Co-hosting is to Short Term Rentals what Wholesaling is to Real Estate Investing.
The Key to Any Type of RE Investing is Marketing! Consistent Marketing is best but you have to FIND the properties. Actively go looking for the type of homes you need.
What type of property do I look for? You are looking for a home that no one lives in but is furnished. It could even be a staged house for sale. Just non-owner occupied, no one living there, but furnished.
Where and how do I find these properties?
*Buy a list on Listability.com
*Put out Yellow Signs (Bandit Signs)
You are looking for homeowners who are open to allowing you to host guests in their already furnished home.
What is my job as Co-host? You will run the STR business. You will get the property BNB ready. Clean & Stage, take photos, create the listing, insure the property, arrange the cleaning crew, hire a maintenance man, set up pricing, and communicate with the guests.
Because you have no money, you do the majority of the work.
How much can I expect to make? Everything is negotiable. However, I would say the Best Case Scenario is for you to make 50% of the profits after all the expenses are paid. Splitting the profits creates a Win-Win for you and the homeowner and keeps them happy, which keeps you earning.
Get everything in writing. Inside your contract, include a list of monthly expenses you will cover, what your fee is, who Airbnb will pay and how those expenses, like the mortgage, will be paid. If the house is on the market (for sale), include the day(s) of the week or dates you will leave the home vacant in order for it to be shown to potential buyers.
WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...
Michelle recommended you try Listability.com. Click here to go to their site. Listability is a site where you can purchase a list of addresses to mail letters or postcards to.
You can choose from a variety of qualifiers for your list. For instance, non-owner occupied homes, homes with out of state owners, 70% equity in the home or 70% paid off, 3 bedrooms, 2 baths, worth between $150-$200k, between 1200-1800 sq ft, in the 60542 zip code. Yeah, you can really narrow it down! Send out at least 50-150 names a week consistently. Start small and work your way up but be consistent.
Recommended Article or Blog Post Related to This Week's Podcast:
Read the article, Real Life No Money Down Investing.
Recommended Podcast Episode that is paired with this one like a Fine Wine:
Get This Episode's Show Notes in a pdf form...
[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income, is your host, best selling author and Speaker, Michelle Russell.
[00:21] Hi, this is Michelle, the Master of Money Mindset, and you are listening to the Short Term Rental Revenue Podcast...
and in today's podcast we're going to talk about no cash, no problem, how to get started on a dime. So this one I know a lot of you have been waiting for. We've got a lot of little notes and messages that have been sent to us and so we're gonna get started right away. But first I wanted to really quick do a shout out to healthy for Austin. I'm healthy for Austin, left us a five star review and I wanted to say thank you and read it to you. It says, Michelle's podcast is by far my favorite one out there on short term rentals. She shares her professional experience in the real estate world in highly entertaining stories that become teachable moments for her listeners.
[01:07] I love her delivery. She's honest, logical, and loyal to her fan base. I look forward to every episode. I reached out to Michelle with some questions about launching my first Airbnb listing and she responded, was such enthusiasm. It's so great to know she's the real deal in wanting to help women grow the real estate businesses. I've shared her podcast with my local Austin, Texas meetup group knowing she will help them on their Airbnb journey to. Thank you, Michelle. Gail. I love Gail. Gail. Thank you. And I'm shouting now to your. Your Austin real estate group, especially that they're all women. Do you know that interview that I did with Maria Giordano's? Maria is a very good friend of mine and Maria is in charge of our Andrea here, the women's group there, and I think women in real estate rock. We really do. We really have something to offer that no other people have.
[02:04] I mean, men just cannot touch us on that because we care and it comes across and the way we relate to people and our real estate deals. People always wonder like, why real estate women are out there are so damn good at what they do. You know why? Because we care and because we are out of the box thinkers, we give people what they want and it's not always about money, so I love that. If you guys have any more questions, reach out to me. I want to answer them for you too and things. Again, healthy for Austin. Love you too. Gail, just to reminder to anybody if you've got any questions, comments, reach out to us at support at the prosperity process. The prosperity process is my bike home company, the parent company that owns all our Ip and you can reach out to me there to Michelle at the prosperity process and you can also reach us at facebook on the facebook messenger and we will get back to you as soon as we possibly can and answer any questions.
