Nathan Carillo:                   00:00                     Now we are, for example, booked almost the whole year. We’ve been having 98 to 97% every month and we’ve been making a lot of money and now we have an org board and we have employees and blah, blah, blah. It’s been only since may of this year.

Julian Sage:                         00:18                     This is episode number two, five of short term rental success stories podcast. 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 their 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 views, so please go on over to iTunes and let us know what you enjoy as it really helps support the show if you haven’t done so already. Going over to a Facebook group with the host nation to connect with the community and other professional hosts that have been featured on the show. They have the honor of speaking with Nathan and Raquel. Cardio. Nathan and Raquel are fulltime hosts who currently reside in manage five units in Mexico city, which they’ve scaled up to in five short months.

Julian Sage:                         01:02                     They portfolio five consists of two properties which they own and three which they are subletting in this conversation. Nathan and Raquel share their experience of growing this business in five short months. How they’ve organized their business for easy scalability, how to create units that stand out and what it’s like managing multiple properties and Mexico would be like my show notes for this episode. You get a short term sage.com backslash STR to five or if you’d like my show and it’s sent directly to your inbox every week, then go to short term sage.com backslash show notes. 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 the special honor of speaking with Nathan and Raquel cardio. If you please wouldn’t mind introducing yourselves and letting the host nation know who you are and what inspired you to get into short term rentals.

Raquel Carillo:                    01:51                     Hi, my name is Rick Cal, so it’s me and my husband that we’re doing this. And we started with the short term rentals basically because it’s an opportunity for constant expansion and creation. So that’s what we found. And then also because we traveled a lot and so we’ve always loved the experience of, I guess the short term rentals for that. And we started with our own property just to make it into something that we could use. And then it just started sort of snowballing from there. So.

Julian Sage:                         02:21                     And how did you first hear about a short term renting?

Raquel Carillo:                    02:25                     Oh, well, we were actually Airbnb clients initially, so we would use therapy and bees. And then it was, I guess a Nathan’s idea because we got into a lot of traveling situations where we would leave for let’s say a month at a time. And so it was very expensive to have this other property that was just at a standstill and wasn’t producing anything. And so he was like, well, why don’t we put it on Airbnb? You’re already, I guess logged in there so you can just turn it into a host and see if somebody rents it. And they did.

Julian Sage:                         02:57                     So you just started renting your first property because it’s like you want it to save some money. It was getting expensive and when did it kind of click for you that it was like, Oh wow, this is actually a good business and we should start scaling this up. Cause right now you, you a, you have two that properties that you own, you’re subletting three. But you guys are kind of like on a rapid expansion. You’ve only been doing this for about five months now and you’re, you’re really kind of planning to grow up to 20, because you’re by the end of the year you’re planning on getting investors and stuff like that. So when, when did it kinda click that was like, wow, this is a good business. Let’s go all in on this.

Nathan Carillo:                   03:29                     Look, we, we started this because we wanted to leave some months outside of Mexico city because Mexico city, it gets very intense for, it’s a easy, we deceived, but we wanted to live in some other countries and I said that we can rent or a home and digged up money and brand, for example, in flooring something or something like that. We live in outside of Mexico city. It’s like 30 minutes a week. We’ll live in the, from the center, from the center. We’ll live in a golf Aria and golf glove. And it’s very far from the museums and restaurants. And, and once they put it on there, a BNB, it received a lot of requests. And it for me too, I was like, if if listing my property here, I’m gonna have that eh, amount of clients put in in the blank on the best areas in Mexico city, it’s going to be a boom. And that’s how we started because it was at the beginning, we had, we were afraid that the clients or guests are gonna do something wrong on their property and everything was very smooth and very ethic. So that’s fine.

Julian Sage:                         04:53                     I, I think it’s pretty interesting because before Nathan, you, you, you were in real estate and Raquel, you, you were doing art. So before you got into the short term rental and you really started kind of like getting in heavy with this like where were you? Did you have the possibility of, of like moving somewhere else or was it, is it because of the short term rentals that it’s like now you have the opportunity to kinda move to different areas and, and scale this business up and, and be able to live off of your, your rentals?

Nathan Carillo:                   05:25                     No, I do good in my other businesses. I own some buildings and a do longterm rentals and it’s, it’s very, not easy, but it’s very okay. But the way that I can scale my business on their regular longterm rentals, it’s not even similar to the, eh, arbitrage, eh, real estate. Because with 1 million best sauce, I can get 10 unit and with 1 million [inaudible] I can’t have one apartment in Mexico city, you know? So the way that I can scale the business and it’s not even close one to each other. So that’s basically why I got more attention on this business because now we are, for example, booked almost the whole year. We’ve been having 98 to 97% every month and we’ve been making a lot of money and now we have an org board and we have employees and blah blah bindings. It’s been only since may of this year. That’s crazy. Wow.

