Stefan Pougatch…:          00:00                    Me and Mario will never get scared of getting denied by landlords. I think that’s a lot of people have that challenge of getting that first denial and then, all right, this is not going to work, and I remember I got denied at least 30 times before one landlord is like, yes. Trust me, we didn’t see that as a challenge. We saw that as like, all right, it’s just a numbers game. The more units you see, the more you know more later to see that eventually you’ll get a yes.

Julian Sage:                       00:22                    This is episode number four nine or the shorter mental success stories, podcasts. Are you an investor that’s looking to have your home professionally managed, go to cohostit.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 hosts. We all strive for five star reviews, so please go on over to iTunes and let us know what you enjoy as it really helps support the show if you haven’t done so already, go on over to our Facebook group, the host nation to connect with the community.

Julian Sage:                       01:01                    Hey, what is going on Host Nation? I am super excited to be back again with you this week. We are just one away from the big 50 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 the 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 little value is through the next iteration of content that we’re going to 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 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.

Julian Sage:                       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 company 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 want to help nurture you guys so that you have everything that you need to become a profitable and professional short term rental manager. If you are interested in finding out more than go to shorttermsage.com/earlybird and you can actually join our email list and know exactly when it will be released and maybe it will be available by the next episode.

Julian Sage:                       02:40                    Stay tuned because we’re coming up on March and March is going to be a very exciting time because that’s when people are going to 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 shorttermsage.com/earlybird 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 Stefan Pougatchev. 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 is way too expensive to purchase.

Julian Sage:                       03:24                    Stefan 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. In this episode, Stefan talks about how he and his business partners structured their partnership and why they decided to do business together. He also shares his experience on getting denied at least 30 times before he got his first yes to be able to start this business. Stefan 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 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, because if you want to be able to shortcut your success, you invest in short term rentals.

Julian Sage:                       04:13                    It’d be like my show notes for this episode, go to shorttermsage.com/str49. Or if you’d like my show notes sent directly to your inbox every week, then go to shorttermsage.com/shownotes. With all that being said, on to this week’s conversation, hey welcome back host nation to another episode of short term rental success stories. In this episode, I have the special special honors of speaking with Stefan Pougatchev. Stefan, would you please introduce yourself to the host nation and let them know who you are and what inspired you to get into short term rentals?

Stefan Pougatch…:          04:40                    What’s up Host Nation. My name’s Stefan. What has really inspired me to get into short term rentals is I’m trying to get out of the rat race and having my own side income.

Julian Sage:                       04:51                    Awesome. Awesome. So getting out of the rat race and starting your own side income what, what’s your current situation? You have you have a full time job. You have five units. Could you essentially retire? 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?

Stefan Pougatch…:          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 to 30 units. And that wouldn’t really support of our salary that are making now, but it would definitely I’ll definitely be able to live off that, which I’m okay with. I’m okay with sacrificing a little bit more money to not have to work and, you know, do it and do this full time.

Julian Sage:                       05:38                    And just to bring up something real quick, you said, because they’re not luxury units is there a big difference from how the luxury units in the California area are being priced versus yours? Cause when you’re sharing something, the numbers you’re, you’re averaging about a thousand dollars per unit throughout the course of the year.

Stefan Pougatch…:          05:56                    Yeah. So there and which surprised, well, you know, I was, what I was doing when I first started into this. Mmm. I was, I really, I had an opportunity to get a luxury in it and I didn’t do it. Just because I’m a little nervous and a little more expensive and I was worried about covering reds. But what I found was, and I, what I’ve been seeing is that luxury units, you can charge a lot more. You have a lower occupancy but you’re making, you’re making a lot more just because you’re charging so much. So on average, my occupancy’s around 80, 85 and also, you know, and if I got a luxury unit, let’s say somewhere in Hermosa beach or I want to the beach, it could be like 60, but I could be making twice as much. I’m making a just because it’s right along the beach. It’s a vacation house and it’s just different numbers and the way you want to play it.