[03:03] If you've got any ideas for upcoming podcasts or anything you want to hear about or learn more about, we want to get to you and get those things out to you. So as you guys know, I treat my short term rental business like a real estate business, like an investing business, and if you're just toddling around with this, if this is just a hobby for you, that's dangerous, it's dangerous, number one, because the government's going to treat you and tax you as if it's a hobby. And guess what? Hobbies get taxed in the higher bracket than a business does. So you need to treat your business like a business. It is not a hobby. It's a business. Treat it like a business, and when you're investing in real estate, people always say it takes money to make money, but that is not true. It is not true.
[03:52] The proof of the pudding is wholesaling. Wholesaling is a way that a lot of people get started in real estate without any money in their pocket. They basically become a middleman, so they find a seller, somebody who is selling their home, they work out and negotiate a great price for that, and then they find a buyer on the other end, usually another real estate investor or somebody who has more money in the money. Maybe they're going to fix it and flip it or turn it into a rental property or whatever they're going to do with it, but they find the seller and the buyer and they become the middle man taking from the seller and turning it over to the buyer for a fee in the middle and most of the time that fee ranges in price between, you know, 5,000 and $20,000 depending on the property and the terms that they got and the price that they got.
[04:44] But you can make a lot of money without having any money. It's the best way to get started when you don't have money, when you're getting started in real estate investing, you have to have different exit strategies and everything and we can, you know, we would go into that, but that's not this show. This show is about short term rentals, but co hosting is to short term rentals. What wholesaling is true real estate investing. Okay. So Co hosting is the way to get started in short term rentals without any money. So if you were going to get started in real estate investing and you had no money, you would do it wholesaling. If you want to get started in short term rentals and hosting, you start with co hosting a property that you would have no property that you own. You would have no resources, no money, no cash, no nothing.
[05:38] Okay? So you can. You can do this with nothing literally with nothing and it's called co hosting. Super duper easy to do, but it's going to take a lot more work. Now, remember we've talked about this before, people, anytime you do anything, the more work that's involved, the less money you need, but the more money you have, the less work you have to do. So it's just like this weird scale that goes on. So if you don't have any money, just know you're going to have to work your little fanny off, a little bit harder, a little bit stronger than than the regular guys out there. You're going to have to put forth a little more effort than the average joe out there. But the key to any investing is marketing. You have to find the properties, you have to find the sellers, you have to, in this case, you're going to have to find the people who want to or allow you to cohost the property, which means you're not going to have to sign any rental agreements with them.
[06:35] You can if you have a little bit of money behind you, but if you have no money, we're going to adjust. Talk About Co hosting today. We're going to assume you're broke, hopefully not living in your parents' basement, but you know what I mean, like you don't have a lot of money behind you yet and maybe you're still cleaning up your credit or whatever, so we're going to assume that that's the case. That's why you have no money to get started. So any key of any real estate is really the marketing and finding the properties or finding who you're going to in this case be co hosting for. Okay? So airbnb is actually. They have a cohost team feature, but they're eliminating it. This year. They're going to get rid of that entire feature, but that doesn't mean it's gone guys. That just means that it's gone off the airbnb platform, right?
[07:27] It's not there any longer, but you can still do it now. How do you find or these people that you're going to partner with because basically you're going to become a partner now in the regular short term rentals that we've been teaching, we've been teaching people to go out and rent properties from landlords if they don't have the money to buy a property themselves and maybe maybe they do have the money to buy it themselves and they just don't think it's the right price because right now real estate prices are super high. They're starting to adjust and even come down in some areas, but we've pretty much reached the top and they're going to start adjusting and coming down and the best time we know to buy. You don't buy high, right? You buy low sell high. So right now is not the best time to buy because the prices are high.
[08:15] So maybe you're renting simply because you know the prices will be coming down shortly. So whatever reason you would be renting a property. In this case, you're not going to have the money behind you to rent the property or the credit right to, to put all the furniture in there to get all the utilities and everything set up to have the first and last and security deposit, all that stuff you're not going to have. We're just going to assume you have no money, so you're going to be looking for a particular type of landlord or a person will. Now they're not landlords because you're not renting in front of them, but you're going to be looking for a specific type of seller, okay. Or a type of person that you're going to go in business with and that's basically what you're going to do. Okay?
[09:01] You are going to become this person who takes their property, hopefully a furnished property. Maybe it's furnished with their own furnishings, or maybe it's staged because they've got a property for sale, but whatever the reason the property is already furnished, you're going to be looking for a person with an empty place that's furnished. That's what you're doing. That's that's who you're looking for. So there might be a bunch of different reasons why that they have a place like that, so maybe they are a landlord or maybe they had an Airbnb, but whatever reason they had a property that they already had furniture in it and they're just getting tired of doing it. They don't like all the headaches that go along with it there, you know, they don't want to mess with it. Maybe they're moving out of state, maybe their health, whatever issues they have, they don't want to deal with it anymore.
