{"id":1835,"date":"2022-03-06T12:57:03","date_gmt":"2022-03-06T12:57:03","guid":{"rendered":"https:\/\/imsfund.com\/?p=1835"},"modified":"2022-03-06T12:57:03","modified_gmt":"2022-03-06T12:57:03","slug":"the-secret-sauce-behind-short-term-rental-success-part-2-w-rob-abasolo","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2022\/03\/06\/the-secret-sauce-behind-short-term-rental-success-part-2-w-rob-abasolo\/","title":{"rendered":"The Secret Sauce Behind Short-Term Rental Success (Part 2) w\/Rob Abasolo"},"content":{"rendered":"


\n<\/p>\n

You can build wealth<\/strong><\/a> with short-term rental investing<\/strong> quite easily. All you need is a great location, a solid property, a good strategy, some phenomenal cleaners\u2026wait maybe it isn\u2019t all that easy. But it\u2019s certainly doable if you\u2019re willing to put in the time, effort, and work to make your <\/strong>vacation rental<\/strong><\/a> stand out from the rest<\/strong>. This is exactly what investors David Greene<\/strong> and Rob Abasolo <\/strong>are doing with their current partnership\u2014buying luxury homes and turning them into once-in-a-lifetime getaways for wealthy vacationers.<\/p>\n

But maybe you\u2019re not ready to drop a few million on a multifamily mansion. Even so, you can still make a phenomenal return in the short-term rental space<\/strong>, you just need to know how to do so. Back in episode 578, David and Rob walked through the first three steps in their short-term rental success strategy. Steps like finding a <\/strong>short-term rental market<\/strong><\/a>, choosing your location, <\/strong>and defining your strategy<\/strong>.<\/p>\n

In this part two episode, David and Rob walk through the more granular steps to getting your vacation rental up and running. Steps like what property type works best <\/strong>for which investors, understanding your timeline so you can build wealth while obtaining <\/strong>financial freedom<\/strong><\/a>, and divvying up work between you and your partners<\/strong> (or investors). Follow all five (six) steps in this episode, and you\u2019ll be on your way to cashing in the profits from your vacation venture!<\/p>\n

\n

David:
This is the BiggerPockets podcast show, 579.<\/p>\n

Rob: Most of the properties that I\u2019ve purchased have been sub $500,000. But now as my time has grown more rare, I suppose, I\u2019m really not looking to acquire real estate that\u2019s less than a million dollars in the short-term rental game. And then we start looking at the deal that you and me are looking at. That\u2019s a $3.4 million luxury home.<\/p>\n

What\u2019s going on, everyone? It is David Greene, your host of the BiggerPockets Real Estate Podcast, the podcast where we teach you how to find financial freedom through real estate. So if you\u2019re looking to have a better life, to have more freedom, to have more control, to build your own destiny instead of someone else\u2019s, you my friend have found the right place to be.<\/p>\n

David:
If you don\u2019t know who we are, BiggerPockets is a company with over 2 million members whose sole purpose is to help you find financial freedom through real estate. We do that by bringing on experts, guests, people who have done this before to share what they did right, what they did wrong and how you can do it too, giving away the knowledge that used to cost a lot of money to get access to, and you can now get for free.<\/p>\n

David:
In today\u2019s episode, it is a Seeing Greene show, as you can see, there\u2019s a green light behind me. This is where I will be going and taking all of your questions and answering them myself.<\/p>\n

Rob:
We now interrupt this episode of Seeing Greene to show you how to make more green in the FTR industry. Hey, what\u2019s up man? I\u2019ve got some questions.<\/p>\n

David:
Rob, I am such a narcissist. I totally didn\u2019t even realize you were here.<\/p>\n

Rob:
I was sitting here the whole time. That\u2019s okay. Man, I have a question. I have a question for you. Can we continue the conversation on short-term rentals that we started on Thursday?<\/p>\n

David:
I think it would only be right. We did promise everybody that we were going to continue that conversation and share the rest of the information today. I\u2019m glad that you\u2019ve been sitting here for three days straight, waiting for me to log back in and do this. What a trooper.<\/p>\n

Rob:
I haven\u2019t even used the restroom, man. Come on.<\/p>\n

David:
Well, why don\u2019t we take a quick break to let you use the restroom and we will be right back?<\/p>\n

Rob:
This episode is brought to you by Nutri-Grain bars, the official bar of the BiggerPockets podcast.<\/p>\n

David:
All right, on today\u2019s show, Rob and I are going to finish up part two of what we started on the last episode. We are going to be talking about how to choose your property type if you want to buy a short-term rental. How to figure out the timeline that you want to achieve success by. Is this a long-term investment? Is it something more short term? How quickly do you need cashflow versus how much can you delay gratification to make more money later? And then what work is going to be involved in the beginning? And if you\u2019re going to partner, how to divvy up that work.<\/p>\n

David:
Now, Rob and I are actually doing this ourselves. We are buying properties together. This information that we\u2019re giving you comes right out of the systems that we have created for how we stay on track ourselves. After this show, I want you to keep an eye out for a future show where we will talk about how to analyze and underwrite properties right up to the point where you\u2019re going to make an offer. And then after that, we\u2019re going to do a show where we explain how we manage these properties. This is a short-term rental masterclass, and you are being taught by a master classman with my co-host, Mr. Abasolo.<\/p>\n

Rob:
Hi. Hi. Hi. Fellow master classman here. Man, I\u2019m excited to dive into this. I think everyone knows I get all giddy whenever we start talking about Airbnbs and short-term rentals and for good reason. I think it\u2019s a really great place for a lot of new investors to start. And today we\u2019re going to be covering a lot of things.<\/p>\n

Rob:
We\u2019re going to be covering property types. Are we doing standard single families, multi-family, modified single family, luxury? The timelines associated with it. How do you want to divvy up work? Who are you going to empower? Are you working with a partner? Should you do some of the work? Should you make all your partner do the work? How do we avoid resentment in partnerships? So pretty stacked itinerary I\u2019d say.<\/p>\n

David:
Very nice. I imagine that you also might be a little extra giddy, because you went to the bathroom for the first time in three or four days now. So, well done.<\/p>\n

Rob:
Well, yes, that\u2019s\u2026 I thought we were going to edit this out, but yes, I did use the restroom and I\u2019m back. I\u2019m back, baby. I lost myself there for [crosstalk 00:03:38].<\/p>\n

David:
Jedi-like bladder control, incredibly impressive. And that is how I know that I picked the right partner.<\/p>\n

David:
Before we get into today\u2019s show, let\u2019s hear a quick word from today\u2019s show sponsors. All right. Thanks to our show sponsors as always. Rob, anything you want to say before we get into it?<\/p>\n

Rob:
There is nothing that I\u2019d like to say other than I appreciate you, man. I don\u2019t know if anyone tells you that enough, but today I\u2019m letting know, my friend, I appreciate you.<\/p>\n

David:
Thank you, Rob, that warmed my heart.<\/p>\n

Rob:
You appreciate me?<\/p>\n

David:
Not that I\u2019m going to admit on a podcast for everybody to hear, but you could be worse.<\/p>\n

