Boom! Shake the room, Fire Nation. JLD here, and welcome to Entrepreneurs on Fire, brought to you by the HubSpot Podcast Network, with great shows like Being a Boss. Today, we'll be focusing on how to make money on Airbnb without owning property.
To drop these value bombs, I brought John Bell and Julian Sage on the mic. They teach people how to build a six- or seven-figure business on Airbnb without owning property. And today, Fire Nation, we'll talk about why Airbnb is changing the game for real estate, where most people fail with Airbnb investing, how can people learn more, and so much more, when we get back from thinking our sponsors. Customers want more from brands.
Delivering more means owning the customer experience, taking control over data acquisition, analysis, creative, and delivery. Klaviyo calls this owned marketing, and they believe it's the best path to growth. For more, visit klaviyo.com slash fire. That's K-L-A-V-I-Y-O dot com slash fire.
From tools that help with automated emails, increasing sales, gamification, and more, it's never been easier to create an online course than with the Thinkific app store. Learn more and sign up for a free trial of Thinkific at thinkific.com slash firefree. That's T-H-I-N-K-I-F-I-C dot com slash firefree. So what's up, Fire Nation?
We have John and Julian joining us today, and we're going to get to hear both of their backstories before we dive into some real detail about Airbnb and all its awesomeness. And let's just start with John. And John, why exactly did you quit buying real estate and instead build a business without owning property? What's the deal with that?
Well, it came down to a couple of very important things where let's talk about cash flow and just being able to generate that cash flow. Of course, you know, the old way is to go in and buy a multifamily and, you know, rent it out and possibly make $400 to $500 a door if you're lucky and go about it that way. Well, I found something short-term rentals specifically that allowed me to go out and still do the same thing with the same property, but I can also accelerate it by going out and still renting other people's properties and then pulling in somewhere around $1,500 to $1,000 a door for that same apartment. And then I would have great tenants, right?
I'm not looking at those tenants that are just want to kind of mess up the place and they're not there long-term. The place stays absolutely great. It was the best thing that I found and I could 10x what I would do with flipping a home. If I had $40,000, let's just say that was four units.
Four units, $4,000 generated a month. I couldn't do that with regular multifamily leases or rents or anything that way. This is really important to the Fire Nation to think about the new world that we live in right here. I mean, Kate and I went on a 90-day European trip where we stayed at 17 different Airbnbs over the course of those 90 days in various European countries.
I mean, we're talking all the way from Italy, all the way up to Scotland and everywhere in between. And I'll tell you, we went in. They were nice. They were neat.
We stayed for four days, five days max. We left the place neat and clean. And they got a very high rate for that because, again, we were just short-term. We were in, we were out.
And then I'm sure the person was coming within a couple hours to take our place for the next little short run. And this is a world that we can now live in when you have a tool like this that allows you to really make things happen. But John, I want to ask you real quick before we pass it over to Julian, you know, obviously Robert Kiyosaki, he's still alive, but if he was dead, would he be spinning in his grave hearing you talk about this stuff? Absolutely not, or maybe so if he didn't take advantage of it.
Right. You know, actually, I did read. He's got a new book and he's talking about not owning real estate. So maybe he's already here.
Maybe that's the new message. Hey, one thing I know about Robert, and this is legit, I want to give you a little pre-context. There's different strategies that we're talking about here. What John's talking about is this concept called master lease investing or rental arbitrage.
And the whole idea there is that you don't have to own property in order to benefit from it. And just to give a little back story with myself, you know, I, you know, I'm a military guy. We don't get paid a whole lot. And I actually got started in entrepreneurship, you know, listening to guys like yourself, John, I listened to Andrew Warner from Mixer G, Pat Flynn, Smart Passive Income.
So that's really what, you know, got that fire in me to even get started on this entrepreneurial journey. But what I realized with entrepreneurship is a lot of, a lot of things that people talk about or they tell you to get entrepreneurship for, it costs a lot of money all the time. You know, I went to actually started and tried to develop a mobile cooking. When my dad had cancer, I wanted to create something to be able to help him.
And I had no clue. I just listened to shows like yours. I got inspired. I thought, man, I can do this.
But it costs a lot of money. I spent over nearly $20,000 to develop this cooking app. And then I was never able to finish it because it just started costing so much. So I honestly, I decided to quit entrepreneurship, just get my degree and stay in the military.
