I don’t have mortgages, I thought buying moderate priced cabin/small homes for cash in a popular summer vacation market (and cleaning myself) would provide good margins. So…not all the way relating. I’m doing a gut rehab on one right now, fingers crossed! I’m using quality materials like locally sourced pine tongue and groove, good flooring and finishes.
I totally agree! I just opened my first STR property 4 months ago and my friend had an identical unit nearby and quickly quit and sold because he thought it was RE investing and had one fifth of the bookings I had. Sean’s training helped me develop a staff that loves to work for me, everybody is happy. I’m in negotiation for my first arbitrage unit, so excited! Thank you Sean!
Great content. I pop in and out of your channel because I'm a real estate investor... but about 2 videos ago that I watched you changed my mind and made me realize I'm not a real estate investor I'm in the hospitality business. I'm actually to a point where I don't think I'm going to buy any more properties so I really need to stop thinking I'm a REI and get cozy with the fact that I'm a hospitality manager. Thanks for the mental shift. I think I'll do a video on this and give you a shout out on my channel.
I had to run a large home AirBNB via circumstance for 6 months, Sean's info is priceless. We took a ton of precautions and the neighbors still hated us, and it was an ungodly amount of work and trouble. Never intended for it to be anything longer term. With this market shift it seems the stand-alone units will have to be run by people who are more professional, it may take the hobbyists out or simply back to hosting a spare bedroom?
Another great video! I have 1 STR that I purchased and I thanked another channel for the guidance on getting in on the idea to acquiring that property, BUT I have to give a standing ovation 👏 to you Sean on how to actually run this hospitality business! Thank you again! 🙏
How do you target your apartment complexes/buildings in more geographically spread out areas (assuming you do that at all)? Are you looking on STR sites and seeing if any STRs currently exist at that location? Are you looking at anything other than competitive STR listings for demand/pricing or do you look at nearby hotels too? Are there common attractions (like airports, sports stadiums, etc.) your target apartments need to be close to? Last selection criteria questions, do you only go with complexes/buildings which are cooperative with guest needs like check-in or pool/gym access, etc.?
I am comfortable with breaking into a city with no STRs. If those still exist. I’m the cases we’ve lacked STR data we track hotels to do market research
@seanrakidzich I appreciate your time to make this video but I think you missed a few points that you would only know if you understand the real estate ownership cycle and how it correlates to the Airbnb investor. Maybe I should make a video clearing up some of those items
I'm just starting now the house I owned is payoff is small and it also have 2 guest apartments with it and I'm planning to be the housekeeper with my mother 😊. I'm so exciting about it and I'm trying to learn and absorb as much information as possible. A big overwhelming to be honest but I guest I have to deep dive to understand how to maximize my business . Thank you so much for all this useful advices. 🙏 🥰
Max pain is coming( and needed) Way to many heros created last year .Dry powder on the sidelines right now is the best play. Good content and very comprehensive . I appreciate you
One correction: I think Chic filet is following the Mcdonald model and they definitely are a real estate company, albeit one that purveys questionable caloric products in order to generate the cash flow to do that. My experimenting with dynamic pricing, to fill holes, is proving to be very interesting.
Sean, I am a newbie, learning about this space, have been watching you for a couple of months now, amazing content! Love hearing about you scaling like this. Thanks for sharing your knowledge!
So this sounds good in certain areas. But I think the biggest risk to rental arbitrage is cities that are now restricting short term rentals that it would be hard to grow and commit to 2-3year lease with that as a risk?
@@currently9143 I have a rental arbitrage unit and I own home that I do strs in. The one I own makes more sense for mid term stays then my arbitrage unit. I have hosted both mid term and short term. My thing is money wise for rental arbitrage (especially with rent being so high) mid term stays are ok during the slow months but getting multiple arbitrage units for mid term stays is cutting it close on the cash flow.
Paying people 15 dollars or less an hour during the state of the economy is absolutely horrible. The fact that you think that less than 15 is okay is mind blowing. Maybe people could spend more if they were paid living wages
Maybe there wouldn't be a need for minimum wage laws if government stopped devaluing the currency through printing. Maybe giving people the right to set their own hourly rate would actually create more jobs. If the government arbitrarily raised the minimum wage to say $100 an hour, how many businesses would be hiring? How many businesses would immediately sack their staff and file for bankruptcy? If I need a job and there is only one available but ten people apply, all with relatively the same skill and experience, shouldn't I be able to offer that business to pay me $10 an hour instead of $12 to beat the competition and get the job? Maybe we should all stop relying on the government to save us and take a good hard look at how much they are actually ruining the economy, draining us of our income through exorbitant taxes and stifling innovation through nonsensical regulation
If rent prices are also rising, doesn't that make rental arbitrage even riskier? Your margin would be slimmer with higher rent prices and travel habits changing on airbnb causing you to lower prices to remain booked.
I think this is correct in some areas, I can tell you that here in Southern California the rents are crazy!! no less than 2,900 the profit is very low now, compared to 2 years ago.
