Cold open

SPEAKER_01 0:00

You just never know what's a good place. And there's those shocking little small cities that just have something that are attracting a lot of people. Don't overlook those. You know, take a look at your city, take a look at what's around you. There might be a hidden gem.

SPEAKER_00 0:14

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

SPEAKER_03 0:25

Hello, hello, hello. And welcome back to another exciting episode of Live Let Raw. What's up, Micah Man? I am chilling. How you doing, Stevie Stack?

SPEAKER_02 0:40

I just got done watching the rides, man. I had to run up here and get this interview up and running.

SPEAKER_03 0:45

Watching the rides. You haven't automated that yet either.

SPEAKER_02 0:48

Oh see. I will tell you something. I rotated my own tires the other day and nearly killed me. So I'm like, yeah, Micah's got something about this automation thing, though. I could have paid someone 25 bucks to do it and just um had my whole Sunday back, you know.

SPEAKER_03 1:07

There you go. I was uh watching the Cowboys game while you were doing that.

SPEAKER_02 1:11

Well, see who won in that situation? I'd have rather been rotating tires than watching the crappy Cowboys playing. Anyways.

SPEAKER_03 1:18

So we have a special guest on today. We have Mr. Kyle Stanley.

Kyle Stanley's background and the accidental Fresno Airbnb that launched his business

SPEAKER_02 1:23

Give it up, Rakon.

SPEAKER_01 1:25

What's going on, guys? Thanks for having me on. Excited to be on here. I'm not anywhere near Texas, but uh I do love me some Texas. And where are you based out of, Kyle? Fresno, California.

SPEAKER_03 1:36

Fresno.

SPEAKER_01 1:37

Fresno. Yeah. People always ask me why would anyone want to go to Fresno? And I still don't know the answer to that.

SPEAKER_02 1:44

I know the answer.

SPEAKER_01 1:45

What's that?

SPEAKER_02 1:46

When I'm flying to LA and it's all filled up, the flights, you know, I fly standby, I have to go somewhere like Fresno or that is a good reason. I might buy a keychain at the airport, but you know.

SPEAKER_03 2:00

So, man, so fro how's the Fresno market as far as well, first of all, give him a little background of yourself and what you do. Because he has a very interesting way of doing Airbnb. So, yeah, give him a little background.

SPEAKER_01 2:11

Yeah, for sure. So um for for me, I I mean I don't know how deep you want me to go into this story, but I'll kind of real quick, real quick, Kyle.

SPEAKER_02 2:18

Uh, this is episode 104 of your favorite Airbnb uh Share Economy podcast. All right, go, Kyle.

SPEAKER_01 2:24

Alright, sounds good. So uh yeah, real real brief uh story of me. I I'm from Fresno originally, moved um away for 10 years. One of those places I moved was Scottsdale, Arizona, bought my first house, and when I bought my first house, I realized very quickly that I might have bought a house too soon because I was like, oh my gosh, I don't know if I'll be able to afford this mortgage. And a friend of mine told me about Airbnb. This was 2014, 15, right around there. And um used, if you guys are familiar with the term house hacking, you know, decided to take the house hacking way of Airbnb, putting the the room together, and I had a couple roommates too. And so since then I've never paid a single dollar on my mortgage because of Airbnb. But then in 2016, my dad was uh diagnosed with bone cancer, and so it was time to move back to Fresno, and so kind of gave up what I was doing over in Arizona, and when I moved to Fresno, I said, well, shoot, I'm not gonna be able to do Airbnb in Fresno, no one wants to stay there. So uh I kind of put it off for like three weeks, and then I was like, you know what, I might as well give it a shot. I threw up uh a listing there, kind of, I mean, for lack of a better term, I really half-assed the listing because I was like, no one's gonna want to book here anyway. First night it got booked, and I was like, why are you coming to Fresno? And since then, guys, I've I've been doing it for three years this year, and I've consistently had the business person, the family person, and the traveler wanting to go to Yosemite or the Sequoia National Park, LA, San Francisco, and they use Fresno as this hub. And if you go on to airDNA.com, um, I mean, Fresno is an A- in terms of listings, and I mean the demand is like 98 out of 100. It's crazy. And I was just like, you know, there's something to this. So essentially, um, I kept on doing the room in 2018. I got curious. I was like, what can I do with an entire house? I threw some astronomical price on there. That got booked three days in a row, and I was like, okay, it's time to really take a look at this thing. Since then, bless you. Thank you. Uh since then, um, for the last basically half a year, I've been doing uh full houses and just locked down my second rental arbitrage today. I actually just walked into an apartment complex and gave the spiel, and two hours later they're calling me, and I've got my now fifth Airbnb uh under contract and and just rolling with this thing. It's I was telling Micah here, you know, the I do flipping on the side, but that's kind of my bonus money, and Airbnb is really my consistent uh cash flow that I get every month.

SPEAKER_03 4:51

Wow. So you said you're up to five, so you're arbitraging and buying, right?

SPEAKER_01 4:56

Yep, I've got three that I bought um and then two that I'm arbitraging. The three that I bought, two were with my own money. Um again, it was just one of those things where I had my own house. Wasn't in the best area for Airbnb. It was in a really nice neighborhood, but wasn't the best area for Airbnb for what people were coming to Fresno for. I was I just really decided to get to know my customers, and my customers all wanted close to a highway, close to the airport,

Two houses on one lot: $2,100 monthly cash flow with a long-term tenant managing the short-term unit

SPEAKER_01 5:22

or close to Fresno State, and I wasn't close to any of those. So I decided to sell my house. I bought two rentals with that house, and then my third house that I got is actually two houses on one lot, and we can kind of go into that one in a little bit. That's kind of my my favorite one. I get cash flow about $21 to $2,300 a month on that one.

SPEAKER_02 5:41

Whoa.

SPEAKER_01 5:42

Yeah, because um essentially what happened there was that was going to be a flip, and then me being new to flipping here in January, that's when I started my flipping career. Um, my mentor said, Kyle, that's a rental all day long. And I was like, Well, why is that a rental? Well, and he got to telling me in, and then I was like, Well, why would I want to do a long-term rental there? Why don't I just do what I know I'm good at, which is Airbnb? So I put a long-term tenant in the big house, and I'm Airbnb in the small house, and the long-term tenant is managing and cleaning the small house. That's awesome.

SPEAKER_03 6:16

I love that.

SPEAKER_01 6:17

And so literally the big house, like 90% of the mortgage and expenses are covered by the long-term tenant, and then right after like day three in the small house, I'm just cash flowing. Um, and that thing is, for example, this last 70 days has been booked up from one person who's here in town for work. Um, so that those three are enough to give me a full-time income, but then I got really excited about the arbitrage stuff recently and um have locked down two apartments uh for arbitrage, and maybe even a third uh single family home here pretty soon. We'll see.

SPEAKER_02 6:49

Whoa.

SPEAKER_01 6:50

Hey, you're moving.

SPEAKER_02 6:52

Moving, trying. So I t I take it, um Fresno's pretty um Airbnb friendly.

SPEAKER_01 6:58

Uh when you say Airbnb friendly, um Like there's no strict laws against it. We just actually had um one that was kind of because of stuff going on in Sacramento, there was a couple like news stories in Sacramento of people's places getting trashed. Fresno kind of you know put their antenna up. They're kind of the last place to find out about things, it seems like, in California. Um we call it, you know, Fresno's like living in California without actually living in California because of prices and really just not cut up with the rest of society. Uh, but they heard about some stuff in Sacramento, so the city got together, talked about it, and said, do we need to put some sort of regulations on it? Lucky for us, all they did was put a business license. You gotta get a business license. So that's coming up here where I've got to do that. And you know, to me, that's an advantage because I think a lot of the fakers here in Fresno that are just wanting to make a couple extra bucks are not going to stick around once they find out they gotta go down to the city and and get a license. Um, so yeah, not not much regulations here.

SPEAKER_02 8:00

Well, that's great, man. I know Micah's already looking up the real estate in in Fresno as we speak.

SPEAKER_03 8:07

No, no, no. I had some questions though, since it's it seems like uh seems like it's pretty profitable out there, right? Since you're doing doing all that, and then you said you have a total of five. And are all your five in Fresno or you sold your house in Scottsdale?

SPEAKER_01 8:21

Yeah, sold my house in Scottsdale, um, then bought a house in Fresno, and then two years later sold the house in Fresno in order to buy two rentals um in better areas.

