BiggerPockets Real Estate Podcast - 576: Short-Term Rental Roundup: Small Markets, Partnerships, & When to Go “All In” | Q&A w/Rob Abasolo

Episode Date: February 27, 2022

The short-term rental market seems to get bigger and bigger every day. This should come as no surprise, seeing that short-term rentals not only work for vacationers, traveling business people, or anyone else who wants a nice, unique place to stay. But, while the rest of the world is focusing on which mountainside chateau they’re booking for their weekend getaway, real estate investors worldwide are figuring out how they can buy, rehab, furnish, and profit from these vacation rental ventures. With so much competition in the market, it begs the question: is the short-term rental space becoming oversaturated?And, if it is, how can investors get on the ground floor of sleepy markets that will explode in popularity over the next decade or so? Of course, with questions like these, we need our short-term rental and wave-hair-styling expert, Rob Abasolo at the side of Sir BRRRR himself, David Greene. In this Q&A episode, David and Rob will discuss a handful of topics, mostly centered around short-term and vacation rentals. Topics like: how to mix a long-term rental and short-term rental in one property, how to market outside of the top short-term rental platforms, can you convert a regular rental into a vacation rental, and the pros and cons of real estate partnerships. In This Episode We Cover: Buying mixed-use properties so you can combine long and short-term rental advantages Whether or not the short-term rental market is starting to see saturation How to adjust cleaning fees to optimize your booking rate Converting a long-term rental into a short-term rental (and the time it takes to do so) What to do when you can’t find comps (comparable rents) in your area? The pros and cons of real estate partnerships and what to do before you join forces And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Rent Estimator BiggerPockets Forums BiggerPockets Talent Search BiggerPockets Rental Property Calculator BiggerPockets Pro Membership Airbnb VRBO Airdna Rentalizer BiggerPockets Podcast 453: Live Q&A with Brandon and David: Risk, Partnerships, Inspiration and Opportunity of Real Estate Julian Gonda's Instagram Join us for our Q&A Shows and ask your question Invest With David Greene David Greene Team David’s Instagram David’s BiggerPockets Profile Click here to check the full show notes: https://www.biggerpockets.com/show576 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show. 576. When you're investing big amounts of money, you'll never get the same return as you can with small unless you just got lucky on a deal, but it won't be sustainable. So that's just two things to keep in mind as you're moving forward. If you're investing smaller amounts of capital,

you can almost always get a higher return. And if you're putting in more than just capital, you can increase the return on your capital, but go into it with your eyes wide open, knowing that's what you're doing. What's going on, everyone? It is David Green, your host of the Bigger Pockets Real Estate

podcast, the podcast where we teach you how to find financial freedom through real estate. So if you're looking to build wealth and build a better life through the power of real estate, you, my friend, are in the right place. You should check out the website, biggerpockets.com, if you haven't already.

It is a community of over two million members that are all in the same journey as you. So this is where you go if you're looking for answers to your questions, agents, loan officers, handymen, all the resources that you need to be successful. If you want to read blog articles about other people that have found success or are willing to educate you, Bigger Pockets is a place to do it. And this is the podcast branch, that company and that

website. Here today with me to help educate you and take down some tough questions is my good friend, Rob Abas Solo. How's it going, Rob? Hey, man. Man, I'm excited. We have a really, really good episode here. We dive into a lot, a lot of nitty gritty curveballs, as I like to call them. You know, they always keep us on our toes here. We talk about things like partnership. and the implications of a good partnership and the implications of a partnership gone wrong. The true meaning of ROI, is it just money or is it time? What about pioneering a new market? Is it too early to get into a market?

Should you be the one that gets brave and braves a new market all by themselves if there are no comps to support the data? And oversaturation. Is this the end? Is this the end of the real estate market as we know it? So I'm really excited to kind of get into some of these because I think, I think we got some pretty interesting POVs along the way. That is a great point.

Now, if you guys would like to be featured on a show like this, please go to biggerpockets.com slash live questions, scroll to the bottom of the page. There's a lot of instructions. And you can join us for a behind the scenes look at how we record a podcast as well as getting yourself on the podcast. That's going to double up as our quick tip for today is please get yourself involved. We love answering questions. We love when you're here live because we get to dig into the specifics of each caller.

and give advice that is custom built for them. And I don't think that there's another podcast, radio show, anything that's doing what we're doing right now, or people can literally show up and throw whatever pitch they wanted us, curb ball, fastball, screwball, forkball. It doesn't matter. We will do our best to swing at it. And I think that this brings a lot of value to listeners that you're not going to find somewhere else. The whole tried and true, here's my story, here's what I'm doing is great.

But it doesn't really let you dive deep into the specifics of where the person's at. And that's what's different about these shows. So we want to keep them going and we want to hear what you think about it. If you're not already doing so, please follow Bigger Pockets on YouTube and leave a comment below and let us know what you thought about what each person said. Tell us what you like. Tell us what you wish we would have done different. Tell us what we didn't cover that we should have covered so you can get the education that you need.

Before we move on to the show, Rob, you have any last thoughts? No, I just want to tell everybody, definitely make sure to catch this on YouTube because someone revealed there at the very end that there's, There's a bit of a hair shimmer with every good question that's tossed out. So be sure, comment every time you see my hair. That's right. You don't want to miss that. Real estate investors, the April 15th tax deadline is coming fast.

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select plans, then send postcards, emails, or call sellers directly. Don't worry if you're new. PropStream also gives you AI-powered insights and comps that are over 99% accurate. So you know, you're making smart offers. Plus, you'll have access to PropStream Academy to guide you step by step. Start your seven-day free trial and get 50 free leads at Propstream.com slash BP. That's P-R-O-P-S-T-R-E-A-M dot com slash BP. Don't just dream about real estate. Make it happen with PropStream. All right, let's bring in the first caller. Hey, David, how are you? How's everybody doing? I'm great. Thanks for asking. Rob, how are you? Oh, man, it's a beautiful day in the neighborhood over here.

David, I'm so proud of you. You are doing such an amazing job saying Louisville, Kentucky, because that's good job. Pat yourself on the back. So my question is tied in a little bit with your webinar a couple of weeks ago or whenever that was where you were analyzing a property in Louisville, Kentucky, and you were talking about how everything is appreciating at a great rate, this, and the other. and that area is a, it's a tricky area. So that ties into the fact that I want to house hack where my nephew has been stationed.