Generally rents are rising. We make it a priority to negotiate two months of free rent on the front end of all of our leases which makes us profitable right out the gate
@@AirbnbAutomated theres no way landlords are giving out 2 months free rent, who you fooling brah. Im not saying that you didn't do this in the past a couple times, but this is not something that everything watching this video is going to do. If anyone else has negotiated 2 months free rent, please comment below. I would love to be corrected.
Building credit is really simple, it isn't necessarily easy. Paying off/paying down installment loans doesn't really do anything, keeping your revolving (Credit card) balances as low as possible will help the most, and save you the most interest. Don't close any revolving accounts, either. A chunk of the credit score formula is based on account history/duration. Good luck!
@@prosperitybeginswithpeace229 Oh ok. If you’re doing the lease strategy like Sean and not owning, you’ll need to shop banks around, local banks over national banks are generally better for unique small business needs like this. One would need to be prepared to share booking history and future bookings, bank statements, etc. then you’ll be able to get lines of credit and other things, it starts with a biz credit card backed by the owner’s personal credit though. Some banks do offer secured biz cards if credit is low. Good luck!
As Always Sean, Another Great Video.. BTW, I Thought I Had A Piece Of Hair On My Screen, And I Kept Trying To Wipe It Off. It Was The Lamp Shade Next To U, And Not On My Screen. .. 🤪 Aside From That, U R So Right - Arbitrage Is Terrific. Now I Need To Continue To Scale Up In Order To Be Able To Only Pay My Cleaners $20+ / Hr Instead Of $100+ / Cleaning.
Once upon a time, I used to take this guy‘s advice not so much lately what he’s not telling you and what everyone should understand is that regulations from state to state are killing the Airbnb space rental arbitrage was the excellent business plan when you can rent less than 30 days today 30-day minimum plus permits and town new regulation business model is dead switch to long-term rental if you have to gain your equity pivot. Philadelphia come September most of his properties going to be under new regulation but he’s only pushing his courses as an Airbnb arbitrage guru real estate will always be solid on your property build future wealth arbitrage is short-term money with no value in equity tax write-off true wealth do not listen to a self impose guru who is Hawken classes for $500 a pop he’s holding on by a string.
Most of the real state investors use a co-host because they don't have the time to operate the business. They have another job and can't do hosting. When something brakes or do a mess they don't have the time to handle it. Also investors they do short-term because is more secure than long-term. Florida have a lot of companies that runs airbnb for investors. Do short-term for an investor is a long-term business. Reservations will pay the cost of there investment and in the future they can sell the property and boom all the money in one's. I believe every model can work just need to operate a bit different.
This is just Hate. There are so many cities that you can do Arbitrage and STRs in with no problem at all. Even the cities that have regulations like Miami… there’s still a way to operate there. You don’t just get completely shut out or regulated to 30-day plus stays. Your response is the problem with people. You only know how to make money when it’s glaringly easy. I’ve scaled to 22 units in 2 years (in two cities) and we’re still growing.
Well it actually goes into affect in January of 2023 not September. Likely to be reversed as well because the date has been pushed back twice. Philadelphia host here and actively working with Councilmen.
I see everyone making comments this is my personal opinion whether you agree with it or not but perhaps you should look and see what’s happening to Atlanta, and large cities with regulation not to mention Airbnb affecting host an algorithm due to the changing of website site, I wish nothing but the best for everyone doing short term rental I don’t like the fact that regulation and big government is dictating I’m all for the small business operator we all just need to be vigilant and pay attention to what’s going on in the market before we start giving out advice and selling courses in the middle of what will soon to be no doubt a recession that would be as reckless as me telling you to invest all your money and bitcoin and cryptocurrency.
One issue with rental arb'ing is that most landlords won't have the proper insurance for airbnb. Its against the terms of their mortgage company and their insurance. If the mortgage company finds out they will likely call in the mortgage, if the insurance company finds out this was an airbnb they wont cover losses. You are putting people in a very risky position when you do this. As a landlord whos done both airbnb, long and medium term rentals I would never fall for this type of an agreement - Its just too risky. This is the real truth that nobody ever talks about. Also it will make refi'ing very difficult if the bank finds out there is airbnb in a unit. They don't count any of that income.
The way you state your point, it sounds like you are certain of your perspective and the information "should" be taken as factual financial advice. You should investigate legal advice on what you should say before you give your opinion. You should also watch more of the channels you comment about because they all do this.
Hey Sean, You and your videos are incredibly impressive. I do get the impression though that you could be running any business including those unrelated to airbnb. I see a potential Elon Musk but with a strong dose of Anthony Robbins in you.
I understand your point(s), but you mentioned that Real Estate Investing is not the same as hospitality. How (And maybe why) do you think that the real estate investor can "easily" fire their co-host, who probably is way better and more in tune with hospitality, and then do this job themselves. Even knowing who to hire internally with these hospitality skills is mostly unknown territory for the real estate investor. Any thoughts on that?
you should fire your co-host aka property manager and manage it yourself to make the most amount of money and get the best roi. of course you can keep a co-host but at a high cost in profits
@@AirbnbAutomated I am more in the vacation industry (Bali, Koh Samui, Phuket). I feel many owners are really not up to it (OR, not even want to do it) because hospitality levels here (With our price levels) need serious understanding and attention. I get that the more city apartments and different types of travelers (Like you described) are "lower maintenance" ... :-).
