Kyle Stanley is the host of the Fearless Flipping podcast where he educates new hungry real estate investors about best practices for getting started. We flip the roles into today’s episode with J being interviewed for Kyle’s podcast. Find out how J is conquering the coronavirus and adjusting his short term rental business to be even more successful than before.
How did you get to this point and what brought you into the short term rental business?
The keyword for J is cash flow, everything he’s done in terms of business is around generating an income without physically going to work. Due to some very challenging physical ailments where both J and his wife were unable to work and earn money, they needed to figure out a solution which is what led him to real estate. Everything he should have been doing should have been geared towards creating cash flow.
The next two years were transformational for J’s business. He had no money, terrible credit, no way to earn an income, and was selling his possessions on eBay when a friend recommended he start investing in real estate. His friend didn’t let those obstacles stop him and in a relatively short amount of time J closed his first subject-to deal.
How did you find your first deal?
You need to move at the speed of instruction. We need to be more like Walmart. Walmart perfected just in time inventory, we need to perfect just in time learning. There are certain parts of a real estate transaction that you don’t need to know yet, you need to learn the first step and then go out and take that step. There is no real benefit to understanding everything before you take any action.
Trust yourself to learn what you need to know when you need to know it and go out there and take action. That’s exactly how J found and put together his first deal, one piece at a time.
Real estate is a skill the marketplace rewards. We can all learn to play the real estate game once we’ve been told the rules and practiced a bit. Within 3 weeks of closing his first deal J closed an additional 10 deals in the span of a week, which was a complete mindset shift for him.
Fear is what holds all of us back, but we like to tell ourselves that we’re just being prudent. When you’re afraid any excuse will do. You have to ask yourself has anyone overcome the thing you’re afraid of because if that’s the case, the fear is not an excuse.
How are you operating right now?
Most short term rental operators think about the business incorrectly and they need to understand what the problem actually is. Changing your thinking from “I have an Airbnb business” to “I have a short term rental business” will unlock your mindset and allow you to see new opportunities.
The short term rental business has existed since the American Civil War. When the coronavirus hit, J’s business took a significant hit but that hasn’t removed the need for what his business provides.
J’s business is still on all the marketplaces like Airbnb and Booking.com and he’s now adding additional channels that he planned on including later in the year. He’s also increasing the amount of online advertising he’s doing and offering coupons and discounts to previous customers.
At the end of the day it comes down to whether you understand the problem. It’s not like the business is bad, it’s just that the person with the need doesn’t have your number and that’s fundamentally a marketing problem.
The only reason you feel what you’re feeling right now is because you don’t have a plan of attack to be able to replace what’s missing. J is changing his approach to finding customers and that includes talking to local city governments to house police, firefighters, and other first responders that need to be quarantined.
This period of time is when we are seeing the weak being weeded out and the one’s with an “Airbnb business” fall away. The economy is going to be hit when the virus finally goes away and we’re going to see areas with active rentals disappear, but that means that the ones that survive will have a major opportunity.
J is not offloading any of his inventory, he’s actually looking at expanding his business over the next few months.
What do you say to the person that is thinking about pausing their short term rental plans right now?
It was your plan before so that hasn’t changed, you just have to change your perspective. Maybe you thought it was going to be easy before and you need to adjust your expectations but you were going to jump in before when the market was 40% more saturated and expensive. There are many aspects of the business that may be more challenging or scary, but the numbers have been made much better.
Every entrepreneur on the planet is undergoing the same changes and looking at making adjustments to how they work. This is an opportunity that’s going to take more mental and emotional work than it would have two months ago, but if you can protect your mindset you can be successful.