From 0 to 15 Rental Arbitrage Properties in 3 months w/ Humza Zafar

and while that was happening i would be going to work at night time come back in the morning and just making more cold calls and more units it got to the point where i'm like okay now we have three more units now i have six units and uh so we have three more units and that was going to start december the 15th we're getting access to them okay so then again do the same thing ikea costco et cetera et cetera uh we're going getting all this furniture dropping them all off getting the guys guys are going in building all the furniture again two three days bam done okay getting the listings up listings ready listings made pictures taken and just from the minute like i would get the units i'm counting down how long it take to get ready because every day the unit's not ready is every day that i'm losing money this is episode number nine for the shorter mental 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 to short-term rental success stories i'm your host julian sage this is a show where i talk to hosts about their journeys in 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 host we all strive for 5 star reviews 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 go on over to our facebook group the host nation to connect with the community hey what is going on host nation i'm super excited to be back again with you this week so today i had the special honor of speaking with hamza zafar hamza is a full-time electrical engineer and a canadian citizen that's living and operating out of the philadelphia area in the past three months humza has scaled from zero to over 15 properties all of these being master lease units in this episode hamza shares this experience of going from burn vesting to student housing and then ultimately discovering master lease investing and why the pros and cons of each what it's like starting and scaling a shorter mental business out of the philadelphia area and why he chose one-bedroom apartments out of you know all of the others some of his lessons learned being in philadelphia dealing with things like parties uh parties being a really big issue in the philadelphia area as well as some of the strategies that he's learned uh having a sales background he definitely was utilizing that to be able to scale very rapidly so he shares kind of his formula for how he was able to do that as well as a lot of the lessons that he's learned along the way so of course if you like my show notes for this episode then go to short term sage.com backslash str94 or if you like my show that's sent directly to your inbox every week then go to short term stage dot com backslash show notes with all that being said on this week's conversation hey welcome back host nation to another episode of short mental success stories in this episode i have the special honor of speaking with hamza safar hamzo would you please introduce yourself to the host nation let them know who you are and what inspired you to get into short-term rentals my name is i'm from philadelphia right now i'm currently based out of philly just expanding to dallas recently doing torture rentals i work as an electrical engineer full-time and i also do short-term rentals and uh adults do that full-time so i have two full-time things i'm doing currently uh what i originally started was doing student rentals back in canada when i used to live in canada and as everyone's familiar with bigger pockets that's where i originally started learning everything bigger pockets learning the burn method um trying to get the highest cash and cash return possible and sooner rather than what i found got me the highest cash on cash return and after i came to philadelphia for work i realized the potential with georgia rentals and airbnb and um i saw that there was actually more potential with churchill rental than there were student rentals and then i just started diving back diving into the church rentals in philadelphia and then started it merely started in october of 2020 so october december january in about four months we're almost at 15 16 units now between dallas and philadelphia awesome yeah definitely definitely want to talk about um you know you've definitely scaled up in a short amount of time i'm sure that a lot of people are probably listening and saying man like you know 2020 was a rough year for a lot of people but you seem to you know towards the tail end of it uh have definitely picked up so i want to talk about that but just going back to the beginning um you said that you first got started into real estate doing student rentals so can you talk a little bit about you know um uh you know what what type of properties were you looking for and what types of returns were you were you seeing with the student rentals so i'm bigger pockets right and that's usually where everybody starts when i was reading bigger pockets i saw a lot of people were aiming to make at least a hundred dollars 200 in cash flow every month right and that was like a successful burger when i thought about it i'm like 100 a month is really nothing you know 200 a month is really nothing so i was looking at my area uh where i used to live uh near the university area big hot spot for student rentals so bedrooms themselves were going the going away for a bedroom was around 600 bedroom right if you were to rent per bedroom if you rent the whole house you were to get 1600 1400 right so it wasn't really worth it to rental house by itself i'd rather rent you know honest per room basis to students so the first deal that i did was in 2019 and that was the that was basically my all-in i bought a duplex bar from 170 thousand 175 thousand dollars uh right university like a three minute walk it's a duplex two bedrooms on one side uh four beds on the other side i put a hundred thousand dollars into the duplex and then i basically i was all into it for 275. uh when i did the bur i got a uh praise at 350 360. i gotta refinanced it i put up a 80 out so i took basically a hundred and ten thousand dollars out so i pretty much took everything out of it that i put into it and um i'm still cash flowing now every month around four thousand two hundred dollars from that place so i took all my money out i left 20 equity in there i paid off everything that i used to uh renovate the house and now i'm ranking for around 4 200 a month and and that 40 that 4 200 uh that's that's cash flow or you still have to that's not that's included that's not including the mortgage and expenses so i'll break that down for you a little bit further uh the mortgage before the refinance was hundred dollars a month after the finance is around twelve hundred dollars a month property taxes around two hundred so what i did was to get those higher rents basically i had to furnish everything from just like an airbnb furnish everything from the bags the bed frames and mattresses and 4k tvs wi-fi internet everything basically and when i renovated the house i did everything brand new so like from the water here's the hvac everything brand new so i would never have anybody calling me in the middle of the night or anybody calling me saying this is not working right because for me it's like i'll just get something brand new done now rather than you know have somebody call me for a problem later on so there's six bedrooms total in the duplex on both sides all together i'm getting around six hundred dollars so hold on this is before covered i was getting around 600 per bedroom uh one bedroom was eight hundred dollars okay after covert happened every international student in my city and that city basically just disappeared they left okay i still had half of them stay because they were you know they're working as well and the other half is left so i thought you know instead of basically putting uh an ad up and running the students again let me try airbnb let me try coaching rentals now those same bedrooms right instead of getting 600 a month i'm making a thousand dollars a month on airbnb so just like i think was last month the total income for that uh one duplex was around five thousand dollars right this one's like a 43. before airbnb when it was just for rentals is around 42 3800 a month depending on you know the months so your your your net profit at the end of the month uh prior to short-term rentals was around 600 uh for that duplex no it was about should say eighteen hundred dollars for the two bucks fifty data dollars on duplex depending on utilities so eighteen hundred dollars net cash flow um i mean and and you you own the place um you know you're getting you're getting appreciation i mean that that sounds like a pretty pretty good deal i mean eighteen hundred dollars for a duplex uh cash flow i mean obviously you found something that's pretty successful why not continue scaling up with that the problem is in the city that i'm from so the city i'm from the original is winston terry are you familiar with the toronto market by any chance or no no no the city that i'm from when i bought in 2019 went under a crazy massive appreciation phase just within the last year because interest rates went almost pretty much sub two percent in uh the city that i'm from everyone just started buying students everybody caught on and everyone's over bidding it got to a point where i was making offers on houses and i was being outpaid like 50 60 000 over asking it was crazy so i'm like it's not worth it right like i'm not trying to pay you know 300 000 for a house that was worth 220 000 literally one year ago at that point right and then the whole point is to burr right i'm not going to put 100k into a house where i can't take the money at the end of the day it's not worth it for me anymore so now if you even go on like on your local classifieds for that city specifically the appreciation of the houses when it when astronomical it's insane price price has doubled like it went almost 40 higher within one year in that specific area because everybody caught on to you know how much money you can make do you think that for you is maybe a little bit more luck or do you think that this was really like a skill in finding that right property coming up with the numbers or do you think that it was just like you said like things were just going crazy at that time you know every property was just appreciating so much that you were able to to find a successful bur