John Bianchi:                     00:00:00              I’ve seen too many and talked to too many people who have signed on a lease in a location and a unit size that would never make the money no matter how hard they tried and how well they did. You have to understand that some areas are better as an annual rental and some areas are better as an Airbnb. You need to understand that and do not sign a lease unless you understand that.

Julian Sage:                       00:00:19              This is episode number 52 of the short term rental success stories podcast. 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. Going over to our Facebook group, the host nation, to connect with the community. Hey, what is going on? I am super excited to be back again with you this week.

Julian Sage:                       00:01:02              Thank you so much to everybody that joined Jon and I last week as we held our first live training on the 10 steps every host needs, if you’re going to be scaling a business on Airbnb using rental arbitrage and cohosting. It was really, really powerful. It was so awesome to be able to cover the 10 steps and from everybody that we heard that attended, they got so much value from that training because really what we’re doing is we’re compressing everything that you need to know about Airbnb. Like this is something that I wished that I knew when I first started and we compress that into 10 steps and covered that and then also gave everybody a checklist that they need that they can follow to build their own vacation rental machines. So if you’re looking to start, automate and scale, that is a training that you need to be able to go to.

Julian Sage:                       00:01:43              But because of how powerful that training was, we really want to do this more often. So what we’re going to be doing is we’re going to be hosting this live training next week again. We’re going to be doing these trainings live as of now in anticipation of the VRM formula, which is Jon and I’s program, where we go over the 10 steps more in depth. So we cover everything and give you all the tools and check lists. We have really cool bonuses that, you know, the people that were attending our training, they’re like, Oh my gosh, these bonuses are crazy because we give everything that we use in our own business. So again, if you do want to join that training and go to shorttermsage.com/earlybird, this is going to be only for the early bird people that we’re going to be doing this training live.

Julian Sage:                       00:02:22              We might do it live a few more times in the future, but right now is where you can talk to Jon and I have your questions answered, cover anything that we covered in the training or ask any questions that you might have about the program. So really, really awesome. Again, go to shorttermsage.com/earlybird to find out when the next live training will be and this episode is really perfect timing because in this episode I have the special honor of speaking with John Bianchi. John is a property manager that has around 10 properties right now, seven of them being rental arbitrage, three co-hosting and majority of his units being in Chicago and Scottsdale, Arizona. John is also the founder of a new startup called point analytics, a short term rental tool to be able to help you analyze markets. It’s pretty unique and I’ve gotten a look at it.

Julian Sage:                       00:03:07              I think John’s onto something and I’m excited to see where this tool turns out. And in John’s story he shares his experience of getting into the rental arbitrage space and the importance of analyzing and coming up with the numbers. I think that this is a really great episode because John walks us through his progress of, you know, finding out about rental arbitrage, trying to come up with the numbers and literally picking up his life and moving to new locations based off of what he thought was going to be a good market. Sometimes the numbers are not enough though and it’s not until you really dive into the localities that you’re able to find out if this is a profitable market or not. So in this episode, John talks about his entrepreneurial journey, about him hitting obstacles that he had to overcome and he also talks about the risks involved in doing short term rentals and shares some tips on how to avoid those.

Julian Sage:                       00:03:52              If you are going through market research in your journey and you’re trying to find out where are those specific locations and what are the things that you should be looking for and how to work with investors, this is a really powerful episode. Of course. If you’d like my show notes for this episode, go to shortterm,sage.com/str52. Or if you’d like my show notes sent directly to your inbox every week, then go to shorttermsage.comshow notes. With all that being said onto this week’s conversation, Hey, what is going on host nation and welcome to another episode of short term rental success stories. In this episode I have the special special honor speaking with John Bianchi. John, 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.

John Bianchi:                     00:04:29              How’s it going everybody? My name is John Bianchi. I’m a owner of Jaunt Stays. I actually got into the Airbnb community because I read a lot of articles of Oh, people who are making a killing on Airbnb. Literally Google searched and read articles over and over again about all these different people who figured out how they could make all this additional money on Airbnb. I thought it was a super cool way to make money sort of, you know, be able to very scalable. There was, there was a lot of not too much work for everything that was coming through, right. In comparison to other businesses that you can grow. So plus Airbnb is such a dominant platform that it, that it brings in the marketing side for you. Right? So you don’t have to do too much on that end. Anyways, so it seemed like a really great business model. Some good people were doing it as well. And I decided that this was something I wanted to go for.

Julian Sage:                       00:05:17              So would you mind telling us a little bit about how you got started into this business? You said that you were reading about some other people that were making money, but where were you before this that led you into getting into Airbnb?

John Bianchi:                     00:05:30              So before this I was a financial advisor, had my own financial advisor practice. I did that for about three and a half years. Got to the point where I was you know, partnered with an investor, I was managing 10 million, he was managing 90 million, to be honest, you know, it was a pretty good setup, had my name on the door, the whole, the whole shebang. But I just did not like the day to day like whatsoever. And I, and I thought about my life you know, 20 years from now and I, and I would’ve totally regretted it. Jeff basles always talks about future get optimization. So you’re, you’re optimizing your life to not have that future regret. Right. And so I guess that was kind of in the back of my head as time was going and, and being in the financial world, you know, you have to learn all the numbers and all the, how everything works.

John Bianchi:                     00:06:13              And I, and I’m reading these articles, learning about all of these up, what these other people are doing, and I’m start running the numbers on it, right. To see like what was actually possible. And then I started understanding like there’s a good amount, there’s a good gap here where you know, if you have a home, you can actually make a good amount of money on an annual basis from home by home. Right. and so I was like, this is, you know, if you have, you have a good amount of these, you’re doing pretty well. Right? So I actually, from that I decided to then go and open up a home and the first one I actually opened up was in Detroit. Right on Woodward. The biggest mistake I ever made, by the way. So if I can explain how, why that was such a bad mistake goes that, okay, go for it.

John Bianchi:                     00:06:52              Okay. So didn’t tell the condo association or the apartment association that I was going to be doing it because at that point I knew next to nothing and I was just like, Oh, they find out, you know, I’d be like, let’s go for it. And I was working with somebody else at the time. We had a whole conversation. We were like, should we do it? And he goes, let’s do it. And I was like, alright, let’s go for it. Right. So we, anyways, we set it all up. One month in we get an eviction letter, you know, time, time to get out. Luckily I had met somebody who does corporate rentals, so they ended up renting it out corporately for the rest of the year. But I had no idea how to do that. So we’re paying them to do that at the end of the year.

John Bianchi:                     00:07:27              We ended up making $800. Mind you, we made, we ended up losing money because of how much cost for the furniture and everything. So terrible, terrible sake. Also looking back on it with the amount of research that I didn’t do to open up that home, wouldn’t admit us money regardless. Right. But at the same time, so I opened up that one and then I bought a month later, opened up another one that was in gross point, which is like 20 minutes away from downtown Detroit for wealthier neighborhood. Same idea. Two bedroom, one bath would’ve never made me money over the full years. Terrible decision. I didn’t really look into it. However, those two gave me a lot of experience that allowed me to get to the next step. So okay. Should I go on to the next step there? Okay. Okay. So, so like I said, so open up that want to try to open up that one at gross point and at that, at this point, you know, it’s still a financial advisor.

