House hacking is appealing for many reasons. First, it eliminates your largest expense which is likely rent or mortgage. Second, it allows you to get into real estate with not a lot of money down, and lastly, it is a great way to build wealth and achieve financial independence.
In this episode, we are with Craig Curelop, author of the book, “The House Hacking Strategy,” and currently works at BiggerPockets. Craig talks about how he did his first house hack and soon turned it into a short term rental which helped him pay off his student loans and mortgage.
House hacking helped Craig achieved financial independence, and now, he doesn’t have to do things he hates to do.
Video Transcript
00:00:00
It is a phenomenal way to build wealth with not a lot of money down, right? You don’t need a lot of money. And for that reason, you just get such high, high returns of a hundred percent or more. After that first year, I just don’t know any other investment vehicle, even in real estate or outside of real estate, where you can consistently get a hundred percent plus return without throwing money at something super risky. That’s essentially gambling.
00:00:23
This is episode number three, eight of the Short Term mental success stories podcast. Are you an investor that’s looking to have your home professionally managed, go to cohost.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 in 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. 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 in this nation?
00:01:04
I am super excited for this episode because it really hits home for me. For those of you that don’t know I got started in the short-term rental space by how sacking my basement unit. And it was able to essentially cover for my mortgage where I was able to live for free. You can actually go back to some of the earlier episodes where I was talking about getting the space already during that renovation process, when I actually started the podcast. But how sacking for me was really a game changer, because for those of you that don’t know about five years ago, I really got started on this entrepreneurial journey because I was trying to reach financial independence, financial freedom. When my dad got sick with cancer, I just knew that I needed to be able to find a way out of just trading my time for money.
00:01:41
And I tried so many different businesses and tried so many different things like mobile home investing, Forex, Amazon, FBA, all these different things, thinking that this was going to be the way out of the rat race. And for nearly five years, I just tried and tried again. And I was really at my wits end. And I honestly felt like, okay, this is it. I’m going to just put everything down. And I am going to purchase a house and just kind of, you know, work towards retirement. I got my college degree. I was just going to try to work for another job. So when we decided to settle down and actually purchase a property, my wife was the one that came up with the idea of saying like, Hey, why don’t we list the basement on Airbnb? Maybe we can pay for a portion of the mortgage.
00:02:22
And honestly, when I felt like all hope was lost in that I wasn’t going to be able to achieve things that I really wanted to achieve. It’s just a light bulb went off and still, it wasn’t easy because we were going through the renovations and dealing with bad contractors. And it was a very big pain, but the payoff, once we did get it listed was just a game changer. And to be able to just instantly start making like a lot of money right off the bat was just like mind boggling because I had tried all these different things before and had just never seen anything come to fruition. So I know the power of how sacking I know the power of short-term renting and that really instilled a fire in me. And it was because I was doing these podcasts and talking with all of you on a daily basis, I just felt like I had to keep going.
00:03:01
And even now, as I’m still learning and still growing, it is very challenging to be able to learn all these new things. But every day, it’s just one step at a time. And having this community to support and really all of this starting with how sacking. Now I understand the power of community and the power of just taking that first step. So how sacking is appealing for many reasons, first that eliminates your largest expense, which is likely your rent or mortgage. And then second, it allows you to get into real estate without a lot of money. And lastly, it’s a great way to build wealth and achieve financial independence. I personally know this in this episode, I talked to Craig author of the book, the house hacking strategy, which has actually published through bigger pockets. And Craig also does work at BiggerPockets. I actually met Craig at first when we were at fin con in DC.
00:03:44
And then I ran into him again at the BiggerPockets event in Nashville, Tennessee. So Craig is a really good friend and he talks about how he first got into house sacking and soon turned that into a short-term rental, which helped them pay off his student loans and mortgage, how sacking helped Craig achieve financial independence. And now he’s able to do the things that he really wants to do. And Craig has really taken the strategy to the next level as he is picking up multiple properties and how sacking them, and then basically moving out and doing again, it is such a brilliant thing. Craig is such a smart guy and you’re going to take away so much from this episode. I’d definitely recommend picking up Craig’s book, which you can get on the show notes page, just go to Short Term Sage dot com backslash STR three eight. Or if you like my show, that’s sent directly to your inbox every week and get the success secrets, which are really awesome. Going to Short Term Sage dot com backslash show notes with all that being said onto this week’s conversation. Hey, welcome back to this nation to another episode of short term rental success stories. In this episode, I have the special, special honor of speaking with the one, the only Greg Carla,
00:04:43
Carla.
00:04:43
Okay, great. Nice. The one and the only, so Greg, would you please introduce yourself? Let the host nation know who you are and what inspired you to get into short term rentals?
