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In this week’s episode, our hosts David Dodge and Michael Slane interview Al Williamson about Short Term Rentals and how to Increase your profits by leveraging the FULL powers of Airbnb, VRBO and Homeaway (without all the hassle of one-night stays).
David: David Dodge, hey guys!
Mike: If it’s your first time listening, thank you so much for joining us. We always recommend people start real estate investing by learning to wholesale. Doing that we suggest checking our course, the FreeWholesaleCourse.com. 100% free. Shows you everything you need to know to get started wholesaling real estate. That’s FreeWholesaleCourse.com. That is a great way to get started. Learn your numbers by buying properties at a discount, and selling them to landlords and flippers. We are very excited today, we have a seasoned landlord with us. Dave, do you want to introduce our guest?
David: Yeah we have an awesome guest today, guys. We have Mr Al Williamson. He is a professional engineer, a full time real estate investor and the author of several real estate books including ’40 ways to increase your net income of your rental property’, and ‘Building wealth with inner city rentals’. Al began investing in 1996, Al welcome to the show, how are you, man?
Al: Awesome, thanks guys for having me here. It’s great here, I love the place you guys got here for me.
David: Cool, absolutely. We are happy to have you, man.
Al: You guys got those nice arm rests, I like that.
David: This is our new set up, man, we just got this set up a couple of days ago. We are really excited to have you on the show today, because we do a lot of things in real estate, right? We wholesale, we fix and flip, we have about 50 rental properties. Mike is a broker so we have a brokerage. We do some lending, we do some creative financing. We basically do a lot of things, right? But one thing we don’t do yet is short term rentals. You seem to know quite a bit about it. So we are really happy to have you on the show today. You do AirBnB’s as well as short term rentals?
Al: Yes, I do both. I like to diversify. I think every landlord, especially with multi family property has got to have at least one short term or at least flexible term rental, it just makes sense. It opens up a door of opportunity that you are not going to find as a traditional landlord. In fact, I think it is less risky to be– to operate furnished rentals than it is to operate just as traditional landlord.
Mike: That seems so counter-intuitive to me.
David: Yeah, let’s talk about that.
Al: Folks haven’t really thought about the whole ladder. Of course, Mike, you can leave your place vacant, right? Then you can operate as a traditional landlord and when the water heater goes out, a leak, sewer line breaks, all that takes your profits for the whole year. You can operate as furnished rentals, and make about 30% more. This is with the exact same property we are talking about. You can make 30% more if you just simply furnish it, rent it long term, furnish rentals, nothing new there, right? Then you could take another step and do sites like AirBnB, VRBO, HomeAway. I call that flexible terms, because you are flexing your terms of how long people stay. You can flex terms with dogs and all kinds of stuff. You can add cards, rental cars, just flex your terms. You can make between three and five times more than a traditional landlord, but it’s the exact same property, okay?
David: Yeah, interesting.
Al: Then from there you can go up to doing aiming for corporate rentals, and make up to ten times more on a net income with the exact same property. So that is why I say, if you are aiming for corperate rentals, if that doesn’t work for you, if you fail at that you can do AirBnB. With AirBnB you can do long term rentals, long term furnished rentals. If you fail at that, you can do the least profitable, most risky thing which is being a traditional landlord.
David: Isn’t that nuts?
Al: It doesn’t have any safety nets, you go right to bleeding.
Mike: Tell us more about corporate rentals, I am not really familiar with that.
David: Yeah that’s one thing–.
Mike: Could you describe that, I assume that is part of your portfolio then?
Al: It is, I aim for corporate rentals. I use AirBnB as a backup strategy if I can’t find a business person on a business travel, or rent directly to a company.
David: Is that the main goal, Al? Whenever you buy a property, and you furnish it, you are trying to do the corporate before the AirBnB? Is AirBnB more of a backup for you?
Al: Absolutely, that’s exactly right. Often times there are companies probably right next door to you guys who are bringing in a place for training programs.
David: Say that one more time.
Al: They bring in employees for training programs, and they put them up at extend a stay hotels.
David: That’s pretty common actually. What’s the average term?
