Latest / Own More Doors / #5 From 0 to 100 Airbnbs: Building Wealth with Short-Term Rentals (Rafael Loza)

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#5 From 0 to 100 Airbnbs: Building Wealth with Short-Term Rentals (Rafael Loza) · Own More Doors

0:00
SPEAKER_02: Hey everyone, Juan Weezar here, president of Stage Real Estate.
0:03
SPEAKER_02: Another show on our podcast, Own More Doors.
0:06
SPEAKER_02: If you haven't checked it out on Spotify, Apple, Pandora, we're on there.
0:11
SPEAKER_02: And of course, we're recording this for YouTube channel as well.
0:14
SPEAKER_02: We are very thankful for our loyal YouTube subscribers, our fan base.
0:21
SPEAKER_02: Uh they're reaching out.
0:22
SPEAKER_02: We're doing business together and just can't uh thank them enough.
0:26
SPEAKER_02: And so excited today.
0:28
SPEAKER_02: I'm here with Rafael Loza.
0:30
SPEAKER_02: And Rafael, man, I um you have a huge following.
0:35
SPEAKER_00: Uh, you know, kind of.
0:37
SPEAKER_00: I mean, yeah, I'm I'm pretty good people actually follow me.
0:40
SPEAKER_00: Uh good, loyal, uh great.
0:42
SPEAKER_00: I mean, the majority of my followers are people who are trying to get into real estate and short-term rentals.
0:46
SPEAKER_00: Yeah.
0:47
SPEAKER_00: And um, it's been growing over the last like two years.
0:50
SPEAKER_02: Raphael, tell me, tell me so.
0:52
SPEAKER_02: So today we're gonna be talking about short-term rentals, Airbnb, and this is a really hot topic.
0:57
SPEAKER_02: Listen, Raphael, I've been selling multi-family for over 20 years.
1:01
SPEAKER_02: And when I first started, there was no Airbnb, there was really no short-term rentals.
1:05
SPEAKER_02: That wasn't really a thing.
1:06
SPEAKER_02: Now, you know, and I know that um the higher the income, the higher the value of your asset.
1:12
SPEAKER_02: So whether it's uh it's a house, it's a condo, or multi-dwelling building.
1:16
SPEAKER_02: The goal for for all of us, the business model is very simple.
1:20
SPEAKER_02: Bring in more income.
1:21
SPEAKER_02: Yep.
1:21
SPEAKER_02: In fact, bring in as much income as possible.
1:24
SPEAKER_02: Now, through the years, Airbnb has been one of those things that's been about short-term rentals.
1:29
SPEAKER_02: And now there's this like big community of people that are that's gonna be their business plan.
1:34
SPEAKER_02: Yeah, and that's something that you've been doing.
1:35
SPEAKER_02: So tell me a little bit about yourself so folks know who you are, how you got started, and what you're doing now in the world of real estate, utilizing short-term rentals to build wealth, success, etc.
1:47
SPEAKER_00: Yeah.
1:47
SPEAKER_00: So um I started doing real estate short-term rentals specifically about seven and a half years ago, um, give or take.
1:53
SPEAKER_00: And uh it started with I wanted to buy a property um in Orange County.
2:00
SPEAKER_00: And so I live in Orange County, and um, I couldn't afford one.
2:03
SPEAKER_00: So I had about 20 grand at that time.
2:06
SPEAKER_00: And the idea was I'm gonna buy a property, I'm gonna put a tenant in it, and I'm gonna cash flow, right?
2:10
SPEAKER_00: Like that was the goal.
2:11
SPEAKER_00: Um, listening to all the podcasts and studying and doing all the real estate stuff.
2:14
SPEAKER_00: Quickly realized that's not the case.
2:15
SPEAKER_00: Um, I wasn't gonna make any money.
2:17
SPEAKER_00: I was gonna be negative cash flow.
2:18
SPEAKER_00: So I was like, well, this sucks.
2:19
SPEAKER_00: So, you know, somebody sold me on this great real estate idea, and uh, it's not gonna work out.
2:24
SPEAKER_00: So I started doing research.
2:25
SPEAKER_00: I found out I actually went to a party um and I met these kids.
2:28
SPEAKER_00: They were driving, I don't remember, it's like a Ferrari or something.
2:30
SPEAKER_00: I was like, Hey, what are you guys doing?
2:31
SPEAKER_00: They're like, Oh, well, we Airbnb, a bunch of apartments in a building.
2:34
SPEAKER_00: And I was like, that's a thing, you can do that.
2:36
SPEAKER_00: And so they're like, Yeah, you know, and I was like, Well, how like they allow you?
2:39
SPEAKER_00: He's like, No, we do it under the radar, nobody knows.
2:41
SPEAKER_00: We're just Airbnb and a bunch of apartments.
2:42
SPEAKER_00: And I was like, Well, that's not a very good business model, right?
2:44
SPEAKER_00: I mean, I've I've ran businesses in the past, so I'm thinking, like, this isn't gonna work out.
2:49
SPEAKER_00: Long story short, I I it piqued my interest.
2:51
SPEAKER_00: I started re doing the research about the short-term rentals Airbnb.
2:54
SPEAKER_00: I found out that quickly, I actually kind of it was a hack at that time, not a lot of people were doing it, and so I was like, wait, I can actually go out and rent people's places, put them on Airbnb, right?
3:04
SPEAKER_00: Get them furnished set up, and then I can cash flow and I actually don't have to put the big down payment down on the properties.
3:08
SPEAKER_00: As long as I have permission from these people, I can do it long.
3:10
SPEAKER_00: And so um I tried it.
3:12
SPEAKER_00: I started calling people, trying to get information and uh getting a yes from a landlord and talking to investors.
3:17
SPEAKER_00: And finally, at some point, I got a yes, you can do it.
3:19
SPEAKER_00: It was a 120-unit building, it was under construction, and about 60 units were vacant.
3:26
SPEAKER_02: What um just so people kind of understand, um, what is it you're telling these owners so people could kind of wrap their head?
3:33
SPEAKER_02: Because what you're doing, uh, people in I guess, uh, I guess in your community do it, but a lot of people don't know exactly what it is you're doing.
3:39
SPEAKER_02: So, how does that conversation go with with an owner who's got a lot of vacancies?
3:43
SPEAKER_02: And by the way, if I'm an owner with a lot of vacancies and someone calls me and says I could fill those vacancies, you got my attention, is what I would think.
3:51
SPEAKER_00: So, you know, in the beginning it was like, hey, I want to Airbnb your place.
3:54
SPEAKER_00: And uh it was a quickly like you're crazy.
3:56
SPEAKER_00: You know, nobody's I don't want parties.
3:58
SPEAKER_00: And when you say Airbnb, it's quickly like parties, right?
4:01
SPEAKER_00: Oh, you're gonna destroy my house.
4:02
SPEAKER_00: Oh no, we're gonna have bad people here.
4:04
SPEAKER_00: Like, and so I quickly learned that I had to not sell it, but kind of pitch it in a different way.
4:09
SPEAKER_00: And so now it's simple.
4:10
SPEAKER_00: Hey, I'm doing corporate leasing because it's what I've been building over the last seven and a half years.
4:14
SPEAKER_00: And so, hey, I'm doing a corporate lease.
4:15
SPEAKER_00: Um, we're gonna house medical professionals.
4:17
SPEAKER_00: I just talk about the customer now.
4:18
SPEAKER_00: So we got medical professionals, we have business travelers, we have families here for leisure, we have small families with their babies that are visiting Disneyland.
4:25
SPEAKER_00: Um, and we're willing to take over this apartment.
4:27
SPEAKER_00: We'll sign a two, three-year lease and we're gonna take great care of it, we're gonna furnish it, we're gonna put money into it, we're gonna make it look beautiful, and we're gonna keep you fully occupied for as long as you let us operate in the building and as long as we're making sense and we're making money.
4:39
SPEAKER_00: Um, that's the conversation I have with an investor when I'm going back and forth.
4:43
SPEAKER_00: Um, but you know, it always starts with building report.