But it wasn't until my wife and I bought our first house using this thing called the VA loan. So I didn't require like any large down payment or anything like that. So it's one of the benefits of being in the military. But I bought this house and I was trying to save money because living in DC, it's really expensive.
You know, the rent's over here. It's like over $2,000 a month. And my wife said to me, she said, you know, why don't we try to rent out the basement on Airbnb to try to save some money. And this little entrepreneurial light bulb kicked in.
You know, I had that buyer come back. And we decided to rent it online and quickly realized I was able to cover the cost of the mortgage. I was blown away, you know, being able to make $2,000 a month off of the basement unit. And I wanted to find out what are more people, like are there people that are doing this at scale?
Because from what I've heard, when you buy property, you might make a few hundred dollars, but that's not a sustainable way. It's not an easy way for someone that's not making a lot of money. So I went online, I started looking for people. I actually found John in a Facebook group.
And I decided to interview him through my podcast. So I started interviewing him. I interviewed other people and quickly realized that there's so many people, there's hundreds and thousands of people that are making a living without owning property. One of the models that John, like I said, utilizes is this model called master leasing or rental arbitrage where you're essentially just leasing apartments.
You don't own the property. But another model that I actually started utilizing to be able to increase my cash flow was co-hosting or property management. So I would actually find other property owners that had invested the money, had the time and put all of that into property. And I would just manage it for them.
And then I get a commission based off of managing a property the same way like I managed my basement unit. And again, that's called co-hosting. And that's one of the strategies that, you know, I'm really excited to share as well. Well, I love just talking about new concepts like this and financials like it's even super new because listen, I mean, Airbnb is around for a bit, but now you're getting to this place where you're having people like John and Julian who are just really figuring out how to do it right.
And as we talk about on the show, success leaves clues. So listen to their success, follow their clues and you make things happen. And I love the fact, you know, now that I've been hosting entrepreneurs on fire for a decade, I've interviewed over 3000 successful entrepreneurs, you know, getting more and more guests on the show who literally were inspired by the show to go launch their thing. Now we've become massive successes over the years.
And now I get to interview them. You know, before it was like in the early days, I was like having to interview people would have been successful five years prior. I even started the podcast doing something completely unrelated. So Julian, thanks for sharing that part of the story.
That was super cool. I'm really proud of what you accomplished. And of course, you know, as a fellow combat veteran, I thank you for your service, brother. And let's just keep it with you right now.
Why, Julian, is Airbnb changing the entire game for real estate? I think it just goes back to that idea that Airbnb, think of Airbnb kind of like as a platform. So the same way that Amazon is a platform for people to be able to build, it disrupts the e-commerce or disrupts the retail brick and mortar industry, the same way that Uber disrupted the taxi industry, YouTube disrupting traditional media. Airbnb is changing the way real estate is done, because now it completely opens up a new market of being able to leverage real estate like John was talking about before, where you have to purchase a property and then rent it out.
Now you don't have to purchase a property anymore. You can just short-term rent it. And there's only different creative ways that you can leverage the power of short-term rentals utilizing platforms like Airbnb. So Fire Nation, we're going to take a break.
We're going to thank our sponsors. But when we get back, I'm going to have John answer this same question about why Airbnb is changing the game for real estate. We're going to talk about where most people fail, like where people are going wrong when it comes to Airbnb investing and so much more when we get back from thinking our sponsors. As entrepreneurs, we have unique expertise and goals.
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So John, we are back, brother, and as I teased before the break, I want to pass the same question back to you. Why is Airbnb changing the game from real estate? And maybe even walk us through how you came up with this real estate arbitrage idea you're now using so effectively. Let's take it to the examples of disruptors in the space.
I mean, we got Uber when it came around. People were kind of like, oh, you know, taxis and app, and they don't own cars. Then there was, you know, Lyft that kind of came along and did the exact same thing. Amazon, not necessarily owning any products at first, but still being able to make a lot of money.
Airbnb does the exact same thing. They actually list properties, but they don't own them. So that's why I like rental arbitrage. I can have the property, I can get it listed on one of these platforms or multiple platforms, and I don't need to own it.
I'm just taking their model down to the finder level and then using that to compound my cash flow. That's why I think it's the biggest game changer in the space. Just any business that doesn't necessarily have to own things to still generate a high amount of revenue, I think is great. So how are you finding these owners?
