Making $100K in 18 Months w/ "Misfit" Medium-Term Rental Properties

this is real estate rookie episode 273. yeah so I went back and I figured it up before I had my first interview with you guys because I just wanted to know for myself and just from uh me doing you know multiple house hacks in a row and doing an Arbitrage doing some co-hosting this and that um I've made over a hundred thousand dollars in the last 18 months off of media intern rentals which is absolutely insane my name is Ashley care and I'm here with my co-host Tony Robinson and welcome to the real estate rookie podcast where every week twice a week we give you the inspiration motivation and stories you need to hear to kick start your investing journey and Ashley man am I so excited for today's guest uh we've got David rosenbeck on the podcast and we met David in person at one of our Bigger Pockets meetups uh not too long ago and then I bumped into him again at another conference in January and I'm so glad we brought him on because um I feel like it's not often actually that we get a guess where like we're learning so much in the moment from that person as well but today was one of those other says where I feel like me and you are our gear is returning a little bit right yeah we definitely uh used our position as the host to pick Dave brain to our advantage and to what we should or shouldn't be doing but um one really cool thing about this and this always gets me excited is David tells us how much money he made off of his rentals in the past 18 months uh so I think if anything this should be motivation for you guys that you can completely turn your life around in 18 months like David did yeah he had a pretty healthy six-figure salary which we'll get into and he left that high paying six-figure job because he had so much cash flow coming in from his portfolio so so many good things but but David uh talks about uh his journey obviously but he gives a quick breakdown on renting by the room and how he's had success doing that and then we spend the majority of the episode uh really doing a deep dive on medium-term rentals and how he's been able to just dramatically uh increase the revenue and profitability of his Properties by going to medium term rental route and he talks very specifically about what he looks for in a city like what are the here you need to search this term to invest in the city he talks about what he looks for in his properties to to make sure that they'll they'll be good candidates for medium-term rentals and um yeah just a really great episode about medium term rentals today now one last thing I just want to give a shout out to someone who recently love to say five star review and apple podcast this person goes by the username of Matco Justin and Matco says I'm in a position after a divorce to buy a home so why not buy a property that pays me while I live there as I'm going through the pre-approval process with the lender I'm learning as much as possible from Ashley Tony and their guest and the more I listen the more I realize I can do this to you thank you guys both um man what a what a great uh review not just because it's a five star review but just because I love the you know in a position that you know maybe a difficult position someone going through a divorce they're finding uh support in the podcast in the community so for all of you that are listening if you haven't yet left us an honest reading review on Apple podcast or Spotify please do uh the more reviews we get the more folks we can reach and the more folks we can reach the more folks we can help David welcome to the show thank you so much for coming on can you tell everyone a little bit about yourself and how you got started in real estate hello Ashley hello Tony thanks for having me on I really appreciate it yeah my name is David rosenbeck um I am a nurse practitioner by trade but turned a real estate junkie within the last couple of years um I am from Fort Wayne Indiana but my wife and I we've been traveling around the past eight months or so uh I switched jobs about eight months back to a remote position and we've kind of been doing the The Nomad lifestyle for a little while and now we're back in Fort Wayne Indiana because we um our 12 months is up for whenever we can buy a new primary residence so we're back in Fort Wayne and we're house shot house shopping Again David can you kind of break that down what that last sentence is that you meant what does that mean for anyone who has no idea about why would you move after 12 months yeah absolutely so in my humble opinion it's it's the way that we've built the major majority of our portfolio is every 12 months you can buy a new primary residence and so whenever we purchased our last home we bought it with the thought that it was going to be a rental property in the near future and so we purchased it and um you know we knew that it would make sense as a uh rental in our portfolio down in the future it wasn't going to be like a forever home for us or anything like that so we bought it we furnished it um in the way that we knew that it would rent out as a medium-term rental which is my specialty what we do here in the Midwest and um we furnished it didn't put any really of our uh personal stuff inside there no we didn't hang up pictures didn't do any of that stuff and then within about three months I took we took off traveling for the last eight months and we've had a a guest staying in there ever since then and so the idea is that every 12 months you can use a nice low down payment typically five percent for a new primary residence so it's a really really easy way as long as you have a little bit of flexibility and your wife is okay with it or husband's house whatever is okay with moving every 12 months it's a really really easy way to build up a portfolio and kind of get the ball rolling with low down low down payment one one follow-up question to that David so the the type of debt that you're getting if it is it like a conventional loan is it like what kind of loan is it that you you've used so far yeah so we uh we work with the local bank here and we're just using five percent down conventional 30-year fixed rate like the best best type of uh um you know loan products that you can get because it's made for the you know General consumer so whenever you start moving into some of the other stuff like commercial loan stuff like that usually interest rates start going up and it doesn't make as much sense because banks have to protect themselves a little more but they know that oh this person's you know buying their primary residence we uh they give them a little bit more leniency and they they let the lower down payment usually with a lower interest rate as well David how many how many times have you done that where you like move into a place lived there for a year and then move out so this will be our fifth time doing it this go around and so uh the very first time we did it we accidentally flipped a property and that was back in um 2019 and so that kind of brings me back to the beginning of our my story of how I got started in investing um 2019 I graduated uh with my degree as a nurse practitioner and uh you know was making more money than I had ever made before you know making in 120 130 000 a year as a 25 year old guy and um but didn't really notice any difference in my bank account and I didn't know why there wasn't any difference in my bank account and uh so then uh covet hit not too long after that and so we had some time that we we purchased a home five percent down back in uh our hometown area and um renovated it and then um covet hit and so we were sitting at home and I wasn't seeing many patients uh from home you know doing virtual visits and uh I just got on YouTube and literally searched what should I do with my money in my 20s and uh it was a Bigger Pockets that popped up first it was Graham Stefan but then shortly after watching Graham Stefan he was talking about real estate Googled real estate Came Upon Bigger Pockets and you know the rest was history after that um so we uh that first property that we had we owned it for um