all right exactly my original cash out was going to be at around 300 000. that's what i was hoping for at the appraisal and during the time the appraisal happened everything else appreciated i got 350 out of it sure i'm paying a little bit more on the mortgage but i got more money back out that way i don't have to basically keep any money in at all i mean that that still sounds pretty pretty nice so you don't think that you could have you know duplicated that like you come into philadelphia or you're doing something somewhere else that's what i thought about in philadelphia right so and that's the thing right i i try to figure out the niche in real estate where i can make the highest cash on cash return i don't want to you know just make 1200 a month that's not worth my time right i want to make the highest cash flow every single month and student rentals in my opinion for a traditional risk standpoint outside total analysis is the best way possible okay here's the biggest problem in the city like philadelphia and why the reason the city that i'm from i appreciate it like crazy in philadelphia right now you have we're in school of business you've got penn you have drexel you have all these id schools top-tier schools okay a 4-0 townhouse cost around six hundred thousand dollars okay seven hundred thousand dollars these apartments are costing seven hundred thousand dollars six hundred thousand dollars in center city great house right so you have to do the math thing i'm buying a you know let's say a five bedroom townhouse for seven hundred thousand dollars right that's not worth it then because the max i can get let's refer to 800 a month right so five bedrooms 10 800 a month from four thousand dollars i'm paying six fifty seven hundred thousand dollars for this house as well right so it's not really worked at the end of the day the reason was worth it in my city around fun because the houses were so under appreciate like they're so undervalued we were still charging 600 bucks a bedroom right so you're making more than one percent roll you're making much more than that and so you know you you had a really successful you know turn with the student housing uh and then what what brought you to philadelphia and changing up your whole strategy yeah so i've moved around a lot for my job i've been in philly for the last two years and up until covet you know i was just living in philadelphia basically i wasn't really doing anything investment wise there i was looking at units i was looking at property but it was too expensive honestly everything was around 600 700 800 000 it was too much it didn't make sense right the numbers the numbers did not work there are some hot towns in philly like fish town uh but that was like overlap over last year like that's pretty much done now there are other up-and-coming areas like brewery town grace ferry gross point but those are like very very dangerous areas right just like last week they had like they had a huge shootout you know at an airbnb grace ferry so like a lot of dangerous areas too so it's not for me it's like you know it's not really worth it the cos the cost to acquire a property just that 20 down right for 600 000 property how long will it take you to get that one unit it's not really worth it you know for a cash and cash return so you're you were in philadelphia for around uh what about seven eight months before you actually got into shorter rentals and how did you kind of discover that yeah i was in philly for about let's say one year one and a half years basically uh just you know just living and just live just basically living and working basically and then as code would happen i saw my students basically leave i decided to put my unit up on airbnb and like i said instead of getting 600 a month for that bedroom i'm using a thousand dollars a month for that bedroom on airbnb right so now i thought you know what let me take a look and take a look at you know how their social mental game is going to be philadelphia and that time i discovered sean rocketj as everybody else has for me beyond me right i've been watching sean rocky's videos for the longest time like like the last two years now right i just never thought you know how to end up in the same city i said basically right so that's actually very surprising like literally every single time you talk to philadelphia like i'm literally in the same city you're talking about right so in my head i'm like if he can do it you know i can pretty much do the same thing i've had all the experience before as there's not much more difference the only main differences between uh you know doing actual like renovations and bur and regular real estate and airbnb research and rentals is the operations and customer service aspect of it that's really it right if you can make the math working if you can manage everything efficiently then you can handle it you know short term rental when i was doing a renovation on that duplex it was a hundred thousand dollars in my own money right and i was at gc i did i managed everything from the roofing from the hvac foundation framing everything right i had guys run away with money i had guys that chased after my like i did everything right so just from the experience from there like i knew i'm like if i can handle that i can handle a truck's maximum problem so in october september basically i wanted to test the model right just see the demand right obviously you're going to air dna but the problem with air dna at that time was you couldn't really trust statistics because they were really wrong because of coping right so what i decided was i'm like all right let me first try uh the arbitrage model and see if a landlord bites or not just to test the model out right at this point in philly everybody was leaving the city like everyone was leaving the city so i saw that a lot of landlords were basically open to the idea of arbitrage so and one of my skill sets is because i've been an engineer i'm very very good at sales right i worked at sales and cell phones i worked at sales and um and a lot of like high school jobs i was younger so sales are like one of the things i'm really good at besides being an engineer so i just started cold calling started uh going on zillow emailing calling email and calling for every 100 emails i send out i'd get like 95 no's four hell no's and one let's talk right so it took that you know within the first week of mail of emailing people i had one landlord that said yes to me it was a four bedroom house okay and decided you know what i'm gonna rent it per room basically and the whole first month of october i got almost like 90 occupancy okay from the four bedrooms themselves and at that point i was basically learning the airbnb system and in those four months i had so many people coming in and out those four bedrooms right so i would have probably one day stays all the time for four different things all every single day so probably had a hundred guests just in that first month alone right so from that first month i handled everything from learning everything from you know uh resolution claims and the problems the airbnb gas and smoking in the rooms and dealing with you know situations where guests are you know causing problems or a lot of the like the nitty-gritty stuff of airbnb that you don't really learn until you have a lot of problematic uh guests and i think i'm in failure there's a lot of problematic guests right um so i basically learned everything i had to learn the process and just you know and then i actually learned how to clean efficiently as well right i didn't do any cleaning before that so we were doing all our cleaning myself you know life every day you know uh luckily for my job i work at nighttime from 9 00 pm to 5 in the morning so then during the day you know at 11 people check out we just clean the whole place ourselves and get the place ready just to make it just to learn everything basically right so after october i'm like all right so the demand is there now i need to scale this up so that uh townhouse i arbitrage only for four months i just ended the lease to that one like last month okay because i knew i i just wanted it for four months just so i can test the market and see how it is scale wise you can't really scale that right because the laundry for all four units the uh logistics does not work right the biggest problem that a lot of people have is laundry laundry is the biggest problem right time is everything right if you're waiting you know you have one washer dryer in the house and you have four bedrooms right it's gonna take you six seven hours right to run the dryer for all of them it doesn't work it's impossible right can you can you talk about some of the the numbers with that unit like how much uh did you rent out the place for and uh what was that yeah so the first month of uh october the the rent for that unit was 1900 okay sorry that was 2100 okay uh plus utilities utilities are running around two hundred dollars with wi-fi it's a two twenty two fifty the month of october brought in four thousand dollars okay so i saw that i made seventeen hundred dollars seventeen hundred dollars at net cash flow after all expenses right and my only cost was around two thousand dollars in furniture it wasn't much and i was like very very cheap i only like the cheapest bed frames the cheapest mattress and ten dollar nightstand just to test the market to see how it was all right so so this was this was a you got into the property for 2100 that that was rent and security security was 700. security was 700. so okay and then and then you spent on four separate rooms out of that that townhouse uh two thousand dollars total here's the best part that townhouse of the four bedrooms three of the bedrooms already keep fully furnished with beds mattresses bed frames everything that's only for one room and get some tvs for everything and buy some utensils that's basically it and how much i mean philadelphia i mean philadelphia has already been was already hit pretty hard during kovid and then you know nightly rates i mean how much were the how much were these rooms going for now you're going for around 40 50 a night and and people were people were booking them up instead of staying like a big you know like a like a saunder i saw saunder like they're like you know seventy dollars for like a whole you know a saunders sweep