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_03 0:11

Hello, hello, hello, and welcome back to another exciting episode of Live Let Thrive.

SPEAKER_01 0:22

What is up, Micah Man?

SPEAKER_03 0:24

I'm good, Stevie Stacks. How you doing?

SPEAKER_01 0:26

I'm doing great in this wonderful episode 229 of your favorite Airbnb VRBO short-term, mid-term, long-term rental podcast in the world coming at you from Arlington and Fort Worth, Texas. Let's go, man. Have some fun today. Yes. How you been?

SPEAKER_03 0:44

Man, I've been good. I've been running, I was running a little late. Um, I was uh actually talking to a seller, potential seller, so we had to come back in, route, roll up, load up everything to get the podcast rolling. But uh, everything's been good. How's things on your end?

SPEAKER_01 0:57

A B B always be buying, right?

SPEAKER_03 0:59

Yes, sir.

SPEAKER_01 1:01

Pretty good, man. Pretty good. Um, yeah, picking up uh yeah, closing on a deal, closing on a purchase, uh, also picking up two more arbitrages and picking up two more clients. It's just moving, man. It's moving. Federico's gonna get here soon from Argentina, so we'll put some green uh gasoline on the fire. So I'm ready, man. I'm ready. Oh, and we have

Alex Jarbo introduction and Guinness World Record

SPEAKER_01 1:24

a special guest today. Enough about us, Micah, Mr. Alex Jarbo. Who is Alex Jarbo? You ask? Well, let me tell you, Alex Jarbo is a short-term rental developer and manager. He was born and raised in Detroit, Michigan. He served in the Marine Corps for four and a half years, where he was stationed in Washington, DC, part of the Marine Corps Honor Guard. He left the Marine Corps at 22 years old to pursue his career as a real estate professional. He is the founder and CEO of Sargon Investments, and he has a goal of developing 650 cabins in the next three years. Alex holds an MBA with concentration with a concentration in a in real estate development and is currently finishing a doctorate in business with a concentration in leadership. He is the host of the YouTube channel Alex Builds, where he teaches the ins and outs of short-term rental development and management. Fun facts, Alex is a Guinness world record holder and has been practicing street magic for the past 15 years, I assume, as a hobby. Welcome to the show, Alex. What's up, guys? Thanks for having me on, man.

SPEAKER_03 2:39

Wow. First off, thanks for your service. We got a oh, thanks. Guinness World Record holder?

SPEAKER_01 2:46

Yeah, what's that about? What's that all about?

SPEAKER_02 2:48

Right up there. Yeah. No, my degrees are not behind me or anything, just that. That's all that matters.

SPEAKER_01 2:54

You get a free Guinness beer with that Lifetime Supply of Guinness. Yeah. Uh well, how what is that about? How'd you get the Guinness World Record?

SPEAKER_02 3:03

Um when I when I transitioned out of the military, um, I had a lot of free time on my hands compared to when I was in the military. I just wasn't used to that. So I remember when I was a kid, I used to go through the Guinness World Record book thing, and I always wanted to get one of them. So I just went on their website one day and I was like, what's the easiest thing I can do to like just get like and it's like it took like six months, it was like the furthest distance to roll a coin. So my buddy had like a a gym and it was like a or he he operated a gym, but there was like this long concrete stretch that I just like whipped a half half dollar down and just videotaped it with a couple friends.

SPEAKER_01 3:37

Yeah, wow, that's crazy. Yeah, and and so I how does that work? Because I don't know. I hear people, I mean, you have to call them and and get them to take the video. I mean, what what happens? How do you get it?

SPEAKER_02 3:49

Yeah, I mean, so like you can go on their site and just look up every record, and then from there, like you can just choose one, you apply for it, and then you you just send the video over. Each one has like their own little requirement and stuff, so you just send them the video. You don't need that person in the suit there with uh everything, but yeah, I just sent it to them and then waited like six months to get a yes or a no, got a yes, and then they sent me the cert right after that.

SPEAKER_01 4:12

So so Michael Jordan listens to our show and he's gonna beat your record just because he can. That's what he does. Totally everybody's record. So, man, welcome to the show.

SPEAKER_03 4:21

Detroit is not fond of that guy.

SPEAKER_01 4:24

No, man, bad boys, bad boys. So, tell us about how you got your start in this whole real estate game.

Marine Corps to real estate: choosing Asheville

SPEAKER_02 4:32

Yeah, guys. So, um, like last year of my enlistment in the Marine Corps, I decided I didn't want to re-enlist, so I just started reading up on a lot of real estate books, a lot of business books in general, and then real estate had really caught my eye just because I enjoyed the control you could have over it. I was mainly reading like Burr, flipping, flip fixing or flip flipping books and stuff. So um I'd originally joined a flipping mentorship while I was still in the military, and the gentleman who was running that flipping mentorship, we were doing like a group coaching call once, and he was uh he had mentioned that most of it, this is back 2015-16, but most of his long-term wealth was tied into short-term rentals, and that sort of like might perked my ears a little bit. So I had gotten him on a one-on-one call right after that, and um, he was pretty open with his numbers to show me his cash flows and stuff, and they were ridiculous compared to like the some of the long-term rental stuff that I was looking at, or even the multifamily stuff. And um so I he helped me choose a market. I was like, I'm really open to moving anywhere after my service. Um, and he he taught me how to choose the right short-term rental market, and that that's where so like the day I got out of the military, moved straight to Asheville where I currently live right now, and um just got my real estate license and just started looking for a property for myself. And what I realized really quickly at that time was everything was either way out of my price range or it was in my price range, but it just wouldn't have done well as a short-term rental. There was nothing unique about it. There was no draw, maybe it would have done well as like a long-term rental, but not necessarily a short-term rental. So after looking for like six months, um, I was a couple offers that we submitted that didn't get accepted. Um, I decided to build my very first short-term rentals,

Building the first A-frame when nothing was for sale

SPEAKER_02 6:13

like ground up development from from nothing. That was my very first real estate investment. And that one was an 800 square foot cabin that we own to this day, or it's an A-frame, and then one turned into two really quickly, two turned into four, but on brought on some investor capital. And today we're developing over $10 million in short-term rentals, and I'm hoping to triple that next year.

SPEAKER_01 6:35

So I I like what you said, man. You couldn't get anybody to accept your offers. You're like, I'm gonna build my own damn house. I love that. What made you think you could do that?

SPEAKER_02 6:43

Uh and that people ask me that, like, oh, like what made you think that that was gonna work? And I tell them, like, I didn't know it was gonna work. I just I had backup plans, like I had underwritten it as a long-term rental, and then also my uh there was an exit in there as well. Like I could just sell the property if it didn't work. I was everyone's always looking for some sort of affordable housing, and that square footage range would have fit that. But yeah, I originally I didn't I didn't know if it was gonna work or not. I was just building a really cool property, and I was like, if it doesn't work, it's still gonna cash flow some money if it's a long-term rental.

SPEAKER_03 7:17

You turn your turn, you turn no, I was gonna ask, you said your mentor should told you taught you how to choose the right short-term rental market. How do you choose the right short-term rental market for people that are looking to get in?

SPEAKER_02 7:28

Yeah, so for people who are looking to get into it, when you read, so I'm a writer for bigger pockets. I write their for their short-term rental blog. And one of the things the question that I always get is that well, how to choose a short-term rental market in the bigger pocket, any real estate book you read, they recommend when you're first starting to start in your own backyard. And I sort of recommend that for this as well. And it might not necessarily be your direct backyard, but the way I the way I develop unique short-term rentals, and I recommend putting them in more rural settings. And what that means is every single person, no matter where you live in the United States, there are these pocket markets that are within an hour to two away from you. The two extreme examples I give is like people in who live in New York City will drive up to upstate New York to stay like an extended weekend vacation. And then people who live in San Diego will take an extended weekend vacation to say like Big Bear Lake or whatever. So you want to ask yourself, where in my market or where close to me within an hour or two, do people in my city like to take an extended weekend vacation to? And that's probably the market you want to be in. One, real estate prices are probably gonna be a little bit cheaper where you live if you live in a metro market. And then two, you can you can put like an A-frame or some sort of unique property that's unique to that specific landscape wherever you are, and I guarantee it's gonna do well.

SPEAKER_03 8:46

I love that where they want to take an extended vacation.

SPEAKER_02 8:49

So now extended weekend vacation. Another thing I've written for bigger pockets was like this. I I don't I personally don't think you can ever go wrong with the strategy of investing close to a national park or a national forest because there's an insane amount of foot tracker traffic going through any every single one of those parks.

SPEAKER_03 9:05

Man, I got a few outside of Yellowstone. They never miss, man. They never missed it.

