Cold open

SPEAKER_00 0:00

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

SPEAKER_01 0:11

Hello, hello, hello.

SPEAKER_04 0:13

And welcome back to another exciting episode of Live Let Thrive.

SPEAKER_03 0:20

What's up, Micah Man? I'm good, my man. How you doing? Oh, great, man. It's cold and rainy over here in Fort Worth, Texas. And we're coming at you from Fort Worth and Arlington. Uh, Live Let Thrive is our name. And Making Money is our game. And so I changed it up a little. So, yes, we are Live Let Thrive, biggest uh Airbnb

President Leo's background: sociology, psychology, and 11 years in automotive

SPEAKER_03 0:43

podcast in the world. VRBO, Uber, Lyft, Turo, all the share economy stuff we cover. And today I'm so excited because we get to cover Turo and Hire Car and all that stuff that we've been neglecting for a little while. And this is episode 184 of your favorite podcast. So we have a special guest today, Micah. Who we got? President Leo is joining the show. What's up, President Leo?

SPEAKER_01 1:07

What's going on? What's going on? Glad to be here.

SPEAKER_03 1:12

Glad to have you. Let me read your bio. It's a long bio. I'll try not, I'll try not to mess up too much. Okay, President Leo is the founder of Star Across Enterprises Inc., a leader in the automotive space. Leo specializes in using behavior economics and sociology to drive consumer decision making. President has more than 11 years of experience uh in converting his behavior insights, experience into profits for businesses within the automotive industry. As a graduate of Colgate University, President Leo leverages his degrees sociology and anthropology and psychology and educational studies to provide others with an unique approach and wealth of knowledge in the auto sales and rental space. Some of his best educational content can be found in this in his The Wealth on Wheels program. This program aims to be the key to unlocking one's wealth potential in automotives. As one of the first fleet owners in Atlanta on the Turo platform, President has also experienced success on the higher car platform and through his private rental business. Uh, President currently resides in Atlanta, Georgia, but is an avid traveler, always looking to expand operations. Welcome, President Leo.

SPEAKER_02 2:29

Yes, yes.

SPEAKER_01 2:30

I didn't realize how long it was until you just read it. Yeah, me neither.

SPEAKER_02 2:36

I got through it though. I got through it.

SPEAKER_04 2:38

Absolutely.

SPEAKER_02 2:40

Well, man, we're glad to have you.

SPEAKER_04 2:42

Yeah, man. So my first thing, let's hop right into it. Like it's I know you've been killing it on the with car rental.

Turo vs HyreCar: leisure travelers vs gig economy workers

SPEAKER_04 2:49

Which is more profitable, Toro or Higher Car? Is that market attack?

SPEAKER_01 2:54

I think it, I think it's I think it's all about you being intentional with you know what you want to attack, how you want your business to kind of play out. Um, because they're different markets, right? It's the same economy, right? But higher car is aimed uh uh, you know, just from just how they built out the platform to aim towards those gig economy workers, right? So those Uber drivers, those Lyft drivers, Uber Eats, Instacart, all of those great deals right there. That's usually where the bulk of market share kind of resides on that app right there. Um and Turo is more of your leisure type of activity traveler, right? You're your person coming in and out of state and stuff like that. So now when it comes to profitability, um once again, right, it depends on what type of unit that you're actually running. Uh for me, I see great ROIs on on both of the spaces. Very, very strategic on um the kind of cars that we pick, um, and also making sure that we get the right people inside of uh inside of our particular uh in our in our particular units.

SPEAKER_03 3:58

Oh, nice, nice. So real real quick, I mean, I mean you kind of alluded to it, but what is the the the major difference between putting your car on a higher car or to the difference between these two platforms, um, like I said, it's just about who they appeal to.

SPEAKER_01 4:11

Um now they do have some differences in the way that the insurance is structured and stuff like that when we start to really peel back the layers of of their actual business plans, and I mean Turo and Hire Car. And I don't want to neglect uh Get Around too, right? Get Around's another great app that kind of still plays around that higher car space right there where they're aimed towards the more gig economy workers. Now, what I will say is that these two particular platforms call for different types of cars, right? And so if we're looking for premium, luxury, exotic type of vehicles, then we're gonna lean more towards that Turo platform. So when you're talking about profitability, of course, those cars would call for a higher price per day, right? Um, as opposed to some of the more economy cars, the more affordable options that you will find on Turo, but in bulk on the higher car and the get around app as well. Um and once again, it's just about those two platforms, those three platforms actually being intentional about the type of people that they intend to serve. Now, what I specialize in, right, is the ROI, right? Because I think that that's very, very important. Um, because I think a lot of times uh the the beauty of this industry gets lost in having the flashiest cars, right? When technically it's not all about that, right? In business, we always look to how to cut back our expenses and how to maximize our profits. Um, and so for me, that's why I say I experienced success in both of these areas because I have um, for lack of better words, mastered uh what needs to be on each particular platform in order for us to achieve desired profitability. Because I hope that answers it a little bit better for you.

SPEAKER_03 5:54

Yeah, yeah. And so, in other words, so my understanding, higher car is where you're renting out your car and to individuals that are then gonna go and perform jobs like um they could be a Turo driver, lift driver, or uh deliver groceries or whatever. They can do anything with your car they well, they want within reason, and um, and so you're just providing them the vehicle. Whereas Turo, you're written to one individual at a time, like

How platform marketing shapes the guest mix

SPEAKER_03 6:20

a traveler.

SPEAKER_01 6:22

Uh, so maybe I wasn't clear. So let me let me just unpack it a little more, okay? Um, so this is how these particular platforms have marketed themselves. So higher car get around markets themselves to those gig economy workers. It's still the same experience, still, you know, if you were a driver for Uber or something like that, right? You would log on to the higher car platform, you'd find my cars along with everybody else's cars, and you'd be able to select which one. From that point, you would then meet us, we would check you out, and then you'd be on your way with the car. Now, the same thing is in the Toro market, right? You would be applying for a car, you'll see my car along with many others, right? And you'll choose my car and you'll be able to use it for whatever your activity is. Now, these platforms aren't subject to only these particular groups, but what I'm speaking to is how they use their marketing dollars in order to bring people in. And so if I'm marketing towards gig economy workers, well, then I'll get uh a large influx of those people coming my way, but it's not subject to only those people. So you'll still have travelers that come in and grab vehicles, uh, just local people in the community just looking to get to and from work, right? But just from a fundamental standpoint, as what those platforms stand for, that that would be that would be that cool.

SPEAKER_02 7:42

No, I got it.

SPEAKER_04 7:44

Okay, so that brings me to this. Uh, you said something like Toro, you said leisure. So, which platform do you see as providing the better guests? Like, because I know we're in the Airbnb short-term rental space, and you know, when we hear leisure, I will experience when we hear leisure, those are the travelers we don't want. You know what I mean? So, in your space, is that a traveler that you does is that a desirable traveler, that leisure travel.

SPEAKER_01 8:11

Um, yes, so that's where my I guess my background, right, in behavioral sciences and things like that kind of come into play. Um, because I'm able to um kind of see someone, right? And it kind of just from how they conduct themselves, right? How they engage in conversations with me. What type of vehicle are they picking out from my fleet, right? That kind of lets me know a little bit into the background of the type of person that I'm dealing with, right? You'll be surprised how just a simple text conversation with someone or a quick phone call with someone could start to reveal a lot of personality traits, right? And so when I say leisure, I'm I'm I'm I'm not being prejudiced towards the leisure people. It's just that I have to take it at face value, right? Whatever you present to me is what I see. And so, for instance, it could look like, uh, okay, I see I'm texting this individual about their reservation tomorrow. Um, the communication seems to be stagnant, right? It's spotty, right? I'm texting you at two in the afternoon, you're not responding till seven. Let's me know that you're you're you're really not caring much about that one-on-one personal connection, and probably you're only on the app to fulfill right your need for that vehicle. Because let's let's not neglect that vehicles are a necessity in this world. Transportation is a necessity. People and things must go from point A to point B. So not everybody's going to be in that relationship community building type of field that we come to know inside of the sharing economy because that's the beauty of it, right? We're developing communities where people we're able to form better uh relationships with people, and hopefully it blossoms into a long-term type of deal uh where we can continue to serve to serve them. So I'm not really so much worried about that type of leisure, but more about how they interact with us in our business. Um, that kind of speaks volumes to the type of person that they will be.

SPEAKER_03 10:05

Nice. So here's a quick question. Um, let's say the Super Bowl is coming to town

Super Bowl week strategy: which platform makes more money

SPEAKER_03 10:11

right here, right down the road, Dallas, you know, Cowboy Stadium. And what would be the best way to utilize to make the most money for your car? You know, I'm saying, would I put it on higher car for that week, or would I put it on to roll, or how would you what would you what do you think?