a year and like nine months and then my wife was like we need to move to Fort Wayne which is where we're living at now because my work my well my commute was a you know an hour and 15 minutes one way and so she was like that's dumb we're not doing that anymore and so um we found a property in Fort Wayne that had a carriage house out back and my wife was like would this work for that house hacking thing that you were talking about and I was like oh my gosh honey yes this would work perfectly for house hacking and uh so then we sold our house back home uh we made uh right at about thirty thousand dollars on that first house and rolled it into our next one David so I I just want to comment on something because you you kind of joked about this already about like if you can get your spouse to go along with this but you've done this five times um like was your was your spouse always on board from the beginning like did she say like hey I love this idea let's do it or was there kind of like a a period where you had to maybe convince her to get on board and if so just how did what was that dialogue like because I know a lot of our rookie audience a lot of folks that are listening they're married or they're in a serious relationship and they're the person that's listening to the real estate rookie podcast twice a week and they're the one that's on YouTube doing all the stuff and their spouse is just kind of you know like in the in the Matrix still like not realizing what's what's what's really available so just walks you with what it looked like for you and your wife yeah for sure so I think she she just knows that whenever I really dig into something I dig into it big time and so you know I I mentioned I was driving an hour and 15 minutes one way to get to work and so I hammered through Bigger Pockets podcast episodes and every time I would come home from work I'd be talking about nothing but real estate for like six to eight months that was going on and she finally got to the point where she was like okay this isn't just some you know flighty dream that David's talking about this is something that could actually work and so it was literally just me coming home talking about what I had learned about on you know the that day's two podcast that I'd listen to one there and one back and uh she she kind of got like an honorary PhD in real estate just from osmosis you know yeah so I think really it comes down to just like making sure that it uh you're your spouse knows that it's something that you've actually put a lot of thought into and so you know I I listen for I think it was eight months before we finally took our our jump into buying that new primary residence in Fort Wayne and it had the Carriage House out back like I said and my wife actually was the one that found it on the MLS which was phenomenal and uh we were able to move into that when we sold our house we were then able to take all the proceeds from that it was about thirty thousand dollars and by our second investment at the same time which was a college house and uh my wife was like shouldn't we take like this 30 000 and like put it towards our student loans put it towards this put it towards that whatever and I was like no we're buying a college house too so we kind of went for you know three properties all in one because the Carriage House the main house and then our College house did you write out any spreadsheets do any kind of math or run the numbers to decide that that was the right move or you just wanted an investment property so bad you just didn't care a little bit of both and so the thing that really really helped me was the the hospital that I was working for there was a fellow he was an infectious disease doc that was working there and I knew that he was investing around the college that this house was by and so I reached out to him I was like hey can I you know go buy you dinner and let's go talk and he was telling me about some of the numbers that he was getting for his college house and I was like okay like if he's getting that surely I can get that and I told him about the house showed it to him and he was like oh yeah that's a no-brainer you should buy it so having somebody that I was able to ask from my numbers by and then once he said it was a no-brainer then I was like okay let's Off to the Races if I can I I just want to ask Brad because you're you know you you said that you were making you know a healthy six figure salary in your mid-20s which is you know there's a lot of people who work 30 40 50 years and never make over six figures so in a lot of people's minds financially you'd already kind of made it right early in life so why even go down this Rabbit Hole of trying to become a real estate investor why not just like you know let your healthy six figure salary turned into a multi-million dollar uh you know stock portfolio that you can retire off of sure yeah um I think it was a combination of I've always kind of had a uh an entrepreneurial kind of mindset I always I always told my wife I was like I'm gonna invent something someday I mean I'm gonna come up with some sort of an idea and then on top of that um the the group of people that I was working with in my W-2 I worked at a Cancer Institute and it was for upper GI cancers like pancreatic cancer which is you know one of the worst cancers that are out there liver cancer esophageal cancer a lot of these really really nasty ones and um I just saw so many people that were in like their mid 50s or so something like that and they're just about ready to get to retirement they're just getting excited about it they might have just bought their you know second home down in Florida or something like that then they just get hit with this awful diagnosis and then you know they're stuck financially it starts to ruin everything that they've built and then you know potentially could be a life-ending disease to where they thought that they had all this extra time and they really didn't and so that really motivated me that I was not going to you know just put in 40 hours a week for the next 40 years so that I could hopefully retire at some point I knew that I wanted to be able to start making my money work for me sooner so that we could you know kind of have the life that we wanted to live now what would be your advice to somebody who's thinking of making that transition are there any things that you did to kind of Safeguard yourself or prepare yourself for making that transition having that pay cut maybe even talk about some of the conversations you had with your wife before you made that big move yeah absolutely um so the biggest help to me was uh Fort Wayne actually has like a really really robust investing group in uh and there's a Facebook group and anybody can join if anybody wants to join the Facebook group and um there was just a lot of really really good people that I was able to kind of glean onto and learned a ton from and uh one of my early mentors in real estate investing and really medium-term rentals in specifically because that's my specialty is um his name was Seth and he he was gracious enough to help me out to where he helped me you know set up my properties in a way that and set up the um like minimum stays and bookings and things like that to where I felt confident that I would be able to you know have my properties booked because I had never heard anything about medium to rentals this was you know a couple years ago so Jesse Vasquez hadn't come on to the the scene just yet and uh so we were um you know I was kind of Flying Blind but then having that support group of people in a in an investing group like that was phenomenal so if you can find people get to your local real estate uh you know meetup groups and stuff like that and start talking to people that are doing what you're doing and it makes all the difference in the world because then you're not sitting at home thinking or trying to Google and you're wondering is this you know good information or not you know then you you have somebody that's tangible that can pull out their spreadsheet on their phone and show it to you and it just makes