SPEAKER_02 9:09

Yeah, man.

SPEAKER_03 9:10

Yeah. Uh where where's your A-frame at?

SPEAKER_02 9:13

It's in Asheville, and then we're building like six more of them, six different ones. Yeah, yeah. So we we do like log cabins, a-frames, cottages. We're playing around with tree houses,

Risk mitigation: the exit strategies behind new construction

SPEAKER_02 9:22

it's just hard to get financing on them.

SPEAKER_01 9:26

So, so going back to like I like what you said, you know. When I when I asked you the question, how the hell did you know you could do you know, you could build a house, you know, and yeah, and and and a lot of people told you it was a risk, you know. And here it here's what was cool. Your answer to these people thinking it's a risk, is like um, you well, if if anything, I could just sell it or I can you know rent it out as a long term or you had different money in that square footage, like under 1500 square foot.

SPEAKER_02 9:51

There's always a need for houses at that size, always, no matter what the market's doing.

SPEAKER_01 9:56

But it's like me and me and Micah. I mean, well, Micah was able to retire to you know through uh real estate, and I'm on my way out too. But it's like people at work, like man, I would yeah, I just too risky. I wouldn't, you know, I can't buy right now. Prices are this or that. I mean, how could you buy a house? And then and what happens if no one rents it, and like I'll sell it. You know, I don't know. It's just to me, it's just like it's it's not much of a risk, you know. You can get someone in there, it's people are always looking for places to rent.

SPEAKER_02 10:21

If it don't work out as a short term, don't make no matter what interest rates are doing right now, there's still a shortage of inventory.

SPEAKER_01 10:26

Exactly. And I'm like, if anything push comes to show up, I'll just sell the damn thing, you know. They act like I'm just gonna make zero dollars if if no one rents it. Nah, it doesn't work like that, man. It's more of a risk to not do nothing in life and just rely on a job to take care of you and your family, right? Right, yeah.

SPEAKER_03 10:42

Jim Rohn says, Man, the uh investing's risky, but what's the bill for not investing? That's yeah, Jim Rohn. Yeah, so yeah.

SPEAKER_01 10:53

So, how'd you become a writer for bigger pockets?

SPEAKER_02 10:56

I was connected through them. Um, they had like done a redesign of their website, and I think they they were trying to push out more content. And I I'm uh I got connected a couple years ago with Paul

Writing for Bigger Pockets through Paul Moore

SPEAKER_02 11:08

Moore. He's in charge of Wellings Capital. I think he wrote a he wrote a self-storage book for bigger pockets, and then he had written a couple books before that. Um, but him and I had become really good friends a couple years ago, and he sort of took me under his wing, and he's in the syndication space, and he had sort of just helped me understand how syndication works and the different moving pieces to that. Um, and I had let him know I wanted to originally I was trying to get on the podcast, but I was it was way too early for me to even do that. Um, but he had reached out to me, he's like, hey, they're looking for a short-term rental writer. And I got I got in contact with their editor, he interviewed me, and then it turned out their editor lived like three, four miles away from me. And I was like, Oh, okay, cool. So um I wrote, I sent them the first article as like a test, and then I think like 40 or 50,000 people read it in the first day, and then ever since then that they were it was pretty consistent. I think I've done nine or ten for them at this point. I try to push one out every two or three weeks.

SPEAKER_01 12:05

That is awesome, dude. Yeah, it's great exposure for you and your business as well, I reckon.

SPEAKER_02 12:10

Yeah, and I I learn I learn a lot off of like I learn a lot about the short-term rental market based off of the questions that are being asked as well. You're trying to write a book? I have one in the works, but it's it's it's a it's like a small e-book. I'm I'm I don't I I had I haven't decided on what I want to write. I think short-term rental development, I would need like four textbooks for something like that. Uh but yeah, I'm in I'm in the works of writing one right now. I just don't know when I'm gonna finish it.

SPEAKER_01 12:41

Cool, man. Um, one thing I I hear it a lot, and I and I I kind of know what they are the A frames. Can you explain what an A frame is? It's not a cabin, it's an A-frame.

What is an A-frame and why do they crush log cabins

SPEAKER_01 12:51

What is that?

SPEAKER_02 12:52

Yeah, and those terms tend to be used interchangeably. Just think of like literally a house that doesn't have walls in its entire roof. Think of an A. And uh for some reason, I mean they're for some reason they do really, really well. Like I'll give you guys the example. I built that first one with the land acquisition. I got a loan on the property, but with land acquisition, with furnishing the property and developing it. So turnkey, it was about 225,000, 250,000. And that property grossed about 82,000 last year and it netted after debt service and expenses about 46,000. So I think I put in maybe 30 to 35,000 into it. So like my ROI, I have no investors on that one, but like my ROI on that one's been like over 100% every single year. Yeah. And that one, that one does better than some of the log cabins that we've purchased, close to like 900 grand.

SPEAKER_01 13:45

Holy crap.

SPEAKER_02 13:46

It is so what when I say to people, it's like, okay, like how do I choose a unique property? I like to say like Instagrammable properties. Um, you just go on Airbnb's website on the on their home page, put in your put in your city address and see what are the top properties that pop up in your market, and then model those designs. There's nothing wrong with having two A-frames in the market. Like when I started, there was only one other one, and now there's like 12 of them, but it hasn't affected my occupancy in any way.

SPEAKER_03 14:13

I love how you said that because we interviewed Peter Behooth a long time ago, right? He was like one of the first dudes with the tree house. He was, I think he might still be the most wished-for Airbnb, might not be anymore, but basically he was one of the first people to like really do the tree house. He has the big tree house in Atlanta, and like ever since then, everyone's doing tree houses, but it's not there's like 12 in my market, yeah. Exactly. And it's like a huge thing now, and people are making killer money doing that, man.

SPEAKER_02 14:40

Yeah, I'll I mean, for your listeners and for you guys, the easy the best way to do a tree house is essentially to put the house on stilts. Imagine like a house over the water and like on the coast or something. And if you look at most tree houses that are built today for short-term rentals, they're on stilts and then there's trees around them, or maybe there's a tree that goes through the deck, and you can get financing through a normal bank, like an SBA loan or something, if you do if you go that route. And in my opinion, it's the best. I always think about like optimizing square footage so you're not wasting any space, especially with how expensive things has gotten with trades and uh materials. I mean, those tree houses, five to six hundred square foot, even if it costs $400 a square foot to build, which is relatively expensive, four to four fifty a square foot. I mean, those are bringing in anywhere between three to six hundred a night easily. So it's like that that is like if you if you read the book that Brian Chesky wrote, one of the co-founders of Airbnb, he said the most popular thing to put on Airbnb is a treehouse.

SPEAKER_03 15:44

Wow, I believe it too. Because I remember, yeah, Peter Behouse was all over that. He's like, Yeah, man, I just didn't think it would do all that well. And yeah, took off. Like he said, he his tree house was booked so much. In order for him to stop taking res, he has to shut down his calendar. He goes, I can't go away. Yeah, he has to literally shut down his calendar. He goes, I can I can be booked every single night of the year for 300 plus minute 300 minimum a night. He goes, Yeah, he literally he was like, dude, I have to like just shut down my calendar because he does everything himself. He basically turned it into an experience where people come and he gives them like a tour of it. And so awesome! Yeah, and he turned it into an experience, and he's like, I have to shut it down for it not to get booked. I was like, Wow. So now when you're doing like short-terminal development, like when you do you do you sell them as well?

SPEAKER_02 16:33

I don't. I I mean they're all with my investors, they're all long-term holds, yeah, yeah. So like, yeah, we're we're in it for the long play, man. Like, my investors know that we're gonna be married for at least 10 years. So okay.

SPEAKER_03 16:44

I was gonna ask.

SPEAKER_02 16:45

We don't we don't sell any of them. I mean, we we've done a couple cash out refinances. I don't need a hundred percent of the money, so it's like we just take cash out refinance and move it into the next deal.

SPEAKER_03 16:54

So, what some on the cash out refin, what kind of financing is available for like a short-term rental

Financing options: second home loans, SBA, and credit unions

SPEAKER_03 17:00

A frames, things like that?

