Latest / Thanks For Visiting / 233. Jump-Starting Your Airbnb Journey with Ellen Yin, Cubicle To CEO

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233. Jump-Starting Your Airbnb Journey with Ellen Yin, Cubicle To CEO · Thanks For Visiting

0:00
Sarah: Hello, hello.
0:00
Welcome back for the great episode.
0:02
My name is Sarah Karakaian.
0:03
Annette: I am Annette Grant, and together we are--
0:05
Both Annette & Sarah: Thanks For Visiting.
0:06
Sarah: We are going to kick off this episode like we do every week, that's
0:09
sharing one of you, our amazing listeners or viewers if you're here on YouTube
0:12
with us, and share your property.
0:14
You're using the hashtag #STRShareSunday.
0:16
We will not only share you on our Instagram page on Sundays, but also
0:20
blast you out on our email list, talk about here on the podcast,
0:23
give you some free marketing, which is a segue to today's show.
0:26
Annette, who are we sharing this week?
0:28
Annette: Today we are sharing @purvisionproperties, and
0:32
that's P-U-R-V-I-S-I-O-N, and it's Jake and Jackie Purvis.
0:37
Please go check them out.
0:38
I'm going to give you a couple of reasons why.
0:40
Number one, they're short form video content, aka reels, they are crushing it.
0:46
Jake and Jackie, I hope you don't mind, I'm going to tell our listeners,
0:48
please go look at what they're doing.
0:50
Look how they're showcasing their properties with the short form video.
0:54
They're doing an excellent it's job.
0:55
It's fun.
0:56
It shows you would want to go to their place.
0:59
It gets you excited to stay in the property.
1:02
But one other thing I want to highlight, because we talk about this
1:04
very often, just like most people in the short-term rental world, they
1:08
don't just have one because I'm sure they started with one, they have
1:11
three and they're all under their larger brand of Purvision Properties.
1:15
But they have the centennial, the perch, and the cove.
1:19
And I love the centennial, it's a 100 years old.
1:22
The perch is a modified A-frame, and the cove is a lake cabin.
1:25
So they have different properties, but they're all held under their
1:28
larger brand of Purvision Properties.
1:30
So if you are someone that is struggling with trying to figure out, how do I
1:33
create content for all of my places?
1:36
Do I have different handles and different names and this, that, go check them out.
1:40
See how well they're doing it.
1:41
About the interior of their homes too, they've done a really great job.
1:44
One of their properties has this amazing, green accent color flowing throughout from
1:49
their glassware to wallpaper in a room.
1:52
Just a really great use of color.
1:54
And I want to go stay with them.
1:56
Sarah: They're branding experts.
1:58
You guys are doing a great job.
1:59
Annette: Yeah.
2:00
So please, go find some inspiration, in not only the spaces that they are
2:04
creating, but the content they are creating to showcase their spaces.
2:07
So well done, Purvision Properties.
2:09
We can't wait to hopefully come stay with you one day.
2:12
But speaking of the Pacific Northwest--
2:15
Sarah: And speaking of marketing experts, we're going to
2:19
introduce you to today's guest.
2:20
In today's episode, we have the one and only Ellen Yin, the founder and host
2:25
of Cubicle to CEO, a top 1% podcast, you're welcome, and media platform
2:31
creating a financially transparent content, events and education empowering
2:35
entrepreneurs to pursue what is possible.
2:39
She is my friends.
2:40
She is STR curious.
2:43
She is Airbnb curious and so if you are a listener who's yet to buy your first
2:47
property, or if maybe you're a co-host or a property manager and you're wondering
2:52
what your client is potentially thinking, this episode is going to be for you.
2:56
Ellen, welcome to the show.
2:58
Ellen: Sarah and Annette, I am so pleased to be here.
3:00
And yes, all of you listening, think of this like free market research.
3:04
I'll be your guinea pig.
3:06
Annette: And if you didn't notice in Sarah's intro, if there is anything
3:10
to take away from this episode, it is inspiration for the name of Ellen's
3:14
podcast, which is Cubicle to CEO.
3:17
So if you are there, if you're at work right now today, we want you to be at
3:22
your job, potentially in your cubicle to the CEO of your hospitality brand.
3:26
So please just maybe write that down, cubicle to CEO, that's on your goal list.
3:30
That's what we want for everyone.
3:32
And hey, you can love your job.
3:34
Maybe it's cubicle and CEO.
3:36
So, um, maybe you're somebody that wants to do both, so you can
3:38
rename it cubicle and CEO too.
3:40
But, Ellen, let's tell our guests a little bit really quick though.
3:43
We are no stranger to you.
3:45
This is a very normal thing.
3:46
Ellen used to be one of our coaches, everybody.
3:48
We can let you in and we've been on the mic with her before.
3:51
We've asked her a lot of questions, but always us asking Ellen her expert
3:56
advice, and she was a very, very important part of us launching our
4:01
hosting business mastery membership.
4:03
And so we're super thankful for her, and also just letting our listeners know,
4:06
we have always continued to invest in ourselves and so we just want to offer
4:11
that up to you to invest in yourself.
4:12
You never know who you're going to meet and where that network is going
4:15
to turn out to, us today on the show.
4:17
So Ellen, we've talked about it a lot because we have done some masterminding,
4:21
we've been in-person, and you have a lot of questions about short-term rentals.
4:25
And I hope you don't mind us sharing this.
4:27
Ellen financially is very capable of purchasing this home.
4:31
You have some cash, allocated sitting there waiting to pounce
4:37
at the right property, correct?
