STRSS 49 – Approaching Landlords for Short Term Rentals w/ Stefan Pougatchev

Video Transcript

 

 

00:00:01

Me and Mario were never scared of getting denied by landlords. I think that’s a lot of people have that challenge of, you know, getting that first and this is not gonna work. And I remember I got denied at least 30 times before, you know, one landlord is like, yes, we didn’t see that as a challenge we saw. It’s just a numbers. The more you see, the more you knows Julian. Yes.

 

 

00:00:22

This is episode number 49 on the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed, go to cohost it.com for more information, welcome back to short term rental success stories. I’m your host, Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing the short term rental business. My goal is that you’ll be able to walk away with practical information. That’ll help you become a better host and learn how to scale your business. Like any exceptional host. We all strive for five star reviews. So please going on over to iTunes and let us know what you enjoy. This really helps support the show. If you haven’t done so already going over to our Facebook group, the host nation to connect with the community.

 

 

00:01:01

Hey, what is it going on? Host nation. I am super excited to be back again with you this week. We are just one away from the big five. Oh and wow. I am super excited. It’s hard to believe that it’s been 50 consecutive weeks. Now that we have just been putting out these success stories and Vacation Rental machine podcast every week, it feels like we’re just moving forward and continually growing and adding so much value. One of the ways that we are looking to provide that next level value is through the next iteration of content that we’re gonna be coming out with. And that is through the Vacation Rental machine Formula. So for those of you loyal host family followers, you know that I’ve partnered with John Bell and he’s been my mentor business partner and friend, and we’ve been working together through the Vacation Rental, into machine podcast to create this Formula, which we’re calling the Vacation Rental machine Formula to help hosts that are looking to start automate and scale a Rental arbitrage cohosting business.

 

 

00:01:53

So we have a really unique way that we’re blending the two. And we’ve decided to create a way for you to walk step by step and follow along with us. As we build out our own management cut and using all the tools and all of the systems that we have so that we can take everybody along. The content that we’ve been sharing is very next level. And that’s the whole reason because we don’t want to just provide information out there and then hope that you guys can just become good hosts. We wanna help nurture you guys so that you have everything that you need to become a profit and professional short term rental manager. If you are interested in finding out more, then go to Short Term Sage dot com slash early Birtch, and you can actually join our email list to know exactly when it will be released and maybe it will be available by the next episode.

 

 

00:02:40

Stay tuned because we’re coming up on March and March is gonna be a very exciting time because is that’s when people are gonna be traveling more. And maybe our early birds that are subscribed to our email list are going to be getting a very special discount on the course. So go to Short Term, Sage dot com slash early Birtch to subscribe and find out when we do release it and it will be coming out very soon. I’m excited for you all to be able to have really amazing growth. And one of the people that we have the special honor of speaking with today has had that really awesome growth. And that is Stephan Fuga. Stephan went from zero to five Rental arbitrage units within eight months of being in the short term rental space, all of these located in California. So many people say, oh, California’s way too expensive to purchase.

 

 

00:03:24

Stephanie even says that, which is why he got into the Rental arbitrage space. And now he’s planning on going to about 12 units in the next few months. And this episode Ste talks about how he and his business partners structured their partnership and why that decided to do business together. He also shares his ex experience on getting denied at least 30 times before he got his first, yes, to be able to start this business. Stephan shares a lot of the trials and tribulations of getting into the Rental arbitrage space. The beauty is though, is that you can do this literally anywhere where regulations are allowed, of course, but in a place like Cal, California, where it is more expensive. And you’re thinking, how am I supposed to get my return on investment back? There are creative ways. And of course that is through the short-term rentals.

 

 

00:04:09

Cuz if you want be able to shortcut your success, you invest in short-term rentals. If you like my show notes for this episode, go to Short Term Sage dot com slash STR four nine. Or if you like my show notes sent directly to your inbox every week, then go to shorttermsage.com slash show notes with all that being said onto this week’s conversation. Hey, welcome back, host nation to another episode of short term rental success stories. In this episode, I have these special special honor speaking with Stephan PTE. Would you please introduce yourself to let, to the host nation and let them know who you are and what inspired you to get into short term rental

 

 

00:04:40

Post? What is really inspired to get the short term rental is trying to get outta the rat race and you know, having my own side of income.

 

 

00:04:51

Awesome. Awesome. And do you wanna tell a, so getting outta the rat race and starting your own side income, what, what’s your current situation? You have a, you have a full-time job, you have five units. Could you essentially retire or could you leave your job at this point or what’s, what’s kind of the number that you’re looking for to be able to, to quit?

