FAR 268 Notes Rich Munroe AirBnb
Short Term rentals are a hot topic right now. Today we are doing the first of a two part series on them with a focus on AirBnB. Our guest is Superhost Rich Munroe of Diamond Edge Properties. He has his own properties and manages properties for other AirBnB hosts. He’s coming along shortly to discuss the ins and outs of short term rentals and help us understand the amazing potential of this investing method.
And do you know what an AVM is? You should, because it’s about to be involved of 70% of single family home transactions. The acronym stands for Automated Valuation Model. The problem is – AVMs are generally unreliable and can often create problems rather than solve them. I will explain.
Realogy is back in the news – this time not about their lawsuit against Compass. This time they have trouble of their own. Purplebricks is closing shop in the US, and we have an engagement announcement – Redfin and OpenDoor have announced a joint project in two cities. What that is and what it means to you is coming up.
Plus if we have time I’m going to share with you some towns that will pay you to live there and a few places you can get FREE land.
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Expected Air Date: 7/11/19
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and by Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital Solutions. Calm and now here’s that flipping America guy Rodger Blankenship a little everybody how’s it going out there.
Short-term rentals are a Hot Topic right now and today we’re going to be doing the first of a two-part series on then with a focus on Airbnb.
Our Guest is super-host Richmond row his company is Diamond Edge properties he’s right here in the Atlanta area and also works out of Gainesville Georgia.
And no that’s kind of in the Atlanta area he has his own properties any managers are the properties for.
Are there Airbnb host he’s coming along in a few minutes to discuss the ins and outs of short-term rentals and help us understand the amazing potential of this investing method.
[1:27] And coming up next week Pam Odell is going to join this Rich will be back and we’re going to talk about some of the legal issues set
are coming up around Airbnb and the controversy that is surrounding Airbnb and the short term rental industry in some areas with
it will get into a little bit today but we’re saving most that conversation for next week in part 2 of the series do you know what an AVM is you should.
Because it’s involved in about 70% of single-family real estate transactions an AVM is an acronym that stands for automated valuation model and here’s the news that’s not really news,
most of them suck,
the problem is avn’s are generally unreliable and can create problems as much as they can help solve problems but there’s some news out today they’re starting to try to make them better.
[2:21] No not told you a couple of and I’ll get to that in a few minutes but I told you a couple of weeks ago that reality was suing compass and,
Compass apparently according to reality is up to some pretty nasty things in the business but now reality is back in the news and they’re in trouble on their own
and I’ll get to that in a minute purplebricks is also in the news and your thing in purplebricks who’s that well,
they’ve decided to shut their operations in the US and I’ll talk about that I’ve got some news about Redfin and open door they,
basically announced an engagement they’re kind of going steady and two cities Arizona and Phoenix Arizona and Atlanta Georgia and I will get to that in a few minutes as well in the new segment Plus.
If we have time.
[3:09] I’m going to share with you some towns that will pay you to live there and a few places across the country where you can get land for free and also if we have time.
It’s time that we check in with our good friends out in Kalispell Montana but we call him our good friends they don’t even know that we’re tracking them but just if you’re a fan of the show you’ve been listening for a while,
I latched onto Kalispell Montana about the probably a year-and-a-half ago,
to track what’s going on they’re mainly because of the name of their newspaper the Flathead Beacon.
I know it’s a geographic reference out there but I just love thinking about a newspaper called the Flathead Beacon and the Kalispell Montana we’ve got some news from there and I’m in a real estate report coming up in just a few minutes.
[3:57] I think that be minutes is now because we’ve got the conversation coming up with Rich and I’ve got some of your questions I need to try to get to today so let’s do the news.
[4:12] Open door and Redfin joined forces to begin buying houses in Phoenix and Atlanta
now open door and Redfin have been in the news quite a bit lately and I talked about them on the show from time to time and we did an entire show on the eye buyers and I don’t have a lot of respect for what they’re doing cuz I believe it’s a business model that’s essentially based on,
deception it may seem like a surprising partnership between these perhaps competitors in the.
Market but Open Door in Redfin and decided to join forces and the article doesn’t say this but my speculation is
this is an attempt to try to get up enough strength to compete with Zillow Zillow recently entered the ibuyer market and they have enough size and profitability to crush.
Open door and knock and offerpad.
[5:06] But that’s just speculation on my part now the companies announced this week that the homeowners in these two cities will now be able to request a direct offer for their home from open-door
through with red fins website was easy for me to say red pens website and mobile apps,
with this partnership home sellers will have the opportunity to compare listing their home on the open market with a full-service Redfin agent or receive an instant offer from open-door and skip the process of listing all together.
The company said in an announcement by presenting a complete set of selling options open door and Redfin are empowering homeowners to make the best decision based on their needs and situation.
[5:49] I applaud that I think that they’re still a group of homeowners that are left out then we start thinking about the implications of this for Real Estate Investors that buy single-family fix and flips.
I think that this really doesn’t touch our Market because,
if you’re going to sell your house to Open Door one of the ibuyers after you put it in the contract they’re going to come to your house and they’re going to tell you what you have to fit.
