Kyle Stanley:                      00:00                    You know I was getting at that point $35 a night for a room, so it was like, let’s just throw out an astronomical number. I’ll be crazy about this. How about $119 a night for the room and Julian, it booked out all three nights that I was gone plus cleaning fees. I made 450 bucks in three days and I was like, what just happened?

Julian Sage:                       00:17                    This is episode number 47 on the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed? Go to cohostit.com 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 because 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.

Julian Sage:                       00:57                    Hey what is going on host nation. I am super excited to be back again with you this week. There is just so much stuff happening right now. One of the big things I am super excited to share is that the empire builders mastermind group, the BNB empire builders is going to be opening back up again. I know a lot of you guys have been applying and are registering to join the group and we do have some more information about that that will be coming out very soon, but we are going to be opening that back up towards the beginning of March. One of the other things that going to be coming in March is that we are going to be opening up our program. So for those of you that are interested in learning about the vacation rental machine formula and really just having everything given to you, Jon and I have been working really, really hard and trying to provide this really next level content that we’ve been talking about for awhile.

Julian Sage:                       01:42                    We’re going to be including everything in this program such as like all of our contracts, memorandum of understanding, operating agreements, service tiers, everything that we use, checklists, all of this stuff as well as some custom built things. So like we had a calculator that Jon and I, we went in and we tried finding what’s the best way that we can have people to be able to come up with their rental arbitrage numbers, their cohost numbers and what are they going to be, the numbers that your clients are going to be seeing. So we have this really unique calculator that we developed and when I say we developed, I mean we took our ideas and then we worked with a developer. But there’s just so much cool stuff. We also have a really cool thing that we’re going to be rolling out such as like a certification program.

Julian Sage:                       02:19                    So if you’re interested in becoming a certified vacation rental property manager, that is maybe the apart of the program. So man, I’m just super pumped for that and I just kind of wanted to share it like my own personal success story. So you guys have been following for a while now and you know that I started, you know, nearly just given up on entrepreneurship. I just wanted to find a way to get out of the rat race and to be able to have more of that time freedom. You know, when my dad got cancer and I was just trying to find a way to be able to reclaim my time back. Airbnb, I saw was the way out and nearly after a year of being in this and stumbling along the way, and I just found my calling, which was being able to talk with you all and be able to share these other success stories and to be able to partner with and work with Jon.

Julian Sage:                       03:02                    I really found my place, but still I wasn’t seeing the types of returns that I was looking for and I wasn’t scaling the business the same way that I thought. You know, when I came into this business I thought I was going to have a hundred properties by now, but really to have like my own property and a cohost client, I really felt like I was a fake. Like I talk about this stuff, I’m always, you know, every day I wake up and I’m just excited to keep on working on this business, but I really never saw that exponential growth or even some of the really great returns. Like, like I’ve been able to see some really good numbers off of the properties that I do have, but nothing that was like really, really life changing. But since I’ve partnered with Jon and we created this property management company, cohostit, and then we started offering this thing, which we call the turnkey rental arbitrage program.

Julian Sage:                       03:42                    This has completely changed. Come March, we’re going to be picking up an additional 10 properties and these are 10 properties that Jon and I are going to be managing together. So going from two properties to 12 just like that, you know, it’s, it is life changing as far as the type of returns that we’re going to be able to get and that our investors are going to be able to get. But I’m just more excited for the potential because now we really are striving to become something big. We, we believe that we have something really, really good, but even more than that is just the idea of creating something even bigger than ourselves to be able to create a brand and a company that is just really kind of like our baby. To be able to provide that next level service that we teach people how to do.

Julian Sage:                       04:20                    There really is no other feeling like this. I wake up everyday. Just super excited to be able to talk with you all and share this so I’m excited to share my success story. Maybe I’ll do another episode where we just talk about the business and talk about that, but I like talking with people so much and one of the people that I really had a pleasure speaking with this week was Kyle Stanley. Kyle is a real estate investor and a full-time Airbnb host in the Fresno, California area. Five years ago, he started renting out rooms in his house which covered his mortgage and it was in May of 2019 when he went all in and rented out all of his houses. Kyle shares his “mother-in-law” hack and how that’s allowed him to be able to grow as an investor. He also talks about how he’s been able to let go of complete control of the business so that he can focus on scaling.

Julian Sage:                       05:04                    This is really good if you are in that position. If you’re planning to scale this business, it’d be like my show notes for this episode. Go to shorttermsage.com/STR47 or if you’d like my show notes sent directly to your inbox every week, then go to shorttermsage.com/shownotes. With all that being said, onto this week’s conversation,.Hey, welcome back host nation to another episode of short term rental success stories. In this episode, I have these special special honor of speaking with Kyle Stanley. Kyle, 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.

Kyle Stanley:                      05:33                    Hey, what’s going on, Julian? Thanks for having me on the show. Yeah. Coming from you from Fresno, California, which the first thing everyone says is, why are you doing short term rentals in Fresno, California? No one wants to be here. But I honestly, I’ve always had an entrepreneurial spirit. I’ve always hated my biggest expense, which is my living expense and renting. And so when I first heard about Airbnb from a friend I all in and that’s what got me into the door in 2015 and here I am today now and going full time with a man.

Julian Sage:                       06:03                    And just to give a little pre context, you have your own podcast, the fearless flipping podcast. Is that just about flipping homes? What is that about?

Kyle Stanley:                      06:15                    Yeah, so I started that back in July of this last year of 2019 and I had gotten into real estate investing back in January of 2019 and I’ve always been, I’m a fan of the mic, a fan of video. I was a sports anchor before I ever went into any other career. And so I knew whatever I was passionate about, I wanted to share with people. I wanted to be vocal about what I’m doing. And so when I started this, I was like, Oh yeah, I’m going to talk about flipping houses and interview experts. And then I found this whole Airbnb thing to be really like the main thing that I was passionate about. But I was in the beginning kind of hiding it cause I was worried that, Oh man, if I tell people about it, it’s going to saturate the market. And like this thing that I think is this huge secret is going to be led out.