Like, what strategies are you using to identify the properties and talk to the owners? And what does that communication look like? You know, talking to the owners is probably the most difficult part of the business. I mean, it's conversational.
Of course, you want to talk to the right person up front, but it's really just exposing exactly what you're trying to do, full disclosure, and to at least allow them to come back with some of their objections. So then you can kind of come back to them and say, hey, this is how I resolve this objection. Of course, most people, when we talk about Airbnb, they say, oh, that's the party place. No, I don't want a party house.
Well, we do certain things to fight against that. Like we make sure we have cameras, we have noise monitors. We are not trying to end up on the news because that hurts our business. We want to provide a space similar to you that you went to when you were traveling.
Clean, comfortable, where you can cook, where you can really just relax and treat it as if it's your home. That's what we want to do. And we want to focus on that. So what ways or strategy do you use to first identify homes that you might approach?
I mean, it's really understanding the market. Airbnb is one of these places where it's not necessarily a city that you have to be in. Like it's an experience based platform. So maybe you have a tree house.
Maybe you have a tent in the middle of the woods. Maybe you have an apartment in the city or a home in the city or a lakefront home. All of these properties can kill it on Airbnb because when you play up the experience, people will come just for that experience itself. COVID has taught us that, hey, social distancing and people wanting to get out of the cities, out to those places that are more spread out.
Those places have seen major growth. And it's still the experience that those people are going for while looking for the comforts of home. So this is really interesting, Fire Nation. You're looking for unique, special, experiential properties.
And John, once you've identified a property, so to say, what is the next step for you? Like what steps have you successfully taken to identify who owns that property, how to contact them? What does first contact look like? You know, sometimes it's as simple as Zillow.
Zillow has a lot of information that you can just find. And if I'm really going to an apartment building, I don't need too much more information than the management company that's there and pretty much try to book a tour. I'm going to try to go talk to one of the managers that's there. And I'm going to just, again, let them know exactly what I want to do, how I'm going to do it.
And I'm going to talk as if I am really interested in as many apartments as they have available. In most cases, I am. We can take them on by the 20s at any given time. So that sometimes is a good outlet for them.
It's a win-win relationship when it really works out great. And you fill their occupancy, they get their regular market rent, so they're not charging anything extra. But in some cases, you might work with a smaller owner and they want a little bit extra because they know you're going to be making extra. It's really about relationship building.
I'm going to digest the numbers. We use tools like AirDNA. We also just browse other sites like Airbnb and HomeAway and we look at competitors within the space. We see what they're charging.
We look at their calendars and we try to set a mark for ourselves on, hey, we know we're going to outperform because this person is lacking in this area. Or we're going to be right on par with this other person. Maybe we can charge the exact same nightly rate. How do you handle the objection from property managers who might come back and say, well, we can just put this up on Airbnb?
What would you say to that? Absolutely, you can. But I mean, it's also infants can walk, really, but they have to start somewhere. Instead of just kind of standing up and walking from the first stage, you got to crawl, you got to go through all these different stages.
I've already gone through them. We have definitely experienced almost everything that you can experience within the business with over a thousand reservations and multiple apartments, multiple cities. There's so many things that can kind of happen when you're doing this business. And one of the biggest misunderstandings is one, it's not real estate.
This is more hospitality than it is real estate. And some of those people come in with the real estate mind and they think, hey, I get real estate. People come, they pay me money. It's not quite like that.
And that's normally the first failure. I mean, one thing I will say that was pretty cool is some of those better Airbnbs that I stayed at, they literally were offering upgrades. They're like, hey, do you want us to have like 10K cups waiting for you? Like, we'll go pick those up first.
Like, do you want me to pick up from the airports? Like, here's my rate. And they were all super reasonable and it all made sense. But, you know, they were all making margin on those things.
So people that were really doing these Airbnbs right were opening my eyes up to like, wow, you can really layer in additional expenses. And so now, like, of course, you're going to be booked out because you can afford to be one of the more reasonable places in the area that still looks great. And then you layer in all these additional hospitality experiences. And now you're making as much more money as those higher priced places that are just getting that one flat rate.
So, Julian, let's flip it back to you, brother. Where do most people fail when it comes to Airbnb investing? Well, I think maybe just kind of piggybacking off of what John said, or what you said, John Lee Dumas, was that a lot of people, they think, like, why don't I just go out and do this myself? And that's probably where most people fail, where they think that they can just go out and try to do things on their own, whether that is leasing a property and then, you know, starting a hospitality business, or, you know, turning their own property, thinking, I'm just going to, you know, I own this property, let me furnish it, and then try to manage it myself.