John Bianchi:                     00:08:15              I was going back and forth. I actually had to like leave the office multiple times just to go help there and things like that. So I’m going back and forth. I know I’m kind of headed on my way out of the business. But I wanted to, before it could be there, I had to make sure that I was secured enough financially to be able to cover all my bills and continue to grow the business. Right? So that was the, the, the, the idea and the homes that I had didn’t give me that ability to do that. But what I did was I put together an entire business plan called it my accountant friend who put together a financial projections of how well a business this business could do if you started to scale it. Then I used air D and H research every single possible location that I put together, an entire business plan.

John Bianchi:                     00:08:55              And then I went and started talking to investors and I had a two separate groups of investors that were willing to lend me or sorry, not even let, give me the money to own a portion of the company to go scale it. And so one was looking at giving me around 400,000, and then the other one was looking at going to be 250,000. I ended up going with people who are given 250,000, because I knew them in a, in a different way. We, you know, you, you gotta, you gotta click with people that are giving you money, right? So, so we we got along a lot better and it just made sense to go with these guys. And so I, I got the money from them. We secured the locations that we were going to go to. And and so I left the business behind.

John Bianchi:                     00:09:38              Like I sold off my portion of business back to my business partner and, and scrape my name off the door and took essentially took off. And I was ready to go and open the mall. The funny thing is, is that we actually went down to Florida because we thought Florida was the best place to be. And if you look at the numbers, if you’re just basing it off of the data and the numbers, it is a great location to be. However, this is the, the next lesson that I learned, which is regulation comes first. Regulation. You got to understand regulation, then look at the numbers, right? If you’re not looking at regulation, you’re gonna, you’re just screwing yourself. So I literally packed up my entire life and drove down to Florida got down to Florida and I was in this the absolute best best city. I can’t remember the name of it right now, but anyways, it was the best. There’s best city. It’s like number one beach in the world, right? Well, CSC, so Sarasota. Yes. It’s just a key.

John Bianchi:                     00:10:30              I grew up in a Sarasota, so then, you know, okay, okay. Yeah, so I get down there and then when I start talking to people and going around, fine, it turns out there’s a zoning law that doesn’t allow you to do Airbnb pretty well anywhere unless you’re re like, I always like to explain this way. If this was the entire city and County and everything, my, the nail on my pinky finger is the only place where you’re allowed to do Airbnb full time. Everything else is illegal. Turns out almost every city along the East coast of Florida operates the exact same way. So if you’re not purchasing, then you can’t do it. And the thing is that Ford has been a traumatization forever anyways, so I spent a month driving from city to city to city. So I went I did, I did siesta key then, whichever is just North of that.

John Bianchi:                     00:11:16              And then I ended up in, in Tampa and the st Petersburg, and then it was Clearwater, this whole grand plan for Clearwater. I still can’t believe I did this all in one month. I think about it. So anything clear water and then it got to the point, I was like, no, nothing. Like there’s nothing here. The next thing would’ve been had to go all the way down to Fort Lauderdale. And my my ex girlfriend lived there, so I didn’t want to do that. I was like, ah, no, we’re not gonna knock on there anyways. But I was like, so the next thing was, was Miami. And so then I, I drove all the way over to Miami and then I tried figuring out Miami as well. Like, so, you know, the, the numbers are amazing there, but it’s really only for South beach.

John Bianchi:                     00:11:54              Right. And then even when you’re in South beach, like it’s next to impossible in South beach anyways, the best places, if you’re in Florida, by the way, West Palm Hollywood, Fort Lauderdale, those places allow it. That was actually where I stopped and gave up, which is, it’s funny how you know, everyone talks about when you’re when you give up, you’re usually about like two, two inches away from success. I literally went all the way around Florida and stopped at Hollywood where Fort Lauderdale allows it and it’s very, very successful. And West Palm is the same thing and I stopped right before and drove all the way back because I was like, it’s not working. So anyways so that thing is true.

Julian Sage:                       00:12:32              So just to kind of recap your, your story is you had this financial business, you were, you know, you’re doing well with it, but you, you saw that you’re, your room that you’re renting out was making a whole lot of money. You decided to basically you know, scale this up by picking up a unit, but you found out, you know, regulations it was, was a little bit troubling. And then you, you, we’re able to acquire a good lump sum of money from some investors that we’re going to get into this a rental arbitrage space. But then you decided so you decided to leave the job. Then you just went on another tour around Florida trying to find the perfect locations because you were utilizing this data and the data, if you’re just looking at the data, it’s showing it’s, you know, hot hotspots, you know, Florida, Miami, all these things. But what people don’t realize is it just numbers itself isn’t, doesn’t dictate if you’re going to be able to have a profitable business. So, Mmm. You decided to head up back North. So what, what was kind of the next step in your, your, your progression?

John Bianchi:                     00:13:36              Great. Okay. So you know, I, I talked to these investors and, and secured this money and then all of a sudden after a month, I realize I didn’t know one of the most important things, right? And so felt that was, that was tough, right? That was real tough. But it really drove me into this mode of like, I need to find a solution and I only have so much time. Otherwise this isn’t gonna. I, you know, it’s not gonna work. And I just gave up my entire business that it took me a while to quite a bit to grow. So so what I did was I just went back to the numbers and then when it went back to the numbers, I also went back to I tried to find good locations, but then I also looked for what areas allowed it, right.

John Bianchi:                     00:14:16              So, so then I went, because I essentially would go anywhere in the United States. That’s the way I was operating. I was like, I’m going to go anywhere. It doesn’t matter. Right. So what I did was I tried reading the regulation for all of the different major cities where it’s most profitable. And Chicago was actually one of the places that had put regulation in place, but there was still room to play. So that, that’s the thing. So people like the other best option would have been San Diego, which sounds like a way better option than Chicago if you think about it. However, the reason I didn’t want to go for it was because I didn’t have any regulation in place. So I didn’t want to go all the way down to San Diego, put all of this into these investors money and all these homes and then they pass a Alon and all gets changed.

John Bianchi:                     00:14:55              And they did pass a law a year later from the day that I made that decision, however, 60,000 people signed a petition to have it turned over and it got turned over. And they still don’t have anything right now, however. So, but anyways, so Chicago was the safer, smarter with other people’s money bet to make. And so then I just learned about Chicago left right and center and tried to understand absolutely everything that I could using the numbers of data. Cause like I said, I didn’t do that for the first two homes, but to, to raise money, I really needed to do that. And so I got more and more and more and more into it. And, and so I understood what were the good areas, what were not the good areas where I could put money in. And we’re doing rental arbitrage model at this point, right?

