Cold Open

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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.

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Hello, hello, hello.

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

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What's

Welcome to Episode 351

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up, Micah? Man.

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I'm chilling, Stevie Stacks. How you doing, brother?

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Doing good. We're harmonizing over here. Yes, sir. Episode 351 of your favorite short-term, long-term, mid-term pass split podcast in the world. Coming at you from Fort Worth and Texas. Fort Worth and Arlington, Texas.

Life as a Brand New Agent

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Arlington, Tejas.

SPEAKER_04 0:49

Yes, sir. How you been, man? How's the life of the agent? A brand new agent.

SPEAKER_01 0:53

It's actually been fun, man. I got one client, a couple clients I'm working with. Um, I'm trying to get my seller up tomorrow. I may start working on getting my sellers, seller side up because I have a bunch of hot leads. Uh, but it's been fun, man. Walking in different houses. I actually been like, you know, you get a little app, so I get to tour any house I want. You know, I can just pull up my app and walk any any house that's uh that has a uh that's for sale. So I've been doing that, did it around my neighborhood, found a few houses that are just sitting, so I was like wondering why they were sitting. Now I can walk in them, so that's been fun. And then searching for a house for our guy, Antoine.

What Makes a Perfect MTR?

SPEAKER_01 1:28

Shout out to Antoine Renee.

SPEAKER_04 1:29

What up, Antoine?

SPEAKER_01 1:31

Yeah, so I've been searching for a house for him, and funny thing is, uh, we're searching for an MTR. Um that's actually one of the conversations I wanted to have tonight. Like, I know what I look for in an MTR. What is a perfect MTR for you?

SPEAKER_04 1:47

You know, that could be, you know, different things in different areas of the city, of the state, of the country, right? Because like, for example, I don't know, Austin is like a tech hub, so maybe the perfect MTR over there is a one-bedroom or two bedroom, who knows? Yeah, but like I'll say in my area where most of our um midterm stays are the um uh insurance claims, right? The people have their houses flooded or fire or whatever they're going through, and we and we house them until their house is fixed. Yeah, so for us, you know, we and I was talking about this with Antoine, because he was talking about which the the perfect house, what he should choose, and all that.

Three Bed Minimum, Four Bed Sweet Spot

SPEAKER_04 2:28

And I'd say, you know, uh three bed, it's gotta be have at least three bedrooms, two baths. That's first of all. But I think if you have a four a good four-bedroom, two-bath, I think that's good. Oh after that, you know, get into the five bedrooms. It's not necessary, you know. Um it's it'd be it's it's a bonus if I mean the price is similar with a five-bedroom and a four-bedroom. I'd go for the five-bedroom, of course. But I think you know, the the sweet spot is right around four bedrooms because I would I would say a lot of people around here, you know, have uh, you know, it's a husband, wife, or you know, couple, whoever, whatever you do that. And then um they got like they got like three kids, right? That's just normal around here. Maybe in like big city, New York or you know, San Francisco or places like that, it might not be people might not have three kids, but around here, people usually have about three kids. And and so you want if you have a four-bedroom, you you can have room for the parents and a room for each of them kids, right? And they're not fighting, they're not having to share a room and all that stuff. So I think uh a four-bedroom is a is a good is a good thing. Now, I I told Antoine too, if you find a three-bedroom with like an office or a flex room, you they can't sell it as a four-bedroom, technically, because they don't have a closet. Um but we can, you know, us uh STR MDR guys, we turn that fourth flex room into a bedroom, right? Yeah. So you can get you can get you a four-bedroom for the price of a three-bedroom, and I think that's you

A 5-Bedroom for the Price of a 4

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know, that's that's winning all day.

SPEAKER_01 4:05

It's funny. I went to look at one today, and it's actually we're getting a you can get a five-bedroom for the price of a four because they turned the fourth bedroom into an office. However, it has an egress window and has a closet. So I'm like, oh, it's this is five legitimate bedrooms in here. So I would and and what you said, I'm happy you touched on it, because I've always wondered like the max that I have right now is four bedrooms. When those seem to be doing the best. Like my mom's four-bedroom, I think was it last year? She did like 70 grand on it in like eight months. Just strictly an insurance client staying for that long. I was like, dang, you know, but it's a four-bedroom. The four bedrooms I think hit. Um, so my perfect MTR is kind of similar. I try to

The Fenced Backyard Nobody Thinks About

SPEAKER_01 4:52

do three bedrooms up, two bat, two-batroom, backyard fenced, so I can house PAV pets. Um, like I'm real big on the fence backyard. Because I I was talking to a couple operators this week, and they were like, they have condos or they have apartments, and they're like, ah, we're just not getting the midterms. And then the two bedrooms like we talked about last week, and they just don't hit. So I I would say minimum three as well. And the fence backyard. I think a lot of people they forget the forget the backyard thing, but man, that fenced backyard, most in Texas it's fenced, but in Arkansas, man, you got to go through hell and high water to get a fenced yard, bro. They don't they don't like to put fences up, bro.

SPEAKER_04 5:29

Everybody just shares the backyards, I guess.

SPEAKER_01 5:32

Yeah, bro. They they like don't even in my duplex, like they they I had to tell them to put a fence up. Dude puts a fence up and then he didn't put a divider. I'm like, bro, you gotta divide the backyards, man. What you have two tents, so you you gotta kind of guide them in that area. But here in Texas, you usually get a fence backyard.

Why Insurance Families Want a Pool

SPEAKER_01 5:49

But yeah, that's like my perfect MTR.

SPEAKER_04 5:51

Oh, nice, nice. Yeah, um I I also you know, you're talking about perfect MTR. Now, here's something that that's um become popular. People requesting, you know, families requesting, especially if they if their house is something happening to their house in the spring or summertime. Yeah, you know, they want a house with a pool. And so that's like a that's like a big thing, man. So um, so I I like to look for houses with a pool, right? And and that, if it's gonna come with a pool, to me, it doesn't really, it isn't a huge difference between a three-bedroom or a four-bedroom because that pool is such a huge um asset as far as attracting people, right? Yeah. Because they're gonna be out of their house for months at a time. Uh those kids want to have a they think it'd be cool to have a swimming pool. Okay, we should get a house with a pool, right? And and so um I look for houses with a pool because it don't cost too much more to buy a house with a pool here, you know, around this area. Yeah. And if you're gonna get a house and try to build a pool in the backyard, you're looking at like a hundred thousand dollars easy for like a basic pool nowadays, right?

SPEAKER_03 7:05

Man, bro.

unknown 7:06

Yeah.

SPEAKER_04 7:08

So so it so you you have a choice here, uh, a how uh regular cookie cutter, three, two, four, two, whatever, around three hundred grand. Or you can get one with a pool for like another 20 grand or so. And of course, it's rolled into the life of the mortgage.

SPEAKER_01 7:22

Yeah.

SPEAKER_04 7:23

So I look for houses with pools.

SPEAKER_01 7:25

Happy you brought that up. Do you see someone paying like a surcharge for a pool? Like what would a house with a pool go for with a house with not a pool? You know what I mean? Because pool comes

Charge $1,000 More a Month for a Pool

SPEAKER_01 7:38

with its own maintenance, so that's a cost.

SPEAKER_04 7:40

Oh, yeah. I charge like for um the houses that I have with pools as midterms, I charge at least a thousand bucks more a month.

SPEAKER_01 7:46

Oh, yeah, that's a hit all day. That's a hit. I like that. Yeah, because that's what I was thinking. I'm like, you at least be able to charge a thousand. I'm I'm with it. Yeah, you can get a three-two with a pool. Even a four-two, a four-two with a pool, you're definitely winning. Okay. So you're like, okay, three, two with a four. Whenever you have a pool, I'm assuming you're automatically targeting family, so insurance is probably gonna be your best bet. Okay.