Rob:
We\u2019ll fix that in post.<\/p>\n

David:
You\u2019re really-<\/p>\n

Rob:
I could be worse. I\u2019ll take it.<\/p>\n

David:
You\u2019re very okay. I\u2019ll give you that.<\/p>\n

Rob:
Hey, that\u2019s no way to speak to your future social media manager.<\/p>\n

David:
That\u2019s a very good point. Rob has done a lot to help me as far as with the camera quality and with social media in general. So if you\u2019re following me on social media, it will look better soon. Thank you for your patience. It\u2019s been under construction for five years, and we\u2019re finally getting around to actually finishing the rehab on my Instagram. Very good point there. Thanks for pointing that out.<\/p>\n

David:
Today\u2019s quick tip, if you\u2019re interested in what we\u2019re talking about, if you want to dive even deeper into a specific asset class, BiggerPockets has resources for you. Check out biggerpockets.com\/events, where you can find a host of different boot camps, one of which is hosted by Tony Robinson on this specific topic, short-term rentals. So if this has tickled your fancy, if it\u2019s caught your interest, if you have itching ears, go to biggerpockets.com\/events and sign up for the short-term rental bootcamp or a different bootcamp that might suit your needs.<\/p>\n

Rob:
I\u2019d like to add a bonus quick tip here. If you\u2019re looking to get in shape, just follow Tony Robinson\u2019s workout routine. He\u2019s jacked.<\/p>\n

David:
All right. Without any further ado, let\u2019s get into today\u2019s show. All right. Number four. The fourth step we talk about is the property type. You\u2019ve got a couple different options. Why don\u2019t you run through those?<\/p>\n

Rob:
Option one here is going to be your standard single family residence. This is most of my bread and butter here. This is a house, basically, just a house that you can go out and buy on Redfin. This to me is perhaps my favorite to go into because you can buy a house, and I don\u2019t typically buy a single family residence within a neighborhood where I have close neighbors. I\u2019m not against it. I own probably one or two that are like that.<\/p>\n

Rob:
But I\u2019m usually trying to find something that\u2019s on half an acre or on an acre, something that\u2019s a little bit more secluded. You have that luxury a little bit more in those national park type of areas, because usually houses aren\u2019t stacked next to each other, like in the Smoky Mountains, dor example.<\/p>\n

Rob:
This to me is probably one of the less risky ones specifically because you don\u2019t have neighbors that can call the cops on you or get mad at you. You don\u2019t have really too many people that you can make angry. You don\u2019t have next door neighbors in a condo, for example, that they can be loud.<\/p>\n

David:
That\u2019s just a huge, huge point. If you\u2019re going to do a short-term rental and the neighbors are super close, you are asking for problems.<\/p>\n

Rob:
Happy neighbors, happy life.<\/p>\n

David:
Yes. When you and I are looking at properties one of the first things we\u2019re looking at is how close are all the other houses to it? This one\u2019s on five acres and there\u2019s 10 acres on each side of it. There\u2019s nobody else around, that becomes much more desirable than if it\u2019s a track house and they\u2019re all right next to each other.<\/p>\n

Rob:
And so then we get into things like multi-families, which is a duplex. I\u2019m okay with that. I actually love the duplex strategy quite a bit. I was buying a house in Destin that wasn\u2019t technically a duplex, but it was a main single family residence home. Then there was a pool, and then there was a carriage house in the backyard.<\/p>\n

Rob:
And it wasn\u2019t that I wanted to rent it out to two separate parties. I actually wanted to rent it out to just one really big group of people, like two families, that will pay me a premium to have their own set of bathrooms, their own kitchens, their own spaces. Because if you\u2019re traveling with other people\u2019s kids, if your kids are like my kids, they\u2019re probably ultra wild. I don\u2019t want my kids to be in the same house as other kids at night, when everyone\u2019s trying to go to sleep and we\u2019re trying to cook for each other and it\u2019s like a whole thing.<\/p>\n

Rob:
I love the idea of a multi-family where are two separate kitchens and you can rent it out to two families at a much higher premium than if you were renting out two houses separately.<\/p>\n

David:
And then next up is we have the modified single family. This is one of my favorite asset classes. What\u2019s your thoughts on that?<\/p>\n

Rob:
So this would be if you\u2019re converting a space into any kind of bonus space or anything like that, right?<\/p>\n

David:
Yes. Taking a house and basically modifying it by either adding an ADU, converting a garage, splitting it into two different components. It functions as a duplex or a triplex, even though it\u2019s just one property.<\/p>\n

Rob:
Oh yeah, man, this is what gave me my jumpstart. I really attribute the wealth that I have today and everything that I\u2019ve been able to build up to my house hack. Like I said, I had this in Los Angeles, it had a 279 square foot studio under it. I rented that on Airbnb. That was making $2,000 to $3,000 a month. And then I built a tiny house in my backyard. I was also Airbnbing that too.<\/p>\n

Rob:
And now I don\u2019t live at that house anymore. So now I rent to three different tenants. I rent to the people in the studio. I rent my tiny house on Airbnb and now I rent my main house on Airbnb. And it\u2019s all three different types of stays. It\u2019s long-term stays, short-term stays and mid-term stays. And so I\u2019ll have basically a triplex.<\/p>\n

Rob:
And on that property, it\u2019s a $4,000 mortgage. Total, I think it brings it anywhere from eight, on a high month, $9,000. The cashflow is quite a bit for me. And it\u2019s because I\u2019ve modified a lot about that property and converted it to the ultimate house hack\/triplex-esque type of place.<\/p>\n

David:
And that is what you got to do in today\u2019s market. If you want to be in the best areas with the best properties, you can\u2019t just take it right out of the box. I think that\u2019s where a lot of the listeners that are frustrating saying, \u201cI can\u2019t find good deals.\u201d They\u2019re looking for something that\u2019s already there. In their mind, analyzing it in the calculator, looking at the cash on cash return to writing an offer is the job of an investor. And when that doesn\u2019t work, they say, \u201cWell, real estate as it work.\u201d<\/p>\n

David:
But you and I are putting a much, much more creative and detailed look into every single property. We\u2019re sitting here and we\u2019re saying, \u201cThis is what it would look as is, this is what it could be.\u201d We\u2019re seeing the vision like a coach that\u2019s drafting raw talent. What can we turn this property into? And then we\u2019re saying, if it was there, how would it be performing? What could we expect out of this player if we got them at their maximum ability?<\/p>\n

David:
And then the question is, well, is that worth the time and effort it would take to get it there? Or could we find something else for less time, less effort that would perform at the same point? Just like Brandon and I used to say, you don\u2019t find deals right now. You make deals and you have to embrace that that is what we\u2019re doing.<\/p>\n

David:
Not only are we looking to make a deal, but we\u2019re understanding we are competing against all the other people that are trying to do the same thing. It\u2019s not set it and forget it real estate when you get into the short-term game, it\u2019s high risk and high reward. So your unit, your property has to be better than the other options and that\u2019s how you mitigate risks.<\/p>\n

David:
So that\u2019s part of why we want to do this show is I\u2019m trying to get people to understand the level of detail that you and I put into what we\u2019re looking to do. And it\u2019s not just run it on a calculator and then move on.<\/p>\n