John Bianchi:                     00:15:35              So when you’re doing rental arbitrage model your expenses are X through the entire year. You have to make more than that, you know. And so I had to make sure that I was getting these right locations, so I put a lot of research into it before we could ever. So anyways, I ended up going to Chicago within the first eight days that I was there. I secured three locations all in a general same sort of general area that I still have now just except for one actually because we got rid of it. So, but so the first month I got there, first eight days had three within a month and a half, all three of those were set up. We, I ended up getting another one during that same time period. So we had four within a month and a half. By the end of the summer we had five all rental arbitrage again.

John Bianchi:                     00:16:22              And then by October we opened up two more locations. And this is another huge lesson that I learned. Rental arbitrage and Airbnb. You need to understand cashflow and seasonality better than anything ever, ever. You just need to understand, you should always have, what’s my absolute worst month, those are my expenses, not nothing, not medium months, not, you know, best month, just absolute worst. And I mentioned that because we use the money. So the money that we used open up those first five locations generated so much money in, in four months that we were able to open up another two locations just from the money that was earned. Right? So that’s like, that’s, you know, we’re, we’re on a high, we’re like, this is amazing. Let’s just keep up things, things open. And then we actually drained the account so low that when B winter game, I had to go to the investors and say like, we’re short, like for four months. The, the down season in, in Chicago is four months, right? The up season is strong. Six even two down four. So for four months I had each at the end of each month I had to get about 10,000 or more from the investors to to float us through to get back to that, that summer.

Julian Sage:                       00:17:36              You that that’s pretty, that’s pretty interesting John and I love how how numbers driven you are. You know, like, cause when when you’re, when you’re talking about investors and money it having those, those numbers, having those figures is so, so like you know, with with us we have, we have this thing we call the turnkey arbitrage program and you know, the same, same deal. You have those high seasons during the, those like six or eight months. Then you have those two more neutral months and then you also have those, those slow months, people don’t realize that it’s not green all year round. You know, and when you’re talking with investors and you’re saying, Oh, this is a profitable business, you also have to tell them you could be breaking even or you could be losing money. You might have to pull some money out of your pocket to be able to keep the business afloat. And a lot of people are just thinking when they start and maybe they’re starting at the tail end of like that high season and they’re just like, man, I’m making all this money. I’m doing really good and now I’m not doing anything. What’s, what’s wrong.

John Bianchi:                     00:18:28              Right. Yeah. Big time.

Julian Sage:                       00:18:30              So you had these investors and you, you, you had, you took the cash flow that you’re using, take up more units, but now you have all these units and you also have a slow season that’s coming up. How did you get through that?

John Bianchi:                     00:18:43              A lot of stress, a lot of stress, but a lot of I’m gonna, I’m gonna shout out Danny with optimized by BNB saved absolutely saved my, I think it saved my business because his book there that he has, which is $25 and has made me thousands. It teaches you every single last thing that you can do to bring in more people to, to optimize your listing, to, you know, change this, change that. And it’s like this, it’s like search engine optimization for Google, for air B for Airbnb. And then if you can understand all these different things, then it, it helps you stay afloat. You know what I mean? It helps you keep those things coming in. And he even says it the best. The winter separates the good hosts from the bad hosts or the, the, you know what I mean?

John Bianchi:                     00:19:30              Like that’s what he says and it’s, it 100% is true. Right. and so, and the thing is, it’s, it’s funny cause like nowadays we were so strict with our optimizing our revenue. Like it’s, it’s very consistent. We have a, a such a strong process to go about it. But before read that book, we’ve been operating for like a half a year without ever even touching those numbers or trying to make sense of it. Right. And so to get through the winter I really had to learn every trick that there was to this business and, and make sure that I was implementing them. And then on top of that track when every single dollar was going to be coming out and when every dollar was going to come in and project what dollars were going to come in at that time period. And then when we got to a certain time, it’s like, okay, we need this amount, right?

John Bianchi:                     00:20:17              Like this is, this is the amount we need. Luckily we got one of my favorite texts from the investors was at the, around between Christmas and new year’s because of those, because of Christmas and new years there, there was a jump that I wasn’t expecting. Right. And so I was expecting to have to ask them for about another 10, like when you’re there, 10 grand come through. Right. and I, I didn’t end up meeting it and they’re like, that’s the best. This is the best text that I’ve received. All Chris, the best Christmas gift you gave me. Anyways, so, so, but it was just a matter of, I think you said it best, so just understanding the numbers will not make you a successful host. Understanding the numbers will help you select the right home, right, and the right area. However you also need no regulation first, then you get the right home, then you learn how to do that, run the business right and optimize it and make sure that everything is a well oiled machine and coming through. And then once you understand that part there, it’s like they’re, you’re, you’re pretty well set, right? Like other than you know, bookkeeping. You’re, you’re just, you’re, you’re good to go. Like there, you’ve almost said every, everything. Actually maybe I’ll run into something that I don’t know yet.

Julian Sage:                       00:21:20              So you were scaling up these units in the Chicago area and you were playing within the regulations, which is also a pretty, pretty smart move. We’ve talked to some other hosts that at play within the Chicago and is, you know, a lot of people say Chicago, you know, it’s, it’s regulated. I can’t do business here. How are people able to make money? But the, the, the smart hosts are able to play within the regulations you know, to keep things afloat. But you decided to expand operations a little bit. Do you mind telling about that and what you had going on when you decided to move?

John Bianchi:                     00:21:51              Are you referring to Scottsdale? Yeah. the Scottsdale decision was actually not until like a year 28, so it was a, it was like the following summer that we had made that, so we had been open for a little over a year. And, and it was, it the, the idea of being was, you know, there was, so the regulation does hold you back in Chicago, right? Then the seasonality also holds back and Scottsdale, Arizona, so Arizona, the state state allows Airbnb through the entire state. And so I was like, you know, it’s a great spot to go. So I started doing all the research there. Scottsdale is like one of the most profitable layers you can be. And and so I ran all the numbers just trying to figure out what best spot spot was. And the other nice part about it is it’s the exact opposite season of Chicago, right?

John Bianchi:                     00:22:36              So you know, we only have one location down there right now. Realistically, we’re going to end up increasing that number, right? Because, because they are perfect opposite, opposite seasons. So like right now, like this month in February, right? Like we’re going to be, we’re going to lose like 10 to 15,000 ish dollars. Right. But the one hole that we have in Scottsdale’s gonna make like seven, $8,000 net so that, that money is going to go directly, you know, tell them, offset that, not just one. Right? So if we have multiple [inaudible], it’ll be a, it’ll actually help us level load our cashflow as we, as we grow. So it was a, is a decision that made sense. When, when you looked at the numbers, when you looked at the regulation I opened it up, I was in Chicago and I made phone calls to random people down in Scottsdale to open the home up.