SPEAKER_04 8:11

Yeah, but the the cool thing is um you make a lot of money on it on houses with pools in the summertime as an Airbnb as well.

SPEAKER_01 8:18

Yeah. So you definitely can switch up that strategy, which we talked about last week, man. People don't understand. You can't just go buy an MTR, you gotta be able to fill those gaps, man. A lot of people just think they can go buy it. I'm like, man, that don't exist, man. You can you're gonna be running into some vacancy issues.

SPEAKER_04 8:34

But I'll tell you one thing though. Um now buying a house with a pool, that's that's that's uh, you know, that's what I look for, right? And I and I have a have a few that

The Problem With Arbitraging a Pool House

SPEAKER_04 8:46

are that I own that have a pool. I have a couple that are arbitrages with pools. Now that's a different story when I'm running into because whenever something comes up with a pool, you better hope you have an understanding landlord, because you know, the pools can cost some money, right? Yeah, but when you tell them, hey, uh it's got this thing that you need to be fixed on it, either the pump or the the motor or the you know, whatever's going on, the the piping, it's gonna cost uh at least a thousand bucks, you know, just bringing that up to your landlord out of the blue. That's and to them, it's like, okay, they can understand even if it's a good landlord, they're like, okay, AC's out, okay, we can get that fixed because 110 degrees, people are gonna die, right? But swimming pool, they'll be like, okay, uh, let me think on it, let me get some quotes. By that time, you got two or three stays coming through, and their people are pissed off because the pool ain't working, and then you got a refund. So you'd be out a lot of money if you can't get those things resolved. And of course, am I gonna pay to fix their pool? It's not my pool. Am I gonna be paying thousands to fix it? So I've come across that a few times. So I don't know if I'm so fun uh keen

Can You Put Pool Maintenance in the Lease?

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on arbitraging houses with pools anymore.

SPEAKER_01 10:00

Oh, man, that's a tough one right there. I'm happy you brought that up because my question too is like, are you putting anything in the because you know how we used to put it in the lease, like, hey, anything up 200 bucks will cover. Are you putting anything in the lease like, hey man, the pool maintenance or like a pool maintenance structure or something?

SPEAKER_04 10:17

You know, it and it's in there that they they'll take care of the pool, or you know, I'm paying a premium for the rent or whatever it is. But yeah, you can put anything you want in a lease. Now are they gonna do it? What happens if they don't do it in a week or two or or a month? You're gonna go sue them. What are you gonna do? I mean, you know what I'm saying? It's yeah, you put anything in the lease you want, but it's just up to finding a good landlord that's gonna that's gonna fix it for you.

unknown 10:39

Damn.

SPEAKER_01 10:40

Yeah. I would maybe you can structure something in there that you can take something off rent.

SPEAKER_04 10:45

Oh, I do that. I do that. If it push comes a shove and I gotta get something fixed, you know, I'll I'll fix it and I just take it off the rent. Sometimes I'll be like, hey, the you sent a little less to rent. Yeah, I sent you the invoice, I sent you the thing, this is what I paid. You know, I just but I had to get it fixed. And then they kind of like, oh okay, you know. So but yeah, that's another that's another way to do it. Now luckily my landlords have been begrudgingly cool with that, I guess. You know, when I've done that as certain times or fixed an AC because they were their guy couldn't get out there, blah, blah, blah. You know, luckily uh they've been begrudgingly cool with it. But I mean, I could get a come across a landlord that says, Oh no, that no, you're gonna send me, you know, try to I did not authorize you to blah blah, you know, one

Why We're Hopping Out of Arbitrage

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of those landlords.

SPEAKER_03 11:32

So yeah.

SPEAKER_04 11:32

But that brings us back to, I mean, that's why a lot of us are hopping out of the arbitrage game.

unknown 11:38

Yeah.

SPEAKER_01 11:39

Man, I'm talking, I went through hell when I was doing it through apartment complexes because it's a lot more logistics, man. You gotta get the locks on there, get the key. It's it was just a lot of logistics, man. I remember the first few arbitrages I had, I was using that key pickup stand, and it was just hell. They had to go downtown, pick up the key, then go back. It was it was like, man, it was it was becoming key. Yeah, man, it was becoming like a problem, bro. And then, yeah, man, I remember those days, man. Dang, we've been doing this a long time. So yeah, I was using that, and it just yeah, it

Adam James & the Early Arbitrage Days

SPEAKER_01 12:11

just wasn't efficient. And then I had the five in Dallas, it just got out of hand.

SPEAKER_04 12:15

Always brings me back to um to a guest we had a long time ago. Um uh, what's his name? Uh dang it. Uh Mike, Mike Brown's good buddies with him. Um, jeez, it slips my mind. It says two letters like AJ or A. Adam James, yeah, yeah, yeah, yeah. He came on our show a long time ago. And he actually was telling about telling us about this thing called arbitrage, right? He was one of the early ones to tell us about this thing called arbitrage. And he said, Oh man, you don't even know. I mean, I have I'm rinsing, I'm renting a house and then putting it on Airbnb. And and for example, uh a water, a water pipe busted under the house, and you know, all this thousands of damage. I called the landlord up, hey, come fix this. I ain't fixing it, it's not my house. You know, he just like it sounded like this like too good to be true thing, right? This is like, wow, we we can have we can make all this profit and not have to fix nothing. This is beautiful. But once you get into it, you're like you get a landlord, uh, wait a minute, I might have to call insurance on this. Oh, wait a minute, I'm gonna get some quotes. Oh, wait a minute. And you're sitting there, you can't rent out a house for a month or two because they're dragging their feet. So that's not, I mean, it's still being sold. There's still gurus out there selling arbitrage, right? Yeah, man. Um, and if you get a good landlord, it's it's it's all right. But it's like um, it's not, I mean, there's no perfect way to do it, right? It's not if it sounds good, too good to be true, you know, most of the times it is too good to be true. But um, but yeah, every time something comes up, I kind of laugh at those those early days, man.

SPEAKER_01 13:50

Man, it was hard, man. It was hard. You we were sitting on a gold mine though. The early days, you just throw a piece of furniture in there, you could throw a blow-up mattress in there, you're gonna make some money, man. It was it was a good time.

Apartments vs Houses: Why He Switched

SPEAKER_01 14:02

I made money in the hood with arbitrages, yeah. Straight up, straight up, man. But man, I I had some in the hood of far north Dallas, and it just got out of hand. They were just like, you could like walk in and just straight smell weed in the hallway. Some people wouldn't care, but then other people, you know, they're complaining. So I was like, oh man. So that's why I went to houses, man. I love houses, houses are my sweet spot. Houses are my sweet spot. I love houses, and then that's what I think you have to do in this business. Find your sweet spot.

SPEAKER_04 14:29

Yeah. And then that's what um it reminds me of walking through hallways, smelling weed, all that stuff. There was a real ghetto one I was I was doing some arbitrages out of, and there was this um French couple there, and they thought it was the they thought it was the coolest, they thought it was a great, good area. Well, it's close to downtown, but you know, they I mean, I guess they over there it's normal, yeah, you know, homeless people all around and people smoking, and just but that's just they're from the urban, you know, environment. So they to them it they thought it was really nice. We love this city, but

Cast a Wide Net, Then Narrow to Your Avatar

SPEAKER_04 15:03

people, you know, get the wrong people in there.

