All Forum Posts by: Account Closed

 Ken, You're absolutely right! BeyondPricing is the tool I recommend. However in the very beginning some people may not be willing to invest in something like this. 

Thanks!

So many people are graduating college every year with tens of thousands of dollars of debt. Many of these graduates are having a hard time finding jobs that pay 50K+. It doesn't make sense to me to "invest" all of this money into system that doesn't give you a good ROI. Am I just biased and short sighted or am I missing something here? I'm open to all opinions...

 Will do Jon... thanks!

It certainly is John and believe it or not I've got more! But the important thing to point out is that each of these resources serves a purpose be it small or large. Having the systems in place to know where to go to get what you need, when you need it is huge. Hopefully this helps shorten the learning curve of those getting started in the Airbnb world. 

Knowing what tools, software and resources to use can make all the difference when running a business on Airbnb. Here are some of the top tools that I recommend for this business model and just in general.

1. Market Research
   1. Local business news
   2. Local real estate news
   3. Local city planner and urban development department
   4. https://www.airbnb.com
   5. https://evolvevacationrental.com
   6. https://www.airdna.co
   7. https://trends.google.com/trends/
2. Finding Properties
   1. https://www.zillow.com
   2. https://www.apartments.com
   3. https://hotpads.com
   4. https://www.trulia.com
   5. https://www.realtor.com
   6. https://www.homes.com
3. Business Resources
   1. https://www.legalzoom.com
   2. https://www.docracy.com
   3. https://www.rocketlawyer.com
   4. https://www.nolo.com
   5. https://www.incfile.com/form/llc
   6. https://www.corpnet.com
   7. https://quickbooks.intuit.com
4. Book Keeping
   1. https://quickbooks.intuit.com
   2. https://www.freshbooks.com
   3. https://www.zoho.com/us/books/
5. Running A Successful Business
   1. https://beyondpricing.com
   2. https://evernote.com/products/scannable
   3. https://www.google.com/drive/
   4. https://www.yourwelcome.com
   5. https://sandiego.craigslist.org/
   6. https://www.guesty.com
   7. https://august.com/
   8. https://get.google.com/trips/
   9. https://primenow.amazon.com/onboard?sourceUrl=%2Fhome
6. Building Your Team
   1. https://www.handy.com/services/maid-service
   2. https://www.mollymaid.com/about-us/contact-national-office/
   3. https://www.merrymaids.com
   4. https://www.maids.com
   5. https://www.uber.com
   6. https://www.fiverr.com
   7. https://www.upwork.com
7. Interior Design & Decorating
   1. https://www.pinterest.com
   2. https://www.instagram.com
   3. https://www.hgtv.com
8. Photo Editing Software
   1. https://pixlr.com
   2. https://www.canva.com
   3. https://www.gimp.org
   4. http://www.photoscape.org/ps/main/index.php

 Great point John,

The owners do have control once the legally binding agreement we signed together runs out. After that if they want to change things then that's up to them. However, what I've found is that most property owners are trying to build their net worth and rental income by expanding their portfolio. The great thing about renting to someone who does Airbnb is that their property is in top shape year round other wise it wouldn't rent. Also many owners are completely ok with the fact that someone doing Airbnb is making more money than them because they get to rent to a solid tenant. Everybody's values are different this is why people are able to raise millions of dollars in real estate syndications. One at first might think "why would someone provide their hard earned capital to earn a preferred return while the General Partner rakes in all the cashflow above that". But the answer is simple. The passive investors don't want the responsibility of operating the property. They just want cashflow and appreciation. The same concept goes for this model as well.

Also you have to look at the owners as your team members. You're not "renting from them" you're helping them expand their portfolio. If they want to acquire a new property they know that they will have a long term reliable tenant to who will pick it up immediately...

As for $3K/month you're right. I'm just being conservative with the numbers because most people probably wouldn't believe me if I said the properties are actually doing $7,000 - $9,000/month per home.

Thanks!

When people think about starting an Airbnb business one of the first excuses that comes to mind is not having enough capital to buy one or multiple properties. I'm writing this post to dispel the belief that you need to own a property to run a successful Airbnb business and to also prove that renting is more profitable. 

Buying A Property

Starting Capital: $25,000

Purchase Price: $200,000

Down Payment: $20,000 (10% = best case scenario)

Furniture & Admin Startup Costs: $3,000

P&I, PMI, Taxes, Etc: $1,250/month

Business Expenses: $750/month

Revenue: $3,000/month

Cashflow: $1,000

Rental Arbitrage

Staring Capital: $25,000

Purchase Price: $0.00

Down Payment: $500 security deposit

Admin Startup Costs: $1,500 (using a furnished apartment & not including rent)

Rent & Utilities: $1,450/month

Business Expenses: $750/month

Revenue: $3,000/month

Cashflow: $800

Total Capital Used: $4,200

Leftover Capital: $20,800

So as you can see you made a little less with the rental arbitrage model however you also have $20,800 leftover in your pocket. You can now take this capital and do the same thing with 4 more properties each making $800/month cashflow. $800 x 5 = $4,000/month cashflow for the same amount of capital you used to buy ONE property. But not only do you have more upside you have less "potential" downside. What happens if the property you bought isn't performing? what if the neighborhood goes south? what if your AC blows out or your roof needs to be repaired? With rental arbitrage you get all the upside without the downside of owning a huge liability. A smart thing to do would be to have an escape clause in your rental agreements that allows you to plan for unexpected problems with the performance of your property so you don't get trapped. 

To be honest the numbers on the rental example are a little higher than normal. You could actually acquire a new rental property for much less than that by finding motivated owners and negotiating better terms. You might be able to get into a new property for $500 if you know how to cut and slice the deal the right way.

Thanks!

I would never purchase... a house.

But haunted could be a good unique selling proposition. 

 Michael, 

This brings up a great point. Every market, submarket, property type and platform could potentially have it's own systems that work best for it. What you've done is found out what works best for you and your listing. This is what I tell people to do again and again. There are universal systems that work most of the time and then from there you have to experiment, split test and find out what works best for you.

Good luck!

I can ask if someone would be willing to talk with you but most of them don't teach it or anything so I can't promise they will get around to it. I however am willing to answer some more questions if you want to PM me. 

Most aren't luxury units, most are regular apartments, single family homes, lofts, villas, studios, etc. Some are luxury if the financials make sense. 

I personally don't know anyone in the SF Bay Area. I will say however that area is one of the most expensive and restrictive areas in the entire United States which may be why this seems impossible. I operate in the South East U.S. which is growing and cheap compared to CA. If you want to do what I've been talking about you may want to expand your business to TX, AZ, NV which are great markets close by. 

Thanks!