Kyle Stanley:                      07:02                    I’m going to have all this competition. Well friend of mine started talking about an abundance mindset and how, you know, he was worried about the same things sharing, but then when he started to share everything came back to him tenfold and was like the universe. God was just like, you know, you are going to be blessed because you are sharing all this information. And so I just trusted it, adopted that mindset, started throwing it out on my podcast, started telling people throughout, you know, the the area that I’m in, what I’m doing. And he was right. It’s come back to me tenfold. And honestly I had no idea how many people would be wanting to learn about this Airbnb thing. I thought I was the crazy one. It turns out that everyone else wants to be able to do something like this. So it’s been a really great platform for me to share. And yeah, like you said, podcasts and YouTube channel people can find it on fuels flipping.com or just search and Google feels slipping.

Julian Sage:                       07:55                    Awesome. Well thank thanks so much for coming on the show and, and reaching out. Kyle, I know that you reached out cause you, you know, you have this abundance mindset and this is what the show is all about. I love sharing the success stories of all these hosts and all these people, all these different backgrounds. Everybody has such an interesting story and that’s what I like highlighting. So can you tell a little bit about your story when you first got started in real estate investing and then how you, you know, kind of discovered a short term rentals and Airbnb and how this is kinda changed your, your business and your life.

Kyle Stanley:                      08:25                    Yeah, I guess you could say the official start of real estate investing was January 6th, 2019 but the unofficial start was February of 2015 when I opened up my first home to Airbnb. I, you know, we call it house hacking today. Essentially, you know, a room out of your house being used for either roommate or short term rental like Airbnb. And so a friend of mine had told me I had just bought a house in 2014 I was worried about paying the mortgage. You know, there’s all these things they don’t tell you about when you are a new homeowner with the, you know, inspection, the appraisal, all these points that you’re going to pay on the loan. And suddenly there was like three to $4,000 that I no longer had and wasn’t expecting to spend. And with my mindset, I wanted to earn that back as soon as possible. So I was just kind of venting to a friend about that. And he was like, man, you gotta list your room on Airbnb. And I was like, what is Airbnb? You know, 2014, 2015 no one really knew what Airbnb was. And so aye, he told me straight up, these were the exact words he used. You basically just rent a room out to a complete stranger and you just make sure the beds sheets are made and maybe even make them breakfast. And I was like, dude, that sounds sketchy.

Kyle Stanley:                      09:43                    And he was like, well, you can call it sketchy, but I’ve done this with my place over in Vegas. And in the last five months I’ve made seven grand just renting out one room. I was like, all right, well now you sold me. So I went and tried it and man, I was so happy. I did I to this day when owning a house since 2015 I have not paid a single dollar on my mortgage. And that’s a combination of roommates and Airbnb. And then it was like this, this thing happened in 2018 where I was like, man, like I wonder if people were running out entire places. And by the way, that started in Scottsdale, Arizona. But then because of health reasons with my dad, I moved back to Fresno, California in 2016 and I was like, well, no one’s going to want to do Airbnb and Fresno, I was totally wrong.

Kyle Stanley:                      10:27                    It’s actually more popular here in Fresno than is in Scottsdale, Arizona. Believe it or not, if you look it up on air DNA, Scottsdale is like a C plus B minus, whereas Fresno is like a B plus a minus. It’s crazy. But anyways, so I started running out a room in Fresno and then one day in 2018 I just got this itch where I was like, man, I’m out of town all the time on the weekends. Maybe if I lock some of my things away, maybe I can do the entire house. We’ll see what happens. You know, I was getting at that point $35 a night for a room. So it was like, let’s just throw out an astronomical number. I’ll be crazy about this. How about $119 a night for the room? And Julian had booked out all three nights that I was gone plus cleaning fees.

Kyle Stanley:                      11:06                    I made 450 bucks in three days. And I was like, what just happened? So that’s when the itch happened for me to start, you know, looking in, educating myself, I started listening to podcasts. Like this one, I started to hear about this whole rental arbitrage thing and not having to own a home. And that’s when the light bulbs really clicked. So fast forward to may of 2019 I went all in and I’ll share this story cause I think it’s a good learning experience for people. And I think we’ve gotten to the point today where people know that this is a bad idea. But when I was alone and trying to figure this out on my own and I bought a course and I spent a bunch of money on a course and then the course taught me how to do it the right way and then do it the wrong way, which you know, if you’re listening right now and you’re like, what’s the wrong way?

Kyle Stanley:                      11:53                    Well, the wrong way is to go to an apartment complex or a property manager or a landlord and tell him that you’re going to live there, but then you don’t live there. So I did it the wrong way because that’s the way that I learned and I paid for it. But in doing it the wrong way, I also saw that this thing really worked. And so from may of 2019 until now today, so basically six months, I’ve added one property per month. And in Fresno here, that means at least $1,200 of cashflow per month on average. So you can do the numbers there. I’ve basically hit financial freedom. That’s after expenses through, you know, six properties in Fresno, which is a wonderful thing.

Julian Sage:                       12:32                    Wow. That, that, that is so powerful. Six, six properties, financial freedom. I mean, and this is all because of short term rentals because you do have a background, you started investing in flipping homes. Yeah. Did you kind of transition from the flipping homes to the Airbnb more strictly?

Kyle Stanley:                      12:49                    Yeah. So in the beginning I wanted to really master flipping homes and, and I have and I still am doing that. But I kind of just saw this whole passive income beast of Airbnb and said, man, if I can put my time into this and create, I’m a systems person, I love systems. I love having things either done for me because I’m creating the right systems. I brought on the right teammates, I’m treating people the right way. And so with Airbnb, you know, I’ve got managers, I’ve got VAs, I’ve got all these things that help me to be able to not have to be so hands on with it. I tell people all the time, the only time I’m really touching Airbnb is when I’m either accepting or declining to guests or having to file like a claim through the host guarantee. That’s the only time I’m really doing anything and that allows me to go find more properties for Airbnb.

Kyle Stanley:                      13:44                    But then on the real estate investing side, I’ve created these relationships and not to like throw out a bunch of terms cause I know most of your listeners are going to be Airbnb, not necessarily real estate investing, but I created a great relationships with wholesalers and real estate that when they find a deal they bring it to me. So I’ve created these two different sides of the business where a lot of things and systems are being done for me. So I can focus on my podcast, my YouTube channel, my course my, my masterclass, all these things that allow me to spread the word a little bit more while having some more passive streams of income. And it’s a beautiful thing.