[09:52] Or maybe they're selling their property. Maybe it's a home that's for sale and it's. If it's a bigger, nicer home, a lot of times they'll stage these properties. More expensive houses take longer to sell in real estate, but they can be gold mines to you if you want to be a cohost because here's a house that's sitting on the market and it's usually up and around. It depends. Well, it depends on the area, but in, in Arizona or Florida, if it's in the $700,000 range or above, it takes longer to sell than it would if it was, you know, six, nine, 99 or below. So those houses take longer to sell, but they, they want them to know people to walk in and feel like, oh, I can put my stuff in here. I live here. But a lot of times people, especially, especially the wealthier they are, they don't have the, the, you know, the vision to see their stuff in there.
[10:46] So they stage these places, they can't envision their furniture without furniture in it. So they'll hire somebody and they pay a lot of money to get, you know, furniture in there and paintings in there to make the home look lived in when there's literally no one in there. And you can go in and find those properties that have been on the market for awhile, don't have anybody in them and you want to turn them into a BNB and make money on the side when they're not using the property to sell. Right. So that that's a good reason why it would be furnished. They're selling the house or maybe the owners are now going into a longterm care facility. They're older, maybe they're sick or maybe they passed away and the property is in, you know, maybe there's some kind of something going on with the property.
[11:34] They don't know whether they want to sell it or if they want to hold onto it. If the parent might get better or whatever reason, they just don't know if they want to sell the property, but there's furnishings in the property. Those are the types of properties you're looking for. Whatever reason they're out there. The owners have furniture in them because you have no money to put furniture in there. You've got to find a property with furniture in it. Now, just like real estate and investing in real estate, there are a bunch of ways to find owners and one of the biggest ways that we always did, and I think Maria touched on this or maybe she didn't, but we use companies like listability listability and we'll put a link in the show notes for you. Listability is a place where you can go buy real estate lists and they're fun and amazing to do.
[12:26] When when we were heavily buying properties, we would put out, we would take these big lists of all these people's names and addresses and you can choose what type of properties they are, so you can say, I want a list of all the people who have less than 20 percent to pay off on their mortgage or maybe no mortgage, but they're that they, the owners of the homes do not live in them. They live out of state or they even live out of country. You can pick anything you want. You can choose a list and any zip code you can choose the size of the house and how many bedrooms you can choose, all kinds of things you can cut. You can cut this down to this, this awesome little cookie cutter area, wherever you want to be, and you look specifically for owners of homes who no longer live in them, who have properties worth above this amount, who live in this zip code.
[13:28] You can like narrow it down with listability. It's pretty cool and they're a great company to. They'll, they'll help you buy a list. Then you buy that list. Okay, so non owner occupied homes, blah, blah, blah. You know you buy, I don't know, maybe you know you can start off with a 100 names, 500 names, thousand names, it doesn't matter, but then you're going to send out some kind of mailing to them. Now some people will send out form letters. I always recommend that you make your letters look as if they are handwritten and you do the less business, like your letters look, the better they seem to go out and if you can have somebody hand write your envelopes. Oh my gosh, we paid a lot of money. I can't remember what we paid right now to have our, our letters handwritten, but we used to pay a woman to hand write all the envelopes for us so it didn't look like it was marketing because your open rate is really, really good when you have that, but you can also go on craigslist and look for the same kind of properties.
[14:29] You can use yellow signs, right? It says, I'm looking for your home, I want to rent out your furnished home or, and you can even say that, but then negotiate that. You don't want to rent it later. Say, hey, how about we do this instead? So, but you can put out a sign and what you're doing is you're, you're putting out a hook with a warm on it, right? And you want to get these guys and they go, hey, we have a furnished house that we have just sitting empty, you know, and they'll, they'll look for it and you want to put them in areas where the people are going to drive by and obviously areas where they're not going to be illegal to put up the signs. But you can look on Zillow, you can talk to real estate agents. Real estate agents are great for this.
[15:12] If you see on Zillow, a bunch of houses that you can tell are furnished but they don't live there. And how you can usually tell is how darn clean it is and what the rooms look like. I mean, come on, let's be honest. If they got kids rooms and there's like no toys out and nothing in the closet, if there's nothing in the closet and nothing in the pantry but a couple of jars, you know, nobody's living in that house. Was it like just take a look at the garages and stuff like that. But when you talk to a realtor you can say, hey look, we can have, we can do business with you and we can have the property empty on these days like Wednesdays and Thursdays. It's open open house days so that you only rent it out on the weekends. Weekends are the biggest days, so you really do want to have the house available on weekends, but you'll be able to.