John Bianchi:                     00:23:25              I started, got, I’d never went there until like a month and a half ago and we opened it up in, in like August. And so I hadn’t gone there until like December. And so, but I just made anyways. I mean, I made random phone, I made phone calls, connected with a handyman, a realtor a cleaning company, a photographer just, and like, I need you to do this, we need you to do this, I need you to, and they, and they all did it. And so yeah. You were able to, you said you picked up, how many properties did you pick up in Scottsdale initially? Initially to initially to, and usually to all remotely just by utilizing other teams. Don’t recommend that by the way. And why not? From my ex. So how can we, with my experience now, I guess, I guess I could go for it right off the bat.

John Bianchi:                     00:24:10              It was, it didn’t help. So the one home went well. Okay. So the one one home went well. However, like the initial marketing of it was not nearly as high as the standards that I want it to be. So it was really difficult to communicate to the people setting things up exactly. Like, like the little things, right? Like the, where certain plans should go and why those bands go there and like, you know, the, all that kind of stuff. And then explained to the photographer like how to get this absolute best photo shoot. Right. And I put together like a a slide, a presentation that says how to shoot every single room. And I’ve got like 40 of these slides and it’s perfectly laid out, but it just still didn’t come through properly. Right. so anyways, but, but that first home was, it was, it was pretty good.

John Bianchi:                     00:24:51              Like it wasn’t, it wasn’t terrible how it worked out the second home. Actually, so this is a like a warning to people when it comes to rental arbitrage that you can throw a warning out there. The rental arbitrage model, the, the profit margins are somewhere around 15 to 20%, right? Per home by home basis. So when you grow, when you’re certain sitting on a certain number of homes one bad home can, can really hurt almost the entire business where if you continue to get past, you know, grow and grow and grow, you have so many homes that one home won’t affect the majority, right? It’ll affect, you know, your cashflow and some of them, but it’s not going to affect the entire business. That’s true for any business, right? If you actually listen to podcasts with what’s that grocery store that everyone loves the whole foods, whole foods.

John Bianchi:                     00:25:38              He, he said when he was building whole foods, every single store he opened from the first few years put, he put the entire business in, in jeopardy, right? Because if one of those stores failed, his entire business is going to fall apart. And that’s just how business work when you take on these expenses, right? If it all comes crashing down. So the reason I’m explaining all this is because the second home that we’ve got in Scottsdale, the realtor told me there was five bedrooms when there was actually four. The landlord was a had some drug issues and that led to him not and money issues. And so you didn’t take care of any of the lawn. You never took care of the pool. So guess would show up in the pool was green. Right. And so they then they would just request their money back.

John Bianchi:                     00:26:20              We started in the slower season and then also we just had the, the way that the home was set, once again, the photographer right then set the whole home up. Or should probably, so we didn’t have the right marketing, we didn’t have somebody taking care of the landlord taking care of the things they were supposed to take care of. The home was different than we are numb. Like, cause I was projecting a five bedroom compared to a four bedroom way different. Right. There’s, there’s huge numbers difference there. And, and so that hurt us because we took on a rent that was higher than it should have been. Anyways. That so, so that, and then the regulation ended up changing before we got into the high season. So the neighbors all changed the regulation for that home. It wasn’t an HOA area. It was in a, an area that was a CC&R. They changed the regulation for, we could hit the peak season to make all the money back that we had lost. And so we had just lost it. That’s it. We had no way of getting it back. So it was that, that’s the risk we take though, right? So,

Julian Sage:                       00:27:13              You know, that, that, that, that’s pretty, that’s pretty wild that, that whole story. And one of the things that really kind of stuck out was that whole CC&R. Do you mind w how, how does, how does that, how does that even work? Because Scottsdale, you know, a lot of people, and I love what you said about the, the counter seasons that, that’s one of the strategies that professional professional rental arbitrage hosts that they try to implement, you know is you have all of your, you know, if all your properties are in Chicago and then it’s like in the slow season, you know, you’re going to be hurting during that time. So you counter that with you know locations that are, you know, countered to that. So that, that’s really smart of you. But with the whole regulation thing about the CC&R that that kind of throws a wrench in and things. Right. Can you kind of explain what that is and is that something that hosts should be concerned about and how do you prevent something like that from happening?

John Bianchi:                     00:28:05              Yeah. So, okay. Now mind you, I know what I know from it, but I don’t know everything, so I’ll give the, the my understanding. Okay. a little disclaimer. So in Arizona, the entire state is allowed to do Airbnb is, everyone knows that, well, everyone should know as an, as an Airbnb host never go into an area that has an HOA. Right? Because almost unless the HOA says you’re allowed to do it, then run to there. Okay. But if they, but they almost say don’t, no one’s loved to do short term rental. So everyone stays away from there. However, groupings of homes still have a sort of agreement, I guess you could say for neighborhoods. At least that’s what it is. In Scottsdale, they have this, this, this agreement within certain homes. So this was 63 or 68 homes within this area. They all had this different, it’s not like a, it’s not HOA, it’s just like, it’s a little different.

John Bianchi:                     00:29:00              It’s kinda like, you know, put your garbage Joe on Tuesdays, right? Don’t let your, so it’s those kinds of things. But in there there’s something called a CC &R, right? And, and that you can change to not allow short term rentals within those 68 homes. And so it essentially becomes like an HOA where they’re saying you can’t do it, and then they can find you through the city for every time you do it. So they can, they can now essentially shut you down overnight. Right. Because once you start getting those fines, like you can’t cover the bills. Like that’s just, that’s what happened. So we never got the fine, but we, we shut down before then, obviously. Right. now, so anyways, so that is, that’s, that’s my understanding of the CC&R. They’re there, I think they would like, so if I, if you kick that logic right, of like, that’s just how it is for there.

John Bianchi:                     00:29:52              That’s most likely the same case for every city, I’m assuming, right. That they, there is some sort of neighborhood agreement when you buy a home. Right. And so I’m assuming that that is something that everybody should sort of understand and know could be a possibility. The thing is, it’s like one person, so one person has to rally the troops essentially, you know, get a majority vote on, on it and then they have to all sign off on it. Right? So you really need like somebody who was in the neighborhood who goes door to door knocking to make this. It’s not like, cause with HOAs there’s, there’s like a few people who are in charge, they have their meetings they make decisions and they let everyone know what’s happening and if everyone disagrees, then they can do it. But anyways, so it’s a little bit different. It’s more rare because you really got to, someone’s really got to push for it.

Julian Sage:                       00:30:38              That’s kinda scary though, because if people just automatically know that Scottsdale is, is kind of one of those areas where you can, but then there’s little pockets. How would you even find out if you were to, you know, do this that, that that’s something that, you know, that they’ve implemented in that one specific area,

John Bianchi:                     00:30:59              The landlord will know. So the landlord will know. They all, all the landlords, it’s like our landlord received a letter in the mail saying like, this is the change to our CC&R. Right? Or, or the CC&R change. I’m not sure to see it. So I don’t even know if it’s an entire thing or just a subsection. But anyways, so, and I’d say just Google it, you know, trying to learn a little bit more.

Julian Sage:                       00:31:23              So, so, you know, you’ve really, you’ve really had John, your, your story is really interesting. You, you, you’ve, you’ve done you’ve been all around Florida, you’ve done all their different regulations. So, so where did, where did you take take the business next after the Scottsdale incident?