 

 

00:05:12

No, I definitely can’t leave my job yet with five units. They’re not luxury units, but you know, if, if we were, if I were to leave my job, I’d probably want around 20, 30 units and wouldn’t really supplement my salary that I’m now, but definitely I’ll definitely I’m sacrificing money to not. And you, and

 

 

00:05:44

Is there a big difference from how the luxury units in the California area are being priced versus yours? Cuz when you’re sharing some of the numbers, you’re, you’re averaging about a thousand dollars per, per unit throughout the course of the year.

 

 

00:05:57

Yeah. So there is, and which surprising, you know, I was, when I was doing, when I first started into this, I was, I really, I had an opportunity to get a luxury in it and I didn’t do it just cause I was a little nervous. It was a little more expensive and I was worried about covering rent. But what I found was what I’ve been seeing, that luxury units, you can charge a lot more, you have a lower, but you’re making, you’re making a lot more just because you’re charging so much. So on average, my occupa is around and El and if I a, let’s say somewhere in beach the beach, like, but I keep making twice as much I’m making just because it’s right along the beach, it’s a Vacation house and you know, so it’s, it’s just different numbers and the way you wanna play it.

 

 

00:06:50

Awesome. And do you mind, Sharon, what, what, what’s your story? How’d you get started and even here about, you know, Airbnb or Rental arbitrage, because you’re are still relatively new. I mean, you got started. I mean you are new, you got started March, 2019. So just a little over what, eight months now?

 

 

00:07:08

Yeah, just a little bit over eight months. So I’m originally from New York and I moved out here to California for work girlfriend actually at the time just wanted and move to, so we both just never been to California, never been out west and we just decided to, you know, she’s like, Hey, can you find a job in California? I was like, sure. I’ll look. And we moved out here and then my business partner I’m in on this, he also moved to California and I didn’t, we didn’t, we, we were both friends in Brooklyn and said, Hey, I’m going to California. And I kind just brushed it off. Like yeah, probably not. You probably won’t go to California cause he doesn’t do some things. And then, you know, I was in California and then I was like ID. I, you know, we, we, up when we started about side hustle, I know he, he was trying to work on a real estate company, starting a real estate company down in orange county. And you know, I started talking about Airbnb and how one of my friends in New York was crushing it. And at near ski resort he was buying houses and you know, my as well. And I said, Hey, you know, that’s a lot of capital. Let’s just Rental arbitrage. Let’s figure out these systems and see if it’ll work. So he got board and we took a course. And from there we just started doing it.

 

 

00:08:35

So you, you had a friend in New York that was already operating and, and crushing it by the ski resort area, but then you’re coming into California, brand new. You, you just knew about someone that was doing it. How how’d you, you know, how did you first get started? And how’d, you know, to go the Rental arbitrage route because your partner wanted to purchase properties, which is, you know, more traditional, real estate, more people are thinking, okay, I gotta purchase a property. And then, you know, maybe I can rent it out on Airbnb, but you said, Hey, let’s not tie up that capital. Why don’t we invest it into, you know, rented units?

 

 

00:09:08

Yeah. So, you know, if we, if we bought a house, we wouldn’t have we in California, it’s very expensive buy a house. And if we were to do it, we’d probably barely afford one. And so we kind of went over the numbers together with him and I was like, we can take this, we can take these and we can, you know, get five units right away. And so he thought about it a little bit and he’s like, right, let’s do. And the goal is to, you know, for five more money and then, you know, reinvesting that into more Rental arbitrage,

 

 

00:09:42

Rental arbitrage space.

 

 

00:09:47

So only about purchasing resort, he told me a little bit about it. And then I started, you know, doing more research on Airbnb and I fell a video on YouTube about a guy. His name is Macy and that’s his website, but he started about Rental arbitrage. I got a lot interested in, I was like, this is something I could probably do. Cause I didn’t have, you know, a ton of money to start and I didn’t have a ton of money to start. And I started doing that. I started researching it more and more on YouTube. And then I finally went to an event here in California, just like a, a meetup group and Jay Macy was there and he was actually talking about, you know, shorts and Rental. And doesn’t what, what the business model is. Just the general idea, kinda it. And that’s how I found out about it.

 

 

01:10:44

Awesome. And you decided to go in with a business partner. What, what’s the, what’s the role of your business partner? Could you have scaled up to five units right away without him? Can you give a little backstory on that?

