355: How to Make Big Money on AirBNB Without Owning a Single Property

SHOW NOTES FOR EPISODE 355: HOW TO MAKE BIG MONEY ON AIRBNB WITHOUT OWNING A SINGLE PROPERTY

Brian Page became a millionaire in his 20’s as a residential real estate investor, only to lose it all in the historic crash of 2008.  Starting over with no credit or ability to buy property, Brian discovered a way to use other people’s properties to generate significant income.  He went on to make six figures in six months, and, scaling his business, became a multimillionaire by renting and listing properties on Airbnb.  In today’s podcast, Brian shares the secret of how he not only grew a successful cash flowing business but how he further created a business that operates almost entirely without his involvement.

What You Will Learn

• How you can literally start an AirBNB business with NO MONEY
• Why it’s easy to make $1,600 to $2,100 monthly, per AirBNB, with very little effort
• How you can run an AirBNB business while working your regular full-time job
• Why Brian’s model is more like the hotel business than a typical rental property business
• The importance of building a strong team to handle all aspects of your AirBNB business
• How instituting tested and true systems is the only way to scale into a larger wealth generating business
• Why AirBNB guests treat AirBNB properties better than lease rental tenants

About Our Guest

Brian Page

Brian Page became a millionaire in his 20’s as a residential real estate investor, only to lose it all in the historic crash of 2008.  Starting over with no credit or ability to buy property, Brian discovered a way to use other people’s properties to earn income.  He went on to make six figures in six months, earning over $300,000 his first year, renting and listing properties on Airbnb.  Realizing that no one at the time was teaching how to build and scale an Airbnb business, Brian created training called the BNB Formula.  His masterclass is now the world’s bestselling Airbnb training.  He has now taught thousands of people from 38 countries how to build a six to seven figure Airbnb business, with several of his students now doing over $1M in bookings.  Brian has worked with big names such as Tai Lopez, Grant Cardone and Dean Graziosi and he and his students have been featured in Forbes, Entrepreneur and Inc. Magazine.  He is passionate about helping people create new sources of income and become financially free.

More About Brian

• Became real estate investor right out of college
• Tried but didn’t do well in the 9 to 5 world – kept getting fired
• Thought he would become an entrepreneur
• Most of his business ventures failed miserably
  • Network marketing
  • Landscaping business
• Read that most people became wealthy in real estate
• Got into flipping houses
• Flipped over 100 properties in his 20s
• Did real well – became a millionaire
• Also built an impressive rental property portfolio
• Was doing real well until the 2008 recession hit
• Lost everything – all his properties were taken by the banks
• Had bad taste in his mouth for real estate
• Found a 9 to 5 job that he really loved
• Lost a roommate and decided to rent out the extra room of his 2 bedroom apartment as an AirBNB as a sort of “side hustle”
• He ended up making enough money through AirBNB to cover the full rent and all utilities for the apartment
• He saw what he was doing as “apartment hacking”
• It was really profitable so he decided to scale it and launch a serious AirBNB business

Creating His AirBNB Business

• He didn’t have the money nor the will to go out and buy properties to launch his AirBNB business
• He was working full time, about 50 hours a week
• One day he was on a flight for his work and was sitting next to a guy who seemed wealthy and successful
• He asked him what he did and the guy said,  “I buy and sell companies.  I’m an angel investor.”
• The guy asked him what he did and Brian mentioned his AirBNB business and the guy was very interested and asked a lot of questions
• The guy told Brian that he thought he was sitting on something very big
• Brian said, “If I had the money to buy properties, I could make this into a big deal but I don’t have the money.”
• The guy said, “You don’t need to buy properties, just control them through the leases and through the property owners.”
• Brian took what he said to heart and immediately started looking for properties to lease
• He found this little one-bedroom apartment just down the street from where he lived that had a “For Rent” sign out front
• He spoke with the lady leasing the apartment and said, “I want to lease your apartment but not live in it.  I have this crazy idea, will you hear me out?”
• He explained how he wanted to make it into an AirBNB rental
• She gave him permission to rent it out on AirBNB
• In the first month, he made $1,600 net (after all expenses)!
• He went on to make between $1,600 and $2,100 every month on that property
• At that point, he knew he could just go on and duplicate that process
• He saw how he could take any rental and make 200-300% on it each month

