Airbnb Arbitrage - Story Time

[Ben Morand]

Hello BP folks,

So I am currently a 21-year-old college student at the University of Florida, as well as a licensed real estate agent. As of right now, I am not making consistent enough income, nor do I have enough in savings to hop into a rental property. (While I do value to idea of strategic partnerships to compensate for this lack of capital, that is a whole other discussion.) 

Recently, I stumbled upon some BP members discussing Airbnb Arbitrage and fell in love with the idea. After watching tons of videos on YouTube (honestly the best education out there), I came to the realization that I could open an LLC and use some small business credit to start as soon as I find a deal. This idea excites me, but at the same time, just like any other real estate endeavor, I know that Airbnb Arbitrage is not as simple and easy as it may seem.

I am wondering if anyone who has actively held Airbnb Arbitrage properties would be willing to share their story on how they got started, their timeline from start --> first property, their returns, and any good/bad experiences along the way?

Thank you guys! 

[Marcello Di Gerlando]

@Ben Morand

The BP forums have been good to me for the past 11 years. However, of all the BP forums I have spent time on, the short term rental forum consistently has folks on it that are not shy of using toxic internet speak to insult and discourage others.

One would expect a more refined, graduate level industry knowledge from purported professionals and experts.  I hope this changes as this type of toxicity will doom this wonderful community we've been building. BP is not twitter, parlor, Facebook or 4chan.

First, based on your comments the first thing that comes to mind is your real estate license. I think you will find that in many states pursuing arbitrage may put your license at risk.

Second, make no mistake arbitrage is a JOB it is NOT real estate investing! 

Are you looking to start your own business? because that's what you are suggesting.

In order to be successful doing arbitrage the stars really have to align.  local ordinance and laws, on-ground services, software management, staffing, accounting, insurance to name a few.  And of course Deal flow - you need a bunch of properties. What about Interruptions? I'm sure you have considered seasonality, damage, maintenance etc.

If you can squeeze a few hundred bucks a month out of each deal you are probably doing well. Be prepared to work for it.

Those who tell you STRs are not work are lying to you. Scaling STRs like you would for arbitrage is full time of work.

I have an STR that does very well. However I'm just about ready to move on to my next venture. My options include bringing in someone under an arbitrage arrangement.

I'm in touch with a fellow US Army officer who has the arbitrage game firmly in hand and has about a dozen STR properties both his own and arbitrage rentals he lists on Airbnb. His success and workload has forced him to consider resigning his commission to pursue STRs full time.

He is under no illusion about what arbitrage is and how it works and the real risks associated with it. The cash flow he generates is rather impressive but expenses are also impressive. His success is a product of his understanding of the law, excellent management and exceptional operational talent. He has a team to help and a lot of motivation. Most folks don't have the traits he has. I surely do not.

Arbitrage is an option, its just not Real estate investing.

I wish you success