John Bianchi:                     00:31:42              So I tried two different things sort of around like before Scottsdale, after Scottsdale around the same sort of time. I always wanted to take the business to the next level, right? So in my head I was like, okay, this makes sense, but it makes sense at scale. Right? And, and I understood that and I saw companies like Saunder and Domo, I saw what they were doing and I was like, okay, if they’re doing it, we could do it. Right. if there’s gotta be a way to actually make this happen, right? Like, so Sandra raised 300 million so far. If I have the right systems in place and the data and information, like why can’t I do the same thing? Right. and so what ended up happening was I had another person, so I started off on my own with the investors.

John Bianchi:                     00:32:19              Then I started working with another guy, and then there was a sort of a, a mentor, I guess you could say, that I had had from back home who was an older guy. And he actually owned three different marijuana companies in Canada. It was legal. And so the, you have these three different marijuana companies that brought him a good amount of money. And so what he did was he was sort of our right, like he worked with us and he’d put us in contact with people that you needed to make these things happen. And and so what he wanted to do, wanted us to do is was to push right to like, like become a Saundra. Well, I wanted to become like a Saundra and he, he saw that vision and so he knew how to, how to make them Dowdy because that’s what he had done his entire life was like build a couple of these up like that.

John Bianchi:                     00:32:58              And so we actually got to a point where we had a turn to open up 200 locations in, I think we’re going to do Chicago and new Orleans. Like that was a, that’s the two areas that made the most sense. And we were going through the due diligence process of all of this. Now mind you, this isn’t like a, isn’t exactly like a term sheets that you hear about for the San Francisco. It’s a little bit different of a term sheet, but it was, it was a, the potential to move forward. Like they, they saw the opportunity, right? It was like, okay, well this is real, right? Because actually like a hotel in a hotel costs a crazy amount of money to open and it takes like 25 years to make their money back. And then they saw what our what, how our business was structured and they were like, you can make the money back in like two years, you know, a year or two.

John Bianchi:                     00:33:37              Like they, it was just like, so mind boggling to them. They’re like, how? Right. so they, they jumped on it quickly. Anyways, what ended up happening was the marijuana license got approved in Canada. So it is fully recreational legal that propelled this guy’s business like significantly. Which means we had no time for us whatsoever. You just, you just, you know, through the businesses couldn’t go for it. My, the other guy was working with at the same time how to change apart and, and wanted to do a different career. He was more of a, not, not, not that this isn’t a bad way of saying it, but it’s truly what it is. Like a tree hugger, right? Like, that’s, that’s who he was. He was more of a hippie at heart and like, that’s what do you want to do?

John Bianchi:                     00:34:17              You know, he’s living in Thailand right now with his fiance and they’re just, they’re, they’re loving life. Right. but, and, and so it, it was everything collapsed. Let’s say, right. So everything that we were working towards fell apart fairly, fairly quickly, like with actually within like a two week period. And, and we had put so much work in to get to this point, we stopped opening homes just so we could work on all of the operations to get him to the point where we’re working with consultants. We were working like, anyway, so we did all that and it essentially fell apart. And so I had a decision, do I stop? Do I keep going? And obviously I kept going, right? I wasn’t gonna let fall apart and I just started moving again. And actually that’s sort of around the time where Scottsdale stepped in a little bit, actually was, was saw the opportunity there wanting to keep open up more locations, things like that. And I was like, let’s do something a little bit different, right? Let’s not just keep going in Chicago. And so that’s, that’s where that really played into yeah, correct.

Julian Sage:                       00:35:11              I mean, you, you, you, you’ve had such, such an entrepreneurial journey and I think it’s really interesting though this, this space is so new and this space is so new and there’s, there’s, you know, like, like you were saying [inaudible] there’s, there’s these established businesses that the hotel companies, and they’ve been doing this for years, but they also have, you know, ROI and their timeframe is a bit longer for us in this space. You know, we can see these returns really, really quickly. But man, you’ve just been hitting an obstacle, an obstacle. Did you decide, so did you decide to keep on going the arbitrage model or did you decide to kind of divert your attention at that point?

John Bianchi:                     00:35:48              Different pivot? So I thought it would be a good idea to, to, to, to change in the route that we had gone. One of the actually sort of nail in the coffin decisions for that was when Airbnb invested 160 million into lyric, which is another Saundra another Dormio stay offered. Like, so, so I was like, okay, these guys are all, the worst thing you can do is start a business where there’s that much competition. You know what I mean? Like everyone recommends, do not get into a business where, and try and grow it. That’s, that’s go where it’s just because your margins are going to be ridiculous, right? If you ever look at like a hotel industry, their margins are like 10%. Right? They’re making a lot of money, but their margins are 10%. If you look at like Facebook, you know, those kinds of businesses, they’re there, the margins are insane and that’s where those monies are really coming in.

John Bianchi:                     00:36:30              So I decided to pivot to something that would be more along the lines of a technology type company that had the, where it wasn’t really infrastructure. Like I wasn’t owning the homes. I wasn’t managing home, but I was like, I was giving the ability for everyone to control. Right. I, I, the way I saw it was that I had the systems down, Pat and I had the operations style patch. We had to build them all up to take on that money. And we were marketing properly. It’s like, okay, we’ve got something that’s, that’s working. Let’s package it and make it into a good system that other people can just easily implement and grow. Right? So franchise model but not just the typical franchise like subway type model where you’re throwing the, you know, systems in the name on the board.

John Bianchi:                     00:37:09              It was like technology type process and it was actually a company from China is doing something very similar to this. And I realized how they were doing it too. And, and, and I learned their business model a little bit more, a little bit better, like short term. So, and then essentially the idea is that you’re, you’re franchising them, right? So you’re allowing for other hosts to do everything that you do under your brand name and you take a percentage of that. Okay. So and they can list or your platform as you continue to grow. And like now it’s like, it’s like short term rentals, individual hosts, but standards and, and strong operations, right? So, no law, our whole thing was we wanted to get rid of the idea of going to an Airbnb and not knowing what you’re going to get.

John Bianchi:                     00:37:52              Right? So having to fear getting a bad experience, having a fear that the beds weren’t gonna be made. Like we wanted to create a way to get rid of that and be known for like these pre, not even just like a regular home, but well, well-kept. Right? and so no one will no longer have those bad experiences. It’s like that’s what we want to do and use the technology to be able to scale it properly. And what happened was like we did the MVP type model and I continued to work on it, learn it, understand it. I started, you know, at one point I like CFO is working with a a C a CEO who is also we’re helping us there too. And we started to move it and we were, I was working with different franchise people who are going to be franchisees that I was going to learn from that how to bring it together.

