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June 9, 2022

Ep 199- John Bianchi Understanding Your Numbers In AirBnB

Ep 199- John Bianchi Understanding Your Numbers In AirBnB

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https://reports.pointanalytics.co/sales-page1646591520576

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Transcript

Hey, welcome to today's episode. I'm your host, Daniel Martinez. I have a special guest, John Bianchi from Canada. He lives over the river from Detroit to talk a little bit about that for the show. But he is a Airbnb data specialist. So we're talking a little bit about that, and how he should hopefully get a real estate too. So we're talking about that. But here's our guest job. So Airbnb is a little bit newer. I know it's been around for like, 510 years here, give or take volume and do an Airbnb. Since 2017. Okay, 2017. So you got you got ahead of it before it got popular. Yeah, it honestly when I got started, I thought it was popular when I was getting started. So now it's like, to the max, you know, or we'll see where it goes from here. But yeah. Okay, that's awesome, man. Since it doesn't seem this long time. Now, are you a host yourself. So funnily enough, I'm not right now. But I did have up to 15 locations in Chicago, I had a couple down in Scottsdale, a couple over in Michigan, and I sold all of them in 2020. When everything kind of fell apart, I had somebody who actually wanted to buy my portfolio at the same time. And so I just ended up selling off all of them. I was doing rental arbitrage, and property management. So I didn't own any of those homes. But I was still able to sell all the contracts. That's good. That's good. I mean, it's that shows you there's even revenue to me just by management. Now I know, I know, rental arbitrage and management usually charge a lot more. So you see what your rates were when you when you are charged when you do charge for management? Yeah, so management's. The average is now about 20%. It was 30. When I got started, it's now about 20%, though. And that's 20% on like the pretty well, the entire revenue, right? So if the home makes $100,000, you're you're taking away 20 grand for managing that home. So that's, that's awesome. And then with rental arbitrage, it's really all about finding the right property at the right price. And that's really what's going to maximize that revenue for you. I never paid a landlord more than what they're asking in rent. So they didn't get the better deal I always did. And that's kind of how I wanted it to go. But yeah, you definitely there's definitely money to be made to management, especially if you get the bigger homes to do you get those luxury homes, the luxury homes are doing like $200,000 a year, and you're taking like 20% of that home. So it's it's pretty impressive. That's crazy. It's crazy. So you are in the arbitrage game, just essentially landlord of the rental of the of the Airbnb itself. So how much was your exit on that portfolio? It was, so but $250,000 not not a crazy amount. It was based off of the one year's cash flow for every single property that I had. Now I focused on really large property. So I had the biggest properties in Chicago, which were four bedrooms in the high end neighborhood. And so each property cashflow about $20,000 or more and I sold them for that amount. And then however with that being said there's some people's businesses who have gotten they get they're getting multiple effects when they when they're looking to sell so but I also know of a company named a casa which is like largest management company that buys home for $1,500 A contract so I sold mine for 20 grand they they were selling them for 1500 So it's it varies a lot. Let's just put that way and I'm happy with what I got. That's not a bad win. But what I what I what I hear is that you may turn $50,000 on stuff you didn't know that's that's what I just assess some paperwork and the lot of people to understand how much the paperwork is worth but paperworks worth $200,000 Potentially Yeah. Contract right yeah, yeah fee if you get if you get enough paperwork, he can make it we can make it worth your while. Yeah, exactly. Get the good operations behind it, get a good brand behind it, that paper becomes even more valuable. So were you strictly an Airbnb because what I'm hearing now is I feel Airbnb, they're kind of diversifying their rentals across multiple platforms, including even building their own. Were you in that were in that as well trying to click your own client database and sell your own clients directly? I actually never I never did that. And during the time when I was doing it, it really wasn't a thing. There's definitely better software's out there nowadays that allow for that there's better marketing as well. If I were to be doing it nowadays, and like without a doubt I'd be trying to do that. VRBO is is is really difficult to use and if you really understand Airbnb, like extremely well, you don't need another platform in some markets, right? In some markets, VRBO dominates. But it's rare. And then another sort of issue that I have with direct bookings is repeat business. So I don't like repeat business because you have to give the same price usually from the year prior to the same people. And if they come back for 10 years straight, you start losing profits. And so you kind of dig yourself a hole, it becomes easier, but over time, you actually might start losing. And I've seen that with a lot of people that have like long term they have have have had rentals for a really long time. Right? So but yeah, that's, that's my take on that. repeat business. I never thought about that. But that would be a downfall, you have to you have to fight the uphill battle of like, hey, those are last year's rates. That's happened this year, right? With the amount of inflation like, you know, if you paid $5,000, last year, you're paying 7500 This year, right? And like, that's not an exact science or perfect for me, perfect number, but the idea of like, you're paying quite a bit more this year, and to have to go back to somebody who's been like a loyal customer to you and say, like, I need you to pay