@@TheilTube You're talking about a different business model. Sean is talking about people who WANT to be in the STR game but are approaching it from a Real Estate investor mindset. He's not talking about owners who don't want to manage their properties.
Newbie here... so if I'm understanding this correctly, you are using other people's homes to AirBnb? Thus negating repair costs etc? And these landlords are okay with it?
Sean I have been doing Rental Arbitrage for 2yrs unfortunately with that system, you risk of having the landlord take the house any time after the lease is over for many different reasons. This just happened to me, the landlord after 2yrs asked for his house back. What strategies do you use to keep the lease for a longer time?
We get the landlord to sign a two-year or three year-long lease by standard and because of that inevitability it is best to go to some size so that way you are always looking for new leases. Sometimes you pick them up and grow sometimes you pick them up and move
Most states adopt the statute of frauds exceptions and require written leases for tenancies exceeding one year. Therefore, unless a tenant and his landlord enter into a written lease in Florida, the lease cannot exceed one year.
I would argue that that is not the norm… As he probably decided to sell his house because of record appreciation. Just an assumption, but he was probably trying to get on that train before it got too far away. Sometimes landlords do just get tired of being landlords, or it’s part of their personal investing strategy to finally sell a house… And you can’t always account for that.
You lost me at 16:20 when you mention a rental market slowdown. More foreclosures means a stronger rental market as those former owners look for places to live. It also extends the time of those renters saving to buy in as they are now faced with rising costs. As an owner (with no mortgage), I am not worried and that is the beauty of owning my units, if the SRT market crashes, there is always basic renting to fall back upon while the arbitrager would face bankruptcy struggling to pay rents...the beauty of diversification. I look forward to losing that competition, from my own investigation, my local arbitragers are already not making much profit now. How is the fight about that new Airbnb home screen going? As a traveler looking for basic accommodations outside of all the little niches they are pushing, I found it infuriating.
Foreclosures during the squeeze occur because the occupant cannot support payments. Just because the payment is rent versus a mortgage doesn't change the solubility of the occupant. Sub-prime renting pressure increases, but is that the long-term market occupant affording a luxury condo? The price of rent directly impacts the quality of occupants. So while sub-prime renting will intensify, prime and better rentals will suffer along with the mortgage industry. This is why you need to look at the rental as a business. Good job on having no mortgage. That opens up options for sure.
@@nm999999991 Yabbut contrary to popular belief, not everybody is hosting SRT luxury apartments. Wealthier folks paying rent in luxury condos are likely unaffected by a downturn. It is the middle and lower classes most affected and will they will filter down as downturns progress. My market is not a luxury market, we cater to providing a home experience for mostly out of town workers - frankly, the backbone of my local market (which makes Airbnb's new Home page infuriating....)
@@proppo4924 Okay sounds like you have a handle on it then. There is a difference between what Sean is pitching and your business goals, but your question was about 16:20, which relates to why prime rentals will be affected. Good luck.
Actually, no. As an owner, each of my units, effectively, are less than $900 a month in rent, in an A-class neighborhood. Goodluck finding that through arbitrage as a renter. A "market meltdown" just means I'm earning 2k a month from a long-term renter vs 4k via str. I'm thoroughly in the black in either scenario.
Yeah but hotels these days cost $360 for one room with not even a microwave and you have to eat 3 meals a day outside that adds up to it . Do the math and all the people in hotels . Same money u can rent whole place in Airbnb
@@pastrami00 yeah and when u reach there they have extra $100 now they charge at reception as resort fees and one room . Omg the sofa was so old and dirty . Room smelled like old people house and people everywhere. In picture they have nice pool with no one but three day we were there pool was maximum occupancy and eating out 3 meals a day adds up a lot . Hotel is trying to shut down short term rental as they are billionaires so they can do monopoly
I'll be more interested in Sean's advice after he has actually weathered a recession. 7 years in an amazing bull market is child's play, and its easy to talk like you are an expert. But I do think Sean has the right idea, by not owning properties directly, keeping maint low through volume, and renting in big cities. On the other hand, Robuilt, aside from his ridiculous haircut, is likely way over leveraged. I suspect he owns far too many properties to survive the coming market, and it seems his business model is vacation homes, in locations that won't easily convert to long term rentals, or cant be sold off in a down market (once he can't sustain the 75% occupancy he counts on for profitability). And his homes are all over the country - so no cleaning economy through volume, like Sean. He's probably depending on selling you his advise (through his AirBNB courses) to make it through these coming hard times - but do you really want to learn from his model, or Sean's?