Julian Sage:                       14:20                    What does it look like from a from a flipper to short term renting? Is, is your strategy when you’re looking for homes now for the sole intent of being able to flip them and turn them into a short term rentals because out of your, out of the, the, your portfolio, you have three that you own to arbitrage and then two that your cohost thing.

Kyle Stanley:                      14:41                    Yup. So basically what I look for is multiple exit strategies. So I evaluate everything as a flip and as long as my numbers are there, like a, Hey, I’m gonna make X amount of dollars. Cool. It’s good to flip. If I’m not going to make thoseX amount of dollars and it’s more risky than the plan B needs to be, that this will be able to turn into a short term rental or even a longterm rental. So,uI just think the idea there, and I evaluate my Airbnb deals that way too. Like whether I’m arbitraging or owning, I want to know, Hey, what if worst case scenario happens? What if a, it gets saturated? What if there are sudden regulations and I got to turn this into a traveling nurse placed at a corporate rental or just a regular longterm rental, either furnished or not furnished. Is the deal still going to work that way? So in my ideal world, yeah, I keep finding flips where I can go ahead and flip it, refinance, get all my money back, essentially own a place for free and be able to turn it into an Airbnb. Ubut most of the time I like to get that 30 to $35,000 check on the flip. Uand just keep on focusing on doing more arbitrage or doing partnership deals with other people.

Julian Sage:                       15:55                    One of the things that, that when you’re talking about the arbitrage space and trying to scale that exponentially is, you know, when you’re purchasing a property, you have to put a lot of money down. There’s also a lot of risk with, with flipping a place. You have to find the deal. You have to be able to, you know, undergo that, that that time period, you know, you could be looking at, you know, tens of thousands of dollars and months which you know, is potentially, you know, which is opportunity costs. Have you found, you know, being a flipper that the opportunity costs is, is not maybe that big of an issue when you are flipping compared to let’s say rental arbitrage where it’s that low startup costs, you can get started like you know right away,

Kyle Stanley:                      16:35                    Right? Mmm. Really the answer to that is creative financing. Mmm. Especially with having a podcast and YouTube channel, people are asking, how can I be a part of your deals? So I’ve created programs where if someone wants to be a passive part of the deal, wants to invest, and I find the right deal where there’s enough meat on the bones that things going to cashflow for me at least 2020 $500 a month for Airbnb, you know, and I’ve got maybe a thousand dollars to be able to give up of that every month. You know, someone might come in and say, Hey, I’ll help fund your rehab or I’ll help fund your conventional purchase. Sometimes even I find a place that I’m like, man, this place is awesome. It’s, but the down payments can be 40 to $60,000 with repairs and furnishing. So I got to bring a partner in.

Kyle Stanley:                      17:24                    I’ve got a, you know, an idea that it’s going to cashflow 2020 $500. If I can give up 1000 bucks of that, that’s a great return for the creative or for the a the lender and allows me to be able to be in a place for free essentially. And now I get to get that remaining, which is a thousand to $1,500 a month. So I like creative financing. I like being able to bring other people in on the deals on the ownership side. And then of course on the arbitrage side, my whole thing is if it’s a one bedroom, one bath, I’m going to finance that myself. If it’s bigger than that, I’m going to bring in a financing partner and give them a great return.

Julian Sage:                       17:59                    So, so when you are planning on purchasing properties you’re, you’re, you’re not investing your own capital into these because you’re taking the money that you have into arbitrage units.

Kyle Stanley:                      18:11                    Yeah, I want to stay as liquid as possible. And real estate investing, that’s the biggest thing that I was coached on early on. You know, you hear a lot of things out there about, you know, getting into real estate investing with no money. And there are some creative ways. I mentioned the term wholesaler early on. That is a great way to have, I wouldn’t call it no money because you’ve got to spend money on marketing costs and buying these lists to target for people. But when it comes to flipping, Mmm. You know, let, just for example, you know, I’ve got two projects going on at the end of December and they ended up costing both of them about five to $10,000 more for the rehab than expected. While my lenders are not expecting to pay for that. So where does that money come from? Comes from me.

Kyle Stanley:                      19:00                    So I’m gonna always be that person that fronts the money, if there’s any issues so that I can keep a great relationship with my lenders and not ask them for more money. And that way the next time that they’re coming into a deal there, they know, Hey, $40,000 means $40,000. It doesn’t mean $40,000 with maybe another 10 to 20. So I stay liquid for that reason. And then that again, even the arbitrage deals, I don’t like putting my own money into it unless it’s a one bedroom, one bath and I know I’m going to be in under $5,000.

Julian Sage:                       19:32                    With all your deals and even because you’re even taking on some co-hosts, clients yourself now, out of all these different types of models, which one do you think is maybe the best for people that are just starting off? Cause when I think of flipping, I mean that that’s, it can be pretty intimidating. You know, you’re finding a place, you’re having to put, you know, a lot of money or your own money down. You know, you said you have to come out of pocket a few thousand dollars. Is the return on that as great? Is it worth it for new people that are just starting off or is it arbitrage or co-hosts? Then what’s, what’s your perspective

Kyle Stanley:                      20:04                    To give a a black and white answer? Cause I hate giving vague answers. I’m gonna I’m going to really say that arbitrage is the best way to start off because you’re the only person that’s going to lose if you lose. So for, I would start with arbitrage and I would say if you don’t have money, go to someone who has an excess of money that’s going to be able to help you. And maybe it’s a family member who knows that like, Hey, you are a trustworthy person. You’re going to fall through on this. And at the end of the day, if I lose, you know, a couple thousand dollars, at least I tried to help you. Which shouldn’t happen as long as you’re doing this the right way. I haven’t lost any money in Airbnb. I don’t know many people that have. So I like it that way though because I want to, I always teach master automated scale.