SPEAKER_02 17:01

Yeah, man, when I first started, there was almost nothing. So what when when I first started, I did a second home construction loan, and they were they were fine with me using it as an Airbnb, quote unquote, as a second home. And um, there are some rules around that now. Um, but at that time it was completely fine. I think it was like 10 or 15 down. Now there's a lot of lender, a lot a lot of really good lenders that will do like new construction on Airbnb. So all of our properties are permanent foundation stick-built houses, stick built, some sort of custom, which means like they get certificate of occupancies, which means you can sell them to a normal person and they can get financing on them. Um, so we we build them with full kitchens, full bathrooms, like a normal house. There's just there's a really cool design attached to each one of them. And um, right now there's a lot of really good lenders, uh, just off the top of my head, Center Street lending, host financial, and visio lending. I've used host financial and visio both. Um, and I I like Visio, but I I forgot which one doesn't do construction, but there's enough short-term rental financing out there. And then also, I mean, just local credit unions. I don't know about new development, but local credit unions are open to stuff like this. And a step above that, um, so what what I'm doing now, the best use of my time is to develop anywhere between like six to twelve cabins in these cluster developments. So we put like a theme behind them, whether it be barn dominiums, tree houses, a frames, log cabins, something, and we'll build six to twelve at the same time on like 15 to 20 acres. And you can get SBA financing on that. We we're just about to close on SBA financing on one of our first ones. New construction, new development from ground up land, everything. Damn, yeah, that's awesome.

SPEAKER_01 18:41

Yeah, now here's the thing that when you say you get like um uh some acreage, and then

Beating minimum square footage with primary plus ADU splits

SPEAKER_01 18:47

then you want to put like you know 15, 20 houses or uh tiny homes or cabins or whatever it is, right? I I guess I don't know if it's just around here in like North Texas area. A lot of places uh they don't allow you to to build like smaller homes on them. Do y'all have those regulation problems up there?

SPEAKER_02 19:02

Yeah, yeah, there are, and I'll tell you the way we got around some of those minimum square footage requirements is we'll take it, we'll say we'll say if it's five, say four acres, just to keep it round. So say if it's four acres and you want to build four cabins, there are minimum square footage requirements usually in a city or it's in the HOA. Most of the times I want to invest if it's in an HOA, anyways, but if it's in the city and there's minimum square footage requirements, the way you get around that is, and this isn't breaking the rules, it's just getting around it, it's the gray area, is you would take that four-acre plot and you're trying to put four houses on it, you would split it in half, and it would do a primary and an accessory dwelling unit. Primary accessory dwelling unit, excess ADU being the mother-in-law suite. So for us, it's usually like a 15, 14 to 1500 square foot house, and then there's a mini version behind it. And then same thing on this side big house, mini version behind it. And then that way you have four units, but you just got around the minimum square footage requirement, and you just built for like 2,000 square foot per yeah. Those ADUs because in the eyes of the county, that's just one address, or it might be two addresses, but it's on the same parcel. Um, but in the eyes of a short-term rental, it's two units.

SPEAKER_03 20:15

Yeah, um, you you just hit a huge like people who are listening, man. What he just said is actually a really gold bar where America's going is ADUs.

SPEAKER_02 20:25

Yeah, man. I did an entire YouTube video on them, and that's how a lot of people start. They're like, I got some room in my backyard, I'll build something back there. And I know how that's how Rob built got started. Um, he built an ADU in his backyard, and then that turned into what it is now.

SPEAKER_03 20:40

You know, oh I was gonna say my mentor, I'm wearing his jacket, uh, Thatch. He is big on ADUs. He goes, Yeah, man. If you want to buy something, buy something with an ADU. But in Texas, they haven't valued ADUs yet. But in other places, like the North Carolinas, they're you can evaluate an ADU, and man, it's we're crazy.

SPEAKER_02 21:01

We purchase too. So, like, we'll purchase if there's some land attached to it. So if it's like we just purchased a big log cabin that has like four acres attached to it, and then they're like, We're just building ADUs next to it, like because in some zoning districts, you can build multiple ADUs attached, like multiple mother-in-law suites.

SPEAKER_01 21:18

You know what's crazy about that is back in the you know, I wouldn't say older days, but a little bit older days of the bigger pockets. Uh, David Green said he he's you know, you know, David Green, the house, he he's I see the appeal of these ADUs, and you know, and maybe in a place like LA where there's hardly any, you know, there's no there's no supply. Yeah, you can get away with it, but I just don't like how you can't get a loan to pay for these things, you know, and that will that will be your your cash on cash returns smaller because you have to pay out out your out of your pocket for to build one of these.

SPEAKER_02 21:48

Now you can use renovation loans to build those detached ADUs and re refi them too. You can refi out, and then if if you don't want to reset your interest rate right now, you can just take a HELOC and And just build that second one. That's beautiful. Amen. Yeah.

SPEAKER_03 22:05

Us are a major play in the U.S. right now. Arizona, all in those areas. It's that's a killer play right now.

SPEAKER_02 22:10

Imagine your resale value, too. I mean, I know I've looked at my numbers. Like, it's just like you just added another house behind your house.

SPEAKER_03 22:17

Like I had a friend build an ADU in his backyard. He was all in at 500k.

SPEAKER_02 22:24

The appraisal came at back at 1.5 mil just because we purchased we purchased for like 850 on a cabin, massive cabin. And then we built that ADU, and then the appraisal came back very similar at 1.435. Yeah.

SPEAKER_03 22:45

That is crazy.

unknown 22:46

Yeah.

SPEAKER_02 22:46

So the renovation to build that was about just under a million for everything. So, like we uh created like close to half a million in equity.

SPEAKER_01 22:55

Yeah, we're the wrong business, Micah.

SPEAKER_03 22:59

I'm trying to get into that ADU business. I've been on that for a while. It's just Texas doesn't do the ADU thing yet. It's coming though, it's gonna come.

SPEAKER_01 23:07

You're throwing so much at us so fast, and it's going back to one point. No, no, no. I we love it, we love it. I'm writing it all down, so I'll get back to it. Most of it. So so what you said earlier was really cool. You said just go on Airbnb, find find something

Finding Instagrammable properties on Airbnb's homepage

SPEAKER_01 23:20

you like. You mentioned like a treehouse or a cabin in a certain area, whatever, and then just uh see how good it's doing and and the reviews, and and then then do one also. I mean, and and it's funny because the other day, and you know, when you if you get on Airbnb, the for the front page, it's all these unique, you know, yeah, and you can just run through the tabs and see what catches your eye. Yeah, so when the one just jumped out at me was this one in Marfa, Texas, right? Out in the desert, and I was it looked like such a cool freaking, you know, it's one of those where it's just like glass windows all the way around, right? And then you know, everything opens, and so your bed is like just looking out the freaking beautiful mountains and stuff, and the whole thing opens, and then it has like a big, you know, metal uh roof covering everything, so you got a lot of shade. And I was just like, and I went through the pictures, like, man, it just tells such a cool story. You see the sunsets, the sun rises, it's 360 views, just all glass all the way around, you know. And I was like, I want to build something like that. I said, I wonder if that's as expensive as building a house. Probably not, maybe I don't know. But I was just like, I want to. I don't I didn't see a bunch of them out there. Like, I guess I guess those were those kind of buildings were popular. Oh, it's all 100% solar, too. Those were popular in um Joshua Tree. I guess that's when they started like those kinds.

SPEAKER_02 24:31

The big one is what they started on that one, yeah.

SPEAKER_01 24:34

Yeah, yeah. And so I'm like, Man, that's I I don't know nothing about Marfa. Seems pretty cool. A lot of you know, a lot of hipsters going there now and doing uh you check it on air DNA or Rabu, and you're like, Oh, and it's making that much. He charges over 500 a night and he's booked all the time. I'm like, holy crap, it's like a two-bedroom, uh, one bath, uh, like a glass house, you know, with the with the roof over it. It's just out in the middle of the desert, is making over 500 a night. I'm like, holy crap, it is beautiful, but I mean, like I said, it tells a story.

SPEAKER_02 25:04

So, like, yeah, then that's the thing. It's like you're you're building, I think that's where short-term rentals are going to be going in the next like five to ten years, is like these Instagrammable properties where the property itself is an experience outside the city that the guest is visiting. That also it makes the property less seasonal because people are just drawn to the property compared to the

Influencer marketing: 365 days, 120 guests

SPEAKER_02 25:24

market. Um, and another thing is like you want to build properties that people are proud to put on their social media because that opens you to a completely different world of like insul, like influencer marketing. Like we've we've put influencers through all of our properties so far, and they're they just they're just remarketing it to on their social media. And you I think of my days, like each cabin has three as inventory, like each cabin has 365 days. That's my inventory. If my average daily stay is three days, like averaged across all my guests, I only got to bring in 120 guests a year. So it's like imagine if like an influencer go an influencer with 300,000 followers on Instagram goes in that property, shoots some stuff for me, and posts it on their social media. 300,000 followers here, 120 guests here. It's like it's gonna get booked easily.