this amount, right. You can't book. I mean, it hurts the reputation, right, that you're trying to build with your clientele. So you're better off getting new customers. Yeah, that don't question the rates. Because when you look up the rates are looking at comparables. Exactly, because it just it is what it is. Right. So So yeah, so there's there's definitely pros and cons, without a doubt with every single action that you take, right? As always. So what do you what are you doing now as far as in the Airbnb space? Because you sold your portfolio, you're not necessarily in management. So what do you kind of do now in the Airbnb space. So during the time period of building up that entire business, what I learned how to do really well was understand Airbnb data, and how to organize it, make sense of it, and actually take actual steps with it. And since I've stopped with my portfolio, or sold my portfolio, I built a course that taught my process and I put that course on YouTube. I didn't try and sell it, I just put it out there and like this is my process is how I do things. When it comes to comes to Airbnb data. And from that organically grew a Airbnb data consulting business. And so now what I do is I actually help people that are looking to purchase Airbnb is all across mainly the United States, but across the world as well. And I help them understand the data, I build reports for them, I analyze properties for them, and I just make their lives easier in the sense of and also give them the confidence to purchase that, you know, half million dollar home or a million dollar home and with the confidence that yes, it is going to cashflow Yes, it is going to give you a 20% cash on cash right like or and more often than not, I tell them not to buy it. So, so Yeah, and like the main goal that I have is I want to ensure that nobody's buying or you know, signing a lease that would be an unprofitable Airbnb, and I don't want them to ever buy a home, that would never be a profitable Airbnb either, right? So and I know for a fact that the data in my process can help you figure that out. And then the last thing I like to do is ensure that people are able to maximize the amount of revenues that they're going to be getting when they're going into a market. Because the the honest truth is that most homes are better off as long term rentals after expenses, it would be better off if there's a long term rental, especially in metropolitan areas, right. And so understanding the data and understanding what allows you to maximize the revenue and where within a certain market is the most money being made is extremely important. And the data allows for that. Just to like, give an example of this, I focused on four bedrooms within a neighborhood in Chicago, and those ones would profit me anywhere from 20 to $40,000 of like, of net profits, right. But if I were to focus on three bedrooms, I would have lost money, right? And it's just because there's there's a variety of reasons behind it without going into too much detail. But that's the level of insights that your understanding the data can really give you. Yeah, I travel here and there. I used to get Airbnbs the cleaning rates are getting ridiculous lately, but they're getting ridiculous lately. But one thing Monday I'm always looking for is at least like a two bedroom because I got four kids. So I'm looking for two to bet I got three kids. So I used to put the two two kids in one and I'll have like a little like to go crib thing. Yeah. So I'm only veteran but coming forward as my as my youngest gets older, I need to I need a three bedroom minimum. So I guess no, knowing the numbers where people travel a lot and peak seasons and all that good stuff. Do you do analytics as far as like? You do like consulting work as far as like, hey, this might not be a friendly Airbnb city, because now there's like municipalities that are fighting against it. Like why Yeah, so I don't. So I don't do consulting on that, just because it's not my area of expertise. I do know in a lot of different areas. You know, I know the regulations for a lot of different areas. So like, I have general knowledge on it, but I always tell people to call City Hall call lawyer, read through the audience or audience will say, thank you. So, you know, do the due diligence themselves to like, truly figure that out. But I don't do direct consulting on it, it's way too much to keep up with because like, in Chicago, it's one thing in Nashville, it's another thing and like, it's pretty well like that everywhere you go. They all have a different way. And like that, what I tell people, though, is understand your regulations so well, that you can still operate, because a lot of people won't do the work to actually figure out how to get through the regulations. And that lowers competition. And so that's, that's one thing that I was able to do in Chicago that actually helped me with my portfolio, right? Most people were like, you can't do Chicago, and I was like, Yeah, you can. I just I just figured out how to do it. Right. So. So yeah, that's how I recommend operating within the gray area. And I think I think it's for entrepreneurial entrepreneurs in general is that you have to understand what you're going into fully and make sure it's a it's the right decision for what you're planning to do anyway. And if you do the work, people don't that's where you win. And they don't. Exactly, yep, I always do say regulation First Data second, right. And if you can get those two figured out, everything else is easily figured out operations and design and whatnot. So I know there's technology to understand the data at least, I don't want an Airbnbs at this moment. But I've heard of like air DNA and all these. I'm sure there's other services out there that that can help you understand the data. And I remember I remember I was I was trying to I was trying to do arbitrage like two years ago, back before, like 2018 might have been like 2018. And I remember looking at like air DNA looking at like comps for like a townhome, townhomes and Atlanta, that's where I lived at the time, and I was trying to get a guy hit. I hit like five, five units inside one building. So