Raquel Carillo:                    06:38                     Yeah. And then the living somewhere else, it was a plan that we actually had together initially, but now it’s turned into a reality because you do have something that’s sort of a cashflow thing. So you know that you’re going to receive some amount of money that you can use for whatever you, whatever purpose you want in the future. So let’s say that if I want to go to Florence next month, I know that I can because I had the whole this month booked. So there’s some money there that I’m getting throughout the whole month that I can use next month. So basically.

Julian Sage:                         07:09                     And is that basically how you are planning on scaling so quickly because that’s kind of the, one of the beautiful things about a short term renting and rental arbitrage is like once you, you know, once you have those bookings and they are deposited into your account, it’s like you already know how much you have and you can already anticipate and plan on what you have based off of your foot future bookings. So is that how you’re planning on scaling this up to like 20 units by the end of the year?

Nathan Carillo:                   07:33                     M is, it’s not specifically that because we need to pay a, in Mexico, I don’t know how it worked in us there rentals, but in Mexico you need to pay two or three different concepts before you get into a contract and you need to do some thing legal, legal things here. But eh, I can use money from other companies that I own and work with that money. Now we’ve got some investors that they put in some money so we can expand much, much faster. And they banks are getting to start to qualify the incomes from arbitrage or from Airbnb as a good income. So they start lending money to us. So that’s how we can increase or are appropriately,

Raquel Carillo:                    08:30                     I want to explain that a little bit further. So it’s like they look at your statement. So let’s say that I have this apartment in Polanco on Airbnb and it’s fully booked for this month. And then you have bookings that go out through the year. So they take the total of that capital and they say, Oh, so you’re going to get a revenue of blah and they can lend you that money because it’s money that you already sort of own. So that’s, it’s sort of, they lend you money based on what your income is and is going to be. So it’s very interesting because you sort of use that instead of a bank account, let’s say.

Julian Sage:                         09:05                     Wow. That, that is, that is pretty amazing. And that, that’s something that I’ve never heard of anybody doing it anywhere else. So Mexican, Mexico city though that that’s a pretty, is that just because you live there and you’re familiar with that? Did you know going into that market that it was going to be something that you could do or I, I’m not sure how it is in Mexico with like the regulations and, and the bookings. How does that work? If you wouldn’t mind explaining

Nathan Carillo:                   09:34                     There? Regulations in Mexico are very smooth right now, but it’s going to be tough in the future because all the companies like Kuma and rugby and all that stuffs and Mexico started very tree and then the government started doing things here. But I think at the end the demand of houses and listings in Mexico are bigger enough to make a good business.

Raquel Carillo:                    10:04                     Yeah. It’s a very, very big city. So we have like millions and millions of people that live here. So we will get a lot of people that say from the rest of Mexico that are just coming into the city for a, I don’t know, work things that are, that’ll last a weekend and stuff like that. And then we also get a lot of people who are from out of town, just foreigners that come in because Mexico is a very important sort of layover. Stop for other places, and then let’s say they want to go, I don’t know, to Cancun, which is sort of a very big Mexican spot. Then they’ll usually stop in Mexico city first and some people say, well, it’s a good city. I mean there’s a lot to do here. There’s a lot to see. There’s tons of museums and it’s a beautiful city, so it works that they sort of go like, okay, so I’ll stay a couple of days in Mexico city and then I’ll move on to wherever I’m going.

Nathan Carillo:                   10:54                     Yeah, Mexico city has everything because if you want to have some good food, you can come here. If you want to. Basically museums, if you want to go to beaches that you want to go to downtime in, if you want to work or you need to work or you all that kind of thought stops

Raquel Carillo:                    11:13                     In Mexico happen every day and it’s not very expensive. I think that’s a very key point for people who are coming from outside is it’s a very big city. So let’s say it’s sort of on the same scale as let’s say a London or New York in terms of just how big it is and how many people you have coming in. But it’s not as expensive as those cities. So it’s, it’s much cheaper to stay here than it would be to stay in London or in New York.

Julian Sage:                         11:40                     So with the units that you’re, you’re getting in Mexico are, are people, are, is there a lot of other people in the same space kind of doing similar things or are people doing the rental arbitrage model? Are people owning turning their units into Airbnb units?

Nathan Carillo:                   11:56                     Eh, I don’t know a lot of people, but they are, because when you, when I do the market research AC the same, eh, person owning or listing some properties in good areas, I know one of my closest friends that he or re owns nine apartments and he’s doing very good. Another one has six, but eh, how can I say? There is a lot of office space and we were in cute in Mexico and for what he can see on the feasible chats and whoops in the whole world because for example, in Mexico, Airbnb create tech com and a campaign on the streets that says you can stay in their BNB here in Mexico or any place in the world. So Airbnb now is not only on the iPhone or on the internet, it’s now on the buses and on the concerts. And so there’s promotion on the streets. A lot of more emotion. That’s very good in Mexico for what he understood it last year it was the third master a visit to place via Airbnb in the world. So yeah.

Julian Sage:                         13:11                     And how, how do people take, so when you are talking to landlords and saying, Hey, this is what our business model is, how, how have you been able to to bring that subject to them?