Kyle Stanley:                      20:56                    My acronym is mass. So you’ve got to master something and if you are pressured with other people invested in this to master this, you start putting unnecessary pressure, you start getting fearful and you start looking for ways to either get out of the deal or if you fail, you know you’ve failed multiple people. So I got in to arbitrage for the entire places right away cause I said, okay, I’ve already got furniture. If I get an apartment and I, and it doesn’t work, you know, all I gotta do is break the lease and maybe I’m out a couple of grand. And that was a very low risk option for me. Then I built up the confidence to say, okay, now I know this works. Now I know if I go purchase a place that this is going to work. So that bigger capital upfront is less intimidating.

Kyle Stanley:                      21:45                    And then as I built up my knowledge and learn how to automate or how to systematize things, and now I’m ready to scale. All these people view me as the expert and they’re bringing their properties to me. And now, you know, they’re very confident in the cohost you model. However, I will put a little twist on that. Get with a mentor, get with someone that knows what they’re doing. Go to someone who already has a property. Hey, I’ve never done this before. But what I can tell you is that I’m being mentored by Julian or by Kyle or whoever it is, and they’ve been doing this for, you know, three plus years, five plus years, and they’re going to help me step by step until I’ve mastered this. And here’s, you know, all the benefits of doing this and here’s all the, you know, risks that you take. And I just, I like to be as transparent as possible with people so that they know what they’re getting into. And I, I never make promises that I can’t keep.

Julian Sage:                       22:38                    So, so your strategy you’d say for people that are just starting off into real estate would be, you know, go the arbitrage model because it’s, you’re assuming the risk of yourself. Once you’ve proven that you can start taking on maybe some investors or some partners for co-hosting their properties. And then at, at which point would you say it’s a good, maybe a good idea. Let’s say someone does say, I want to purchase a property. Maybe they don’t want to purchase a turnkey property. Maybe they, you know, they want us, they want to get into flipping a, when do you think is a good point for people that get into flipping

Kyle Stanley:                      23:07                    Anytime? Mmm. All right. I don’t think you have to wait for that. You know, the only, the only thing that I would say it, I’ll, I’ll switch your terminology there and I’ll just say real estate investing because flipping in itself, you know, market cycles right now, I think we’re in a market cycle for me that this is the last year I’ll be flipping for a while because I just see as being at the top. I see these deals getting thinner and thinner and I see the opportunity to be able to make a great profit on a flip being less likely in 2021. So for me, I’m still flipping right now, but I’m educating myself on other exit strategies and how I can leverage myself to, for education, to learn how to start developing relationships, to have a similar business model or deals are coming to me, but at the same time, like I’m storing away cash.

Kyle Stanley:                      23:59                    I’m not the person that’s going to be flashing the car or the, the Rolex or any of that kind of stuff because I’m always like, Hey, how, how can I make sure that if that does happen, if suddenly this 10 to $20,000 that’s coming in every month is now gone that I’m okay. And you know, that’s a very real thing when you’re in real estate. How, how many people have you heard in 2008 lost their shirts is because they were over leveraged they were refinancing their houses and buying stupid stuff. They were refinancing to put more money into the house or to buy the car or to go on the vacation. And I believe in, you know, those things in moderation. And so my short answer there, Julian, is that get into real estate investing now, but don’t have this mindset of Oh it’s gotta be flipping, have the mindset of learn the market cycles. We actually just had a guy on the show who I’m going to be airing in a couple of weeks. His name’s Lee Carney. He’s a big name in real estate and he talks about how, you know, he definitely sees a market cycle at the top right now and what to be doing to prepare for that and what types of strategies you can use that will protect you from losing your shirt and real estate.

Julian Sage:                       25:06                    I think you brought up a good point that I want to touch on with market cycles where, you know, you said flipping, it’s, it’s one aspect of real estate investing. You know, we have this real estate investing spectrum. Flipping is, is one part of that cycle. Where do you see rental arbitrage Airbnb co-hosting in this whole market cycle?

Kyle Stanley:                      25:24                    Yeah. You know, I’ve thought a lot about that. And again, that’s why I do the deals to make sure that a longterm renter is going to work with that as well. With an arbitrage deal, you know, you’re not really looking for a longterm renter. If for some reason you’re in a 12 month lease, you know, and something happens with Airbnb, sure you can put a longterm renter in there and make another a hundred or $200 and make sure that, you know, your lease isn’t broken or whatever. But to me, you gotta look at your, your market and I love my market of Fresno because we’re not a destination. Get away. What’s the number one thing that people stopped doing when a recession hits? When they’re short on money? You have to stay home. Yeah. They stopped traveling, they stopped doing the vacations, they stopped doing the luxury types of things.

Kyle Stanley:                      26:15                    But in Fresno, and I tell people this all the time, people come to Fresno because they have to, not because they want to. And so that’s a very positive position for me to be in because I know that when a recession hits, the traveling nurses still going to come to Fresno. The, the employee is still going to be sent out to Fresno. The granddaughter or the daughter who has her, you know, two kids and a husband now is still going to want to visit mom or grandma. And those are nine 80 to 90% of my business. Then every once in a while we have that person saying, Hey, I’m coming in from out of town and I want to go to Yosemite and the Sequoia national park or LA and San Francisco and Fresno is a good middle ground. I’ll probably lose a majority of those people during a market cycle or a recession.

Kyle Stanley:                      27:07                    But luckily for me, I do my deals to hit my break even point right around the 50 or 60% occupied rate. So if I lose 10 to 20% of my business, I still have a gap there where I’m going to be profiting. So with that being said, I just say, look at your market. And, you know, I do think that people who are in the you know, Southern California markets, the the Vegas markets, I know Vegas has regulations now, but you know, all these places that are going to be hit when there’s some sort of recession I think are going to need to make sure that their margins are really good. If you’re getting in to a place that’s $2,000 a rent and you’re going to gross $4,000, you’re going to be in trouble when a recession hits. You’re getting to a place that costs $2,000, but you’re grossing $8,000 a year. Okay. so that, that’s my theory on it. I’m, I’m not 100% sure on it, but I definitely have taken a lot of time to think about it.