House keepers are not making 12-15 an hour. Not sure how you keep them. Most cleaners around here are sole proprietors and make 150-300 per turnover. 100 on a studio. 30-60 an hour. Anything less and they don’t get cleaned same day. There is no reason for housekeepers to prioritize low paying jobs that they can’t take over the high paying ones that pay a lot. Housekeepers you train will leave and run their own cleaning business. The business startup cost for a cleaner is so low that anyone with a savings account can start up a cleaning business. Plus the operation costs are very low too. Cleaners are a scarcity right now.
The part you’re missing is that who we hire: They aren’t housekeepers until we train them to be. They were fry cooks, babysitters, assistants, tellers, college students
Thank you, Sean. I just now found you and watched this video. I was just about to pull the trigger on 2 apartment units in Alaska for Airbnb purposes but a friend of mine rang my bell on the slow months (winter) up there and your video just drove the point home about rates. In addition, I also learned a ton about how you deal and work with the house cleaners and how to compensate them. Great video. Thanks for sharing.
Thank you for sharing the tips. Just playing devil advecate, it’s hard enough to convince a landlord to let you sublease and do airbnb why would they also give free rent? Instead of the free rent, they can go vacant for a little more and find a long term tenant with good credit scores. Having people come in and out constantly increases the risk exponentially and a lot more wear and tear but the rent the landlord get is the same whether they rent it to a long term tenant or people who airbnb. It would be too hard and I think it takes a lot of skills to get the landlord to agree.
The concept of going vacant s little more to “try” and get a tenant. Or having a lease executed now in exchange for some free rent. One is certain, the other isn’t. A bird in the hand is worth two in the bush
You can search past vides for some negotiation tactics. You will need a lot of money for furniture and such. Have you done arbitrage before ? Good luck and let's know..
I had to restart this video because I spent minutes wondering why I couldn’t get the hair off of my phone only to find out it was a part of his chair’s 🪑 design and not hair…… 🤣🤣🤣🤣 Very nice place…
This is easily the cheesiest of cheesy business models! I think air bnb overall is great but I’d be pissed if an air bnb next door popped up ran by a RENTER! They have no stake in the game. Your behavior completely changes when your name isn’t on a lease but a 20-30 year mortgage. This is wrong and I think these guys are going to go upside down with the current recession And clearly they’re doing horrible with how defensive this video was
So you are suggesting to get rid of co hosts. Do you have training on how to be perfect host? Especially with all the needy and horrible guests that what only complain to get money back.
Man. Its hard to feel good about this guy. His advice is to fire your host partner, underpay your housekeepers, and stiff your land lords for 10 weeks rent. And then you too can profit off the misfortune of others.
Breaking even or even a minor loss when you own the home is COMPLETELY different than breaking even or taking any type of loss doing arbitrage.
If I don't see you one week I feel alone. Explain anything I will be here for you master 😇
I don’t have mortgages, I thought buying moderate priced cabin/small homes for cash in a popular summer vacation market (and cleaning myself) would provide good margins. So…not all the way relating. I’m doing a gut rehab on one right now, fingers crossed! I’m using quality materials like locally sourced pine tongue and groove, good flooring and finishes.
I totally agree! I just opened my first STR property 4 months ago and my friend had an identical unit nearby and quickly quit and sold because he thought it was RE investing and had one fifth of the bookings I had. Sean’s training helped me develop a staff that loves to work for me, everybody is happy. I’m in negotiation for my first arbitrage unit, so excited! Thank you Sean!
Translation= I’m pivoting from owning toward arbitrage and scale because I tested Sean’s model and it works.
What was the reason for 1/5 of your bookings? He must have been doing something wrong 😂 was this at the same time?
Hi I want to learn further about this.
Great content. I pop in and out of your channel because I'm a real estate investor... but about 2 videos ago that I watched you changed my mind and made me realize I'm not a real estate investor I'm in the hospitality business. I'm actually to a point where I don't think I'm going to buy any more properties so I really need to stop thinking I'm a REI and get cozy with the fact that I'm a hospitality manager. Thanks for the mental shift. I think I'll do a video on this and give you a shout out on my channel.
I had to run a large home AirBNB via circumstance for 6 months, Sean's info is priceless. We took a ton of precautions and the neighbors still hated us, and it was an ungodly amount of work and trouble. Never intended for it to be anything longer term. With this market shift it seems the stand-alone units will have to be run by people who are more professional, it may take the hobbyists out or simply back to hosting a spare bedroom?
Another great video! I have 1 STR that I purchased and I thanked another channel for the guidance on getting in on the idea to acquiring that property, BUT I have to give a standing ovation 👏 to you Sean on how to actually run this hospitality business! Thank you again! 🙏
How do you target your apartment complexes/buildings in more geographically spread out areas (assuming you do that at all)? Are you looking on STR sites and seeing if any STRs currently exist at that location? Are you looking at anything other than competitive STR listings for demand/pricing or do you look at nearby hotels too? Are there common attractions (like airports, sports stadiums, etc.) your target apartments need to be close to? Last selection criteria questions, do you only go with complexes/buildings which are cooperative with guest needs like check-in or pool/gym access, etc.?