Nathan Carillo:                   13:23                     It’s very three get or no, it depends. It’s like there’s no specific or there’s, for me there is no, like a scientific way to approach one. The only one that I change and it started to work much better. It’s that I never say at the beginning I want to sublet or I want to do Airbnb because right away they hung up right away. They don’t even want to listen to you. So I started saying like, Hey, I own a business and they do it corporation rental for short, long term. And they, sometimes they got confused because they don’t know. You find my broker or, or if I am the owner or what I want, but that’s much better than no, you know, and now I have one like on the future, three or four properties, now I can reject some people and the beginning, you do us, no, please, please, I want your property. So yeah, it’s very different. And now I have a very good contract. They AE, I look for the properties by my own. They don’t have any gay or broken in the middle because I need to do it. It’s much, much easier.

Julian Sage:                         14:41                     Is there any you have any advice for people that maybe are interested in Mexico city? Like, are there things that people should watch out for or things that maybe do better for short term renting?

Nathan Carillo:                   14:54                     Yeah, yeah. The tax, the taxes here, the people that usually rent a place or something like that. They one day M the payment every month in cash and that’s sometimes very difficult. Big Serbian B doesn’t allow the cash, you know? And that creates a lot of problems for me because I need to understand how to handle cash, you know? And that’s, for me, that’s one of the most eh, important or problems here in Mexico city. And there is a lot of informality.

Julian Sage:                         15:34                     That’s what I’m kinda, that’s what I’m kind of curious is, is, is this something that is a, maybe a scalable business in Mexico when people are maybe kind of inclined to an old system, you know, exchanging money, maybe they don’t want to put like, you know, smart locks or door locks for automated check-in. Is this something that is a scalable automated business or is it very kind of clunky?

Nathan Carillo:                   16:01                     The them, the people that work in Mexico, like the common people, they’re not so expensive. So you can pay your people and it’s not very expensive. It creates a lot of, eh, not automate, automatization as in you as you can make it. Right. But you can hold on that.

Raquel Carillo:                    16:23                     Oh, so for example, I was looking into some of the, since we started scaling in the point is to expand quickly. I was looking into some of the automated a small books [inaudible] also that, but I looked into properly and those sorts of things and they didn’t actually work for Mexico city because of the same thing that Nathan saying. It’s not as automated. But the way that we managed to sort of turn it around was that we have this one person who’s in charge of the cleaning. And then I said to her, okay, so look, we have these properties. And at first she could do fine on her own. And then there’s this point where you just can’t, you, there’s no way to cope with everything that you need to do. And so she started bringing in more people and making her own sort of little business inside of our own business. So each person turns into this hub of extension and you get people who just sort of have to replicate what they’re doing and show somebody else how to do it. And then just I treat with this one person and I say, okay, so you need to be in these three apartments on the 26th, and then she has to figure out how she’s gonna make that work.

Julian Sage:                         17:32                     Now with, with, with that, do you always need to, are they able to like use like like some people use like g-mail or they use like Google calendar to be able to coordinate are do your cleaners, is there, do you need to constantly be

Nathan Carillo:                   17:50                     In contact with them and telling them like, Hey, you need to go to this unit, this unit, this unit? Or is it pretty automated?

Raquel Carillo:                    17:55                     Well, I think it’s a little bit of both. So what we do is I’m the only one we’ll, me and Nathan were the ones that actually get the bookings. So I will just log them into my own sort of little notes and then I just pass them on to the person and they log them as they wish to do so. So I don’t care if they go, let’s say it. So we have a sort of check in and check out policy. It said 12:00 PM checkout and then 3:00 PM check-in. So they have a three hour window. Sometimes it’s more, sometimes it’s less. But that’s usually what happens to get all of the cleaning done. And then all of our welcome stuff set up and everything that we need. So I don’t mind if they get there at 1:00 PM if it’s ready by three, then it’s fine by me.

Raquel Carillo:                    18:38                     Like they can do their own sort of thing in that. But that’s because I already trust the person. I know how they work. And in the beginning it was a lot of sort of, okay, so you have to be here and then you have to do this. And I would go with them and say like, okay, so we’re going to do the sheets this way and stuff like that. So at first it wasn’t very automated, but now it’s gotten to the point where we know each other very well. After a couple of months of actually doing this and just putting it in practice and I can trust her to show somebody else how to do it so I don’t have to worry about it anymore.

Nathan Carillo:                   19:12                     And w what has been the most challenging part of starting your, your short term rental business? The amount of time that you need to put into looking for the market. Because at the beginning we were a little bit of afraid that were, where are we going to put our first a 5,000 or $10,000 to start, eh one property in, it’s more like, I’m thinking like, how can I explain this? Because at the beginning we said, no, let’s take a small apartment so we don’t have a lot of eh, of risk on it and let’s take it very slow. And my, at the beginning, that was my, like my first concern. But now I want, I only want to have the biggest eh properties that I can get because it’s the same amount of time. It’s the same amount of effort that I need to put.