I was trying to I was trying to get out. Yeah, I was trying to I was trying to get arbitrage. And yeah, he don't want to he don't want to sign a long term contract, because they already furnished to, which is like my, my one thing I was trying to get, because like, they already furnished. He was really used to short term rentals. He just didn't do Airbnb at all. And I was just trying to negotiate that. Interesting. So how do you how do you? How has it changed since then? Because I saw some I did it air DNA was Oh, yeah. So air DNA definitely is still the leader in the data industry. There's a variety of other ones, but it's not worth getting into it. Air DNA is like the place to go. The reason why I have a data consulting business is because Airbnb data is there, air DNase data is not displayed well. And they have a ton of bad data. So the issue with their data is that they have these dashboards where you can kind of like, hover over properties and see how much they're making, right. But the whole thing about data is you're trying to find a trend, you're trying to find some sort of consistency, some sort of pattern, right? I always refer to it as the Burger King logic, McDonald's spends millions of dollars to figure out what corner to be on, Burger King opens up across the street, right. And so you have all this data to figure out where you should be going, like where's making money, where's not making money, but you can't find the pattern, because it's so scattered. And so what I have is a software that allows me to extract that data, and then organize it in a way that you can sort it by neighborhoods and unit sizes. And then you can organize it by who's making the most who's making the least you can see these these patterns and trends. And you can see homes that are, you know, making 150,000 And then other homes that are making 50,000. And they're both four bedrooms in the exact same market, right? But so I teach this process of trying to fully understand like what allows a home to make 150 between in comparison to 50,000 so that when you're actually going to get that property, you're not picking up a property that would only make 50,000 thinking it's gonna make 150,000 And those aren't made up numbers. I literally was just going through a report before we got on this call. So it's this is I interviewed an Airbnb person out of Jacksonville, he did like 3 million in revenue last year out of one market out of one market. So he really understood his market so that's one of the things was knowing knowing your numbers. He said that pools having a pool was like a huge huge like, revenue booster like 30% or something like that. Yeah, so I want to know a fun little fact and a sad story. So pool heaters in some places make a world of difference. So I was in Scottsdale Arizona I got did all the research and Scottsdale Arizona and this was like when I was like still learning the process of understanding it. I picked up two homes ran was like $4,000 month on each. And I was expecting them to make was $100,000 or around that amount. And they both had pools because everything said you need to have pool, both homes I picked up to not have a Pool Heater. And both of the homes lost about 20 $30,000 less than was expecting them to actually make simply because it didn't have a Pool Heater. And I didn't realize that until I was in the market long enough and actually understood like what was truly driving the revenue there. And the reason was because Arizona like Arizona, yes, it has like this crazy hot time of the year. But then the rest of the time. It's just kind of like chill, right? And so you need that heater to expand your peak season further than just the three months. And I didn't have it on either. And so both of those properties I lost like tons of money. What have you been working to install the Pool Heater yourself? It I like No, it wouldn't have been worth it, it would have been better just to pick up and go to another property that had a pool heater and call today. You know, but But yeah, so sad story. But honestly, like the tiniest little details really matter. So even in Chicago, I focus on four bedrooms, and I wouldn't pick up a home, I wouldn't pick up a four bedroom if it didn't have a dining room. And the reason was, because when you have four bedrooms, you're hosting 12 people at a time. And if there's no dining room, there's no common there's not enough common area. And that actually decreases it makes people not book your home, which makes you have to lower your nightly rate to actually get people to book it. And you ended up making, not the right amount. So yeah, so like that's a that's another big one as well. So what and this, I guess this goes back into the data too, because then you can see like what what your high performers are, and what are they're doing differently even at the same size, you can kind of figure out like, hey, these ones, because like I've seen like people that they do like the they'll do like other artists come in and paint some year old on walls, and just, that's one of the driving factors is what they get. Or you get like these. These one off destinations are limited. But that has nothing to do with you, you're looking for regular, regular base homes that you can kind of upscale, or really profitable in their own way comes with all the things you needed to come with. So that's where that's where like the data is the best, right? Because there's there's a lot of there's a lot of those types of homes. And so you can find that pattern and that consistency, those special unique like one off amazing homes, those are the ones that are fun to look at and see how much revenue they're making. And like, personally, like I'm looking for that unique, unique home that like one off type home. And so I'm trying to understand the data from those homes, how much of difference they're actually making in revenue, and figuring out how to make that type of revenue as well. Right. So you can you can get it from both for sure. Yeah, Airbnb, Airbnb is crazy. I watched he was not one of my clients was something I watched on social media. Get one house in California that mean then that brought in like 300 