Hey everyone this is Richard founder of short-term rental university and Airbnb
super host and right here I'm with my man the guy who taught me how to kite
board I still have a long way to go but if you ever want to learn this guy Eric
and howdy pronounce your last name Barajas Barajas is the man in the
meantime we also found out that he's an Airbnb host he just got started we're
gonna walk through his Airbnb we're gonna talk about the deal that he swung
with his landlady and how you know he's doing rental arbitrage and she's aware
of it we're gonna take a look at his place we're gonna talk about some of his
early stage findings this is his first year doing your B&B and we're gonna talk
about how we renovated the place relatively inexpensively and is having a
lot of success attracting kite boarders and like the right people for him and
it's just like working and he's trying to grow his real estate business and
Empire and we Mako invest on something we're talking about so it's super
exciting but in the meantime Eric you have anything you want to say as an
introduction or should we just go on in oh yeah just we're here in the Outer
Banks I'm gonna take you guys inside kind of give you some tips of stuff that
I did to quickly turn a unused space into a very useful space for a
reasonable price so a lot of people have been enjoying that for those of you that
don't know what rental arbitrage is it's a really popular way for people to get
started on Airbnb they can't afford purchasing a home what they want to do
is rent a home and then either sublease it or sublease portions of it and that's
really cool if you do it the right way okay so Eric so you rented this whole
house in this space here that we're entering was what oh so this space
before I got here was just completely in ruins this is actually the original kind
of what the whole place look like as you can see there's like plenty of holes in
the walls it's just that old kind of house where they really weren't even
using drywall or anything like that so originally this front part was a big
mess that we decided not to do anything with it we kind of turned it into a gear
storage just kind of appealing the kite boarders and wind surfers that's why we
have the rack right here decided to put this shelf and just to kind of make it
look nicer this part needed a lot more work than the part we're going into it
was like broken windows rain damage water damage the floors were terrible
everything about it was Terrell it was like an ice storm but he saw opportunity
and kudos to him for being entrepreneurial
and innovative and creative and seeing an opportunity and so he approached his
landlord in full disclosure and said hey if I fix this place up if I put my time
and energy and money into fixing this place up will you allow me to rent it
out and keep the income and his landlady kind of said jokingly hahaha yeah no one
will ever want to do that because it was too much work she didn't have that
creativity she didn't have the energy level and she didn't have the vision so
she just gave it to him and so he went and he did the work and he put in his
time and labor and fixed it up and one thing I definitely want to showcase is
the the bathroom in the wall that you used pallets for which is super cool so
we'll let a little bit of light in here and you can see it's just a you
efficient mini kitchen right you've got a little refrigerator a little microwave
toaster oven I'm going to tell you a story about these shelves and about this
countertop and the shelf as well so this was a door a like thick wood door that I
actually found when I was throwing garbage away it was just sitting on the
side of the dumpster this huge heavy thick door and I was like wow this is
really nice wood how can I use it and at that time we were looking at buying
shelves we're looking at how to fix this countertop so actually I came home and I
used the front of it which is the nice part and I made the shelves using the
the right corners super-creative though I made the show it looks great
and I made this countertop I mean it's beautiful
so it all works out that way and tell me a little bit about because a lot of the
viewers here are really interested in what we call rental arbitrage so renting
a place and then subletting it out or renting a portion of it like how did you
come up with the idea of how did you pitch your landlady and I you know I
think here is a unique situation I pitched it because this space was really
unusable at the moment all the windows were blown out I had to replace the
windows I mean it was pretty much deteriorating the value of her house I
live in the other part of the house which is separate so she just saw it as
waste and she didn't want to spend money so the way I pitched it was I would put
in all the initial money and with the deal that she would allow me to rent it
out he was very intelligent about it he wrote it into his contract into his
lease term that he's allowed to do that and that it won't terminate his lease
and that he can renew his lease and so on and so he's protected his viable
sustainable business in perpetuity for as long as he has the lease
he owns the right to like sublease that space out and that's really cool because
therefore he won't get kicked out and what he feared was that she would see
how successful he was kick him out and do it for herself but you also told me
when you first approached her she was like Yeah right good luck like no no
chance no one's gonna rent it it was horrible the carpet in here was
molded the subflooring was bad so we had to buy new carpet we had to take out the
old subflooring I mean it was all really bad so actually this is another thing
that I did too that nobody notices unless I tell you check out the ceiling
right here so because this window was blown out from all the rain coming in
these were like falling off only in this section of the ceiling so what I did was
I took him off I put this one and I put this nice trim around it just to make it
look like it was done on purpose great we had an idea of like hanging plants
maybe in the corner same thing for this wall as you can see it's different so
like this whole section of the house was really bad because of all the water that
was come then due to the windows the window was broken yes well how much do
you think you put into this hole oh it came out we ended up spending
about it was about 1,800 around there that was the whole rate with everything
I mean it with appliances the chairs you know the bed the bed yeah you have to AC
unit you know that was in the end and will you make that back this year oh
yeah I'm definitely from what Airbnb is showing I'm
be able to make that back this year and then some right oh yeah a little bit
it's gonna help offset a little bit of my rental costs so who I live in a
unique place where we pay rent all year long even though I leave here