He's in South Carolina. And I want to get a property there, multifamily, where I get a long-term rental, a long-term tenant, and then a family can go and visit anytime they want in the other half. So my question is, what are the main things I should be focusing on in terms of house hacking at a long distance? All right. Well, the first thing we have to go over is the phrase house hack is actually used when you're living in the house yourself. So it's for a primary residence. I think what I hear you describing is more of like turning a house into two different units. Is that accurate? Okay. So that's not technically a house having me, but I totally understand. And that's actually a common mistake because it sounds like you're hacking a house up into several pieces, which is why it's called that. It actually came from Brandon created the phrase. It came from like a computer hacker that can like get into a program and make it work for them. It's a way to make your house. work for you. You'll hear this said with like a credit card hacking or something like that, a way to make your credit card work for you by getting you bonus points. That's where the

origination of that name came from. But if what we're talking about is buying a mixed use property, which is what you're talking about, you're saying you want one side to be sort of a long-term rental on the other side to be a short-term rental. Is that right? Yes. And I've actually found a property using a lot of your criteria. You know, you want to have plenty of parking and lots of square footage, lots of bedroom. So I've actually found a property online that I feel like I can maneuver, but I just need to, and it needs a tremendous amount of work as well. So several pieces to the puzzle as to how I can make this work. And I haven't been able to find an investor-friendly agent there. So that's tied into the question as well. Rob, why don't you start with this one? Because

this is right down your wheelhouse. And a lot of the questions and concerns Dana's having are Wednesday, you and I literally talk about. Yeah, for sure, every day. So, hi, Dana. How's it going? A couple clarifying questions. I want to ask just about your overall goals here. Is your goal to make money on this property, or is your goal to just have a property that sort of breaks even? And, you know, as long as you're covering expenses, you're happy. Great question. As long as I'm covering expenses, I'm happy into break even. The most important vision for this particular property is for the family to just to be able to go visit my nephew whenever we want and not have to pay to stay in a hotel. Yeah, yeah, that's great. Well, the good news is I think that's super possible.

Typically, whenever I'm looking at a deal like this, I'm looking for something that has, you know, it doesn't necessarily have to be a duplex. It can also be like a house with a detached bonus space or bonus room. I prefer for two separate entrances personally, something that is somewhat of a duplex. and usually I'm running my calculations to see if this property is going to work on a long-term rental basis. So a lot of tools out there that you can use. I think rentometer is one of them. You can go, you can plug in your address and it'll sort of spit out the market rate on a long-term basis. And so that's how I would try to make the deal work if you're just trying to break even. See if you can find a property where both units will help you pay that mortgage.

Now, for me, obviously, my strong suit here is Airbnb. So I like making a little bit of money if I can. I'm typically targeting properties that are going to be somewhat of a, like at least like a 20% cash on cash return. And I think that Airbnb definitely opens up the opportunity to do that. So if you want to run the numbers based on a split use long-term rental and short-term rental, what you would then do is take the bed bath configurations for the long-term rental. And then you would do, and you would run that through the rentometer like we talked about. And then on the other half of it, there are so many tools online that you can use to run calculations based on a short-term rental. One is called AirDNA. You go, you plug in your

address and then the bed bath count. It'll kind of project what you'll make on a short-term basis. And then you can kind of average out both of those to sort of see where the cards may fall with that specific properties. Now, when you're mixing a short-term rental on a long-term rental like that, I will say that for the most part, covering your mortgage is going to be something that you can definitely do unless you're just buying in a very, you know, thriving location and all. all that kind of stuff. But I think what you want to look for specifically when you're getting into something like this is try to reach out to your realtor and kind of ask them about their Rolodex, if you will. Ask them if they know any good cleaners, any good handymen, any good contractors that

you can have on call should anything happen while you're out. But I think that for the most part, if this is one of your first deals, for example, managing this on your own from a distance is actually quite easy because what most people don't realize is when you're doing any kind of short-term rental or anything like that, your cleaner kind of acts as your property manager. So as long as you have a good cleaner, you're paying them, you know, a fair living wage. I never negotiate with my cleaners. I always like them to be super, super happy. As long as you have a good report with your cleaner, they're always going to report back to you with anything that needs maintenance on the property, anything that needs to be repaired or a place or anything like that. If you find a good cleaner,

then you'll have pretty much a self-sustaining and something that's a property that's also very easy to kind of run from afar. So between your cleaner and your handyman, I think you'll have a pretty smooth operation. Awesome. And I think I heard you state that if someone, if someone actually goes in the property and then they let you know what is wrong, like you immediately send out whatever it is to fix it. So that was good information as well. I do. I mean, it depends. Like a lot of that I try to troubleshoot, you know, at the beginning before I send out a handyman. I mean, 99% of the problems that I have, especially in short-term rentals, are usually things that can be solved for just by me like troubleshooting it with them or just communicating a lot of basic things. Like, you know,

hey, that's remote's not working. Well, it's probably the batteries. And then I point them to, you know, to the cabinet where the batteries are versus sending out a handyman just because everyone's time is at stake here. And, you know, I'm fine giving up my time. But if I started involved, my guests. I start wasting their time. Everybody gets kind of grumpy and it's not quite as smooth. So I try to have a lot of systems in place that create redundancy and have backups to my backup. So anytime I'm visiting an Airbnb, even if I have a whole pack of batteries, for example, I'll always buy a new pack of batteries because those are the one big pain point that I have in my entire business. That's funny. That's awesome. All right, Dana, any follow-up questions after getting

that sort of rundown from Rob, the Rob rundown? The only other thing is, should I be concerned about the area? Like I was saying with the property that you were analyzing in Louisville, what should I be concerned about in terms of like this particular property that I'm looking at? It needs about $100,000 worth of work, but it will really fit my needs. So in terms of, you know, the after repair value and things like that, should I be concerned about that? Okay.

So I'll answer this one quickly because. we have another caller. We got to get him before they go. But here's a couple piece of advice for you to take into mine. If you're going to dump significant money into a property and I would consider a hundred grand significant, it has to be in a really good area. As a general rule, do not dump money into a property regardless of how well you think it's going to cash flow afterwards if it's not an area where it's likely to have the ARV increased from that $100,000. So if you're an area where everything else is low and this one takes $100,000 to get it up and running, don't put $100,000 into that property. Save and put that money into a property that is in a better area that will

pump up the ARV. And the other thing is that if you're in Louisville and there's a lot of cash flowing opportunity, don't fall in love with any one specific property and try to make it work. If you're in an area where there just isn't a lot of that type of deal and so this is what you got to do, that is the case for me in the Bay Area. I'll make it work. I'll figure out a way. But if I was where you are and I'm like, man, there's a lot of single properties around here looking for a little bit of data in their life. I would absolutely continue dating. until I committed that $100 grand to that one deal. All right.

Off to the dating game. There it is. Thank you, Dana. Thank you all. Rob, I watch all of your YouTube videos. Thank you. And you are actually a huge inspiration for why I started my short-term mental, which I literally just started in January, like two weeks ago.

Woo! How's it going? How's it going? Is that what this question's about? Please tell me good things, right? Yes, yes. So we're super excited. I'm from Austin, Texas, but we have our short-term rental in Canyon Lake, which is Texas Hill Country. And it is definitely slow because obviously we launched in slow season. So I kind of knew it would be slow. So trying to stay positive here. But now that we have actually been doing it, I just wanted to get some input from you and your thoughts on if you feel like the short-term rental market, is starting to get saturated because I've been looking at a lot of our competitors and even

one of the houses right next to us is actually an Airbnb as well. They've been there for a while and they said that it is just really crazy seeing all the people that have come into the market. And I really like, I mean, every time we travel, we do Airbnbs. And so I really like the model and want to stick with it. But I do get concerned using these apps like Airbnb and in VRBO where they control how you come up in the SEO, knowing that a lot of people are starting to get into short-term rentals. Sure. Yeah.