all the difference do you think that networking component and going to these meetups is a big part of why you felt comfortable to actually start making offers and you know buy that first investment property or even the first house with the The Carriage House in the back what are some things that you think made you different than someone who's still stuck in that analysis paralysis yeah I I definitely think um it was having other people around that I was able to ask questions I mean that that's that's really the because in healthcare whenever you're working especially in the nurse practitioner role you know we have a lot of autonomy we get to you know prescribe diagnose do all kinds of other things see patients on our own but there's always a physician that we can lean on and ask questions to because they are the ones that went through all of the training to really really get a firm grasp on everything that's going on and so that's how my entire career has been as a nurse practitioner I've always had you know a physician that I can lean on and ask questions to so whenever I got into the uh real estate world I knew that I needed somebody because that's the way that I learned and like I feel most comfortable is having somebody that I can work through the problems with and ask them questions so I was able to you know find a mentor that was able to help me out you know we talk about this all the time Ash about like just the the value of community especially as a rookie and you know I asked you David like how you got your spouse on board and for me and my wife Sarah she's my business partner it was it was a lot of the same right where she kind of saw my enthusiasm but what really um what really kind of put her over the edge and and really gave her the the bigger picture of how how successful we could potentially be was meeting other people who are already doing it and you know I think it was like a meet-up that we went to First maybe like a small conference and then um you know then we went to bpcon and she met so many people there and that's like when her eyes kind of opened and it was like wow like there there are really people who have built massive businesses in the world with real estate investing and it's like well if they did it why can't we uh so man I I I love that um it was the network component that really spurred you all to to kind of take action completely agree and most in most cities they'll have a Facebook group for Real Estate Investors you know so if you can get into that Facebook group search inside there surely you know a friend of a friend that is inside that group or something like that or just shoot a message to somebody that's doing a lot of stuff you know replying to a lot of people or doing whatever within the Facebook group because then you can send them a message and be like hey uh you know I'm gonna come to this week's Ria meeting um I was just curious if you know I could talk to you on the phone for 15 minutes before we go just so I know what to expect or something like that and then that helps like you kind of like be able to move into the Ria be like oh I already know you know Seth he's already you know part of the group and Seth's gonna say oh hey David how's it going you know it's not you just flying in there blindly uh David one thing I want to Circle back to as well because you you mentioned this briefly and I don't think we spend enough time kind of diving into it but um you said that you were going back to Fort Wayne um where have you been in the meantime like what does your life look like now that you've kind of built up this this real estate portfolio yeah so so once we were able to build up um we've got five medium-term rentals right now and then one long-term rental and that was able to offset a pretty big chunk of my W-2 income that I was making at the Cancer Institute and I knew I mean this this is one of the highest paying NP jobs that you could get in Fort Wayne and so I was really lucky to get into the group um and so I was hesitant to you know step away from it because I was going to take a pretty hefty pay cut but I was able you know I felt comfortable doing that because I started having this residual passive income coming in from my rentals and um so now my wife and I we've been traveling around our first stop was in Denver where the first week that we were in Denver we stayed there for a month and the reason I wanted to go there was because I knew it was you know the Bigger Pockets Mecca and the first week that we were there there was a meet up at a brewery where I met the two of you while we were there and so I was like okay this is definitely where we're supposed to be and uh spent a month in Denver met a ton of really really cool people out there there's meetups like two or three a week out there it's crazy um and then we spent a month in Oregon spent some time in California Arizona Texas Florida Louisiana uh South North Carolina Kentucky and then back in Indiana now over the last eight months and yeah it's been a beautiful thing because we've been able to do it and the reason we've been able to do it was because of the income that we were making off of our rental properties because I was I was making decent or am making decent money at my my remote job that I have I'm working for an insurance company now um but I'm making probably about two-thirds of what I would have been making at my prior job but now that residual income is you know replacing it which is fantastic are you working less than two with this new job absolutely so I always tell people you know I I had uh probably a nine out of 10 stress level whenever I was working at the Cancer Institute just really sick people seeing lots of them you know and now with this job I work off productivity and I'm usually done by 10 11 o'clock in the morning I got I got my five appeals done and then I can just kind of relax and focus on real estate the rest of the day and just respond to emails when I need to and it's a beautiful thing that really is amazing and I think a lot of people listening probably might be striving for that same lifestyle um if you've ever seen Tony at a conference he pretty much is working while attending the conference or staying up until 4am to work after the conference so Tony might even be uh you know seeking that lifestyle one day too but uh David that's awesome and congratulations on you know finding that path and kind of getting to somewhere where you want to be yeah and that's the funny thing too everybody always says that they want to get into real estate so they can quit their job but it doesn't need to be so black and white and so extreme like you can get into real estate and help you know supplement a third of your income which is basically what I was doing and and I was able to take a job that had 10 times less stress and I'm still making some decent money still have benefits and everything that I need to have and that's a similar situation that other people can have to where you know they don't need to be able to you know quit their job cold turkey because of all the money that they're making from Real Estate because that just sounds like such a big daunting task but if you're able to get into enough real estate that it's supplementing some of your income then you can move into an adjacent job that you might enjoy more or it's more involved with real estate like working for a title company you might not be making as much but you're learning more on the job you're meeting new people so it's uh it doesn't need to be okay I need to make ten thousand dollars a month in passive income before I can quit you can you know make a little bit of that and then you're able to transition into something else if you want Steven I want to go into kind of the strategy piece of your real estate Investments so you primarily focus on medium-term rentals are you doing any other kind of strategy right now or just that uh I have one college house that's actually doing really really well for me I rented out out by the room and so I was able to find a five bed two and a half bath house that was right next to a college and I'm