Julian Sage:                       06:50                    Awesome. And do you mind sharing what, what, what’s your story? How’d you get started and even hear about, you know, Airbnb rental arbitrage. Cause you’re, you’re still relatively new. I mean you got started. I mean you are new. You got started in March, 2019 so just a little over what eight months now?

Stefan Pougatch…:          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. My girlfriend actually at the time just wanted to move somewhere warm, so we both just never been to California and never been out West. And we just decided to 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 that I’m in on this way, he also moved to California and I didn’t know, so we didn’t know that we, and we’re both friends, Brooklyn. And then he said, Hey, I’m going to California. And I kinda just brushed it off like, yeah, probably not. You probably won’t go to California because he doesn’t do things. And then you know, I was in California and then I was like, Hey, what’s up?

Stefan Pougatch…:          07:52                    I just moved to LA because I had been in orange County for like a month. So, you know, we, we met up and we started talking about the side hustle. I know he’s really accused trying to work on a real estate company, starting a real estate company down in orange County. And you know, I started talking to him about Airbnb and how one of my friends in New York was crushing it in at nearest ski resort. He was buying houses and you know, my business arm wanted to start buying houses as well. And I said, Hey, you know, that’s a lot of capital. Let’s just, hi, rental arbitrage, let’s figure out these systems and see if it’ll work. So he got on board and we took a course. And from there we just started doing it.

Julian Sage:                       08:35                    So you, you had a friend in New York that was already operating 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? 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’ve got to 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.

Stefan Pougatch…:          09:08                    Yeah. So, you know, if we, if we bought a house, we wouldn’t, it won’t be in California personal, it’s very trumps 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, listen, 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, all right, let’s do it. And the goal is to, you know, for these five units to January more money and then reinvesting that into more [inaudible].

Julian Sage:                       09:41                    And how’d you know about rental arbitrage? Being in the space.

Stefan Pougatch…:          09:46                    So I only knew about purchasing just because my friend was doing it at Hunter mountain hunch in New York. So he was right there. So I, he told me a little bit about it. And then I started doing more research on Airbnb and I fell on a video on YouTube about a guy his name is Jane Macy, this cashflow diary on a website, but he started talking about rental arbitrage. They got a lot more interested in it. That’ll be great. Okay. This is something I could probably do cause I didn’t have, you know, a ton of money to start and I don’t know. I’m telling you when to start. And as 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 rentals and half dozen, what, what the business model is. Just the general idea kind of it. And that’s how I found out about it.

Julian Sage:                       10:44                    Awesome. And you decided to go in with a business partner, a what? What’s the, what’s the role of your business partner? Could you have scaled up the five units right away without him? Can you give a little backstory on that?

Stefan Pougatch…:          10:57                    Yeah, so I think, I think without him I probably would have got three or four. But I think we both wanted to do it together cause we still, you know, I was reading a quote somewhere the other day, which I kinda kind of makes sense in this scenario. It’s, you know, if you want to go fast, go by yourself. But if you want to go far, go together. And I think having been as coroner, you have more capital, you have more resources that your hands, you know, hopefully the goal is to build for a longer, you know, longer journey here. And so we wanted to, yeah, I definitely think I could probably, we could, we could have probably done it by ourselves. Well we both just realized, Hey, let’s do this together and I’ll figure it out together.

Julian Sage:                       11:38                    Now, how, how do you, how do you delegate ah, 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?

Stefan Pougatch…:          11:59                    Yeah, so we both, I mean we’re both really good friends. So when we first started we kind of just [inaudible] if I had to do something, I’ll just do it. If he did something he’d been in and we totally sure that what we did. And then eventually got to a point where I was really building the system. So I was building the messaging of building the guestbook, you’ll, it’s all general pricing. He was more focused on working on that. And then you know, I, I started building all this stuff and I really didn’t tell him about it just because I was like, Hey, I’m going to start doing this. And I was telling him later, I finally built all these systems and I told them and you know, he’s, wow, this is really cool. All this research they’ve done. But now the male is, the main thing that we do is really answer messages. So, you know, we’d like to respond within an hour when we get our message if we can. So if I’m not responding to, he’s usually responding and we kind of have this general idea of what to say and you know we have the generalized, we have this like list of questions that we have that people usually ask them, you know, we have a response to them. So it’s really managing it. We both just share my message messaging with the guests and stuff like that. Now,

Julian Sage:                       13:08                    Now going back to what you said, you know, you said that you could’ve picked up, maybe if you were to purchase a property, you may be, could have purchase one property. What is, 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 a 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.

