Cashflowing over 7 figures in revenue with Airbnb, without owning property?!
But first, if you've been thinking about acquiring a biz but are curious how in the face of inflation, rising interest rates, and economic uncertainty, then no need to look further... we got you. On Wednesday, September 7th at 4:00pm EST, we will be hosting a FREE webinar that will go in-depth on how you can still buy a biz and build wealth during a recession (like this one...welp).
How a buddy of mine built a million-dollar short-term rental portfolio by outsmarting the system.
How to start in the Airbnb space without owning property.
The good, the bad, and the ugly sides of Airbnb.
INTRO
6 Figures Managing Airbnb's He Doesn't Own?!
He makes over $300k+ managing other people’s Airbnbs.
And he started out with $0.
When you think Airbnb, you probably think of curfews, absurd cleaning fees, and mystery holes in the wall.
But what if it could also look like literal millions in revenue and an easy way to cash flow while hiring a property management team to help you actually run it?
We’re seeing a lot of negative hype around Airbnb lately, but I still think short-term rental properties are a great way to cash flow.
Why? *pulls out the soapbox.
You get full control of your property inventory.
They’re a great fit for you if hospitality and customer service are your thing.
You can follow the same processes across your portfolio.
The maintenance, cleaning, and other admin tasks are easy to outsource.
There are some things to look out for of course, but we’ll get to that later.
For now, I want to introduce you to my friend, Lucas, who built a million-dollar short-term rental portfolio after snatching up some property, outsmarting some old-school contract terminology, and turning it into a bunch of Airbnb's that made him well over a milly in revenue in less than a year.
Make sure the Ts & Cs in your rental contract are locked tight, or your property could look like this.
YOUR GOALS
Your investment goals probably look like this... You’ve got “own a property in XYZ city” on your list of goals, but you think you could never afford to pocket enough cash for a down payment.
And so…month after month, you’re forking over thousands of dollars in rent money to a stuffy landlord who collects their cash and doesn’t know your name, all while building $0 in equity in the process.
Bummer, right? Gets worse.
With inflation rising (and rent rising with it) …your big dreams of getting into the rental property investment game and making enough to cover a mortgage can feel like one hell of a long shot.
But then, things changed.
He learned his new favorite word: House hacking.
It’s when you buy a house that you, the owner, will stay in (while clocking the one year of living in your home that’s required for FHA loans in Texas), while ALSO renting out the other bedrooms to your roommates.
It’s a win-win-win (unless they leave the dishes in the sink for more than a day…grody). Time to break out the ‘ole chore chart from your college dorm room days.
Here’s why I’m totally into house hacking…
You’re building equity without throwing away $$$ on apartment rent. Honorable mention to cheaper rent than if you tried to lease alone.
You’re meeting the one-year requirement of living in your property before you can rent out the entire place to other tenants.
You’re getting your mortgage covered by the rent that your roommates are paying you (and possibly even staying in your place for free).
When Lucas first got started with house hacking, he paid his $1.9k mortgage with $4k of rent from his roommates. Plenty of cash leftover for activities (or to reinvest in the next property).
Here’s a look at one of his current rental properties. This place is rented out through Airbnb for the majority of the year (especiallywhen major events are in town). Photo source: Lucas Piper
Then came a new second favorite word…
Rental arbitrage a.k.a. property management.
When you get into rental arbitrage, you’re essentially scooping up a long-term lease somewhere as the “renter,” but are legally allowed to find a subleaser/renter/guest who will actually stay on the property.
A lot of owners won’t be into rental arbitrage (especially if you’re dealing with a mega apartment complex or property management company), but if you find a contract through a friend-of-a-friend?
Chances are…rental arbitrage or property management could be on the table.
Most of the time, owners who are interested in rental arbitrage want all of the benefits (ahem equity) that come with owning a property, without doing all of the maintenance or management of the property.
Long story short: they don’t wanna deal with pukey bachelor parties, ant infestations, or fixing random holes in the wall, and they’re willing to pay someone who does.
When you get into rental arbitrage, you’ll be standing in as the property manager on behalf of the owner.
Another benefit of this form of property investment? Your properties will likely already be furnished.
Meaning you won’t be burning through cash or hitting up every Goodwill and garage sale within a 20-mile radius trying to deck out your rental property.
And by adding just one property to your portfolio, you could add an additional $2.1k to $4.5k of revenue in a month.
Not sure if this boring business concept is for you? The numbers might make you think otherwise.
In total, that amounts to just shy of $1.5M so far, and with plans to add three new properties in the next few months, you can expect Lucas to cross the $2M mark by the end of 2022.
I just returned to my Airbnb to find a dirty diaper left under the bed AND a hole in the wall about the size of a fist.
Own an Airbnb they said, you’ll make lots of money they said.
They weren’t wrong. I made $200k a year on one property and I make $50-100k on most of the others. And yet, it was miserable. Everyone wants that vacation rental passive income but ain’t nobody prepared for the dirty work.