SPEAKER_01 10:25

So once again, it all depends on the type of vehicle that you have, right? Okay, and so if you have your 2010 Hyundai Alantra, right, then yeah, I'm probably gonna say, you know, you could use tarot, you could use hire car, but are you an individual that wants to continuously have to check in and check out vehicles, right? If you're saying, no, I don't really want to deal with that regularly, well then I'd probably say hire car because what we see is hire car and get around as well, they tend to be in these rentals longer because they're using these for work, right? They're the the asset for them in their particular line of work is that vehicle. But the same thing can be said for the Turo, right? Because if people are coming in town, it's a Super Bowl, so it's a big event. Some people are gonna want to travel luxury, some people aren't really gonna give a hank because they figure, hey, we're gonna be at the Super Bowl, we're not gonna be spending much time inside of this vehicle. So we just need this to get from the Airbnb to the actual Super Bowl thing, right? And so it's not a big uh uh decision for them when they're actually picking that type of vehicle out. Now, what I will say is that typically when you rent out vehicles during those types of sporting events, if you have those consumers that are coming for that, then typically they will be done with that rental by the time that whole event kind of ceases, right? So we usually see that Super Bowl activity last for about a week, right? And so people are usually getting around at Tuesday, stay till Sunday, some Thursday, stay till Sunday. And so it's just all about you kind of understanding, you know, where is your, I guess, who has more of the market share in your particular area, right? So hire car, get around isn't big in certain markets. Turo is big in certain markets, and vice versa, right? And so you have to use your due diligence when seeing which platform suits you better, and then continue to build upon that by starting to um, I guess, isolate what type of uh consumers that you want to actually be a part of your business.

SPEAKER_03 12:23

Now, now here's one more quick question kind of on that same topic. Have you seen people successfully arbitraging these vehicles in this way? Where let's say I don't have a car or whatever, but I know Super Bowl's coming to town. I know it'll be like a thousand parties, right? So I was like, man, if I could get me, if I could rent a really nice car, you know, I don't know, a Tesla or

Why car rental arbitrage doesn't work (fees and platform friction)

SPEAKER_03 12:42

something from somebody off higher car, then I can and I could tarot it out, you know. I it's is that is that a thing? Like I can I could tarot it out, do the arbitrage, so I don't have to buy a car, but I could use someone else's car to make a whole bunch of money that Super Bowl week, right?

SPEAKER_01 12:56

So that'll be kind of tough, um, simply because of the additional fees, right? Um, so for one, uh it's not like the short-term rental space, right? Where you all can cross-list your um your your listings upon different platforms, right? So that's pretty much frowned upon in this space right here. And so what you'll get is a lot of these companies vetting the other companies to see if your vehicle's listed there, at which point they'll tell you that that's an infraction on that particular platform. Now, I do see in the future sometime, you know, them being more collaborative in that effort right there. But right now, it's each is kind of fighting for their own for a bulk of the market share right now. They're trying to really make draw a line in the dirt and make people choose one side or the other side. Um, and so that model in what you're explaining is not sustainable in the fact that if you're renting a car for someone, right, you're gonna have to pay the base fee, you're gonna have to pay your booking fee, you're gonna have to also pay your insurance fee, right? And so that's gonna go pretty high. Now, when you turn around and try to re-rent it out, right, as a host of that particular vehicle, now you're gonna have to what give a portion of that to the uh to the platform, you're gonna have to give a portion of that to the insurance. So it's kind of counterworking itself and uh it's kind of counterproductive in that sense, right there, because you're spending a premium to rent the car from another platform, but then you're having to assume a small cost uh as far as what you'll be receiving from each of those rentals as it as it goes out. Now, it'll be more beneficial and more um uh impactful if you were to find people that were that have inventory that they're not using, which is quite common, right? And it could be as simple as driving for dollars, like what we talk about in the real estate world, right? Driving for dollars in your own neighborhood and and picking out cars that look fairly nice but maybe covered in pollen or maybe covered in dust, right? That kind of lets you know that this person isn't driving this vehicle as often as they would like, right? You can put yourself in great situations to find these people. Um, you could go to a dealership, right? Sit around this dealership and actually um vet people that are coming in and out of this dealership about, you know, why what is the reason for them being there? Now, of course, there's creative ways to do that, which we can get into later. Um, but finding those individuals and seeing if the car that they're servicing is in fact an extra car of theirs that they're just only bringing because it's it's free, because it's under warranty, right? Finding those people, being able to speak to the pain points that are involved in the industry that one would have um putting their car up or letting you use their car would then put you in a position where you could then leverage that vehicle in an arbitrage fashion um by using their commodity in order to remarket at a higher price.

SPEAKER_04 15:41

So it sounds like there is really no hybrid models like you have a car on tour and a car on higher car. It's you one or the other. So it sounds like you definitely got a niche down on what type of vehicle you want on which platform, which brings me to the question like in a in a market, like let's just say Atlanta, which which would be a more profitable, what's like a a really good car to have on Toro, like on the Toro market.

SPEAKER_01 16:05

Oh man, so the market is ever changing,

The most profitable cars in each market: Camaro, Corvette, Tesla

SPEAKER_01 16:09

right? Um Tesla. And it's beautiful, and it's beautiful because what may be hot today may not be hot tomorrow, right? And so if we rewind, let's just say 2018, right? One of the highly sought-after cars at that particular time was the Chevy Camaro. Then we move into uh 2019 and it shifts to the Corvette, right? Now the Corvette to call it for premiums, right? Towards the end of 2019, now we see this big emergence of Teslas, right? These electric vehicles, but mainly Teslas and stuff like that. Now it is important to kind of separate these vehicles into different classes. Um, a lot of times, people who are not involved in the industry, they like to separate vehicles into three categories, basically. So you have your um economy vehicles, you have your luxury vehicles, and you got your exotic vehicles, right? But in the industry, it is broken down into, I mean, 10 plus different categories, right? To where we would start with things like compact, mid-size, all the way up to getting up to our premium vehicles and um and above those when we start talking about luxury vehicles and stuff like that. I think to be successful in this industry, you really have to understand where the value is, where you will get more for that vehicle, right? Because this is a thing, this is a platform where people are basically purchasing with their eyes, right? The same thing in the short-term rental world, right? That's why the pictures are so important in the short-term rental world, right? Because they may see something that catches their eyes and makes them want to uh do business with you. The same thing in the car world. They is something that catches their eye about that vehicle if they're looking for that particular outcome to have a good-looking vehicle. But then you have some people that can give a hank about that whole deal right there, right? And they want something that's super efficient on gas. So, of course, they're not gonna take the BMW, um, the BMW 3 series, they'll probably opt for the Mishabishi Mirage. Why? Because the BMW 3 series probably costs you about 70 bucks to fill up on premium gasoline. The Mishabishi Mirage is probably gonna fill up at about 18, 20 bucks, right? And so if they're using that only to get to and from work, then that provides better metrics to where they're able to keep more money inside of their pockets, right? And so, once again, it's just all about what is that particular consumer looking for when doing business with you, which as an operator, and and what I like to term to be a high-level operator, which separates you from a bulk of the host that already exists, um, is very, very important for you to understand how your fleet will be built out, because then that speaks to the type of consumers that you would bring in, right? So if I have a fleet full of Mishabishi Mirages, right, then I'm thinking I'm probably going to be dealing with more of that affordable population, affordable consumers, right? But if I have a fleet full of Audi Aights, well, now I'm looking for the people that are looking for more of a flash, right? More of an executive look, right? More of a premium look, um, exclusive look, right? And that's a different type of consumer avatar than we would see in the uh in the other option there.

SPEAKER_03 19:16

Nice. Quick question of a couple series of questions. Here's here's something that crossed my mind because a friend of ours came on the show a while back, Tiana, and she has a few cars, you know, renting out on on uh a higher car. She she loves it, she says you're making great money, and um, so it was really motivational episode. And so I will, I mean, I went out the next day, I got pre-approved at my credit union. I was all ready to get me a car, right? Just to get into this. And um, I got

COVID rental boom: 30% spike in rates and vehicle valuations

SPEAKER_03 19:43

cold feet. I just I just uh yeah, I got cold feet. I the thing is we I I'm having this, uh having my uh co-hosting Airbnb uh short-term rental business up and running at the same time. I was like, man, I don't know if I should just I should I should do something else while I'm trying to grow this. So I I kind of you know, I kind of didn't didn't pull the trigger. Shortly after that, um, it was coming out of COVID, and and we saw the thing that there was no everybody wanted to travel again, and there was no cars. And I was like, and I'll ask you, was it like crazy profitable to have some cars on Turo at that time coming out of COVID?

