KGCI: Real Estate on Air - Unlock Airbnb Success: Transform Your Property into a Money-Making Machine!

Episode Date: March 7, 2025

Welcome to the Financial Freedom Mastermind Group podcast. Here we're all about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 p.m. Eastern as we explore different types of investments that can fast track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions, and keep the momentum going. Good evening, everyone. This is Ni Yi Adewale, hopes of the Akaba Home Financial Freedom Mastermind. podcast and I'm excited to be joining you here on this Wednesday evening and today was one of the first days in Atlanta for 2024. It was actually a little bit chillier outside. So I hope that everybody feels that fall season coming in and that you're excited for the holidays. And we're going to kick this open session off as we usually do with our motivational quote and then three

questions that we enter this week. And so the motivational quote is never tell someone something you can show them. And this is essentially building on what we talked about last week in actions being more important than words. Your consistency and your habits are going to speak way louder when you walk into a room than what you say. And so even when you look at communication, they say 90 plus percent of communication has nothing to do with the words. It's more the intonation. It's the eye contact. It's how you're connecting with all the people in the room. And so So you definitely want to show people more than you tell them. Three questions that we got this week.

One was, should I hire a designer for my Airbnb? In the past, the answer would be maybe, could. You know, it could enhance it a bit more and make yours pop out. But was it necessary in the past? No. Nowadays, at the end of 2024 heading into 2025, absolutely. You definitely want to have a designer put together your B&B so that it can pop off the age because now there's a lot more people that are doing this. It used to be the Wild Wild West

where there wasn't as many people doing it. But now that everybody's kind of had their eyes open during the pandemic to this type of investment, it definitely allowed more people to jump in and made it a little less scary to get in because you may know somebody within your circle or at least maybe one length outside of your circle that's already doing it that you could talk to. And so nowadays, if you're going to put together a B&B, you should be aiming to make it nicer than those in the neighborhood and hiring a designer could definitely help with that piece. Another question that we got during this week was purchased a house hack last year, but recently received the promotion from work and will be moving to another state soon. Should I sell this

home or rent it? And the answer to this question is it depends, right? If you bought it in an area that's path of progress where it's just up, up, up, up, and you've gotten a lot of equity in one year, which is not normal, but if you have, sure, you could sell that house. house, but if you are open to hanging on to it and you're willing to put systems in place to allow you to manage it from afar, I'm a fan of hanging on for the long term. The only reason I think you should sell a house within one year of purchasing it is if you bought it as a flip or a major value ad to do that. If you're planning to buy it as a buy and hold, and that was the original intent, selling it within one year is going to be difficult to get your returns back. For example,

When you look at selling a house, a lot of people think that the number that you sell it for just needs to be higher than you bought it for. So if you bought a house for, say, 100K for easy math, if I sell it for 105, I'm getting 5K. And that is not true because when you sell a house as the seller, you're paying roughly 10% in closing costs. I don't know you're paying 3% and 3% in real estate commissions typically, right? You're paying 6% total for realtor commissions. But you're also playing closing cost that can add up to 3%. And whatever's negotiated from the buyer, right, which could be some seller credits, things that nature,

that could put you at that 10% mark on average. And so if you bought a house for 100K and you're selling it for 105, 10% of 105 is 10,500. And so 10,500, subtracted from that 105 actually means that you're losing a little over 5 grand if you sold it for that amount. And so it's better to hold it for the long term so you can get the tax benefits, the depreciation benefits, and then have it appreciate enough that you can sell that thing and make a good bank on that. And then the last question that we got this week, at least the third one that was top of mind,

is what is an eight-day unilateral? And this is something that I had no idea what it was before moving to Georgia, but I've quickly become acclimated to it, both on the investor side and as we've built out our realtor business. And the eight-day unilateral is something that's unique to Georgia. it essentially is a clause within the contract when you're under contract for a property where you can, for a few reasons, extend the contract additional eight days. Where I found a lot of value in using this is when we have a deal that's set to close toward the end of a month, say like November 25th, 26th, we would use an eight-day unilateral to get us the beginning of the next month so that your first mortgage payment is not due for two months. So if you close on a property at the end of a month, say you close at the end of November,