John Bianchi:                     00:38:36              And I, honest to God, I just stopped. I just, it just was like, this isn’t the, where the route that I want to go to the day that I die. And once again, future got optimization. I got deep enough into it that I was like, this isn’t how I want to go for another 20, 20 years. And I obviously, you know, maybe, maybe it’s my fear of just continuing to grow and getting to that size. And, and some people will, you know, we’ll probably assess that and be like, well, he just didn’t want to continue. And he’s using that as an excuse. And sometimes I contemplate that myself, right? Like, but but anyways, so I stopped the motors on that one and now what we do is now we’re just continuing on the rental arbitrage and property management side with a heavier focus on property management. Because of the, the cashflow property management, the profit margins, property management. We have a creating company in there as well. And, and you know, we use all the data and research this weekend to make sure that everything comes together. What type of data

Julian Sage:                       00:39:36              Because when we were talking before you know, I, maybe we can get you on another show to talk more about this, this, this thing that you have currently that should be released pretty soon. But you’re, you’re very data driven and you’re working with all these investors. You decided you’re also taking on cohost properties. But when you’re analyzing these deals, what type of information do you really need to look for? Because you, you were saying that some of the information from rDNA, like if you’re just going off of our DNA you know, places like you know, Florida would make sense. They don’t tell you about the regulations. But you know, just off the numbers, it makes sense until you start going there and then you realize that, you know, it’s not maybe exactly what you thought it was going to be. So what type of information do you need if you’re going to be partnering or working with investors or a cohost clients and a property management business?

John Bianchi:                     00:40:26              So if you go online, if you Google a regulation for a city, right? It’s almost always going to be there. If you go to the city hall, you can find it. If you call it the city hall, you can, you can get that information right? I always tell people that step one, she’ll just figure with regulation because that’s going to hurt you and make sure you’re not an angel way understand what HOA is. Right? the CCNR scenario, not much you can do there. Just brisket. I would say honest to God. But when it comes to the data there, there’s really only one company that’s out there that’s any bit good at it right now, which is air DNA. Almost everyone knows what our DNA, there’s mash Pfizer, but if you ever try using that, it’s like, it’s terrible. It’s a terrible site.

John Bianchi:                     00:41:03              It’s not very, it’s not helpful at all. So but our DNA just gives you all the information. Okay. So they just like, here’s everything. They have a cheap version, which gives you a bunch of information that I don’t find useful whatsoever. They’re like, here’s the average daily rate. I’m like, what am I gonna do with this? Right. That doesn’t help me price my home. That doesn’t there’s, there’s very little calculations that I can actually use to make that happen. But then the other thing too is like, they have issues with their algorithm, which is a part that I left out of my story, but I’ll tell it real quick. I use data to, to, to figure out an Arbor, which is a city in Michigan, you know, Michigan university. That’s, that’s what they are in Ann Arbor. And I, I it Erdene is data show that there were a lot of homes that were doing like crazy numbers, like 150,000, 200,000, which doesn’t really make a lot of sense, but I was like, well, maybe it’s really close to school.

John Bianchi:                     00:41:51              There were these big homes. I’m like, you know, I logic did to make it make sense. But after doing more research into it, what I realized was just an issue, an issue with their algorithm. There’s, there’s seven massive football games that happen every single year. Okay. And so in that city, and what happens is all of these major homes that are directly beside the stadium, they just leave for the weekend and rent out the home for like four grand for the weekend. Right? Five grand for the weekend. And so what happens is that they, they just have that available. And as soon as I gets booked, air DNA assumes that all of these other days are our booking note around the exact same time, but really they’re all blocked, right? And so what happens is air DNA is saying that they’re making $150,000, but really they’re just making like four grand a weekend for seven weekends.

John Bianchi:                     00:42:33              And so I actually was, was like about to sign a $7,000 lease on a, on a absolutely beautiful home that was steps away from the stadium. Like it was going to be amazing. Like the numbers on it were amazing. Realize that the whole algorithm, everything is just completely off, right? So you really need to like with the data you need to, to, to look into it, right? You need to find the averages within it, track as much information as you can, just sort it out, right? And put it together and then make sure that these listings that they’re showing you are actually doing what they’re saying to do. Right? They like go into the listing and like read through the calendar. Like, if, if, if, if the listing is doing $200,000 a year and it has five reviews, it’s not doing $200,000 a year.

John Bianchi:                     00:43:15              Right? Like, that’s just how it is. You have to, but like, you don’t know that unless you really, really get into the nitty gritty stuff of it. Right? So and that took time, that took practice. And I like finally figured all this out and, and got to that point. So but, but if you’re, if you’re, so my advice, if you’re gonna use their DNA they do have the market minder, which is nice and cheap, and you can, you can, you know, a hundred bucks for a city for per month, and it’s, you can cancel whenever it gives you all the different locations. You can break it down, just start recording that stuff and see if you can find an average, right? See if you can find something that, that’s common that, and then run the numbers backwards on it. So if the 100,000, what are all my expenses?

John Bianchi:                     00:43:53              What am I left with? Right? then there’s the other option, which is the investor’s investment Explorer which gives me the entire country and gives you every single last thing. That one takes a lot of work cause it’s just here’s all the information. It’s well put together. Like well, easy to navigate, but it’s just all bare, like everything is there. And so you really got to just sort through. Step-By-Step-By-Step. And then the last option is the enterprise option, which, which is where they just give you a, a spreadsheet with every single listing that’s ever been purchased. We just got New York and as 238,000 lines, 238,000 lines. Every single line is an Airbnb that’s ever operated in, in New York since 2008, 238 put that in perspective. Chicago had 38,000 lines. And anyway, so we, we sort that data out. And we went from actually in, in Chicago Olympian 30,000 lines to 900.

John Bianchi:                     00:44:44              And out of those nine hundreds were the only ones that we actually ended up keeping it and using as, this is what we want. The, the best way to explain it is the burger King logic. So ma back in the day, this has been a logic for like 40 years. So McDonald’s puts millions of dollars in, do their research to figure out what’s the absolute best corner to be on. And then they open up a store there and then burger King opens a cup up across the street, right? Because burger King knows they’re there. It’s going to be good for us too, right? So what you want to do is you want to say, okay, this guy’s done it and this is how well he’s done. We can do that, right? Or we can do that better. So that’s a, that’s my take on, on data.

Julian Sage:                       00:45:21              So whenever you’re analyzing a market, you’re looking at who’s, who’s the, you know, versus regulations versus, you know, HOA gotta, make sure that you can do this. But then next is you’re looking for the McDonald’s, like who are the people that are bringing in the money? Once you have that information, you’re going into the listing and you’re finding, you know, is what they’re saying makes sense throughout the span of the year or is it just during a particular season? Because air, air DNA is just going to tell you, Hey, this is what it is throughout the whole, you know, throughout the whole year based off of maybe only a certain season?