four months out of the year so I think my landlady also was really
understanding about that this being a seasonal place regardless what I'm doing
with this front room she's happy that she's getting her rent yeah you're a
great tenant right so show us what you did which i think is really cool here in
the bathroom what did it look like before so the bathroom was in horrible
shape before this whole wall was just like completely like it looked like
somebody a punched wall like just punched into the wall and I had this
idea I'd seen online before I've always had like like use for pallets so these
are all pallets from where I work that I was able to pick up outside and
I'm some being Muir's some being older and what I did was I cut them one by one
just kind of a free-for-all people ask but there was no like measurements I
just this one looked good and then I had to cook the other ones so they all fit
and I sanded each one of them just so that you know when you touch it it's
nice and I varnished it well it looks great really knows a varnish and for
anybody who's been watching my channel you've seen I did a very similar sort of
application on a wall in Jackson Hole and I'm sure if it looks that much
better you were also recycling and saving my
place I clean I take it well mine was upcycle too because it came from like
the highway partitions or whatever in Wyoming but here's a little tip to you I
just want to tell people so these were rusted really bad and if you don't want
to replace them what you do is you sand them with about a like a high volume
sand like a really really coarse one so that you can get in there nicely and
then you just you know make sure not to spray-paint the tub itself and then you
spray paint them and they come out really nice you can wash them and the
pillars that you clean yeah a black glossy or rather no it was a sign
cool well it looks great yeah it looks like brand-new so if it was rusty and
deteriorating now it looks perfect and so this place is just super comfortable
serves its purpose and Eric in your own words how would you describe like the
feedback that you get from guests and what type of guests are they so we've
been getting really positive feedback especially just the price point so this
area it's really hard for people unless you're renting a big house Airbnb has
not really made it here fully and small units so we're getting a lot of feedback
because there's a lot of people that just want to come down for three days
and they're gonna spend most of the time at the beach anyway so they're really
happy just with a nice comfy bed that was really important when my wife and I
thought of this we've got a really comfortable bed just you know really
nice coffee machine you know just the basic things that when you wake up in
the morning you want to brew some coffee before going to the beach and then
actually that front room that I kind of covered up as a gear room people love it
because they're like hey I don't have to leave the bikes outside I don't have to
leave the kites in the car kiteboarding equipment surfboards all that are really
expensive so people feel really comfortable being able to unload their
vehicle and have a storage spot and I feel comfortable because they're not
bringing in sandy dirty items into the house sort of kind of works well
together so overall what would you say your experience has been as an Airbnb
host and what sort of you know occupancy rate are you experiencing I mean since
I've been here I've seen same-day turnover almost every single time but
what have you experienced what are your thoughts how do you like Airbnb I love
Airbnb I think it's a really great thing I used it for a long time and being able
to become a host myself has been a really great experience really positive
you get to meet a lot of people along the way some people you don't meet at
all but not so much on the people side I think it's great being able to give a
space for someone to share you know so when you're kind of designing your
Airbnb you kind of set it to the tone of the
people you're expecting to have now that doesn't always work you know so I've had
I'd say maybe out of 15 you'll get two people that you know this maybe wasn't
the space that we're looking for you know so I'm trying more and more based
on what Airbnb gives me as a platform to make sure in my description and in and
what I'm offering the people that I'm getting the right kind of people perfect
that's a big tip really exactly and what sort of occupants Steve you think you've
had in the prime months here um so I've been fully occupied I mean our prime
months here are June July August and I'm turning over every day June July August
so so pretty happy my tip to you that I've shared with you and other viewers
is your price too low right you should have some occupancy and definitely and
are you charging a cleaning fee no I I was not not until I just like I taught
Richard had a kite board recently and we met and it's been a really great thing
because the cleaning fee was something that I was kind of unsure about and I'm
happy I watched this video and kind of read other feedback and I've just
changed it recently and we'll see how that goes it's gonna go well because
you're gonna get paid for your labor right yeah so Richard knows I just
finished I was on the water for three hours this morning and I literally have
ran over here you know make the bad vacuum you know make sure everything's
looking nice fresh towels and he's right that time is worth money you know so I
do recommend to anybody if you're not doing it do it and so the point of this
video is if you want to do rental arbitrage because you can't go out and
buy your place and you want to do that and either offset your your cost of
living or save which is what I would encourage you to do for an equity down
payment for your like actual business then do it the right way don't try and
get creative don't try and skirt the issues
don't tell little white lies don't post on Facebook like what about this idea
and what about that idea like if you have to ask about these ideas it's not
good like is there anything that I said to you about Eric's story that doesn't
resonate do you feel like he cut any corners do you think he was dishonest do
you think I mean she could have said no but then he wouldn't have done it
but to his delight she said yes and now he's doing it and he probably will keep
that lease forever because it's such a good deal and he's got a homerun on his
hands so if you want to do rental arbitrage be forthright find the right
partner ie landlord tell them what you're gonna do write it into the
contract protect yourself and then do it forever and I would encourage you
instead of having a better lifestyle save that money put it away
that's your nest egg for your down payment on your own equity get rid of
the landlord start buying real estate liked the video and please subscribe