It’s Not a Sublease

• Hos arrangement with owners/landlords was unique
• It’s not a sublease because there is no document a person (the renter/guest) is signing
• AirBNB guests are booking through AirBNB and were only coming in for a couple of nights
• It’s just like a hotel.  When you book a hotel room, you aren’t subleasing the room
• They are not tenants.  They are guests
• He is just adds an addendum on to the lease that says:
  • “Brian, who is leasing the property, is not going to be living in the property.  The owner gives Brian the permission to have guests stay there.  Whoever Brian approves to stay in the property, gets to stay in the property.”
  • “Brian will pay the lease for the year at an agreed upon annual rent.”
  • And that’s it.
• One of his students, who has 10 listings in Washington, NEVER EVEN SIGNS A LEASE!
  • She partners with the owner
  • She says to the owner, “Hey, you’re asking $1,000 per month.  What if I can get you $1,300 per month?  You don’t have to do anything.  I will do all the work”
  • She offers owners a “service.”  Does not sign a lease. Does not pay them the first month’s rent. D oes not pay them a deposit.
  • What she may be doing is:
    • The rent is $1,000
    • She makes $3,000 on AirBNB
    • Pays the owner $1,000 and possibly splits the $2,000
    • She walks away with $1,000 per month, without a lease, without the downside
  • This is a great way for anyone to get started who has no money
  • Then they can graduate into a lease arrangement and, eventually, even purchase properties to rent
• Brian doesn’t mind signing the lease because he gets to keep all the profit and the owners are are still happy because they get their market rent

Owner Acceptance

• You must ask talk with a lot of owners before you get someone who will go along with the idea
• A lot of owners will say no, but don’t give up!  Others will!
• Brian said, in his experience, one out of 5 or 6 will say “yes”

Start-Up Costs

• He recommends that, when people start their AirBNB business, that they find furnished properties
• If it’s furnished, your only costs are:
  • First month’s rent and deposit
  • Towels, Soap, Shampoo, etc
  • TV & Cable
• If it’s not furnished…
  • It start-up can cost $5-6,000 to furnish it and make it AirBNB ready

Brian’s Ideal “Starter Property”

• When a person get’s started, he recommends that they focus on the small cheap end rentals (studios, one bedroom rentals)
• Studios, for example, are less expensive to furnish
• Once your business gets up and operating, then you can grow into nicer properties with more rooms
• Start small!
• As you start generating cash flow, you can start to scale

More Than Just Apartments and Houses

• Brian has students that are doing unique AirBNBs:
  • Airstream trailers
    • One of his students approached a guy who had an Airstream trailer in his driveway
    • Asked how much he would rent it for a month
    • The guy said $250
    • He agreed and now makes up to $2,500 a month on AirBNB
  • Other people have become successful booking out AirBNBs that are
    • Yachts
    • Boats
    • Treehouses are “instant money” according to AirBNB’s founder
    • Tiny houses
    • “Off-grid” houses and cabins
    • Yurts

Answering Owner Objections

• How do you respond to owners concerned that guests will destroy their property?
  • Percentage wise, AirBNB damage is extremely rare
    • AirBNB tracks these stats
    • AirBNB has their own $1 million guarantee to protect its hosts
    • There’s also supplemental “short term rental” insurance AirBNB entrepreneurs can purchase for further protection
      • He highly recommends that you purchase this
  • Tenants and guests look at the properties in very different ways
    • Tenants think of a  property that they rent as “their property”
      • Can do whatever they want: paint it weird colors, build things, etc.
      • Even destroy the property over the term of the lease
    • AirBNB Guests think differntly because they are only their for one of two nights and generally will treat the property better
    • Guests won’t:
      • Leave their car in the driveway up on blocks
      • Won’t let their dog destroy the backyard over the course of a year
      • Paint the bedroom some weird color
      • Put up pictures
      • Make holes in the wall
      • Clog up toilets, drains over a few nights
    • Very different mindsets
  • Guests must give ID and credit cards to AirBNB
  • Guests can also be asked to leave deposits
  • It’s very rare to have guests damage AirBNB properties

