Anuj Datta:                         00:00                     My overall business strategy is occupancy. I want to operate on 90 to 95% occupancy. I feel like volume equals value.

Julian Sage:                         00:08                     This is episode number 34 of the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed? Go to cohostit.com for more information. Welcome back the 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:                         00:48                     Hey, what is going on host nation. I am super excited because of the couple of things. One because of our awesome guest today, but I’m really, really excited because we have officially just become the number one short term rental podcast on iTunes. That is so, so cool in 33 weeks because we got it by the last episode just after the last episode released. We made it to number one but 33 weeks, 33 episodes and now we are the number one short term rental podcast. That is just so cool. I am so honored and so proud of the community that we’ve been able to build up. The host nation just keeps on getting bigger and better. I love the host family so much and we’re just doing so many cool things. I, I, I love talking to every single host on the show and talking to the people in the community and educating people.

Julian Sage:                         01:37                     It’s just so exciting and so fun. And then just the amount of possibilities that like, I never would’ve thought of, you know, now having a property management company doing turnkey arbitrage properties, which is really cool. And if you are interested in learning more about our turnkey arbitrage program, then go to cohostit. Ah, that’s C, O, H O S T I T.com, cohostit.com, and you can find out more about our management and our, our arbitrage program. It’s just so, so cool. The BnB empires builder’s mastermind group that is just like, I love, I love the host family and I love our community. I can’t help everybody. And the people that want to be helped and really want to grow are endless group. And that’s really who we want in this group is people that are looking to grow and really serious people. And I know all of you guys are serious.

Julian Sage:                         02:26                     If you’re listening to me, it’s just talk for an hour with other people, then I know you’re serious. But these are the people that are looking to grow themselves and increase their management, increase their clients, take on more rental arbitrage properties. It’s just so cool. So I’m just super proud. I’m super honored. I’m humbled. Thank you so much everybody. So now what’s next with the show? Now that we’ve reached this huge, huge milestone. I would love to just know more about what you all are looking for because I’m trying to provide as much value as I can to you guys and I would love in the host nation Facebook group, send me an email, whichever way Instagram, YouTube, whatever it is, let me know what it is that you’re looking for and how we can best serve you. Because I want to try and provide as much value as I can.

Julian Sage:                         03:10                     I am all in this for you guys to be able to give you exactly what it is that you’re looking for or we’re gonna keep on rolling out with awesome interviews. I’m going to try to pick people’s brains even further. I don’t even know if that’s possible because I have a pretty good talent of just really diving into people, but I’m going to try to just scoop out as much golden information and try to provide that to you as much as humanly possible. So I need more humans. Is is one thing I need more people helping me, but I am going to just try to provide as much value. So that you guys can become the best hosts that you can and I would love to be able to have you all the shorter mental success story podcasts because that’s, that’s really what this all is all about.

Julian Sage:                         03:51                     This is about becoming your own success. If success means for you having one property, having 10 having a hundred starting your own management company, being financially free, whatever success is to you, that is what I really would want you to be able to strive for it. And that’s what you know, through the show, I hope everybody can achieve that level of success. And speaking of success today, I had these special special honor of speaking with Anuj Datta. Anuj prior to jumping into short term rental investing owned various franchises such as gas stations, a subway and a checkers. If you don’t know what checkers is, it’s like a kinda like a burger King. It’s like a, they offer like shakes and like kinda like a shake shack I guess. Because of the overhead costs in the business, Anuj decided to sell off all of his businesses and move to Houston to jump head first into real estate without prior having any real estate experience.

Julian Sage:                         04:40                     Just jumping in and getting into the short term rental game. Anuj has now has 10 listings that he owns himself. Three of those are shipping containers that he’s turned into these beautiful and very unique tiny homes. He’s currently growing his management company and taking on more clients so he’s going all into the short term rental game. A news talks about how his background in business helped him start his short term rental business and how it got him being able to go so smoothly. We talk about a lot of the similarities and differences between franchise management and ownership and short term renting and if he could go back and do it all over, which one would he would do initially. He also shares his ideas of converting a shipping container to a short term rental property and what are the challenges that has brought on and what did he do to make his stand out from everybody else’s.

Julian Sage:                         05:26                     It’d be like my show notes for this episode. Go to shorttermsage.com/STR34 or if you’d like my shownote send directly to your inbox every week, then go to shorttermsage.com/shownotes. Last little note is that the BNB empire builders mastermind is going to be closing its doors very, very shortly guys. So if you are interested, go to vacation rental machine.com or just go to the store on the short term stage, fill out an application. If you are interested. We are going to be closing this off very soon. We are limiting this to our early adopters so that allows us to be able to work with you a little bit more. One on one with John and I, we’re going to be doing a kickoff call. Actually today is one we’re going to be doing our kickoff call.

Julian Sage:                         06:05                     So we’re really excited to be able to start helping people grow and grow their portfolios. But we are limiting this to just our earlier adopters that we can help. Really just to figure out how we can provide the most value to you guys. So if you are interested, again, go to vacation rental machine.com or go to the store on short term Sage and fill out an application and join before we close off the doors. So with all that being said, on to this week’s conversation.

Julian Sage:                         06:31                     Hey, welcome back hosts today. I have these special special honor of speaking with Anuj Datta. Anuj, would you please introduce yourself, let the hosts nation know who you are and what inspired you to get into short term rentals.

Anuj Datta:                         06:42                     Hi guys, my name is Anuj. I’m originally from New York. And now I operate my businesses out of Houston, Texas. I have 10 listings that I own myself and I have one listing under management. I’m currently growing my management company to take on more clients. And I come from a business background. I come from a gas station, so my franchises, checkers franchises. When I was in New York, I ran those businesses. And that’s, I decided a few years ago to sell off my assets and moved to Texas to get into the real estate world. And I’m, I purchased an apartment complex. And when my first lease was out, didn’t renew it and I I’m converting to Airbnb and actually there’s a story behind my first Airbnb unit. It’s that the, the, the, the tendon had the place immaculate.