SPEAKER_01 20:18

Oh man, super profitable. I mean, not even coming out of COVID. You went too fast, right? Into COVID, right? We literally seen fleets positioned in different places in the US literally spike up at least 30 for us. At least 30. And the and the main driving force of that, right, was um a slowdown in the Ubers, right? Because they had to figure out that whole situation and how to make it safe for everyone, right? And so, especially in the affordable uh vehicle space, because what you see is a lot of people started to gravitate towards Uber pool, which is no longer existing anymore, right? For obvious reasons, right? Um, and once that was eliminated, it forced people to now say, hey, I can't do this. Uber isn't really running right now. Okay, I need a car because I still have to get to work. Not everybody was was uh was laid off doing this, especially people um that have jobs that kind of keep this world kind of going, right? Um so those people were still working. Um, and and while they were doing so, they needed transportation. But what happened, right? We started to see a lot of complications with the big rental car companies, right? Um, a lot of people didn't have cars, so it caused a huge demand to hit the market and kind of outweighed the supply, especially if you were in a lot of these urban cities where it's vibrant, very vibrant, and people have to always be moving and stuff like that. So um that was very, very critical for us, and and and we saw a lot, a lot of profits um at that particular moment. The other sweet thing about that, right, was the vehicle valuations, right? And so I come from an automotive background, like you mentioned earlier, Stephen, right? Um, so I know how to affect. Effectively buy vehicles. So I was already buying vehicles with equity. Now imagine the car shortage being coupled with that. And now I'm actually the beneficiary of the spike in the valuation of the asset itself, right? That vehicle itself. Now what I'm seeing is that, okay, yes, my active income from the day-to-day operations of rentals is increasing, but also the valuation of my fleet is increasing. Um and it hasn't shown the slowdown at all, right? I'm I'm being inside of the stocks. If anybody watched anything dealing with the stocks today, you would have seen that Avis just released their earnings.

Avis earnings jump 300% in a day on the stock market

SPEAKER_01 22:36

They didn't have many cars, but cars are going at a premium. You're talking about people paying 200, 300, 400 bucks a day for economy-sized vehicles, right? Their profits, their earnings were through the roof, which took Avis right from a stock that was trading at $100, I believe $120 just yesterday. Today it hit $546 per share. Right? It later cooled off, of course, and then now it hit a modest 376. But I mean, that's a three, that's a 300% move right there. That's incredible, especially in the stock market. I know a lot of people made a lot of great money today. I lost on that. Me too, man. Dang. Oh I got in late, man. I got in late, but I did well on Tesla, man. I did well on Tesla.

SPEAKER_03 23:24

So here's the thing, too. Like, um, is it too late to get in now because we hear the car shortage and then they can't get enough chips to run these cars and stuff like that? Is it too late to get a good deal on a car that's going to be profitable on these platforms?

SPEAKER_01 23:37

So, right now, right, cars aren't coming down anytime soon. Now, cars on average are about 15 to 25 percent over its traditional valuation, right? Um, and the main reason why it's not coming down right now is because it's a shortage of chips, right? The chips, so it's not a shortage of the cars, the cars are made, ready to go, but they don't have the chip that helps power them, right? And so that's what's put a lot of pressure on the used car market um at this particular time because of because of that situation right there. So um is it too late? No, there's always room for elite level hosts, hosts that deploy high-level strategies, right?

The three equally weighted parts: acquisition, operations, insurance

SPEAKER_01 24:19

Because I want to be honest with you, right? Over 50% of the people that enlist as a host don't last for that first year. And the reason why is because they think that it's just as simple as getting a car, listing a vehicle, and running the business, right? But you have to understand that this this business is broken down into three equally weighted parts, right? The first is the vehicle acquisition, like you're alluding to, Stephen, right? Am I able to still get a vehicle at a profitable, I mean, at a good price, right? You can as long as you do the work, as long as you know different creative strategies, because I would also argue that there are ways to get inside of vehicles where you don't utilize your as much of your money as you do your time, right? And that's creatively sourcing vehicles. So it's always room for that, right? There's always room for creative financing, there's always room for uh buying vehicles wholesale and being able to bet each and every deal and picking up those hidden gems that are inside of these markets right here. Um, but if you don't know that, right, and you're just the average Joe who just says, Hey, I got good credit, I'm about to take this good credit and go down to the Ford dealership, right? Well then you can expect to pay that Ford dealership price right there. So while it may take a little more sweat equity for you to assume a vehicle that has built-in um equity inside of it, right? It still would speak volumes to your business and the trajectory of how high you could actually go um in that business. And I think that is critical. The reason why, you know, I mentioned the three equally weighted parts. So let me just finish that portion out, right? Is the vehicle acquisition, it's the daily operations, and then there's the insurance. Okay, those are equally weighted parts. Um now, if you get in these vehicles at a profitable margin, right, meaning built-in equity, what you'll see then is not only are you able to realize the the income from actively renting out your vehicle, but also packing in and further insulating the business, right, with an additional passive income stream in the form of when you're done with that car, you can usually sell that car at a profit, or in the unlikely event that your renter totals out that vehicle, right? You'll be assuming a profit for that vehicle. Um, I uploaded one to my Instagram about a month or so ago, right? That shows a vehicle. It was a it was a Scion. It was a Scion XB, the box-looking SUV, not the sweetest looker, but a durable car, right? Purchase this car for 4,500 bucks. Car a year later was totaled out after averaging about a thousand bucks a month, right, in rentals. It was then totaled out, and the insurance company had to cut me a check for $9,000. So not only did I realize about $12,000 worth of active income, I also realized 100% profit from where I bought that vehicle at. And that speaks volumes to me being very, very strategic and my company being very strategic while acquiring these hard assets that help our business run.

SPEAKER_03 27:18

It's kind of like the saying real estate, you make money when you buy.

SPEAKER_01 27:21

Absolutely.

unknown 27:22

Wow.

SPEAKER_01 27:22

It is real estate, it's real estate on wheels, it's mobile real estate. I mean, I don't I don't know. Think of all of these cars as small, tiny houses, tiny homes, right? Small tiny homes just kind of floating around. The only beautiful part about this is that for real estate, they're not making any more land, which is a good and a bad thing. But with cars, they're making cars each and every day, right? And when this returns to normal conditions, you'll see more and more cars start to hit the market and stuff like that. So I think it's very, very important um to kind of note that as well, because it shows you that there is plenty of upside in this business right here. And I want to drop this one last gym, right? The uh the CEO of Turo actually said that the reason why these conditions are so perfect, and I had to do the research to confirm all of these things, is that now what you're seeing is that younger individuals, right? Each and every day someone gets their driver's license, right? But what's changing amongst these younger individuals, let's just say from 18 to 21, right? Is that yes, they're getting their licenses, but they're not valuing car ownership like I did when I was growing up, right? For me, it was a rights of passage. I couldn't wait to turn 16 so I get my permit, knowing that a year later I can go and get my license, right? Now they'd rather just catch an Uber, they'd rather just carpool one another and split the bill, right? It's 20 bucks, it's four of us, we all pay five bucks, everybody's happy, right? We didn't even have to drive, right? And so what you're seeing is that there's still situations where the car is necessary. The car is necessary, and so that's when they will opt to then support the car sharing economy by in the form of renting out vehicles. So if you have a growing population of people that agree and think like that, and you couple that with people like ourselves who are saying, hey, getting owning these vehicles, right? Renting these vehicles out is a profitable profit stream for us. Then let us get cars, right? Then we see that the metrics will always even out. So it'll never be too saturated of a market because of why. What I start with each and every day, someone's getting their license, each and every day someone's renting out a vehicle.

SPEAKER_03 29:37

Nice.

SPEAKER_04 29:39

So go ahead, go ahead, see.

SPEAKER_03 29:40

I was gonna say you had some questions. I have a bunch of questions, so I'll let you jump in on some too.

SPEAKER_04 29:44

So so you you you talked, you touched a little bit on vetting vehicles. Um, how would one go about doing that? You know, because you know, we in the short-term real space, you know, we have tools like you know, we can go to air DNA and vet this area on what type of what's most profitable. How would you go about doing that in the Toro space?

SPEAKER_01 30:00

No, you're saying in terms of acquiring the vehicle or in terms of just making sure you're in the right place to rent out the vehicle?

SPEAKER_04 30:09

Uh, right place to rent out the vehicle and the right vehicle for that place.