Al: Well corporations and companies bring in people for a number of different reasons and different periods of time. Sometimes their staff level, moving their staff around just to open up– opening up a new Target store, they have to send their project managers out there for– it could be 13 weeks to set up a new store. They would put that person in a hotel or hopefully one of my corporate rentals. They would save a lot more money if they came and gave that employee a full house, where that person is more comfortable, and that employee is more productive than being in a hotel. Have you guys stayed in a hotel for a couple of weeks at a time?
David: It’s terrible, I don’t like staying more than two or three days at a time.
Al: That’s exactly right. That’s why there is a really big opportunity to skip tourists. Just get a regular place, furnish it, make a connection with a business person or a company, and save them money by letting that person stay at your furnished rental, so corporate rentals, yeah.
David: Al, tell us how you got started with the short term rentals. We were talking earlier and you told me that you started investing back in 1996, you have been in the game for quite some time. How did you get started with the short term rentals?
Al: I was working on ’40 ways to increase the net income of your rental property’, using AirBnB was just one of the strategies. I started the book because truth be told, landlords are– rentals are a great way to build your equity, but it is terrible on your cash flow, because you get wiped out if you maintain your property.
Al: People just don’t want to talk about that. I thought I was the only one. I was being careful, I was maintaining my properties, I was doing a lot of work myself. At the end of the year, I look back on my cash flow– this is terrible, but thank God there is depreciation to make up for it. That makes up for it. But cash flow wise there is something wrong. Also, relying on just one source of cash flow, how crazy is that? Just relying on your renter. I mean, what kind of business does that? So I started back when I needed a short term rental, I was working in 2012 in San Francisco, have you guys every heard of Alcatraz Island?
David: Oh yeah.
Mike: Uh huh.
Al: I’m project manager. Yeah Al Capone. I was project manager for putting solar panels on that island which is now part of the natural park service. I was in San Francisco for a year and a half. I needed a place to stay for three months after my lease ran out. I had a budget from the natural park service for housing. I needed a place, so I started looking on AirBnB around San Francisco back in 2011 and 2012, just when it was picking up, when it was becoming a thing. It was gaining popularity. It just so happens that I had a budget and needed a place to stay. I wanted to see more of San Francisco. So that’s what happened. But at that time it had more of a bed and breakfast flare to it, where people were bringing me cookies, carrying my luggage up, they wanted to interact with me.
Mike: It seemed more like couch surfing when it started. Whereas more people were renting out a room than a full house, is that kind of true? Where people are now most renting out houses, right?
Al: No, it has many different facets to it. There are still a lot of people renting out rooms, absolutely. That hasn’t gone anywhere. It’s just in 2015 AirBnB came out with a category called Business Travel Ready. You only qualify for that if you did not share your rental. They were aiming at business travelers, okay?
David: Is that an option in there?
Al: It became an option in 2015, where they just said, we are going to promote your listing, which you can’t live in, so they are talking to landlords. We are going to promote your listing to just business travelers.
David: Okay cool.
Al: You can’t have a pet in there, they have all these rules back in 2015. It’s changed now, but 2015 they said, if you are not living there, we will promote it just to business travelers. You need to have some things like, locks where they can let themselves in and things like that.
Al: At that time, from 2011 to 2015 I was like, ah you know, this is just going to be one of my 40 ways. But, where it came to where I didn’t have to share a place, I don’t have to carry luggage and all that type of thing, and really need to interact with that guest. I said, okay let me test this out. That’s what happened. My eight unit property, I call it my laboratory, I dedicated one unit to AirBnB, VRBO, I ran some experiments. For example I had three people in one month stay with me. I made a lot of money, my gross was great. My net was pretty good. I was worn out. I felt like I had just gone through finals. I did well on the text, but I was exhausted.
Mike: I love that idea though. You have a multi unit building. You are getting that traditional landlord money through some of the units–.
David: The long term.
Mike: Yeah the long term rentals, then you have got a couple of units that you are playing with, you are testing, I love that. Al: Absolutely, every multi family, I don’t care if it’s a duplex. One of them, one unit should be a short term rental, absolutely. There is no excuse for not.
Mike: We are definitely going to do that.
Al: That goes to– as a side note, a lot of landlords are business owners, right? Don’t have an internet strategy at all. This is 2019, most landlords do not have an online strategy. This is crazy, what business does not have an online strategy now?
David: Can you give me an example?
Al: Just connecting to AirBnB is an online strategy.
David: Got it. So you are saying as a landlord people are just putting a sign in the yard, or listing on Zillow or something along those lines, right?