Nathan Carillo:                   20:18                     And it’s much more profitable. A house of seven rooms, four 44 people, it costs a lot, a lot of money, but you base off, you know, so for me they experienced at the beginning we were alone. We didn’t, we didn’t have any coach or we didn’t have any safety net to talk on that. But just patience and be very, very, very, very systematic because it’s not something that you list properties, takes photos with your iPhone in the people loves your, you know, there’s a lot of competition, a lot. And there are some people like gauze that are very good doing this and they have oral boards and they have money and they have intelligence. And, and for me now it’s like a very, very, very scalable business and they can do it. Any PR in any place in the world. So,

Raquel Carillo:                    21:11                     Yeah, I think it’s important to note Carol. So that we made it sort of very automated for us. Not necessarily, you know, just as, as the operations go, but just how to, let’s say a design, a property. It’s become sort of very mainstream in a way because I’ll just take a theme and I know exactly what to do with it. I get a budget and that’s it. So it’s become sort of very expandable in that sense. So what we realized is that you do need to have a good design. You do need to have sort of [inaudible] specific things that will help you differentiate from somebody else.

Nathan Carillo:                   21:49                     I’m not, I’m not at work because if you don’t have an oral board, you’re gonna go down very easily. If you want to do it for, for big, you know, you only want to rent your home and get some extra money. It’s okay, but if you want to own a hundred or I dunno, whatever, anyone ones that he wants a hundred now you need to, you need to have an artwork because if you don’t have policies and you don’t have a specific tasks, specific products, you don’t have like a eh, a company you don’t like like USA, they have the best franchise in the world. So we are doing that or working with Airbnb. Very good.

Raquel Carillo:                    22:34                     You just replicate what works.

Julian Sage:                         22:36                     So, so if you wouldn’t mind explaining a little bit about your, your organization board because and how, how, why that you, you feel that that is so important and how that has been able to help your business?

Nathan Carillo:                   22:47                     Because we have seven divisions in our niche division. There is Agnes specific, we call it and product and with the them product and refer to something that that division needs to work to get it done at the end. It doesn’t matter what they need to do, they need to get that product at the end. And each division has one product and that product, we get each of those, of those seven products at the end, we have their biggest product that we need to a sell to the guests, that it’s a positive experience. So each division needs to work towards that direction so we can get that eh, five stars, eh, review. So,

Julian Sage:                         23:35                     So when you’re talking about the product, you’re talking literally like Airbnb, they have like cleanliness, hospitality, all of that. You have dedicated people to those types of products.

Nathan Carillo:                   23:46                     Yeah. Yup. For example, their first division, it, it, it, they scare of there. And obviously I say that, that our base, that our base, you know, and they’re welcome. Hey, in the, they register all their email phones and do the hello to the guests. Then division two, it works on a, everything that has to be with marketing, market research and professional photographs of the listings, right? Eh, the description of the listings and look at the other competitor competition that, how they work, what they do and that type of things. For example, the last week we started a to selling art Mexican art on the properties. That gives us some extra money. And we started with selling. Like for example, Listerine and diet Coke and beers, toothbrush and depletion treats everything that has to be with financial incomes and outcomes, everything. Everything is there. Division four is everything that has to be with experience and the setup of a new listing and experiences. Everything that has to be with cleaning, with hosts, with taking care of the guests, seems key book, everything is smooth to him. Division five is everything that has to be with a qualifications and corrections reviews, how was everything and how we can improve each property and each process. And division six is expansion. So and divisions seventies the owners basically. So each one has to do, has some specific dusk and that’s how we can scan it very easily.

Raquel Carillo:                    25:42                     It sort of goes moving in from one to the other one. So the first thing that happens is you get a property, let’s say from the seventh division, right? And then you go into, so you put that Dee, that new property into your first division, which is sort of your interior communication. So you log it as a new property and then you have to sort of say, okay, so we need a good marketing for this. And then you start taking pictures of that property. And then in the third division you say, okay, so we have this much money for rent and this much money for a design. And so then you set it up and you do everything. You start getting bookings and everything, so you have a good experience in the fourth division. And then let’s say that somebody says okay, so I went into the bathroom and the towel rack fell off. And so division five has to go, Oh, okay. So we need to correct that and they’ll send it back to the person in form so that the person in full will correct it. And then in six, it’s just of

Raquel Carillo:                    26:44                     Extending everything so that we get more people so that we can just replicate the process again and again and again. So it turns into a sort of cycle.

Julian Sage:                         26:52                     I liked that because you, you’re, you’re, you’re taking this approach because right now it’s, it’s a YouTube from what I’m understanding is you’ve laid out this whole kind of roadmap, these, these these different divisions, but you guys kind of are managing the different divisions currently, but the way that you’re, you’re planning on scaling it is that you’ll be able to step away from that, that and be able to just manage, have people managing these specific parts so that you can be on the S the division seven, correct?