Fresno's Airbnb-friendly regulations and why fakers will quit when the business license requirement hits

SPEAKER_01 8:33

So um I currently, when my dad passed away, I moved in with my mom just to help her with you know the transition. So uh currently I'm living there, which is very lucky. I don't have any rent. Um, but right now I'm I'm building up a you know a an empire in Fresno in order to be able to in the next year live wherever I want, however I want, whenever I want. Um that's that is the goal. And you know, I I'll tell you this, just in terms of the profitable question, you know, it's not Southern California. You know, I'm not making, you know, I've got a buddy of mine that has 28 arbitrage places in Fresno, which by the way, I'd love to introduce you to him. He'd probably be a great guest for you. Um he's I mean, there's one place he makes like $30,000 a month, just one place. And you know, the Southern California is crazy good for it. But you know, in Fresno, uh what I love about it is that it they're they're still learning about Airbnb. So this town is very open to these new ideas. So I'm not going into apartment complex and getting shut down. I'm like, I'm getting a lot of, hey, that's really interesting. I haven't heard about that. Let me talk to my manager. And so that's what happened today because I met with a leasing agent. They're like, this is really interesting. They had actually never heard of Airbnb. Where I was like, Where have you been? And and then and then she called me two hours later and she's like, hey, my owner said that they want to give it a shot and we'll do a little trial run. Um, so so that's the benefit of being in Fresno. And so I mean, I'm I'm really happy with a thousand dollar profit, but my goal with every place is at least twelve hundred dollars a month.

SPEAKER_03 10:09

Yeah. Hey, that's a that's that's one heck of a profit margin, man. So with you having those five, love to run in, are you are you fully automated or you got all your systems in place? And what how what do you use to automate your business?

SPEAKER_01 10:23

Yeah, so right now the only thing that I do is either accept or decline guests. Um that is the only thing that I've got my hands on. Um I have because I still have a manageable amount of Airbnbs, you know, three moving into five.

Automation setup: $20/hour manager handles all guest communication, professional cleaners at $40/hour

SPEAKER_01 10:38

I have a manager who is also my assistant that I've just hired to take over managing all them. She communicates with all the guests. She um she and another person clean all the places. But as I'm adding on more here, what we're doing is uh we're hiring professional cleaning companies who I'm negotiating prices with. Um was able to find a really good one here in town that's gonna work with me for about $40 an hour. So I'll take that. Um and then I've I've looked into guesty um, you know, for communication with guests. Um I I'm not I'm not sold on it yet just because my system is working really well with having a manager, and I know that she's happy, so as long as I continue to pay her for her time, um, she's got buy-in, and you know, I want I want buy-in. That's the thing. I Mike, I saw your face. Do you not have a good experience with guestie?

SPEAKER_03 11:29

They're a bit expensive. Are they? Okay. Expensive and they take too long to get their uh automations to where they're supposed to be. So I use them for about a year and then I kind of hopped off the guestie train. Gotcha. So gotcha.

SPEAKER_02 11:45

Yeah. Now your uh manager is is she like a a co-host? Do you pay her like a co-host, or how does that work?

SPEAKER_01 11:52

Yeah, she's a co-host. Um and basically what we've done because she's also my assistant, um, I've just started paying her a salary. And when I say assistant, you know, I've because I'm doing other things outside of Airbnb, I've got a lot of paperwork with flipping houses, and um, because I have my own podcast and my own YouTube channel where I'm doing a lot of things as well. Um it just she does a lot of those types of things. So what I've done is I've just integrated essentially what I think the amount of time is that she'll be spending on average on Airbnb and my other things to come out to a salary uh per month that comes out to about $20 an hour. And so if she works more, uh that's great. If she works less, that's great for her. So um basically, yeah, that that's where I've got it at now. And what's really cool is that uh her mom has been looking for a place to live. So what we're doing is with one of my Airbnbs, we are converting the garage into a bedroom, and her mom is gonna live in that

Converting a garage into a bedroom for a live-in cleaner at reduced rent

SPEAKER_01 12:50

bedroom and is going to also uh be like an on-site manager that is going to clean as well. So, because of that move, so if if you can kind of picture these numbers, I'm an I'm a numbers guy, so I'll try to slow it down enough for the audience here. But I'm averaging at that place about fourteen hundred dollars of cash flow a month. It's a three-bedroom, two-bath, um thousand square foot place right next to the highway. And so I'm putting in seven grand to change the garage into a bedroom. She's gonna pay me six hundred dollars a month to live there. So essentially in twelve months, I'll have my investment back, but in return, she's also going to take four hundred dollars of expenses every month out of cleaning, and she would have had to pay about $750 to $800 to live there. I'm giving her reduced rent, so I'm getting about a thousand dollar swing, which is gonna take this fourteen hundred dollar cash flow place into a twenty two to twenty-four hundred dollar cash place, so that I'm gonna get my money back from that investment in about six to seven months.

SPEAKER_02 13:55

Now, this is this is a beautiful concept because you spoke about it at the other place, how the person that was living there, you know, manages and then and then um yeah, manage pays for the long-term rental part of the house or the big house and then and manages your rental for you, your short-term rental. And now you're gonna and you're gonna your friend's mom's gonna do the same. It's like you're hiring, I mean, it's it's put you're putting your long-term renters to work for you. It's um it's amazing.

SPEAKER_01 14:22

Yeah, well, and here's the thing is that you know, I I want to encourage people to do the same thing, but I also want to encourage people to do the research because there's there are based on states a lot of regulations and you know can can turn into lawsuits as well. So people need to be aware as well that, hey, if you know, if Sally is gonna live in the garage and Sally's gonna clean the place and she's getting, you know, essentially $200 a month, then it's been established that Sally is working for $10 an hour for an average of 20 hours every single month. And if she is logging her hours and reporting that to you, then you're in the clear. If she's not logging her hours with you, but she's privately logging her hours on the side and saying, Oh, I worked 40 hours this week, you know, or 40 hours this month, I should have been paid $400 instead of $200, and suddenly after two years, now she's got you know $10,000 of expenses that she hasn't been paid for, and now she wants to sue because for one reason or another that's been her plan the whole time or whatever, you know, that people can get into trouble. So I want to I want people to try this, but at the same time do your research and make sure that you're doing it the right way, and not just assuming that Sally is going to you know be your best bud and and be okay with the situation.

SPEAKER_02 15:42

Now now if you're telling her like if she does the cleanings and stuff, she okay, instead of you paying her cash money, you're just taking off $400 a month for the rent. Is that the s still kind of like payment or what?

SPEAKER_01 15:54

Yeah, I mean I'm not a lawyer, so I don't want to give that type of advice. Um, but that's the way I'm doing it, and people are just basically logging their hours. Um but again, you know, it it just depends on what legal advice you're getting. I don't want to get on here and start giving legal advice. I just want to encourage people that if they want to go down that route, then you know check it out. You know, make make sure you do your due diligence.

SPEAKER_02 16:17

But just the just the concept alone is like I mean, it's taking the like the share economy to to the next level because you know people complain, oh, you know, we can't Airbnb is pushing people out, nobody can afford places anymore. Oh, you know what? I got a place for you at a decent price, but all you got to do is manage the Airbnb part of the house. I mean, it's it's a beautiful thing. It's like um uh symbiotic relationship.

SPEAKER_01 16:40

So yeah, and if you're doing it the right way and you're not you know buying mansions or you know, arbitraging mansions, and then these people are you know cleaning a uh a thousand you know, 700 to 1,000 square foot place that should take them, you know, 45 minutes to an hour, maybe five to ten times uh a month. You know, it's not it's not a big thing to ask, and they get a great deal for having uh you know reduced rent.

SPEAKER_02 17:03

And then your friend, real quick on your friend that you're paying, you know, what amounts to twenty bucks an hour to manage you know your your all your um everything real estate going on, um she could do she can go find a VA in the Philippines and pay them three dollars an hour and then she don't have to do nothing. Just split the difference.

SPEAKER_01 17:21

Exactly. She hasn't quite gotten there yet, but well, and and that's the thing is that like you know, I to I was told by a lot of people, oh, get a virtual assistant. And you know, I've got a virtual assistant for a lot of my podcast stuff and YouTube channel for editing and everything. But when it comes to you know some of the things that I need a little bit more trust, like you know, passwords for accounts and things like that, I just that's my comfort zone is having someone that I trust and someone that's local and in town rather than someone across seas.