4:39
Ellen: Absolutely.
4:39
It's really about for me, finding the right opportunity.
4:43
And as an entrepreneur, and I'm sure the two of you can relate,
4:47
you're always thinking about not only the ROI of a potential
4:51
investment, but also cost opportunity.
4:53
So it's like if you use your funds for one specific thing, it removes the option
4:59
maybe to use that cash for something else.
5:01
And so you have to weigh the opportunity cost and ask yourself,
5:04
which one best aligns with my goals, my long-term vision, which one is going
5:08
to support my needs in the meantime?
5:10
And so there's so many factors to consider, and that's why I'm so, so
5:14
grateful to the two of you because you're the first people I've met really in the
5:18
short-term real estate space that feel so accessible, and even though you're such
5:23
experts in this category, I feel like you still can resonate and understand
5:28
what it's like to be a beginner, and you're really able to guide people like
5:32
me through this process of exploring STR.
5:35
So I'm super grateful for that.
5:37
Sarah: Where are you today in your short-term rental journey?
5:41
I've talked to you a couple times, and on your mind, but where is it
5:46
sitting in terms of, is that cost opportunity leaning more towards the
5:50
short-term rental investment or not?
5:53
Ellen: So interesting thing that has happened since we last saw each other
5:56
in December in North Carolina for our in-person mastermind, I actually
6:01
hired a wealth manager that, Hayley, our mutual friend, introduced me to.
6:06
So shout-out Caitlin Carlson.
6:08
And goes back to your point, Annette, that it's so important in your journey
6:13
to invest in mentors, invest in help, invest in support in whatever way that
6:19
looks like, whether it's a DIY course, or whether it's something more intimate.
6:23
But I think that to your point, it's all about the people that you meet within
6:28
those containers, like that will pay more dividends in your life than any
6:32
strategy or skill you walk away with.
6:35
Anyways, because I got introduced to my new wealth manager, we literally
6:39
just had our onboarding call.
6:40
So I'm actually waiting until she maps out my portfolio strategy
6:45
before making any concrete purchases or moves to ensure that I'm making
6:50
the right moves in the right order.
6:52
So it's not a matter of if I will have an STR, I know I will.
6:55
It's really just a matter of when.
6:57
But as far as my curiosity goes, my interest and why I
7:01
want an STR has not changed.
7:03
So for those of you listening who don't have the same context, I live
7:07
in Oregon and we're only about an hour's drive away from the coast.
7:11
And being by the ocean is one of my favorite places to be.
7:14
It brings me so much peace and I have this dream of wanting to have an STR
7:20
in my portfolio that, of course, can provide cash flow or tax benefits,
7:25
but also a place that can really be a legacy for my family where we can
7:30
come personally to stay make memories.
7:33
So that's my approach or desire for wanting to buy an STR.
7:39
Annette: Love it.
7:40
And then I know you and your partner, you have done some pretty extensive research.
7:45
I think you hired a real estate coach when you were just thinking
7:50
about maybe long-term rentals.
7:51
Can you take us through that thought process too of what piqued your
7:55
interest in real estate period, and then going down through your
7:58
learning, your education part, and then thinking more on the STR side?
8:02
Ellen: Yeah, absolutely.
8:03
So yeah, you're right.
8:04
We totally invested in real estate programs and mentorship
8:08
early on, even before we knew for sure if this was an asset class
8:11
that we wanted to be a part of.
8:13
And really, I think it comes down to if you're wanting to invest in something
8:17
new or try something new, you have to raise your own financial IQ around that.
8:23
It's like you have to learn the language of that industry, and
8:25
the more you understand the better quality questions you can ask.
8:29
And this is something I think the three of us agree on.
8:32
A lot of your success is dictated by the quality of questions you ask.
8:35
So you need to be able to have better understanding to actually
8:40
formulate those questions.
8:41
And so for us, we first started looking in long-term rentals, so typical single
8:46
family housing, three bed, two bath style.
8:49
And the thing that really drew me to real estate is that there are so many levers
8:56
you can pull within this asset class that are not true for every asset class.
9:00
So one I liked that with rentals especially, you don't have to rely on
9:06
something like speculation, which is more the deal in an asset class like let's
9:11
say stocks and bonds or the stock market.
9:14
Because when you buy in the stock market, it's not like you literally
9:17
control anything that goes on in the companies that you invest in.
9:20
And so you're more of a bystander and you're just waiting it out and seeing what
9:24
happens over many decades because I would never try to time the market personally.
9:29
So one thing that's interesting to me about real estate is that, yes, your
9:33
house can appreciate and there's value in your property appreciating, but
9:37
also you are able to, in the meantime actively influence the cash flow.
9:43
It's something that you're not just a pure spectator for.
9:45
So that was one thing that really drew me to real estate.
9:48
Another lever that I love is, of course, the tax advantages, especially
9:52
as a business owner where income can fluctuate wildly year over year and you
9:57
are really trying to maximize profits.
9:59
Come tax time, you still want to make sure that you are taking advantage
10:02
of as many deductions as possible.
10:04
And I think real estate just gives such an amazing opportunity to do that.
10:08
And so those were some of the levers that I was just considering when I
10:11
was looking at real estate that really drew me to wanting to learn more.
10:16
Annette: All right, so pretend right now, we're at a coffee shop,
10:19
you're like, okay, I'm going to buy my first short-term rental.
10:22
Let's do a rapid fire coaching.