renting it out for 400 bucks per room with 50 flat rate for utilities and the house cost me ninety one thousand dollars so my mortgage is like four so my mortgage is like 480 bucks and I'm bringing in 22.50 a month and so it's it's uh been a cash cow for me David just one one question on that um first I love the rent by the room strategy and you know all of our portfolio is short-term rental but you know eventually we want to start adding more long-term rentals but when I do make that transition I wanted to either be um maybe more of a medium-term rental or a rent by the room strategy because I like that approach but one of the things that always kind of gives me a little bit of hesitation around renting by the room or I guess two things really one is if you're in a college area um everyone pretty much leaves at the same time during summer so how do you account for that and then second um do you how do you kind of manage the uh folks that are sharing that space like like do you supply things like dishwashing detergent and or laundry detergent and like like who's doing the household essentials and or are you do you just let them figure that out yeah so I I actually going into this I advertised it as renting by the room but that was just my justification for the big two thousand two hundred fifty dollar price tag was like you will be staying in this house you know with your utility utilities included for 450 bucks for your room and uh my my main strategy was that I wanted a team because uh that was already already all those people know each other and so I actually started going through and I made a list of all of the coaches for all of the teams at Indiana Tech which is the college that's in Fort Wayne and I emailed all of the coaches that were there and then I happened to see somebody's last name that I knew on the volleyball team and so I shot her a message on Facebook because we had a mutual friend that uh that kind of like quasi knew her and uh I was like cave are you guys I I just bought this house here's the address would anybody on the team be interested in uh renting the place out and so then we were able to get five girls from the volleyball team that already knew each other that all agreed that they were going to rent the house together and the second reason that I wanted the team other than they already all knew each other so you know theoretically they should get along because they're going to be on the same team together no matter what so the reason that I wanted the team was that there's always going to be Perpetual overturn with these teams and so you know you've got upperclassmen then there's Junior sophomores freshmen that are on this volleyball team and so you should theoretically always have new people that are going to be coming through and staying at your property and the reason that we chose girls teams instead of guys was because there's been I've been to plenty of guys College houses it doesn't look great and so my wife was like we need to do girls if we're going to do college rentals so um when I remember when I was in college the you know my boyfriend in college he lived in a house that was like five bedrooms I think it was and they were in the downstairs part of it and I mean it was literally you just got the house empty and you had to bring you know your furniture for the common area there was nothing provided I don't think the house was even cleaned before they moved in but it we've had guests that have been on that talk about doing you know house hacking or they do rent by the room but I think the college experience and expectation is very different than if you are renting to professionals or even just people who aren't in college where I've seen a lot of them you know Supply the dining room table they Supply the couches and the common area of furniture and then you know every maybe they'll Supply you know some of the toiletries or things like that so have you kind of seen that with colleges as to it's very different than if you're renting by the room to I don't want to use the word adults because obviously college students are adults but not student housing yeah and so um I I didn't um I didn't provide anything whatever it was just like they were basically signing a long-term rental lease and the way that I did it was I had all of them sign an individual lease but that was just kind of the way that I pitched it was renting by the room and uh one of the most important things because you know renting a college house everybody you know thinks of the worst you know how College House parties and stuff like that going to ruin everything um is I had a I reached out to my attorney and I talked to him I was like okay what can I do to like protect myself in this situation and so he said have them sign a parent guarantor reform is the name and so what that does is I the have the girls all you know like physically sign the lease together so there's five signatures on that lease but then I individually send out through DocuSign this just one page document that says I blank blank um agree to all uphold all of the terms of the lease individually and holy so I now have each one of these five sets of parents that are also responsible for everything within the lease as well as taking care of the property and so I don't have to rely on the kids making rent because the parents are on the hook for it if they don't pay I don't have to worry about if they destroy something trying to squeeze money out of a college kid the parents are on the hook for it so that has made a huge difference and made me way more comfortable with going into uh you know getting into a college rental space that's a really really good tip David and um we had a recent uh guest Ashley who also mentioned something about like getting the parents to sign for the students I can't remember who it was but it seems like that's a common thing and honestly I would have never thought of that so I appreciate you sharing it man I think that's great advice for even not somebody who's in college but somebody who's a first-time renter if you can you know they're moving out of their parents house and you know they don't have maybe any credit they just got their first job there's no rental history that's something you could ask for as having their parents kind a cosine that's such a good point because like I got my first apartment when I was in college too and I remember I remember being shocked when they like approved me for it I was like I was like you're actually going to give it to me like I almost applied thinking they were going to reject me so I I love that idea of like even if you're a first time renter whether you're in college or not it might be beneficial um well David I want to talk a little bit about the midterm rental stuff because you know obviously moving a short-term rental guy Ashley's kind of expanded her short-term into portfolio but the MTR space is starting to get a little bit more love especially as we're seeing kind of fluctuations in the economy and kind of what what the short-term rental market might look like so you've got the one long-term rental where you're renting by the room and then the rest of your units are midterm rentals correct so I guess if you can I I think that the first I guess first if you can Define what midterm rental is because there might be some folks who aren't familiar with that phrase and then second how are you sourcing uh people to put into your midterm rentals absolutely yeah so uh medium term rental at least in my definition is anything that's a 30-day stay that's furnished where you're paying the utilities and so it's basically you have an Airbnb that instead of renting it out for a weekend or three four nights whatever you're renting it out for at least 30 days plus and the main reason for that was because Fort Wayne's not a vacation Market people aren't coming here for leisure they're coming here for work and me being in healthcare whenever I went and I walked through the hospital once we were allowed to come back after I think it was like six weeks they had us NP stay at home and try and do like video visits and