# Easiest Way to Make $100k/Month In Real Estate as a Beginner

Channel: Brett Malinowski
Video: https://www.youtube.com/watch?v=xlYvxKWPS9k
Duration: 58 min
Language: English
Words: 12780
Transcript page: https://viewrankai.com/tools/youtube-transcript/xlYvxKWPS9k

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[0:00] all right so how much money do you make what $250,000 a month nice what do you do uh Airbnb Arbitrage is my main uh business right now Airbnb Arbitrage yes what does that mean we're subletting properties from landlords and property managers Furnishing them you know hiring cleaning teams and basically putting them on short-term rental platforms like Airbnb and renting them out so you're literally going to like go rent an apartment like you'll get like a 12mon lease or something exactly and then you just will list that on Airbnb yeah it's it's pretty simple when you think about it like that um a lot of people think

[0:32] it's super complicated but it's it's really not it's just that it's getting permission from a landlord you know Furnishing the apartment and then putting it on Airbnb so apartment buildings like let you do this yeah actually that's another question I get a lot all the time like people think it's so complicated but here in the US there seems to be a lot of vacancies especially in apartment complexes um so it's great to Target those they'll even offer me free rent a lot of the time to take a unit from them it's not just that they'll allow air B they're like here we'll give you four or 8 weeks free rent

[1:02] and do Airbnb in it for us please it kind of seems like a Nob braider cuz then they get your rent so they're making money and then you since you can charge a little more for short-term rentals that's your spread basically yes they understand that we're going to be making a little bit of profit on the unit so and they they're basically guaranteed their rent so a lot of um property management companies and landlords are having issues with tenants paying rent right now so they know by me operating the business out of the unit that they're guaranteed to get that rent every month I'm taking care of routine

[1:32] maintenance it's being cleaned on the regular you know we're um background checking background uh checking guest and that they know that their unit safe in my okay so this is something you have to be really communicative with each specific apartment ability that you're probably working with though yeah like it's not like a like you can't just I feel like do a lot of Apartments like ban Airbnb in general for all residences it just depends on the market and there's lots of buildings in every different city across America you know that allow it and some don't right like a condo buildings where you have a lot of ownership in there probably going to

[2:06] have some sort of HOA or rules against doing Airbnb that makes a lot of sense so but it's probably not something like this feels like this is what you ideally want to do because you don't have to take any risk up front you don't to put any down payments down on the building itself like instead of just find an apartment that you like I guess you kind of have like a little flavor in your brand how you furnish it or whatever to attract people and a little more based on how nice it feels but there's like no risk in the sense of you don't have to

[2:34] put money down get a loan from A bank you don't have to get approved for credit I guess maybe for an apartment but it depends you'd be surprised sometimes I don't get asked for income or credit that's wildely depends on the complex that's wild but as you were saying um the risk factor that's what I love about the business because I've been in you know I'm in uh multif family ownership and long-term real estate Investments they cost a lot to purchase upfront there's a lot of risk with non-paying tenants you know tenants that don't take care of your stuff Market fluctuations interest rates all this stuff got you're fighting against with

[3:06] Airbnb Arbitrage it's it's really no risk like you said it costs very little to furnish you can get your Capital back uh relatively quick and like I said you're not going to worry about tenants not paying because they C before they before they stay and you're making a premium on the short-term accommodation how much is like an average apartment that you're going for like are you going like super high-end apartments are you going like lower end what's like the price range for rent my for apartments I found the sweet spot is like almost at like economy level like stuff that's relatively cheap on rent but looks nice

[3:39] like have some decent renovation wood floors I try to stay away from carpet stainless steel appliances upgraded kitchens all to make it look luxury yeah but at a you know economy budget so you're not going to be able to go in and actually make Renovations but you'll find has a good base and then you can style it furnish it EXA it's all in the furnit furnishings and photography okay so what would the like what's like a good rent for what you're discussing that you would pay if you were going to get the lease for the apartment so that's all relative to the market you're in you know something in Texas in where

[4:13] the market the market that I'm in you're probably looking at like $1,000 to $1,200 for a one-bedroom whereas in Miami be like 2,200 right but you're also going to make more in Miami okay so you have to look at the you have to break the numbers down and see and the rent is really the rent really doesn't matter I if the if the um what should I say if the uh if the revenue is there yeah okay so you're in Texas mainly is where you're doing this okay so you're looking for like a $1,200 a month apartment basically yeah anywhere from like 12 to 13,400 and then how much would you rent

[4:47] that out for on Airbnb typically typically we'd see usually D we usually aim for double double double our rent okay so a good way to look at it you know if you're if your all expenses in you know with a $1,300 R let's say $1,500 after utilities you're probably going to want to make at least $3,000 a month gross revenue on Airbnb so your goal is to make 3,000 yeah and do you just make like an assumption that I'm going to rent this out for 15 nights a month 20 nights a month like guess they're like an average number that you would say I try to rent it out every

[5:14] night of the month like in the last year I've been 95% plus occup so you're so like a 100 bucks a night it it fluctuates because it depends what's going on in the city like we just had the solar eclipse in Austin so people were paying like $4 or $500 a night for one bedroom apart this is really where you get your Edge like you're looking at like big events in the city I was paying my whole rent in three nights for every apartment for the solar eclipse whole rent of the month in three nights that's wild yeah wow okay so how many of these do you have I have 34 now 34 least

[5:45] apartments that you rent out um 11 homes and 23 Apartments oh so you can do homes too that makes sense yes huh okay and so these are all what city is it just Austin and San Antonio yeah I'm working on Dallas and um hopefully going to start coming into some fora markets you're Canadian though right I'm Canadian yeah so how did you choose Dallas or Texas um originally we thought we wanted to relocate to Texas we were kind of like you know vibing with with that kind of uh what's the word I'm looking for we're country folk like like Texas yeah I mean but then we actually

[6:17] had a couple friends get their visas and move to the Ford area so we decided to try here and and we love here too okay so do you need to like get like an explicit CU I know this isn't like a thing you just do so you kind of have to have like a one-on-one conversation with the landlord right yep are you guys like setting out like a contract like essentially yeah like you have your standard lease and then in that lease they're giving permission to sublet the property or you're signing a lease addendum so sublet yeah essentially subletting permission that's kind of just something you could find online