10:23
What are those questions you're literally like, okay, I have Annette
10:27
and Sarah for this cup of coffee, I am going to-- and there's like
10:31
anything, like where are the sheets?
10:33
Do I have a plunger there?
10:35
What are the questions-- never host in a guest in a STR before.
10:39
What are those questions that you would just love to
10:41
rattle off and have us answer?
10:44
Ellen: Are all of you listening jealous that I get this opportunity?
10:47
Okay, cool.
10:48
I will role play.
10:49
So I have a lot.
10:50
I think one of the first questions that comes to mind, I'm sure I'm not the only
10:53
one thinking this is, for your first STR, does it make sense to buy something
10:58
nearby to where you live that is easily accessible within driving distance?
11:03
Or you have this dream destination on your list, should you pick that bucket list?
11:08
So let's start there.
11:09
Annette: Hmm.
11:11
That's a worst--
11:12
Sarah: Ellen said quality of questions.
11:14
She's not messing around.
11:15
Here's the thing that no one wants to hear.
11:17
It depends.
11:18
So Annette, I know you'll have a lot to say on this too.
11:20
If you write down pros and cons of dream destination versus backyard
11:26
investing, and for some people it might come up with, I am so busy in work
11:31
life right now or career building right now that for me, I want to get in,
11:35
I don't want to hesitate any longer.
11:37
And you don't have a dream destination other than maybe it's at the
11:40
beach or in a sunny destination, I would say, you buy real estate
11:45
and wait, so buy in your backyard.
11:47
It's inherently easier because you have connections right off the bat
11:51
with people you know and trust already.
11:52
But if you've grown up knowing that you want to buy a property on the shores
11:57
of Oregon, in wine country, it's a few hours away and there are going to be
12:01
some getting to know realtor who you can trust and know that they've got a
12:05
good book of business share with you.
12:07
There's going to be more phone calls, there's going to be some more trips, which
12:09
poor you, you get to hang out on the coast of Oregon, but you've got more time and
12:14
that would really just help you check one thing off of your bucket, then do that.
12:18
People do both.
12:20
They do backyard and they do remote investing as well.
12:24
Annette: What I would do is, if you do, if you have that bucket list place,
12:28
I would start looking-- I mean, I'm sure everyone is probably looking
12:31
at Zillow on their phone right now.
12:33
I would really start to look at both of those areas.
12:36
What's your book bucket look?
12:37
Because this research too, you can use it in the future.
12:40
So I would start researching both of the areas.
12:44
What is the cost of the home?
12:45
What are the average nightly rates there?
12:47
What does that look like for you?
12:49
So I would really start two separate spreadsheets on both of those areas
12:54
and just see what the market's doing in both of those places.
12:57
I'm a firm believer that not everything can go on the Spread Sheet.
13:00
Not everything can be jammed in a cell to tell you what that's going
13:03
to mean to you and your family.
13:05
So I would actually start researching both, see which one,
13:09
financially does make the most sense.
13:11
And, um, one of our mentors said this to us such a long time
13:14
ago, and it really just hit home for us is, a base hit is good.
13:17
So maybe you do get that backyard.
13:20
Start there.
13:21
See if you really like it because maybe that bucket list place, you take the
13:26
money from your backyard investment and you go to your bucket list place, and you
13:30
live it up once or twice a year and you don't have to worry about the property.
13:34
Because we do see that happen a lot, that people buy properties
13:38
in their dream destination.
13:39
Well, that week or two, that used to be so sacred, there's someone
13:43
sitting there looking at the cracks and crevices and cleaning up and doing
13:47
DIY projects instead of enjoying it.
13:49
So I think, definitely do a cost analysis financial plan on both of those,
13:54
and just see where they sit for you.
13:56
Ellen: I love that advice, to simultaneously be tracking both, and
14:00
ultimately, I'm not surprised that you guys shared, it comes down to the data.
14:05
We can feel however way we want to about something, but that's really helpful.
14:09
Two other questions popped to mind as you were answering this last one.
14:13
Selfishly, I'm going ask my more personal question first then another question
14:18
that I'm just in general curious about.
14:19
So I did do some research on properties at the Oregon coast, and actually I think I
14:25
had shown maybe Sarah this late one night.
14:28
She was like, probably ready for bed.
14:30
Annette: No, you showed her a house, she's like, let me get out
14:32
my computer and a spreadsheet.
14:33
Let's look at it.
14:34
Ellen: Yeah, so kind.
14:35
I found such adorable A-frame property at the coast and I love it because it doesn't
14:42
feel like an overwhelming property.
14:44
It's two bedrooms, one bath, but it has that ocean front view.
14:48
And the price is not really the issue.
14:52
We got pre-approved for an amount that would cover whatever the
14:56
purchase price they're asking for is.
14:58
Of course, interest rates are high right now, but you guys also taught me some
15:01
things around, okay, there's different options for buy downs and whatnot.
15:06
So my biggest hurdle really in moving forward at all and exploring
15:11
that is the area that it's in.
15:13
So it currently operates as a very successful short-term rental.
15:17
And I think I even just peaked on Airbnb.
15:19
They're almost booked out for the next 10 months.
15:22
But in Oregon, when they transfer ownership of the property, the STR license
15:27
does not transfer to the new owners.
15:29
So I would have to obviously resubmit with the city.
15:32
And my real estate agent, she's amazing.
15:35
She called around everywhere, really trying to understand, what
15:38
is the timeline, what is realistic?
15:39
And the office came back and said it could be anywhere from three months
15:44
to potentially two years before you get approved for this license.