Anuj Datta:                         07:36                     It was like beautifully furnished. You was, it was great. It was, I saw and I was like, this is, this was good to go. We can just list this right away. So all they had to do was make a deal with him for his existing furniture, which was great for him because he didn’t want to move anything. And I made a deal for 1000 bucks. I was existing furniture. I added a couple of benches and a TV and I had the listing going. And so my first experience was great because it was a kind of low cost way to get in. And we started the listing. I saw the, the revenue opportunity kind of started learning the business right away and I saw when I saw the next,

Julian Sage:                         08:14                     So you came to Houston purchase that apartment complex with the intent to longterm rent it?

Anuj Datta:                         08:20                     Yeah. Yeah. I was going to a, I was actually, it was in the apartment complex. I had this one kind of storage space, which I was gonna convert to Airbnb and try it, but actually the first rental came up, the first lease came up, so right in renewing the lease, I made a deal to buy the existing furniture that the tenant had and just and then converted that to his Airbnb unit in that as a, as I saw that happened and saw the revenue come in and how, how it worked, how the business operated, it was a, it was a no brainer to kind of, so I have the complex right now with 10 units. Oh, three of them are the shipping containers and then the rest are just wrong, you know, regularly.

Julian Sage:                         09:02                     Yeah. I’d love, I’d love to be able to talk more about the shipping container. You actually shared a, your video in the the host nation and I thought it was just super cool, super original and met super cheap too. Super affordable. Like that is someplace that I would like to stay if I was in Houston. Definitely right up my alley. I think it was like 29 bucks a night right now. Like wow, what a good deal. But I wanna talk a little bit about that more in coming up, but I want to go back to original because you, you’re, you’ve been, you know, hustling, you’ve been working, you’ve been a franchise owner. What, what made you give up that whole franchise life that those businesses to take on a short term? Renting in real estate,

Anuj Datta:                         09:40                     William Park and there’s a lot of overhead labor, a lot of moving parts when you’re running restaurants, when you’re running gas stations, 24, seven business. So, you know, I, when, when I noticed what the overhead costs were and the coordination with the labor and it kind of heavy wear, you know, I didn’t want to deal with so many moving parts when, when it came to running a franchise running restaurant, you know, I had over 50 16 I wanted to kind of downscale that and then grow back. And it’s harder when you’re in the franchise business with gas station business because, well, you know, restaurant, franchise business because you know, you can’t, you don’t have the cream of the crop in the labor. You know, you’re typically paying minimum wage labor and that’s tough to deal with. There’s a lot of turnover. There’s a, there’s a lot of issues. I come in, anybody in that business and a lot of people do really well. But from me, dude, it just wasn’t there. It wasn’t deliverable.

Julian Sage:                         10:34                     So you owned a gas station. How many, how many gas stations that you owned?

Anuj Datta:                         10:39                     I owned, I bought and sold a lot. I wouldn’t, what I did was I actually bought underperforming gas stations, underperforming subways, and I turned those interim approximately businesses. And and then sold those home. So I basically throughout time, throughout the nine years that I was in these businesses, I turned over about 20 businesses. So I had like pet operating in it at any given time.

Julian Sage:                         11:06                     So you, you owned a checkers and a subway, some gas stations. I mean, it’s, it’s, it’s pretty interesting because what you’re basically doing is you’re taking these properties these, these businesses that are rundown, not performing and you’re adding something to it in order to make them optimal. It’s a very labor intensive, like you said, but what is it, what is it about taking a business that is maybe run down in, do you find that similarity and like real estate because you purchased a multifamily, is there similarity in how you’re able to take something that is run down and making it, you know, profitable?

Anuj Datta:                         11:42                     Yeah. I mean, if you want to increase revenue, you gotta be empathetic, right? You gotta realize what the, what the customer needs. So a lot of these underperforming, they, they just weren’t, the previous owners were not thinking about the needs of the customers to cleanliness of the place. You know, some of it was low hanging fruit. It was just kind of easy to go in there and doing things and implement the right merchandising and the right customer service, you know, service with a smile and things like that. And we were able to turn those businesses around and in a short term turnaround, a lot of times slip businesses within like the years. So it’s, I think it’s in Airbnb or whenever you do, you have to put yourself in the shoes of the person who’s going to be paying you and you guys, you know, you got to see what, what’s good for them, what works for them and do that, you know, go towards that. And, and just brand new service catered towards your clients.

Julian Sage:                         12:45                     I mean you, you’ve been, you’ve been in the franchise business since 2007 a and he first got started with short term renting in 2017 so that’s a 10 year span. What, what about the franchise? Like was was the franchise business worth the amount of labor that you were getting? Like was the returns on that like a lot better than maybe short term renting or

Anuj Datta:                         13:08                     No because the costs are less so. I mean as facility costs are more in a franchise business. Like I said, when you have a lot of labor to kind of manage then your labor costs are higher. In New York you have pretty high rental costs as well. So I see more profitability within the short term rental space for myself at least just because of the efficiency in the way that the operation is being run on. On the franchise side it’s, you know there’s, there’s, there’s definite upside but your margins like especially when some way for example, your margins are really tight, you know if you’re, if you are operating on like 10% revenue, if you’re operating 10% of revenue, you’re in good shape when you’re really on tight process. Same thing in the gas station business convenience store. Depending on the amount of tobacco products you sell, which are usually low margin products, you know, your, your margins can be tight in that space as well. Gas and gas margins are pretty tight as well. So I definitely see better profit margins in the short term rentals.

Julian Sage:                         14:10                     Now, you know, obviously, you know, running, running a single franchise that, you know, such as like a checkers or you know, and then a subway and gas stations, they all operate differently. I’m sure that they all have their unique things to them. What about the business though? Have you been able to take away, like what are the big things that you’ve taken away from running [inaudible] like big businesses with a lot, you know, a lot of expenses, a lot of employees, all this and then converting it towards you know, short term renting, which is what a lot of just like mom and pop, you know, just your, you know, your everyday person is able to, to up and run.