Al: That counts, but I will tell you what, that is fading out. That is like borders books putting out a sign in front of their–. That’s the same thing for BlockBuster, didn’t have an online strategy. Every company that is going out of business has a weak online strategy.
David: That’s a good point. Radio Shack–.
Al: Landlords are next in line, landlords are the next in line. It shouldn’t even be a stretch in the imagination now. I have been saying this for a while.
David: Wow that’s interesting, very interesting.
Al: Anyway, as I was doing those experiments, doing it frequently, multiple times per month was good, but I was worn out, so I started to say, what if I test one month, make it 30 days. I was able to get bookings there no problem. That felt a lot better. But, when I looked at my net income it was nearly the same as when I was doing those multiple times, because I had less taxes that I had to pay, it didn’t take up so much of my time. It was less turn over and cleaning. I wasn’t go back and forth to the place all the time.
David: Are you talking corporate or long term right now?
Al: This was just testing. This is how it came to the fact that these three– two months to seven months, those rentals for business travelers is the holy grail. That’s how I got there. Also, just coming from the fact that I was a project manager engineer, who has overseen different projects, there was a lot of people just like me that had those budgets. Sometimes you could pocket your housing allowance if you had created a savings. They are motivated to do that, and that’s tax free by the way. That housing allowance is tax free. I could talk to people that way. There are some people who are on different federal contracts who have turn in their receipts and they just get reimbursed for their receipts for the housing costs. Those guys were absolutely holy grail because they just wanted to be comfortable. They would turn over their entire budget to you if you– they have been extra comfortable. It is an extremely– like you two guys are very smart guys. You have been in the business a long time, you have a lot of exposure, you can see why people who are very knowledgeable who are still not knowing about this category, which makes it so that I don’t have any competition.
David: I think we should dabble in the corporate, corporate is interesting. Do you get about 30% hire rent? Just by furnishing it?
Al: No, you get 30% hire from anybody by furnishing it. You could go much hire with corporate. You should expect eight to ten times more on your net income per month for corporate.
David: eight to ten X?
Al: Eight to ten X on the exact same property just by furnishing it and talking to a business person, and saving them money on what they are already spending.
Mike: — just getting a nicer place–.
David: You have a really good point, man. In a hotel like– man, it just sucks so– you don’t even want to be in the room.
Mike: — then you walk half a mile to the hotel, take an elevator, then walk another quarter mile to the room. It’s just not easy.
David: Nothing about it.
Mike: You can’t cook anything, you are always eating out.
David: — the ability to have a family room with a decent couch, a full kitchen.
Al: Man, you guys are onto something. So you are are saving your food budget if you are getting a food allowance. You are eating better so you are healthier. You are sliding– pressing the remote on the garage door opener, sliding right into it, and you are saving the company money. That– and so that’s a big win, and from a landlord’s perspective, or a rental ownership perspective. When one property has the cash flow of ten properties, you don’t need so many properties. You can just relax.
Mike: That’s really cool. What about wear and tear? I’m assuming your AirBnB’s– you’ve got the short term vacation type guests, they are probably going to be a little bit rougher. I guess the corporate guys are going to be a little bit more gentle. I am just making assumptions here.
Al: That’s not an assumption.
Mike: How often are you replacing your furniture? I assume you have to keep it looking pretty good. There is going to be some expense.
Al: Let’s expand that, because you hit on some good points there. First, there are two types of people, there are the tourists and the travelers, okay? The tourists are paying out of their pocket, and the travelers are paying out of their boss’s money. Their mindsets are completely different, okay. If you are spending your own money you are looking for deals, you are maybe– act like a tourist. If you’re spending your boss’s money, I know how to contact your boss, you are going to be very gentle on the property, just because you know I can escalate if there is an issue, or I can just flame your on Twitter and drag your company’s name into it. So you are really not going to do anything.
Where the source of money comes from is extremely– that’s the main thing, that’s why I deal with someone who has some accountability as an employee type of thing. The next thing is like– do you guys have Motel 6’s in– low end hotels?
David: Oh yeah.
Al: You probably have the Nexus hotel in your area.
Mike: Probably the Ritz.