15:47
And there's really no guarantees or expedited options at all.
15:52
So now I'm sitting with this thinking, all right, if I do want to buy that
15:56
dream ocean front property that I can also see being used for personal
16:01
enjoyment, but I don't really know if in the meantime I want to be fronting
16:06
all of the cash for, let's say, worst case scenario, it takes two years.
16:10
Do I really want to be paying this mortgage and all the expenses
16:13
of upkeep for two years while I'm waiting for my STR license?
16:17
What would you say to a situation like that?
16:20
Annette: It's a good one.
16:21
First, I haven't encountered this, so I'm just going to put this out there.
16:25
I don't know if there is in any way, shape, or form that the purchase of
16:30
the property could be contingent on you getting the license, the license transfer.
16:36
Because maybe there's something with the current owner, since
16:38
they have 10 months of booking.
16:41
There's going to be something in that in-between that the licenses are going
16:47
to have to be transferred because hopefully this host is not going to
16:50
sell the property and then cancel 10 months of reservations on people.
16:55
So the first thing I would talk to-- see if your realtor tour can talk
16:59
to the owners about their license and if there's a way to transfer
17:04
it to you in the sale the property.
17:06
I don't know how that municipality works.
17:09
And then also talk with the owner about, is there a way within the purchase,
17:15
maybe if you do purchase it, the license stays in their name, you somehow partner
17:18
with them for until it is transferred?
17:21
Maybe just some agreement, obviously with your attorneys
17:24
and your realtors about that.
17:26
But the next thing I would do, I know you called there or your realtor
17:29
called, I would call three more times.
17:33
See what answer you get.
17:34
Maybe not three more times, but one or two more times and just see,
17:37
did the timeframe stay the same?
17:39
Did you talk to somebody different?
17:40
And they're like, "Oh, get in your car.
17:41
Come down here.
17:42
We'll give you one today."
17:42
So I wouldn't take that one person's timeline say that's written in law.
17:48
So if you have the opportunity, if you're ever-- I would also, depending
17:52
on how close you are, I would go there and get face-to-face with somebody
17:55
and tell them, this is my dream place.
17:57
I want to buy it.
17:58
And exactly what you just said to us, seeing you in person telling me
18:02
your story there, I might be able to, hopefully if they're at their desk in
18:06
the city hall or whatever, they can walk over and say, "Oh, well, we've
18:09
got four meetings these upcoming months," and really help you dive in.
18:12
So I would not stop the pursuit of it because one person gave you a timeline.
18:16
I would go dig a little bit deeper with that.
18:18
Sarah: I like the idea, Ellen, of seeing if you could have the purchase contingent
18:24
on you getting the license, and maybe there's a lot of things you could discuss
18:28
with your realtor there of renting it from the owners in the meantime, pre-determined
18:32
dates where you guys could use the property during this contractual period.
18:36
That's interesting to me.
18:37
Annette: I would get creative.
18:38
Yeah.
18:38
Sarah: Is this place still avail-- is it still for sale, Ellen?
18:40
Because I remember it.
18:41
Ellen: It is.
18:42
Sarah: Wow, girl.
18:43
Annette: Okay.
18:43
Yes.
18:44
Then saying that, listeners, we talked to Ellen about this property in
18:48
December, so I think that was almost 45 days ago, and the market, I mean,
18:55
rates are rising, I think you have got a lot more negotiating power now.
19:00
And so I would just start going down that road and pose those questions with them.
19:04
And listeners, we would love if any of you had this specific scenario happen with
19:08
your short-term rental and your purchase and being limited amount of license
19:12
or things like that, please email us.
19:14
We'd love to hear how you work through this situation.
19:17
Sarah: Because here's a thing to consider for yourself too, Ellen, is we always
19:20
like to buy with exit strategies in mind.
19:22
And clearly if it's, I don't know how long it's been on the market now,
19:25
but let's say you do move into it and actually then you want to upgrade.
19:28
You know what I mean?
19:29
Your podcast, it's killing it.
19:30
You want eight bedrooms, and so you would--
19:32
Annette: Your cubicle to billionaire CEO.
19:35
Sarah: You want a 1031 exchange it, but you're having a hard time selling
19:38
it because of the same exact issue.
19:41
And I'm not saying let that stop you at all.
19:43
But that should be a part of your decision factor here of how much will
19:47
this property cost you each month?
19:48
And have you stayed there?
19:49
Could you rent it from them?
19:51
Ellen: I have not.
19:52
So we would want to stay there obviously and experience it first
19:55
before we would actually really pull any real moves on this.
19:59
But yeah.
20:00
Honestly I had been just stuck at precipice of, is it even worth
20:03
pursuing any further if I can't potentially-- because we did ask
20:08
if our licenses are transferable.
20:09
They concrete where like, absolutely no licenses are transferrable
20:13
in this county, unfortunately.
20:15
But I hadn't thought about all those other options you talked about like,
20:18
oh, could we base the sale with this contingency or could we somehow get
20:22
creative and say, "Hey, you still have this amount of revenue potentially
20:26
coming in from your reservations.
20:27
How about you keep the house for 10 extra months and get that cash flow while we're
20:32
figuring things out on the backend?"
20:33
I have so many ideas sparked just from that, so thank you.
20:36
I really appreciate it.
20:37
Annette: Yeah, and maybe they could, and again, this is all legal stuff too,
20:40
is maybe there is an opportunity for them to stay co-hosts of the property.
20:45
You could work out a property management.
