Cold open

SPEAKER_03 0:00

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SPEAKER_00 0:28

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 0:39

Hello, hello, hello. And welcome

Kent He's mission: affordable housing funded by short-term rentals

SPEAKER_03 0:42

back to another exciting episode of Live Let Thrive. What is up, Micah? Man, I'm chilling. Stevie Stacks had a long week. How are you doing?

SPEAKER_01 0:54

Uh, had a long year so far, man. It's been craziness, but that's how we do, you know.

SPEAKER_03 1:00

Hey, we're only three weeks in, man.

SPEAKER_01 1:03

That's the whole year, right? Oh man, this is episode 192 of your favorite Airbnb VRBO, home away lifts, all that share economy stuff, or Uber podcast, whatever in the world. And we're coming at you live from Fort Worth, live recorded, whatever, from Fort Worth and Arlington, Texas. And we have a guest today, Micah. Who we got? Kent he is joining the podcast. Who is he? Who is he? Who is he? He's got a little bio he wrote us. His name is Kent. Uh, he works full-time, a full-time tech job in the corporate insurance company and a corporate insurance company, and has held various jobs before being an EMT restaurant owner, manager, management consultant, and tech manager. He's a short-term rental investor looking to cash, use cash flow to fund affordable housing units here in Southern California for social workers, nonprofit employees, volunteers, and first responders. His goal is to provide a better world for my for his daughter. That'd be good for my daughter. That'd be good too. Oh to grow up, yeah, to grow up in where people can choose to do things over money and where good people can be the best versions of themselves without worrying about high rent. I love that. Thank you, thank you guys. I appreciate that. So you got a cheap place for me to rent in SoCal?

SPEAKER_02 2:37

Hey, there can be government subsidies, right? That's what I'm looking for. It goes back, man. It really goes back to like, you know, when I used to work as an EMT, I was making 12 bucks an hour. And you know, that's that's crazy, man. You're running around trying to save lives, and I couldn't pay rent in the metro Boston area. You know, it's just like it's it's not, it doesn't make any sense to me in this world that good people can't choose to do good jobs because they can't pay rent. So to me, that was just very backwards, and that's why I really chose this mission. I really want my daughter to grow up in a world where people can be the best version of themselves and not have to worry about the high rent, man. It's just so important to me for my daughter to grow up in a better world and for all of our kids, man.

SPEAKER_04 3:24

Right.

SPEAKER_01 3:25

No, uh that that would be like like you said, they're working the the hardest job, saving lives, all this stuff, and you know, getting not getting paid very much. Yeah, maybe I mean we're gonna dive into it more

How he picked Scottsdale using AirDNA and found a bachelorette house team

SPEAKER_01 3:36

in the show, but maybe like uh government get some government credits, you know, for doing things, doing jobs like that, you know. That would be that'd be cool.

SPEAKER_03 3:42

That'd be good for real, especially EMP, man. So so Kent, uh, how did you get involved in the short-term rental space?

SPEAKER_02 3:52

Man, I think a lot of people might have a similar story, like me, where they're trying to achieve financial freedom, they're trying to get out of their nine to five job. And I read a couple of books last year during COVID. That might be the silver lining and all of it. Is I was home, I read up more than I would have normally did, and I learned about real estate, rental properties, and I started out looking at turnkey investments, to be honest with you guys first, because I was scared of managing rehabs, I was scared of managing contractors. So I said, what's my next best move? And listened to a couple of podcasts and finally realized that short-term rental is where I need to go. If I'm trying to leave my uh full-time job, I need to replace that cash flow as soon as possible. And short-term rentals were the only way that I was gonna be able to do that. And I think figure out my why is just so important. So, in order to fund an affordable housing project, you need another high cash flow, and then that really plays well to diversify out with each other. So I said, Hey, let's jump on in. Short-term rentals is it, and um, I don't know how much more detail do you guys want me to go in in terms of like the research process.

SPEAKER_03 4:53

Oh, good research, yes, yeah. Go into the research and then like go into how you yeah, how did you get your first one?

SPEAKER_02 4:59

All right, all right. So my research started with Air DNA. So they had this big report three years ago where they said best places to invest, right in that list. I picked out a couple of markets um based on rental demand. And I prioritize rental demand because I know there's a lot of hustlers out there. And if you're willing to dominate the market and you're willing to take more action than anybody else, then you can succeed in the market when there is enough rental demand. So that's how I fixed Scott's sale. Went to the Air DNA, purchased a report, and basically just looked at the top 10. And I stumbled upon one of the top 10 Airbnbs and it was bachelorette themed. And then I found the realtor who also owned the Airbnb, who also was a realtor, and I said, Hey, I want to do what you're doing. And thankfully, she referred me to basically her designer. Uh, she helped me look for property, she guided me along the path of how to pick an Airbnb. What am I looking for? What will help me succeed in that market? So, right then and there, I was probably looking at three markets at that point, but that gave me the most confidence to pick Scott sale as my market because the team was there. And if there was anything I learned more from corporate America and all my prior jobs, the people you work with are the most important. So that is the where I got the most confidence to start my uh short-term rental investment career. And that's how I picked Scott sale. I knew what theme worked, I knew I had the right team, and I had to be decisive and off I went.

SPEAKER_03 6:24

Wow. You said you read some books. What books did you read to get into real estate?

SPEAKER_02 6:28

Oh man, they were like rental property investing and you know, like those Brandon Turner books by Bigger Pockets. Um, read a bunch of like like books on how to like do financial analysis. So I read a book on how to do financial analysis. I created a spreadsheet based on that book, and then that's how I applied it to use that towards um analyzing my short-term rental properties. So it's just pick a book up, learn it, apply it. And I must say, I would advise all people is just learn as you go, don't try to read all the books in the world, like pick a book. It's like I think what they call is adjusting time learning. Read it, apply it so that you don't try to like overflood your brain with too many thoughts, man.

SPEAKER_03 7:08

That is a fact. That is a fact. I love that. So, and then what what podcast were you listening to to get into like the short-term rentals in real estate?

SPEAKER_02 7:15

Uh, I think it was one of the first podcasts that I heard from I listened to bigger pockets, tons of those. I listened to all of them about turnkey investing, decided that wasn't my path. And then I heard a podcast, I think it was by Tony Robinson, who leads a real estate rookie podcast now, um, on Bigger Pockets. And he was just talking about how he listened to this podcast, another episode by Avery Caro, and he applied it. And this was like 2019, 2020 when he got started in Joshua Street. I was like, all right, finally something that seems achievable for like a regular guy like me. You know, I'm not competing with the guys that own thousand units, I'm competing with a guy that just started two years ago. And I was like, all right, there's a way to do this, there's a way to do it, handle all this madness. And that's how I learned it. I figured out I want to do short-term rentals and I want to diversify with section eight housing so that I can have a really balanced portfolio. And by getting a couple short-term rentals and then getting a couple of affordable housing units next, that will actually probably propel me to be more brave, more bold, and take more action to buy more deals because you get high cash flow with higher risk, higher time commitment, but then you can balance that out with some short-term uh long-term rentals in Section 8 housing.

SPEAKER_01 8:25

Diversity, diversify, yeah.

AirDNA versus PriceLabs market dashboard for underwriting

SPEAKER_01 8:28

I like that. Um going backwards real quick to air DNA, do you does air DNA work and is it worth the price?

SPEAKER_02 8:36

I don't think it's worth the price anymore. Um, and here's why I think that if I were to do this all over again, and this is the advice I'm giving to everybody now, is and I'm a big fan of action. So for our listeners out there today, I would advise you go look at your MLS today, find a three-bedroom, four-bedroom property, kick the address down, go to price labs, sign up for the market dashboard, plug in the address, and then just filter down on top revenue. And just then and right now, to that, like today, you will learn and take a step towards getting and becoming an expert in short-term rentals. Because right then and there, you'll figure out hey, is this market suitable for short-term rentals? What makes this property successful in that market? Is it amenities? Is it a theme? And that is such a more concrete analysis than like some of the more general numbers I saw from Air DNA. I'm a big fan of price labs now, so nothing against AirDNA. Like, I think they probably got more sophisticated. I just personally prefer price labs now going forward, and especially with the market dashboard feature.

SPEAKER_01 9:41

And this and it's free to do that on price labs, it's like $10 a month.

SPEAKER_02 9:45

So for me, if you are using if you're investing $100,000, pay the $10 right now. Uh-huh. Yeah. So much data in Price Labs. A lot of people use price labs. So you know they're not making up this number off the top of the head. Um when I first compared one one property in Temecala, California on air DNA, and I actually made a bid on that property to do purchase that property. I compared the numbers that was released from the seller and compared that to air DNA, and it was really off. So I was like, all right, that gave me some skepticism about the data that I'm seeing. So I don't want to overtrust like that data that I'm seeing air DNA. I think it just you have to do the due diligence and you can't rely on just whatever you see on your DNA.

SPEAKER_03 10:31

I'm happy you brought up that price labs plug because I just found out about it about a month ago. Because I've been using price labs for a long time. So that market dashboard thing was like eye-open. I'm like, dang, you can like see like the real live data. Because if you compare it to air DNA, you're like, wow, this is a little bit more accurate. Now, when you said air DNA was off, it was it off as in it was too low or too high.