So I guess let me, let's kind of unpack that a bit. So yeah, you launched a lake property in January. So it's expected that that's going to be a little bit slow, which is a good thing. I would really take that as an opportunity to optimize your listing as much as possible. I think a lot of us get into these seasonal places. and we're like, oh my God, it's slow. What am I going to do? But if you realize that you have two or three months to get any repairs in, any remodeling in, it can actually be a really, really great opportunity to get your Airbnb in tip top shape. So I think just stick it out here.

Once March comes around, I think you're going to be doing okay. Now, in terms of market saturation, this is, believe it or not, the number one question that I get from every single person out there. And I totally understand it because, you know, there's a lot of new Airbnb's popping up every single year. What I want to say is that the concept of short-term rentals has been around for a long time. It's not like it's a brand new thing that came around. But the popularity of short-term rentals has really come about in the last 10 years or so when Airbnb came out. I don't worry about market saturation as long as I'm doing my job. And what I mean by that is when I'm going into a new market and I'm taking a look at my competition, the first thing that I'm going to

do is I'm going to gauge myself against the competition and say, are they marketing themselves correctly? So what this means is, have they gone through the effort of staging their property with high class furniture, with high quality furniture? Most of the time, if you are in just any regular place, the answer to that's going to be no. Most people will be thrifting or going to Craigslist free and trying to cobble together the furniture in their, you know, in their listings. Two, Did they pony up the cash to get professional photos done? Again, most of the time, the answer is no. Most of the time, people like taking photos of their Airbnb on the iPhone 3. They'll spend $10, $15, $20,000 on an Airbnb. And then they'll say, yeah, I don't think I can afford $300 on professional photos. Three, I take a look at the listings. Did they actually spend time to copyright and really just make the listing copy sparkle? Most of the time, the answer is no. They'll write two little sentences. So I like to go in and take a look at my competition. Now, if I go into Canyon Lake and there's a specific neighborhood that I like,

well, if every single person has beautiful photos, beautiful interior design, great listing copy, and they're booking, I'm still going to probably invest in that area because if they're booking, then that means that people are wanting to book in that location. But if they have all that and they aren't booking, then maybe I move on. So I think market saturation will really start to affect you. if you stay married to like one specific spot or pocket in the actual market that you're looking at. Market saturation doesn't really affect me because when I find myself in an area where I can't be competitive, that's fine. Maybe it is saturated. I move on. And that's why I start compiling lists of my top five markets. David and I right now are looking at a couple markets right now. I have

realtors and, you know, basically resources on every corner of the country because, yeah, sometimes it's a little tough to get into it, but that's okay because there are a million houses in the United States. So just find one that works for you. All to say, yeah, it can be. But I really find the power of good marketing do the work. Good marketing works 100% of the time, truly. It does in this industry, I think. Right. Yeah. So I've followed literally everything you said. So we have decorated it, really nice to try to make it nice because we did notice a lot of the properties in the area not ragging on them. It's just like it's like they use their parents furniture, you know, it's not cute. But when we go travel, like I'm specifically looking for things that are cute.

And we just launched this. We don't have our professional pictures yet, but they are coming this week. So. And that's okay. And let me just clarify, it's totally fine to take cell phone photos in that first week or two while you wait for a photographer, but some people just never actually switch them over. Right, right. So I guess like my question in terms of like everything being saturated is would you ever go out, like so far out to create like Instagram pages or something to help the word get out. That's not just depending on Airbnb to boost you in the SEOs because I know there's ways to get boosted.

but I'm just trying to think of ways to market it beyond just those platforms. That's a good question. That really does get asked quite a bit too. If you should go direct or if you should create a social media handle, you know what? I'll be honest. I've got two social media handles for two of my properties. I have, I think, 14 or 15 at the moment. One of those handles has about 2,000 followers. The other one has about 4,000 followers. It's great. I'm grateful for the followers there. It's a good thing. But when you're first starting out, creating an Instagram account and posting photos could help you get more bookings, but nothing is going to help you get more bookings than having a completely solid, like, listing. So I get a lot of people that will come to me

and say, hey, I'm not booking. I want to create this like Instagram account. You know, maybe if I can get some followers, I can start getting bookings. But the reality is like when Airbnb listings really start getting that traction online, it's a lot of the, it's a lot of whenever they're kind of a little bit bigger, right? They go a little bit more viral. They have maybe 10, 20, 30,000 views and reposts and they get in the real game and those go viral, TikTok viral, all that kind of stuff. It's possible. But a lot of people take their attention away from like the main task at hand, which is to just make sure that their listing is kind of up to par. Now, I understand like you don't necessarily want to give like all of your attention to Airbnb because

it's one platform. But I also want to remind you that like Airbnb and VRBO, they do all the marketing for you, right? And they own like 90% of the market share. And their actual booking fee is relatively low. It's like 3% to 5%. So they put you in front of millions of people, you know, from an impression standpoint. So I think it's better to just work with them versus trying to hedge your bets against. But I don't necessarily mind creating a direct booking website. There's just so many logistics that are needed with that, that people don't think about like insurance and concierge services and customer service and all that kind of stuff. So once you start laying all those different logistics, it kind of becomes another job, you know? And so that's why for me,

I don't necessarily mind going with the main OTAs, online travel agencies. Right. No, that is all super helpful because people have asked if I do direct booking, and I'm like, I already have a job plus this Airbnb. And then just one quick last question, because it's hard to do. to ask anybody, especially if they're in the area because, you know, they're competing against you. But as far as, like, you actually brought up the cleaners on the last question. And you said you don't really ever negotiate with them because you want them to be happy. Obviously, like, you want them to do a good job. And so we're kind of in this weird phase of launching it brand new. It's in slow season. And our cleaning fee, like if we were to put our cleaning,

fee at a rate where we were actually like getting it covered by the guest, it is close to our booking fee that we need to just get booked in the slow season, not like what it will be in the summer. But have you ever just had to lower your cleaning fee so you're kind of eating part of that cost so that you actually do get bookings? No, I have never done that. You know, I might lower the cost of my nightly rate, but the cleaning fee, it is what it is. In fact, I know a lot of hosts I would say 25 to 45% of hosts might even mark up their cleaning fee. But I have never taken a hit. So I would say for that to be worth it, you start looking at things like three, four,

five-night minimums because, right, like if someone wants to come and book your place for a night and it's $200 and the cleaning fee is $200, to stay there for one night, it's $400. And that, you know, it makes sense why someone might scoff at that, right? But if the minimum is five nights, well, now they're splitting that two. $200 over five nights. And so it's much more palatable for people. But no, I've never really reduced my cleaning rate. But at the end of the day, whether you reduce your cleaning rate or your nightly fee, it kind of ends up being the same thing. So that's up to you. If you're not getting booked right now, like I said, it's January in a Lake Town. You're not alone here. Everyone's

going through this right now. I'm in the Smokies right now. My chalet out there did not book a single time in, let's say, like, the last two or three weeks, that's fine. That's why we save up. So all this means is whenever March, April, May, June, July, August come about, save that money, you know, don't go spend it on the next thing where, you know, like pad your bank account and have a little bit of cushion for the January's and the February is out there. Okay. Awesome. Lexi, I think Rob gave you some fantastic micro advice. I would not change one thing about what was said. So for the near future, that's exactly what you should do. and if you want your unit to operate efficiently, this is really, really good for everyone listening.