Anuj Datta:                         14:42                     Yeah. Systems and protocols, you know, there’s, when you’re running a franchise, you have a system in place, right. And that’s kind of what you pay for when you’re, when, when you’re running a franchise. You know, the same thing with, with, with gas station inventory controls. It’s something that I’ve brought over here. Merchandising doesn’t really translate that well into the short term rental space, you know, weren’t utilizing was what was a big Oh for customers. You know, you got to set up the stores in the right mate, you gotta you gotta know and keeping everything clean, keeping everything in order. But the systems, where are we, you know though, like the POS machines, all those systems that are in place to kind of keep your inventory together, keep the scheduling together, bringing those kind of systems and implementing them in the short term rental game as really you know, done well. And that experience has really translated well into this.

Julian Sage:                         15:33                     Now for your first, you know, longterm rental property, you purchased a apartment complex and then you subdivided it coming all the way from New York to Houston and dealing with this project. You know, how, how was that in order to get that property to where you want it to be so that you knew that you could start becoming profitable?

Anuj Datta:                         15:53                     Well, initially I just subdivided the apartment complex last year, so I was running short term rentals like for two years prior to that. Once I saw the upside of the short term rentals, it made sense to subdivide. What was the initial question?

Julian Sage:                         16:11                     How was that process with finding this multifamily? That was it? Was it like a turnkey property or did you have to invest a lot into the development?

Anuj Datta:                         16:19                     Well initially it was, it was turnkey, but it’s an older property. So there was definitely so much investment that has to be made within the plumbing, within some of the infrastructure. And then I made investments as far as dividing all the existing units that I had initially built some. So I had six units, which I converted it into eight units within one building. And then I had had put another unit into another building that I have right on the same property. And then after all of those units were cash flowing, I decided to build the shipping container as far as compared from Houston to New York uses much easier to deal with some local building permitting standpoint. So building permits is actually classified as a single family house even though they use three separate units. It’s classified as a, as a single family house. And I had to go through the whole permitting process. We had to run the water meter, run all the plumbing run that run all the electric. So it was a tool. It was a full development project.

Julian Sage:                         17:23                     Now off of a multifamily, have you, have you found that it’s more profitable investing into let’s say a multifamily then like single family homes? Cause I know a lot of people are purchasing single families and turning those into you know, into short term rentals. But you decided to, you know, because you’re originally going the long term multifamily route and now you’re going short term rental. Have you found it a venture or would it be easier going single family?

Anuj Datta:                         17:52                     I liked the ease of operation with multifamily, you know, because you can, if you are condensed within units, within one space you’re claiming people are running across town cleaning different listings. So, so you save a lot of time as compared to if you have one listing here and then when another listing across town. So you know from my, from my future investments, I’m actually going to do exactly what I did, which is I just kind of small, you know, five, six, five and 12 unit type of all multi-families and I’ll convert them all into short term rentals.

Julian Sage:                         18:24                     Now when, when you have a multifamily, you know, because you have 10 units now, have you been able to justify being able to have like a full time cleaner or are you still contracting that out

Anuj Datta:                         18:34                     Until I have a full time cleaner. They’re not my in house employee. I do contract it out, but like that’s just the way that it operates on paper is kind of like they are my employee. But once those, the system that I like is that I don’t have to deal with hiring several different employees and deal with, you know, giving people time off and things like that. I haven’t contracted out to two to one person and that person coordinates all the different cleaners that are gonna come in and do the cleaning on a daily basis, who kind of takes that off my plate so I can focus on.

Julian Sage:                         19:10                     So, so you’re, you’re able to pay your cleaners a minimum minimum wage rather than a contract price and they’re basically,

Anuj Datta:                         19:17                     I pay somewhat of a premium because I feel like you kind of get what you’re paying for. So I pay, I pay somewhat of a premium for them for, for the cleaners, but my system is set up is I pay a fixed rate. So I had him a fixed rate that I pay on a weekly basis. And no matter if the person has to clean 10 units or they have to clean one unit, so, you know, it works out for them as well. And it keeps me kind of right in control of my cost. So I know, so my labor is more or less.

Julian Sage:                         19:48                     And what, what have you done to, you know, encourage them to want to keep working with you. If they know like this week it’s going to be pretty easy, but next week it’s going to be hard. You know, how, what, what keeps them from saying like, okay, well do, so this, I’m, I’m outta here or anything like that.

Anuj Datta:                         20:02                     I mean I, maybe I got lucky with the person that I’m dealing with and, and they just do great job. They just do great job, consistent income for them and kind of works out well.

Julian Sage:                         20:19                     Okay, great. And I wanted to get into the shipping containers because if you haven’t, if you haven’t seen a new, just a shipping containers, I highly encourage you in the video description you can go to the show notes page check out his listings. And then in the host nation Facebook group, you also shared the video. I’ll include that in the show notes as well, but it is very unique. Very cool. What, what inspired you to, to start that and create that? Cause that, that AMAT the how it looks and how it’s set up. It looks very complex and looks like it took a lot of time, a lot of effort, a lot of energy into that.

Anuj Datta:                         20:52                     Yeah. Well the inspiration was I liked the idea of repurpose views. You know, initially it was used for one thing and then we converted it into something else and it has a completely different use. It’s all you, you can even translate that into people, right? Like we all have kind of a purpose on the planet to do some things, to fulfill our dreams, our desires, and make our goals happen. Sometimes in life you lose that initial purpose. You kind of forget, you get sidetracked, you know, there’s so many things that go on by, you know, you can always find your report. And that was, that was an inspiration just to repurpose, use of it. You know, and, and giving, giving people something unique, something, something different, just like a different experience that people enjoy.

Julian Sage:                         21:45                     No. And I, I think it’s really cool and I love in the video there, I think he, one of the highlights is like on the side of the building, it says like what does it, does it actually say like repurposed or something like that.

Anuj Datta:                         21:57                     Find your repurpose, find your re purpose, so find it, you know,

Julian Sage:                         22:02                     So, you know just, just to kind of maybe walk people through that, having seen the video, do you mind kind of walking through how the structure is of, of the of the container roles?