SPEAKER_02 10:54

It was too high on Air DNA for that for that one property that I was trying to buy in Temecula. Um, it was like bachelorette themed again, but the numbers that a cell disclosed to me was just so off compared to what I saw on Air DNA. Like I looked up that property and I was like, this doesn't make any sense. Red flags kind of jumped up to me. I was like, then you had you know, you got to get wildfire insurance in California because everyone, everything burns, and you know, it adds like five thousand dollars to your whole in your home insurance frame really quick. You gotta watch the your cash flow, and it's just it's different challenges to different markets, right, guys?

SPEAKER_01 11:31

Yeah, yeah. And what year did you did you decide on on Scotstale?

SPEAKER_02 11:35

Uh 2021. So I made an offer in a property in Temecula, California in June of 2021. I as soon as I got that quote back from the fire insurance, man, I was so attached to the deal, but I pulled it because it didn't meet my criteria anymore, you know. And that's why you have to be really good with your numbers. Like, wow, I just got this information. Hey, let me pull out a deal now because it's no longer makes sense for my deal.

SPEAKER_01 12:02

Um, so take some guts.

SPEAKER_02 12:04

You gotta use you gotta use deal and you gotta remember to keep it, keep your emotions out of it and stick to the numbers and don't try to make it up.

SPEAKER_01 12:12

Man, numbers over emotions, huh? Yes, sir.

Remote management: backup cleaner, backup handyman, backup backup handyman

SPEAKER_03 12:17

I've been in that situation. I know what you mean, man. So you you live in uh Southern California and your listings in Arizona. How have you handled remote management?

SPEAKER_02 12:27

Oh man, it's been it's been a while. My listing has only been up for about three months, guys, to be honest with you guys. Um, and I've had a cleaner quit on me, I've had things break in the house, I've had hot water problems, but I knew this was going to happen. So, what I would advise everyone to do is find a cleaner, find a backup cleaner, then find a backup backup cleaner. Same thing for my handyman. I've got a handyman, I got a backup handyman, and I got a backup backup handyman so that whenever anything happens, I'm calling them right away because chances are someone might be at dinner and they might not be able to get over there in time. So you really need to have all your contingencies in place so that you can handle whatever problem comes up at your property. Um, and honestly, like hot water problems, man, like I think customers just expect you to take care of it right away. And I think if they know that you're being sincere, they really appreciate it. Like, as soon as I got a hot water problem, I said, I will work on getting a plumber LT right away. Please be patient with me. Um, let me buy you lunch. I will pay for you lunch. Here's a quick refund for you guys. And they're like, Oh my god, that's so nice. And I think my advice is like, you when you are first starting out, you need to preserve that five-star rating because that has snowball effects on all of your kind of upcoming income. Because, like, if you have like a three-star review to start out with, chances are people aren't looking at your listing that fast anymore. And you know, just be smart, be really smart about what you complain about and what you nick on dime your guests about if you're starting out.

SPEAKER_01 13:58

So don't so don't just tell them to get to get like a giant pot and fill it up with water and put it on the stove. Old school, man. Yeah, man.

SPEAKER_03 14:10

So hold on. You oh, yeah, that that's one cool thing about your unit. Did you say it was bachelorette themed?

SPEAKER_02 14:16

It is, it is bachelorette themed. Nice.

SPEAKER_03 14:18

Now now, how does that work for you? How like um are you is your cleaning more expensive or like how does that level out with you being with it being like a themed unit?

SPEAKER_02 14:28

Yeah, and are you guys okay if I share numbers about the cleaning? Oh, yeah, so it's like about three $300 for a clean. Um, they and they're raising rates now. So for this one house is $300, but I really like the company that I work with because they do a clean, they have someone come in and QA to clean, and then the day of check-in, someone also goes back and takes pictures of everything, just so you don't get people trying to scam you saying, Oh, I love that. We're a dirty house. And that for me was worth the premium because I know it's labor to send someone out there one more time, but I need the assurance that things are looking good. I need to make sure that there aren't fallen leaves in the back. Because when you are when you have a property that's averaging a thousand dollars a night on a weekend, people expect perfection. And they don't want to walk in with a ugh this part. Like they don't want that. That's I think that has really helped me set the mind to like just take care of the customers, make sure they get the best experience possible, don't try to nickel and dime them and just spend the money because you will see that pay so much more dividends in the end.

SPEAKER_01 15:34

This was the biggest. I mean, it's one of uh you're dropping a lot of gems, as they say, but this was a really big one, and you gave me uh me uh a great idea for my company, and I'm gonna tell it to my partner right now. But the quality control part, because like you said, the you get someone to they got someone to QC it like right after the cleaning, and then the next day, I've never even thought of sending someone out before they get there. Man, that is, I mean, because you get people in there and say, Look, it's all dirty, and we just no, we were just there like 10 minutes ago, man. It's clean, and we got the pictures to prove it. And I'm gonna bring that up with our cleaner because here's the problem with cleaners most all the cleaners that I'm come across, the the head cleaners freaking rock star, badass cleaner, right? And they'll do the first couple cleanings. You're like, Oh man, I'm set, I don't have to worry about I'm gonna throw away all the other phone numbers, and then they they they they send on the third or fourth cleaning, they send their crew, they send whoever's in the group that can make it out to clean your place, and they're the ones that jack it up. And so I'm I know that they have to do that in order to scale because I mean they're in high demand right now, right? But if I pay them another, I don't know, 15-20 bucks to go out the next day. The head cleaner, I want to get get it from her phone, from her phone, the head cleaner go out there and take pics and check everything before the guest checks in. You know, it'll take her a few minutes, but she'll get paid for it. That's a freaking phenomenal idea, man. Thank you for that. Thank you for that. I'm I'm out.

SPEAKER_02 17:00

You are going to kill it, man. You're going to kill it with any cleaning company because that is literally a problem that most hosts fear, and you're taking that fear out of their equation now. And just by that, you're solving problems, and you are helping them avoid a hundred dollar, two hundred dollar potential credit that they've given a customer just to argue, like, oh, I'm sorry that wasn't dirty when you they had no evidence. And I think it's just so important, man, especially with a new Airbnb policy out there for damage coverage. Like, you really need to have really strong evidence that it was clean and not damaged before you get and and I'm gonna put that in the in the check-in thing.

SPEAKER_01 17:36

Oh, by the way, we sent, you know, thank you welcome to our place. We hope you enjoy it. And by the way, we sent our cleaner out again to make sure everything's perfect for you guys when you arrive, and that'll be part of the yeah, ah fuck, this is sweet.

SPEAKER_03 17:50

That was a deep gem right there. Cause I've been talking to my cleaner about like QA checks and all that. I never thought, hey, send them out there the day someone checks in. That that is that was next level. I love that.

SPEAKER_02 18:02

Love it.

SPEAKER_03 18:03

Now I have a question for you. Since it sounds like you're buying all of yours, right? You're buying all your short terminals.

SPEAKER_02 18:08

I am.

SPEAKER_03 18:08

I am then how are you buying? Are you doing traditional 20% down? And yeah, how are you buying them?

SPEAKER_02 18:14

Uh, I am doing traditional conventional financing. I'm using the second home

15% down second-home loan, now switching to 20% after fee hikes

SPEAKER_02 18:18

loan. So, with my first deal, I had a partner that I grew up with. I knew him since eighth grade, one of my best friends. And you know, shout out to Wilson because I'm so blessed that he he agreed to say yes to sign on Dot Align with me. And you know, that for you guys, for all the listeners out there, just be a good person throughout your entire life. And eventually that will also pay dividends, man. Um, be a good person, be consistent with who you are. And that allowed me to find a partner that's wanting to sign up on a loan, sign on dot alignment with me, get the loan, get the credit. And when I first signed and bought this deal, I paid 15% down with no PMI, which was amazing. But that is no longer available now as of the first week of January this year because they just raised all the fees. I think it was like a federal housing authority or something like that that added the fees. So we were just trying to close another deal and we were trying to do it 15% down, and they were trying to charge us three points for this loan. That's like 20 grand. So we're just like, whoa, guys, we're just gonna pay the extra 5% down and just get 20% down on 3625 uh interest rate. So we're working on a deal right now. Hopefully, we'll close it within a couple of weeks. Um, and we'll set it up and get it up and running again.

SPEAKER_03 19:29

Man, so are you now are you planning on to keep scaling up by putting the 20% down, or are you gonna try to have to get eventually tap out and get creative with it?