SPEAKER_01 15:06

Yeah, it is see, and that was a thing like I had to learn. Like, once you know your because really, I really this is how I think you have to survive in short-term and midterm. Cast a wide net and then lower it down to your target avatar. Meaning, if you have a two-bedroom, two-bath apartment, you're limited. But if you have a three-bed, two-bath house, four-bed, two-bath house, you have a wide net of people. Now you can limit it. Okay, I want insurance or I want construction workers. You know what I mean? Because when I had those apartments, man, you got a two-bed, two-bath apartments. I would luckily sometimes get two nurses. They wouldn't really trip because they were barely there anyway. But man, it was just hard to get like a good avatar in there. And that's the thing about it. You have to find something that sweet spot. Or if you get like someone thinking it's in a nice area and they're from the burbs and they walk up in an urban environment, they ain't with it, bro. They complaining, they're trying to get a refund, get out of there. So it's

Dallas vs Fort Worth & "Up and Coming"

SPEAKER_01 15:59

a lot, it's a lot, man.

SPEAKER_04 16:01

But uh it's funny though, because we've talked about it before here, like Fort Worth and Dallas, right? It's two different worlds, yeah. And people from international from all around the world, they come they come to Dallas. That's what they know. Dallas, the TV show. But people from around Texas and around the surrounding states, they come to Fort Worth. You know, it's just it's just two different worlds. And if someone doesn't know that Dallas world, you know, we we say, hey, it's a colorful neighborhood. It's uh one of the code words you're using, you know. Up and coming, up and coming. Uh you just want to put that in your title so the wrong people don't book it, and then you know, they get mad at crackheads.

SPEAKER_01 16:48

Yeah. That was like really, really heavy back in the day, the up and coming thing, you know. People still do it, you

Construction Crews Never Complain

SPEAKER_01 16:56

know. It was an up and coming neighborhood, you know. You know, but like the up and coming, now I have a target avatar for that. Like you just said, you you make money in the hood, man. Those construction workers don't mind it if it's big enough. You know, those construction luckers like the four-bed, two bath, but this sex six bed, four bath I got the duplex on both, they love that, you know. So big huge construction crew coming to lay fiber for X amount of months. They see they they said they're leaving in February. I was like, damn, okay. So yeah, man, just have to find that right target avatar.

SPEAKER_04 17:28

I've never had construction people complain about nothing. No, they don't. I don't care. No, I haven't, man. Come to think of it. And usually

Underwater Welders: $7K for 50 Days

SPEAKER_04 17:37

somebody, some some lady's booking for them. That happens a lot.

SPEAKER_01 17:41

Yep. I have some uh underwater welders who were staying with at one of my places and some lady booked for them. And I was like, what the hell are underwater welders doing in Arkansas? But never know, building a bridge. I don't know. But yeah, that's some high dollar stuff that they're doing. And they they they pay like 7,000 for 60 days, 50 days or something. I was like, damn. So Arkansas, that's good. I know, I was like, I ain't mad at that. The mortgage only like $800. I'm like, I'm with it. So yeah, man.

SPEAKER_04 18:12

Hey,

Northwest vs Central Arkansas & Hot Springs

SPEAKER_04 18:13

where is where is Henry Henry Washington up there?

SPEAKER_01 18:15

Well, he's in Northwest Arkansas, it's a different market.

SPEAKER_04 18:18

So it's more expensive up there, right?

SPEAKER_01 18:19

Yeah, it's more expensive. So Northwest Arkansas, that's where you have like the Razorbacks, you have um the Walmart, Bittenville. Like Northwest Arkansas is actually very, very uh what'd you call it? It's very uh it's very diverse. Northwest Arkansas is very diverse. Like it's very like, man, a lot of people are going up there.

SPEAKER_04 18:39

Um why don't you invest there?

SPEAKER_01 18:42

I don't have boots on the ground there. Um uh northwest Arkansas is like a different monster. I don't have boots on the ground there. Um central Arkansas is just my sweet spot. You know, now if you do go to Northwest Arkansas, you get the appreciation and the cash flow. So where I'm at, I just get the cash flow, not much so much the appreciation. The only thing you're gonna get, you have to do pay put buy down, you know what I'm saying? You pay your mortgage down. After 10 years, you own something in Arkansas, central Arkansas for 10 years, you really start to see the advantage. You're like, damn, it's because it's you you're basing it off buy down.

SPEAKER_04 19:15

Where's Hot Springs?

SPEAKER_01 19:17

Hot Springs is like 40 minutes south of Little Rock. Hot Springs is cool, Hot Springs is real cool, actually, because you have people that drive from Texas and all the surrounding areas to go to Hot Springs. Only thing about Hot Springs, I think it's more vacation rental. So I think they I don't know. We'd have to matter of fact, we have a listener from Hot Springs who listens. Uh I forgot his name. Last name is Johnson. Shout out to him. But he uh we would need to actually we actually need to get him on the show because I want to see like is he able to do midterms there? You know what I mean? Because I think you would get you're gonna run into a lot of short terms in Hot Springs,

What's a Good Owner Finance Deal in Texas?

SPEAKER_01 19:56

it's definitely a tourist destination. Yeah. No, I did have a question because we were we were we were running across some owner finance opportunities, right? And I I think I texted you, I said, Hey, what do you look for in an owner finance deal? So my question to you is what's a good owner finance deal in Texas? Like how much what price do you have a price point you're looking for? Like what's a good owner finance deal in Texas?

SPEAKER_04 20:22

Oh a price point. Um that's a good question. Um I guess if it's similar or just a little bit more to what like the comps are doing, I'm comfortable getting something like that because I get you know I get to negotiate a lower down payment. Yeah. And sometimes a lower interest rate too than what the um what they're offering out there, right? Yeah. So so yeah, as long as it as long as it's comparable or right around what what regular houses are selling as, I'm then I'm not gonna really say, hey, you know, you need to knock it down fifty thousand dollars for me. Or I'm not gonna try to to knock it down, right, too much, because I'm gonna get a good deal because I get to get in on the house for you know, ten to fifteen grand down. And and I don't have to put seventy to eighty thousand dollars down to get a house, you know. I don't have to jump through hoops to Wells Fargo and send a million documents and all that crap, you know. Yeah, man, I hadn't done that in years. I don't miss that stuff at all. Um and then the interest rate, you know, six six and a half to seven and a half percent, you know, just yeah. Competitor with what the area is, and um, and then a house that I know I can I can make more of more, of course, than what the what the mortgage and all in,

Do You Underwrite Long-Term? (He Doesn't)

SPEAKER_04 21:39

you know, taxes and and insurance is.

SPEAKER_01 21:41

Now I have a question for you. When you're running your numbers, are you looking at midterm and short term rental numbers? You don't care about long term?

SPEAKER_04 21:49

I don't care about long term. Okay. I know you should, I mean, people say hey, you should always build it as long term numbers. Um here's how I look at it, too. Um Yeah, I I can get into a house, you know, uh owner finance house for around around here in this area for around $2,500 a month, all in, right? Taxes, insurance, and all that stuff. You know, yeah, utilities is more than that, but but as far as finding a nice house, that's an arbitrage, right?

SPEAKER_03 22:19

Yeah.

SPEAKER_04 22:19

Um $2,500 was normal uh up until a few years ago. You can get a little bit, you can get a little bit cheaper now, but to me, I I look at it like this. I'm getting like an arbitrage price where I'm actually buying a house.

SPEAKER_01 22:35

I like that.

