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_02 0:13

And welcome back to this exciting episode of Live Let R. What is up, Micah Man?

SPEAKER_01 0:27

I'm doing great, man. And you always stay chilling, but I I've never seen you chill before. You're always busy hustling.

SPEAKER_02 0:33

Hey, if you enjoy hustling, then it's a chill, right?

SPEAKER_01 0:37

I like that. I like that. Well, we are back with episode 167 of your favorite Airbnb,

53 units built, 23 live across Orange County

SPEAKER_01 0:43

VRBO, homeway, turbo, lift, shortcut, short-term rentals, and share economy podcast in the world. And we have a special guest today. We got we got we got a special guest named Rafael Losa coming at you. And let me read a little bit, uh little excerpt about Rafael Losa, uh, or Rafa, as he's called, I'm sure. Uh let me see, where did it go? Here we go. So, Rafael, he's been doing short-term rental arbitrages for four plus years and has built over 53 units, and currently 23 are live. He works with to help his friends and family around him to get started on their own str journey. And we want to know how the hell he got so many units. And yeah, Rafael, what's up, man?

SPEAKER_03 1:32

Hey guys, thanks for having me on. Appreciate it. Yeah, it's a pleasure to be here.

SPEAKER_01 1:37

Yeah, likewise.

SPEAKER_02 1:38

Yeah, so where are your where are your where are your units located?

SPEAKER_03 1:42

Uh all over Southern California, Orange County. Um, I have some in Fullerton, Santa Ana, Costa Mesa, currently, those three cities. Wow.

SPEAKER_02 1:52

And you got 50 50 there?

SPEAKER_03 1:55

So I actually only have 23 right now. I had 50. Well, no, so I've had 27 up to one point. I've built out 50 because I've built some out for my friends and my families, and then uh my old business partner, she's got a couple that we've helped her build. Um, and then you know, taking up putting up some and then taking some down. Um over time it's been a total of 53. But live right now that are operating, 23 of them. That are mine, that are mine.

SPEAKER_02 2:19

That's what's up.

SPEAKER_03 2:20

And you do only arbitrage, right? Correct, yeah, all arbitrage, all arbitrage. Um, I do single families and apartment complexes.

SPEAKER_02 2:27

Oh, now we got to touch on that. So most people are with the apartment route. I like that you do the single family.

Single-family revenue vs apartment scalability

SPEAKER_02 2:33

So which one do you like like more?

SPEAKER_03 2:36

Uh I like, you know what? In terms of return and revenue, single families. But in terms of growing faster and scaling, apartments. For sure. It's easier to scale and grow if you uh if you're doing apartment complexes.

SPEAKER_02 2:51

Okay. And uh like how many, like how many do you uh units do you pick up at a time in an apartment complex?

SPEAKER_03 2:58

Anywhere from eight to twelve? Eight to twelve. Yeah, I'll end up doing eight to twelve. Um, it used to be one. Well, when I first started, obviously one and then two. Um now I just have literally, I was talking to a landlord a couple days ago, and he just offered me a uh eight-unit complex and we're about to take over at the end of the month.

SPEAKER_02 3:17

Ooh, good one. So you okay, and that eight-unit complex, that's more of a smaller, and he owns the whole thing.

SPEAKER_03 3:23

Correct. Yeah, so it's more of like um, it's like uh it looks more like a hostel style, but it's all individual little apartments. So if you walk in, it's got a front door, but then it's got one apartment on the left, apartment on the right, you go up the hallway, two and two, upstairs, two and two. Um, so it ends up being a total of four front and back. And then in the back of it, he's got a two-bedroom bungalow that they're rebuilding that I'm gonna take over at the end of August as well. So it's a total of 10 units on one lot, but an eight-unit complex total.

SPEAKER_02 3:52

That's the power of networking right there. I love it.

SPEAKER_01 3:55

It's it's so right away, uh, I have a

Operating before regulations vs navigating existing ordinances

SPEAKER_01 3:57

question because you said Southern California, and then all we hear about is like really, really strict um regulations on Airbnbs over there. So, how do you get around that?

SPEAKER_03 4:06

You know, um, luckily in two of the cities that I was in, um, they didn't have regulations yet. So Fullerton just passed the regulation right now. So I in terms of I usually like to get in before the regulation hits because if you're in, once the regulation hits, um, then it's pretty much kind of you're gonna, if you get lucky you can get grandfathered in. Um rather than when there's already a regulation, you it's a little bit harder. Um, you have to kind of follow the guidelines, get a permit, apply for a license, all of that. So um there is a lot of regulations here. You have the city of Anaheim, obviously, everybody knows Disneyland. They have the biggest regulation possible. They only allowed a total of like two something, 270 something. So um I like to go into the cities where they don't have regulations, and Santa Ana doesn't have any. Fullerton didn't until literally, I think a week and a half ago, two weeks ago, if I'm mistaken. And Costa Mesa has had one and then they removed it. Um, when I was in uh in uh Fullerton when we first started, I used to have 17 units there, and um, it was the Wild West, right? There was no regulation at all. So um I can open locations in pretty much wherever there's a regulation, I just very thorough about reading it, understanding it, and knowing what I'm allowed to do, rather than being scared and saying, oh no, I can't operate here because of a regulation. It's more of what can I do with this regulation? Where can I operate in the city with the regulation and how can I follow the rules of the regulation?

SPEAKER_02 5:30

Well, and that creates that barrier to entry.

SPEAKER_03 5:33

Right.

SPEAKER_02 5:34

Now you said something. Oh, go ahead, Steve. No, no, go ahead. Go ahead.

SPEAKER_01 5:38

Oh, as there's one thing that stands out is that you you search out places that don't have any regulations. Whereas Mike uh he's like the opposite, he he likes to search out places that already do have regulations, right, Micah?

SPEAKER_02 5:48

Yeah. I was gonna touch on that. Go ahead, yeah.

SPEAKER_01 5:51

Go ahead. No, that's what I was saying. That's just uh it's the opposite approach.

SPEAKER_02 5:54

So when you go for the place that don't have regulations, does that hurt you on the single family side? Because most of the time when regulations come down, they end up hitting that single family residential route. The or are you like, hey, you ain't got regulations, I'll go the apartment route? How is it? How are you looking at that?

SPEAKER_03 6:11

So it's it's when I did where there's no regulation, it doesn't matter what I get. I I'll go for whatever I can get. So if it's a single family, I'll do it. I just do it with knowing that once the regulation hits, they're gonna be the ones being targeted first. Um, so it's basically like I'm not gonna go and in my business model, I don't go and get 10 single families because we're looking at 10 different owners, it's just harder, right? But I can go and get 10 set 10 one bedroom apartments instantly. So I'm not too worried about when the regulation hits if I have a single family residency, because if I do have to shut that one single family residency down for any reason, it's only one. I can pick up my furniture and split it into numerous um one bedroom apartments. So it's it's the risk is not as high as if it if it was regulation towards a 20-unit complex where I have to shut down 20 units immediately. Does that make sense?

SPEAKER_02 6:56

Gotcha. I got you. I like that. Okay.

SPEAKER_01 7:00

And that that was so the next question would be what what is your contingency plan? What do you put in your leases to you know to protect yourself in case something some regulations come down? So you won't be stuck with these leases.

Contingency plans when regulations arrive

SPEAKER_03 7:12

So to be honest, I haven't had anything because I haven't had to deal with it when the um when the ordinance hits up to now. Um, most of the time I just explain it. For example, with the owner that I'm working with now, he used to actually be so this gentleman, he's um I had to close down it was 18 units in Fullerton, and I came down to open some down here. I met this gentleman, he used to be on city council down here in Santa Ana. So um he's familiar with everything. So I've talked to him about it. I said, hey, look, I have to close down some units over there. Um the ordinance is gonna is gonna eventually come to us because Santa Ana is pretty much the only city left out here without a regulation. And um he's introduced me to the mayor. We've walked my properties, they all love it. So I know that once it hits, it's not like I'm gonna get my like a heads up, but it'll be one of those things where, hey, it's probably coming, prepare for it. And when I talk to him, it's like, okay, look, whatever, whatever the the deal is, at that point we're gonna have to sit down and talk if like if they ban it 100%, then just be aware that odds are I'm gonna have to change the business structure to to do um 30-day or more um night minimums, or I'm gonna have to end up shortening our leases so I can move elsewhere where I am allowed to operate. And he was okay with that. So there isn't like a special like clause contingency on my lease or anything like that that I do.

SPEAKER_01 8:25

Oh wow. See, I uh to me, I feel much safer if there is something like written in written down, you know. That's just me because people you know.

SPEAKER_03 8:33

Yeah, no, and I agree with you. That the thing is that I I I'm pretty well versed in terms of being able to short-term rentals, right? Is only 28 days and under. So if a regulation does hit, I know I can structure and pivot my business to do at least one month minimums, right? With um nurse contracts and some of the business people that I work with were here for six months, some of the insurance companies. So I know I can structure and change that way. I might not make as large a profit that I want to make on those locations, but at least I can shift and get them occupied in the meantime, so where I start looking somewhere else where I'm able to operate. So I don't know if that makes sense as well.

SPEAKER_02 9:07

No, no, you're you're already ready. You're ready. Say regulations come, we pivot. Yeah, that's the way to do it.

SPEAKER_01 9:14

And that's what we we've told our listeners for a long time. It better make sense as a 30-day plus rental before you even think about doing a short-term rental. Because if that regulation comes, you better be able to pivot.