SPEAKER_02 19:38

I am gonna have to get creative with it. I think you and I probably talk offline. I think I need to figure out how to find financial partners for my next couple Airbnbs because um, you know, everyone runs out of capital at some point. And I think I am trying to get out there and show people what I'm doing. And I would say I've gotten advice from a lot of different people where some might say, don't take money from other people because you won't get the peace of mind. Um, I completely agree with that. And then I also have friends that are looking to me sort of as a leader, even though like I only have one Airbnb guy, right? I'm not the expert at this. Um, but I have the confidence that I'm gonna do whatever I can to fix whatever problems I can so that they don't lose money. So I think everyone has a different perspective on this. For me, I would never partner with a stranger, but for me, partnering with someone that has known me since eighth grade, and if we can draw out in a legal agreement about how I will make certain decisions on every single type of problem that might come up so that we can be philosophically aligned, I think that it lays a good foundation for a partnership. And that's what I've done with a second deal. I'm also partnering with someone that I also knew since eighth grade. And man, I literally laid out, hey, when this happens, I'm gonna do whatever I can to make it right for the customer. Are you okay with that? This means that I will give refunds, I have to be responsive, but I'm gonna take care of it for the sole purpose of preserving that five-star ratio. And this might mean a smaller bottom line for you. Are you okay with that? So I think just getting to that level of detail is so important if you're taking money from people. Don't just say, I like you, we're good, and we're gonna go for it. So I know I went on a little tangent there, but man, I'm just trying to get some good advice out there for people that are trying to pick their own paths.

SPEAKER_01 21:19

Another beautiful gym, another one, and that's that man, it just reminds me because something just came up tonight and it goes going back to the cleaning, right? And um, it's it's our unit in Houston. I like they sent the the you know the the B team in to clean it, I guess, like I was talking about, and and and you know, it didn't do the best job, so we're we're handling the issue. Um, my partner Frederico reached out to the our partners we partnered on that with uh two people down there, and so he reached out to them and our little WhatsApp chat group and saying, Hey, this happened. What what should we do? I was thinking of this and that, that, that, that, that. And then now it started this like stream of a thousand messages. I was like, dude, we're we're kind of managing. You know, we're the management company, right? I mean, Federico, I was like, maybe we shouldn't bring them into the mix and every single issue that comes up because then we'll start this whole, you know, a thousand different questions, a thousand different opinions, thousand whatever. And then when you said that about okay, when situations happen like a missed cleaning or something, let's agree how we're gonna figure this out, and then we don't have to message them, we'll just handle it, man.

SPEAKER_04 22:22

That's cool.

SPEAKER_02 22:24

And that's such a big peace of mind for you, isn't it? Um, like I agree with them, nothing under $1,500. I'm not gonna ask you guys for permission. Anything over $1,500, I won't ask for permission. And you just gotta set those thresholds and just know that you have the ability to manage. And obviously, it stems from them having trust in you, and they can only trust you if you tell them what mistakes you have made and how you're gonna handle certain issues when they come up. And that's the best way to kind of lay it all out so that there's no sort of like nebulous, oh, what's going on over there? Just know that he's handling it, and that becomes now a passive income for my friends, and they get to continue building wealth for themselves, for the kids. And I don't know, that actually motivates me more. Um, it might scare certain folks for taking money from other people, but it motivates me way more to make sure like they don't lose money and I can help them build financial freedom and help them get out of corporate America because I know everyone wants to get out of that grind. So, you know, it's it's a different set of motivations, different people.

SPEAKER_01 23:27

Micah, this guy has a hundred units that's been doing it for 10 years, right?

SPEAKER_03 23:30

They like I I love, see, I love that he one at the very beginning, you started with your why. This is my why, and it's easy to build up if you have your why. That's why it sounds like man, he's been doing it a long time. Man, he started with the end in mind. I love that.

SPEAKER_02 23:46

Right, you gotta have clarity in what you want.

SPEAKER_03 23:48

Thanks. Now, on your uh now, since yours is a themed unit, um, do have you tried like putting it on Peer Space or anything like that?

SPEAKER_02 23:57

I have not, honestly. Um, I put on VRBO and I've gotten zero bookings from there. So to me, that spells out that my clientele

Targeting bachelorettes nobody else will book

SPEAKER_02 24:06

for the bachelorette theme in Scottsdale only want to book through Airbnb. And I think that's okay. I can listen to my customer. And if I am just on Airbnb, then maybe I need to think about how to advertise better. Maybe I apply for the Airbnb Plus program or something like that, right? What else can I do to help my listing stand apart? Um, and another thing I'll start doing is probably just starting a blog online, talking about what do badge reds do and Scott's sale so that I can generate some sort of SEO and get track more traffic towards my listing, too. So again, I'm telling you, if the demand is there, I would do whatever is necessary to get the demand to my listing. And I think that is like a key driver of success for all your listeners. Just think about what else you can do to get it moving and get it popping.

SPEAKER_01 24:50

Yeah, send mail strippers or whatever you gotta do. Oh yeah, I fixed the plumbing, you know what I'm saying? Anyways, um, you know that it's cool too because like so many people are like, no freaking bachelor parties, no freaking bachelorette parties. We don't want any of that crap on our places. You're doing the exact opposite of what most every host, including myself, do, you know, and you you've keyed in on something like a need out there in the market that all these people are like they can't rent places in Airbnbs because people don't want them to party, you know. But you're actually providing a place for bachelor, bachelor, and bachelorette parties to happen. That's freaking cool.

SPEAKER_02 25:32

And I know that because I've talked to people in my own group that says I try to book an Airbnb, and when I told them I'm coming for a bachelorette party, they actually get declined. And I think for that same exact fair, and I would say my advice is if you are pursuing the bachelorette theme, you have to have a very high level of betting your guests.

Vetting guests: what events happen at the house versus offsite

SPEAKER_02 25:51

Meaning, this is the cool part about bachelorette's. Most, I don't want to generalize here, but most groups do a really good job of planning their bachelorette parties because you got like eight, 10, 12 girls, right? 14 girls. You got to figure out what you want to do when you're on there. So here are the questions that I learned uh from my realtor. I always ask, like, hey, tell me a little bit more about yourself. Tell me a little bit more about your group. What do you have planned while you're in Scott's sale? And what events will be happening at the house. If they're saying I'm gonna have a pool party at the house, it's probably not a good fit, right? If they say, Hey, I've got all this plan on Thursday, I'm gonna go hiking on Friday. I'm gonna go to this pool party at this day club, not at the house. And Saturday, I want to go for a nice dinner outside. Those are the guests that you want to invite into your house. So, in order for you to have that choice, you need to have a really good product. And man, we spent so much money on this house renovating and making sure, like when in doubt, we got the nicer couch instead of the cheaper couch. When in doubt, get the colorful pop instead of just like the mundane gray couch that just looks really nice. And by having the nice product, that gave us much more attractiveness to the clientele that we're looking for, so we can have a larger pool of good bachelorette clients to actually pick from and actually invite into our home. And so far, uh, I haven't had anybody trash my house, knock on wood. I've had the neighbors call the police on my guests before. So that is a lesson learned that I then quickly applied and asked, hey guys, all my incoming guests, please know that there was new regulation in Scottsale. Our neighbors have a lot of power, they can call the police reporting a nuisance party, and I asked them to hey, can you please not play music outdoors and move it all indoors? I did this as a trial, I got about 30% cancellations, and then it all rebooked. So I was like, whoa, I can I can have a higher standard for my guests, and I'll I can still be booked. Man, it was just such a relief, man. Because, like, look, you're not gonna learn everything as you go unless you do it. And this was just a good case of like how you prove out that you can attract a certain type of clientele that nobody else wants, but you can still make it work. So having a good product in place is so important, vetting your guests is so important, and then trying to make sure you're putting policies in place that help you find those non-pottiers. And I think if people are canceling it because like it's a deal breaker because you can't music outside, chances are don't let them in, even though you might be foregoing money, that gives you so much more peace of mind on the weekends to know, like, hey, whatever they're doing isn't going to cause my neighbor to call the cops, and then cops are gonna call me because that is crazy stressful. So we all got into this for peace of mind, financial freedom. Don't lower your standards for money, keep your standards high so that you can attract a more higher clientele that's responsible, it's gonna take care of your home.

SPEAKER_01 28:51

Go high-end and have high standards. I love it, man. And then you know, always invest in a more sturdy stripper pole because big girl, she's gonna want to get on that thing.

SPEAKER_02 29:02

Dude, when the cops can't it always happens. I've seen TikTok with the stripper 9-11s or poor milk. Oh my god, I was I thought the pull. I'm hoping it was good karma from back in the days when I was at EMT and you know, good karma paying forward, so I didn't get in trouble. The cop didn't report me, they didn't cite me. And man, I was very blessed, very blessed, very lucky. But I knew right away I need to take action. And I messaged all my guests that were coming in and say, Hey, no music outdoors, are you okay with that? It's okay if it's a deal breaker, that's fine, but it might not, it's just not worth the stress for me. So you have a lot of power in how you manage it.

SPEAKER_01 29:43

So is it is it just bachelorette parties? You don't do bachelor parties.

SPEAKER_02 29:46

No bachelor parties, okay.

SPEAKER_01 29:48

Because guys are guys guys wild at, right?

SPEAKER_02 29:51

Guys might get you know right then and there when I bought the house, I said that diving board gotta go because some people's gonna do some dumb things when they drunk. Oh, yeah.

$600 AirDNA average versus actual $1,100 nightly rate at 50% occupancy

SPEAKER_01 30:00

Um, so yeah, it's a big girl. Yeah, she's gonna do something.

SPEAKER_03 30:06

So you you only do bachelorette. I've never thought about that. Like, so you don't do the bachelor side. Do you think there's like have you had now have you had people inquire to do bachelor parties there?