Al: The Ritz, okay. So there is a whole spectrum of housing, right? There is a whole spectrum of furnishings as well. The Red Roof or the Motel 6 still makes a very impressive profit. So it’s all about that margin. You can furnish it, you can make a really good budget– I have one place that I house– concrete masons. Their whole crew, okay? They don’t want luxury furnishings.
David: Right because they are dirty, they are filthy.
Al : That’s right. They want a big TV, they want a sofa and they want a little yard so they can set up their grill. They want to take a call, send home most of the extra money, okay? Now where is also regular folks who are not corporate travel, maybe a project manager, or a small business person. They are going to want something nicer. So you really have to narrow in on who you want to serve and where you can make that margin, because you have to make an extra margin for where you are.
David: Yeah and that’s something– so Mike and I have probably about 50 rental properties. They are all long term. Our goal is to get to 150, so we have a hundred to buy, we are going to try and get there in 24 months, closer to 18 months.
Al: Do you guys want the cash flow, or do you want the rentals?
David: We want the wealth. We want– and have someone else pay it off. So obviously this is a cash flow game. So of course we want the cash flow, but really the main thing is we want the wealth.
Al: That’s what rentals are for. Traditional landlording is for wealth accumulation.
David: Absolutely. If we were to mix it up a little bit. Let’s say we had 20-30 corporate rentals, 20-30 AirBnB’s and 100 single family long term, that would be a good diversification.
Mike: I really like that idea.
David: I really like that idea too.
Al: You would have the cash flow and the equity if you did, if you aim for–. Wait, can we pause here, I want to pause and talk about this word AirBnB?
David: Yeah, let’s go.
Al: That often– AirBnB is like one planet that has this big gravitation pull on it. People never thing beyond it, okay? But it is one in a big solar system. It is not even the biggest one. There are just– by getting away from your computer, walking away from your computer, taking a gift basket with a few chocolates to the company down the street, talking to the office manager. You can make more, you can go directly to them, okay?
Al: Then there is temporary housing, which is furnished rentals, but you are dealing with in betweeners, in between selling their house and buying a new house. Realtors need that type of option, okay?
David: Yeah that’s a good point.
Al: They need that. They are not going to use AirBnB for that. So there is this whole galaxy, many many planets, because of that I just want you guys to call this short term rentals instead of AirBnB.
David: No, I love that idea. That makes sense. AirBnB is just one channel. Like so many other channels out there, and you have channels that aren’t even online like you said, go down the street and talk to the office manager of a company.
Al: That is the most profitable step you could take.
Mike: What I think it’s like is Kleenex. Just what we all refer to as tissue paper. AirBnB has become so synonymous with short term rental–.
Mike: We just refer to it as–.
David: What’s so crazy is that– there were so many companies before AirBnB that did the exact same thing. AirBnB in my opinion as a better UI.
Al: Absolutely correct.
David: Just looks prettier.
Mike: Short term rentals, I love it. So Al, how would you say somebody could get started in this? Dave and I have got our foot in the door in it, you obviously do as well. But how does a new person? That’s our target market is the newer investor. How would somebody get started in short term rentals?
Al: You want them to be a mechanic, or you want that person to be a waiter at the local street? What income level do you want to talk about?
Mike: Let’s do both, can you do both?
Al: Let’s talk about somebody that doesn’t have any money at all, okay?
Mike: Perfect I love it.
Al: Okay, so a person who doesn’t have any money at all, they would need to see if there is an extended stay hotel in their city. They would typically– they would count them up, sometimes Extend Stay Hotel America has three, but there are different pockets of people that use these different luxury levels.
David: Probably five or six in St Louis.
Al: Okay yeah, that means that this business model that I’m talking about absolutely works, there is no question about it then. Each one of those is about 22 million dollars to construct. They have done more research than you can ever do, so you don’t need to do any more research now. If there is an Extended Stay, that means 18 days is the average, which means there are plenty of 30 days or longer stays, okay? So there is no more research that you need to do. You have done the research, then you point that out to someone who has a self-corrected IRA that you can meet at your local REIA or someone who has a little extra money. Okay, that’s great, then you say, well why don’t I go rent something, go rent an apartment that has– or rent a small house. So I need money for the first month’s rent, and a security deposit and furnishings. That could be– where you guys are in St Louis, that could be all of $10’000 maybe for that. They set up, start marketing like I said. I have lots of marketing techniques. Once you know how to market, then everything is easy after that. Especially when you find out you are saving companies money, local company’s money. They want to work with a local person anyway, instead of a corporate brand. Then you are overwhelmed with trying to keep up with the demand. Also, all of a sudden that person who didn’t have any money, who just used the right language, and used the right idea, can take that person’s 10’000, pay them back within five months.