In order for you to get that price so you’re going to have to make some repairs and some improvements basically leave the house in the condition that,
Open Door will then be able to go sell your property without having to hire their own rehab group that’s a little counter that’s that’s different I’m not saying it’s necessarily bad the only thing I don’t like about
this process is the fact that they’re deceptive about it but.
[6:37] And you know they don’t tell you all that stuff up front you find that out later on after you’ve already signed an agreement to sell the house of them now you don’t have to go through you don’t have to make the repairs that if you don’t make the repairs then they’re going to reduce the the offer.
Down to drum roll please very similar to what.
[6:57] A regular real estate investor would offer you the other thing about Open Door is they there are a lot of properties and just don’t qualify that be a minimum age you have to be in a certain area,
you know I I talked about rich our guests coming up in a few minutes that he works in Atlanta and Gainesville Gainesville is around Lake Lanier for those of you not familiar with the Atlanta geography Gainesville,
is about probably 40 miles Northeast of downtown Atlanta and there is a large man-made lake their Lake Lanier it’s a big source of boating and and
activity for people really it’s it’s now become a bedroom community to Atlanta,
and almost a suburb I don’t think people really commute from Gainesville to Atlanta everyday but.
You don’t get out into the country before you get from Atlanta to Gainesville it’s all Suburban between.
Downtown Atlanta where we are right now and they’re however.
[7:52] Speaking with someone yesterday about this who tried to sell the house to Open Door out there in Gainesville open open door doesn’t go to Gainesville and so they stay pretty much in the,
metropolitan areas that again is not a criticism everyone is entitled to do business where they want and not go where they don’t want that’s fine
the only problem I have with
the ibuyers is this deceptive there there’s a deception about their fees and about what you actually have to do and how profitable it’s really going to be for you.
And I’m not saying that all Real Estate Investors,
are equally are oppositely honest because they are not I’ve often said you heard me say it on the show that a lot of people get into the real estate investing game because
they lack the moral to become used car salesman so there are a lot of dishonest people out there.
[8:46] I just hate it when it’s institutionalized and built into a business model.
[8:52] To open door and Redfin had this partnership going in Phoenix and Atlanta right now and if it goes well they plan to spread it to other places and so we will see.
I was just going to impact us as single family Real Estate Investors
probably not much not anymore than it already does I will say that we have lost some opportunities to buy houses to open door and knock and offer pad simply because they offered more money
the disappointing thing is to realize that in the end those people weren’t ending up with more money because they had to make repairs to the houses themselves.
[9:32] Okay let’s talk about adm’s abm’s are about 70% of all valuations and.
The problem is they have not.
Been that great automated valuation model is also often come under special scrutiny as mortgage experts seek to increase technology in Industry while warding off the possibility of another housing crisis.
[9:57] 11 AVM just go to Zillow and look at the zestimate and that is not only is an example of an AVM that’s an example of the problem with abms automated valuation model uses
it it takes the rules of.
Appraisals and tries to create these data points in the collects the data points and then tries to just.
Use machine intelligence to derive a value for the home in the problem that you seen it look I’m not trying to be critical of Zillow here I have a lot of respect for Zillow in the things that are doing and I know that they’re working to try to improve this but the problem is.
[10:37] You inevitably end up with things that a machine can’t tell the difference from.
It should be able to but these are not data points that have been considered a lot of times Zillow will use new construction and they may have a,
that property that’s a wildly different age there maybe and this is a lot harder for a machine to distinguish there may be a wild difference between the properties just across the street from each other,
maybe one backs up to a noisy commercial area or maybe the one on one side of the street is sitting on a lake front or Golf Course.
Those things are difficult than and still need a little bit of human interaction to get just right.
I’m so this is one of the things we say is there a lot of useful things that you can get from Zillow but the thing that you should ignore is the zestimate.
And again Zillow people look I’m not trying to be critical you know what the issues are you know the problems are and people who rely on the zestimate to.
To try to sell their home with for sale by owner or to go to a bank and try to get a refinance this based on that number Come Away disappointed quite a bit.
[11:46] But of course the industry is learning in some really bright minds are working on this I know that the Zillo is working hard to improve,
the zestimate Adam data has added another 40 or 50 data points to consider it with their AVM.
And there’s an a coming out there called House Canary that is doing some groundbreaking work in a vm’s I just want you to know,
what an AVM is and understand that it’s going to be a factor in the future and they’re going to rely on it more and more
I’m not saying that this is the end of on-site human appraisers
I’m not sure that will ever go away but definitely an AVM is going to be used in lending industry and you should be aware of what it is,
we’re about at a time on the new segments here so I’m just going to tell you a purple bricks is shuttering its out,
operations in the United States I meant you this for two reasons number one purplebricks is just a cool name anytime a company called purplebricks is in the news you got to kind of make fun of it but,
also because it is a flat fee operation is a flat fee real estate company and they just can’t make it.