SPEAKER_02 30:15

I've had some guys inquiry, but it was because like there's like a big golf tournament in um in Scottsdale in February, where like you can rent for two thousand dollars a night easily. Um it's like the biggest golf tournament of the year, it's like the waste management open or something like that. Um but yeah, two thousand dollars a night, easy and they don't blink.

SPEAKER_03 30:36

Um now you have a question because you said you went to air dna before you made your decision. Like, what's the average nightly stay out in Scottsdale?

SPEAKER_02 30:45

Um I don't know, it was pretty low. I want to say when I did my when I did my underwriting was about six hundred dollars uh for average daily night rate. Um, and I've just blown past that. I'm a I'm like a thousand eleven hundred dollars a night, but my occupancy is about 50%. So some people might say I'd rather be more full. I'd rather be more empty and make a higher rate.

SPEAKER_04 31:08

Hell yeah.

SPEAKER_02 31:10

And guess what? Everyone is going to ask for an early check-in. So my advice to people is like, what do we do on real estate? We want to look for a deal. So give your guests a deal. Hey, they're asking for early check-in. Hey, normally we we're pretty booked out. Um, would you be interested in blocking the night off before for $300? Because it would have been an empty night for me, anyways. So I said, Hey, would you be interested in blocking the night off before for Wednesday night? So that you can either check in early on Thursday, whatever time you want, or you can actually fly in on Wednesday, get a full night in, and it's actually cheaper for everyone to fly on Wednesdays in general. So now you just gave them a deal, they feel like they won, and they also saved a lot of money for the crew because they're flying in a day earlier and they're flying, all their flights are cheaper. So you were able to get from a three-day booking to consistent four-night booking for all these bachelorette parties just by offering them what they would have asked for, anyways, which is an early check.

unknown 32:05

Wow.

SPEAKER_03 32:06

That's really good money because if you're charging $1200 a night, an extra $300 for the to block a calendar, man. That that man, that is G man. You're dropping some good gems, man. I love that.

SPEAKER_02 32:18

Hey, I I I'm really here. I'm really trying to help people. And I guess like my ass from all your listeners, just if you're taking these hints, um, please just promise to do good with your money, man. That's all I asked for. Just promise to do good with it. You know, make do your money so my daughter and all of our kids can grow up in a better world. That's all I asked for. That's way more important than any sort of amount of money that we can ever make in this world.

SPEAKER_01 32:40

Don't make it rain. Unless you're at a charity event. There you go.

SPEAKER_03 32:47

Well, you said that uh you said you you you went a little high end on your furniture, like on something like a themed unit, and you're charging $1,100, $1,200 a night and you're at 50% IP. That's great, in my opinion. Now, what's your startup cost on something like that?

SPEAKER_02 33:01

Uh, let's see. So I can give you guys some numbers. We put about, I want to say we budgeted.

$250,000 all-in after pool deck, gas line, and designer furnishings

SPEAKER_02 33:08

So first deal went all way over budget, right, guys. Uh, I would say we were planning to spend about 180 all in, down payment, furnishing, et cetera. But I think we quickly realized there were some issues with the pool, you know, things that you just don't know unless you kind of get into it. Like you think a one inch wide gas pipe is good enough for a pool heater, but it actually needed to be one and a half inch. So boom, there goes a couple thousand dollars, right? And we were part all in for about $250,000 uh after furnishing, after renovating the entire backyard. Um, we thought about, I'll be honest with you guys, at some point in time, we're like, you know what? Should we do the pool deck for $3,000? Like, let's not, but it looked old, it looked tired. It we could have gotten by it, but it wouldn't have been the experience we wanted. We wanted people to come in expecting perfection and we want to deliver on it. So huge cash burn in this business. But if you want to succeed and it still makes your numbers make sense, you should go for it. So, how I structure with my partner is like I take a 10% management fee for handling a lot of problems off the top line, and then we split the cash flow um from the remaining cash flow profits, and we're still making 20% for the partnership. So 20% cash on cash is still a very good return. And for me, that's almost like a 30% if you think about it, because I get 10% off the off to the uh the top line. So it was it was all worth it.

SPEAKER_01 34:32

That's awesome, man. Did you have a designer to design the themed um bachelorette house? Or how how did you do it?

SPEAKER_02 34:39

Yeah, I found her through my realtor, and I think I was talking to three designs at that point in time, and I think everyone just needs to be honest with themselves that most people aren't good interior designers, and you need to trust the designers who have success. So I picked a designer that had a lot of success in the bachelorette theme with another house in Scottsdale that I found. So that's how I decided to pick her. Uh, she's Lindsay Peterson Collections. You guys can find her uh online. I told her I would give her a shout out too, but she has done really amazing work, she's wonderful to work with. And my advice to everyone is just like everyone works by hourly rate, so just do a good job and be a good human being and just like help help them along the process. Get them whatever they need. They need photos from all four corners of the room, they need measurements, get that in advance, be prepared so that everyone knows like what you want. And she's very accommodating. Um, she can you had to like just go on Pinterest, go on Instagram, send her like a dump of like everything in your brain, like what you want, and it'd be as detailed as you want, and she would materialize it into something. Um, and for you guys, like my whole theme around is like, hey, I want my house to be bachelorette themed, but I also want it to be classy enough that people can get ready in before weddings. And I have I've actually had people inquire, like, hey, can I get ready your house before a wedding? But they only want to book like a one-night stay, so I it wasn't like a right fit, but it worked. Like, someone actually inquired about getting ready at a wedding and and it and it works. So yeah, trust leave it, leave the design to the experts. Don't try to just like cheap on design because I think having everything come together and having people comment in their reviews about how well everything is coming together. Um, you know, I think that's so much more worth it at the end of the day.

SPEAKER_01 36:22

I bet you have the full-length mirrors in every room, right? I got the makeup mirrors in like one big room and girls love what the makeup mirror with the lights and all that shit.

SPEAKER_02 36:32

They got like the um the banny mirrors and stuff like that. And you know, people are gonna drop them, they're gonna

Makeup mirrors, Yeti wine tumblers, and towels people don't steal

SPEAKER_02 36:38

break them. I quickly realized I need to just have like two backups in in the garage, just so that when they break, they drop, just replace them right away when the cleaner comes in. So you just gotta learn all these things as they go.

SPEAKER_01 36:48

And you have um uh wipes to wipe off the makeup too.

SPEAKER_02 36:51

Yeah, I got the makeup makeup towels uh for the guests as well. So you gotta think about their needs when they're at the house. Um, because if they don't have the makeup towels, they're putting on your regular towels. So not a good idea, exactly.

SPEAKER_03 37:04

Man, this is good stuff, man. I like how you did the theme unit. You you said you went on well, you spent 250, but I mean you're making what average 18,000 because you're at 50 occupancy, 11 to 1200. That ain't bad at all.

SPEAKER_02 37:17

Now conservatively grows about 160, 170 this year, conservatively, I think.

SPEAKER_03 37:21

Uh one unit. Love it, love that. So now I don't know. Well, our backstory is me, me and Kent, we're basically we're in the same mentorship program, uh, which is Springboard. So uh I know you're you were uh you're you're big on the I'm not big on it, but we're both follow the Burr strategy. Are you planning on using that to like scale up your short-term rental side?

SPEAKER_02 37:44

Um, I am considering it. Um, I think my strategy is gonna be a little bit different for the summer. So here's my guidance, right? Burr is like the holy grail of like real estate investing methods, but I really had to think about like my market. And if I were to say I'm gonna try to do a Burr and spend a whole year renovating it, like I just said, I could be losing 160 grand of revenue. So you got to think about it from that perspective. Like, do I want to if I put 120 down and I'm trying to burr it and spend a whole year and lose 160,000? Like, don't I get back all my money just from running it for a whole year instead of trying to burr it? Um, but for me, that was like a decision that I had to make like, no, I'm not gonna try to burr this because it's my first deal. I'm gonna learn how to do cosmetic fixes only. I coordinate my own flooring, according to my own painter. I didn't have to do any of this, but I coordinate my own painter, um, my landscape contractor, do a lot of backyard renovations, coordinate a pool guy, coordinate the thing. And from there, I can actually get referrals on contractors that they can actually do burrs. So if you guys don't know where to start, I would recommend do something easy to start and don't try to like, I need to solve the world in one go. Just take it easy and just like get some work done, find out who's the dependable, uh, find out who's a dependable painter. And chances are the dependable painter will be used by a dependable contractor. And I think that's how you can slowly expand. So I think for my summer deals, because the slower season in Scottsdale, that's when I might actually decide to um do a burr or look for like a fixer upper, uh, if the right property kind of comes along. It's just the the market is so crazy in Phoenix and Scottsdale, just because you have so many wholesalers there already. Um, it's just very, very competitive. So my goal is like if I were to do it, I will only do it if I'm starting a property in the summer. If I was starting a property in October again, I would not do it because I want to be up and running before busy season. Because you know, February, March, April, I'm grossing 20, 30, 20, 20 grand conservatively a month in rent just for one month. And you don't want to miss out on that um because you're trying to burn.