Raquel Carillo:                    27:20                     Yeah, exactly. That’s the, you got the point perfectly. The point is that you get people who can do these jobs for you and everybody knows what we call it sort of hats. So you put on your hat and you know what you’re supposed to do. So it doesn’t matter that I’m doing it or he’s doing it because you know what your product is and you know what actions you need to take to get that product. So each person is very clear on what they have to do. It’s very easy to expand it and to give that job to somebody else because you just sort of just keep replicating it,

Julian Sage:                         27:54                     Right? Because you’re creating the systems within those divisions that can be passed on to somebody else so that you can step away and they can just manage that at one particular area. That that’s a, a really nice way to kind of chunk up the information. And so it doesn’t feel overwhelming to just pass this on to somebody else.

Nathan Carillo:                   28:09                     Right? Yeah, exactly. Yeah, we can do it any in any place also. That’s a good point.

Julian Sage:                         28:17                     And w what has been the most challenging part of scaling your business? So after you got your first unit and you, you, you had it up and running how, how was that getting more units?

Nathan Carillo:                   28:27                     Yeah. For me it’s the fear of failure that that’s like the, their biggest problem because for example, eh, today I’m going to sign one contract and it’s very close to another property that we have in common. They’re secondary sites like Soho in New York, for example, to give you something like that. And sometimes a on divisions have and we are looking at a do we need another property in the same building, eh, where the same strong, the same street and you know that that kind of, I’m curious in, in that for me the darkness of this business that they don’t have any coach or I don’t have any Gundalow from the way that can let me know of course to go it, it’s like the hardest part because Airbnb, it’s very intelligent. The for me is one of the most amazing business that ever exist. Airbnb because this is like some diff to tell you why, what a, we sign a contract and the owner gave me two weeks to set up everything and in what, 30 minutes? I already have three books for in the future, you know, so I paid the rent with only $200 that the photographs, the pictures cost me. So it was like if I want to give for free my apartment and I posted in on Facebook, I don’t know if I’m going to have that amount of people wanting my apartment for three. So coming back to what I was telling you, the expansion for me, it’s there, the [inaudible] problem to know where to put the other coins, wherein, how has the demand in that area

Raquel Carillo:                    30:36                     [Inaudible] and then what to do with it. Also because I mean that’s his part was his expansion. And for me in the experience area, it’s how to know how to best use the specific thing that I’m given. So I’ll say, I don’t know, let’s say that they go, okay, so you have $2,000 and that’s your budget. And so I need to make that into something that will be very noteworthy. So for me the most difficult part has been, okay, so they did all the work as to where it needs to go, how much money it’s gonna cost and everything. And then I need to put their ideas into the physical universe and make it a thing. So it’s sort of, that’s been the most, I guess challenging, which is also the most rewarding part and the most fun part. But it’s difficult to sort of, you start getting confused as to, okay, but what if I do this?

Raquel Carillo:                    31:24                     And then I could do that, but then that’s going to cost more money. So should I invest in that or should I invest in something different or make it very cheap? And so it’s been sort of a tug of war to see at what point. So now I know that I can invest in some key things that will make it better and make them be able to charge more. And sometimes it’s just sort of this, okay, you need to give me a little bit more because it’s going to work out, I promise. So that’s just knowing what the balance is has been, I think the most difficult part for me,

Nathan Carillo:                   31:57                     And this is, this is a a good question to kind of play off of that. What do you do to set your units apart?

Raquel Carillo:                    32:02                     Okay, so usually it’s a very specific thing with the art and design, which is great, but what I do, because that’s literally my other business. So we try to, for example, I’ll put accent walls in each room because I know that that’s going to look good in a photograph and it’s going to make a space much more habitable and much more, I guess a homey. And then you don’t need to necessarily do anything with the rest of the walls if you have this one accent wall. So for example, in one place there’s this brick wall outside. That was great. It actually came with the apartment, but I started playing off of that. So I got that as the theme. So the theme is now sort of this New York brick house and it works really well because you have this one thing that sets you apart.

Raquel Carillo:                    32:47                     And then there were things that I started replicating. So we always put in a as you say excellent like extra beds because in the end it is a business. So every head that you can get into sleeping in your apartment is going to be extra income and revenue for you. So to do that with the less money and to make it an actual comfortable thing was, was sort of difficult. But we found this product that’s like a poof. So like you can sit on it and it’s really comfortable and then you take off the top and it turns into a bed, which is awesome because it looks very good, but it still sort of works as a bed and it’s not the typical sofa bet that I hate them all. They look so terrible. So that was, that was sort of the one thing that we do, we do put in a lot of extra beds or like we have this one bed in a room and then you can pull out a second bed.

Raquel Carillo:                    33:48                     So that was very important. And also just what I’ve been saying about the accent walls, trying to use them, a lot of plans, a lot of Mexican design because what we figured was at first we were trying to make them very, just sort of, I guess from other places, you know, like this New York apartment. And then we started realizing that if people come to Mexico, they want to see Mexican things, right? So now we changed the whole setup of that and we’re making this a, the house that made them mention with the six or seven bedrooms, you can fit 30 to 40 people in there, which is by comfortably. Yeah, it’s great. And the design is completely Mexican. Like the house is bright pink, like Mexican pink. So it’s awesome because you can see it through from the whole block and sort of went around that one thing and it just sort of scaling. And so now the floors are like this mosaic thing and all of the walls are different colors. And it just sort of turned into this thing where you need to find a way to make something beautiful without necessarily putting too much money into it, but with key things that will make it stand out. So that’s the most important.