SPEAKER_01 30:14

Okay. So, once again, right, the market determines what's the right vehicle. And so oftentimes I'm asking what is the best vehicle, and it's simple. It's a vehicle with four wheels that drives and it's mechanically sound, right? And as and as hilarious as it may seem, you have to really put it into perspective, right? What car dealership, and I don't care if we're talking about um um Mishabishi, Hyundai, or whether we're talking about uh Ashton Martin and Rolls Royce, right? None of them get together and have a regional corporate meeting and say, hey guys, you know what? Today, let's create a vehicle that nobody wants to drive, right? And we're gonna be great at it, right? It wouldn't make sense because it wouldn't be any profits. And so they make vehicles that address whatever need

Why every car has a loyal following (no bad vehicles, just wrong strategies)

SPEAKER_01 31:00

that their particular consumers have, right? And so if that's always the case, then that lets you know that for each vehicle, I don't care if it's a Subaru, I don't care if it's a Mercedes, right? They have some sort of loyal following, right, that follows that vehicle and want and will rent that vehicle out. Now, to say that it will be their first choice, I can't say that it'll be their first choice, right? Because we don't always know before the booking why a person is booking with us. Earlier, I mentioned various reasons why one would be getting a vehicle. And so if that's the situation at hand, then we have to also understand that they have the right to choose what vehicle they want to get into to suit their needs. That's the beauty of it, right? That's what draws the difference between the car share economy and the traditional car rental economy. Because if I'm looking for a car rental and I hop on Avis or I hop on Expedia, I'm gonna probably be presented with a section that breaks down these vehicles by class, right? And what you're gonna see is that maybe it may say mid-sized vehicle. And then when I click on that to then get a vehicle, it's going to say Nissan, Ultima, or similar, right? And so I'm booking this vehicle, not knowing what I'm gonna get when I get there. So I could easily arrive there at Hertz or arrive there at Avis. And although I did book for Nissan Ultima or similar, when I get out there onto the lot to pick my vehicle, it's a row full of Hyundai Launchers. And the only choice is what color do I want? Do I want the gold or do I want the black, right? And so this economy has eliminated that pain point. So you actually know what type of vehicle that you're getting, but as a host, we don't know why they're getting that vehicle. Um, so I think that that's important to note when deciding what vehicle that you want to get. I think it's more important to have that business plan and understand how you want to build out your fleet. Are you trying to address this type of consumer or this type of consumer, right? And make sure that your vehicle falls in lines with whatever their perceived needs may be. Now, going to your to your to your um to your question about the actual market, right? I think it's important for you once again to understand um how do you intend to serve that community, right? And so my first place of business where I started operating this business was in Atlanta, Georgia, right? Urban population, people are moving, hustle and bustle, it's the middle of the city, big metropolitan area, all those great things, right? And so what we'll see is that in a metropolitan or urban area, the populations are larger, right? So the more people, right, then the um the more people that we have in that particular area, the higher the chances for a rental car being needed, right? The smaller, the smaller the chance of people actually needing cars. And so that's why it's important to be strategic with that, right? If you're addressing your particular consumer, you'll be able to extract them no matter where you are, right? And so I don't care if you're in Atlanta, I don't care if we're in Galveston, Texas, I don't care if we're in in uh Biloxi, Mississippi, right? There are people that need cars. Why? Because, like I alluded to earlier, transportation is a necessity. There's a difference between this field, right, and let's just say our Airbnb field to where it's more of a hospitality play, right? This is more of a transportation type of situation. And so people and things have to get from point A to point B. And so it doesn't matter what kind of car is out there, at the end of the day, right? I could be wanting the Mercedes bins, but the Mercedes isn't available. I have to take something that's gonna get me from point A to point B, right? And so, and I think that that's where it's very, very important. As long as you're getting very, very intentional with targeting um who your consumer will be, where your consumer is, right? And making this accessible to them, then you'll do fine in the industry. I hope that that kind of answers that question in that sense. Definitely did, definitely did, which is why I operate in Hawaii, and people wonder why I'm not continuing to fluctuate to the high hot markets like LA, which I have a couple vehicles there, or Miami and stuff like that. It's because I understand that there is an untapped market there as long as I know how to address those the needs of particular people right there, right? And so, why do I choose to go to a Hawaii versus a Miami? Well, because frankly, everybody else wants to run to Miami. They're to be different, right?

SPEAKER_03 35:34

Live let thrive all day. Now, before we get to more nitty-gritty stuff, and this is all good stuff. Um, tell us some crazy stories. I know you've been doing this for a while. There's gotta be some crazy stories, man. I don't know, robberies or or uh theft or you know, whoopee in the car. I don't know. Anything anything you want to tell us that's that'll make good uh good good for the show. We'd we'd appreciate it.

SPEAKER_01 35:58

Oh man, I got a lot, man. I mean, this is the real car industry. So I mean, when you're dealing with people, man, you're dealing with all kinds of things. Um man, there's been situations where I've literally gotten a car, and this is when I was really actively working in the business. Um, I got in a car, man, and there's just bullet shells everywhere on the ground.

Horror stories: bullet shells, high-speed chase in a Hyundai Elantra, parts theft

SPEAKER_01 36:17

And the first thing I'm thinking is I'm seeing empty shell cases, and I'm just like, oh my goodness, I don't even want to begin to think what this car has been through, right? Um yeah, I do with situations like that. I've had some some more of my speed cars where I've had people actually try to remove uh major components of my vehicle and then replace them with faulty components of the vehicle. Um, which if I wasn't prepared from an insurance standpoint, I would have had to burden that cost, which could have been thousands of dollars. Um, I've seen stuff like that, man. I've seen people just not bring the car back, care less. Oh man, I'm talking about I've actually had someone go on a high-speed chase in a vehicle. And it was on the news, right? Went in a high-speed chase in the vehicle, and it wasn't so much that I was disappointed, right? In the fact that they were involved in a high-speed chase. Where I was really disappointed was in their choice of vehicle for the high-speed chase, right? This was a Conde Elantra. This was if I'm looking to take the police on a run, right? That's not gonna be the first vehicle of choice. You know, I probably opt for the Camaro, the Corvette, or something that screams speed. Um, but but that was that was weird, man. I got the vehicle, the vehicle was totaled. They actually put the uh man, what's the thing that they lay down with the spikes? They put that down, um, popped all of the tires, they had to bust a window out to get the personnel, drugs, and all kinds of stuff in the car. Man, it it gets wild, man. There's no shortage of horror stories, right? But the reason why I kind of usually stray away from telling people the horror stories because it kind of gets people in their own head, right? So then they start to get in their own way because they're thinking about all what's the worst that can happen. And I'm like, the same thing that can happen each and every day that we leave our houses, right? We could literally be taking a step, a step down outside of our houses and and trip, right? And and break our ankles, right? And and we got to have this massive surgery behind it. I mean, those are very well outcomes that could potentially happen. But the idea is that we know that we can't stay in the house forever, right? We have to get out the porch, we have to go out here because there's a big world outside, and we have to make our impact on that. Um, and so the same thing is in this space. And so, what I always stray away from is ever is never preaching fear, introducing you to what could happen, but but showing you, right, and teaching you and coaching you on the ways to basically minimize any kind of potential loss that you could have assumed in those particular situations. If we spend more time on the solutions and less time on the problems, then we'll definitely, definitely um continue to build this community stronger.

SPEAKER_03 38:56

So, what is like um, let's say we're heavy on the Airbnb field, short-term rental field, right? What how what do we need to change about our mindset as uh Airbnb hosts or short-term rental hosts that would say, Oh, I'm not gonna get a car, I'm gonna do this, I'm gonna run the business the same way I run my Airbnb. What what mindset, how do we need to change our mindset from going to having a running a property to actual car?

SPEAKER_01 39:20

I would say um I would say what I see in the in the Airbnb space um is that uh people are very it seems picky when they're trying to select where they want to operate this business out of, right? I don't think you have to be as picky um in this particular space. I think you just have to be intentional. And I think the same thing for Airbnb, right? But I think people just get picky because they think about how hard is it for me to manage, you know, a house versus an apartment, things like that, right? Traditionally, cars are only but so big, and so you can kind of facilitate that. Um, I think making that shift is to spend less time also thinking of how I can make this a value add to my short-term rental business and kind of letting that business have an identity for of its own, right? But also noting that I can tell my regular consumers about this this business that I've generated in case it appeals to them, right? So it's kind of a supplemental type of deal right there. I think where you don't want to get caught up is trying to pair it one-on-one with the short-term rental, right? Because then you start to affect your earnings, right? You'll have someone, maybe they book for 30 days, but they only need a car for two weeks, right? Or maybe they booking over the weekend, and so now you're subjecting that car only being rented out over the weekend when there could potentially be bookings that can come in for the whole week or or two weeks and things like that, right? So understanding that these are two different businesses, and while the operations can draw a lot of similarities, right? Um, being the way that we want to draw our business plan, we'll have some different different um components to it. I hope that makes sense.

SPEAKER_03 41:07

Uh that definitely makes sense. It sounds like to me when you were saying that selecting, you know, where you want to do business, and of course, uh, oh, you know, downtown Dallas, downtown Fort Worth, that's where it's happening. And uh, but with but with uh renting out your car, it could work anywhere. It don't have to be in the the biggest, you know, metropolitan city. You can rent it out anywhere and make some money, it just depends on your strategy.

SPEAKER_01 41:30

Absolutely, because keeping it keeping in mind, once again, right, transportation is a necessity, right? It's not an option, it's not an alternative. We have to transport everything, right? The mics, the hacks behind you, right? Everything out here on wheels, right? That's how our world moves, and that won't be changing anytime soon, and as long as that remains the uh situation. I I always see literally, I'm in Atlanta, right? But I see people come from you know an hour out, 30 minutes out, right? Because of what I probably have a great deal on this car. Maybe I'm one of the few vehicles that are available at this particular moment that they can just get in, get inside within the hour, things like that, um, are all motivating factors for consumers to make sure that they get to wherever my place of business is. Um, and so I think that as long as I'm just being intentional within my business and how I build out my fleet and who I want to attract with that fleet, then I'll be pretty much I'll be doing well um in that space right there, you know. Um, because I don't have to deliver those cars to their door, I don't have to be in their immediate vicinity, like what you would usually probably see in the short-term rental space where people want to be relatively close to whatever they're engaging in, whatever activity and and wherever that's located, in my opinion.

