbnb, but I focused on trying to get midterm to long-term bookings or at least a couple of weeks to be able to not have the turnover be so constant and so short term. So that was a big mistake because I couldn't run it comfortably. I was always looking over my shoulder. I feel, I feel like I remember myself unlisting it during the day and only listing it at night. Like huge mistake, huge mistake. So I told myself I'm never going to rent an apartment illegally again, basically. So that was my first big mistake in arbitrage alone. And that was the first one, I guess you could say, that was under my belt besides my spare bedroom, which also was not allowed. So I kind of messed up a little bit at the beginning. Um, but I had to get my feet wet somehow and learn the hard way to be able to do things the right way. And I just knew I would have to work a little bit harder and be better at conveying the Airbnb idea and getting up the chain of command if I wanted to grow.

SPEAKER_05 15:59

And that's the thing. I mean, a lot of people, I mean, if they don't get if the situation isn't perfect, they never start. So most people don't ever start, right? And and then a true entrepreneur, okay, it's good enough. I just gotta get a start, or I'm not gonna do this thing. And then we yes, we do something maybe not smart at first, but we we learn, right? We learn the ins and outs, we learn not what not to do next time, and then we're in the game, and then we know how to we learn from these no's, we learn from these maybes, we learn from whatever uh these apartments we it's like playing poker. You start reading people, right? And then you learn like just like you were saying, you go through that whole spiel about corporate, all the stuff, you get past the first level, second level, all and then you say, Oh, by the way, we're gonna rent, you know, short periods between, and then you get the no. Like then you learn, god dang it, I'm not gonna go through all that spiel if I know that that's gonna trigger a no, and I have to spend an hour here to get to that no. I'm gonna get to the no right away. I'm just gonna tell them, you know, we we you know, you know what I'm talking about. I'm gonna tell them corporate long term, we just fill in the gaps with with um other sites, and they usually know what you're talking about. Now, of course they know, but back then, you know, it was it was a little different. There was some people that still didn't know what the hell we were doing, but anyways, um so you so yeah, just getting getting the start is the is the main thing, and and you did it um kind of under the table, but but you learned a whole bunch. So when when did you start getting like actual yeses and were able to do it legally?

SPEAKER_01 17:28

Yeah, so it actually was when I was moving to Dallas that I got my first real yeses. Now, in Vegas, I did get two more yeses.

Dallas yeses and 11 to 20 units at peak

SPEAKER_01 17:38

Um, so I had a total of three units in Vegas uh outside of the spare bedroom that I rented. So I had the one that technically wasn't allowed, and then I got two more yeses in a different complex where I rented out those, and those were closer to the strip. Um, they crushed it, they were only studios, but I remember I remember my total expenses per unit per month was close to 950. Those units were bringing in like eight grand per month. It was insane. It was literally insane. And it they allowed Airbnb. They allowed it. We we we took out the addendum in the contract that says no Airbnb allowed, like they agreed to it. And I only was able to even find out that building was allowing Airbnb because I saw that someone else was Airbnb in that building. So I basically went and asked. And then from there, I went in and I got a couple units in there. But after about eight to 10 months, I guess the owners said that some of the neighbors were complaining. Because again, people realized that people were Airbnb in that building. So they ended up wanting other people wanted Airbnbs, and then other people wanted Airbnbs. And then a lot of people started getting Airbnbs. And then from there, you have a ton of different operators in one building doing different things, allowing different people, not having certain restrictions in place. That just is a huge call for a mess, basically. So the owners said, Hey, we'll let you out of this lease, no problem. We just really don't want to do Airbnb anymore. And for me, Vegas, even though the landlord allowed it or the management company allowed it, and even if a building allows it, a building can allow it all day, every day. But if the city doesn't allow it and you don't have a permit or you don't follow their rules, the city's gonna find out and they're gonna enforce it. So even though the building allowed it and technically I could finish out my lease legally, I knew that the city was gonna come for me sooner or later. And like I said, I don't want to have my back like looking over my shoulder every other day, trying to figure out is the city gonna find me. Because at that time, the city never had any really strict regulations. But then right shortly after I got involved in arbitrage, they started putting in a ton of strict rules. And everyone knows now, if you're in the arbitrage space, Vegas is one of the hardest markets to get into. So I just told myself, you know what, I'm gonna let them go. And then I think at that time I had already picked up a few in Dallas. But Dallas is where I really started to thrive and where I started to pick up more units, get more yeses, be able to build relationships with landlords. So the first batch of units that I got in Dallas after I moved there was over in um over by like Greenville area. So I ended up getting a couple units there um by Deep Elm, like in between Deep Elm and Greenville. So uh I picked up three there and they it was a small multiple, I wouldn't say it was super small. The smallest multiplex that I feel like I've been in is like an eight-unit building, but this one was closer to 60. I picked up three in that building, and that was really where I got like my first few yeses and started building in Dallas. I think the most I ever had in Dallas at one time was 11, 16, 17, like close to 20. So Dallas really was a great market for me when I first was getting started and just being able to build relationships and grow that portfolio. And all of them were legitimate yeses. All of the contracts were basically airtight that I could Airbnb, that I could sublease, that I could rent for less than 30 days. And that's where I really started to just allow myself to do things the right way and tell myself that I'm not going to, you know, skirt the rules and I'm I'm gonna do everything. What do they say? They say how you do anything is how you do everything. So if I'm gonna go and I'm not gonna do things the right way here, but I'm gonna do things the right way there, it just doesn't align. So I just told myself, you know, what type of person do I want to be? What kind of host do I want to be? What type of operator do I want to be? And that's kind of where um I started getting all the yeses is when I made that decision.

SPEAKER_05 21:46

Nice, nice. And it's funny because Dallas used to be, you know, uh a yes city as as far as for short term rentals and arbitrage. Yeah, come on, everybody can do it, it's fine. And a lot of people did go there, um causing a little bit of saturation, but still. And then all of a sudden they just uh oh we're gonna shut it down. You know, they just went the other way. Like what, you know, is uh came out of nowhere, but um, they're still fighting that. We'll see what happens. But yeah, but but as far as Vegas, because because I know people talk about about when when things get banned or or regulations come, you know, now they're they're smart, they call it regulations, they don't call it ban anymore because it's a constitutional thing, they're you know, whatever property rights, but but they call it um regulations. And and I know the cities that have uh strong ties to the hotel industry, you know, your days are numbered because I mean Vegas, they they they live, they live off the hotels, right? This that's it's Vegas. So so you would think they have a strong lobby over there to get rid of all these pesky Airbnbs taking away dollars from them, right?

SPEAKER_01 22:45

Mm-hmm. Exactly. Yeah. And there's definitely some loopholes in that, and there is a lot of Airbnbs. I remember I was listening to a um a podcast with Bradley. He kind of just talks about uh entrepreneurship, not Airbnb specifically, but just entrepreneurs in general. And he had this guy on there that has a lot of owned properties. He either has a management company in Vegas and they own and manage all their own properties, or he just manages them. But I'm almost positive he owns and manages. He has eight properties out there. I want to say eight or eighteen. Anyway, there's 12,000 Airbnbs in Vegas, like over 12,000. And I think only five to 600 of them are licensed, and 18 of them are his. So, and he they crush it, like they absolutely crush it, but that just kind of shows you how many people are Airbnb in Vegas. I remember I went out there recently, maybe six months ago, and I had to go out there because I was transitioning from Vegas back to California. Had to go get my storage, so I stayed in the Airbnb for a couple of days. First thing I see when I go to the door to check in is a eviction letter.

SPEAKER_05 23:58

Oh Lord.

SPEAKER_01 23:59

Like they hadn't paid their rent, they need to, they need to leave. And I'm like, okay, well, I'm only here for a couple days. I'll leave this letter here, I'll let them know, but I'm gonna stay, I'm gonna stay in this unit for the next couple of days because uh I think everything was booked at that time. It was super last minute. So I was just like, sounds about right. Sounds like Vegas to me.

SPEAKER_05 24:21

So oh Lord.

The friend who signed leases with hidden loopholes and got fined

SPEAKER_05 24:25

That's what I was gonna say. Um, and it's and it's funny because I was gonna allude to that. The the bar, you know, they got strict regulations, so that would make the barrier to entry, you know, hard, difficult, and keep most people away, but it doesn't seem to be working in Vegas.