grand 2020 Even through the pandemic brought in like 300,000 owners. Yep, I see homes. I think the highest I've seen is 900 900,000 in a year, but we're talking like, like, massive homes right like, and luxury like luxury is its is its own thing. I still haven't stepped into luxury just yet. I really want to get into that playing field. But it's a whole other ballgame. And you can make a crazy amount with luxury and big homes. Yeah, I think we were getting we're actually gonna have a family vacation in the end of this month. And we got to Airbnb for like, my family, my brother's family, my brother brothers family, and my mom. So it's like 30 We got like a huge, huge, something. I'm excited to see it, but I know it's huge. So sleep like 30 people or something. Where are you going? Yellowstone. Oh, that's awesome. That's gonna be sweet. We got like a big cabin. I don't even know how big it is. But I'm excited to see it because it was an Airbnb. I don't know how much they paid for it, but it's gonna be that'd be in the 1000 to 2000 for sure. per night. Like, it's got to be right because that's his home. That's just, you don't rent it out for anything less those ones. So like my so I also work for superhosts Labs, which is a investment short term rental investment company. And I'm the data analyst for them. Right. And we were looking into these, like 10 bedrooms that can sleep 2025 people. And it's crazy to think like how much we can actually make per property. But we still have to get at the right purchase price. Right? So we still have like, you're looking at them and we know they're gonna make $250,000 a year we know that right or more. However, they're still too expensive because they because they're 10 bedrooms. They're so unique. So they think they can just like ask whatever for it. Right. But we Yeah, so those ones those ones are the fun ones with started out. So are the company you work for? Are you buying Airbnb producing properties? Are you just buying properties and turning them into Airbnb producing properties? Mainly turning them into Airbnb producing properties. All right, because one thing one thing I've seen and it's not it's not, it doesn't make sense to me. But because I'm not actually buying those but people are actually going to the retail marketplace and selling their Airbnb, Capri over doesn't even, it doesn't even make sense price. Now. The only way that you're ever going to make that work isn't a vacation rental market where the vast majority of the homes are vacation rentals. That's the only way it's gonna work. So there's people that have been trying to do that in metropolitans, right, like in a metropolitan, the homes are gonna be priced based off of all of the other homes not because your vacation rental revenue, right? But if you're going to be in like Gatlinburg, Tennessee, or if you're going to be in the area of St. Augustine, where you have a transferable license, right, then you're going to be selling based off of your Airbnb cap rates. But and that's where that's where, like, there's beautiful returns, especially if you get in before the regulation was put in place. And you've got this license that's transferable to somebody else. You know what I mean? And you bought your home based off of just like long term rental rates, or just like regular short term, single family home, and now you're selling it based off of like these Airbnb revenues, right? Like, it's just, that's sort of the dream. But some people got lucky with that. And you don't really want to bank on that, though, right? You want to be trying to like, figure out where they're gonna change the regulation and hope for the best. Yeah, then, I guess I've been, I've been seeing that lately. I'm like he is retarded. The goal is it brings us this amount of money. And like, there's too many open variables. And what if, what if Airbnb gets bought out? Or goes bankrupt or something? I don't know. There's just there's too much risk involved when people are trying to sell their $200,000 property for half a mil because of cap rates that it brings on Airbnb. Yeah, no. Then the thing is, is like they could be right. You know, I mean, they could actually be bringing that amount of money in but like, it's not going to happen. It's not going to happen that a lot of markets. So it's it's sad though, because like some people I've talked to Craven credit few people in the mention that and I'm like, I'm like list a property in a regular neighborhood, against all the other comps that aren't Airbnbs and try and sell your home for 40% more than everybody else. Like what do you what do you mean? How do you think that's even going to be possible? Right? They're just gonna buy the house next door that looks very similar to yours and turn it into an Airbnb. Right? Like, why wouldn't they? So it goes down to like, your property is not unique. Yeah, like, that's a perfect example. You just buy the neighbor's house and do the exact same thing. Exact same thing. Yeah, we're crazy. People are crazy and doesn't make sense. But you can't you can't talk to crazy out of them. No, you really can't. You just gotta you gotta let crazy be crazy and just do your thing, right? So what's what's a way people can maximize Airbnb rental? rental revenue. So it's gonna depend on the market. It's definitely like a market by market thing. And there's no I can't just say like, Hey, if you're going here, do this right now. It's really about the amenities. So you really want to add a ton of amenities, but you have to be strategic about what the amenities are, right? So if you're going into, like a cottage area, you want to Mac, here's a better example. Sorry, if you're going into like, Phoenix, Scottsdale, that kind of area. So I've experienced there so I can talk about it, right? You have to make your backyard into an oasis. It has to be like I'm serious. It's literally has to be like the way I always thought about it was when you go to an all inclusive resort, you don't leave the resort because they got everything for you in the backyard, right. So that's what I wanted to do with my homes in Scottsdale wanted to make it like you don't need to leave, you can just chill here and go