00:04:52
Yeah, so my name is Craig am kind of known as the house hacking guy. And actually my first property that I did was kind of a hybrid short-term rental long-term rental. What I did was I bought a duplex that was an up down duplex and a really good part of Denver. And I rented out the top. Full-time lived in the bottom, but that quite, that wasn’t quite covered my mortgage. So I decided I wanted to do a little bit more than that. And so what I did was I Airbnbed out my bedroom, put up a closet bedroom in the living room, which was basically like a room divider and a curtain. And I slept behind the curtain for a year on a futon while ABN being out my bedroom and just lifted up for a year, man, bachelor life.
00:05:32
Oh man, that, that, that is the grind right there. But what got you to that point because you, you, you also have quite a bit of experience with some real estate you’re working at bigger pockets. You’re, you’re, you’re a house hacker guy. You wrote a book on this, so you obviously have a lot of experience, but take us back to what, like what got you started into real estate and then what led you to short-term renting?
00:05:56
Yeah. So coming to real estate was back in California. I was in a child that I absolutely hated. And what happened was I was, I was basically on a little mini vacation with my girlfriend at the time down in big Sur where there’s no cell reception and we had this really wonderful weekend. And when I got back on Sunday night, I got an email from my boss saying that I had to get this memo out by Monday morning, 8:00 AM Eastern time, 5:00 AM Pacific. So I basically had to do it that night. And it was the last night that my girlfriend and I were going to spend together before we moved away. So I was really upset and she was really upset. And I was just like, man, I don’t want to live my life like this. If this is going to be like a preview for the next 30 or 40 years, there’s gotta be a better way.
00:06:37
So I started reading, started educating myself, thought of a bunch of startup ideas that didn’t really work out obviously. And I just figured about real estate. And I was like, man, real estate is tried and true. It works. I don’t need to reinvent the wheel. Let’s just do what works. And so I decided to start doing that. And that’s when I moved to Denver, I will basically, I, I found BiggerPockets. I was on BiggerPockets. I thought they were hiring. So then I moved, I applied for the job. I was lucky enough to get the job and now moved to Denver and started a house out here.
00:07:05
Wow. So, I mean, you, you, you wrote the book on house hacking, was that how you initially decided like, this is how I’m going to get my foot into the game? Like, why didn’t you go out and, you know, do what everybody else is doing with like these subject to, or the wholesaling and all these, all these different niches within real estate. What brought you to, how sacking your first unit and then Short Term renting it?
00:07:25
It was mainly because I actually got the job bigger pockets, which I thought was just kind of like a dream come true. And if I had not got that jail, I probably wouldn’t be wholesaling or doing subject to or whatever it is, where I could basically build up a, a nest egg so that I could have been start house hacking. But because of the bigger job, bigger pockets, I said, Hey, what the heck? Like I’ll just work at BiggerPockets, gaining much of knowledge, be around a bunch with our new real estate. And obviously I will learn a whole bunch about real estate and the process. And that’s how I kind of like stumbled upon into it.
00:07:55
You know, when, when I think like when, when I first started having sacking and it, it was like, okay, I’m just going to rent out another room or I’m going to have someone going to get a bigger place, maybe rent out a portion. What brought you to listing this property on this, this room on Airbnb?
00:08:11
Because it was my personal space. Like it was my bedroom. And so I figured I didn’t really want that long-term because in the event that I didn’t like it, I’d like to easily be able to cancel it. So that was my first thought. And then I realized that Airbnb wakes from the way more than a regular rental. And so I was like, oh, whoa, like, you know, I’d probably be able to get six or $700 a month for that room at any other time. But with Airbnb, I was making on average 1100 bucks a month, which is a significant difference, you know, especially being your first one. So yeah. And I just thought it’d be cool to meet people from all around the world, meet travelers. We’re a big traveler. So I always like to meet other travelers and kinda just have a revolving door of friends coming in and out
00:08:50
Now with renting out because you rented out just that, that one room on the unit. W how much was that able to cover for your rent?
00:08:59
I was not paying rent, so yeah, I was, I was, I was profiting like $700 a month and living for free at the time with between both units.
00:09:10
Okay. So from, from there, you, you saw that this was working and you decided to scale that up. Can you talk a little bit about what, what led you to start taking on more, more units? Yes.
00:09:23
So again, I saw like the profit and stuff and how good it was and eventually how easy it got once I got my systems in place in terms of having some automatic pricing, automatic messaging and automatic reviews. So I was very much so out of the day to day. So when I got out of that, I was like, oh, look, this is pretty scalable at this point. So I actually ended up converting my top two Airbnb as well. And that started making like even more, you know, I mean, I think, I think the last month in August, the duplex, which would typically make about maybe three grand, maybe a little over three grand in regular rental was making closer to six grand just in, you know, in the summer months in the winter, it’s closer to three, but either way you get that huge boost. So I realized that and said, Hey, let’s just do the short term rental.