SPEAKER_01 26:11

I love how you did the math right there, man. And then you broke it down. It reminds me of um of uh what's her name? Uh Ziona McIntyre went on the beat bigger pocket show the other day, and she was like, you know, we they do midterms, you know, and she broke it out the same way. Three months, yeah, three month rentals, and so I only need four guests a year. And I was like, That's it. Oh shit, I didn't even think about that. You know, it's just like the way the way they broke it down. Okay, I'm only after four guests a year. That's it, that's all they need to make a major profit each year.

SPEAKER_02 26:38

Yeah, so it's like if you have like 12 of them, you need yeah, 30 something. That's nothing, it's nothing, right? Yeah, yeah.

SPEAKER_03 26:45

You make a good point about like where it's going because, like, like you guys just said, you can get on Airbnb now and just click what you want. Like you can click a mansion, like, hey, I want mansions, yeah, right.

SPEAKER_02 26:56

I want a castle, yeah.

SPEAKER_03 26:57

Like it's and I do think if you're planning like on just being on Airbnb, you should definitely invest in like one of these types of unique type of space because that's what they're catering to, man. And like these people are charging twelve hundred dollars a night, you know, for a yeah mansion, you know. So, you know, that that's definitely where the where the wave is going. I fully agree there.

SPEAKER_01 27:19

And if you've seen the um when you're setting them up, you know, we we were walking through a new client, you know, they wanted to show us how to set it set up their listing and all this stuff. Um, and I hadn't I hadn't been on one of these calls in a while, right? Now I was hopping on, I was like, holy crap, the amenities list is like a hundred different things now. One of them's like uh indoor ice rink, indoor basketball court.

SPEAKER_02 27:40

I mean they're talking about like when you're setting, yeah, yeah, yeah.

SPEAKER_01 27:42

When you're setting it, yeah. I'm like, oh I said, and then and Federico, you know, he's he's usually the one that said my my business partner, he's like, Oh, yeah, you know, every time someone does something new and unique, they add it to the to this the amenities list. And I'm like, this thing is is insane.

SPEAKER_02 27:55

I remember when I used to coach students like three years ago. So I'm a part of um, I'm a part-time coach for the BMB formula, which is like a big rental arbitrage coaching community. And um, when we used to set those properties up for or

Checking every amenity box for Vrbo's algorithm

SPEAKER_02 28:09

help them set up the properties for the students, there was I I used to say, like, just try to check off as many amenities as you can because it's gonna help your listing more. But I don't even say that anymore because, like you said, there's like a hundred and something amenities that's just gonna overwhelm someone if you're trying to every little thing.

SPEAKER_03 28:24

It's funny you say that because uh if you um you know verbo is actually catering to that now. So yeah, I'm I'm uh I'm a I'm a host, I'm on hostfully and have the integration manager. And he goes, Hey man, you should uh hit because and I had never really just went through and looked at all the amenities, but he goes, Hey man, I'm gonna be honest with you, Verbo, we're you know, he's he works for him. He's like, Verbo, we're catering to people that have most of the boxes checked. He goes, So have your VA go back through and check all the boxes that you have. He goes, That's what we're catering to. And he goes, You'll get way more reservations. So yeah, man, on Virgo, that that's all they cater to. Hey, check the boxes, then they'll start pushing you up the rank. Airbnb now, yeah, right. Click whatever you want, and the most beautiful thing you've ever seen will come up. So, yeah, it's crazy. You always gotta always pay attention to where these search algorithms are going so you can be ahead of that curve.

SPEAKER_01 29:15

Absolutely. Now, do you uh do a lot of direct bookings or mostly Airbnb?

SPEAKER_02 29:20

Yeah, man, I knew that that's where the conversation was gonna go. So I need so six months ago, uh a year ago, we just had like some issues with Airbnb with one of our properties, with like a guest lying about something that didn't happen. And that was sort of like the first time where I started thinking about direct bookings because it's happened to all hosts. And especially what we were just talking about Airbnb's platform, they Airbnb completely just changed their algorithm in the summer. Like a lot of people were caught off guard. We went from like being fully booked out to they're starting to change it, but they did. I mean, for sure they screwed up the algorithm a little bit, and I'm pretty sure they know they did that. Um, because like they're they're finally starting to backtrack on it. But that was we started really working with Mark with Boosley um to build out a direct booking platform. I was just on his podcast last month, and um we're doing it on our first, we're we're purchasing seven cabins, like yeah, there you go, man. Hell yeah. Um but yeah, uh, we're we're working with Mark to put together like just a direct booking site. And then Jordan from Staamo, actually, we just we just hung out last night. He was at one of my properties. Um he's he's in charge of like the influencer marketing platform thing. And um that's sort of our that's sort of our strategy going forward now is like utilizing influencer marketing and then pushing people through direct bookings. And I mean the easiest way to do it is just use Stafi, like have your guest, yeah, man, do freaking check, check, check, right? But like literally, you I tell students you need to be looking at Airbnb and VRBO as just a marketing arm to your business. It is not where your property should live. Because if it like if you look 10 years ago with like Google and everything, when Google changed their algorithm, the big Google slap like 10 years ago, seven, 10 years ago, a lot of people in the internet marketing world got screwed. And I think of that when I think of Airbnb and VRBO, they can change one thing like their algorithm, say like just like what just happened in the summer, and a lot of people can be left out to dry. So we use Airbnb and VRBO to bring the guests into our property. We use Stafi to capture their contact info. Like one of our log, one of our log cabins leaves 14 people, it's like a five, six bedroom cabin. Um, and then then we're gonna be re-marketing to them through a boostly site from there. Um, and that that's our strategy going forward. And then since the you we have unique properties, we can bring influencers through our properties and push them to a direct book, a direct booking site from there too.

SPEAKER_03 31:45

I love it, man. I have my boostly site, and it's been man, a game changer for us.

SPEAKER_02 31:49

So yeah, I was I was gonna use I was gonna switch over to Streamline as a PMS, and then they pushed me towards uh hostaway. So that's that's what I'm gonna be using from now on.

SPEAKER_01 31:59

So you you touched on something that I'm

Influencer partnerships through StayMO

SPEAKER_01 32:02

not even I mean, I I've heard of it, but I really haven't really dove into it too much, is influencer marketing. How do you how do you utilize influencers to like I say get the eyes on your property?

SPEAKER_02 32:12

Yeah, so there's there's two ways to do it. The easiest way is to just take your listing photos and send them to like take your best to your cover photo or your best listing photos. And you can, I mean, you can go on Instagram and just start looking up cabins or Airbnb and short-term rental pages that have anywhere between 20,000 to say 100,000, 150,000, and just ask to pay for a post $50, $100, $150, and then give them your best images and they'll just they'll feature your cabin, your property on their sites. That's the easiest way to do it. The other side is using Stay MO or any, you can just reach out to influencers directly. Stay MO is easy because it's a it's a community that they've built and they they vet all the properties and they vet all the influencers as well. Um, but you can trade, you can pay for some travel, some of them, the higher end ones, you're gonna be paying a little more. But a lot of times you're just paying for their travel and you're giving up your days that weren't gonna get booked, anyways. Talking about like a Tuesday through a win, uh, a Thursday or like a Monday through a Thursday. You're giving those days to them, maybe they weren't gonna book in the future, and then they're coming in and they're shooting content for your property. So like you're not paying for that, and then obviously they have rights to their content, but then you can share it on your social media, they're gonna share it, share it on their social media. If they have friends, like how Jordan does, they'll bring in a whole bunch of people um into a pro like a bigger property and just do like one big like media push, essentially. Um, and that's that I think that is one of the keys going forward is like having people like reviewing your property to their communities, essentially. Yeah, yeah. But so those are the two legs of influencer marketing. You can do it. I think Instagram is the best channel to do it through. You can do it through YouTube as well if you can get someone who's good with long-form content. Instagram's the easiest, in my opinion. You can just pay for a post, or you can have an influencer come through, pay for their stay, have them stay at your property, and then they can they can just remarket or market to their their platform or their community.

SPEAKER_01 34:10

It must be nice being an influencer, man. You go around the world and they you not only do you live for or yeah, stay for free, they pay you to stay at their places.

SPEAKER_02 34:18

Yeah, I was I was talking to Jordan last night because we uh my my investor on the property he stayed at, uh, he's local, and we took him out and his friend last night, and we were just talking about the platform. And he's like, they have some influencers that just live in a van and they'll literally just like boom, boom, boom, like throughout the whole country, like just knock out these like big like shoots. So, like they'll like stay here for three days, stay here for four days, and they'll they'll be their job is essentially just to shoot content for their community. Wow, it's like it's a win-win for everyone.