4:45
SPEAKER_00: So it's like, hey, I they get to know me, they know who I am, they know how I operate my business, um, they see my background.
4:50
SPEAKER_00: Uh, that's why I also started posting on social media because it kind of started giving me um credibility.
4:56
SPEAKER_00: And so people know that I'm that I'm legit, right?
4:59
SPEAKER_00: I have 120 of these units across the country.
5:01
SPEAKER_00: I mean, now I'm buying stuff, but um, in the beginning, when I started, I had to get into this point of I need a cash flow to start generating revenue.
5:08
SPEAKER_02: Okay, so okay, so so you get someone on board who says, You're crazy, but I'll give you a chance because I'm desperate and I want some income and you're my tenant.
5:15
SPEAKER_02: Yeah.
5:16
SPEAKER_02: Okay.
5:17
SPEAKER_02: So I I guess tell us what you more or less what you're renting a unit for and what it's bringing in to you.
5:25
SPEAKER_02: And I guess what's the difference?
5:26
SPEAKER_02: And I know they call it arbitrage, and and so kind of walk us through a typical scenario on like how much you're making per unit per month on average.
5:36
SPEAKER_00: So let me backtrack just a second, though, because you said something that kind of I want to clarify too.
5:40
SPEAKER_00: I've had I've had investors that don't want to work with me, and they're like, no, dude, look, uh we feel like it might risk destroy our building, the quality of the building.
5:48
SPEAKER_00: I've now I take over buildings that are brand new construction that are vacant.
5:52
SPEAKER_00: I take them before they're even ready.
5:53
SPEAKER_00: And something I always tell, and and your listeners might get some value out of this, uh I always tell the investors, listen, if you don't like me, try me out, right?
6:00
SPEAKER_00: I come in, I'm taking the risk.
6:02
SPEAKER_00: I'm gonna pay you first months' rent, I'm gonna give you deposit, and I'm gonna spend about$15,000 in your one-bedroom apartment.
6:07
SPEAKER_00: Try me out for six months.
6:08
SPEAKER_00: And if six months we cause any problems, we have bad people, we're disturbing your other tenants, you can kick me out and I'll find you a tenant, right?
6:15
SPEAKER_00: I pick up my stuff and I go.
6:17
SPEAKER_00: Simple as that.
6:18
SPEAKER_00: And to them, it's no risk, right?
6:19
SPEAKER_00: It's no hassle.
6:20
SPEAKER_00: Like it's it's just upside because if they end up liking me, I stay there long term, I'm not bothering anybody, right?
6:25
SPEAKER_00: So I wanted to touch on that for a second.
6:27
SPEAKER_00: Now, when I go to answer your actual question here, when I go into any any apartment or any house, any any type of real estate, I you always got to make sure that you run numbers first, right?
6:36
SPEAKER_00: So, for example, a one-bedroom apartment, if I'm renting it for about$2,000, I need to make at least$1,000 in profit.
6:41
SPEAKER_00: So back when I first started, we were doing$2,000,$4,000 a month in profit.
6:46
SPEAKER_00: So a two-bedroom would make me$4,000 a month in profit.
6:50
SPEAKER_00: It was crazy.
6:50
SPEAKER_00: Now a two-bedroom is making me about$1,800 a month in profit.
6:54
SPEAKER_02: Why okay?
6:54
SPEAKER_02: So and I just this is more my question.
6:57
SPEAKER_02: Why is it making you less?
6:59
SPEAKER_02: So market meaning there's more competition.
7:02
SPEAKER_02: Market saturation is number one.
7:03
SPEAKER_02: Yeah, people thought you were making money.
7:05
SPEAKER_02: Yeah, too.
7:06
SPEAKER_00: So it's funny, I uh I went into a market and uh kids you and I started talking about it, and there was in my corner probably seven short-term rentals.
7:14
SPEAKER_00: A year later, after me talking about it and letting people know, um, we had about 190 in that same corner.
7:19
SPEAKER_00: Um, and then I ended up leaving that market, went to a different city, and there was probably 190 short-term rentals at the time.
7:26
SPEAKER_00: And it's I'm not, you know, taking responsibility for it because a lot of people, a lot of influencers start talking about this anyway.
7:31
SPEAKER_00: But um, right now there's about a thousand in that market.
7:35
SPEAKER_00: And I when I started, there was literally nothing, right?
7:37
SPEAKER_00: So people have followed me different places, like in that that uh 120 unit building I was telling you about.
7:41
SPEAKER_00: When I went into that building, nobody had even contacted them, right?
7:44
SPEAKER_00: I go in, I set up a couple short-term rentals.
7:46
SPEAKER_00: The owner ended up selling the building because he had 72 short-term rentals in that building from different operators.
7:52
SPEAKER_00: And so a lot when COVID hit, a lot of people weren't paying their rent and they were doing sketchy stuff.
7:56
SPEAKER_00: And so he's he sold a building.
7:58
SPEAKER_00: The new owner calls us and he goes, Listen, I have a bunch of other people here not paying, right?
8:02
SPEAKER_00: And so uh he actually ended up kicking everybody out, so I left.
8:06
SPEAKER_00: He didn't want anybody at all because he has such a bad taste in his mouth.
8:09
SPEAKER_00: Um, got it, I got, I built, ended up building new relationships with other people, and then I started all over again, right?
8:14
SPEAKER_02: The the 120 units that I guess got your got you, I guess, your foot in the door.
8:21
SPEAKER_02: Um, what city was that in?
8:23
SPEAKER_00: That was in Fullerton.
8:24
SPEAKER_00: Okay, yeah, and now there's regulation there.
8:26
SPEAKER_00: So there's uh they offered uh a hundred per 100 and some permits.
8:30
SPEAKER_00: So I still have units in Fullerton permitted.
8:32
SPEAKER_00: Um, and so that building specifically, well, you know, it's not there anyway.
8:36
SPEAKER_00: I mean, the building's still there, but we're not in that building.
8:38
SPEAKER_02: Tell me the difference because you're using the word short-term rentals, but does that in your world mean Airbnb as well?
8:44
SPEAKER_00: Yeah, so great question, actually.
8:45
SPEAKER_00: A lot of people always can go straight to Airbnb as the business model, and it's part of the business model.
8:50
SPEAKER_00: Short-term rentals just means I'm housing people for 30 days or less.
8:53
SPEAKER_00: And it can come from anywhere.
8:54
SPEAKER_00: I can market on Craigslist, I can market on Zillow, I can market on Virgo, I can market on, I mean, there's a million websites.
9:01
SPEAKER_00: Um, it I can even go out and find my own people and bring them in, which is kind of the majority of major part of our business here.
9:07
SPEAKER_00: Is I want to say maybe 45% of the business now is through people that know us or rebook now at this point.
9:13
SPEAKER_00: Airbnb is just a marketing platform for short-term rentals.
9:17
SPEAKER_00: That's all it is.
9:17
SPEAKER_00: Everybody uses Airbnb as like that's the business model.
9:20
SPEAKER_00: It's not short-term rentals, is the business model.
9:22
SPEAKER_00: Airbnb is the marketing platform to bring in people to keep your places occupied.
9:27
SPEAKER_00: Does that make sense?
9:28
SPEAKER_00: Yeah.
9:28
SPEAKER_02: Um, how do you prevent people from um because you said hey, that that the number one reason someone doesn't want to do uh short-term rentals is because people party.
9:36
SPEAKER_02: I uh so let me give you an example.
9:37
SPEAKER_02: I during COVID, a guy calls me and says, uh, he's got a four-unit building here in Long Beach.
9:42
SPEAKER_02: That's kind of our bread and butter, that's what we specialize in.
9:44
SPEAKER_02: We sell a lot of fourplexes, and so he said, Um, I say, Great, what's the income?
9:48
SPEAKER_02: He's like, Well, one guy rents all four units.
9:52
SPEAKER_02: Uh, he gives me$8,000 a month.
9:54
SPEAKER_02: I'm like, okay.
9:55
SPEAKER_02: And he's like, uh he and then he rents them out the uh to make the spread.