[12:56] I had a realtor that work was he 4 years old hundreds of my house is for me at with a flat fee and I told him I don’t know how you’re making any money and he said well I’m not really making any money on your listings but my sign gets in a whole lot more yards because of you
and that brings a lot of other customers to me where I do make money and so I thought that was pretty shrewd but I don’t think purplebricks
is really leveraging that in that way there just kind of proving that the straight out flat fee
did not work in their case so bye-bye purplebricks okay I’ve got more to say about reality and I’ve got some some cities that are going to pay you to live there and some free land,
but it’s going to come up after my conversation with Rich Monroe because in just a couple of minutes we’re going to talk about what’s going on with the Airbnb industry
and how you can turn a rental property into a livelihood and not just cash flow a few hundred dollars but maybe,
turn the house into a source of tens of thousands of dollars of income,
well that’s coming up right on the other side of this break I’m Roger Blankenship the flipping America guy and we will be right back.
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[15:49] Rich Monroe welcome to the show glad to have you here man and thank you for taking time from your schedule to join us I know you’re busy right now right.
[15:59] Very busy we’ve been very active with setting up European bees and where
every two weeks we’ve got a new one coming on board so we’ve been continuously busy okay let’s just Dive Right into this topic re Airbnb you know,
when I started this show 2 years ago someone sent in the question to me and what about what you think about vacation rentals and at the time I had studied vacation rentals a little bit and I thought you know
if if you manage to get your mortgage paid out of it there you’re doing pretty well but I don’t see it as a viable income thing that was just two years ago and now.
You can make a living with short-term Rental Right.
Oh absolutely you can make better than a living and ironically was about two years ago that I started looking at the short term rental model,
and at the time my wife and I were on our way to get probably seven or eight traditional rentals and we were adding to that inventory.
We started looking at it was simple math I mean you can have a three-bedroom home that you can rent for your 902000 bucks a month.
And that same free by better mom to generate between you know 2800 3000 and gross rental income from short-term rental so for me it was a simple map.
When you can do to to ask soon after three times your.
Revenue for short-term rentals instead of traditional box okay so just yesterday this came up with a several times with with people that are lunch meeting and.
[17:25] I also one of my students is going through this himself and he’s thinking about you know he’s got a flip that
really not working out that he’s got some problems that’s a contractor problems and budget overruns things like that so he’s thinking about refinancing and putting it into the short term rental playing but this is the number one question I get.
How certain are these numbers.
[17:45] Absolutely so that’s a question I get quite often as well there’s no and that’s part of why it’s taking awhile for traditional lenders to basically get comfortable lending off of that Revenue stream because it is very inconsistent.
One thing I can tell you that I typically do though I like to look at things conservatively worst case scenario and so when I do an analysis and I do a 12-month forecast,
I’m looking at what’s the bare minimum number that we can expect with no guarantee because you know these things a lot of these bookings occur within a day or two of the,
so there’s not an easy way for you to say six months out this is what it’s going to do however but I look at it you can basically look at percentages of occupancy depending on the area.
I am the type of property and basically do a conservative estimate from there so.
You know in some cases that conservative estimate a B-52 60% of occupancy,
historical data that shows that you going to get that consistent type of
I like that kind of brings me to my number to go to the number to question I get I think I have an answer for this but I want to hear yours people say well even here in Atlanta Georgia
Atlantis not really a vacation destination it’s a place to spend the night on your way to the vacation how can an Airbnb work right here in one of the suburbs in Atlanta Georgia.
[19:14] Right so if you think about it from this perspective anywhere that there’s a hotel.
That’s doing business and any suburb Suburban City you’re going to also have folks are doing Airbnb.
And there are people that are traveling to Atlanta for.
[19:32] Weddings funerals are you named it they’re coming in and for them to stay in a four or five bedroom home versus work by hotel rooms,
yeah you’re looking at about half the nightly rate when you do that as a family or just a lot of business hours as well as different conferences,
so a lot of folks kind of think all will if they’re not going to downtown then I’m going to Midtown to see the sites that there’s no reason for someone to come here but that’s actually the same exact all the Suburban cities,
in the United States as well as globally.
You know they’re experiencing this Airbnb phenomenon where folks are setting up their homes to accommodate guests.
[20:18] Okay forget it. You know that’s a good answer now I’m wondering though what’s the minimum number of hotels in a townhouse small of a town would you go to.
[20:27] Well yeah oh it’s happening in towns where there aren’t necessarily hotels but you know so that I wouldn’t just a bad as the as the Mainstay but there are some remote locations,
that lend themselves more chill application type real property that would be a better use in terms of,
I rather than taking advantage of problem so that the lakefront Mountain front property the store mode.
Are those are still good candidates for this type of business because you can cater to more but the patient has recliner so that part of the country,
okay well I’m all right I was thinking of it this way my son went to Bluefield College in Bluefield Virginia.
For a couple of years and the town has a Best Western and I think of a Quality Inn or one of those in that group you know and that’s it.
Bounce the town has a blue field and also Bluefield state colleges in town as well so it’s a little small college town in Western Virginia kind of out in the middle of nowhere.