Stefan Pougatch…:          13:36                    Yeah. Net. So tell you the truth. I don’t know, because you know, my, I was just so scared of the, of the real estate prices in California. I’m like, this is not going to be an option. So I looked at, like, I looked at one place in Elsa again though, and it was, it was like $1 million for like a two bedroom. Like, Whoa. You know, it’s like a lot of money in a comparable to New York as well as apartments in new Yorker. You know, a two bedroom apartment can be like around $500,000. 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 didn’t even look at the numbers for owning a property, but, you know, kinda just looking at data. Mmm. I don’t look at data on pricing and from Airbnb and whatnot, you know, it looks like it could be a good investment. I mean [inaudible] I like a two bedroom house, you know, so even though would be probably make pulling in around 60 K a year, 70 K a year so it’s not bad.

Julian Sage:                       14:36                    Awesome. And 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.

Stefan Pougatch…:          14:45                    Probably a lot less than that. Probably a lot less than that. I, you know, I’d say hour they just to be probably just less, a lot less than that just because I’m a guest versus coming in. We have a lot of messages. So, you know, I tried smart BNB and smart being be really helped out a lot and then, but I still like to communicate and have that real person communication with the guests. So I decided like I’m going to take off smart being, being still a sealed that way I made a lot easier. There’s a lot of, you know, saved templates that I have. Well then I’ll send it, but I just felt like, you know, I can’t get a more personal and quicker connection with the guests if I’m messaging, you know, without using smart BNB. And so that’s, you know, 30 minutes in a 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 most challenging, hard about running the business most challenging for running the business is really doing stager. 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.

Speaker 3:                          16:02                    What, what are, what are some of those first mistakes that you made when you, when you were staging units?

Stefan Pougatch…:          16:06                    Oh man, so much. So we, we first started out with a a stager. We are like interior designer. She was great and I recommend her to anybody that wants to use her. Her name is Luke tiny keys and she does her website is STR interiors.com. She’s based out of 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 lot of money. So well being both of us from New York, we were really good negotiators. And you know, she was originally originally charging, I think she was trying to charge around $25 and $20 per square foot to design a place. And we didn’t have that tech money to get five units. So we got her down all the way until like $10 a square foot.

Stefan Pougatch…:          17:00                    You know, the first year she gave us for $10 a square foot and then the second, second year it was like $12 $13 a square foot. And then she just told us like, Hey, like I can’t really do this because I’m not making any money. You know, I’m happy to help you guys starting out, but I’m not a game money. So really, all right, we can’t afford you right now so we’re not going to, 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 game and spending so much money I went through to like reduce my risk. And so the biggest challenge is really doing it ourselves and doing ourselves and painting and doing design work going out. So it took a long for a lot of effort and a lot of time off our hands when we could have probably had a unit within like a week using Latanya in her, in her business where for us it took about like a month and a half, two by two months really fully set up because our long beach units aren’t the best quality units are long. These units are very old school, very old school units. And those took a long time to actually get set up and running.

Julian Sage:                       18:14                    That, that’s when you first started. Are you doing anything differently now? Mmm. That it makes it easier for designing units?

Stefan Pougatch…:          18:23                    Yeah, I think the next unit that we both get are going to, it’s going to be we have a set like a line of products that we like to get into the house and see the unit. We have a maintenance guy that I was going to do our painting. We’re still gonna, we’re still gonna do it ourselves. But we’ve come to realize that we learned from all those mistakes that we did, but we knew we had like a set standard now what we want in the unit or what works for us and w wish location. And so, you know, I think it would be a lot easier. I mean, all the products that we use are saying just one click away. We still have extra, extra paint from all our other units. So it’s, you know, we’re trying to save costs on furniture. That’s one of the biggest costs. When first, you know, setting up a unit

Julian Sage:                       19:07                    How much are you spending on, on average per unit?