01:10:09
So I mean, realizing like how much you’re able to get on this return, what, why would you consider going other options in the real estate, or would you kind of double down on the short term mental aspect and just kind of focus on that?
01:10:23
So I’m actually kind of, it’s kind of funny. I’m kind of doing a high, I’m kind of like slowing down with speeding up. If that makes any sense. Like, I kind of just do what makes sense right now, Denver is really cracking down on short-term rentals, especially if you don’t live there. So I’m actually working on probably converting at least one of my units to a, a long-term rental just to play it safe. But that one goes, I just closed on my third house hack, which I will be living in. And it has like basically a separate basement and all that kind of stuff, three bed, one bath basement, or its own kitchen and a separate entrance. So I’m going to end up converting that into an Airbnb, which I’m excited to. I’m just about to furnish it as we speak. So
01:11:05
Can you, can you talk a little bit about more like your, your strategy, your mindset when you’re going into these units? Because how sacking to me, like, like my first unit, it was, was a house hack and it just seemed like very natural, very easy, but you know, it’s also easy to look at that. Like, this is maybe not like a legit business, the way that you’ve kind of approached this, though. It sounds like you were setting up those systems in place while also living in the home. So what, what’s your, what’s your mindset with, with picking up units and also have sacking?
01:11:35
Yeah, so I’m really just trying to do what works best. I can’t say that I go into a property’s thinking, alright, I put my strategy to the property rather than give my property to the strategy. I think like I saw this house, it had an easy way to convert the basement into a separate entrance bottom unit Alto itself. And I’m in a good location basically, right? Where two highways meet, where I know people are going to want to, to be either they’re going to be in Denver, they can go up to Boulder or they can go to the mountains pretty easily from my place. So that was kind of the biggest thing that I looked for, but really it’s just kind of what will make the most return.
01:12:15
So with, with, with, with house, with, with house hacking, if you can kind of explain, like what, what is it that you’re looking for when you are picking up a unit that you know, that you are going to try and maybe turn that into short term rental, to be able to, you know, cover your mortgage? What are the things that you’re looking for in these units?
01:12:34
If I’m doing this for a regular house, heck I just look for the most beds, two beds and baths per dollar. And that is how I’ll probably get the most amount of money for my mortgage payment, right? The lower the price and the more the bedrooms and bathrooms are, the more profitable it will be. And what makes me decide whether I want to do a short-term rental or a long-term rental is my default is actually probably long-term rental, just because it’s a little bit less work upfront and a little bit less furnishing, all that kind of stuff. But with this property, I just saw that, Hey, it’s, it’s easily can be a short term rental. I’ll do it as a short term rental, basically extract that X additional dollar value while I can. And I can always scale back, right? I can always either rent it out as a furnished rental, sell the furniture to some staging company or someone else, and basically converted back into a traditional rental and still be okay. So that was kind of my thinking there
01:13:25
At which point that it become like a legit business that your, you could start scaling because now you told me that you’re, you’re spending only about two hours a week on, you know, managing your short-term rentals. And you’ve got all these systems in place. You, you have three units or five units, but three total Airbnbs. When, when did it start to click? Like this is a business that I can scale and put those systems into place.
01:13:50
Well, when I started implementing software and having computers take over my role, right, with, with the automatic pricing I pay, I can’t remember it’s maybe 20 bucks a month or something. And I mean, it pays for itself typically in one booking at one point, because will just charge way more than I would charge. So there’s that then there’s automatic messaging, which is super clutch. Every time someone books, they send a message 24 hours before checking, they send a message, you know, 12 hours before checkout, they send a reminder message to check out because you’d be surprised. I’m sure you’re not surprised is having people forget when their checkout time is and all of the things. So once I had that set up, I was like, man, there’s really nothing else for me to do, except answer the one-off questions. And the best part about this software that is automatic messaging, is that it can recognize frequently asked questions and you can set up like canned responses for them. So I do that. And every time I got a question I’ve never heard of before I go in and set up a canned response, and then it automatically responds to it. Now, occasionally the software doesn’t work a hundred percent of the time. So sometimes I have to go in and send a text message, but it’s, you know, maybe once a week that I’m actually texting someone from Airbnb.