SPEAKER_02 17:49

Nice, nice.

SPEAKER_03 17:50

Most definitely. So I like the fact you're doing arbitraging and buying. So I'm gonna ask this question, but I think I already know the answer because of how you set it up. Which of you, which have you found to be a little bit more, I guess more profitable? The arbitraging or the houses that you buy?

Arbitrage vs. buying: one way to earn money vs. four, and why offense beats defense

SPEAKER_01 18:09

Well, the way that I teach it to people is do you want to make money short term or do you want to make money long term? Um you've got four different ways to earn money when you buy a house. You've got one way of earning money when you arbitrage a house. So when when you buy a house, you know, you can get the cash flow, which you also get as an arbitrage. So there's your one-way in arbitrage. Your one way, your first way in buying is you know, you're gonna be able to get the cash flow. The tenant is paying the debt, you're gonna get tax advantages every single year. And then that bonus one, which I really don't promote, but I say, hey, the the fourth and bonus way is really appreciation. You know, if you appreciate, then suddenly after, yeah, and I just did a video here. If if you guys um want, I can send you the link too. But I mean, are you familiar with Grant Cardone?

SPEAKER_04 18:57

Oh yeah.

SPEAKER_01 18:58

Yeah. So so Grant, I'm I'm a fan of Grant. What I'm not a fan of is him saying that Cardone Capital is the best way to invest money if you have no knowledge, no expertise, and and no money when investing into real estate, because it's not. You're getting a four and a half percent return on your money if you're not an credit a credit investor. If you're an accredit investor, you're getting six percent. Well, an Airbnb alone, if I go arbitrage a place, even if I use my own money, let's just say it's ten thousand dollars for that first year for furnishing and for security deposit and everything, and I'm cash flowing a thousand dollars every single month, I just got essentially a hundred and twenty percent on my money in year one. So, which if you do the math there, like I say I'm a numbers person, if you do the math there, you know, you're you're getting basically like 12% every single month. So, or 10% every single month. So, why am I gonna give my money to someone else when I can adopt these systems from someone that's already been doing it and use my own money to go and and grow my money faster? And so for me, yeah, if I if I'm gonna invest my own money, I'm gonna I'm gonna either buy or arbitrage and I'm gonna get a better return than just hoping that someone else is gonna do great with my money. Um on the other side, just to answer your question here, Micah, I I I believe in Fresno, California, it's better to own because when the market corrects itself or the economy crashes again, people are gonna come from San Francisco and from LA and they're gonna go to Fresno. I I don't think I don't think that there's gonna be as much of an effect in Fresno. I could be wrong. Um, but I want to own more. And in the meantime, though, if I can't own because I don't have the funds or I don't have the um you know the deals coming my way, then I'm gonna arbitrage as much as possible so I can start getting that cash flow.

SPEAKER_02 21:00

Diversification.

SPEAKER_01 21:01

Yeah. Well and then you know, obviously with arbitraging, you just don't have to worry about as much if it's if it's an apartment complex. You got your electric and internet, and that's it. With a house, you know, you gotta get that pest, you gotta get the uh the the what's it called? Um the the landscaping, the the utilities, like all these different things that are gonna cut into your profits that you know don't end up being as profitable.

SPEAKER_02 21:28

So could you walk us through how you present to an apartment complex like um the scenario of arbitrage?

SPEAKER_01 21:35

Sure. Um, you know, uh for me I just I go in there, I never share my intent. I never tell them, hey, I'm gonna come in and talk to

The apartment complex pitch: befriend first, never mention Airbnb until after the tour

SPEAKER_01 21:44

you about having a corporate rental. Um what I do is I just go in um as if I'm going to rent the place out myself, but I don't focus on asking a bunch of questions about the apartment complex. I just truly try to make a friend. Um, I try to ask them. Lots and lots of questions about uh not only the apartment but about themselves. Hey, are you from here? Uh did you grow up here? What high school did you go to? Try to find some commonalities, you know. Um that way when after they've showed me the demo of the place and you know, taken me through everything, if it looks like a good fit to me, and they take me back to the leasing office and we sit down and I just say, hey, listen, you know, you can kick me out if you want to, but here's the deal. I'm I I've got a different situation than what most people have. And this is what what I have to offer. And I give them my brochure and I also give them my pros and cons of working with someone like me. I say, I've got this company, it's called Fearless Flipping Um Vacation and uh Corporate. If it's not in front of me, I like have to think about it. It's such a mouthful. Fearless Flipping Uh Vacation and Corporate Rentals Short-Term Management Company. Or essentially what I do is I pre-screen every guest that's going to be coming in and staying at the lease that you will give to me through the platform of Airbnb. Are you familiar with Airbnb? Um, I ask them that question. And like I said, people like today who have never heard of Airbnb, I gotta educate them now versus someone who is familiar with Airbnb. You know, I gotta I gotta break down those walls. I gotta figure out what's your experience with Airbnb, how do you um what's what have you experienced from both a guest or a hosting standpoint of Airbnb so that I can start to um really show them how what I do is different than maybe what their experience was if it was a negative or a positive one. Um and then I just th kind of let the the um materials that I bring with me do the rest of the talking. I show show them how I'm gonna clean it every single time. I'm going to uh pre-screen every single guest. I'm going to, if you don't have a repairman on site, I'm going to bring in the repairman. I've got a guy who does great work here in town. Uh the liability, it's none of the liability is on your shoulders, it's all on mine. I'm protected with a million-dollar insurance policy. At the end of the day, this doesn't add another job to you. It actually is still, you're treating me just like a tenant. If there's a noise complaint, you don't have to go talk to the guests, you call me, I handle it. Um, and so through showing them that, I essentially tell them, you know, hey, listen, at the end of the day, if this lease gets broken, you're gonna have that place in just as good, if not better, condition when I leave than when I got there. And so at that point, I just asked them, you know, is this something that you would consider? And most of the time, you know, I would say, you know, one out of every so far, maybe one out of every six to eight say yes. And the other, you know, five or six say, you know, I I'm not sure, I gotta run out of the flagpole, I gotta try, or we don't allow this, you know. So I but I'm okay with getting the no's because at the end of the day, because I made a friend, they're not like get the hell out of here. You know, they're hey, thanks for sharing this with me. I can try, but I don't think it's gonna work. And it's it's a pretty easy no to take.

SPEAKER_03 25:02

I love that you don't fear no, man. Consistency is key. Like you just said, one out of what, six to eight say yes. So yeah, it's consistency is key. And I think your biggest niche is that you're in a city where they don't really know where Airbnb what Airbnb is, so you use that to your advantage. Because yeah, here in Texas, we you say Airbnb, it's good. That's a bad word. But yeah, I love that.

SPEAKER_02 25:26

That's that's a that's a great percentage you're batting there because our buddy AJ, he's he does pretty good at arbitrage, and he bats he one in a hundred might say yes to him.

SPEAKER_01 25:36

So I yeah, it's it's all about the place, right? It's all about location. Um friend of mine who's here in town right now, she's trying to do this in Cincinnati, and so she's talking about like, you know, hey, uh can I expect the same thing? I said, I don't really know, but I think Cincinnati is probably gonna be like a bigger city where it's gonna be a little bit more, you know, um, a little bit more common that people are doing arbitrage. So you you gotta go in there with the idea that I'm going to get a no, but at least I'm gonna make a friend. Like I'm I'm not going to go in there as a salesperson, I'm gonna go in there as a normal person who's just looking at an apartment, and if I get shot down, I get shot down, but I did it in a professional way, and I showed this person that, hey, you know, I I just I'm I'm here to to show you what I've got, and if you don't like it, no big deal.

SPEAKER_02 26:24

Now, now we're gonna we'll just dig a little deeper into it because this is like the number one question we get asked on the show is how how do we how do we start our arbitrage, you know? Because so many people, you know, they ain't trying to buy houses and stuff to do this, they want to arbitrage, you know. It seems like a quick, like an easy buck for them. And so they're always asking us how you know, how do I start? How do I ask them? What do I do? And so you said you go in there like a normal person. Now you don't go in there with like a suit and tie on or nothing like that.

SPEAKER_01 26:49

No, you're you're you're seeing what I wore today. I've got a t-shirt and jeans. Oh, okay. That's what I wore. Yeah.

