Making Millions Off Airbnb, Best Cities for Airbnb & Airbnb Bust | Humza Zafar DSH #302

my job was fee me $8,000 a month after taxes.

My living was paid for.

My car was paid for for my job.

So every single dollar that I was making, I was just spending on it acquiring more units and just using it to basically buy more furniture.

Wow.

What job were you making aka?

As an engineer.

Working every single day, six days a week, sometimes seven days a week, working 60, 70 hours a week.

Now I see why you left London.

That's why I left.

Wherever you guys are watching this show, I would truly appreciate it if you follow or subscribe.

It helps a lot with the algorithm.

it helps us get bigger and better guests and it helps us grow the team truly means a lot thank you guys for supporting and here's the episode

all right we're talking airbnbs today we got humz uh zafar here how's it going man doing well man all the way from dallas not too far yeah i actually flew in from canada today but i generally i do live in dallas okay you had airbnbs up there no that's where i'm from originally that's where my family lived so i was visiting parents for the christmas and new year's time and i just came to vegas for the quick day okay so you grew up in canada and then when did you you move here?

So I grew up in Canada pretty much my whole life, went to school, went to university in Canada.

Then, right after I got my first job, I moved to Philly, lived in Philly for about three years.

Then I moved to Detroit, lived in Detroit for about a year and a half, almost two years, and then I just recently moved to Dallas, Texas.

Wow.

So you were in the cold, man.

Yeah.

I've been cold my whole life.

Yeah.

But now with Dallas, you're probably finally getting some heat.

Yeah, that's a problem, too, right?

In the summertime, it's 110 degrees and it's burning hot.

You can't really go outside.

Yeah.

So when did you get into Airbnb?

So I got into Airbnb, first discovered it really, was back in 2020 and near the end, around October time-ish, November, and started really diving into it while I was working a 9 to 5 job as an engineer at the Philadelphia airport around November.

And that's when I got basically my first couple of units and really started to take the business seriously during 2021, the new year.

And how much money did you start with originally with this?

So originally, I only had about $4,000.

That's all I really had.

I was making about $8,000 a month from my job.

So I used that $4,000 to basically furnish that first unit and then use the profits from that one, rolled it over, and just continued expanding.

Nice.

So that's not even that much.

No.

How were you able to get a house for just 4K?

So my first ever deal was a four-bedroom townhome in Philadelphia in Queens Village.

And that was really a test concept to see if I'm actually going to make any money or not.

Half the house was already furnished.

The other $4,000 I spent in buying furniture really cheaply from IKEA, built everything myself.

And it was really that much.

Wow, really bootstrapping.

Yeah.

And that was in Dallas?

This was in Philly.

Oh, in Philly.

Yeah.

Okay.

And the first year, what were the numbers like?

So my first year, 2021, I finished off at around, I think it was 50 units almost.

And the entire year, I don't remember, but I finished off at around 100,000.

That was my peak month at the end of the year.

Damn, 50 units in your first year?

50 in my first year.

How were you able to get that many?

So business credit card.

So with me, originally, the biggest problem was because I'm not a U.S.

citizen, I didn't have a lot of business credit.

I didn't really have any credit at all whatsoever.

So it took me a little bit of a while to actually build that credit up.

So what I had to do was I had to just use a lot of my cash, just scale the Airbnbs that way.

Luckily, my job was paying me $8,000 a month after taxes.

My living was paid for.

My car was paid for for my job.

So every single dollar that I was making, I was just spending on acquiring more units and just using it to basically buy more furniture.

Wow.

What job were you making, 8K a month?

As an engineer.

That's pretty good, right?

Not bad at all.

Was that remote?

No, I was working every single day, six days a week, sometimes seven days a week, working 60, 70 hours a week.

Now I see why you left that one.

That's why I left that Your lifestyle is changing a lot from then.

Yeah.

So year two, how many units?

So year two is maybe end of 2022.

I finished off at 200 units in total.

Wow.

So I went from 50 to 200.