SPEAKER_03 42:46

So you you mentioned before, oh go ahead, Micah, if you want to go?

SPEAKER_04 42:48

No, no, no, I was just making a statement, but you go ahead. Yeah, go ahead.

SPEAKER_03 42:51

Yeah,

Why over 50% of new hosts quit in the first year

SPEAKER_03 42:52

yeah. Um, you mentioned before, like over 50% of people who try this in the first year, they they quit doing it. And and I was that's a big number. That's yeah. And so I was I was gonna ask, um, what are some of the the biggest mistakes that newbies make when they when they start trying to do this business?

SPEAKER_01 43:09

So it goes back down to the three components that I told you earlier that makes up this business, right? And I said that they're equally weighted because a full understanding of those three components is what makes you an elite level host. There's plenty of room for elite level hosts, high level strategy operators, right? There's a lot of room for those, but you have to have a great understanding of what vehicle acquisitions, daily operations, and the insurance, because that's where people fail. You'll either get inside of the car, right, and there's no equity, you're already underwater inside of that vehicle, right? Then you have a depreciating asset that's depreciating rapidly if you don't know what type of vehicle to buy, what class, what years to buy, right? Then you have the operations, right? Which can be very time consuming if you don't know how to set up systems and SOPs that start to help you automate the business and start to fire yourself from a lot of the different positions that are involved inside of this business, right? If you don't have the particular teams around you, which I like to call an all-star team, right? People who are going to maintain the vehicle, maybe fix the vehicle, body repair for the vehicle when those when those things are necessary, right? Then you're going to struggle a lot in that space. And the last being insurance, right? If you don't understand what your policy engulfs, and I'm going to say it here on the podcast, I believe that insurance is one of America's biggest scams, right? They love to take in your money and they hate to give it back, right? And we've seen this, and and what makes this um what makes this um any more uh relevant than what we seen during the COVID period, right? Nobody was driving. But I guarantee you, Steven, you were paying your insurance bill for your cars. Micah, you were paying your insurance bill for your cars, as well as myself, right? But people were going nowhere. You know, just speaking for majority people were going nowhere, right? And then you see this commercial after they've embezzled this money for about seven months, and then they say, you know, some of the more prized insurance companies say, hey, we're going to give you something back. And they give you what, a hundred bucks? You know what I mean? Almost a thousand bucks over the duration of that time, depending on what your policy looks like. Um, so you have to have an overstand understanding of what your policy is and what are the terms and conditions of that policy, so that then you know how to leverage that policy to your benefit, right? Because I believe that in the insurance world, right, you're either going to be the victor or the victim. There's only two people. There's only two people, the victor and the victim. There's nobody neutral in insurance, right? Because if you're neutral, then you don't need them. They don't need you at that particular time, right? And so I specialize in making sure that I unveil how you can always be the victor, how you can always leverage insurance. Because there's a lot of things that people even pay for that they don't know that's involved, that's already packed inside of their insurance policy. So bringing those things to light so you're not stealing from your bottom line each and every time a situation occurs is a big thing, is a big value add to that business right there. So if you're understanding how to leverage each three of those situations right there, um, then you'll be doing pretty well and you'll see very you'll see a lot of success in this area. Um, because one of the things that I hear a lot, people are so quick to say that the success that they are successful in this business and they're profitable in this business, right? It's not about how much money you make, it's about how much money you keep. Okay. And so if I'm making $2,000 a month on the Chevy Corvette, right? But my bill is a thousand and my insurance is another four or five hundred bucks, I'm only seeing $500, right? That's not being profitable in my book. Profitable is understanding what is my return on my investment, how fast can I get these vehicles to the green, and what is my exit strategy that leaves me in a profitable position when I'm done with these vehicles, right? Those are elite level hosts, those are people that enjoy this business that and that are truly profitable, not the individuals just taking screenshots on the apps and showing you what the profits are because they're not showing you exactly where they had to pay out.

SPEAKER_03 47:15

So the fake flexing.

SPEAKER_01 47:17

Oh man, it's and it reminds me of this business I had, right? I I have a tire shop, right? Um, and which it kind of insulates my business even more, which is why I have it. Um, but I remember I got into tire recycling in my first year. Literally, I was 21. I mean $300,000 for a guy like me. That was extreme amounts of money. But when I did the numbers, I only took home about 15 grand.

SPEAKER_02 47:44

Oh my gosh.

SPEAKER_01 47:46

Let me know, right? And so while it looks good showing you my numbers, right? It doesn't look so good when we peel back the layers of that. You see what I actually took home, man.

unknown 47:58

Wow.

SPEAKER_03 47:58

That's crazy, man. Um, I guess well, see, that's that's that's that's what prevented me from wanting to get into it. Uh, I mean, I it sounded exciting and everything, but I was like, man, logistically, you know, I'm gonna have to go, you know, drop off this car, I'm gonna have to go pick up this car, I'm gonna have to go take it to the car wash, I'm gonna have to clean it inside it or have them clean it inside and out, and then have it ready for the next person. You know, uh, someone new starting off, I guess they don't have their team yet to do all

The 90-minute airport pickup that killed the delivery model

SPEAKER_03 48:26

that stuff for them. So, how did how does that work? You did all that hustling yourself at first, and then how did you form a team?

SPEAKER_01 48:33

Uh, because I got smarter and I realized that I needed to work smarter and not harder. Um, and I also realized that some of those things that you just named that you have to do, you have to do them because you're choosing to do them, right? So things like picking up and dropping off a vehicle, right? I'm not doing that. My business is not doing that, right? And it took me a while to get to that point because I was thinking, hey, I do the delivery, delivery gives me money, but then I realized that there was something that was a tad bit more important than money, and it was time, right? And the time that it took me to do these activities. And so, you know what I did? I said, you know what? Scrap the whole delivery and the and the whole pickup deal. Why? Because it doesn't amount for that time. And I tell you when I had this revelation, and I tell people this all the time. One day I had a renter at the airport, and the airport's roughly 20 minutes from my downtown Atlanta location, right? Not much time. Um, and at the time, I think it was about $125 for the delivery fee. Of course, they know it's about $100 for the delivery fee, and they take their particular portion out of that, which probably left me at the particular time about 60 bucks. So 60 bucks is okay for 40 minutes of my time, in theory. 40 minutes of my time being 20 minutes it takes me to get the car there, 20 minutes for me to bring the car back, right? And let's just throw in another 20 minutes for the sake of my engagement with that particular consumer, right? Check in, check out, all those good things. That's 60 minutes for $60. Okay. So I had to really think to myself, is this the same sustainable? And I had to answer no, because one particular occasion I went to the airport and I was picking up a woman who had three kids with her. The smallest kid was a baby. So when the baby gets off the airplane, the baby wants food. Now the baby needs to use the bathroom, the baby's diaper needs to be changed. I also have to figure out how do I get out of this airport, right? I don't even know how to get out of the airport a lot. In a lot of cases, especially in these big cities, it's kind of complicated. So, what am I doing during the duration of this? I'm busting Willie after Willie after Willie, just doing circles around the airport, trying to communicate as best as possible with this individual as to when you will be exiting the airport so I can get on my merry way, right? That situation lasted for about an hour and a half, and that was just on drop off. From then, right? I said, no more of that. We're not doing that. I won't do it, and I will not pay someone to do that because it's not sustainable, right? And so, what I had to realize is I said, you know what, my business isn't any different than any other business. McDonald doesn't come and meet me at the airport unless I order it via Instacart or Uber Eats, right? No, they carefully and strategically position themselves in an area that is accessible to a lot of their consumers. So, what did I have to realize? I'm in downtown Atlanta. I'm accessible to a lot of people. I don't have to go and chase consumers when consumers are already here, when consumers know where I'm at. So, what did I need to do? I need to reverse engineer that situation and put more focus inside of me building my brand where I'm at, right? So nowadays we don't look for consumers, right? So I don't care if you're coming from the airport, I don't care if you're coming from a private jet location, I don't care if you're coming from the west side, east, north, south side of town. If you want to do business with me because my prices resonate with you, our service resonates with you, you just like me, right? You're gonna have to come and see me. You're gonna have to come and see our team, right? And the one thing that I notice is that when after we provide quality service to these individuals, people want to do business with who? People they know, like, and trust. Once I gain that from you, you no longer care where I'm positioned because you understand the value that I'm bringing to you, right? The seamless transaction that you're engulfing yourself in, that you that you're you're participating in. And it makes you then come and travel and see me. So I don't worry about things. So you do have to worry about things like cleaning and stuff like that, right? And so, what I would speak to that is find a situation that makes it easy for you. Easy for me was going to the local auto zone, finding a guy who was doing oil changes for 15-20 bucks to people that were coming out and saying, hey, you know what? I got consistent work for you. I need you to clean these cars, or I need you to do these maintenance uh things for me on my vehicle, right? At a fraction of the cost because I'm providing you with consistent work based on how many cars that I have, right? I think that's what made it easier.