Julian Sage:                       28:03                    No, I th I think that’s a really good you know, a good way of analyzing and that that just shot shot some ideas in my head about, you know, when you, maybe people should be looking at markets not just from the perspective from a vacation traveler but for, you know, let’s say in DC lots of people traveled to DC because like you said, they have to come to DC, they have to work by hospitals. Nurses have to travel by college towns. People have to go see their kids graduate from college. But there’s might be places like let’s say, you know Cancoon or you know, maybe other areas where it’s like, it’s more for the destination, for the, for the travel experience. Those are probably going to be the places that are going to get hit harder. But one other thing that you brought up that I think is really important was you said people still do travel. People still are going to be going to Yosemite and traveling. It’s just, it’ll be less. So what are you doing to be able to set your units apart so that you can try to still attract those types of clients?

Kyle Stanley:                      28:58                    Yeah, well the first thing I’m doing, and I’m actually before I go into this, I do have a question for you. Have you tried furnish finders? Yup. How did it go for you?

Julian Sage:                       29:08                    It’s hit or miss. You know, just because of my location, but it really just depends on how close you are to the, to the hospitals.

Kyle Stanley:                      29:15                    Yeah. So I’m, I’m in preparation mode. One of my units I’ve put on furnish finders and you know, I’d spent on for like four days, I’ve gotten three hits, which is fine. I do like knowing that that one’s a four bedroom. So if I do have nurses I can do $800 to $1,000 per room and be making close to the same as what I’m making with Airbnb, just with a little bit more management. And you know, you start getting personalities in the home sometimes. That kind of scares me a little too. But so I’m, I’m trying to prepare right now with backups of traveling nurses. I would like to eventually create relationships with out of town businesses. So as I continue to get these employees, I’m gonna start asking them, what business do you work for? I want to reach out that way they have a streamlined to me in case.

Kyle Stanley:                      30:02                    I actually have a friend that’s doing that exact thing in Georgia. She was on my show and she’s transitioned completely to corporate rentals. Not because Airbnb is not working, but just because she finds it to be a little bit more stable for the longterm. So, which I understand, again, it’s all speculation, right? So we don’t know if Airbnb is going to be around for another year or another a hundred years. But competition-wise I am really excited about this one that’s opening up on February 1st and it’s going to be a national park themed Airbnb. So again, we get so many people coming to Fresno that are looking to have, you know, a middle grounds to travel to these national parks, or they’re coming to Fresno and they’re like, Ugh, you know, I gotta get a place in Fresno. It’s gonna be boring, you know? Okay, cool.

Kyle Stanley:                      30:50                    This one’s luxury. Okay, cool. This one looks nice. Well, Oh wow. Look at this one. It’s got like this whole national park. I had told my interior designer, I’m like, I literally want you to make this place to feel like a national park came in here and just vomited in the apartment that we’ve got so many rustic, like very cool cabin type of features that are going to be in there. And we’re developing relationships with other Airbnb experience hosts who are doing hikes of those places. We’re trying to create relationships with restaurants in town that have Sequoia or Yosemite in the name so that we can offer more value to our guests. And you know, as that continues to be something that I think about, then I started thinking about, well, with my other Airbnbs, you know, maybe I can develop other relationships with businesses in town where I can offer special discounts or get them in the door with a great restaurant at a great price and it’s added value to my, to my guests. So those are the things that I’m looking at right now. I haven’t mastered that yet, but it’s definitely something that is running through my mind a lot.

Julian Sage:                       31:55                    No, I think, I think that’s really, really a smart and very cautious of you, Kyle. You’re, you spin off just a bunch of different ways that you are trying to diversify for yourself. You’re trying to get more of those corporate clients, build up your email list even find back doors into those businesses so that you can create those relationships. So that way when the business is traveling to that area, you can, you’d be like, Hey, I’m the guy that, that, you know, your clients have already stayed with. You know, you can come and keep on feeding people to me. I like what you said about the themed place having a place that is, you know, it’s like like the Tesla with are not the T the, the new cyber truck with the Elon Musk. Like it’s, some people hated it, some people loved it, but the people that loved it, they were, they were crazy about it cause it was different. And like you said, when you’re scrolling through all those listings, you know, another luxury and other, you know, another style and then you just see like, wow, that place is different, you know, that is going to help you stand out. So that way when people are traveling less, let’s say things do change, your place is going to be, you know, sticking out like a sore thumb because it is so different from everybody else. Exactly. Yup.

Kyle Stanley:                      32:55                    You hit it on the head. So I, I just think that especially, you know, here in Fresno, three years ago we had 150 Airbnb listings. Now we have close to 500. So, you know, there’s more competition, more people are coming into town and seeing the same thing again. And again, and getting probably probably eventually going to get tired of that. You know, it’s still a better experience because they’re not going to a hotel, but at the same time at some point you’ve got to start making yourself different with Airbnb and we’re trying to innovate all the time.

Julian Sage:                       33:26                    You mentioned something that is, is pretty, we don’t hear too, too much on the show, but you’re actually working with an interior designer. How, how much of this are you doing yourself? Because if you’re flipping homes, are you the person that’s going in there with a hammer and doing everything or how much involved are you in the build of, of properties or in the build of your units?

Kyle Stanley:                      33:44                    Yeah, you know, I’ll, I’ll say this when I finally adopted the mindset of working on your business and not in your business, that’s when things blew up for me, Julian. And that goes for any business model. This last year was finally the first time that I was working on my business and not in my business. And to be able to just focus on getting the right people in place and hiring out those things. It created two things. It created more income, but it created so much more freedom for me too. It’s funny, a lot of people who are, you know, watching my stuff, they’re like, man, you’re working hard. What you take any days off? I take Friday, Saturday, Sunday off as I don’t, I probably worked less as last year than I did in my entire working career and made more money and helped a lot more people and was a lot more fulfilled than any other time in my life.

Kyle Stanley:                      34:37                    And so yes, I outsource everything. I, I talk about it a lot too. And I even have an entire episode on this, you know, outsource the things you suck at. I get people all the time being like, Oh, what would you do with this kitchen? Or Oh man, or do you think this couch would look good? I don’t know. I have no idea. You tell me. My contract, one of my contractors you know, I told him, I was like, I don’t want to make any decisions. Here’s everything I want change. You go pick the colors. And she comes back to me and she’s like, what color do you want the trim? I was like, I don’t know. I just, I don’t know. Talk to someone else about that. I have no clue. So yeah, I, I make less decisions, you know, I think it’s bill Gates and Mark Zuckerberg wear the same shirt every day and they, apparently, there’s some sort of theory behind this that if you make too many decisions, then you’re not going to have the energy to make the big decisions.