for dinner, and then come back and kick in the backyard. Right? We've got and so the people who are really winning are the people who have created this like literally all inclusive resort backyard that people don't have to leave from. And it just gives all the games all the entertainment they can just like nonstop be back there and have a good time and just feel like they're doing great now. That's that's Scottsdale, right? So that's what people are doing in Scottsdale. If you're trying to figure that out for your market, or wherever you're going to be, what you have to do is you literally have to open up every single top performing property, you have to go through them see what they have and start making a list. I quite literally make lists all day of like they have a large backyard they have a fireplace they have a they have a lounge chair, and it's not like you know one property has it eight properties habit, right and these are the eight properties are doing really well. And then what I also do is I make lists of what the people who are underperforming What they have what they don't have, right? And so I'm getting an understanding of like, okay, these are the things that are have to be driving revenue because these homes are making double the amount of the other ones, right. And then you have to factor in things like bad hosts and luxury and stuff like that. But if, if you can sort through it well enough, you start to understand if I have a hot tub, I quite literally will make X amount more if I have a dining room, I'll make more if I have a heat pump, I'll make X amount more right? In like really condensed metropolitan areas, an extra bathroom tends to make you $20,000 more. So two bedroom one bath compared to a two bedroom two bath in downtown Chicago. $20,000. More like it just it's a really competitive areas make that happen. So, yeah, I'm really I'm really glad you mentioned this, because you said I was like, I use my personal experience on this one. Yeah, my wife was my wife doesn't my booking she's like, I might choose this place because it already has a crib. I'm like, okay. Yeah. But might you might be, you might be paying a premium, that would be the same amount as buying a crib, or something like that, like, but it's the convenience of it, right? And it's actually so love that you mentioned that because, you know, like, I let my girlfriend book out the Airbnb that we're going to as well, right. And that tends to be the case, right? Like the women like to book the Airbnb and like guys don't really care, like, where am I going? Right? Not going to generalize not saying everybody does that. I'm just saying it's the most common one, right. And so what I used to do is use color psychology. So I would paint my homes in the colors that attracted the women that wanted so that they would want my home over another home because they liked it more than others, right. So like the light blue was the color that I wanted to pull people in. And it's just like, that's, you know, that's the strategies that you got to do to win nowadays. And it works so and like everyone you have to you have to you have to gain the female gaze, because they're the ones booking and they're the ones that I literally every time I put together a home designed to home I thought about the title, I was just thinking like, what would pull in the woman who is going to be booking this, you're gonna mean that the mom who's, who's booking this further their family? Like what is she thinking about? What does she care about? Right? She cares about the crib that's already there. Right? Yeah. Well, it was funny to me, because like me, I didn't care. I wasn't even thinking about the baby. And like that's why I had to put myself in the mindset of a woman. Because I wouldn't think of that either, right? And be like, you gotta it's all those little details. So little details. So what is a good cap rate for everyone who doesn't know about cap rates for Airbnb is what's a good cap rate that is good for Airbnb. So I don't I don't use cap rate, actually, because kind of how we talked about right, like, you can't sell based off of cap rate for the most part. So the way that I like to go about it, is I use a 20% rule. If the revenue that I'm expecting to make is 20% of the purchase price, I know it's going to be a really good buy. Anything above that is great. 15 is my 15% is like my bare minimum, right? So if if I'm buying a million dollar home and has to make $200,000 a year, and and if it if it's like maybe closer to 150, with the potential of doing 200, then will will. But that's that's the kind of like rule without having to go deep into it works really well with Airbnbs. So you can get rid of law properties that way. Yeah, it's a rental rental cap rates for regular rentals people are looking for like, like 15% is like amazing. But I mean, it sounds like you're gonna get a rate of return no matter what, what's your expenses. And that's, that's, that's a different thing, too. Because your rentals for rentals going to be less than your rentals with the exact year property. So what's your what's your what's your percentage of profit, per se? Because I know you have to do it, we have to give cleaning fees, you might have extra amenities you offer stuff like that. So what's your like your rent actual profit regularly, like revenue for house? Yeah, so this is this is one that I don't have a percentage. And the reason being is because I used to focus on just how much cash flow, I think how much net profit I think I can make from that. Right. And it would depend on different locations. So I would as an example, so like for bedrooms, in a certain spot, I would want to make $20,000 of cash flow, and that would work out to be about 20%. Right. But there was other times where I'd look for two bedrooms in a certain area and I was still trying to make that $20,000 And it would it would work out to be like 30 or 40%. Right. And so and that's just because in one area I had just been that four bedrooms, I was spending way more on rent than I was for the two bedrooms. And my expenses were also larger because it was a larger space with more people, right? And so like, I guess