SPEAKER_03 9:24

100%, man. I was just talking with the with the guy, he's a newbie, he wanted to get starting short-term rentals, and I've been kind of helping him out along the way. And um, in his market, it's 30-day minimums. And he he's like, I'm gonna sign seven leases, they're ready to go. And I'm like, bro, I was like, Do you know how you're gonna be able to get 30-day minimum rentals? And he goes, Well, I just figured I can contact some nurses and maybe put this on like a website, like um uh the what's the travel nurse one? Um furnish finder. And I'm like, it's not that simple, man. It's not you're gonna put it on there. Go, what are you gonna do when you get a booking for 30

Moving 18 units in 30 days after Fullerton shutdown

SPEAKER_03 9:54

days now, and then you have a seven-day gap in between there, and then you get another 30-day booking, and then you have like a three-week gap, and you get a 30-day booking. I go, Are you prepared to be able to deal with these situations? And you you know, it took me a while to get them to understand that, but you gotta be prepared for those things before you jump in and say, Oh, this is gonna be easy. I'm just gonna put it on websites for 30-day minimums, it doesn't work that way.

SPEAKER_01 10:12

So, how do you fill in your gaps?

SPEAKER_03 10:15

So, I know so that's the thing. I I'm none of mine are 30-day minimums.

SPEAKER_01 10:19

Okay, okay.

SPEAKER_03 10:19

Yeah, so I don't have to deal with it. That's I whenever they go, Well, are you gonna open this in like Long Beach? They just change it to 30-day minimums. And um, I was about to get some units out there, and I just said, never mind, I just don't want to deal with it. It's not because I can do it, I'm just more of the easiest road to get to where I want to get to, and I don't have to deal with the problems of having to do that when I know I can operate five miles down the road without any issues, right? Right.

SPEAKER_02 10:42

And you you said you had to like shut down 17 units, right? Or 17 or 18 and then go so.

SPEAKER_03 10:46

Yeah, it was 18 units.

SPEAKER_02 10:48

Man, so now that my question is how do you bounce back? Like, are you just hey, I'm gonna just take the furniture from all these units and just go put them in another unit and go? Or how is that bounce back?

SPEAKER_03 10:57

You know, dude, that that's a great question because it's one of those things where like it had never happened before, right? Everything was going good. And so we've had to close down because of the pandemic, but not because we were affected by the pandemic directly. Um, the owner sold the building, we had to get out. Um, and so uh it was one of those things when it hit. We at that time we had I think 21. Yeah, 22 at that time. And so um I sat down with my business partner, I said, hey, um, what are we doing from here? Like what's the what's the goal? Are we gonna reopen? Are we shutting down, selling all the furniture, putting it in storage, waiting for the pandemic to hit? I mean, to end. Luckily, it was towards the end of the pandemic already, right? So this was just what in January, three months ago. So we actually started moving in February. So I said, you know what? I think things are gonna get better. Let's take a gamble because I'm not gonna close down, it's just not gonna happen, right? It's our entire business, it's our livelihood, it's what we make money out of. So I basically um I moved all um within a 30-day period. And as we were moving, is literally the day I find out I had to go, it was fine apartments. And I just it took me about I want to say four hours of of searching, phone calls. I got I got in contact with this owner here. Um, I called them, I sold them on the idea, right? We do the corporate rentals, the the business um professionals traveling, uh the short-term rentals. I met up with them the next morning, and dude, luckily, this guy had a 12-unit building that was vacant that was about to go live, that he just finished building. And up the street, about two blocks in downtown Santa Ana, there was a 24-unit loft building, right? Like I'm talking like debt center downtown. And he goes, Hey man, um, you know, I don't know. First thing he says to me is I don't like the idea of Airbnb. And so obviously, as our business structure, it's our job to be able to educate owners and explain to them exactly what our business model is, right? So I went in, I came in, I talked to him, I was like, look, before you get into that, let me explain to you what we do. I went into the details of it. Um, and I said, you know what? At the end of the conversation, it was about a 30-minute conversation. I was like, hey man, um let me do this. Give me one for six months. I'm thinking the back of my head is I'll put some of my furniture and storage and I'll keep making phone calls to find other locations. And so we signed a lease that day. And literally within the week of me um setting up uh, it was I I went and I found a bunch of movie, I had two moving companies on on standby. Um, I went and I picked up some some local guys over at the local U-Haul that were willing to help that have helped me in the past. I called them up. I was like, hey, gather you guys, and I rented up three U-Hauls already scheduled. And within the week, the guy goes, Hey man, I love the way you're setting up the unit. I love how you've been handling everything. I saw the security systems already coming in. He's like, You want to just take the entire building? And I was like, uh, yes. And so instantly it was like I called all the guys. I said, Hey, we got eight units by the end of next week. Get ready. And so we just picked up and so the thing is that I still have furniture sitting in storage. Um, because all my my um units were two bedrooms, and all of these new units are all one bedrooms. And so I took everything and I said we started picking and choosing. I said, This is what we want. I want this, I want that. This is going here, and it just it was transitioning, it was a very smooth transition, luckily. But it's because I was able to get I was comfortable enough to start making the phone calls and getting the relationships. And now this gentleman here is the one who's like, he's constantly just off. I mean, he rented, he he bought a duplex up the street. He called me, go, it's gonna be ready next week. Take it. Um, I'm living in a house that I'm renting off of. And he goes, Hey, this is great for you for short-term rentals. You want it? I walked in and man, I love the house. I was like, I want it for myself. He's like, Take it. He gave me two months free rent, he lowered the rent, no pet fee, all because of the communication and the um and the the networking and just the way that we carry ourselves with them. And he loves me now, and he's constantly giving me I got this eight-unit building coming up, um, and then they got a night, another nine-unit building, literally four blocks away. Um, the other day I was walking my dog around the building, and he he shows up with his contract there. He's like, I'm gonna close on this one. I was like, is this my next building? And he goes, if you want it, it's yours. I was like, All right, we got this. And so that's that's just the way it went, it happened with him. Um, and moving it made everything so easy from moving all of those 18 units to it was pack up the kitchen stuff, drop it off in this kitchen, pack up the bedroom stuff, drop it off in this bedroom. And that's all it was. It was expensive, don't get me wrong. It it it luckily we had a lot in reserve, right? A lot of saved money. So um it cost me quite a bit of money to move everything. Not only that, it's it's the first um the first few units with this one landlord. So um, you know, higher deposits. Now I'm able to negotiate really low deposits and a couple months free rent with him if anytime I take over units. Sorry, I know that was a long answer, but hopefully that answers it.

SPEAKER_02 15:22

No, that was a good answer because I I like the fact. So this is what I tell that. What you really much said is, man, if you do get shut down, you might have to pay deposits, but you at least you already got your furniture. So that's really your biggest startup expense. You just boom, go to another unit, drop this kitchen stuff off to this kitchen. I love it, man. You you definitely pivoted. Now you did say something there that was very interesting. You said you started picking up those units at the end of the pandemic. So, how did the pandemic affect the California market? Because I have a few out there in California, and it was bad for me, but yeah, dude.

SPEAKER_03 15:56

Uh man, don't get me started. It was bad. Um, so when it first hit, was the worst, right? Um, I I did multiple things. So the the very first month I went, it was what

Pandemic survival: forbearance, Furnished Finder, break-even pricing

SPEAKER_03 16:07

March, right? When it first officially like the shutdown happened. Um man, I everything, all my reservations were done. I went down from I think it was like, and March is one of my best months, right? It was like $70,000 or something like that to seven grand. Oh, like in terms of reservations. I'm like, what am I gonna do? Like, I'm gonna have to kill all the reserves to keep going. So all I did was um we started making phone calls. We talked to you to the property managers and we're like, hey, listen, here's what's going on. Um, the shutdown's coming. I don't want to like not be able to pay you guys. Is there anything we can do? And we started working things out with a few of them, uh a few of the units we were able to negotiate where they gave us kind of like a small forbearance. So we were paying them a percentage of the rent. Um uh and then we would pay back the rest as things got better. And they were cool with that. And um, we shifted. So I started contacting a lot of the business um contacts that we had. Um, I even emailed some of the cities and I offered them to the to the I got in contact with the city of Fullerton, uh, one of the girls that that lodges all of the city workers, and um, they were housing um some of the firefighters that got COVID who couldn't go back to their families. So they would ended up, we offered them our locations. I think we end up getting like three reservations from them. Um, and you know, they stayed for because it's 14-day minimum quarantine at that time. So that helped out. Um, I ended up putting all of my all of my units with insurance that um I can't remember the name of it, but it's an insurance company. Um, and then they booked a couple of my spots. And then I lowered, I know people hate saying that, and they say, oh, you don't need to lower rates, but I lowered rates to the point where at least I would break even to hold me over and not pay myself anything and not make a profit. And that was okay with me. It's like one of those things where, like, what do I want to do? Am I gonna be am I gonna be able to keep this afloat for the next couple months and see how it goes and at least cover the cost of operating so I can continue the business? Or is it one of those things where, like, no, I want to make profit and I'm gonna push as hard as I can um and and not give give anybody a chance to maybe stay here longer term. So I offered longer-term discounts. So I ended up I ended up getting a lot of long-term reservations, um, made very, very little profit, broke even a lot of places, and I was able to negotiate rent. So I was able to stay afloat on a lot of those units without any issues at all. So that was one of the easiest ways to do it. Um, I ended up getting a lot, a lot of nurses. I was against the uh furnished finder for a little bit because not that there's anything wrong with them, but I was against it because you don't make the rates that you are expected to make, especially in the Southern California market. But when the pandemic hit, man, I put everything, all my units on Furnish Finder, and um I was able to get quite a bit of bookings through there, um, through that website as well. And uh yeah, I mean I just shifted to a 30-day plus model, and again, it wasn't the greatest profits. Some of them broke even, some of them made me a hundred, two hundred bucks profit, but I was able to stay afloat long enough to where it started getting better. I started raising rates a little bit, start making a little bit more money, paid up all operating expenses. I've paid back the debt that I owed to those complexes, and I'm operating again, no issues.

SPEAKER_01 19:00

That's awesome, man. Whether in the sport, a lot of people would have yeah, a lot of people would have folded, but you persevered, you found a way. That's that's um it was tough, man. Yeah, yeah, that's that's crazy.

Profit First system and reserve discipline

SPEAKER_01 19:12

Um so like you mentioned uh you mentioned a lot of things. Uh one thing is the importance of reserves. Nobody ever talks about having a nice uh nice some nice reserves just in case.