Kyle Stanley:                      35:30                    And so I want to eliminate as many decisions as possible, even if it costs me money. But here’s the cool thing. Interior designer is most, if you get the right interior designer, which I definitely have, she works for extreme home makeover. And so I know I’ve got the right one on my team. She gets all these wholesale deals with beautiful furniture that I know is going to cost me like top dollar but costs her a fraction of the cost. So what I’m paying for her in work is really being made up for in cost of furniture. So we are able to furnish a three bedroom, two bath for right around $7,000 with her work included. I think that’s pretty good. So and that’s with, you know, a lot of new stuff that’s not with many use things. There’s some use things but most of it’s new.

Julian Sage:                       36:16                    Yeah, that, that is a, that is a super deal. You usually, I mean for for one bedroom, one bath you’re looking at around five to 7,000 but you’re, you’re able to do a two, two bedroom, two bath in Fresno, California, which is really expensive with the cost of labor because usually the designer itself is like a thousand, 1500 bucks. But you’re getting everything that’s, that’s a suite where, where do you find someone like that?

Kyle Stanley:                      36:36                    I just network, man. I, I throw things out on Facebook that my top teammates so far have all been found through. Since I started in this business. I didn’t know these people before I started. My manager, I threw a thing on Facebook asking if anyone know, knew someone that was gonna be flexible between the hours of 11 to three every day and could take on some real estate related deals. I had her locked down within two hours after posting that I had my interior designer locked down and after a couple of hours of posting that I needed an interior designer. My repair man, I have multiple repairmen, you know, just being in the industry, going and meet up groups meaning people asking for referrals. You know, I, I’ve got four repairman on, on a call, but I’ve got one that is my GoTo every time because you know, networking. That’s, that’s really all it is. It’s very, very simple. It’s, there’s no like key there. There’s no secrets. Just networking.

Julian Sage:                       37:32                    You said you posted this on Facebook. Are you like posting in certain types of groups or where, where would even someone start looking for this?

Kyle Stanley:                      37:37                    No, I, I just posted on my regular, my regular wall. You know, I think if you’re from somewhere else and living in a new place, you gotta go venture into those groups a little bit. But I’m, I’m living in the hometown that I grew up in. Fresno is a big city but it’s actually a small town feel. So if you know someone, they probably, you know, that whole term six degrees away from Kevin bacon. I think you’re one degree away from whoever you need if you’ve grown up in Fresno.

Julian Sage:                       38:02                    Awesome. I want, I want it to hit on the flipping aspect cause that’s, that’s kind of your, your expertise. You, you brought up something as far as like being able to fund these deals and it being a little bit not as, not as much risk for you. But you’re, you’re able to get a really good return for your investors. How do you structure those deals? When you are, let’s say flipping it and then turning it into a short term rental.

Kyle Stanley:                      38:25                    So you’re talking about in terms of how I’m paying back my investors.

Julian Sage:                       38:30                    Correct? Yeah. How do you structure a deal like a for a partner when you are also short term renting it.

Kyle Stanley:                      38:35                    Okay. And so there’s two different sides of that. There’s the arbitrage side and then there’s the owning the house side. So which one would you like me to start with? The, the own side. Okay. It really depends on the deal and how much meat there is on the bones. So like I’ve got one right now that I’m looking at that could cashflow me $2,500 a month. And so for me, I see that, you know, if someone’s going to be a partner with me on this, they’re going to put forward probably $50,000. Now that’s with, this was actually a conventional purchase. This wouldn’t be a a flip. So with $50,000, that’s going to be the down payment. That’s going to be some repairs. And that’s also going to be furnishing a, this is actually one that I would house hack. It’s really cool.

Kyle Stanley:                      39:20                    It’s this for four units on one law, but it’s used to be this large single family house. But this guy has essentially turned it into one big house and then three one, one studios, which is really cool. So $50,000 all in on a slow month, I should make $2,500 while living there. And so I’ve gone straight to investors and said, how would you like to get a 20% return year after year? And so 20% return on that is basically right around a thousand dollars a month. So they’re protected when they’re a part of a real estate deal. They’re protected in a few ways. They’re on the the deed, they’re on the, Hmm lean, they’re one of the lean positions in case something happens, they’re protected by hazard insurance and they’re protected with a promissory note, which is basically a contract of how long this, this note will last, how long this real estate relationship will last.

Kyle Stanley:                      40:15                    So that’s how I do it. And again, that’s case to case. If they’re, you know, $2,500 on the bone, I know I can give away 1000 bucks. If there was only $1,500 in the bone, I’d start looking at how can I give away 250 to $500. It just depends on the deal. But I just make sure I structure it in a way that they’re gonna make way more than they would in the stock market more than they would with any regular real estate investing deal. You know, grant Cardone is out there talking about his Cardone capital. I’ve actually got a video on that and I’m a part of Cardone capital, but this was before I was educated on real estate investing. And so there’s all these, you know investment opportunities out there with guys like grant and talk about, Hey, I’ll go find the deal and you’ll get a great return, six to 8% and they don’t talk about these fees. They don’t talk about, Oh, six to 8% is the goal. It’s not the guarantee. And so I try to set myself apart by saying, you know, this is going to be exactly what you make. We’re not going to do a certain amount of the rent. You’re just, you’re going to make this month after month and it’s going to be two to three times better than anything else out there. So I just try to basically craft an irresistible deal.

Julian Sage:                       41:24                    What are you doing? So you, you, you, you find the a property that is that needs to get flipped and let’s say you have to put down, you know, 40, 50,000 for the, for the cost of rehab and you source an investor. When you’re pitching this investor, are you pitching them from the perspective? Like, Hey, this is how much it be as a short term rental or as a, as a longterm rental? What, what’s your how do you, how do you present that to them?