What Airbnb work in a town like that.
[21:33] I probably would but when I talk about occupancy levels you’re probably looking at more 30 40% occupancy then 60 or 70 and so you just have to do your bath and see at a $100 nightly rate,
a worst-case 30% occupancy per month,
do those numbers make sense for you or is that property better suited for a traditional rental and locking into a coma.
You’re talking about stays usually have a weekend or or no more than a week is that correct.
Okay 3 to 5 days will you know here in Atlanta Georgia and I’ve heard this from a number of sources now there are people that are looking for properties to place into service for the movie industry and those would be people that would come for a month or two at a time.
[22:24] Is Airbnb a suitable model for that or is that something completely different thing as,
as I focus specifically on Airbnb we do have film industry folks that come into Atlanta a lot of times it’s the the lower projects that are 20 to 30 days,
and I build access through Airbnb and then get that way but leave for the larger broader audience of film industry folks,
like you mentioned it’s more 2 3 4 month projects
and so that’s usually kind of separate event away from Airbnb not a lot of those bookings are in a hurry because I’m just curious are you negotiable with people if they want to stay for three weeks.
[23:07] Yeah so we have a standard discount pricing and place that if it’s a week or more we will do a 5% discount or if it’s a month or more with you 10% okay all right,
looks looks a kind of back up a little bit and.
Answer this question somebody’s listening to this now and they’ve heard of the short term rental thing but they have no idea where to begin where do you begin what’s give us a step 1 2 and 3.
[23:35] Well step one two and three very simply if you never used Airbnb the next time you travel you should use it as from the guest perspective so you can understand,
the platform you know there was a pole that was done by Airbnb a few months ago,
and 67% of the general population still don’t know what Airbnb is like so the fact that we are all in in real estate and do a lot of traveling know about it but the general population don’t really know.
Is getting a better understanding of the platform itself is the reason why your for B&B has been successful and basically grown as quickly as they have something like they’re almost 6 million listings now why.
They have more of a community feel set up in terms of the guests that come into the home,
they’re going to raid you as a host I give you a review process and you as the host will review the gas and so there’s a concerted effort to have more of a community involvement so that you.
Give me the route for the Gaston that way was on the booking platforms that that really don’t have that as a part of the factor and what you’ll get there is a lot of folks that are just trying to,
shopping for the best price for looking at the last minute bookings and it’s a different clientele so the first step is understanding the community and its,
reason why they have been successful as an investor.
[25:03] That you can tap into we get charged 3% on our gross rent or the Airbnb platform.
However I look at that as a huge value that they bring the customers to us.
Are they provide all of the payment collecting information from the from the gas.
Any type of major resolution issues that come out they manage the resolution process they have a million-dollar insurance policy.
That will reimburse you as the owner of a property for any property damage during that guests stay,
so there’s a lot of value that’s brought to the table from Airbnb for that 3% fee that they earn on hold booking.
[25:44] You know I can tell you this that having dealt with a lot of other host throughout the last year or so.
Even those that are experimenting with other platforms are still going to get about 80% of their bookings to the Airbnb,
and then it goes back to the reason the reason for their success so I know it’s a long drawn-out answer Rodger but then stop one is blurry Airbnb
yes and you’re saying learn it by go and go and stay and one but suppose that you’re like the people that were at my lunch yesterday that they’re ready now and they want to dive in but they
they don’t know what to do I told him to call you.
Yeah absolutely I’ll be happy to talk to them and appreciate the referrals that you’ve been sending I’ve been talking to a lot of those folks and kind of getting them started so
you’ll be other alternative things if you have a rental property already in place and you better if a renter in it or you just recently we have the property.
Those are excellent opportunities to get started Airbnb began from Posts that basically.
[26:52] Where three college kids in San Francisco and they had a cop and coming to town all the hotels got booked up.
So the beginnings of Airbnb was them renting out their couch and an air mattress,
to a few folks were coming in for a conference that’s really kind of the first to guess run beer for Airbnb was just at.
And so we have even today there are a large number of people on the platform that are renting a spare bedroom.
Or a base and a basement in their house that is got a separate entrance and so depending on where you are,
as far as property goes you even if you had a two-bedroom you can rent one of those bedrooms out so we’re in the process to get the listing started to get involved with understanding the mechanics of how the platform works.
[27:43] Okay well there’s a lot involved I told people this isn’t really a rental program this is a Hospitality business.
Absolutely absolutely this is a Hospitality business and it’s all about the the gas and the reviews that you get from the gas.
I am a super-host and and there’s a lot of other folks that are out there that Bishop roses well then.
[28:06] There are certain ratings you have to have a 4.8 or above rating I have to have a 100% response rate and you have to have zero cancellations and that gets reviewed every 3 months,
yeah and I’m a big a big impact of that is the best experience both want to come in and have a local,
I experienced in that town and they want to be able to check in the properties easily they want to be able to clean property.
Play track in and that’s a big part of this business it’s not just.