SPEAKER_04 22:36

You know what I'm saying? Um and I always and I always put it as uh short-term or I always put the numbers as short-term and corporate, what I do short-term and corporate. Because that's what I'm gonna do with the house anyway. So I'm not gonna

100% Bonus Depreciation & the $70K Offset

SPEAKER_04 22:47

do long term. I don't plan on doing long term. Um now, if I push comes to shove, I had to fall back on long term, I might, you know, be around the 2200 bucks a month, I might be losing 300 bucks a month. You know, that's that's something that could happen until rents recover, until the you know, prices go up again, and then you build equity in and all that stuff. But um to and it has to be a special house if I think I'm gonna lose money. Um, but the thing is, I also get the the tax write-offs, right? Uh you get the depreciate the 100% bonus depreciation right now, which is huge. Get like $70,000 uh to counter whatever income I made, you know. So that's that's a big deal too. I'm saving a lot of money in taxes, 70 saving $70,000

Depreciation Recapture: Why Myka Buys New Builds

SPEAKER_04 23:32

in taxes by buying one like that. Um, and you're you know, push comes to shove, you might be losing a couple hundred bucks a month if you have to go resort to just regular long-term.

SPEAKER_01 23:42

So this is another thing because I'll I'll go into further what I'm why I'm asking because I'm I'm working some deals. So let's say because you can't the thing about a cost egg, and I think a lot of people forget this, is that depreciation is recaptured if you have to sell, right? Most of the time we plan on keeping it. Um that's why, and there was a really good bigger pockets episode on this too. He was talking about it. That's why I've been going after new builds or burrs because I don't want to be in a situation where anything has to push myself. I don't want to have if I have to go long term, I still want to work out. So if anything goes wrong with any of your units, would you find a way to like how would you supplement if you had to go long term? Would you find like do would you well could you pad split them?

Why Steve Stopped at Three PadSplits

SPEAKER_01 24:31

Last resort?

SPEAKER_04 24:33

Now that's that's a big question, man. You know, real quick off the bat, I got three pad splits, right? I got I made three pad splits, and you know, they're they're they're filled and they're doing mostly pretty good. Um, but I kind of got a little nervous. I kind of got a little nervous because what you know a lot of cities are starting to look into these things, and it just it gives me flashbacks to um to Airbnb. And so um so I'm nervous to start you know building more pad splits because like you said, there's tons of gurus out there telling you what to do, telling you how to do it, but they're not telling you that, hey, at any moment that city can shut you down. They're saying, oh, but you're putting it in a corporation and everybody they don't city don't give a damn about that. They're gonna send you tickets every single day until you shut that thing down, or you get a lawyer and you fight them for however long they got in this money doing that. You can't you can't fight them. And so to me, I'm like, okay, I got my three, I'm good with that. I'm not sure I want to do any more of those yet. I know I can do corporate all day, every day. You know, that's always 30 days plus is always gonna be there, right? Um, unless you got an hoa and all that crap. But um, but pad split, I'm a little bit nervous. I mean, you you saw you uh you showed me that thing that change.org, they're saying that they're putting multi- I like yeah, I like how she worded it. They're putting multifamilies in single family zone places, blah blah blah. That's all

Cities Are Circling Rent-by-the-Room

SPEAKER_04 26:01

you gotta say. And and once enough people start getting riled up about that, and of course, the who's gonna want to get those things out of out of the town too, is the apartment complexes, right? They don't want it because they're people less people are gonna be written from them. Yeah, um, so so I I slowed down on that, and I don't see that as a as a backstop anymore. Like, let's say if I got one of those houses, I'll just turn it into a pass split. I don't know. I mean, if I can get it turned into a pass split for a fairly afford a cheap price, and it's not really everything's so expensive nowadays, right? Everything's so expensive, and um, I mean, we get a lot of lumber from Canada, and and they just raise the price 50% on everything. Uh so it's just like to get anything built, you're gonna spend at least ten thousand dollars to get something done in a house, right? Inside of a house. So that's a lot of money to be you know putting in one of these and then turning your house and into into a pad split, um, and taking a gamble. And then if you're if you're building your numbers on that, you probably shouldn't because it could be shut down, just like

Start With the Exit Strategy in Mind

SPEAKER_04 27:08

Airbnb could be shut down in any city.

SPEAKER_01 27:10

Man, that's that right there, listeners, that right there was a good game right there, bro. Knowing that, you know. Um I don't know, you know, because remember when Airbnb tried to ban in Dallas, they let some people uh grandfather in or whatever. So yeah, and you gotta hope that they do that. So yeah, it's everything comes with a price. You just have to know the exit strategy. Start with the exit strategy in mind. Cause yeah, that that's a tough one. I didn't even know you were backing off of them. Like, yeah, let me keep these three, and you know, because that is tough. That is, because that's what eight three is what, eighteen tenants?

SPEAKER_04 27:45

Three, yeah, uh, yeah, six in each house, right? Ooh, yeah, but eighteen tenants, but eighteen tenants. I've come across like a five-bedroom house that has a flex that I could turn into a six, and hey, there's a passport right there. I don't gotta do too much. Okay. Yeah, I might do that. That's fine. And if they the city tells me to stop, I just turn that one room back into a flex room or whatever, and just rent it out like a regular house or corporate whatever. But um as far as yeah, as far as going and turning a three-bedroom into a six or seven bedroom, that's that's a lot of money, you know. That's a lot of money, and it transforms your house a lot, especially if you do a garage conversion, man. Um so so yeah, I'm just a little bit hesitant right now until I see something on paper. Till the first city around here, because Denver are like like Colorado, they're pro rent by the room, right? They're pro-rent by the room, they got it on the books, they got it on the laws. They love that because the housing is so you know hard to come by over there, you know, for regular, regular folk. Um as soon as I see you know the city, you know, around here puts that on the books, okay. You can do that, and we welcome that, then okay, then I'll invest more heavy. Just like Grand Prairie around here is my is where I invest because they're they're pro Airbnb. And Arlington should be too, in my opinion, but they're controlled by you know who they're controlled by. And so old cowboys owner, Jerry and his um clan, I mean friends, uh so yeah, he's not gonna it's not gonna come back here to Arlington. Um so like are you managing Pas splits for anybody?

SPEAKER_01 29:34

Are we looking to get into it?

SPEAKER_04 29:36

Not yet. Not yet. I haven't yet, you know, because I mean it's it's enough. I'm still doing a lot of it myself, right? Okay. I'm training my team to do things, but there's still situations where you know I have to jump in. Um, so I don't want to put too much of that on my plate right now until I can totally automate it, uh, where where the where the team

Six Personalities in One House

SPEAKER_04 30:01

can do it. Um but yeah, you're dealing with uh six different personalities in a house. You're dealing with it's a lot of it's a lot to it. Some house some houses are harm harmonious, nothing goes, you know, everything's pretty smooth. In some houses it's a drama going on. Uh dang, bro. Like the prison yard, man. Everybody sticks to their own, you know. Um that's crazy, man.

SPEAKER_01 30:34

I I could only imagine with a pad split. I can only imagine.

Property Taxes on Owner Finance Deals

SPEAKER_04 30:37

I think you should try one just to see how it goes.

SPEAKER_01 30:39

I'm not in the area. Well, I don't know. Arkansas might work for a pad split, but I wouldn't I wouldn't want to test it. It's just it could because living there is already cheap. I wouldn't want to go cheaper, and then it's like you don't know who the hell. You about to have some crackheads, all types of shit. Yeah, I'm just saying, I don't want to test it out. Um, and then one more question about your owner finance deals. Are your property taxes going up on those? Like after year two?

SPEAKER_04 31:06

Um let me see. When did I get the first one? Well, it it it follows the trend of a regular house. It follows the trend of regular houses. They just go by what the the value is. It doesn't so because I fight 'em, I still fight them.