Kyle Stanley:                      41:50                    Yeah, I present them all the basically all of the exit strategies. So here’s what it should produce on a, and I’m always conservative with my numbers and I’m always using words like it could potentially possibly, I’m not using guarantees, but the one thing that I am guaranteeing them on is here’s what you are going to earn a guaranteed. So I’m pitching them as here’s what it’s going to go as a short term rental. Here’s what’s happens. If we stopped doing short term rentals you’re still going to get covered. And here’s what happens when we refinance or sell because you’re part of the equity. We are going to be rewarding you based on the amount of equity that you have in the property.

Julian Sage:                       42:29                    So if you do decide to sell it, they do get, because with a lot of flips, a lot of, a lot of time their exit strategy might just be to kind of, you know, cash out right away and then give the, you know, give the equity back to the to the investor. But for you, because you are, you know, sometimes how sacking you are turning it into a short term rental and longterm rental because you own the place. Now typically you’re, you’re able to see those, those, you know, $2,500 returns just off of longterm renting.

Kyle Stanley:                      42:58                    So not that kind of return, but it does cover me still. So if I got to turn this into a longterm rental, you know, I’ve still got $1,000, at least on the bone to where I know that I don’t owe that if I owe everything to everyone, that I’m still either in the green or at the black where I’m breaking even, which I don’t even like to do those deals. But that could be a worst case scenario. But yeah, to answer your question, most flips are just a quick in and out. But I let them know, Hey, I’m doing this as a flip. It could turn into a longterm or short term rental. At that point we would renegotiate the terms. But yeah, the flips are just like, Hey, you’re going to earn X amount of percent for X amount of time. Super passive. You write a check, you get protected by a promissory note by hazard insurance. Your name’s going to be on the deed. And if anything goes wrong, if I die, you own the property, you can go sell it. Mmm. But with the longterm stuff, yeah. It’s, it’s definitely more intricate and I’ve got to restructure the terms a little bit.

Julian Sage:                       43:59                    Okay. Awesome. Awesome. And is there, is there anything that you do kind of moving forward that you, that saves you a lot of time and money because you said that a lot of this stuff you’re, you’re trying to back away from the business. You have a property manager that is managing the properties for you. What else are you using in your business that saves you a lot of time and money?

Kyle Stanley:                      44:16                    Oh, man. The obvious stuff, smart BNB that has been a game changer beyond pricing. I just started using it, that is a no brainer. I didn’t even know about that until recently. My one of my friends and Nate told me about that. And after being on it for day one, I got something booked like 12 months in advance. That definitely wouldn’t have been booked cause I was only doing it three months in advance manually. And now that I’m doing 12 months in advance automatically through beyond pricing, this person booked for double the price that I would have even had it listed at. So that’s really cool. And then other automations, so I would say my manager right now, because we have a small amount of properties is acting as, she wears three different hats. She is the communications manager, she is the operations manager essentially if something goes wrong, she’s the one making the call to the repairman appliance company, the cleaners, all that kind of stuff.

Kyle Stanley:                      45:17                    She’s managing the cleaners. And then she’s also a clean one of the properties too, just for some extra income. When we start to get bigger, she is going to take on less of the cleaning roles and more of the, you know, managing side of things. And then eventually we’re going to have to bring on a second person as well. And I know I was just listening to your episode with Allen and you know, he brought up a good point with, Hey, these people need days off. Yeah, I kind of forget about that too. So I need to start looking for a second person, which I think I’ve got someone in mind and, and I’m always that, that’s what’s great about this. And, and I know Alan talked about this in the episode too, so I won’t harp on it too long, but when you bring an employee mindset to this, it, it fails or it doesn’t scale.

Kyle Stanley:                      46:00                    When you bring a business owner mindset to this and truly work on the business and just even the things that seem so small, these innovative ideas that I now have time to think about a national park theme, Airbnb have time to think about are we doing our cleaning as efficiently as possible? Should we be outsourcing the laundry? Things like that that I wouldn’t have had time to think about had I been trying to do it all on my own or I’m an OCD person, so I try to not show up to my properties. If I show up to the properties, suddenly I’m there for an hour and I’m doing things that aren’t even in my control. And so I, I see you shaking your head. I know. I think a lot of us entrepreneurs are kind of like that. So removing myself from as me decisions and removing myself from as many working in the business opportunities it has really helped out.

Julian Sage:                       46:50                    I think you brought up a good point, you know, entrepreneurs and people that are, are in this business, you know, we’re, we’re, we’re the best cleaner or the best, you know, communicator, we’re the best at all these things. But that, that’s really holding us back from being the best at what, you know, what, whatever it is. If it’s scaling your business, you’re, you’re depriving yourself of that position and you’re depriving yourself of being able to help more people find beautiful places to stay. You really, like you said, it’s being a connector.

Kyle Stanley:                      47:16                    Yeah. Well and, and most of the time Julian, that’s a, that’s a false thought, which is, Oh, I’m the best person for this. No you’re not. You might be for one of those things. I know for myself, I’m the best person for communication timeliness. But in terms of the Pepe, like customer service type of talk, I’m the worst person for that. If someone asked me where to find the remote, I’m like, look on the instructions, don’t bother me. But, but if, if I have someone in place there, maybe they take 10 more minutes to respond than I do, but they say, Oh my gosh, I’m so sorry. You can’t find that. Here’s where it is. I know I’m not responding that way. I don’t have the patience for that. So I need to remove myself from those things and outsource. And, you know, I’m, I’m trying to get to the point where I can just erase the Airbnb app from my phone because I’m that OCD about some of this stuff and I need to not be, but again, that OCD side is taking over and I’m kind of like, do I really want to erase that from my phone right now?

Kyle Stanley:                      48:17                    And so that, that’s probably the next step of my business is letting go of complete control.

Julian Sage:                       48:22                    And, and how, how were you trying to cause many lots of people like it. I mean that that might be like the dream. Like you just have something that’s on autopilot, you have the right people in place and you’re still making money. What’s the next step? So you have this person that is doing all these different things in your business. What would be the next person or the next thing that you need to do to be able to remove yourself even more?