Stefan Pougatch…:          19:11                    Well, so when we first started out was around like 10 K and then we’re like, that’s, you know, to me that it makes sense this is expensive. Well we can definitely do this for cheaper. So we’ve got it down to around six to five K and hopefully we can get it a little bit lower. So,

Julian Sage:                       19:28                    And that’s for a one bedroom,

Stefan Pougatch…:          19:31                    One bedroom in the studio. So our one bedroom studios are basically the same. We have one King bed. And then we have a sleeper sofa. So on Airbnb you 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 bedroom or something to coffee tables and the night night lights and what not. So, but almost the same

Julian Sage:                       19:56                    W what was the most challenging part of starting your short term rental business?

Stefan Pougatch…:          20:00                    Pulling the trigger. Really just pulling the trigger on it and, and saying, all right, let’s do this. And I think, I think both me and Mario will never hear them getting denied by landlords. I think that’s a lot of people have that challenge of, you know, getting that first denial and then just not at work. And we’re more in our bowls from New York and got the New York, New York ads, you know, wherever we are. We just pushed and pushed and pushed these landlords, slows do it. And I remember I got denied at least 30 times before, you know, one landlord is like, yes. So trust, I wasn’t shocked. We didn’t see that as a challenge. We saw that as like, all right, it’s just a numbers game. The more units you see, the more you know more layers to see that eventually you’ll get a yes. So we did that. I think the chamomile challenge part is really just, Hey, let’s take and you know $15,000 and take a risk on our first unit. That was the biggest, like no one really wants to risk $15,000 right.

Julian Sage:                       20:57                    Why so you said you, you said you pitched 30 landlords before you got your first. Yes,

Stefan Pougatch…:          21:03                    I would say the least. Probably 25 31 Lords.

Julian Sage:                       21:08                    Lastly, you went to 30 places that you thought would be potentials and ask them, well, how are you doing it? Where are you like going in person or cold calling? What was your tactic?

Stefan Pougatch…:          21:17                    Yeah, the one person. I mean I always, for me, I know Mario wanted to do it over the phone to save the save time by not driving there. For me, it was always like, Hey, I think we’ll get a yes if we’re face to face just because it’s a lot easier to talk to somebody face to face over the phone. They don’t know who you are. Right. So you can’t really introduce some, 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 to the units called the landlord. You’re like, Hey, can we set up a time and just went and it wouldn’t be all Nelson even though, so it was like some were in LA, some Santa Monica, Venice area a lot of somewhere else. We know long beach obviously, so it wasn’t like in the same neighborhood. But yeah, it was around 30 units.

Julian Sage:                       22:05                    What, what were some of the, the obstacles that you had to overcome with, with pitching to landlords or what were some of their objections?

Stefan Pougatch…:          22:13                    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 yeah, there’s a reason why, you know, their DNA, their free version of market minder is Santa Monica, right? It’s just so oversaturated. But you can see numbers there and a [inaudible] every landlord knew where Airbnb was. No one wants to do it on a lot of planners, just scared about regulations and whatnot. And maybe, and I think also just my pitch was horrible. It’s my first time pitching and I just, you know, I, this is right. This is before 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 Santa Monica Whaler just like, Hey, no, we know what it is. You don’t want to do it. There’s a risk to it. Elsa Greenwell, I think they’re just like, boy, what are you doing? Like, why are you doing it? Like, that doesn’t make any sense to me. Like, crew, how are you? And then, you know, bow pattern for a while until I finally really just changed up my pitch and and I started seeing a lot better results. Just the conversation of what, what it was was a lot better.

Julian Sage:                       23:30                    What was your first pitch and then what was the pitch after you, you started working on it?