 

 

01:10:58

So I think, I think without him, I probably would’ve got three or four, but I think we both wanted to do it together. Cause we, you know, I was reading a quote somewhere the other day, which I kinda kind makes sense in this scenario. You know, if you wanna go fast, go by yourself, but if you wanna go far go together and I think business partner, you have more, you have more resources to hands. So, you know, hopefully the goal is to build for a longer, you know, longer journey here. And so I definitely could ourselves, but we just realized let’s do

 

 

01:11:39

Now. How, how do you, how do you delegate roles or how do you set up that relationship? Let’s say there’s people that are trying to get into the space. Maybe they don’t have the capital or maybe they don’t have the experience. How do, how do you structure a relationship or a partnership so that you are both able to contribute to the business?

 

 

01:11:59

Yeah, so we both, I mean, we’re both really good friends. So when we first started, we kinda just duties laying out. If I had to do something, I’ll just do it. He did something, he didn’t, then we told each other what we did. And then eventually got to a point where I, I was really building the system. So I was building messaging. I was building the guestbook, I was doing the pricing. He was more focused on working, not, and then, you know, I, I started building all this stuff and I really didn’t tell it all these. And I know because wow, this is really cool, all this research done. But now our, the, the main thing that we do is really answer messages. So, you know, we like to respond within an hour when we get our message, if we can. So if I’m not responding, he’s usually responding. And we kind of have this general idea of what to say and, you know, have the generalized, we have this like list of questions that we have that people usually ask and, you know, we have a response to them. So it’s really managing it. We both just share ma message messaging with, with guests and stuff like that. Now,

 

 

01:13:09

Now going back to what you said, you know, you said that you could have picked up, maybe if you were to purchase a property, you maybe could have purchased one property. What, what does it look like out in California, as far as if you were to purchase, let’s say you had purchased that property. What, what would some of the numbers be on return on an investment like that versus where you’re at now, where you have five units that you’re able to pick up and they’re, you know, cash flowing around a thousand dollars a month throughout the year.

 

 

01:13:37

Yeah. And so to tell you the, I don’t know, because, you know, my, I was just so scared of the, of the real estate prices in California. I like, this is not gonna be an option. I looked at, like, I looked one and it was like a million for like a bedroom. Like, you know, it’s like a lot of money and, you know, it’s comparable to New York as well to apartments in New York or, you know, a two bedroom park can be like around $500,000. So it’s, it’s, it’s a lot of money and I just, I didn’t have that. And I was just like, I definitely can’t do that right now. So I, I didn’t even look at the numbers for owning a property, but, you know, kind, just looking at data, kinda looking at on pricing and from Airbnb and not, you know, it like, it could be a good investment. I mean, like a two and probably make

 

 

01:14:38

Where you’ve taken this business now though. I mean, you’re, you said that you’re spending on average about an hour a day with messaging

 

 

01:14:46

Probably a lot less than that. Probably lot than that I’d hour a day safe. Probably just less, a lot less than that, just because, you know, when a guest first is coming in, we have a lot of messages. So, you know, I tried Smartbnb and Smartbnb really helped out a lot. And then, but I still like to communicate and have that real person communication with the guest. So I decided like I’m gonna take off Smartbnb and still, still do it that way. And it made a lot easier. There’s a lot of, you know, save templates that I have that I’ll send it, but I just felt like, you know, I can get a more personal and quicker connection with the guest if I’m messaging, you know, without using Smartbnb. And so that, you know, 30 minutes in the day spread out here and there, you know, five minutes here, five minutes there, you know, that’s really our main, our main job, right. Main duties, I would say. But the challenging part about the business, the challenging, the is really doing staging, right. That’s where a lot of money went into and we made a lot of mistakes when we started doing buying furniture and actually doing staging for the units.

 

 

01:16:02

What, what are, what are some of those first mistakes that you made when, when you were staging units?

 

 

01:16:07

Oh, man. So much. So we, we first started out with a, a stager. We like a interior designer. She was great. And I recommend her to anybody that wants to use her. Her name is Latton ke and she does her website is interiors.com. She’s based outta LA, but she works everywhere in the country. I mean, she flies to Hawaii all the time. Chicago, wherever you, wherever anybody is, she’ll go there. And when we first started out again, we didn’t have a money. So both being both of us from New York, we were really good negotiators. And, you know, she was originally charging. I think she was trying to around foot to a, and we have that of money to get five units. So we got her down all the way to like a square foot, you know, the first she us for a square foot and the unit was like square foot.