then once I got back in the hospital I didn't recognize anybody in the hospital I didn't recognize any of the nurses and I was like what is going on and so I started talking to people and everybody was a travel nurse and I was like where are you guys staying and they're like oh I'm staying at the you know Super 8 down the way and I'm like how much are you paying for that oh like 60 bucks a night and I'm like are you kidding me that sounds horrible and so it got my wheels turning I was like surely there has to be a market for this and then that's how I got synced up with my mentor Seth I just asked in the Facebook group that I was part of I was like is anybody doing you know like 30 day stays furnished for travel nurses and then Seth reached out to me and that's how we got started we started renting out the carriage house and so we furnished it and it's 600 square feet it's a little brick A-frame it looks kind of cool and my wife did a wonderful job of making sure that it looked really really good and within the first 24 hours of us going live on Airbnb we had a nine month booking and the nine months booking was not even for a nurse which is what I expected our bread and butter to be it was somebody that was coming to town with his wife and he was a lineman you know like power lines he was working on them for Indiana Michigan Power the power company and so not even somebody that was on my radar they booked it for nine months and so that just really opened my eyes that hey there's a huge industry for this not just travel nurses and so uh then we expanded um we've got now our main house that was with the carriage house we moved out of that and that's now a medium-term rental that's a two bed one bath and then we have a town home that's a three bed two and a half bath that's a medium term we did an Arbitrage of a one bed one bath path that's near the hospital that I worked at that is a medium term and then I'm co-hosting for a friend of mine that's a medium term can you explain what Arbitrage is absolutely yeah so um there was one apartment complex that was really really close to the hospital that I used to work at on the north side of town that it's kind of like far away from downtown it's like kind of all by itself and so there's one apartment building there and I was like surely if I would be able to because I was looking there's no uh apartment building or apartment units on furnished finder or on Airbnb and so whenever I was looking around and I I just gave them a call I was like hey my name's David I do medium-term rentals for travel nurses I work at the hospital there's not enough housing would you guys be willing to do a corporate lease with me so that I can rent out to some travel nurses and the fact that it was going to be for 30 days only I told him I will never do anything less than 30 days it's going to be for health care providers at Parkview which is the hospital they knew how close they were to the hospital so they made they're like okay that makes sense they were perfectly fine with they were like yeah absolutely come on in we'll have a conversation about it there wasn't even any of this oh trying to like you know woo the landlord or woo the apartment building into letting me do it they were like happy to do it because they felt like they were contributing them um and so basically you go in there you sign a lease saying I will pay x amount which is you know whatever the market rent is and then we furnish the building put all the utilities in our name and then we're re-renting it to travel nurses and then we make the spread did they require did they do a whole like tenant screening on you do the credit and background check on you no as the renter they didn't do anything wow I made sure I walked in with my scrubs on with my badge on so maybe that helped but I liked how you use the word when you kind of approached them you want to do it as a corporate rental because that has been like a that's actually done for a really long time is Corporate rentals where this medium term stay it's kind of new where more people may not know what it is um so I really like the way that you kind of worded that and pitched that and um yeah that's really awesome yeah I made sure that I never once mentioned the word Airbnb I was like because then they're they're gonna freak out but it was yeah I think it was that I'm gonna be having nurses that are coming into town that are working at the hospital and so like it's it's pretty hard to try and turn somebody down with that whenever they're coming to the community to help out with you know the sick people that we have David one one follow-up question so you said the first one came on Airbnb like you you know a few hours taken alive you got a nine month booking are the majority of your medium-term rental uh guests coming from Airbnb or is it coming by you directly reaching out to the hospitals and offering that or like what's what's your biggest source for for folks coming in yeah I would say um early on I would say it was probably 75 Airbnb 25 furnish finder and so furnish finder for people that don't know is an online booking platform and it's tailored for travel nurses but now other people other traveling professionals are starting to figure out that oh it's not just for nurses um and so all you do is pay a 99 fee for the the year for that booking and so they don't take three percent like Airbnb or anything like that it's literally just a place for you to post your property that somebody can find you and contact you but I think over the last like probably six months it's kind of flipped on me and now I think it's about 50 50 because I think before whenever I first started travel nurses were making so much dang money that they didn't care they just booked through Airbnb and they didn't mind the extra fees they didn't want to do so much searching they just wanted to get to town and get to work but now um the travel nurses their their pay has been cut down quite a bit because there's not so much like the the critical need that there was during the pandemic so they're looking more on like you know furnish finder and stuff like that like they used to to try and you know get a little bit of a lower rate um but yeah I'd say probably about 50 50 right now Airbnb and furnish finder we uh for our medium-term rental we actually got somebody that did over the summer grandparents that want to come and visit that their grandchildren for the summer so we have the whole summer booked out because of that and find it interesting too that you've had construction workers we recently just had two different Engineers contact us that are coming in for like a six-month job that they're they're doing in the area so yeah there's definitely more potential than just traveling nurses too so I think that's just an added bonus that you know being by a hospital is great but you could also try and Market to other types of people too absolutely yeah and I would say like the lead driver of the economy in Fort Wayne is Healthcare and so that just made sense in my brain I work in healthcare that's you know the lead of economy but I would say maybe just buy a hair fifty percent of my bookings have been nurses the rest have been other people so I've had people that were in town for a physical therapy internship I had somebody that was a um that was a concrete guy that was working on the courthouse for three months I had a guy that was a crane worker had another person that was in town for a law internship I mean there's just a million different reasons that people need to come into town and stay for two or three months at a time and they're obviously not gonna like lease an apartment they don't want to stay inside a you know a hotel for that long because even these extended stay hotels at you know sixty dollars a night they're still paying multiple thousands or you know well over a thousand dollars for a month to stay there and kind of my sweet spot that I found has been right around like that two thousand dollar a month Mark which works really well in the midwest which is where I I work out with our low purchase prices so David you