Anuj Datta:                         22:12                     Sure. Right. So these are three, eight by 20 shipping containers. So this is tiny spaces. There’s one shipping container on the bottom and then two to LIBOR on, on, on top of the one on the bottom. We have a little kind of barbecue area. We have a deck in the middle of the shipping containers on a hammock in the middle. And and we have patios for, for each one, little sitting area and patios because since we have such a small interior space, we wanted to use exteriors space so people can kind of have the best of both worlds where you can be obviously on a nice, a nice luxurious kind of interior, small interior, but also you can hang out outside as well and just have a space that kind of flows together and as conducive. So that kind of idea behind it is micro luxury. So even though it’s a small space, we put every, all high end furniture and we put, we put high end finishes in their high end tile work, you know, frameless glass shower doors just to give, give people, you know, when you see in a shipping container what are, you don’t expect something kind of beautiful, something high end with how you finish it. So we just decided to go with the micro luxury constants.

Julian Sage:                         23:28                     Now, I mean it is very unique and very like it just pops and it stands out. But the, the prices that you’re, you’re listing on it. Like I saw I was like $29. That seems very affordable. Have you, have you found that because of how affordable it is that you haven’t been able to get people that may be appreciate, that are just looking for a cheap place to stay or what’s the reasoning behind the the,

Anuj Datta:                         23:50                     So I just put things on the market last month, so I want to know, I’m getting some kind of traction and get the reviews and, and kind of got the exposure going. I definitely have some upside that I can take. But my overall business strategy is, is occupancy. I want to operate on 90 to 95% occupancy. I feel like volume equals value. So if I can stay occupied and my business stays consistent, I think in the long run there’s going to be better. So I kind of suit my pricing according to having the maximum amount of occupancy for my spaces. Now that $29 $30 also does not include the cleaning fee. So I, I don’t like to have longterm stays. I like to have just quick in and out, one day, two day, three days, days, you know, kinda like a hotel, you know, so, so the actual average daily rate that comes in on those containers now just having a little bit of data, just like 50 or $60 a night. So that’s the actual average that’s coming

Julian Sage:                         24:52                     Now with, with a project like that, I imagine that that it was very maybe cost intensive is your return on that, how soon would you be able to get your return on? Work like that?

Anuj Datta:                         25:03                     My, so my ROI is looking like three to four years. So if I’m operating on a, do you know, 25 and 30% return, I’m happy with that on the development side.

Julian Sage:                         25:13                     Okay. And then what about the apartment complex? What’s the, what’s the ROI on that one?

Anuj Datta:                         25:18                     The ROI on the apartment complexes, since I’ve taken, since, since I’ve converted it and made it, I basically returned, we’re turning maybe three fourths of the money on it. Wow. Yeah. Yeah. And that was three years ago. A lot of units in one space, in all my space are either studios or one bedrooms. You can work on economies of scale. So you can, you know, if I want to do the volume, I know I’m going to charge a little bit less than the market, but as long as I can retain my occupancy, I can always adjust my pricing and the price. You and you know, it’s always kind of different depending on, on what the market is offering and when it’s just about achieving the occupants

Julian Sage:                         26:03                     Does a container home does it, does it have like the same like type of like equity as like a single family home? How does that work?

Anuj Datta:                         26:12                     It’s, it’s an investment property, right? So, so equity will work based off of income. Your value, cause I’m not this enough for the purpose of selling to somebody who’s like a single family home. Family’s gonna live there cause so if I wanted to sell it or refinance it, then the, the, they’re going to valuate this place based on the income that it produces. So for me it’s, it’s actually a very good equity play because it’s cause the cashflow was so good, you know.

Julian Sage:                         26:45                     Great. And what, what has been the most challenging part of starting your short term rental business?

Anuj Datta:                         26:50                     Most challenging part of starting my short term rental business, the design part. I do my own designs of like, I have one space, which is like a Rubik’s room. So I painted it all like it’s called the Rubic studio and and it’s like a, basically a Rubik’s cube. So you’re living in there. So my whole thing is on one gym, a different design in a different flavor for every single space that I had. And that’s what, you know, we’ve been able to achieve. But that’s, you know, you gotta be creative, you gotta try to think outside the box and you know, that can be a challenge at times. But I guess that would be calendaring. I don’t know if challenging is the right word, but, but that’d be the most interesting part of the business for sure.

Julian Sage:                         27:30                     Yeah. Go, going back to the, the design concept, how did you even find the right person that would be able to create this vision of yours for this container home?

Anuj Datta:                         27:40                     Well, I looked around, I knew I want to do something out of containers, right. Initially going into it, then I shopped around for architects and I found an architect who can make it happen and then they put together plans and you know, getting my approval. And then we went to building IgG senior project and I sub everything out. Two different people. But, so yeah, I just did some research and found the right on architecting. We made it happen.

Julian Sage:                         28:06                     Okay. So you, so you’re actually a contractor in the, in the Houston area?

Anuj Datta:                         28:10                     Well, I only for myself, I don’t, I don’t do any jobs for anybody else, you know.

Julian Sage:                         28:14                     Okay. I’m sure that a lot of ears perked up and they’re like, ah, a reliable contractor that can like, can do work. It’s like,

Anuj Datta:                         28:21                     Yeah, I haven’t ventured to work for anybody else. I don’t know. Maybe down the line it just hasn’t, I haven’t back.

Julian Sage:                         28:27                     Well, what has been the most challenging part of scaling this business?

Anuj Datta:                         28:30                     The most challenging part of us scaling this business, initially it was about the consistency of the cleaning until you know about a year and a half ago is when I found a on the on the cleaner that I haven’t and that I deal with, which has really made life much easier. But prior to that I was not able to find a consistent cleaner. I had people, I had some theft issues with some inventory and you know, that was the most kind of challenging part getting the consistent cleaners. Once I had that, then I knew that this business can be scaled. So that’s, that’s what I think is definitely one of, you know, one of the most challenging parts, getting the right cleaner in place and you can always pay somebody, you know, call hours an hour or whatever to do cleaning. But you know, you have the issues with the turnover, you have the issues. Are they doing the right job and like how involved do you want to be in that part of your business? You know, if you can find somebody consistent, they do the right work and then you can focus on growing and scaling your business. It really alleviates the kind of day to day type of operation.