[16:03] Sometimes, you know, if you just have maybe one day a month or two days a month or whatever, you work it out. Everything is negotiable. But if you have those days available, if the house is up on the market, then you can be renting it out to all those other days and have money coming in. So you're going to be the one who takes the property. They're furnished property and you're going to turn it into the BNB business and make them money while it's sitting there empty. So I don't want to miss two attorneys. Attorneys are a great source to. Because attorneys can be handling, let's say if the parent's, like I said, either got sick, are in a care facility or if they passed away, right, so attorneys are good for that because there might be a bunch of kids and sometimes there are vultures just sitting there waiting for their parents to kroger or the property gets sold and they could divide it all up, so this is a great way for them to be making money while the property is sitting empty with furniture in it.
[17:05] You're going to want to get all the personal stuff out, but that won't take you more than an afternoon to do to box it all up and put it away in a locked facility or give it back to the kids. But you can do that very, very easily. And like we said, lots of different reasons. Lots of different reasons why these people would be putting their, their houses up or have an house sitting there empty with furniture in it, so your job as a cohost is to basically do everything that a host does, except you don't own the property and in this case as a cohost, you don't rent the property either. You're basically a business partner and your job is going to be a lot like a property manager, but not just a property manager a little bit more because you're going to be hosting the property as well, meaning you're going to be responsible for communicating with gas back and forth and making sure that everything is going well for the guests.
[18:01] Your going to be that person. You're going to be the upfront part of this business. Okay, so when you get this property, you're going to have to take it from whatever they give you to a BNB, so you're going to have to clean it and prep it and get it ready. You know, the white sheets on the beds and the white towels and your going to be the one who has to make sure that it has a coffeemaker with coffee filters, you know, everything, all the little shampoos and everything, everything that you would have inside your bmb because right now it's just an empty house. It might have furniture, but it's not a bmb yet. You have to turn it into the BMB. Okay, so we're going to clean and prep it and get it ready. You're also going to take pictures and have staging pictures, you know, maybe with, uh, with some wine glasses and the cheese tray or something by the pool.
[18:51] Something to make it appealing as if this is what it would be like if they were there, like, you know, just give them that great looking area and you're going to have to get those pictures taken and you're going to have to list those pictures on some kind of maybe airbnb vacation, rental by owner, whatever platforms or platforms you decide to use. You're going to be the one who asked to do that. And you're going to do all the marketing for it. Your going to make sure the insurance, again, insurance, I know we've had episodes about this, but I can never say it enough. You're going to make sure that the correct insurance is on the property because now no longer is that property, just a banket property, right? A vacant property has a different type of insurance. Now you're running a business out of it.
[19:34] Make sure you have the proper coverage for that business, for those homeowners, right? And then you're gonna. Set up all the stuff like the cleaning crews and the maintenance guys. You're going to make sure you have all that going for you and sign up for something like wheelhouse, which is your pricing. Because if you, if you're new to this and you don't have any money, don't, don't count on yourself. Being able to choose your pricing. I would definitely go with some kind of dynamic pricing like wheelhouse. So let them set up your pricing and get it going. Now remember, you do all of that, all of that work, and you're going to get a percentage of income. Now every single thing is negotiable. Everything in every contract I e contract people, you need a contract for this, but every single thing is negotiable so you can work out anything you want.
[20:31] You can do it for a flat fee every month that you're doing this for, you can do it for a percentage of the income that comes in. Just make sure that if you're getting a percentage of income that you specifically write in the contract, whether it's the gross income or the net income, because obviously they're going to have the expenses of the property. Most likely they'll have a mortgage or you know, the insurances and the taxes and all the stuff that goes along though electric, the cable, the Internet, um, gas, everything, all those expenses are going on there. And the home owner or the attorney or whoever is handling that property, they will still have those expenses. So they might want to pay you after, which is called net instead of, they'll might want to pay you on a gross. It's okay, it doesn't matter.
[21:19] You just make sure that whatever they decide to pay you, that you get it in writing beforehand, okay, that you've got that percentage down and whether it's gross or net. And remember that percentage is very, very negotiable. The average in the industry for cohosting is somewhere around 20 to 25 percent and that's usually of the net, but I've heard people getting it off of the gross, meaning the gross means all the money that comes in before expenses. The net is what you keep after all the expenses. Okay, so I've heard of people getting 25 percent of the gross income, meaning if it rented out and made 5,000 or $6,000, let's say 6,000 and they got 25 percent of that, that 1500 would go in their pocket. But if you're getting it off the net, that means that all the expenses would come out of that $6,000.