SPEAKER_02 26:54

Sweet. They're more relaxed, yeah. Because then you go in there with a student tie, they might think, hey, what is it, what are you trying to sell me? You know, what is he trying to, you know, I guess I guess that makes sense too.

SPEAKER_01 27:05

I want to be relatable.

SPEAKER_02 27:06

And also on that, on that topic, because I hear people will even tell the apartment complexes, you know, I'll pay you 50 bucks or a hundred bucks more a month if I could do this in your apartment complex. Now, do you ever do that?

SPEAKER_01 27:18

Yeah, that's what happened today. Um person came back and said, hey, uh, you know, because you're you know, you know, and I I don't I don't really like this mindset. I don't think it's a very um good business mindset. So for those that are listening and think like, oh, if someone's making a buck off of you know my place, then I need to make more money too. I that's a that's a shitty mindset. It's you know, er there's enough for everyone to go around. And so this person called me back and you know, they said, Hey, my boss is up for it, but you know, um, would you be willing to pay $150 more a month? I said, you know, it's by the way, cheap. It's $950 was luxury apartments, stainless steel appliances, $9.50 a month. And I'm like, you know, eleven hundred dollars. I said, you know, uh, I'll tell you what, can you get me down to ten fifty? And so I'm paying an extra hundred dollars. They they agreed to ten fifty, so I'm paying extra $100. The only thing I don't like about this place is that there's no wash or dryer in the unit, um, and it's a dollar twenty-five um every time you're gonna do a wash and a

Lockboxes, $50 lost key fees, and why apartment complexes feel safer than single-family arbitrage

SPEAKER_01 28:20

dry um outside in a community location. So my cleaners are gonna have to go through a little bit more effort, which I'm not a huge fan of. But you know, at the end of the day, $10.50 for this beautiful luxury one bath, one uh bed apartment that's a quarter mile away from the highway and two miles away from the airport. Uh I'm gonna be booked all the time. So I'll go for it.

SPEAKER_03 28:42

So are you are you doing, you said you're doing one bed, one bath. How are what are you listing them for? Are you listing them for two people, four people, or what?

SPEAKER_01 28:50

My one beds, I'm doing five people. Um so you got the the queen bed in the bedroom, the futon uh couch in the the living room, which can fit two people, and then the air mattress that can be put somewhere else. So really it could be six, but I don't want to cram six people in there and then be like, wait, this is only one bedroom, one bath. You know, I think five could be comfortable as long as they understand what the situation is they're getting into.

SPEAKER_03 29:16

Nice.

SPEAKER_01 29:17

So have you had any troubled guests yet? Oh yeah. Um it's it's funny. Um, you know, the the shared rooms, I didn't really have many troubled guests when I was doing it out of my house, but then of course, you know, you let people do things on their own. And you know what though? I tell people all the time, I don't know of another company that has better customer service than Airbnb. It is so good. Um, I've had three situations where I've had to file claims. One was a noise complaint, broken door, smoking pot in the place. Um, and you know, they I think at one point they had a dog in there. Another one was a stolen ottoman. Like, really, you're gonna come in and steal an ottoman of all things. Really? Yeah, and then the third was um, yeah, the these guests just they broke just like every rule. There was I have a no smoking, no pets, no partying policy, and they essentially like broke all those rules. And all three of those guests, you know, refused to pay any extra fees, so I took it to Airbnb and you know they took care of me. So I have a very high risk tolerance. That would be one thing I would really suggest to people is determine what type of risk tolerancy you're going to have. I think you need to adjust it based on if you own or if you arbitrage. If you're arbitraging, you need to be a little bit more particular on who you're letting in because you've got, you know, this community that can kick you out at any time. Whereas if it's a house, I can go apologize to my neighbors and you know, offer to take them to lunch. I don't know. Do do something that just makes them happy and they'll be okay. Uh but I have a high risk tolerancy. I w I figure, you know what, if this person breaks a door or steals an ottoman or anything, there's nothing that I can't handle that would, you know, make me not want to have that person there. So um at the same time, you know, I get people all the time sending me stuff like, oh, did you see this story? Someone was killed in an Airbnb, and it's like, well, you know what, that's that's the risk of doing business, you know. That's if it if you're gonna let that stop you, if you're gonna let fear get in the way of you ever starting an Airbnb because you're just like, oh my gosh, what if they trash the place, or oh my gosh, what if someone gets killed in my house and yada yada? Yeah, that's scary, but you know, what if you go and start a a different company and you know everyone says no to your product and then you're going bankrupt in two months? Like there's a risk to every single business that you're starting.

SPEAKER_02 31:45

Oh, go ahead. Oh, okay. So so do you might mainly do one bedroom, one bath in the apartments, or do you go do you prefer or do you do two bedrooms?

SPEAKER_01 31:54

I like the one bedroom, one bath in the apartments mainly because I'm always thinking worst case scenario. And what if this apartment complex after 12 months doesn't allow me back in? And I spent because it was a two-bedroom, one bath, I spent, you know, eight thousand dollars getting it ready versus five thousand to six thousand getting it ready for one bedroom, one bath. Um, you know, at the end of the day, though, because I own that furniture, I can move it to a different place. But I want to get the best return for my money in year one as possible. And I find that if I can keep my costs low getting into a place, then I'm gonna be fine if I'm arbitraging. If I own the house, I'm looking long-term all the time. I'm I'm I want that three-bedroom, two-bath for the house nine times out of ten.

SPEAKER_03 32:43

So I have a question because you said something about marijuana and the place. Yeah. You being in a city like Cal in a state like California, and do you have you seen that if you do allow marijuana, like you say, hey, you're 420 friendly, have you have you known anybody in the area that have probably been able to charge a little bit more?

SPEAKER_01 33:02

Or that's a good question. Um I'm just I don't know, but I'll tell you right now, I'm not attracting those guests.

SPEAKER_04 33:10

You know, I'm I'm okay.

SPEAKER_01 33:11

I'm I'm attracting luxury. I want the business person, I want the family with kids, I want the um the couple that's gonna be just looking for a place to stay because they're getting in at 8 p.m. and they want to go to Yosemite at 6 a.m. Um, you know, I I do not want those people. And the the times that I have gotten them is when most of the time I've had to file some sort of claim because they, you know, they they leave the place a mess, you know, and and that's that's just not something I want to deal with all the time. I want to take as much of the headache out of it as possible.

SPEAKER_03 33:43

See, that's good. See, because we've me and Steve, I'd always talked about that. Like, hey, if you allow those type of people, would you charge a little bit more? But hey, if you already noticed the trend with the guests, yeah, no no.

SPEAKER_01 33:53

Yeah, no way. Uh the the only thing I charge extra for is um the the extra guests. That's the only thing I charge extra for. You know, if there's if I if I'm promoting, and usually my formula for that is if I'm promoting that this place is fitting six people, then one to three is no extra charge, and then everyone after that middle person is gonna be the extra charge, and usually $15 to $20 per person per night.

SPEAKER_02 34:18

Okay, so get on that, Steve. I know, big time. Um so so dealing with department complexes. Now here's a a huge thing for us that we Airbnb out of houses, we always um we always put our smart locks on there. Now, how are they how how how does that work with department complexes? How do you how do you handle the locks?

SPEAKER_01 34:38

Yeah, when you say the smart lock, are you talking about an electronic one?

SPEAKER_02 34:41

Yeah, electronic or you know, or remote or whatever, anything that you have to, you know, that doesn't have involve a key.

SPEAKER_01 34:48

Yeah, you know, uh I'll I'll admit I'm still a little stone age on that, just because I've I I just haven't gone the electric um and smart lock way yet. Uh so I've still just been doing lockboxes. Um and I I do also think though, if you're gonna do that, if you're gonna do the lockbox way, you need to have a system in place for lost keys and a system in place for changing the lockbox code. Um so once a month we change our code, unless we have a troubled guest, then we'll always change the code after that troubled guest. And then I always have in, I mean, and here's here's just a good rule for anyone is you know, make sure that if you're expecting something out of your guest, it's got to be in that introduction uh instructions. And so my introduction instructions have the fees for if you do this, this, and this, this is the consequence of that. And one of them is a lost key. If you lose the keys, you're paying me 50 bucks. Okay.

SPEAKER_04 35:41

And yeah.