SPEAKER_03 39:51

Man, I love you. You're very, very calculated. I love it. You see what season to do it in, what season not to do it in, and what your your your thought process, I think, is where the short-term rentals market in general as a whole is going. You got to know what market to do this to burr in, what market to arbitrage in, what market to you know, you can put 20% down, get your money right back in, and that's very good calculations right there that you just did.

SPEAKER_02 40:16

Thank you, man. I appreciate that for sure.

SPEAKER_01 40:19

It can't you thought of doing like arbitrages and stuff like that?

SPEAKER_02 40:22

To be honest, um, I haven't. And I think it's something that I wanted to explore, but I also don't I don't know, COVID scared me a little bit, and this might be a limiting mindset, but I don't want to. If here's my thought if the landlord saw me making 160 grand in rent, chances are that land's gonna raise my rent next year. Like, there's there's no way that he's not, and I just put in all that money to make the backyard nicer and you know buy all this furniture. It's just it's so painful to do rental arbitrage if I have to move all this furniture out and spend all that money on like my murals on a wall that like I paid a painter to paint on. Like, yeah, I can't take that with me. So there's a lot of sunk costs in there that I don't think it's worth it. If I were to able to get like a three to five year lease, maybe that'd be a different situation. Um, so I think that's the only way I would do a rental arbitrage. I think the money is definitely there. Um, but I'm definitely exploring like the co-hosting um area, and maybe I can expand there to develop a little bit more cash flow uh to kind of find a few more purchases.

SPEAKER_01 41:24

Uh uh, I like that answer. You know, and we had a guest a couple of shows ago, Mrs. Castleberry. And she uh she mentioned that she's getting out of arbitrage

Rental arbitrage risk when the landlord sees $160,000 in revenue

SPEAKER_01 41:32

because she's like, Man, I'm paying 17,000 a month in rent, you know, that could be equity. And I was like, That's that's a that's a cool way to look at it, man. Because yeah, and you're putting all that work and effort, and all of a sudden, you know, when the lease ends, now what you have to get out of there and paint over the murals and all that shit. But yeah, that that's what that but if you're putting all that into your own property and and then building equity at the same time. I mean, that's that's a beautiful thing.

SPEAKER_02 41:57

Yeah, I mean, there's so many ways to make it work, and I think if you were going for a different clientele, it should certainly can work. I think if you're going for travel nurses or something like that, and you don't need such extravagant design, I think that works really well. I'm not saying rental arbitrage method is bad, it doesn't work for my clients, but it can certainly work for other clients and other clientele and your target guests and stuff like that.

SPEAKER_03 42:19

Yeah, yeah, that's very true. Because like I'm in the I'm in the Houston market, one of the markets that I'm in, and it's almost now that I'm looking at the market from a different perspective, it's way easier, it's way better, it's more profitable to buy in that market. Where in Dallas, it's more you can be just as profitable doing arbitrage, you know. So it's you have to look at the numbers in each market. That is, and then our listeners, I want y'all to understand that. And me and Steve are actually gonna break that down here on one of our episodes, so definitely keep that in mind.

SPEAKER_01 42:49

So, do you use at all turnover BNB? I'm sorry, what was that question? Do you use uh turnover BNB? You ever tried that?

SPEAKER_02 42:58

I do not, and I use the software that is preferred by my cleaners, so I let my cleaners dictate whatever software they want because I want their lives to be as easy as possible because it's very hard to find a good cleaner. So for me, if I'm bending any rules or whatever, like it doesn't, I don't care. Whatever works for you, clean Mr. Cleaner. I I want you to use a system that you're aware of. Here's what I need. I just need photos of the after the clean, I need photos during the QA, and that's as long as you make that work for me, I can make it work for all of us. And I look at every single clean, I look at every single picture, make sure things are kind of placed in the right way. I don't kill them if they're like, hey, this pillow is off on the right side instead of left side. Like, I'm not gonna worry about that stuff. Um, but if there's like I don't know, lipstick on the glass or something like that, I'm like, hey guys, like that that's detrimental for my business. And that's another thing for badger at themes. Everyone wears lipsticks, so those clear glass bottles will. Or like plastic bottles. I mean cups, they don't work. Lipstick gets on that all the time. It's so hard to keep clean. So I switched them all out. I put in new Yeti cups that's stainless steel, $25 a cup. But now I know that dishwasher was clean them through. And that's another tip for everyone. Like, whatever you put in your house, make sure you can clean it.

SPEAKER_01 44:18

What did you call it? Yeti cup? Yeti, the Yeti.

SPEAKER_02 44:21

Yeah, the Yeti wine tumblers. You know what I'm talking about?

SPEAKER_03 44:23

Oh, I need umra. I'm writing that one down. Wine tumblers.

SPEAKER_01 44:28

Wow.

SPEAKER_02 44:29

It's it's classy. You gotta, I think that's gonna be one of the things where people open up things like ooh, yeti wine tumblers, right? Like you want people to have that feeling when they go in the house because like expect premium, they're paying a thousand dollars a night, expect perfection, expect premium. You have to be able to match that. It's just like you know, Apple has iPhones and you know, Samsung has like these fancy phones, and no one can compete anymore because they're so far ahead. Like, I need my house to be that far ahead to stand apart. I'm trying to 10% of the market, not racing to the bottom on rates.

Vetting contractors in person: two landscapers, three muralists, aligned on mission

SPEAKER_03 45:02

Man, now since you said you don't use turnover B and B, which is what most people a lot of people use to find the cleaners. How did you find a cleaning company that was good with doing a turnover and not just like a regular clean?

SPEAKER_02 45:13

All right. So, action stuff for everyone listening. Go on your Facebook group right now, go find Arizona short-term rental example, post it. Hey, I use dependable cleaner, and boom, you will get about 20 people right then and there. Get 20 people, and then you just gotta vet them. You gotta vet them. The first guy I hired, he said he loves cleaning. I was like, You're my guy, you love cleaning. Who says that? I don't love cleaning. Um, so you know, unfortunately, he lost a couple of staff because all the COVID turnover and stuff like that. So he had to draw me as a client, but I'm glad I got a backup client, and you just keep looking for referrals, and that's how you find a handyman for your team. So it's not as hard as people would make it sound like to be, but you do need to vet them. So for me being out of state, when I flew there, I compressed my days. I got quotes from two landscapers, two pool guys, uh, three muralists, and I talked to all of them. Um, and I told them what my mission is because I think someone that is aligned with you philosophically will work better with you at the end of the day. It's not about like the best rate, like I could have hired a handyman for cheaper, um, but that's not the point. The point is to share the wealth with everybody else. You don't have to make a lot of money in the world, you can share the money with other people. And that's how I found a cleaner. Like, I told the cleaner, hey, I'm not gonna nickel and dime you. This is like really expensive. Like when I first started, I was charging 250 for cleaning fee. You're charging me 320. Like, I'm losing money on you, but I'm not gonna nickel and dime you unless as long as you do it right and we agree that hey, if I get two four-star reviews or more, I'm gonna cut

$20 tip to the cleaner for every five-star review, fired after two four-stars

SPEAKER_02 46:48

you for cleaning because I got to maintain standards and I gotta be able to communicate with my partner about how do I hold them accountable. And I give them a $20 bonus to the cleaners every single time I get a five-star review. So now the cleaners know about me because I'm a generous person. $20 isn't a big thing, but I want to reward them for like doing such a good job on the house. So now they're incentivized, like, oh, that's a house that gives me a $20 tip whenever I do a good job and it gets a five-star review. And I try to make sure it goes to the cleaners, not the company, too. Um, so yeah, just don't nickel in diamond cleaners because they're the most important part of your team. And when you have a cleaner, like that will give you so much more confidence to scale into the market, right, guys. Like the second one does not feel hard to me right now. You know, I'm about to close. I was like, all right, I got my checklist from how I did my first one. I got about 290 lines line items there, and I just got to check it all off as as I do it.

SPEAKER_03 47:38

So now on that, that that's that cleaning tip was off the chain. Hey, you get two, four stars, you're gone. I love that. Now, are you having to change cleaning companies, or is that cleaner that let's is or is that head cleaner like, hey, we got to put another cleaner on rotation for Kent's unit. So, how does that work?

SPEAKER_02 47:56

Uh, they send two cleaners to my house just because this is a such bigger big house. Um, but for the most part, they try to keep it consistent to the same three pairs uh that come to my house. So they try to be generally aware. But the head cleaner, she's kind of like the client lead. She's the one that comes to my house all the time to do the QA, and she's the one I say, hey, uh something broke. So instead of me paying $40 for a handyman to go in there and fix it, can I ship this band-a-mare, like I was telling you guys earlier, to your office and you bring it to the house? So now I don't have to pay $40 for someone just to kind of like take a mirror and go replace it. It happens during a QA, which is another big value proposition for you if you're running your cleaning company. Like, hey, small things like that, I will now save you money as well. Cause if we can stack it on the same day, it's efficient for me paying my my worker going out to the house to do the QA, and they can replace like a small little thing, like a mirror or something like that. That might have found broke.

SPEAKER_03 48:50

No, okay, so you're the cleaning company is charging you $300, right?

unknown 48:55

Yeah.

SPEAKER_03 48:56

Oh, say now three. How much now now? This is my question. Then so how much are you charging the guest?