And I think at my peak month, I was at 500,000 revenue.

That was in July.

Majority of my apartments or my units are all in the East Coast.

So they do really, really well in the summers, and they don't do that well in the winter.

Got it.

So that was my peak.

2023, I just finished this year off at 400 units.

Jeez.

I'm doing about a million dollars a month month right now, and I did about 10 million for this year.

That is insane, man.

Yes, 10 million in total revenue.

My actual gross profit, my actual like profit from 10 million was about $2.5 million.

Incredible.

From that $2.5 million, if you ask me how much money is left over, zero.

I spent $1.6 million on furniture for more units.

And then on top of that, I spent a bunch of money on just growth, expanding, hiring more employees.

Basically, just all the net-free cash flow left over for this year of that 2 million plus was all spent on just basically growing the business and growing to, you know, eventually the goal is 1,000 units.

So like, for example, right now I have 100 units being starting, I'd say in about the next three weeks.

Wow.

Philly and more in Detroit, more in Dallas.

So 2022 was, sorry, 2023 was a year of just growth.

I wasn't really worried about keeping all that money.

I spent it all on growth.

2023, I'm going to really chill out, relax, focus on leaning out operations even more and try to keep as much of that profit as much as possible.

Nice.

You're still living pretty frugally then?

No, not really.

The penthouse I live in in Dallas is like 15 grand a month.

You know, I fly business class to Dubai all the time.

Like I still live relatively well, but compared to the amount of income I'm making, you know, it's still relatively high.

Like on a million dollars, a million and two in income, I'd say, I'm doing about, I'd say, 200,000 to 300,000 net profit.

So relative to how much net profit I'm making, I'm still, you know, living.

Yeah.

Damn, that makes sense.

So why do you want to hit a thousand units?

So I just want to, that's a number number that I have.

I want to grow the business to that size.

And if I can do it all without any outside investors, without any private funding, without any loans whatsoever, it's going to be a really big accomplishment because all that income is my income.

There's no hands in my pocket.

There's no distributions I have to give everybody.

There's no million partners.

Everything I own 100% completely.

And that's been my goal since day one.

So, like, right now, just with the 500 units that I have lined up, or the 500 units that I'll be at by the end of next month, my 400 right now, if I don't expand whatsoever, if I don't grow and I just just chill at 500 units, I'll finish 2024 off at 20 million.

Damn.

And at 35% net profit margins, I should do at least $7 million in take-home income.

That's after everything.

That is incredible, man.

And the fact that you're doing this right now in the current real estate market is super impressive to me because everyone I know in real estate right now is kind of hurting or kind of standing at a pause.

Have you experienced anything?

Yeah, so it's actually good for me that's happening.

So I'll give you an example right now.

I just had a building, new construction building, Graystar managed.

The builder built a building and they have a lot of vacancy.

They were on a construction loan.

So they were on a bunch of crazy loans.

They needed to basically fill these apartments up.

So I signed a deal for 40 apartments in that building, brand new A-class luxury building.

And this is in Ohio.

I'm not going to say the city, but greatest MBA player of all time is from

that city.

I think they can.

Yeah.

But basically, the builder is basically screwed because no one's going to really rent these apartments right now.

We're in winter time.

It's the lowest time of the entire year for multifamily lease up.

So he's burning money on the front end.

So I negotiated 40 units with four months of rent concession for free.

Almost the entire amount of rent I saved was about $250,000 up front.

Wow.

So I don't have to pay a rent for the next four months and have 48 clash luxury units in a brand new building.

How were you able to negotiate that?

You think it's because you had so many units?

It's just leverage, right?

Because you have to look at it from the perspective of the landlord.

If I don't take them, nobody else is going to take them either.

Every single time a building owner has to basically do an entire lease up, it takes a little bit of time, maybe a year, maybe two years, to get even 80% occupied.

They need to pay a commission to every single agent or leasing agent that even rents that apartment for one month's rent off the bat.

Then there's also the turnover costs and the vacancy costs, right?