20:47
I would really try to see what their goals are and maybe they own a lot of
20:50
other properties in that area and they're just trying to liquidate this one so they
20:54
can have the cash for something else.
20:55
But it's been sitting there for a while, so I think you've got
20:57
some-- it might be a nice thing to ping them and see what can happen.
21:00
Ellen: Also, Sarah, the thing that you mentioned about thinking
21:02
with the exit strategy in mind, I didn't even think about that.
21:05
You're so right though.
21:05
If I bought this property, if I ever wanted to do the same and leave
21:10
or sell, that does pose a problem.
21:12
However, I guess that's not unique to this property.
21:14
It's really unique to the area that I would be investing in.
21:17
Sarah: Because sometimes the license even makes it, they are transferable
21:21
with the property and they're limited, and that adds extra value.
21:24
So if you're looking at the cost of a property, but the license is transferrable
21:28
with the property, I mean, you should add some value there because I know
21:31
someone else who was able to get a property that had limited licensure and
21:35
they could transfer it to themselves.
21:36
So there's a lot to think about there, Ellen, that
21:38
should definitely not stop you.
21:39
I cannot wait to hear what happens.
21:41
You said you had one more question that was more general.
21:43
Ellen: Yes.
21:44
So the more general question is similar to my first question of do you
21:48
invest in your backyard or in a dream destination for your first property?
21:53
Do you think it's necessary or smart for a first time STR owner to learn the ropes
22:00
of hosting, at least on some level for a period of time themselves, so that when
22:05
they hire out to a property management company that they actually know what
22:09
constitutes a job well done versus not, or can you shortcut hire a PM right away?
22:15
What do you think?
22:16
What's your hot take on that?
22:17
Sarah: Since Annette and I are educators in the short-term rental
22:19
space, we're clearly biased.
22:21
But actually, Simon Lehmann, we had on the podcast prior to you,
22:25
Ellen, I love the way he put this.
22:27
Because as a property manager, this made me want to pull my
22:30
shoulders back a bit more.
22:32
Think about your property manager as being your asset manager, how they
22:35
affect the success of your asset.
22:38
And so if you are just giving it to some rando company or rando human who, I
22:43
unfortunately know of people who decided they want to manage property and they've
22:48
never done it before, and they're touting their expertise and it's like, oh boy.
22:52
You know what I mean?
22:53
Do you know how to care for a furnace?
22:56
How plumbing works?
22:57
Where's the water shut off?
22:58
What all the things that can happen?
23:00
And so I feel, again, I'm biased, but who you hire to manage your
23:04
asset and a piece of real estate should not be taken lightly.
23:07
And the more you educate yourself as the investor, even if you have
23:11
no plans, I know Ellen, for you that's really important, that this
23:13
is not an extra side hustle for you.
23:16
You want to invest and trust the expert to really handle it in the most
23:20
professional way, that yes, you should educate yourself on what it takes to
23:25
be a good property manager or co-host.
23:27
What are the average daily rates?
23:29
And is that backed up on data or emotion?
23:31
So that you, as the owner of the property can speak in a more educated manner
23:36
about what you expect to make each month.
23:38
Set those benchmarks with your partner there.
23:40
What they do for marketing outside of just listing it on an online travel
23:44
agency like Airbnb, who their maintenance team is, what their credentials are.
23:50
So if you think of it like an asset manager, I think puts the
23:53
property manager more on the pedestal they deserve to be on.
23:56
Annette: Mm-hmm.
23:57
And I think, Ellen, part of your question that you were asking is, should you do it
24:01
yourself first though, before you hire?
24:04
And so I don't think that's a necessity.
24:07
Sarah: No.
24:07
Annette: Again, that goes back to doing a cost analysis of, is your time better
24:12
served building your brand and the revenue there or hosting your property?
24:18
So I don't think that you have to be in the app and build out your
24:23
listing to make sure that you're an amazing short-term rental owner.
24:27
I don't think that's necessary.
24:29
Wouldn't it be great?
24:30
If you want to, if you have the desire, let's start there.
24:34
If you are excited and you want to, absolutely.
24:38
But if it seems daunting and is not a heck yes, then don't do it.
24:43
Because it's part-time but all the time.
24:45
So like right now you could be recording a podcast and you have a guest that
24:48
wants to book for their mom's birthday at dollar, you can not respond for today
24:53
if you're recording podcast all day.
24:55
So if it is not a heck yes for you, I would not feel like it's obligatory.
24:59
And I'm sure some of our listeners are like, Sarah and
25:01
Annette, you're so hands-on.
25:02
Yes, but only if you want to be.
25:04
Let somebody that wants to be hands-on.
25:06
So I don't feel like you have to host for-- you have to do it
25:10
yourself before you hand it off.
25:12
I know a lot of times as business owners too, you're like, well, I
25:14
need to understand all the things before I hire someone to do all the
25:17
things because you want to know them.
25:18
But I don't think it's absolutely obligatory unless you are really
25:22
driven and excited to do that.
25:24
Sarah: Yeah.
25:24
Let me clarify.
25:24
It's not obligatory for you to do the management, but I do think it's
25:28
obligatory for you to understand the management, and what makes a good
25:31
manager versus what makes a poor manager.
25:33
Annette: Yes.
25:33
Sarah: Is that what you were asking, Ellen?
25:35
Ellen: Yeah.
25:35
It was both, essentially.
25:36
So that's really helpful to know that I don't have to, like you said, be in the
25:40
weeds manually actually doing each step.
25:42
But to educate myself on the actual process and what I should be looking for.