Rob:
And getting into the risky stuff, like luxury, that\u2019s where you and me are starting to transition to. And all previous to now, most of the properties that I\u2019ve purchased have been sub $500,000. But now as my time has grown more rare, I suppose, I\u2019m really not looking to acquire real estate that\u2019s less than a million dollars in the short-term rental game. And then we start looking at the deal that you and me are looking at. That\u2019s a $3.4 million luxury home.<\/p>\n

David:
So that\u2019s a great point, that brings us into the last asset class, at least how I see it, luxury real estate. So let\u2019s define what that even means. Because it could mean different things to different people.<\/p>\n

David:
In my mind, the way I look at real estate and as I\u2019ve described it in the Sold series I\u2019m writing for BiggerPockets, you\u2019ve got three tiers. You\u2019ve got starter homes, which is where a first-time home buyer, what they\u2019re trying to get into. You\u2019ve got step up homes, which are typically, I got a starter home, I sold it and I used the equity to buy this step up home. These are going to be your B, A class neighborhoods, better schools, bigger house, amenities like pools, a little bit bigger lot, better location.<\/p>\n

David:
And then you\u2019ve got luxury homes, and this is going to be, this is more than anyone needs in a house. This is what you do when you have enough money that you don\u2019t have to worry about money basically.<\/p>\n

Rob:
It\u2019s a little extra.<\/p>\n

David:
A lot extra. A little, that\u2019s exactly right. Now, luxury is not dependent on price point. Because if you call it a million dollar listing, in where I live in the Bay Area, that is not that impressive. It is actually incredibly unimpressive in a lot of different areas.<\/p>\n

David:
But if you do the same thing in Kansas, you might have a mansion. So you can\u2019t define luxury by price. You define luxury by its price in comparison to the other homes in the market. I look at luxury like its own asset class, because the people who are going to be renting that property from us are not the same people that are just a traveling nurse who needs a place to lay their head.<\/p>\n

David:
This is someone who wants an extravagant experience, who\u2019s going to maybe have a lot of people go with them and they want to have an amazing memory that they\u2019re going to be\u2026 It\u2019s not practical is basically what we\u2019re getting at here. That\u2019s what luxury is.<\/p>\n

David:
Now some people own luxury properties to live in, so they can have a non-practical experience themselves. Other people like us buy luxury properties to rent it out to luxury people who want to have a non-practical experience, but our purposes are so practical. We\u2019re trying to make money with this thing.<\/p>\n

David:
So as you\u2019re looking at different property types, if you\u2019re going to get into the luxury market, you have to understand what you\u2019re looking for and the quality of service you have to provide. Frankly, you can\u2019t run out of batteries in a luxury house. You have to have a property manager on standby that if something goes wrong, the heater in the pool is not working, a bug gets into the house, yes, that does happen. They will call if a big bug ends up in a property. There is someone that, boom, lickety-split is on that and they are taking care of it and that person knows that their experience will be good.<\/p>\n

David:
You\u2019re probably going to have to stock the fridge with Cokes and other things that people are going to want. Maybe have a chef go by and cook for those people. It\u2019s a higher detailed experience, but that\u2019s why you\u2019re going to make more money.<\/p>\n

David:
So when you\u2019re trying to choose your property type, we have the standard single family. That\u2019s probably the least amount of work. You\u2019ve got the multifamily. That\u2019s going to be a little bit more work, but probably a little bit more profit. Because like you said, Rob, you have extra income streams.<\/p>\n

David:
You\u2019ve got the modified single family, which is the way you combine steps one and two into a property that hopefully gets you the best of both worlds, but it will be the most work. Then you\u2019ve got luxury, which is a completely different animal, high risk, high reward, high attention. Anything you want to add on those?<\/p>\n

Rob:
No, just a little. I said no, but a little bit. On the luxury side of things, what I\u2019m really excited about, and this has been something that we\u2019ve talked about a lot, because in some senses, we are moving a little bit away from the cashflow side of things. Because one thing that we\u2019re uncovering here is, the more you invest, funny enough in this market, the return is actually going down just a little bit more. But we\u2019re okay with that because if we\u2019re buying the $3.4 million house, while we\u2019re not necessarily cashflowing as much as we want, over 30 years, when someone pays for this house, it\u2019s going to be worth double, maybe triple.<\/p>\n

David:
That\u2019s a great point. Now let\u2019s say real estate continues to climb like it\u2019s been climbing. This is something else you and I talk about, we should share. 10% per year is a pretty big number. I wouldn\u2019t assume it\u2019s always going to be that case, but in most of the markets we\u2019re looking in, that\u2019s what we\u2019ve been seeing, sometimes even more. I\u2019m just going to use 10%, because it\u2019s around number. I don\u2019t have to get my calculator out to do the math of 7.2% of whatever it might actually be.<\/p>\n

David:
Let\u2019s say that you buy a house for $300,000 and it appreciates by 10%. You\u2019re going to make $30,000, which is nothing to turn your nose at. But this 3.4 million house that goes up by $340,000, the work is going to be roughly the same. The investment on our half will be bigger, but proportionally it\u2019s going to be the same.<\/p>\n

David:
Even if the ROI is slightly smaller than that 300,000, so let\u2019s say we can get a 14% return, that other one could get a 20% return. It\u2019s dwarfed in comparison to the increase of 10%. And the increase of the 3.4 property is probably going to be higher than the $300,000 one, because there are less of the $3.4 million properties. There aren\u2019t as many of them to compete with. Builders are not going to be building houses like that. They\u2019re going to make more of the $300,000 home.<\/p>\n

David:
And then you throw in how much of the principal is being paid down with every single payment. You look at the whole picture, that starts to be a much more clearly advantageous financial decision, versus the $300,000 one, which it\u2019s still a good deal. I\u2019m not saying people shouldn\u2019t get into it, but that tends to be, the value of that is that you\u2019re going to learn the fundamentals of real estate at a lower risk for yourself. It\u2019s like learning to swim in the shallow end of the pool.<\/p>\n

Rob:
And even just going back to what we talked about earlier, let\u2019s just say worse comes to worse, we buy a $3.4 million house, and then we just break even for two years, but it went up $600,000. Well, let\u2019s sell it and make half a million bucks after all of our fees are paid off. It\u2019s not really that sad. It\u2019s not that sad of a scenario to break even right there.<\/p>\n

David:
That\u2019s right. And then another thing we\u2019ve talked about just as far as mitigating risk, because I know if I heard you say that my first thought would be, well, you\u2019re assuming it\u2019s going to go up. When they go down by 10%, you\u2019re going to take an even bigger hit. When they go down by whatever, you don\u2019t know you\u2019re going to be able to sell. And that\u2019s absolutely right.<\/p>\n

David:
But here\u2019s another reason that Rob and I are looking in the luxury market for ourselves. If we\u2019re getting $2,000 a night for this thing and the market becomes less demanding and we can\u2019t get $2,000, if we drop our price to $1,000 a month, we are a much better option than the other options people were looking at for 800 to $1,000.<\/p>\n

David:
So if we\u2019re talking about a 6,000 square foot amazing estate that has its own basketball court, its own pool, its own movie room, its own game room, it\u2019s got a place you can ride dirt bikes, it\u2019s incredible. And you could go pay $1,000 a month to just rent a nice big house that has nothing, you might say, you know what, for maybe 1,100, instead of 1,000, we get that. Let\u2019s just get one extra person in our group and let\u2019s go do it.<\/p>\n