but people are still what i noticed is that you know people that are booking their rooms for forty dollars a night aren't there you know class a citizens let's put it that way right they're there for the majority of them were all local people in philadelphia all right so they're there for other reasons just to get a quick room for the night for 40 bucks all right um and that basically you know we're having all the problematic yes we learned a lot you know how to deal with tough situations that a lot of guests if you throw them into they don't know how to respond right so i can get more into that later on some crazy stories that happened with guests and what i did to solve those but yeah that that like four bedroom unit taught us a lot you know on the whole process season how to deal with claims department how to deal with resolution department what to say exactly when you're emailing them to get them to pay you out like everything and why why didn't you because you said that prior to this you were uh you were short-term reminding the student housing in canada uh why why not just continue on with that if that was doing so well i did it's still going on right now or or like scaling scaling in canada like you know philadelphia was already you know pretty hit pretty hard you know a lot of people you know probably also move into that area um you know short-term rental operators so why not do it somewhere else where maybe there's less competition the problem is like for example like my city in canada specifically the interest rates for housing right now residential residential housing the 30-year amortization is how i think last time i checked was like 1.8 something it's insanely low right so everyone's over bidding on these houses like no tomorrow they're basically going in and buying these houses that are worth maybe 175 or 200 paying 350 for them because the monthly rate two years ago is the same now because the interest rate right so it's not worth you know to put that much money into a house that's literally worth only maybe 60 percent of its value you couldn't like lease the lease those out as well the the problem is is that a lot of people where i'm from in my city they don't think you know like over like in a big ceiling philadelphia and their head is like okay why don't you do it myself basically right it's a very different mindset where i'm from than the mindset here in america it's a very very different mindset so in in canada people are more inclined to say why don't i do it myself rather than exactly especially the city that i'm from is very like small-time landlords um you know a lot of them don't really think uh on a bigger scale for them it's just you know trying to take every dollar they can so for them it's like if i pitch them as a business idea they'll just reply back to me i'll just do myself trust me you know it's very weird like the city that i'm from like the mentality there is not like the mentality here after this business model could not work where i'm from so why isn't everybody is that so is everybody just doing it them themselves up in canada like they're just buying their own places and short-term thing literally like if you go right now the housing market is a big problem for the residential people because everybody's buying all these houses and they're making them all sooner animals right you're buying family houses going into a living room cutting it in half making the two bedrooms right going to the basement making it four bedrooms and just running all the students all the time wow so so they're having they're having a uh kind of kind of what everybody says here is like short-term rentals are you know really causing um you know uh issues for for uh long-term your residential clients residentials uh in canada that's you're saying it's potentially even worse oh yeah for sure like especially the city that i'm from right the university is a big university right people coming from india people coming from pakistan people coming from china a lot of international students studying medicine and engineering there's not enough housing for these students a lot of people realize that they're buying up all these houses in the area and just literally walking into the living room saying all right drywall hair frame frame three bedrooms here you know like definitely what's happening so the regular people they're not getting a chance to buy a property that's worth it to them at that point so so everybody already in canada is is already kind of like a shorter rental operator but they're just working with students as opposed to short-term guests waterloo toronto london everyone's doing cinemas right now okay interesting so so they haven't really picked up the shorter mental trends it's more just focusing on there's actually i don't know if you know in toronto the city of vaughan completely banned it vrbo just announced two weeks ago they're completely moving out of toronto they got completely banned in toronto airbnb now has like you know how the rules are in new york it's even crazier than in new york now where you have to have a minimum of a 30-day stay it can't be more than 180 days you have something with the property some crazy rules were like it doesn't make sense anymore to airbnb or short-term rental in toronto and the gta like the rules are very very against your tremendous so everyone's resolved to student rentals at this point okay so it's kind of it's kind of a safe haven so um going back so you you know you're running this this uh this this town house four rooms you know really low price and dealing with a lot of um you know not the best quality guest what you know did you but you were finding success so did you decide to scale up with that or did you decide to pivot yeah so i decided i'm like okay this four bedroom stuff is what i wanted to do just to test the market right and i didn't really put that much money into it and at least was ending in three months all right now i need to make a viable business plan where i can scale this automate this how the people need it turn this into a full-fledged business okay so i then started cold calling different places but i made sure i wouldn't do about rooms i'll do my actual like homes all right so the first unit i did i sent a bunch more cold called emails calls phone calls went to people's houses uh just take a look at properties i told them how much i'd be willing to give them they'd get insulted and keep me out their house like trust me like i went through it all right rejection is one of the best things about this business right like if you're working in sales um rejection is part of the game it's a numbers game the more times you inquire about our property the more rejection you'll get but also the higher chances but yes you're going to find as well right so i finally found a couple that owned the house i was vacant they said yes to it they actually had two properties well actually these are very special properties going to later um they said yes yes to these two properties uh it was a two bedroom townhouse i rent for 1900 a month in a really nice area in queens village in philadelphia we furnished the two-bedroom for around five thousand dollars and no last month just a five dollar security deposit that's it and the first month of november 97 occupancy around forty three hundred dollars in revenue for that month the only cost was nineteen hundred dollars in rent and throughout 300 and utilities wi-fi things like that and how how long did it take you to get that those units set up uh that one took about that was when it was just me my wife so me my wife would literally go to ikea uh we'd carry 200 pound sofas upstairs we'd carry bed frames like uh mattresses everything i'm telling you like before like so my wife we just got married right like uh recently so like this like actually like you know i guess brought a little closer you know carrying 200 pound sofas upstairs back up and downstairs right you get to uh you know see things but um it was fun you know you got to experience uh building furniture together you know you order some pizza you guys are building stuff all night long but then i realized i'm like alright this is fun and all but i can't scale this right so it took us about about a week and a half about a week i'd say a week it took us about a week to get the place ready so we need to get the place ready and the whole month of november just almost 95 occupancy wow so so were you doing something different than what everybody else because uh you know when i look at philadelphia i you know i saw that they were hit really hard um were you uh just like trying to just like under price or what was kind of your strategy to hit those numbers so here's the thing during november was actually one of the best months because i noticed that 60 of the people coming were all from new york philadelphia in november was fully open there's no lockdowns no restrictions was that 50 indoor dining everything was fully open new york was full fully fully closed right so everybody from new york and connecticut were coming into philly to visit philly and experience philly right that's why we were getting a lot of bookings and that house could uh have up to eight people okay so it was a very uh it was a very nice house it was by level right so and we took really good pictures and whatnot and remember this was all from my phone camera we didn't have to professional photographer or anything it was all done grassroots style and you know we were just you know i guess the listing was good and we were you know making uh good revenues and with this particular property was was an investor and they had uh two units you said yeah yeah or two two two different two different properties or was it like uh was that two different units one not one property they had another property like five minutes away in a different area so that one actually became it was going to become vacant next month in december the first so we decided that all right i'll take this unit off you guys as well on december the first so so your first month in october was that that those those four individual rooms and then the following month after that success you went out and you found this uh two uh two unit and uh that was doing well then the following month you picked up the second unit that that was available at that property so at this point you're you're at