All Forum Posts by: Robert Gilstrap

Part of staying at the property is the obligation to take the trash out regardless of whose it is. If my trash provider went to every 2 weeks I would find another because thats ridiculous.

Cleaners take the garbage to the road if they are there anytime close to garbage day even if it has to sit at the road for a day or two. Guests are reminded to get the can from the road the day after pickup and to deliver the can to the road the day before pickup. Still hard to get them to do it!

We just bill the owner for consumables as needed but we buy in bulk and store at the property in a locked supply closet then the cleaners replenish when they are there. 

We only do small hotel size conditioners, shampoos, etc. 

Anything that breaks we just bill the owner as it occurs.

Dude, you just blew my mind on several fronts!  Tax savings to offset other income through accelerated depreciation PLUS an RV as an Airbnb!

Long term rental owners want stability and peace of mind in general. I offer them that. Most mom and pop owners are not after getting every last dollar of rent to get the maximum, they instead want a fixed amount they can depend on and not have any worries from month to month. I offer options if they want it like shared revenue / performance type leases or regular old long term leases.  Depending on the arrangement we handle minor maintenance (HVAC, electrical and plumbing systems and appliances are still owners responsibility). Plus when they see what technology we put into a property and the investment we make and how we take care of the property we are already head and shoulders above any "regular" tenant. Really it seems to all be about being open to what the owners needs are. Everybody is different.  

 In my specific circumstance since I'm a property manager I am basically giving them discounted or free management since the net in their pocket by master leasing to me is greater than letting me manage it and charging management fees. 

I'm clearly biased when it comes to property management but besides what @Chris O. mentions you have to factor what your own time is worth. Just because you're self managing and not paying a PM doesn't mean it's free. Your time is worth something and of course once you discover just how much work is involved in STR management at scale then you start to appreciate the economies of scale a good PM can bring.

@Brett Rosenbauer  Brian Page might be doing well but seems like he's more interested in making money selling courses to me. Nothing wrong with that and I applaud his success but the second I start hearing the words "my students..." I shut down.

Going back to your example though you mentioned these calamites like earthquakes and hurricanes.  

A. these are VERY short events and then things go back to normal. Even during COVID we've done really well considering. I had a pretty ****** April and May but things jumped right back up at the end of May.

B. If you owned the units instead of arbitrage and did short term then what's the difference? You're still having to furnish the unit, you still are stuck making a mortgage payments instead of a rent payment, etc. Also you're ignoring the fact that you can work in terms in your lease that give you an out under extreme circumstances (as COVID has taught us).

On furniture $30K is a lot but it depends on how nice the unit is and I'm with you, I don't want crappy units I want as high end unit as I can get because there is less competition there.

@Harsh R.

Hard to go wrong in Cobb County (Marietta, Kennesaw, Acworth). I also love Woodstock and Cartersville. I own dozens of rentals in those areas myself and try to buy anything I can that's a deal. And you can easily get $1,400/mo anywhere in Cobb County is the property is nice. I'm clearly biased when it comes to property management but don't forget you get what you pay for. Bargain basement management will cost you in the end. Find a company with LOTS of experience and your first question should always be how many properties do you personally own as rentals? (lots of PM's out there who claim to be experts at managing but don't even own rentals themselves!).

If you want my two cents on a property hit me up. Also, depending on the property we will master lease it where you pay no management fees.

Not sure what the difference is when you say "arbitrage doesn't work in every place"? That presumes that if you owned the property and did STR then everything is fine.

OK, you own it and pay a mortgage payment of $1,300/mo or I rent it and pay a rent payment of $1,300/mo. The money is the same and the risk to me is actually less given the fact that I don't own it. How is that different?  

I agree that one should seek to own assets and I own plenty but controlling assets through arbitrage that produce income streams without the downsides to owning is also a viable alternative. Not saying I don't have plenty of risk doing so but it's managed risk.

Also, owners in my experience never do it themselves even if you try and convince them to. STR's are a LOT of work and the hospitality biz is a STEEP learning curve for almost everyone. Long term rental owners want mailbox money with no hassles and no extra effort. I pitch owners all the time who solicit my management company for property management services about doing Airbnb and almost all say "no thanks" due to the hassle/work. They DO however perk up when I offer to master lease the property myself and do airbnb where I take on the work and the risk and they get me as a stable long term tenant.

You also don't need to get below market rates in popular places. Pretty much any place will do as short term rentals aren't strictly about popular areas or vacation destinations. My typical guest is the guy who sold his house and has nowhere to go for 40 days or the guy who's installing a new production line at a local manufacturer and will be on site for 6 weeks and prefers a house over a hotel room or the lady whose kitchen caught fire and the insurance company is putting them up in a house for a month while the repairs are completed. These exist universally in every town in America. 

I do agree that a good location is much preferable but its certainly not required.

@Michael Baum  I don't live in a perfect world and arbitrage works just fine for me. The pandemic bankrupted lots of businesses not just ones doing rental arbitrage. Stability in business is always about your position, your cash flow, reserves, what you negotiated, etc. The big boys who went bankrupt did so like many companies because they were never spending their own money they were spending wall street money from investors.  

Also the statement that "any owner will charge you a premium above market rate" means you are either limiting your thinking to your own geographic area or your own limited experiences. I negotiate below market rents just fine and have plenty of owners willing to rent to me (including one I met with today).

"What you do is what we all do. Save up until you have your 10% and go from there."   

Hogwash! @Rex Romano this is where you need to NOT listen to others who would throw water on your ambitions!  Obviously be safe and make solid business decisions do do have a solid cash position but if I waited until I had the money to do things like "we all do"  then I would be broke and only have a couple of properties.

If you want great rewards step out and take great (calculated) risks.