From 1 STR to owning and managing 28 in one year

0:04So so you bought this first what was the price point on this first one then it was 306 okay I put 10% down it's a vacation home loan got it so I was in it at 40,000 is it was pretty much everything I've saved up I paid off college and all that through the funds I made when I was starting in business when I was younger so at this point this is like all I had left and I just kind of put it into the nice and so how did that go then how your your first initial experience with it yeah I I realized that very early on that buying short-term rentals is not passive and it's a business and the moment that I knew that I realized I have all the skills necessary to to run this like a business and the previous

0:53Owners were making 33,000 gross that year I made 60,000 gross wow so I doubled it on top of that all all I did was I spent maybe a couple I think I spent like $1,000 or something th000 $2,000 just Decor just like replacing things and like putting the right utensils in and just took new photos so I took better photos I did the marketing better I did the Angles better I did you know all of the the right steps and I marketed it better I made the listing better that's all it took wow and I operated it so much better like with pricing optimizations all that and it made me double the income so I realized okay well this is great because I have business skills and

1:41I feel like especially now when there's so much competition everyone's coming into it thinking oh my God I I can't do it and I'm just thinking how can I make the marketing better to beat out my competition that's what I'm thinking yeah it's such a great point because there's a lot of people think just a short-term rental is a short-term rental but there's so many nuances that you just outline there from your listing the listing description the pictures to the amenities you offer all that stuff that makes a massive difference in terms of nightly rate and and occupancy and pricing too understanding pricing which is a whole art form in itself and you can I mean it's just perfect example of how how big of a difference that can make so so once you realize that then what

2:29Did you from there how'd you get the next one because now you're you're out of money and but it sounds like you had a great experience you wanted to continue to scale yeah so that that's kind of you know people say well you got lucky because you had money but it's like you can't I mean what I've done and like I've went from that was my first one right and after four months I made like 2K a month and I realized you know what I think I optimize my life for happiness and for for for fulfillment and so when you do that your decision- making becomes very different right so in my mind I was like okay I'm not happy at this job I love shter rentals I can live off of 2,000 you know I'm I'm I'm a single male in you

3:17Know in Los Angeles I'm like okay I can I can make it happen I I had cardboard boxes as Furniture like from my bed I made it my couch and then I made it my dining table and then it was really funny and I just knew I could do it and I did exactly that and saved money and lived off of $2,000 a month wow and I I didn't know what I was going to do I just knew I had to quit my job and I quit my job January of last year now January of this year I went from owning one property to owning six properties and managing 20 for others wow in one year so now how do you actually get to that point right so let's backtrack you have I have one rental right and that's usually like a question like how

4:06Do I scale I will say in real estate real estate's a a really lonely road but it's also like you can't get it's kind of contradicting you can't get to the next level without Partnerships or team sport but it's still like a lonely game I don't know how to explain it so you need to partner up with people is what I'm trying to say and I I I was prepared for it right and the opportunity came I met this guy he was a house flipper he saw that had one short-term rental and that was enough to show him hey I know short-term rentals and he had 100 plus flips under his belt and he basically came up to me and said hey do you want to partner I want to do airbnbs and he's like we can make we could do this thing called the Burr and

4:55I was like the Burr I've heard about this before but what what do you mean and he was like list listen we can buy these properties that are ugly and we can renovate them and then it's as if we bought this short-term rental at a lower cost basis I was like oh and on top of that he's like you know what and we can also put the furniture into the rehab budget and I was like okay and then there if we're in a short-term rental market the appraisals are going to be high because the other comps are going to be also airbnbs and I was like okay this is this is cool so let's do this we ran with it and that we just bought five together and we just did the burster one I just recently bought

5:44And so I had I I bought four with him until recently bought the new one these were bursters so we basically took these ugly homes we made them beautiful and now get this the cool thing is Joshua tree is the area right Joshua tree is super competitive people people say it's saturated people say all sorts of things about you can't make money there but really I don't believe in saturation whenever I hear saturation I hear oh you're too lazy to really stand out like I don't I don't I don't shy away from that I know the traffic drivers are there I know three million people go to Joshua Tree National Park every year I know that it's the eighth most visited national park in the country in 2022 meaning after covid yeah so I know that there's demand I know it's an upcoming area I see Palm Springs the neighbor having

6:33Multi-million dollar houses and I know Joshua tree is at a lower cost point so I know more or less there's a demand for this right and so and I'm still very bullish on it and you know I I knew my market I knew it was going to be good I just need to get in at a lower cost basis and the what better way to do that than start from a blank canvas I have a blank canvas I can add whatever materials I believe would optimize for the most money I can add you know like I can add you know a a chalkboard wall I could do all sorts of very creative things with the space and un and do it at a lower cost basis so instead of buying something that has ugly counters or whatever I if I don't want the counters I have the I bought it under retail value where I can add those things