um you're at two units but then you scaled back on that first property just recently i mean from two units uh and that was probably what around year around what november december yep and in about two months now you've scaled up to around 15. can you talk about like what's what's been happening you know during this past couple months so here's the thing right for me velocity of cash management is a very important thing right so a lot of people talk about this too i don't know do you know who the quack brothers are i think i think i'm pronouncing the name wrong the guys on youtube that do a lot of real estate he basically talks a lot about um he locks and using that money right to uh basically invest in your uh and then on your down payment on your house and then use your credit card training right so i did a lot of that basically so what i needed was basically a way to fund all these units so the only thing i did was open a business credit card with chase uh make america basically every business card possible right they had huge cash backs so i had a lot of credit that i could use okay then on top of that i remember i pulled out a good amount of money for my student rental almost a hundred thousand dollars so after i paid everything off i had like 20 000 and something left and also my full-time job as an engineer pays a lot of money too so i use that as well you know to basically fund everything now for me is finding deals right so in the month of november uh all i did was uh find deals and basically get them started and get them rolling okay you're november 15th i found three units okay with those three units i had to get the furnished the at least started december the first but i got access to them on the 15th at this point now i'm like okay i can't be cleaning all these units myself i need to hire out okay so i found i found a couple of guys in the area that are willing to help out you know just because i'm uh i'm good friends you know with like the mexican community and the philadelphia so a lot of guys know they're looking for work they got laid off recently and they were friends and stuff so you know i hired them to help me on these are like really good guys really good handyman skills really good cleaning skills and whatnot so we what we did was these first three units we took them all at once all right ikea uh costco everywhere you know driving to new jersey driving everywhere for everything we need deliver all the furniture there and then these guys will just go win boom within two days every furniture built for every single unit and then my wife would come in and she would put the pictures off design everything the right way cutlery you know all the utensils kitchen stuff she would go and do all that and while that was happening i would be going to work at nighttime come back in the morning and just making more cold calls and more units it got to the point where i'm like okay now we have three more units now i have six units and uh so we have three more units and that was gonna start december the 15th we're getting access to them okay so then again do the same thing ikea costco et cetera et cetera we're going getting all this furniture dropping them all off getting the guys guys are going in building all the furniture again two three days bam done okay getting the listings up listings ready listings made pictures taken and just from the minute like i would get the units i'm counting down how long it would take to get ready because every day the unit's not ready is every day that i'm losing money right so at that point by december i'd say the 30th we're at around or early and sometimes it's not we're around six units like six separate units either from the first four bedroom in the two-bedroom now here's the crazy part in philadelphia i don't know if you watched on rocky's shawn rocket's videos or no yeah i've seen i've seen his videos yeah so he had a big problem in philadelphia where he'd have crazy parties being thrown in his town houses right it got so bad for him to the point where he had to end his leases right away because it got so bad in december philadelphia went on a lockdown and that two-bedroom townhouse that i had and the other two bedroom unit that the couple gave me it was parties being thrown like no tomorrow all right it got to a point where there was party being thrown i walked inside just told everyone to get up and get out your reservations canceled everybody's on speakerphone at this point right and they all wanted to fight me okay so i called the police police kicked them out like it was a mess and i told myself like i can't ex like you know grow my business when i'm thinking about people throwing parties at these units okay and that's a problem that i realize sean had too so that's what he did he pretty much dismantled all of his leases that are those townhouses and pretty much focus on you know smaller units that's what i did too i told the owners i'm like i can't you know handle this anymore to the point where it's bad for your neighbors it's bad for you guys and it's bad for me as well even though i'm making money stress and time is very important too right so i can't be stressing at nighttime not you know wanting to sleep in case someone's gonna throw a party or not and trust me i had everything from the minute system the ring cameras everything anti-party messaging everything people in the city do not care like they'll show up with 20 people at one in the morning it's crazy right so and you'll be sleeping there's nothing you can do so it got that bad and i'm like okay yeah i'm gonna give you guys the units back you can take your security deposits i'm done with them so once i got those two units out of my end of december i pretty much just went full sales called mo just kept getting more units basically okay i then i just got uh there was a three or four three more units now so now i gave those three give those two back and the four bedroom just ended so now i have six apartments in philadelphia all one bedroom studios i just got then at the beginning of january got three more okay so we just finished furnishing all those three units and um we finished getting those ready and those are all live right now as well so now we're at nine minutes okay this is all about the last two weeks i just literally two days ago went and acquired a tenth unit for the lease for that starting on the first of the first of february in nine days and last week i went to dallas texas i uh negotiated with the landlord there from california was an apartment complex and acquired six students from him so right now i'm literally building my way a favorite card i'm ordering a bunch of units to dallas texas i'm gonna fly out there in about two weeks i have a bunch of guys there that i know uh we're gonna spend three days building out six apartments within three days that's the goal 12 hour work days a day 12 hour work days basically just building out furniture for six apartments and then while i'm gonna be gone my wife's gonna be here working with the crew here to build out the furniture for the studio here it's a lot from you it's all will put me up to 16 units basically [Music] hey this is julian and i wanted to be able to give you our newest book airbnb secrets revealed how to build a fortune on airbnb without owning property in this book we talk about the concepts of rental arbitrage investing as well as co-hosting and how you can build a business leveraging other people's properties this book is perfect for the new short-term rental investor and it's something that i wish that i had when i first started as it would have saved me a lot of trouble and helped me to understand how to be able to leverage the power of short-term rental investing in your own real estate portfolio if you'd like to get our newest book completely for free go to short terms dot com backslash free book now back to the show how much um how much are you are you looking to invest per unit and what type of cash flow are like are you pre-analyzing these deals and saying like hey you know these are going to be hitting certain numbers like what what are you what are you looking when you're oh my goal is to at least my girl so here's the thing depending on your region uh because i know with vacation rentals it's actually much different it's a much different like numbers-wise right you guys are making much more numbers but it's a very different like ball game when you're doing vacation rentals and beach houses in miami things like that rather compared to studios and one bedrooms a downtown metropolitan city right so as you know the gross margin is usually around thirty percent sometimes you can get to 40 for more efficient with your operations or not and i'm that's what i'm trying to do what i realize is that if i'm at six units five units i still have to clean myself or pay cleaners a ridiculous amount because i'm not big enough right i'm not i'm not small enough but i'm not big enough where i can hire cleaners so i can make my operations go as quickly as possible right so i had to basically scale as big as i can that way i can hire cleaners in-house and pay them an amount that's worth it to me and basically scale to the point where i can afford to pay you know somebody or i can afford to pay a virtual assistant i can afford which i'm doing right now so i'm actually trading a virtual assistant right now in pakistan i'm training i know uh more cleaners i've been with my cleaning supervisor hired another cleaner to the point where i don't have to do anything anymore everything's automated everything's taken care of so i realized that i have to expand as big as possible that way i can automate as much as possible so you're hitting around 30 profit margins but for these these one bedrooms i mean like what uh like how much are you cash flowing on like how much are you investing and then what's yeah so i'll give you i'll give an example for a one bedroom uh this month right now we're at what's the months around the 21st of january well let's do december for example december was complete coronavirus lockdown in philadelphia everything was locked down and i was at 95 to 90 occupancy for all my one bedroom studios nothing less than 90 okay so um let's say the rent for one of the studios is a thousand dollars right the gross revenue would bring it would be like two thousand dollars one of the rents for my one