[6:45] just like here's like a sublet section just making sure that's very Crystal Clear yeah I actually have an addendum that's right by lawyer that we would send and they would sign just giving us permission to list on the short-term and you just standardized that yep huh okay so I guess what are like edges that you can get in this game there's lots I mean you don't really you don't you honestly don't really need an edge like just need to go and do it yeah really like it's it's as simple as that it's getting on the phone calling properties calling landlords knowing how to talk and Pitch the business explaining the

[7:19] benefits to a property manager and a landlord and why they should and why they want you to lease this property turn you almost fli the script have you had any issues that popped up like with l landord specifically not really no not since I started I have a very good relationship with all my property management or property managers and landlords they're all very happy um with the business I'm running like I said I do run a a a pretty clean business you know we run cameras noise sensors we vet our guests so we don't have a lot of problems and issues and they love us CU

[7:49] where are the cameras are you allowed to have cameras cameras outside nothing inside nothing inside but we let people know that you know if you're coming here to party you're going to be evicted right away we you know those people just kind of don't book our place yeah okay so with Airbnb you kind of what kind of like team do you need to assemble for you to because you don't even live in Texas yeah you can do it completely remote that's what's even more amazing about it I'm actually setting up two units right now my team's there they order all the furniture last week I have

[8:17] um four virtual assistants that I employ from the Philippines so um they're about three to five bucks an hour so I have uh four four that do like my full-time work and then I have one that actually buildings got he's doing the prospecting so One V so one of your vas is doing prospecting trying to find places to do things gotcha what are you looking for in a building like what's a good basically they're just looking for all I get them to do is look for permission to do you know to we call it corporate leasing that's like the professional term like we're not calling and saying hey can we

[8:49] Airbnb your house or your property right that kind of Scar put landlords you know puts their back up against W they're like well we BNB like right so we always go by the term corporate Leasing we have you know we work with business clientele we work with traveling nurses you know we start off with that to kind of you know like ease them into the conversation I guess gotcha so you're kind of like ah okay so you found like these like so that's interesting it's all about the using the proper terminology first and having the conversation establishing that trust in relationship with the person you're talking to right yeah and then at the

[9:23] end say Hey you know we are subletting the property we may need to fill Some Nights on booking.com ex speedia the short-term rental platforms are you okay with so is there like a stigma towards Airbnb to these people there's a little bit of stigma to Airbnb to to uh single family landlords when you call apartment buildings they are usually just a yes or a no know what you're doing yeah right they're very aware of it got so apartment buildings can be uh a little bit easier I think for uh beginners but then again you know having a conversation with a guy that owns one rental property and just guaranteeing

[9:57] going to paid the rent can be very easy too gotta that makes sense that makes sense so let's say you had an apartment that's down to do it would you ever get like multiple units in one apartment or do you okay yep is that the ideal like like would you get as many as you can is there a Max that would be like maybe this is like pushing it for this location it just depends on the area like some of my mentors have 40 50 units in the same building um I have most units at one building I have is eight if you do what you're doing with Arbitrage

[10:27] and renting an apartment renting or leasing an apartment then renting that out the furniture probably is like the biggest cost yes of course it is so how much is like how much would you typically want to budget for Furnishing for a one-bedroom apartment you're going to be somewhere in like the $5,000 range okay wow um sometimes a little bit higher sometimes a little bit lower just depends on the space and the size right and then let's say a three or four bedroom can be anywhere from like 10 to 15K okay wow that's not terrible though like and then how fast do you think you would recoup that that's uh as I was

[10:58] saying earlier back to the free rent um I basically only take free rent deals now so any property I'm picking up at least 4 weeks free um if I can get eight or 12 even better basically the deal deals I just did are eight weeks free rent so in those eight weeks it'll take me one week to furnish and then I have seven weeks where I'm not paying rent I'm going to get at least 500 bucks a week for those uh seven weeks which is essentially going to get me back 3 $3500 off of 5K so I've almost all paid back in my free r period and the next month

[11:29] after I'll be fully paid back Bas within three months yeah that's really smart yeah cuz I where I just moved did that my first two months were free so basically if you sign a long-term lease they're going to try to get you like they're going to give you one or two months no rent whatsoever yeah you don't even have to sign a long-term I mean like 12 months that long right yeah and I just had the this is where it gets even better with Arbitrage I just had five units that uh I already been there a year so they set me the renewals I asked for four weeks free on the renewal

[11:56] and they said yes so I'm not going anywhere yeah those units are making money but now they're going to give me $7,500 for free essentially just for re like reupping my lease okay so now I'm interested if you have to furnish an apartment what are you all buying um basically everything you need right like give me every like you so you're going to get a couch you're going to get a bed yeah some nightstands just what you see here everything you're going to do the full kitchen you know I do air fryers coffee uh uh cure eggs uh hot water kettles full kitchen uh amenities always a workstation that's

[12:30] very important to people now fast Wi-Fi big Roku TVs are very important I do those uh the ONN TVs from Walmart they're super cheap for 65 in yeah they're like 300 bucks but they're big is very easy to use it has all the apps for everyone right I try to almost like dumb it down you know make sure that the experience is very easy and uh they have everything they need right it's like a hair blow dryer yes okay anything that a hotel would have and then some gotcha yeah is has there ever been like is a little unique like like a espresso machine or something that like really

[13:03] that you've seen like has moved the needle on like bookings like any small detail that you wouldn't really expect no I wouldn't say that there's any anything like that like we do do the pods the coffee pods versus the I prefer that coffee maker a lot of people I don't think know how to even use those I I literally had to have yeah right I'm the same way I went to one once and I'm like I don't know how to use this so then right away I'm like okay I got to put the pods in my airbnbs right are you do you have Netflix in that like those

[13:30] logged in or they just have the ability I I do have augins if someone asked for them um like my it's it's a it's a you know it's a nice business expense I can have all the streaming platforms that I can use them my too right so if anyone ever asked for the login it's there oh that's really cool yeah Okay cool so is do you guys do you have like a specific like thesis on like the location of the building like is it like it needs to be next to a hospital maybe those are great yeah next to hospitals are always great especially small apartments because