Julian Sage:                         29:34                     Coming from a guy in news that has dealt with just so many people that you have had to hire and turnover, what have you found to be most when screening and hiring? Cleaners for your business?

Anuj Datta:                         29:46                     Reliability and trustworthiness. You know, you, you have to be able, you can, you can track your inventory, you know, your supplies. You can, you can always track that, but at the end of the day, you gotta be able to trust the person working. They gotta show up for work. They have to be reliable. So, so the system that I have set out, but like I said, I already contracted out my cleaning when I said three 65 twenties, you know, 24, seven, three 65 contract. So if there’s, I never have to, I just have to communicate what has to be clean. And actually I’m going to automate all that. I have already gone, I’ve been having calendar, but that’s beside the point anyway. Whether they just come in, they do the work and they go and everything’s just kind of automated and you don’t, you know, let’s take that off my plate.

Julian Sage:                         30:33                     Do, do you have a system in place for finding the right people for the, for the job?

Anuj Datta:                         30:37                     Craigslist, you know, I used it. That’s how I got successful initially. I was just talking to local people. You know, when the, when, when I was running businesses, what I did was have job fairs. So when I had to hire a big pool of labor, I had job fairs. I set it up, I marketed it to local neighborhoods. And and I had people just come in and just, you know, rather than little by little, because let’s say I opened up a checkers, Queens, New York in 2013, I needed to hire like 40 to 50 people you know, between part-timers, full-timers, management. So the most effective way was to have a job fair having set up and then just interview people on the spot and just, and just kind of almost hire, hire right away.

Julian Sage:                         31:24                     And how, how do you, if you, let’s say you’re meeting with a cleaner, you’re meeting someone that you don’t know and you, like you said, you have to find that reliability and that trust. How do you do that if you need to just start getting your business up and running right away?

Anuj Datta:                         31:37                     Some is trial and error. Man. You know, you, you’re gonna, you’re not going to know if somebody who’s reliable, they can tell you that they’re reliable, but you’re not gonna really know until you put them in place and get them into the business. So it when, when I put my ad out, basically for the person or the company that I have now, that was what I specifically stated, reliability and untrustworthy. Those are the two words that I use. And luckily I got the right people. But you know, prior to that, it wasn’t, it was inconsistent with my cleaning. As you might reviews, we’re at like 84% five star. Then when I got the new cleaners and now move on 92% so you know all that stuff in the long run.

Julian Sage:                         32:26                     And what have you found most successful when you do find that person that is reliable and trustworthy, how do you, how do you retain that person and want them to and get them to keep wanting to work with you?

Anuj Datta:                         32:37                     You pay them more than the bottom level, right? And you and it’s just human, human nature. You know, you just treated everybody with respect. You know, and if they can see there’s somebody who’s working with, you can see that Hey, there’s some upside in this and there’s, there’s a long term play cause for me it’s all about longterm. When I build a business relationship, I want to have it there for a long time because I don’t want to be running around or people to deal with. So as long as you can make them realize, listen, there’s a long term player with you and with me and there’s a long term vision here, we can grow together. That’s really for the, for the cleaner that I have now I’ll mention even thinking about flirting with him in a management deal for a short term rental, just so you know, they have some older upside for themselves cause she was saying, you know, I can’t be a cleaner forever. I, you know, I want to do different things and you call up, we can work together for the long run, you know, Justin Long thinking rather than like short term plays I would say long term.

Julian Sage:                         33:45                     No and that’s awesome. The, the, the, you know, allowing your cleaner, the potential to move up. But that, is that a conversation that you bring up once they have been there for awhile or is that do you use that to kind of maybe entice them to work with you?

Anuj Datta:                         33:57                     No, no, that’s not an enticement. That’s somebody I know that I could work, work with that somebody, you know, people who’ve been with me for a while. Even when I was in the franchising game, I had, you don’t, managers that are brought up into partnership made the junior partners and it’s actually easier to run that way because then if you have a partner who’s working there, running it on an on a day to day basis, you know, you can focus on, I like doing that and that helps. It helps everybody out or you know, somebody who was just coming in and making us, you know, sort of limited amount of money just based on your time goes fast themselves and then then they can move up. That’s what it’s all about.

Julian Sage:                         34:38                     Pretty cool. I, yeah, I love that, that mindset that you have because really you know that that shows with how you, how you treat people and how you’ve kind of scaled up the business, the, the, the franchise mindset of, of how you’ve been able to apply what you’ve learned, you know, through franchising towards your business and how you treat your employees.

Anuj Datta:                         34:55                     Yeah, yeah, yeah. That’s all about putting yourself in somebody else’s shoes. Empathy is a big thing. You know, if you’re always just kind of selfish looking out for yourself and there’s, there’s definitely a space for the bottom line and the bottom dollar and making a prostitute. Without a doubt. We’re in business. That’s what we’re here for. But if you can do it and bring other people out with you and be considerate and be empathetic towards their needs and working out their families, I think you, everybody growing together can just, you can move mountains, you know?

Julian Sage:                         35:26                     Is there anything in your units that saves you time and money?

Anuj Datta:                         35:30                     Anything within my units that saves me time and money. Hmm. I mean, I don’t know if I’m anything different than anybody else as far as it saves me time and money. I mean, I haven’t pretty, it’s systematic, it’s systematic. It’s kind of like, okay, these units have to be cleaned today. Okay. Are, you know, these codes have the access codes. Have we changed today? Like, I know a lot of people use [inaudible] access on their phones and things like that and people can download apps to access different Airbnb listings. When I do is kind of automated where it’s a cleaner nose, well I use the last four digits of somebody’s phone number digits or somebody’s phone number. We in between the recruiting, we just change that quote every time. That gives us safety, that gives us security you know that. So just things like that, I wouldn’t say fully automated, but it’s similar. So then those systems in the, in the calendar sharing where somebody can just see your calendar, where the cleaner can just see your calendar and just, I’m looking at it, you don’t even need to communicate and kind of what’s going on. They know exactly what to do and you have no issues, you know, with misunderstanding or anything like that. That was, that was a good thing

Julian Sage:                         36:52                     With the franchise type of mindset. Do you, do you have a way that you are kind of already analyzing how you can maybe scale this up? Is that, is there some maybe something that you’ve kind of taken away from your previous experience that is making you look at as at the, you know, real estate hospitality side a little bit differently?