 

 

01:17:07

And then just I’m, I’m, I’m not a game of money. So we’re like, all right, we can’t afford you right now. So we’re not gonna, you know, we’re not gonna use you. And again, now looking back, I would probably pay her the more money just because I know what the numbers are coming in. And I can see it. I was just very nervous about first getting into the, into the game and spending so much money. I went to like reduce my risks. And so the biggest challenge is really doing it ourselves and doing ourselves and, you know, painting and doing the design work and whatnot. So it took a long, it took a lot of effort and a lot of time off her hands when we could have probably had a unit ready within like a week using Latton and her in her business, where for us, it took about like a month and a half to like two months to really fully set up. Cause our long beach units are the best quality units. Our long beach units are very old school, very old school units. And those took a long time to actually get set up and running.

 

 

01:18:13

So that that’s when you first started, are you doing anything differently now that makes it easier for designing units?

 

 

01:18:23

Yeah. I think the next unit that we both get are gonna, it’s gonna be, we have a set, like a line products that we like to get into the house, into the unit. We have a maintenance guy that is gonna do our painting. We’re still gonna, we’re still gonna do it ourselves. But we kinda realized that we learned from all those mistakes that we did, but we, we have like a set standard now what we want in the unit and what works for us in which location. And so, you know, I think it’s be a lot easier. You, all the products that we use are save just one quick away. We still have extra paint from all our other units. So it’s, you know, we’re trying to save costs on furniture, that’s costs, you know, setting up a unit.

 

 

01:19:08

How much are you spending on, on average per unit?

 

 

01:19:12

Well, so when we first started out, it was around like 10 K and then we were like, that’s, you know, to me, that makes sense. I was like, this is expensive. We can definitely do this for cheaper. So we’ve got it down to around six to 5k and hopefully we can get it a little bit lower. So,

 

 

01:19:29

And that’s for one bedroom,

 

 

01:19:31

One bedroom room in the studio. So our one bedroom and studios are basically the same. We have one king bed and then we have a sleeper sofa. So on Airbnb, we can sleep four. So it’s almost the same, just a little bit of, I guess, a little bit of extra furniture in the one, the coffee tables and the night lights and whatnot. So, but almost the same.

 

 

01:19:56

What, what was the most challenging part of starting your short term rental business,

 

 

02:20:00

Pulling the trigger, really just pulling the trigger on it and, and saying rights. And I, I think me and Mario landlords, I think that’s a lot of people have that challenge of, you know, getting that first denial and then right, this is not gonna work. And Mario and I are both from New York and got the new New York attitude where we just pushed and pushed and pushed these landlords do it. And I remember I got denied at least 30 times before, you know, one landlords like, yes. So for us that wasn’t, we didn’t see that as a challenge. We saw numbers, the like, let’s take, you know, 15 and take a on our, that like, no one really. Right.

 

 

02:20:58

So you said, you, you said you pitched 30 landlords before you first? Yes.

 

 

02:21:04

I, I would probably 20 landlords.

 

 

02:21:08

Wow. So you went to 30 places that you thought would be potentials and asked them, how are you doing it? Were you like going in person or, or cold calling? What, what was your tactic?

 

 

02:21:18

Yeah. Going in, going in person. I mean, I always, for me, I know Mario wanted to do it over the phone to save the save time by that there for me, it was always like, Hey, I think we’ll get a yes. If we’re face to face, just cause it’s a lot easier to talk to somebody face to face the phone. They don’t know who you’re. Right. So you can’t really introduce you can’t they can’t see the person talking. Yeah. So it was around 30 units and I would just go to these go units, call the landlord. You’re like, Hey, can we set up? I just, just went and it wasn’t all Eleg so Monica, Venice area, long beach, obviously neighborhood. But yeah. It,

 

 

02:22:05

What, what were some of the, the obstacles that you had to come with with pitching to landlords? What, what were some of their, their objections?

 

 

02:22:14

Yeah, so a lot of, so it’s, it’s funny, like in Santa Monica and Venice, almost every landlord knows what Airbnb is and it’s just so oversaturated and there’s a reason why, you know, DNA free version of Monica, right. It’s just so oversaturated, but you can see numbers there. And so every landlord knew what Airbnb was and no one to do it. Every lot of landlords are about regulations and whatnot. And maybe, and I think also just my pitch was horrible. My first time pitching. And I just, you know, I, this is right this before I kind of took the course, I was just like, let’s just get a unit and then I’ll figure out the course later. And so I didn’t know how to pitch properly. And then so mainly in, in Santa Monica, just like, Hey, no, we know what it don’t it’s to it, El, I think they’re just like, what, what are you doing? Like, why are you doing it? Like that doesn’t make any sense to me. Like, who are you? And then, you know, for a while. So I finally really just changed up my, and, and I started seeing a lot. What, what was a lot,

 

 

02:23:31

What was your first pitch? And then what was the pitch after you, you started working on it.