SPEAKER_03 19:22

Yeah, okay. So uh I'm one of those people too. It took me a long time to do it because when I first started, I started with the Profit First system, right? And um, I know you guys have talked about it. I've seen you guys post some stuff about it, I think. And um, and so I started with it, and then one of my friends who does my book, she's like, Don't do it, I'll help you manage it. So I stopped and I was like, I she kind of like changed my mind a little bit, right? So for about a year, it a year into it, I was doing it, and then a year later I was not doing it anymore, and I stopped, and then I I would got to a point where I wasn't saving anything. It was all sitting in one bank account. I would pay myself, I still only pay myself a salary regardless from the business, but I wasn't putting anything in like my profit account, I wasn't putting anything in my tax account, and I'm like, wait a second. So I went back to it. I said, no, look, this is how we're gonna do it. We're gonna be able to do the profit first. This is the percentage, this is what's gonna be. And so I started making sure that whatever expenses came out of came from that profit, I mean from the operating expense account. So anything above that goes into different accounts, and so um it was because of it. I started started building an account, started building an account, started building an account. And um, because of the fact that I only pay myself a specific amount every month, it doesn't matter if I make 30 grand in profit, it doesn't matter if I make one grand in profit, I still only pay myself a specific salary, no matter what. And because of that, my owner's account was growing and growing and growing and growing. My tax account was growing and growing and growing. And and look, the short-term rental industry creates very high rental, uh very high taxable income, right? But you can still write off a lot of stuff and not pay that much because of everything that we do. And so I knew that the money I had sitting in my tax account was probably not gonna have to go to the to the tax guy because I would have to either relocate or I was gonna use it for some type of expense within the company. And so I took all that money in my reserves that I had in all my accounts, and that's what we used to move everything. And uh luckily it worked out. I mean, I had enough, it was it was quite a bit of money, man. But um, it's okay, you know, it it saved it. And I know that I looked at it as an initial expense to reopen, right? It's like my initial investment. I can have I'm gonna have that money back within the year with all these new uh 18 units that I opened. Probably first.

SPEAKER_02 21:28

Uh I tell everybody that is the way to go, man.

SPEAKER_03 21:31

You're absolutely man.

SPEAKER_02 21:33

You'll get your debt paid off. Profit first is the way to go.

SPEAKER_01 21:36

Yep.

Origin story: one unit, quit the job, scaled to 14 in nine months

SPEAKER_01 21:37

So you you also mentioned the the words livelihood. This is your this is your full time gig right here. Yeah, yeah, it is. So so how were you able to jump into this like well what tell me your origin story? You know, how'd you start with one and then just say, Yes, I don't I quit your job. How'd you do all that?

SPEAKER_03 21:52

Sure. So I I've always ran, I've always been kind of an entrepreneur at heart, right? I've had businesses since I was like, I think 17 years old. Um Whether it was just doing things with my hands or um I had a collection agency at one point, it was a bunch of stuff. It got to a point where um it wasn't doing very well. So I went and I got a job. And um this was five years ago, and I was working at a job, and I said, Hey, I'm the type of person that I need to look at and go, this is a stepping stone for me, right? It's just it's just another step in the ladder that I need to overcome to get to where I want to go. And so I got the job. I wasn't happy in the job because I don't I'm again, I don't like to work. I'm not, I don't like to be on the schedule type of thing. And so um I said, All right, in the meantime, while I'm obviously paying for my my way through life and my and you know, I got bills to pay, I need to figure out what I'm gonna do. And at that point, I was already looking into getting into real estate investing. So I started doing research and um I was gonna buy a uh single family house here in uh it was in Fullerton at the time. It was going for like $480, $86, if I don't, if I'm not mistaken, back in the day, right? And that was expensive four years ago. And um I ran the numbers, I had done all the listening to the to the podcast and educating myself and everything. And I'm like, man, I'm only gonna make like 300 bucks in profit on this thing if I get it at the right price. And I'm talking like on market, I didn't know about the birth strategy back then, none of that. And so I'm like, I'm gonna have to put a lot of money into this. And I think at the time I had like $26,000 or something, and um, then I was talking to my to my um business partner, and I and and she goes, Hey, there's this guy who's driving a Ferrari out in LA, and I'm like, what is he doing? He's got 10 apartments for rent in this one complex doing Airbnb. And I'm like, okay, so I started researching it, and then I came across uh you guys know Jay Right, Jay Messi. So I came across his website and he's talking about short-term rentals, and I'm like, oh, and I start researching it, and I'm like, hmm. And at the time, so he's kind of my mentor. At the time, he was doing this thing called the blueprint, and so I'm like, where he like he helps people like kind of start off and get started. It's like very basic information. I think he gives it away for free now. Anyway, um, and so I got it, and um, I put out a back burner, right? It just sat in my comp on my computer, the portal, and um, as I was working, doing research, researching Airbnb. I didn't know Airbnb and short-term rentals were the same thing at the time. To me, it was just Airbnb and short, like two different things. I mean, they're still kind of different things, but um, I watched his videos over the next, I want to say, five, six months. Um, and that was it. I'm like, oh, cool. And I was still working my job, still trying to get into the real estate thing, research, uh, doing research on wholesaling and the birth strategy. And and then um my ex at the time, she goes, Hey, listen, I'm just gonna make a phone call to this apartment complex. And if I get you the the um appointment, you're gonna go over there, look at them, and tell them we want to rent it. And I'm like, sure, why not? So she calls this complex. I walk up, and um, the entire complex is being remodeled, and it's 128 units, and so they've kicked out half the tenants. And um, I walk in, and so the way our structure used to be is she would call, kind of give them the pitch of the initial hey, we're this is what we do, we're short-term rental operators, we do corporate housing. Um, and she she did it. I went in, I explained it in detail, and she goes, Oh, well, we have a lot of vacancies. Um, we could use one uh if you want, we can give you one. I said, That'd be great. And so um I came back to look at it, I'm like, they said yes, and uh uh the next day we went in, we signed the lease, and um this was in 2017, November. And so um it was it was time to go. I referenced back all these all these videos. I said, you know what, let's furnish it. Um she furnished half of it, the and then half of it we hired a designer to furnish another part of it to kind of give it those finishing touches. And um we went live middle of December. This was a two-bedroom, and man, I kid you not, the rent at that time was $1,900. And within two weeks, I think we made like a $1,200 profit on top of the rent, um, all paid off. And then come January, it was like a $4,000 profit. Um, I'm gonna fast forward the story really fast for you guys, but February was like January was like a $4,000 profit. February was like a $2,000 profit because it's one of the worst, worst months. And at that time, they would have finished remodeling some more units, and the lady calls me. She goes, Hey, I have two more. Do you want them? It's a one-bedroom and a two-bedroom. And I'm like, what am I gonna do here? Um, I said, Okay, oh, and to give you guys even more, in in the middle of January, I was so hyped on it that I literally called my boss and I said, Hey, I'm quitting at the end of uh mid-February. I'm giving you guys a month notice, I'm out. I had one unit, and I was like, I'm gonna go all in. And so um when that those two units came up, I was like, you know what, I'm doing it. And so we took them uh and uh I had all that money saved. I we used that money to furnish the one bedroom. Uh I talked to my um my parents, and I'm like, Hey, you guys want to invest with us? They're like, You guys have some money? Like, we have like they literally said we have about 10 grand under the bed. And I'm like, what is it like under the like legit, like literally under the mattress? And they're like, Yeah, I was like, give me that money, like you guys doing. Oh well, we're gonna invest it. And um, so I I actually that unit, I still have it. Well, it's not that specific unit, but I would pay, I told them I'm gonna so I gave them 33% of the profit because they're my parents, so I offered them higher than I would normally. Um and uh dude, I it was those two units, and with the profit of those three, I still wasn't paying myself anything. I was paying myself, I think, like $1200 at that time. Um, and uh I had no job, that's all I was doing. We were surviving off of money in side gigs that I would do, side things like other other um businesses that I had. And so um, we saved all that money. We opened two more. Fast forward um nine months. I had 14 units live, all from reinvesting the profits, um, using money from my my parents. One of my uncles called me, um, and then half of it on a credit card. And I had 14 units at that point. Um, when I had those units, a buddy of mine, because I talk about short-term rentals all the time, he got all excited. He started asking questions. He goes, Yeah, I have 30 grand. I said, Hey, look, dude, I won't offer this to anybody, but you're my friend. I've known from since like seventh grade. And I'm like, give me those 30 grand, I'll open two units, I'll pay you 33% of profits on those units. Here's the projected numbers. This is how they've done. I showed him everything, and he was like, Wow, it's a lot of money. And he's projected to do like those 30 grand, his return's gonna be um, I think it was like 72 grand in um in four years. And so he was like, How am I gonna get that kind of money? And I'm like, Well, this is what this is what's how it's gonna go and explain it to him. So we opened two more units that way, and um, at that point, I obviously gave myself a raise, and then I went to I did a loan bank, a working capital loan through ClearBank at the time, and then another one through Cabbage, and then I was operating, it was self-su the whole the whole business was self-sustaining at that point, right? I was making enough profit to where I didn't really have to loan money anymore, but I didn't like to take money out of the company, like I was telling you guys. I started doing the profit first thing again, and so um what I did is I talked to a friend of mine, and so she

Raising capital at 33% profit share per unit forever

SPEAKER_03 28:38

she became the girl that became my bookkeeper. She got really hyped on it. She's like, Man, she started seeing like I was trying to convince her for years, and she got excited seeing my number. She started doing my books. Um, I opened we opened a few units for her, and then I said, Hey, you want to open any more units? She got to four, she's like, I can't, I have a full-time job. She's like, I have 20 grand sitting around. I was like, Give me your 20 grand, I'm gonna give you 24,000 at the end of the year in 12 months. Took that money, opened two more units up, paid her back 24 grand, 12 months, and um that was it, man. After that, I was uh at that point, I think I was at like 22 units, and then um I was literally opening up two units every month after that with the profits of the company, and it and it operated fine for about a year, no issues, no complaints. All the debt was paid off, most of the debt was paid off, and then COVID hit. And that's that's kind of where I was at. Um, in the meantime, I was helping um her open units and things like that. So I don't know.