01:14:56
So you’ve written the book on house hacking, and you’re really into this. You’re, you’re picking up more properties living in them. Why do you think that this is such a strong method for getting into real estate? And then also pairing this with, you know, Airbnb, which, you know, has such a higher return. Could you kind of talk about your thoughts on that
01:15:15
With how SAC is, is a great way to get into real estate? Because one it’s a low down payment, right? The whole, one of the biggest attractive features of house hacking is the fact that you only need three to 5% down, right? So you don’t need to save 20%. It’s three to 5%, which you can save in a year or two, if you don’t already have that saved up. And then I think at first you want to really get the most out of your dollar is kind of how I look at it. It’s like when you’re starting out, you don’t have a huge nest egg. So you need to get the highest possible return to build that nest egg as quickly as possible. So then you can then have that large nest egg, you can scale back at a lesser return, but still kind of make this amount of money so that you can do less work.
01:15:56
Right. So I thought, Hey, I want to get the most out of my dollar. I’m going to do the short term rental. And that was kind of how I did that. And yeah, I mean, you look at the return to the house hacking and you’re looking at, you know, I talked about in the book, you’re how much your net worth increases in relation to the down payment you have. I call it the net worth return on investment. And it’s always a hundred percent or more after the first year, because you put down in such a little down. And when you, after you factor in all the cashflow, you get the loan, pay-down the appreciation on the property and the tax benefits. You’re looking well over a hundred percent, most of the time.
01:16:30
Do you think that moving forward, lean in that, knowing what you know now with like short-term renting, would you do like traditional long-term how sacking, because that’s typically the, the mindset when people think of how sacking, like I get a duplex and then I’ll rent out one side of the duplex to a long-term renter, and then I break even, but now it’s like, you kind of realize, like I can actually make more off of short-term renting. Would do you like advise people just moving forward to go that route or, or what, what’s your thoughts on that?
01:16:57
And it works for you. If you don’t mind managing short term rental, ultimately you’ll be in the hospitality business for a little bit, and you have to be able to recognize that, you know, I do recommend that you send the messages yourself for the first few months, you do the cleaning yourself for the first few months, you kind of know your own processes and know you can actually explain to someone what they want to do or tell a computer what you want it to do. So, yeah, I mean, it depends, totally depends. I really like this strategy using Airbnb for families and people that don’t necessarily want to live behind a curtain or live in a room with five other roommates in the house, you can have a house that has a separate entrance basement like I do, or you can get an additional dwelling unit Outback, and you can kind of live in the house that you want to live in while also renting out some other area that you don’t use very much that may Airbnb. So that is always a strategy that I like to recommend for families.
01:17:49
And what has been the most challenging part of scaling this short-term rental business?
01:17:55
I guess maybe the hardest thing is just like getting the systems in place and going in and actually setting up the furniture and stuff. And I’m sure I could outsource that if I wanted to like, get a handyman to come in and set it up in a day, but I don’t know. I guess the inside of me is still a little bit cheap, so if I can do something, I usually do it, but yeah, I don’t know. Sorry, I’m not a good answer, I guess, but yeah, it just hasn’t, I haven’t had too many hiccups with it.
01:18:18
Okay. And, and what, what are you doing to be able to set such a units apart?
01:18:22
So I, have you ever heard of Brian Page? He does this like Airbnb, I think it was probably a page yet. So as he took his class and that actually, and he talks about really scaling, actually building a business, which I was going to do at one point and he helps me actually basically figure out like, how do you, how do you set up the listing, right? You want to have really good pictures, right. I pay the $150 for someone to come in and take professional pictures. I try to make the place really bright, lots of lights. I try to do some decorations, all that kind of stuff. I always make sure almost all my listings. I always say I’m a great responder because my automatic messaging basically messages on right away. And it’s so funny when they had to leave that, leave that review because it’s like, I literally never said a word you so it’s great. Yeah. But you know, again, the using the price labs, which is the, you know, the dynamic pricing that actually helps you set the price, right. So people are looking to get the right thing. Another tip that a lot of people use is, is you actually, for the first few months you maybe set the price a little bit lower. So then people will say great value and all of that stuff in your reviews. So people will think it’s a great value even after you’ve raised the price. So yeah, a bunch of things like that.
01:19:34
And w is there anything that you’re putting in your, in your units or, cause I imagine, you know, Denver, that there’s a lot of people that are short-term renting. What, what is it that maybe you’re doing that helps your units stay fully booked? Because you said that you’re, you’re occupied around on 95%. I mean, that’s, what’s Craig secret to get 95% occupancy. Are you just going really cheap or are you doing something that’s attracting these people?
