The Science of Flipping - Airbnb Investing feat. TJ Tijani

Starting point is 00:00:00 Did you know that being a wholesaler is going to be one of the best ways you can pick up units? I said, how? Imagine you sell it, you wholesale a deal to an end buyer that plans on making a long-term rental. Once they do the rehab, you be their tenant. You've already built the report. You come back and say that, you know what, I'm going to rent the property. Not only am I going to rent it out, I'm going to be a perfect tenant because you are. Yo, yo, what is up? Welcome back to the Science of Living podcast. I am your host justin colby and if you are not watching this you should because i have a special guest right here to my left mr tj to johnny's in the house what's up man what's going on brother man it's great to be here man

Starting point is 00:00:56 it's a blessing man we're all here at the same event together yes um impacting lives changing lives and so i was able to pull you away for a couple minutes to rock out a podcast. How's that sound? Oh man, awesome. Awesome. I'm here for it. So you are and have made an incredible name in the Airbnb short-term investment space. You've blown it up. You're helping others get involved. Tell me a little bit about how you got in that space and how this whole thing got started. Man, you know, it was interesting. I wasn't even looking to get into the space. For folks who don't know, my background is actually in mechanical engineering and mathematics. I got an engineering degree from the University of Houston. Go Cougs, my folks out of H-Town,

Starting point is 00:01:37 you feel me? But worked in oil and gas, right? Did that for five years. But on the side, I was investing in real estate and I was doing wholesale deals, doing about one or two deals a month. What's interesting is that I had to travel and I was working offshore. But I would still be able to put properties on a contract while I was working on the rig. You know what I mean? Doing it virtual. That's it, right? And so then I was laid off June 1st, 2017.

Starting point is 00:02:00 For folks who don't know, the oil and gas industry has its eves and flows, right? So when the market is down, people lose their jobs. Water gas is cheaper, but people lose their jobs at the same time. So when I was let go, there were probably over a hundred people that was let go that day. And so I said, okay, well, I'm just going to go all into real estate. You know what I'm saying? I had a goal of having 10 rental properties before I was going to leave my full-time job anyway. But by the time I was laid off, I had five. And so I was like, all right, I'm halfway there, but I'm still going to go all in. And in my research, in my efforts to scale and do more market research, I came across

Starting point is 00:02:34 a video about Airbnbs. And I wasn't looking to do the strategy. And I said, well, I've heard about Airbnbs. I've never stayed in one, but I know that it could potentially make us more money. And so I started running the play on that. And I had one single family house that I was going to make a long-term traditional rental, but I spent 14 grand to furnish it. And I listed it, didn't get a booking that day I listed it, but I woke up with two reservations the next day. And when I ran the play and I ran the numbers,

Starting point is 00:02:59 I said, well, even at 50% occupancy at the price that I was charging, which was well below market rate, I was still looking to at minimum 2X what I would make on the long-term traditional rental. So that's what made it became a no-brainer for me. Then I learned that you don't have to own these assets. So I said, you can arbitrage them. You can rent these properties long-term, then re-rent them out short-term. That's it. Then I started doing that, buyingying properties creatively with private money. Yeah. Rehabbing them, value add positions while I'm rehabbing them, picking up arbitrage units

Starting point is 00:03:29 at the same time. Yeah. That's how I was able to scale my business and document the process, start sharing the knowledge. Well, so here's the thing. It's always better to control the asset than own the asset, right? Yes. I love the arbitrage play.

Starting point is 00:03:42 So full disclosure, and I've told you this, we've talked, but I have long-term rentals. I flip homes. I wholesale. I don't have any Airbnbs right now. And that's like my mission this year. Like I want four. Nice. So I'm going back and forth.

Starting point is 00:03:53 Like, do I just arbitrage them? Do I want to buy them and do the whole thing? What would you tell me? The path of least resistance seems to be I would just do the arbitrage, right? The path of least resistance is definitely arbitrage. It's going to be your lowest barrier to entry, 100%. But I tell people, you can get into the game with arbitrage 100%, but don't stay there. Yeah.

Starting point is 00:04:14 Get into the ownership. My best yields are the ones that I own. Amen. And when you also think about ordinances and regulations, in most cases, when they have to come down in a particular marketplace, it's usually arbitrage that gets hit. That's right. So understand, controlling without owning is amazing because now you can earn. If you were to tell me eight years ago, TJ, see that house right there?

Starting point is 00:04:35 I'm making $2,000 a month net from it and I don't even own it. I'll look at you like you done lost your freaking mind house, wait. You know what I mean? But this is what the short-term industry has allowed us to do that's right right and so run the play for sure in arbitrage i don't recommend staying there now i have friends they built seven bigger businesses don't own not one piece of crazy i have a friend she only managed she didn't even arbitrage because there's a third strategy you don't own it you don't arbitrage it but you manage it it's called co-hosting

Starting point is 00:05:04 this means that you're facilitating somebody else's right to do short-term rentals, whether they are a traditional landlord that you petitioned and convinced to invest the extra money to furnish it, and now you're just managing it for them. Or maybe they're already in the game, and you're just taking over management for them, and usually the goal rate's about 25% of gross revenue. So you can make cash flow just managing other people. Good cash flow. And I know people who did nothing but management. Built 100 units, 200 doors, nothing but management. We got to do some things together, man. Absolutely.