You know opening staging a property in opening the door you’ve got to put a team in place that can manage that process so.
Probably the most important team member in this business are business cleaning service.
[28:50] You cannot have a guest check-in and first experience they have is in the kitchen if they open the microwave.
About to take the wings out of here from four days ago guess what that gas is not going to want to stick around after the after sex. In that shows a very critical part of the business to make sure you had a team in place as well as handyman in Maine.
IHG AC goes out it’s not like it’s a 12-month ending in there in 3 days it’s the middle of summer,
are you going to be very responsive to those type of state so it’s definitely,
okay we got to go to a break I’ve got with me Richmond row and we’re talkin Airbnb and the prospect sound terrific the numbers are great but it is not without controversy and we can talk a little bit about the controversy when we come back
this is flipping America will be back in just a minute.
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[32:11] We’re back I’m Rodger he’s Rich we’re talkin Air B&B and short-term rentals now I’m I kind of threw this out their rightful went to the break.
There are some controversial aspects to Airbnb.
A lot of people that are paying attention to the news will know this already there it there are certain areas where it’s become a problem and it’s even been banned and
next week we’ve got Pam Odell joining us she’s a friend of yours but the tell us a little bit about some of these
maybe we’ll talk more about the problems and their Solutions next week cuz when I come back and visit this again but tell us a little bit about what’s happening in the industry that makes it somewhat controversial why is it.
Yeah I’m solutely I think in most Industries there’s always kind of Bad actors that cause issues and concerns and and bring attention and in the short term rental business Steve.
Hardee’s the wild parties that happen the neighborhoods are out of ramshack in a weekend and they’ve got 40 cars in the driveway lot of garbage so these types of our stories that make the news.
[33:24] Is what kind of drives the negative connotation with short-term rentals down the reality is you know we probably got you no more than fifteen thousand hoes in Atlanta metro area.
Back in their living 15000 host.
[33:44] That’s been our various types either they have one less thing or their they’re renting out their bedroom or are they renting out their entire house or have multiple listings like like I do,
so you know there’s a lot of incidents that.
Are positive that are not that don’t make it to the news and don’t make it into the Planning Commission hearings that basically Drive the neighbors to complain you’re one example of that.
I unfortunately in Forsyth County over the last several years there was this exact case and investor had a high-end million-dollar property on the lake.
And basically was out of town and rented this property out without without kind of checking with the neighbors and making sure that they can manage any issues,
and they continuously got a lot of Walmart and so this neighborhood basically took it to the Planning and Zoning commission a few years ago.
And try to get it addressed that way and about a month ago.
Unfortunately Forsyth County has now changed the ordinances we’re back at the beginning of January.
The only time that we’re the only location you can just look around as in Police Zone area.
I was just which basically kind of limits it from annesley I’m going to just go on the record as saying if that ever gets to the courts I don’t believe it’ll stand.
[35:03] Right I think there’s some things on the the state and federal level that will kind of assist with the kind of really rocking some of these local ordinances but got going on.
That’s okay we’ll talk with him about that little bit next week because this is a Hot Topic and we’re going to come back to it,
I want to ask you just from a strategic standpoint and also I wanted to mention that you’re part of an organization with Pam is that she’s executive director and it’s.
S t r o a g a that’s the short term rental Owners Association of Georgia to get that right.
[35:39] That’s correct. Write more deeply next week but.
[35:46] The idea of buying these properties and turning them into Airbnb one of the possibilities is too if I understand right you can lease a property and turn that into an Airbnb.
Else about that.
Yeah absolutely a nut sometimes referred to as rental Arbitrage where you’re basically doing a 6 or 12 month lease or sometimes it could be a three month lease with a.
And in most cases you let them know or what you should do is let them know up front you plan on doing short-term rentals out of that property.
And you basically would sign a lease like any other tenant would and some cases you can do either a performance-based or you can kind of give a premium above the market rental rate.
Japanese pros from a property owner standpoint that make this an attractive offer for you to engage with.
Number one the properties end up being in much better shape than if you had a triple Lantern.
Audi Kitchens on is used as much major appliances on its use uses much that they have these problems that are most most of the time you know eating out at restaurants.
The properties of professionally cleaned in between each guest day.
So you don’t have the opportunity for properties to get you no damn instructors were constantly be inspecting them and getting them.
[37:14] You’ll be a property owner and decide to sell it five years from now.
And the parallel universe if you had that property in the traditional rental situation you’re pretty much got to go back and redo flooring redo.
Can you send it’s kind of like a real small rehab project when you get a chance.
When short-term rentals it’s definitely the most are you going to have very minimal any type of get some pushback from landlords if you go out to rent a house and tell him we’re going to.
[37:43] Turn it but you just saying skate some good answers but still not everyone’s going to go long right.
What’s the numbers game like everything else that some people are comfortable and understand the the opportunity and where they don’t and you know if there’s a lot of folks there that are.
I stuck in their box from a historical standpoint and then don’t want to do anything different so you well that would explain why they’re not turning it into an Airbnb on their own.