SPEAKER_01 29:28

Go ahead. One thing I really want to touch on is the 33% of the profit. So they so you get it up and running for them, and then you start you start managing it for them too. Is that correct?

SPEAKER_03 29:39

I do everything. So it's basically all they do is give me the money. Give me the money, like yeah, and that's it.

SPEAKER_01 29:43

And they're gonna give them 33% of the profit. Correct. So so for example, if they gave you 10 grand, then I don't know, in a few months you profited what 20 grand for them, and then you keep 33 or you keep 77% of the profit?

SPEAKER_03 29:57

Yes. Oh, okay.

SPEAKER_01 29:58

That's yeah, go ahead.

SPEAKER_03 30:00

Yeah, okay. So for example, um, they gave me it was fifteen thousand dollars, and I said, Hey, those fifteen thousand dollars, this one unit, we'll get it back in honestly 10 months. That that was like the projected number at that time, right? From my experience of operating in that same location. And so they're like, Really? And I'm like, Yeah, you're not gonna get that money back. What'll happen is I'm gonna give you 33% of any profit out of the unit. And um, the profit is basically anything after operating expenses um for the company, uh, for that one unit. I'm sorry, not for the company, for that one unit. And so, for example, if I profited 900 bucks, they would get three uh three hundred and a thousand bucks, they would get three hundred and thirty-three dollars, and I would put it into a bank account for them, and then the company would keep the remaining um six hundred and seventy dollars or whatever it is in a in a in our account. Does that make sense?

SPEAKER_01 30:49

So it it sounds a little, it sounds like because how a lot of management companies do it, they'll just take 20% of the gross revenue, correct? Yeah, you're you're just you're what what you're doing is taking a chunk of the profit, a big chunk, 77%. So it kind of works out the same in a way, right?

SPEAKER_03 31:06

Well, the thing is that I can do that, but because it's I'm doing it on a unit basis, not on the business, it's got to be different, right? I can't offer them a percentage on the company because even just 10% of the profit, even if I just offer 5% of the business as a whole, I'm gonna give them back their money in in two, three months. Yeah, like that's how much cash flow we we generate. So I said, hey, whatever unit I open with this money, whatever the the profit is, you're gonna get 33% of that money. And so they were doing so well, man. I I paid them back uh the 15 grand that got we had, we got it back literally in like I think it was 12 months, 12 and a half months. Um, and out of that, they took 33% of it and just sits in a bank account. I pay them all out once a year, and that's for the remainder of my life, right? As long as I have these units open. So the projected amount was yeah, yeah, it's not like I like I have it on a that's interesting.

SPEAKER_01 31:58

What did you what did you learn to do at the structure like that?

SPEAKER_03 32:01

I just came up with it. It was one of those things where like I I was gonna do more, um, but and I'll just from talking to investors and like tell people telling me dude, don't offer it because you're gonna be paying out a lot of money over time. I'm thinking, I don't care. I if this is my family, I want them to make money as well. I'm already taking 70% of profit. That's a lot, right? 700 bucks out of a we're talking just a thousand dollars, right? That's what we're averaging it off of.

SPEAKER_01 32:25

So if I take seven, yeah, yeah.

SPEAKER_03 32:27

So if I take 700 bucks in profit for them just loaning me money and I'm able to help them make money over time, that's cool with me. I don't really care as long as the unit's operating.

SPEAKER_01 32:37

So it's kind of it's kind of like how you consider it, it's just another one of you a unit, another unit for your company. You're just you know, like you said, it's a loan and you're paying them back every year, you know, for forever, I guess.

SPEAKER_03 32:48

Forever, yeah. It's literally forever. Um, I mean, those 15 grand are gonna come back to them five, six, seven, eight, nine, ten times over. Um, and I pay them once a year. I think I pay them like I've I've already paid them back to 15 grand easy. Um, I think I've paid them like 20 grand at this point over the last four years or something like that. Wow, so um, yeah, and it worked out. They're happy with it, they got their money back. I'm I'm still operating. I'm I've made a ton of money off those units um with no complaints, and they're okay with it. I don't do it anymore because again, it's the company's self-sustaining, like I can take my own revenue. But if someone comes to me like a friend who who wants to invest, I'd rather just teach them the business for them to go out and do it than then me take the money and do it.

SPEAKER_01 33:27

Find us some units, man.

SPEAKER_03 33:31

Oh, go ahead. Go ahead. Sorry, sorry, go ahead. Oh no, no, go go ahead. Say what you say. I was gonna say that I I've actually become quite good at finding units. I've had a bunch of the local guy, like I just had man, I just had a guy, so I opened up uh units in Costa Mesa and I called him back. And um, I'm like, hey, I need some more locations. She's like, oh, this guy came in, said that he knew you, um, that he knew your company, and so we offered him some units here too. Never heard of this guy in my entire life. I have no idea where he was, but he knows me from all my networking and and talking about this stuff that he he found out where I was at. He went in, gave my name. They gave him five units, and um people have been following like everywhere I go, someone follows me and they want to jump in. He's like become so good at finding locations.

SPEAKER_02 34:10

It's kind of weird, dude. I just went through that today,

PayPal Working Capital and ClearBank loan structure

SPEAKER_02 34:13

man. It was funny. That exact but the guy called me. He he was like, Hey man, do you know? Um, he was like, Hey man, I was at this apartment complex. He goes, I think you're there, and he gave me the apartment complex name. I'm like, Yeah, I'm there. And he was like, Yeah, man, they denied me. He was like, I didn't want to go and say I knew you, but he was like, Man, you mind if I we work a deal out and I get some units? And I'm like, Yeah, yeah. So we we did it that way. So yeah, I he didn't do the, you know, yeah, I know Rafa, by the way.

SPEAKER_03 34:39

Yeah, dude, I I don't even know who he is. I'm like, I called him, I'm like, can you tell me who he is? And she's like, I can. I started so I just went in, I found who he was his company, I found who he was and his profile and everything. And I'm like, I have no idea who this guy is. I was like, he just happens to know who I am, whatever. I was like, as long as he operates good, man, because I hate when a bad operator goes into a building and we get in trouble. That is the truth.

SPEAKER_02 34:58

No, now one thing you said, you said you were using um working capital. Now I'm I'm I'm interested in that. How does that how did that work out for you? What were the terms and how did you have to pay that back?

SPEAKER_03 35:08

Sure. So um to be honest, I don't remember how ClearBank or Cavage worked. Uh actually Cavage, I do remember. So um they so they'll give you an amount and then you got to pay back a specific amount, no matter how fast you pay it back or how late, or at what point you give it back. So, for example, they gave me $20,000 um and I had to pay them back within um an 18-month period, and it was paying them back a total of I think 23 and a half. So they were taking 3,500, no matter what, whether I pay them back next month or whether I took the whole 18 months to pay them back. Does that make sense?

SPEAKER_04 35:45

Okay.

SPEAKER_03 35:45

Um, kind of like like now I use PayPal working capital. Have you guys ever used PayPal working capital? No, but I've been hearing about it. How does that work for you? Okay, so for example, all your units, like and everybody listening, and they run short-term rentals, run all your income from Airbnb through PayPal, everything. And then you run it through um PayPal and you pay yourself out. Well, you start establishing that history with PayPal, and after 90 days, you can apply for a working capital loan, not a business loan, a working capital loan through PayPal, and they'll take into account all your deposits based on your your lap your history of 90 days, um, how good you've been in standing with with the account with them, and then they'll loan you up to. I know a guy who took 160 grand from them. I know another guy who took 110 grand from them. I took 22 grand from them, and they give you um, so basically what they do, okay, so they work two ways to pay them back. Um, the 20 grand, the 22 grand that I took, they made me pay back, I think 26. So I was paying them $4,000. Um, but they take a percentage of any deposit that you put into the account. So going forward, if you deposit 10 grand, they're gonna take a percentage out of those 10 grand. But you can switch it to where they only make you pay back a specific amount every 90 days. So every three months, you only have to pay back, I don't know, I think like twelve hundred dollars or something like that, or eight hundred dollars or whatever it is. So you can extend this thing out, you know, five, six years and only still have to pay the four grand that they're asking you to pay in prop in in uh in terms of the loan cost.

SPEAKER_02 37:13

So they pretty much giving you a net 90, right? Yeah. So you get a net 90. Now, how much now? Okay, so you said you might owe $1,200 at the end of that 90 days, right?

SPEAKER_04 37:25

Yeah.

SPEAKER_02 37:26

Okay. And that's if you oh, go ahead.

SPEAKER_03 37:29

That varies on the amount that you get.

SPEAKER_02 37:31

Okay.

SPEAKER_03 37:31

So it'll change on the amount that you get. For example, um, like I'm I don't like to hold debt over my head. It doesn't matter if I pay them back over a year or pay them back in three months. If whatever the profit that I make on those two units now, what I do now, because again, I'm doing very well off with the other units, I take off the I take the entire profit and I just throw it back into that into that loan if I took a loan to open up those units. So that way those that loan gets paid off right away. And then then now I'm making profit the remainder of my life with it, as long as they're open. So um, but with them, I actually had a choice to pay them back in 24 months. Um, but I when when when I realized that they only take a they only require a specific amount every 90 days, I was like, I don't have to pay them back in 24 months. So instead of paying them back in 24 months, what I did is I saved that money and I paid them back the minimum for 90 days. I saved all that money. I opened another unit one when I had the money saved instead of paying back the entire loan, I took it, I opened another unit as I was paying them the very minimum every 90 days, and then once I opened another unit, then I took the profit from those three units and I just paid back that one loan really fast. So I dude, I paid them back in I think nine months, and it was total 24 grand. Uh yeah, total 24 grand. It was like nine months, so it was cool, it worked out.