10:00
SPEAKER_02: So he he pays the seller eight thousand dollars.
10:03
SPEAKER_02: Um, and then whatever he makes uh on top of that is his.
10:07
SPEAKER_02: And the seller was okay with that because he's like, Well, at least my building's being leased.
10:10
SPEAKER_02: And I said, Well, does he have a permit?
10:12
SPEAKER_02: No, he doesn't have a permit.
10:13
SPEAKER_02: Now, during the sale, I got access, you know, I had to go in, do inspections, appraisals, and the things that we brokers have to do.
10:20
SPEAKER_02: And every time that I went in there, it looked like every unit was used for party purposes.
10:26
SPEAKER_02: One lady even had a um a dance pole in the center that she had attached.
10:30
SPEAKER_02: So how how are you guaranteeing or preventing the party?
10:35
SPEAKER_02: Because that I guess from my impression, that's what I saw.
10:37
SPEAKER_00: Sure.
10:38
SPEAKER_00: So, you know, it always starts with your customers.
10:40
SPEAKER_00: So I have some locations where we allow parties, right?
10:42
SPEAKER_00: Downtown area, there's bars downstairs, there's restaurants downstairs.
10:45
SPEAKER_00: Literally, you walk down and you're like partying, right?
10:47
SPEAKER_00: There's mute live music.
10:48
SPEAKER_00: Those places we tell people, hey, come have fun, go get drunk, have your thing, go upstairs, don't drive home, stay there, right?
10:53
SPEAKER_00: Yeah, and you can party inside because this building's specifically for the downtown demographic.
10:58
SPEAKER_00: We have other places where we don't allow it at all, right?
11:01
SPEAKER_00: Quiet neighborhoods.
11:02
SPEAKER_00: Um, we take over like a 12-unit apartment complex where we want people just business travelers, et cetera.
11:06
SPEAKER_00: And so it starts with the very first point of contact.
11:10
SPEAKER_00: So, number one, if I'm like, for example, if I'm acquiring somebody from Airbnb, our listing already right off the bat weeds out a bunch of people.
11:16
SPEAKER_00: So we have a thing of house rules that we say, hey, you must agree to all the house rules.
11:20
SPEAKER_00: No parties, no loud noise after 10, uh, quiet hours, uh, we have a doorbell camera, so we know that nobody's coming in and going.
11:27
SPEAKER_00: Um, second, like if you're listing, is is the short answer, right?
11:31
SPEAKER_00: I don't want to go to the details.
11:32
SPEAKER_00: Number two is the price point.
11:34
SPEAKER_00: So we target a higher um price point customer type that isn't really gonna come in and cause problems.
11:41
SPEAKER_00: I already know that, and as bad as it sounds, um if I'm gonna book something under$90 a night, I'm gonna get people that are gonna destroy my place because they just don't care.
11:49
SPEAKER_00: They're here for budget, they're here to, you know, have fun or do whatever the heck they want to do.
11:54
SPEAKER_00: If I target a customer from$100 to$200 a night, they're putting a little bit more money for the place that they want to stay in.
12:00
SPEAKER_00: And so they want a nice, comfortable, quiet place.
12:02
SPEAKER_00: And odds are they're not really gonna do it.
12:04
SPEAKER_00: Now, there's people that pay a lot of money to come and have big parties, but you're talking about bigger properties.
12:08
SPEAKER_00: So, like my properties in Joshua Tree, we allow people to come in and have fun because it's Joshua Tree.
12:12
SPEAKER_00: You're gonna go and drink and have fun in the middle of the desert, a vacation rental market.
12:15
SPEAKER_00: The places in Tennessee, same concept, right?
12:17
SPEAKER_00: The hotel, same concept.
12:19
SPEAKER_00: Um, but it always starts with number one, your listing and then your security procedures.
12:23
SPEAKER_00: So they don't get the door, they don't get in the door or get the code.
12:26
SPEAKER_00: If I see seven, eight, nine, ten people show up with coolers and beer, right?
12:31
SPEAKER_00: We we tell them, Hey, look, dude, you're gonna have a party.
12:33
SPEAKER_00: We just saw you, you showed up with a bunch of people, kick rocks, right?
12:36
SPEAKER_00: So does that answer it?
12:37
SPEAKER_02: Yeah, no, it does.
12:38
SPEAKER_02: It does.
12:39
SPEAKER_02: Um, I mean, I would think that people still break the rules, is what I would think.
12:45
SPEAKER_02: Oh, all the time, dude.
12:45
SPEAKER_02: Um, Rafael, do you do this full time?
12:49
SPEAKER_02: And uh how many how many doors are you short-term uh so you know when I started, um, I skilled really quickly.
12:59
SPEAKER_00: Again, you can start with very little money, right?
13:00
SPEAKER_00: One bedroom's gonna cost you 15 grand.
13:02
SPEAKER_00: So right now I have I don't know, don't quote me on the numbers.
13:05
SPEAKER_00: We I have a full team, so it I think I have 76 arbitrage units, and then I have a boutique hotel, that's another 19 units, and then I have random properties throughout the country.
13:16
SPEAKER_00: So I think we have about 110 units total.
13:19
SPEAKER_00: Um, and then on top of that, we have more because I've actually acquired buildings where I don't want to take over, and then I'll give them out to like my brothers and be like, hey, dude, I want you get started in this game.
13:27
SPEAKER_00: And you do it, yeah.
13:28
SPEAKER_02: Yeah, I mean, meaning like you give it to someone and say, Hey, give me this much, and then you allow them to do the arbitrage.
13:34
SPEAKER_02: Correct.
13:34
SPEAKER_02: Um, you you have a team, you're talking about a camera and you're kind of watching people.
13:40
SPEAKER_02: I mean, you're every time someone's checking in, you're seeing who's coming in, or someone is monitoring that.
13:44
SPEAKER_00: Yeah, so we have a full team.
13:46
SPEAKER_00: Um, so we have uh six virtual assistants that manage the entire customer experience and operations.
13:54
SPEAKER_00: I have an operations manager and then I have boots on the ground.
13:56
SPEAKER_00: Um, their job is whenever we have a check-in, you just kind of check the camera and make sure that it's not, you know, people coming in and causing issues.
14:03
SPEAKER_02: And and so a virtual assistant, probably like in the Philippines, is looking at the Philippines.
14:07
SPEAKER_02: Okay, got it.
14:08
SPEAKER_02: And so they're check-in for you.
14:10
SPEAKER_02: Yes.
14:11
SPEAKER_02: And what happens if they see uh uh someone rolling through with a uh like a keg or you know, whatever?
14:17
SPEAKER_00: Yeah, it it's so you know, we've never actually had that to be to be honest.
14:21
SPEAKER_00: But if it does happen, they get a quick message.
14:23
SPEAKER_00: Hey, listen, uh, we saw that you're showing up with more guests in your reservation.
14:26
SPEAKER_00: So you reserved for three people, you showed up with nine.
14:29
SPEAKER_00: Um, you either need to pay a guest fee for the other seven, and please know that after 10 p.m.
14:33
SPEAKER_00: they gotta be out.
14:34
SPEAKER_00: Um, and you can't have any dialog noise after 10 p.m.
14:36
SPEAKER_00: And if they don't agree or don't respond, they get a they get a text message, they don't respond, they get a phone call, if they don't respond, then we contact wherever we got the booking from.
14:42
SPEAKER_00: Um, typically you get those people from Airbnb or Verbo.
14:47
SPEAKER_00: Verbo is actually worse than Airbnb, which is crazy.
14:49
SPEAKER_00: Um, and if it comes from like a direct booking site or like a company that we work with, we know they're not gonna have problems.
14:54
SPEAKER_00: And if they do bring people, we know that it's okay because they're still responsible people that came from a reputable company, right?
15:00
SPEAKER_00: Um, but yeah, they get a quick message hey, dude, listen, you can't have a party here, just so you know.
15:04
SPEAKER_00: Um, we saw that you guys are bringing all this stuff in.
15:06
SPEAKER_00: Please make sure that you guys can have fun until 10 p.m.