David:
So in a sense, our risk is actually less, because we can drop our price more, still hit our nut and be a better option than our competition that can\u2019t do the same thing. So we have thought about both ends of this. The upside is higher and the downside is also better in this situation.<\/p>\n

Rob:
There are a lot of reasons to do this and I would ultimately shy away from this for a new investor. I\u2019ve been doing this four or five years. David\u2019s got a lot of experience in real estate too. And it\u2019s like we could do this. We\u2019re built for this. We got the experience.<\/p>\n

Rob:
If you\u2019re starting out, I\u2019m probably not going to recommend anyone buy a $3.4 million house starting out.<\/p>\n

David:
Great point.<\/p>\n

Rob:
But work your way up to it. Scale accordingly. The reason I\u2019ve always hit home runs on all of my portfolio is because I just was really strategic and tactical. And so I really took it day by day and I didn\u2019t scale up too quickly. And because of that, I now have all the reserves and the cash that I need to get into an investment like this and survive if there is a dip.<\/p>\n

David:
And have a partner that can benefit you there too. So this is what I want to wrap this one up with, all the fears that someone has as they listen to this, the what ifs, but what if this, but what if that, those are all very good. Instead of letting those stop you from moving forward, get them out of your head and write them down on paper or on a Google document, put them down somewhere.<\/p>\n

David:
Then with your partner or yourself or however you\u2019re going to do it, systematically work through every single what if and say what the plan is, if that happens. So if somebody was to get on here and challenge Rob and I, and say, what are you going to do if this happens or what are you going to do if that happens, there is a contingency for every single one of those that we feel confident that we can handle.<\/p>\n

David:
Now, even if we don\u2019t make money, we\u2019re not going to lose the property. We\u2019re not going to go bankrupt. That\u2019s what we\u2019re getting at here. It\u2019s okay every once in a while to take an L. You\u2019re going to have that happen in real estate, even buying the $300,000 properties, you can take Ls.<\/p>\n

David:
The important thing is that it doesn\u2019t take you out of the game, just like a poker player. You can lose hands. You don\u2019t want to lose your entire pot that you\u2019ve got on your side.<\/p>\n

Rob:
You don\u2019t want to re-buy in.<\/p>\n

David:
That\u2019s exactly right. And that\u2019s the problem is when people start playing reckless, like I\u2019m going to go big on my first deal. If you don\u2019t know how to ride that bike, you should not be taking off the training wheels. You definitely shouldn\u2019t be getting on a motorcycle that\u2019s 2000 CCs. That\u2019s what we\u2019re talking about here.<\/p>\n

David:
But if you\u2019ve been riding them for five years and you feel very comfortable and you know how to handle it, it\u2019s not the same risk as someone who\u2019s new. So thank you for pointing that out. That\u2019s very responsible of you, Robert.<\/p>\n

Rob:
Hey, that\u2019s Rob to you, pal.<\/p>\n

David:
You got it. Number five. Our fifth step is the timeline. So this is also important. Before you invest in short-term rentals, you need to be thinking about what is your specific timeline for the property, the partnership, everything else? Why don\u2019t you start with what you think we went into, Rob, when we were deciding on our partnership?<\/p>\n

Rob:
I think we wanted to start with just one and get it right. And it would be very easy for you and I to be like let\u2019s go buy 15 of these things, because we can. But we\u2019re really focused on setting and solidifying a strategy. We said, okay, let\u2019s start with one. Let\u2019s start with a $3.4 million property. We\u2019re starting here in the big leagues obviously, but let\u2019s start with one and let\u2019s perfect the systems needed to run a luxury property that\u2019s on five acres.<\/p>\n

Rob:
Who do we have to hire? Do we have to hire several landscapers because it\u2019s five acres? Do we have to hire a team of cleaners? I think that for us has been the really nice thing is that we\u2019ve been taking it slow. I think once we perfect that one, then we can really assess how quickly we want to scale up.<\/p>\n

Rob:
I don\u2019t know. I would imagine my goal, I don\u2019t know about yours, you can tell everyone here for the world to see, but I would like to be acquiring a luxury property every two months.<\/p>\n

David:
I believe that that goal came from our conversation. So I subconsciously planted that into your mind. But, yes-<\/p>\n

Rob:
You Inceptioned me. I hate when you do that.<\/p>\n

David:
That\u2019s exactly right. That\u2019s a great movie. If anyone has not seen Inception, it\u2019s the like Matrix, but less confusing. So I would highly recommend people check that out. So yes, that\u2019s exactly right.<\/p>\n

David:
Now, when it comes to our goals for the properties, one of the things that we talked about as far as our timeline was long-term wealth. You and I looked and said, all right, we could either get a whole bunch of cashflowing, high ROI properties like those cabins that we mentioned, that would become our full-time job if we scale this thing up. Or we could be a little bit more careful about what we buy, a little more focused to play the long-term game. They\u2019re going to cashflow most likely a little bit less. We\u2019re going to have to keep more in reserves, but over a significant period of time, they\u2019re going to perform way better.<\/p>\n

David:
So you and I chose a path that I would describe as long-term wealth. Other people who might not be in our position, they might not have the resources we do, the experience we do. They might still be working jobs, and not even have the time we do. They might need to go for short-term cashflow.<\/p>\n

David:
So that\u2019s an important thing that you\u2019re deciding either with your partner or with yourself, which of these properties are you going to be pursuing? Because if you\u2019re trying to get maximum cashflow and maximum long-term wealth out of one property, it\u2019s probably not going to work.<\/p>\n

Rob:
It doesn\u2019t happen from one property. It happens from a very strategic journey over years. You build many, many properties. Ultimately, to me, I\u2019m working towards having a solid portfolio. I have 14 now. I would to actually take on less, but take on more strategic. And in the next year, I\u2019d like to be at 20. When I was on the BiggerPockets podcast six months ago, I wanted 40, but no, I\u2019m trying to really diversify correctly.<\/p>\n

Rob:
And the way I\u2019m doing that is now I\u2019m moving into luxury real estate. I just want to have a really well balanced portfolio to just cover me. I think diversification, for me, I finally have figured out. It\u2019s not necessarily about chasing cash. It is sometimes about chasing stability and that\u2019s me. I\u2019m an adult now. I\u2019ve figured it out. Thank you, David.<\/p>\n

David:
I\u2019m an adult now. That\u2019s funny. I need a little stability in my life. I got rid of the pocket protector and the 401(k) and I need to replace it somehow. You made a really good point I want to highlight, that had to do with, you\u2019re not going to find it all in one property. That\u2019s exactly right.<\/p>\n

David:
So the emotions that somebody has as they\u2019re trying to figure out real estate investing, typically is I want appreciation and I want cashflow, I want freedom. I want my time back. I love real estate. They have all of these feelings that they are then trying to figure out, how do I express them? And the mistake comes when they try to express it through the same house.<\/p>\n

David:
I don\u2019t look at a house and say, \u201cI need this to provide it for me.\u201d Just like one relationship can\u2019t provide everything you need in your life. You need a life full of different relationships that meet different needs.<\/p>\n