I'm going to add some macro advice. So don't be confused by what I'm about to say because it doesn't apply to today right now, which is what your specific questions were. But because I can tell your heart is concerned about oversaturation, that's why I want to give this perspective. The first thing I'll say is Rob mentioned short-term rentals have been around for a long time. We used to call them bed and breakfast. You ever heard of that phrase before?

Yeah. It's the same idea. I'm going to be traveling somewhere. I need a place to stay. It's not going to be a hotel. It's a bed and breakfast. You look it up in the yellow pages in a phone book or something, and it was done with direct booking. Part of what's caused the increase in popularity in this is that the technology, specifically Airbnb and VRBO has made it incredibly easy for the person traveling to find somewhere to stay. And that's made it incredibly easy for the person who owns the property to book it, right? So that's sort of acted as lubrication to increase how easy these people are able to get a hold of each other. And then boom, we've seen an explosion in the industry. But that doesn't mean that it will always work that way. There was a time when just having a website for your company was all that you needed to be able to make a lot of money in online sales.

There was a time that email marketing, believe it or not, had like an 80% click open rate, right? Like there's always a period of time where some form of technology increases the efficiency of a system and you see an explosion and then it changes. So I would expect at some point, and I'm not talking about next year to your show now, where we will see a, change in the way technology works. Okay. And when that happens, the model is the same. I got to find someone to stay in this place and pay me for my unit and I have to make it very comfortable for them. But the way you go about doing it will change. We don't have to live in fear of that. Right now, there's no reason to use anything other than Airbnb and VRBO for most cases. And like Rob said,

here's how you maximize them. But I would still plan on the overall businesses. I own a hospitality business and I need people to stay here. So there may be a way where we have to look for other ways to book people in the future. That's just one thing to think about. The other thing is regarding the oversaturation, this is true of any business. Let's say it comes to selling houses and I'm a realtor and you want me to sell your house. And you come to me and say, hey, David, I want to sell my house, but the market's not that hot right now. There's not a lot of buyers looking. It's true. But what that means is that if you want your house to sell, there's still buyers in the market. They're going to go for the best thing they can get. If your property lands within that top era of where the buyers are, they're going to

buy your house and they're going to pay whatever they have to pay to get it. It's when your property starts to decrease in desirability, either location or you're asking too much or it's not in good condition, that you fall below what the buyer pool thinks they can get. And that is where it sits there forever and doesn't sell and it starts to lose value. So Rob's point was, if you're the best option, it doesn't matter what everybody else is doing. And that's what I want to highlight that you should be looking at. As you're getting into this business, don't assume Rob's crushing it with Airbnb's, everyone's doing great. I'm just going to go buy one and it's going to be really easy. It might be like that right now in many cases, but it won't stay that way.

So make sure your property is a great property. It's in a great location. It has great furniture. It's the most desirable one. It's sort of like if the lion's chasing you, you don't have to be faster than the lion. He just got to be faster than everyone in your group. That's what, that's what Rob's talking about when he's describing how he's analyzing deals. He's looking at everyone else. And he's like, man, if these places are just like disgusting and they're booking, if I make a nice one, I'm golden. And that's really what we're getting at. That's how you hedge your risk is you stay in the best markets and you just do a better job

running your business than other people do. And that's the advice he's giving you about getting pictures taken and high-end furniture and giving the client a great experience, making sure there's batteries there. So they're not pissed off at 1 o'clock in the morning when they can't get the TV control to work or the thermostat's broken because there's no batteries. What to expect for the future of short-term rentals? I personally think that people are going to continue to do this more often. I think that communities are going to say they don't like it because it makes houses more expensive and harder for people to buy them.

So if you're trying to figure out not just saturation, I think you should also look into the area that you're buying into and what the political environment is like there. Areas like Arizona are very pro business. Florida pro business, they are very likely to say, yeah, we want people to be able to rent their houses out. They see the higher property taxes they're going to get. They want to welcome that. If you're in an area that's not pro-business, you're more likely to see legislation pass that limits how many days out of the year you can do this or whatever. So don't forget to include that when you're making your decision. If you're buying in an area that's super just traditional, doesn't like change, doesn't like all these people coming in and out of their neighborhoods.

That's where you could get stuck, paying a lot of money for a house and then not able to use it. Yeah. And I would just add to that. Just make sure, you know, as you go into your next investments and everything like that, take a look at travel trends. Take a look at if the amount of people going to that, like that destination is increasing year over year. For example, right now a lot of people would say that the Smoky Mountains are oversaturated. And it's a really fair debate because there are a lot of cabins out there. Traditionally speaking, 12.9 million people have visited the Spoky Mountains.

I think last year it was like over 14 million or something like that. So more people are going there more than ever. It's because, you know, it's in the middle of the country. It's eight hours away from all these different cities. people are continuing to go there. And so I think just take a look at that and stack it up against how many Airbnbs there are in the area. And the Smoky Mountains, there's like 3,000 cabins or something like that. So that 3,000 cabin number is a lot smaller than the 14 million people that are visiting the Smoky Mountains. So I'm just kind of gauging like, are more people going there on a

yearly basis? And how many more Airbnbs are popping up every single year as well, which is data that you can research. All right. Well, you guys haven't so awesome. I listened to. to you both, like, all the time. I do have a client call, so I do need to drop it. Thank you for answering all those questions. How's it go? Christopher? Well, I'm good, man. Love your stuff. I've been trying to study up and get, take notes and everything. And one of the questions that came up was whether to put the efforts of starting the Airbnb into all three of my current long-term rentals and just like just order everything at once, hit them, you know, hard and fast and get them up and running and navigate that all at once or just kind of tease it out with one and

and then go from there and just kind of keep both the long term and the and the short term going. Yeah. So let me ask you this. Where are the three long terms? Uptown Phoenix, downtown Phoenix right next to Roosevelt Row. And then I got one closer to like still Indian Park, kind of like a little venue area. So those are the three areas. Kind of Midtown, uptown, downtown. All in Phoenix, though, for the most part? Yes, yeah, right in Phoenix. Okay, cool.