Julian Sage:                       00:45:58              So what you’re doing is you’re, you’re just looking at it across. Okay. And then, but when you’re working with an investor and you’re trying to give them hard numbers, I mean, these are people that are throwing out big numbers like this. How do you, how do you collect that information? Like how, how, you know, if, if you’re trying to be there like Saunder what information do you need to present to someone? If you’re only given, you know, kind of like this half data and there’s this amount of data that you have to kind of manually scrape,

John Bianchi:                     00:46:27              Just kind of manually scrape you, like [inaudible], you know what I mean? Like you’ve got to put in the work to, to literally scrape it like that. That’s what I did. I you know, you have the information and information’s all there, but you’re going to take that information and compile it into something that makes sense. And, you know, I’m not, I’m not I’m not, I obviously I’ve talked a lot about it right now. Through my experience, I’ve been able to learn more and more about how to put these sort of things together, but I did it by watching, by learning from a, a friend who’s an accountant, right? Or watching YouTube videos or like learning about these different things. Like what is the financial report that an investor wants to see? Like what are they, what are they looking for? Right? what numbers matter mostly to them.

John Bianchi:                     00:47:07              And how can I show that to though to make sure that they understand what, what is there. And if you’re saying like, you just have hopped out and there’s a lot of like manual scraping, I need to go down. If air Jean is the only option, we’ll talk about something later. But if air DNA is the only option, then you have to manually scrape and get to the, these, these McDonald’s is right McDonald’s and then be able to take that and plug it into a financial report and break everything down for an investor. So I’m not gonna try to explain, you know, every single way to put together a financial report because, because Google will, if YouTube will do a much better job, right? But there’s the, that’s just essentially it, you just take numbers, you work backwards and, and you know, there’s a lot of courses out there and a lot of articles that’ll just teach you what are, what’s every single expense you need to consider.

John Bianchi:                     00:47:52              Right? How much so here’s one thing that people miss. The cleaning fee. Okay. So if you have a Airbnb and there’s couldn’t fee, the thing that people miss is they assume what the cleaning fee is before they even know what it is. So they’ll say like, Oh, the Queen’s fee is gonna be $1,000 a month. Well, no, maybe it’s not. Maybe it’s 800 maybe it’s 2000 right? Some places it’s more expensive. A queen can be $50 in one city and 150 in another city, right? Scottsdale, it’s like $200 $225 a clean, right? That’s a lot of money that’s coming out a year in Chicago for the exact same size home. It’s 125. So $100 difference when you’re doing eight Queens a month, that’s $800 difference in revenue, right? So you, you gotta just like figure out what, what are the actual numbers and do the research.

John Bianchi:                     00:48:37              Just every line, do the research on the line, like put, put in that work. And the only way you’re ever going to close an investor is if you put in the work. If you can sit there and show how much work you put into every single last thing. If you don’t, if you, if you didn’t do that, the investors are going to be able to see it. They’re going to be able to understand and they’re not going to give you, not going to give you the money for a home. And also a landlord’s not going to give you his home property manager. Right. It’s simple as that. So that’s, that’s my take. Yeah.

Julian Sage:                       00:49:05              At which point did you, are you still going the arbitrage model or at which point did you say that you want it to start focusing on the property management more?

John Bianchi:                     00:49:14              It happened after the home in Scottsdale that fell apart. Because like I mentioned, you know, one moment at a certain size of business can really pull your chicken down. So what so what we did was that, that actually we almost went broke twice. So the first time was the first winter. The second time was the second winter. Right. Those little cities and kill you the first dish, the first season. The issue was that we opened up homes right before the season. We didn’t understand the cashflow. The second issue was that we had a home that tore apart our bank account, right? The rent on that home, by the way, was $4,500, just the rent. Right? now obviously we’re, we’re, we’re doing okay for the winter and things like that, but, but it, we’re not pulling at you, right? That hurts.

John Bianchi:                     00:50:01              And so, so we going through this winter, like, you know, we’re, we’re realizing like we need to increase his profit margins and the best way to possibly do that is to use this property management model mixed in with our rental arbitrage model. And then, and you combine these two and it just allows like cash flows everything, right? So if you don’t have that cashflow, especially with the seasonality, like you’re gonna be screwed. So our whole plan right now, by that time, we hit winter three our home, like we’re going to have, we’re not going to be worried at all, right? Like, we’re going to get through winter three without a single word because of how well we’re going to push through everything. Watch every single dollar comes through and make sure our profit margins, capitalism significantly increasing reserves and all of those things online. So however, when you know the numbers, there are certain homes you have to do as rental arbitrage.

John Bianchi:                     00:50:49              There are certain homes you would never want to give up and to a landlord. So I have one home as an example that makes me $50,000 on an annual basis net. Okay. That’s one home net 50,000, so it makes $120,000 a year and my expenses are 70,000 on it. If I did it as a property management model, I would be making 20,000, a little over 20,000. Just put on this. I’m making, I’m not going to take the risk to double that money. Right? My risk is next to none other than the furniture I got to get into the zone. But it’s just, you know, it’s the same size homeless, some of my other locations just in a significantly better location. So I have two of those, one that’s doing 51 that’s doing 40. I don’t want the landlords to just switch to property management. Simple as that. Right? Like I just don’t want them to, so whenever I find one of those guys, I’ll set that up as property management all day long, all day long.

Julian Sage:                       00:51:39              John, I, I love it. I love, I love what you said because that’s, that’s the model that, that that we, we utilize as well. And I encourage people, because a lot of people come into the space and they just think, you know, right now it’s a rental arbitrage is, is this the shiny object? It’s Oh, rental arbitrage. You can make all this money, you can double your, your note, you can double the lease. But well, people don’t realize is like you were saying, there’s those slow seasons regulations do change. I mean you’ve, you’ve spent the past two years running into obstacle, obstacle, obstacle, obstacle and it, it can impact like what you were saying was parade as principal, you know, the, that, that, you know, 80% of your [inaudible], you know, that 80, 20 rule where that one property could be taken up 80% of your time while the other 20% is making you, you know, most of the money, this one, this one property is, is really just draining you.

Julian Sage:                       00:52:27              So you decided to throw in the cohost model, which is something that we teach on vacation rental machine where you’re able to basically, you know, if your ROI is, let’s say, you know you know, it’s going to take you, let’s say eight months to be able to get your return on investment back. If you have the cohost model in there and you’re, you’re able to counter that, you can, you can gradually just kind of level things out so you can make basically make your ROI a lot sooner. And then at that point it’s like, it’s just all profit after that.

John Bianchi:                     00:52:57              Exactly. Yeah, that’s exactly it. And I think that the, when it comes to those two models, right, you said sort of rental arbitrage is the shiny model. I think that’s because it’s an easier sale when you have no experience. You can go to a landlord and say, I’m going to figure it out. I’m going to take all the risk. But you can’t go up to a landlord and be like, I don’t know what I’m doing. Take the risk with me. Right. So, so that’s, so it does actually make sense to start with the rental arbitrage model. Maybe on the, like even if you did a one book or one bedroom, right, that’s a super small risk, but you made sure there was still like, maybe you’ll make like 20 505,000 throughout the entire year. Like nothing. Right. But the thing is, is that you’re going to learn everything from that, right?