02:20:00
I don’t think I’m doing anything too special. Again. I think the, I set the minimum for $40 a night for my one bedroom and I’ve got a $55 cleaning fee. So no matter what I’m getting like 90, $95 a night. And if they just say for one night and yeah, I mean, it’s just booked every time. Like I don’t really, I don’t, again, I’d rather than pictures, I’ve got really good description. I try to fill out everything I can on Airbnb to make it have a complete profile. I have a nice picture of me and Airbnb and I tell it in my personal profile and tell them all about me and my bio. I’ve got the Superhost badge. So that probably helps like overtime. You just kind of just continue to fill it out and be able to rank and list your listing. And you get a lot of bookings. Like I just, I feel like I’m booked every time I look on books. So I don’t, I can’t remember last vacancy I had, honestly.
02:20:47
So you went, you went into this with, with the house hacking mindset to, to own a home, to be able to short term rental. What are some of the big things that maybe people don’t realize with how sacking that, that you could shed some light on?
02:20:59
So one thing that people may or may not know is that it sounds like really sexy and stuff when you’re doing it, when you’re doing it, when you’re talking about it, and you can talk about your bank accounts, but not many people care about your bank accounts. And they’re just going to see that you’re living behind a curtain or living in a room or having like renting out a part of your house. So people are going to think you’re poor or you’re broke. And they’re gonna ask you why you’re doing this, or what’s the point and all this kind of stuff. And that, especially for the first year, you’ll feel that way. But then once you get your second and third one, you’ll start having tens of thousands of dollars more than everybody else. And you’ll start picking up properties every year and you start really accumulating wealth. And then people will start to realize what you’re doing and that, oh, it all makes sense, but you’re never going to be, you’re always going to be different, right. At first you’re like the poor guy. And then all of a sudden you become the rich guy. So you have to realize that you have to kind of get used to being different is one thing that, yeah, start again.
02:21:49
And, and for, for house hacking, does, you know, typically when I think of how sacking, I’m just thinking like duplexes, but are, are there different ways that you can have SAC?
02:21:59
So duplex is definitely like the traditional way. I say the way I’ve been doing it recently is the rent by the room house hack where you file like a five bed, two bath or five bed, three bath, you live in one bedroom and you rent out the other four bedrooms, especially that even on a long-term lease, right. You could do Airbnb or you could do long-term lease. But even now in that long-term lease, right. They’re still, the rent is covering your mortgage and more, and you’re living for free. So that works out great.
02:22:26
Now with, with Short Term renting, typically a lot of, a lot of people like to consolidate all their, all their units, put them into like a single home. How is it managing single rooms and getting those filled and turning those over?
02:22:40
Yeah. So I personally have not done the short term rental by the room, but I do know, I mean, I’ve, I’ve stayed in a few and I do know what it does feel like a little bit kind of like a hostel, but I’m sure it’s very profitable. You just have to charge a little bit less, right. Because you know, you got people, you don’t know any now that’s almost different than having just you and a homeowner because at least, you know, the homeowner is there all the time. She cares about her place and all that kind of stuff. So it’s a little bit different, but yeah, I stayed in both and usually there’s cool people all around. So if you don’t, if you don’t mind being social and meeting people, Airbnb is definitely a good way to go.
02:23:13
And is there anything that you’ve, you’ve done in your house rules that has maybe helped save you before? Like, I mean, you’ve been doing this for a couple of years now. W what, what, what is the big things that you’ve learned to implement in your systems that really helps save you, especially when you’re living in the home, because it’s a, you know, you’re dealing with, with guests and you’re, you’re, you’re, you’re getting a lot more intimate, not intimate with them, but you’re, you’re in a space with them. So what, what, what have you been able to do to help separate your personal life and your, your business?
02:23:45
I guess the biggest thing would probably be, like I say, in the, in the house rules and also in the message, the welcome message that, Hey, quiet hours are between 10:00 PM and 7:00 AM. So if you’re going to be noisy during that time, this is not the place for you. Yeah. Just try to really invite non-party people is kind of what I try to do and just make the laws real strict. A lot of people don’t care about the utilities and our cranked AC up in the summer, crank the heat up in the winter. And I say, you know, catch the heat over a certain amount. Like we’re going to have some problems, stuff like that. It’s kind of saved me, but yeah.
02:24:22
Do you ever have any issues with the guests that are in, in your units that, you know, maybe are causing issues or being too loud or inviting too many people? How do you deal with stuff like that?
02:24:33
Very rarely. Maybe once a year, I’ve dealt with that and I would just text him and say, Hey, we’ve got, we’re getting complaints. Can you guys please just be sure to quiet it down? And usually they’re very respectful and I say, oh, I’m so sorry. Like, we didn’t even realize or whatever, whatever BS comments it is. But usually I’m very respectful about it because they also want a good review. You know, they want to be able to do Airbnb again. So you have that against them. But yeah, I mean, it’s been, most people are very reasonable, especially if it’s just a few days. And that’s the best part about Airbnb is that like it’s a few days. So you just have to kind of wait it out a couple of days until they leave.