David:
Your portfolio should be that way. Your portfolio should provide cashflow, not a house. Your portfolio should provide appreciate, not a house. And you take a lot of risk off of yourself when you understand, all right, I\u2019ve built up to 10 to 15 of these type of properties that I use the BRRRR method to get, now cashflow. I have most of my capital back. With that, I\u2019m going to buy five properties in markets that I think are going to appreciate very solidly with the capital that I pulled out of these deals.<\/p>\n

David:
Once I\u2019ve got those two things working really well, solid cashflow, and I\u2019ve got quite a bit of equity, now I can buy one or two of these maybe luxury short-term rentals like David and Rob are talking about. And if they don\u2019t go well, that\u2019s okay, because the rest of my portfolio can support it. This is in that same video I talked about on YouTube. I call it pyramid theory.<\/p>\n

David:
And so that will take a lot of pressure off of you. If you say, you know what, I really just need a buddy in my life. Well, that might not be your spouse\u2019s job to be your buddy for everything. You need to go make some friends. And then if you got some friends and you\u2019re like, man, I\u2019m just feeling romantic right now. That\u2019s probably not your friend\u2019s job to meet that need either. Maybe you\u2019re going to need a spouse in your life.<\/p>\n

David:
And then you have different people that you work out with, people that I do jujitsu with, people that I talk business with, people that I talk spiritual things with. When you have a more balanced life, you don\u2019t put pressure on any one thing.<\/p>\n

David:
And for so many people listening, I really feel like what is holding them back from taking or making progress in real estate is they\u2019re trying to find it all in one deal. And you and I after doing this for a couple years have realized it\u2019s not healthy. It doesn\u2019t work that way, but you can get it all out of one portfolio of deals.<\/p>\n

Rob:
Everyone\u2019s chasing the home run that they forget about the singles or the doubles. Get the bases loaded, then go for the home run, because then it\u2019s a grand slam.<\/p>\n

David:
And you know the other thing I learned, because I used to play baseball and I was not nearly as good as basketball, but in baseball, if I tried to hit the home run, I rarely ever did. Home runs came when the pitcher made a mistake. They just left the ball out there that they shouldn\u2019t have. Basketball would be the same thing. If I tried to get a steal and I reached, I would either foul them or I\u2019d be off balance and they\u2019d go past me.<\/p>\n

David:
If I waited for them to make a mistake with the ball, the steal would come to me. It was just like this thing I learned, steals happen for you. You don\u2019t really make them very often. You can create pressure that\u2019s more likely to have them make a mistake, but still it\u2019s a mistake that allowed the steal.<\/p>\n

David:
Good deals come like that. You create pressure by putting yourself in the right environment. You make the right relationships. You have the conversations. You can\u2019t make that seller that\u2019s not motivated, be motivated. You\u2019ll just foul them and you\u2019ll ruin the whole thing.<\/p>\n

David:
But being in that position, you will come across the person who\u2019s like, they made a mistake in life. They\u2019re financially strapped. They don\u2019t want the property. They didn\u2019t take care of it. They need to get rid of it, and boom, that\u2019s your home run or that\u2019s your steal. That\u2019s your win.<\/p>\n

David:
And so just adjust your mindset when it comes to that. Home runs happen. You can\u2019t really make a home run happen. You can\u2019t make a pitcher throw a bad pitch. You just take advantage of it when it comes your way. But you should focus, like you said, Rob, on these singles, on these doubles, because if you hit a home run with no one on base, it\u2019s still only worth one run. If you\u2019ve got three people on base when that home run comes, because you have a portfolio of other properties, and then rates drop and you can refinance four properties and get better rates or pull your money out, that functions as a home run if that makes sense. Do you have anything you want to add on that?<\/p>\n

Rob:
I think it\u2019s a consistency game, man. That\u2019s the greatest home run, that\u2019s the only way that you can control home runs is just being consistent. I get a lot of people that are like, \u201cMan, how do I go viral?\u201d And I\u2019m like, listen, I\u2019m pretty good at YouTube. But the only way that I ever go viral is I post a video every single week. I\u2019m on my game every single week. And that\u2019s the only way that you can control anything is with consistency, I think.<\/p>\n

David:
I love that. Now we\u2019ve got a sixth step, a bonus step that we did not tell you about, but we love you.<\/p>\n

Rob:
Bonus. Let\u2019s do it.<\/p>\n

David:
At BiggerPockets, we just want to overflow you with value and do everything we can to help you make some money. So here is the bonus step. In stage one of choosing your location, your market and your strategy, which we\u2019ve actually taken that and split this up into two podcasts. So you\u2019ll hear us talk about stage one as these three things, but it\u2019s being split over two different shows.<\/p>\n

David:
The other thing that we recommend you do is you decide how you will divvy up the work. That\u2019s something that either you and your partner need to decide on, or you yourself need to decide, how are you going to handle these components? Rob, if you want, we could just alternate back and forth between the steps that we\u2019ve come up with that needs to be divvied up when someone\u2019s going to buy a short-term rental.<\/p>\n

Rob:
Definitely. So if you\u2019re going into a partnership here, this is really important, because property management is going to be something that\u2019s going to come up. Someone needs to manage the property. Obviously, you can go-<\/p>\n

David:
Can you give us some examples of what that means in practical terms?<\/p>\n

Rob:
So if you\u2019re managing an Airbnb, that would consist of things like messaging guests back and forth, scheduling any maintenance. If something is broken, you need to get it replaced. You need to communicate and schedule all of your cleanings. You need to make sure that your cleaners are communicating with you, that things are broken. And then they need to communicate with the maintenance person, contractors that need to come in and fix any big repairs.<\/p>\n

Rob:
I had a roof leak one time. Maintenance person, finding them, I\u2019m sorry, not maintenance, lawn maintenance, finding them, finding someone reliable that will come every single week. Last one, pool service, if you want that. Oh, pest control. So these are all moving parts that you have to figure that out. You have to coordinate with it.<\/p>\n

Rob:
My pest control person still contacts me every two weeks. She calls me, \u201cHey, I\u2019m going to come by on Monday. Is that okay?\u201d And then I have to look at my schedule and say, \u201cI\u2019m booked that day. Come the next day.\u201d So, that\u2019s a lot of work and it\u2019s also a little bit of work, once you actually get your systems down, your automation, but still, you still have to do it. Someone still has to figure out how to automate all of that. Someone has to do it.<\/p>\n

Rob:
Now. I\u2019m a big fan myself personally of self-managing. I teach people how to self-manage. That\u2019s my jam. I prefer to self-manage, because I don\u2019t think in the Airbnb space, it is\u2026 Again, this will get into time and value of time, but I don\u2019t think it\u2019s worth it to hire a property manager necessarily, because property managers in the short-term rental game can charge between 15% and 30% of your gross revenue. That\u2019s a lot.<\/p>\n

Rob:
What\u2019s standard for long-term rentals, is it eight to 15?<\/p>\n

David:
6% to 10%. So if it\u2019s a higher, what I pay in California, because the rents are higher, I pay 6%. When I get in some of the cheaper markets, it\u2019s more in the 8% to 10%.<\/p>\n

Rob:
10 is what I\u2019ve heard back and forth. So it could be up to three times more than a long-term rental property management company.<\/p>\n

David:
Or five times more if you look at 6% to the 30%.<\/p>\n

Rob:
That\u2019s exactly right. So that\u2019s a really big difference. I think especially if you\u2019re entering a partnership, if there\u2019s someone that\u2019s willing to put in the work and do a little bit of the sweat equity side of things, that is going to make everybody a lot more money.<\/p>\n