[14:00] traveling the traveling nurse industry is very big interesting yeah so you'll get a lot of nurses we get a lot of uh people that are just in town Monday to Friday from work like people that will come from Dallas down to Austin and they don't want to travel back and forth during the week right so they'll rent our places during the week and then on weekends we have all walks of life you know family vacations people coming into party big events in especially in Austin there's always stuff happening every month okay so you definitely recommend a city where people travel you the me a lot of Tourism okay tourism tourist

[14:33] cities have you I guess Dallas or Texas is like the only state you've been in correct correct what's the other City you said Austin and what I'm in San Antonio to be in Dallas yeah how do those two differ uh they both have yeah they have different obviously attractions but it's really the same model just repeated in both cities like there's nothing really different between the two cities the way I do and run things and then photography do you hire like a local photographer I feel like you probably you're looking for like a very specific aesthetic yes you're looking for someone that knows how to shoot short-term rentals like HDR

[15:05] photography knows like shooting in bracket someone that can really light up the space and and make it look luxury shooting in bracket interesting pictures are probably the most important thing yeah it comes out that's like listing so let's get into the Airbnb side I would love to get into the Airbnb side then so basically photos are really where would you find someone like this just Google are you just Instagram or you using like yeah using a referral from someone else like through my network and my other Airbnb communities uh that's the best way obviously if you can find a referral because I've used a couple guys before

[15:36] that were absolute trash like standard real estate photography is not short-term rental photography it's two different ways of shooting like uh if you have someone that's used to shooting just normal real estate for like listing houses for sale everything's going to be like wide angle and going to highlight like the features and stuff yeah yeah that's very important I can understand that so is Airbnb like there's probably like I would love to hear like your thought proc process on like setting up and designing your listings but first question I guess would be are you like creating like a universal brand of like all of your units on there or are they

[16:10] each like independently and unless they clicked on your host name they wouldn't really know cuz this place was basically like they have like this like they have like a company name on like the first photo I saw there's like 20 listings in Miami and it was like their brand name was watermarked on the head like the main photo yeah so I'm not branding like that because I think that works against you in the industry I think that you want to come off as more of like uh a family this is like a small investment you know you maybe got one or two properties and it's family run I think

[16:41] that people appreciate that more I agree actually you know bigger corporations so little things like using uh a family picture in your profile picture so people can see that you're a family person you have kids even um another funny thing that one of my mentors told me too was that if you're a single male uh like If instead of you shouldn't be putting just your picture in your profile you should either be using sorry I shouldn't say single but you should be using your wife or family picture because people tend to actually book uh airbnbs with um you know family pictures or uh female post pictures for males

[17:15] that makes sense it totally does make sense cuz little things like that there's like subtle like messaging about that like one guy like I don't know he might bust it what you feel especially with women they're going to feel moreable booking from a female host for sure without a doubt I've also seen people with airbnbs will put like fake family photos on their like inside the house to make it feel like more Hy or something that's always funny but okay so like back to like listing strategy in general that definitely makes sense like don't like corporatize your it's supposed to be like homie one like more

[17:42] personal experience that you're kind of just like working or living this one person's home and they're going to give you good service that's kind of how it's felt yeah like I try not to um you know have that kind of like like you want to have that homey feel right and we want to be like my vas are checking up on my guests constantly right they're making sure that you know when as soon as they get there that everything is up to their expectations like we're we're coaching them through the whole process to make sure that they're leaving us a festar review at the end too because that's

[18:10] just as important as everything else is great reviews that's really how you're going to stand out and get more bookings over time okay because you'll be surprised people will go through every single review oh yeah for sure there's so many options on there so like you have to have every Edge okay so have you ever found out found like specific like since you have eight units in one Department can you kind of try different marketing angles with like your title like are you speaking to like the Target demographic like the traveling nurse home like I've seen people like brand their yeah so we'll we'll try to throw

[18:40] some of that into like the uh listing description and SEO but like I'm not some of like one of my mentors he does every unit the same like it's all the same Furniture he PS every wall the exact same there's no real thought or character in the units I'm kind of different I try to like change all my units up I use different colors I try to use different furniture for each one so they're not all the same you paint these if you wanted to yeah and I I do sometimes paint accent walls I have a unit that's all pink um so like I've tried almost doing the themed units

[19:11] themed okay yeah like kind of that kind of is like too far one way that unit doesn't do it good some of the other units in that building but it was an experiment I wanted to try and see how well it worked right but I do find that making every listing different with a little bit of a theme behind it you know a subtle theme like that but that can still cater to a wide range of guests is what you want to do so what would you say like a common title is for one of your like what is the title they're very basic I actually

[19:41] hire a copywriter to do my titles and um my description and all that it's we don't get too specific it'll be like cozy and luxury you know warm and like he does stuff like that and then maybe he'll you'll mention like free parking or something that's important to people in that area right so just kind of understanding what that specific area like if it's just New York free parking exactly or pool in you're Texas in the summer he exactly okay yeah that makes a lot of sense it's like these are like obvious things but you really have to think through it and just be intentional about it you once you think about it it

[20:13] becomes obvious how much would you expect like what is like if you are getting a new unit how much are would you need like 8K 10K if you're starting off right from the beginning your first unit's obviously going to cost you a little bit more because you're going to need to you know there's going to be some trial and eror with the first one there's probably going to be a few mistakes you know logistical issues meeting your team member you know hiring a new photographer setting up a company all that but if you're already you know got all that done then yeah I'd say 5 to

[20:42] 10,000 is a is a good budget for like a one two three bedroom and then you'd probably make that back in the first year pretty pretty quickly oh you're you're if you're not making back in the first year then you've made some serious mistakes but are you expecting maybe three or four months to make that back yeah on average with if you're not getting free R free rent concessions then 6 to 12 months is the average uh based on the market but if you're getting free rent man like 2 3 4 months interesting how long have you been doing this uh just over a year actually you've

[21:09] only been doing it for a year and you have 34 yes yeah and I I took like four or five months off in that time frame I did 34 and basically like seven eight months damn dude question my whole life now I wasn't like rushing it either like I was like taking my time like I was already well established before this right so it's for someone that's like hungry and motivated I know guys that have done 50 to 100 units in one year oh my God have you marketed your airbnb's off platform at all like is it just straight upan uh Airbnb has been really good to me so I'm kind of loyal to them