02:25:05
And have you, have you found a difference from like renting from like house hacking and dealing with guests versus having a, a unit that, or a separate home or separate unit that is dedicated to short-term renting?
02:25:19
Yeah. So when you have guests coming in and out versus tenants, guests are way more guests and way more respectful, right? Because they’re not comfortable with you yet. They still want to show you that respect. It’s three to five days. You’re not going to destroy someone’s house in three to five days. However, after you live with someone for a year and more, a longer term stay, then you’re saying you can come from really kind of become friendly. You have friends with them, they get more comfortable, they start living more of a mess. They start inviting people over. I can kind of escalate quickly. So if you do decide to do the long-term rental type thing, you would just have to make sure that you lay the rules. And when things start to kind of go south, you stop it quick.
02:25:55
And w w what would you do differently if you had to start from scratch?
02:26:01
I honestly would probably not buy the duplex on my first one. I’d probably try to get a single family and do that rent by the room, because I just think it does work a little bit better. But with that being said, this duplex is definitely gonna be my highest appreciating asset. And yeah, I think it’ll be it’ll, you know, it’ll be a good player either way.
02:26:21
W w why do you feel that a single family home is a, is a better move than going duplex?
02:26:26
Just cash is a little bit better for the, for one, two, it is cheaper. So it, cash flows better that way as well. And they’re a little bit more liquid, right? You’ve got more people looking for single family homes, duplexes. So I think my duplex might be slightly harder to sell than a typical single family home one.
02:26:44
So, so you’re, you’re, you’re looking at this more from the, from the exit strategy. If you’re, if you are going to be selling something right. A single family is going to be easier to sell then than a duplex. That’s right. Okay. And if you could give one piece of advice to someone who’s trying to get started into real estate and, and maybe getting into short-term rentals, what, what, what would that be?
02:27:06
It would be just to get started and learn before you get started. But once you’re done learning, don’t be afraid to get started because you get, you hit this threshold where you can only listen to so many podcasts and read so many blogs and read so many books that you’re actually not really learning anything anymore. And you just have to like learn through experience and the quicker you can kind of realize and get to that the better off you’ll be. Because once you can start, once you get your first house sack, that timer starts for when you can start getting your next house hack. Right. So I always like, you know, people always ask me if there’s any like negotiation tips, like tactics and stuff. I use my buy a house. And I say, no. Like, I usually just ask for asking price, because I’d rather just get into a house than save $10,000, which if this is a buy and hold, it’s like maybe what 20 bucks a month. It’s just not worth it. I’d rather get into a house, checking the rent sooner so I can go get the next property even sooner.
02:27:58
W why, why do you think that that, how, how sacking it is so appealing to everybody? And why, why do you think so many people they hesitate into getting into real estate in the first place?
02:28:09
Well, I think it’s really appealing for many reasons. Well, it eliminates your largest expense, which is likely rent or your mortgage too. It allows you to get into real estate. So it just is that great kind of transition into real estate three. It is a phenomenal way to build wealth with not a lot of money down, right. You don’t need a lot of money. And for that reason, you just get such high, high returns of a hundred percent or more after that first year. And it’s just, I mean, it’s absurd. Like, I, I just don’t know any other investment vehicle, even in real estate or outside of real estate, where you can consistently get a hundred percent plus return without throwing money at Bitcoin and something super risky, that’s essentially gambling. So,
02:28:51
And, and when you’re, when you’re analyzing a property, are you looking at, are you looking at it from a different perspective now that you have experience with short-term renting, or are you looking at this like a traditional, you know, a traditional real estate investment?
02:29:05
I kind of go into it, looking at it as if it would be a traditional real estate investment. I don’t like to assume that it will be short term rental forever, because with all the regulations and everything that’s going on with short term rentals, you have to be careful to make sure that it also works as a traditional rental, because I don’t think those are going anywhere. So you just have to be careful. And yeah. So I go into it thinking, okay, this is going to be traditional rental. I know that I can get a little more out of it from the Short Term. I will.
02:29:31
Are you analyzing how much it could potentially be making as a short-term rental as well when you’re going into these properties?
02:29:38
No, I actually, to be honest, I actually just calculate it as if it will be a long-term rental to make sure it’s a good with long-term rental cars, anything from the short term rental, it’s just gravy. Do I look at it and you know where I’m buying? It’s like Denver Metro. So I know that they will pretty much always be some demand for Airbnb. And at any point, if Airbnb shuts down and I know that I can shut down my Airbnb and I can turn it into a traditional rental and it will still work. So you have to make sure it works both ways. So you just, you don’t lose your shirt.