15:09
SPEAKER_00: But after that, you need to shut it down.
15:10
SPEAKER_00: And if you don't, reservations can end and you gotta go.
15:12
SPEAKER_00: Usually when they get that message, people you start seeing people leave.
15:15
SPEAKER_00: It's like, dude, okay, we're out.
15:16
SPEAKER_02: Right.
15:17
SPEAKER_02: Um when be because someone was doing this before you, right?
15:21
SPEAKER_02: Did you did you uh set up your business model and how they were operating it, or did you get into it and say, Oh, uh, this is how I think it should be done?
15:30
SPEAKER_02: Like, meaning, like, did you did you have someone, or did you have to like reinvent the wheel and say, No, yeah, both.
15:36
SPEAKER_00: So I I had a mentor.
15:38
SPEAKER_00: Um, he was actually selling this, like, it was like a$600 set of videos at that time.
15:43
SPEAKER_00: Um, my first actual investment in myself.
15:45
SPEAKER_00: Um, best$600 I've ever spent in my entire life.
15:48
SPEAKER_00: They've made me millions.
15:49
SPEAKER_00: Um, he taught business systems, he taught procedures.
15:51
SPEAKER_00: Now I knew about scaling and automation.
15:53
SPEAKER_00: I just didn't know it the way he was explaining it, right?
15:56
SPEAKER_00: Um, he taught me how to actually deal with like problems, um, how to automate certain things, uh, door locks, all that fun stuff.
16:03
SPEAKER_00: All the little details that would have probably cost me thousands of dollars to figure out, they were in this video.
16:09
SPEAKER_00: This is what you need to do, this is how you need to market, and these are the systems and procedures you need to put into place.
16:13
SPEAKER_00: From there, I started tweaking things for our business.
16:16
SPEAKER_00: For example, the the um the VA thing.
16:18
SPEAKER_00: He's like, dude, you gotta get VAs.
16:20
SPEAKER_00: And I was stubborn.
16:20
SPEAKER_00: I went to about 18 units.
16:21
SPEAKER_00: I said, I'm not gonna get VAs, I'm not gonna get VAs.
16:24
SPEAKER_00: And then um at 18 units, I was like sitting there at dinner answering guest messages, and I was like, okay, this is a complete waste of time, and now I'm no longer enjoying it.
16:34
SPEAKER_00: And that's when I was like, okay, it's time to hire my first VA.
16:37
SPEAKER_00: That was a learning curve.
16:38
SPEAKER_00: Nobody taught me how to hire VAs and nobody taught me how to scale with VAs.
16:42
SPEAKER_00: So I had to figure it out.
16:43
SPEAKER_00: I went through 20, 30 VAs until I finally hired a good one who helped me automate.
16:47
SPEAKER_00: Then she started hiring.
16:48
SPEAKER_00: Now we have a whole team sourcing VAs for other short-term rental operators, and it's pretty much automated.
16:54
SPEAKER_02: Tell us the different cities that you're in right now.
16:57
SPEAKER_00: Um, sure.
16:58
SPEAKER_00: So Santa Ana, Fullerton, uh Costa Mesa, um, Joshua Tree, Escondido, uh, San Diego, um Tennessee, Severeville, I think it is, um, Michigan, Lansing, Katoski, Michigan, uh, Milwaukee.
17:19
SPEAKER_00: I was in Kansas City, but we just shut down a bunch of units.
17:21
SPEAKER_00: We were in a battle neighborhood, so they weren't making money.
17:23
SPEAKER_00: Um, I think that's it.
17:25
SPEAKER_00: Off the top of my head.
17:26
SPEAKER_00: Wow.
17:27
SPEAKER_02: And and are what's what's the game plan moving over?
17:31
SPEAKER_02: I mean, moving forward, are you continuing to bring um, and I don't know how you guys call it.
17:36
SPEAKER_02: I mean, like I would just say bring in more more units on.
17:40
SPEAKER_02: Is that is is that something that you're actively doing, or or are you actively having to oversee the current business that you've already built?
17:47
SPEAKER_00: Yeah, so great question, dude.
17:48
SPEAKER_00: So no, so um the business is already like I pretty much handed it off, right?
17:52
SPEAKER_00: I I'm I just oversee operations uh at a very bird's eye view.
17:57
SPEAKER_00: So we have weekly calls with the team to make sure things are operating.
18:00
SPEAKER_02: And so who'd you hand it off to?
18:01
SPEAKER_02: Uh a family member?
18:04
SPEAKER_00: Yes.
18:05
SPEAKER_00: Um, so uh my uh girlfriend, she she started working with me, and so she handles most of the day-to-day stuff.
18:11
SPEAKER_00: She's actually gonna quit at the end of this month now because she's focusing on other stuff in real estate.
18:15
SPEAKER_00: But I my manage, I call her my manager VA, she's my top virtual assistant, she oversees everything.
18:21
SPEAKER_00: Um, she does all the operations, she manages all the virtual assistants, she makes sure everything's flowing, she files claims, everything.
18:27
SPEAKER_00: And then I have a weekly call with her, and she's kind of overseeing everything.
18:30
SPEAKER_00: I mean, it's simple, dude.
18:31
SPEAKER_00: Like, sorry, uh it people think it's a big, big business, and it is, but dude, it's once you get a couple key players in there, it's like 100% automated, you don't have to be involved at all.
18:40
SPEAKER_02: Um and talk about um getting more units on, or sure, and then I guess I you know, for someone listening, you know, you're saying Joshua Tree and Escondido, and I mean these places are all over Southern California, they're not exactly close.
18:52
SPEAKER_02: I mean, Santa Ana Floatin are closer.
18:54
SPEAKER_02: Um when you're um finding a new place in a new location, how do you know it's successful?
19:03
SPEAKER_02: I mean, obviously, like when we for people who don't know Joshua Tree, you know, that's a place out in the desert, it is popular and and it's been popular for quite some time.
19:12
SPEAKER_02: That one was probably maybe an easier decision, knowing that people go there to have a good time.
19:16
SPEAKER_02: But like other cities, how do you know, and especially out of state too, since you're here in Southern California, how do you know that a place is gonna be successful or that it's gonna work?
19:24
SPEAKER_00: So running numbers, number one, and doing research, uh, and your network.
19:28
SPEAKER_00: So a lot of these places I have other people in my network that have properties there and we have conversations, and then I an opportunity comes up, I run numbers.
19:35
SPEAKER_00: So you can run numbers on Air DNA, you can get price labs, uh, you do market research, you make sure that you know what your average daily rate is gonna be.
19:40
SPEAKER_00: You got to make sure that's gonna cover the mortgage if you're buying something.
19:43
SPEAKER_00: Um, to go let me go back to your to your question about what I like now that I fully kind of give this bird's eye view of the company, my role is to continue to grow and add properties.
19:53
SPEAKER_00: And so my job is to actually find the properties that are gonna make money, and then it leads to the underwriting process.
19:58
SPEAKER_00: The underwriting process is making sure that my daily rates are gonna be covered, making sure that my expenses are gonna get covered.
20:03
SPEAKER_00: It's it's simple, fit kind of like you do with multifamily, right?
20:06
SPEAKER_00: Your rent has to be able to cover um your expenses.
20:10
SPEAKER_00: Same thing at a much larger rate uh spread.
20:13
SPEAKER_00: Um, so a single house, even like a hotel, right?
20:16
SPEAKER_00: You're underwriting it like multifamily, but now you're just talking about larger numbers covering bigger expenses.
20:21
SPEAKER_00: Um, you got to make sure all these expenses are covered before you actually go into a market.
20:26
SPEAKER_00: Now, a lot of these markets, number one, happen to be vacation rental markets.
20:29
SPEAKER_00: So they're targeted for these specific things.
20:31
SPEAKER_00: Um, for Joshua Tree, it actually was a difficult decision because that market's extremely saturated.
20:36
SPEAKER_00: People are losing their shirts there.
20:37
SPEAKER_00: Right.
20:37
SPEAKER_00: Um, but dude, I just picked up five properties for free.