Well, here's the good news. That's an amazing market for short-term rentals. I can vouch for that market. I've got friends out there. They're absolutely crushing it. You know, generally, my advice to people has always been jumping head first, figure it out kind of thing. But, you know, considering you're new to the game,

I also like to take the approach of crawl, walk, run. And the reason I say that is because, you know, setting up an Airbnb, it's not rocket science. It's not hard, but it is hard work. And so setting one up, you're going to have to go and get all of your different furnishings. You're going to get art. You're going to have to take up all the boxes, break them down, set up mattresses. It's going to really take some time for you to do that. At a minimum, if you're working alone, it's going to take you a week. In a pair, probably still about a week, week and a half. So just in the actual setup time itself, it's going to be a lot. And

then from there, you have to automate it. You have to set up all your automated messaging. You have to hire your cleaners, your Airbnb Avengers, as I like to call them. And so that's like a lot of work to do for just one Airbnb. Now, if you've got three rentals that you want to convert into Airbnb's each, well, then now you've got to do that three times. And that's going to be a solid month of fully sprinting. You know, so I would say if you're prepared for that hustle, it's not the worst thing to consider. But honestly, as I kind of develop and like really kind of change my philosophies on real estate investing and all that kind of stuff, a lot of it talking to Sir Burr over here. But for me, I've really learned the importance of diversifying. And so I really don't think that there's

anything wrong with like keeping one or two of your current rentals as a turnkey rental. You know, if you've got tenants in there, if they're paying rent on time, if you book and you can rent your rates over time or you can raise your rates over time, I think it's okay to do that. that and keep two or one or two of them as long term rentals, turn one into the Airbnb. Make sure you like Airbnb. This is what I always tell like all of my students and everything. It's like learn the model, love the model, become profitable at the model, and then go all in. So figure out that like Airbnb is something you want to do first and that you like it and that you like customer service and you like the grind. And if you do, convert those other two into Airbnb's. But Airbnb is going to

exist tomorrow next year, three years from now. So I don't think you have to jump all in right now because you've got options. You already own these houses. Stakes are pretty low for you to just convert one to the other anytime you want. So I'd say start small, work your way up personally. That's how I would do it. Okay. I like that. Yeah, the downtown one was an Airbnb when we, when we were because my wife's old house. So we were, whenever she could Airbnb it, you know, she could. So we, we we have some experience and we've stayed at some so I'm familiar but yeah I think I like that perspective crawl walk run and then learn love be profitable and then go all in appreciate it let me give you a little perspective just to take with you as as people are listening to this and

they're hearing about short-term rentals I get this from house hacking also a few things I just want to clarify because sometimes they sound too good to be true we have house hack clients that will get a 78% return on their investment it's incredible and a lot of people think well if If that's the case, I should be able to get a 78% return on my investment. I'm just going to keep looking for another investment property. Or Rob says, I look for a 20% cash on cash return on this deal. And that sets a barometer in people's minds. And they go, oh, well, anything less than 20% I don't want to do because that's Rob's standard.

Here's what's semi-misleading about it. And it's not intentionally misleading. That is why I'm putting this out here. ROI is a metric that measures the return on your investment, but it's literally talking about money. So a true ROI is where you put money into something and nothing else, and that's the return you get on your money. What we're talking about with Airbnbs, with short-term rentals, with what Rob's talked about, he just mentioned a solid month of sprinting. There's time and energy that's going into that investment as well. It's not just money.

So you can increase the return on your money if you put other investment into this thing. And it goes, well, like your time, like your energy. Does that make sense? That's one thing to keep in mind that, yes, the people that are getting incredible returns are often putting in more. more than just money. And so if you're only looking to put money in a deal, don't be misled by these big numbers. The other thing is, and this is a principle of wealth building that just everyone should know, the less money that you put into something, the higher your returns can be. If you go buy a fixer-up or burr, like what I used to do, and I'm just buying a place for

$90,000 and it's going to be worth $120 or $150 when I'm done. Okay? And then maybe I put in $10,000, dollars into the rehab. I could get 50, 70, 80% RIs on those all day long. Sometimes 100%. I'd get all my money back out before I even did anything. That's because I was only putting a little bit of capital at play. Nobody with big amounts of capital, institutional funds, insurance companies have hundreds of millions of dollars. They have to invest. They're not getting 20% returns. There is no one that's doing that unless they're taking big risk. Hedge funds might get you something like that. Right. But they're not just putting. money. They're putting their time, their resources, their experience, their education,

they're actively trying to go after the best returns they can possibly get in the market, and they often lose money. So when you're investing big amounts of money, you'll never get the same return as you can with small unless you just got lucky on a deal, but it won't be sustainable. So that's just two things to keep in mind as you're moving forward. If you're investing smaller amounts of capital, you can almost always get a higher return. And if you're putting in more than just capital, you can increase the return on your capital, but go into it with your eyes wide open knowing that's what you're doing. Yeah, good point. Yeah, I think, I think it's like a, it's a journey, man. It's like when you're starting out, our time is not worth

much when we're starting out. And that's why we can give all of it to any project. But as you begin to grow and as your wealth begins to grow and your portfolio begins to grow, it starts flipping slowly until money is actually less important than your time once you have it, right? And so for me, now when I'm looking at deals, now I'm looking at them more from like a ROT, right, return on time. Like I'm trying to give up as little time as possible for a return that I'm okay with. You know, I've worked my my cash on cash and my like return standards down significantly over the years because I know that, yeah, certain ones might have a high yield, but if I have to give 10 hours, 20 hours of my week every single week, then it no longer becomes

worth it for me. That's a great way to sum up, but I described it make it practical. David, a question for you. So was not expecting it, but I have the opportunity to engage in an off-market deal through a colleague. And I do know that he needs to take the equity out. And I would like to know if you have any ways to frame it or structure to where he could get most of his equity, if not all of it out in short amount of time.

but still allow me to kind of keep it all to myself, like not bringing in another, another partner or asking for like some other loan, non-traditional. I don't know if I can qualify with four mortgages already for a new home. I'm a little confused. So you know someone that owns a house and has a lot of equity and he has a partner with it? No, no. He's just trying to sell it and he's contacted me to try to buy it from him. Okay. I'm just curious to see what's a way, because I was thinking of seller financing, I can give him a good down payment and then pay them the rest over the next two, three years. But it seems like there's more of a push toward getting the equity out, like more. For him, you're saying he wants some cash. Yes, for the seller. So why don't

you do this? Why don't you contact us? We'll see if we can get you a loan based on the income the property would make instead of just the income you have because you said that might be a problem. So you get a loan and he gets all that cash. And then the down payment part, you see if you can do seller financing for that part. So you end up either. putting in less money or no money and he still gets his cash because the bank provides that or the lender provides that. I see. All right.