Stefan Pougatch…:          23:36                    Oh, yes. First it’s was like, Hey, my name is Stephan and I want to use your apartment for Airbnb. And they’re like, and then, you know I remember there’s times where like, Hey, you know, so Mario and I, we have a strategy, like are this definitely gonna work? So we went to them listening together and we’re like, Hey, you know, we both have remote jobs and they’re not remote jobs. We will travel a lot for work. And one of the lessons going to live here once in a while, the other person can live here once in a while, but we would like to, you know, sub lessons, sub Lisa on Airbnb. And they’re only, again though, you know, we are like, why is none of those working? So when we finally did the course and then our pitch changed dramatically. So we’re, you know, now when we go into, go into these part reviewing would be say, Hey, you know, we would like to do corporate and short term rentals in your unit right now.

Stefan Pougatch…:          24:33                    That was a key change. 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 the landlords just a little bit to get some CS. So for me it’s like, Hey, I have a lot of business travelers coming in since we’re from Lex. Right? You know, our, we found the sweet spot was airfare, airports for us and we like it so we stick to it. So, and in LCU and there’s a lot of high floaters, so 18 teas here bowling is, you know, almost took, takes over the whole house even though area. And then Lex, people just come in and travel all the time. So I say a lot of business travelers come in. Oh, I see. Also a lot of airline flight attendants come in and stay.

Stefan Pougatch…:          25:14                    So, and they understand that and well, yeah, that makes sense. So it’s, you know, do business travelers and pilots and pheasants always say at our property now probably only 30% of them do, maybe a little bit less, but, you know, get the landlords comfortable with them. And then finally when land was, are finally comfortable with us about two or three, two months in, you know, they don’t care anymore. They’re like, you know, I tell them like, Hey, we’re doing this on Airbnb. And like they ask them like, Oh, I didn’t know you guys are great. Do you guys pay on time? All the time you guys were, you know, fix things up in the apartment. I don’t need to send my maintenance guys. So, you know, really works out for us now.

Julian Sage:                       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’s, that’s a, it’s a dangerous market. Things are always changing in California like this. Maybe they want to put like a whole ban. W what’s your, what’s your thought process with investing in the California market with, with Airbnb?

Stefan Pougatch…:          26:13                    Yeah, so I know blank right now, long beach technically doesn’t allow it. I mean it does, but it’s only like 60 days out of the year, but there’s, you know, like 400, 500 units and just LC long beach center up on Airbnb. So, you know, mild thing is I think eventually cities are going to, you know, they got to get, this is something that’s coming. This is something that’s going to keep happening. People, people like the shared economy. And eventually I think, you know, cities and towns are gonna see that and kind of changed the regulations on it. So I’m not too worried about it. And I, you know, I know some, some of my friends got out of the game and, and LA and the other just because they were really worried about it. But towns like Elsa, even though, which are small and city long beach is pretty big.

Stefan Pougatch…:          27:04                    But channels like Elsa didn’t though they asked some regulations around it, but they’re not strict and it’s very hard for them to really regulate. So a lot of the sounds only have one code enforcer. He’s not going to be going around town. Oh. To every single Airbnb has so many other things to worry about. So you know, that’s another thing they have to kind of think about. It’s like how really these towns could be enforcing these rules and they’re going to be, now I know there’s a company out there that’s doing it as well and I’ve, you know, I’ve 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 coming really strict in place where it’s like, Hey, no short term rentals 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 out of the year or 200 days out of 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 interview me market in the area, then I’ll go in there. Cause he’s a little, it’s a little less risky.

Julian Sage:                       28:05                    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 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?

Stefan Pougatch…:          28:28                    Sure. I think we’ll probably just, I’ll see you on the active listings around 150 active listings. We also, you can 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 them was like a hot bang, cause the other one’s like a really bright blue. So it really stands out on pictures and people like that. And an LCD window. It’s also really designed well. Tonya really gave us good ideas of how to design it and she designed it really well for us. And pictures really stand out for arson, I think. I think we, I think I can say we have one on the bus, better looking.