[22:16] And let's say there's only, there's $5,000 worth of expenses and there's only a thousand left and then you got 20. That would be $250 out of a thousand dollars. That's left 25 percent of the 250, so there's a big difference between gross and net. Make sure that you have that and make sure that you're covering yourself for all the work you're going to be doing because you're going to be the one getting the phone calls, getting the text messages from, let's just say Airbnb, they're going to be all the, you know, all that stuff is going to be coming to you and you're going to be the one doing all the work. Okay? And you also want to make sure that whatever you do, that you set up any kind of open house dates. If the property is for sale, okay, if it's, if it's ever for sale, you want to make sure that ahead of time you work out what days of the week or what days in the month that property is going to be open for them to have new buyers, potential buyers coming in to look at it.
[23:15] Okay? So you want to set that up ahead of time. Put that in writing, put that on your calendar. Right, and it's all set up because if it's being sold, if it's up for sale, you've got to make sure that people can go in and look at this property anytime those guys want, but not when somebody is in it and that needs to be written very, very clearly because that would be a huge turnoff for somebody who is renting a really nice property, save for $500 a night if it's really nice property. Right. And then they've somebody traipsing through, looking at the house when they've got all their stuff and spread out and they're, you know, they're Disney world or something and they've got their nice and three different, you know, size families and they're all sharing the house and the house is a mess and it's chaotic and they're like, who the heck are these people walking through the house trying to buy it?
[24:06] Not a cool thing. You never want to interrupt your guests, right? So make sure you set that up and you also want to keep extremely, extremely accurate records for everything, right? Every single thing down and keep receipts for every single thing. Okay. You just want to make sure that you're getting the money that you need, but a lot of times they're not going to be able or willing to start you with that because they don't know how much that property is going to make. Right? They've never done it before, most likely. And so they have no idea about the potential. So a percentage in this case is a lot better to work with. It's, it's honestly the first thing that I would go for and the first thing that I would offer the owner. But you also want to make sure that whatever you do, their expenses are always, always covered.
[25:01] So find out what their expenses are and make sure that regardless of anything that their expenses will always be covered. Have that in the contract too. That says, first of all, your expenses will always be covered always regardless. And then my percentage will come out after your expenses are paid. So let's say you do work out for 25 percent of the gross and it's, you know, it's still, their expenses weren't covered except for maybe there was only $750 left after all the expenses that $750, maybe less than the 25 percent, but it would still be all that you are going to get paid. Just let them know their expenses will always be covered and your pay will come out after the expenses are covered regardless of whether it's net or gross. Okay. You just want to be fair and make sure you're not screening them because why?
[25:57] If you screw them, if they're ending up paying money out and not making any money, are they going to want to continue with this business transaction? No. And you want them to be happy. You want to see them make a profit too. So honestly, I don't think doing a net is a bad thing, but I would just go for a higher percentage of the net and just say, okay, I want half 50 percent of the net you get half and half after all expenses are paid and that is actually the best case scenario in my mind for this situation because that way all the expenses come out and get paid. Then there's a big chunk of money left of profit on the table and you guys split it 50 slash 50. That gives them the incentive to keep. And after all it is their property and their furniture.
[26:46] So Hey, you don't have all of that, right? That's a lot of responsibility and you didn't have the money anyway. So what you're doing is for 50 percent of the pay, I think that's more than reasonable. So I think it's a great place to start or want to end up and you can be adamant about it. Remember, if somebody, if you go to people and somebody says, no, there are a lot more houses out there. Don't ever feel bad. If you get a lot of no's, holy cow, you have no idea of all the houses that we've bought and all the things that we've done and all the negotiations that we made. The majority of people say, no, you got to get to like the nose because every no gets you closer to a yes, so don't first. Don't shoot yourself in the foot by giving yourself way more work than you're getting paid for by lowering and lowering and lowering it until you're not making anything and you're working your butt off all the time, getting all these phone calls right?
[27:44] But then again, don't shoot them in the foot because they're the ones who own the property and you know you've got to make sure that they're making money too. So it has to be a win win situation. But know that there's not always gonna be people who understand exactly what you want to do and they're going to be leery of it. So you want to have a list of all the pros about this, why it would be a good idea and the insurance coverage and all that stuff that will help you out and the fact that you present yourself in such a way that you are professional and that you know what the hell you're doing when you walk in there, that's going to say a lot too. Don't go there dressed in a t shirt for the love of God. You know you want to present yourself as a business person.