your first mortgage payment is going to be January 15th. But let's say you close on a property at the very beginning of December, say December 2nd or 3rd, your first payment is not going to be until February. It's due on the quote unquote first, but it's not late until the 15th. So you essentially have like 70 plus days to get your property fully functioning, get it turned over, have cash flow coming in before you actually have to pay out a mortgage. And so I'm always a fan of if it works out timing-wise, trying to fit it to where you can close a deal in that first week of that month so that you get the most time. And so with that said, that was the three questions of the week.

If anybody has any comments, any questions, feel free to throw it in the chat. And then we are going to open this session up to an open session. So again, this is an open session. You can join live. You can throw questions in the chat. And we will get this thing rolling. AJ, how you doing, man? What's going on, brother?

Not much. Shout out to the eight-day unilateral. I love that you brought that one up, actually because I used it on my house hack when you helped me out with my deal. So, uh, one, you know, that was definitely, uh, helpful in our situation. And it was so crazy because I've never heard of anything like that. But, um, you know, you brought up that's something that's kind of unique to Georgia in a way. So definitely, definitely something that is great to leverage, especially with, you know,

depending on when you're closing on. your home. So definitely excellent points on that, man. Come on now. And to that point, it threw me off too, because I invested in Louisville for a long time. Then I moved to Boston. And then when I got to Atlanta, when I was reading about this, I'm like, what is this? Right? Like, how does this work in practice? And then I actually had to use it for one of my personal deals. I was like, all right, this thing is pretty incredible. So now it's something we keep in our back pocket. Don't tell the other realtor. You know, crazy. It's kind of like a crazy wild card that you can just pull out of your back pocket. And it's kind of weird to think that, you know,

a home owner or someone who's looking to buy wants to extend their closing date. But like you said, you know, if you're pushing towards the end of the month, it makes a lot of sense to basically pull that card out and then close on the first of the month. So then you have essentially two months until your mortgage is due. And I know for me that allowed me to, you know, have a lot of time to set up my house hack unit without having to worry about a mortgage payment. So like I said, definitely something that's a great, great tool to use and just go ahead and apply when necessary. Come on now.

And I know that you're a big football fan and you played football as well. And one thing that I liked about Bill Belichick and the Patriots, I didn't like a whole lot to be clear. All right. I hated Tom Brady when he was there until he just kept winning and I had to call him the goat. But one thing I liked about Bill Belichick is that they would find every small little piece in the rule book that was legal, right?

It's not that it was illegal. It was in the rule book. You could do this. And they would push it right to that limit so that they could. could make the most of their plays and really win these Super Bowls and things that nature. And I think that as real estate investors and as an investor friendly realtor, we have to do the same thing. You've got to know these contracts through and through. You've got to understand, okay, this is a small out that we can utilize here. This is something that we can negotiate a

bit harder here. And here goes a way that we can structure a deal to where it makes sense for all parties if you want to be successful long term. Yeah, it's one of those things. Sure, man. Just trying to figure out a way to win, even, you know, after purchasing a property, and holding it, being flexible with the different kind of renting options available going short term, midterm, and then maybe even down the road long term and just having the flexibility, but just finding a way to, you know, get a week, or I'm sorry, a win. The triumphant return, Justin, welcome back. What's going on, Nate?

How you live? Super good, man. How you been? Been good, man. I can't complain. Just trying to get it done. It's been a little busy, so I've been missing the calls. happy to be back. Come on now. We're pumped to have you back. And I'd be remiss not to do this before we get

too deep into conversation. But AJ, congrats on the new role. I heard you got it. I know you're going to be starting soon. Are you excited? Honestly, I'm really excited. Um, the good word to, actually, I'll summarize it in two words. So number one is relief. And then the second thing is just grateful and appreciative. Well, I guess that's three words. But honestly, I'm very happy with how everything has played out. Obviously, going through a layoff is something that can be very stressful. I was the entire time, you know, 10-week process was just a great process driven and focused in on my daily goals and treating it as if your job at the time. You know, that was really something that really motivated me and something, you know, worked out and just extremely grateful.