what, you know, you want to make at least, you know, 15 to 15%, like minimum on your cash on cash that you're putting in there. I think that's like a great bare minimum. And you can, it's tough, it's tough to answer that as well. Because if you're going to, if I was in Chicago to clean a four bedroom costs $120 $125 to clean up that four bedroom, but in Scottsdale, it costs $250 To clean the exact same sized home, right? And so your expenses change quite a bit. And you have to keep that in mind as well. Right? And like, you have to factor that in. So I guess, I guess what I'm trying to say is like, the 20% rule definitely helps. But try to get like a 15% cash on cash minimum. In your you'll be sitting pretty. You're supposed to say it depends. Depends. Okay. Okay. That's a good. I'll keep that in mind for next time. It depends. It depends. Because, like I said, people want like straight answers, but like, you know, it depends. I know, everyone, everyone, like I honestly, people give me shit all the time. They're like, can you just give me a, like a quicker answer, like, no, because you can't, you can't get a quicker answer out of that, like you were your enemy. It literally depends. So I'm gonna use that now. It depends. Where you're talking b to c, at an exact property, give me an exact area, even the exact area won't matter. You want to mean like, because there's a lot of variables within different unit sizes. So so this, this is a great point, too, because you can't get me to give like definitive, you got to be like ranges like, Hey, this is the high end, this is the low end, you're going to be somewhere in here in the sandwich. If you do this, this and this. Exactly. So we the way I like to do this is is like something I say I'm 100% confident that we're going to make 100. But I am 75% confident that we could potentially get to 135,000 If we do XYZ, right? And are in like, I'm 100 confident we're gonna make 100,000 and but like worst case scenario, if we made 80 We're still good, right? But you don't want to say I'm gonna make ad, when really, you know, you're gonna make 100 Because you're gonna miss out on properties that would have still penciled right? Yeah, gotcha. Gotcha. So, let me ask you this. Is it how easy or difficult? Is it finding cleaners in different markets? Virtually? It depends. Is there is there like tools or resources? You can go to that? Yeah. cleaners in every market? Yeah. So like, personally, I've never really had an issue with this. I've heard of other people that have I actually had my own Airbnb cleaning company as well. So we cleaned all of the homes. And it's that's honestly like, if you're looking to get into Airbnb being and if you want to do it on a large scale, and if you want to do management, or rental arbitrage, you can literally double your profits just by owning the cleaners, and managing and like controlling all of that. We never really had issues, we had to work to find the cleaners for our company. But when I didn't own the company, I mean, it wasn't really difficult to reach out to a bunch of different people interviewed the different companies and tried to find find one that worked. When I first started off in Chicago, like Airbnb in Chicago wasn't a thing, really. So there wasn't a lot of Airbnb cleaning companies. And so I had to have a weekly meeting with my, with the cleaning company that I chose to create SOPs to get the homes cleaned within the certain timeframe and done properly. And then it was honestly like through creating all of that for them that I was just like, why am I why am I paying you? I'll just do it myself. So. So anyways, it depends. But generally like you can definitely find a good cleaning company, the more remote you get, the harder it's going to become. If you are looking for just an individual cleaner look for a mom who's a stay at home mom that's looking for something to do whether kids are going away to school. That's the best recommendation there. So let's say you kind of overly kind of overstepped this, but I'm gonna dig in a little bit deeper, doubling your profits or starting a cleaning company. Why? Yeah, so it's super it's super overlooked. But cleanings there's beautiful margins on cleanings like there really there really is it's like 50% profit margins, right because you're just mainly paying for labor. You know, the, the bigger you get in the more you scale like you're you're going to be cutting into your profits but I was paying my cleaners $15 an hour in Chicago, which was about way above minimum wage for the time and And you know, they're getting bonused out as well. And that worked out to be about $60 per turnover that I was paying just to the cleaner, right. And then I had you know, some additional like cleaning supplies, expenses and whatnot that was mixed in there as well another 15 bucks per clean, maybe like, that's even overestimating it. But I was before it was paying $125 for clean, and I cut that down to 75, which means I'm essentially putting $75 into my pocket on every single turnover. And there's about, you know, six to 10 turnovers every single month. So you're looking at an additional somewhere around like, 600 to 1500 to $750 a month, that you're you're making per home, right, additionally per month. And when you're doing management, generally like your it's not a perfect double, unless you're talking about like a one bedroom or two bedroom. For mine, I had like four bedrooms. So, you know, my management fees was 20%. And the homes were making like $80,000 of I was taking 20% of 80,000. Right? Which works out to like 17, or $18,000 $18,000. Yeah, 1616? Yes. So, you know, with the cleaning, I was ending up making, like almost $10,000 a month, a year additionally off of that, and my my management contract was 16,000. Right. So it's not an exact double, but an extra $10,000 in your pocket. I know, I know, I the numbers I gave, it's not, it's gonna vary per property. But yeah, 7500 to 100 a month, per property, per property, you're not, you're not going wrong, it's a little bit more work naturally. But what I actually did, so what I did was, I hired somebody to run the cleaning company, and the management company paid her