[28:25] And so wear business attire, you know, present yourself as a business owner because you are now a business owner. This is a business. Be a business owner. Dress like a business owner. Talk like a business owner, dropped the f bombs, you know, leave those at the door. Don't drop them there. I mean drop them before you get there. You know what I mean? Don't, don't be swearing. You want to really, really, you know, tighten up all those loose screws before you go in and have all your ducks in a row written down and kind of practice them. Practice them with your spouse or a friend or even in the mirror if you've got no one else to practice with what you would say to all these things. Make sure that you go through all the scenarios in your mind of the negotiation tactics that you're going to go through.
[29:09] What would their reasons for not wanting you to do this be so they're going to come at you and they're gonna, have all kinds of reasons and all kinds of questions. Why they shouldn't do this. You know, oh, well, what about this? Or what about that? So you, for every argument, they come up and they snap at you. You've got to have a comeback ready for them and you want to do that in the mirror so that you can be smooth. When your confidence, the more confident you are, the better you present yourself. The more yeses you will get. Okay? People just reek intelligence and that's all you need is some confidence, not cockiness. There's a big difference between cocky son of a bitches who come up to us and confident people who know what they're doing. Okay? Don't be cocky. He was like a star wars movie, right?
[29:58] It's like, don't get cocky kid because when you get cocky, you get sloppy and when you're sloppy, nobody wants to work with you. Okay? You're not the be all. End All. You don't have any money, so keep reminding yourself. If you're getting cocky, I've got no money. That's why I'm doing it this way, so never let yourself get too big for your bridges. Okay? The more humble you stay, the better you'll do in any of these cases, so once you get the home owner or the attorney or the real estate agent to present this to the homeowner, once you get your contract signed and you're ready to go, you're going to do all those things that we set, right? You're going to set this all up just as if it was your short term rental. You're going to get it all raw, rocking and rolling, and you're going to get all the people set up.
[30:46] The only thing when a house is for sale that you have to worry about is how far out you're going to go. That should be in your terms of agreement and most of the time they don't want you more than a month or two out, so just know that. Just know that if you're going in there in the middle of April that you'll be able to put April, May, but probably not June on the calendar until it gets closer to the middle because most closes take 30, 30 days, 30 to 45 days, close on a big property, but 30 days so they don't want you to go too far out, but it's super reasonable to say two months out, you know to have 60 days out on your calendar because you can. They can always put that in the contract. So if they sell a house with a BNB inside of it, they'll say that can convey with the property.
[31:38] Right. But you have to have in the contract that they will convey those reservations so that you don't have to cancel any reservations if they do sell a house because you will be hugely penalize if you cancel any reservations. Not just penalize but in losing income and stuff, but you could lose your super host status if you're a super host on Airbnb, they don't want any cancellations, so you want to prevent all that and have all of that in your contract. Every single thing in writing. Very, very clear English. What's really funny is I've heard stories of friends who do this and they actually turn the seller of a property, so these guys were out there trying to sell their homes. It was a big home. It had been on the market for several months. They started doing this and they started making so much money for the people that they decided to keep the home and I didn't think that was such a good thing because the market was going up and now it's starting to go down, so that was top of the market, which wasn't the time to sell, but think about this.
[32:42] Not a lot of people think that way and they decided to keep the home as an investment, so it's making money. Now if the money is, is that good, then who cares? Keep the property. If it's cash flowing and you can cash flow it making thousands of dollars, then heck yeah. Then keep that in your portfolio making money and so the people decided to take it off the market permanently and turn it into the BNB and allowed those people to continue with the property hosting the property co hosting the property with them. So now here's the one tricky thing that's going to be now airbnb right now has cohost feature that you can use, but in 2019, that's going to be eliminated completely so you have to have really good bookkeeping and they've got to be able to trust you so whether that the money gets deposited into their account or your account or another account that you guys owned together is completely up to you.
[33:44] You're going to have to decide ahead of time and remember, if you're just getting started, you cannot blame these people for not wanting the monies flow through you because they've got to make sure that it's coming out, but you can use. There are different agencies out there that you can use. I just know people because of all the things that I do, but anytime I do any kind of sandwich, lease is any kind of weird transactions. Um, almost all my transactions are weird out of the box, almost all handwritten contracts, but we as a title company for everything and we use a loan servicing company for everything because it just keeps better records and it protects both sides. So if you're buying a property or if you're renting a property for from somebody or if money is coming in, there are service keeping bookkeeping companies out there that will service these loans so you can make sure that the expenses are going out or work out the bookkeeping system with them ahead of time.