Finding land in Joshua Tree, pivoting to Smokies and Texas

SPEAKER_02 38:45

That's that profit first system, man. I love it. So now you were talking about you were doing research on burrs or anything like that. Now, are have you hopped into the buying side yet?

SPEAKER_03 38:57

So, um man, I I've right before um COVID hit, literally the month before, I was about to close on a plot of land out of Joshua Tree because we're gonna do a new construction on a tiny home. And um, man, it was like literally like I already had the architect out there, I already have the plans for the water meter to get everything done. We needed a pole. I mean, it was a great spot. And then COVID hits, um, and then I'm like, okay, stop a second. And then um I'm like, so I slowed it down. I I I backed off, and then I started that they sold a lot to someone else. I was so upset. And so um I kept doing research. I finally found another lot, dude. I'm about to close on this plot of land. Uh I have the plan, same architect, ready to go, and then I have to shut down the 18 units. And I'm like, oh my god, one thing after the other. So I shut down the 18 units. I can no longer use the money to buy the land or to open the to build the new construction. And so now finally, because I'm up and running, I've been doing really well for the last two months. Um, I'm actually looking to purchase out in Texas or out in the smoky mountains or um somewhere down here. I'm literally gonna get into it now. Hey man, you know the hot spots.

SPEAKER_02 40:04

You said the smokies and you said Joshua Tree, man. Hot spots right there. Yeah, for sure.

SPEAKER_03 40:11

I'm I'm kind of glad that I didn't buy because I it it now that I know how very specific markets, how I'm more my business is now changing from arbitraging complexes now that I'm making enough revenue to purchase, I'm now focused on very specific markets for the vacation rental market. So, like the smokies and um JT down here, it's starting to get really packed though. But uh, you know, I'm gonna find very specific markets and purchase in those locations.

SPEAKER_02 40:36

I love it, man. I love it. Now now are you doing traditional purchasing? Are you doing burrs? How are you doing it?

SPEAKER_03 40:41

Both, both. Um, so if I can if I can purchase a good one at a good down payment and the numbers make sense to where I know for a fact that I'm gonna, I have a really good friend that I made um uh on Clubhouse also. It's funny, we talk every day now, but um he runs, he's great at running numbers and market data, and so I I have him, I I analyze the property, then he analyzes it. And if the numbers make sense, I don't mind buying turnkey property as long as it's a hundred percent like in really good shape. But I just went and I looked at a burr um property out in uh in Riverside. This was for not for short-term rentals, but um, if I can get a good deal in terms of burr, then I'll 100% jump on that as well.

SPEAKER_01 41:22

Gotcha, gotcha. What's the name of your company, real quick?

SPEAKER_03 41:25

Night and rain properties. So it's K, yeah, it's night, like uh like K N I G H T. And then Rain, R-E-I-G-N.

SPEAKER_01 41:37

Night and Rain.

SPEAKER_03 41:39

Yeah.

SPEAKER_01 41:40

Night and Rain. How'd you come up with that name?

SPEAKER_03 41:43

Um, me and my ex at that time, um, we were like, hey, let's come up with a uh good company name, and one of my dogs names Rain, and it's R-E-I-G-N, and then we were gonna name my other dog knight. She's like, Night and rain's a cool name, and she came out. She was like the creative one, yeah. So um I don't know, just it's just stuck, and we started going with it, and um we just I mean it stuck, we ran with it. Now my short-term rental side is nightly stays, kind of like same thing with the K and I the K.

SPEAKER_01 42:10

So yeah, that's that's a clever name.

Running 23 units on six hours a week with full automation

SPEAKER_01 42:13

Nightly Stays.

SPEAKER_02 42:14

Now I have a question for you. Now you run 23 something units now. What systems do you use to keep those units up and running? And how how how many hours the week do you work on your business?

SPEAKER_03 42:25

Man, um on the high end six hours. Um, on the low end, one, um everything's automated. Everything I the only thing is right now I'm actually currently onboarding two new virtual assistants so that they can do the all the messaging as well. So that's gonna it's gonna put a lot of work on my side to be able to train them properly and get them to the standard that I want them to. But um, the only thing that I don't 100% automate is pricing. I still go in and I uh I check my pricing at least once a week. And I do it on, I know that in my market, the days I get the most bookings are Mondays and Tuesdays. So I go in on Wednesday and I check where I'm at, um, how my prices are, and then I go in again on Sunday and I check how my prices are so that Monday and Tuesday I can take advantage of all those really good rates.

SPEAKER_02 43:16

Oh, um sorry.

SPEAKER_03 43:18

No, no, go ahead. Oh, well, I was gonna ask you now where are you hiring your VAs from? So um I've I've I got in contact. I have three different locations. I got in contact with a really um good real estate investor. Um, his name's Steve Rosenberg. You guys have probably heard him, he's all over Big Appuckins. Um, I talked to his personal virtual assistant, and um, she was really cool. She's from Mexico. She actually does onboarding for certain people. I just said, hey, look, I'm looking for some virtual assistants. So I'm about to reach out to her. She's gonna get me some. Um I've done virtual staff finder out from the Philippines. And then um my buddy, he actually put an ad out on um what's that? Not Upwork, but the other one.

Hiring and training three VAs to cover 24-hour messaging

SPEAKER_03 43:59

Um Fiverr, yeah. And he put a thing out. He interviewed three of them. One of them he wasn't going to hire. He was only looking for two, and he um referred her to me. I did the initial interview. I explained to her what I wanted. She has experience with everything that I want, like literally with everything. Smart BNB, Airbnb, already communication with other companies. And so I hired her. So I've done all three different, just from word of mouth referrals from virtual staff finder and then from the Mexico ones. I'm excited about the Mexico ones. So we'll see how they go as well.

SPEAKER_02 44:32

Yeah, because we we've been like going south on our virtual assistants, either Mexico, Argentina. We've been going that route instead of going all the way across the ocean.

SPEAKER_04 44:39

So yeah, that's a smart move.

SPEAKER_02 44:42

Now um, I think I drew a blank, but I had something to follow up on that virtual assistant.

SPEAKER_01 44:48

How do you structure the pay for a virtual assistant?

SPEAKER_03 44:51

Yeah, that's where I was going.

SPEAKER_01 44:52

Yeah.

SPEAKER_03 44:53

Do you mean like like how I pay them or like how much I pay them, or what do you mean?

SPEAKER_01 44:57

Either way, because like I mean, people are like, well, what if they answer like only five phone calls today? Are you gonna pay them like eight hours of work? Or how how does how does it work?

SPEAKER_03 45:06

Got it. No, I I pay them uh hourly. So um I pay them hourly, but I make sure that so from the beginning when I first originally hire them, um, I make sure that they know what their job is going to be, what the task is gonna be. Um, I hire them as part-time so I can see that they are starting to understand everything. Um, but I pay them depending on so the ones from the Philippines, they get paid an hourly rate. Uh starting, I think it was the ongoing rate at the time was $350. I pay them that for the first um for the training period, and then after the 90 days, I go up a dollar. Um, if they if they're doing like really well with how I want them to go. The ones for the ritual assistants from Mexico, they start at 450 to 550. Um, they go up um uh a uh a dollar as well after the 90-day training period. Um, and then I pay them on the first Friday and the last Friday of every month. And that's just because the way that I do my payouts for anything, if you send me an invoice, it goes to my bookkeeper, she reviews everything, and then she sends me all my payouts on Friday, and that's when all my payouts come out. So every every invoice has to be in by Thursday of the first Friday and then Thursday of the last Friday. And so I pay them twice a month through uh we use uh Zoom with PayPal X O O M. Oh, yeah, that's for the Philippines, yeah. Yeah.

SPEAKER_01 46:22

So Zoom you use in Mexico and Philippines?

SPEAKER_03 46:25

So I so no the Mexico one I haven't hired yet. We're about to onboard. Oh, okay.

SPEAKER_01 46:29

Okay, yeah.

SPEAKER_03 46:30

So I don't know how they're gonna get paid, but most likely the same thing.

SPEAKER_01 46:32

Zoom, yeah. Um that's that's how I send money to Mexico. Oh, cool. Um uh so so okay, so you pay them an hourly. So you you what do you do? They do eight-hour shifts, or how does that work?

SPEAKER_03 46:42

So when they first start, it's four hour shifts. So for the starting period, we train for one hour every day on a specific topic. For example, um, today at six o'clock after this, I'm going to start one of them that I just hired. We're gonna do an hour training and it's on Smart BNB. Tomorrow it's on um like just guest communications, and then the day after is on Trello. The day after is on like Slack. So every day I do one specific thing for the system. And then after that's done, after the hour training, they stay on board and I just kind of plug them into the communication system. They already have to have experience with communications, right? So they already know how to deal with it. So then I just kind of monitor them from my side, making sure that they're um answering all messages. Um, when and then as we go along and we run into problems and things, I make them document the problem so that they have a system in place. So they they're actually building out my SOPs as well as we go. Um, and so uh after the first hour they jump on, and like if a a specific, like a very specific issue arises that I'd already already have a system in place for where I can can't just send them a video because I do video through Loom as well. So if I can't just send them a video to answer that specific task, then I uh we go into it in detail, we dive into it the moment it happens, and um, then we create an actual system for it. And now the second time it happens, they just follow that system, they follow watch the video follow the system, and it it just that's it's a continuous loop over the first 90 days. After 90 days, they gotta they gotta know all of my properties, like by heart, uh not by heart, but I mean they gotta be familiar with my properties, right? I send them videos of all the properties, they have all like I have a spreadsheet of all the details, whether from the does it require a key, does it have a pool, does the pool require a key? I mean everything on a line item spreadsheet. So they know how to answer those questions. Where's the trash can? They just go in a spreadsheet, trash can, these are the instructions for the trash can, right? So all of that's already done, and that's the stuff that I train them. This is why this is where most of my time goes into right now is training the virtual assistants.

SPEAKER_01 48:35

And then you get them onto eight-hour shifts, right?