through the cleaning profits. So all the profits that came to the cleaning company that I just like, opened up by doing that, was was able to pay her. And she also ran my day to day of the actual Airbnb company as well took care of all the maintenance, the you know, taking care of the stick over the cleanings, which allowed to take over the maintenance took over the guests, communications took over everything. And I was able to give her a good salary because I was paying her from the profits of the cleaning company. So yeah, which gave me so much free time and then allowed me to find more properties, right? So total win win. That's good. That's a good, it's a good little tidbit. Because I mean, 500 or 700 a month adds up pretty quick per property. Like I said, that's, that's most people's, That's most people's rent, profits, they get per property on a regular rental unit. That's actually less because most people get like three to 500, you know, and you're the 500. Yeah, per unit per unit. It really, really adds up just by running a cleaning company. It was a good little tidbit, I really want to dig into that one. Because, I mean, that's just something you're overlooking in overstepping by not doing it on my on my YouTube channel. If anyone wanted to find me on YouTube, it's just job Yankee. If you look up Airbnb data actually be a significantly easier way to find me. But I interviewed a guy who has a cleaning company that does a million dollars a year in revenue. And he's he's from Chicago, great guy, he claims on my properties. We talk all the time and like I was like, Man, I gotta get you on my channel. Like nobody knows what Airbnb cleaning, and like the amount of profits you can make from it. And so he got on and he explained his whole business, he explained how he does things explained how much money he's making. He doesn't manage any properties. He doesn't have a single property they take care of. He just cleans Airbnb properties. That's it. So it is business that you really wouldn't think of, but it exists. It exists. That's the disability of when opportunity is created. There's so many things that follow it. And yeah, yeah. Which is cool. That's cool, man. What is a quote that is yours or somebody else's that you resonate with? Ha, this has nothing to do with what we're talking about. But the first thing that popped in my head is this too will pass. I don't know who I can't remember who it's from. But I've recently been hearing it quite a bit from like multiple sources. Sounds like Lord of the Rings it's more of a it's more of a quote. That is a reminder that everything that's good and everything that's great will eventually pass your mean. So this too shall pass. So if you're you know, if you're ever going through a tough time, like this, too shall pass. And so yeah, totally off topic, but it's the very first thing that popped in my head. No, it's the point. I want to get you on your toes. I'll make you a better speaker. Yeah, appreciate it. Thank you. Oh, it's good, man. So where can people find you online? What's your, your error? You know your stuff. Yeah. So best place to find like all my content everywhere I put it is on YouTube, if you were to look up Airbnb data or air DNA, you're gonna five two courses online that teach you my entire process everything you need to know it's completely free. So you can go in there a bunch of other videos to John B Anki, b i A N, CH AI, that's where most of my stuff is. And then I have, you know, my other links are on there. So you can get my Instagram and Facebook and whatever else you want. But honestly, like, if you're looking for help with purchasing an Airbnb are trying to find the most profitable place within your city. And I have reports that allow you to figure that out very, very easily. And the process is online for free. So all you need is a report. So if you want to talk about that, if you want some general advice, reach out to me, my email is Hello, h e l l o at point analytics.co. So yeah, hello. Hello. I mean, perfectly. That works, too. Yeah. And I like to talk to everybody. So like, I like to hop on a zoom call and see how I can help out. So final question, kind of alluding to what you're saying, How long does it take for a new novice to underwrite a property, if it makes sense for them using the free tools you provide? The the course that I have that teaches you about how to go through the report and teaches you my process is two and a half hour course. Right? It's what I call a little mini course. And that you can put it on double speed because I the way I speak, you can put on double speed and still understand everything so you can get through in an hour and a half. Then with that knowledge, you can start going through the data. And like depending on the size of the market, you can figure out where how profitable places are underrated place in quite literally like an hour to three hours. Right. So within one day or half a day, you can know where the most profitable money is. Most profit places within anywhere, anywhere you're looking to go for myself, like I can figure it out in about a half an hour. Right, easily. And then and then I find the next place and the next place next place. And so yeah, like it's it's pretty awesome, right? I go into Phoenix, Arizona and within like a half an hour, I know where I can make a huge return based off of the properties that exists there. Reason why I asked this because people were like, like, oh, it's gonna take me a week. Oh, yeah, no, no, it's, yeah, it's I mean, like, it depends on how many places you're going to look into. But most people are just looking at one place, right? You figure out that one place, and you can figure it out fairly quickly. And then from anytime after that is just bonus, right? You're kind of learning a little bit better. So Gotcha. All right, man. Go check it out. Link will be in the bio with his email and his website and all that stuff to get a hold of them. And definitely learn how to do some research and figure out if you're getting a good deal or not, don't miss that opportunity. Thanks for coming on. We appreciate your time. Thank you. Yeah. Thanks for having me. Appreciate it.