[21:44] they have great uh insurance coverage as well so anytime I guess like say they smoke in my unit just trash the place they always pay out um so I'm not worried about the insurance side when you do off-market bookings you definitely need to have some solid insurance that you're paying for outside of the platform just in case that does happen but airb be almost I hear that they will penalize people if they're you know on all these other sites because it will like say I take a booking on vbo my Airbnb calendar is going to be blocked that's happening more and more and they see that you know this guy is booking

[22:17] somewhere else 50% of the month we're not going to push him as much because we're not making they have an algorithm so now they're going to take someone that let's say you're only on Airbnb maybe they replace you with me nice right they want to push as many listings get as many bookings as they can on their platform it's interesting that there's an Airbnb algorithmic it's very tricky and always changing it too like probably how much you're on there for support how fast you apply like they're really going to there's little t uh tricks and uh or tips and tricks that you can try like little things like even just changing

[22:47] your pricing for every listing three times a day will help push it in the algorithm so I was always taught to go up by a dollar down by a dollar just three times a day because just you being on the platform constantly messing with your listing Airbnb sees it as this professional host they're constantly making adjustments you know they're on the platform and they like that right what other variables like that be like how obviously screen time on the app how quickly you reply to guests reviews are obviously going to be like the number one thing for sure yep and then changing price is there anything else that you

[23:19] thought of that's like or that you've heard of that yeah obviously being a super host is a is another great what does it take to be a super host you basically need over 10 booking over 10 over a 4.8 uh rating 100% uh reply rating I think and then there's uh less than 1% cancellation that's the big one okay so if you have 100 bookings and you cancel two of them then you're got to lose superh status so we I never cancel any bookings okay if there's a problem we always get the guest or airb me to do it but that's different than requesting and then denying yes so if they if you

[23:55] confirm the booking then cancel that be your reference exactly it's 10 stays for one unit no it's just 10 stays across um your Port many you have in every quarter so it's not 10 units it's just if you have three three or four each yeah correct and they'll assess super host once every three months gotcha do you just like apply for that basically they just assess all their Airbnb hosts you meet the criteria every 3 months then keep the badge lose it definitely you can wow okay so what what is what are mistakes of someone that would is like just doing this they don't see coming yeah I I think probably some of

[24:33] the biggest mistakes that people don't see coming is just managing the business like as a business that PE a lot of people I think just think that they can throw Furniture in a unit and then put up on airb and there's nothing else right the back end is just as important right having systems and some sort of structure like with virtual assistance and procedures that they're following to ensure guest you know satisfaction is the most important thing in the business we need you need your guest to be happy so let's go through that team process then cuz I can imagine like the turnover like you have someone checking out at

[25:03] 11:00 someone coming in at 3:00 if you're like doing every day like you said like the cleaning person needs to be on time they they can't be working for somebody else and be like hey last minute I can't do it for you yeah are you going to would you have to step in and go do it yourself have you done that we have backup cleaners but um I've been working with the same cleaners for a while now in both cities and they're very reliable so they have teams and they have M so it's a cleaning company yeah I used use cleaning contractors contractors yeah like a couple of them I

[25:32] have a couple cleaning companies and then I have a couple just individuals um that are starting now to hire people because we're getting so busy okay so there I'm sure at this point this Market has evolved where there probably are like dedicated cleaning companies for airbnbs right so you probably have like three or four independent contractors in your roster and like these two companies that could like come in an emergency and it's just your job or probably one of your va's job to just communicate book and make sure a cleaner is to do that correct yeah they're doing all the scheduling a lot of it's automated now

[26:02] actually through the softwares but oh what software um so you can use turno which is the big one and then um my uh property management system we use is hostway so hostway will automatically schedule the cleaners I've set for certain properties and then my V will double check with the cleaners like hey we're just making sure that you know you're cleaning this this and this tomorrow can you confirm everything's all good all good so the night before we know that we're going to have a problem for the next day and then that's when like hey we can't cover this one clean okay contact the backup clean just get

[26:32] them there okay I like to get really detailed so on hostway say that this person's checking out and you need them to be there tomorrow at 11: because you have someone coming in at 3:00 you would just like click a button set the time or what how does it no it's all automated because hostway knows our checkout hours so they know that the guest is leaving gu the cleaner automatically gets scheduled the next day yes or the moment after yeah and so does a cleaner have to accept it or click it or does it correct so every time we have a booking it will get sent in order to like our primary

[27:01] cleaner and then if they don't take it it will go to the secondary cleaner so if they accept it then it goes right to them and their schedule they will go to their calendar they know and then my VA will also follow up like 95% automatic yes so on their side they just open up this app and then say Oh job opportunity job opportunity job opportunity I'm going to work today yeah they can like make their own yeah but it's it's they they're working every day we're having a ton of turnovers so most of my cleaners are full-time with me are fulltime yeah ask that so the best thing you can do

[27:31] for your but like for your bottom line is to hire in-house cleaners if you can find cleaners that are willing to clean for an hourly rate and then just Outsource the laundry that's going to that's going to make you the most money explain that what's what's an ideal hourly rate and why do they Outsource on the city as well like with Austin no one wants to work hourly they all want like per job priceing how much would that be uh anywhere from like 80 bucks from a one-bedroom up to like 150 bucks for a four bedroom I'm getting chared way more than that the Clean Hands Like My cleaners have come

[28:04] down on their pricing because I'm giving them so much work now right their prices used to be a lot high so you got bulk deals so 80 to 120 for a flat fee what would be the ideal hourly like to 15 an hour 20 and in Austin you probably have to pay like 35 bucks an hour damn how long does it take to clean one would you say uh one bedroom should be like half an hour what yeah yeah they change the sheets yeah because they they've already got the laundry done off site right so what does that mean so they have like so offsite laundry means like you have like

[28:30] two sets of everything yeah we always have multiple sets so like they'll take the dirty stuff off they'll send that to the uh cleaning company they'll do it and then they have a fresh set do they have to drop it off at the cleaning company or does yeah sometimes they'll come pick it up drop it off I don't have any of those Services right now because we do everything on site okay so they so right now they will take the dirty sheets off throw it in the washer start cleaning throw it in the dryer and then they'll already haveh fresh set have the fresh sheet but they'll wash through dir