SPEAKER_03 48:37

Yeah, after after the 90 days, so if if they're they're on it, like let's say they're on point, like within the first two months, even within the first 30 days, I'm happy to put them on an eight-hour shift. I just don't like to do so because I need to make sure that they got everything scored away within that first four-hour shift. So that if I give them more time, I'm gonna start adding things to their to their plate, right? It's not you're getting four hours to hang out anymore. At that point, you're doing more things that you would be doing on a different time. So, for example, like reviewing my my door footage, instead of when they first start, they just review the people checking in so that they get familiar with it. But when they're on an eight-hour shift, you have to review every single listing, right? Because what if tomorrow the guest brings five extra people that weren't there yesterday, right? Things like that. Um, and then when they're when they're on an eight-hour shift, when they're on their downtime, because messages don't come in all the time, when they're on their downtime, um, I have them go through the through our SOPs and say, hey, do you know what can be done better here? Or is it is it structured properly, or um just kind of clean up the the uh the cards, the trello cards, or the spreadsheet, whatever you want. Um, and I kind of give them the freedom to do so as long as they're doing something along those lines. Uh um, because most of the times when I offer them the eight-hour shifts, it's at night when I'm sleeping. I just want them to be on point for communication. So as long as they're there in front of the screen for communication, I'm okay with it.

SPEAKER_01 49:54

So then you communicate when they're when they're not communicating, is that is that how it goes or what?

SPEAKER_03 49:59

When they're well, yeah, so when they're not, no, no. So they have to one of the requirements is they have to have the communications open on their screen at all times, whether it be their phone or their computer. And so um, but they have to have basically smart BNB open at all times. So when Smart BNB comes in and notification pops in, they got to respond to that. So the the the standard is you have to respond within 10 minutes of any message, no matter what.

SPEAKER_01 50:21

So for 24 hours, for 24 hours for 24 hours, correct.

SPEAKER_03 50:25

But um so that's the thing, right? Because it's not it's not just one virtual assistant for 24 hours. What when I had a book, that's why I'm hiring you ones now, so I can cover the entire day. It was um one was working from 3 p.m. to 11 p.m. Then the other one would come in from 11 to 6, I believe. I don't remember the time. Um, and so they would take over. But um it was you need to be on top of communication at all times. The only time I knew I had to respond is when I don't have a virtual assistant on on on the clock, basically, where it's like let's say 10 a.m. and I know nobody's there, then I respond to those messages.

SPEAKER_01 51:01

I see. So, but you'll you'll cover that with the with the next assistant. You'll have it all three shifts, right?

SPEAKER_03 51:06

Yes, correct.

SPEAKER_01 51:07

Oh wow, that's correct. Correct.

SPEAKER_02 51:09

Yeah, I like how you did that. You broke it up, get three, put them on eight-hour shifts. That's a 24 now. Question are you are are they working five, seven days a week?

SPEAKER_03 51:18

No, so I actually have them take off. Um, they work five days, two days off. Uh, Mexico actually works six days, so the there, I guess um, from what this girl was telling me, um, she says that out there the standard is you work 48 hours a week, so it's six hours, I mean six days a week, so they only get one day off. And I was like, Oh, that's cool. Um yeah, and well, no, so my days off are for one of them, like the one. So, what I do is I'll I'll basically put one in charge after a while, right? And um, that one takes off Monday and Tuesday. So they get my so because Saturdays and Sundays are my busiest, Mondays and Tuesdays are my deadest days, like they're the the off days basically. Like I can chill on Monday, Tuesday. Um, but I have the backup, the one that works a different shift on Monday and Tuesday on the busy hours, which is um 3 p.m. to 11 p.m. From check-in time to night time, and so I had and then they get um Wednesday, Thursday off. So I always have the weekend covered no matter what.

SPEAKER_02 52:18

Woo man, you dropping some heavy gems, dude. This is how you run a full-blown business right here on 11.

SPEAKER_01 52:24

And that's how you can keep from I mean, that's how you could only work, you know, yourself personally work six hours a week or less, right? I mean, that's that's because you're handing it off, and by doing that, you're able to scale faster.

SPEAKER_03 52:36

Yeah, man, I was stubborn, I'll tell you. It took me to get to 22 units before I said, you know what, I need to hand off the messaging. I was stubborn. I was like, I'm gonna handle this all myself. I don't want to bring in the extra expense of an hourly rate on a virtual assistant. And it got to a point where like I'm having dinner and I get a message and I'm like, all right, it's time to put this off, it's time to give it to someone else. I'm I'm done. Setting codes, I used to have an alarm on my on my phone at 3 50 p.m. Um, because I I so some of them aren't automated, right? Like some of them we use August locks, that's automated, some of them we use the Yale locks, that's automated, but some of them we use the Schlage locks that don't get automated. So you have to come in on the on our security system and plug it in yourself. And so I would set codes at 350 and I'm like, I'm done. Like, I don't want to do this anymore. It's it's just it's not that it's time consuming, it's just a distracting thing, right? For example, like even if I'm watching a movie, alarm goes off, it's time to set off the code. It's like it just ruined the the the time that you're having, whether it's out with friends, whether it's imagine my phone goes off right now on a message and I'm on this podcast, and I have to stop the podcast to respond to a a water issue or something like that, right? So um it took me a long time to get to get to the point where I'm like, all right, I need to I need to seriously hand this off so I can be a hundred percent um automated because everything else is automated, I don't have to deal with anything.

SPEAKER_01 53:50

Here's what's cool I did a quick math, and so let's say you're paying them roughly you know on average five dollars uh five dollars an hour and they're working eight hours a day, and eight hours, and then that's 320 bucks a week. So and you having three shifts covered, that's nine sixty a a month. So uh wait a minute, that's nine sixty a week, right?

SPEAKER_03 54:08

If you're having three shifts covered, yeah, it should be um yeah, nine sixty times times four equals three thousand eight forty.

SPEAKER_01 54:18

Now, is your that that's uh what um our listeners have to ask themselves, is your business strong enough that you could pay to for you to do absolutely nothing but try to grow your business, is it worth it spending you know three thousand eight hundred bucks a month to have everybody uh have other people handle all your all the day-to-day for you while you try to grow it? And I think the the answer clearly is yes.

SPEAKER_03 54:37

Yeah, well, so I I think everybody needs to c assess their their situation and say, right, if you have four units where it's gonna kill your entire

Why it's a short-term rental business, not an Airbnb business

SPEAKER_03 54:45

profit of those four units to have someone else do this hands off, odds are it's probably not a good idea. But when you get to a specific amount of units and you are already paying yourself your salary comfortably every single month, and you have a bunch, let's say, for example, for me, when I pay myself my salary, I still have four or five, six grand left over in terms of my profit, right? In terms of my pay, I can take that money now and use it to hire my virtual assistants full-time because I know comfortably that I'm gonna make that money. I'm gonna make that profit. And now I'm still gonna pay myself what I'm comfortable with, and the the business is a hundred percent. I mean, I can literally sit here and like sculpt and paint and watch TV all day long with no issues, and um and add units. And as I add units, I plug them into the system and it's all automated, and not only that, now my profit's going higher. Every time I add a unit, I can pay myself more, all because it took me the sacrifice of these couple units, right? So, for example, like when it takes about 10 10 units, I don't know, on the on the expensive side, maybe 10 units worth of income to be 100% automated, right? I think it's seven to ten, um, where where you can be a hundred percent automated without paying yourself anything. So anything over that, where you start making that profit, then it's all it's all pocket money.

SPEAKER_02 55:58

Perfect. Man, yeah, and another thing to to go into what Steve was saying too, when you start talking about paying people, uh, that's why that book Profit First is so strong, because he tells you, man, if you ain't at that 300k mark, you need to be doing everything yourself, which most people be like, man, that's crazy. But he's like, think about it, start breaking down your percentages. If you're gonna pay yourself this percent, your taxes this percent, you got to get to a point to where you can start hiring people out. So, yeah, definitely I recommend that book for anybody, man. That book's a life-changing right there.

SPEAKER_03 56:28

Yeah, man, I gotta read it again. I haven't read it in like a year and a half, maybe two years. I like to reread certain things over time.

SPEAKER_02 56:33

Yeah, and it's not like man, like something like you, it's not like you don't even need to reread it because you you it's a system. And when it's in your head, it's just like clockwork, you know what I'm saying? Straight up, man.

SPEAKER_01 56:42

And I'll ask you, since you um, since you're you're good at bringing other people in and you know getting their units set up like that. Have you ever thought of just uh management? I mean, it w what is the pros and cons, you know, arbitrage versus management? Have you ever thought of just doing management?

SPEAKER_03 56:58

So to be honest with you, I never thought about it. Um, just because I know that I can do it myself, right? Like I don't to me, it just makes more sense to do the work myself, plug it into my system and start pocketing over it than having to bring an extra person in, having to deal with different books for that specific unit, add an extra system for that, um, all of that. And and I that's as much as I can speak on it because I've never done it, but I've met a lot of people um who do do it. Sorry, it's my dog. Who can who who do do it, right? So I've met a lot of people who do both arbitrage and management, but I think it's because they started doing management and then eventually did arbitrage. I started with arbitrage, so I don't have the system or even the the the the knowledge in place to be able to start doing management or or to nor do I want to because again I can just do it myself. If I have the funds, I can just do it myself, plug it in, and I know I'll make more money on it. I think it's more of the headache of having to deal with with books for someone else and having to do a completely separate thing with the income for someone else that I'd rather just not do it. I don't know, that's just personal opinion, I guess.

SPEAKER_01 58:01

No, that's fine. I mean, it's it's the ongoing argument right now, right? In all the clubhouses. Yeah, it's funny, yes.

SPEAKER_02 58:12

Yeah, dude, yeah. It's funny, yes.

Loom videos for SOPs and instant training links

SPEAKER_01 58:15

He's a good talker. Oh man. So um you you mentioned Loom. I've seen some Looms. How does the Loom work? You set up like a video, you know, you can record yourself, you know, an instructional video, and then you send it to your uh your VAs. That sounds pretty cool.