SPEAKER_01 24:38

Yeah. Um, and I had a I used to live in Vegas, so I'm I know quite a few people out there. And one of my good friends, he's a host at a nightclub, and he reached out to me, super ambitious guy, and he was just like, Hey, I'm thinking about getting started an Airbnb. I have a friend that's into it. He signs all of his leases and doesn't tell them that he's gonna Airbnb, but he has certain like uh paragraphs in the contracts that protects them and he wins all his suits. I'm like, he's getting sued. Like, that's already a red flag. I'm like, you need to not listen to this guy, whatever you do, and go to a different market or run it remotely or get a management company if the numbers make sense. Like, just don't do that. And he was like, So you don't recommend that I get my first unit in Vegas and just like find an owner that's open to it. I'm like, you can find an owner that's open to it all day. But if it's not in an in a zone or in a location or in a place where you can get a permit, do not do it. Your your days are basically numbered. Next thing I know, he listens to that guy. He goes and he gets an Airbnb. I think he tells the owner, but he ends up getting caught by the city like a month later. He has fees up to here, and he basically said that that guy was super shady and he should have never listened to him. So he learned the hard way, just like a lot of people do. But um yeah, it's it's not a joke out there. Your days are definitely numbered if you if you go in and do it illegally.

SPEAKER_05 26:02

It's just not worth the stress either, man. Yeah, it's just yeah, doing it under the table or or without a permit and all that stuff. Um so so you started getting a few under your belt. You you were you were to the point where you were um, I guess a digital nomad and you you could live off the income.

SPEAKER_01 26:21

Correct, yeah.

SPEAKER_05 26:22

Okay, and so you didn't have to have a job if you didn't want one, right?

SPEAKER_01 26:26

Correct. And that was kind of my goal when I got started

Putting a quit date on the calendar

SPEAKER_01 26:29

in it. I told myself I wanted to get to a certain number of units and then I was gonna quit my job and I was gonna go full time, which is what I ended up doing. So I didn't get to the exact number of units that I wanted. I just knew that okay, if I want to make this much income, which is more than what I'm making right now, I have to get to this number of units. I didn't hit that number of units because of other factors and the fact that I want to focus on apartments and it was harder to scale with those, or for whatever reason, we weren't getting as many yeses, or I just had so many things going on in my life, whatever the reason was. But I did know that I put a date on when I was going to quit and where I was currently in my business kind of allowed me to do that. So I said, okay, I'm just gonna take the leap and I'm gonna go for it. Because if I continue to continue on this schedule and not just pursue what I'm wanting, that I may never. So that's kind of where that thought process came from.

SPEAKER_05 27:21

That's powerful right there. Cause you put a date on it. Yeah. And that made you, you know, that made you go through with it, I guess. Cause it because a lot of people say they want to, right? They want to leave their job and and then oh, as soon as the income gets here, then then it gets there. They're like, oh well, maybe it should get here because that's benefits. You know, start thinking about all this stuff. And but you put an actual date when this happens, I'm gonna leave. And you did, and you made the leap. That's that's pretty crazy.

SPEAKER_02 27:49

Yeah, yeah, yeah. You know what? I really congratulate myself enough, but yeah, I'm proud of myself for that one. That is happy I did it.

SPEAKER_05 27:57

It's scary as hell, right? I mean, we're we're programmed all our lives since school, you know. We go to school for eight hours, have a lunch break, and then we get out of school, go to you know, college, and we go to the job force. And same thing, eight hours lunch break, Monday through Friday, and just to go like I don't want to do that no more. And I think these uh arbitrages are gonna are gonna pull me out of that. And I guess just um, because you your your feeds are probably full of these the you know the gurus or the people uh in the in the industry saying that you can do it after a few properties and and they're giving you motivation, you know. And and and I know for you know for myself being in a in a workspace where there's so much negativity and people are just you know, that's how life is, and and they don't they don't look at things like us entrepreneurs look at them. You know, it's kind of sad, but it it's not good to be around like that negative um like you said, you you can't the way you do something is the way you do everything, right? So if you're around a lot of negative energy for eight eight hours a day, 40 hours a week, whatever that is for a month, uh you know. Um it's just um and then you go, okay, now after work I'm an entrepreneur. It's like how do you live in both worlds? You know? Yeah, and yeah. Yeah, pardon my rambling.

SPEAKER_01 29:15

I just no, no, I totally agree. And I think about it too because I quit probably about a year and a half ago, maybe a little less than a year and a half ago.

Quitting a year and a half ago instead of waiting longer

SPEAKER_01 29:24

I was thinking about it today. I said, I could have continued. There was, I mean, I had I was already doing Airbnb for about three years when I quit. I can continue and I can continue to work and I continue to make what I'm making at my job, which I was making good income. Or I can take this leap, live below my means because I was a little bit too comfortable, live below my means, scale my business, and quit, you know, and just like I said, live below my means. And that's what I did. And now that I look back on it, I say I could have continued for another year and I could have just quit a year later, like put a new date on it. But I told myself when I was kind of reminiscing or reflecting earlier, was that I'm so grateful that I did leave because I know so much more now. I've already gone through so much in this last year and a half with my business, and then on top of that, the new agency, that I don't know if that would have happened if I would have quit a year later. I don't know if I would have ever, you know, built this new business and also been able to uh learn more about arbitrage again and just kind of be full in that and be a full-time entrepreneur. For me, that's such a blessing. And reflecting on that and being like, dang, I'm glad that I know more now. I don't, I wouldn't have to, I don't want to have to do it again, you know? I don't want to like all these things that I just went through and all these things that I've been learning. I don't know if I would have learned them. You know, you just don't know. I think that I won't I won't say everything happens for a reason, but it feels like this all happened for a reason. So so I'm I'm grateful.

SPEAKER_05 31:05

A lot of blood, sweat, and tears involved, I'm sure.

SPEAKER_01 31:08

Yeah, definitely. Definitely.

SPEAKER_05 31:14

I kind of know your story, some, of course. And and and um so so going for from okay, running them yourself, and you still have your job, and and you're hitting these marks, you're making this income and stuff like that, to to the next step is leaving your job, of course. And also not only that, but but finding a management company to run it for you, and even though you're gonna lose and you in your mind, you know, in your mind, you you you might lose part of that income that the management company's getting paid, but they're gonna run it 100%, which will free you up to do another thing, right? So, so how did you how did you get from you know the whole leaving your job thing, which is a huge leap, to also handing the business off to someone else to do so you can go do other things or try to grow uh something else?

SPEAKER_01 32:06

Yeah, yeah, definitely. So I ran my units by myself for the first, I want to say two years. And I didn't bring on a management company until I think I got to over 10 or 15. Um, and I told myself when I did start an arbitrage that no matter what, the business comes first. If I have to walk away and you know, stand outside on a phone call outside of my job in order to help someone check in, I'm gonna do it. Like if I have to, if I have to wake up in the middle of the night and I have to go help somebody, I'm gonna do it. Like, and I did it. Like there was a lot of times where I had to go out to the units. Remember when I lived in Dallas, I was in the same market where a lot of my units were. So I was right there. Why not just run over and go handle it, right? Which is something that is so easy for people to do if you're owning your own market. And everyone thinks it's super beneficial to be in the same market as your unit. But unpopular opinion, I don't think the same way. I think that it's great if it's remote and they're not in the same market as yours, only because you're gonna be tempted to go over there and be involved in every little thing and you're never gonna own your time. So for me, um sorry, can we go back to the question?

SPEAKER_05 33:21

So is it like these stages that you're jumping? You you're going from leaving your job, which is a huge deal, yeah, uh to you now you're running these um arbitrages on your own, and then now you're gonna give that away, you know. So that's another leap because you're risking, you know, money, but you're getting time back, right? So I'm just saying, what was your your logic to going to the next level and and having someone else manage them?

SPEAKER_01 33:45

Yeah, so that's a great question. Sorry about that. I got a little caught off guard thinking about all the times I've had to go to my units and deal with all these S H I T shows.

SPEAKER_05 33:56

We'll circle back to that. We'll circle back to that. So many.