Instead of trying to do seller financing on the whole thing. Cellar finance the down payment, all right? Because that's the part that matters to you, right? That's what you're trying to do is put less money in. Right on. All right. I'll be contacting you soon then. There are two kinds of real estate investors, those who have reviewed their insurance and

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So my business partner and I are looking at purchasing property in a small market. And my main question is when looking in a small market, how do you know when it's too small based on, so again, this is for Rob on the Airbnb side, like looking at small markets, if there's not enough comps on the Airbnb platform per se or on VRBO, for example, or any other platform, how do you know when the market is too small if you believe that it's a good deal, number one, financially, but also based on AirDNA comps and also based on the destination. nation that it's in. So it's not a large market. Not a lot of people know about it. So how do you know when you're too early or how do you know when you're like just at the ground floor and it has a potential to boom? I mean, it happens all the time, honestly, where you know, you will find a really nice house and you're like, great, okay, this seems like a winner. And then maybe you run it through the air DNA rentalizer and you're like, okay, this sounds good. And then you go to pull cons on Airbnb and there's like two houses. That is not necessarily an alarm, an alarming thing for me, but, you know,

I would say that the confidence to do something like that comes a little bit later, you know, with time, basically. Like for me, I'm willing to take swings like that because I've got a pretty diversified portfolio. But at the end of the day, it's pretty risky to be the first Airbnb or the second Airbnb out there. I get this all the time with like glamping people who want to like buy a piece of property and it's super secluded and they're like, hey, I don't see any other tents, airstreams or domes out there. Am I too early? And the answer is, yeah, you might be. But being too early isn't necessarily a bad thing because it could actually really work in your favor, but it's risky. And so if you don't have any comps to support, you know, the investment, I wouldn't

necessarily steer a newbie into that market because a newbie may not have a portfolio that can handle the dips, the ups and the downs of that. So for me, if someone wants to go and explore a market, I'd like to see a little bit of experience and a little bit of padding in the rest of their portfolio to help them kind of, you know, hedge that bet a little bit. Now, there are other things that you can look to to really determine that. Obviously, you can, you can look at how many hotels are in the area? Are there hotels? Are there hotels being built? If so, then yeah, you know, that means people are going there. Those hotels have already spent 10, 20, 30, 40, 50, $100,000 on market research to decide that it's worth building in that area. The other thing that

I'd like to like really point to is how many people are visiting that town. If it's a population of 1,000, well, already that's a tough one for me to co-sign just on the sole basis that finding vendors in that 1,000 person town is going to be really tough because vendors are everything, whether you're flipping a house or you're running an Airbnb or starting any business. You need vendors that can help you run that business. But aside from the actual population, I like to see how many people are visiting. So if it's a population of, let's say, like, you know, there are places in Arizona that I invest where it's like a population of 8,000 people, pretty, pretty small town.

But millions of people go through that town to get to the nearest national park. Well, then we're on to something. Then I'm like, okay, just because the town is small. doesn't mean it won't be successful. So there has to be something that's drawing people to that town or through that town that makes it a worthwhile stop as an Airbnb. And so that's something that I think you need to consider. There may not be Airbnb comps, not necessarily a bad thing, but if only 10,000 people are visiting every year, I'd probably walk away. However, if it funnels you to some kind of national park or state park where hundreds of thousands of people or millions of people are going through,

then that's something that I would consider. consider. And unfortunately, when it comes to comping a deal, especially on Airbnb, sometimes it's 50% art, sometimes it's 50% science, sometimes it's 90% science and 10% art. And then sometimes it's 90% art and 10% science. It really is going to depend on the market and how much data is available to you. So that's why I say if you're kind of on the newer side of things, I would be weary about entering a market like that. But if there's data that supports that there's visitation in that area, by all means, like, I think it'll be okay. Awesome.

Awesome. Perfect. David, what do you think? Do you ever kind of shy from a place if it's like, you know, from a Burr standpoint or any kind of real estate standpoint? Do you ever shy away from a place if it's a kind of a small market? Yes, I do. I wouldn't outright say I won't do it.

But the problem is, like, for me, I don't want to put a lot of time into the stuff I'm looking at. I want to be able to just set it and forget it. And the way you make a deal work in a small market is you make up for lack of ease with more elbow grease. Like you can invest in really bad neighborhoods. You can invest in D class neighborhoods, but you're not doing that like passively. You're going to have to be putting a lot of time in screening tenants really good and marketing to the right ones. And it can work, but it's it's sort of becoming more like a job.

And I have a job. I run a couple companies. I make this podcast. So I don't want another one trying to keep a property filled. That's how I would perceive that. The more data I have, the more of an understanding I have walking into it. I know what I can expect. Now, what I was thinking when you were talking is that there's more value into buying real estate

than just the return on your money. There's things you learn. There's skills that you build. There's relationships that you develop. This is why when people are new starting off, it just feels so, so hard. It's like the first time you go to the gym and you haven't gone in 10 years. Like everything sucks. but you didn't get a lot of value as far as muscles you built going to the gym that first time.

Just like buying your first deal, you're probably not going to get a lot of money. But your body getting used to the workout is a value that you got out of it. You learning how to use the machines a little bit better. You probably ate a little bit better that day after you worked out. It made it a little bit easier to go the next day, right? Like there's value that you get out of doing this thing, even if it doesn't show up as I want to, you know, be super strong or I want to have a strong cash flow. So if you're in a situation with very low risk, I say do it yourself. If you're in a situation with high risk, but you still want to learn and you feel like this is a market you want to learn in, get two or three buddies and all of you can go in together.

Now, it won't be efficient, but you're not doing this to be efficient. You're doing this to learn. Three of you can learn from one deal, right? Three of you have reduced the risk amongst the three of you if you're going to do this so that if it doesn't make a lot of money or it doesn't cover the mortgage. Instead of you taking the full $500 a month hit, that split three ways, right? And then eventually you will figure out how to make it do money and you'll be good. And maybe you'll sell it and go put your time into something better or you'll keep it because you figured it out.

But what I'm saying is don't stay out of the gym just because you're like, I'm in bad shape. It's hard to find a workout that's going to help me here. I'm also not saying to go, don't buy in this area if it looks like it's a bad idea. We're assuming that you see something of value in this market that makes you think, yeah, I just, I know there's a way to make it work, but it's not conventional and it's going to be messy as I try to get to that point. Gotcha.

Is that helpful? Yeah, that's really great. I think the synergies of partners like that, honestly, on your first deal or like on a deal like that is really important because, like, I had partnerships for a few of my first Airbnbs and for my first, like, real estate investments in general. And, you know, I can't really point to how much money we made in that. I don't really care. But what I really liked was, like, the problem solving that all three of us were able to do

through those, through that deal. there is a problem every day, it seemed like. And so we were just texting back and forth, like, what if we did this? What if we did this? What if we did this? And we learned how to, like, solve problems together. And I think that's really what you're doing on your first couple deals. You're learning how to like problem solve. You're not necessarily going to be printing cash. It would be great if you did. But what you're really learning is how to be resourceful, efficient, and intuitive. 100%. And that's kind of like what we're going through right now with, you know, my very first property that I purchased was four years ago.