Signing over 40 apartments to someone like me gets rid of 40 headaches, gets rid of 40 tenants, gets rid of a lot of the problems that you've had in terms of commission on to leasing agents.

And that's 40 units it doesn't have to worry about.

So when you have leverage right now, and especially right now, it's like the best time because landlords are hurting literally everywhere, you can get crazy deals.

Dude, that is insane.

I've never heard that strategy, strategy but it's super smart because some people are buying one apartment at a time it's not no it's not worth the roi of my time anymore right i'm at the institutional level where i'm competing with a lot of the bigger players in the arbitrage space so i don't even do anything less than a couple floors at a time i need at least 20 30 40 units at a time to make it worth the roi of you know my money and my time because the only way to really make money right now is to economies of scale so me having five apartments and paying cleaning staff a hundred dollars to clean a one bedroom i'm not making any money but i have 50 apartments in a building where i'm paying cleaning staff you know 10 12 an hour.

That's when it can actually scale and make a lot of money.

Yeah, because then they don't have to travel to each location.

And yeah, a lot of nuances.

Are you interested in coming on the Digital Social Hour podcast as a guest?

Well, click the application link below in the description of this video.

We are always looking for cool stories, cool entrepreneurs to talk to about business and life.

Click the application link below, and here's the episode, guys.

So with your big competitors, how large are these companies?

So I'll give you an example.

Saunder has like 10,000 plus apartments.

It was actually started by a guy from Canada too, himself.

He was a student at, I think it was McGill University.

Started with one summer and scaled to, you know, 10,000 apartments.

But it's not his company.

Obviously, he's the owner, he's the founder.

He took VC back.

You know, he had a lot of VC backing and venture dead and raised a lot of money.

The problem with that company is that they're losing money.

For every dollar they make, they're losing about 30 cents.

Wow.

Yeah.

So I think in the 100 plus million they made, they've also lost millions and millions of dollars.

So, you know, my goal is to not expand just for the sake of market share.

My goal is to expand, but also make money at the same time, right?

My goal is not to get to a thousand 10,000 apartments.

I have no, you know, goal for that.

If I'm making, you know, 20, 30 million dollars and take-home personal income on a thousand apartments, I'm very happy.

I'm good with that.

Yeah, that is crazy.

And were there any hiccups along the way, like any years or months where you were losing money or going?

Oh, yeah.

So last winter, I lost about $250,000.

November, December, January, February.

Those four months in total, I lost

grand in total.

Yeah, so a few mistakes in my end, but overall, it's just general market.

One was pricing.

I didn't really price all of my apartments properly, assuming that last year, not 2022 winter, but 2021 winter, was what can I expect?

That wasn't the case at all.

So I didn't really discount my rates way ahead of time.

And then on top of that, the actual units themselves, when I first started the business, I was in a lot of B-class, C-class apartments.

I had to go to Dallas, rent an apartment for $800,

B-class, C-class stuff, and it would make $2,700, $2,2800 a month.

That was during the good old days, the glory days of Airbnb, where anyone can grab an apartment, throw barely any furniture in there, and make $2,000 a month in that free cash flow.

It doesn't exist anymore.

So what I did basically for the year of 2023 was start eliminating and cutting all the units that weren't really profitable, they didn't have enough meat on the bone for me, improving my operations, leaning out my housekeeping, decreasing my housekeeping costs tremendously in almost every single city, and upgrading my units to higher-end, luxury, A-class units.

There's a a lot more meat on the bone to actually make profit.

Got it.

So last November, just the November that just passed, I did about $200,000, $225,000 in total net profit on 400 units.

But the November before that, I lost 50 grand on 200 units.

So they go off the same metrics.

I should have lost 100 grand this November, but I didn't.

I made 225 grand because housekeeping costs were reduced by 70%.

The units now are a lot better, a lot nicer, designed a lot cleaner.

And pricing.

I just went pricing way ahead of time, two, three months ahead of time, because I didn't want what happened last winter to happen again.