SPEAKER_01 33:59

Oh my goodness, so many. But I realized that once I got to a certain number of units, there was enough income coming in, enough revenue being generated. Even with me doing everything, I did have a PMS system that I used. Um, but I didn't really have a ton of great pricing strategies. I would watch gurus or YouTube videos online on pricing strategies and pay attention to some competition in the area. But again, you are constantly having to adjust the prices. That was probably one of my hardest things. Or having to deal with resolutions and staying on top of resolutions. I literally did everything, right? Scheduling the cleaners, communicating with the cleaners, communicating with maintenance, handling everything to where I was like, okay, I'm fine with handling everything. Like at the moment, I was okay with it. I was like, I can keep up this schedule for a bit longer. But once I actually started implementing a management company, and by the way, the management company that I ended up going with, I only gave them my worst units first.

SPEAKER_05 34:56

Here's a test for you guys.

SPEAKER_01 34:58

Yeah, I said, I said, okay, I have about 15 right now. They were highly recommended. I want to see how this goes. I want to see if they can increase the review ratings. I want to see if they can increase the revenue and kind of help me make up for what I am, giving them as a percentage. I want to see how they handle resolutions, how they handle the, you know, guest check-ins, how they handle the cleaning schedules and the maintenance. So I said I'm gonna give them my worst units. Not that they were horribly performing, but they were like, there's constant maintenance issues with these units because the landlord didn't know what he was purchasing when he bought the building. Um there was uh there was kind of a little bit of a location issue because it was next to an abandoned building. So it was just overall, and the in I furnished them for super cheap because I had picked up eight of them at once. And I was like, I got two months free from the landlord. So I just said, okay, I'm gonna furnish the first floor and then I'm gonna generate revenue, and then I'm gonna use that revenue to generate the next floor. It was just like very bootlegged. Um, it was during the pandemic, but it was a great opportunity because the landlord was kind of desperate to get renters in there. So, anyways, um I gave them my worst performing units and they did great. So then I was like, okay, now I can kind of, and once I got a taste of them being able to handle all the gas check-ins, handle all the communication, handle the cleaning schedule, making sure that the cleaners are submitting photos, that they're actually cleaning the units, that they're showing up on time, things like that. It was all just like Yo, yo, yo, Stevie Sachs again.

SPEAKER_05 36:33

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SPEAKER_05 36:37

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SPEAKER_01 36:56

Yeah, so uh getting rid of myself in the equation of management was probably one of the best decisions I could have made because I didn't realize how much time I was actually spending. I think I uh had mentioned that I told myself the business came first and that any situation that arised, I would kind of walk away from work or walk away from what I was doing in that moment and make sure that I was there to assist, whether I was in town or not. And I did that a lot. I did that for the first couple of years until I actually did start to offload some units, but I did it progressively to where I first gave the management company the shittier units just to see how they how they could um handle them, how they could improve them, how they could really make a difference and show me what I might might be missing or what I might be doing that wasn't as efficient as what they're doing because they're the professionals. And after that, I really never looked back. I just gradually gave them the rest of my units, and any units that I do decide to pick up moving forward, they get as well. And I think it's definitely important that if you do want to create freedom within the industry and you do want to really truly be your own boss, you have to be willing to let someone else take the reins and do the things that maybe you were doing.

SPEAKER_05 38:19

That's good. Um plus you you had them prove their mettle with the crappy units, right?

SPEAKER_01 38:25

Yeah. I think that's a good test. I think that giving someone all of your business right away can be I don't want to say dangerous, but it might it could be a rookie move, I guess you could say. I mean, they could end up being great. Everything could be perfect. But what I've found, and I'm sure other people will say this in any industry, like for example, with contractors, since we're talking about real estate and short-term rentals, with contractors, nobody pays the contractor the full amount up front. And if you do, then either you just made a huge rookie mistake, it's your first like deal and you didn't know that, and you just paid them up front for the whole thing, or you trust this contractor, you've worked with them time and time again, and you guys have the agreement that you'll just pay them in full. But even then, most of the time, people will not do that. They'll do milestones. And that's how it is for myself, too. Like when I'm having new properties furnished, when I have a designer come on, we're paying half the amount up front or a portion of the amount up front, and then a milestone is hit, and then we pay another portion, and then the the project is finalized, then we pay the last portion. And same thing with anyone that comes in to actually assemble the furniture for us, like a maintenance man or a handyman. Same thing, never paying the full amount up front. And I've learned that the hard way. So yeah, definitely, definitely a good route for anything that you decide to do.

SPEAKER_05 39:52

That's great. That's great advice. I'm gonna jump into contractors real quick because something happened at one of my places. But um quick reset. We you notice we are the clothes changed. Uh my background's changed. I've been doing some doing some updates to the pod room. Um, also, yeah, so we had technical difficulties uh last week when we recorded this. We started right about where we ended. And so just just to if you're wondering what what the hell happened to them, the background, everything. But anyway, so yeah, uh you talk you mentioned contractors, and here's the thing. So I want to I want to talk uh talk about this because here's a here's a touchy

The frozen-pipe flood and landlord blame game

SPEAKER_05 40:31

situation. You know, people don't mention it a lot in the arbitrage game. You know, when when something happens, something gets damaged, or it's not not exactly you know your fault or your your guests' fault or whatever. It's something that's with the unit, you know. Like, like for example, I just went through something where where a pipe bursts uh you know from the deep freeze at one of the houses, one of our houses that we arbitraged. And it was just um, you know, of course the place well the place flooded, it was down, there's floor damage. Right away, the um the um landlord starts blaming me. Did you not cover the spigots? Did you not keep the water running and all this stuff? And I was like, you know, long story, I don't want to go through that back and forth, but of course I convinced her, no, we did everything. You know it's in my best interest to keep this thing going too. I don't need a property that's down, I don't want anything else damaged. We we you know I have rental properties too. I I know how important this stuff is, so we did all the precautions. So after that kind of got settled, um got her handyman in there, and like you said, we we have a relationship with this particular handyman, so he went in there, did the work, just needed the money up front for the supplies, and then afterwards pay him the other half for the work, you know. I'm saying that's how we had we we um do it with him. But um getting the people that the landlords to pay, that was a bit, you know, the dragging their feet, you know, because the whole it was just a sensitive situation, and it and um finally they did pay. We got the thing up and back up and running, agreed on a prorated kind of rent because it was down for a few weeks and it was not our fault. Such a balancing act. This place is very profitable for us. We want to be fair, but then we don't want to pay thousands of dollars in damages that ain't our fault for this a house that has really old pipes that's been given, you know, that's been having issues before. So, what has your uh your experience been with um landlords and arbitrages when situations like that occur?

SPEAKER_01 42:26

Yeah, oh my god, that brings me back to a horror story that I'm still dealing with to this day. And it brings me to one of my first, well, one of my first big issues was when I first had picked up some units in Dallas. I had a huge slum lord. Like he was working with his dad. So his dad kind of gave him like this big boy project, and he was the main guy who was supposed to manage everything. They had like 60 plus units in this little complex, and they didn't have any leasing staff. It was literally the owner running everything with one handyman who was not the best. I mean, he was just doing his job. But basically, one of the things that I do like about apartments is that maintenance is in-house. And whenever you're having issues, you can really just kind of contact maintenance opposite to a single family home or a condo where you do have to pay someone to come out every single time, opposed to an apartment where, yeah, you may have to pay for some things out of pocket, like little minor repairs. But for the bigger things, even things with like plumbing or whatever the case may be, they're gonna handle all of that. So um I had this slum lord basically. And I should have already kind of taken a few things as red flags. But again, these were my first units in Dallas right before the pandemic. Super cheap units over by like deep Elm Lower Greenville. And um one of the first things I noticed when I was getting my units was there was mold like on the wall.