Rob:
Because I\u2019ve gone into partnerships where, when I work with investors, for example, we will charge them anywhere from 7% to 10% to manage the property. That\u2019s a really good deal because we\u2019re like, \u201cHey, we\u2019re still going to charge a little bit, because our time goes into this, but we\u2019re saving you\u2026\u201d<\/p>\n

David:
But it\u2019s a third of what they would pay from someone else.<\/p>\n

Rob:
That\u2019s exactly right. So that\u2019s the benefits of it.<\/p>\n

David:
I would also add, in addition to it being cheaper, if you manage it yourself and if you do a good job, it\u2019s also better. So the problem isn\u2019t that proper managers want money, it\u2019s that they might not be good at what they do because they don\u2019t care. A lot of property managers are trying to do the minimum they can, especially if you negotiate a better rate for yourself. You\u2019re just disincentivizing them to care.<\/p>\n

David:
And with short-term rentals, the quality of management is exponentially more important than it is in a long-term rental. Your long-term tenant says, \u201cHey, the toilet handle is jingling. Can you get someone to fix it?\u201d If it takes a couple weeks to get someone out, they\u2019ll deal with it. That\u2019s their house. That\u2019s where they live.<\/p>\n

David:
Your short-term rental, if they don\u2019t have enough sheets in the house or if they smell because the cleaner didn\u2019t do their job right or something, that\u2019s a bad review on Airbnb that decreases future bookings for a very long period of time. It\u2019s a huge, huge, huge deal. The quality of work for short-term rentals has to be significantly better than with long-term rentals. And if you\u2019re doing it yourself, you have more control over how things go down.<\/p>\n

David:
Now, Rob and I agreed that we would take a chunk of the revenue and pay it to him and his team, since they will be handling the management of the property. But even if you\u2019re not doing a partner, you need to decide, am I doing this myself or am I going to hire somebody to do it?<\/p>\n

Rob:
And again, there are pros to hiring someone to do it. I understand that. And as I grow and develop and all that kind of stuff, develop my philosophies, I think my brain is done developing now. But my philosophies, then I would say, I\u2019m starting to now come around to the idea of it.<\/p>\n

Rob:
But what I\u2019ve done is, I have an assist that helps me across all of my businesses and property management is just one way that she helps me. I could still be involved with it, because I don\u2019t ever want to feel like I\u2019ve grown too big to just send a guest a message. I\u2019m not in the weeds of my business, but I\u2019m in there. I\u2019m bird\u2019s eye viewing it. I step in when I\u2019m needed.<\/p>\n

David:
Well, I\u2019ll give everybody a little behind the scenes look. I\u2019m actually looking at making a property management company that will manage short-term rentals. It won\u2019t be full service, so it\u2019ll be cheaper, but it\u2019s a company that\u2019s going to handle the bookings, the revenue, getting you going. And so they\u2019ll be responsible for making sure that there\u2019s people staying there. And then the person who owns it can be responsible for making sure that everything gets done.<\/p>\n

David:
I see that there\u2019s a really big need here. Rob doesn\u2019t have time to manage them all. He\u2019s incredible at the stuff he does, but for a lot of you listening, send me a message and I\u2019ll get you connected if that\u2019s something that you think you might want some help with.<\/p>\n

David:
The next thing we have here is bookkeeping. So bookkeeping also becomes a little bit more detailed when it comes to a short-term rental because there\u2019s just more income and expenses that are coming out. With my long-term rentals, I get a rent check every month. Sometimes it\u2019s two, because they don\u2019t pay the full amount right away. And then every once in a while, there might be an expense on there that\u2019s not much. I get a statement from a property manager. My bookkeeper takes it, puts it into my information for taxes and that\u2019s all there is to it.<\/p>\n

David:
But with a short-term rental, I\u2019ve got several different sources of income at different nightly rates for different periods of time. I\u2019ve got several different types of income. I\u2019ve got cleaning expenses. I\u2019ve got registration expenses. I\u2019ve got the actual booking of it.<\/p>\n

David:
I\u2019m sure Rob could probably come up with some more, and then sorry, that was [crosstalk 00:34:36].<\/p>\n

Rob:
Batteries. Lots of batteries.<\/p>\n

David:
That\u2019s in the expenses side. And then on the expenses, I said expenses, I meant income. You\u2019ve got all the materials that you\u2019re getting, all of the products that you\u2019re buying, all of the different people, the handymen, the cleaners, the things the cleaners had to buy, the things the guests needed that we had to go drop off last minute, the property management themselves. There\u2019s a lot more expenses associated. So bookkeeping becomes a much bigger issue and you\u2019re going to have to decide how that\u2019s going to be addressed.<\/p>\n

David:
Rob, what\u2019s your preferred way of tackling that in your properties?<\/p>\n

Rob:
I have a bookkeeper, and my bookkeeper basically creates a profile for every single one of my properties. I thought about doing it myself, but then it was one of those things that I had to really be honest with myself and say, am I going to be punctual about this? And the answer was no. So I hired a bookkeeper. They can be affordable. They can be expensive. It\u2019s up to you.<\/p>\n

Rob:
But for me, because of how fast my portfolio grew, I started getting very serious about tracking and everything like that. I sync up all my different bank accounts and all of my different credit card accounts and everything like that. Now I\u2019m starting to have to really get into the nitty-gritty of getting a separate credit card for every single property, so that we can match it up to the different profiles.<\/p>\n

Rob:
But luckily my bookkeeper is much smarter than me at the mathematical stuff. So far, it\u2019s been the best decision I\u2019ve ever made.<\/p>\n

David:
I think you saying mathematical might have been the most funny part of this entire show.<\/p>\n

Rob:
Mathematical.<\/p>\n

David:
I haven\u2019t heard that since third grade. Good job. All right. Why don\u2019t you move us on to the third segment in the bonus step?<\/p>\n

Rob:
This next one\u2019s going to be setting up the furnishings, the decor, any kind of rehab work. If you\u2019re going to partner up with somebody in this world, then you should really lay out responsibilities here, because a lot of people really underestimate the furnishing part of it. We\u2019ll get into this in another episode. We got a whole episode where we\u2019re going to actually dive deep into the nuts and bolts of analyzing and furnishing and everything like that.<\/p>\n

Rob:
But what I do want to say about this is, a lot of people, they underestimate furnishing. They\u2019re like, \u201cOh yeah, whatever, you\u2019re going to move a couch? Well, how hard can that be?\u201d And then you get there and you\u2019re like, all right, we have three days. And then you\u2019re late to the airport because someone was cutting up a box and you couldn\u2019t find a place to dispose it. And oh man, I\u2019m getting all the flashbacks and everything like that. I\u2019ve had some crazy times.<\/p>\n

Rob:
But most of my Airbnbs, I\u2019ve actually set up with my partners. I think there\u2019s a little bit of comradery there. So I would recommend that if you have a partner in the deal, even if one is like, \u201cNo, you can do it,\u201d if y\u2019all agree on that, I would definitely recommend just everybody. It\u2019s a full effort. It\u2019s not a one person job. Setting up an Airbnb can be a two, three, four, five person job.<\/p>\n