SPEAKER_01 34:46

So are our influencers uh see? I don't know a lot about this industry. Are they pretty much just all hot women, hot girls? No, I mean Jordan's a dude.

SPEAKER_02 34:54

Uh, but like uh is he a hot dude? It's it's like because you have like people like uh shooting his name. Um, well, Mike, but I forgot his last name. Mike will travel. You have Levi Kelly, those are the two big ones, those are on YouTube. Um, but yeah, I mean it it's it's a mix of everything, and it's when my wife and I went to Tulum Beach last year. That's like influencer central, but it's like annoying influencer central, like they're just like these children or these misbehaved adults, essentially. Um, so when when I when someone says influencer, that's the first thing I think about is what I saw in Tulum. They're they're not like that. It's like a lot of these are like mature influencer, they're just travelers. Um, and they're they're really good with their content. And again, like what I like about Stammo is they vet all of their people. So like you can't just go up and just sign up the way you can Airbnb. Like, you need to submit an application either as a host or as an influencer, and then they'll approve you or not approve you.

SPEAKER_01 35:48

Man, it was it was it's funny because it's going back to yeah, it's not exactly what I thought influencers are, but going to like um That's what I thought.

SPEAKER_04 35:56

Yeah, yeah.

SPEAKER_01 35:57

I hadn't well, it's funny because I hadn't been to like a gym gym in years, right? I have like a gym at work out at my at my uh at my work, you know. Then I signed up for this gym, and man, walking through the gym is hard with all these, it's all cell phones everywhere on the floor filming these chicks do all their workouts, man. There's so many, uh so many girls moto videos is what we call them in the military. Moto videos, yeah. What what girls you wouldn't even think that would want to be filmed doing the workouts, you they're doing it too. It's like okay, I don't I guess it's I mean it's the dudes as well.

SPEAKER_03 36:28

Like, I think every day, man. I'm trying to do my chest day. It's a dude, he it was one guy, he comes in, man. He sets up his whole studio.

SPEAKER_02 36:38

Yeah, seriously. I'm like, bro, come on, does two sets and then just sits on the machine.

SPEAKER_03 36:45

He does like two reps, then he sits, sets up his camera again. I'm like, bro, get the hell out of here. That's the world we live in, though, man.

SPEAKER_01 36:56

It's for his OnlyFans account. That's funny.

Insurance: Proper and State Farm for short-term rentals

SPEAKER_03 36:59

Oh man, I have a funny off-air story about that. But yeah, go ahead.

SPEAKER_01 37:03

Tell it on the air. You know how we do. So okay, so we touched on um direct booking. So obviously, everybody is uh so many people I taught to is afraid of doing direct bookings, right? Because they know that Airbnb is always going to be on your side and protect you 100%, right? And so wink wink. Um, so how do you protect your your properties uh insurance-wise uh for direct bookings?

SPEAKER_02 37:25

Yeah, I mean we we we have short-term rental insurance. A lot of our properties, um, crap, I forgot the name of the proper. We use proper insure, they're a little bit more expensive, but they'll they'll they'll they'll insure the lost income of a property and blah, blah, blah. What I've realized though, about, and I I love this question because with the unique properties, we already talked about how much money they can make. Usually those higher I consider those like higher end properties where like you're charging nowhere between two to eight hundred dollars a night. Um, those tend to push away a lot of the bad guests, anyways. It's like you have you have a property like an A-frame that can bring in anywhere between 250 to 400 a night or 450 a night, and they're staying for three to six nights. Like that that tends to push like deter a lot of the bad guests, anyways, that are just looking for a place to stay, or maybe a roof over their heads while they party. Um, but I mean, yeah, like you said, like having good insurance is key, like short-term rental insurance. What I also learned was stare state farm started doing short-term rental insurance, and we're playing around with it right now. It's very similar policies compared to proper insurance, state farm.

SPEAKER_01 38:29

Yeah, yeah, I mean, you know, for a catastrophe to happen, I'm sure it's it's always it's always good to have good insurance. But I mean, uh what me and Micah talk about on the show. We used to, for all of our uh houses that we own, we used to we used to put um uh what is it called? The noise aware. Uh well that too, but um American Home Shield. Home shield, American Home Shield. I'm sorry. The uh what are those called? Uh I forget it slipped my mind. What are those things called? Home warranty companies.

SPEAKER_02 38:56

Oh, home warranty. I I I don't, yeah.

SPEAKER_01 38:58

Anyways, back in the olden days, they paid out pretty good, whatever something happened, you know, you got paid whatever you paid a small fee, monthly fee. Then it just got to the point where um I don't know if they if there's their computer system blackballs you for making too many claims or whatever. Then it gets to the point where they just deny everything, and I know and insurance companies are in it to make money. Home warranty is kind of like insurance, right? So I got we got rid of all those, but uh the thing is, I mean, as long as you're uh like you said the prices are high, these are unique places, people are probably not gonna destroy them, hopefully.

SPEAKER_02 39:30

But if you're developing, if you're developing you uh from ground up, you're you're most of the things in the house are also under warranty because they're brand new, like five to ten year warranties automatically. That's beautiful, yeah.

SPEAKER_01 39:44

And and so so, yeah, as long as you're stockpiling enough, you know, to I guess do a self-insurance type deal, you know, you make you're making a lot of money, and so you can I've I've I've heard, I mean, we just toured a property that had 12 units, and I was like, What insurance company did you use?

SPEAKER_02 39:59

And he's like, We used Lloyds of London, who use it, which is what Proper uses, but they're like, We haven't, we've been we we haven't been insured in a while, they said they just like and they had a house fire in one of their properties, but it was like it was still cheaper to pay for that out of pocket than it was to pay the insurance. Yeah, I'm not telling anyone

Syndication: JV deals to joining a Michigan fund

SPEAKER_02 40:20

to do that. That was just my experience with one of the hosts.

SPEAKER_01 40:22

I don't do that, but and it just look what happens when you know in Florida gets wiped out, you know. Insurance companies, what do they say? Uh, we ain't got it, man. Sorry, we can't.

SPEAKER_02 40:29

Yeah, sorry, everyone just filed a claim at the same day. Yeah.

SPEAKER_01 40:33

Call the government, though you know the taxpayers will pay for it. Um, so anyway, syndication, you touched on that too. There's so many things that you touched on. Um, how did you are you how did you get into syndication?

SPEAKER_02 40:44

Yeah, I mean, I leaned very heavily on like multifamily books to figure that out. Um, and what I realized was when I so I I did a big capital push at the beginning of this year. I hopped on a lot of multifamily podcasts, and the the owner of the podcast knew that I was going to be pitching something at the end in terms of short-term rental partnerships or something. So I had enough people coming through my funnel for investors where I could do JV deals, individual JV deals with each one of them. Where I guess you can consider that a syndication. I don't look at that as a syndication because I wasn't pooling multiple investors' capital. I was just doing like a straight 50-50 with some sort of management and some sort of equity tied into each one of them. And so my first four that I did were all joint partner deals where the one investor would bring up all the capital to the deal, um, and then they would help me guarantee the loan because I got to a point where I couldn't guarantee the loans by myself. Um, so they'd be a personal guarantor on the loan with me. And then when I started doing the multifamily podcast, or when I was pretty done with multi-family podcasts, what I realized was after I would hop off the podcast and like not hop off, but like we would stop recording, um, all these multifamily podcasts have their own fund. That's how they a lot of times that's how they promote the fund is through that. What I realized was like I had like three or four hosts of those funds that were running also their podcasts, they would pitch their fund to me. Like they were multifamily funds, but multifamily was getting crushed, it's still getting crushed, but not as bad as like six months ago. Um, looking at like two and a half, five percent cap rates. And they would pitch the fund to me. So I ended up teaming up with a fund out of Michigan, um, and we're just about to close our first deal where they raise all the capital, they handle all the investor relations. I am the operator and the deal finder, and I put the deal together. That's it. Um, and I I think I'm giving up more equity that way, but I'm also not they get they help me guarantee the property, they're putting together all the investors. We're tied to our investors eight to 10 years, like I said, depending on what the market is doing at that time, and they're gonna be handling all the investor relations during that time where I don't have I can just focus on creating content like this, but also uh just focusing on finding deals and putting deals together. That's what I enjoyed doing. Um, so that that's been I did the joy JV stuff. I was thinking about putting my own syndication fund together, but then I was like, let me just tap into someone who's been doing multifamily for 10, 15 years. Numbers are numbers at the end of the day. Returns, cash flows, preferred returns. It's just a number at the end of the day, no matter what real estate class you're in. Um, so that that's been my that's been my experience with syndications. I just decided to just integrate myself into a fund that's already doing real estate syndications.