SPEAKER_01 31:22

Okay. Do they so on a on a finance deal, do they look at it as owner occupied, or are you getting the well rent it's a renter, it's a rental.

SPEAKER_04 31:32

Is the city looking at that?

SPEAKER_01 31:33

Yeah, because you know, on an owner occupied, you get the homestead, right?

SPEAKER_04 31:36

The homestead, yeah. You can only put that at one house, though.

SPEAKER_01 31:39

Correct. Oh, so it's looking at it as a rental?

SPEAKER_04 31:41

Or how does they just look at it as I mean, anybody can buy a house and not homestead it, right? There's a lot of people I know that never did that because they're lazy. Because I'm like, dude, homestead your house. What are you doing? Yeah, you know, it's so the state they'll they'll just tax you as as much as they can tax you if it's not homesteaded. So it's not like they're looking at it as a rental house, they're just looking at it as someone.

SPEAKER_01 32:02

It doesn't have a homestead on it. Okay, that's it.

SPEAKER_04 32:04

Yeah, don't have a homestead on it, yeah. Okay.

SPEAKER_01 32:06

Because I I was wondering, because like owner finance, because I keep telling people owner finance and sub two in Texas seem to be the best strategies to try to get like as close to cash flow as possible. Because I found one I was showing to our friend, um, and it cash flowed long term. It was a three-bedroom, and I'm finding stuff that cash flows long term, you know. So it's certain things I look at and I'm like, hmm, if I could find a few more of those, I might come back to Texas, but it cash flows long term the first year, and then it, you know, property tax goes up, and

The Real Advantage: You Own It Day One

SPEAKER_01 32:38

people looking at a fat bill, kind of like those people in Utah right now.

SPEAKER_04 32:42

Here's the biggest thing, okay. Biggest advantage, and there's so many great advantages to I wonder finance or subject to. It's day one, you're buying that house, it's going into an LLC. You could have made that LLC, you know, that week, right?

SPEAKER_03 32:58

Yeah.

SPEAKER_04 32:58

So you're buying that house in an LLC. Hopefully, like I said, like how I do, you're not putting a lot of money down, a down, big down payment, and then you go in there, furnish it, and do your thing and put it on uh short term or corporate or whatever you're doing. Um push this let's say a year out, that thing's not profiting like you thought it was gonna profit, right? Yeah, a year out or two years, you're you're losing money. You're bleeding money. You got the lady from hell next door, you got H. I don't know what I don't say HOA, I wouldn't buy an HOA, but you got whatever's going on. You got neighbors from hell, you got people across the street

"Here's the Keys Back" — Walking Away Clean

SPEAKER_04 33:30

selling stuff you didn't see. You know what I'm saying?

SPEAKER_01 33:32

Start out.

SPEAKER_04 33:32

You're like, man, I gotta get out of this house. You call up the the previous owner or the one you bought it from. Hey, here's the keys back, bro. You know, here's the keys back. I mean, you could I I'd hate to do that to somebody. I'm just saying that's a that's an option out there for people that are buying houses this way. You have it under this LLC, right? And you say, well, you know, here's the keys back.

SPEAKER_01 33:58

Um I ain't gonna lie, that's probably the strongest thing for owner finance right here.

SPEAKER_04 34:02

You don't gotta and to them, it to them also, they don't have to foreclose on you, right? Yeah, you say, hey, I'm not gonna, you know, I'm out, I can't profit off this house, or this, this, this, this was wrong, you know, uh all this this area is wrong, whatever. Here's the keys back, you don't have to foreclose on me, but I'm I'm I'm out of here, and you just give the house back, right? Um and you don't they can't really come out, they come after the LLC, I guess, right?

SPEAKER_01 34:28

For as long as what can they do? That's a good thing. Well it could it it depends on how you're structured, because LLC LLC on the house kind of protects you, but there's a thing called piercing the corporate veil, I believe. And it just depends on how you're structured. You have to talk to like a uh a structuring company or whatever, and they'll structure it that way.

SPEAKER_04 34:52

But yeah, they could, but if it's in an LLC and you don't want the keys anymore, and it also depends on what's in the contract, but I thought it's not it's not a foreclosure on you on your personal credit, right? Uh it's talk to a lawyer, of course, about it. Yeah, you have to talk to the lawyer.

SPEAKER_01 35:09

Yeah, you have to talk to a lawyer.

SPEAKER_04 35:11

Yeah, my understanding you bought an you buy a house from Vos Fargo and you stop paying, that's not good. You're gonna get your credit screwed up, right? Yeah, straight up. You do that.

SPEAKER_01 35:19

But they can the owner can take that same action, but if you structured it correctly, you know, if it's in the right company.

SPEAKER_04 35:27

The LLC owns it, right?

SPEAKER_01 35:29

Yeah, you'd you'd have to talk to a lawyer though. But yeah, I I like this I like the mindset behind it. You know, get

Predatory Seller Finance & How to Spot It

SPEAKER_01 35:36

you out of there, you know.

SPEAKER_04 35:38

And then to the owner, too, it's a bonus too, because like let's say he sold a primary to somebody, right? And and they're living in it. Because a lot face it, a lot of there's a lot of people that sell owner finance, let's say kind of you know, in a predatory way. In a predatory way, you see it where they want like 20,000 down from these poor people and then 10% interest, and then that the price is like you know, 50 to 100% more than a regular house, right? So they try to and they know they're gonna fail. They know they're gonna fail. They see their credit, they say everything, they know like they're gonna make a few payments and they're gonna fail. They're gonna go, they're gonna foreclose on them, and then they're gonna, you know, eventually get the house back or whatever. Or let's say they're not, let's say they're not predatory, they just they're just trying to, they like to want, they would start wanting to sell their houses off owner finance. If they if they sell it to a couple or a family and they're gonna live in it, it's gonna be a lot harder to get them out if you have to foreclose, right?

SPEAKER_03 36:35

Exactly.

SPEAKER_04 36:36

You're gonna pay thousands of dollars and it's gonna take a while to get them out. Whereas an investor, hey man, it didn't work out, here's your house back. He gets it back the same day, he don't have to pay thousands to foreclose on you. And he gets the house back and he puts it on the market, he can sell it to someone else owner finance. So it's good for it's good for the seller and it's good for the for the buyer as well, the investor.

SPEAKER_01 36:56

I agree. Because even if you owner finance a the only I think the only caveat is if they sell them more because they can sell the note, right? Oh

The Stop 6 Condo & the Sold Note

SPEAKER_01 37:06

yeah, yeah, you don't want them selling the damn note to somebody.

SPEAKER_04 37:08

They did that, they did it to me before on that little that I owned a one-bedroom condo, actually a two-bedroom little condo over at uh Stop Six. Okay, Channel 11. Yeah, and they and they um the guy I I bought it from from I told you, I think I told you the story. My buddy, I I bought one there from from a dude at work, and then his son ended up, hey, you want to buy mine too? I guess he owned one there too. So I bought his for like 80 grand, you know, cheap. And um I had her for a while, Section 810, anyways. She ended up passing away. Oh she never lived there. Her her um her son was using the the voucher, you know what I'm saying? But I don't know how that goes. So it was upstairs. I was like, man, she's like 80 something years old. She's getting up and down them stairs. Apparently, she never she wasn't living there. Um, that's all that matters. That's all that matters. Fort Worth was paying. Uh and so um, so my buddy was he, you know, he asked me like a couple years after I I owned it. He said, Hey, do you wanna do you wanna um oh what'd you say? Oh, he said, you know what? He said someone made me an offer for it, uh, this bank, and they want to buy it from me. And so, but he said everything's gonna be the same because you know, I hold the note, I'm just gonna sell the note to them, you're just gonna pay them.