SPEAKER_01 35:42

And so I've never had any there's only been one person that's walked away with keys in their pocket, and I called them, and they were like, oh my gosh, I didn't even realize that was in my pocket, and they brought it back two days later.

unknown 35:54

Wow.

SPEAKER_02 35:55

Yeah, make it hurt, right? Make it hurt. Yeah, exactly.

SPEAKER_03 35:57

So the you guys you you use lockboxes, is that a little bit easier for you? Like, are you you just allowed to post them somewhere at the apartment complex?

SPEAKER_01 36:04

Yeah, just I mean, right next to the door is usually either the the railing to go upstairs or the water pipe, and you know, it you can find places for sure. If it's got that little um hook on the the doorknob, you know, just hook it there. Um I I find, especially for apartment complexes, I find that's probably gonna be the easiest way. They're probably not wanting you to put the smart lock stuff on there.

SPEAKER_02 36:27

Okay. And what about um cameras? Do you do you deal with cameras at all?

SPEAKER_01 36:32

Yeah, I've got a ring system at all my houses.

SPEAKER_02 36:34

And apartment, but about apartments though.

SPEAKER_01 36:37

Yeah,

The Canva-designed trifold brochure that closes deals at FedEx print prices

SPEAKER_01 36:39

again, it because it's an apartment complex, I know they don't really like a whole lot of that stuff being put up, so um so far I haven't had any yeses to that. But because the apartment complexes have their own camera systems, I know I'm pretty pretty safe with just using their own. Um, but I just haven't I haven't gone that that route, and I don't know what it is about apartment complexes that just makes me feel more safe. But I I just know that when I have a guest coming into an apartment complex, the likelihood of them creating any issues is just so much lower uh than than a house because most of the time people realize, hey, I'm sharing a wall with someone, and if I make any excess noise, they're it's gonna be known. Whereas like a house, I can probably hide that a little bit more.

SPEAKER_02 37:23

I guess I meant like towards the uh if they bring extra guests and without trying to pay, you know.

SPEAKER_01 37:28

Oh, right, right, right. Um yeah, you know, I'm not a huge stickler for that. Um if they bring extra guests, they bring extra guests. It but if they bring extra guests and they leave a mess, then I have that ring system on my houses, which you know really allows me to be able to call them out. Um but you know, haven't I haven't done that in the apartments and honestly don't really have a good reason why.

SPEAKER_02 37:50

I I myself, I would like you know, I'm always I'm always contemplating trying to do some arbitraging myself. But um I I'm interested in how you how your um catalog looks or a catalog brochure, whatever whatever it is. Um you wouldn't happen to have one close by, would you?

SPEAKER_01 38:05

Uh if you give me 15 seconds, I could grab one.

SPEAKER_02 38:08

Okay. I'll count.

SPEAKER_01 38:09

I'll go grab it. I'll be I'll be right.

SPEAKER_02 38:12

Because, yeah, that's the thing, man. I wanna, I mean, I hear these people doing these badass um brochures, and I'm like, man, I gotta get I gotta get one of these, man.

SPEAKER_03 38:19

And so uh about to start arbitraging Stevie Stacks.

SPEAKER_02 38:22

I want to get some, dude.

SPEAKER_03 38:24

I have one bite right below me.

SPEAKER_02 38:25

Oh, okay. And it's uh where'd you make your get yours made at?

SPEAKER_03 38:29

At Vistaprint.

SPEAKER_02 38:31

Okay. Is it all shiny and glossy and pretty or what?

SPEAKER_03 38:35

Yeah. It was like one of mine that I use.

SPEAKER_02 38:41

Okay. It's just is it open up too?

SPEAKER_03 38:43

Well, I gotta put my paperwork in it. I have my paperwork separate.

SPEAKER_02 38:47

But yeah.

SPEAKER_01 38:47

What's up, my little guy?

SPEAKER_03 38:49

Check it out.

SPEAKER_01 38:50

I usually charge for this stuff, guys. Oh, there you go. Alright, so it's a trifold. So there's my there's my front there.

SPEAKER_02 38:59

Nice logo, by the way.

SPEAKER_01 39:00

Thank you.

SPEAKER_02 39:01

Oh, I like that. Is that a wolf?

SPEAKER_01 39:04

It it's a uh lion, actually.

SPEAKER_02 39:06

Lion. Almost like a saber-tooth tiger, because that long thing coming down right there.

SPEAKER_01 39:09

Almost, right? Yeah. I so the meaning behind that um is my when I grew up, my mom was always saying to have uh the courage of a lion and the sensitivity of a lamb. So the lion and lamb. But um when I got into real estate investing, you know, I just wanted to have this idea of courage and fearlessness, and um I thought of a lion for that, and so that's where that's where that comes from.

SPEAKER_02 39:34

Nice.

SPEAKER_01 39:34

Yeah, so that's that is the back end of it, you know, just a little little motto there on the side. And then on the inside is a picture of my listings, a few of them.

SPEAKER_02 39:45

Nice.

SPEAKER_01 39:46

And then what we're all about here in the middle, my you know, um, picture of me and showing that you know I'm qualified on Airbnb, and then a few of my reviews here on the side.

SPEAKER_02 39:58

That's cool. Where'd you get that made at?

SPEAKER_01 40:00

Wow, I like that. Where where'd I get what?

SPEAKER_02 40:02

Where'd you get it made?

SPEAKER_01 40:03

I made it myself on Canva.com, and then I had it printed at uh FedEx.

SPEAKER_03 40:10

That's dope. I like that. Yeah, Canva. Canva is the truth.

SPEAKER_01 40:14

It's it's good. It's really and then I've got uh on the back here, I've actually got this on a uh web design um web page, so it's just fearlessflipping.com forward slash rentals, so they can go there to like a business page, uh, so it looks a little bit more official too.

SPEAKER_02 40:30

Okay, so you you so you leave some behind for them to to contemplate. They'll have something to hold in their hand and show to their boss or whatever. Exactly, exactly.

SPEAKER_01 40:37

Yeah.

SPEAKER_02 40:38

That's cool, because business business cards are business cards are dumb, I think. But oh yeah. But brochures, those that's pretty neat, man. Um so um so you go in there with your brochure, you you you tell them all about your thing, uh, and you're paying more for that one. So you um so the arbitrage thing, you're thinking that's that's the best way to scale right now?

SPEAKER_01 40:59

Best way to scale. Um it's it's the easiest to me to be able to um not only not only to scale, but to help other people make a return on their money too. Uh, because you know, when you can uh eight, you know, six, seven, eight, ten thousand dollars at the most is what you're spending to get into this. Well, that's that's great for one, you know. So uh the majority of people can have that set aside to be able to do one. But you start getting into five, six, you know, like my friend, twenty-eight different different ones in in uh urbine California, and you know, you're you're not using your own money. So to be able to also have a a system in place and a program in place that's helping people to put forth the capital and help them get a great return on their money. Um, I I think that's easier than saying, hey, put up 60 to 70 grand for a house and get a return on that, you know, 10, $8,000 to $10,000. Uh you can get a lot of people that are gonna give money for that.

SPEAKER_02 41:59

Nice.

SPEAKER_03 42:00

And so so what are your walking in the door like for arbitrage? What are your startup costs like furniture? Are you going high-end? Are you just hey, grabbing some stuff there while it's here and there, Facebook Marketplace, or how are you setting up?

SPEAKER_01 42:13

Well, I am very blessed because I have an interior designer who is also on Extreme Home Makeover as of recently. So yeah, she just got hired for Extreme Home Maker Makeover. So if you go to my listings and you're like, holy cow, this place is nice, it's all because of her. Um and but she she and I have negotiated some terms so that you know essentially if I'm out of town or anything's going on, she can go put the the place together. And that's a whole other topic, too, is just you know, seven days before starting a listing, what that looks like. Um, but she's a huge part of that. And um, so I would say for my one bedroom, one baths with

Furnishing a one-bedroom for under $6,000 with an Extreme Home Makeover designer on the team

SPEAKER_01 42:59

the necessities, all the things I get on Amazon, you know, your vacuum and your ironing board and all that stuff together, I want to be right around a thousand bucks, no more than that. And that's gonna last me, you know, for probably three to four months, you know, um, for just stuff that's saved up. Um, and then furnishing for that one bedroom, one bath, you know, furniture probably is gonna cost between about three to four thousand, and then I'm gonna pay my interior designer about a thousand to fifteen hundred for her time. So I'm hoping in a one-bedroom, one bath to get out of there under six thousand dollars. And then for the three twos, you know, anywhere between seven and nine thousand.