I am comfortable with breaking into a city with no STRs. If those still exist. I’m the cases we’ve lacked STR data we track hotels to do market research
@seanrakidzich I appreciate your time to make this video but I think you missed a few points that you would only know if you understand the real estate ownership cycle and how it correlates to the Airbnb investor.
Maybe I should make a video clearing up some of those items
You should!
I'm just starting now the house I owned is payoff is small and it also have 2 guest apartments with it and I'm planning to be the housekeeper with my mother 😊. I'm so exciting about it and I'm trying to learn and absorb as much information as possible. A big overwhelming to be honest but I guest I have to deep dive to understand how to maximize my business . Thank you so much for all this useful advices. 🙏 🥰
This is your ministry ! Wow I just found your channel!!! You are amazing
Max pain is coming( and needed) Way to many heros created last year .Dry powder on the sidelines right now is the best play.
Good content and very comprehensive . I appreciate you
One correction: I think Chic filet is following the Mcdonald model and they definitely are a real estate company, albeit one that purveys questionable caloric products in order to generate the cash flow to do that. My experimenting with dynamic pricing, to fill holes, is proving to be very interesting.
Great video. I always appreciate how genuine you seem in sharing all your insights. Thank you!
Short term rentals are 1 part real estate investment and 2 parts hospitality.
Sean, I am a newbie, learning about this space, have been watching you for a couple of months now, amazing content! Love hearing about you scaling like this. Thanks for sharing your knowledge!
You can't pay someone 12-15 an hour in Canada, but you got to do it best I could get was 17.15 and that was must better then 25 most wanted
So this sounds good in certain areas. But I think the biggest risk to rental arbitrage is cities that are now restricting short term rentals that it would be hard to grow and commit to 2-3year lease with that as a risk?
Mid term stays!
@@currently9143 the money is different with midterm stays
@@prosperitybeginswithpeace229 You are correct but profit will still be made
for example travel nurses or business people
@@currently9143 I have a rental arbitrage unit and I own home that I do strs in. The one I own makes more sense for mid term stays then my arbitrage unit. I have hosted both mid term and short term. My thing is money wise for rental arbitrage (especially with rent being so high) mid term stays are ok during the slow months but getting multiple arbitrage units for mid term stays is cutting it close on the cash flow.
I know many people who book mainly through AIRBnB yet this year none are doing so ...strange! I should ask them why not.
Paying people 15 dollars or less an hour during the state of the economy is absolutely horrible.
The fact that you think that less than 15 is okay is mind blowing. Maybe people could spend more if they were paid living wages
Maybe there wouldn't be a need for minimum wage laws if government stopped devaluing the currency through printing.
Maybe giving people the right to set their own hourly rate would actually create more jobs.
If the government arbitrarily raised the minimum wage to say $100 an hour, how many businesses would be hiring? How many businesses would immediately sack their staff and file for bankruptcy? If I need a job and there is only one available but ten people apply, all with relatively the same skill and experience, shouldn't I be able to offer that business to pay me $10 an hour instead of $12 to beat the competition and get the job? Maybe we should all stop relying on the government to save us and take a good hard look at how much they are actually ruining the economy, draining us of our income through exorbitant taxes and stifling innovation through nonsensical regulation
If rent prices are also rising, doesn't that make rental arbitrage even riskier? Your margin would be slimmer with higher rent prices and travel habits changing on airbnb causing you to lower prices to remain booked.
I think this is correct in some areas, I can tell you that here in Southern California the rents are crazy!! no less than 2,900 the profit is very low now, compared to 2 years ago.
Generally rents are rising. We make it a priority to negotiate two months of free rent on the front end of all of our leases which makes us profitable right out the gate
@@AirbnbAutomated I doubt it
Doubt what?
@@AirbnbAutomated theres no way landlords are giving out 2 months free rent, who you fooling brah. Im not saying that you didn't do this in the past a couple times, but this is not something that everything watching this video is going to do. If anyone else has negotiated 2 months free rent, please comment below. I would love to be corrected.
Still going strong! God bless you Sean!
Hi again! Do u have a video on building credit as you are working to get more properties?
Building credit is really simple, it isn't necessarily easy. Paying off/paying down installment loans doesn't really do anything, keeping your revolving (Credit card) balances as low as possible will help the most, and save you the most interest. Don't close any revolving accounts, either. A chunk of the credit score formula is based on account history/duration. Good luck!
@@garrettmgunderson I think she is talking about business credit
@@prosperitybeginswithpeace229 Oh ok. If you’re doing the lease strategy like Sean and not owning, you’ll need to shop banks around, local banks over national banks are generally better for unique small business needs like this. One would need to be prepared to share booking history and future bookings, bank statements, etc. then you’ll be able to get lines of credit and other things, it starts with a biz credit card backed by the owner’s personal credit though. Some banks do offer secured biz cards if credit is low. Good luck!