Exactly yeah they’re just stuck in their box and maybe they don’t want to be in the hospitality industry they brothers be a landlord,
okay so if they’re the landlord and you got an Airbnb 10 it in there and a toilet floods who gets the call.
Is the owner of that lease or the runner-up that business gets the call and you wouldn’t you wouldn’t turn over to the landlord to fix it.
He’s kind of the value proposition the the certain things that you take on.
[38:40] For that property that official tenant wouldn’t ordinarily do so any kind of minimal repairs that need to happen on a monthly basis.
That’s something that when when folks are doing the rental Arbitrage that they’ll offer up to basically handle you don’t have to call the landlord for those type of small,
that’s another selling point to Haley’s house to me and you’re not going to hear from you get your money and then I can hear from me and your experience most landlords do they want the rent pump or.
Profit share or do you always give up something like that or is that kind of a a chip use to sweeten the pot later on.
Yeah I think it’s you know I’ve always used it for kind of a small bump in The Rance is usually for me workout better but I know that there are other folks that are,
quite successful with B performance profit-share model as well as needs and you can kind of adjusted accordingly.
Okay so those are some pretty compelling reasons why a landlord would want to go ahead and and let you use it I want to shift gears just a little bit,
because this is just a little fun thing I do is mostly guess on the show because rich.
[39:46] I know that when you are a little guy you weren’t dreaming of one day being a short-term rental owner and you but here’s what I do want to know when you were younger,
and started thinking about what you wanted to be when you grew up what was it,
pilot a pilot okay did you ever become a pilot I actually probably log about 60 to 70 hours in a Cessna and started the process.
But back then it was I was also starting college so I was kind of figuring out exactly what I wanted to do so I.
[40:17] But not too much further from 60 or 70 hours like on okay come back to now that you’re a big wealthy real estate investor.
absolutely possibly okay a pilot now that’s a good one I haven’t heard that one much I don’t know if I’ve heard that at all but all right so then when you went off to school did you go to college doesn’t matter what you did or not. Just curious,
Howard University in Washington and what did you study there.
[40:49] Business administration okay so you knew you wanted to do something in business but you weren’t sure what I guess or did you have something in mind.
No I wasn’t sure at that time.
Okay well not really trying to bug you about this I’m trying to point out something most people that are in real estate business the vast majority and think all but one that I’ve ever had on this show
I did when I asked him the question they they had something else in mind when they were little
when they were younger and now they’re in real estate so you never can tell which direction lights going to take you but.
If you end up in something that you enjoy that pays the bills and maybe his chance of giving you Financial Freedom then that’s a good thing right.
Absolutely all right so.
[41:32] I believe I’ve been around you some and I’ve heard you speak it so forth I believe that you are a driven individual you’ve got your own inner motivation but,
it if I could get some just pull back the curtain little bit tell us what drives Rich what what’s in there and it is contributing to this emotional makeup of you that makes you the success that you are.
[41:56] Well you know what I’ve had.
Various businesses for proposed to 20 years now are you I was in the Consumer Debt industry just before the recession that got hammered with the Frank Dodd Act.
I found a baby move into real estate and one of the not much unlike a lot of folks that are Real Estate Investors I mean at the end of the day.
You know we’re taught that the passive income and moving into retirement is something you should be looking out for me a big driving force is being able to build up the,
inventory of any two or three years ago my motivation was you no get up to 20 or 30 through rental properties.
Now that I’m in short-term rentals in that’s my main focus,
we have to go someplace to go get some more numbers but in the short term rental and you’re my wife and I run business know by tomorrow but is in the business she handles all of her staging and decoration managers and staff.
We also have a rehab business we have our sons in mall so we’ve got a free large family got three boys and seven grandchildren.
And driving force for my wife and I are basically to be able to have the time in the flexibility to enjoy.
Do you teach people have to do the Airbnb business.
[43:23] I do have several different things that we do have a monthly meeting in place for a couple of the different via groups are in town.
We also do webinars occasionally and workshops is here in town folks he’s referring to Atlanta Georgia.
[43:42] Jordan sorry about that so we have a dedicated.
And it’s for aspiring folks that want to get involved with Airbnb to learn more about it if it also includes folks it already doing it and talk about
and of course size bust down Rollie of the legislative issues is a big driving force for that
community tax Gumball all right we’re going to get back together next week with Pam Odell and Richmond Road he’ll be joining us again to talk about the legislative issues around Airbnb I’ll be letting you know and I’ll I’ll be talking about that as we get into the next you show so so I’ll be sure to let you know rich thank you for joining us today we really appreciate your time
and up grateful to you for spending that with us.
[44:41] If you’re a real estate investor.
You owe it to yourself to get a profile on the fan the flipping America Network it’s at flipping America network.com.
The profile is free if you’re a buyer a landlord a rehabber you enter what you’re looking for.
Particularly the ZIP codes of interest you don’t have to sit on the app
all you have to do is tell us what you’re looking for your profile includes your cell phone number which will verify and when a property is posted in the zip code you’re interested in your going to get a text message that says,
look what just hit the fan.