SPEAKER_03 43:42

Okay. Wow, seven to nine?

SPEAKER_01 43:44

Yep.

SPEAKER_03 43:45

Okay. That ain't bad.

unknown 43:46

Yeah.

SPEAKER_03 43:48

I've been thinking about going a little bit higher in after our last guest told us, yeah, he goes high in. Seven to nine ain't bad, and that's pretty good high-end stuff.

SPEAKER_02 43:55

Yeah, right.

SPEAKER_03 43:56

Yeah, yeah.

SPEAKER_02 43:57

Oh, go ahead.

SPEAKER_01 43:57

No, no, go ahead, Stephen.

SPEAKER_02 43:58

I was in our last guest. He'll put 30,000 into one of his arbitrages. It's it's insane. Next level stuff, man. Where is he?

SPEAKER_01 44:05

Where is he at of though?

SPEAKER_02 44:07

Dallas.

SPEAKER_01 44:08

Okay. Yeah. Well, you know, the big thing that I have told a lot of people is it just it really depends on location. Like Fresno, people are not coming to Fresno for the same reason that they're going to Dallas. You know? Um if I'm if I'm coming to Fresno, it's because I have to, not because I want to. And and if I have to, then I'm gonna probably look for the the nicest stay at the lowest price, versus in Dallas, you know, you got a bachelorette party coming there with 20 girls that's willing to pay, you know, a hundred bucks each per night, and suddenly you're getting two grand a night, you know, that's great, but that's not gonna happen in Fresno.

SPEAKER_02 44:47

So so you since you do um diversify, you do the flipping, you do the arbitrage, you do the long-term. How does um you know the word synergy come into play? You know, how does one thing feed on the other? And you kind of gave us examples of that, how you're you got your um long-term you know, tenants, you're putting them to work for you in a way. And um, but how how well how else has um the synergy become uh helped your business?

SPEAKER_01 45:10

Well, the networking for sure. Um I've become the the Airbnb guru in Fresno. So all these guys who are flipping, who are looking for, you know, starting starting their own rental business. Um Micah's got some kids back there. There you go. So uh with them starting their own rental business, you know, lots of people in Fresno are bragging about $200 to $300 of cash flow every month, and I'm over here, you know, making sometimes $1,500 or more of cash flow, and they're wanting to know how I'm doing that, which has created partnership opportunities, um, which has created um an opportunity for me to be able to sell my services, which is really cool. Um, but then you know, as I'm coming across uh people that you know want to sell their house and and want to do the flipping thing and and you know, all that for me, if I get a deal under contract, I get to also look at it as you know, do I want to flip and sell this or do I want to flip and hold on to it and create an Airbnb situation? So um, which is great because I'm always using other people's money in those, which means that like this two-bedroom, one-bath house, you know, I didn't put a single dollar into that house. That was all other people's money, and it's making me over $2,000 a month, which is really freaking awesome.

SPEAKER_03 46:27

That is awesome. Yeah, I think it opens up your opportunity when you mix the flipping with the Airbnb. I love that. Exactly. Yep.

SPEAKER_02 46:35

And so you mentioned um selling your services. What kind of services do you um to you sell?

SPEAKER_01 46:41

Yeah, it's basically I've got an Airbnb jumpstart program um where I am going to help that person understand and adopt every single one of my systems. Um essentially I tell them I'm gonna take my brain, take it out, and put it into yours. Um, and part of that program is also co-hosting with that person for one month so that they see how I communicate with guests and that they can adopt that same communication platform and then decide if they want to use it themselves or outsource it to a manager like me or to some guestie. Um so it's just essentially taking that person from point A, whether they have an Airbnb business or not, to point Z, which is multiplying or starting your profits with Airbnb. And the way that I really share that and sell that is that you know I was doing Airbnb for four years, not realizing how much money I was losing because I was only doing a room out of my house and didn't know about arbitrage, didn't know that an entire house would make me so much more money. And so when I was making you know $600,000, $800,000 a month with a room out of my house to literally three months later, now I'm grossing over $12,000 a month with four three to four locations. Um it was because of the the reason of that gap, in the middle of that gap was education and mentorship and courses and understanding the systems to reduce my learning curve, reduce my risk, and raise my profits. So that that's really what I'm offering is to help people not have to wait four years to do that and do it in a few months' time so that they can get off to the best start possible.

SPEAKER_03 48:23

That's awesome. Are you listed on any other platforms besides Airbnb?

SPEAKER_01 48:28

You know, I I listed myself on VRBO and I don't know what it is. People don't look on VRBO in Fresno. I just I've never gotten a listing from there. So um Airbnb works here. Um I I'm a part of Furnace Finders as well. I don't know if you guys are familiar with that.

SPEAKER_04 48:42

Yeah.

SPEAKER_01 48:42

Yeah. Um but I've never had to use it. I'm just a part of it. You know, I get the I mean here in Fresno, if if I have less than 25 nights booked out of a month, I'm disappointed. You know, so I there's not if it's not broke, don't fix it. So, you know, that's kind of where I'm at on it. You know, um, but you know, at at some point I know that there's probably going to be um some changes and adjusting that has to be made. And I think I always tell people, you know, worst case scenario, everyone says, oh, worst case scenario, you know, you change your house from a regular um from an Airbnb rental to a regular rental. No, there's there's a couple steps in between that. Like you can get those long-term travel nurses that are gonna pay more money. You can get um someone who's gonna rent out a furnished home rather than a regular home for an extra two to three hundred dollars a month. And then at that point, if those still don't work, then you know, sell the furniture and turn it into a regular rental.

SPEAKER_03 49:38

Yeah. To our listeners, he he's yeah, that's corporate renting 101 right there. Yeah. He's giving it to you.

SPEAKER_02 49:45

And so is this your full-time gig? The whole is real estate your full-time gig?

SPEAKER_01 49:49

It is, yeah. Um part of uh a long roller coaster ride of other jobs and and careers that I've had, this is the one that has definitely come to stand.

SPEAKER_02 49:59

Nice. And when did you have the courage to just like quit your fight, your last job and say, I'm done, I'm doing this full-time?

SPEAKER_01 50:05

Uh it was June of this last year.

SPEAKER_02 50:07

Nice. Congratulations.

SPEAKER_01 50:09

Been, what is that, four months?

SPEAKER_02 50:11

Wow. And so I guess what what was your what goal did you want to hit before you're like, okay, I'm uh I'm after I get to this point, I'm gonna jump. I'm gonna quit for uh for good.

SPEAKER_01 50:23

Uh at least four thousand dollars of reliable monthly income, which was done with three properties here in Fresno for Airbnb.

SPEAKER_02 50:32

Nice.

SPEAKER_01 50:33

Yeah.

SPEAKER_02 50:34

And then you saw after that, you saw the job just getting in your way.

SPEAKER_01 50:38

Oh yeah, definitely. Um taking away time from finding other properties,

Burning the boats: quitting the day job at $4,000 monthly Airbnb income

SPEAKER_01 50:42

taking away time from putting time into my uh my podcast and YouTube channel, from finding other deals for flipping. Um, yeah, it it you know it was it was literally it was just a job. It was fun, but it was just a job. And so um a good friend of mine who's a wholesaler here in Fresno really it spoke to me when I interviewed him in May. And he said, you know, if if you're looking to do this this business of real estate investing, uh you need to burn the boats. You cannot, you can't have a plan B. Because if you have a plan B, it'll always be safe, you'll always go back to it. And until that point, I hadn't really thought about it. You know, you hear about a lot of people say, hey, use your full-time job to fund your dream. And I I I do believe in that, but if your full-time job is going to uh really not even fund your dream, but be the crutch for why you don't put a full-time effort into your dream, then at that point, why? You know, why hang on to it? And that's really what it was for me.

SPEAKER_02 51:38

Nice. And go ahead. Oh, okay. I guess I guess one big thing that people say they don't want to leave their jobs for, they they stick around and is the is the insurance. How do you handle like the the insurance part of that?

SPEAKER_01 51:52

I go to an insurance company and tell them how can they insure me.

SPEAKER_02 51:57

Is it crazy expensive like out there in the real world?