David: Yeah that’s pretty cool. Borrowing somebody else’s money to get your foot in the door.
Al: That’s right.
David: Your cash flow is good, it’s great really, so you could pay all that back. So that’s a great scenario, that’s somebody that doesn’t have any money. They can get a small loan from somebody, or even partner with somebody to rent, or basically arbitraging what they are paying and what they are collecting, very cool. What’s the other side of that spectrum like? Somebody–.
Al: At the very far other side of the spectrum is someone who has money, may have a self directed IRA, okay? Same strategy. If you rent someone’s property for example, you don’t have debt associated with that rental. So that slips into your IRA nicely. So you can create– working with a partner okay? Because you can’t self deal, you can’t do it yourself. You can create one of the arbitrages inside of your self directed IRA, just pumping out money each month. You could get a bunch of those. So if you are behind in your retirement account, you can create these pretty quickly, machines inside of your self directed IRA, pumping out money so you can take it out tax deferred, tax benefit. Just compounding year after year.
Mike: That’s a great idea.
David: — it’s great, no tax, money I don’t need either so putting it away so it can grow. I never thought about doing an AirBnB slash arbitrage type deal.
Al: Short term rentals.
David: So many ways to make money. The people that are doing the best are just creative I feel like. Man, that is really cool. I have a couple of questions about touristy areas, so like in St Louis, I don’t look at this as every being a destination place for anybody unless you have family here. I would imagine that is probably a lot of the AirBnB business is friends or family coming into town. We also have a zoo which is free, probably one of the only zoo’s in the country that is free. We have some sports games. We have some places, but we don’t have any mountains to go skiing on, we don’t have any beaches to go lay out on. Does that effect the mindset of doing an AirBnB in a city like St Louis versus Tampa?
Al: No, it doesn’t. There are a couple of things we need to tease out. One, St Louis is in the center of the country. There are a lot of conventions there. If you wanted to go short-short rentals, less than 30 days, you could save a lot of companies money by just getting the biggest house you could and allowing them– so they can do lodging and meetings there.
David: Yeah, that’s smart.
Al: In fact, in St Louis when I was there, I interviewed a guy– you know you have that industrial area out there where all those abandoned warehouses and factories are?
David: Uh huh.
Al: So he bought one of those and he set it up for bachelor parties on weekends. Ended making $350’000 a year just doing bachelor parties on the weekends, okay? So that’s another area. He lived on the top, he was a realtor, and just had set up– four floors and everyone had to stay there, they could make as much noise as they wanted, but the rules are that they can’t leave anywhere. He was just blowing it up. Also there are businesses there, anytime there are businesses, they are bringing people to St Louis, and because they are bringing people to St Louis, they are paying for a place to stay. That’s constantly going on. The St Louis airport is small, but there are always people there when I’m flying through.
David: That’s true. People come, that’s for sure.
Al: What you’re saying is– by using that word AirBnB, it really just squashes your mindset of what’s going on. You can’t see the rest of the world. You just need a few of these– each one you can make ten times your cash flow, so you just need a few of them to change that. You have– you said you have about five Extended Stay hotels in St Louis?
David: I would say at least that, Mike? One here across from us, a bunch of them on I70 and I40 when you’re heading out to St Charles.
Al: Yeah, St Charles. Each one of them has 150-200 rooms, okay?
David: Yeah and they wouldn’t spend all that time building them if–.
Al: What I’m saying to you, Dave, what are your chances of taking one of their customers?
David: High, very high.
Al: Okay so you got all the business you could possibly have right there.
David: Right, that’s a great– that’s an awesome point. So let’s talk a little– I love your mindset and your terminology of– it’s not– let’s not say it in terms of AirBnB, let’s talk about it more in short term rentals, because there are so many other avenues, I love that. Thank you for sharing that, that’s a huge gold nugget for us. One of the reasons I haven’t done AirBnB’s yes– I will correct myself; short term rentals yet– is learning, I’m learning. Is because the turnover is high, therefore– this may not be the case, but I would just think you are going to have higher maintenance, you are going to have higher management. Mike and I don’t manage our own properties. We are working aggressively to acquire, and you can’t do both, right? So we have a property manager. If we did– he doesn’t manage short term rentals though. You either have to find somebody to do that or we have to do it, I just kind of want to get some feedback from you in terms of the added maintenance or the added management that goes into that, because people are moving into and out of this place weekly sometimes, maybe monthly. But, you know, our average tenant with a long term may be 18-20 months.