Stefan Pougatch…:          29:15                    Two of our listings are definitely the top design units and Elsevier notes are really stands out on Airbnb. I think that’s how we differentiate ourselves. But it is a competitive market, I’d say. No. So you end up because some, you know, a lot of these units are nice and they’re all near their airports. So people are taking these up and we’re not the cheapest. So what I found was that, you know, guests like achiever listings 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 unit gets mashed up and there’s so many people traveling from Lex that you know, Mar listings will get booked and sometimes it’s only a week before they get booked or maybe it’s only like three or four days before they get booked. But they do get votes. So the best way,

Julian Sage:                       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 going to be scaling? Are you going to be moving to different markets in the California area? Are you looking outside? What’s your strategy?

Stefan Pougatch…:          30:21                    I think we’re now, we’re trying to build up to 12 units in California area just because we’re still both here, right? So our milestone is really getting past 10 and then get back 10. We’re like, alright, this is what 10 units are doing for us in California. This is how we’re running it. Can we take the same model, gets tenured somewhere in those, in a different state or in a different area? We really, I like the business, the business traveler, airport market. That’s basically the customer that we’re trying to serve, which Jay Macy always talks about. It’s like, you know, Airbnb, what’s, what customer do you want to serve? Just pick that customer and you know, pick a location and roll with it. So that’s a, that’s a market that we want to be in. I want to be in. And Mario likes it too. So I think that’s what we’re going to stick to is that we’re going to try to get you more, more units. And Elsie get though a few more units near long beach airport as well. And then you know, move on somewhere else. We’re not sure where yet.

Julian Sage:                       31:17                    Awesome. And is there anything that you have in your units that saves you time and money?

Stefan Pougatch…:          31:24                    Yeah. Broke TV that things awesome. As, as a, I think it’s like the TCL TVs. I’m sure a lot of people know what I’m talking about because it’s like the number one Airbnb TV, you know. So that’s, that’s you know, that’s pretty 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 a three or four pack of them and it saves you a lot of money per unit. Like if you’re just going to by itself it’s like 120 bucks per. Why did you buy like a set? It turns out to be a second or 100 bucks per unit. 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. He’s really the automation tools. So like the smart pricing. Yeah, smart messaging. If you’re used that, the calendars, the, the, all that is really what saving you money, right? Cause idea years. Your time is your money. So you want to kind of minimize your time as much as possible. So a lot of those things, what really saves you the money?

Julian Sage:                       32:34                    Is there anything that you’re doing that helps your guests leave positive reviews?

Stefan Pougatch…:          32:38                    I think that communication, so again, as I was telling you a little early that I don’t use smart BNB, I used it before and I really liked it. It’s kind of saved a lot of time and I was like, wow 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 sleep. Five star reviews. I think that’s something that is really beneficial because the more you’ve talked with them more thing. I always send a nice personal message after it was like, Hey, you know, thanks for saying I really enjoyed it. I hope you really enjoyed your stay as well. You know, it means the world to me if you can leave a five star review because it helps me with other, you know, with future guests like yourself in the future and you know, they’re always leaving. What’s that message? Is that 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 want to just because I feel, you know, it’s a nice, nice personal touch. I that

Julian Sage:                       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?

Stefan Pougatch…:          33:46                    No, not really. So you know, for our cleaning we use turnover. That’s how we manage the calendar on that. I just, because it’s nice cause sometimes my clothes, I have a, I have my own personal cleaner. We don’t hire an outside company to do it. And you know, she sometimes not always available to turn over. Bnbs nice. Cause there’s a, you know, there’s more cleaners out there and then so not really. I mean in our smart pricing is with within our wheelhouse. And Oh sorry. No, we actually just switched to price labs. We’re using price, I’d know for pricing. And then what else? That’s it really. It’s really just price slides and turnover, BNB, sometimes more BNB when we’re both on vacation and that’s just

Julian Sage:                       34:32                    Okay. Awesome. And is there one hash rule that you’ve started including in your in your manual that has saved you before?