SPEAKER_03 58:29

So um they used to have a free system where it it wasn't um it can be unlimited number of minutes. Now they limit you, I think, to five minutes. Um, and so what it does is you can create a quick video, like for example, um, how to unlock doors, right? Or how to set codes. I can do it, record my screen, record my face talking as I'm doing it. So it's like basically creating a quick instructional video. Literally, the moment it's done, it renders a uh link, and that link you can send it, and within 30 seconds, the other person can see it. So there's no no uploading time, no rendering time, no having to put on a different website time. It's just that direct link, it goes to that other person, and then that other person um can see the video, they watch the video, and then they know what to do immediately. And you have a video in place to train the next person. So then if that person ever gets let go or you have to replace them, or you have to show someone else, it's literally you take that video and send it to someone else. I can man, I can tell you how many people I have a video on how to how to structure your listing, and every time someone needs help, it's like, yeah, sure. And I just send them the video and they're like, bro, thanks. It's like I'm like, all it did was take me copy, paste, and send. There was nothing, right? And they're super like I can't believe you walked through all this. It's like a 15-minute video of like literally how to set your your your title to how to set your paragraph, your body, like everything.

SPEAKER_01 59:48

I don't think I yeah, that's that's that sounds awesome. We'll look into that. But another thing you mentioned earlier, early early on was Jay Massey, and you and and you mentioned also you said, well, it's it's not an Airbnb business, it's an STR business, short-term mental business. So how do you what do you mean by that? And and how have you um structured your business to be an STR business instead of just an Airbnb business?

SPEAKER_03 1:00:09

Sure, that's a great question, man. Um so I actually that's something I picked up from Jay. Um a lot of people go, Oh, I get it's like it used to not irritate me, but now it's like, hey, how's your Airbnb business doing? And I'm like, bro, like I don't run an Airbnb business because running an Airbnb business means you're only doing Airbnb bookings. And even then, Airbnb is just a marketing platform, right? It's just like doing my drone, my own. If I have my own direct website, but I had a billion dollars to promote it, I'd be just as big as Airbnb. My website would be just as big because everybody would know about my direct website. So um when when you run an Airbnb business, you're literally doing only Airbnb bookings, only having to deal with people with Airbnb. You're talking about opening Airbnbs, right? When you go to a landlord, hey, I want to open an Airbnb in your unit. But when you talk about short-term rentals, we're talking bookings for business travelers, corporate travelers, we're talking, I can call the local companies here, all the hospitals, and try to get contracts with them to provide short-term rentals for them. Um, we're talking a completely different business structure, right? Um, in in terms of the way you look at it, the way it's structured, the way it's even zoned, um, the way people talk about it. If I go to my if I had I gone to my landlord that's offering me all these units and I said, Hey man, I'm gonna open an Airbnb in your unit, he would have been like, no, thanks. But I went to him and I said, Hey, I do short-term rentals. What that means is that I house um all types of people here for business, um families for leisure for Disneyland, nurses who are coming to the UCI Medical Center, um, insurance companies when the house has flooded, and I explained it from the short-term rental side. It was a game changer. The guy was like, Oh, so it's not just Airbnb. No, man, Airbnb is just a website that I use to bring in people when I don't have a when I don't have a booking from my my other sources. And they're like, Oh, oh, and I educated them on that, and no longer does how your Airbnbs. He goes, Hey, how are your extended stays? That's what he says, that's what he calls them. I go, You mean my short-term rentals? And he goes, he just laughs. He goes, Yeah, how are they doing? I go, they're doing great, man. I go, you got any more units for me? He goes, they're coming, they're coming. We have this talk every day, right? So it's very distinct. People got to understand that it's very, very distinct.

SPEAKER_01 1:02:10

So yeah, that is awesome. That's golden right there. And also, can you find me some units in SoCal?

SPEAKER_03 1:02:19

I can. No, yeah. So look, it's funny. I was just talking to a buddy of mine who who uh he's also out there in Fullerton, and he called me and goes, Hey bro, any new locations? And I'm like, uh, I can share them. Do I want to share them? I don't know if I want more people in my locations, right? Because again, it's like it floods specific areas. Man, when I got to Fullerton, I kid you guys not. Uh, it was me and maybe like in that one corner, uh, literally just me. And then you fast forward 14 months, there was 130 within a 10-mile radius of me. And it was all people who literally just started following me. One guy went into the same building. In that same building, we had 39 short-term rentals. I mean, if there's a reason why we got kicked out, right? Uh, and and they're like two other buildings, right? Even like this, like I was telling you guys in this Costa Mesa building. Um, this guy that walked in and used my name. Uh, I called him to try to get more, and now they don't want to do anymore because they're stopping the corporate rentals there. And I'm like, uh, why? Well, because there's another guy in here now, we can't give out anymore. So it comes to a like it's a like uh a fine line, I guess, because people can find out where you're at very easily. But it it I would only share my locations with people who I know run their business the way I run it because I just don't want to have any problems. I don't want somebody going in there and just letting any random person into the building. It just happened, it just it's happened to me multiple times. It just happened in the at this new location. The same owner who didn't want I listen to this story. The same owner who didn't want to do Airbnbs in our in in his building where I educated him, sold them on the entire business structure, was literally asking people, hey man, this is perfect for extended short-term stays. Do you want to rent the locations? And I look at him, I go, What are you doing? I go, You're putting people on the you're putting people direct competition in the same building. He goes, Well, take the whole building. I'll take the whole building, stop offering it to other people. And um, in one of the other locations, he actually gave another company um seven units. And I didn't find out about it until a week later. I'm like, Yeah, I'm ready for the rest of the units. They're at least I go to this other company who's gonna do what you're doing, and then he has the audacity to call me to train and teach these people to do things the way I'm doing them. I was like, oh my god. I was like, nope, figure it out, man. If they got problems, it's on you. And then, no, so I actually sat him down and his business partner, they both own the building, and I sat them down. I said, listen, I go, I've been through this before. You've brought people in. There's gonna, I don't want to say it's gonna happen, but

Lessons from overcrowding one 128-unit complex

SPEAKER_03 1:04:41

there will be a time where you're gonna have issues with someone that doesn't know what they're doing and doesn't run the business the way that we run it. When that happens, do not pull me in to that pool of trouble. As a matter of fact, keeping 100% separate, because if you guys ever do decide to keep these people out, I want to take over their units. I don't want to be involved in it. And luckily I had that conversation because, man, sure enough, within two weeks of operating, people are smoking in the building and it's 100% smoke-free building. They're allowing it. I'm watching them from the patios. I'm down there with the owners having a meeting, and it's that unit that they rented out, and there's kids out there with furniture on the on the patio, and they're smoking. And I'm like, I'm not calling them, man. Figure it out. That's on you. That's on you. So, you know, it depends on who you work with, the operate who you operate with and how you operate, that's gonna keep you afloat.

SPEAKER_02 1:05:32

Now, have you thought about doing like a right to refusal on those?

SPEAKER_03 1:05:35

Yeah, yeah. So, man, I wish I would have thought about that before I I signed those LOFs because um uh now I do. Now, now I I am uh I am I'm thinking of doing it every time it happens. So um every time somebody like for this eight unit building, I literally said, Hey, not only am I doing a right to refusal, I'm making sure that he doesn't talk to anybody else before anytime a new building comes up. So now I'm I'm starting to consider it in every single location that I go into.

SPEAKER_02 1:06:03

Wow. Yeah, because I noticed that when people start overcrowding, like you said, man, if people start getting shut down, you start getting a whole bunch of now, and also one thing you said is very important. Last question. How did you now you said you had a bunch in one building? What was the lessons learned on that?

SPEAKER_03 1:06:21

Man, okay. Number one, don't open so many in a giant building like that, right? Unless I control the entire like a small unit building, like anything from five to 12 units, I don't want to do any more in a building with like I'm not gonna do 14 in a building with like 150 anymore. Because if they decide to change their mind, even though we're operating good and something happens, and they they shut me down and I have to move, I'm gonna be stuck moving all those units. And that was a big, big lesson, right? Um, it's great in terms of scale because you can open a lot fast, but not only that, now you're in direct competition. People say there's no competition in the short-term rental game. There isn't, there isn't, but when you're in the same little corner, there's definitely competition 100%. And so you know, one unit will perform, outperform the other, and the other will outperform the other. And so, so now I'm very, very specific. Like, like at that loft building, I could have taken all 24, but instead I only took nine, right? That's it, that was my max. Um, because if they decide to change their mind, if the building sells, if a regulation comes in, anything, I don't want to be stuck having to scramble and figuring out what to do with so many units in one location.

SPEAKER_02 1:07:26

Man, and also now how how do you handle like new management coming in?

SPEAKER_03 1:07:31

So um, it's funny. That's a great question, dude. Um, it happened that happened at that other building where I was at, three different management companies in the time I was there. And so each one is like teaching a brand new kid what you're doing. Like it's it's just you have to the moment they come in, it was hey, listen, I'm Rafael, I'm the night and rain properties. I have the 15 units here. Um, I just want to sit down and talk to you guys so you guys understand how it is exactly that we operate. I'm sure the prior management talked about us, but if they didn't, let me know when it's a good time to come in. We'll talk about it, we'll get going. And so um it was sitting down with them and then walking them through every single one of my units. I made sure that they were able to see all of my locations within the building um so they understand um what it is exactly that we do, what it is exactly that that we bring in, who it is that we're we're housing, and how we operate most importantly, exactly what we have in place to be able to manage our locations properly. And it's just teaching them all over. So it's it's basically just teaching that new management company exactly what you do. And man, luckily, all three of them loved us. They absolutely loved everything about us because we kept their occupancy rate low. We we handled everything professionally. Um, we never had any issues, and we handled most of our maintenance issues ourselves anyway.

SPEAKER_01 1:08:42

So you deal directly with owners mostly, you don't just deal with the front office?

SPEAKER_03 1:08:48

No, I do both, I do both. Okay, so um I just love owners mainly because they're easier to deal with. Um, you you have more control with them as opposed to a front office property manager.