SPEAKER_01 52:00

Yeah, but you know what? I mean so just so you know, I'm you know, I'm single, I don't have kids, um, so it's a different situation for me. You know, I yeah, it's you know went from $70 of insurance uh costs every month with a job to $260 or $270 as a uh a business owner. But I mean, you know, for someone that's gonna let something like that get in their way, uh that's just another thing of fear. Like you you guys have heard me say it before. That's why I name it fearless flipping. I mean, it's there's too many things that these people that people get stuck on that should be speed bumps but become brick walls.

SPEAKER_04 52:39

I like that.

SPEAKER_01 52:39

I like that. Yeah, and I mean, like I've got a a friend who's like, oh man, what am I gonna name my LLC and what what's my pamphlet gonna look like? I'm like, you're thinking about the wrong things. You need those are those are important steps, but if that's what's on your mind, you're never gonna take the first step. You need to be thinking about who am I talking to next? Why doesn't everyone know what I'm doing? When are we going to get that first deal? How are we gonna get that first deal? Those are the questions that you got to be thinking about. And if and at the end of the day, because you're thinking about those things, you're making so much money that you're just like, well, yeah, sure, insurance has cost me fivefold, but I'm paying for it way, way better than what I was gonna be making at my job.

SPEAKER_02 53:19

That makes sense. Um, and another thing that people bring up about not wanting to quit their jobs, even I hear it on bigger pockets, they say hang on to your day job as long as you can because it's easier to get financing for the next house. Now, how did you how did you deal with that issue?

SPEAKER_01 53:34

It's true. I'll I'll be honest, refinancing has been a bitch. Um yeah, I mean it this this how but luckily because because I create opportunities with my private money lenders through flipping, and for those of those people that are listening that don't know what private money lending is, it's essentially someone who has money in the bank, doesn't know what to do with it, isn't getting a great return, and they see an opportunity to invest with me. Because I have great relationships with my private money lenders, this one with these two houses on one lot, the idea was that I was going to flip it, refinance it, give my private money lender all their money back, and own a house free and clear and have my private money lender pay it off. Well, when I went to refinance, because they haven't seen consistent income and I haven't owned this business of flipping an Airbnb for over two years, they couldn't create an opportunity, a situation where I could get what I needed for that refinance. So what I did is I just restructured the terms with my private money lender to last for the next two years, where they're getting paid a great return on their money, and then they're gonna get, when I do finally refinance, they're gonna get that lump sum at the end of two years where they're making essentially another six or seven percent on their money uh two years from now than they would today.

SPEAKER_03 54:52

Nice. That's a nice way to structure it. Yeah, give them the two years, and that gives you two years to build up your business.

SPEAKER_01 54:58

So so here's the deal. I mean, and this is what I tell everyone is when it comes to real estate investing or owning your own business, if you're going to let something like insurance, or let something like, oh, I don't know if I'm gonna get the refinance, or oh, hey, I don't even know what to name my business, then you're not cut out to be an entrepreneur because you

The apartment complex that caught him because the unit was too clean

SPEAKER_01 55:19

have to be a problem solver. So for me, I know that every single thing that comes my way, I'm gonna find a way to solve the problem. And I'm going to make smart decisions along the way that are going to allow me that if I do make a mistake, it's not going to break the bank. I'll give you a good situation. I didn't know about rental arbitrage until this year. When I found out about rental arbitrage, I aligned myself with the wrong course. I took the wrong course that was teaching the wrong way to do it. They were teaching the way of, oh yeah, just tell them that, you know, you want to put a lockbox out there because you have a lot of friends that are coming in all the time, and and you know, you're not telling them that you're going to go do Airbnb. And so I did it the wrong way, and I wasn't transparent with my um with my management company. I got away with that for five months. And then at the end of the five months, they did their semi-annual checks, and they found out, oh, this is weird, this place is too clean, this place has like a lot of towels and a lot of sheets, there's nothing in the fridge, what's going on here? They look it up on Airbnb, they find out that I've got this listing on Airbnb, they call me out, they say essentially, hey, you know, if you don't get out, we're going to evict you, yada yada, yada. Well, I'm telling you this story because I looked at this worst-case scenario before I ever started. And so what I found out from this apartment complex, and again, I'm not telling anyone to do this, do it the right way. Bring bring in something like this, be professional about it, share your intent, use the word Airbnb, um, make sure they understand what you're doing. But if if you come into a situation like this, make sure you're looking down the road. Make sure you're asking, hey, if you're not happy with this situation, if for some reason we're getting consistent, you know, noise complaints, which shouldn't happen, but and and you're not happy anymore, three months down the road, what's that gonna look like for me? How much is that gonna cost me? Is there an eviction fee? Are you going to evict me or are we going to part ways peacefully? You know, you need to look at these things. And so essentially what happened was I only had to pay them $200 per month for every month that I lived there. So I only had to pay them $1,000 to leave. And they didn't evict me. They came to a peaceful agreement with me and said, hey, listen, you know, we we know you're trying to run a business, just don't do it on our grounds. If you give us your notice, you can get out of here in 30 days without any sort of you know issues on your rental agreement or on your rental record. And so again, I'm I'm I'm gonna just bring this up as you've got a problem solve, but you also need to know worst-case scenario going into it, no matter what you're doing.

SPEAKER_03 57:59

I like that entrepreneurs are problem solvers. So when you when you said that you said that you took a course or whatever, we're not gonna put the course out there, we'll maybe talk off air. But um you you said you were so you tell them you're airbnbing. Well, you weren't telling them you were Airbnb. Are you telling them that you're doing a corporate lease or a corporate doing it like that, or how were you doing it?

SPEAKER_01 58:22

You're talking about the way I was doing it when I didn't do it.

SPEAKER_03 58:24

The way you were doing it.

SPEAKER_01 58:25

Yeah, I I essentially did it the the wrong way by telling them that I was just gonna live there myself, but I wasn't gonna be there all the time. And so if I wasn't there all the time and had friends that were gonna be in town for a couple days, is that okay? And yeah, and they said yes to that, but you know, it it just it was it was I was so like dead set on I'm going to do this that I wasn't gonna let anything stand in my way. Um and the first best case scenario that came around where it was gonna be the best worst case scenario, um, I was I was ready to jump at and I I don't I don't regret doing it, I but I wouldn't do it again.

SPEAKER_03 59:02

Yeah, uh to add on to that, that's actually a very good learning lesson because I've been in that situation with one of my arbitrages. Then the next two I was able to get the right way, but the first one is like it's always that cloud hanging over your shoulder over you, you know, like uh is this gonna happen? This gonna happen. Man, when you do it the right way, it's easy.

SPEAKER_01 59:20

Oh, I I had sleepless nights that first week of just like are they gonna find out? Like, I I know that you know, based on the sublet agreement they had, that I'm I'm in the right with that sublet agreement, but at the same time, they don't know I'm doing Airbnb, and it just it just didn't make me feel good. Um so so yeah, gotta do it the right way.

SPEAKER_02 59:40

The the the comical thing about all this is that your house was too clean, it set off alarms because it was too clean. That's how that's how that's how Airbnbs get busted, you know. We'd rather have it all dirtied up and ruined. Come on, man.

SPEAKER_01 59:54

It's so funny. I mean literally. I mean, uh I I hate to say it this way, but when I went in there to sign my uh you know, leaving in 30 days, my 30-day notice, um, the the manager said, Oh, you're Kyle. And I was like, Yeah, I'm I'm Kyle. She's like, you know, my leasing agent came back after doing the the inspection and she was like, something's up with it. And the manager was just like, What do you mean it's too clean? Like, is there such a thing as it being too clean? Uh she's like, something's just weird. Like, we need to look this up on Airbnb. I just want a hunch. And hunch was right.

SPEAKER_02 1:00:34

You see that city council? One of the dangers of Airbnbs is the houses will be too clean and taken care of. You don't want that in your city. You want crack houses in your cities, right? You don't want the clean stuff going on.

SPEAKER_01 1:00:45

There's no room for that.

SPEAKER_02 1:00:48

Man it manicured lawns? Come on, we don't need that in our neighborhoods.

SPEAKER_03 1:00:52

That's funny, man.

SPEAKER_02 1:00:56

But uh oh man. This has been a great this has been a great episode so far.