Five cars is abundance: how a nucleus fleet attracts team and renters

SPEAKER_01 53:17

Never never underestimate uh how people will gravitate towards your business, which is another reason why I always advocate for people to start with smaller cars and build a nucleus of their business first. At least probably with five, five or so small cars, because I tell you what, a person with five of anything is a person of abundance. When somebody recognizes someone of abundance, they want to do business, be involved with that person, right? So if I were walking today and I seen Elon Musk, right, the chances of me speaking to Elon is very, very high. Why? It's not that I per se just want Elon's money, but I understand the type of personality, the type of person that he is, at least from the outside looking in, and I understand that he's someone that has amassed uh specialized knowledge that could potentially have an impact in my life, right? So I want to be involved with him to some sort of capacity. Same thing with cars, right? If I see someone with five cars, 10 cars, I'm inclined to see what's going on. I don't care if those five cars are Volkswagen Beatles. If Micah has five Volkswagen Beatles in all kinds of flavors, I'm just a regular guy at the gas station. I've seen Micah week in and week out, and he's coming in all these different colored beetles. Eventually I'm gonna say, hey, you know what? Tell me a little bit about what you got going on, man. Because I've seen the red one, I've seen the yellow one, I've seen the blue one, I seen the white one. Let me know what you're doing with these beetles, right? Now, the price of those beet, those beetles collectively may be what 50,000. Let's just say each beetle was worth 10,000, right? You may be an individual that says, Hey, I want to go to luxury first and build this business through luxury, understanding that that's gonna carry a heavier monetary burden, and it's gonna be harder for people to see you because now you're getting one car for the price of 50,000 when you could have got five cars for the price of 50,000 in this particular scenario, right here. I think having an abundance is what helps you build this business, start to draw in people that will be value ads to the different uh positions that you have in that in that business.

SPEAKER_04 55:26

You you brought up something, you touched on you're no longer going to them. And I'm gonna tell you my stint. I was about to hop in, and now I'm really about to hop in. Now you just really touched on something. So my neighbor owns a car lot, he owns his car lot, but during COVID, it kind of slowed down. So I had talked to him, I pitched to him, I was like, Hey, have you ever heard of Turo? He was like a little bit, and I'm like, Hey man, you got all these empty spots out here. If I got five cars, put them on the lot, would you be cool with me? You know, we work a deal, I put the five cars in light. You you already have a guy in there washing them. Is that a sustainable model? You know, then and it's right in the middle of the Metroplex, about 20 minutes from one, about 20 minutes between both airports. Is that more of a sustainable model than because that was one thing I worried about? I'm like, man, are we gonna have to pay somebody to drive these cars off the lot to the to the airport, or is that sustainable in Europe?

SPEAKER_01 56:17

I do think it's sustainable, but how much can you scale there, right? Because at the end of the day, his first business is that car lot, right? So there's two things that I want to address right here. So one is the sustainable in the in terms of space, right? Does he have space to always facilitate your cars? And when is enough too much? Now, granted, these cars will never probably be in, the likelihood of them being in at once is slim to none, right? But any event that they may be in, you want to make sure that you're not in the way of his business. Now, what's beautiful right there is that, you know, and I've been in the car industry for quite some time, and I've realized that the cash flow exceeds what you see in a traditional sale, right? In a traditional buy and flip type of deal, right there. And so it may be a situation where you all would go into business where he may even want to bring some of his own, maybe inventory that's not moving, inventory's been sitting for 60, 90 days, and now join you in that endeavor to build that. But I think one key thing has to be there, right? And that's your human capital. The person that you have working that business in your absence has to be equally as motivated in that business as you are. Why? Because a person that is not equally as motivated lacks an attention to detail. How does an attention, a lack of attention to detail hurt the business? Because now things become overlooked. So maybe someone doesn't bring back the gas on full, right? That's a cost, right? It probably costs the average car about 20, 30, 40 bucks to fill up. And that's before we start talking about premium and luxury vehicles, right? If you have someone who's missing those things, you're not getting compensated for that. Now the business has the burden that in order to make sure that the next person has a full ticket of gas, right? Same thing with accidents. Maybe this person had a curb rash or something like that. Person's not equally as motivated, just getting paid on the hour. Guess what? Now you don't make this claim with the insurance, you don't get paid out, you're not even knowing that this even happened to the vehicle. So now what? You have to come out of pocket in order to restore this vehicle back to its original condition. Who's hurt in this scenario? Micah's hurt. Who's not hurt? The guy that Michael employed. Why? Because he's working on the hour. And at the end of the day, where's my money? I was here for 10 hours. You know what I mean? And so you have to make sure that someone shares that same uh that same value inside of your business right there. And those people do exist, but you have to find them.

SPEAKER_04 58:45

Oh, now that that brings to the ultimate question: building out your team. How do you find those people? How what's your process of how did you build up your team

Finding motivated team members (they find you when you build something real)

SPEAKER_04 58:53

to find that people, those people that were equally as motivated?

SPEAKER_01 58:56

Like I mentioned earlier, it's crazy because it just sounds so hypothetical. Those people find you. People want to be attached with something that's successful. It doesn't matter what we're in. I want to be involved with something that's successful. I don't want to be involved. Most people do not want to be involved in the building phase, which is why even when companies start, right, they have to do all of these rounds of funding, rounds of funding, right? Because at first nobody wants to be involved, and then somebody seen a small light at the end of the tunnel and said, Hey, I'll pour in some money. And so now somebody says, Oh, the valuation went up? Oh man, you know what? Goldman Sachs is back in that. Put in a little money with that because I know they wouldn't make a foolish investment, right? And so when people see that business kind of get out of that grassroots stage and it's starting to build, those people come down a dozen. Man, I got renters that come in and say, hey man, can I work for you? Can I clean the cars? Can I can I do anything, right? And so, of course, you have your more traditional methods where you know you can put out classified ads and things like that and form strategic partnerships, but I I assure you, it is not as big of an issue as one would assume coming in with no cars and having no experience in the business.

SPEAKER_03 1:00:11

Yeah, we got this platform right here, Live Let Thrive, man. You ever seen the the movie The Founder about McDonald's, the how it was formed? Oh, it's a good movie. It's on uh it was on Netflix. I don't know where it's at now. I thought I would think it's on Amazon Prime, anyways. It talks about Ray Croc, how he formed McDonald's. I'll make this long story short. But in the beginning, he was having trouble. Uh he was getting investors, but it was kind of like rich dudes that just wanted to park their money at a spot they didn't give a damn about the McDonald's, and the you know, everything went to crap at the places, you know, they weren't taking care of them, they didn't care, they just wanted to park their money somewhere. But and one day in his little office, some some guy, uh a Jewish guy came in selling Bibles, and he comes out and he's talking. The secretary kind of intercepts him now. He don't want to talk. He comes out, he goes, You're a Jewish guy selling Bibles. What's going on here? He's like, Man, I'm just trying to make money. I'm just trying to trying to make money for my family, blah blah. And he goes, Hey, come sit down with me. And he and he talks to him. He's like, and he's like, he he liked that the guy's hustling, you know. He don't even believe in the Bible, he's out there, you know, doing a sales pitch, going at door, you know, every door to door trying to sell these things, and and um and he he respected that. He said, How would you like to have your own McDonald's? And the dude's like, you know, freaking out. He goes in there, him and his wife sign for one, they get their own, and they take care of that thing, like it's their baby, right? He's he's uh entrepreneur spirit, and they're there, you know, all the way. The wife's out there helping the customers out, you know, handing out free stuff. And and I I just like I like that you said you gotta find someone passionate as passionate about as your business as you are, right? Just go pay someone 10 bucks an hour to to go wash your car, like they're not gonna care. And and and that's that's cool. I mean, it's it's it's great, those people do exist, and and we we network and we talk to people like that. Maybe even say, help me grow this, and I'll get you into your own cars or something like that. Give them some incentive, and then and then boom, there you go.