unknown 43:59

And I

SPEAKER_01 44:00

Told them this, and you know what they went and they did, they painted over it. Oh gosh, they painted over it. So immediately I was like, this is already gonna be a shit show. I already know. I ran into issues with the AC. I ran into issues with the plumbing. I ran into issues with the flooring. I ran into issues with roaches. Like there were so many issues that I ran into with that building. Maintenance handled all of it, but I constantly had to contact them on like a daily basis. And if they weren't there right away, I would have to like contact them over and over and over and over again. And I've had to pay out of pocket for certain things. Like, for example, the maintenance guy, like if he couldn't get there on time, I specifically offered him money to get there sooner because the landlord wasn't gonna do it. You know what I mean? So I would pay him out of pocket. Obviously, that was a loss that I took. I'm not like going out of my way to sue somebody over, you know, doing those little minor repairs and things like that. But that that is a lesson learned to not pick up units where number one, the landlord is giving you the type of vibe that they just don't, they don't have the tenant's best interest at heart. And then the same thing if it's an older building, you need to keep in mind that there are gonna be maintenance issues that arise if it is an older building, more than likely. And you're gonna either have to stay on top of maintenance or you're gonna have to pay out of your own pocket. So that's something to account for when you're running your numbers, is to be like, okay, how often do I think that I'm gonna be having to put money out for maintenance? And just knowing that, okay, if I have to put out, let's say, an extra 200 bucks a month, I need to include that in my projections. But that was one of my biggest issues. But in regards to just maintenance, the biggest thing that I would recommend to people is pay a portion prior to them doing the job and then a portion after. Like if it's a big project, portion before, portion after. If it's something smaller, obviously just letting them know, paying for the supplies up front,

The $12,000 Dallas pipe burst that collapsed ceilings

SPEAKER_01 46:05

like you had mentioned, and then paying them once the job is done and getting proof that the job has been finished, or letting them like, you know, if it's something regarding plumbing, making sure that they send a video testing it, things like that. That's what I would recommend. But I had a similar situation where specifically in Dallas around this time, you know, how cold it gets during some of the winters, the pipes burst as well. And this was an older building. And every single unit went down. Like when I tell you, every we had eight units, every single unit went down. Uh, ceilings collapsed, floors were like flooded, all the furniture was damaged. There was uh water buildup. You could see on the side of the building, like it looked like the side of the building was going to like push water out. Like it was so bad. It took a good three months to get everything up and running. And the landlord, and this is a completely different building. The landlord wasn't a Sunlord, but that management company was like the devil, let me tell you. That management company is the devil. So they tried to do everything to blame it on us and our, you know, and our business model and us not taking the right precautions when we did. And they tried to make us uh cover certain repairs and things like that. But long story short, they ended up like covering the repairs that were that they were obligated to repair. And then we had to handle obviously like refurnishing the units, which is why it's important to have STR insurance like proper, which is what I use. But they covered all of that. They wrote a check, so that was great. But um, but yeah, I hope I didn't go off topic with that horror story, but definitely just something to keep in mind if you do feel as if you're gonna need more maintenance than a normal property to just account for that when you're running your numbers.

SPEAKER_05 47:54

And that brings me to the what I wanted to bring up was proper, because I know you work with proper. I've never I've never used them at my properties. I've had I've had clients before that used them and they would get denied. And I'm like, is it even worth getting? And I just never, I just never did. And um, and when this incident happened, uh a buddy, uh uh friend of the show, Mike Brown, he said that, well, do you have property? You know, they would have paid for it. And I was like, Are you sure they'll pay for it? Because it's a deep freeze. And uh it how do you have to prove that it's the guests' fault that it happened? Or what what what all do you have to do? Like in that situation, property didn't fix the pipes or nothing, right? What what all do what you know what happened there?

SPEAKER_01 48:34

No, if we were the owners of the property and that was on the policy, they probably could have covered the structure. But that is for that was for the owner of the building when his insurance to cover. If he didn't have insurance for his own property, which he needed to because it's a commercial building, technically

Proper insurance: $209/month covering furniture and lost income

SPEAKER_01 48:50

over four units. And his insurance, to my knowledge, covered his repairs for the structure. For proper, where they came in for us was we just said, hey, we just had a huge flood due to the pipes bursting in our units. A lot of the furniture is damaged, we're gonna need to replace it. On top of that, we can't even rent out the units for the next month or two. We had a bunch of reservations that had to be canceled. We had a bunch of reservations that were currently going on where they're wanting refunds. And then we're also gonna lose money on what we would have, what we're potentially supposed to be booked to make throughout these months. And proper has um a benefit or a feature to where they actually cover like lost income or income, potential lost income. So we added everything up. We sent them like our average daily rates or average occupancy. We sent them the cost of the reservations that we lost, the canceled reservations, along with the furniture costs associated with it. And they wrote us a check for the whole thing. Like there was, we didn't have any pushback. It was just a lot of back and forth with emails and just providing them all the information. But that was like that was my first big claim with proper, and they took care of it. And then I've had other claims that have gone after that and they've taken care of those too. So I always recommend proper. Like, and I think a lot of people, a lot of the gurus that I've noticed, they say, oh, you don't need any type of STR insurance, you don't need any type of insurance because Airbnb will cover it. But what about when you have like VRBO? Yeah, you can have an insurance included in there, but what about if you have like bed bugs? Or what if you have um a situation with the pipes bursting? Airbnb isn't gonna cover that. VRBO isn't gonna cover that. No one's gonna cover that. So you're gonna have to pay out of your pocket for new furniture, replacing items, things like that. Um so proper's been great. It's a small expense. Like, for example, our apartments on average, the cost per unit is about 70 bucks per month. And then for our homes, they're anywhere from literally 100 bucks. I just renewed another year on two homes that we have. It's 209 per month for both. So it's about 104 per month for both, which is worth it because we've already had to open up claims for both of those units or at least one unit. So it pays for itself, in my opinion.

SPEAKER_05 51:07

Yeah, yeah. As I get older, I'm I'm I'm more about the insurance game than I was when I was younger. I was like, I don't want to pay that expense, you know, 70 bucks a month, that's a lot of money. But um, but when this thing happened, and it's Murphy's Law, you know. I was like, um, what happened, you know. I always thought about that. If if a pipe bursts or something like that, but it's not just uh getting it repaired, get like getting the owners to repair the flooring, but it was out for like three weeks, and that was this this place, this home was killing it before that happened, you know, and it sucked that it was down. I was like, ugh, it hurt, you know. But I was like, if prop if I had proper, it would have covered that loss of income.

SPEAKER_04 51:46

So it would have, yeah.

SPEAKER_05 51:47

But anyways, uh I'm glad you I'm glad you brought that up. Um another thing, because because when you're doing your sales pitches to the to the landlords, um, well, first of all, so you said you notice red flags with that it's a slum lord. So how do you how do you vet the landlords to know that they're gonna be easy to work with or good to work with, and they're not gonna try to screw you over when it comes to repairs and getting things back up and running?

SPEAKER_01 52:13

Yeah, I would say initially off with first conversation with him. He didn't seem very slummy, like you know, he was just he was just he was just a normal, he was a normal guy, like just pretty easy to work with, you know, sent over the contract, no problem. We had an addendum in place, no problem. Um, I could Airbnb it, no worries. But after the lease was signed, that's where the issues arise. Because with all the maintenance that had to take place, all the different um scenarios, the bugs, the leaks, the AC not working, I had to get really familiar with tenant laws. And I had to get really familiar with um, and now I'm trying to get more familiar with commercial leases because technically that wasn't a residential lease. It was more like a commercial lease, which is different because the business name was on it. But um I don't know if he asked me to do a personal guarantee. I think that the one of my first red flags, not that this is a huge red flag, especially if you're newer, but I had already had a few units in Vegas and I had proof that I had ran other units. And he still wanted me to do a personal guarantee, which I can kind of understand because I think this was the first time he allowed someone to Airbnb in his building. But I also was like, if if all went to hell, I wouldn't want to be personally responsible. Although I've never had to do that. Like it just for me, that was something where I was like, I should have maybe negotiated it to be like, hey, after three months of consistent rent payments, can we drop the personal guarantee? Whatever the case may be. But then from there, it was the first sign that I had noticed was number one, like dead roaches on the ground in one of the units, and then the mold. And then I think a couple other things that stood out that I can't quite remember, but just a ton of maintenance issues before I even like started moving furniture in. And I had to create a list and then have his guy come out and do it. But the first thing that I would notice is with the like a potential slum lord is excuses or trying to put it on you as the tenant, like, oh, you should have evaluated, oh, you should have done this, oh, you should have done that. Like them trying to put it back on you or them trying to make up excuses. That's like top one. And then from there, uh like for example, I feel like I recently dealt with another potential slumlord semi-recently at uh at a small duplex. I feel like they are a little bit slummy because of some of the issues that we've ran into. But what I've also realized is that the stronger the contract is, it doesn't matter whether they're really like a slumlord or not. So if the contract is kind of like airtight, for example, if you guys have really strict maintenance rules, like for example, where I messed up is I said I agreed to anything under $600 a week, take care of, anything over $600 they take care of. Under $600, almost everything is under $600, almost everything. And if there's things happening every single month and it's a $400 expense, a $550 expense, like you still got to cover it, you know? But anything over $600 they take care of, which are usually things that they're required and obligated to take care of, anyways. But just things being airtight. So for example, with this landlord in Dallas, what I would have done differently is I probably would have said, like any the first hundred dollars for any maintenance request will take care of, and then anything over that, you are responsible for. Something like that. Because, for example, with all these maintenance issues that we ran into, I just wish that we maybe had a contract in place that said, you know, if your maintenance guy doesn't get to it within a certain time period, you guys have to take a certain amount of. I don't know, right? But something that just makes things less complicated. And it and we all we have to do is revert back to the lease, revert back to the contract. Like I heard this great quote once where it was like, and you have to have this anyway for all your leases, but have sign contracts for everything, even with your mother. Like literally, this one guy had said it one time, and I was like, man, that's so good. Because people are gonna be people and people can surprise you. And when money is involved or investments are involved, people can change their tune very quickly. So just having airtight contracts, that's number one. If you have to pay to have a lawyer review it, pay to have a lawyer review it. You know, it's gonna be worth it and