Rob:
There are some diminishing returns there for sure. I\u2019ve had eight people in my Airbnb before where it\u2019s like, what are we doing? Everyone\u2019s doing a little bit, but not a lot. And it ends up being worse than if there were just three people there.<\/p>\n

Rob:
But same thing with rehabs. Some partners are very handy and they want to hop in there and they\u2019ll say, \u201cI\u2019ll just paint the wall. It\u2019s so much better than hiring a handyman for $1,000,\u201d or whatever. So regardless of what that is, just make sure that there\u2019s some level of compensation or some level of agreement for how everybody\u2019s going to maintain the status quo.<\/p>\n

Rob:
My partner just went out and completely set up a new unit for us in West Virginia. He was happy to do it. He has to do it out of the two of us, because of my schedule for this month. And I was like, \u201cWell, let\u2019s just pay you, man.\u201d And we\u2019re going to pay him $2,000, $3,000 to go and do that for a week. And he was like, \u201cDude, that\u2019s awesome. Thank you.\u201d And I was like, you deserve it, because without you, I couldn\u2019t do this.<\/p>\n

Rob:
I think throwing a bone to your partner in this category specifically will go a long way, because resentment can start as early as furnishing in Airbnb.<\/p>\n

David:
I said on Facebook a while ago, I think I said bitterness, but it\u2019s very similar to resentment is the lactic acid of relationships. When you\u2019re working out, lactic acid builds and at the point it gets to be too much, at least this is my understanding. I know there\u2019s fitness people that are about to DM me and say, \u201cThat was totally only 99% true. You missed this part.\u201d<\/p>\n

Rob:
The YouTube comments are going insane.<\/p>\n

David:
Yes. There you go. The basic understanding is that lactic acid builds and then the muscle can\u2019t perform. And then it has to be flushed out before it can perform again. And during that period of time, it regrows. But if you let bitterness and resentment leak into your relationships, the relationship stops performing. And here\u2019s the thing is lactic acid doesn\u2019t really do anything to actually help you perform better. It just slows you down. So resentment doesn\u2019t have any positive impact on a relationship. It doesn\u2019t protect you from anything. It\u2019s totally bad. So you\u2019re very wise to mention, you don\u2019t want that to build.<\/p>\n

David:
The part I want to highlight here is that this is not passive income. Short-term rentals are not passive income. They are high income. They are real estate investing, but real estate investing and passive income are not synonymous. There are ways of doing it that are passive. There are ways of doing it that are not passive and there\u2019s a whole lot in between.<\/p>\n

David:
So this setup portion is, what I tell people is imagine you just bought a business. You bought a Taco Bell or a 7-Eleven or some franchise. You have looked at it from the outside, but you don\u2019t really know much about what you got. You\u2019re going to have to show up and look at all your employees, who\u2019s got a good attitude, who\u2019s got a bad attitude, who needs to be fired, who needs to be promoted? What\u2019s your inventory look like, how the book\u2019s been kept. It\u2019s a lot of work when you first buy it to try to get it running the way you want.<\/p>\n

David:
That\u2019s what you\u2019re doing on these short-term rentals is you\u2019re showing up and you\u2019re trying to get the business set up the way you want it to be, the furniture, the decor, everything you want that\u2019s different than what the previous owners had, and that\u2019s work. So be prepared. That\u2019s why we\u2019re going over this in the bonus step. If you\u2019re going to be doing that work, be prepared knowing you\u2019re going to go into it and what is going to be done. And in a future episode, we\u2019re going to dive deeper into all of the steps that are involved.<\/p>\n

David:
All right. And that brings us to our last point, are you going to work with investors? Now, Rob and I are bringing this up because we are raising money to help buy these properties. Like you said, we\u2019re going to buy one together, maybe a couple together. Then we\u2019re going to start raising money from other people, so people can invest with us in these properties. They\u2019ll be paid out, just like if it was money in the bank.<\/p>\n

David:
Now, some people are going to just use their own capital and you can get that from refinancing houses, from putting HELOCs on existing properties. Typically, if you\u2019re going to try an expensive Airbnb, you probably already have quite a bit of capital saved up. So odds are, you\u2019ve done a little bit of real estate investing yourself if you\u2019re jumping into that.<\/p>\n

David:
But if you\u2019re not and you\u2019re looking to raise money, it\u2019s very important that you understand that cashflow will cover the debt service of both the loan that you\u2019re taking out and the investors that you\u2019re going to be paying out. That\u2019s one of the reasons that bookkeeping and analysis is very important, because you\u2019re not just investing your own money. You actually have to take care of someone else\u2019s money, even more importantly than if you did it yourself.<\/p>\n

David:
So if you want to invest with Rob or I, please reach out to us. You can go to investwithdavidgreene.com and you can learn a little bit more about it. But if you\u2019re also looking to do this yourself and you want to invest with other people, that\u2019s one more reason why you better have a lot of money in reserves. I personally don\u2019t like the model that says, \u201cHey, invest in real estate, you get some of the equity, but if it doesn\u2019t work out, you invest it at your own risk.\u201d<\/p>\n

David:
Some people do that. In fact, a lot of people do that. The majority of people I think do it. I just don\u2019t like it. I don\u2019t like it because I can\u2019t sleep at night. I don\u2019t like it because so many people trust, \u201cHey, if I\u2019m saying you should do this,\u201d that that\u2019s why they\u2019re investing in the deal with me, and they\u2019re not doing it because they\u2019re looking at the deal. They\u2019re doing it because they\u2019re looking at David.<\/p>\n

David:
When we first talked about this, Rob, I\u2019m curious, did you have concerns, fears, were you excited? I don\u2019t think we ever talked about what emotions you went through when we talked about doing this with investors.<\/p>\n

Rob:
Wow, man, we\u2019re going to air it for everyone to see here. No, no. I\u2019m excited, man. I\u2019ve worked with investors quite a bit. I work one-on-one with investors and I think what investors really appreciate when they work with me is that they see the pain. They see the future pain. They see, I really take an investor\u2019s dollar very seriously. I always say in my mind, an investor\u2019s dollar is worth four of my own. And so if I lose an investor\u2019s dollar, which has never happened, but if I do, it hurts me like I lost four of my own. That\u2019s how I really need to approach it.<\/p>\n

Rob:
Because I always make it very clear how serious I am with all of my analysis. I shoot down stuff. I\u2019ll have investors that pitch ideas to me that are just not good or they\u2019re okay, and I\u2019m like, \u201cListen, I understand why you think that, but let me be real with you.\u201d I try to just be very real with investors of what has worked for me, what doesn\u2019t. If there\u2019s something that I haven\u2019t really tried before and they\u2019re pitching that to me, I\u2019m like, \u201cNo, I\u2019m sorry. It probably will work, but I\u2019ve never done it.\u201d<\/p>\n

Rob:
I think a little bit of honesty with your investors and your commitment to making sure that their dollar goes a long way is super important. I think I\u2019ve had a couple investors that have been not annoyed, but a little like, \u201cHey, I thought you were going to move faster on this.\u201d And it\u2019s like because I haven\u2019t found you the deal yet, man. I found a bunch of deals that comped out here, but for it to be Rob stamped or whatever, it\u2019s got to be here.<\/p>\n