 

 

02:23:36

Oh, the first pitch was like Airbnb. Like what? And then, you know, I remember there’s sometimes like, Hey, you know, so Mario and I, we had a strategy, like this is definitely gonna work. So we went to listen together and were like, Hey, you know, we both jobs. And we both travel a lot for work. And one of us is gonna live here once, once in a while the other person’s gonna live here once in a while. But we would like to, you know, sub sub on Airbnb and they’re like, yeah, no, you know, we’re like, why is none of this working? So we finally a course and then our pitch. So, you know, now when we go into, go into the, these part viewings, we say, Hey, you know, we would like to do corporate and short term rental in your unit. Right. So that, that was a key change.

 

 

02:24:35

And we have a company set up now, so we have a business card and whatnot. So we look very professional. And for us, for me, I like to bullshit a little bit with landlord, just a little bit to get them to say yes. So for me, it’s like, Hey, I, lot of business travelers coming in, since we’re from right. That’s, you know, our, we found the sweet spot was air, air airports for us. And we like it. So we stick to it. So, and, and El there’s a lot of, so at&ts here, Boeing is, you know, almost takes over the whole area and people just come in and travel all the time. So I say a lot of business travelers coming in, I say also a lot of airline and flight attendants coming and stay. So, and they understand that and well, yeah, that makes sense.

 

 

02:25:19

So it’s, you know, do business travelers and pilots and flight tend, always stay at our property. Now probably only 30 of them do maybe a little bit less, but it, you know, gets the landlord comfortable with them. And then finally, when S are finally comfortable with us about two or three, like two months in, you know, they don’t care anymore. They’re like, you know, I tell ’em like, Hey, we’re doing this on Airbnb. Like they ask like, oh, I didn’t know. You know, you guys are great time. You guys paying time all the time. You guys are, you know, things up in apartment when I don’t need to send my maintenance guys. So, you know, it really works out for us now.

 

 

02:25:53

And, and you, you brought up the regulations. A lot of people were fearing regulations. And whenever I hear about California, I’m just like, oh man, that that’s a, it’s a dangerous market. Things are always changing California. Like this. Maybe they wanna put like a whole ban. What, what’s your, what’s your thought process with investing in the California market with, with Airbnb?

 

 

02:26:14

Yeah. So I know like right now, long beach, technically doesn’t allow it right long. I mean, it does, but it’s only like 60 days outta the year, but there’s, you know, like four, 500 units and just long beach that are up on Airbnb. So, you know, my thing is, I think eventually cities are gonna, you know, they gotta give, this is something that’s coming. This is something that’s gonna keep happening. People, people like the shared economy. And eventually I think, you know, cities and towns are gonna see that and kind of change the regulations on it. So I’m not too worried about it. And I, you know, I know some, some of my friends got outta the game in, in, and S just because they were really worried about it, but towns like also even know, which are small and city of long beach is pretty big, but sounds good.

 

 

02:27:07

They have some regulations around it, but they’re not strict. And it’s very hard for them to really regulate. So a lot of these sounds only have one code enforcer. He’s not gonna be going around town up to every single Airbnb. He has so many other things to worry about. So, you know, that’s another, they have to kinda think about, it’s like how really these towns gonna be, you know, enforcing these rules and Airbnb be, I know there’s a company out there that’s doing it as well. And I, you know, I hear they have some, some success with it. So, you know, back, you know, towns can hire that company to do it, but regulations, I’m not too really worried about if there’s like something really strict in place where it’s, Hey, no short term rental at all, then I don’t go in there. But if there’s like, you know, if there’s a little bit like, Hey, you can do it 120 days outta the year or 200 days outta the year, or you can only do it on, you know, you can only do it at your main primary residence and there’s already an Airbnb market in the area.

 

 

02:28:02

Then I’ll go in there. Cause there’s a little, it’s a little less,

 

 

02:28:06

What are you doing to be able to set your units apart as more people are coming into the space, you said that a lot of people in particular areas knew about it, but then you said like in El Segundo people weren’t super aware. Are, are you pretty new to that new to that market? Or was there a lot of new investors coming in? What, what are you doing to be able to set set yourself apart?