[34:40] Okay? But they've got to be able to trust you. Never, ever take advantage of somebody. This is a business. You don't want to be responsible for a bunch of money coming in and you don't know what the hell you're doing with it because you are responsible for making sure that those expenses get paid first. So make sure those expenses get paid first. Do you get it? You can never take advantage of people because that shit will follow you around forever. You make sure that you handle money with kit gloves, baby, okay? That means you've got all your receipts, you've got all your. Everything is written down. Even if you're really shitty at that, put all your receipts in a shoebox or something and handed to someone else to do. Okay? There should be a profit and loss on every business that you do. You should know what expenses are going out and what money is coming in.
[35:36] You need to know that that's how any business runs. You've got to know what your expenses are. You've got to know where your money is going out and you've got to know how much money is coming in because anything that's anywhere near loss that you're going to have to adjust those prices. Everything is your profit and loss. Tell you everything about how you're running your business and where your adjustments need to be made. Okay? So make sure that you're not that guy. Make sure that you're not going out buying a whole bunch of shit with somebody else's money and you're counting that as expensive. Oh, I got myself a brand new computer because that's a business expense for this business. You know, for my new short term rental business and they're going to pay for it. Bullshit. They are. That's your expense. That's not that short term rentals expense.
[36:25] You make sure that you're doing it the right way, okay, and legitimately and all on the up and up and don't take advantage of people. You take those profits and you turn, you turn that over to your business and you can have a few of those different ones and you can be making a lot of money and that business that's bringing in all the cash from all those different homeowners, that business can buy a computer with the money it's made. Not those little short term rentals. Okay? You make sure you're not taking advantage of people or being stupid or being. No, that is stupid. It's not. I was like, let me find a nicer word for that. There no nicer word. It's just stupid. Don't be stupid, don't be an asshole and don't be stupid. I'm going to. I'm reading this really great book, scrum and, and one of the rules was don't be an asshole and don't have any assholes and your business.
[37:18] And I was like, that's a good rule. That's a good rule to scrum is a great book. If you haven't read scrum, it's really, really awesome. I'll put that. I'll put it in the show notes. Oh, and that reminds me too, if ever you guys want to read books, like honestly, reading is the best way to get to know anything and I recommend that everybody reads at least a book a month and everybody goes, well, I can't sit down and I can't read. Neither do I. not anymore. I listen to audible books all the time. I have had audible since 2006. I have literally over 600 books I think on there. I'll have to count them for you guys, but I have so many books on audible. I've got a deal with audible and it's right. I'll put it right on the link. You guys can get a free book and start your membership with them and get a free book to start listening to and listen to a book a month.
[38:13] And honestly, your life expands when you read it. Really, really does. And I read everything at fast paced, which is probably why I talk it fast paced, but audibles amazing. So I can't, you know, I can't promote them enough because I've been a fan of theirs way before Amazon bought them way before their apps and stuff. I mean we used to take, um, and I still do to take them and download them and put them into our little MP, three players and know our little ipods that we have. I still have an old, thick, super heavy ipod. People are like, how old is that thing? I'm like, Dang, I don't know. It was like one of the first ipods. The thing weighs like a ton and it's massively huge. Well now it's like the same size as a phone, right? Or maybe even smaller, but audible is a great place to go to learn and you need to do that.
[39:03] But back to the short term rental business. Okay, just don't take advantage of people. Don't be stupid. Make sure that you're following everything by the book. All right, now let's go over really quick what we talked about, what we talked about was real estate investing. People said it takes money to make money not true, and that co hosting is to short term rentals as wholesaling is to real estate investing, and that's really important to know you can do this with no money of your own. Okay? But the less money you have, the more work you're gonna have to put in. Just know that it just like any investing. If you want to be in an investment, you find a great house, but you have no money and you go find an investor to invest with you. Yeah, he's going to get the majority of the money because it was his money that you bought the property.
[39:51] When you're going to have to do all the footwork and he's going to get as big or even more of a profit than you are because he had money. How did he get money? He was smart enough to make that money. Someday you'll be smart enough to make that money and you can use your money like a bank too, because that's just. That's just the way the world works. Just know less money. You have more work you're going to have to put in, right? And the key is always marketing, marketing, marketing, marketing. You have to get out there, you have to find the properties, right? So we know why. There's like all these different reasons, all these different reasons why somebody might have a property that's empty with furniture and him, but how are you going to find them? Where are you going to look?