SPEAKER_01 1:02:00

Absolutely, absolutely. I mean, you gotta make make sure that people feel some sort of ownership inside of the business and whatever they're and whatever they're doing. Because, and that's one of the beautiful things like I love about the company Publix, right? You see these people, and and from the outside looking in, people like us just going into the this is a grocery store in case you all don't have a Publix, right? You see these people going inside when you go into the grocery store and you see these people, you're thinking, like, oh man, they just you know, they're just workers probably making 15 bucks an hour, whatever minimum wage may be. But what you don't understand is that they also get shares in the company, right? And so that's why it provides, and I know you probably don't have a Publix, but it provides a better environment. So when you go in, right, all of the people are happy, right? All of the registered agents are smiling and things like that, right? Everybody's willing to serve you, help you take your bags to the car, ask you how you're doing, and then you go to Walmart, and you're in there and they're like, Yes, on I five, yes, uh, you see what I'm saying? There's a different feel because those people are are working, but they don't have that ownership in the company that makes them take pride inside of what they're doing. Um, they're just kind of doing it for the face value of the money that they're receiving on a bi-weekly basis.

SPEAKER_03 1:03:14

So, okay, so how do I start, man? What's the best what's the best advice you give me? How to go out there, get my first ride at a good price, it could be profitable, and and what things should

How to start: sourcing, vetting the deal, Kelly Blue Book vs Black Book vs NADA

SPEAKER_03 1:03:23

I know starting off? How do I how do I do this?

SPEAKER_01 1:03:26

Um, so the first thing I think um uh, and it's gonna be a lot, right? Uh, but what I do um is that I understand how to source my vehicle. So the first thing that I want to do is understand how vehicles appreciate and depreciate and have a good understanding of that based on the particular year-making model that I'm interested in getting. Okay. Once I understand that, right, then I now want to start to vet the deal. So, in order for me to vet the deal, I need to start running the numbers, running the comps, right? Just like real estate, running all of the numbers from the different books that are available. And so traditionally, what people are talking about is always Kelly Blue Book. And Kelly Blue Book is trash, but so are all the books. All the books are trash, right? Right? But when we couple them together, it gives us insight on where what the market says this particular valuation lies in this particular asset. Um, and so I think you need to understand that. And so some of the other books outside of Kelly Blue Book, which is the consumer book, which is why everybody has access to it because it's for consumers, right? You also have Black Book, which is for um, which is more or less the uh each and every time a vehicle is sold in a wholesale fashion at an auction or something, that value is recorded, right? As they're recording that value, it now starts to set where the market is as well. So you're coupling those, then you add in JD Power, NADA, right? Which is now the bank book. Now you get an understanding of what the bank would lend on a particular vehicle, right? So you understand that, hey, if I'm going to get a loan, I need to get my vehicle around this. So I have built-in equity, and I know for sure that the bank is going to lend me money for this particular vehicle right there. Um, once you finish running the deal, you also want to do things like Car Facts and Auto Check, which start to give you a history breakdown of the vehicle. Now you get some real insight, right? Has one person on this vehicle or has 15 people on this vehicle, right? In the business that you're doing, you need more gently used vehicles if you're going to use car route, right? You need gently used vehicles because the business is built around people driving, right? So you don't want to use a vehicle that's just been abused by everybody and their mama, right? Um, and then lastly, you want to understand how to walk through an inspection of your vehicle, right? And and which I have is a 200 point inspection checklist. And we go through each and every component because what you may not use in a vehicle, right? Just because you don't adjust your rear view mirror doesn't mean everybody else that you do business with is not going to adjust their rear view mirror. So you want to make sure that each and every component of that vehicle is in the Operable condition um and is ready to be rented out.

SPEAKER_03 1:06:04

Of course, you don't do that anymore. You have someone that does that for you, Ray. Absolutely.

SPEAKER_01 1:06:09

There's times that I get out there and do it because I actually have like have joy in buying and selling vehicles from a wholesale, um, from a wholesale capacity. Um, so that's pretty cool. Now, one thing that I will say is that I do advise, and I don't work for Toro at all, I don't have a dog in the fight, but I do advise someone starting out to start out with Turo. And the reason why is just a more of a turnkey platform. You know, the other platforms are great for what they're worth, but if you're really trying to learn, you're going at it with no coach, no kind of mentor, anything like that. You just, you know, you got inspired, you probably attended, you probably got you're probably alma mater at YouTube University or something like that. Definitely, definitely, definitely want to make sure that um make sure that that experience is as seamless as possible for you. Because the last thing that you can afford to do when first starting out is be losing money, right? Or or be doing things wrong that cost you money. Because then what does that do? That now takes away your enthusiasm, which now leads you to a lack of attention when it comes to detail, which is a recipe for disaster inside of your business. So I would I would advocate for tarot, um, just because I love the metrics of them. Um, and then you know, then start to spread out. Now, if you have a mentor or coach or something like that, then you definitely find to go on any of the platforms as they all kind of provide you know a similar service, but just a different approach to how they attain their consumers.

SPEAKER_03 1:07:35

Nice. Now you got any hacks towards buying a vehicle, like buy at a

Buy in August-September, avoid stick shifts, use LLCs for fleet ownership

SPEAKER_03 1:07:40

certain time of year, you know, when you know they got to get rid of a bunch of inventory for tax reasons. Is there any of that? Is that any is that a re a real thing?

SPEAKER_01 1:07:48

So traditionally, what you would see is like right around just coming out of August into September, you'll start to see what will usually be the time that cars kind of bottom out a little bit. Um, but once again, there's a lot of pressure on the used car market simply because there's not enough supply of the new cars that are ready to go, um, that are ready to be sold. And so as they're coming in at slower rates, it's putting a lot of pressure on that bubble right there. So you're not seeing the prices kind of uh uh go down as you would normally see. Um, and so uh, but but typically, right, you will see that August, that September kind of be your prime months, um, you know, in a regular, in a regular, in regular conditions, outside of uh, you know, COVID and stuff like that.

SPEAKER_03 1:08:33

And never buy a stick shift, right?

SPEAKER_01 1:08:36

So stick shifts is for enthusiasts, car enthusiasts, right? I love them. I love them. Yeah, I I I mean there's nothing like there's nothing better than becoming one with the car and the road and you feel it shifting and it makes you pay attention, it's just a cool experience, right? Like I tell people all the time, like, don't go get a Corvette if you want an automatic, right? It's not fun like that, right? It's only fun if you're able to shift gears and feel a car move, right? Um and so understanding that I'm a car enthusiast, so that's why that appeals to me, right? But how many people are car enthusiasts versus the people that just need a car to get from point A to point B, or people that want a car that looks good, right? There's no value inside of knowing how to drive a stick shift like there once was. Um, and so for that reason, um, you don't want to eliminate your vehicle from a lot of the market, from a majority of the market, which are people that drive automatic vehicles. So I would say gravitate towards that.

SPEAKER_03 1:09:33

But if you had a fleet in Europe, I thought you'd go all stick shift because that's what they drive over there.

SPEAKER_01 1:09:37

You'd be good. I get people that come in from Europe all the time that visit, um, that visit and they love the stick shift cars. I get people that get the car simply because it's a stick shift. It just is what it is. But I'm just saying that in a larger scale, right? Because profitability is still a driving factor. Now, if you're just painting out your fleet, you know, you're building around your core fleet and you want to add some specialty cars like that, that's cool because you have your nucleus profit kind of locked in, your your nucleus growth, right? Um, but if you're just starting out, you don't want that first car to be a stick shift to where you know maybe your vehicle's only getting rented on the weekends or something like that, and it's kind of affecting how profitable you could be in that vehicle.

SPEAKER_03 1:10:22

But if part of your fleet is a car you enjoy driving, like that stick shift, that's fine.

SPEAKER_01 1:10:26

Then that's fine because I mean you have to understand where your priorities lie, right? Your priority in this particular equation with what you named is I want a vehicle that I want to drive first and foremost. And the renting and making profit from that vehicle is secondary. Okay. In my particular situation, getting profits from that vehicle is first. If I need to use that vehicle, then I do, but that's always secondary.

SPEAKER_03 1:10:52

Hmm. Well, one more thing that was on my mind is okay, for for like um when we do Airbnb short-term rentals, uh, you know, we can get a special insurance called proper insurance, and it covers not only if something like happens, you know, they I don't know, they break something major, like to break the sink or to I don't know, toilet, whatever.

Premium insurance pays you during vehicle downtime

SPEAKER_03 1:11:10

They also cover the time it takes that you can't rent the rent the place out. Does there any kind of insurance like that? Let's say someone damages your car, it's gonna take a few weeks to get it fixed. In the meantime, you're not making no money on that car. Is there insurance that covers that gap?

SPEAKER_01 1:11:24

Absolutely. So you have your platform insurance that's pretty cool. Um, and I'm always an advocate, and I'll speak for like Turo, right? Um, and this is why I say use Turo to start as well, while you're kind of building out your business and understanding your processes, procedures, and insurances. So Turo has a thing, as long as you have the premium policy, okay, um, which comes at a you know at more of a premium, obviously, than other policies. Um, then what they would do is they will pay you for the days that your vehicle is down. Um you know, and then until the uh the appraisal kind of does, you know, does their thing, and and then you have your schedule for how long it should take for you to get your vehicle in and out of the shop and stuff like that. Um so you will get profits uh during that down period right there, which is which is pretty cool. Which is critical. So you don't really have to worry about that pain point, like, hey, I'm just not making any money during this time. No, you'll get what your average rate for that vehicle would be, right? So if you were, you know, if you rented it on Monday at 100 bucks and Tuesday at 50 bucks, then they'll take the mean of that and pay you according to that $75 per day until they figure out, you know, how they want to pay out for your vehicle, and then they set a uh a time scale for how long it should take you to fix that vehicle and get it back right.