bedroom was fourteen hundred dollars it would bring in twenty eight hundred dollars right so the i would try my best to at least double the double the revenue in rents basically and then everything after that you know you're added on overhead cost cleaners cost that's all extra and that's where you would end up by your 30 and why why are you specifically you know just targeting kind of like one bedrooms why not you know go larger bedroom count you know higher price point why why keep everything honestly it's risk i don't know what it is about this city but people just love throwing parties and like going crazy and i can't take the risk anymore like literally if you go on the news right now there's a shooting at an airbnb uh last week um in an area a crazy party house uh sean rocky had dismantled a bunch of his townhouse releases because of crazy parties being thrown same thing with me i don't know i honestly don't know what it is there's something about people in the city where do you see uh literally anything that's bigger than two bedrooms all right you guys are throwing a party tonight it's insane and are people just like under pricing or are they are they even even more even the more expensive ones are these somebody i had somebody booked a townhouse like the townhouse for three days okay paid like 200 a night okay somebody on airbnb messaged me saying hey just thought i'd let you know this person booked your airbnb they're advertising on instagram and the person on instagram posted a huge party three day party uh bring kush bring bring drinks bring whatever we're gonna have a casino night gambling we're gonna go crazy and i'm losing my mind like what is going on right so thank god for this person who saw an instrument there's some random person who's never i've never been in my life they saw the picture of a bedroom they went on airbnb and tried to find a picture of that bedroom and found me that person that night tried to get in i already called their navy i locked them out and everything i told them you're not getting inside the house uh they're like what do you mean i paid six hours for a night i'm like you can do whatever you want not getting in the house locked him out and he didn't even complain or nothing he knew he got caught i sent him the screenshots of his instagram post and just walked away from it basically that is wild so i'm telling you there's something crazy about this city where people love throwing parties and rangers it's insane so everything after a one bedroom gives me anxiety i can't handle it it's insane people just love doing parties but anything one bedroom under never had a problem once literally i've had properties where i literally furnished in october i haven't been to in three months because they run so efficiently like class a guest upscale people never had a problem once but literally two bedrooms above party because usually like that's kind of the unique thing is like usually you know the smaller you get the cheaper you get you might be dealing with you know uh you know people that aren't the best quality but you're saying because you're keeping it so small that that's preventing the party people from even coming into the property in the first place so are you able to like increase your one bedroom nightly rates or like like how does that work in philadelphia if so many people are picking up one bedrooms to short-term rent um like is there some type of like uh grading system right so location is the main thing right you can find a one bedroom for eight hundred dollars in south philadelphia but nobody wants to go to south florida off here right do you want to go to rain are you feeling the area or no no oh so they want to go like downtown they want to rent a house i want to go to center city that's where all my units are they're all center city greenhouse right the areas are amazing that's where everybody wants to go to right and another thing is right what's differentiating me in somebody else's airbnb is the furniture's inside right i don't cheap out on the furniture i try to get the nicest mattresses the best pillows the best bed sheets and reviews matter too if you look at my account you i don't know if you saw all the reviews i had i think i've had what was it 4.93 overall after 150 reviews right like my reviews are top notch i try to do everything i can to make sure i get that five star review no matter what so reviews is one thing and value as well what do i have in my unit that somebody else doesn't have i value parking parking downtown is insane it's impossible to find parking downtown for all these units i have that i give people free parking i met a guy who owns a parking garage we strike a deal for a bunch of my units he's gonna give me a parking pass so i pay you know anywhere from a thousand to two thousand dollars a month just in parking passes right so let's say parking pass is 240 for the month right that's an eight dollars a day average i just increased my price for eight dollars a day but people will book it then because you have that free parking available so even this month right now one unit i have 100 occupancy another unit of 97 occupancy now you have 98 occupancy like that's a very very high occupancy because of these reasons yeah i thought i thought it was pretty interesting and now that you kind of brought that up when i was looking at your listings you know i was seeing that like there's a bed right next to the kitchen and i'm just like man these these places are tiny but you're also you know they don't look like um like trap houses like they're they're very yeah they're very nice newly renovated nice mattress my best frames 55-inch 4k tvs disney plus amazon prime netflix everything included free parking right the majority of my guests have been people who are traveling from out of state that are coming to the city a lot of people are coming for work they're coming for business i've had i've had a microsoft engineer state for four months at one of my units right and paying top dollar right so like people are working from home now so a lot of people like a lot of my guests are those up class a citizens that aren't you know destroying the union or throwing parties or whatnot they're just you know to visit you guys remember right even though everything should down in philly city itself is a huge tourist destination the reason why we have such amazing airbnb laws is because the city makes a lot of money from airbnb right from the taxes we're in school business drexel penn uh temple right you have all these other events going on you have tourist attractions at the rocky steps you know um and on top of that the state being open as well right to new york helps a lot too so a lot of people are coming for those reasons as well so touristy wise the city is still there for business and for work and for school right even though some things are closed that demand is still there especially in the area that i'm in which is downtown and going going back so uh you know obviously you've got some sales skills and you were calling i mean you must have been just on the phone uh non-stop what uh what were some of the most common objections that you were hearing and um uh you know kind of what was the temperament of airbnb in philadelphia when you know everybody there's you know everything's kind of on the news about like all these party houses and stuff like that that's happening right right so my strategy was i have to basically figure out how to squeeze an owner that needs revenue coming in okay i'm a landlord right i fix costs every month right my property taxes are fixed costs my mortgage is a fixed cost my interest is a fixed cost utilities everything they're all fixed costs whether somebody's paying 80 percent of rent or 100 rent 80 70 is still better than zero okay so i would go on zillow i would find basically units that are basically on there for like three months vacant four months vacant and these are the landlords that pretty much didn't die or need to rent okay that are willing to negotiate on price so like if i tell you about the least concessions i did for example like in philly i would do like two year lease three months free or three and a half months free right like trust me like it's crazy in these concessions maybe they're not effective though right so um for example the one deal i negotiated in dallas it was like i think it was three and a half four months free under two year lease right so i did i only do deals where i can get a huge lease concession on top of it right to make it worth it for me so i'll just cold call people and find landlords that these are in a tough situation that need the money okay i would approach them and give them you know all the information they didn't require i would tell them you know i wouldn't mention airbnb at all i would just mention know short-term travel you don't have their selfish goals you don't mention airbnb you don't mention anything you just mentioned short-term travel corporate clients for customers okay when i mention that to them then they're more interested they're more than more interested okay now i'll tell them you're basically hands-off you're not dealing with an individual you're dealing with my company you get a check deposit in your bank account every month you don't have to worry about it you don't have to worry about attending not paying rent you don't have to worry about not evicting a tenant you don't have to worry about any of those issues whatsoever you're getting your check bother to pay your bills every month and that's the majority of the reason why a lot of people are saying yes because in that tough situation i'm having a vacation for three months and and what were some of the most common objections that you that you'd hear uh some of those common objections were one of the one was price right a lot of the people people a lot of people are still in delusion where they think you can get 2700 for you know three bedrooms before covered sure now it's gonna be worth eighteen hundred dollars that's the growing market rate right it's prices drop like crazy for rent so a lot of people i would tell them i want these concessions i did like no no these concessions you're paying full market one person tried telling me because you're making money i want to charge you 10 percent more i would tell them i'm here to ask you for 30 less right at that point you