Al: That’s great, because that blows into what– people have already made up their mind about this. There are– 36% of the travel in the continent of the US are with people who are staying between one and six months at a time.
Al: 36%– extended stays, and you see them keep growing with putting kitchenettes in, 36%. Other parts are doing those weekly stays, so I say in mind mind, and to my students I say, you guys let them do those– that fast turn over, we are just going to focus on two months, seven month stays. We are just going to focus on that. There is a lot of that going on. That’s what I’m saying, once– my typical stay is four months.
David: Corporate or–
David: Corporate, okay.
Al: — and traveling health care professionals too coming through.
David: Oh yeah, like traveling nurses or something like that.
Al: Physical therapists, stuff like that. As long as you see a growing– baby boomers are still growing right? The trend is still ticking up. Because of that, there is going to be lots more traveling health care professionals, it is just going to become a strong industry. So because of that we only focus on these extended stays, because I don’t want the turn over or the daily activity in that. From there it is just setting up a series of check lists so that– you can get things done. There is not furniture being moved in and out, it’s just doing the laundry and setting it up for the next person, which our house keeper does all that. The house keeper or somebody goes and does your quality control check list, and makes sure– pillow case liners, that’s one thing that’s on my check list. I like pillow cases and pillow case liners, pillow liners you know? So make sure those are on, make sure the laundry is done, make sure there is a full bottle of dish washing liquid. All that is only my check list so that I don’t do anything. I check my score card, I think I get my assistant– sends me a color coded score card of my 19 extended stay rentals that I have, if it’s all green I don’t do anything that day. If it’s red I– which one of our systems failed? It’s because we run it as a business, and not as a job.
Mike: That’s awesome, man.
David: You’re doing great, man. You’re crushing it. I love it. That’s great.
Mike: Do you have any other questions, or is there anything else you would love to share with somebody who is interested in this? I would love to follow that up with– where can we get more information?
David: Al, you mentor landlords all over the country. So tell us a little bit about your coaching business.
Al: I’d love to. We are just kind of talking about the short term rental part of my business. I have– I call myself the world’s first landlord scientist.
David: I love that, man! You are the landlord scientist.
Al: I’ve earned it.
David: You have.
Al: I am documenting ways to increase your net income with your current properties, and also reduce your expenses. For you guys let me share this; I want you to go to HomeDepo and get something called Green Gobbler. It’s $11, green packages on it. Every time you go visit your property I want you to toss that into your sink. Let it dissolve, it is a biologically friendly drain opener. That will eliminate your need to ever call a plumber again. By doing a little bit of very inexpensive preventative maintenance, you can wipe out the plumbing industry, okay? It will save you guys quite a bit of money, right? So I have a whole lot of coaching on that, then– my extended stay rental business, I teach people how to start with nothing, and how to grab somebody else’s harvest, and plant a little bit of their harvest so they can have a harvest of their own. Start with nothing on how they can focus on extended stays where people are nothing thinking about– and make things better for their families. No matter where they are starting out, or what it looks like or whatever. So that– is on my website, it is called LeadingLandlord.com, kind of a clearing house. If you are interested in just extended stays, then you go to ExtendedStaysLandLord.com. If you see my coaching and training program, it walks people through six steps, if they just do a step, do the task, they are going to make more money and get the same results as so many people have and changed their lifes. So it doesn’t matter if you need cash flow now, or you want to catch up on your retirement. This whole thing works for you.
David: Al, are you doing– I love how you refer to them as short shorts. Are you still doing some short shorts? Or are you really focused more on the corporate?
Al: Yeah I do only corporate, 30 days or longer. Sacramento has really bad– and really strong anti BnB anti short term rental laws.
David: Oh they do?