Airtight contracts: first $100 on tenant, rest on landlord

SPEAKER_01 56:32

it'll probably save you thousands down the line if you ever end up running into an issue. And if you don't, then that's fine. But you at least saved yourself the potential headache of running into those problems with a landlord. So those are some of the things that I would say. But yeah, sometimes you don't know they're slummy until you really, really get in there with them. But what I have noticed is the nicest properties that we've ever had, all the great, like nice A and B class properties, all the landlords, all the investors, all the management companies operate very professionally and are very quick to address concerns and don't try to put everything on the tenants. So when you go with C and D class or, you know, those type of properties, those are usually when you're gonna run into bigger issues and it's gonna be a he said, she said type of thing.

SPEAKER_05 57:19

It's funny you mentioned that that um the A, you know, A A and B properties where they do want to take care of the houses, right? Um and that that's most of the time from what I've what I've noticed as well. But going back to this leak that that happened, um I won't get exactly into I don't uh maybe they're listening to the show, who knows? But but the the message I got when I when I explained what was going on, um they said, okay, you know, we'll we'll go ahead and send a plumber out and you know, be sure to turn the water off and we'll get there. Plumber won't be there till Monday. Of course, it happens everything, everything always happens on a Friday. You notice that everything always happens on a Friday. Nobody, you know, most uh plumbers and all these people, electricians, they don't work on the weekends. They're off. Anyway, so Monday uh they were able to get out there, cut a hole in the wall, fixed it, and I got this long freaking text. You didn't you you covered the the spigots wrong, and this all could have been avoided, and you know, all this long message, you know.

The passive-aggressive text you write but never send

SPEAKER_05 58:19

And um what the method I use to cover the spigots real quick, I I I wrap them in, I you know, they were sold out of those, you know, little foam cups everywhere, whatever, you know. But I've always I've always been able to, you know, you could wrap it with towels and you could put some bags over it, duct tape, you know, whatever. Anyway, she she was trying uh the landlord is trying to you know pin it on me, right? And and um so in a nice way, you know, I like it's like I said it's a balancing act, you know. I I I just absorbed it. I said, and in a nice way, I said, well, I've used this method, you know. First of all, those foam cups are sold out everywhere, but I use this method on all my rental houses, and I go and put these personally on my mental house on my rental houses because I don't, you know, I don't trust the tenants to do it for me. So I take care of my houses, I go do this personally. In other words, I was saying it without saying it. If you were so concerned about the freeze, this is your house. Why didn't you get out there and do it yourself? But that being said, I went out there and did it. I said, you know, and I explained to her, I I have no, you know, I I don't have this this issue earlier this year. I mean, this these pipes have had like two or three problems already. You had to dig under your house because there's roots growing into them. This how you know, I just said, you know, exchange explain it to her in a way. I was like, sometimes this stuff happens, even if you do all the precautions, because deep, you know, year after year, deep freeze after deep freeze, they're finally gonna give out. Um, that's just Texas, right? And there's nothing, you know, you can do unless you buy like pipe protection insurance or whatever. But anyways, um, so so I I it there are people that that do have higher-end houses, but still try to pass things on in a way to um to to trust the tenants to do it for them, which I don't, you know, that's just me because because this is your investment, this is your house, right? Um, either have your handyman go out there and make sure the house is weatherproof or the house is you know, go changing out filters. It's so it's so crazy to me how how landlords uh expect the tenants to do that, where they could I agree with that. That could take down your whole system. That could take down your whole system. I know you you you're gonna save 10 bucks by not you know doing it yourself or or buying them yourself, or you say you better change out the filters, blah, blah, blah. Uh and and good luck trying to prove that it's their fault your system went down, right? But anyways, uh you're trusting someone to take care of your ten thousand dollar air conditioned unit, whereas you could go out there or get a handyman, pay 50 bucks every three months to go out and change the filters. I I just it's just some you know, some people want to be cheap. They're just that's just how they are. But anyways, I we got off on a tangent with the whole maintenance thing. But that's a big part of that's a big part of the arbitrage game they don't tell you about.

SPEAKER_01 1:01:15

It's huge. It is huge. That's something that I wish I knew a little bit more of for sure. And on top of that, like with arbitrage units, you just have to be prepared to pay out of pocket if people aren't getting to it quick enough. Like I've had so many situations where I've just been like, fuck it, who do I need to call to get this taken care of right now? Because I'm not gonna keep waiting for maintenance and these people that technically are off to come through just because I need them to, you know.

SPEAKER_05 1:01:45

So one thing one thing I do to kind of press them a little bit is that you know what? You know, I know you know you you haven't been getting back to me. That's fine. I'm gonna send my guy out to fix this, and I'll just rem you know take off from the rent, whatever you know the cost is gonna be. That usually lights a fire, and I will stick to that and I'll send them, you know, I'll do the prorated rent thing and I'll take care of it, you know. But usually that gets all right, you know, no, no, we'll get we'll get our guy out there, blah, blah, blah. But you you gotta press them once you once you start throwing that money thing around, they kind of start responding a little bit better.

SPEAKER_01 1:02:17

Yeah, exactly. Exactly. That's good. I think I've used that one before too. And they'll be like, you can't do that. I'm like, okay.

SPEAKER_05 1:02:26

That's what I need to start putting in my leases too. Yeah. Yeah. If if a maintenance issue doesn't get pressed fixed, uh, we will say kind of like the banks, you know, the banks always do that. Hey, if you don't put insurance on that car, if you don't put it, we'll put it on there for you, and it'll be it'll cost you. I know what you're talking about.

SPEAKER_01 1:02:42

Yep. Yep, I know exactly what you're talking about. Yeah, I think that's good. Maybe if you created a list of like potential uh line items in a lease to add, like as tips, I think that that would be really beneficial to your audience. Like as a resource.

SPEAKER_05 1:02:58

Right, right. I I love it when landlords tell me, hey, do you what lease do you use? Can you can you make one up for us? Yeah, I'll make a lease for us.

SPEAKER_02 1:03:06

Yeah, like that is that's wild if a landlord, you know, there's newbies out there.

SPEAKER_05 1:03:13

I love the newbies.

SPEAKER_01 1:03:14

There are, there definitely are, and I think that that's another reason why some of them, like for example, I I don't know the landlord that you're referring to with the pipe issue, but maybe they aren't like a big time investor and they just are kind of learning as they go. But I guess anyone that has a lot of properties, they probably have a system and they have, you know, they know for each property doesn't matter whether whether it's an apartment building that they own, like a small apartment building or a multiplex, a condo, a home, they're gonna have systems in place to make sure that both the tenant is taken care of, the investment is taken care of, and that everyone's kind of happy or everyone knows their role. But some of these landlords just buy a property, put it up for rent, like do the most basic thing to it, put it up for rent, and just expect people to deal with any issues that arise when it's just bad business.