John Bianchi:                     00:53:39              My first two homes in Michigan that failed, I learned everything from, I learned enough to be able to raise $250,000. Right? Like, so like, you know, the homes failed, but I learned so much to be able to do that. So if you could take a tiny, like a studio just in a good area, put barely any money into it, learn every single last thing over like a three month period and then go to a landlord, be like, look, it is what I know. Like along with, you know, listening to podcasts, like your machine, a podcast where they go through a, you know, how to do the property manager, learn how to do that while doing at the same time. Then you can go to a landlord, be like, I’ve already got this one. We’re doing it this way. Here’s the data. This is what we’re doing. This is what we’re going to put this together. Let’s take their suppose together. And then if the numbers make sense, the land is going to be like, yeah, let’s go.

Julian Sage:                       00:54:17              You know, if you’re, if you’re trying to level out your arbitrage and your cohost how do you, how do you know when you come up to a deal? Hmm. If this is something that you should be taken on yourself or if you should be you know, working with the landlord or investors to be able to turn this into a cohost property.

John Bianchi:                     00:54:35              So it actually, so from my experience it’s going to depend on the way that the referral comes to you and the way that you approach somebody. Okay. So a perfect example is I, you know, I had a a landlord come to me for the a because I was promoting the property management side and his property I would take on as rental arbitrage, but I came to him with the property management. And when you do that, you’ve got to show them all the numbers. You got to show them every single last thing. So he sees it, right. So when he sees it, if he goes, well, I’m obviously going to take it, right? Like this is one of those homes where it’s going to make a good amount more. So he’s like, he’s obviously going to take on that risk. I’m okay with it.

John Bianchi:                     00:55:10              You know what I mean? Cause cause it is, you know, we’re, we’re still making good money, so it is what it is. But there’s another example a home actually just, just went for rent directly beside one of my other homes that I had, the very first one that I got. It’s nicer, but it has one less bath path, but it’s significantly nicer. It’s like completely redone. And the, and the rent is $300 cheaper than what I’m paying on the other one. And so I’m looking at this, I’m like, well that’s a, that’s that’s like, it’s like a 30, I would say about 30 to 35,000 a year property profit, all rental arbitrage model. So I’m actually a, I’ve approached that landlord, saw his rental and reached out to them and said, this is what I want to do. Can we, can we talk about it? Right. And so he’s been approached before by some idiot because the impression he has was ridiculous. So we’re going to, I’m going to try and walk him through that and like make sense of it. And if it, if it makes sense, then we’ll, we’ll go the arbitrage model. Right. so it’s just a matter of the way that the, they come through. Like if a referral comes through where they’re like, Hey, here’s the, this guy’s going to show you how much property you can do. You gotta go property management. Right. So anyways,

Julian Sage:                       00:56:14              I love it and I love, I love what you said. You have to, you have to you know, walk the landlord through because a lot of people might be coming into the space and they say, I want to turn your property into an and make money off of it. And then it just ruins it for that landlord. They’re like jaded. Whenever a new person comes up to them, they’re like, no, this is a legit business. Like, you know, I think, I think that’s really great. John, you know, that, that, that is so cool. And definitely, you know, I, I know you’re very data driven and you know, we were talking before the show about some of the stuff that you have going on. So you’re, you’re from all of this research and all this stuff that you’ve been doing, you’ve kind of been cut coming up with some, some tools to be able to utilize that you can provide to a property, a property manager or to landlords or to your property investors if you are taking on clients.

Julian Sage:                       00:57:04              So I, I think it’s really cool. I definitely maybe we can get you on another show where we kind of walk through your tool and see, see how that works. Because some of the stuff that you were saying was like rDNA, you know, it’s, it’s, it’s something that, you know, all of us, you know professionals that when we are looking at this data, you, you can’t just take everything as as it is. And I think your story of how you got started and where you are now really shows that, you know, you can’t just base off the numbers. There’s other factors that come into the play. And there’s also things that should be presenting to a property investors. If you are taking on management, you know, if you’re working with an investor and you’re saying it’s going to be green all year, but in actuality it’s, it’s actually red during certain seasons or you don’t take a deep dive into the numbers, into the listings.

Julian Sage:                       00:57:49              There’s a lot of things that come into play. So this is an exciting time for a lot of new people that are coming into the space. There’s a lot of new tools and a lot of new things. So I would definitely like to get you on to maybe share about, you know, some of the, some of the next moves that are coming into the space. Because you know, if, if you know, if, if these things actually do turn out, like what, what do you say that they are? I mean that, that, that, that saves us a lot and also allows for us to be able to grow our businesses as professional hosts. What’s, what’s the best way that a anybody can reach you if they, if they want to know where’s the best location that they should be investigated. Cause you seem to know

John Bianchi:                     00:58:27              You can send money to my Venmo and then I can tell you no you don’t. I’ll give my I’ll give him my email because I like I like when people actually reach out to me. If you have a, if you have a question, if you, you need some advice or you want to, if you want to figure something out I’ll get you. Please do so. So I like, I do like to talk to people. I’ve done this one other time and I did that and I had a lot of people who judge me and it was, it was very insightful and I, I found that there was a lot of good connections there. So if you want to reach out to me, my email is John, I’ll include it. I’ll include it in the show notes. Perfect. Okay.

John Bianchi:                     00:59:02              Okay, cool. So he’ll include it, reach out to me, I’ll respond and give you as much information as I possibly can and help you out wherever I can. But if I were to give one line of advice you make sure that you understand your numbers from the data through and through before ever signing a lease. I’ve seen too many and talked to too many people who have signed on the lease in a, in a location and a unit size that would never make them money no matter how hard they tried and how well they did. You just, you have to understand that some areas are better as an annual rental and some areas are better. As an Airbnb, you need to understand that and do not sign a lease unless you understand that, okay, that’s mine. That’s my line of advice. Everything else comes around it. But that’s, that’s the biggest thing. Okay. Otherwise you’re not gonna make money. So.

Julian Sage:                       00:59:51              All right. Thank you so much, John. This has been a, just a really impactful episode. We have so much information for people that are coming into the space. You know, it’s not, it’s not all you know, gold and, you know, cash just coming out of your ears. I mean there, there are those seasons and like you were saying, John you know, with those properties that are profitable, you know, you’re making like $1,800 net is what you’re saying per per listing. And you have, you know seven arbitrage listings, three, three co-hosts, listings. So, you know, there’s, there’s a lot of money there, but like you were saying throughout this episode, there’s, there’s those high seasons. There’s, there’s those slow seasons. You have to learn how to be able to take your cash and use it and safeguard it so that you can expand and that you can also protect yourself. So much good information. Definitely recommend for those of you that are getting into that rental arbitrage or co-hosting space, take a listen to this episode again. And, and really, you know, let this sink in because these are the risks that are involved in this business. So if you want to grow and scale a profitable vacation rental machine, then you definitely want to a, he’d, he John’s tips in this episode. But thank you so much John. And until next time, host nation. Keep on hosting.

Julian Sage:                    01:01:01              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 hosts that have been featured in these episodes as well as the community going over to our Facebook group, the host nation.