From Cash Flowing Rental Properties to Airbnb



From Cash Flowing Section 8 Rental Properties to Airbnb

The video above was taken this week with my student Andy at rental property #10. Andy is only 31 years old and he now owns 10 rental properties.

Andy has added almost 1 million in equity to his net worth from those 10 rental properties.

He purchased his first rental property just 5 years ago after attending my real estate boot camp and signing up for my real estate coaching program. I helped Andy learn how to identify and find properties at below market value, and I also went to the properties with him and helped him reject many properties before we found one that would be a good fit.

I also provided Andy with the hard money loan to fund all of his property purchases (this is one of the benefits of my coaching program). On the first house that Andy purchased, I also provided him with one of my contractors to help him on the rehab. Andy purchased his first house with just $10,000 down for $130,000. I gave him a hard money loan for $120,000. Today that house is worth over $300,000 and Andy still owns it. Since then he has purchased a total of 10 ten houses. The house in the video above is house # 10. Just 5 years later, he has over 3 million dollars of real estate with almost 1 million in equity. He achieved all of this while maintaining a full time job. He invests in real estate in his spare time.

Andy used to rent all of his rental properties to Section 8 tenants using the Section 8 housing program. But he got tired of the wear and tear and damage that the tenants created with his properties. He decided to experiment with his first Airbnb just one year ago. He got so much cash flow form his first Airbnb that he was simply amazed. He gets at least 3 times as much cash flow with way less headache. And the best part is that his properties are maintained in excellent condition.

He has now converted 3 out of his 10 rentals to Airbnb and he is working on his 4th conversion now. The house in this video would rent for no more than $3,000 on the Section 8 rental program. That is probably $500 more than fair market value. But it pales in comparison to the returns you can get by renting it on Airbnb.

Here are some numbers for you. The cost of the house was $202,000 and the repairs for a section 8 rental would have been around $35,000 (including a new roof).  As a rental that would have produced gross rental income of $36,000 a year. By spending a little more on the rehab ($60,000) and going higher end with the materials, Andy is able to substantially increase not only the value of the house but also the cash flow from the rental by using Airbnb. The repairs on this house ended up being a little over $60,000. But Instead of getting $3,000 a month in rent he can probably get at least 3 times that amount by renting it using Airbnb. This is a conservative estimate since even if he only rented the property for $500 a night and it only rented for 20 nights a month that is $10.000. He currently has it listed on Airbnb for $800. At that rate, just 20 nights would equal $16,000 a month in income. Now that’s a return on investment!

This higher return comes with less headache, and with less wear and tear and damage to his property than he would get by renting it. When you use Airbnb each person that stays there has to put up a deposit with their credit card. You have a lot more protection than you do as a landlord. You also have the added benefit of being able to access the property routinely on any days after someone checks out to see the property and to make sure that there is no damage. Compare this to a rental property where the landlord may not enter the property for years and have no idea about the deferred maintenance.

If you want to meet Andy and hear him share his story of how he purchased 10 rental properties in 5 years all with borrowed money from private lenders then make sure you come to our next boot camp. The dates are on the events tab at the top right of this page. Andy will share his story of how he got started investing in real estate at the age of 25, and how he has acquired his rental properties methodically with borrowed money and then refinanced into conventional loans. He will talk about his transition from Section 8 to Airbnb and he will explain why he did this and the pro’s and cons of this Airbnb business model.

You could be doing this too! You just need to learn how to do it. You need to learn how to identify and find houses at below market prices that would be a good fit. You need to learn how to buy these houses with other people’s money. And then you need to learn how to fix those properties up without paying too much and how to rent them out to get positive cash flow. It’s not rocket science.

You just need to apply the system that we teach. When you fill out the application, I will personally make sure that Andy gets a copy of your application. He has agreed to take the time to personally reach out and give a call to everyone that fills out this form. He will discuss investing in real estate and our coaching program with you. You can talk to him about his experience working with us in our coaching program over the past 5 years and how that has benefited him. And you can decide if our real estate coaching program is a good fit for you.


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