SPEAKER_03 38:29

Yeah, yeah.

SPEAKER_04 38:30

Okay, that's exactly what happened. They called me up and blah, blah, blah. And then I just put on an auto pay with them. It was a first something bank. I never heard of them, but it was it was a bank. So I just started paying them. But I think the same thing though. My um my LLC owned it, right? Yeah, so I don't I mean, I don't I don't know. I mean, maybe yeah, I need to talk to a lawyer and stuff like that, but they can go after the LLC if I stop paying.

SPEAKER_01 38:54

Yeah. Yeah, it is, you know, it's on the LLC,

How to Pitch a Seller on Owner Finance

SPEAKER_01 38:59

especially if it's credited and all that. But yeah, you'd have to talk to a lawyer.

SPEAKER_04 39:02

And that's that's another selling point. I talked to because I've I've started reaching out to buy uh sellers uh-huh and trying to, hey, you know, your house's been sitting for a while, you you considered, you know, seller finance, and oh no, I can't because of this. And I'm like, I was like, you know, the market's down right now. The market's down, and I know you want to get 300 grand, but you're probably gonna get low ball, you know, 250. People are gonna because you can't, because you can't unload these houses right now. I say uh what I tell them is I'll give I'm I'm giving you this 300 grand right now, but we're you know, we're we're um we're do we're setting it up in the in this manner where you're the bank and I'm paying you and this interest rate, whatever. But I know you want to cash out and get that big lump sum, but you can wait, you know, a year or so or when the market recovers, and you can sell that note. You don't have to hold on to that note for 30 years. You can sell it to a bank once the house prices recover and they see this is oh, this is a good note, 300 grand, we'll buy the house, and you can cash out at that point. Otherwise, you're gonna take a haircut by trying to sell it right now, and no one's buying, no one's gonna pay you that amount. So you're getting a guaranteed $300,000 note from me

Aggressive Offers Are Getting Countered

SPEAKER_04 40:16

that you could sell it in the future.

SPEAKER_01 40:18

I think that's a real good selling point. One, because I'm gonna be honest, so we were just talking about that, like stuff sitting, right? Like, so these offers I'm making for one of my clients, we're making these, we're making some aggressive ass offers, but we're getting counters. So even the aggressive ones, they're taking the aggressive and giving counters. So we're giving these offers out there, but everything I'm noticing about all the houses that are sitting and the versus the ones that are selling fast, people don't have the finances to fix them up. Like they're just sitting, or they've done crap flip jobs. Like this one on the corner down here, it was a great flip job, but it's small things they didn't put in there and it's on a busy street. So if you're gonna sell right now, like a flipper, you gotta be real targeted on what you're picking up and what you're getting and what you're

Bad Flips: Why Houses Are Sitting

SPEAKER_01 41:01

offloading. It needs to be fully decked out and not just going in there. A lot of them are just going in there putting new floors in and walking out. Like, bro, we can see you didn't put no paint up, nothing. So though those are the ones I'm watching that are just sitting, bro. It's it's getting it's pretty bad out there, bro. Like, I'm like, I have six houses sell in my neighborhood. And I'm I walked one of them. I'm gonna try to walk the other one tomorrow because that's what I've been doing. Like, I got that little app. I just hey let me do push the code and I just go in any house. I just you know, it's pretty pretty cool, you know. Just schedule the showing. But it it it shows you quick, like okay, what's selling, what's what's what's selling and what's sitting. And like you said, yeah, the market's got to recover. I like that. I like that that you know that strategy you just said. Hey, you can sell the note later on down the line, you know.

SPEAKER_04 41:44

Cash out, yeah.

SPEAKER_01 41:46

I like that. I that that would work with a lot of shoes. I I know a lot of people that would work with. Yeah, because I got I know people that just don't can't afford to fix up the house. And you give them sell their finance, you go in there and fix it up, turn it into a pad split midterm, whatever you do, it would work all day for them.

The Aubrey, TX Pre-Foreclosure at $280K

SPEAKER_01 42:05

Yeah.

SPEAKER_04 42:07

My buddy showed me one today. I guess this this girl put it on I think she put it on Facebook or something. He sent me the screenshot. It's over in Aubrey, Texas. Okay, north. I think so, yeah. And um, I've never been there. But he said, I mean, she slashed the price all the way to like 280,000, and she's trying to get out of them. She's like, hey, you know, I need to sell this quick, you know, it's gonna get foreclosed on quick, you know, soon. So please help, and and you're gonna get equity right away. And these things were selling like uh in 20. There's brand new builds, almost brand new, you know, there's like 23, 24, right? 2023, 2024. You're getting a brand new house. And then um, but people are already foreclosing on those ones because they bought them for 350, right? And she's trying to sell it for like 280 so far, and she'll probably take less. Yeah, yeah, yeah. And she's just trying to get out of this thing because it's gonna get foreclosed on, anyways. And so, I mean, subject two

Subject-To a New Build & Rate Buydowns

SPEAKER_04 43:07

could work in a situation like that, uh, as long as you caught her up on her on what she's you know back behind on, right?

SPEAKER_01 43:15

I'm gonna be honest. You could sub to a new build, you'd be in there because most new you know why a lot of people are going to new builds, right? Because they can buy down the they'll the builder will buy down the interest rate for them. So they're probably looking at fours and fives. So a lot of people sub to those all day. Um the new build, I just talked to a new build construction that's going up in Innis. And everyone, that's all they're offering. Rate buy down. So if you that uh bigger pockets episode I was talking, telling you about, that's what he was talking about. He was he compared what's better right now, a new build or a burr. And a new build is actually just as good as a burr because of the rate buy downs, and it's less headache, you know. So I was like, Like that's something to consider. You know?

SPEAKER_04 44:02

It's the only thing with the new builds, is usually they come with HOAs.

Small Multifamily: No HOA, Cost Seg, STR Loophole

SPEAKER_04 44:08

So hammer is what I'm trying to do. Yeah.

SPEAKER_01 44:10

So this is what that's what I agreed on. That's why I said new build, multi-small, multi-families are where it's at. No HOA, you get two doors. Like the one where we've been looking at, that's steady dropping and dropping. Talk to the owner on that, by the way. I'll talk to you offline about it. Oh, okay. Yeah, I talk to the owner, man. Yeah, so it it's a lot of those, but those right there are a hit. If you can get them at the right price.

unknown 44:40

Right.

SPEAKER_01 44:40

Get those at the right price, those are a hit because it's no HOA. Everything's brand new. Perfect for a cost sick,

Arlington's One-Mile Airbnb Rule

SPEAKER_01 44:47

perfect for the short-terminal tax loophole.

SPEAKER_04 44:49

See the cool thing about that one, is it in the entertainment center? Because it doesn't matter. It don't matter.

SPEAKER_01 44:56

RMF 12.

SPEAKER_04 44:57

Yeah.

SPEAKER_01 44:57

The zoning. And it it is, though. It is like even if it is, it's right there, but you get the zoning, so you automatically qualify.

SPEAKER_04 45:06

That's a weird thing that Arlington did that people don't talk about.

SPEAKER_01 45:11

What is it?

SPEAKER_04 45:12

You know, because they did the okay, you could out of houses, single-family homes within a mile of the stadium, more or less, you can do Airbnb. Anything outside of that, which is like 99% of the city, you can't do Airbnb, right? Out of houses. But anywhere in the city, all the way to the very edges of the city, you can do it in multifamily.

"That's Gentrification"

SPEAKER_04 45:34

It's a weird thing.