Come on now. I am pumped for you and we're happy for you, man, for real, especially heading into the holiday season. Christmas is on and popping at AJ's house. All right. The eggnogs on you. I don't like egg gnaw. Everybody come my way, man. I get the check and I'm just going to blow it off as soon as I get it. Canio, welcome back, man. It's been a couple weeks since we've seen you on.

How you been? Good, good, good, good. I'm doing well. How's everyone doing so? Super good. We're just trying to figure out why you're sitting in the dark. I don't know what's going on. You got to get some video light in here.

There we go. Okay, that is better. I think it's better. And I'm feeling the shirt. Yeah, I like the shirt, too. He's trying to say on that literature bill, me. You know, keeping slow. No, no, we can't do that on the Cabo home podcast, man.

We got to turn them lights up, all right? We got to show people that we can turn lights on it. Let me see if this is better. Yes. Canyahu, what's new in your world, man? How's the investing? Man, it's been a rough, rough three months. But the way I take life is every time I see like some, well, like setbacks,

I just start looking for other ways to kind of survive. and it's since September I've been dealing with, I remember telling about having bed bugs in my main listing. So a lot of things I've changed in the last three months. I added three new properties. One I bought and two of my friends don't live here in Atlanta. So managing four properties now. I recently also got on hospitable, like just this week.

And the bed bug is the guest actually left a review on my. And that since then I've not gotten not a single. go booking. But I've been trying to get past that. I've tried doing a new listing. That didn't work. But today, I just deleted my own comments on the person's on, like my response to the person's review, because I think my response would actually be giving more light to that review to see how that works next. So just different things going on and I'm trying to just get by daily. It's been a reference. Come on now. The bed bug piece is. is super tough. We actually had a scare with bedbugs for one guest, and that's one of those things

where you definitely don't want it to pop up. We ended up, I don't even know if it was, but we ended up giving them the whole stay back, like no arguments, anything like that, because we didn't want that review. And that's one that you got to take seriously, right? Like, you have to send in the professionals, and it's got to take a couple treatments to knock it out, but it's not impossible. After about like two weeks of treatments, it should be good and ready to rock. But you mentioned you just got unhospitable. I thought you've been using it. So you just now, have you been messaging on the app the whole time? Yeah, I have. Actually, I tried it the first time like three weeks ago, but it kept on resending, because I already had automated messages on my Airbnb regardless, right?

So my guests were getting several messages, and the AI thing wasn't responding humanly enough, so I just canceled everything. But yesterday, I had a meeting with one of their reps, like on Tuesday, I think that was yesterday. And after I spoke to her, I just got back on it again. They gave me like a week trial again. So I'm trying to see how that goes. And I think that's what my question was going to be to

you, how your experience was the very first few weeks or months. What should my expectation be like with hospital? I know they've grown a lot, but I'm just wondering based on the new developments, what's what should like expect from hospital? I think this is a perfect question

for the group that we have on the phone. and we could just go around Robin. I'm going to kick it over to AJ first. What are your thoughts with hospitable, managing with and without? Yeah, for sure. So I'll be happy to start it off, although I'll be excited to hear from you because you're the hospitable guy. You're doing great with the direct bookings and everything. But anyway, I think I don't know any other way other than starting off with hospitable.

So really, I'm happy with the services that it provides. I do know that Airbnb has added some kind of automatic messaging, as you had already mentioned. But I do believe hospitable does just. just have like way more flexibility, has a lot more options, customizations. You can add smart lock so that, you know, it can generate codes for your guests. Should we lead the direct booking, which I'm sure me will also speak to. And then I will also like to speak to just kind of the support system that hospital has, right? Meet biweekly and have town hall meetings.