I live in Fort Lauderdale and I bought it in Columbus, Ohio. So I've never invested in a property in my own, in my own home state. So everything's been remote. Everything's, you know, in the beginning, it was nerve wrecking and crazy. But yeah, it's cool to go into those few couple deals with your partner and just, again, have that synergy, bounce ideas off each other, make mistakes. And that's really, that's, you know, that's the best way to learn in my opinion. Just make as many mistakes as possible. And reduce your risk while you're in that phase.

Right. Like that's why we ride a bike with training wheels where it can't go as fast, but we reduce our risk. And then as you start to build up your skills, there's a point you take them off. And your risk is higher, but your skills are also higher. So it's not as risky. Right. Exactly. And that's what we did. Like our very first property we purchased for $87,000 and flipped it $19,000 later. We rented it out long term rental flipped it 19 months later for like $135,000. So very low risk at $87,000. You know, we went in with with 20% down, very little money up front. So yeah, that's what we did. So that's, yeah, and I'm still doing that now. I mean, everything is managed, calculated risk. So yeah, very much appreciate it, man. Appreciate it. Well, awesome, man. Well, good luck on that. You know, based on the experience he just told us about it, I'm really not sweating it. You'll probably, it seems like you've got some systems and experience in place that can help you mitigate some risk. Yeah, man. Appreciate you guys. Thank you so much. Okay. So I have two questions. One question. question is when are we going to start selling Bay Area as a one-up for selling Sunset? And the second

question is I'm doing a partner deal with a friend of mine, going to be a health hack. So I just want to hear the pros over the cons about doing a partner deal and one person taking up the loan while the other person does a real estate aspect of it. So are you saying that only one of you will be on the loan and the other person will be managing the real estate? Yes, exactly. Are you each going to be living in the house together? Yeah, it's going to be a deal. We're both going to be living in it at the house.

So is the person who's doing the loan need, they're putting down the down payment and the other person's managing? Yep, exactly. All right. Rob, you want to take that one or do you want me to start? I could start, I think. Pros of a partnership is, as we just talked about not too long ago, you're kind of spreading out the risk over two people, which is a really nice thing. Number two is I really like the camaraderie of, you know, partnerships and like having a good partner that you can, you know, live or die by, right? And all of my partners, thankfully, that I've ever had. I've always had an amazing relationship with them. And it's always gone

pretty smoothly. And I've really learned a lot just based on seeing how smart they are and, you know, kind of like feeding off of all of their ideas. So there's going to be like the two things for me that I really like in a partnership is obviously I don't have to worry about as much from a risk perspective. I'm going to learn a lot from that partner. On the flip side of this, not all partnerships are perfect. And I think the con of a partnership, not necessarily the con, but one of the things to look out for is communication and communication styles. And that was something that I didn't really figure out in my first couple of partnerships was like explicitly communicating exactly what it is each of us were going to do.

or ever writing anything down. We never wrote down responsibilities or anything important. And so I think the con here is that it can really build tension if you or your partner aren't necessarily very good at stating, A, what you're feeling or B, what you feel the other partner should be doing. And so a lot of partnerships really have, you know, falling outs, if you will, because of this main thing, because of the communication. And it's really easy to get into a partnership, it's really hard to get out of a partnership. So, you know, everyone gets into a partnership excited. You know, no one really plans on breaking up. But if you buy a house together and that partnership must dissolve, there's a lot of hoops that you're going to have

to go through for that partnership to equitably dissolve. And, you know, the implications of that can be really huge. If you're buying a house together, one person put down the down payment, then the other person didn't. Now you have to sell the house. And if you're having to eat the, you know, the closing fees and all that kind of stuff. It can, it can make for a little bit of a little bit of tension, if you will, a little bit of a grudge. And so I think that's really going to be the big one for me is like, I don't really like any kind of controversy or confrontation in my relationships. I like to like keep it pretty chill with all the people that I know in my life. And so I think a lot of people are very, very fast to get into a partnership. I don't think you

necessarily have to if you don't want to. But I would definitely like consider the implication of like the worst case scenario. And a lot of people don't. They just think about the best case scenario. I'm not saying plan for the worst case scenario, but acknowledges its existence because the moment you can do that, the moment you and your partner can start outlining all of the different facets of your partnership. If this, then what? If this happens, what happens? And really, I think for me, my first couple partnerships, I never brought in an attorney because I was like, oh, we'll figure this out. what's the big deal. But the moment I brought in an attorney on some of my later partnerships, they started asking a lot of questions that I had never thought about and questions that were

really awkward to answer in front of my partner. And I think that for me, that was one thing that I was like, oh, you know, I probably should have brought one in a little bit sooner so that we could have had a lot of this in writing. So not necessarily pros cons here, but, you know, kind of. I mean, there's a lot that could be said about partnerships. Luckily for me, might have gone pretty well. David, I don't know about you. I mean, maybe you have this a little bit more, maybe more pointed POV here on an actual pro and con. Well, part of, I've never really done partnerships. I've avoided them for almost all my career until this year. And that's mostly because in our mind, we look at a partnership and we say, well, I will do this and they will do that and we'll

get the best of both worlds. But what I think it actually turns into is it's double the work because everything each of them has to do. They have to report it by the other. Then the other asks a bunch of questions to make sure that they like it. And if the person who's doing it one way, if that's not in favor with the other person, then they're going to question it. And that's where like hurt feelings come from. So there's a lot of ways partnerships can go bad. It doesn't mean don't do it. But I think if there is an exit strategy, that's much more important. So if you're buying a deal that has a lot of meat on the bone or you're going to be living in the house together. so each of you is getting some value from this other than just the property itself.

It's a much safer bet for you. Because if you're going to be roommates and you each own the house, I like that much more than we're going to buy an investment property and we're going to argue over how to manage it. What would concern me about your specific situation is, let's say the partnership dissolves. The person who is going to be doing all the work of managing the rental has no work anymore and no liability and no nothing. They've walked away. The person who put the down payment on the house and who's on the loan is stuck holding the bag.

So it's not really like an even risk or responsibility over both people. And if it goes great, the person who put the money down isn't doing any work and the person who's managing the property has a job. The other one has passive income and that can also lead to her feelings and expectations. So I would probably feel better about this partnership if each person was putting money in for the down payment. And the person who was managing it was getting paid out of the money that the property makes to compensate them for their time, then they won't get upset.

If they're like, they get paid a property management fee out of the property to manage it. And then if each of you are living there, well, then the money that they're being paid to manage it is very minimal because maybe there's only a handful of people that they have to find to put in the property. So the passive person isn't going to feel like, this is a ton of money. It's a very small amount and the risk is mitigated by living there. So I guess my gut tells me that if you were each going to rent a room in the house and then you were just going to rent out other rooms, other people.