SPEAKER_05 1:04:03

And here's a pro tip. I know we can go talk about this forever. Maybe people are getting something out of this. That's good, hopefully. But but um you you don't be too reactionary whenever they uh uh you know a landlord is frustrating you, right? And we're talking about the arbitrage game here, people. And and um, but like I said, when when I messaged uh that particular landlord back, the I went to my notes, first of all, and I wrote out like a 10-paragraph monstrosity, like you know, I painted these rooms out of my own pocket, I did this, I handled this toilet leak over here. I went you know, I wanted to name every single thing I've been doing for them for to they didn't have to do nothing, you know. But that's not the that's not the right approach. It's not the right approach. So my 10-paragraph thing, I paired it all the way down to a nice neat one paragraph of you know, just just letting them know how we've been taking care of the house, how they've not had to deal with a lot of issues because we have, you know, and um and that it like I said, it's in our best interest to keep this house going because when it's down, we're not profiting. And so so get all that frustration out in the long ass thing that you wish you could send. Don't don't don't start writing it in the text because you might actually hit sin on accident, but but get it all out on a on a on a piece of paper or an email or or your notes on your phone, and then just pair that thing down, pair it, get all the negativity out of it, and then send them that and just keep it cordial, especially if it's a profitable unit. You know, you want to keep it, you want to keep a good relationship with them. You don't want them to kick you out as soon as the lease is up, definitely. Because, yeah, you pay you put all that money into furnishing it and all that stuff. Just getting it all out there. Thank thank you for uh hearing me out there.

SPEAKER_01 1:05:44

No, I agree because I've had lots of times where I've been super frustrated with landlords, and I just have to remember you know, this is a professional relationship. Things could potentially come back and bite someone in the ass if things turn legal. So it's just a matter of keeping your composure, documenting everything, keeping everything. Everything through text messages or emails. Phone calls are okay if it's a casual conversation, but if it's anything regarding issues with the home, I always always do text messages or emails. No matter how long I think it has to be, I don't care. Documentation, always.

SPEAKER_05 1:06:19

Cool, cool. I think I think we covered that that topic pretty good. I have a bunch more questions for you, Rachel. Okay, cool. Um yeah, this is fun. Let me see. Okay. Uh I think I I don't think I asked you this one. What was your most um valuable mistake either in um STR

Running weak comps in 2022 and picking up three bad homes

SPEAKER_05 1:06:40

or just life in general? The most the biggest mistake that brought you the most value.

SPEAKER_01 1:06:46

Biggest mistake that brought me the most value is probably running more in-depth in-depth comps. For the first two to three years I was involved in arbitrage, not that many people were involved. You could really just kind of pick up any property, any landlord that says yes, you could feel confident that you could go in there, put in some basic Amazon furniture, put it up for rent on Airbnb, and then collect a nice little check. Um, and the game has definitely changed. After I quit my job, I started looking for more properties to rent for Airbnb. And I picked up, I think like three at once. Um, and these were all like single-family homes or they weren't apartments. I had done a lot of apartments and only maybe like one condo. And I made a big mistake by thinking, oh, you know, the landlord says yes. This is another thing, too, is I had such a hard time getting yeses for apartments. I had heard no so many times. It's like you go through like 500 no's just to get like one yes, it felt like with apartments. And I didn't realize how easy homes were, because I learned that later on. Like getting a landlord, an actual landlord of a single family home to say yes is very actually pretty easy from what I've experienced. And the first couple yeses that I got for some homes, because I was like, oh, let me try homes. I was like, okay, I'll pick them up because I'm so used to everyone saying no. I'm like, dang, I'm getting all these yeses, gotta pick them all up, right?

SPEAKER_03 1:08:11

Yeah.

SPEAKER_01 1:08:12

So I go and I pick them up. And I'm like, oh my God, what did I just get myself into? I didn't run super in-depth comps. I didn't double check the numbers, I didn't double check like the surrounding listings and what, even though it showed that, oh, this property, my property would make this much. I didn't really compare it to the look and the feel of the other properties around me. So I was like, I really just fucked myself by getting into properties that aren't as good as what I was maybe used to, or they take longer to see results. So moving forward from those, I just said, you know, moving forward, I'm gonna double check my comps. I'm gonna see what it's gonna take for me to outperform the market, the design that we're gonna have to do, the strategies that we're gonna have to implement, things like that. So everything regarding that moving forward has changed. But one thing I would definitely um one of the biggest valuable lessons to me, and again, when I had quit my job, I had the management company in place. So I wasn't as involved in Airbnb. I wasn't keeping up with the trends and the market and everything else that everyone was talking about in the in the general topics of arbitrage. So I just was like, I thought I was still back in 2020, 2019, and treating it as such when you have to kind of adapt to the market, you have to adapt to your surroundings, and that's something that I didn't do in 2022. So learn my valuable lesson that way.

SPEAKER_05 1:09:33

That is a very, very, very valuable lesson. And um and one note on that if the little you know, do that little Google Google street view, whatever. You know, when you're when uh when you go to Zillow and look at the house, it is you can walk around the neighborhood. If the yellow, if the little yellow guy gets mugged while you're while you're looking at the neighborhood, you probably shouldn't rent that house.

SPEAKER_02 1:09:58

I want to go see if my little yellow guy gets mugged.

SPEAKER_05 1:10:05

Man, I used to be on those groups pretty hard, those those Facebook groups with the you know Airbnb. It's pretty much just a bitch fest, right? All these Airbnbers are oh no, you're bitching about everything, right? And I used to just I I loved rally riling them up, and I think one time I was looking at a Google Street View, and someone's someone's car was getting towed, looked like getting a repo situation. I don't know. And I was like, it got it on on the Google on the Google Maps, and I was like, I was like, if you see this scenario in the street, you're looking to do an arbitrage, you probably shouldn't get it. Or I said something like that. I forgot what I said. I probably was more cheeky, but but oh my god, they they just ramroted me. How dare you say that? You don't know, and this is uh gentrification. All this craziness came up, and I was like, oh my god, it just started in a shitstorm. But anyways, uh yeah, I used to hit up those those groups pretty hard, but yeah, yeah, you you gotta do the comps, and it and here's and here's one thing with me, because I've been I've been operating getting my arbitrages in a similar area, almost like a few blocks away from each other. I'm so comfortable with that because I know how the area performs, right? And and it's so tempting to just grab them wherever, like if I see a deal come up and hey, you know, they can they can you can arbitrage this, and it's like ah, but I don't really know that area too well. And and then that's where the research comes in, right? And and uh on that note, I I I texted you today because um friend of mine, it's actually you know, the day job I I work with his with his dad, and and he's his son's becoming this investor. He already got his first house, he's already looking to jump into like a duplex next, it's real cool, you know. I'm kind of mentoring him a little bit. And um he said, Hey, did you ever have you ever wanted to do uh luxury Airbnbs? And I was like, it sounds cool and all. It's it's a whole different game, though. Is you can't just can't half-ass it, not that not that we half-ass it, but we you you have to really, you know, um it takes a whole new skill set to be a luxe property. He's like, Well, you know, I'm talking about property you get like 300 or 400 and 300 to 600 a night. I was like, well, no, that's not to me, that's not a luxe property. Uh that's a high-end property, you get three to six hundred bucks a month, but I'm talking like a thousand, two thousand dollars a night. That to me, that's a really a luxury property, right? Uh or more. And um, and everybody goes on Airbnb and names their property Lux, whatever. It's not really Lux. But um, I'll I said, if you're talking about high-end, yeah, that that's you know, that's something to consider too. But if you're talking about luxury, that's that's the you know, everything has to be high-end. There's no IKEA furniture, like you said. This high-end furniture, high, you know, high-end amenities, uh, high-end appliances, everything to the T. You can't go cheap anywhere. And plus, um, you have to really, really be super attentive to the guests' needs and stuff like that. Now, do you um do you deal with Lux properties? Are you looking to get into Lux properties, or what's your what's your take on that?