SPEAKER_01 45:36

I don't think it's weird at all, because I know exactly why they did it. They want to improve the area. It's gentrification. Arlington's always gentrified stuff.

SPEAKER_04 45:46

It ain't working. I mean, not near the stadiums. There's still a lot of crack houses over there.

SPEAKER_01 45:50

But but I mean, look, but look, you know what, and else is if you look at by the stadium, look what it's all over there, though. You got the um all the women's shelters are over there, all the uh the um, like the what is it, Mission Arlington stuff's over there. So the stuff to help is all in that area. So I think they're trying to con put it to that area. Because even that lady, remember that video I showed, that screenshot I showed you when that lady was against pad splits, and she's like, Oh, they should just limit them to the entertainment district. I'm like, why is that? But that's what they you know what they're trying to do. They're pushing people, a certain demographic, to one area is what they're doing. We know what the hell they're doing. I I I remember the day we were sitting in a courtroom and they were sitting there arguing back and forth, and then they said, Oh, we're gonna put it to entertainment district. I'm like, that's gentrification, bro. They're trying to gentrify it. Even like the because even have you know what the duplexes look like in Arlington, man. You know what neighborhood they're in.

SPEAKER_04 46:43

So they're Sam Houston.

SPEAKER_01 46:46

Yeah, yeah, you know what neighborhoods they're in. So they were straight up like, well, let's just put them. Hey, you can do Airbnbs in multifamily, you know what I mean? In small multifamily, so you know what it is, but yeah, um, but yeah, Deby Low Stadium, it ain't working too much, and I just I don't know why though. But oh, you know, I think I know why. Like when I used to call the people over there, because me and Mahaga Mahogan have to talk to them because she speaks Espanyol a little better than me. When I talk to the people, they want at outrageous prices for the properties, and it ain't going to the outrageous prices they want. But yeah, I don't know. Interesting how they did that, but yeah, nobody talks about it. I already knew what it was. That's

Airbnb's Notorious Overnight Changes

SPEAKER_01 47:28

gentrification. They're trying to gentrify it. We all knew.

SPEAKER_04 47:32

I'll tell you, I'll tell you a quick thing that um you know how Airbnb would always slip these things on us, right, overnight. And then we find out until later. Remember the the no one of the notorious ones was the short-term uh cleaning fee that everybody everybody got hit on, man. Yeah, got burned on because they didn't tell us, man. They just said, okay, if someone's staying one day, right? Is it one day or two days? I don't know, is it whatever it was, then you you might have a $200, $300 cleaning fee in place, depending on what you got, right? A house or something. They pay zero dollars if you didn't set it up, and they didn't tell nobody. So all of a sudden you got this booking come across at night or in the morning, and it got accepted, instant book, and you're like, holy wait a minute, wait a minute. It's only this much. What about the cleaning? 70 bucks.

SPEAKER_01 48:19

$70? Yeah.

SPEAKER_04 48:22

And so people got burned on that. But Airbnb is notorious for always slipping in these things on us, right? Without telling us. Um, so and as I told you, Pad

PadSplit Is Copying the Airbnb Playbook

SPEAKER_04 48:32

Split is kind of like following a lot what Airbnb does, because they started their own super host thing, right? Um, and they told us before a super host, uh though they told me before that it doesn't ding me if I deny people, right? Because I'm real picky at who to put my houses now, because I've I've been through some some bad um guests. And so, and now they're saying to get super host, I hit all the markers except for oh, I've turned down too many people. Wait a minute, you said that that didn't matter for nothing, and now you're

The 30-Day Beta That Emptied His Room

SPEAKER_04 49:00

saying that if it's a ratio over a certain, I said, I'm keeping bad people out of my house. This is not fair, you know, to tell me that that's gonna be a marker to be a super or you know, passport super host, whatever you call yourselves. Anyway, so they slipped that in. And the other thing they slipped in just happened to me yesterday. I got someone that that, you know, uh put in a request to book. You know, I was glancing at everything, finances was good, all this stuff, and he was a travel nurse and he's working at medical city, Arlington, whatever. And yeah, and he was gonna be here, you know, three to six months, whatever his his thing is. He paid for extra to be you know flexible. You can pay extra, and you can leave, you know, uh give like a week notice and go and and leave, and you don't have to stay there for another month. Um, so that but I get I make I get more money, I get more rent money too when they do that. But anyways, um so oh you sound good candidate, sound a cool dude, and you know, I accepted him. And then the next day I was looking, okay, you know, who who's in room, I was looking at the members in each room, and I said, and it came up to his room five, and I was like, check-in date September 20th. It's like, dang, that's a long ways away. I was like, Oh, because before it was within uh first I thought it was like seven days. You you have like a lead time of seven days for someone to book your place, they're gonna be there with it. Most people want to get in, you know, at least uh the next day or two days. Most people, and then sometimes I'll have one that'll that'll push it to seven, and then I think they changed it. I don't know if they changed it to 14, but that was like a working thing. I I kind of knew, okay, 14, I didn't know, I didn't. I was like, I thought it was 10. But anyways, now they started a beta, they call it a beta testing. It goes where where they're they're letting people book out up to 30 days out. And so if I they didn't tell us they were gonna do that, so I didn't I assume this is just a regular booking. I approved it, good guy, all the financials are good. But this is like this is like uh like a 22-day out booking. So my my that room's gonna be empty for 22 days. Whoa, I mean now that's my question.

SPEAKER_01 51:04

Hold on now. What's the shortest pad split stay? Like they can't stay a week or so.

SPEAKER_04 51:10

You know, they can if they pay extra, they can stay, they can go week to week if they pay extra. Now, if they pay the regular price of the rent you're charging, they have to sign an initial three-month um bookie with you, right? Initial three months, and then most people stay longer than that, but that's just the thing. They gotta do the initial three months if they're gonna pay that rent price that you're doing. Now they have to pay extra if they're gonna if they want the privilege to to bounce around pad splits.

SPEAKER_01 51:40

Yeah, they're they're definitely going to Airbnb. They're definitely they're trying to they're going to Airbnb. And I'm gonna be honest, Airbnb's business model works for Airbnb, and it makes sense, you know. But like 30 days out, you know, they've already they've he's already paid, they're probably holding the first months or however long, you know, they making their money like Airbnb was, but that puts you in a tough spot. Now you're sitting empty, but you have what five other people or whatever, but still that's right, right.

Airbnb's 15.5% Host Fee Backlash

SPEAKER_04 52:07

Yeah, they didn't they didn't tell us they were gonna do this, they just do it host.

SPEAKER_01 52:12

Yeah, and I'm and and one thing right now with Airbnb too, though, like Airbnb's on people's bad side with this new 16, 15 and a half percent host fee. You know, I talked to people last Thursday on a call I was doing, and they're like, Man, I'm starting to see like a difference. And I'm like, that's why in that Claude episode, that's what I was telling people. Like, I built that dashboard to know my cleaning fee and the Airbnb host fee so I can up my prices and know how to set my discounts. Cause yeah, even that's starting to piss people off, you know. Uh, but I mean, in pad splits defense, they gotta make their money, you know what I mean? You knew it was coming. You probably knew when they start doing the pad split host, super host thing, you kind of tell like ah, they're going the Airbnb route, you know.

SPEAKER_04 52:55

But

The Share-Your-Link Discount Nobody Wants

SPEAKER_04 52:56

now that 15%. Now, was it you that sent that to the group that little the MTR group that we're in? That if you shared your Airbnb link somewhere, that they would knock your is that real?

SPEAKER_01 53:09

That is real.

SPEAKER_04 53:10

Uh, where are you sharing the link to?