Thank you for all the information
As Always Sean, Another Great Video.. BTW, I Thought I Had A Piece Of Hair On My Screen, And I Kept Trying To Wipe It Off. It Was The Lamp Shade Next To U, And Not On My Screen. .. 🤪
Aside From That, U R So Right - Arbitrage Is Terrific. Now I Need To Continue To Scale Up In Order To Be Able To Only Pay My Cleaners $20+ / Hr Instead Of $100+ / Cleaning.
Sean I just want to say thank you!!!!!
Once upon a time, I used to take this guy‘s advice not so much lately what he’s not telling you and what everyone should understand is that regulations from state to state are killing the Airbnb space rental arbitrage was the excellent business plan when you can rent less than 30 days today 30-day minimum plus permits and town new regulation business model is dead switch to long-term rental if you have to gain your equity pivot. Philadelphia come September most of his properties going to be under new regulation but he’s only pushing his courses as an Airbnb arbitrage guru real estate will always be solid on your property build future wealth arbitrage is short-term money with no value in equity tax write-off true wealth do not listen to a self impose guru who is Hawken classes for $500 a pop he’s holding on by a string.
Most of the real state investors use a co-host because they don't have the time to operate the business. They have another job and can't do hosting. When something brakes or do a mess they don't have the time to handle it. Also investors they do short-term because is more secure than long-term. Florida have a lot of companies that runs airbnb for investors. Do short-term for an investor is a long-term business. Reservations will pay the cost of there investment and in the future they can sell the property and boom all the money in one's. I believe every model can work just need to operate a bit different.
Speak for yourself there are plenty of cities that are arbitrage friendly.
This is just Hate. There are so many cities that you can do Arbitrage and STRs in with no problem at all. Even the cities that have regulations like Miami… there’s still a way to operate there. You don’t just get completely shut out or regulated to 30-day plus stays.
Your response is the problem with people. You only know how to make money when it’s glaringly easy. I’ve scaled to 22 units in 2 years (in two cities) and we’re still growing.
Well it actually goes into affect in January of 2023 not September. Likely to be reversed as well because the date has been pushed back twice. Philadelphia host here and actively working with Councilmen.
I see everyone making comments this is my personal opinion whether you agree with it or not but perhaps you should look and see what’s happening to Atlanta, and large cities with regulation not to mention Airbnb affecting host an algorithm due to the changing of website site, I wish nothing but the best for everyone doing short term rental I don’t like the fact that regulation and big government is dictating I’m all for the small business operator we all just need to be vigilant and pay attention to what’s going on in the market before we start giving out advice and selling courses in the middle of what will soon to be no doubt a recession that would be as reckless as me telling you to invest all your money and bitcoin and cryptocurrency.
One issue with rental arb'ing is that most landlords won't have the proper insurance for airbnb. Its against the terms of their mortgage company and their insurance. If the mortgage company finds out they will likely call in the mortgage, if the insurance company finds out this was an airbnb they wont cover losses. You are putting people in a very risky position when you do this. As a landlord whos done both airbnb, long and medium term rentals I would never fall for this type of an agreement - Its just too risky. This is the real truth that nobody ever talks about. Also it will make refi'ing very difficult if the bank finds out there is airbnb in a unit. They don't count any of that income.
I like your accessories man! Thanks for the info too.
Thank you Sean, I appreciate all the good information.
dope af video truth is spoken need to bring all cleaning/management/repairs/maintenance/construction in house no cap
The way you state your point, it sounds like you are certain of your perspective and the information "should" be taken as factual financial advice. You should investigate legal advice on what you should say before you give your opinion. You should also watch more of the channels you comment about because they all do this.
There is the upfront cost of furnishing a unit too!
Can yiu di renters Arbitrage?
Love this video
. Thank you
Excellent and easy to understand information 😊
Hey Sean,
You and your videos are incredibly impressive. I do get the impression though that you could be running any business including those unrelated to airbnb. I see a potential Elon Musk but with a strong dose of Anthony Robbins in you.
this is my fourth business. thank you for noticing!
I understand your point(s), but you mentioned that Real Estate Investing is not the same as hospitality. How (And maybe why) do you think that the real estate investor can "easily" fire their co-host, who probably is way better and more in tune with hospitality, and then do this job themselves. Even knowing who to hire internally with these hospitality skills is mostly unknown territory for the real estate investor. Any thoughts on that?
It absolutely is unknown territory. What I’m advising is not simple, but necessary.
you should fire your co-host aka property manager and manage it yourself to make the most amount of money and get the best roi. of course you can keep a co-host but at a high cost in profits
@@AirbnbAutomated I am more in the vacation industry (Bali, Koh Samui, Phuket). I feel many owners are really not up to it (OR, not even want to do it) because hospitality levels here (With our price levels) need serious understanding and attention.
I get that the more city apartments and different types of travelers (Like you described) are "lower maintenance" ... :-).
@@TheilTube You're talking about a different business model. Sean is talking about people who WANT to be in the STR game but are approaching it from a Real Estate investor mindset. He's not talking about owners who don't want to manage their properties.
It would be funny if every time the video cuts away and then comes back to you, you're wearing an additional necklace and wristband.