have told us a lot about your portfolio you have you know cut back on your position you're living the life that you want right now so we all have to ask how much have you made in the past 18 months since you started doing this off of your rentals yeah so I went back and I figured it up before I had my first interview with you guys because I just wanted to know for myself and just from uh me doing you know multiple house hacks in a row and doing an Arbitrage doing some co-hosting this and that um I've made over a hundred thousand dollars in the last 18 months off of media intern rentals which is absolutely insane that's amazing congratulations thank you and I I do think a big component of that is being able to you did change your job and having more time to focus on your rentals and real estate too yeah absolutely I completely agree because now with this job I mean I'm I'm able to take multiple phone calls a day I'm able to underwrite properties I'm able to just like have one laptop open that's for work and one laptop open that is for the fun work which is real estate and uh you know answer emails whenever I need to but then I'm uh you know perusing Zillow and looking for other things and so yeah it's made a huge difference because now I have so much more time flexibility that I didn't have before whenever I was working in my previous job yeah well congratulations brother that's a that's an amazing achievement um so you you've shared so much information I really enjoyed this conversation Dave but I would love if you can talk a little bit about your uh process for selecting these homes that you're using as medium-term rentals like do you have a process in place or like what kind of thing do you looking for to say yes this property makes sense as a medium-term rental absolutely yeah I the reason that I think medium to rentals is one of the best investments out there is because a lot of people aren't looking for the type of properties that I personally think do the best and so I I like to call them my Misfit properties and so whenever you're looking around for these homes you find these little one bed one bath two bed one bath less than a thousand square feet places that no investor wants to buy because what how much are you going to rent a one bed one bath for maybe 600 bucks a month and it's not going to cash flow very well and then no family is going to want to buy that because they're going to grow out of it in no time and so if you can find these properties it's usually a very very low down payment because you know it's a cheaper property you can usually negotiate pretty well on the price and then the renovation on these types of houses because they're less than a thousand square feet typically renovation is very very cheap and then your utilities once you have everything renovated is very low because you know your heating bill electric bill everything else is usually very very low and a one bed one bath house or a two bed one bath house is fantastic for a travel nurse that's coming into town because they don't need that much space they're usually at work the majority of the time and they just want to come back and crash and then watch a little bit of Netflix go to sleep and then go back to work the next day and so I think that these houses are the perfect thing that people can start looking for and the way that I like to tackle a new market because I'm looking to Branch out of you know my my home City of Fort Wayne because things are getting a little bit saturated here because I keep preaching medium to rentals from the mountaintops and so now everybody's getting into it but I'm reaching out into some of the more tertiary Midwest markets and my favorite way to do it and the way that you know if somebody wants to do this for free right now at home super easy you pull up furnish finder on one side of your screen you pull up Zillow on the other side of your screen you find a misfit property somewhere in whatever City that's closest to you and I always like to look for at least a level one trauma center hospital so like 450 beds typically level one trauma center hospital because then you know it's big enough that there are going to be travel nurses there no matter what because there's such a nursing shortage still and so if you can pull up Zillow on one side pull up furnish finder on the other you look at kind of where the pocket of furnish finder properties are because that must be okay this is a safe enough area then you pull up Zillow and look and see are there any overlying areas is there a nice little Misfit property hanging out inside that spot to where I can go and underwrite it like oh this property is getting 2200 bucks a month and it's got Grandma Furniture inside it I wonder if I could purchase this little house and I can make it nice and get even more than that and so it's just a really simple way that people for free at home could pull up their uh you know internet browser and be able to look for properties right away David one thing you mentioned uh level four trauma center and you said 400 beds how how does someone who's not in the uh healthcare industry identify that yeah so level one Trauma Center that's like the highest level that you can get yeah so a level one Trauma Center is um you know like somebody that's critically ill in an accident or something they would fly them by helicopter to a level 1 trauma center and so you can literally just Google level one Trauma Centers in Cleveland Ohio level one Trauma Centers in Louisville Kentucky and then or if you know if it's not a level one Trauma Center which is kind of Ideal because then there's lots of people there they have icus and all this other stuff um you can just Google whatever hospital is in whatever Town that's closest to you I'd say you'd want at least a hundred thousand people a hundred thousand people in the town like population wise because then it'll probably have a big hospital and if you get a hospital that's at least 450 beds you're going to have so many nurses that are within that Network that you know they probably aren't meeting the supply for the nurses that they need and so then they'll likely have travel nurses that are coming in I just Googled like level one Trauma Centers for my county and yeah there there's three that are within like I don't know probably 25 minutes of where I live right now um that's so crazy I never I never knew that man that's that's awesome yeah it's it's a nice way that you can just kind of suss out smaller hospitals from bigger hospitals because there's not going to be a a you know 50 bed hospital that's a level one Trauma Center it has to be a large one so whatever Town that's within I mean just about everybody listening to this right now has a level one Trauma Center within two hours of them and so whatever town that that's in then you can start looking on Furnish finder set your parameters on Zillow for two bedrooms or less thousand or twelve hundred square feet thousand square feet or less find those cheap Misfit properties turn them around furnish them put them up and see what you can get for it yeah David that's that's an awesome breakdown man of of kind of uh how to get rock and roll in the median term rental space and um I might have to seal that whole level one drama thing because I've I've always you know I don't have any long like long-term rentals I've never had any long-term results in California but we have short-term rentals here um so maybe a medium-term rental could do well in California also because I I like the idea of having Assets in California because they appreciate well and and you know you're you're you're going to get the long-term upside but obviously as a as a traditional long-term rental it gets a little tough to to kind of find properties it makes sense but this this level one Trauma Center might be my might be my gold man um cool so I I want to take us to our next segment which is our uh Ricky request line so for all of our rookies out there listening uh you guys can give us a call at 8885 rookie and uh if we like your question we might just use it on the show so David are You Ready for