SPEAKER_02 49:03

Uh, I charge them $338.

SPEAKER_03 49:05

Okay. Okay. That's so you are you can okay, so you can kind of count that as a little bonus, uh, income a little bit. Okay.

SPEAKER_02 49:12

I mean, to be honest with you guys, I started out, I kept it at $299 until it got the occupants that I wanted, and then you can start playing with it like, hey, what the what is the sort of tolerance of the groups that are coming um to my house? And I can stretch it a little bit more and stretch a little bit more, and I got to 338. And I was like, I can be pretty good about my booking uh right now. And my counter is still getting booked, and people aren't blinking at the 338. So I'm gonna leave it at that because that also gives me money to tip out my cleaners whenever they do a good job as well. So um it's just you don't try to like squeeze every dollar. I mean, you try to, but like you don't have to try it as long as like the market tolerates it, and you just gotta be responsive. Like when you get no bookings because your your cleaning fee is like hundred dollars more than everybody else, take that as a sign because that didn't that worked in my market, and that's not necessarily meaning working like a market like Houston.

SPEAKER_03 50:06

That I'm happy because me and my uh my partner, we we had a whole meeting this week. We're like, man, how do we get good cleaners and incentivize them to be good? And the four-star thing, and then the 20 per five star, I think that's awesome as well. Because we were like, hey, let's tip them after X amount of five stars, but if it's five star every time and you get a tip, I think that's that's lovely.

SPEAKER_02 50:26

Yeah, absolutely. And you got to make the job easy for them. So I don't expect them to try to clean a cups every single time. So I'm just trying to minimize the amount of problems that might happen in your house, and I think that's something auto listeners just gotta do and learn as they go because you'll quickly realize what works and what doesn't work. I try to get really expensive towels and people start taking them home. So maybe I should stop buying these $50 towels, right? Like stop, don't spend too much money on these towels because it's just gonna cause you more headache. Um, but it's like the give and take relationship. What can you invest that will give you your guests the best experience? And whenever problems happen, make sure you take care of it right away.

SPEAKER_01 51:03

Yeah, that's what I was gonna ask. I mean, do people wander off with these expensive, you know, Yeti cups and these towels that you're spending on? They wander off with that stuff.

SPEAKER_02 51:11

So far, no. Um, and I'm not sure it's because people overpack for these bachelorette parties. Um, maybe they get on no space in the luggage. I don't know, man. Um, but I charge it, I charge security deposit to be honest with you guys, and I just request it through Airbnb Resolution Center. Um, and I say, hey, if everything looks good, 48 hours after you check out, no damages, no, no missing items, I'll give it all back to you. So I try to have sort of like a chaperone in the group. Like I have a security deposit, so maybe they will if there's a logical voice in the room, like, hey, don't steal the cups, maybe. Like, I don't know, maybe it works, maybe it doesn't, but having someone keeping a group accountable in the group.

SPEAKER_01 51:50

How how big of a security deposit do you put?

SPEAKER_02 51:52

I charge $750. Um security deposit.

SPEAKER_01 51:56

So and we've talked about it on this show before. It's not a it's not really a security deposit because Airbnb can choose to give him some money or not, you know.

SPEAKER_03 52:04

Well, he's requesting it from the resolution center. He gets it.

SPEAKER_01 52:07

I'm requesting it. Oh, oh, okay.

SPEAKER_03 52:10

Yeah, that's something like yo, you that that is a good idea to quest a seven. Yeah, of course they ain't running off with no Yeti cut of $750 on the line.

SPEAKER_02 52:18

Well, here's how I explain it, right? When I request a $750, I tell them, hey, this is $750 security deposit. Um, this is very similar to a hold that the hotel puts on your credit card whenever you check into a hotel. So right then and there, you normalize security deposit that you're requesting from your clients because they're like, oh yeah, uh, whenever I go to the hotel and check in, they do put a hold on my credit card. Same concept. So that's how I do it. And no one has ever given me any issues about requesting the sound 50 deposit. Um, so it works, it works really well.

SPEAKER_01 52:51

Okay, so they book, right? Right, they book and they they, you know, that you you talk to them, thank you for booking all that stuff, all your automated stuff too. And they they their credit card goes through and they pay for their their stay for the weekend for I don't know, you know, two thousand, three thousand dollars, whatever it is. And then you on then you hit them with a message, hey, I need you to send me $750 deposit.

SPEAKER_02 53:12

I ask for it three to seven days before the check-in. So I don't do it right away, I do it oh, so that mimics the hotel experience that you guys are so familiar with. So I'm trying to normalize the security deposit as much as possible. So someone doesn't think I'm trying to take more money.

SPEAKER_01 53:26

Yeah, it is so we get I was thinking no one gets pissed off and says, What do you what are you asking for more money for? I already paid this shit. No one gets pissed off.

SPEAKER_02 53:33

No one, no, no one.

SPEAKER_01 53:36

It's all on how you word it, like Micah says all the time. It's all you how to word it. So yeah, so how do you how do you word it to them again? I just want to I just I'm gonna try this shit.

Wording the deposit as a hotel hold, zero pushback in three months

SPEAKER_02 53:44

You should. I mean, it's it's like your only how to say it, it's like your only remedy if um it's your only remedy if anything ever happens at the house, right? Like that's within your control, and you you have to have someone keep in the group accountable, like you just need that sane voice when they're about to do some dumb stuff, and like, hey guys, everyone show out. Let's not like I don't know, body slam someone into this this table or something like that. Hey, I don't know, but you know, you got you just gotta do it. Um, so I'm gonna try to look up the exact wording for you, but basically it's along the lines of hey, uh, we're so excited to welcome you to the house. Um, we're requesting the $750 security deposit per the listing description. This is very similar to a the hold that a hotel would put on your credit card whenever you check in. Uh, we our intention is to always fully refund you 100% of the security deposit uh within 48 hours of checking out, assuming no house rules have been broken, no damage to the property, uh, and no sort of like house rule violations and no issues. And so you you you make it really clear about why you're asking for the 750, you normalize it, and I I haven't had any pushback.

SPEAKER_01 55:01

Like okay, what happens when you get the pushback? I mean, do you have a contingency plan or they're saying, I don't feel comfortable paying that?

SPEAKER_02 55:07

What are you gonna tell them while we're gonna be a red flag for me? Like, why is this person refusing uh thing at that point in time? I would cancel the reservation, to be honest with you. Like, I would rather have the house be empty than invite someone that's gonna trash the house. And that's a part the decision I cleared with my partners. I told them every single time I would rather have the house empty than invite someone that's gonna come in and cause problems because it's not worth the stress, it's not worth pissing off your neighbors if they're gonna have a big party at the house. Um that's yeah, I don't have a really good answer for you. Besides, I won't let them into the house. Um, because you got to have high standards, right? Like what we talked about, you gotta have high standards, otherwise, you are inviting problems, you're losing that peace of mind. You're gonna spend the weekend instead of playing with your daughter, you're gonna spend a weekend looking at your ring security cameras, make sure they're not having a party. Uh you don't want to do that, it's not worth it. It's not why we got into this business.

SPEAKER_03 55:58

That is true, man. You got to go high-end. I love that that security deposit. I'm gonna start doing that. And I've heard people say they do it, like you know, hey, I just requested through the you know, but that's 750. Yeah, that'll make somebody think twice, man. That'll, you know, somebody got 750 on the line. So I'm gonna leave, I might try it at 200 or something just to test it out.

unknown 56:17

Okay, why not?

SPEAKER_02 56:18

Why not? I mean, do it, do it that is like in commensural or in proportion with like the nightly rates that you're charging. I think that just makes so much sense, and it's not something that's so I don't know, like out of the ordinary, you know what I'm saying? Like for me, like I ask for everyone's emails through Stafy at the property so I can direct market to them afterwards, and they don't view that as weird. It's like I go to the airport and I sign up for Wi-Fi, and I usually get my email for it. Same thing for the security deposit. I think it's very normalized behavior. People used to travel to hotels all the time, and I think they know what a security hold is.

SPEAKER_03 56:54

Now, oh, since you brought up Stafi, um, because I we use Stafi as well. Now, with you having like make you're charging like twelve hundred dollars a night, right? Now, I know Airbnb has to be having a huge chunk on the guest side because they're charging three percent of that. Have you do you have your own direct booking website?

SPEAKER_02 57:12

No, not yet. And just another piece of advice for people, like you don't have to have everything set up right away. So yeah, I know where I am in my in my path. I knew my first goal was to build up the Airbnb reviews first and just focus on that. My next step is gonna be after I get the website up, uh, I mean, after I get my second listing up, I'm gonna get the reviews on there, and then I'm gonna set up the direct booking site so that I can refer all the girls that have been to my house to my new house so that if they have weddings, they can kind of get towards there. So, my whole thought is just I'm gonna specialize in bachelorette, I'm gonna specialize in family-friendly ones so that when all the bachelors kind of grow up, they have kids, I can continue to market them to family-friendly Airbnbs so that I can maximize the value I get from the customers throughout the entire life journey. Um, after I get kind of like building what we call an insurance, like a book of business, like they become part of your book of business. Love it, you love it. You have to keep marketing back to them and give them incentives, especially if you left your house in a good condition. Those are the people you want back in your house.