Starting point is 00:05:35 Because I get asked all the time, how do I get into real estate? That is a hustle to get yourself into real estate and make good money. 25% of top line revenue as an Airbnb that potentially could make 5, six, 10, 15 grand a month. Absolutely. That's a beautiful... That's a top line too and that's gross. That's right. So what's new? What's changing? What's going on in the short term space? Yeah. I think when you look at what people that are looking to get into the space to do, what they should be focused on right now is literally building their own brand within their short-term rental business. A lot of folks that get into short-term rentals look to just do Airbnb. You got a property, you want to make a quick buck, put it on Airbnb.

Starting point is 00:06:17 That's cool, 100%. But if you're looking to go bigger, better, faster, if you're looking to go far and actually have a long-term, sustainable short-term rental business, you have to change your mindset and how you look at Airbnb. That's right. So the way you look at Airbnb is, yes, that's for the normal way is we get reservations, we make money on it. Yes. But you also have to start looking at it as a lead source now. Every single person that steps foot in your property from one of these OTAs, they need to be in your own database. You have to get to a point where you're systematically building out your own direct

Starting point is 00:06:49 booking pipeline. That way people can book with you directly. And we do that multiple ways. But the way you want to do it, once people get into your pipeline, now you can retarget them. And we send our retargeting campaigns once a month. Every single person that steps foot in our property, not just the person that books it, everybody that comes with them. It's in our database. We retarget them on a monthly basis. Nine emails goes out on a monthly basis. And what happens is now it starts building that repeat business. That's it. And only on top of that repeat business, they start sharing your brand out. Because in order to do this, you have to have your own direct booking website. So now you're building your own direct

Starting point is 00:07:29 booking pipeline. People are booking with you direct. Now this is the difference between just doing Airbnb and having a long-term sustainable short-term rental business, what's going to withstand the test of time for years to come. And that's what people should be focused on right now. Having a systematized fashion, a way that you're curating and building your own database so you can retarget them. So just like anything, you might get started in the Wild West

Starting point is 00:07:53 and go get yourself one and figure it out and get it rented. But then if you want a business, you got to systemize it. Just like any of these. Absolutely. You know, I tell people

Starting point is 00:08:02 what changed my life, what changed my life in this game was when I decided to go all in. When I decided to go all in. Kind of irony with this conference right here, right? A little irony. With all in, right? And that's why I love this conference because it really is, you have to go all in. You know, there's a saying that says, jack of all trade, master of nothing. That's right.

Starting point is 00:08:22 But there's a second part to that quote that people don't really realize it says that but it's still better than the master of one because at the end of the day you want to master one more than one thing but you can't master more than one thing unless you master one thing there you go now you master you build a team you systematize you outsource then you now now you've created the time freedom now you can go out and master other things like build other businesses. And that's what changed my life. So if you had to tell someone, is it going wholesale, rehab, or Airbnb? Talk to the people right now.

Starting point is 00:08:56 Where they got to go? Are they going? You know, quite honestly, that's not even a fair question because you already know I'm going to be biased, right? But I'll say this, though. I'll say this. And I'm going to be biased, right? But I say this, though. I say this, you know, and I'm going to tell you a hack. And this is something that we in our community, we do. Because a lot of my students, they are wholesalers.

Starting point is 00:09:14 Or they came from the wholesaling world and they're getting into short-term rentals. You know, and a lot of them want to leave the wholesaling world to get into short-term rentals. And I tell them, I say, look, can you still do the wholesaling? They say, well, yeah. I say, you know, if you're looking to do arbitrage, did you know that being a wholesaler is going to be one of the best ways you can pick up units? I said, how? Imagine you sell it. You wholesale a deal to an end buyer that plans on making a long term rental. Right.

Starting point is 00:09:35 Once they do the rehab, you be their tenant. You've already built the report. You come back and say that, you know what? I'm going to rent the property. Not only am I going to rent it out, I'm going to be a perfect tenant because you are. If you're doing this business properly, you are literally going to be the best tenant that they've ever had in their lives. It is always, always, always maximize your opportunity. 100%. Go get the opportunities, drive as many as possible, and then you have all the exit strategies, right? Wholesale it,

Starting point is 00:10:03 flip it, Airbnbbnb long-term rental arbitrage airbnb this is why they say some of the best investors started off wholesaling or at least know how to generate leads and wholesale deals drive the opportunities matching wholesale a deal it's one end buyer they rehab it and now you go back and rent the property out for them and you put it on airbnb 100 brother i appreciate you blessing this audience. You guys need to follow this man on every single platform possible. Where are they going to do it? At TJTijani, that's it. At TJTijani on Instagram, tap it with me and trust me, always the value, always leaving the value. So he will be speaking at my next event,

Starting point is 00:10:40 which you'll want to be at June 24th, 25th. It's all about being a well-rounded real estate investor, not just a wholesaler, not just Airbnb. We just talked. You can diversify how you exit these properties. My man will be there giving you all the game on Airbnb. Tactical value. I appreciate you. No worries, brother. If you have not subscribed to YouTube, make sure you subscribe. If you have not given this a five-star review, go do that right there on iTunes. See you guys later. Peace.

The Science of Flipping - Airbnb Investing feat. TJ Tijani

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