25:47
And again, what constitutes good performance versus, oh, you're not taking
25:52
care of this asset like you should be.
25:54
That's really, really helpful.
25:55
So thank you.
25:56
That gives me encouragement though, because there was a part of me that
25:58
had this mentality of, oh yeah, I feel like I have to get in the trenches and
26:03
do the thing to be able to pass it off.
26:05
So that's really affirming to know that's not the case.
26:07
Annette: And to be honest, the property manager, the co-host, whoever's going
26:10
to help you, they'd probably rather just start off the listing themselves
26:15
so they can get all of their SOPs, the way they would get it listed.
26:20
They could optimize it from the very beginning.
26:23
I think probably, from that perspective, they'd like to do that.
26:28
Sarah: Well, we did it with you, Ellen, for a mastermind in December,
26:31
but I also recommend people who want to buy an asset like a short-term
26:34
rental to stay in a short-term rental.
26:36
That way you can understand too what you want for yours and what
26:39
don't want for yours either.
26:40
Because the reason why you like this asset class is that you can pull
26:43
different levers, including your choice of property manager, and that would
26:46
then trickle down into what they offer.
26:48
Because as you know, we had Veronica on the show too, Ellen, and Veronica
26:52
is who hosts this mastermind, and she ended up firing her initial property
26:55
manager, creating a hybrid experience because she ended up going to the property
27:00
between a turnover and was very unhappy with the way it was being managed.
27:03
Annette: And reservations were not--
27:06
Sarah: Being optimized.
27:07
So, yeah, that's really important.
27:09
Annette: All right.
27:10
So still sipping on our coffee here.
27:12
Do we have any other?
27:14
What are any other burning questions that you might have?
27:17
Ellen: I think my final burning question around this, and hopefully this is
27:21
helpful to any of you who are STR curious like me, is when you are personally
27:25
evaluating a potential property to purchase, what are the most important
27:31
data metrics that you're looking at?
27:34
Is there anything that is a absolute deal breaker when you see this number
27:39
or this percentage or ratio, whatever, where you're like, absolutely not, let's
27:43
just eliminate move on to the next thing?
27:45
Annette: Ooh, that's a good question.
27:47
This is going to be something that actually have-- Sarah and I have had a
27:50
lot of conversations about this, with a lot of people and they're always wanting
27:53
to talk about cash on cash returns.
27:55
Deal breakers for us, because things could amazing on paper, we need to see
28:01
the property, we need to see where it is.
28:03
For us, we need to see the neighborhood, where we're going to
28:06
be impacting the entire community.
28:08
Honestly, that is probably the number one deal breaker for Sarah and I is,
28:12
is this property a short-term rental?
28:15
Period.
28:15
Before you even look at the numbers.
28:17
Because the numbers could be stellar and it's bad for the neighborhood,
28:21
it's bad the guests, so that is the deal breaker of really understanding
28:27
where that property is, in the city, in the community, in the neighborhood.
28:31
That to us is, I think, one of the deal breakers.
28:34
Sarah: And listeners, if you think that's woo-woo of us, I want you to think
28:38
about that a little bit longer because it's just like starting any business.
28:42
If you start a business and then you get impacted by constantly being reached out
28:46
by your guests because they don't feel safe, constantly being harassed by your
28:49
neighbors because you decided to buy it in an HOA, that doesn't like short-term
28:52
rentals, even though they're allowed.
28:54
Now, the cost of your time, if you are self-managing or maybe your property
28:58
manager then fires you as a client because it just doesn't make sense
29:00
for them because you are the 80% of their time making 20% of their money.
29:04
So these decisions that aren't the easiest to put into a spreadsheet,
29:09
for us, are the most important.
29:11
Plus Annette and I very much value our brand as human beings.
29:14
And so that to me too is a really important asset that
29:18
I take care of on the daily.
29:20
But to give you some--
29:21
Annette: Yeah, we'll go back to the numbers question though.
29:23
But that would be the deal--
29:24
Sarah: Yes.
29:24
Annette: That is something, again, because there is so much online about
29:29
the cash on cash return and they're running the numbers, and then I see
29:32
these properties, and I'm like, no.
29:34
That it can't even-- why'd you even run the numbers?
29:36
That shouldn't even be a short-term rental.
29:38
What are you?
29:40
Yeah.
29:40
Anyways, we go on and on about that.
29:42
But go ahead, Sarah.
29:42
Sarah: So that component next on my list, Ellen, would be exit strategies.
29:47
So there are people out there that believe, hey, this is a short-term
29:50
rental, it's meant to be a short-term, it'll sell as a short-term rental.
29:52
I disagree.
29:54
Even the vacation rental markets, especially if you're going to go all
29:57
in on a large luxury property, that exit strategy is going to be a lot
30:00
more difficult than one that you could sell or you could rent it out to a
30:04
long-term person and then sell it in with multiple purposes for the property.
30:09
So if you want a large property that is mainly a short-term rental
30:12
market, just understand that.
30:14
I think then I want my cash on cash to be higher.
30:16
I want my opportunity for it to appreciate to be higher because I
30:20
know that I might be up against a bigger challenge when that time comes.
30:23
So I'm not saying that would be an immediate no, but for me, the exit
30:26
strategy would be very important.
30:28
And third, when it comes on cash on cash, I know the gurus say 30%, but I think
30:33
if you're getting 15% cash on cash, on a short-term rental that has exit strategies
30:38
in place, that it might increase if I need to put those into action.
30:42
And that for me is a win.