You each put in the down payment. You are each on the loan. Or at minimum, you just put skin in the game. Even if you're not both on the loan, then the partnership is more likely to last longer. And then if you decide, hey, I want my money out of this thing to spell out, we're either going to refinance it or we're going to sell it. And this is the way we're going to make that decision. And then, you know, when the partnership is run its course, if it does go that way, it's

okay. No hard feelings are there. You're going to have some equity and you'll be able to get out of it. And then you have all the knowledge that you learn to put into the next deal. where you might not need a partner. I actually want to harp on this a little bit because something that David said is like super important. And it's that like having some kind of skin in the game is going to be great because now the person

that put the money into the deal isn't going to hold a grudge for having done that. Even if they agree to it, at a certain point, it is pretty common for that person to be like, hey, I put on my money in this deal. I'm known that's holding the risk. And then the other person doing the sweat equity, you know, they might have agreed to work for free for the next three years before they get a cut. And then, you know, that's really great for the first year. But then as they start figuring out that their time is super valuable, then on year two and three,

they might start getting a little bit frustrated that they agreed to a deal that they're working basically for free, right, for their sweat equity. And that's why it's important. What David said is maybe compensate that person for the actual management of it so that, you know, even if it's just a stipend, even if it's just a little bit, at least they're making something for their work because there are a few deals that I've gone into where I said, hey, I'm going to take 50% equity in exchange for doing all the work if you pay for it. And those partners are like, great.

That sounds awesome. And I was like, awesome. But now I'm like, you know, a year and a half into this deal. And I'm still like, it's still a great deal. It produces cash. I'm still managing it. But in the year and a half since we purchased this property, my time has become significantly more valuable to me.

And now I'm, you know, I'm barely starting to get paid from that property. And it took a long time. And I'm not like frustrated or there's no tension. but I can see how someone in a different situation might say like, man, this is kind of tough. I wish I was making a little bit of money right now. I knew that going in because that's how I've worked all of my deals, but a lot of people aren't really prepared for that realization when it hits. And that's what no one ever thinks about is the person they are right now when they're

doing this deal is not going to be the same person they are five years later, 10 years later. I see this with like business partners that I have where everything looks great right now, but what if our business is successful and we make millions of dollars? Do I know what they're going to turn into once they have millions of dollars, right? You just can't predict a lot of the time, A, how success will impact you, how adversity will impact you. What if your partner in a business or in a property ends up having a family and just decides, I don't want to do any work at all and someone else is stuck holding the bag, how long before they get bitter. So I'm not saying don't do a partnership, I'm saying don't plan on having the perfect relationship for 30 years.

Like, have a plan in place for when we'll exit, how we'll know, and don't wait until the relationship is so terrible that there's bitter feelings before you get out of it. But I want you to buy something. Yeah, and agree on the exit strategy because that's something that's always like, yeah, we'll get there when we get there. And then when one partner wants to sell and the other one doesn't, it starts creating really difficult conversations for both partners. That's really good.

Awesome input. not discouraged, are you? No, not at all. Okay, right on. Julian, what's your social media? People want to follow you. See how this deal goes. Julian Gonda, J-U-L-I-A-N-G-O-N-B-A. Julian Gonda. Awesome. Thanks, Julian. Thanks, guys. All right. That was our show for today. So that last caller, Julian, had some pretty good questions. This practical. I'm going to get to a partnership on a house hack. What are some things I should be aware of? Rob, I thought you gave some really good advice when it comes to sort of predict in the future. You pulled out your little crystal ball and you said, well, a year and a half ago, I was in this kind of a situation. And now it's

completely different. And that's not things that people ever predict. Yeah, man, you know, hindsight, or what is it? Oh, shoot. I've already forgotten the, oh, hindsight is 20. I knew I could do it. Thanks for believing in me. Yeah, man. You know, I have just, I've had probably six or seven partnerships over the years. You know, this is all good stuff to really keep in mind is that like one thing that we learn more and more in our career is that time is just the most finite source on this on this planet. And I think nothing brings that to light than both a good and a bad partnership. That's a good point. What else did we talk about today? We had some pretty good conversations about how to handle a short-term rental, how to know if the market is becoming

oversaturated, the importance of marketing within business. And I thought that we gave some really good insight, particularly you, Rob, about how the return on investment is, we're not just investing money sometimes. A lot of the time we're putting in time. We're putting in energy. We're putting an effort. And the whole reason that many people are listening to this podcast is they want their time back, or they want their energy back. They want to give it to their family. They want to give it to their friends. They want to do other things. So if you build your empire in a way that maximizes the return on your capital, but still requires consistent energy and time being put into it. You may get everything you wanted, but it's not going to serve the purpose that you had. So I think that that's something that people

would be wise to consider before they just become these ROI hungry paper chasing cash flow fiends. Yeah, definitely. I think it's really, that's the difference between kind of someone starting out and someone becoming a little bit more seasoned is really understanding that ROI, that the eye in investment, it is both money and time. And it starts to turn into time on the later half of your career. Very good point. Well, thank you for joining me here, Rob. I appreciate your support as always. You always give a really good perspective and it's just fun when you're here. So I appreciate that. Any last words before we get out of here? Yeah. Where can people find you, my man? If people are like, hey, I want to, I want knowledge bombs dropped on me. How can people find you on the internet to get those? To be dropping bombs. Well, I'm David Green 24 on just about all social media. You can also message me directly through bigger pockets. A lot of people don't realize that's a really good way to get hold of anybody that you find on the podcast is go look them up on bigger pockets. They probably have a profile. You can send them a message there. I'm,

you know, I'm inspired now to go and check my inbox after you said that. I probably have a few messages. How about you? What's your preferred method of contact? Well, you know, as always, people can go and smash that sub and that like button on YouTube. Find me on YouTube at Rob Built. You can give me a follow on Instagram at Rob Built as well. And if you want to see me do silly dances on TikTok, no, I don't do that. But, you know, you can find me on Rob Biltow. Because, yeah, as always, people always snag my handles out from under me. So I always have to add an O if someone took Rob built. That's funny.

All right. And you heard Rob and I talk about properties that we're looking at buying together. If you'd like to invest with us, you can go to invest with Davidgreen.com. Fill out the forum there and we will get in touch with you about what the opportunities look like. Other than that, keep listening to podcasts like this. Check us out on YouTube. Leave comments in the YouTube section to let us know what you liked about the show, what you wanted more of. And the last thing I will say is in order to make more of these shows, which are totally

free for you. We need people to show up and ask questions. So those who are here, thank you. If you would like to ask your question, if you would like to be featured on the biggest real estate podcast in the world, if you would like your opportunity to make Rob's hair tingle in a cool way, please go to biggerpockets.com slash live questions and bring your best questions. And you'll see that, like, literally Rob's hair will move when a good question is asked. Is that in tune with the force of real estate? I've trained it over the year. years. It's a little muscle on my forehead that allows it to just give it a little shimmer. Very, very impressive. All right, I'm going to get us out of here. This is David Green for Rob,

the Hair Jedi, Abasolo. Signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.w.com. The content of this podcast is for informational purposes only.

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