 

 

02:28:29

Sure. I think as, probably just also I think active listings around like hundred 50 active listings and also alone. And those range from, you know, big houses to fall one bedroom studios and then long beach has a bunch. So I really, you know, in long beach we try to set ourselves apart by the color, the color of our units. It’s very poppy. So like one of S like a hot thing, cause the other one’s like a really bright blue. So it really stands out on pictures and people like that. And El good though, it’s also really designed well, Tanya really gave us good ideas of how to design it and she designed it well for us. And so pictures really stand out for us. And I think, I think we, I think I can say we have one of the best, you know, better looking.

 

 

02:29:15

Two of our listings are definitely the top design units in El. So it really stands out on Airbnb. I think that’s how we differentiate ourselves, but it is a competitive market. I’d say that’s because some, you know, a lot of these units are nice and they’re all near the airport. So people are, you know, taking these up and we’re not the cheapest. So what I found was that, you know, guests like the cheaper listings, definitely near the airports, just because they’re not really too worried about living there for a week or two, they’re there for a day or two. So we’re not the cheapest, but I don’t mind that because you know, the cheaper units get snatched up and there’s so many people traveling from lax that, you know, my listings will get booked. And sometimes it’s only a week before they get book, or maybe it’s only like three or four days before they get booked, but they do get book. So

 

 

03:30:07

What’s your strategy. Are you, you said that you’re, you’re planning on scaling up to 12 units in your portfolio. How, how are you gonna be scaling? Are you gonna be moving to different markets in the California area? Are you looking outside? What’s your strategy?

 

 

03:30:21

I’d be right now. We’re trying to build up to 12 units in California area just because that we we’re still both here. Right? So our milestone is really getting past 10. If we get past 10, we’re like, right, this is what 10 units are doing for us in California. This is how we’re running it. Can we take the same model, get 10 units somewhere in, in a different state or in a different area. And we really, I like the business, the business traveler airport market, that’s basically the customer we’re trying to serve, which Macy always talks about. It’s like, you know, Airbnb, what’s what customer do you wanna serve? Just pick that customer and you location and with it. So that that’s a market that we wanna be, I wanna be in Mario likes it too. So I think that’s what we’re gonna, we’re El a few more units, long beach airport as well, and then, you know, on somewhere we’re.

 

 

03:31:18

And is there anything that you have in your units that saves you time and

 

 

03:31:25

Yeah. Broke through TV? That thing’s awesome. Has it has I think, I think it’s like the TCL TVs. I’m sure a lot of people know what I’m talking about. Cause like the number one, Airbnb TV. So that’s, that’s, you know, that’s good. And then we have, obviously our smart locks, we have our, I think I like really like your Google wifi system. I bought, I bought like the three or four pack of them and it saves you a lot of money per unit. Like if you were just gonna buy itself, it’s like 120, you buy like a set. It turns out to be, it’s like hundred bucks per that was nice to know. And then what else? I mean, not, not really a lot of like, I think, I think what saves you a lot of money and makes you more money is really the automation tools. So like the smart pricing, the smart messaging, if you use that, the calendars, the, the, all that is really what’s saving you money, right? Cause the idea as your time as your money, so you wanna kinda minimize your time as much as possible. So a lot of those things, what really saves you the money

 

 

03:32:35

Is, is there anything that you’re doing that helps your guests leave positive reviews?

 

 

03:32:39

I think that communication. So again, I was telling you a little earlier, I don’t use Smartbnb. I used it before and I really liked it it’s cause it saved a lot of time and I was like, wow, this is great. But again, I, you know, I really want that one on one communication with the guests and I think that’s what really helps lead Fivestar reviews. I think that’s something that is really beneficial because the more you talk with them, the more thing I always send a nice personal message after was like, Hey, you know, thank you for staying. I really enjoyed it. I hope you really enjoyed your stay. Well, you know, it mean the world to me, if you can leave a five star review, cause it helps me with, you know, with future guests like yourself in the, and you know, they’re always leaving. What’s that message is sent like most likely it’s a yes. I’ll, you know, I’ll get a five star review and I guess I can automate that. I can probably easily automate that, but I, I don’t wanna just cause I feel, you know, it’s a nice, it’s a personal touch. So

 

 

03:33:35

What, what are some of the other systems that you have in place, aside from like the, the, the obvious tools that are in the market? Do you have any like internal things that you’re using in your business?

 

 

03:33:46

No, not really. So, you know, for our cleaning, we use turnover. That’s how we manage the calendar on that. Just because it’s nice. Sometimes I have, I have my personal, we don’t hire an outside company to do it. And you know, she, she sometimes not available. Airbnb is there’s and wheelhouse and we’re and then what else? That’s it really it’s really just price and turnover. Airbnb sometimes Smartbnb when we’re both on Vacation and that’s it.