I would say that's maybe one of the biggest failures people getting into this business and not realizing, like, how much systems and how much process is involved. I know John really didn't talk too much about it, but, you know, he comes from an IT background. I'm an IT myself. So we're very systems and process oriented.
So, you know, trying to reduce a lot of the friction that is in this business. Because, again, this isn't a real estate business. This is hospitality. But for the owners that are interested in getting into this business, we do try to make this a win-win situation.
So people that are interested in furnishing the property, they want to maximize their rental income by turning them into short rentals, they can partner with guys like ourselves who run the business, who operate and manage properties. So that way, they're actually able to increase their cash flow. Just to kind of give you some numbers, because, you know, I do like things that kind of be a little bit more concrete. Let's say a property owner rents out their space for $2,000 a month.
If they decided to, let's say, you know, let's say the mortgage... on that place is like um you know 1700 so they might be able to profit let's say 300 but let's say they decided to short-term rent it they could potentially you know make let's say four thousand dollars if they're making four thousand dollars we'll charge our management fee um so let's say that's 20 for managing property so we'll make uh eight hundred dollars essentially so four thousand dollars minus 800 that leaves 3200 that means they made a potentially around somewhere between like twelve or fourteen dollars of profit that they that they wouldn't have made maybe they only made three hundred dollars if they long-term rent it but as a short-term rental they're able essentially three or four times that and they don't even have to do any of the work themselves which is why you know the management model co-host model it's such a powerful strategy because the landlord is able to increase their revenue they don't have to put you know they're the ones that they're investing their money they purchase the property they purchase the furniture and then we just take our experience our expertise and manage it for them they're a little profit we're a little profit and it's really a win-win john i'm loving this stuff i know you love this stuff as well julian breaking out the numbers like he is that's what we love to see curious so john do you have any other areas that you see most people just continue to fail when it comes to airbnb investing it's starting out and doing furnishings everybody thinks that they can go out and buy cheap furniture and charge a high nightly rate and that just doesn't work right you have a value category that you need to add to every stay and your value needs to be equal to the interpretation of what the person is going to pay and what they expect of course using words like luxury or sometimes used so loosely um that it can be interpreted the wrong way but sometimes when you walk in the door you can tell hey this is a nice place because they got nice stuff or when you sit down on the couch and it starts to wiggle side to side and i pay 500 a night i'm probably going to be a little upset about that so people think in a lot of cases that hey i don't need to put a lot of money into a property to get a big result and in fact you kind of do julian anything you want to add to what you want to share you want to create a brand and when people stay at a property you know i'm sure that uh there's gonna be different categories so let's say you might some people might prefer to stay at a motel six other people would rather stay at a trump hotel uh some people want to stay at you know the marriott everybody has a different style even marriott in itself has so many for brands because it caters to so many different types of people so one of the things that i commonly hear is you know it's oversaturated there's too many people in this business well look at hotels i mean hotels all they are is providing a room you know they don't have anything else it's just a square box but that square box is very different and hotels been in business for you know uh centuries they've been around since the beginning of time um but that square box it's not the box it's the brand it's the style it's um it's what makes up that property um and that's really what we're doing here so you can invest you know very minimal you could uh you know go ikea and try to furniture that way and you know you might be the budget friendly place or you might spend a little bit more money uh and you might be the you know more expensive place or you might cater your place to uh traveling nurses or to family travelers and you might be you know the more family oriented place and then just the subtle nuances between each of those properties each of those styles is gonna have so much so there's you know what i love so much about this and really you know what um you know i think it's kind of like the fire nation belief is that there's there's so much opportunity out there um and i really hope that people realize that you can get into this business you don't have to own property anymore um it's not oversaturated because there's so much opportunity for you to be able to be an entrepreneur and create the things that you want to create um yeah i hope people understand what i'm trying to say here well julian you've gotten fire nation fired up i'm gonna be honest you and john have gotten fire nation fired up so how the heck can they learn more best way would be to go to shorttermstage.com uh backslash uh fire uh we have a um you know we have a free book like i said in the beginning you know jld was that you really inspired me to get into podcasting um and uh that's really what i started to do was to talk to guys like john i think their brains find out you know what are the successful people doing and just really model that and after talking to you know 100 successful hosts uh