Contractor networks unlock investor-owned multifamily deals

SPEAKER_03 1:09:01

If that property manager, like we were just saying, if that property manager changes, now you're having to teach a whole new person the same thing. And if that new management company doesn't want you, adios, you're out the door. And so with owners, not only I actually like to deal with investors, owner investors more than anything now, because um those guys are the ones that when you have a really good relationship with them, they'll literally start offering everything. I mean, I I I'm not kidding you guys. Like, I have three buildings lined up an eight unit, a nine unit, a 12 unit. Like, I don't even know if I can handle all that coming up, right? So, you know what's another you know what's a great way to find out and tell you guys really quick is contractors, bro. Contractors that do multi-family. That's gold. Not everybody talks about that, but um, the contractor that built that one nine-unit building, uh, he's building four other buildings for four other investors, and it's a simple phone call. Hey man, what do you got? Anything new that's coming up? He goes, Yeah, we're about to finish on this 12-unit building. The my my business partner that I told you guys, so we decided she's she's starting her own separate now, and so she's building up her own company, and that's how it worked. We called the the the contractor, and she took over an entire an entire um, I think it's like a 12-unit building, slowly taking over. She's got seven there now, and she's slowly taking them as they go. And it was the we call the contractor and said, Hey, the next building for your next investor when you're ready to go. As soon as it's ready, call me first before you call anybody else. And it was a simple, I took him out to lunch, bought him some coffee, now we're friends, and now he just calls me every time there's a new building from any investor.

SPEAKER_02 1:10:30

Smart move, man. That's what I've that's what I've been doing. Like, that's what I like in my clubhouse bio. When I I don't get on it as much, but that's all I'm looking for. Uh, contractors, uh lines of credit. Yeah, I tell them straight up what I'm looking for. I need uh STRs. So yeah, that's a fact. That's a major plug, major game.

SPEAKER_01 1:10:49

Man, I I I need to rewind this. I need to listen to this episode a bunch, man. This is so much dropping so much knowledge on us. Uh, I have a really important question. Um, in and out burger or Tommy's burgers?

SPEAKER_03 1:11:01

In and out, bro. 100%. 100%.

SPEAKER_01 1:11:06

You ain't down with those chili burgers.

SPEAKER_03 1:11:08

Dude, no, you know what's if I don't if I'm eating a burger, it's gotta be in and out, man. I don't eat them anywhere else. Oh man. Can't go wrong with the double double on almost all fries.

SPEAKER_01 1:11:17

Oh man, yeah, we got them out here. It's not the same. It's not the same as the cali in and out. So I don't know what the deal is. Different, different different water they use. I don't know. Oh man, this has been a this has been a great ep. You got some more questions, Micah?

SPEAKER_02 1:11:30

That was it, man. This is a dope episode. I'm definitely gonna be rewinding it back. I know it's gonna get a lot of hits because man, hey, that how you trained a VA, that was dope, man. I love it. Uh, but yeah, man, Roth, thanks for coming on, man. Of course, I'll see you on Clubhouse. Um, I ain't been on as much, but I'm gonna hop back in there. But yeah, man, thanks for coming on. Cool, man.

SPEAKER_03 1:11:48

Yeah, I know. Thanks for having me, man. I really appreciate it. I had a great time.

SPEAKER_01 1:11:51

I know you give a bunch of advice. What advice do you get people starting out, you know, to go ahead and take the plunge and jump into arbitraging?

SPEAKER_03 1:11:58

All right. Um, don't everybody that that I've met, literally is like they'll sit down and try to learn as much as they can. Just learn how to talk to a landlord and then

The pitch: corporate housing for travel nurses, not Airbnb

SPEAKER_03 1:12:07

go do that step. Don't worry about what comes next. That's literally it. Learn what to say, educate yourself on how to talk to them, and then just go out and find them, make the phone call, sign that first lease. Literally, everything else will fall into place. Don't sit there and try to learn the entire business before you get going.

SPEAKER_01 1:12:22

Uh okay. Can we do a little role playing? Uh, act like I'm the I'm a landlord or I'm I'm a front office, whatever. How would you approach me and pitch me?

SPEAKER_03 1:12:30

Yeah, man. So I wouldn't it would be a phone call first. So it's a simple hey, my name is Rafael. I'm with Nine Rain Properties. Uh, we're a corporate housing provider here in Southern California. We do short-term rentals for business travelers in the area. Uh, in your area, we're actually looking to expand. We've had some demand for some travel nurses coming from the hospital, uh, UCI Medical Center. And we're uh we're hoping we can work with you guys. Do you guys allow corporate leases? That's it. That's literally it.

SPEAKER_01 1:12:56

And and do you um you put everything under your LLC as corporate leases?

SPEAKER_03 1:13:00

Yes, everything. And so every single lease that I have is under my corporation.

SPEAKER_01 1:13:04

Okay. And so I know, like starting off, like let's for example, I started off my LLC this year, right? And so it's a lot of players are saying they want to see at least two years, you know, uh of you doing business under that LLC. How did you how did you get started putting stuff under your LLC?

SPEAKER_03 1:13:22

So um, okay, the the people that will ask you for um two years experience are the very well-established property management companies that manage the REITs, right? Those big real estate investment trusts that have 500 unit complexes, um, those guys already have a procedure and system in place to handle corporate leases. And their procedure and system is usually two years experience, um, business bank accounts, um, business credit. Those are the things that they'll ask you for. So anybody who wants to get started, I always tell them, look, look for the small complexes, the the ones that are that are in need to get vacancy filled, right? If that's a 500 unit complex and a property manager, they don't care if you're gonna take one or five units, they're gonna they're already doing their marketing. That's what they do. It's it doesn't matter to them if they have a five or six units empty on 500 units because they know they'll get filled at some point. But if you go to a uh a landlord or a single family operator who's got four or five units that they're losing money every month because it's like their baby or like their third, fourth investment, they're not gonna care that you've been operating for two years. They're gonna care more of how you operate, what you do, and that you have the funds to cover those expenses. That's literally it. And so if you're not gonna start, if you don't have that to that two-year business history or that two-year business credit, um, go find those single family, those single uh operator investor owners that own one 12-unit building, that own five, six houses in the area, and explain to them what it is that you're doing. Have your bank account with money ready so that they can see that you have the funds to cover the expenses. That's super huge. And just literally have a conversation. Have a don't be fake, don't lie to them about who you're bringing in, um, and and explain to them what you're gonna do and show them that you have the funds to cover their rent, and you're they'll guarantee will probably 100 out of 100 out of like I don't know, 90% of the time will be that they'll accept you.

SPEAKER_01 1:15:15

And and okay, and what if you get this question? Oh, you mean Airbnb? You're gonna come in here and do Airbnb. Oh, how do you answer? How do you answer that?

SPEAKER_03 1:15:22

So that that was the the going back to that same owner. The first question he asked me, you know, walked in the door, he goes, Look, man, I don't want any Airbnb here, right? And so, hey, do they go, oh, so is it like Airbnb? I go, Hey, look, before we get to that, I just want to explain to you first what we do. I just stopped the question, I kind of divert it. I just want to explain to you what I do. Look, I do short-term rentals, okay? What I do is I bring in corporate house, I provide corporate housing for business travelers who are here in the area for nurses who need a place to stay in short-term days, anything under 30 days. Um, I have used Airbnb in the past. Um, Airbnb is used to fill my vacancy and my gaps in those days in the calendar where I absolutely need to get it filled, because if I'm empty, I can't pay you your rent. If I'm 100% occupied, then I pay you the rent. And so I don't I tell them I don't have a business traveler who's coming in for the entire year. If that was the case, they I just hand them over to you so you can do a 12-month lease. But they're here for a week, they're here for a month, and in between that time, when I don't have someone else coming in or a nurse who's staying or a or a family for Disneyland, that's when I come in and I say I have to use Airbnb for those days because I need to be occupied. But those people still give vetted the exact same way as everybody else, right? We make sure that they that they're good people, we understood they gotta have a um a host referral. Um, we got to make sure that they have a government ID, we got to make sure that the person who booked checks in. And then our security systems in the house is the second vetting where we make sure that when they're in the apartment, there's no parties going down because of the noise decibel monitors. Um, we make sure that there's no extra people coming in with them because of the doorbell camera. And once you explain to that and show that to them, it's like, oh, okay, I see. It's not just Airbnb. You're right. You're actually, and again, and the most important thing, let them know you're running a business. It's a professional business, not a side gig, something you're doing for fun, right? Well, I'm gonna take care of your place perfect for the next 10 years. It's gonna be in perfect shape 10 years from now, right? Because I'm I'm gonna get it cleaned 30 times a month, right? Um, and so in five years, the property is gonna look just as good as it looks today. You're not gonna have to bring in someone in 12 months to to repair the wall because there's a hole in it. Because I'm gonna make sure that that wall's been taken care of while I'm I'm operating there. And once you explain that, it's it's like, yeah, how many keys do you want?

SPEAKER_01 1:17:36

No joke. That's awesome.

SPEAKER_02 1:17:38

Keep that value, that that maintained property. That's always the you know what I'm saying. Them apartment pumpings, they they hate going in there after 12 months, somebody long term did stay, destroyed the place, you know. That's a huge one, man.

SPEAKER_03 1:17:50

Yep.

SPEAKER_01 1:17:51

Yeah, so stay on after we after we end this, uh, after we end the video, man. I ask you some things about you know, getting some places from you.

SPEAKER_02 1:17:58

Yeah, sounds good, man.

SPEAKER_01 1:18:00

All right. Well, this is a great episode, Micah. What do you think?

SPEAKER_02 1:18:03

Yeah, great episode, man. Definitely check us out at uh live let thrive at gmail.com. Follow us. Email us at liveletrive at gmail.com, follow us on Instagram, and yeah, thank y'all for continuing to listen. And we are out. Later.

SPEAKER_00 1:18:21

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 Airbnb and obviously. Bye bye.