Anuj Datta:                         37:10                     You need to pay attention to your numbers. That’s a really important thing. You need to pay attention to the, to the revenue coming in. You need to pay attention to labor costs. You need to pay attention to your supply cost. You know, the way, the way that you look at it in the restaurant business, in the foot franchising businesses, you have a total amount of revenue. Now what percentage of that revenue is your labor cost? What percentage of their revenue is your supplies, causes you, is your product cost? What percentage of their revenue is your utility cost for percentages? You’re renting. So you, so you have your pie and you say, okay, what are my costs out of this pie? And then what is my net return at the end of the day based on the revenue that I’m doing. So that’s kind of the approach that I’ve taken with this business as well. See, see what, see what the revenue is trying to get, make that pie obviously as big as possible and then slice down your expenses. And then once you have an idea and you can see what those are, you can see, Hey, where, where can I save money, where can I be the profit side of this pipe?

Julian Sage:                         38:12                     And does it make more sense to you to keep on replicating the same type of format that you have or diversifying to different types of investments.

Anuj Datta:                         38:22                     So for me, I’m, I’m working on the management and my business. I’m also working on the arbitrage end of the business. And then, but, but my, for, for my real estate investment side, I want to do the same exact thing on my next part, just which is going to be, you know, taking the smaller apartment complex and converting them into young Airbnb units. So on the real estate investment side, I want to do that. But definitely I have the management I’m going and I like to have, I want to have different types of that. I’m not really big into single family. I read them.

Julian Sage:                         38:58                     Okay. And why is that just because of the ease of all the units together or

Anuj Datta:                         39:02                     Exactly. Ease of operation in economies of scale. You know, those are the two main things.

Julian Sage:                         39:08                     Okay. And for w w what have you done to be able to help your guests leave positive reviews?

Anuj Datta:                         39:15                     Hospitality is something that I was raised with. I was, you know, I come from Indian, that’s my background and Indian people are just raised. If you have guests coming into your house, you know, you just treat your guests as your God basically is, is, is what the same. So you know, like [inaudible] you treat them with that respect. You made sure that everything is taken care of for them. Initially. Like I didn’t have too many amenities like coffee. And little by little I started adding a lot of different amenities cause it’s just like putting yourself in somebody else’s shoes for one of the Oh things that was actually a game changer for me as far as hospitality goes with all my units. So somebody walks in, you know, they’re, they have fresh water, they don’t got to worry about water tap. They don’t gotta buy water bottles. I was noticing that people will come in and they would leave like, you know, buy 24, pack a one and they have like 20 water bottles left cause they can’t take it back. And that’s probably annoying. You walk into a place and you’re like, damn, I need water. And you know, you’ve got to go to the grocery store, you got to go buy the water and then you’re not even going to finish the whole thing.

Anuj Datta:                         40:28                     You use five gallon water coolers in every single unit. That actually was a game sheet.

Julian Sage:                         40:38                     So just recognizing that what people are are requesting just from their actions. You’ve been able to modify your business to basically fulfill that

Anuj Datta:                         40:47                     And paying attention to the previews. You know, like, Oh, what are people telling you about your business? Taking their feedback to you. You don’t get defensive about it. Don’t think, Oh this person doesn’t know what they’re talking about or this and that. Not just say, Hey, this is what’s good for my business. So it’s so in the point is with small things such as like water and coffee and like what else? I mean those are two main things that come to mind now, but with those type of small things, they’re really small investments but they bring you great reviews and returns. One of my big, big things in STR is exceed the expectation under promise over deliver. So if so, and then, and that even works with pricing. So if somebody is coming in at a value price, they’re going to come in and say, wow, I, you know, I paid this much and look at all of this as coming from now what’s, what is that gonna translate into is going to translate into great. That is what this game is about. Who want to be consistent in this game. You’ve got to have great reviews.

Julian Sage:                         41:43                     And is there, is there one house rule that has maybe saved you before?

Anuj Datta:                         41:48                     Why the hours initially I had no really house for those quiet hours after 10:00 PM. And I, one thing about house rules is you got to be very straight up. You cannot be unclear. You have to be very clear about what your house rules are, what your guests expectations are and, and, and because we’ve all dealt with parties, if you’re in this business, you doesn’t dealt with parties, but if you can from the pre-booking phase without the people who want to do parties and not ugly house rules and that’s a much easier way to run the business.

Julian Sage:                         42:23                     Yeah. I, I can’t imagine because I think you’re one of the first guests that is, is actually renting out a full apartment complex for the intent. Just the short term rental. A lot of people that are in the rental arbitrage basically they may rent out a unit out of, you know, maybe a few a, but your whole apartment is is a short term renting. Have you found what, what has that been like dealing with or managing a property that is just solely short term rental with multiple people, you know, side by side.

Anuj Datta:                         42:54                     It’s good. I mean, Hey, at the end of the day it’s kind of like a little hotel, you know, so it’s been good. You know. So short term rental is a business. So you have the business aspect of it and then you have the real estate investment aspect of it. So it’s like two different things. So the essence out of one asset you have to you, you have a business asset and you have operating business which is bringing your cashflow and income when you also have the land and the structure, which is your hard assets. So I love it because it’s like double values. If I wanted to, you know, I haven’t been successful STR business, I want to go having just selling business and retain myself as a landlord and just get a fixed rent from somebody who just wants to do that. That’s an option that’s available. And I’m thinking maybe down the line I would do something like that once, once I a couple more apartments. That way you can sell your actual business for some, for some money. And you know, obviously it will be running furnished, fully running business for somebody to come into. And you would obviously work out all the terms as far as what the rent is and they’ll call legal with the selling prices of the business. It can be a win win.