[45:19] Everyone should register all 43,000 ZIP codes in the United States are included and you could be finding your next property just by listening for your text we call it snap,
click sold because if you are a seller.
[45:38] You can download the app will anyone can download the app and in the App Store it’s called flipping America Network all one word no spaces you download the app flipping America Network,
and does a seller you could be at the property negotiating a deal with someone that you want to wholesale you can take a few pictures of the property and that’s the snap part then you can,
take to upload this property to the fan put a little information about the property there and.
[46:06] Immediately that property will get texted,
to however many investors have expressed an interest in that zip code you no longer need to manage a mailing list you don’t have to go out and put together your flyers in your brochures or create
ads for Craigslist or other sites just posted in the fan it may be sold by the time you get back to the office that’s why we’re calling it snap,
click sold www.dot flipping America Network. Com register now
vacant land is one of the most overlooked in misunderstood real estate investments in the world. Most people think land
incredibly powerful investment if you know where to find property owners who will sell it for virtually nothing in the good news is these people are actually all over the
place you just need to know where to look how men check out the re tipster club or I will spill the beans on everything I know about the land is,
again that sorry tipster. Club.
[47:24] Alright let’s dive right back into the news are there cities that would pay you to live there yes there are believe it or not even in the United States why would a city pay you to live there.
[47:37] Their population is declining and they need people and they need jobs they want to keep their City going they don’t want to become a ghost town.
And so yes even in the United States there are cities that will pay you to live there the question is do you want to live there it’s just a place where you would choose to go while it sometimes,
you might so I’m just going to give you a list and you can think about it and some of you may be.
We want to think about packing up and heading out and finding a life a new place you know one of the things that cross my mind is if you’re in a business now
where you’re just too buying and selling or you’re selling things through the internet baby you have an occupation that doesn’t require you to be physically present somewhere it really doesn’t matter where you can live so you might as well live in place where they pay you to live.
[48:28] That’s okay as long as you don’t need a lot of nightlife entertainment and find restaurants because these cities are not going to have a whole lot of that here we go Lincoln Kansas.
[48:40] If you were looking for some free land in a picturesque County considered Lincoln Kansas this City offers free home sites to those who meet his demands applicants will need to physically build the homes so this city may be best for someone is willing to take on a project
according to the city of Lincoln’s website Lincoln has the benefits of a smaller town including no serious crime but
big city benefits like Medical Care and broadband internet there you go broadband internet how about Curtis Nebraska.
Like Lincoln Kansas the city of Curtis Nebraska offers free lots to build a home on if you can construct a single-family home within a specified time the lot is yours.
[49:23] All lights come with paved concrete streets and utilities so that’s to hassles you don’t have to worry about
what attraction to living in Curtis is the annual pageant held on Palm Sunday in fact this pageant is how Curtis got its nickname Nebraska’s Easter City
to learn more about Curtis Nebraska and all of these cities by just clicking on the link in the show notes that’s if you’re listening to the show through our app,
remember the app is a free download in the App Store and you get all of the show notes included with it as a part of the deal but if you’re not going to listen on the app then please go listen to us on iTunes podcast because we’re trying to get ranked,
okay next Chattanooga Tennessee It’s Quickly becoming a hub for young Geeks.
Who are willing to relocate the city was recently nicknamed big city.
This means that Chattanooga is the first Western Hemisphere City to have gigabit per second fiber internet accessible,
to the entire city grid with this designation Chattanooga’s created geek move,
it’s an incentive program designed to financially assist computer developers who are interested in relocating to the newly Revitalize communities all I can say is how interesting.
[50:35] When I was a young man and this was back in the seventies okay that reveals how old I am.
I actually enrolled in a college in Chattanooga Tennessee Group Louisville Kentucky went to Chattanooga Tennessee to go to college and.
At that time Chattanooga was a would-be steeltown it was on the way to losing out to Birmingham Alabama but there were steel mills that we’re functioning it in Chattanooga and
I had to tell you one of the things about the steel mills was an overwhelming smell of sulfur and.
As you would come down I-24 from Nashville and wind around in between some of the mountains and come around the bend of Lookout Mountain even if you were asleep in the backseat while your buddy was driving this happened to me more than once you could always tell
you were coming into Chattanooga by the smell.
And now after you’ve been there for a little while the smell kind of paid off you know you became noseblind and but that’s why we referred to Chattanooga as the armpit of the South.
[51:36] The city stunt,
it was bad you did get used to it but when you first drive into town you wonder if you’re ever going to be able to eat there.
[51:47] Chattanooga definitely has changed its image of steel mills are gone and now it’s a gig City and that that’s just all kind of interesting to me this transformation didn’t come quickly
but it is nearly complete it’s actually kind of a cool place to go hang out now here’s a beautiful sounding Place Harmony Minnesota.
Does a place billing itself as a nice place to visit even better place to live sound enticing that’s how the city of Harmony Minnesota describes itself and its willing to give you a cash rebate for building a home and it’s.