SPEAKER_01 58:10

So you so you like mail chimp them like every few months to remind them, hey, come, you know, come stay again, you know, get a discount and all that. So, do you do you have it like set up to send a message after three months? You know, hey, I'm hoping you're like going great, you know. If you ever get in town again, you know, honeymoon time, come come hang out, and then like six months out or a year out, say, Hey, um, is this still working out? You're gonna get divorced, you can have a divorce party over here.

SPEAKER_02 58:35

Well, I'm telling you, that's all my plan. I don't have I don't have that set up right now, and it took me a long time, guys. Like, I was like, Oh man, I didn't do this yet. I didn't get a direct booking website yet. And I just had to remind myself, like, dude, you're you're still taking steps consistently every day. That's what matters the most. You've educated yourself, just take it easy and just take it slow and just make those incremental steps every day. So I don't have MailChimp set up. I've continued capturing the emails. I don't have my direct booking website set up, but I'm going to, and I know exactly what I'm going to do with it when the time comes. Um, it's just about, hey, you have like a newborn at home, and I think I'm trying to be a good dad, good husband first and foremost. And I know like this stuff takes a lot of time, and I want to make sure I'm there for my wife and my daughter because you only get to be a dad once. So I'm I'm trying to really cherish that time with my family, and I'm not trying to kill myself. Um, I really wanted to quit my W-2 job as soon as possible, but I know that if I stick it out longer, I can have more conventional loans up to my name, I can borrow more money, scale faster. And you know, that's a decision I'm I've come to peace with. And I think, you know, everyone has their own way. Everyone might say, hey, you should quit now, you should quit now. Um, for me, I don't want to work on the weekends. So this nine to five thing works out well for me. I can continue to build income, I can scale my portfolio. And once I get to the 10 conventional loans,

Hiring a virtual assistant now with one listing to train her before scaling

SPEAKER_02 59:58

I chances are I'm gonna be on my way. And I think I'm I'm gonna be in a really good position when I do that. And I think I'm investing in a virtual assistant right now. I'm gonna she's gonna start on Monday. And I only have one listing, guys, but I'm hiring a virtual assistant because I'm trying to make sure all these small little tasks get to the VA so that she can handle all the messaging, she can handle like these issues when the hot water heaters. Like, I just I'm gonna spend the time to develop her so that I can invest everything back to the business so I can scale a lot faster.

SPEAKER_01 1:00:28

This is so beautiful, this is so beautiful in so many ways because because you you just now dropped another gym. He's hiring a virtual assistant right now with one fucking unit, because and and I'll tell you from right now, what we scaled like crazy this past year. We have over 40 units, right? And now we're hiring um Airbnb virtual assistants, right? And it's Fed is going crazy trying to empty everything from his brain for all 40 units and to teach him all this shit. But if you have one from the beginning from unit one, and then you get unit two and unit three, she's gonna grow with your company. That's beautiful. It's awesome, and it's awesome.

SPEAKER_02 1:01:06

I I and something so feels so good about being able to provide a job opportunity for someone overseas, you know. Um, you know, she I the person I'm hiring is a single mom, and I got having raised a kid for just three months, I'm like, yo, I got so much respect for single moms out there, it is hard. Um, so I I look for grit first and foremost. I look for like high charisma um from my VA because they're gonna have to answer calls from my guests, and you know, I'm gonna have to coach her, like, hey, when you answer the phone, pretend you're my wife so that like they if any issues, you can just kind of tell me, and like I can kind of call them afterwards, like, hey, my wife told you, so they don't think it's like a virtual assistant or something like that.

SPEAKER_03 1:01:48

Yeah, you you're you're a mindset guy. I love your mindset, you're not gonna take on too much. You're like, hey, this is where I am, and you do everything very calculated, man. I I love your mindset, and you uh how you even said you hired a virtual assistant right now. What you're basically like, I know in two or three years you're gonna blow up off this because basically what you're doing is just loading up, you're not shooting, you're just loading up. So then by the time you got your VA, you can just scale that thing all the way up. Now I know how to hire another VA and what they need to do. Man, you you're about to kill them in like two or three years, bro.

SPEAKER_01 1:02:19

And yeah, your VA can train the next VA.

SPEAKER_03 1:02:21

Exactly.

SPEAKER_02 1:02:23

And that's why I'm telling everyone to be patient because everyone wants to quit so fast. And I really had to have the mindset like, why do I really want to quit? Like, what am I wanting to do? I thought about like, hey, maybe I become a real estate agent so that I can specialize short-term rentals or something like that, right? Because I'm killing it. But I was like, do I really want to spend the weekend like showing houses instead of playing with my daughter? And I don't know. This quote came to me like like an offshoot from advice I got from um from a mentor is I thought of this to myself, like, you can have it all if you just realize you already have it all. And I think that is like so good that I taught myself that I was like, you can have it all, just remember you already have it all. And I was just looking at my daughter earlier and just playing with her. I was like, wow, this VA is gonna cost me five dollars an hour. If I didn't have that VA, like I wouldn't be doing this with my daughter, like I would give up five dollars there, five dollars for this hour any day. Um, so I'm gonna live my life with no regrets. I know I'm spending a lot of money on a VA already when I have just one listing, um, but that's why I'm staying in my corporate job so that I can keep investing back into it so that I can make like 50 bucks in my corporate job. I give five dollars an hour into the VA to handle some of the stuff, and in turn, I get to spend more time with my daughter, and that is so good. That feels so good, man.

SPEAKER_03 1:03:37

I know, man. It took me four years to get off my corporate job after doing this. So, and the reason, and that's why I say, like you're right, be patient. It took me four years, and yeah, like this whole time I've been off. My daughter was just born. I could spend time with her in my office, I can have her in my office with me while I'm working. You can't beat that, you can't beat it. So, yeah, just be patient, man. You you you're gonna keep you're gonna crush it.

SPEAKER_02 1:04:01

Hey, what helped you finally make the leap to to put your job? Like, was there a number you had to hit? How did you decide to do that?

SPEAKER_03 1:04:08

Well, I had already hit the number. Um, the thing that was keeping me on my job was fear. It was truly fear of leaving. Okay, how do I get health insurance? How do I uh how am I gonna get loans? So basically, what I did was um so

Hospital pneumonia, writing down fears, and quitting two weeks later

SPEAKER_03 1:04:25

basically I'll tell you the backstory. So basically, I I got sick. Um, I went to the hospital. I had caught um pneumonia and I stayed in the house in the hospital, and I was just sitting there in the hospital, and you know, it's COVID season, so your family can't be there with you. You're by yourself, you know, they they're not allowed to be there. And my wife was seven months pregnant, so I'm like, okay, I can't, life's too short. I'm like, I can't sit here and just sleep doing this, working every day. Then I have to go try to help with the business. So I was like, I in my hospital, I just wrote down all my fears of like, why don't why don't you quit? You know, and I just wrote it down that I wrote the answer to the fear, and then two weeks later, I put my two weeks into my job, and it was just like it's fear. You write out your fears and write the answer to the fears. That was it for me.

SPEAKER_02 1:05:08

Yeah, I think you're right. I think sometimes I try to cover it up with just saying, Hey, this is why I want to mess everything back, but fear is definitely in me, man. It's like it's built into all of us. Um, I think doing this real estate investment has proven to me like I need to keep reaffirming my identity. It's like, hey, I used to be an EMT. People used to call it I'm one to get me coming through the doors. And I was like 19 years old when that happened. And I just had to keep confirming, like, hey, I left corporate before, I went to run a restaurant, turn it around when they were losing so much money. And then now I'm back in corporate. I was like, oh, I can always go back to corporate. And I think that's like trying to mean to self-affirm and get my identity right. Um, so yeah, I definitely still have the fear in me for sure. Uh, but I think I'm gonna take your advice and write down all my fears.

SPEAKER_03 1:05:52

Yeah, yeah. I keep it on my whiteboard. So when so ever I walk in my office, I see my fears and I see the solution to them. So and I do it even when I get anxious. Like if I get anxiety about something like, for example, I'm working on this deal in Arlington and the numbers didn't work out for me, right? So I'm like, and then I got into the deal and I'm like, I could walk away and lose 7,500. I'm like, well, how do I make this thing work? What am I fearful of right now? And I wrote it out and I'm like, okay. So I called my I called one of my real estate state fan friends and he gave me advice and what he could do. Then I called even called Steve. I'm like, hey, I got this. If you want to do it, and you know, so it's about using using the world around you. You usually have everything you need in front of you. It's just when you're full of fear and you're anxious, you forget what's around you. So yeah, man, and writing out those fears, man, that that is powerful. Powerful. I love that, man.

unknown 1:06:42

I love that.