[29:00] sheet while they're cleaning prepare for the next cleaning you got it interesting yeah you can do it a few different ways like my mentor he um it depends what city you're in CU some cities you can hire uh you know hourly employees and then Outsource the laundry and that is a lot cheaper gotta right so if you can do it like that I recommend doing it like that this is fascinating bro okay 10 seconds on the clock how many things in your life can you name that are growing your relationships your skills your customer base how about businesses on Shopify Shopify is the global Commerce platform that helps you sell at every

[29:32] stage of your business from the launch your online shop stage to the first real life store stage all the way to the did we just hit a million orders stage Shopify is there to help you grow whether you're selling shipping supplies or promoting productivity programs Shopify helps you sell everywhere from their all-in-one e-commerce platform to their in-person POS system wherever and whatever you're selling shop a shopify's got you covered Shopify helps you turn browsers into buyers with the internet's best checkout up to 36% better compared to other leading Commerce platforms and Shopify is the global force behind Alberts rothy and Brooklyn and millions of other entrepreneurs of every size

[30:16] across 175 countries go to shopify.com wgmi to grow your business no matter what stage you're in that's shopify.com wgmi so you have CLE that's probably the most like crucial part of this yes then you have so you have four vas two of them are doing three three so three of them like every shift so we're covered 24 hours so you have so you have three sets of three no I have one for each shift and then I have an Outsource VA okay got yeah and I have a manager now actually as well okay so those three vas are just doing replying to messages on Airbnb doing scheduling with cleaners

[30:52] and other team members what other team members do you need in your pipeline to be covered on all basis basically just the vas and then uh a handyman and the cleaners like you should have a handyman outside in case stuff gets broken you need to fix setup units stuff like that okay so the handy so interesting question here Apartments have like maintenance already for like an apartment building so can you use those people or do you want your own person that's another beauty of the rental Arbitrage like any big issues like air conditioners heating water Plumbing it's all going to be covered I'm not coming out of pocket for it right whereas if I

[31:23] own the property all those expenses fall on me too so what about so the handyman would bore so be for homes or just like be for apartments too just like if someone like say they broke a chair chair you know we had trouble with the Electronic Lawn or something not maintenance handyman my cleaners can do a lot of changing furnace filters and stuff my cleaners do do a lot of the routine maintenance so I don't often have to bring in the handyman either if you have handy cleaners it's it's even better like my cleaners will charge my ring cameras they'll change the uh batteries in the locks nice so I don't

[31:53] have to little details it all adds up right yeah so you so basically did you use on jobs. pH to hire these vas what was your listing that's the number one site for virtual assistant and yeah not even not I I never even went crazy with the listing just asked for uh someone to have prior experience with Airbnb obviously managing short-term rentals doing inventories talking to cleaners Obviously good communication skills and so that's just like on a high side five bucks an hour and you yeah I'm paying 100 bucks a week to the three of them and then 125 to the Outreach so that's a deal yeah for 40 hours yeah wow and then

[32:28] they're all just you have it scheduled hey your schedule's 8:00 p.m. to exactly 4:00 a.m. this one's 4:00 a.m. to noon so you always have someone so your reply time I basically pay 20 bucks a shift gotcha kind of like that cuz they do work weekends as well too gotcha and then you have one that's dedicated towards the actual outbound yeah okay I'll get to that in little later so a handyman is just how much this is just one person for like all your units pretty much and he's like yeah I have a few of them in every city just because they're not so reliable some of them

[32:56] like have fulltime jobs and stuff they're doing this part-time right so we've got three or four in each City that we can call but they're not usually like twoo urgent of issues it's more so just like a oneoff problem here one up yeah if it's like a super urgent issue it's usually the property management company that's going to deal with it right cuz super urgent issues are usually like HVAC or or Plumbing gotcha yeah so they have a maintenance team that's cool that makes a lot of sense so is the cleaning fee like a place where you do make like a good margin as like some people will uh upsell their the

[33:25] cleaning fee on on the on the platforms but don't like whatever I'm getting charged for cleaning is what I put and Airbnb they're trying to make way with the cleaning fees so I'm trying to get mine as as possible yeah it's frustrating when you're like oh it's only 200 bucks a night it's like $700 cleaning fees like yeah what how does that even possible exactly but now I think they changes so you can see total cost right which includes everything they probably got a lot of flack for that then yeah okay so is the but can you make the cleaning feed whatever you want technically you really can but but

[33:54] at a certain point no one's going to book yeah yeah yeah right so you got kind of you got to be Strat like some people will even reduce their cleaning fee and they'll up their nightly rate depending on the market right but the market I'm in the cleaning fees are high so I leave them what I pay it is really cool how you can like Market these airbnbs in a way to like make it feel luxury that has a pricing strategy that's luxury yep cleaning fees maybe if you want to have a high cleaning fee but a low pricing to like attract people yeah like it's like all like a thing you

[34:18] should test yeah definitely every Market's different and you've got to play with your pricing strategy and you've got to tweak it until it's per perfect right dude I'm loving this conversation wow okay so the softwares that you use is it is it hostway what was the other one I use hostway and slack for my uh Team communication monday.com for like task management inventory basically yeah all that stuff and then um basically hostaway does majority of the were what all does hostway do um I have my electronic locks integrated in there it's doing all my automated messaging it can do auto reviews um it's handling my cleaner task

[34:58] it can it can do so much more like you can integrate with all these different products like uh your minute sensors uh your Dynamic pricing software basically they have I think the most Integrations on the market right now and it's just all integrated into Airbnb basically yeah they work with they work with all the short-term rental platforms and so you Dynamic pricing so this thing can how how would you set out Dynamic pricing Dynamic pricing is essentially like a software where they have a pricing algorithm based on demand in the city so you set like a b price and you set different rules for your each of

[35:30] your listings and then they'll fluctuate prices up and down based on but that app has all the data yes and they do it for you so you don't even have to do it unless you like see an opportunity yeah you essentially set a base price um you know they'll give you a suggestion a suggestion on the base price based on your Market you know how many bedrooms you have all that stuff and then you can tweak that and your rule sets and then they'll fluctuate based on what's going on interesting and what automations would you have typically like messaging automation yeah basically the messaging automations are when someone inquires about a