So every other week at 12 p.m., from 12 p.m. to 1 p.m., basically give consumers of the product, like myself, me and Justin, anybody who wants to join live to go ahead and do a live Q&A session. And I think that's really important because it, you know, gives us just that comfortability and knowing that any questions or concerns that we may have as users of the platform, we can go ahead and get answers to that. So I've been extremely pleased with the product. A lot of different tools and customization. So I would definitely say just starting out, kind of take it easy.

But spend some time every day, just kind of familiar. familiarizing yourself with the space and the different customizations or what have you. But once you kind of really fully integrate your properties with hospitable, be sure that you're going to be satisfied with the product because I've been using it ever since I've started and, you know, I don't really have too many complaints. Okay. In terms of occupancy, like how did that improve your capacity rates? Because I think that's what my major concern is.

A lot of these automations you're talking about that of Sweetable has where I've already between them in Airbnb for the longest. In terms of messaging my guests when they broke, a day before, even in the integration with my logs, I have all those things with Airbnb. But my major and my biggest concern is occupancy rates, which is what I'm hoping to see that's improved with optional. So for my take on that is utilizing hospitable, I don't think is going to increase your occupancy rates. I think it's really just a management piece of it and having peace of mind just knowing that the systems are properly integrated for your guests to check in, check out, handle different things. But in terms of like occupancy, I think that kind of just

goes into your listing's performance, having quality pictures, getting those good reviews. I know you're kind of in a tight situation with the bed bug situation. But if you want to increase the occupancy, I will focus on listing optimization, performance, and then also pricing. So I'm not sure, and this may be another side conversation. But if you have pricing optimization tools, one that I use is Price Lab to basically look at the market data and properly price your property so you're not going in and manually doing it and updating it every week. Yeah. And another way, especially because you're struggling with a listing that you may feel like isn't getting bookings because of that one issue, I would say try using Airbnb pricing tool because they push

a lot of those listings to the top. Obviously, you'll lose out on a little bit of earnings for a short period of time, but if you want to just push that listing to the top, you could always switch on their dynamic pricing because they'll make sure that you're being featured at the top of those at the top of the algorithm, right? Because they want to push people to the lowest price point so they can make their money off the top. So once you get pushed to the top of the list, even if you have some maybe one or two, you know, bad reviews, like you should be able to still get a couple bookings because there's still some people out there that are just looking for budget options in order to find some more to stay. For sure. And I think that's actually a, uh,

unique way to combat your bed bug situation, right? I mean, you know, it happened. And the review is already there. It doesn't seem like you can kind of get that off unless there's some way that you can, absolutely by all means. But at the end of the day, it's about, you know, kind of reacting to the situation and then trying to basically find a way forward, right? Because I'm sure you're not just going to quit the business behind one bad review. So maybe offering some deep discounts early on and maybe you can kind of bury that rough review at the bottom because that review is probably showing up, like you said, you haven't gotten any bookings recently. And as likely because people are going onto your listing page, oh, seeing a bed bug review,

oh, I'm out of here, you know what I mean? So if you can kind of work on burying it at the bottom, getting more quality reviews by maybe like lowering the price a bit early on and then you kind of ramp it back up in the future. Yeah, I've been. Yeah, I think you already missing it, but you go ahead. I was going to have one. I think you already missing it too, Kenno. Sorry, my bud.

Just go ahead, Justin. Oh, no, no, no, you're good. I think you already missing it, but you can't duplicate that listing, right? Duplicate that listing. And I don't know if you can hide the previous one. I did that at first, but I deleted it. I stopped because the thing is I always had two listings, right? Which I used one as my long term, because I didn't want to do a discount on the other one.

So I just used one as my long-term listing. So when this issue came up, the one that was my long-term listing, I just made it. a short-term list and to see how that also functions. Fortunately, for me, that one, I did get a long-term booking on it. In December to January, maybe just about almost two weeks. Then all of the bookings that I had, maybe from three months ago, a lot of them canceled, like two of them canceled right before their checking. Then one of them actually reached out to me to ask me about the situation.