30:44
And it's in a great place, great neighborhood, I might want to visit, I'd
30:46
be proud to have my friends and family, it'll enhance my brand, sign me up.
30:50
Annette: And last but not least is when you're doing the numbers,
30:54
you're doing the projections, make sure to take into count those
30:58
shoulder seasons, those slow seasons.
31:00
Or if anything were to happen and you didn't have someone in there for
31:05
30, 60, 90 days, could you afford it?
31:09
I would have, what is that number?
31:11
What is that worst case scenario number if that property does
31:14
not bring in that revenue?
31:15
You're selling that place.
31:17
Be really comfortable with what runway you have to run it if and
31:22
when something were to happen or you had a few reservations canceled.
31:24
I just wouldn't want you to be on tilt about the property
31:28
or paying out for too long.
31:30
So look at what runway you would have if for some reason you
31:34
didn't have those reservations for an extended period of time.
31:37
Sarah: How's that feel, Ellen?
31:38
Ellen: So much gold.
31:39
I'm so excited to listen back to this episode so that I can just
31:44
soak up everything you all said.
31:46
I just want to point out for the listeners, by the way, so on our show
31:49
Cubicle to CEO, podcast tagline is we ask successful entrepreneurs the business
31:54
questions you can't Google, but what Sarah and Annette just did, those non
31:59
spreadsheet factors to consider, that is exactly what you all are doing.
32:03
And I feel like that exactly proves why it's so important to hire mentors
32:08
or to invest in your education in any potential asset class or endeavor.
32:12
Because these are the type of things that if I googled look for in a
32:17
potential Airbnb property, I'm not going to get those type of answers.
32:21
And so it's truly the stuff you can't Google.
32:23
so I just appreciate you being willing to share some of those non number
32:27
specific things that I need to look out for, especially the exit strategy.
32:29
I feel that that's my biggest takeaway from our conversation today is, for
32:33
some reason, which is silly, but I never even really thought about what
32:36
happens if I don't want this anymore?
32:38
Or something in my life changes.
32:40
So I really appreciate you giving me that to marinate on.
32:44
Sarah: I also give you permission.
32:45
I like to call it future.
32:46
It's a future Sarah problem.
32:48
It could be a future Ellen problem.
32:49
And if you love the property so much that you're like, you know what, I'm
32:51
going to kick that to future Ellen worry about because future Ellen might be in
32:55
a very different-- well, she will be in a very different financial space.
32:58
So I don't want that to get anyone out there to roadblock their mindset, but I do
33:02
think it should be up for consideration.
33:04
Annette: Think about it.
33:04
Yeah, for sure.
33:05
Sarah: Ellen, I have a question for you now.
33:07
Because you're an expert in taking people from cubicle to CEO, whatever
33:13
that means for them, we have a lot of listeners who dream of trading in
33:18
what they're doing now for a life of full-time, short-term rental-ness.
33:22
In all your interviews, in all the work that you do, what is
33:26
that non-googleable thing that you could offer our listeners on--
33:30
Annette: Dang, Sarah, that's a gold.
33:32
Sarah: On how to reframe their mindset a bit so that they can chase that and do
33:38
it with purpose and ask better questions?
33:40
Ellen: Oh, putting me in the hot seat, I see.
33:42
Okay.
33:44
Like you guys, I feel like every question requires some context
33:48
for me to give the best advice for that particular individual.
33:52
That said, if you are someone who is actively trying to exit your day job
33:57
to do something else, whatever that may be, I think the most important
34:00
thing to consider is, what do you already have available to you?
34:06
There's this weird thing that happens, I see a lot of new entrepreneurs
34:09
experience where whether they just left their 9-5 or they're thinking of
34:13
leaving their 9- 5, they almost discount their entire professional past lives.
34:19
They're just like, oh, I'm a new business owner, therefore I
34:22
know nothing and I have nothing.
34:24
I have no network.
34:25
I have no skills.
34:27
I have no value to provide.
34:28
It's crazy.
34:29
People who are such accomplished individuals, who have done so many
34:33
amazing things in their personal and professional lives, they almost
34:36
act like everything they did up until that point no longer matters.
34:40
And that's the biggest, I think, mistake that people make is not
34:44
looking at what they already have.
34:46
Who do they already know?
34:47
What skillsets are they already using in day-to-day job that
34:52
could be monetized outside of a traditional employee position.
34:57
Because that's exactly how I started my business.
35:00
I was working, uh, marketing for a corporate healthcare.
35:04
I was very young and naive, 23, so maybe a lot of the fears didn't come
35:08
to my mind because I just wasn't even thinking, um, big picture.
35:11
When I left my job, my very first client for my freelance, at the time I
35:16
was a freelance social media manager.
35:17
Obviously, my business, uh, drastically in the last five years.
35:21
But at the time, my very first marketing client was actually, uh, a
35:25
colleague of mine at the company I left.
35:28
I was putting out there, hey, I have these marketing skills that obviously I was
35:34
getting paid for within my day job, but I knew I could also monetize that existing
35:40
skillset in a non-traditional way.
35:41
I knew people were looking for freelance help in marketing, and I just started
35:46
talking to my existing network and saying, "Hey, I have this skillset.
35:50
If you know any local, small businesses that may need this
35:53
support, please send them my way."
35:55
And lo and behold, like I mentioned my colleague, I didn't even know this
35:59
about him um, my desires out there.
36:03
Him and his wife own these local coffee stands, and I knew him as the
36:06
project manager at a health plan.