[36:02] booking they'll get a automation right away because that helps with that response time and rate right so right way we're making sure that we we touch that guest right away and then my vas will take over the conversation they'll get like a notification that been triggered yep and then after the booking they'll get uh you know booking we always send the in uh checking instructions a day before that's another automated message and that's set up for each unit individual cuz they all you know different particulars right when you're setting checking instructions what's pretty important to cover like it's like this is you have to d Almost

[36:35] dumb it down for people could you explain like some of the key things that you'd want as a host are like pretty critical for your system because again you to make money you need to be dialed in and you need a book for like 25 30 days a month pretty much if you're wanting to be a professional at this and so like those checkin instructions are probably designed where it's kind of like a meet in the middle with the guest like dishes in the dishwasher stuff like that we don't really do any of that I'm I hate airb hosts who make me do the dish uh I I don't put any like tasks for

[37:03] the guest check out you're a hero yeah like I'm paying my cleaners a good penny to clean like they can clean right obviously we get the odd guest that just takes advantage and they'll just leave everything everywhere and sometimes my cleaners will charge me a little bit more but for the most part guests are pretty reasonable with checking instructions we're basically trying to explain to the guests and walk them through the whole process right so what do they do when they show up where can you park where can you not Park do you need a parking pass on your car what this is the code for your unit how to

[37:35] use the lock once you get in what to do Wi-Fi password yeah Wi-Fi password and then the rules again because we want to let people know hey no smoking no partying you're going to be kicked out all this stuff right okay cool are there any specific rules that you found that like are just pretty important rules yeah the smoking we always put that even in the listing before prior like you're going to be a did charge $500 same thing with parties unauthorized guests unauthorized pets all that stuff yeah we allow pets but we charge for them once that's basically just to avoid the more thorough and the better written that is

[38:11] the less messages you're going to get for sure like I said you just really have to dumb it down honestly sometimes you even have to provide like directions just which way to walk yeah right to make sure people get lost really easy they're in a city they're not familiar with so make it as easy as possible or not text happy people so can you change the code to get into I'm assuming it's a code that they get so with our electronic locks they automatically set a code for each guest B on the last four diges of their phone number right it it makes it really easy everyone can

[38:39] remember the last four diges of their phone number right so we'll tell them hey this is your code it's also the last forages of your phone number and it's only valid for for their checkout date or check-in date and check out through this day yes exactly wow so everyone gets their own code and their code won't work after their reservation's over like we don't don't want any guests obviously back well new guest is in or whatnot yeah interesting interesting interesting and have you found that that code system is better than like I guess that's probably the most convenient for everybody yeah the slange and code is

[39:11] the best lock you can possibly use in the business lung and code that's like what you're putting on your door yeah that's the and so will the landlords let you do that yep yep some some buildings may be against it but I haven't had one tell me no yet so you I I did have one building kind of push back and I EXP them the benefits and you know with maintenance and a guest if if we need to get in for emergency maintenance and a guest has a key and they're not there how do you get into the unit with the with the door lock I can give you know a

[39:38] set of specific a specific code for maintenance to go in and I have a history of who went in the unit what code was used what time stamped and everything gotta very important right yeah so do you have do they do apartment complexes have access like they can get into your unit at any time technically they have a key unless you have like a dead VT while you're in there all units have a dead PLL in case someone's in there right in there right but if in theory so do you have to give the apartment complex just a universal code I usually do just in case there's an

[40:06] extreme maintenance like all the apartments are going to have a spare key regardless right so but like I said for guest safety if they are in the unit they all have a dead lock that or a dead bolt sorry that if even if they tried that key that can't get in if someone's in there interesting yeah and then you the thank you automated message is just encouraging them to leave a review basically yeah we're almost trying to coach the guests from start to finish you know hey when you show up please let us know everything is perfect we strive for five star uh reviews and then I even

[40:36] have a magnet that goes on every fridge that kind of shows the Airbnb rating system because people don't understand that anything less than a f star in airb is like a fail and airb takes it very seriously where with hotels you can go three and a half four star is decent that's what the hotel's called it's four star yeah exactly right so we always have to kind of reiterate that to the guest and let them know that hey as long as you know everything was fine you should give us a five star and so are you how time intensive is this for you assuming that you weren't looking for

[41:04] new places let's say you just stopped today straight up management yep how how much time would you say you're spending on this really like probably a couple hours a week if we're talking like no unit expansion I'm more involved in the unit expansion even though I I have a team on the ground doing it I'm still talking to them telling them how I want the unit to look what furniture I think they should buy because I'm not doing a universal setup I'm using the same stuff over again over and over again if I was to do that it would just be like they know what furniture to order they know

[41:32] how to set it up I wouldn't have to be involved but I still like to be involved in my pricing right because at the end of the day a a virtual assistant in the Philippines doesn't know what I need to make yeah right or how I want to set my prices so every morning I adjust them I look at them I'm happy with them and that's essentially all I have to do for the whole day with EV what's a good margin with every like all your employees all your units what is a good profit margin in airbn Arbitrage you are you should expect around a 30 to 50%

[42:01] Marg depending on the mar the time of year yeah like last month we did a 44% margin that is amazing dude wow that's cool okay so whole team is just three vas for like management managing the units scheduling the cleaners double checking the cleaners the messages yeah just anything that could really go on dayto day for tiny common so I actually brought on one of um the ladies that runs um the cleaning one of the cleaning teams for me in Austin I actually just brought her on as a manager nice so now I took myself cuz I was the vas wereing and asking me questions now so I wanted

[42:39] to take myself out of that so now I brought her in between now she will come to me if there's a bigger issue that I need to you know answer to what's a good salary for that role just Baseline she charges me 300 bucks a week it's not a lot it's all virtual for her right she's just doing it from her phone you know while she's doing a good job businesses yeah I think it's a it's a pretty good gig and I was all over that I'm like w $1,200 a month CLE for me just to like not have to worry about anything yeah so cleaning teams on standby a handyman on