20:40
SPEAKER_00: 100% creative finance, all five of them, right?
20:42
SPEAKER_02: When you say picked up, um you bought them.
20:46
SPEAKER_02: Bought them.
20:46
SPEAKER_02: So, okay.
20:47
SPEAKER_02: So so so someone probably overextended themselves or they bought the right thing, and they were they were in a and I'm reading about this.
20:55
SPEAKER_02: So they were in a tough situation, and you were able to convince them.
20:58
SPEAKER_02: Well, well, they probably wanted out, it's probably what it sounded like.
21:01
SPEAKER_00: I was, yeah, I wasn't even convincing, it was more like, hey, dude, we have this property and we're not making any money.
21:05
SPEAKER_00: Would you mind taking it over?
21:06
SPEAKER_00: Or would you be interested in taking it over?
21:08
SPEAKER_00: And here are the terms.
21:09
SPEAKER_02: Yeah.
21:09
SPEAKER_02: Um, a lot of these things.
21:10
SPEAKER_02: And and in those cases, um, and sorry to cut you off, just just so that people could like understand, like a lot of times people in real estate, we we rush through the deal making and then people who are trying to learn it.
21:22
SPEAKER_02: So they they essentially said um, take over the property, we'll play the role of the bank.
21:28
SPEAKER_02: So they became your bank.
21:29
SPEAKER_02: Correct.
21:29
SPEAKER_02: So you don't have to go get a loan a loan.
21:32
SPEAKER_02: Uh, in fact, in this case, because you said 100% financing, you didn't even have to put a down payment.
21:36
SPEAKER_02: Correct.
21:36
SPEAKER_02: And then they said, Hey, pay us probably interest-only payments on whatever's acceptable to the both of you, and it made sense.
21:41
SPEAKER_02: Correct.
21:42
SPEAKER_02: Yeah, and in most cases, if someone offered me that, I'm I'm in as well, right?
21:46
SPEAKER_02: Because it's uh it's it's a no brainer.
21:48
SPEAKER_00: I actually got what, two or three of them this past week that I passed on because the numbers just still didn't make sense, even though they were great, the numbers just don't make sense.
21:55
SPEAKER_00: I'm not gonna make any money, and then I actually have to put money into them to make them cash flow even more, right?
21:59
SPEAKER_00: So, like, for example.
22:00
SPEAKER_00: I picked up two properties, uh, a million fifty and a hundred percent seller financed for five years, right?
22:07
SPEAKER_00: So what means is they're my bank for five years and I got to pay them back that million fifty in five years, but they gave me five years of interest only payments at three percent.
22:15
SPEAKER_00: Yeah, right now, if I go get a loan, sorry, if if I go get a loan for a million fifty, it's gonna be about eight percent.
22:21
SPEAKER_00: That payment's gonna be through the roof because you're paying uh mortgage, interest, taxes, insurance, all of that.
22:26
SPEAKER_00: Right now, my payment on million fifty a month is$2,700 for two houses that are gonna generate about ten thousand dollars a month.
22:33
SPEAKER_02: That's including the taxes, or that's just the interest no, that's just the interest payment.
22:36
SPEAKER_00: The interest payment.
22:37
SPEAKER_02: So for anyone listening, there's additional expenses to that.
22:40
SPEAKER_02: 100%, yes.
22:40
SPEAKER_02: Yeah, and okay, so I would think uh because I would think that there's even more money when you own the building.
22:48
SPEAKER_02: Now, I right because because although right now what you're doing, or when you got started, and I get it for anyone listening, this is a way to get started with uh not as much money.
22:58
SPEAKER_02: Because if you come talk to me, I don't I don't do the game that that they're playing or the business model that that um Raphael is doing, you're gonna need you're gonna need a lot more money, and there's gonna be a lot less cash flow.
23:09
SPEAKER_02: In fact, a lot of cases you're gonna be negative because uh that's the that's the world that I'm in.
23:14
SPEAKER_02: But it seems like if you're in a position and now you've you've grown into a position where now you're you're acquiring assets.
23:21
SPEAKER_02: And I'm thinking you you're buying assets and then you're still um have this efficient business model where you're maximizing the rent.
23:29
SPEAKER_02: So now it's like uh a double whammy.
23:31
SPEAKER_02: You have massive cash flow and you have the appreciation that's really gonna make you wealth, yeah, right.
23:36
SPEAKER_00: So, you know, to be very clear, I started this because I had no money, right?
23:39
SPEAKER_00: When I started my first unit, I had$5,000 at that point.
23:42
SPEAKER_00: Like I had$20,000 when I wanted to buy a house, then using all that money up for living and just kind of disappeared, right?
23:49
SPEAKER_00: So I had five grand.
23:50
SPEAKER_00: Um, my idea was like I can rent the property, I can use the$5k for down payment and deposit.
23:55
SPEAKER_00: That's all I needed.
23:56
SPEAKER_00: And then I borrowed a$9,000 credit card from my brother.
23:59
SPEAKER_00: I started this with a credit card.
24:00
SPEAKER_00: Um, I call him up.
24:01
SPEAKER_00: I was like, dude, I got this great business idea.
24:02
SPEAKER_00: They finally said yes.
24:03
SPEAKER_00: Let me borrow your credit card.
24:04
SPEAKER_00: It had nine grand on it.
24:06
SPEAKER_00: I furnished the entire two-bedroom apartment with nine grand, right?
24:08
SPEAKER_00: I put the five thousand down for um, I put the five thousand dollars down for the first month's rent and the deposit.
24:15
SPEAKER_00: Literally, the first month, it full, full, full, first full month in operations, we made a six thousand dollar profit.
24:20
SPEAKER_00: Okay, I was like, holy cow.
24:22
SPEAKER_00: Um, so my idea was like, I'm gonna add a bunch of these, cash flow a bunch, and then start buying one property a month.
24:27
SPEAKER_00: Um, market changes, saturation, the market's still down right now, anyway.
24:31
SPEAKER_00: We're kind of in a recession.
24:32
SPEAKER_00: Um, profits are down significantly.
24:34
SPEAKER_00: Um that that you two-bedroom unit probably does about$1,500 a month still.
24:39
SPEAKER_00: A one bedroom will do about$800 a month now.
24:41
SPEAKER_00: Um, in some cases, they were doing maybe two, three hundred bucks a month, but they're still in the green.
24:46
SPEAKER_02: When you're saying, okay, so you're you're saying or uh you're saying profits are down for your type of business.
24:52
SPEAKER_02: Correct.
24:52
SPEAKER_02: Got it.
24:53
SPEAKER_02: But but but when you're saying still the green, you're still making money.
24:56
SPEAKER_02: It's just it's not as much as you were once making.
24:59
SPEAKER_00: So, for example, um the if I go and I arbitrage a building, right?
25:06
SPEAKER_00: I'm paying you your base rent.
25:08
SPEAKER_00: So you're making your money, you're covering your costs.
25:10
SPEAKER_00: I'm still making a spread above that, right?
25:12
SPEAKER_00: Right now, if I were to go and buy the building and I run it the exact same way, now I'm covering my expenses and still cash flow on top of that a significant amount.
25:19
SPEAKER_00: So it's still in the green, just the spread is a little bit smaller now.
25:23
SPEAKER_00: Does that make sense?
25:23
SPEAKER_00: Yeah.
25:24
SPEAKER_00: So to go back to the point I was making earlier, the goal was always to buy property.
25:28
SPEAKER_00: I just couldn't afford it.
25:29
SPEAKER_00: And so my idea was again to scale and start cash flowing enough to buy a property every single month.
25:34
SPEAKER_00: Now I'm making enough money to buy a property probably every two to three months, and I can just go and buy one and add it to the portfolio and slowly weed out all these rentals and start owning for the long-term wealth because that's the goal.
25:45
SPEAKER_00: Ultimately, is to have wealth long term and to be able to live 100% off just the rent and the income from these properties, or maybe you have an exit strategy where I sell it all and have a couple million to go and do whatever I want, right?
25:55
SPEAKER_00: Right.
25:56
SPEAKER_00: Um, you know, it that was the idea.