Julian Sage:                         34:54                     There’s, there’s actually, we had a, another host that was on the show, a, the, one of our most recent episodes with Ty and sink. And one of her questions was actually how do you build out and design such a big house cause you guys are taking the one of the biggest houses in Mexico city is what you said. So how do you, how do you the biggest house in Mexico city? So how do you, how do you design and decorate and make each room and that whole place unique without it being like cookie cutter?

Raquel Carillo:                    35:25                     Well we will what I did with themes, so what I do is first I will literally design the house. So first he found the property and the property needed a lot of renovation or something, something amazing

Nathan Carillo:                   35:38                     For me because I didn’t have to pay any rent. And we partner with the old nurse because that house was not abandon exactly, but they didn’t live there since 1974 in any, it’s in the best start in Mexico city and it’s a big house. Big, big, big. For example, if I need, if I want to rent that property, at least for me, it will cost me $10,000 per month at least. And now they’re gonna get 15% of the incomes, like our royalty and they’re gonna make a lot of money. Also, we got a agreement that if I sell the house, I can get 40% of the profits. And I mean, you can start making another businesses if you are smart and you understand the real estate business. Yeah.

Raquel Carillo:                    36:31                     Okay. And for the design part it was basically to get a theme, so it was the Mexican theme and then each room has to have a different theme. So let’s say we’ll go through colors and we’ll invest in this one accent wall that I was talking about. That’s always sort of the GoTo thing and in getting as many beds as possible in, so the first thing was I go to the house that you found, which is great. I take every single measurement in the house and I will make my own sort of little blueprint, a digital blueprint, and then I’ll stop or start playing around with what I want it to look like. And it’s actually very close to what my original idea was. So it’s great because I can visualize and then get an [inaudible] a differentiator in. So will with a house this big, it was very easy to put in a lot of common spaces.

Raquel Carillo:                    37:27                     So we tried to make most of it into beds because that’s where your actual revenue is and where your income is going to come from. But you also have to make it a good experience for the people who are staying there. So it was very important to put in specific things that are going to make it more desirable for the people who will go and stay there. So we invested, for example in a a projector to make a little outdoor cinema. And it’s something very, very simple, but it’s a great hook and it wasn’t that expensive to make and you can literally just sit down under the stars and watch a movie and it’s great. So those sorts of things were very important for us to make a good experience. Cause in the end the product is the actual experience. It’s not necessarily the design or finding the place. So it was all sort of geared towards that. So everything that we do is with that in mind. So we went, for example, the last weekend we went to wetland, it’s another city in Mexico and we went to buy decoration, Mexican stuff for this house. And so we will go extra mile and go somewhere else. And just to make it special. So that’s also important. Make it something that people won’t usually see in other places so that they want to stay at yours

Nathan Carillo:                   38:46                     Somewhere else. Yeah, we set up a space to do, go working and we create a common now of bathrooms or they can take a shower at the same Dame eight people. You’re not that, that is more, more like I’m hostile, something like that. But Airbnb hostels, so it’s something much better than our regular hostel.

Julian Sage:                         39:12                     So in that house you’re, you, you’ve created like a, a community bathroom type of a hostile environment?

Raquel Carillo:                    39:19                     Not really. I mean we have like a one kitchen, then we have one dining room, we have one sitting room. Then there’s the what I mentioned about the outdoor cinema and then we have all these different rooms. So some of them will have a bathroom and some of them won’t. And for the ones that don’t, we have a big bathroom that lots of people can be in at the same time because if you’re thinking, I mean we have 30 to 40 people in there, you do need to have a lot of places where they can sort of hang out. And then also the bathroom is very important. That kitchen is very important to like we have this huge four meter long table that we put like a little benches. And so if somebody wants to actually sit there and work, they can and somebody else can be having breakfast at the same time. So I think that’s what he needs with the hostel thing. Yeah. And we put in a coworking bench as well because we know that people do want or do sort of like us, they have this business that they can manage over the internet. And so they do want to have a space where they can work. And so we sort of thought about that and geared it towards those types of people.

Julian Sage:                         40:26                     Well how so? So this, this home cause it initially kind of what I was thinking was he got this place and it’s going to be like just maybe for like a like a big family or something like that, but what you’re saying is that this unit is going to be multiple people can book different rooms in this place and it’s going to be like a hostel that there’s going to be community and you’re creating an experience for it for the guests.

Nathan Carillo:                   40:45                     That can happen too. It depends on their market. Yeah was we, we don’t have like that specific viewpoint on that property. We are looking to solve problems or experiences. Two big groups that usually come to Mexico or big families or a lot of France and whatever and they want a big place. They want to eat together, they want to hang out together and they want to feel that they own a place in the heart of Mexico, in Condesa and there is only three more places in Mexico. They can accommodate, accommodate 20 people, something like that, 20 something but they’re very tight in here. We have like our real place and lot of space. Yeah.