03:30:05
Now, you said education is a really big part in that people spend a lot of time, you know, even, even this podcast, I’m sure that there’s plenty of people that are just listening to this show without maybe taking the action and be in being a part of bigger pockets. You’re exposed to a lot of real estate, a lot of people that are all about this. What, what does maybe some of the big, I’m just curious, what are some of the big things that you’ve taken away working at bigger pockets and being in that environment,
03:30:27
It’s just being around everybody, right? Everyone’s doing deals, not everyone’s doing deals, but I’d say about a third of the company, which is significant, like 10 to 12 people are consistently buying real estate. And so when you see it, we constantly buying real estate and talking about real estate and learning about it. It’s just like, okay, why am I not doing this? Like everyone else is saying it kind of thing. So it definitely helps to be surrounded by people that are also doing it. So I’ve definitely had that going for me. And if you don’t have that going for you, and you’re stuck with a bunch of rats in the rat race, I highly recommend joining some real estate groups, find the bigger pockets meetup in your area and join that. If there’s not one, create one and you’ll be, you’ll be good to go.
03:31:08
And now are, are you because you’re coming into this and you have this, you know, this house hacking short term rental kind of perspective is what what’s the, you know, being in this space where there are so many people that are doing real estate, what, what, what is the general kind of thought and the general feeling towards short-term renting at this time within the bigger pockets community,
03:31:30
We have a few people here that do short term rental. I can think of you count me for the top of my head, but are doing short term rental of BiggerPockets. And they love it. I mean, one, one guy has got a house up in the mountains and that does magnificently. Another woman here rents out her studio basement, and she pretty much covers her mortgage with that. This other guy has just bought a house. It was just converting his to an Airbnb. I’m just bought, I’m doing Airbnb and I’m converting mine’s interview me. So yeah, I mean the general sense consensus says it works. It’s really profitable, but if we did have to switch it, we could still switch it and still be profitable and still be able to hold on.
03:32:09
So it sounds, you know, from what you’re saying is that the big thing is that you can’t go into the steel with the sole intent to short term rental. You have to go in there with a different, you know, a more traditional, more conservative mindset. That’s
03:32:22
Right. That’s
03:32:23
Right. And, you know, you’re, you’re, you’re with a lot of, a lot of people that are asking a lot of good questions, but what would be a question that, that maybe you would ask another professional host, maybe someone that is at a similar level, or maybe that next level from where you’re trying to be, if you could ask anything, what would that be?
03:32:42
Probably, how do you find and manage good contractors, which is very hard, but someone who has systems and stuff probably does that. I don’t think there’s like a right answer to do it. I think it’s just a matter of getting as many contractors in your funnel and, and just assessing them that way and just trial and error kinds kind of stuff and recommendations. But yeah, I just had a lot of problems with contractors in the past,
03:33:07
And that’s what the, the, the, the rehab rehab work that you’re doing. Do you, do you think that there is maybe just like an ease? Like what if you, if you could kind of give, like, what’s the most easiest way for someone to get into, because lots of people maybe that are getting into this and they think like, oh, I want to find a property. I want to rehab it. I’m going to own it. And I’m going to Short Term rent it. If you could give, like, do you have an idea in your mind of like the easiest way of getting into real estate and being profitable and turning it into a scalable business without like the most amount of friction?
03:33:40
Yeah. I think if you want, like the least amount of work, you know, with, with less work likely comes less money. So the first deal I did was that duplex that needed absolutely no work. It was just a complete move in ready, and I was still making good money off of it. So, yeah, just find a move in ready place, especially if you want to do the, if you’re into the short term rental strategy, find a place that already has the basement done. Right. Find a place that already has it. You’ll pay a little bit more for it, but you can just move in and get started right away. And I’d almost recommend that for the first one, because there’s just such a learning curve for that first one that, you know, my first one was I did, I’ve done incrementally, larger rehabs on each property so far. So
03:34:19
Maybe baby steps. Yeah, exactly. And do you, do you have a, besides, besides your book, Craig, do you have a favorite book that you can recommend that has really kind of maybe changed your business or your life?
03:34:32
I haven’t booked. This is always such a tough question. I feel like I always want to give a different one every time I answer it, but you know, there’s always the ones that you hear, right? Rich dad, poor dad kind of changed my mindset. The four hour workweek by Tim Ferris is the one that actually got me thinking about passive income, Brandon Turner’s rental property book, the book on rental property investing. I read that before I ever came to BiggerPockets, it was the first real estate book I ever read. And that got me hooked into real estate. And I just dove down the dove down the rabbit hole from there.
03:35:03
Awesome. Yeah. And we’ll, we’ll include those, those book links in the description as well. And just to, just to kind of wrap this up, what is a new question that I’m going to start asking is what is short-term renting allowed you to do in your life? Like how, how is Short Term renting and how sacking really kind of changed your life and then moving forward, where do you, where do you see that?