SPEAKER_01 53:12

So basically, what they're trying to do is because they know the 15% would drive you to go direct. So let's say how you would normally, let's say you send to and this is what I don't understand, but I'm gonna tell you something. So let's say someone on Furnish Finder hits you up, but they talk to you directly, and you send them your direct booking link. They're saying if they click your link from Airbnb that you direct them to, you get a percentage off. How they're determining that I don't know.

SPEAKER_04 53:41

If they're reaching out, here's the question for people like me and you okay if they're reaching out to me directly, why the hell would I push them through Airbnb? Exactly. I'm gonna take that money directly.

SPEAKER_01 53:49

Yeah.

SPEAKER_04 53:49

And keep 100% of that money.

SPEAKER_01 53:52

Because it's people out there that don't think like me and you, and they're like, oh, I get five percent off and I'm gonna be a super host because I'm paying 10% now.

SPEAKER_04 54:00

Like are they scared? Oh, Airbnb's gonna protect me from bad. Yeah, they're not gonna protect you, bro. If some if the shit if the shit goes down, it's up to you to get that bad guest out. Airbnb ain't gonna get them out for you.

SPEAKER_01 54:11

Nah. So I don't I seen what they were doing, like I get the point of it. I see what you're trying to do, but I don't see a rational operator. I'm gonna send you my Airbnb link for five percent off. Like, come on.

unknown 54:26

Like, what?

SPEAKER_01 54:27

I just don't like like people in the Facebook group were going crazy on that. He's like, why would I send them for that and I can just send them directly to my website and I don't have to give them anything else. Yeah, that's how I look at it too. So yeah, they are doing that.

SPEAKER_04 54:40

Now, once in a blue moon, you'll get somebody that'll say,

Why MTR Guests Must Finish Through Airbnb

SPEAKER_04 54:44

Well, I feel more comfortable booking through Airbnb. You know, every yeah, once in a blue moon. Most people are cool booking direct.

SPEAKER_01 54:50

I'm gonna be real nowadays. I mean, even my midterm people, they'll say, Hey, when I go direct. Now I'm gonna now this is one that I I if people book through Airbnb and like they do a midterm 30 days through Airbnb, they have to finish their stay through Airbnb for me now. The reason is something breaks in there, I lose Airbnb's insurance. So that's why I say, Hey, next time you come back, you can book direct, you know. And I had one guy do that. He went to another one of our places, but he went direct.

SPEAKER_04 55:18

Yeah, so watch out for that.

SPEAKER_01 55:20

Yeah, yeah, yeah. Because if they're came in through Airbnb and you don't go in there afterwards, or I'll tell them you have to check out and come back in the next day after we walk it.

SPEAKER_04 55:29

I think we've been both of you, both of us have been burned by something like that before.

SPEAKER_01 55:33

Yeah, yeah, I've been burned by that. So yeah, I'll straight up you have to get a checkout or you know.

SPEAKER_04 55:40

Yeah.

SPEAKER_01 55:41

Yeah, it's a lot of little tricks to the trade

Could You Airbnb an Empty PadSplit Room?

SPEAKER_01 55:43

you gotta learn with Airbnb. A lot of tricks to the trade.

SPEAKER_04 55:45

Yeah, they're slick, man. They're slick. One one thing I was thinking, you know, because I know a lot of people who do like the rent by the room model without Pasplit, right?

SPEAKER_03 55:54

Yeah.

SPEAKER_04 55:55

And you gotta build your systems out, you gotta get it all on point, you know. Um, but still it's it's possible, and a lot of people do it. What I was thinking, okay, with that 20 20 night empty or 30-night empty room, I could Airbnb that thing until someone gets in there. It's my house. Now, Pasplit tells you you can't do any other platform while you're hosting up Pad Split.

SPEAKER_01 56:16

Happy you said that. If you were to Airbnb that thing for the next 20 days, how would they know?

SPEAKER_04 56:23

Uh well, uh, I guess a uh a guest could complain. Maybe that's one way. Yeah. Plus, I guess the other thing is, you know, Airbnb guests might book to bring an extra person, you know, instead of just being the one person. Notorious. Yeah, it's notorious for that. But but yeah, if it's if it's my own place, I could do something like that. But what's it's against uh Pasplitz rules where you can you can't Airbnb out one of the rooms. Up until recently, you couldn't even live in the house yourself and rent out the rooms. Now they let you do that. They let you do that in your own house.

SPEAKER_01 57:01

And now yeah, because we at the meetup, that's what someone asked. They're like, Can I live there? I was like, You gotta ask Steve, because I'm like, I I remember you telling me, like, nah, you can't you can't even do that. Like, they they don't they want all the rooms.

SPEAKER_04 57:12

I'm like now they're cool with it. They understand people do that. So I guess I mean you gotta register your I guess self through Path Split and and put yourself into that room, but oh okay, okay.

SPEAKER_01 57:24

That makes sense. Yeah, so but imagine house hacking through Pad Split, you're making some good money.

SPEAKER_04 57:30

Yeah, yeah, it's just it's just the convenience of it, you know. They take care of everything for you, just like the convenience of Airbnb. That's why people like it. It's the convenience, it's all in the app. You don't gotta build out systems and processes yourself, you know. They do it for you and they find people for you. Yeah, it's the biggest site, you know. And and then um just like Pasplit, it's the biggest uh rent-by-the-room site, so they're gonna find people for you.

SPEAKER_01 57:52

Can't complain about that as

Airbnb: Poster Child of the Share Economy

SPEAKER_01 57:53

they're bringing the clientele.

SPEAKER_04 57:54

Yeah, but you know, they're doing some Airbnb stuff.

SPEAKER_01 57:58

Yeah, and I'm gonna be real, man. Airbnb, I think Airbnb is the poster child for the share economy, in my opinion. Because if you look at all the everything else, Turo is still there, but it ain't. Airbnb is still hitting, making changes, you know.

SPEAKER_04 58:14

I just think it's Uber, yeah.

SPEAKER_01 58:16

Yeah, Uber, yeah. Uber, Uber Eats, uh, even what's it called, DoorDash now, you know. And I think like with Airbnb, people kind of follow, especially in housing, you know, because Airbnb is more in the housing hospitality. I think people more or less follow suit on what they do, like past, but it's like, well, it's like one of those things, don't reinvent the wheel.

Wrap-Up

SPEAKER_01 58:37

You know, they already perfected it.

SPEAKER_04 58:39

Yes, sir. Well, this is a good episode, man. Did an hour, we had some fun, uh, we talked some some good stuff. Uh, he sprung it on me as hey, we can do one tonight. Oh, okay. Heck yeah, gotta knock it out, man. But yeah, we always got stuff to talk about.

SPEAKER_01 58:53

Always, man. I'm doing showings, you're taking care of properties, I'm taking care of properties, so we got plenty to talk about. Um but yeah, man. Um, but yeah, y'all can find us at Live Let Thrive at send us an email, live let thrive at gmail.com. Uh follow us on Instagram, TikTok, all that good stuff, man. And uh we'll hopefully have another meetup here soon. That was fun last time we did that.

SPEAKER_04 59:15

Yeah, I started doing the Bostons thing at least once a month. I I missed the Bostons meetups, those are fun.

SPEAKER_01 59:20

Yeah, let's uh I'm gonna see if we can get some on the calendar, man. See if we can get ass pizza there, too. Hell yeah. I'll see if we can get some on the calendar. Heck yeah. All right, where can people find us, Micah? Find us Instagram, TikTok, email us, livelethrive at gmail.com, and uh thank y'all for continuing to listen to us.

SPEAKER_00 59:38

We are out. Later. 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.