I need to do something like this lol
Newbie here... so if I'm understanding this correctly, you are using other people's homes to AirBnb? Thus negating repair costs etc? And these landlords are okay with it?
Yep! It’s all negotiated in advance
@@AirbnbAutomated mind blown! Where are good places to do this? I don't think this would fly where I live. Too populated and rent is dominating!
I’d say the midwest is best right now
Dude!! HunterXHunter!! hahaha You are awesome! Thank you for your videos! I am a new host (2 months so far).
Yeup that's me, I just closed on a house in my area as an investment for airbnb, and now this is happening. It's worrying.
Sean I have been doing Rental Arbitrage for 2yrs unfortunately with that system, you risk of having the landlord take the house any time after the lease is over for many different reasons. This just happened to me, the landlord after 2yrs asked for his house back.
What strategies do you use to keep the lease for a longer time?
We get the landlord to sign a two-year or three year-long lease by standard and because of that inevitability it is best to go to some size so that way you are always looking for new leases. Sometimes you pick them up and grow sometimes you pick them up and move
Most states adopt the statute of frauds exceptions and require written leases for tenancies exceeding one year. Therefore, unless a tenant and his landlord enter into a written lease in Florida, the lease cannot exceed one year.
I would argue that that is not the norm… As he probably decided to sell his house because of record appreciation. Just an assumption, but he was probably trying to get on that train before it got too far away. Sometimes landlords do just get tired of being landlords, or it’s part of their personal investing strategy to finally sell a house… And you can’t always account for that.
Good Video Again Brother !!!
What about those that are just starting and cant start of with multiple units? Most complexes are not negotiating free rents where I am
Start with local landlords that have 5 or less properties before pitching big complexes
Thank you with this video.
You are the best
You lost me at 16:20 when you mention a rental market slowdown. More foreclosures means a stronger rental market as those former owners look for places to live. It also extends the time of those renters saving to buy in as they are now faced with rising costs.
As an owner (with no mortgage), I am not worried and that is the beauty of owning my units, if the SRT market crashes, there is always basic renting to fall back upon while the arbitrager would face bankruptcy struggling to pay rents...the beauty of diversification. I look forward to losing that competition, from my own investigation, my local arbitragers are already not making much profit now.
How is the fight about that new Airbnb home screen going? As a traveler looking for basic accommodations outside of all the little niches they are pushing, I found it infuriating.
Foreclosures during the squeeze occur because the occupant cannot support payments. Just because the payment is rent versus a mortgage doesn't change the solubility of the occupant. Sub-prime renting pressure increases, but is that the long-term market occupant affording a luxury condo? The price of rent directly impacts the quality of occupants.
So while sub-prime renting will intensify, prime and better rentals will suffer along with the mortgage industry. This is why you need to look at the rental as a business.
Good job on having no mortgage. That opens up options for sure.
@@nm999999991 Yabbut contrary to popular belief, not everybody is hosting SRT luxury apartments. Wealthier folks paying rent in luxury condos are likely unaffected by a downturn. It is the middle and lower classes most affected and will they will filter down as downturns progress. My market is not a luxury market, we cater to providing a home experience for mostly out of town workers - frankly, the backbone of my local market (which makes Airbnb's new Home page infuriating....)
@@proppo4924 Okay sounds like you have a handle on it then. There is a difference between what Sean is pitching and your business goals, but your question was about 16:20, which relates to why prime rentals will be affected. Good luck.
I love your content. Can you write down your calculations pls?
Actually, no. As an owner, each of my units, effectively, are less than $900 a month in rent, in an A-class neighborhood. Goodluck finding that through arbitrage as a renter. A "market meltdown" just means I'm earning 2k a month from a long-term renter vs 4k via str. I'm thoroughly in the black in either scenario.
That’s super great. Does that negate the advice I just gave to owners?
Yeah but hotels these days cost $360 for one room with not even a microwave and you have to eat 3 meals a day outside that adds up to it . Do the math and all the people in hotels . Same money u can rent whole place in Airbnb
Hotels have gotten crazy lately. Just tried to book a room for my mother and the cheapest I could find was over $400 per night.
@@pastrami00 yeah and when u reach there they have extra $100 now they charge at reception as resort fees and one room . Omg the sofa was so old and dirty . Room smelled like old people house and people everywhere. In picture they have nice pool with no one but three day we were there pool was maximum occupancy and eating out 3 meals a day adds up a lot . Hotel is trying to shut down short term rental as they are billionaires so they can do monopoly
@@pastrami00 Try M8 they are the one's I use when traveling.
I'll be more interested in Sean's advice after he has actually weathered a recession. 7 years in an amazing bull market is child's play, and its easy to talk like you are an expert. But I do think Sean has the right idea, by not owning properties directly, keeping maint low through volume, and renting in big cities. On the other hand, Robuilt, aside from his ridiculous haircut, is likely way over leveraged. I suspect he owns far too many properties to survive the coming market, and it seems his business model is vacation homes, in locations that won't easily convert to long term rentals, or cant be sold off in a down market (once he can't sustain the 75% occupancy he counts on for profitability). And his homes are all over the country - so no cleaning economy through volume, like Sean. He's probably depending on selling you his advise (through his AirBNB courses) to make it through these coming hard times - but do you really want to learn from his model, or Sean's?