Al: Yeah but they don’t effect me at all. All those ordinances are for 30 days or less. They are called transients, that’s why you pay that lodging tax when you go to your hotels. Since you go over 30 days you don’t have to pay that anymore, you become a regular month to month landlord, and you follow landlord tenant laws. That’s why I only do nothing but specialize in– collect marketing tactics for 30 days and longer so you are in the sweet spot for the highest paying–.
Mike: I’m really impressed, Al.
David: Me too, man. Like– so honestly, I think it would be kind of nice to dabble with some of the short shorts, but I really prefer what Al’s doing. The extended stays. I think the extended stays make more sense.
Al: That’s competition.
David: Absolutely. Al, tell us those websites again.
Al: Okay so ExtendedStayLandlord.com. Walks you through my six step program for that. Absolutely it has worked for many people. That is how you get into extended stays. Like the regular traditional landlord is saturated, everyone is doing it, right?
Al: There are tons of people piling on doing the short shorts. If you want to set yourself up and relax you do extended stays.
David: Not very much competition there other than just the big players, then of course you. In our market there is not a whole lot of–.
Al: I stay in Sacramento. I don’t really need to go anywhere else outside Sacramento.
Al: I don’t teach anything in Sacramento. I don’t talk– I don’t coach anyone in Sacramento, I don’t talk in Sacramento.
David: That’s good though.
Al: My main website is LeadingLandlord.com, where I post about my different experiments.
David: Is that ‘Leading’, or ‘Leaving’. L.E.A.D.I.N.G’.
Mike: We will get that in the show notes.
Al: All my experiments– I you guys are on the BRRRR series, I am on a series called ‘Abundance series’, where I talk about the laws of abundance, then I actually video tape myself using them to create money out of thin air. We were told that money doesn’t grow on trees, right? Over and over again, pounded into our heads. But it’s not true if you have the right language and a good idea, you don’t need money, it just– you can use other people’s money, and you pay them for their money, and you go make more money– it really reduces the stress in your life.
David: Yeah, we do that with the BRRRR strategy obviously. We have private lenders that lend us purchase and rehab, and we have a property management company that helps us with the leasing and the management of the rental, the renting and what not. Lots of banking partners of course, but we pay all of our lenders back, and on average of the 50 properties we own we are into each a little less than 500 bucks. So that’s maybe two or three months worth of cash flow , then we have no money in that deal.
Al: That’s exactly right, exactly the mindset, absolutely. And you guys are doing long term holds which is super smart. Man, you guys are going to be on the beach pretty soon.
Mike: We got too much to do.
David: We got a lot to do. I got to get 50 of these short term 30 day plus–.
Mike: Long term short term.
Al: Why don’t you call them mid term?
David: Mid term!
Mike: Mid term, I love it, Al. Alright guys–.
David: Al, thanks for coming on today, we really appreciate it guys, don’t forget to check out Al’s two websites, make sure I got this right, Al. LeadingLandlord.com–.
Mike: The other one is–.
David: ExtendedStayLandlord.com. Is there where you want everyone to go in terms if they want to connect with you? Do you have any other–?
Mike: He also has the book too.
Al: Books, I’m everywhere.
David: We are trying to be like Al, we have a book too.
Al: Yeah– you will have no problem finding me.
Mike: ’40 ways to increase the net income of your rental property‘. So he has that one out there on Amazon. You said you had another one or two?
Al: ‘Building wealth with inner city rentals’. That’s on Amazon too.
David: We got a fire truck coming to the door here, guys.
Mike: We are on the 6th floor, and you still hear them coming down the road.
David: Well Al, thank you so much for coming on. Again, I love talking with people who are doing things a little differently from what I’m doing, because I am a life long learner, I love to learn new things, you have actually taught me a lot in this podcast, this episode. Sometimes I will get on here and it’s like, okay everything I know. Our listeners obviously might not. I love it whenever I can actually learn.
Mike: I’m excited too. Hopefully our listeners get some of that, hopefully some connect with that.
David: Alright guys, check out Al’s books, check out his websites, he is the man! We are very happy to have Al on the show, we are grateful to Al. Again, this is the Discount Property Investor podcast, don’t forget; you make your money when you buy, you get paid when you sell, alright? Also don’t forget we have a book, ‘The ultimate guy to wholesaling real estate’, it is a comprehensive plan, and basically everything you need to know to wholesale real estate. Mike, any closing words or statements?
Mike: Thanks for listening guys, we appreciate you guys.
David: Alright guys, until next time, thanks.
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