Quote big little town in fact if the home you build has an estimated market value over 250,000 you’ll get a cash rebate of 12000.
There are also no age income level or residency restriction so get to applying learn more by just clicking on this link in our show notes and you can go right to it.
And how about an entire state that will pay you to live there Alaska.
[52:50] You may have heard about this it’s not just certain cities in Alaska that will pay you to live there it’s the whole state,
state of Alaska is developed the Permanent Fund dividend in 1976 and started paying out money to residents of Alaska In 1980 this essentially pays people to permanently live there.
[53:07] Downside is yet for only live there although I will say this one of my best friends from high school what is served for 30 years in the military and I asked him one time his favorite Duty station to always hit Alaska.
Alaska without hesitation in the soon as I retire I’m getting back there and I’m going to live there.
[53:24] The nun my friend Jeff he’s an outdoors guy he loves fishing and hunting and there’s plenty of that and in Alaska if that’s your thing maybe you want to think about this.
Investment earnings on Alaskan mineral royalties are paid out to Alaska residents it’s an annual payment in the amount varies every year but in 2015,
637000 residents got $2,000 each since 1988,
the payment has been higher the 800 okay so you may make 800 to $2,000 just for living in Alaska so,
you have to think about you know it’s $2,000 worth it to me to go to a place that has winter 8 months out of the year I don’t know that’s just me joking around or at the bottom line,
in fact the place that will pay you to move there might seem like reasonable to pack your Duds you got some other factors to consider okay.
The money is not that big of a thing really in in the end you need to think about whether or not you would want to live there anyway but I threw out this story just as kind of an interest point for you now let’s talk about some places where you can get some free land.
[54:33] Actually several small cities in Kansas will give you land if you’ll build a house you can even put a mobile home on it if you want to Marquette Kansas would be pleased as punch to give you a second lot of Jason to the first also for free.
Just so you can you don’t have a little garden
Atwood Kansas offering free land to anyone willing to move their family to their community and build a home on one of the Lots Elwood Nebraska with just 761 residence bills itself as a great place to find a home.
[55:04] They’re giving away much in terms of land is worth a look if you want to live in the county seat Marne Iowa Marne Iowa is giving away what appears to be attractive looking Lots with well-established trees do that or someone went a little crazy with Photoshop.
And then if you’re a business you can get land in Muskegon Michigan which has a port deep water port,
and if you can create 25 jobs are going to give you a five acres create a hundred jobs and get 30 Acres so there’s a lot to love about Muskegon especially if you’re Hockey Panthers in minor league hockey team there
The Lumberjacks and Coastal Camden Maine they’re offering a free 3.5 acre lot to any business that will help generate tourism
there’s no corporate income tax or sales tax for the first few years and they’ll even pay your insurance premiums just bring some jobs with you.
[55:57] All right now I’ve got a debate in the time we have left about what to do next because we’ve got a couple of stories that I want to get to but I’m going to go with reality right now reality you know for those of you that don’t know
who I’m talkin about what’s real G and really that’s not a name brand that you hear out there reality is a holding company that
Homes real estate and relocation services companies here are some of their subsidiaries not bet you’ve heard of at least two of these Better Homes and Gardens Real Estate.
Century 21 Coldwell Banker ERA Real Estate.
[56:38] Is stately the website ZipRealty zaplabs South B’s International Realty nrt,
title Resource Group and cartas.
This is a large conglomeration of real estate companies now in the news a week ago I told you they were suing compass for unfair business practices and it sounds like they have a case but,
in the news today reality has been slapped with class action suit for Securities fraud and the suit is is also.
Involved with the Securities and Exchange Commission in folks if there’s one thing as worse than dealing with the IRS it’s dealing with the Securities and Exchange Commission so it’s going to be interesting and.
[57:23] I’m going to have a little fun watching this but I know it’s not fun for the people that are involved you think you want to build a big company.
Think about this you’re going to be in and out of court you’re going to have to lawyer up and and there’s a lot of things that you’re going to do if you build it a big huge company like this I guess the reward is,
you’ll be hiring lawyers while you’re sitting on your yacht or flying in your private jet I don’t know
there’s good and bad to every bit of it but that’s what’s going on with real G and I’m I’m a little broken hearted I didn’t have time to get today to Flathead Beacon up.
And what’s going on with real estate in Kalispell Montana but folks it’s hanging in there don’t worry and perhaps we’ll get to it on the next show,
but that music start starting meaning we’re running out of time for the show today.
And I hope that you got a lot out of it thank you for listening and we appreciate you tuning in will be back next time with more news and information that you can use my folks keep your eyes open because I.
[58:50] Colin Powell says there are no secrets to success it’s the result of preparation hard work and learning from failure.
[58:58] This quote is brought to you today by the foundation for Renewal working together with communities across the country to bring lasting life change and renewal find them on the web at renewal fund. Net and is always your gift in any amount is,
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[59:31] You’ve been listening to flipping America real estate investing for everyone if you have any questions about real estate send them two questions at flipping America network.com,
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