 

 

03:34:33

1. Awesome. And is there one house rule that you’ve started including in your, in your, that has saved you before

 

 

03:34:40

House rule? Yeah, so late checking. So, so all our units are in multifamily buildings and you know, being LA and lax, a lot of unit, a lot of people are coming in at like 1:00 AM sometimes cause their flights are coming in. So, you know, we’ve gotten like one or two complaints with, from neighbors saying, Hey, people are coming in, they’re slamming the door when they’re coming in. So we really said no more check-ins after 9:00 PM. And if you do wanna check in after 9:00 PM, you know, you’re gonna pay x-ray and you’re gonna, you’re have to be super, super quiet. So that’s one policy that we changed, which helps I think saved us a lot. You actually made us a little bit more money here and there.

 

 

03:35:22

Have you been tracking how, how much? Because that’s the first time that I’ve heard. I’ve heard of that.

 

 

03:35:26

I haven’t we’ve I think charge I checkout, but I don’t keep too much track of it just cause it happens. It doesn’t happen like super often. Cause again, we get, you know, we’re, we’re very, I would say to occupied, so, and it’s almost like majority states we’re, you know, 20 in, in and outta that apartment in a month. So there’s so many guests and we’re just like, you know, it’s not really something I keep track of.

 

 

03:36:05

And why why’d you go the, the one night stay versus typically like a lot of hosts. They, they like to do the two night minimum just, you know, to avoid the high turnover you get typically longer stays you, you know, people that are partying, weeds out. A lot of those people too. What made you wanna go the one night stay rep?

 

 

03:36:25

Yeah. So kinda going back to a couple questions back, you’re saying what differentiates us in the market? I think that’s one thing that differentiate us. I know a lot of hosts talk to don’t one night space. And for that reason is the turnover right. Is so much turnover that, you know, and for me it’s like, Hey, I’m still making money. Like, you know, on, on the one night, say I charge like one 20 a night per, per night and then 75 bucks for the cleaning, whatever my cleaning, lady’s making a lot of money. I’m happy for her. She’s she doesn’t mind doing the cleanings every day on the same bar. It and I’m making money per night. And so, you know, there’s a for lax coming

 

 

03:37:14

You’re is just stay requirements.

 

 

03:37:20

Yeah. I mean like again, I love week long stays, you know, it’s also really nice and week long stay are great and two nice days are great. I’m open to everything. I think I try to, I had one guest that stayed in apartment for three months. That was nice. He just, he literally just booked it on Airbnb. His company paper thing, I think is the employee for Boeing. That was nice. I made a lot of money on that one, but you know, the one nice days are nice. I, I like those as well, just cause I get to communicate with more guests. I love giving people advice and giving, telling people what to do and where to go. So I’m always telling people that. So I enjoy that. I enjoy that. And I’m really happy that also when I, when I first started this, my maintenance guy was like, Hey, my wife doesn’t have a job. Can we hire her for cleaning? So she wasn’t making any money. And then now she’s making on average, like 2,500 a month. So she’s crushing it. I cleaning I’m crushing it with Airbnb, Airbnb. So I’m, we’re both happy. So, you know, I, I feel good that about as well.

 

 

03:38:22

Awesome. And what, what would you do differently if you had to start from scratch?

 

 

03:38:28

Oh, so much. So I would probably, if I had to start from scratch, I would take a course right away. You can watch all the YouTube videos you want, but I would really invest in the course and just listen to the course one time over and then take notes a second time over you really just the trust. The, you know, people are teaching the courses, they’ve done it before. If you’ve done for, and they, they know what you’re talking, they want you to succeed. They want you to, you know, make money. And so you trust the, and you gotta the triggering that. So that’s, I probably definitely would’ve the course. Right.

 

 

03:39:13

I would’ve focus on the furniture. I like the fact that we were the interior designer just cause we learned the system and we learned what she, how she does it. And I’m not gonna say we can copy her. Cause she’s really good. We can’t copy her, but we can get pretty close. And I’m happy with that. And what else? I think so learning how to save furniture on the first couple units as well. I think also I would’ve changed. We went through so many different smart locks. We finally found one that we like. So there’s a few things. There’s a few things I think in every business, you, you kind like every month, you, Hey, we could, you know, this is really way business and let’s move forward and this, you know, this way. So you we’ve learned a lot and we’ve made a lot of mistakes, but I think now we kinda have a system where we’re like, when we get a unit, we can get it up and running within, you know, three, four days.