told me get out my house i'm like all right so so your strategy so would you just cold call people or would you actually go to every single property or was it i would send a template i had an email like a script that i would i typed out see what it worked or what not after a while developed the script really well i just blasted to like 100 units every day like 50 of them would email me saying like like you know leave me alone stop messaging me or whatnot and then never uh this is illegal are you uh a realtor just know weird things basically and then occasionally once in a while i'd get a yes and you would you would uh go through what zillow and then just like zillow and so you were sending these emails out to like real estate agents or was it all real estate agents when you send it to them didn't really get anywhere okay i would find the units that are listed by owner if you're listening about owner you're gonna get the email to the owner right away i mean how many listings in philadelphia were faking and sitting on the market for hundreds if you even go right now there's hundreds and hundreds of vacant listings literally right now i have i think it was an apartment complex that asked me we have 10 videos we want to give you because i have a website right that it's dedicated towards owners and investors that are looking to give me units and um i have an instagram as well that people find me on and that owner basically approached me i think we have 10 vacant units in a complex in downtown which is right next to all my units i just want the capital right now and i actually expanded 10 more units all at once so i literally have to say no right so trust me there's a big problem right now in the city where everyone is leaving and all these owners are basically losing money bleeding money every month so they're basically open to different options why what's what's happening in philadelphia is everybody just moving out or like well yeah think about it like this right school is a big thing in the city warren school of business one of the top business schools in the whole united states right penn is an ivy league school right uh drexel top engineering school all these schools are all online for whoever knows how long right uh every uh single headquarters that's here let's say you have wells fargo bank of america jp morgan all those employees they're all working from home so everybody's going away from the city anymore so nobody really needs to live in the city anymore but if you're coming to visit still a fun place to visit if you're coming for work for the four or five days you start to come to work right for those four five days uh nursing business conferences conferences um events things like that tourism spots are all still all open okay so so you you would send out about 100 emails let's just say you know uh for round numbers 100 emails to these uh you know listed by owners and then you'd get about how many how many responses from that i probably get like 30 responses all saying like oh literally like 50 people you know back 95 would all be knows 95 would all be no so you you'd have what five five people that that say that they're interested and then you know what people just say can you explain more and then from there you know you just keep and keep going until you finally get to want to say okay i'll still go to look at the place wow so so okay so so you wouldn't call anybody prior to you just send this this email out and that's how you waste the time right like you want to see if they're interested as well it's really hard to change somebody's mind depending on the type of person they are right if they're very like and they don't they don't they don't think outside the box they don't want to you know they only think linearly in one direction like i have to just run to a regular family a regular person i don't know what torture rental is i don't know what airbnb is it's not worth their time and energy to try to convince them otherwise i'd rather just move on and focus on somebody else so that's why i emailed if they were interested right away then i would focus my time on that so would you not really even really consider or look at the properties prior to it was just you know mass email out and then whatever kind of falls from that okay and and was that the same strategy that you used in dallas as well yeah so for dallas it's actually interesting is that uh some person in a facebook group uh sean's facebook group was uh get ending her leases uh for those three units um i talked to the owner of the building myself i told them you know i'm established coming from philadelphia i want to make them with the dallas i'll take six units but give me a better lease concession than you're currently giving your current operator and i got you know it's like four months free on a two-year lease basically wow and this is this is like uh uh like what's the rent and kind of if you can break down what this type uh what this property is about yeah so it's about five minutes from downtown dallas uh near the deep lm uh area um it's about 800 a month in rent uh plus utilities your internet you're all in for about a thousand dollars a month air dna uh every other website from doing all my uh basically background searching people are making around 22 to 2500 a month on a one bedroom unit basically in revenue and so so they're yeah okay so they're basically doubling doubling the profit around there okay so you and dallas is another market i think isn't shawn and dallas as well you're you're creeping up creeping up on them you're taking taking all the markets that he's in yeah at this point i'm just following him pretty much wherever he goes at this point that's that's funny that's funny so so why so you've obviously you know you kind of found your niche the and the one in dallas also there are one bedrooms as well and you're you're trying to stay within the one bedroom realm you're not trying to venture outside of that yeah there's been horror stories man i've read online like horror stories where people have 20 units a party happens neighbor calls everybody bans the whole account completely bans it bans are social bans everything if that happens to you your business is done you're literally going to go to zero the next month right how are you gonna afford twenty thousand dollars in expenses if your account's banned right for me it's a risk thing it's not worth it honestly like you sure you're making a little bit more money but the risk increases exponentially because there's more chance of a party happening it literally takes one neighbor to make that phone call it maybe will ban your account right away it's been happening to a lot of people recently ever since airbnb's ipo they've been cracking on it's a lot and just outright banning hoes without even asking what happened give us some proof just outright man what are what are some of the the biggest challenges that you see um you know trying to scale like a one bedroom um are you doing like one night stays are you doing like two night minimums or what's your schedule one of them stays perfectly fine with me so pricing strategy is also another big thing right where i'm pricing my uh prices really really high for single day stays i'll give an example one of my studios uh the base rates are on 80 a night okay now i i use beyond pricing for all my units beyond pricing work as well but then i also have to do manual pricing adjustments as well so i'll basically give a discount for a two-day stay discount for a three-day stay 20 off on a four-day stay and so on right then every month these days okay so if somebody wants to book far out right and block out my calendar i'm gonna raising my prices like by 40 okay so even if they do uh vote that day right i'll still make a lot of money okay but i want my calendar clear far out that way if somebody doesn't want to book a week or two weeks in advance they can no problem so a lot of my days have been four days on average so somebody just booked you for example like this weekend as a website next weekend as a one day stay instead of paying 80 they paid 130 right somebody else for july the fourth they paid 200 dollars for a one-night statement right so sure you can book block on my calendar for those uh days but you're gonna be paying almost double or a much much higher rate so that basically makes people book one day stays less uh and uh you know block on my calendar and keeps it open for longer stays so i mean you're you're getting into these properties for what around almost like four thousand dollars is is about how much yeah so i don't buy anything used everything brand new from wayfair ikea amazon costco costco is a thing that a lot of people don't really order from or use i think costco is the best for coming when it comes to bath towels um your cutlery toilet paper bat like everything basically costco is amazing the only problem is you don't really know what costco sells until you walk into the costco store right so that i haven't had like trips where i have to drive five times to cost with one days to get stuff right so it cost me i would say about 2500 for a studio uh four thousand for a one bedroom like fifty fifty five like a true bedroom so so in total with like uh rents and uh furnishings all of that you're in about seven around seven thousand six thousand oh yeah yeah around there yeah okay and then you're typically getting uh your 30 30 profit so you're you're doing around what a 60 roi about yeah around there so like i'll give an example like this month right now with the current nine units um i think we're at almost all ready for the month i think we're at 14k in revenue profit on that it's going to be on 30 right so this one my calculations on the six units and dollars just doubling the rent and 30 gross margin on that revenue next month and the end of february should be around 30 000. i should be making about 30 000 starting uh in march and then obviously thirty percent of that's around ten thousand profit and you can't you came in during also kind of a weird time too and in philadelphia i don't know if it's the same in dallas um with slow season is that something that you're concerned about or did you kind of adjust for that as well i was really really worried about slow season in january and if i show you my poor draft right now it's nothing but ninety percent above and occupied which is