SPEAKER_01 1:13:06

Um, for myself, maybe eventually. I really want to focus on locations where the homes

Luxury vs. high-end: $1,000/night takes a different skill set

SPEAKER_01 1:13:19

are cheaper than like, like, for example, Vegas. The the market is actually it's not expensive out there, depending on the type of property that you're looking at. If you could get like a three, four-bedroom home with a pool, your property could probably generate upwards of six figures per year, but your mortgage is gonna be about $2,000 per month. Like a market like that, compared to if I wanted to go to Miami and pick up a property, the margins would the margins I could probably still generate six figures with a Miami three, four-bedroom home with a pool, absolutely. But my mortgage is probably gonna be closer to five grand or you know, something along those lines. So I do want to be in markets that are popular that I myself would want to visit because I think it's important, like when you are getting involved in arbitrage, you know your reason why you're doing it, whether you want to create a specific type of brand or a property, like a line of properties that kind of represent who you are and what you stand for. But for me, like if I'm looking into owning, I want to own properties that are in markets where I myself would want to visit, that I myself enjoy, but also getting a good deal on actual property, a good price. And then, of course, furnishing it well, designing it well, hopefully outperforming the market. That's the goal. But that doesn't mean that they're gonna be luxury properties. It just means they're gonna be amenity-driven properties based on what the market is providing and what's doing good out there. Um, I've seen people do really well with luxury properties. We have a couple right now that we're promoting like just within our agency. But you know, you had mentioned that LuxU is like $1,000 to $2,000 a night. There's some properties that we have that I think could probably be char, like people can charge that amount depending on the season. But for example, like we have one in Palm Springs right now, gorgeous home, fully furnished with a pool, like just immaculate. Like it's a beautiful home. I know during high season it can do over a thousand a night, but during low season, it's gonna be closer to maybe like three to six. Um, and then we have one in Thousand Oaks in California. That one's also like gorgeous. I think it's like a four-story home with five bedrooms, five bathrooms. That one has great views, beautiful. I think that it could generate over a thousand per night, but at the end of the day, I'm not in the Lux Market. I don't want to pay six grand in rent per month, at least not right now. So um, but no, those are definitely nice homes. And I think that it takes an experienced operator to do something like that. Whether you buy or rent, I would not recommend anyone to get their first property for over 3,000 per month, 4,000 per month. I guess 3,000 would be all right, but it just depends.

SPEAKER_05 1:16:00

Yeah, and that's the thing too. I mean, like I said, it it's because you look, you look for a minute there. I mean, everybody, you know, uh Airbnb got super saturated. So a lot of the big gurus they started doing, you know, going into the Lux and then showing it makes great reels, it makes great, you know, little whatever clips on the internet and showing these amazing houses, right? That are they say, oh, this house generates uh $20,000 a month for me, blah, blah, blah, $30,000 a month for me. And and of course, it's it's all decked out. Swimming pool, it's got a mini golf course on it, it's got a hot tub, it's got all, I mean, every bell and whistle, right? Especially like if for example, Joshua Tree, it got like that where you had to put like crazy amenities, otherwise, I mean, if you had a really nice house, you were you were losing money because there's so many people went out to Joshua Tree. So, so that's the stuff that's all over the internet. So people are like, oh, you know, do Lux, and then I'll make $30,000 a month. That's uh what's why would I bother with a regular house? But but that like I said, it takes a lot more money to get into that, and you gotta you're gonna pay uh you're gonna build a 80-80,000 swimming pool, you're gonna be with uh with the waterfall and with all the stuff. I mean, these the people that are doing those houses, they're they're they're getting investors together and they're spending you know a couple hundred grand to upgrade these regular houses and make them into luxe properties. So but on that end, yeah, there's money to be made there. Now, um on my side, what's the bigger company, you know, um Walmart or Neiman Marcus? I would say Walmart, they serve the regular everyday middle class family, right? And I and I think that um I think that you know that's a that's nothing wrong with trying to be Walmart. There's nothing wrong with that. Getting a getting a house in a decent neighborhood at a decent price, and you're gonna make a decent profit and you get another one and another one. Or you can try to be an eman markets and be super high in it, only cater to one type of client. Not everybody can afford $1,000 a night or $2,000 a night. So so there's um there's benefits to both. You just gotta you kind of gotta find out what your niche is, right? And be what you're good at. And I uh I love low rents and I love you know high profit margins myself, like you.

SPEAKER_01 1:18:15

Yeah, yeah, absolutely. That's another thing, too, with high luxury homes that have expensive monthly rates or high mortgages. You have to have reserves. Like there's gonna be months that or or times in the market where maybe you won't get booked as much or maybe more competition is gonna flow into the market. You just have to be able to try to keep your costs down. And that's tough with a luxury home. That's tough when you're in a super popular market and maybe regulations start to take effect. Like whatever the case may be, you just kind of have to be able to adapt. And I see a lot of people wanting to come in with that same mindset, like, oh, I want a $10,000 a month home that can generate me $30,000 a month. Well, I'm sure that's possible and that's out there.

Why newbies shouldn't touch a $10,000/month luxury lease

SPEAKER_01 1:18:57

But for your first property, if it's an arbitrage, how do you expect to qualify? Like people think that they're just gonna be able to slap their corporate name. I'm not upset about, I feel like I'm being kind of mean. Um, they're just gonna slap their corporate name up there with their brand new entity that doesn't even have any business credit and get approved and what get three months free on a $10,000 a month rent. Like it's just people are delusional. Um, and maybe it's because some people are teaching them that that's possible based on what maybe the gurus have done. But if someone is a good coach, if someone is a good mentor, if someone is properly educating people, the best thing that you could potentially or possibly do, at least at this time right now, is get a home that is less than $3,000 per month in a market where you can see projections of consistent income being generated. And it doesn't have to be a huge luxury home. It doesn't have to be um something that is super unique, but you have to be able to furnish it nicely and have the funds to do so. And then obviously know what you're doing when it comes to pricing strategy and optimizing the actual listing. But I mean, you gotta start somewhere, but I wouldn't start with a $10,000 a month rent or a Lux property first, unless you have someone or a partner that knows what they're doing and you're just the bank for them. That's it.

SPEAKER_05 1:20:19

Right. And that's dangerous too. They take your money. Uh yeah. Lose your money. It's not their money.

SPEAKER_02 1:20:24

Exactly. Exactly.

SPEAKER_05 1:20:26

Um, yeah. No, and uh, I'll even, you know, I I mentioned people to uh to start off at a one-bedroom apartments or or uh, you know, efficiencies or whatever they're called. Uh because it's just it's a lot less money to get started. You lose you know, your your rents not too crazy expensive, and you're learning the game, right? And you're learning how to deal with customers and you're learning how to deal with the all use all the apps and all the pricing and all the tools. And and and you're not like I I think you know, it's in my opinion, it'd be even dangerous to start like with a uh three thousand dollar lease on a house, you know, because and there's a lot more moving parts of the house, plus there's the landlord and all like we discussed earlier. I think I think you you want to build up to that, but I always suggest start start with the one bedroom, you know, uh one bedroom condo or one bedroom something, and then and then uh learn the ropes, you know, like you said, like you threw those uh the the crappy units, you know.

SPEAKER_01 1:21:18

Yeah, and and even with those, I had eight units. The most expensive rent per month out of the eight was like 2200, and that was for a two-bedroom, but there was one bedroom and two bedrooms in that eight in that eightplex. And the rents on average were like 1700 per month between all of them. So I remember my total rent for all eight was like 12 grand per month, which first someone being like, oh my God, how am I gonna afford 12 grand a month? Well, if all the units are performing, let's say this one bedroom is potentially at like operating at a potential loss, maybe lost like 300 bucks this month. But this other unit just profited like $2,000 this month. Like you have different properties that can feed off of each other, which is the power of scaling. It's the power of being able to grow. But it's gonna be hard for you to grow with only three luxe properties or, you know, like three single family homes where you have like these high rents or all these bedrooms and you're only getting booked on the weekends or whatever the case may be. So absolutely I agree. Like two bedroom or less for your first property, less than 3,000 a month in rent. I think that those are some of the best ones to start with in a good market that's consistent.

SPEAKER_05 1:22:30

And plus, like you know, not to be a dead horse, but like one of those houses, uh, a big house got big problems. So, like if an AC goes out in Texas, you can't rent that thing out. And then the the owner, the landlord, and uh good luck, you know, getting them to uh put a new AC unit. And it here's the thing they look at us differently, you know, and and right, I guess rightfully so, but we're not living at these houses. We're not there, I'm not there with my wife and kids living at this arbitrage house, right? So they think they can drag their feet more because oh, there's no one there, yeah, we can't rent it out right now. Okay, so there's no guests there. Okay, we'll get someone out next week to go fix it. Whereas if the family's living in this house, you can't have a family living with no AC in Texas, you know, they'll die. And and so they they'll fix it, they'll get it fixed immediately. So it's a different. So if if like I said, if you're a newbie starting off in a house, ACs do go out in Texas, it happens every year. Uh heaters go out in the wintertime, uh, pipes bust and stuff like that. So yeah, it's it's a it's a it's a more profitable landscape for sure, but it's uh you know, you gotta have a higher skill set to be able to do that. Um yeah, so yeah, that being said, on to the next question. Um, so this is this is a you having fun? You having fun?