being able to take that knowledge and then put it into a book with strategies that you know myself and john have learned um and we decided to give that away for free so again that's shorttermstage.com uh backslash fire fire nation i really hope you're understanding what julian's breaking down here i mean he wanted to surround himself with the right people he launched a podcast for talking to the right people one of those individuals ended up being john they are now rocking it in a business together i mean this is some really exciting stuff when you make the decision to take action and surround yourself with the right people so i'm gonna start with you john then we'll have you go julian as far as giving us the one key takeaway from everything john that you've been talking about so far in this masterclass what's one thing that you really want to make sure fire nation gets before we say goodbye a lot of people think it's a fact right everybody wants to kind of just go out and do it um but doing it professionally is a completely different thing uh if you're not going to really kind of immerse yourself into the industry you do need help you do need to either somebody to co-host with you or you need somebody to actually hold your hand through training or whatever um that you can arm yourself with to make sure that you're doing it the right way uh there's so many other things that can kind of hit you in this business of course this is kind of day by day and you're dealing with people so um it's kind of difficult sometimes dealing with people because there's multiple different personality types uh the joys of this business is you make money daily and that is one of the most exciting things that i've actually experienced is when my phone goes off i really like it because i know hey i'm either closer to someone or somebody has paid me some money and i'm making it within the next night or so so that's what i love about the business um julian can definitely add on to that there's so much here and if you really want any more information from us you can definitely find us on shorttermstage.com and uh everything that we do there we do a lot we have multiple different companies oh julian it's not easy i thought that when i first started listening to your podcast earlier was that uh this would come so easily i'd start my cooking app and then i'd become successful um you know it's a long process um but i you know i realized that surrounding yourself with people that are successful and where you want to be rather than just going out and you know starting that cooking app on your own or going out and starting that property uh on your own uh you can really shortcut your learning curve you can save yourself so much time and uh you know hopefully by you succeeding and being able to achieve your goals uh through coaches through mentors um you know you'll be able to shortcut that learning curve and you know be able to do the thing that you want to do which is you know for me was being able to spend more time with my uh with my dad and my family um you know i wish i learned that lesson sooner but um you know i'm just grateful for where i am today though i want to double down on what julian said because fire nation it's not easy but guess what it's hard and what i mean by hard is it's hard to build your dream business it's hard to build something that is providing real value and a message and a mission out there to the world but it's also hard to be broke to be living in your parents basement it's also hard to be waking up every morning and not being inspired to do what you want to do but what you have to do you know it's hard living a life you feel unfulfilled so why don't you choose your heart why don't you choose the heart that you want it's either building a business of your dreams or it's the the other heart that we just talked about and the best part is you get to choose and of course you're fire nation so we know what choice you're making john julian you guys rocked the mic today and fire nation knows that they're the average of the five people they spend the most time with and you've been hanging out with jb and js and jld today keep up that heat visit shorttermsage.com slash fire shorttermsage.com slash fire get that incredible gift that julian talked about and of course shorttermsage.com has all the information that john was mentioning and real quick julian what's the name of your podcast short term rental success stories or vacation rental machines the top two podcasts on itunes if you just look up airbnb just type in airbnb fire nation the top two ones will pop up it seems like julian's listening to me on how to have the right keywords for your podcast so congrats on that and of course you can head over to eofire.com and type either john or julian in the search part with all the links but one more time shorttermsage.com slash fire that's your call to action john julian thank you both so much for sharing your truth your knowledge your value with fire nation today for that we salute you and we'll catch you on the flip side hey fire nation today's value bomb content was brought to you by both john and julian and fire nation i've created a treasure trove of free courses for you i teach you a podcast where masterminds create funnels for your big idea all you need to do is visit eofire.com slash resources to start learning today i'll catch you there or i'll catch you on the flip side customers want more from brands delivering more means only the customer experience taking control over data acquisition analysis creative and delivery klavio calls this owned marketing and they believe it's the best path to growth for more visit klavio.com slash fire that's klavio.com slash fire from tools that help with automated emails increasing sales gamification and more it's never been easier to create an online course than with the thinkific app store learn more and sign up for a free trial of thinkific at thinkific.com slash fire free that's t-h-i-n-k-i-f-i-c dot com slash fire free