How to Manage Your AirBNB – Creating a Winning Team

• Brian recommends that you don’t do any of “the work” for your AirBNB yourself (cleaning,booking,  etc.)
• To be truly successful, you need to get a strong team in place:
  • Brian doesn’t hire staff but he does rely heavily on outsourcing
  • He hires independent contractors and most that are not from the local area
  • Hires a great cleaning company
    • A big franchise company (Molly Maids, Maid Brigade. etc.) that can handle a lot of properties
  • A “Virtual Front Desk” company
    • Once you have a number of AirBNBs in operation, it’s like running your own hotel
    • The virtual front desk handles all of the guests’ requests
      • Questions on the property
      • Booking details
      • Check-in/check-out procedures
      • Maintenance issues
    • You don’t want to be the front desk person
      • Once you get 5-7 listings, it will be very busy all the time
      • Calls, texts coming in at 2am where people want an extra towel, etc.
      • Something breaks and you need a handyman to run over to the property
    • There are services available where you can automate all of this
    • You will need to remove yourself from the day-to-day operations of your AirBNB properties to be successful
    • He never talks with a guest unless it’s a major emergency that his “front desk” can’t handle
    • You can even hire a virtual assistant (VA) oversees
    • You can hire outside services that can handle all of these things
  • You have to train the independent contractors to coordinate with each other
  • The idea is to make the management of your AirBNB operation require as little of your effort as possible.
  • It should be easier than running rental properties
  • You need to set the system up to work without your regular involvement
  • Brian is a big supporter of outsourcing and automating
• The problem is, 98% of everyone doing AirBNB only have one or two because they do all or most of the work themselves, instead of outsourcing
• The big profits come from scaling and growing — you need to automate and delegate
• Create a system — a FORMULA
• When you start scaling, it’s much easier to achieve a six figure income net

Getting Good Reviews

• Guest reviews are very important on AirBNB
• Brian has a lot of techniques for building and receiving good reviews
• He even starts the process way before they even check-in and write their review
• The second he gets a bad report from a guest he immediately responds favorably
  • He sometimes give discounts off their stay
  • Writes (or his virtual desk writes the guest) and says, “I’m taking care of you so I hope this is still a 5 star stay.”
  • You always need to go above and beyond
• Someones, however, there are just some people who will give you a bad review regardless
• The good thing is, if you get enough good reviews, the bad ones become less significant
• You should always respond to bad reviews with your side of the story
• You need to establish the right systems to get the good reviews
  • Here’s an example
    • Keys are always a problem
    • People always lose them
    • So all of his properties have electronic code-based locks
  • He also gives every guest a bottle of wine
    • He gets decent wine for only $3 a bottle at wine “superstores”
    • It’s the little things like this that guests appreciate

Meeting Your Monthly Expenses

• You’ll always make more money with your shorter-term rentals than with longer-term rentals, even if you don’t book the calendar up
• If you’re charging $100 per night on a unit and you are paying the landlord $1,000 per month and you only book half the nights, you’re still making $500 or more in extra profit
• Statistics show that you will book 65-75%, on average, of your available nights
• Statistics show that you should always be cash flow positive
• Brian says if you are not sure that you will be cash flow positive, sign-up as a partnership with a landlord first – before signing a lease – and see how it does and then sign a lease later

Location Issues

• You don’t have to be in a resort town or area to be successful on AirBNB
• The vast majority of AirBNB guests are not vacation travelers
• AirBNB guests book more like people who book hotel rooms, even though a lot don’t regularly stay in hotels
• He’s in Charleston, SC, which is a high tourist area
• However, many of his students are not in tourist areas and still do really well
• If you’re in an area that has a lot of hotels, it’s probably because there is a strong demand there

Biggest Mistakes

• Not knowing how to scale
• Not knowing how to pitch an owner
• Picking the wrong location
• Not having a plan
• Not picking the best team members

Biggest Success

• Doing as little as possible
• Delegating and outsourcing everything!

 Advice for Old Dawgs looking at Real Estate Investing/AirBNB to help in their retirement years

• Start small
• He found out that a lot of his students were retired – some in their 70s and 80s
• David in Loganville, GA (one of his students) had no retirement plan at all
  • He now has 3 listings
  • And is now nets $3,500 a month

His Current Business

• Just started a new podcast called Digital Titans that interviews some of the most successful online entrepreneurs in the world
• New book, “Work Less Have More” that will be coming out soon
• Brian loves helping and educating people to generate passive income and wants to continue his education business
• Still is an active real estate investor – renovating properties and turning them into AirBNBs

Rap-It-Up

• Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki
• Favorite business book: 4 Hour Work Week by Tim Ferris and Deep Work by Cal Newport
• Most valuable web site for success (other than your own): Amazon.com
• Favorite app: Audible and AirBNB
• Favorite quote: “People who say it cannot be done, should not interrupt those who are doing it.” –  George Bernard Shaw
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Partner with an owner to get your first AirBNB going (which really wouldn’t require any money) and start generating $1,500 a month and then scale from there.

Special Offer – Free Training From Brian!

• TheFreeTraining.com

How to Reach Brian

• BNBFormula.com

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com