Kyle Stanley:                      48:42                    Yeah, I kind of mentioned already. I think I just need a second manager. Someone who’s going to cohost and know that they’re the backup. Hey, you know, you’re by the phone. You see that no one’s responded for 30 minutes, it’s your turn to respond. You know the answer. And I really, for those that are like, Hey, how do I find a good manager? You don’t have to go out and get a company. You don’t have to go out and like train them on anything. You just need to have them co-hosting with you and watching what you’re doing for a couple months or maybe not even a couple of months. Maybe it’s a couple of weeks and now you tell them, now you’re going to respond. And when you don’t have the answer, you ask me what’s the answer? And now, you know, my manager has been managing with me for three months and co-hosting and the only times that she even reaches out is, Hey you know, someone just said, Hey, they want to check out at four o’clock. Should I allow them to do that? That kind of stuff. You know, I, and she’s getting even better at that stuff. I mean, I’m getting, my point is I’m getting very few messages from my manager anymore because she has seen how I respond. And I’ve given that control at pass that Baton just one step at a time.

Julian Sage:                       49:48                    And with, with the manager, is this a person that you’re paying like a fixed rate or are you paying a percentage and how much,

Kyle Stanley:                      49:55                    Yeah, I pay a salary. And I just make sure that if it’s a light month, let’s say for example, someone books for two or three weeks and I know that they’re not going to have to manage as much in terms of turnover. Now I’m going to give her other things in my business that are related to taking, you know, some time or giving some time back to me. That could be email responses, that could be tracking receipts, that could be a lot of different things. So I, I just make sure that they’re fulfilling their 20 hours a week is what we’ve kind of laid out. And if they’re not, then I’m giving them tasks to be able to sell that.

Julian Sage:                       50:30                    And are you, are you sourcing this from the U S or are you going outside the U S Oh,

Kyle Stanley:                      50:35                    I, I believe in an onsite, an in state, in city manager. I really want her to have a pulse on everything that’s going on. So she goes and does inventory checks. Even though we have all our maids do inventory checks. And here’s one thing that really helps out if you’re not doing this already, have a laminated checklist for your maid. And at the bottom it says know, Mmm, place was dirty place was clean yesterday. Great desk guests, you know, left a mess, whatever. So they know how to review and then under that inventory needed. So it’s just an erasable little checklist every time. And they just take a picture, send it to our emails so that we can reference back every single time. If someone says, Hey, this place looks like it hasn’t been cleaned and we don’t have a clean report from you, then you’re paying for that. So Mmm. When I’m getting out there is even though we have inventory checks from our maids, I have my manager go to a property once a month and make sure that the doors are working, the water’s working, the lights are all on the things that the maids don’t have the Kenai for, that my manager will.

Julian Sage:                       51:45                    You said that you pay a salary. Is there a reason why? Cause we usually with co-hosts you give it like a, you know, anywhere from like 15, 10 or up to 30%. What about the fixed salary made you go that route?

Kyle Stanley:                      51:59                    Mainly because this person wasn’t a company. It’s not like you and me, you know, it’s not like, Hey, I’ll go manage your place. It was more of like, Hey, I’m looking for a part time job. Can you help me make some money? And so with me taking that person under my wing and showing them the ropes they basically become a part of my company. They’re essentially an acting employee of my company. So I’m going to pay them as if they are an employee, not as a company that’s managing it.

Julian Sage:                       52:27                    And w and with that because there, there’s the difference from the contractors to the employees. Are you, are you paying them like all the, all the employee benefits or because they’re working part time? I don’t have to do that. Or are you paying them [inaudible]

Kyle Stanley:                      52:40                    Yeah. Part-Time. I don’t have to worry about that. Yeah.

Julian Sage:                       52:43                    Yeah. What would you do differently? Let’s say you had to start from scratch. What would Kyle do?

Kyle Stanley:                      52:49                    Oh man, I, I would educate myself in the process, get a mentor, take courses back in 2015. I know that those things probably weren’t in, I don’t even know if there were any courses in 2015 but I would definitely have found someone, I would have started looking on Airbnb and looking for the Superhosts and asking what they’re doing and just learning quicker. Because at the end of the day, Julian, I was leaving thousands of dollars on the table. I mean, when you go from making your best month $1,800 gross in Airbnb before expenses to now my best month and this happened in her six months, my best month has been $15,500 and under six months making that change, I look at four years ago and say, what if I started that right away and where I’d be today? You know, I mean that’s, that just is really in the back of my mind of like I would, that would be what I would do differently is just educate myself and find a mentor.

Julian Sage:                       53:49                    What question would you ask another professional host that’s maybe at a similar level or the next level from where you’re at?

Kyle Stanley:                      53:57                    That’s a good question. Man probably the question that you asked me earlier, which is just, you know, what are you doing to separate yourself? What are you doing to prepare? I’m always looking at worst case scenarios and what, I don’t have the answer for worst case scenario that always kind of like makes me uneasy. So those are questions that I would probably be asking to someone who’s above my level.

Julian Sage:                       54:21                    Do you have a, a, a favorite, favorite book or something that you’d recommend for people that are just starting off in a, let’s say, flipping

Kyle Stanley:                      54:28                    A favorite book and flipping man, I’m such an audio book guy and course guy. I would say, I mean, you’ve got, I think just real estate investing overall. It’s rich dad, poor dad. Everyone that I interview when they talk about books, that’s always the one that they’re talking about. Mmm. And then recently, one that I’m going to be reading here in a little bit because it’s so many people have told me to read this book, never split the difference by Chris Voss. That’s a negotiation book. I would say those two, the one is a definite read with rich dad, poor dad for any real estate investor. And then it sounds like that one with Chris Voss, the never split. The difference is one I’m definitely gonna be reading.

Julian Sage:                       55:12                    Yeah, definitely. You know, with people coming into the, into this space and maybe just their first entry point is Airbnb. There’s a whole other world of real estate investing and, and rich dad, poor dad definitely helps you to you know, change your perspective on what’s possible. But thank you so much, Kyle, for coming on the show. You’re just a wealth of knowledge and you know, really appreciate your abundance mindset and everything that you’re giving back to the community. And yeah, thanks so much. And until next time, host nation,

Julian Sage:                       55:40                    Keep on hosting. Hope the host 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 host that have been featured in these episodes as well as the community, go on over to our Facebook group that the host nation.