Julian Sage:                         44:03                     Yeah. I think, I think, you know, the ideal, the ideal situation. Every everybody wants to get into multifamily, multifamily, multifamily that’s what people really want. But it is also very challenging to maybe find those properties because everybody already wants those and people are willing to spend a lot of money on those properties. Have you, with the property that you purchased, were you willing to just pay top dollar because it was a turnkey property or how does really someone get into opposition where are able to

Anuj Datta:                         44:31                     Find that multifamily and, and be able to short term rent it? Well, once you got, you’re not going to buy a multifamily property our basis on the cash flow or short term rental because then you’d be way over because of the way the multifamily properties are calculated is something about cap rate, which is basically your profit is your net operating income, African oil expenses. So, for example, if somebody just for easy numbers, if somebody is buying $100,000 property, multifamily and it’s netting them $10,000 annually, then you’re working on a 10% cap. So, so when you’re looking to buy a multifamily on my next one, I’m not going to be looking to look you know, talk to the seller and say, Hey, I can make this much money and you know, give me the price based on that. No, you’re going to have cash.

Anuj Datta:                         45:23                     You’re going to analyze it based on the income that’s coming in and what the net return is on that income and then, and then, you know, make a deal based on that. You gotta do a, I guess a little bit more educated on it when you’re in, I’m also real estate agent as well. I’ve been in the real estate game, so you’ve got to analyze the numbers. You got to analyze the experiences that are coming in and you don’t add in, you don’t do it based on short term because that’s your potential. You don’t pay for your own potential. You pay for existing is what is the business bringing me right now? What is the net income and what’s my return based on that? So, so you, so cabaret, back to [inaudible] on Calgary is, is a, is it is your rate of return, but it’s also an assessment of risks.

Anuj Datta:                         46:07                     So if you, if, if you’re buying a property like a 12 tab, this returning, you know, 12% in any given market, that’s going to be a higher risk kind of low rent property where your turnover on tenants is not going to be in your, like you won’t have the best tendency in place. Whereas if you’re buying something in a 5% return, you should, you know, buy theoretically you shouldn’t have better tendency. You shouldn’t have as many issues because you’re, you’re buying it at a lower rate of return. There’s an inherent risk in higher cap. So the higher cap rate is somebody who’s buying it. The more inherent risk is in the assets and the, and you as a buyer is your job to analyze and find out what is, why is this deal so good? When do you know what’s going on? You know the guy next door is selling it at double the price. Why is this so, you know, these are the things that you’ve got to kind of analyze.

Julian Sage:                         47:00                     So, so when you purchased this property, you went in there with an intent to a longterm rent it, but then you converted to short term rentals. Would your cap rate maybe change? Would you allow maybe a higher cap rate now knowing that you are going to be short term renting it and the returns on that is going to be significantly more than a traditional longterm rental?

Anuj Datta:                         47:18                     I can do my own analysis, but I would never bring that into deal negotiation because if I’m buying something that’s longterm rented and, and they’re, they’re marketing, they’re probably at at a certain rate. I’m not gonna say that, Hey, I can come in here and WWE can, I can come here and double cash because that’s my own potential. That’s what I’m going to be bringing you to this property. That person wasn’t able to do with the seller, wasn’t able to do it and that’s why they’re selling it. At a certain rate. So I wouldn’t bring that into a negotiation. I would, I would only base it off what the longterm market gives me because at the end of the day, you need to take that into consideration. Anything can happen in this. You all, we know it’s always changing with regulations and just different, different things happening and is going to go public next year. Who knows what’s going to happen with their fees and their rates. You know, you remain obvious as profitable as it is now getting charged two to 5%.

Julian Sage:                         48:10                     Right. But I’m, I’m, I’m asking, I’m asking you it, when you’re analyzing a property, would you now knowing that you can get a much greater return on a short term rental, would your flexibility for maybe a higher cap rate where, you know, the, maybe people are looking at this as maybe not as good of a property to invest in? Are you going in there with a different mindset now?

Anuj Datta:                         48:30                     Yeah, because I want vacancy, right? A lot of people, they don’t want vacancy. But if you’re gonna do STR, you wanna make it so you can make a better deal on something that is vague, that has some vacancy.

Julian Sage:                         48:41                     So you’re saying that because you, you now know that short term renting has such higher returns on investment that you’re willing to work with a property that maybe has a higher cap rate where some other investors might look at that and say, Oh no way. I wouldn’t touch that with a 10 foot pole to you. Now you’re looking at this, well I might actually be able to use the returns on this for short term renting, fix the property up and then get it to, you know, if I do have the long rent rented a lower cap rate,

Anuj Datta:                         49:06                     But I wouldn’t buy based with what I would look for it is, is a deal. Right? So I would look for, if somebody wants a long term rent something, right and then they want to buy an asset and they just want to hold it in place and I have the renders in place and get buy in on a five or six cap, that’s fine. I’d be looking for the deal that is actually a lower a lower cap rate, but that has vacancy place. So I, sorry, a higher cap rate, not a little Intel on cap rate, but higher cap rate, which has vacancy so that you can just get in there and you can turn those into short term rental units. You know, I’m looking for the best deal possible. So the best deal possible is going to give us most likely a higher cap rate and, and you get in there and then you can fast

Julian Sage:                         49:56                     Now. Now multi-families you know, they can be they, they are a bit more expensive and a lot of people might have to go with like a hard money lender. When you are working with someone that is going to be up front of you, the cash, are you yeah. I don’t know how you, how you structured your deal if you just purchase it with cash. But if you are going to pitch to a hard money lender and they’re going to be analyzing that deal for you, are you talking with them about the potential of short term rental and how that could impact or does strictly have to be off of the traditional longterm side

Anuj Datta:                         50:27                     With the, I haven’t really worked too much with hard money lenders, but if you go with a bank, so, so what, what I, what I’ve done is use my own cash. I’ll purchase what I purchased and then, and then I’ll refinance it just pulled out equity. So what’s, so what’s great with the bank is that when you’re cash flowing on the short term rental site, they’re gonna evaluate your property at a higher level. So you can essentially pull out more equity than if you just had a long term lease was in place and you’re making less revenue. It actually works out better on the, on the, on the refinance side, if you are going to work with a hard money lender or if you’re going to work with any lender, they want to perform a right because you’re going to say, okay, well what are you going to do with the place? So of course you’re going to, you’re going to show them, Hey, this is what I can do as far as revenue goes and how much, Oh, how much I can produce. Yeah. You want to show lenders as much revenue as possible are the lender who can say, Hey, this is the existing, this is what’s coming in now I’m willing to lend to you based on this. I don’t know what your upside is. I don’t believe you and your upside or anything like or something like that.