Daniel Esteban Martinez Profile Photo

Daniel Esteban Martinez

Host/ Ceo/ Speaker

I have been an entrepreneur since 2018. I come from a regular home just like most people. My dad worked on the roads in the Chicago area for over 30 years. He always taught me to work with my brain, instead of my body. Your body can only take so much abuse. I learned so much from my father. He always pushed me to work smarter and not harder.

I have owned and operated a trucking business for 2 years. I started learning real estate in 2019. Fell into the Data & Skiptracing business in 2020. My partner Anthony & I started Hivemind in 2021.

I have done a ton of different jobs coming up from painting, to door-to-door sales, telemarketing, truck driving, and loading trailers. What I learned most is that I want to stay in the digital business space. The leverage you can have delivering digital products to the marketplace can yield limitless possibilites.

I started The List Guys in 2020. It is a data and skiptracing service. We provide seller and buyers list nationwide. My clients have been getting great results and I am proud to help people killing it.

I started the Hive in 2021 with my partner Anthony Gaona. It is a real estate and business mastermind. It also comes with a all in one CRM, that can host unlimited websites and users.

Starting the Hivemind has been an amazing journey so far. Seeing one of our users make his 6 figure month in June 2021 leveraging our software, I know there will be plenty more to come!

John Bianchi

Analyst/Teacher

John Bianchi has more than a passion for the short-term rental industry. In his words, “[He’s] obsessed with it!” John is known in the industry as The Airbnb Data Guy.

In 2020, he sold his successful Chicago-based STR management business. John has developed a unique data-driven approach to evaluating vacation rental properties and for the past few years has been advising investors and owners on how to identify the right properties to buy and to maximize their revenue.