Julian Sage:                         41:36                     How I’m, I’m, I’m curious because I think that that’s super interesting that you, you know, the, the biggest house in Mexico city, you are able to just go there and say, Hey, you know, partner with me and I’ll give you a split of the profit and you worked out all these, all this really amazing deal. How, how, how do, how do you even structure something like that where because I’m sure that there needs to be a lot of renovations and stuff to the, to the whole, how long, you said that there was some it was a bit older you need and you’re putting in all these, these new things. Are, are you guys also splitting the cost of rehabbing it or is he just doing that or

Nathan Carillo:                   42:11                     We are, no, we’re, eh, investing like $80,000, something like that. A little bit less.

Raquel Carillo:                    42:21                     That includes the renovation of everything like that. Anything from like rotting walls and stuff like that to floors a, the beds, beds. Yeah, exactly. All the furniture, all the art, painting the walls. Everything is in that something that

Nathan Carillo:                   42:35                     It’s very important that the people, eh, get appointed their money. If you are going to best money on this, you need to invest it on the furniture, not in the walls and not in the floor because if you need to run or do you need to go out?

Raquel Carillo:                    42:53                     Yeah. If it’s not working for some reason, the only thing that you can take, it’s not the bikes, it’s a belts and it’s a couches and you know, and they will,

Nathan Carillo:                   43:02                     That’s it. So maybe there’s 80% of 70% of my budget there. It’s for a furniture chain. So if I need to, if that, if this house doesn’t work, I know I can get five or six apartments right away. Yup. But no, we’re not partnering with them. And I’m looking for properties daily. Daily. I have maybe three or four eh, appointments daily and a make maybe 20 inquires daily. So for me, that’s the only way to understand the market, to, to also to feel the owner because there are some owner that they are in need of money and they are very, you know, yeah, yeah. Come here and we can set up right away. So it’s not something I can tell you like scientific things, but it’s more like a feeling that you need to develop on the sales and because you are selling yourself, you’re not buying the property, you are selling your concept to them and then they need to buy from you the contract. So when I understood that for me to as much easier,

Julian Sage:                         44:18                     No, I, I think that that’s that’s, that’s really interesting that that you know, you, you, you’re having to sell yourself to, to them in order to get this business. But a lot of people are saying like, Hey, you know, just, just come here, just come here, rent, rent. And you have to discern whether this is going to be good, a good business, but also while you’re also selling yourself.

Nathan Carillo:                   44:39                     Yeah. For example, we create a video that explains or business and needs a very good video. A we created with very good designs were very good music so they can understand because in Mexico, the people that owns the best places, they are not young people. They are not like us. They are. Maybe people’s dad has 70 80 years, 60 years, because that’s the people that have the money or the everything. Something, something like that. Yeah.

Raquel Carillo:                    45:08                     Or they inherited a property from their parents for example, and they have it there and it’s making very little money when it could make so much more, but they don’t know how to put it into practice because they don’t know anything about this whole digital age

Nathan Carillo:                   45:21                     One, two. So once I said to the, the one person, I’m going to make this amount of money, she canceled the contract and he started the Airbnb. So also you need to be aware of what you’re saying, but we create that whole package of sales from us as our public relationships so they can understand the why we do it. I take a success stories from the landlords and they say, no, he bays me very good Duran. He’s very hectic, all blah, blah, blah. That’s all I have a carpets or our file that I can share with other landlords. So they understand that I have a good business. You know? I agree. I understood that. I need to create a [inaudible] trust on my company. So I saw it like that. I, I said that I need to create a business, a presentation, I need to create a website. They need to create this. There’s this, there’s this. So,

Speaker 4:                           46:25                     Okay.

Nathan Carillo:                   46:25                     Was they look at me, they saw me like, okay, these guys are gonna take my apartment for three, five years. So I want him. So yup.

Julian Sage:                         46:36                     There there’s a lot of, there’s a lot of education and a lot of trust that you have to build up before you get into these relationships. Is, is there, is there anything that you would do differently if you had to start from scratch?

Nathan Carillo:                   46:47                     Don’t take apartments, have one bedroom

Speaker 4:                           46:51                     [Inaudible] and

Nathan Carillo:                   46:54                     Also don’t invest in the walls and on the floors a lot of money on that unless it’s absolutely necessary to get to the bare minimum. Right, right. And also,

Speaker 4:                           47:07                     Eh,

Nathan Carillo:                   47:09                     Do it much, much bigger because it’s the same amount of effort to handle one or a hundred properties. So for me, no, I don’t have any regrets at trolley. I was thinking on that, but nothing that we would change. No, I didn’t. I wanted to understood this business before because I spent a lot of time renting longterm rentals and it’s not that profitable as this one. And, and w where do you see short term rentals going in the future in Mexico city? I don’t know. I really don’t know that. That’s something that scares me a little bit because I had the I have different viewpoint. I was doing it. I was a landlord six months ago. I did regular landlord and now I became a, an arbitrage landlord or something like that. And it needs, sometimes I said, if this is going to work, wow, it’s amazing.