SPEAKER_01 1:06:44

You know, real quick, you know, we're getting we're gonna need to wrap up on time, but um at work, there's there's people that are like, you know, they they kind of know that I have these rentals and the Airbnbs and stuff like that. And a lot of people are like, Why are you still here? Why are you still here? You know, and then I'm like, Yeah, no, you know, I'm planning my exit, don't worry. And then there's some people like, how can you leave? What about what about you know security and like health insurance and stuff like that? And today someone asked me that, and I was like, Well, well, okay, what would it's line expense? What is what is health insurance? As I well, here at work we pay 500 bucks a month, you know, how much is it out in the real world? Is it 10,000 a month? And he's like, uh, well, something compared to what we get about a thousand a month. I said, That's one that's one rental property. Yeah, if I'm if I'm not working, I can get more rental properties, right? I can get a few a month, otherwise, I'm at work, and then I have to do it after work, and then I like you said, sacrificing time with the family, you know, and then I'll just be working. It's like two jobs. I'm like, why can't I just I mean if I quit here, I'll if that health insurance and that health insurance keeps these guys at work to like 70, man, 80, almost 90 years old. These guys are so freaking terrified of losing their health insurance through work, and and the only difference between paying for it from your paycheck and paying for it outside is 500 bucks. You're you're sacrificing your whole life for 500 bucks. Yeah, I don't know. You just gotta look at things differently. It's all mindset. There you go.

SPEAKER_03 1:08:03

I love it. That's mindset, man. It's mindset.

SPEAKER_02 1:08:05

I love that. I love you are able to attach a number to that fear because I think that's like so important. And I think uh I'm starting to talk to some co-workers at work, and some advice I've been giving people is like, hey, if you do want to invest in short-term rental, be really careful about who you share this thought and this news to. Because I can guarantee you, if you don't start in short-term rentals or real estate investment, it's probably because you're putting yourself into an environment that everyone is telling you that it's not gonna succeed or you're crazy, and that is toxic. So you have to be really careful about who you tell your aspirations to because not everyone has the same mindset. Not everyone is going to want to invest in real estate, and not everyone's comfortable being uncomfortable. Uh like some of the things I tell people is like, hey, look, you want to start doing this, maybe start getting uncomfortable.

Cold showers, the Wim Hof Method, and training yourself to be uncomfortable

SPEAKER_02 1:08:58

Like, I read this book called Wim Hof Method. I'm trying to improve myself. I don't know if you heard of the Wim Hof Iceman, but this guy takes like ice bath all the time, right? And one of his first things that he recommends is like just take a shower, take a cold shower. At the end of a hot shower, turn to cold for about 15 seconds or 30 seconds. And that's how I first started training my mind to be comfortable with being uncomfortable. And every like week that went by, I added 15 seconds um to it. So at the end of my hot shower, 30 seconds this week. Next week, I'll do 45 seconds, and I kept adding and adding. And then, like, on a day I closed on my deal, I was nauseous, dude. I was like, oh my God, I'm about to do this deal. Um, I went into like three minutes at the end of it. And I was like, okay, all right, I got um I'm comfortable being uncomfortable. And I don't know, like just start training your habits on like how do you become uncomfortable? The coke shower works for me. I think another thing is like just being decisive. Uh, I heard about this on a podcast. If your wife and you can't decide on what it's on dinner and then you decide two places, just pick two places, get get food from both of the places. And right then and there, that rep, oh my god, that's gonna train you to become a millionaire easily because now you're repping yourself into becoming decisive. And I was like, Oh my god, that's like that felt so good. Uh now every day when I talk to my wife, like, hey, look, millionaires are decisive, just just pick, just decide, just pick, just decide. And it's just like trains your mindset to become more decisive uh over time. And um, it was Wim Hoff method. That's the ice, that's the iceman guy. Um, but I'm pretty sure I heard about like the four traits of a millionaire from like a bigger pockets podcast at some point. So I think two one, two of the traits were like being decisive, another one was about having momentum. So that's why I asked all your readers today. I mean, your listeners today, when you listen to this podcast, go home right now, go look up an address on a pod, I mean on Price Labs, pay the $10, and instantly you would have built your knowledge, like, okay, I know this much about this market now. I am now more equipped for a short-term rental investing career. I'm gonna take a 15-second cold shower to end on my shower today, and now I'm comfortable being uncomfortable. And man, just taking these small steps would get you ready for so much more stuff, I think, going forward.

SPEAKER_03 1:11:16

This is the best podcast we've had in a long time, man. This was good. I love this. This was a good podcast, dude.

SPEAKER_01 1:11:22

I got I got a nickname for him, it's Kent He, the hippie assassin. Because he'll say some assassin ass shit, and then he'll go back to oh, yeah, but I want to save the children and stuff. And it's like so he's supposed is Kent He, the hippie assassin. So, yeah, man. Thank you for hopping on.

SPEAKER_03 1:11:38

Yeah, thank you, Kent. Man, this is awesome, man.

SPEAKER_02 1:11:41

Hey, I really appreciate you guys. Like, I I love being able to surround myself with people like you guys are in real estate that has the abundance mindset, and you know, I told my wife last year, I was like, Hey, maybe I'll get on a podcast, and you guys just came out of the boo. Like, I was like, How did this manifest? I was like, I'm gonna get on a podcast, and you guys invited me. And I was like, Tina, like you invited me. I was like, What? So thank you guys for this opportunity. I I really do appreciate it. I had a great time talking with all you guys, and um, thank you for giving this opportunity.

SPEAKER_01 1:12:13

Where's where where can people find you?

SPEAKER_02 1:12:15

Yeah, they can find me on Instagram at who you're with. That's Y-O-U-R-E. Um, we chose his name because it was the model that we grew up with. You know, we didn't grow up with a lot of money, so we always remind ourselves that it's not about where you're at, it's about who you're with at the end of the day. And I just wanted to just carry this model forward, and now it's on one of our walls in our Airbnb, and it's just like mind-blowing. It's like we get to provide a home where people come together and cherish like their relationship that they make in life because you can't take money to the grave, but you can take their relationships a lot of memories with you. And I think that's so important for everyone to remember just so much hate, so much divisiveness over the last couple of years. Just get people back to like chilling with each other and just like just remembering what's what matters most. I think that's what's most important. Hey, man, the hippie assassin. Hey, thank you guys.

SPEAKER_01 1:13:04

You should you should you should do the ad. You should you should get that at the hippie assassin. Boom, there you go.

SPEAKER_03 1:13:10

Thank you for coming on, Kent, man. This has been awesome, man. And uh, yeah, I think I'll see you Tuesday on the next call. We'll have to listen to that.

SPEAKER_02 1:13:16

Hey, thanks, guys. Have a great night.

SPEAKER_03 1:13:18

You too, man. Bye. Peace out. Dude, that that was a good that was a good show, man. I haven't had a that he was dropping some gems, not only about the cleaning, the mindset. I love this show. That that was a that was a good one. That was a good show, man.

SPEAKER_01 1:13:32

That was a great show, great show. And and it it just oh man, when we talk to someone like that, it just it kind of make you know refreshes, refreshes us, you know, it because we get bogged down in the day-to-day and you know, handling putting out fires and trying to scale and doing all kinds of craziness, and then but that I mean, but the way he like he's meticulous about things, right? Yeah, and that's that's the thing. I mean, he he he could like say, Oh shit, I just get you know, I'll just try to get four or five or six or you know, seven houses right now. No, you know, do do this one, do this one right, get my VA in place. Okay, then we're gonna get my my partners in place, then we're gonna get the next one, and then we're gonna get everything settled before problems occur so we can have it all ready to roll. And it's just like, oh man, just the meticulousness of it. I love that, and then um, and then he wants to give back. That's the thing, you know. He's doing that's his why. That's his why he wants to make a better world for his daughter for all of our daughters, and and so and everything, you know. And so, yeah, the hippie assassin.

SPEAKER_03 1:14:33

Yeah, man, that that was a good episode, dude. I'm I'm definitely I'm pumped about that one. Oh, that's what I'm about to brag about. I was like, Man, I just told I told text my master my groom, like, bro, y'all gotta wait till y'all hear this next episode, dude.

SPEAKER_01 1:14:44

This dude was dropping gym, so yeah, that was I moved the mouse about 10 times to make sure we were recording because I was gonna be so upset.

SPEAKER_04 1:14:53

Yeah, because this was too good. This one too good.

SPEAKER_01 1:14:56

Okay, I see the red button blinking still, so we're recording.

SPEAKER_03 1:15:01

But yeah, thank y'all for listening. Thank y'all for uh continuing to listen to us, man, and hope y'all are inspired by that. If you haven't, you should be able to take action after listening to that. He only has one and he's making 18 grand a month, so y'all should be able to take action after that. And uh yeah, remember you can find us at livelethrive.com, email us livelethrive at gmail.com. Um, and yeah, and you want Steve's management, R Just Rentals. I'll let Steve pitch it out to you.

SPEAKER_01 1:15:27

RJ's rentals.com, your one stop shop for uh managing your Airbnbs. You know, you're learning from our show and stuff like that. Hit us up and we always give free advice. You know, you don't have to sign with us, but whatever. We just love to give it free advice. We love to talk to people, our fans. We love to talk to our fans, you know. Fans shout out to us all the time. We talk to them and and give them advice, and uh it's just something we love to do. So, yeah, so Argistrenals.com, A-R-G-E-S-T, R-E-N-T-A-L-S, Argist is the largest. Let's go.

SPEAKER_03 1:15:58

All right, and we are out later.

SPEAKER_00 1:16:04

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.