today's question yeah let's do it all right so today's question comes from McKinley Ward and McKinley says I have a few questions around medium-term rentals uh to traveling Healthcare professionals I'm about to close my first single family property this week this house has a fully furnished I'm assuming uh one bed one bath basement equipped with full kitchen and laundry as well as separate access uh entrance we plan to house hack live in the main level and originally rent out the basement as a traditional long-term rental however I recently came across the idea of renting to traveling Healthcare Providers and found furnish finder I'm thinking of the cash flow much more each month doing it that route and have a higher quality tenant my question is does analyzing them numbers change much with this approach compared to a traditional rental as in look at it more as an Airbnb also has anyone had much success doing this or using furnace finders anything to keep in mind so what are your what is your advice David to McKinley 100 would say go with the medium term rental route because likely if it's a if it's a basement unit you're probably not having separate metered much of anything maybe you have separate gas maybe you have separate electric but if it's a basement unit probably not so you're already going to have to figure out a way to split those utilities or you're paying them yourself already and so that's one of the things with medium term rentals you're paying your own or you're paying the utilities for that unit and one thing that she mentioned as well was you get a higher quality tenant which you know theoretically that's the idea you know you get a traveling professional that's going to come stay at your place it's not somebody that's renting out you know a basement unit for 500 bucks a month because they can't afford anything else then you might start getting you know some lower quality people that are going to be staying there but if you can rent it out typically what I see is about 12 twice whatever you can get for a long-term rent I would say at least two times that is what you can probably get as a medium-term rental usually even a little bit more than that and so if you're doubling what you're getting you have to shave out a little bit for the utilities that you're going to be paying um but then you're going to be making much more in regards to profit off of that property and in my opinion I like it more like with our carriage house that we have behind our house we had you know people that were living close proximity to us if we signed a lease with somebody for a year they're there for a year and we have to put up with them but with these people that's typically you know three months four months something like that at a time and typically then they they head out after that and so you usually have a shorter amount of time that you have to deal with them but usually you don't hear anything from them because they're off working that's why they're in whatever Town you're in is because they want to work hard make a bunch of money and then go back home and so I think it's a brilliant idea I think it would work out beautifully so I just had another Epiphany while you were talking David so my sister-in-law um she's a nurse she's a freaking nurse and I just Google old her hospital and it's a level one trauma center and I didn't even know that um so I gotta I I gotta go call her after this and say hey where are all of your co-workers living like do you how many of them are traveling nurses um so I think I got my end at the at the local hospital yeah just pull up furnish finder and look around the hospital and see what the furnish finder units look like and then if you're seeing okay you know there's you know a quad Plex and one of the units in the quadplex is renting for x amount then you can just kind of extrapolate that out and you can kind of see what the market is bearing because that's whatever you know price that they have on there and yeah it's furnish finder and Airbnb make it really really easy to kind of see what people are willing to pay for what quality you have and then if you know a guy like you I've seen your short-term rentals they're phenomenal I know that you guys are going to do an amazing job Furnishing it and a lot of people on Furnish finder it's like Airbnb six years ago you know everything is hand-me-down Goodwill looks horrible and so if you can go in there and do a bang-up job with your decorations actually because I would bet ninety percent of the people on Furnish finder do not do professional photos and if Bill blows my mind and so do professional photos make it look really nice because you know these travel nurses they're usually young single females ninety percent of travel nurses are females and I forget what the number was 80 of them are single or something like that and so you get a young single female that's making like 125 dollars an hour she wants to stay somewhere that's really nice she doesn't want to stay at Grandma's place you know with the but you know within reason they want to be able to you know stack up some cash but live somewhere nicely for the three months that they're in town I got one last question for you David so when you're when you're analyzing how much you can charge for your medium term rental um you know obviously there's tools on the short term until side I'm not sure how accurate those numbers are in the medium term rental side um but like I know one process is like you can just open Airbnb you can just open furnish finder you can see what what those properties are being listed at but um the only downside with looking at that is that there's um there's no guarantee that that's what they're actually booking for right so someone could list a property at you know 2400 bucks a month but then when they actually like book and get paid maybe it's some other number so do you have a process for on the medium term rental side projecting what that income might be really the the enemy method which is what you mentioned just going around and looking at what other people are getting is the best way that there is right now like price Labs air DNA stuff like that they they're not you know up on the the new up and coming asset of medium-term rentals I was actually just on a Instagram live last week where it was Jesse Vasquez and the CEO of price labs and they said that they're currently working on tools that will help underwrite medium-term rental properties so that's something that's on the horizon that I was excited about um but something just a quick little nugget that I learned from that ways that you can utilize price labs for medium-term rentals is um you know the worst thing that you could have happen is that you have somebody that's moving out and then somebody books for you know four months but they booked it five weeks from the time that your current tenant is moving out so you've got five weeks that are dead in the water right there because no one is going to want to book it you know only for a month or not typically and so he said that a new rule set that they've set up in price Labs is that you can determine how long of a length of stay it needs to be for you to allow it for how close it is to whenever somebody moves out and so let's say that you know you're okay with a three-week gap after your current guest leaves if that person books for six months but it needs to be then booking for three months if it's a two-week gap or they need to book for one month if it's a one-week Gap and so there's all these new rule sets that uh price Labs is coming out with to be able to help you um with that so it's nice to see that you know these big companies are coming out with tools to try and help with the underwriting process for medium term rentals because it is still kind of a shot in the dark and you're just hoping that you can get a good average on things whenever you're looking at like furnish finder and Airbnb you can always go back to the old-fashioned way too of just tracking listing so like every week just writing what listings are available and then usually if they're not there the