SPEAKER_01 43:28

That is cool, man. You find you and you're doing the part that you like.

SPEAKER_02 43:32

Yeah, I'm doing the part that I like, and then they they have experience in that. They've been doing it 10, 15 years where I would just be starting out and making those mistakes like myself. Like they they and they have the relationships, they've exited some of their partners already. So like their partners trust them more than if I was just coming in and talking to them cold.

SPEAKER_01 43:52

So, how how is the recession and the inflation been affecting this building business?

SPEAKER_03 43:58

Ooh, that's where I wanted to go with that. Yeah.

SPEAKER_02 44:00

Yeah, I would say that it hasn't affected it as much as COVID did with like with um I mean you're looking at labor costs that were absolutely ridiculous. And then same thing with like labor or uh like materials costs, like material like contrary to popular belief, like labor costs and materials costs are going down right now because we are in a recession. The recession, the economy is receding, which makes things cheaper. That's the whole point of doing all like entry increasing interest rates. But like, I mean, we're also I the two two bigger pockets articles ago, I wrote a specific topic on that where just because we're going through a recession does not mean you should stop investing in real estate. Like like you just like you said before we hopped on, like you should be investing in any type of market. So what I said in that blog post was no matter what interest rates are doing, you need to be underwriting the deal. Underwrite the deal and look at the numbers. The numbers don't lie. Underwrite it the same way you would have in in the best market we've ever seen compared to now where we're at. Like, I just got a term sheet for six cabins we're building, and the interest rate was eight and a half percent, which hurts. That hurts when you see that. But the numbers and the lender was still comfortable going forward. It's fixed rate debt, it's not even adjustable rate debt. So they they were comfortable. I talked to my investor this morning about it. Like, we were comfortable moving forward because the investors are still gonna make their money on it. So when it comes to the recession, it's like uh my very first mentor had said just avoid the news, avoid the news completely. If the news is important enough, someone is gonna tell you about it. And that's sort of what I stick to is if the news is important enough, someone's gonna tell you about it. Um, I'm still looking at properties, if the numbers work for my investors, and if the numbers work for me, I'm still going through with it. You might have to get a little bit more creative on the structure, like who gets what, but at the end of the day, like things are on sale right now. Like it's that simple. And we on the development side, people are instead of us trying to hunt down people like tradesmen for them to work for us, now they're calling us because that, like again, like the people aren't building as much now on the custom side and stuff.

SPEAKER_03 46:07

Yeah, I'm loving the fact that the material costs are going down. That's definitely helping me. So I'm I'm fully with you right there.

SPEAKER_02 46:13

There, I I'm gonna say this they will never go back to where they were prior to COVID, but for sure they're going down. Yeah, at least now you're operating with knowing that compared to like when we we had a couple budgets that were caught in between COVID and not COVID that we had to restructure and stuff. Yeah. Oh, yeah, there should be no reason why you're not investing right now. Do not discredit investing completely. It's like what Robert Kiyosaki says like the mark, everything's on sale at the market, like in the market. Like, if you were going to the grocery store and something that you wanted was on sale, you would purchase it immediately. What's the difference here with real estate?

SPEAKER_03 46:48

Another thing I will say too like some people make money off fear, so they'll say, Hey, the world's coming down, crashing. Always look at who that person is. I think someone said, I think Warren Buffett makes a lot of money off fear.

SPEAKER_02 47:00

So I mean, he made the bulk of his money in 2008 and 9.

SPEAKER_03 47:03

Yeah, so I mean, you know, certain things he says, yeah, you know, but he'll make a lot of money off of it. So yeah, invest, invest, invest. That's what I tell people as well, man.

SPEAKER_02 47:12

Yeah, and it's yeah, I'm writing a bigger pockets article right now, and it's I I have a feeling it's not gonna be a there's gonna be a lot of hate coming my way towards that, but it's essentially what I just said about like you need to exactly what you just said too. Like, there's a lot of fear-mongering out there because people people are in positions where they're investing in a certain way, and if they have the platform to talk negatively, we're in a recession, blah, blah, blah, their portfolios are gonna benefit because of that. And I wish more and more people understood that. That's that you need to be very careful of who you're listening to because those people might have a position in something if they're big enough to be on CNN, Fox, whatever, or like a big podcast, they're they probably have some sort of position or play in the market, and they're just trying to influence that.

SPEAKER_03 47:54

That's exactly. Um has anyone have you ever met someone who said I bought a house 10 years ago? That was the biggest mistake of my life, right?

SPEAKER_01 48:02

Right.

SPEAKER_04 48:03

Exactly.

SPEAKER_01 48:05

So yeah, that I never even thought of that. That's a good angle to take on the article saying they're out there saying don't buy now's a terrible time, all these bad articles, and they're over there in the background buying as much as they freaking can.

SPEAKER_02 48:15

Yeah, right. I've seen it on the short-term rental side, man. I'm not gonna name names, but it's like I've seen people talk about like, oh, there's like an influx in inventory and blah blah blah, and it it's not a good time to invest, but like they're a short-term rental investor. Why would you be talking about that if you're on the podcast on this massive platform? I'm just saying, so that that's what the whole pot the part the article I'm writing right now is all about. That's gonna be fun.

SPEAKER_01 48:38

And and that's what doesn't make sense to me either, right? People saying, Oh, you know, over inflation, you know, there's too many people doing Airbnb or short-term rentals, whatever. But at the same time, you know, it's funny because I work at this uh at a job where you know uh it's it's mixed, you know, a lot of middle-aged, and then there's a lot of older people there, and all the older people like a couple years ago, older people didn't even know what the hell Airbnb was. Now they all use it, and most of them that's all they use when they travel now.

SPEAKER_02 49:04

So I'm like, Well, there's stuff going on, yes, there's more people doing Airbnb's or yeah, but then Airbnb is still adding market share, and then not just Airbnb, like VRBO as well, booking.com. People, I think if you have a hotel room and a house and they're priced similarly, people are gonna choose the house all day, or at least like the cabins we're developing. That's that's my thing on that.

SPEAKER_01 49:25

Yeah, yeah. So yeah, more people, yeah, there's more people supplying, you know, there's more supply, but there's more demand every single freaking year, right? Right, and the old people figured out how to put the app on their phones, and that's you know, that's yeah, right, and then that is pretty cool, and uh, and a lot of them are doing Airbnbs, and um we're managing for these, you know, older, older people, older generation, like, oh wow, yeah, you can yeah, you can manage it for me, young man. Um, anyways, so yeah, the fear, and and and and what's beautiful too, you know, on our end, I'm not building them, but I go shopping right now, and I I go every week I'm going looking at houses, and it's I get the whole the whole hour to myself. There's not someone waiting for us.

SPEAKER_02 50:03

There's open houses happening now compared to six months ago, where like it's it's not normal for a property to get 30 offers in the first day. Like, I wish people understood that.

SPEAKER_01 50:13

The best and last highest offer by 5 p.m.

SPEAKER_02 50:15

What the yeah, you're like, you just listed it two hours ago.

SPEAKER_01 50:18

Like that's how it was when interest rates were low. That's how it was. Now they're high. People are complaining I can't buy now because they're high. Well, now you can buy. Now there's less competition.

SPEAKER_02 50:28

Yeah, it it I don't know if it directly correlates between interest rates and prices dropping, but just ask a real estate agent in your market, is it still people like there's still a good amount of inventory out there, like for people to purchase? It's just it's just getting back to where it was, say like in 2015 and 16, where it takes some sign to sell the property. I don't think 2008 or nine will ever happen again in terms of the real estate. There's always some sort of like economic vehicle that causes it. It was just more mortgage-backed securities back in 2008 and 9. Prior to that, it was like the the dot-com crash in the 2000s. Prior to that, it was like the savings of loans in the 80s. There's always something, but I don't I don't see real estate taking the crash that it did. Like prop, like I grew up in Detroit, like property values losing 50-60 percent of their property values. Um, I don't see that happening again because back in the day, you could walk into a bank, lie about your income, and get a loan. That would that was what caused that. You can't do that anymore, at least like to the point of like 2008 and nine, you can't.

SPEAKER_03 51:27

Yeah, the predator it was predatory lending. That that's like so many things in place, so that can't happen again. So, yeah, like right now, I mean, you're in a buyer's market, you can go out there and get a good ass deal, you know what I mean? So, stuff sitting, you know, like this house around the corner from me. I don't know if anyone wants to buy it because, like, if it's it's right in front of a school and like if yeah, school days you can't back out of your house. But you know, I'm saying it's just sitting there, you know, and it's sitting there with a for sale sign. If you want to go make it, I don't know if you want to make it a short-term rental, you'll get a lot of complaints, but you can get a good deal out here. People go get a good deal if you're in a buyer's market.