[40:30] So you're going to buy lists, maybe at listability. Are you going to use Craig's list or Zillow? You might use yellow signs and put them out there. They call them bandit signs. You might find realtors or attorneys, wherever you find these people, it doesn't matter. Pick one and go for it. Just market the shit out of it. Start calling. Start Making postcards, letters, handwritten envelopes. If you're sending out letters from a list, write handwritten envelopes, nice message inside. And remember, you're going to find furnished properties. Furnished property is only if you have no money because you don't have the money to put into them. So you're going to be a business partner. Why are they doing this? You know, maybe they're tired or whatever. You don't care, you don't care, and you're going to do all the cleaning, the prepping, getting it all ready to turn it from a house, or maybe a house that's empty with just rented furniture inside of it into a bnb.
[41:25] So the white sheets and towels, the sobes, all that stuff, the coffee makers, the coffee and the filters, all that stuff. You are going to have to do it. Okay? You take the pictures, you stage it, you list it, you market it, you insure it. You set it up with a cleaning crews and the maintenance guys. You do all that stuff and then you get your pricing right and you put it out there. You make sure that inside your contract had everything from the dates, how far out you can list it to any dates that you might have to have it open for open houses. You're going to have your fee in there or your percentage, like I said, I like the 50 slash 50 of the net income, so that means all their expenses will be paid for of that profit and make sure that you list those expenses.
[42:07] Guys, don't say expenses because they'll start putting shit in there that you don't let them take advantage of you. You make sure that you have their expenses listed, mortgage taxes, insurance, cable, electric, you know, put all that in there and then after those expenses are met and paid, the profit that comes in after that is split 50 slash 50. Okay? So make sure that you have it all in writing. Everything super accurate records. You keep receipts for everything. You have a company, hopefully if you know, if they don't trust you, don't worry about it, but you have a company who does all the bookkeeping for you if you want. That's. That's literally what I suggest. If you're not good with money and that's pretty much why I told you that story because I wanted to make sure that you're covering those people and the more people that you do.
[42:58] Then you can go up to them and you can get them to be a referral for you. You can take a little video and say, Hey, would you mind just giving me a referral? Just telling somebody how you feel about the experience that you've had with me doing the cohost seem for you, and they'll say, oh yeah, sure. If you're making them a lot of money, they're going to be super happy. Super happy to do that with you. You're covering their mortgage or covering their expenses. You're taking care of their property, right? They're going to love to do that for you, and then you can get more and more and more people and you've got a nice little business going, right, and then you're done. Just you know, what do they say is shampoo, rinse and repeat. That's all you're going to have to do.
[43:38] Now, here's something super exciting for you. We are putting together a five part free training on how to set up your first short term rental, so this five part series is going to be absolutely free. You're going to find it right on our short term rental revenue website and you'll be able to sign up there for free. I know we rock, but we had a lot of people asking us and we said, you know what, we can just do this. It's super, super duper easy. There's just a few things that you really had to cover were like, we can do this and probably five parts and we, you know, we don't want to charge you for this because basically you're broke already. So getting started right now and you're like, I can't. I have no money. How are you going to pay us for this?
[44:23] Anyway, so we're like, look, we can do this for you as a gift. We just want to make sure that we're paying it forward. We want you to have a wonderful business, but you have to promise us something in return and you know what that is. That is that you will go out there and always do your best to be on the up and up. You make sure that every deal that you do is a win win scenario and that you never take advantage of somebody else because if you believe in your heart somewhere that you have to take advantage of somebody in order to make money. That is a wrong mentality. That's the wrong mindset and you don't belong listening to my show honestly because that's wrong. That is just plain wrong. You can make a lot of money. The more people you help, it's all about people.
[45:06] It's all about serving people. The more people you help and the more people you serve, the more money you make. It will all come back to you. So I believe in giving because I know it comes back to me in the end. So we've got this course. It's getting set up for you. It should be ready to launch in February and I'm honestly not sure when this podcast is launching so it may be already going when we launched this podcast or it may be just afterwards, but just go to our website and find it and I just wanted to say thanks again for listening everybody. It's so amazing. All the five star reviews we're getting in all the feedback and please keep sharing us with everyone you love. If you've got any comments or questions or anything you want us to talk about, go find us at. We're at the short term rental revenue.com or you find this on facebook in our group and message us and if you need to message us in an email, if you feel more comfortable doing that, just go to [email protected] and we'll get back to you. So God bless you. Thanks so much for listening. Have a great day. Go and grow.
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