36:08
So why would I ever think that that was something that he did.
36:12
But he was like, "Hey, we actually have these local coffee stands
36:14
stands and we don't really have any presence on Instagram.
36:17
Yeah, we'd be interested in seeing how you could help us launch our account."
36:21
And that first project, you guys, it was $300.
36:23
It wasn't any life-changing amount of money, but it was proof of concept.
36:27
It was like, okay, there's someone out there that's willing to pay for something
36:31
I already have, already know, I'm already good at, and how can I then reinvest
36:36
that money into growing my business?
36:39
And that's how we generated more than $2,000,000 in revenue now.
36:43
It all started with that $300 project.
36:45
Annette: That was so much gold.
36:46
And I want to give to our listeners, Sarah and I get a lot of questions
36:51
about, how do I become-- because a lot of people want to become co-host,
36:55
they want to become property managers.
36:56
What Ellen just said, there is someone in your network right now
37:02
that has a vacation rental, they want to have a short-term rental.
37:05
They need help with their Airbnb, whether it is, just messaging guests or maybe
37:11
they need help with their bookkeeping.
37:13
Maybe they need help with design.
37:15
Please look at your immediate network.
37:17
And when I say, look, don't just look at them.
37:19
You got to put the offer out there that you can help them.
37:23
So that's my last question, Ellen, is, let's say someone wants to co-host or
37:27
they want to use their skillset, what do you think is the best way because
37:30
you're expert in marketing, how can they tell people when they don't have
37:33
any proof of concept, this is what I'm interested in, this is what I want to do?
37:38
Ellen: I think the best thing-- Okay, this is a piece of advice that actually
37:42
one of our podcast guests shared on the show that really stuck with me.
37:45
So shout-out to Michelle.
37:47
She says, sometimes you have do to the unscalable things first in order
37:52
to do the scalable things later.
37:54
So what that means is when you're just starting, it may make more sense than
37:59
for you to put-- I mean, you can do both.
38:01
It's not an either or.
38:02
It's an and situatuion.
38:04
So put out in a social post across wherever you hang out or exist online, do
38:10
tell people, "Hey, I'm really interested in entering into the real estate market.
38:14
Um, I'm looking for these type of experiences.
38:16
I would love to offer time, my services, my skillsets."
38:20
Like you said, if you happen to be really great at design or you're a really
38:23
great organizer, or whatever it is in your personal life that might actually
38:27
help an existing STR host, put those things out there and say, "I'm willing
38:30
to volunteer my services to learn.
38:33
Do you know anyone, um, that I could potentially help?
38:36
I would love to be connected."
38:38
Put that out on social.
38:39
But don't discount the part of actually sending individual emails,
38:43
one-on-one emails, one-on-one to specific people that you know love and
38:48
support you and want to see you win.
38:50
Don't assume things about people because again, like I said, if I had looked,
38:54
from a very surface level at my existing network, I would've never picked this
38:58
random project manager to be like, yeah, you're my ideal first client.
39:03
How would I even-- I wouldn't know.
39:05
But sometimes you just don't know who people are connected to, what other things
39:11
they may have going on in their lives that they just don't publicly share.
39:15
So don't be afraid to just reach out to anybody who you know has your back
39:18
and wants to see you win, and tell them, "This is what I want to do.
39:22
This is the value I have to offer.
39:23
Can you introduce me to anybody who might be a good fit for that opportunity?"
39:28
And make the ask, because nine times out of 10, you will be shocked by
39:33
the plethora of connections that are already within your community.
39:37
Um, so again, don't make assumptions and do the unscalable things first.
39:40
Sarah: And the world needs you.
39:42
They need to know what your special skills are and they need it to come
39:45
from you, not the other people out there who you are going to tell
39:48
yourself are better than you are.
39:49
They need your special secret sauce.
39:51
And so that is why you need to announce it to the to the world because we need you.
39:55
So Ellen--
39:56
Ellen: 100%.
39:57
Sarah: Thank you so much.
39:57
Where can our listeners find out more about what you have to offer
40:00
via your podcast and elsewhere?
40:03
Ellen: Absolutely.
40:03
Well, if you all like to nerd out on business stuff like the three of us
40:08
do, like Sarah Annette mentioned, our media companies specifically spotlights
40:14
women-owned bootstrapped businesses that make between a 100,000 and under
40:19
$100 million in revenue annually.
40:22
So we think of ourselves as B2B media company for all the stories and amazing
40:28
entrepreneurs and founders who are ignored by mainstream media since mainstream media
40:32
likes to hyper focus on billion dollar unicorns and venture-backed startups.
40:36
So if you're interested in that type of content, we send out a weekly
40:40
newsletter every Wednesday, giving you a peak behind the scenes, into the
40:43
case studies, real-time strategies, and finances of 6, 7, 8 figure businesses.
40:48
We also have a podcast that releases new episodes every Monday
40:51
and Wednesday, Cubicle to CEO.
40:53
So you can subscribe wherever you're listening to this or you
40:56
could head over to cubicletoceo.co.
40:59
That's C-U-B-I-C-L-E-T-O-C-E-O.co to add your name to our weekly newsletter.
41:07
Sarah: Do yourself a favor.
41:09
Ellen is one of the sharpest business owners we know and we are so lucky
41:14
to have you in our sphere, Ellen.
41:17
With that, I am Sarah Karakaian.
41:18
Annette: I'm Annette Grant, and together we are--
41:20
Both Annette & Sarah: Thanks Visiting.
41:21
Sarah: We'll talk to you next time.