SPEAKER_02 52:02

And and you know, you know what's exactly, it's a buyer's market. Like that use that word, like it's a buyer's market. You are not a seller if you're trying to get into

Detroit's comeback: downtown stadiums and dispensary money

SPEAKER_02 52:11

the real estate market right now. It is a buyer's market, you are a buyer. It's it yeah, I just like I just wish more people understood that, but it's it goes back to the fear thing, like people are just scared because he's just constantly seeing stuff on the news. So real quick, is Detroit making a comeback? Oh yeah, man. If you if you go down like downtown, um not a lot of people know that like the uh the Mike, the Illich family, the Illich family owns little Caesars, but they purchased like city blocks in 2008 and nine, and it's like all of that's like if you go to downtown Detroit, downtown Detroit's beautiful, don't go to the suburbs, but like downtown Detroit's beautiful. Um, and there's there's left and right like skyscraper development happening. It's it's pretty, it's it's really fun to see that. I wish I would have bought townhouses back in 2007, even 17, because now they're like tripled, quadrupled in value. Damn, funny.

SPEAKER_03 53:01

I just got back from Detroit, and um we the event we went to was downtown. The event downtown, I'm like, damn, this is nice ass brand new stadium, everything. Yeah, you know, it's a totally different mindset, but then like, yeah, but we stayed in the suburbs, you know, stuff shuts down at 10 o'clock. But the town homes, they were short-term rentals. The town homes were beautiful that we stayed in, but you go down the street, some of it's still abandoned, so they still are trying to a lot of it's but like downtown itself is thriving.

SPEAKER_02 53:30

There's there's three casinos, one of them is MGM Grand. There's um left and right development everywhere happening up there. Like, and now I'm not just talking about little houses, like full-blown skyscrapers and everything.

SPEAKER_03 53:42

Yeah, and they even got like the dispensary money out there now, like yeah, man, huge dude.

SPEAKER_02 53:46

I have a lot of family in that world, yeah.

SPEAKER_03 53:48

Oh, really? Yeah, man, yeah, yeah. Because I've I've seen the dispensary stuff, yeah. It's Detroit's definitely has it definitely has opportunity.

SPEAKER_01 53:56

Yeah, uh it's funny. I always bring it up, but like we we have a friend uh in Chicago in um Denver, and and whenever they they got the the the you know marijuana tourism and all that stuff, and we we asked him on the show, you and your wife partake because they have like a basement thing where they did Airbnb, and um because yeah, yeah, yeah. The writer for pockets, by the way. Yeah, he was on our show, he admitted it. You want to say their name, that's fine. Yeah, no, I'm not saying the name, go ahead. Okay, okay, anyways. So he's like, he's like, I was like, Well, okay. So you you hit up the dispensaries to to get your stuff. He's like, he goes, Man, since we've been doing Airbnb, we had never have to buy anything ever again because these people come to town with with big eyeballs and then buying all these things, buying giant candy bars. He goes, they eat like five bites off a candy bar and they're they're done for the whole weekend. He goes, they just end up leaving piles of stuff at our place. Yeah, it is true. I'm I never even thought about it like that. That's oh yeah.

SPEAKER_03 54:54

When I was in Detroit, I'm pretty sure our Airbnb hosts were satisfied with our left behinds, but it happened, you know.

SPEAKER_01 55:05

Man, they had little Caesars. Little Caesars hit me up.

SPEAKER_02 55:08

Yeah, the Little Caesars Arena, they just built that. So you have like, I mean, I didn't talk about Detroit here, but like you have literally the Lions Stadium, Ford Field, and then you have Comerica Park, like a baseball throw across the street, and then across the highway, which is right across the street, is the LCA, uh, Little Caesars Arena. So you have literally three stadiums within like a quarter mile of each other. It's crazy.

SPEAKER_01 55:30

That's how you should build a city, but these freaks over here, man, they got them spread out over the Metroplex.

SPEAKER_02 55:35

And then in inside of that, there's three big casinos as well, like the within that, like maybe like two or three mile range and stuff. It's crazy. Yeah, you heard it here. Detroit's make it a comeback, invest in Detroit. Look at, I mean, if you guys want to, if you guys uh people who are listening about Detroit, um, if if if you guys are numbers people, just look at the unemployment rates. Like they were at like 12%, but now like if you look at it now and you don't have any basis, like okay, you look at it and you're like, okay, six, seven percent um unemployment, sorry, interest rate, unemployment rate. Like, if you looked at it during 2008 and nine, it was ridiculous. And then even 2017, you're looking at like an eight to eleven percent in uh unemployment rate, but now it's like seven to eight percent. But you need to look at the whole thing, like because if you compared that to like the national average, it's trash, but it's it's getting better, it's like cut in half since like six, seven years ago.

SPEAKER_01 56:30

Wow, wow, wow. That's what they say with statistics, you know, because it's the way you read them. But I heard a cool quote on statistics it's it's a group of numbers out looking for a fight, and so and so in any yeah, any argument you want to make. Oh, look at it, seven, eight percent. That they're garbage, like you said, they're trash.

Where to find Alex: Bigger Pockets, YouTube, course

SPEAKER_01 56:46

But no, look at it like this that they're recovering from 12 years. The last 15 years, yeah, yeah, exactly, exactly. Man, been a good show, uh, Micah.

SPEAKER_03 56:54

Yeah, man, this is really good. I love the fact that you are building the short-term rentals. That is that that you're the first person I think that's came on and said you're actually building them in a development phase, man. That that is awesome.

SPEAKER_02 57:05

And if there's I appreciate it, man. Yeah, it's it's been it's been a fun roller coaster the last like five, six years, but it's it's good, it's it's getting really, really good. Yeah, yeah.

SPEAKER_03 57:14

So if there's anything you need help with us from with us from, I'll reach out. We'll I'll try our best to help you out, man. Cause that that's a really cool thing that you're doing.

SPEAKER_02 57:22

Yeah, brother, absolutely appreciate it. Can you do any street magic? You're no, man. All my stuff's all my stuff's in the other room right now. But you know, you're like the second or third person who's asked me about that. I've done like three or four podcasts the last couple months, and I was like, I don't know, that always gets brought up. Can you do some magic for us right now? Yeah, I need to like keep a deck of cards around me or something.

SPEAKER_03 57:43

Yeah, yeah, you definitely gotta do that, man.

SPEAKER_01 57:45

That's that's a good way to break the ice with a with a potential seller, you know. It's a cool networking thing, too.

SPEAKER_02 57:51

Like, I was just at the ClickFunnels event and there was like an after party that I was at at the ClickFunnels event, and we're just doing magic tricks to people with like seven, eight, nine-figure earners and stuff.

SPEAKER_01 58:00

Oh wow, yeah. You got a like a David Blaine vibe, do you? Oh, thanks, man. I look like him too with my hair. Well, cool, brother. Well, thanks for hopping on. Where can people find you?

SPEAKER_02 58:14

Yeah, man. Uh, if you guys are interested in what I do, we already mentioned bigger pockets. You guys can check me out there. I'm pretty active in the comment section. And then uh I have a YouTube channel as well. It's called Alex Builds, sort of just details what I work on on a daily basis. It got to a point where I was like, I'm just gonna bring a camera with me. I'm already visiting the sites, might as well just talk about it instead of thinking thinking of it. And then uh I just put together a short-term rental development course. Um, so like I essentially sat down and I was like, okay, what's the course that you wish you had when you first started? And that's I just outlined a course, took me like six to eight months, six to eight months to put together. It's like 120 videos. Coat, there's some group coaching in there, there's some templates, workbooks, everything that you need to essentially do what I do. And that's at my personal website, which is alexjarbo.com.

SPEAKER_01 59:01

Sweet. Any more questions for Alex Jarbo, Mike?

SPEAKER_03 59:04

That is good, man. Uh, I don't have anything. And uh, I will want to tell you, man, thank you for coming on and coming. Okay, man.

SPEAKER_02 59:10

Thanks for having me on. I love these like longer podcasts we've been riffing for like over an hour, which I love.

SPEAKER_01 59:15

Yeah, yeah. Oh, Micah did have a question. Why is there no good food at Detroit?

SPEAKER_03 59:19

What? I didn't say no good food, I said why does the food shut down so early? Yeah, I'm like, man, ain't no food. I mean, you got this dispensary over there, people's a lost opportunity there.

SPEAKER_02 59:32

That's funny.

SPEAKER_03 59:34

You gotta stop partaking at about six o'clock or else, but yeah, man.