Nathan Carillo:                   48:12                     But how many con edition that we’re going to have or how I can kale it? One thing in Mexico that I saw as a good good and bad indicator is the bank doesn’t give money to everybody as seen us or it’s not a cheap, the bank here, a charge 20% per year for one vessel or each vessel, they charge you 20 to 18% for what I understand in us it’s two or three, four, 5%. So that makes the, if you don’t have some money with you, you can’t do it. You can’t pay your rent. With that trade card in Mexico, there is no way to be with great dogs. So for me, that’s good because I have the possibilities to go into that market and expand and expand it and, but I see very good future because Mexico, it doesn’t matter what happens in Mexico always, there’s people that want to come to Mexico city, you know, it’s like,

Raquel Carillo:                    49:22                     Or work here. It’s such a big city that if you have, so the only thing that you need to survive is a food, water, and a place to sleep. So there’s always going to be somebody who can pay a rent for a place because they do need somewhere to be, so they’re going to invest in that and in food before they invest in or anything else. So the point is if you always have something that you can use as an active asset, it’s always going to be, I mean, maybe you rented a little bit cheaper, maybe a little bit more expensive, but you’re always going to need somewhere to sleep. So I think that’s an important point with this business. If for some reason Airbnb just suddenly drops off the face of Mexico city and nobody can do anything with it, then you can always take those properties and rent them because it is an asset that you have.

Nathan Carillo:                   50:13                     So I think,

Raquel Carillo:                    50:14                     I mean it shouldn’t, it’s growing substantially. So a, it looks like it’s going to go up and up and up, or that’s at least the the tendency that I’m seeing. But if for some reason it should fail, it’s a very easy and thing to

Nathan Carillo:                   50:27                     Sort of make into something else without much effort on your part.

Julian Sage:                         50:33                     And are you all planning on just expanding within Mexico city or are you looking at other areas right now?

Nathan Carillo:                   50:38                     Yeah. Well there are yes in other countries. Yeah, but as I said, there were more that we have. We are very sure and confident that we can replicate it replicated in Africa or we can replicate it in any place. We need to understand the laws and the taxes policies and you know, that kind of things in each country. But this for me, it’s very, very easily to, to work with it. You need to just find a person that’s going to be sort of your safe point in a different country and that’s it. You just sort of expand it from there. So I think it’s very simple and we are looking at, for example, some cities in the United States. I think Europe would be awesome. So hopefully,

Julian Sage:                         51:26                     And do you have any questions for maybe another host? Is there anything that maybe you’ve been wondering about or, or if you could ask someone that is maybe at the next level from where you guys are.

Nathan Carillo:                   51:38                     Yeah. What would that be? Yeah. How they, how they look at the future as a question that you said to me, ask to me because the only thing that I don’t like from this is that if for some reason there’d be a be changed something the whole or word collapse, you know like if they want to change something, have the one to charge something or they put the company on the market stock in other people want to change something, you know, that they bill things, maybe everything will collapse it. They are not very smart people on humbling power or something and they only one prophet. Some of like that. It’s how they look at that, how they can risk a much more money on this, their businesses and also, well, what is better to put a lot of attention on places like a beaches that are very seasonable or like the metropolis like Mexico city or New York or you know, that, that, that type of things. Yeah,

Julian Sage:                         52:49                     No, that, that, that’s a really good question. And just to kind of re rehash that, it’s your, what you’re asking is like, how do companies, like let’s say Saunder or these big companies that have multiple multiple properties, what is their backup? Like if, if they just say, you’re not allowed to do this in New York city or you’re not allowed to do this in whatever area, what do you, what do you do with those? With those properties is what you’re asking?

Nathan Carillo:                   53:12                     Yeah, basically. And the money that you put on the down payment and everything, you know, because you do also get longterm leases too. Then you sublet. So if you have a lease for let’s three to five

Raquel Carillo:                    53:26                     Years and then suddenly at the second year they go, Oh, guess what? You can’t do Airbnb anymore than what do you do with that remaining lease?

Julian Sage:                         53:34                     Yeah. It sounds like it’s, it’s, it’s, it’s an issue. We had a, another guest on the show, a Farhana bossy and he, he had about 40 properties in the Boston area, but due to regulations, he had to start scaling them back and he I, he didn’t really have that kind of like back up a system set in place for his, his organizational board and he just had to start dissolving properties and, and you know, either selling the furniture, getting rid of the furniture. So it’s kind of an unfortunate thing, but I think it’s an important question to, to maybe once I get someone on the show that has scaled up to much larger amounts, maybe within smart cities that have had to dissolve, like what do they do with those units? I think that’s a really good question that I’ll be sure to ask one of the next guess.

Julian Sage:                         54:18                     But thank you so much for coming on the show today. It was such an honor to hear and I wish you the best of luck and success on your expansion and with the house. And until next time, host nation, keep on hosting. Hopi hosts benefited from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to hosts that have been featured in these episodes as well as the community going over to our Facebook group, the host nation, talk to you, host in the next step. So to keep on hosting.