 

 

04:40:10

And what’s your strategy moving forward. Do you have anything planned out on how you’re gonna be picking up all these units? Are you gonna be using the money from your current units or are you gonna be, be finding more capital to invest?

 

 

04:40:22

Yeah. So I know still have money save, save that we can use our own money to invest, but we inactually safely have. So I think that’s what we’re gonna do is our next three units is gonna be coming outta our own outta the business money, which is nice. It’s finally, you know, the businesses reinvesting in itself. So that was a cool turning point for us.

 

 

04:40:54

What would you say is kinda like the secret sauce to being able to scale quickly cuz you you’ve been in the space for about eight months now and you’ve went from zero to five and now you’re planning on going up to 12, you know, in the next, next few months as well. How do, how do you scale quickly in, in the Rental arbitrage business?

 

 

04:41:13

Just it’s a numbers game, right? Rental arbitrage. It’s so you just gotta keep to landlords and keep going to these appointments. And I know once you get, once you do so many, like we’ve done, it sucks to keep going employment, getting denied and it’s not fun. And it’s, you know, people don’t realize that aspect of it. I don’t think it’s a very, you know, people are like, oh God, you have 10 units. You’re crushing it. You’re still good. You know, I kind wish I kinda wish, you know, I was like you having 10 units, but that guy who 10 units, probably not a hundred times. Right. They don’t, they don’t see that in the background. They don’t see that you go through get so it does, it’s it, you just gotta keep pushing. You gotta keep pushing. Don’t give up on it. Cause once you, I mean, you know, once you get one unit, once you get two units once, and once you start, I think like around three or four units, you start making a little pocket change and it’s nice. And you’re like, okay, you know, that struggle is worth it. Let’s let’s keep going. I think in ideal world we find, we find a brand new, not brand new, but we find like a whole building that’s being for sale or saying, Hey, instead of being for sale, we’ll just lease the whole thing from you. We’ll deal master lease on building and that’s like your ideal world. So we’re gonna try to see if we can do that in your future.

 

 

04:42:25

What, what question should, would you ask the next professional host, maybe someone that’s at a similar position than you, or maybe the next step where you’re trying to go, what would you ask them?

 

 

04:42:36

How to raise outside capital, how to use other people, how to use other people’s money to do this. And I think that’s one thing that I’m trying right now is how can I use somebody else’s money to really, and you know.

 

 

04:42:53

Awesome. Awesome. And what is last question is what has short renting allowed you to do? Has it made any big impacts in your life prior to investing in this space or has it made things a little bit more complicated?

 

 

04:43:06

It’s taught me that I really like the hospitality game. So my mom was an immigrant from Russia and growing up, she was, she was waitress for 20, she’s still a waitress, but she, she came here and she’s been waitress for like 26 years and the same restaurant, same restaurant, the boardwalk of brain beach. And she’s always been a, a waitress. And I worked, I used to work for a bus, you know, high school and middle school. I, and right after, right after high school, before I had a job, I worked for as a bus boy. And I really learned that she taught me the hospitality and how to be really nice people. And in Airbnb, it’s all about hospitality being nice to you, having that conversation, really understanding yes. And really understanding that, Hey, you know, if a guest $50 back because you know, they weren’t happy with the state, just give the $50.

 

 

04:43:59

Like it’s, it’s $50 is not a big deal. Right. So it’s, it’s really learning what people like and how to communicate people and how to really, how to make someone’s time in your place and enjoyable. I think I really learned that the fact that I really like that it’s, it’s, it’s, it’s a lot of fun. I really enjoy it. And I don’t thinks, I don’t think it’s, you know, when I get a message, I know sometimes, sometimes when I get message, I’m like, oh my God, I got a message. But majority of the time I see like, Hey, I got a message. I’m excited what this person wants. Like what, how can I help this person? How can I, this person, how gonna make them have a better stay? So short term rental has really helped me understand that. So it’s nice. I don’t think it’s a game changer yet with money wise. I think I still have a long way to go before I can fully retire and say, you know, short term rental Rental really helped me retire, but I can see the there and I can see, you know, the direction I need to go that. get So that’s, that’s really good.

 

 

04:44:53

Awesome. Well thank, thank you so much Ste for, for taking the time. I’m, I’m very curious. We’ll, we’ll keep following your journey and you know, would be, would be honored to have you back on the show when you, when you get to, you know, that goal, you said 12 units. So I’m sure that some things are gonna be changing as you continue to scale, but until next time, host nation keep on hosting, Hope you host benefit from the show. If you found value, please going over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to host that have been featured in these episodes, as well as the community, going over to our Facebook group, the host nation.