[43:09] standby every once in a while whenever you need them just like a few in your rotation 3 Vaas just one every eight hours you don't need that though you need that at my scale like I didn't even have a VA for my first seven homes I was just doing it myself what even that for all those people it's probably not even like how much is that a month like 3,000 a month yeah essentially yeah 3,000 right around there you just as you scale up you have more money to spend on stuff like that so you can you know d-stress your life right by giving away a little

[43:35] bit extra of the money you make right that's so worth it yeah so basically most of your time is going to go into getting new units Furnishing them getting the photos taken getting a listing up are you doing all that exactly if I want new units that's where my time's going right my VA will message me say hey Colin you know we got some leads in the city here's the info and then I'll follow up and I'll call the property if I think that a good fit for me and uh start negotiating you know sign the lease and then get my team to start the process of setting it up okay

[44:05] so then let's let's go into that side of this things now this is kind of like sales in a way like you're selling the landlord on your thing essentially is so let's do prospecting first how does you have a dedicated VA that sole job is just to look for units look for opportunities where you could potentially do Airbnb Arbitrage yep so like how can they identifi just tell me all about the lead prospecting are they identifying a potential Target and then once they're once they've identified one when they call what are they trying what information are they trying to get before it gets s to you yeah so back to

[44:36] the corporate leasing uh terminology they're basically calling buildings seeing if they've worked with corporate leasing if they allow it okay if they allow it is there any restrictions can the guest stay less than 30 days is it you know what are the restrictions around the corporate Leasing and then if they're they say yeah they do corporate leasing yes they allow short-term rentals you know under 30 days that's when he lets me know hey we got a hot lead at this building I'll call and I'll talk to the person is that what you're using monday.com for uh yeah essentially Mondays just to like organize everything you know keep a I I I do a property

[45:10] detail database in there so I have a full database built out of every property so every little detail for every property so my VA like say I hire a new VA how are they going to they've never seen any of these properties they can go in there any question that a guest is going to ask is going to be in that database archive it in there okay then I have full storage unit inventories like my cleaners will go once a week they always tell my uh they'll do a full inventory at the storage unit and they also tell my VA what they're taking so they can adjust

[45:37] stocks and order new stuffs okay so you have like a storage unit that has like toilet paper paper towels all delivered from Amazon to that storage unit and then cleaners go and and organize it we have shelving systems so you'll get it shipped directly there ler responsibility is to unbox it organize it shelves y labels and everything and then let my VA know let my Vaas know that the stuff we ordered are D and then if they take anything hey we took you know 50 rolls of toilet paper and then they'll adjust the stocks and then if they need to order more they have my Amazon account they can go in place an

[46:06] order gotcha that's cool would have never have thought of that so they you for that what's the typical cost a month for that type of stuff and you're doing it varies because I buy everything in bulk right like even when it comes to shampoos and shower gels and stuff I buy always the Amazon brand if I can Amazon brand seems to be the least expensive and if you buy like the big containers and then pour it in the little shampoo bottles versus buying an actual individual plastic bottles yeah I try to do everything in ball nice what's the do you have like a range I know it's

[46:34] variable cost tough I yeah I don't per unit yeah no no across all I guess per unit but three bucks that's I have so many units now it it just depends and we we used to like let guests have free reain to it all and now we have a locked closet at each property too so we only put out like a couple rolls of toilet paper people might take us to the road yeah we give people like the starting Essentials now before it was just a free-for-all so we're definitely spending less than we were when it was in the beginning and I've adjusted because I've seen you know what's

[47:05] happening like okay we got to make some small changes here right and save some money okay that was an interesting tangent thank you so lead scraping like so I understand I guess I'll go a little deeper on the call but lead scraping in general are they just like every apartment complex in the book is there like a specific location that like what dis what would disqualify something so what I usually do is is I usually look at the Revenue data for the city first so I I I have it broken down by ZIP code so in Miami let's use Miami as an example I'll see which zip code makes

[47:38] the most money and then where do you find that um I have a software called profit Maps but it's essentially air DNA the airdna has a lot of uh airdna.co is the main data website for short-term rentals they have a lot of bad data in there and it can be kind of confusing there's a lot of stuff to look at in there so there's a service called profit Maps which I use where the guy extracts the good data and puts it into simple to read spreadsheets so essentially I'll pull up Miami it'll be listed by bedrooms how much they make by Z and by ZIP codes so I can see a three-bedroom

[48:07] and this ZIP code makes this much amount of money right and then I basically basically find the the zip codes that make the most amount of money and tell my VA to proos prospect those first profit Maps yeah Maps profit Maps that's what they call them yeah cool wow that's interesting and so that's where they probably are scraping the like looking for good locations good areas you're saying I don't have to VA so much like find the area all I do that I tell them hey call this ZIP code today call this apartment complex and this ZIP and then he'll scrape all the apartment complexes or condo buildings anything for lease

[48:42] and uh he'll put it in like a spreadsheet or monday.com and just go through them start calling them all MH wow and then on that call is there anything that you're I guess you're using the language of corporate what' you say corporate corporate leasing corporate Leasing kind of being like vague on what you're doing and not very clearly saying Hey I want to do Airbnb Arbitrage because that might turn people away at first have their relationship yeah is there any like red flags that you read into like have you ever like had a problem with the landlord like where it's like they were bad landlord not really I have a couple property

[49:14] management companies that aren't as great as I'd like them to be like there's a lot of maintenance issues they're slow to you know address things um in Texas we have a lot of pest control issues yeah what about a fob I know most apartment complex are like you have to fob to get into the building yeah so I don't have any like high-rise condos that have like that security at the front most the M are like you know one one story twostory apartment style complex facing the outside the doors are facing outside yeah yeah like that okay so anyone okay okay so that's pretty so we don't have any fobs would that be

[49:46] like a like that would probably be pretty hard to like there's there's a couple um companies that deal with that I think one of them's called key Cafe you can put like a box in the parking structure and people can go up and you give them a like a lock and lock essentially okay okay easy solve right there I was telling myself that that was either lock box or a service like that will do what you needed to do okay great interesting okay and then basically they're just like betting it if this is a possibility if like what their these people's like standards are if they've ever done it