You wouldn’t consider Covid a rehearsal for a recession
I love your videos, Sean. You got me going in the business and I thank you so very much!
I am not trying to be negative or mean but where in the U.S. can you hire someone for $12 an hour? Doesn't seem like a livable wage.
You can find online what jobs what which amounts in various cities
It's not a 'livable wage' because cleaning apartments is not a high value, differentiating skill.
@@pastrami00 My daughter worked at a 5 star hotel and that is about what they earned as house cleaners.
House keepers are not making 12-15 an hour. Not sure how you keep them. Most cleaners around here are sole proprietors and make 150-300 per turnover. 100 on a studio. 30-60 an hour. Anything less and they don’t get cleaned same day. There is no reason for housekeepers to prioritize low paying jobs that they can’t take over the high paying ones that pay a lot. Housekeepers you train will leave and run their own cleaning business. The business startup cost for a cleaner is so low that anyone with a savings account can start up a cleaning business. Plus the operation costs are very low too. Cleaners are a scarcity right now.
The part you’re missing is that who we hire:
They aren’t housekeepers until we train them to be. They were fry cooks, babysitters, assistants, tellers, college students
Your points are all why you should use what I teach in cracking superhost
Thank you, Sean. I just now found you and watched this video. I was just about to pull the trigger on 2 apartment units in Alaska for Airbnb purposes but a friend of mine rang my bell on the slow months (winter) up there and your video just drove the point home about rates. In addition, I also learned a ton about how you deal and work with the house cleaners and how to compensate them. Great video. Thanks for sharing.
Can someone point me to his video on smart locks? 17:14
It’s not that old, you can find it on my channel homepage
Great content as usual Sean. You’re the best but I didn’t like the background music.
I will take that into consideration
Do you recommend dynamic pricing software or setting prices yourself?
He uses software, matter of scale.
We use wheelhouse but also actively manage over the top of the software. A software will only do half the work
Great videos - but I have to say. sometimes your beauty is distracting.
Thank you for sharing the tips. Just playing devil advecate, it’s hard enough to convince a landlord to let you sublease and do airbnb why would they also give free rent? Instead of the free rent, they can go vacant for a little more and find a long term tenant with good credit scores. Having people come in and out constantly increases the risk exponentially and a lot more wear and tear but the rent the landlord get is the same whether they rent it to a long term tenant or people who airbnb. It would be too hard and I think it takes a lot of skills to get the landlord to agree.
The concept of going vacant s little more to “try” and get a tenant. Or having a lease executed now in exchange for some free rent. One is certain, the other isn’t.
A bird in the hand is worth two in the bush
Yeah
I am about to sign a 22 apartment arbitrage deal. Need the script for free rent on the first two months.
DONT DO IT MAN, NOT NOW
You can search past vides for some negotiation tactics. You will need a lot of money for furniture and such. Have you done arbitrage before ? Good luck and let's know..
hundreds of hours cleaning toilets" 10k hours this channel is the BEST
Watch my AirBNB a walkthroughs for the HOUSTON Market.
A double Malcom X hat
I had to restart this video because I spent minutes wondering why I couldn’t get the hair off of my phone only to find out it was a part of his chair’s 🪑 design and not hair…… 🤣🤣🤣🤣 Very nice place…
Haha. Oops.
Thanks for the watch time, and sorry for your lost minutes
@@AirbnbAutomated….. I’d rewatch it again and again because you’re that good. 👍🏾
Thank you!!
You can’t negotiate free months rent with a property management company that’s 95%+ occupied… They will laugh at you
Love
This is easily the cheesiest of cheesy business models! I think air bnb overall is great but I’d be pissed if an air bnb next door popped up ran by a RENTER!
They have no stake in the game. Your behavior completely changes when your name isn’t on a lease but a 20-30 year mortgage. This is wrong and I think these guys are going to go upside down with the current recession
And clearly they’re doing horrible with how defensive this video was
All obvious things. If you’ve looked into this for even a little bit this video isn’t for you.
🔥🔥
$25/per elean. Sorry you are lying.
Hrrrrmmmmmmm.....
So you're cheap with house keepers.
No. We’ve almost always paid them more than their last job. And since we aren’t a charity, that’s positive.
So you are suggesting to get rid of co hosts. Do you have training on how to be perfect host? Especially with all the needy and horrible guests that what only complain to get money back.
I have training enough for homeowners to become self sufficient yes
Hahahaha! $12-15)hr.....what a joke.
Silly necklaces, grow up
But, daaaad
Man. Its hard to feel good about this guy. His advice is to fire your host partner, underpay your housekeepers, and stiff your land lords for 10 weeks rent.
And then you too can profit off the misfortune of others.
I’m teaching how to survive, not how to get invited to dinner.
@@AirbnbAutomated lmao well said