25:59
SPEAKER_00: Now I just enjoy the process that I want to keep growing and building businesses, like I'm actually buying a business now.
26:04
SPEAKER_00: Um, completely outside of real estate, right?
26:06
SPEAKER_00: Because I enjoy the process.
26:07
SPEAKER_00: But when I started, I had no money.
26:08
SPEAKER_00: I have to figure out how to get money to number one, cover my expenses, number two, start covering my lifestyle, and number three, to be able to buy and invest in other bigger projects.
26:17
SPEAKER_02: Right.
26:17
SPEAKER_02: Talk to us about run just one unit running a successful Airbnb.
26:23
SPEAKER_02: Yeah, tell us about like the furnishings, the importance of um, because you're not going because you you said earlier, you're you're you're not trying to go for the low budget stuff.
26:32
SPEAKER_02: So if you're a hundred dollars or above 200, 300, just uh for someone who says, Hey, I'm just gonna do my first, uh I guess maybe give advice to someone who owns a four-unit building.
26:42
SPEAKER_02: Yeah, the city of Long Beach will allow one of those four to legally have an Airbnb um uh permit.
26:49
SPEAKER_02: Um what what advice would you give someone who says, Hey man, I'm not gonna do it at the scale that you're doing it because I you know I don't know how to do that, you know.
26:56
SPEAKER_02: Um what what advice would you give someone who's gonna just do their first one via Airbnb?
27:01
SPEAKER_00: Yeah, I'm glad you I'm glad you asked this question because a lot of people think that they can just put furniture in it in an apartment or house and they're gonna cash flow.
27:09
SPEAKER_00: That's not the case anymore.
27:10
SPEAKER_00: So, number one, whatever property you choose to do, run comps, right?
27:13
SPEAKER_00: Go on Airbnb and find other similar properties like yours that are performing very well.
27:18
SPEAKER_00: Um, and similar, I mean room count, same type of design, um, style of the infrastructure, and then see what kind of furniture is and what amenities they're providing in that place.
27:27
SPEAKER_00: That's number one, because now you're gonna have a base level of what you know you're gonna be able to make.
27:31
SPEAKER_00: So if I find to give you a very basic example, if I have a three-bedroom home that's nice and modern and very good finishes inside that looks beautiful and it's updated, I'm gonna go find one exactly like that that I that and then I'm gonna see what they're making.
27:43
SPEAKER_00: And then I'm gonna take those numbers and go, hmm, this is what I can make in mine.
27:46
SPEAKER_00: Is it enough to cover my cost?
27:48
SPEAKER_00: Once it is, now I know the type of furniture and the type of amenities I need to do to be better than that one, right?
27:53
SPEAKER_00: So now I'm gonna start putting higher end.
27:55
SPEAKER_00: Maybe they have crappy Amazon furniture and they're crushing.
27:58
SPEAKER_00: I know that if I put a little bit higher in stuff, now I'm gonna be better than my competition.
28:01
SPEAKER_00: If they have a pool and I have a pool, but my pool has different types of amenities, right?
28:05
SPEAKER_00: Maybe even just better photos and better floaties and just certain things, maybe a little water basketball court, it's now better than that one.
28:12
SPEAKER_00: And if they're doing this much, I'm gonna make this much more money, right?
28:15
SPEAKER_00: So, number one, find out what what it is that your competitors that look similar to you are doing and beat them and put some money into your property.
28:23
SPEAKER_00: Like the budget stuff is not gonna work anymore.
28:25
SPEAKER_00: I see a ton of people have beautiful properties and then they're going on Amazon and buying you know sixty, seventy dollar tables and chairs, and it's like, dude, you're doing a disservice at this point because nobody wants to stay there.
28:36
SPEAKER_00: Um, and number two, provide amenities.
28:38
SPEAKER_00: It's all about experiences now.
28:40
SPEAKER_00: It's not the days of like where you can just put a property up on Airbnb and somebody would book it are gone.
28:46
SPEAKER_00: Like, people want an experience now when they travel for them to give you your money, right?
28:49
SPEAKER_00: If someone's gonna spend their money, they want something in return.
28:52
SPEAKER_00: Um, unless they're traveling for business, of course, but that's a different story.
28:54
SPEAKER_00: Um, put amenities in there, right?
28:56
SPEAKER_00: Have things for them to do, whatever, whatever your customer type is.
28:59
SPEAKER_00: If you're targeting kids and families, have stuff for the kids, right?
29:01
SPEAKER_00: Like, how many times do you travel with your kids and then there's nothing for the kids to do, or it's unsafe, right?
29:06
SPEAKER_00: Do you have a playground?
29:07
SPEAKER_00: Is there like a like a little private area for the children so that the parents can relax?
29:11
SPEAKER_00: Like all that stuff.
29:11
SPEAKER_00: Know your customer, target that customer and market and put amenities for that customer.
29:16
SPEAKER_00: And I mean, you'll always succeed.
29:18
SPEAKER_02: Are you hiring a designer?
29:20
SPEAKER_00: Yeah, every single unit's been designed professionally by a designer.
29:23
SPEAKER_02: Okay, so then you're paying someone to go do it, and then I guess do you and then that designer gets paid to go uh furnish the place.
29:32
SPEAKER_00: So they get paid a fee, so their designing fee, and then um they spend money uh uh based on a budget that I give them.
29:38
SPEAKER_00: So if I go, hey, I have a$30,000 budget for this three-bedroom house, go have fun.
29:42
SPEAKER_00: And this is my customer, and now they know what they need to target, and then they they'll send me designs and I go, Hey, this is good, this is not good.
29:49
SPEAKER_00: Um, hey, you're all over the place.
29:50
SPEAKER_00: Hey, I need this, and then you can work with them.
29:52
SPEAKER_00: As if you find one that knows short-term rentals and midterm rentals and stuff like that, um, they'll be able to provide certain amenities and certain furniture for your customer type.
30:01
SPEAKER_02: Yeah.
30:02
SPEAKER_02: Um Raphael, so right now I'm selling a four-unit building on Long Beach.
30:06
SPEAKER_02: Uh one unit has uh Airbnb, um Airbnb permits uh and it's really successful.
30:14
SPEAKER_02: Um, it's a two-bedroom.
30:16
SPEAKER_02: I think it brings in like 4,300 um because of Airbnb being because of Airbnb for that two-bed uh two-bath.
30:24
SPEAKER_02: And people are like, well, what would it rent for in the market in that area?
30:28
SPEAKER_02: That might be like 2700, right?
30:29
SPEAKER_02: So it makes sense for them to run that one.
30:31
SPEAKER_02: Now the other three, the other three, they're doing short-term rentals via um uh furnish finders.
30:38
SPEAKER_02: Do you can you make money off of Furnish Finders?
30:41
SPEAKER_02: You specifically, can you tell us how you do that?
30:43
SPEAKER_00: Yeah, so great question.
30:44
SPEAKER_00: I just spoke about this at the uh at the midterm rental event.
30:47
SPEAKER_00: My buddies he's a genius at this, the guy I have a podcast with.
30:50
SPEAKER_00: Um, so Furnish Finders is number one a budget-friendly website for midterm rentals, so 30 days at a time.
30:57
SPEAKER_00: Um, you can make money, but you got to target specific customers in that website.
31:02
SPEAKER_00: So people that use it are traveling on a budget.
31:04
SPEAKER_00: Um, if you put it up on Furnish Finder and you wait, their lead, let me be what let me explain what they're about, right?
31:10
SPEAKER_00: Furnish Finders strictly a lead generating website.
31:12
SPEAKER_00: So they generate leads for people, and then it's your job to call them and figure out you know what how to get these people into the property.
31:19
SPEAKER_00: Now, a lot of these guys have a certain budget that they can um play with.
31:23
SPEAKER_00: If you wait and get those leads, you're not gonna succeed on Furnish Finders.
31:26
SPEAKER_00: But if you start proactively looking at the off leads and what people are searching for, because they send all that to you anyway.
31:32
SPEAKER_00: So they go, hey, these guys are looking for a property similar to yours here.