[50:19] before and basically if it's something that they've done before they already have like subletting allowed it's a hot lead you give a ring and you're ready to take action basically yeah cool is the approval process just pretty subjective like at the end of the day if they want to let you in they'll let you in or is there literal like regulation yeah it it's all going to it's building dependent right so what you can do when you're first starting if you you know maybe don't have that income to show or you got some bad credit or something that look for buildings that have a ton of vacancy

[50:46] because buildings like that are yeah they're they're going to be more willing to take a risk on you to fill Apartments okay fascinating so it's pretty subjective you can like sell the guy and like just sell yourself like I said I've had so many calls and where like get for my units that they they've never even verified income or asked for any sort of History gotcha so just building out the system of consistent leads how many like Apartments do you think you could do a month right now like if you were like if you had like endless leads like what's the most you could take on at a time4

[51:18] years I think I could I really think I could do whatever I put my mind to right like it's it's just it's just your your limits you create your own limits Furniture like Furnishing I feel like that's like the biggest time consuming part know like going in there scoping it out what would look good shipping how do you buy furniture yeah basically Amazon Ikea Walmart you're going get you're going to get everything shipped in boxes and you're going to basically like build it all yeah so you can do it a couple different ways if you have like a singular home or unit you can just ship

[51:47] it direct to the house you don't have your person on site put it in the house start building it if you're doing like 5 10 units in the same city or complex probably the best way to do it is to get a storage unit and have everything shipped to the storage unit and then on the day your lease starts hire guys with trucks to come get us yep bring it all to the unit start building it do you build the furniture yourself no like Craigs us people or like like task grabbit task grabit Craigslist referrals what would you make the listing on that just like looking for someone to install

[52:20] Furniture you can just go on Tas R Tas rabbit there's hundreds of them and literally hire them it's like furnit that's like a thing yeah F Builders furniture builders okay cool M this is awesome where what's your social media uh it's agent right on Instagram okay great I'll link all last name w w r ghd cool awesome I'll link all those below but go follow him that was sauce outside of Airbnb Arbitrage what do you have so I kind of started at the bottom with real estate um I also should probably mention that I never graduated from high school I went right from uh right from

[52:51] dropping out of high school to getting my real estate license started as a realtor while working other full-time jobs so basically real estate was part-time for a long time so eventually I built up enough clientele and business to do it full-time uh started taking my commissions from Real Estate putting it into uh long-term Investments buying my first house buying rental properties uh started flipping homes so basically the full real estate Spectrum whole road yeah and then basically air found Airbnb Arbitrage and just realized that I wanted to stop purchasing long-term Investments because you're tying up you know sometimes hundreds of thousands of dollars and making like no cash flow

[53:29] yeah and interest rates are crazy so I saw the Arbitrage B I was like I can make a lot of cash flow doing this so do you have like you said you have how many you have actual rental units that you own yeah so I have 35 units that I own that are rented to long-term tenants so you own 35 where you have like a mortgage on them basically yeah they're like different multif Family Properties like some of them have four units some of them up 12 units like town homes or yeah like duplexes yes ex yep okay Co cool so you actually own those where

[53:57] you're kind of building up like the equity value you got it the longterm real estate play you know pay down paying down uh a mortgage and and uh banking on appreciation so do you see did you do that first or are these like in tandem yeah I did that first so you you went like the traditional real estate Tradition Way yeah and if I could go back I would do it the opposite way because like creating the cash flow first is what's going to allow you to buy the long-term assets yeah the barried interest seems much lower with Arbitrage so but I do have a question do

[54:28] you now since you discovered this recently are you taking this cash flow to then buy more rental properties right now I've just been using the cash flow to keep growing the Arbitrage business uh so you see more opportunity there I see a ton of opportunity there and like I said the the barrier the the capital to the capital I need to start new units is very low and I can get it back quickly right so I can take five grand you know get it back in two months and then that unit will make me 500 2,000 bucks every month could right could and then I take that money and I'm probably

[55:00] going to invest it into longer term stuff or even building like some sort of unique airbnbs I'm looking in Costa Rica right now I live there yeah one of my students actually no I don't live there okay um sorry I'm going to I want to build an Airbnb there I have a student that actually built an Airbnb there and I stayed at it and it was it was an amazing experience there's a lot of potential in some of these other countries even outside like vacation rentals basically like yeah that's really smart let's play could you play like Devil's Advocate sure like cuz you do both sides like what would be the

[55:30] cons of Airbnb Arbitrage compared to that actual like owning the rentals or just in general like what are potential like risks cons is it's it's a little more of an active business especially when you're starting off you've got to set up the units you've got to build the teams you've got to get systems and structures in place so you're going through all that at the beginning where the long-term real estate play is basically just put up the cash by the property find some tenants and set it and forget maybe have a handy in yeah or have a property management company deal with it and you ever hear about it yeah

[55:58] right so Airbnb Arbitrage is a little bit more active at the beginning but can can be 100% passive if you build the proper systems and hire people to do all this all the tasks for you yeah and you don't have to really worry about interest rates or anything like that because you know what your R is going to be that's the apartment damn that's so interesting and there's no real Market risks to this like you don't there's no AI That's to take over hous once you're paid back like realistically even if something were to happen in a market like say like New York they brought in

[56:25] like a full Airbnb B mhm you're you're paid back so quick by the time they introduce a ban it's still going to take a year or two before they actually put it into effect so you're already well paid back by then you paid money you can always move the furniture to another the fure back property right that's your main investment right so so there's no like that's how I look at it there's literally no risk like with actual real estate like you could get liquidated or like your loan could go under like you don't have guests and you could they could take that money back out the gate

[56:51] where this case you just walk away from your lease or there's some there's usually an exit clause like maybe pay like one month rent or something like that it's not going to ruin your life it might it might hurt a little bit in the short term but of course hurt but like I compared to how much the house would hurt I I know some people get smoked right now that own a bunch of real EST over lever 10 millions of dollars Equity gone exactly right and I think that you know we had the we had the uh all the covid stuff happen and you know travel

[57:19] shut down and all that right and now people are traveling a lot more and I think it's going to be like that for for years to come man you're I apprciate Shing this every thanks for having me this was so much fun all right guys I put the links in the description go follow himin my man thank you so much you killed that

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