I was like, oh, this has been resolved properly. You see, they told me that they saw a concerning review, and I was like, close shot that has been treated and you have nothing to worry about. So in terms of bearing the review, I've been doing that a lot. I've had given like really deep discounts to people that I know to sort of both use it and just leave reviews. So I think right now maybe I've done like four or five reviews kind of like push that down and still working on that. Just considering that before the end of the year. But I think I just have like a timeline to make sure that I get this started before the end of the year.

So that's with the new year, new season, just getting ready for the new season. And Ken, just one last question about the bed bugs. Do you have those mattress, the zipper mattress protectors? Yeah. Actually, the bed that has happened with my, I'd never used beds with fabric for my homes, but this particular bed was one of my beds in my visitors' rooms in Minnesota. So he had fabric on it. So that's the only one that's

Have this issue But in making this happened I went to the house And I took out Every furniture in that bedroom To trashed everything And bought new furniture In that room, mattress

And bought And just changed everything And bought like mattress A bed frame without the fabric Then I do have all the What you call them The mattress protector For all my beds

And pillow cases too Yeah And it's painful man Like I've been through that piece, living in the Bedbug Capital, Louisville, Kentucky. We've had a couple of units that have had that, and that was terrible to get out. I think you're handling it the right way. But to circle back to some of the things that you asked about hospitable, I think, again, what AJ was saying is spot on. It's there for management.

But if you use it in the right way, it's going to ease your mind so much on the managing of these properties and make it easier to onboard more. So you mentioned you're on Airbnb. I don't know. Are you in VRBO on booking.com? Yeah, I'm on VRBO. What about Booking? I think I've had this discussion with you on booking, why I can be on booking for now. True, true, true, true, true.

Yeah, yeah. So with that in mind, right, at least you can have a direct site. You can have VRBO, you have Airbnb, and all of it can get managed directly through the hospitable. And then you're also able to do the pricing pieces that AJ was talking about and have that lock through there. But the most important thing and the reason that I actually joined on there was to manage the cleaners, right? to make sure that they're going to be able to get those automatic text messages and those automatic, like, be able to see the calendar without having to do anything weird with like Google calendars and know exactly when the cleanings are, know exactly when it canceled,

when it's altered without any messages coming from us. That's the main piece that I've seen. And then also the fact that you can create that direct site. Because now that you're growing, you've got four properties. Like you're going to have five, six, seven, eight. You sell that? Yeah, yeah. Yeah.

And so you're going to have five soon. And so now you're going to be able to leverage all of them and send people to the direct site. Because the cool thing about the direct site, you don't have to worry about bad reviews, right? People actually will give you time to correct an issue. And typically what we've seen a lot is somebody will book maybe for three or four days, Airbnb. They'll see that we have the direct site and we put signage up everywhere. And now they're starting to reach out to us and just book it direct. And once they book once direct, we've had a couple people that continue to book, book, book, book, book.

because they're waiting for their house to get done or whatever, right? And they'll just continue extending direct. And now we've got them in our circle. And if anything bad happens, like, hey, a water heater goes out, anything like that, they're not going to leave us some crazy review on Airbnb. And so that's the true key. Once you start hitting that growth period of more than four, you've got to start using some type of software.

Otherwise, it becomes a lot to mention. I think the reviews as. That's what it is for cleaners is one that I know that I'm still doing manually that should be automated. It's huge. And one last piece, and then back to AJ, is if you're going to continue to expand this thing, which it looks like you are, being able to build out the team, right? The reason I like having that app is one for the cleaners. They have their own section login. All they see is their cleanings and only their properties. They don't see any financials, none of that stuff.