31:35
SPEAKER_00: And you start contacting these people and you start actively looking for specific customers, and then you kind of do the whole process of, hey, why are you coming here?
31:43
SPEAKER_00: It are you booking for you?
31:45
SPEAKER_00: Is it a company?
31:46
SPEAKER_00: Are you here for business?
31:47
SPEAKER_00: What's the business?
31:47
SPEAKER_00: Oh, maybe I can get them directly and then they can work with me directly.
31:50
SPEAKER_00: And I work with the company now, and now you get a better place and it doesn't have to come out of your pocket, the company will pay for it.
31:56
SPEAKER_00: So you got to be proactive on the website, you will succeed.
31:59
SPEAKER_00: We do it all the time.
32:00
SPEAKER_00: Um, but it is budget friendly, so you got to keep that in mind.
32:04
SPEAKER_00: If you're doing a super high-end property, odds are you won't be you you're not gonna succeed on Furniture Finder.
32:08
SPEAKER_00: But if you're doing a good budget-friendly, um, nice amenity home for a good rate, you will succeed.
32:16
SPEAKER_00: Uh and you have to go out and actually look for those leads on the website itself.
32:21
SPEAKER_02: Um, Rafael, I you know, based on what I've seen online, you know, you're um you have a a awesome social media presence.
32:30
SPEAKER_02: You you do a lot of education.
32:32
SPEAKER_02: Uh, I'm sure you're motivating a lot of people that were maybe a younger version of you and you're kind of showing them what you do.
32:38
SPEAKER_02: You're being asked to speak at these huge events.
32:41
SPEAKER_02: Uh, talk to us about how how you are using uh all those platforms.
32:47
SPEAKER_02: And it's not just social media, you know, uh YouTube gets lumped into social media, but it's actually a search engine and even public speaking.
32:54
SPEAKER_02: Like, tell us how you're using that.
32:55
SPEAKER_02: Uh I guess the reasons why you're using it and how it's benefiting your business.
33:00
SPEAKER_00: So, you know, when I I never was interested in social media.
33:03
SPEAKER_00: Um it started when I was on Clubhouse.
33:05
SPEAKER_00: I don't know if you know Clubhouse back in the day when COVID happened.
33:07
SPEAKER_00: It was like a talking platform.
33:09
SPEAKER_00: We just talked to people.
33:10
SPEAKER_00: Um, people started asking me questions about short-term minus, I started answering, and then popularity started to grow.
33:14
SPEAKER_00: Um, I quickly realized I can add value to people who need who needed to get started with no money, right?
33:20
SPEAKER_00: Um, and I just started helping people out.
33:22
SPEAKER_00: And in return, I started seeing people helping me out with stuff.
33:26
SPEAKER_00: Um, for example, my buddy Tony, he's the host of the Bigger Pockets Rookie podcast, right?
33:30
SPEAKER_00: Um, one time we were chatting, um, and we had like an hour phone call.
33:34
SPEAKER_00: He's like, hey, dude, I want to get into arbitrage.
33:36
SPEAKER_00: We had about an hour phone call.
33:37
SPEAKER_00: I ended up talking to his wife for like 45 minutes.
33:39
SPEAKER_00: Um, I was at a coffee shop just having a good conversation with them.
33:41
SPEAKER_00: And I was just trying to be like, hey, this is this is how I operate, this is what I do, this is how you guys can do certain things.
33:47
SPEAKER_00: And they were awesome because I was trying to learn from him how to partner with people.
33:51
SPEAKER_00: So I called him, I was like, dude, can I can I actually have a conversation with you about how we can partner, how I can partner with other people?
33:56
SPEAKER_00: Because at that time I wasn't even buying stuff, right?
33:59
SPEAKER_00: Uh he's like, Yeah, sure.
34:00
SPEAKER_00: Dude, it he's we had a he answered it in 15 minutes, give me a ton of value, and then I ended up talking to his wife for about 35 minutes about my business and arbitrage and operations.
34:08
SPEAKER_00: The next day he goes, Hey, dude, um, we love your story and we appreciate the help.
34:12
SPEAKER_00: Would you like to be on bigger pockets?
34:14
SPEAKER_00: And I was like, Me, like, really?
34:16
SPEAKER_00: Like, uh, I don't, there's nothing special here.
34:19
SPEAKER_00: Like, why would you want me on there?
34:20
SPEAKER_00: Right, yeah, and I had this imposter syndrome where it's like, Well, I'm not doing anything crazy.
34:24
SPEAKER_00: Anyway, long story short, I get on bigger pockets, right?
34:26
SPEAKER_00: Um, it blows up, and people are like, Oh my god, this guy's making all this money off of no money and not even owning property.
34:32
SPEAKER_00: Then the following started, and then so I was like, Okay, now I have to kind of have this pressure of like you have to keep posting because people want to know what you're doing.
34:39
SPEAKER_00: So I started posting more on social media, and then I started posting more um videos about how to do it, how to furnish, like just literally everything.
34:45
SPEAKER_00: And then in turn, something I don't want to say magical, but it was like people started calling me with opportunities.
34:51
SPEAKER_00: Yeah, hey, we have a 10-unit building, hey, we have a 30-unit building, hey, we want you to take over this building.
34:55
SPEAKER_00: Hey, I have an opportunity to buy this.
34:56
SPEAKER_00: Hey, we want to partner with you.
34:58
SPEAKER_00: Um, hey, we want you to manage this.
34:59
SPEAKER_00: And I was like, oh, okay, this is what happens.
35:02
SPEAKER_00: Now there's credibility.
35:03
SPEAKER_00: People know that I know what I'm talking about.
35:04
SPEAKER_00: Um, and people actually like me, and then people actually trust me because of it.
35:08
SPEAKER_00: They see what I'm doing, and now I can continue to grow this business.
35:12
SPEAKER_00: I mean, I've raised a ton of capital through social media.
35:14
SPEAKER_00: Um, I've partnered with people through social media.
35:17
SPEAKER_00: Um, I've bought stuff with people through social media.
35:20
SPEAKER_02: Um, I mean it's it's it's the result of years of you doing this and being successful with it.
35:27
SPEAKER_02: And you know, you talk about building that trust.
35:30
SPEAKER_02: Really, what you're doing is it's it's um, and I read this in a book.
35:33
SPEAKER_02: It's you know, we always talk about compound interests, but but what you're doing is you're compounding uh the relationships that were being built.
35:41
SPEAKER_02: Um yesterday, Caleb in my office said, dude, did you know he was interviewed for um bigger pockets?
35:47
SPEAKER_02: I'm like he was?
35:49
SPEAKER_02: Yeah, I'm like shoot, awesome, awesome.
35:51
SPEAKER_02: I I think that that's huge, but it's it's because you put yourself out there.
35:55
SPEAKER_02: You know, a lot of times, you know, when I look at your Instagram, I'm like, oh, this guy loves the camera, but you know, you're telling me that's not really what you wanted to do, but you you you were kind of forced to uh into it.
36:04
SPEAKER_02: And and similar to me, where people are like, Oh, you're a YouTuber, I'm like, man, I hate I see myself, Raphael, as a as an actual professional, you know, like and when I get called a YouTuber, I'm like, uh, I would use a different word.
36:19
SPEAKER_02: But I think similar to to to what you're saying and what you're doing is that you're providing value and and giving value and meeting with people and showing people how it's done.
36:27
SPEAKER_02: You're not like saying, Hey, I don't want to give my secrets, and then through through you sharing your information, uh, you know, and I've always said, and even in my businesses, the more you give, the more you receive.
36:36
SPEAKER_02: And that's what you've you've been able to witness.
36:38
SPEAKER_00: So you said a lot of key things there, and I appreciate it.
36:40
SPEAKER_00: Funny story, though.
36:40
SPEAKER_00: It's funny.
36:41
SPEAKER_00: Uh, talking about the YouTuber thing, my sister texts me the other day and she's like, Hey, uh, because I'm always recording content, right?
36:45
SPEAKER_00: People don't understand.
