All Forum Posts by: Ethan Cooke

@Erwin Sham - Totally legit question. Courses can be great. I self-studied AirBnB management books and online forums (including BP) for 6 months, and then attended a local real estate conference organized by one of my mentors, @J. Martin. I got to network with a bunch of successful Airbnb folks and it gave me the additional knowledge and courage I needed to launch my AirBnB business. I also signed up for a great course led by @Al Williamson. One year and 12 units later I had stepped out of 20 years in corporate America. After 2 years I had 20 units and I was earning a good income managing AirBnB units. 

Hard work and mistakes have been my best teachers, but my mentors are a very close second!

Good luck. 👍 

@Paul Sandhu - Yes, please send the link. Although I run my furnished rental business in cosmopolitan-hipster San Francisco, I am seeing more and more similarities between my business and yours. Just today I had a life-changing moment when I stopped to ask myself, "What would Paul do?" Let me explain...

Tonight I accepted a last-minute reservation for a 6-man construction crew at one my furnished homes in San Francisco. But the key was missing from the lockbox. So I'm heading over there to let them in when I realize, "Oh sh#t! I forgot to text the cleaner when the last 1-month construction crew left early a few days ago! We are going to walk in to a very messy house!!" I get there and they are standing around in the driveway, laughing and drinking beers. So far so good.

Next frame shows Ethan inside the house, stumbling over huge piles of used sheets and towels in the hallways and every bedroom while apologizing profusely. But wait...these guys were COOL! No indignation, no savage frowns, and no demands for a refund. They were actually apologizing to ME for booking so late in the day, as if THEY were putting ME out by booking a same-day reservation! I assured them it was on me, and left to grab some clean sheets and towels at my house a few blocks away. 

THAT was when I had a revelation that I had to make it up to these guys. So I asked myself: "What would Paul do?" Hmmm, X-rated DVDs? No, the drive is too far and I don't want to explain the credit card statement to my wife. A crossbow for target practice on the back patio? No, the neighbors would object to holes in their Victorian stucco. What about...a case of BEER! Could it be that simple? Suddently the clouds parted, the angels sang and I KNEW I had my solution. 

When I arrived 30 minutes later with sheets, towels and a case of good beer, they looked at me like I was the Second Coming of Christ! Best $30 I ever spent. 

@Aristone Louxz - Rental arbitrage is legal with the landlord’s consent. It requires some investment but can be quite profitable. Some smart and successful furnished rental owners like @Paul Sandhu and @Luke Carl don’t like it, but there are hundreds of folks doing it successfully.  Two years ago I stepped away from 20 years in corporate America to build a rental arbitrage business in San Francisco and just south. Now I am managing 20 units and earning a decent living. My landlord partners frequently bring me new properties because they great corporate tenants and free property management. 

Check out posts and info from my mentors @Al Williamson and @J. Martin, and read the book by Scott Shatford. They are arbitrage masters.This business is NOT passive and it’s NOT easy money. But if you rent good properties, use great photos, enjoy hard work and take good care of your guests, it can be fun and lucrative. Good luck!

@Avery Carl - Yes, there are a few issues here. One is appraised value, and the other is business value. I agree 100% that there’s no change in appraised value if a place comes fully furnished with 5-star AirBNB reviews. And you’re right that you would need to really trust anyone who you Co-host with on AirBnB. I work with 3 different co-hosts, and it’s a great arrangement. Too bad it’s not offered yet on VRBO!

From a business standpoint, there’s real value to saving a few weeks of planning and thousands of dollars on furniture and set-up by buying a proven turnkey AirBnB. 

Per @Meir Greenblatt, sounds like you can transfer an AirBNB listing to a new owner, which is definitely a better solution than my co-hosting idea.

@Mark Miles - Ultimately if the sellers do not want to transfer the furnished rental listings to you, you can re-create a terrific furnished rental with great  reviews in a few months. Good luck!

@Mark Miles - I think the best way to "transfer" a listing is to keep the original owner on the listing and have them add you as a Co-Host. Put this in the contract. 

High AirBnB/VRBO ratings and Superhost status definitely have monetary value along with the furniture, housewares and especially the time and money you save in setting up the place. I run a furnished rental business in the SF Bay Area with 20 units. If I were buying a “turnkey” 3BR/2BA AirBnB home in this area, it would bring in $6K a month in furnished rental revenue immediately. I would be happy to pay an extra $18K (3 months of AirBnB revenues) for the home, plus the value of the used furniture and housewares. And I would pay another 2 months of revenue if if it was my first furnished rental and the owners had very good systems and processes in place (communication templates, pricing guidelines, furniture and housewares list, cleaners, maintenance folks, etc.)

@Paul Sandhu - I am deeply honored. But in the immortal words of Wayne Campbell, “We’re not worthy!!” 

All who post here know that YOU are the “King of The R-Rated Refinery Worker Furnished Rentals!” Nice niche! Not to mention the insane stories that go along with it!! Before reading your posts, I thought mold and dead rats were bad... 

👑  💪 🔨 💥 

@Eric P. - My simple mitigation strategy in California is the spread between market rent and the monthly rent for a furnished rental. If a “tenant” (medium-term guest) in a 3-bedroom home in San Francisco is paying $6000 a month and my unfurnished market rent is $4400 plus $500 in utilities and expenses, then there’s a $1000 spread.  As long as the person pays rent, I am happy to let them “squat.” I collect rent each month 2 weeks before the month begins, so I have time to respond if someone doesn’t pay rent. Finally, the vast majority of people paying for a medium-term furnished rental are business travelers whose rent payments are tied to their work. In nearly 2 years of doing rental arbitrage, I have never had a problem collecting rent for more than a few days. 

@Jake Cohen - I’m glad it’s useful to you. I’d be happy to speak with you about a podcast. I’ve done a few Meetups and podcasts, and it’s a lot of fun. I will send you a Connection request and we can take it from there.

@Jason Breton - I use AirBnB to assess demand and pricing. Search AirBnB for comparable listings using future 1-month periods (Oct 1-Nov 1, Nov 1-Dec 1, etc.). Look for the listings with a lot of high ratings. Their pricing is a good market indicator. I generally find below-market-rent properties on Craigslist, decorate them nicely and then price them in the bottom 30% on AirBnB. My vacancy rate is 5-10%
2 pitfalls to avoid: 1. A unit missing any of the main features of a decent arbitrage unit (located near large employers, good neighborhood, at or below-market rent, private  entrance, easy parking, private bathroom, kitchen or kitchenette) 2. A unit that has serious maintenance problems (insufficient electrical capacity, pest problems, mold, etc.)

@Eric P. - Most of my  medium-term bookings come from AirBnB. I have also gotten some from Zillow. When you post a listing to Zillow, it also posts automatically to Trulia and Hotpads. My Home Away/VRBO listings produce very little action.  

NINJA TIP:  look for a place for rent that has two units in one.  For example, a single-family home with an Inlaw unit with separate entrance.  Sometimes the owner will rent out a place like this as a single-family home. But the second unit has a ton of value as its own furnished rental. I have two places like this and they are very profitable.  

Now go out, get your first place and kill it!  :)

@Jason Breton - @Andrew Myers has it right: you can rent out one or both units as medium-term furnished rentals for 30+ days and still make a good margin compared to a traditional unfurnished rental. I operate a 19-unit furnished rental business in San Francisco and just south. SF has some of the toughest STR restrictions in the country, but there is a strong year-round market for medium-term business travelers. It's a nice way to earn decent "semi-passive" cash flow in any market with a lot of business travelers. Tech workers, construction workers, consultants and medical professionals often travel for more than a month. Good luck!