amazing and you you you do you have any plan or do you have any um insight as to like you know how you uh if it will slow down and how you plan to kind of prepare for that yeah so for me it's where i need to basically figure out what my daily average rate is right divide that by 30. let's say my let's say one of the units is a thousand dollars right you divide up by 30 or about 33 a day okay even if i have bookings that are let's say you know uh four days five days four day bookings then i have those days in between that are usually vacant i will then drop my price down from ninety dollars down to fifty dollars under forty dollars okay as long as i'm making anything above my cleaning fee that's the revenue coming in right because your costs are fixed but there's somebody who stays there for ten dollars somebody doesn't stay there at all your costs aren't really changing as long as you're making above the cleaning fee right and also keep your cleaners on payroll keep you give your cleaners work to do right rather than coming all the way downtown to clean one unit you get to clean two or three right but that's something that i'm doing with orphan days is i'm dropping a price like crazy on like today tomorrow the day after that way i'm getting those you know days that wouldn't be booked completely basically nice and what have been some of your your biggest challenges with uh scaling your business in such a short short amount of time capital honestly like i'm almost out of i'm pretty much out of capital at this point right to scale like i've i've literally started in this last two months i've probably spent like fifty thousand dollars just growing as fast as i possibly can building out the team as pos i thought i possibly can so right now i my another big thing for me is um my day job right like i work as an engineer full-time so i don't have time right to keep track of like a million things so i basically outsource and out hire for a lot of things and automation helps too so if you want we can if you want me to go into more of the automation and what i use for yeah if you want to give your stack yeah so i use your reporter okay your report is not expensive it's around i think six to nine dollars a month okay six to nine guest is amazing but they're charging in the same price it's almost 55 it's not worth it porter does almost everything so i use a reporter for all the automated messaging okay for the porter you can basically send the automated messages at the right time it says the cleaners are scheduled the night before so the cleaners are never calmly saying what house i go to where do i go send us them to schedule the night before they go they clean they do their thing okay um remote lock everything with the remote lock yeah so i have to afford them yes i use slave smart locks on every single door instead of me going on my phone changing the code every single time deleting it remote lock what it does is as soon as somebody books and generates a code for the guest it only activates at 4 pm and then when they check out it deletes a code right away at 11 a.m so that way i never have to go into this smart app and ever delete a code out of code it takes up too much time right you know four or five check-ins a day so remote lock handles everything for me and that's six dollars a month all right so i have mint smart devices in every single unit that's six dollars a month rings stick up camps the battery operated the batteries last for about a month and a half my cleaners charge them every once in a while whenever they go clean the unit that was around six dollars a month as well and then um what else i use now what i'm i'm also experimenting with virtual virtual co-hosts basically right somebody that handles all my messaging my daily messaging so i have a co-host that i hired from pakistan basically so their time zone is different than us right so when i'm sleeping they're awake right so during the peak hours they're always they're always live while i'm sleeping i'm busy with my life right so right now i'm training them right now so we have an excel document google document for every unit right we label everything we uh document everything for checking process checkout process what the unit looks like what day is trash um how to turn the heat on for each unit wi-fi password for everything right everything's there that way if they ever need to refer to something they can go back for the message it gets right away right and i tell them anytime something does happen or a problem does happen document it that way another virtual host or we can always look back in that document and see okay this problem happened before yes this is how we correct it right away so i'm training them right now hopefully once the units in dallas are live i'll hire them on it's like okay you guys not full time i'll be paying you guys every week just to be working 24 7 around the clock and and how much how much does that go for 100 a week 100 a week for 24 7 24 7 complete guest messaging okay and that's all that they're going to be handling is just the guest messaging yeah anything from guest messaging alteration requests um things that and that nature anything claim related i handle myself that's something that's like very tricky you have to like play it properly to you know handle claims and stuff so i handled that myself but everything else from managing the calendar that's something i i'll always do myself and everything else from uh messaging themselves i'm sure you've got some plenty plenty of insight you know especially right now airbnb is uh becoming notoriously bad with their resolution center but you've also had a lot of experience with resolutions in airbnb yeah i've had 11 times where i had submitted a claim for smoking got paid out for 10 out of 11 times so i'm a pretty good hit rate you know on claims for smoking so what what are what are some of your uh trade secrets with the resolution center those um let's say so one you have for airbnb right now they're only basically uh giving you uh payout for physical damage okay and it also really really depends on the representative that you get okay and you can tell right away the representative doesn't want to help you i tell them right away and please talk to somebody else or just call back a different time basically okay and you have to make sure you document everything a lot of people in philly are dumb when they come and smoke weed they smoke cigarettes or backwards or whatnot they leave it everywhere that's easy for me literally every time i just snap pictures sent it to them within five minutes email we have sorry for you know the inconvenience we've paid you a hundred dollars for cleaning or whatnot a couple times um everybody says you know we can't pay off for cleaning and i told them smoking is a physical damage because odor orders are physical damage and i tell them how to pay a cleaning company so you know that over for me i'll just invoice myself basically right my company a cleaning cost which maybe it paid out every single time one time i did not get paid out because the guests they cleaned up everything there was no evidence of drugs or swede or anything anywhere i couldn't really you know submit the claim so here's what it is you know awesome awesome and uh kind of wrapping up here i know um you know you you're really kind of short in the space but if you could go back and start from scratch what would you do differently not get two bedroom units honestly like that's just the market here i know every city is different um but just this city specifically for some reason i don't know what it is people just love throwing parties man in two bedroom units and above so yeah i just you know stay away from the two bedroom units and just stick with my studios and my bedrooms that's what i that's what i'm good at and what i've learned honestly they're easier to manage too the people that are coming or they're mainly for business reasons they're mainly there for corporate reasons they're for school reasons it's not something you know people are there for any schedules whatsoever and it really is a numbers game at that point right sure you're only making 700 800 bucks and profit for a unit but you're getting that unit at a much lower cost and this is an interesting numbers you just get as many of those as you possibly can right and just go you're everywhere that way do you have any issues uh you know coming from canada um your wife uh not being able to work uh you said you know prior to the call um and you know uh you're just being here on a work visa is that run into any issues or uh any advice to anybody that is maybe from you know canada that is operate here uh the social security number that's a big thing if you have a social security in america you can't do anything literally you cannot do anything in america without social security but see if you're on a work visa you get social security and then after that i have my llc right your llc gets this own ein number once your llc has the own ein number then you don't need your social trade anymore and you can do everything through the ai number but you can't get your ein number for your llc if you don't have social security right so you know it's it's literally impossible to do anything in this country without a social security number that's like the only way to do anything form an llc signing leases anytime they run a background check on you let's say my credit for example you need a social security number right to run a credit check you don't have them they're not going to rent you which is the problem a lot of people are um you know hesitant about moving forward because they feel like they need like a d b number is that anything that you had to deal with or did you just go straight to social security well because my work visa is like uh specific for engineers so we got social security right away it took like it took like literally 30 minutes okay no issues with like landlords or apartments you know you're typically working that was like larger reits you're working with smaller landlords yeah okay um and where do you kind of see yourself going in the future is this something that you see as being like a long-term sustainable business or is this more something that's just like quick cash flow you know profit while it's there i was kind of your mindset with this yeah so for me it's like i have two