Stefan Pougatch…:          34:40                    House rule? Yes. So late check-ins. So our, all our units are in most multifamily buildings and you know, being LA, Lex, a lot of unit, a lot of people were coming in at like 1:00 AM sometimes cause their flights are coming in. What if so, and we’ve gotten like one or two complaints from neighbors saying, Hey, people are coming in, they’re slamming the door when they’re coming in. We really said, Hey, no more check ins after 9:00 PM and if you do want to check in after 9:00 PM, you know, [inaudible] you’re gonna have to be super, super quiet. So that’s one policy that we changed, which helps I think saved us a lot. It actually made us lose more money here and there.

Julian Sage:                       35:21                    Have you been tracking how much? Because that’s the first time that I’ve heard, I’ve heard of that.

Stefan Pougatch…:          35:26                    I’ve really, really been tracking how much money we’ve been charging. Right. I think we charged, I think it was like 30 to 40 bucks per late checkout. It’s happened, you know, it probably happens twice or three times a month, but I don’t keep too much track of it. Just cause it happens. It doesn’t happen like super awful. Cause again, we get, you know, we’re, we’re very, I would say 80 to 90, 80, 85% occupied. So, and it’s almost like majority is one. I’d say we’re getting, you know, 20 guests coming in, in and out of that apartment in a month. So there’s so many guests and we were just like, you know, it’s not really something that you track or,

Julian Sage:                       36:04                    And w why did 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 know, people that are partying weeds out a lot of those people too. What made you want to go the one night stay rep?

Stefan Pougatch…:          36:24                    Yeah. So kind of going back to a couple of questions back, using what differentiates us in the market. And I think that’s one thing that differentiates us. I know a lot of hosts in LC wouldn’t know that to talk to. They don’t like, when I say sing for the reason, it’s the turnover, right? There’s just 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 I’d say I charge like one 29 per per night and then 75 bucks for the cleaning. What are my cleaning ladies making a lot of money? I’m happy for her. She’s finished. She doesn’t mind doing the cleanings every day on the same Barbet and I’m making money per night. And so, you know, there’s a market out there for it, especially near Lex, just because of people coming out of LA and wanting to stay somewhere close to the airport on their last night or the first night here, whatever it is.

Julian Sage:                       37:13                    So one of the ways that you’re able to differentiate yourself is just off of your, your, your minimum stay requirements.

Stefan Pougatch…:          37:19                    Yeah, I mean like again, five love week-long stays, you know, it’s also really nice and we’ve long sleeves are gray in two nights, days or right. I’m open to everything. I think I try to I had one guest with sturgeon that stayed in apartment for three months. That was nice. He just, he literally just booked it on Airbnb. His company paid for the whole thing if he needs an employee for Boeing, that was nice and made a lot of money on that one. But you know, the one that stays are nice. I like those as well, just because 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. I’m really happy that also what 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 it an average, like $2,500 a month. So she’s crushing it and cleaning. I’m crushing it with Airbnb, so we’re both happy. So I feel good about that as well.

Julian Sage:                       38:22                    Awesome. And what, what would you do differently if you had to start from scratch?

Stefan Pougatch…:          38:27                    Oh, so much. So I would probably, how to start from scratch. I would take a course right away. You can 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. I really just trust the process, trust the process. You know, these people are teaching the courses, they’ve done it before, especially if you’ve already been instructor, they’ve done it before and they know what you’re talking. They want you to succeed, they want you to, you know, make some money. And you just got to trust the process and you’ve got to pull the trigger on actually spending that money. So that’s one thing I probably definitely would have changed was invest in the course and look at the course right away. And the other thing I probably would’ve done was really focused on how to save money on the furniture.

Stefan Pougatch…:          39:17                    I like the fact that we weren’t as interior designer just because we learned the system, learn what she, how she does it. And I’m not going to say we can copy her because she’s really good. We can’t copy her. Well we can get pretty close and I’m happy with that. And what else? I think so learning how to save our furniture on the first couple of units as well. I think also I would have changed the 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 will, he kind of like every month you like, Hey, could, you know, this is a really good way to do business and let’s move forward and keep doing 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 try to have a system where we’re like, when we get a unit we can get it up and running within three, four days.