SPEAKER_03 1:01:01

Yeah, so I guess we'll get into our our round of questions. Hey, what is a tip that you would give to those that are looking to get started?

SPEAKER_01 1:01:10

A tip to those that would be looking to get started is hmm, um man, off the top of my head, I would, I would really just say you've you've got to be intentional. Um what I mean by intentional is setting up a plan. When I first got started, I was going on to Google and I was identifying which apartment complexes I was going to. Um I was identifying how much I needed to spend on a home in order to make the right return. And I I had identified exactly what was going to be like the perfect scenario for me so that when I came across it, I knew it was a winner. Um there's too many people I think that say they want to start something and want to get into something, but

Kyle's tip for getting started: identify the exact property and guest before you search

SPEAKER_01 1:01:58

don't know what it would even look like if they came across it, so they never take action. So identify what that looks like for you. If you've only got $5,000, don't go looking for a three-bedroom, two-bath apartment. Go for the one-on-one. If if you're if you're wanting to attract luxury, don't go looking in the bad neighborhoods because they're cheap. You're not going to get luxury. You're not going to get the business person, you're going to get the the the crack house that you know gives you headaches. Um identify the type of person that you want to attract and the budget that you have, where that money's coming from, and what that place looks like so that you know that when it's go time, you're going.

SPEAKER_02 1:02:37

Nice, nice. I I have a question. Uh what are um, and we talk about we talk a lot about um hacks on this show, and you did um house hacking yourself. And so what are some Kyle life hacks that you're what are some of your favorite life hacks?

SPEAKER_01 1:02:53

Ooh. Man, you guys you guys should have prepped me with these questions.

SPEAKER_02 1:02:59

It seems everything you're doing is kind of a hack, so yeah.

SPEAKER_01 1:03:03

Uh well man, I'm I'm trying to think if this would even be um uh a hack. Um can you give can you give me an example? Like, what's a life hack for you, Steve?

SPEAKER_02 1:03:15

Okay, life hack would uh would be using credit cards to travel for free. That's a that's a life hack. I like that.

SPEAKER_01 1:03:20

I like that. Okay. Um man, a life hack for Kyle. Um I've got a lot of mottos. I don't know if I have like hacks that come to mind.

SPEAKER_02 1:03:31

Okay, what's some Kyle mottos?

SPEAKER_01 1:03:33

Uh don't settle. Definitely don't settle. Don't settle. Um, which is probably why I'm still not married. Um worry, the unicorn is out there waiting for you.

SPEAKER_02 1:03:43

Um they're all messed up, don't they?

SPEAKER_01 1:03:45

Right, right. Um but uh yeah, no, uh a hack though, I guess I guess the the hack that I'm always looking for is um well and I guess this would go along the lines of a motto too. For a long time I played defense because you know, you go like you hear about Dave Ramsey and it's all about get out of debt and you and you you know you gotta pay off your home and all this stuff. Um to me that's defensive. Like you're going to always be uh investing in something like card-owned capital. I invested in card-owned capital. That was a defensive move. That was not an offensive move.

Why investing in Cardone Capital was a defensive move he regrets

SPEAKER_01 1:04:23

An offensive move would have been taking that X amount of dollars that I invested into Cardone Capital and saying, I'm gonna go learn about Airbnb and turn this money into three Airbnbs and go make $3,000 a month rather than, oh, Grant Cardone knows what he's doing and I should trust him, and now I'm gonna be happy with making $100 a month and just collecting a check. That's a quick uh the best advice I've probably gotten in the last year I didn't take. I wish I would have taken it, and it was from an apartment uh guy in town who owns commercial real estate. He owns over 200 units of apartments here in town, and sorry, 200 million dollars of units in apartments here in town. And he said, if you want to get into a syndicated deal, that's a quick way to lead a mediocre life. And I said, But this guy Grant Cardone knows what he's doing. I gotta, I, you know, I that's really the best place for my money to be. And it was because I had a defensive mindset, I had an employee mindset, not an entrepreneur, do it on my own and multiply my money, not just 10x, but 100x, that that I could have been doing a lot better um with that money than than what I'm doing right now. So made that switch on. And that's the important thing is you know, I I problem solved it. I figured out when I did that, that was not the right move. How can I do better moving forward?

SPEAKER_02 1:05:39

You 100x Grant Cardone, that's awesome. Now, now, if you if you leverage that, say, hey man, I'm uh you know, I'm investing in your system. Can you jump on my podcast? And he jumps on, then there you go. There's your thousand X right there.

SPEAKER_01 1:05:53

Exactly.

SPEAKER_02 1:05:54

You might have an in.

SPEAKER_01 1:05:56

I'm I'm sure of the uh what 10,000 people that are invested in the Card on Capital, he can be on all of their podcasts, right?

SPEAKER_02 1:06:03

He has to see how many viewers listeners you have first, and then you might think about it.

SPEAKER_03 1:06:07

I have two questions for you. Okay. First one is Has anyone ever told you you look just like Ed Norton?

SPEAKER_01 1:06:14

Oh my gosh. Ed Norton, not in a while. I get a few others, but not Ed Norton in a long time.

SPEAKER_03 1:06:20

Yeah, maybe the like you look just like him. Second one is, what's the best mistake you've ever made?

SPEAKER_01 1:06:27

Ooh. The best mistake I've ever made. Business, life, anything?

SPEAKER_03 1:06:34

Yeah, anything.

SPEAKER_01 1:06:35

Telling you guys, you need to write down these questions and send me before. Matter of fact, business and life. Okay. Bit business was getting into business with someone just because I felt like I needed to be in business with someone. I could have done it a lot better on my own. I've learned that and applied that to my new business with real estate. I'm really glad I don't have a business partner. So in life, biggest best mistake, probably probably um not moving back to Fresno sooner. Um when my dad was diagnosed with bone cancer in 2015, I waited a year, and I wish I would have been back here sooner, but because I did eventually move back, I I was really happy that I moved back.

SPEAKER_02 1:07:26

Nice, nice. That's awesome. Well, thank you so much for hopping on with us, man. And um and where can people find you?

SPEAKER_01 1:07:34

Yeah, um fearlessflipping.com. Um, if it's okay with your uh with you guys, if I offer uh a little something for them.

SPEAKER_04 1:07:42

Yeah.

SPEAKER_01 1:07:44

Um if you go to fearlessflipping.com forward slash consultation, you can book a uh free 10 to 15 minute uh call with me whether you're interested in um you know learning more about my Airbnb systems or learning more about real estate investing. Uh that is a great way to be able to connect with me again, fearlessflipping.com forward slash consultation. Uh and yeah, uh Instagram, fearless flipping316, everything has this you know logo right there. So if you see that logo, you got the right place.

SPEAKER_02 1:08:15

It's like a lion eating a house, y'all.

SPEAKER_03 1:08:18

Pretty making sure I get it on right now.

SPEAKER_02 1:08:22

Fearlessflipping.com. You calling for your consultation, Micah?

SPEAKER_03 1:08:26

Yeah, I am actually. Are you calling for a consultation on uh the rental uh flipping in the rental market out in Fresno? Nobody knows what it is.

SPEAKER_02 1:08:36

Every time, every time we interview somebody, Micah starts checking in. Oh, I need to go to Chicago. Oh, I need to go to New Orleans, oh there you go.

SPEAKER_01 1:08:44

Well, that that's the one thing I'll just leave you guys with is you know, there's probably a lot of people out there that are wondering, wow, you know, lucky Micah and Steve, they live in Dallas. Of course, that's great. Well, you know what? That's what I thought about Scottsdale when I moved back to Fresno, but you just never know what's a good place. And there's those shocking little small cities that just have something that are attracting a lot of people. Don't overlook those. You know, take a look at your city, take a look at what's around you. There might be a hidden gem.

SPEAKER_03 1:09:12

That is actually my secret. I'm in, I'm I've been targeting some small cities no one goes to, but they have the attractions there, and it works. That is the truth. Smart.

SPEAKER_02 1:09:23

Well, thank you so much, Kyle Stanley. Awesome job. Thanks for hopping on.

SPEAKER_03 1:09:28

Thank you for hopping on, and uh yeah, we'll definitely be letting people know about your flipping flipping.com. It'll all be in the show notes. You guys are awesome. Thank you.

SPEAKER_02 1:09:36

Thank you. Take care.

SPEAKER_03 1:09:37

Peace.

SPEAKER_00 1:09:39

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