SPEAKER_01 1:23:47

I'm oh I'm having a great time. I have to hold on. Uh don't include this in it.

SPEAKER_03 1:23:51

Okay.

SPEAKER_01 1:23:52

I have a I do have a call at four o'clock though. Oh, which is five minutes. I I should have told you that in advance. I didn't know how long it would be. I should have asked, but I do know that I'm getting a call in five minutes. So I don't know how you feel about that or what you're thinking.

SPEAKER_05 1:24:06

Yeah, yeah. We've been going at it for a while. We can jump ship and I just one more question, we'll get off. Okay, no problem. All right, all right, all right. Let me see. Yeah, but um, let me see. So when designing a house, uh go ahead and okay, give people five uh five design tips, good design tips to when you're putting together a house that's gonna it's gonna go a long way towards uh getting booking and stuff like that, or five tips in general.

Five design tips: reliable assembler, accent walls, real couches

SPEAKER_01 1:24:30

Yeah, I would say five tips when designing. Designing?

SPEAKER_05 1:24:37

Designing, yeah, putting together, yeah, yeah.

SPEAKER_01 1:24:39

Okay, okay, okay, okay. Um, okay, so first thing is having a reliable assembler. So a handyman or someone like that. I know that this is it doesn't have to do with design, but it does have to do with like time, getting things done on time, being able to make sure someone's coming in and bringing in the packages, making sure that they're assembling them on time, that every that anything that's missing that they send it back or they're able to help. I think it's so undervalued. It is a huge win to have someone that's reliable, that can stick to your timeline, that can give you a flat rate for them to assemble everything top to bottom in your property. So, number one would definitely be to have a reliable handyman or assembler to put all the furniture together if you're not planning on doing it yourself. Another thing is to be able to create something that makes the home stand out. So depending on what market you're in, if there's certain amenities that you know really bump up the potential profit margins, or if there's a design look, or maybe something that isn't currently in the market that you think the market might be looking for, adding something, whether it be a pool table or a ping pong table or maybe cornhole in the backyard, that's super easy to do. All you have to do is get the two boards in the little sackies, you know? So those are those are those would be great. Um, or an accent wall, which is also pretty easy to do. You just have to hire someone to come and paint it. You can even do peel and stick wallpaper if you if you know how to install it, or you can hire someone to install it. I did those on a lot of units. Um, I didn't do them, but I hired someone to do it. And I think that they made them stand out at least during that time. Um, another thing that's also very easy to do, but also easy not to do, is getting quality beds. Um, that's some a mistake that I made when I first started, which was just getting like the prison style mattresses that were really thin and just cheap. And then uh having to learn the hard way that a lot of people didn't like it. It hurt their back, it was too hard for them. So, an easy fix instead of you having to get a brand new mattress is a mattress topper or something like that. That is gonna make it a lot more comfortable for them, maybe like a couple inches. That way, it'll make a big difference and it'll still be able to save you some money because you know, obviously, really nice luxury mattresses or comfortable mattresses can be a little bit more expensive. But definitely if you're gonna go the cheap route and you are gonna get a cheap mattress and you're trying to stay on a budget, which I understand some people are, some people are still bootstrapping it, and that is okay as long as you're investing heavily on the things that really matter, like design and uh and you know, the main pieces of furniture, you can save a little bit on the mattresses by just doing like a you know a cheaper mattress, but then a nice mattress topper. You'll still be able to save somebody in that department. Um, another thing is if it is something like in the city that I've noticed is TVs in every room. So every bedroom having a TV, the living room, of course, having a TV. I think that those are also super important. Um I was gonna say a washer and dryer, but that doesn't matter. Um okay, we talked about this on the last episode, but it got cut out. No futons, regular couches, no futons, regular couches. I have every single property that I've designed myself have had a futon, and they are Are like not very comfortable. Yeah, you can put you know push them down into a bed or like lay them out onto a bed, but not comfortable. They don't have armrests. Like having a couch is just more comfortable. I do think that it lasts longer. You have the armrest. Anyone that's ever designed my properties have always put in a nice couch and it's lasting. I've never had to replace a couch that someone else has put in the property based off their design structure. But anytime I've ever designed a property, the futons are usually quick to go. So definitely regular couches. And I know that we went back and forth about the futons a little bit, just like discussing how the evolution of the futons, but definitely no futons. Um, and then last but not least, if you are gonna be amenity

High chairs, pack-and-plays, and pet bowls for families

SPEAKER_01 1:28:45

driven or if you are trying to, if you are going to allow pets or if you want to stand out with families, having anything that is maybe like toddler focused or baby focused, like having a um uh like a high chair, like a like a foldable high chair or a pack and play, something like that that a lot of people can appreciate if they are coming in with small children. And then same thing with animals. So if you know you have dogs or you're pet friendly, maybe having some extra bowls, of course, having the cleaner wash them or you know, sanitize them every time they go in and clean if there was a dog there. But I think that those are also important, just adding key amenities. But overall, like design, if you are not a designer, I always highly recommend having a designer or hiring a designer because they're gonna be the professionals. You can get them for really good rates on fiver, no, maybe not fiver, upwork or referrals. And there's a lot of new and upcoming designers that'll do it for cheap rates, and they'll help you order the furniture, they'll help you set up the delivery. There are people that can do it for great rates, and all you have to do is add it into your potential startup costs. But I think that it hiring a designer is super beneficial and having them do all the work for you, especially if they're STR focused. So hopefully that helps. Um, those are just some of the things that that I've learned along the way.

SPEAKER_05 1:30:08

No, it helps a lot. And here's a cool thing, people, before you hop off. Uh, if if you need help doing all this stuff, it is overwhelming, or you want to up your game, Rachel can help you do all that stuff. And and and not only that, she she helps she finds arbitrages for people, good ones. And she's good at vetting, you know, as she said on the show, she's good at finding good ones. She's she knows uh the locations, she knows she'll give you an approximation of what it should earn, and then she even knows uh design tips, she knows how you should design it, she knows designers, she can introduce, I mean, she knows everything. So if you're gonna hop into this game or you want to up your game, or you want to find more arbitrage, you can't find any out there. She's got a whole list of them and she can send them your way. So reach out to Rachel. Rachel, where could people find you? And you're a cool company where you find you put people in, you put people in arbitrage, you put them in places.

SPEAKER_01 1:30:58

Yeah, yeah, absolutely. That's um our main focus right now is just helping people find their own arbitrage properties. We go out there, we search for deals that are within your locations of interest, your criteria. We go out there, we get the yeses for you on like on behalf of you. We ask the landlords if they're open to Airbnb arbitrage. If they are, we send them your way. We include projections of what the home is um supposed to potentially make based off of the surrounding deals in the area, along with regulation information. So if it's something that um is a highly regulated market, we'll let you know if it's eligible for a permit. If it's not, we won't even send it to you. So those are some of the things that we're focusing on right now. Um, and then uh yeah, you can find us at lowcassa.com. So it's l o casa.com C-A-S-A. And then on Facebook, we have a Facebook group all about short-term rentals, education, and deals. You can find us on there at facebook.com s trdeals and education. I'm almost positive that that's the link, but I can send it to you.

SPEAKER_05 1:32:00

You send it to me and then we'll put on the show notes.

SPEAKER_01 1:32:02

Yeah.

SPEAKER_05 1:32:02

Thank you so much, Rachel. I know you gotta hop off, but uh it's been a blast. And you you better hop on again because we I mean I got a million more questions to ask you. But awesome, I appreciate it. An hour just went by like nothing.

SPEAKER_03 1:32:14

I know, right?

SPEAKER_05 1:32:16

All right. Well, thanks for being on the show. Thank you all for listening. Reach out to Rachel, hit her up. She's gonna make you some money. Um Live Let Thrive out.

SPEAKER_00 1:32:24

All right, thanks, Mike. 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.