SPEAKER_03 1:12:40

So you like their premium the best, the premium insurance.

SPEAKER_01 1:12:43

I'm always premium. We don't know these people until we engage with them, right? And so while I can put my there's a thing between between there's a difference between taking risks, right, and then being risky. Okay, so to not have premium and to be renting out to someone you don't know is risky. To rent out to someone that you do know, right, is a risk, right? So I'm willing to take a calculated risk, but I'm not willing to take a risk on the unknown. So and that insurance you just described, that's actually provided by Toro on the platform, yes. So they wow and all of these platforms come with their own insurance company. So um, so like with Toro, they're backed by Liberty Mutual. Um, and so in that backing right there, that's kind of who you would go through any event you had a claim or anything like that.

SPEAKER_03 1:13:33

And one more uh a million questions, but one more question before we go is um, can you buy cars with your LLC?

SPEAKER_01 1:13:41

Absolutely, absolutely. I actually did a segment last week. I had a masterclass um with a banker from over 10 years, and we were talking a lot about business credit and the rental car business. Um, and I think that it's the perfect storm, right? It's the perfect recipe for it to just be raining down money um when you understand how to leverage that particular situation. Um you do need some experience and stuff like that and knowing how to structure that whole deal because I like to do it strategically, you know, place my assets here, place the business here, you know, um, and do business with certain banks that favor the type of business that you're doing. Um and so it's important to kind of see those things. But but no, the LLC route is great, um, plus the fact that, you know, you can get cars with business credit and those great things like that. Um, but just understand that when you do uh structure your assets like that, when the check is cut, you know, let's just say in the event of a total loss or anything like that, that check would then be cut to whoever is on the title. And so if it's your company that's on the title, then that's who the check would be cut to, um, and vice versa. So make sure that you have access and you know have the proper banking structure set up and stuff like that. So that wouldn't be a pain for you.

SPEAKER_03 1:14:58

Man, this has been a great episode. Uh, we appreciate you hopping on. What how how can folks find out more about this? How can we learn? I can go where can I go to find out more and learn more?

SPEAKER_01 1:15:08

Uh for sure. So you go to presidentleo.com, right? PresidentLeo.com. Um, there's quite a few offerings there, but if you click the selection in the top left, which is the Wealth on Wheels Performance Plan, um it's a platform that kind of walks you through those different um equally weighted um pieces of the business that I mentioned earlier, right? Vehicle acquisition, daily operations, and uh insurance. And it's a real high-level type of deal right there, um, because we really peel back the layers um of this whole business and show you how to be extremely profitable according to the numbers, not according to a screenshot, right? According to the numbers uh and how much you're able to keep. Um, so you can be a part of the Welcome Wheels family. Uh, would love to have you. Um, you know, the Welcome Wheels. Wow! WOW can't say so that's a pretty cool deal, right there. Outside of that, though, President Leo on the social media as well. Um, so Instagram or Clubhouse, um, and actually on Clubhouse each and every Friday at 4 o'clock, 4 15 Eastern Standard Time, you'll actually hear me where you can get in, you can ask some questions, engage with me um as well. On the normal conditions, I'll usually be there.

SPEAKER_04 1:16:22

All right, man. Thank you for coming on, man. You you dropped a whole lot of gems, man. I'm definitely I took a whole page of notes. Uh, just really looking at the differences between Turo and Airbnb. And I do like one thing I do, I will say, Turo is more favorable as far as the insurance goes, because uh yeah, Airbnb ain't paying nobody for no gap in the gap in reservations, so that's that's definitely a plus. But but yeah, definitely thank you for coming on, man. And also thank you for wearing my family shirt, the Delta Dirt Distillery the other day. I didn't know you were connecting with them, so definitely thank you for that as well.

SPEAKER_01 1:16:55

Yeah, that's my people, man. That's my people, man. I actually went down to the spot, man, checked it out. It was a great deal, man. Uh man, that was just, you know, to see business like that, especially from the melanated community and just the whole setup, man. It was it was pretty cool, man. I even got me a uh a mule out there. Uh uh uh yeah, yeah, I got me a mule out there from shout out to Tahara, man. She whipped me up one real quick. Um go way back, man. Got a chance to meet, you know, a brother and all them, man. So it was it was a great deal. Um, just kind of being out there and kicking it with them.

SPEAKER_04 1:17:27

So that's cool, man. How did you end up in Arkansas?

SPEAKER_01 1:17:31

Oh man, I I actually went to college with Tahara. And so uh we went to Colgate for a couple of years. Uh, she transferred and went to another school. And um, man, you know, social media now keeps us all engaged. They say that, you know, our college buddies are the ones that we really forge those lifelong connections with. So hit her up, told her I want to hit the casino. She's like, Oh, we can go to Tunica. And I was like, Cool, let's do it. So um, it was cool to see her after so many years, and uh and and you know, I'm always a supporter of what my people are doing, people that I know and stuff. So it was a priority that she had to take me to the Delta Dirt Distillery, man. And uh it was super cool, man. I even got the t-shirt, got to play on the piano. Hey, man, it is a great deal. They're doing something special out there.

SPEAKER_04 1:18:15

Thank you, my man. Thank you, man.

SPEAKER_01 1:18:16

For sure, for sure.

SPEAKER_03 1:18:19

All right, yeah, it's a great show. Thanks for hopping on.

SPEAKER_01 1:18:22

For sure, man, for sure, man. Thank y'all for having me, man. It's been a pleasure, and I hope each and every person tuning in experiences an abundance of prosperity in whatever they are doing, man, and in whatever business, just continue to be intentional and high level with the execution, man. I think everybody experienced success, man. So, and I appreciate the opportunity to pour into the community, and uh until next time, fellas.

SPEAKER_04 1:18:48

Until next time, my man. Thank you. Peace. Man, dude, that was a really good app. A lot of good things I took from that. Um, one thing I did notice about the Toro space, which makes it a lot better. I said one thing that makes it a lot better than Airbnb is you can't arbitrage. And I'm gonna say why I think that's better. It's because you know how now have to figure out how to get equity with our Airbnb. You can arbitrage, and like a lot of these arbitragers, they don't even really understand real estate in the Toro space. You have to understand the car business. That's one thing I noticed. I'll still have been taking a whole bunch of notes and I'll just write down what's similar, what's different. But other than that, they're pretty alike. That's the only big difference. I noticed you can't arbitrage.

SPEAKER_03 1:19:41

And that's that was the biggest takeaway, too. Was um it is is that's when you when you make your when you make your money. It kind of similar to real estate is when you buy, and so I I was thinking, yeah, I'll just get a loan to my bank, go pick out a pretty car I like, and then let's do this. And I was like, nah, not really. You know, you know, you gotta look at you know, like you said, he man's his homework, he does a 200-point exam, looks at all the books on the car, and looks how much it's gonna depreciate. You know, you want a car that's gonna depreciate like 30 as soon as you drive off the lot. That's not good for business either. And uh, and the exit strategy that's is just as important as the entrance strategy. You know, you gotta what are you gonna do after you've used up all this? You passed a hundred thousand miles, you got you want to sell it, and if you can sell it for a profit, you win on that too. I mean, it's just so many they're thinking they're thinking like many steps ahead on the on the chessboard, you know, not just oh, I'm gonna buy a car and throw it on there, and you know, you know, here we go.

SPEAKER_04 1:20:36

It seems like more of a I like his and the name of it is wealth on wheels, so it's a long-term play. Like when he said, Hey, he bought this car for 4500 and total it out, they gave him a nine thousand ten thousand dollar check. Well, damn, you know what I'm saying? You can't you know you can't you ain't doing that in the short-term rental community. You own it, and you know you can file an insurance claim on it.

SPEAKER_03 1:20:59

But right, right. That was really good. I opening stuff, man. I'm excited. I'm gonna start looking. I'm gonna start looking again. I'm gonna start looking again.

SPEAKER_04 1:21:06

Yeah, yeah. You know, and uh definitely those car auctions are something to look at. I see a lot of Turo guys getting in those car auctions, working with people with dealer license. So definitely something to look into.

SPEAKER_03 1:21:16

Nice, man. Great episode, great seeing you again, and um keep living letting thriving, everybody. And we will see y'all next week.

SPEAKER_04 1:21:25

We will be on next week. And uh follow us on Livelet Thrive. Send us an email, liveletrive at gmail.com, and thank you for continuing to listen to us. Uh, we'll try to provide as much value as possible. And uh yeah, thank you for tuning in listening to y'all out.

SPEAKER_00 1:21:38

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