They just see when it's coming and it texts them, which is awesome. But also I have team members like operations managers, maintenance people, VAs that are helping with messaging. And they all work through the same hospitable app and they have different permissions for what they can see and what they can do. And I'm able to keep track of it through that one location as opposed to trying to make everybody a co-host. So it helps. A. J. I was just going to say, like, I can't believe I even forgot about that benefit. Honestly, there's so many different things to hospitable and that's actually a really great one that I enjoy is the automatic messaging to the cleaners. And communication, especially with cleaners are so important, you know, making sure they're on time for checkouts and also for alterations.

in case, you know, a guest may change whatever the case may be within a request booking. Cleaner is up to date and knows when to show up on time. So that's another added benefit. I also wanted to bring up because this is something I'm sure you'll be happy about me, but he integrated an API where they'll pull the five-star reviews from your Airbnb listings onto the direct now. So I don't know, I don't think that was something that happened in the past. But I'm actually looking at your direct site right now and I'm seeing two of your five-star reviews from Airbnb showing up on your direct site. That's dope. That's dope. And to that point, I was looking at it this morning.

I didn't know that that's exactly what was going on, but I didn't see that. I was like, what the heck? This is cool. It's, it's. I guess that helps. They had talked about it today. I didn't see what. Like when I did my, my hospitable sites, is the thing that all. Yes. So, so hospitable is partnered with Google, because Google's trying to get into just about everything, right? And so they have their own booking, quote, unquote. And so you have to enable that section, though. So if you have a direct site with hospitable, I didn't have this enabled for half the properties until like two weeks ago. So

you've got to go into the settings. I forget exactly how, but you've got to check all of them. And once you check all of them, it'll start showing up on Google. And we've gotten one booking so far strictly just from Google, from when I enabled it, like within the last two weeks where it's like, okay, this person found us through whatever Google is pushing out there from a vacationing standpoint. So yeah, it's solid. That's how I'm hoping that it helps with occupancy, in my own opinion, because I think it was after I heard that part of it that I kind of was interested because in terms of value to me would be closing. I feel like I'm not, my capacity rate is so low and I'm not making enough. I should be able to at least make some profit off to pay off my

debt, but I'm barely breaking even for all my houses. For the properties, the price lab, and however you're using that, are using price lives or beyond that? I'm not using price lives, but I think I'll consider that using that also. Yeah, I would say, I think Justin was the one that put me on to it. Justin, what you got to say about the price lives, man? Yeah, I mean, I think pricing is going to be the most, I mean, obviously, your decor and everything is very important, but I think pricing is going to be the most important thing when it comes to these rentals, man, because that's probably the number one thing where people are looking when they're shopping for

someone to stay, like they're putting in that price first. So the more competitive you can be on pricing, the better you're going to be. For instance, I got my occupancy up on my five-bedroom to about 80%. But that's because Monday through Thursday, I'm dropping the prices down to like the bare minimum. But once I do that, I'm getting four or five-day stays in between the weekend stays, you know? So it's like, even though I'm slashing those prices, you know, I'm getting heads and beds. And something coming in is better than nothing. And over time, it just adds up.

Like just last month, between my two properties, we did $11,000, around $11,000. And that was like what we did the highest in the busy season. And we didn't change anything. We just dropped the price. So it's just like being very competitive on the pricing, we were able to drive the occupancy up. And we're getting people that are like coming in for work, like the five bedroom. You get five guys that are coming in to do a construction project.

And they're like, man, we're paying $80 a night. And they're probably getting a per diem. And they're being able to pocket the rest of that on the backhand. And so that's really intriguing them to stay in the home to where they may only have two bathrooms, but they're able to save that money and put it towards some other things that they have to do. And to that point, Justin, that was an awesome area to stop off tonight. And with the money he's making, we're going to have Eggnaga, AJ's house and dinner at Justin's house. All right.

Oh, this is crazy. To you right with hospitable. And we're going to get the price lab situated. And after that, we're going to have dessert at your house, man. Bye. Everybody, that is an awesome. Where's your partner is, man? Hey, listen, I'm just here to come and celebrate with you guys.

I'll bring the drinks. I'll bring the drinks. Okay, okay, fair, fair, fair, fair, fair. Guys, I appreciate you joining, and I look forward to seeing you next week, and we'll catch everybody on the next podcast. Okay, I'll have a good one, everyone. Peace. All right.

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