Anuj Datta:                         51:33                     But you would definitely want to pitch higher and higher revenue to a lender for sure.

Julian Sage:                         51:37                     You said you think it’s easier for ’em investors to be able to get into the multifamily space? Now with, with short term renting being more, more common, more well known than it was previous.

Anuj Datta:                         51:47                     Is it easier man, every deal is different, right? So is it, yeah, if, if you had that game plan in place, if you’re saying hell, I’m going to buy this place a place which is let’s say 50% beacon, so therefore I can get a great deal on the place because it’s like banking and then you come in there and you’re turning them into short term rentals, then and then I mean that’s all, that’s the play. That’s the play we did. That’s why I’m saying when, when I’m going to buy something, I’m looking for some vacancy and so therefore something has vacancy. I should be able to get a better deal on.

Julian Sage:                         52:19                     Awesome. And what would you do differently if you had to start from scratch?

Anuj Datta:                         52:24                     It was so much, I guess I had a lot of kind of trial and error kind of getting into this property in the past when I was in businesses. What, what hurts you in business is getting over leveraged. When you, when you have a lot of debt and you’re, and you gotta pay those, you know, those, those, those payments, it hurts your bottom line. You’re usually paying higher interest rates. So you know, from my learning, from, from what my experience has taught me don’t get over leveraged. That is good. And then can that be a good thing? And it gives you buying power and it gives you scalability. Oh, you have to call me with last. You can make good cash on cash returns, but that’s a slippery slope we can, you can always kind of get too much in over your head and you get overleveraged and that’s when people get in trouble. Anybody who, who in business in general to look at big business, small business, real estate, whatever it is, people who operate on too much debt typically get in trouble.

Julian Sage:                         53:23                     Okay. So say staying away from, from overleveraging yourself is something that, that you would do differently. Yeah,

Anuj Datta:                         53:29                     Yeah, yeah. Cause when I was in [inaudible] when I was in New York running my businesses, I definitely, I had some on leveraging issues, which, which I kind of worked through. Learning to was definitely those issues. I wouldn’t, I wouldn’t be overlevered.

Julian Sage:                         53:42                     Okay. And then what about for the short term rental side

Anuj Datta:                         53:46                     For the short, what the question was, what would I do differently? I think, I mean I’m not saying everything you did was great, but like I think the steps I took on probably take the same approach. If if I buy a new, another apartment complex with, with tenants in there, at least it’s come up, I would you know, obviously terminate the leases and then little by little grow it slowly, you know, and then turn and turn those longterm rents or long term leases into short term.

Julian Sage:                         54:17                     Awesome. Where do you see short term rentals going in the future?

Anuj Datta:                         54:21                     I think it’s going to change the whole game of living in housing. Kind of like see what, what Airbnb has done and Uber has done, they taken the transaction out of the deal. So it’s not like I got to give somebody money. Like let’s say I was just sitting here and an apartment complex, had a desk setup on site. Okay, you want to stay here, let me give me $100 and then go walk inside. It takes, it takes out that uncomfortability of kind of the transaction between people. Everything’s kind of handled, taken care of on the platform. So I think, I think in the future people may not even need to sign leases. People might just live street on Airbnbs and it’s going to change in the process of changing and look at how much progress has been made. So I think the future is wide open and I think you could just literally change housing happens in shelter.

Julian Sage:                         55:12                     Awesome. And what, what question maybe do you have for someone that is maybe at that next level or doing something maybe a little bit differently than you? What question would you have for that PR for that host?

Anuj Datta:                         55:23                     My business is not fully automated. My business is semiautomated. You kind of got to think about the automation all the time. So I would definitely end, there’s definitely holes who have obviously many more units than I do who have automated their businesses and done really well with them. So, you know, my, my main question lies within the, the automation aspect and kind of how to get the business fully automated that you can take yourself.

Julian Sage:                         55:51                     Okay, great. Great, great. And do you have any books that you recommend? Do you have anything that you listen to or follow that, that you would recommend to someone that is maybe getting into the space?

Anuj Datta:                         56:01                     We’re thinking grow rich. I’m reading that right now in Napoleon Hill. I think that’s a pretty famous one. Mastery by Robert Greene on the laws of human nature by Robert Greene, Markus for released meditations of Marcus for release, which is a great book on stones. You know, stoicism being, not letting things affect that much and just, and just focusing on what you can control and then things that are out of your control, you know, don’t even waste too much time on I, you know, there’s so many books.

Julian Sage:                         56:33                     I don’t know. I love it though. I love it because a lot of the stuff that you’re talking about, I love, I love, I really love that about you and it was just that throughout this it’s always kind of come back to character and how you treat people and you know, how how you present yourself. I think that that’s you know, it says says a lot about you. The, the books that you’re saying would help you in this business are maybe not those optimization, you know, real estate, the number crunching because obviously you have a lot of experience with that, but you’re saying it goes back to the, the person you know, how your character is, how you present yourself, how you treat other people

Anuj Datta:                         57:06                     And how, how you are as a person, you know exactly what you said. It’s you, it’s all about your character and people only going to deal with you in the long run. If you’re your personal character, if you are in word, if you, if you say, if people know that this guy says something, I know what’s going to happen, or I know he’s going to stay true to it, then you know, you’re going to solve a lot of problems.

Julian Sage:                         57:25                     Awesome. Well thank, thank you so much news for taking the time to to educate us and, and you know, share it. Share your wealth of experience and knowledge. I just think that is so cool. I love what you’re doing. I, I wish you the best of success and thank you again and until next time, host nation, keep on hosting.

Julian Sage:                         57:43                     Hope you hosts benefited from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to hosts that have been featured in these episodes as well as the community, then go on over to our Facebook group, the host nation. Talk to you hosts in the next steps episode. Keep on hosting.