36:46
SPEAKER_00: Recording content's a lot of work, and putting a lot of this.
36:49
SPEAKER_02: We're doing this right now, dude.
36:50
SPEAKER_02: Yeah, it's we're we're recording content right now.
36:52
SPEAKER_00: Yeah, like it's a ton of work, dude.
36:53
SPEAKER_00: Um, you have to practice like a lot of a lot of it, like you have to practice what you're gonna say so you can feel comfortable because you're not comfortable.
36:59
SPEAKER_00: Um, you don't sound natural, you re-record, like, and then you have to figure out what's the value that you can add, right?
37:03
SPEAKER_00: Like it's a ton of work.
37:04
SPEAKER_00: Anyway, funny story.
37:05
SPEAKER_00: My sister texts me the other day, she goes, Hey, uh, I have a niece, she's like five years old.
37:08
SPEAKER_00: And so I was recording a uh uh a YouTube video for a 21-unit building walkthrough that I did.
37:14
SPEAKER_00: Um, and she she texts me, she goes, Hey, uh uh Penelope just asked me if if Uncle Rafa's a YouTuber, and I was like, What do you mean?
37:21
SPEAKER_00: She's like, Well, because she she sees you with the camera all the time, and I started laughing.
37:24
SPEAKER_00: I thought it was hilarious.
37:25
SPEAKER_00: I never thought about that, right?
37:26
SPEAKER_00: I'm comfortable on it now.
37:27
SPEAKER_00: In the beginning, dude, it was like awkward, like extremely awkward.
37:29
SPEAKER_00: Like, if you go back and see my stuff, I'm like, dude, this is uncomfortable.
37:31
SPEAKER_00: Yeah, um, but yeah, it it you know, the the value add like my thing is how much value can I actually shove down people's throat without asking for anything in return.
37:39
SPEAKER_00: Like people tell you it's like give, give, give, ask, give, give, give, ask.
37:41
SPEAKER_00: To me, it's just give, give, give, give, give.
37:43
SPEAKER_00: Maybe something will come back, right?
37:45
SPEAKER_00: I don't like, I'm not very like people get mad when I say this, but I'm not money motivated.
37:49
SPEAKER_00: I'm I I get motivated by excitement and partnerships and relationships, and that always comes back with something fun to do, right?
37:55
SPEAKER_00: Um, I want to do projects that are exciting.
37:57
SPEAKER_00: And so if I give you as much valuable value as possible, like that you're like, dude, this guy, like he knows what he's talking about, he's just giving it out for free.
38:04
SPEAKER_00: You're gonna see that and you're gonna go, I I kind of like this guy, and I want to be able to work with him or maybe see if he can help me with something.
38:10
SPEAKER_00: I never turn away a phone call where people need help as long as they don't waste my time, right?
38:15
SPEAKER_00: Um, I give away all the information because there's so much misinformation online right now, especially through social media.
38:21
SPEAKER_00: Like, dude, there's a ton.
38:21
SPEAKER_00: People will lie to you about a bunch of stuff.
38:23
SPEAKER_00: Right now, somebody will tell you on the arbitrage dream where you're gonna make$2,000 a door.
38:27
SPEAKER_00: That's not the case.
38:28
SPEAKER_00: I'm here to tell you it's not true, right?
38:29
SPEAKER_00: You're gonna make a couple hundred bucks, right?
38:31
SPEAKER_00: Profit.
38:32
SPEAKER_00: You still make money, but I'm here to tell you the truth, and I'm here to teach you how to do it for free, so that you don't have to go and pay someone else to do it because I understand the value of the information out there and such the amount of misinformation out there.
38:44
SPEAKER_00: The last thing I want is to mislead people in the wrong direction.
38:46
SPEAKER_00: Right.
38:47
SPEAKER_02: Raphael, we're we have an in-person meetup uh that's starting in a few minutes.
38:52
SPEAKER_02: How uh um tell us, tell us how people could get a hold of you.
38:58
SPEAKER_02: Tell us if there's any courses, anything that you're trying to um uh present at this moment.
39:04
SPEAKER_02: Like just uh I'll give you the final say.
39:06
SPEAKER_00: Yeah, so uh get a hold of me through Instagram.
39:09
SPEAKER_00: It's Rafa Loza.
39:10
SPEAKER_00: That's the name, ITS Rafa Loza.
39:12
SPEAKER_00: Um, I always respond to messages there.
39:14
SPEAKER_00: I do have a course, I don't push it, but if somebody wants to buy it, I will sell it.
39:18
SPEAKER_00: I sell it for 2500 bucks.
39:19
SPEAKER_00: Um, it teaches my entire business model, um, which is send me a DM and we'll we'll do the whole process.
39:24
SPEAKER_00: I have it online.
39:25
SPEAKER_00: Um, otherwise, I have a podcast also, it's called The Big Break Show, um, where I bring in other people like this and we talk about real estate and investing and sports professionals and life after real estate and like just entrepreneurship in general.
39:36
SPEAKER_00: Um, and yeah, I mean that's it.
39:38
SPEAKER_00: I don't I have a YouTube channel, Rafa Loza.
39:40
SPEAKER_00: I I I try to post on that, but it's again, it's a ton of work, so I don't do it as often.
39:44
SPEAKER_00: So yeah, I appreciate you letting me uh bring these things up.
39:47
SPEAKER_02: I I um I appreciate you joining us today.
39:49
SPEAKER_02: You know, for for our listeners, um the beauty of real estate is that there's different angles, different angles.
39:56
SPEAKER_02: And so what I the reason why I bought Rafael on today is because I I want to interview people that are doing it, not just talking about it or doing videos on it.
40:04
SPEAKER_02: Because to your point, not just because you do a video doesn't mean that you're actually doing it, but you're but your boots in the ground and you're doing it.
40:10
SPEAKER_02: And so I wanted to show people I I don't really um uh talk about short-term rentals or Airbnb because it's not really something that I that I've done personally, so like I don't feel comfortable telling people to do this if I have not done it.
40:22
SPEAKER_02: So I do appreciate you coming on.
40:24
SPEAKER_02: But for our listeners, there's so many ways um to to work the game of real estate.
40:31
SPEAKER_02: And and this specific style might fit people's styles that are listening.
40:36
SPEAKER_02: I mean, sometimes, I mean, the reality is if anyone calls me and you watch my videos, I'm pretty adamant.
40:40
SPEAKER_02: Hey, it's hard to break even in Southern California.
40:43
SPEAKER_02: Yeah, and you saw that early on in Santa Ana.
40:45
SPEAKER_02: But I tell people that up front, hey, you're gonna lose money, but why are we buying?
40:48
SPEAKER_02: And typically it's for wealth creation.
40:50
SPEAKER_02: I'm like, okay, you don't need the cash flow today.
40:52
SPEAKER_02: But with your situation, it's almost like you're you're we're we're able to get to that cash flow much, much quicker.
40:58
SPEAKER_02: Uh obviously there's risk, but I'm all about risk because the only way that I made it was through taking risk.
41:05
SPEAKER_02: And and you're taking risk and you're out there doing it and you're you're being honest with the people sometimes.
41:10
SPEAKER_02: Uh early on when this was happening, we were getting um, we were getting um, and even myself, sometimes we were getting misled.
41:16
SPEAKER_02: People were would rent our spaces and then Airbnb without telling us.
41:20
SPEAKER_02: And like if you told us, we might be okay with it, but uh when it's done behind our back, that's probably not the best way.
41:26
SPEAKER_02: That's not the way that you're gonna build trust and credibility and have a good reputation.
41:30
SPEAKER_02: And if you don't have that, then you're not getting the the compounding uh benefits that you're seeing now.
41:35
SPEAKER_02: So uh, Raphael, thank you so much, guys.
41:38
SPEAKER_02: Check them out, check out all his platforms.
41:40
SPEAKER_02: Uh, I appreciate you being here today.
41:41
SPEAKER_00: Thanks for having me, dude.
41:42
SPEAKER_00: I appreciate it.
41:43
SPEAKER_02: Awesome.
41:43
SPEAKER_02: That's all.