Julian Sage:                       40:09                    And what’s your strategy moving forward? Do you have anything planned out on how you’re going to be picking up all these units? Are you going to be using the money from your current units or are you going to be finding more capital to invest?

Stefan Pougatch…:          40:22                    Yeah, so I know both of us still have money saved, save that we can use our own money to invest in these units, but I think we made enough Ian money in the past eight months to actually get three more units safely and still have a nice little safety, safety bang. So I think that’s what we’re gonna do is our next two to three units is going to be coming out of our own, out of 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.

Julian Sage:                       40:54                    What would you say is kind of like the secret sauce to being able to scale quickly? Cause 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 twelves you know, in the next, next few months as well. How do, how do you scale quickly in, in a rental arbitrage business?

Stefan Pougatch…:          41:12                    Just, it’s a numbers game, right? Rent’s arbitrage. It’s so, you just got to keep topics and landlords and keep going to these appointments. And I know, you know, once you get, once you do so many, like we’ve done, it sucks to keep going in employment, getting denied and it’s not fun. And 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 so good. You know, I kind of wish, I kind wish, you know, like you having 10 years. But that guy who has 10 units probably got mad a hundred times, right. They don’t, they don’t see that in the background. They’ll see the struggle that you go through just to get to you. And so it does suck and it’s hard to do it. They just gotta keep pushing.

Stefan Pougatch…:          41:51                    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 getting to 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 keep going. I think an ideal world, we find it, we find the brand new, not brand new, but we find like a whole building that’s being for sale or saying Hey, instead of being at least the whole thing from you, the dual master lease on a building and that’s in your ideal world. So we’re going to try to see if we can do that in your future.

Julian Sage:                       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?

Stefan Pougatch…:          42:36                    Add or raise outside capital, how do you deal with people how to use other people’s money to do this? And I think that’s one thing that I’m trying to learn right now is how can I use somebody else’s money to really go getting to this game and, and you know, and started doing it.

Julian Sage:                       42:52                    Okay. Awesome. Awesome. And w last question is, is what has short term 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?

Stefan Pougatch…:          43:06                    It’s taught me that I really liked the hospitality game. So my mom was an immigrant from Russia and grew up growing up rookie shoes. She was a waitress for Tony. She’s still a waitress. She was, she came here and she’s been with [inaudible] 26 years and the same restaurant, same restaurant restaurant and the boardwalk and Brighton beach. And she’s always been a Sur, a waitress and I, I used to work for as a bus boy, you know, in high school and middle school. And then right after, right after high school, before I had a job I worked for as a busboy and I really learned that she taught me the hospitality in and how to be really nice to people. And in Airbnb it’s all about hospitality being nice. You having that conversation, really understanding. Yes, and really understanding that, Hey, you know, if a yes, it’s $50 back because you know, they weren’t happy with the state.

Stefan Pougatch…:          43:57                    Just give him the $50 like it’s $50 not a big deal. Right. So 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 liked that it’s, it’s a, it’s a lot of fun. I really enjoy it and I don’t think it’s more, I don’t think it’s, I want to get a message. So I know sometimes, sometimes when I get messages I’m like, Oh, I got it. I got a message. But most 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 serve this person? I’m not, I make them have a better say. So short term rentals really helped me understand that. So that’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 rentals really helped me retire, but I can see the path there and I can see, you know, the direction I need to go and to get to that spot. So that’s, that’s really good.

Julian Sage:                       44:52                    Awesome. Well thank, thank you so much Stefan, for taking the time. Very curious. We’ll, we’ll keep following your journey and you know, it would be, it would be honored to have you back on the show when you, when you get to you know, th that goal you said 12 units. So I’m sure that there’s some things that are going to be changing as you continue to scale. But until next time, host nation, keep on hosting.

Julian Sage:                       45:13                    Hope you hosts benefited from the show. If you found value, please go on over to iTunes. Leave us a review and let us know what you enjoy about the show. If you’d like to talk to the hosts that have been featured in these episodes as well as the community, go on over to our Facebook group, the the host nation.