SPEAKER_02 59:42

Oh, my wife's gonna love this podcast when it comes out. His wife. Because she's like, What'd you guys talk about? I'm like, Detroit, like for most of it.

SPEAKER_01 59:52

I do like the Detroit style pizza. That's that's bomb.

SPEAKER_03 59:56

Oh, yeah, you guys do have some good pizza. I forgot the neighborhood we went to, and it was some damn good pizza. Uh, I forgot the neighborhood, but yeah, you guys do have good pizza.

SPEAKER_01 1:00:04

That's funny. Yeah, well, thank you for hopping on, man. Uh we'll hopefully see you again in the future for sure.

SPEAKER_03 1:00:12

All right, later. All right, man. That was a great episode with Alex Jarbo. Is it Jarbo or Jarbo?

SPEAKER_01 1:00:20

Jarbo, Jarbo.

SPEAKER_03 1:00:20

I think that was a really good episode, man. Uh, I love the fact that he's developing that. That that's a new one. Like when you actually develop them yourself, you have so much opportunity of like creating something unique, you know, and doing the A-frames, and then he's doing the cabins, then he's looking to do the tree houses. That's pretty dope, man. I like that idea.

SPEAKER_01 1:00:40

There's no excuses, man, because he said, like, he couldn't get anybody to he couldn't, you know, sell them anything, right? So he's like, Well, shit, I'm just gonna build my own shit, and he did. And then so much of that of this industry is um, you know, jump out the plane, build the parachute on the way down, right?

SPEAKER_04 1:00:57

That is, man.

SPEAKER_01 1:00:58

And that's that's just how it is. And the people that that take risks are gonna be successful, you know. Yeah, they just keep at it and it minimize the risk. Hey, if it don't if it don't rent well as a short-term rental, I can rent it long term or sell the damn thing, you know. And yeah, bread and butter. I go back to this on my show. A buddy of mine got into real estate a few years back and lost quite a bit of money because he tried to hit two home runs wide away right away, never done real estate in his life, tried to buy big old, you know, McMansion type deals. And anyways, he made all every mistake in the book. But if he and he says it himself, if he would have started with the 1500 square foot three twos, even if he fucked up, he could still sell those like hotcakes every single day in any market. They're great, you know, starter homes are always in in demand. So, um, yeah, so don't be afraid, take risks, take calculated risk, and you're gonna you're gonna end up you know learning a bunch of stuff and you're gonna end up making some money.

SPEAKER_03 1:01:50

Yeah, and another thing you just said is very important is man, start small, don't try to go into this big home run shit, just start small. All you need is one small little 1500 square footer, and then compound off that. Then once you learn that, you can go into the multifamilies. That's basically what I'm doing. I'm just waiting to I'm eventually going to go to multi-families and gonna go to vacation rumbles. But right now, I'm compounding off what I know, so I can expert at that. You know, basically, you always have that in your back pocket, and then you can grow in into other areas, man. You can always start.

SPEAKER_01 1:02:21

Yeah, yeah. But one thing I'll share real quick is I'm kind of proud of this, and and it might come to fruition, it's getting close. It seems like it's gonna come to fruition, it might not, whatever. But you know, so this house, this house in the Grand Prairie. You know, I I ended up talking to talk to the the owner, and and you know, we've been going back and forth, you know, they like my idea of doing the arbitrage thing, and um the rent was a little higher. I got them to knock it down a little bit, I got to knock it down the the um um the down, what's it called? The the deposit. I got them to move the you know, let them do the last months or whatever, stuff like that. I got I got a lot of things, and then we negotiated and it got it to a good price. But while we were getting towards the end of the negotiations, something came up on one of the uh one of the listing platforms, right? And someone was looking for a place for three months in Grand Prairie, and the same exact they want to be in that same exact area that this house is at, right? And they and also it said they want it unfurnished, and I was like, What do they they want it unfurnished? And I was like, that's interesting. And so I called the person, I said, Hey, I got this house, blah blah blah. I acted like I already had the house, I don't have it yet, right? But then and they said, Okay, yeah, when can she see it? It sounds good, everything is checking off all the boxes, the pictures look great. I said, Why do y'all do unfurnished? Oh, okay, it's because we furnish it for the clients. That's how they make their extra bit of money, right? But okay, so you I said, Yeah, yeah, yeah. I said, So y'all are gonna go in there and furnish the damn thing for me. He goes, 'Yeah,' I said, TVs and everything. Yeah, we put everything in there. I was like, Oh, what happens when they leave? Oh, we take it all out. Oh, okay. So I can get I'm gonna get into this house, right? Uh let's say 2200 bucks a month. I'm gonna rent this beautiful house for, and these people are gonna come in and pay me 3,500 bucks a month, they want it unfurnished day one. I don't have to put a stitch of furniture in this mother lover, and I'm gonna be making that much profit. Did you find out what industry they're in? These people, no, I didn't, I didn't find out.

SPEAKER_03 1:04:14

Find out, find that out. Hey, I was just curious, what industry are you guys in? Okay, and kind of see, like, okay, if you're paying $3,500 unfurnished, who's who's the guy behind you? Maybe he's insurance or something. Yeah, find that out. That's a good opportunity, bro.

SPEAKER_04 1:04:28

Yeah, yeah.

SPEAKER_03 1:04:29

Like, so you want this unfurnished. What industry are you in? Yeah, just kind of find that out.

SPEAKER_01 1:04:34

Well, yeah, well, the they the the people renting it, they don't want it unfurnished. It's the it's the inch the provider, the insurance, the the place that works with the insurance companies, that's part of their spiel. So then they find a place unfurnished for these for these people and they furnish it, so they get paid for the furnishing part of it.

SPEAKER_03 1:04:51

Correct. So fuck who they are, yeah. And then you can because hey, think about it. That's the opportunity. Hey, you can go find them unfurnished and be like, hey, what I'm serious. Like, now you're now you're calling yeah, now you're calling unfurnished people, like, hey man, I got a client. Uh, I'll I'll give you hey, you want 2200? Hey, I'll give you 2500, you take your 3500, let them come in your furniture. You take the walk the hell out. Oh, dude. Yeah, exactly. That's I'm like, hold on, who's behind them? I'm like, if you just want yeah, man, that's an opportunity, man. Take advantage of that.

SPEAKER_01 1:05:26

Sweet. So, yeah, thank you for all y'all for listening to our little show here. That's getting, you know, a little popular. Uh Live Let Thrive. Uh, find us at livelethrive.com, livelethrive at gmail.com. Uh, my company, Argist Rentals, A-R-G-E-S-T. Rentals, Argist is the largest, we'll manage for you, make you some money. Um, Micah. Yeah, yeah.

SPEAKER_03 1:05:46

If y'all uh if y'all have anything that is for not for sale, if you have anything in the DFW area, tore down houses, crack houses, trap houses, uh, houses that your grandma holding on to and she needs to get rid of, your aunts holding on to, holler at me or mahogany. Hit us up on Instagram, hit mahogany up on Instagram, actually. And uh yeah, we'll see what we can do for you. And thank you for continuing to be a loyal listener of Live Let Live. Go ahead, Steve.

SPEAKER_01 1:06:10

Real quick, you haven't bought uh Micah Buys Houses yet? You haven't bought that website?

SPEAKER_03 1:06:14

Not yet.

SPEAKER_01 1:06:15

Oh man, buy it.

SPEAKER_03 1:06:16

Yeah, I'll look into it. Five bucks, five bucks. Oh, speaking of that, uh quick tip to everyone. If you really want to like really set yourself up, just a quick tip. Buy your first and last name.com and your kids firstandlastname.com and hold that shit. Just a tip. So I'm happy you brought that up. Just a tip. Always buy that.

SPEAKER_01 1:06:37

And why is that?

SPEAKER_03 1:06:39

Just they ever want to do something, they always have that in the bank. If they want to be some type of influencer, it's in the bank. They got it. Um, but yeah, uh, also, yeah, thank y'all for continuing to listen to us. We appreciate all the love, support. Um, sorry the YouTube videos are coming out slow, but we got them back on track. And make sure you go check out the old episodes and hit that subscribe button and leave us a review. If you leave us a review, we will shout you on the podcast, even if you leave us a bad one. Uh, you know, I know one person said we talk about coffee too much, which I was like, what the hell? A long time ago. And while I'm drinking my Starbucks, but yeah, yeah. But, anyways, yeah, give us a good review and yeah, thank y'all for getting here to listen to us. It's been a fun five years, I think, and we're gonna keep cranking them out. Let's go. LLT out.

SPEAKER_00 1:07:27

Peace.

SPEAKER_03 1:07:28

Later.

SPEAKER_00 1:07:29

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.