options right you can quit your job and you can focus on this full-time all right or i can just keep working my job and do this as well right so sure i let's say i you know i hire out for a lot of things and i have to add maybe an extra seventy percent of management costs but i still get to keep my day job and this is what i want right i don't want to put my days off as of yet right maybe like let's say another for example starting february i'll start making 30 30k a month in revenue right and then maybe a little bit after that we'll see where we got to once that maybe hit 50 60 came out through everything then i'll reassess and see okay do i still need to keep working my day job or not right that's the main thing was it right now like my day job as an engineer like i like it i enjoy my job i enjoy working with co-workers i enjoy my boss and then also for me it works out a lot of people aren't in that situation you know i'm lucky enough to like my job so for me it's not the situation where you know i hate my job i want to quit i want to escape that nine to five trust me i wanna skip that nine to five two but just as of right now i don't feel the need to because of outsourcing out high for almost everything right so for me automation is the big thing like i was telling you earlier one of the main thing is people all right hiring the right people is a big big thing for me right so a lot of people that i hired are people that i can trust right and that's a big thing when it comes to handling gas and issues and things like that and also training them as well to the point where they know what to do if a situation does happen right so i feel like right now especially in philly i'm at that point where i have that team in place if i were to expand to you know 20 units or 25 units it's just hiring on the right people and just having the people that are originally hired train them and be under that right that's what i did originally when i hired my cleaners my cleaners all twelve dollars an hour in philadelphia okay now i promoted one cleaner to supervisor and increased her pay but now her job is to handle all the other cleaners okay and same thing with everybody else like everything else like is just outsourced and outmanaged and i don't really have to do deal with those day-to-day things uh such as property maintenance emergencies on calls toilets clogged does not have to do with me anymore i just i call somebody he shows up 20 minutes he fixes it it surely cost me 50 bucks but it's just a one time thing that the chances are happening again are very unlikely right another big problem a lot of people i don't know if they talk about is your laundry situation right for me is this an advice i give a lot of people when they ask me how do you do laundry okay i have a deal here with the laundromat okay a big big thing for uh reviews is cleanliness and the first thing you notice is when you go into your bed you see hair did you see any hairs there instant like you know one star two stars send a picture to airbnb full refund cancel everything okay and it's really hard when you're using your own laundry okay your own washers and dryers all right and on top of that the regular washer and dryers you buy from like a home depot or a sears or a costco or not they're not as good as a commercial washer and dryer right they don't get rid of stains as easily they don't get uh you know when you do the laundry there's a lot of wrinkles i mean too okay so i have a deal with this i'll explain to my laundry process last thing basically um what happens is before what i was doing is my cleaners were getting paid a couple hours an hour but they would literally be done cleaning a studio or a one bedroom in one hour and he'd be sitting there for two hours waiting for the washer and dryer it was annoying right so i had to figure out how to create a system where i had to be more efficient with time right because time is money you can't pay someone to sit there right for the dryer so what i did was i negotiated a deal with a laundromat in the city and they what they do basically is my cleaners will go into the unit they'll strip off all the sheets all the linens all everything put them in a big blue laundry bag turn over the unit i have four sets of laundry and limits for every unit to turn over turn it all over within 45 minutes done take the laundry bag put it at the front of the building leave to the next house let loose the next apartment and they could hit four apartments four or five apartments within that five hour period right and at the end of the day at five o'clock a delivery driver would come to every single apartment you'd walk in the front door pick up the laundry bags take them to laundromat they would then wash them dry them fold them lynch roller and everything take off any hairs any lid whatsoever wrinkle free press them put back in laundry bags for me and the next morning deliver them also for free right at 10 a.m waiting for the cleaners to take them upstairs with them into the units and that i just increased my like you know productivity by tenfold at that point and do you have like a dedicated like cleaning cleaning hub or something for them like how are you operating uh uh you know in really small spaces like like one bedrooms what do you mean like do you have like like a linen closet or like how how are you how are you coordinating yeah so uh what they're doing is basically it's a it's really a linen closet yeah you have bedrooms and stuff you put all the you know stocks of sheets in that closet and then every time a new pair needs to get taken off you put a new one on for the whole in the laundry bed and when the laundromat drops off the next morning you take the new fresh laundry put it on take the old one put in the laundry bag or put it in the closet for the next step basically right that just increased productivity increased efficiency and it made my cleaning costs much lower because now i don't have to buy tide i have to buy tide pods i want to buy oxyclean i have to buy any of those things anymore right that's a big saver as well and time is one of the main things do you think that this would still be a sustainable business if you just had contractors or do you think because of what you've done on the cleaning side you know being able to save that money there that that's what's allowed you to be able to uh really uh profit from from these units oh for sure that helps a lot right because my cleaning cost for a one bedroom or less even a studio thirty five dollars so i will just charge thirty five dollars for that unit okay it'll take my laundry person about an hour to clean it so i'll be twelve dollars gone right for a one bedroom turnover they charge me by the pound right maybe it'll cost me fifteen dollars in laundry right maybe sixteen dollars delivery and pickup is free so my overall cost for cleaning that unit for the cleaner and the laundry is around thirty dollars so a five dollar gap for any case anything happens right everybody else in my area is charging sixty dollars an hour six dollars for cleaning fee right they can't operate that way because if they pay their cleaners 25 30 bucks an hour then you have to have them wait for three hours for the laundry for the washer dryer to work right so even though my 90 degrees is a little bit more if someone's looking for a one-night stay they'd rather book my place but then cleaning costs you know is only you know 35 dollars compared to 50 or 60. wow i'm so you you got this down man you you are crushing it um you know what what's what are you what are you planning on being at the end of uh 20 20 21 so my goal is to be at 20 units by end of 2021 i'm already at 15 uh within the first month so i don't know honestly we'll see we're we'll really really see you know like where i can go for me honest it's about capital right the more capital i have the more bigger i can grow right it's not about finding units it's not about the business operation and it's not about doing that sales calls i already know all that i have all that down it's literally just capital right so once i run out of money then i'm gonna call my dad no but honestly it's just capital honest at this point it's just the more capital i have the bigger i can go the faster i can go right speed is the main thing too because the more time it takes to set up a unit the more money you're losing to for example right like six apartments my goal is when i fly out to dallas that weekend i have you know the weekend off from work i have six guys that are gonna be waiting for me and another two if i need to furnish twenty five thousand dollars worth of furniture within three days twelve hour days if you have right so me speed is a big thing too so the faster i'm in there the faster i can get the faster i can move on to the next units awesome well what's what's the best way if anybody wants to be able to reach out to if they have any more questions or they want to be able to connect uh how could they reach out yeah so um if there's any owners or investors or landlords or property management companies looking to fill in vacant units in dallas and philly please let me know my website's hspropertyholdings.com you can also follow me on instagram as well at uh hs property holdings and uh you can also uh yeah find me on there and then reach out to me if you guys have any more questions or one apartment with me awesome and you know we'd love to be able to have you on a future show i mean you're you're on a rapid growth trajectory uh excited to kind of see you know where we're to be uh you know moving moving forward in the in the future but uh thank you so much and until next time host nation keep on hosting awesome thanks so much man see you guys hope you host 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 go on over to our facebook group the host nation

Channel: Short Term Sage - Airbnb, Vacation Rental Host

Views: 8,700

Rating: 4.9464884 out of 5

Keywords: shorttermsage, julian sage, jon bell, airbnb, rental arbitrage, airbnb cohosting, master lease, vacation rental investing, Julian Sage, Short Term Rental Success Stories, Short Term Sage, short term rentals, Philadelphia Aribnb Market, How to Short Term Rent in Philadelpia, Airbnb Philadelpia Hosts, BRRR investing, Master Leasing, Airbnb Fast Scaling

Id: ho3K4ikP8Uk

Length: 68min 22sec (4102 seconds)

Published: Thu Jan 28 2021