That’s why we are kind of obsessed with Here.co. You invest in vacation rentals… and they deal with the diapers. You own shares in properties and earn, 100% passively.
Then we make Here take care of the bookings, incessant text messaging for new lock codes, cleanings, repairs, dead bodies (joking), and Chad’s with a beer pong predilection in your dining room.
Here properties sell out fast, and lucky for you they are launching three new properties in Sedona, San Diego, and Tucson on Wednesday, September 7th. Head to Here.co to invest so you don't miss out!
If I were going to get into the rental property management business, here’s what I’d do first…
Step 1: Start a side hustle ($$$) and offer to list a friend’s house for them and get a % cut to learn how it all works and see if a boring biz like this is for you.
This is my idea of the ultimate “work smarter not harder” side hustle (much better than feet pics on the internet IMO). If you have a friend with a property or spare bedroom that could be rented out, offer to be their property manager or listing agent. Fun fact: I’ve seen people also list out their fancy pools and backyards for events during the summer…this isn’t just for bedrooms or houses.
Offer to take photos of their property, list the property on websites like Vrbo and Airbnb, message guests, etc. Run it like you own it. You could even offer to be their stand-in bell boy if a guest needs towel service or wants to file a noise complaint if you live in the city.
If you’re interested in starting this as a side hustle, the name of the game is to get paid while learning the insider secrets of how the industry works.
You’ll learn what the market looks like in your area and get a good taste test of what it’s actually like to run a business like this, without the risk of buying up a property, only to hate the actual “management” part of running a property management business. Genius.
Step 2: Pick up a few money-hungry friends who need somewhere to live, take ‘em out for drinks, then pitch them to go in on the deal together.
If you don’t have a lot of cash on hand to put toward a down payment and can’t afford to pay rent AND a mortgage (or save up for a mortgage while paying for your other living expenses), you’ll want to look into finding someone else to put up the money. Think of it as a sort of modern weirdo take on crowdfunding.
First, you’ll want to buy the property, preferably with someone you know who’s willing to be your real estate partner. They can either be a silent investor (i.e. money-only, no roommate) or live on the property with you while you rent out the extra bedroom(s) to other people.
If you’re looking to grow some equity without having a full-blown rental property portfolio, this is also a way to get started on a smaller scale.
Step 3: Check out newly listed long-term AND furnished rental properties and see if the owner would be open to a convo around rental arbitrage.
Probably not a great idea for newbies or if you don’t live in the same city as the owner. Basically, start refreshing Zillow during your lunch breaks and take a look at new long-term rental properties that are available. DO NOT REACH OUT IF THE PLACE ISN’T FURNISHED. You’ll be on the hook for outfitting the entire apartment with furniture, and with today’s market, Goodwill’s Finest™ ain’t gonna cut it.
I’d also make a list of what you do and don’t want in a rental arbitrage sitch so you can get clear before ever reaching out to an owner. For example…
Is the owner older/retired/busy/traveling for work?
How involved do they want to be in the process? (Ideally, they’re fully hands-off)
Are there any high-maintenance things in a property you aren’t willing to oversee? (i.e. pools, excessive groundskeeping & yard work, old appliances, etc.)
Word of warning: here’s the not-so-sexy side of this biz…
Airbnb's can be a trendy business to get into—that it all sounds really good when you first hear the numbers. But it also takes a lot of work. He’s managed Airbnb’s for me that have had a literal torrential downpour in the living room, that have thrown psychedelic parties with rave music, that have left dirty diapers in places that astound the imagination.
There’s a different horror story every week.
If you’re overly emotional or don’t do well with last-minute, totally unplanned, “WTF do we even do” levels of sh*t show, this probably isn’t the business for you.
But if you’re down with that (maybe even a little into it), we’ve made lots of zeros with property management.
Just make sure you’ve got backup plans on backup plans
Part of what makes this business particularly challenging is the fact that you’re managing TWO wild cards at any given moment. You’re managing PEOPLE and PROPERTY, two variables that are completely out of your control.
Guests can have big, and often expected reactions to your property that are also out of your control.
Things like smells, the neighborhood, sticky situations, and even your neighbors can all impact a guest’s experience.
You’ve also got to manage a constantly moving target, if a guest requests more towels, a late checkout, or even if the heater goes out during the middle of the winter.
If you’re not ruthlessly committed to hospitality and don’t have a customer-first attitude, STAY AWAY FROM THIS KIND OF BUSINESS.
You can never be fully prepared for everything, no matter what kind of business or portfolio you’re running, but if you’ve got the right team in place and the right attitude to get sh*t done, you will always find a way to cash flow.
How To Make $10k a Month During The Recession (The BRRT Method)
Wanna know how I'd make $10K - $1M during this downturn? It's called the BRRT method. Watch to see why NOW is the time to use other people's money to buy up businesses and increase your income!
Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.
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