7:21And it doesn't break the bank now look I mean we got trapped right I'm not going to say it's all sunshines and rainbows you know the high interest rates came in and we need to refight the higher interest rates but guess what because we were at a low we bought at under market value we're not in a position like everyone else that bought at market value and having to sell because they can't make money yeah we had this we had under market value about at 50% sometimes of the arv so we knew arv being after repair value so we knew that if we're in at 80% of the value and it drops 20% we're we're we're pretty much right now with our rentals we're probably not at Cost it's probably around the the arv if not more we've

8:10Still pulled out money so I I really don't I think it's a good strategy and we can always refile later right yeah so we're good with that nice it are there certain features that you've learned by doing this drive a higher value or a higher nightly rate or occupancy yes 100% so every Market's a little different so josa tree specifically it's about like before I even walk into a space like let's say this is like an ugly house that's all torn down maybe fire burn whatever the perfect example is the recent one we just bought it's torn down I mean bad yeah but when I go into it I look at the view of the mountains I

8:59I remember I remember the time when I decided I wanted to buy that property was I literally went up to the the roof and there's this unsecured roof and I'm like this is where the roof deck's going to be there's going to be a fire pit overlooking those Boulders and then in the background you can see the tennis court that's on the in the backyard this is the money shot that's what I'm looking for the money shot because if people aren't clicking the first picture they're not going to click the rest of it this is how it's different from Real Estate you need to have marketing knowledge because I know this is my money shop I have to spend a lot of money on this shop because this one shot's goingon to bring clicks see what I mean yeah absolutely no that's that's so so important that that makes a lot of sense

9:48So when it comes then to to your partnership how do you guys divide up your roles within the partnership you said his background isn't flipping so what does he do and what do you do and and how do you divide up the I guess the ownership of the properties then yeah so at the time when we made this agreement it was pretty much he does he puts up the money and he taught me how to flip on the first one so the first one all took was one rental and I went through the whole process I was like I love this I can do it so I went through number two three four five and now six with pretty much with without him I mean you know he's definitely helping with decisions and and all that but I'm the pretty much The Sweat Equity partner on his

10:36End he's the experience he's got the hard money rates you know I can utilize he's done so many flips he's getting z% down rates sometimes like we got a 0 perc down loan with like two points 8% gez it's just like why like it's so then what would I get I would get I mean his normal rates 10% down right 90% LTV of the of the loan and the purchase but you know he's he's getting 7% interest rate at the time so we have to refine to a higher interest rate from hard money isn't that crazy I don't think I've ever heard of that yeah yeah when your short-term loans at 7% you refinance into a 30-year loan at at eight% that's

11:26Crazy yeah wow so okay so so that makes that makes a lot of sense and it sounds like you guys you know you're doing a lot more on your own now what what's the goal from here so it sounds like even with the higher interest rates you're still cash flowing correct yeah okay oh yeah and so are you still are you planning to grow more there or what's how how do you what's your thoughts on the future right so I think as a real estate investor whatever the the market shifts you know when the market zag zigs you zag you know like you you gota you got to I mean you got to play with what what's working right and what's happening so right now sub 2 is huge right like subject 2 is coming back heavy

12:15And for the people that don't know it's basically taking the existing mortgage and assuming it and then if there's some seller carry then you can do that as well so that's like a whole another thing I'm learning but I think from a buying standpoint right now we just I I realized I wanted to get into co-hosting and I wanted because because it helps our rentals as well right but what I realize is why I'm all about scale and leverage those are the biggest things in my mind like it takes it's going to take me 20 flips to get those hard money rates he already has them I'm going to use him to get it today instead of waiting 20 flips later yeah see I'm all about leverage so in this case I was like okay well these rentals are going to be here anyways we have the infrastructure built out for these rentals why not just take on more

13:03Rentals you know and the cost Bas is going to go lower over time because economies of scale so I was like okay well I can do this I'm I'm an educator in the space I run Str Nation so I have a bunch of investor relationships and I was like you know what I think I can do this and I and I asked I'm like who would like to and this is during the holidays this is like December who would like to you know host with me right like who would want to be you know give give me their property and I had a couple leads here and there but then one person came to me and said listen I can't get you one but I can get you 16 would you be open to that and I said yeah absolutely and here we are we bought a property management company so this management company they had a baby they didn't want to operate anymore we pretty

13:52Much came into it negotiated his seller financing with them Josh put up the money and now we we own a property management company we created a job for ourselves now the the property management company was not optimized they didn't have the employees in place it's a business right they didn't have employees in place they all that but they had some pretty good infrastructure so we took that and we just took to the next level and right now it's like we're stabilizing it and as we're stabilizing it we onboarded four clients and I've gotten 15 leads since the launch which was March 1st and this is we're recording it's like March 15th or something so you know in 15 days I got 15 leads or 20 leads I think at this point so I know that we're going to scale this thing and and I'm already thinking about how can I leverage this into other markets right I'm already thinking

14:40Ahead of the the I'm 10 steps ahead I'm playing chess you know so so but obviously I'm not getting too carried away like I'm focusing on what phases we need to develop right because I'm I'm an you know I come from a product background so I know like phasings and all this other stuff you know and leverage your skills by the way if anybody's listening to this if you're a photographer if you're whatever skill set you have double down on that and use it in your in your journey because it's going to help you and if it doesn't help you it's going to help somebody else