03:35:22
So it’s allowed me to just really have a way more comfortable financial position, right? Like I’ve done a whole lot of traveling in the past year. I went to Greece, I’ve been to Southeast Asia, I’ve traveled all around the U S just, just, just in the past year. And so it’s allowed me to do that, which the things I love to do, it’s also given me a of comfort around, okay. If my job is in jeopardy, I’m not super scared. Right. I don’t have to do things that I hate to do. I can last for a very long time without a job, basically forever, because now I think I’m actually technically financially independent now. So yeah, it just allows you to have way more confidence and way more ability to kind of take those chances in life.
03:36:00
Do you think that you would have been able to get to where you are as quickly had you not been than short-term renting?
03:36:06
Shorttermsage.com definitely helped out. Right. And I even did the, we didn’t talk about this in the show at all yet, but I also did the whole Airbnb arbitrage thing where I rented my rent and my buddy’s place from him and put it on Airbnb and kept the difference. And that alone, we only did that for a year because we ended up getting caught by the HOA and just shut it down before we had any ramifications, but we did it for a year and I was able to pay like 10, $15,000 off my student loans. And I had, I had $85,000 of student loans, like 18 months ago. And they were paid off entirely. And this April, 2019. So like six months before this recording, I paid them all off. So yeah, I mean, it felt good.
03:36:45
That was all because of, of using rental arbitrage,
03:36:49
Not all the, not the 15,000 was rental arbitrage, but that was a huge, you know, that’s more than 10% of that 90,000 or the 85,000 that I had. So that played a huge factor that along with the, you know, I was putting some of the money from my rentals in, depended on my student loans, all my other savings and some side house and stuff. I did all the also, so yeah, it just, it all, it all helped it’ll help.
03:37:15
Wow. That’s awesome. That’s awesome. And moving forward in the future, you know, with, with your experience being, you know, in, in real estate being part of the, the community, where do you see moving forward and how you’re going to be incorporating short-term rentals?
03:37:29
I want to continue doing what I’m doing and picking up properties as they go, and basically analyzing them as long-term rentals and seeing if I can do a short term rental, I likely will at least at first, just because you get that high return at first and yeah. Just kind of go from there. Awesome.
03:37:47
Well, thanks. Thanks so much, Greg. Very, very short, very action packed in this episode. Lots of, lots of stuff that we did cover, but you, you just got the answers right there. So I thank you so much for taking the time to come on the show. And of course I’m going to include all the, all the books and everything in the description. The lo Greg wrote the book on how sacking. So if you want to get into house sacking, definitely check it out a really good, really good read. Good. Listen. You can get it on audio as well. I, I, I’m going to thoroughly enjoy that once the audio version comes out, listening to that. Cause I, I don’t, I don’t sit down to read books anymore. I just listen to everything, but so, so much good stuff. What, what, what would you say would be the kind of big, big things that for a person that it would be purchasing this book? W what would they be able to take away from, from, from this,
03:38:31
This book has everything I know about how sackings and like 250 pages or so you would get the whole, the whole gamut, right? It’s how how’s that can, can help you achieve financial independence. It’ll go from, how do you find a property? How do you analyze the property? How do you list it as a short term rental? How do you list it as a long-term rental? How do you manage tenants? If you are doing a long-term rental, it’s got case studies of like 13 or 14 different people at the end of each chapter that tell you basically to show, tell you the story of what they did to house hack and why their house hacking. And it just shows you that you can do it from so many different angles. And so many have so many different strategies, and it works out almost in any case, you just have to kind of start taking action and doing it.
03:39:11
Yeah. And, and, and, and this is, this is a legit look, guys, this is coming published through BiggerPockets. And that, that’s kind of one of the benefits that, that, I guess you kind of have Craig is you’re part of the community you’re working in it and your house back in. And you’re like, Hey, you know, let me write the book on this and they just let you go.
03:39:29
Yeah. I mean, it was, I was, it was wasn’t that easy, but yeah, I mean, I had to, you know, he had to pitch it. I had to write it, outline I had to do all the, they don’t treat me any differently than they would any other author, but I guess they may take it. I guess I take it easier, but they don’t like review. If someone else came in with a better offer, they wouldn’t take me take mine because that’s mine. It’s because
03:39:53
You’re providing, you’re providing the quality and that’s in the work. So that’s awesome. Well, yeah. Look looking forward to listening to that book, when that does come out, that’s coming out by the time that this episode is out, it should already be out. So that, that is so cool. So thank you so much, Craig again, and until next time, host nation, keep on hosting Hopi hosts benefit 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.
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