Rob:
It\u2019s like a fault and a good thing that it\u2019s like I\u2019m over critical of every deal that I go into, something that you and me talk about quite a bit. And it\u2019s like I\u2019m happy\u2026 I used to be a lot more of a risky person. And now when other people\u2019s money is on the line, I\u2019ve actually become really conservative with how I approach deals.<\/p>\n

David:
It\u2019s the way you drive when you\u2019re in the car yourself versus when your kids are in the back seat.<\/p>\n

Rob:
Exactly. That\u2019s so perfect. Yep.<\/p>\n

David:
So one of the ways that we are structured, and I am saying this because I highly recommend anyone else who\u2019s looking to raise investor money, please consider what I\u2019m about to say. I am keeping enough money in reserves that even if some horrible thing happened, a tornado ripped the house off the ground, aliens abducted it, and they just sucked our property off of the Earth.<\/p>\n

Rob:
Hate when that happens.<\/p>\n

David:
Just in case, we have enough money set aside that investors will still be paid on the investment that they made. I just wouldn\u2019t be able to move forward if that wasn\u2019t the case. This is not one of those, \u201cHey, it\u2019s on you if it works out or if it\u2019s not.\u201d And so if you\u2019re investing with someone who\u2019s never done it before, or they don\u2019t have any money themselves, I would just be way more cautious. If they haven\u2019t learned how to manage their own finances, I wouldn\u2019t trust them with managing your finances, even if they\u2019re very charismatic or hardworking or you\u2019re impressed by their knowledge base. There\u2019s a little more that goes into, there\u2019s some discipline that goes to managing money, in addition to just the skill or the knowledge of investing in real estate.<\/p>\n

Rob:
I think there\u2019s always a little bit of due diligence that\u2019s needed. I think it\u2019s important to reveal that due diligence, so that they\u2019re like, \u201cOh, okay, they\u2019re pretty serious with my dollar.\u201d I try to make that as clear as possible, as soon as possible.<\/p>\n

David:
All right. Well, I hope you have all enjoyed the first and second part of our series for choosing your location, market and strategy when it comes to short-term rentals. Now there will be future episodes in this series that we will be diving into, so keep an eye out for those.<\/p>\n

David:
Please leave some comments below and let us know both on the YouTube page and on biggerpodcasts.com\/podcast what you think. Did you like the deep dive into a specific strategy? Would you like it if we would actually maybe analyze a deal live on the podcast for you to see how Rob and I break down both the pros and the cons of a property and weigh out if this would work?<\/p>\n

David:
We actually have a matrix that we use that incorporates five different elements that we think are important in real estate investing. And when we\u2019re looking at a deal, we evaluate it through that matrix. So we\u2019ll go and say, \u201cWell, how does it affect this one? How is it affected by this one? How does it weigh out?\u201d<\/p>\n

David:
I just want to know, what would you guys like to see more of and what did you like about this show? So please leave it in the comments. If these are popular, if you like having us go deep on one specific strategy like this, tell us. We will do everything that we can to do more. Anything you want to add, Rob?<\/p>\n

Rob:
If anyone wants to hear it from you directly, if they want to just find you online for those short-term rental knowledge bombs, my friend, where can they find you?<\/p>\n

David:
They can find me on all social media @DavidGreene24. And then I have a YouTube channel as well. But what I basically do is when we\u2019re doing in the podcast, I\u2019ll take a concept that I was like, that was really, really good, and I\u2019ll dive deeper into a video on that. I was describing how you diversify risk in a portfolio. I\u2019m going to make a video on that, cashflow versus appreciation, I\u2019m going to make a video on that. So oftentimes what I hear people say is, \u201cThis was a great point. Can you talk about it more?\u201d Well, I get buried in DMs. I can\u2019t answer every single person individually. I try to make a video there.<\/p>\n

David:
And I know you\u2019re no slouch on YouTube yourself. Rob is a bit of my\u2026 I\u2019m the Padawan learner and he\u2019s the experienced Jedi when it comes to YouTube. He does a lot.<\/p>\n

Rob:
We got to do a collab, man.<\/p>\n

David:
Yes. that\u2019s a good point. If you notice my camera, it looks like this because your camera looked\u2026 I\u2019m not as handsome as you, I\u2019m still working on that.<\/p>\n

Rob:
I disagree.<\/p>\n

David:
You\u2019ve done a lot to help me in that area. So where can people find you if they want to learn more about what\u2019s going on in the brilliant Jedi mind?<\/p>\n

Rob:
Well, as always, you can find me on YouTube at Robuilt. A lot of people say Robuilt, that\u2019s fine if you want to. But Robuilt, like Rob built it. R-O-B-U-I-L-T. You find me on the Gram as the young kids call it, @Robuilt as well. TikTok at Robuilto, because someone snagged that Robuilt from me.<\/p>\n

David:
I love that you say that every time. I still think Robuilto is hilarious.<\/p>\n

Rob:
It\u2019s important because I think this is a sign that\u2019s like, oh, okay, I\u2019ve made it because I\u2019ve got a lot of scammers that will make fake accounts of me. By the way, just anyone watching this right now, I will never ask you for crypto or Forex or any of that other stuff. I will never ask you to DM me on WhatsApp either. But I always have to clarify because there are a lot of Robuilts.<\/p>\n

David:
That goes for both of us. I have a scammer, I get them all the time. It\u2019s usually some derivative of DavidGreene24. So the current one is-<\/p>\n

Rob:
It\u2019s DavidGreene25.<\/p>\n

David:
Yes. DavidGreene024, DavidGreene_24, David Green with no E at the end, 24.<\/p>\n

Rob:
Or David dah, dah, dah, Greene 24.<\/p>\n

David:
It\u2019s always like that. So look very closely at the screen name. Scott Trench ha the same thing going on. There\u2019s a Scott with three Ts. And so what happens is people will make these fake profiles. They\u2019ll message you, because you trust us, then they will ask you for money or they\u2019ll ask you to buy crypto with them, or invest in some course they have. They\u2019re ripping you off. So there\u2019s nothing we can really do about it. I would love it if I could get that check mark from Instagram finally, so you would know if it was me or if it was Rob, but that\u2019s very difficult. Instagram is-<\/p>\n

Rob:
2022, man, we\u2019re going to get those blue check marks.<\/p>\n

David:
It would save a lot of people money. But in the meantime, please pay attention to that. We don\u2019t want you to get ripped off and then follow Robuilto. [foreign language 00:49:00].<\/p>\n

Rob:
[foreign language 00:49:02].<\/p>\n

David:
[foreign language 00:49:10]. I don\u2019t know how to say I would appreciate it, but I would like that. [foreign language 00:49:24].<\/p>\n

Rob:
[foreign language 00:49:24].<\/p>\n

David:
[foreign language 00:49:24].<\/p>\n

Rob:
Robuilto.<\/p>\n

David:
Robuilto. On YouTube. All right. Enough of these shenanigans. Thank you everybody for your time. We really appreciate you listening. Let us know in the comments what you think, reach out to each of us and tell us what you would like more of. We will let you get out of here, but keep an eye out for future shows in this series of how to get your first short-term rental with Robert mathematic Abasolo. No. With Robert mathematical Abasolo. This is David Greene for BiggerPockets, signing off.<\/p>\n

\u00a0<\/p>\n<\/div>\n

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n


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