next week they most likely rented for what they were listed for they're sitting wild there could be the risk that they were renegotiated but if you're thinking of doing medium-term rentals even short-term rentals or long-term rentals that's just kind of the pen and paper way of tracking what rental prices are in your area absolutely so David um we have three more questions for you uh so this is our rookie exam are you ready for it let's do it okay the first question is what is one actionable thing rookies should do after listening to this episode as I mentioned before one thing that every single person should do because it's free and it'll take you five minutes to do is find whatever the biggest hospital is within two hours of you in whatever town that is and look at furnish finder and you can do furnishfinder.com forward slash stats and you can type that ad or that City in and it'll actually tell you what the demand is how many requests there's been how many views there have been for that City and that kind of helps give you an idea of how many people may be looking to get into that area as well but then look at what your competition is doing look and see how much people are getting for a one bedroom a two bedroom if it's an apartment or if it's a house and then pull up Zillow right next to it and see if you can find any properties that would kind of meet those those same parameters that those properties are for on uh furnish finder and see what the and then underwrite it using one of Bigger Pockets calculators it's super simple you just go in there use whatever your utilities are if you have a similar type of property that you're living in if you're living in a one bedroom apartment you kind of have an idea of how much you're going to be paying for it and then use that against whatever you're getting on Furnish finder and you can come up with what you're going to be making and I think it'll shock a ton of people how close by people can get a property that's cash flowing hundreds and hundreds of dollars a month and it takes little to no management whatsoever that was one thing that I didn't get a chance to touch on but these things are so so simple to manage it's unbelievable across my portfolio I usually tell people I spend about three hours a month on my portfolio and I bet that's being generous because I just don't have turnovers people are there for four five six months at a time it's it's beautiful all right question number two what's one tool software app or system that you use in your business always use Airbnb always use furnish finder I haven't ever gotten onto verbo because I've just never heard of any other medium-term rental person being on verbo but um typically those are my my two go-to's for trying to you know bring people in as well as trying to underwrite properties and uh always use the Bigger Pockets calculators because they're phenomenal and then when I'm starting to now look to bring on investors and so whenever you send over that Bigger Pockets underwriting where it's got the nice pie graph on there and everything else that makes you look really really professional so that's that's one tool that's been invaluable for me where do you see yourself in five years what is kind of your your goal your plan it seems like you have a pretty good uh hold on your journey right now and happy with it um what's the plans for the future though so um I have always been a dreamer with doing super cool super unique uh short-term rentals that's something that I've been looking to get into but I knew that medium-term rentals would be a really really good Baseline for me that's that's kind of the foundation that I'm building my financial Empire on as medium term rentals because it's something that's more stable than short-term rentals but it makes more money than long-term rentals it's easy to manage like a long-term rental but you know it's doing better than what the traditional long-term is and uh so next step for me um I think I joined uh Rob's host Camp Rob abasolo's host camp and I want to start getting into some of these more unique short-term rentals and so um been working with some of my old physician colleagues that I had worked with and they keep asking me hey what are you doing how are you doing this what's going on we have money that we want to invest in so I'd like to be able to bring on some of that private capital and be able to deploy it into some of these kind of unique properties and uh you know these cool short-term rentals but then on the other hand then keep building my personal portfolio of these super easy to manage medium terms because the um I'm almost hesitant to get into the short-term rental game because I just know how easy it is to manage the medium term rentals and then I know how you know how stressful and how strenuous it can be at times with short-term rentals as I'm sure Tony can attest to and uh so I I'm almost hesitant to do it and that's why I think it's going to have to be these very unique like Tree House properties and things like that things that are not your standard run-of-the-mill shorts and Rental because it needs to be something that makes it worth my time versus just pursuing more medium-term rentals David I'm so sorry but I lied to you I have one more question a fourth question as soon as you you mentioned stats I was Googling away at the furnish finder stats so when I did Buffalo New York it said for the map searches and housing requests for the Buffalo area in the last 12 months was 26 130. is that a good number that's a great number so you know I mean okay there's 26 000 people that were searching in your area trying to find somewhere somewhere that they could stay and so if there's 2 000 people a month that are looking for somewhere to stay in Buffalo New York then I'm sure that you could have uh somebody that would be staying in your property and that's that's also another thing with medium terms where there's there's a lot more room for more properties whenever it comes to short-term rentals you know you've you've got people staying for two three four nights and so or something like that and so that takes a lot of people to get that occupancy rate up to you know 90 or something like that but with a medium-term rental whenever one person stays there for six months it knocks that property out of the pool for half of the year and so there's a lot more room for a lot more medium-term rentals to be in the market because there's more people that are staying in them for longer well David thank you so much for coming on with us uh Tony and I have our brains going a mile a minute on this and uh we appreciate all the valuable information that you've given uh can you tell everyone where they can reach out to you and find out some more information absolutely yeah I'm on BiggerPockets David rosenbeck rosenbeck is r-o-s-e-n-b-e-c-k and then uh I'm on Instagram at David rosenbeck as well no spaces no dots no anything and uh I've started doing some uh coaching and cons uh Consulting for people so that that link is in my Instagram so if anybody wants to learn how to do medium term rentals find those Misfit properties in the midwest uh reach out to me I'd be happy to help you out awesome thank you so much I'm Ashley at welcome rentals and he's Tony at Tony J Robinson on Instagram make sure you guys are part of the real estate rookie Facebook group and that you are subscribed to the real estate rookie YouTube channel and we'll see you guys on Saturday for a rookie reply [Music] don't know [Music]

Channel: Real Estate Rookie

Views: 13,086

Keywords: rental properties, medium term rentals, mid-term rentals, mid-term rental properties, mid-term vs short term, mid-term vs long-term, str, furnished finder, furnished finder properties, airbnb, airbnb properties, airbnb arbitrage, airbnb business, airbnb rental, rental arbitrage, rental arbitrage business, travel nurse housing, housing for nurses, hosting travel nurse, housing for college students, hosting college students, real estate rookie, real estate rookie podcast

Id: P34JGQygzJA

Length: 56min 17sec (3377 seconds)

Published: Wed Mar 29 2023