Yeah.

So are you using AI to determine the price you charge on?

Yeah, so there's a software everyone uses called Price Labs.

It's pretty self-explanatory once you sign up.

But just using that software alone isn't enough.

There's a lot more in-depth revenue management skills that you have to have to actually apply to make sure it's actually working.

Have you seen a sweet spot in terms of the pricing?

It's dynamic, right?

It really changes.

In the winter time, you're trying to sell off apartments as low as possible at break-even or a little bit above.

Summertime, you're just blowing up your weekend rates.

You're blowing up those concert rates to even $700,080 a night.

Taylor Swift concert was crazy for me this year.

I think I didn't sell a single apartment for less than $600 a night for the Taylor Swift concert.

Yeah, middle Wall.

No, in the cities that I'm in, in Pittsburgh and Philly and Detroit.

Those are three cities that she came to.

Every single apartment, minimum, $600 for the entire weekend.

Jeez.

I think she was making like a million a day or something.

Yeah, so I was making a lot of money.

That could be an interesting strategy go go after cities where like artists perform at yeah but the thing is you can't rely just on that because those things are really dynamic and changing at any time yeah so those are they're nice to have it happens once in a while but can't really rely on it i feel that do you stick with like the same cities for them for the most part no so i try to expand uh where i can but i've actually changed my strategy this year last year my goal was to expand horizontally and get into you know multiple different markets but realize it's not really the way to go i want to expand more vertically because if i'm expanding vertically my economies of scale actually actually get a lot better and actually hire housekeepers and cleaning staff for a lot lower, therefore increasing my overall net margins.

That makes sense.

Yeah, because then you could just use the same team rather than.

Yeah, there's no point of getting 20, 30 apartments in 10 different cities.

Get 100 apartments in three different cities,

you'll make a lot more money, you'll make way more profit, your margin is going to be a lot better.

Yeah.

So you care mainly about the cash flow, not the equity, right?

Well, correct.

Yeah, there's no equity in this business whatsoever.

The only equity you really have is the actual business itself.

Is the business sellable after a certain amount of EBITDA that you're making per year?

Yeah.

It is to bigger arbitrage companies, to private equity.

You have to be past a certain point for them to even be interested.

That point is around, I'd say, 500 plus units.

For the 500-plus units, if your goal is to sell, then you can sell the business if you want.

Yeah, is that a goal for you or no?

Honestly, I have no idea.

Either I scale to 1,000 units and sell, or I sustain it and make it a lifestyle business.

Yeah, because I feel like, I mean, how many hours are you actually putting into this a week?

Now, I'd say probably three, four hours a week at the very moment.

Damn.

Yeah.

I mean, you could just make 10, 20 million a year off three to four hours a week.

Right.

So, and that's the goal, right?

So we'll see really where life takes me.

But as of right now, I'm just trying to get to 1,000.

Yeah.

So what's this Airbnb bust?

I see people are quitting Airbnb.

So almost every single news outlet in the media, you're going to basically hear Airbnb bust almost everywhere.

And it is true.

And I'll give you some context behind it.

So the old days, two years ago, in Airbnb, you could go rent any apartment, put anything inside of it, ugly pictures, price it randomly, you'll make a lot of money.

Because so many people have been talking about Airbnb arbitrage specifically in social media, right, in the news, and how lucrative the business model it is, the markets got saturated.

What happens now is you have a huge amount of supply and demand cannot keep up.

So the only people that are actually going to make any money are the top 20% of hosts.

They're probably going to attract 80% of all the revenue.

So you have to be an exceptional host nowadays.

You can't just put in random furniture and you're going to make money.

Your design has to be on point.

Your pictures have to to be on point.

Your reviews, very important, have to be on point.

You have to be a super host.

Your pricing strategy, your revenue management has to be on point.

The quality of your unit has to be on point.

The amenities, do you have free parking?

Do you have a gym?

Do you have a pool?

All these things matter now.

And those are the hosts that are actually making most of the money.

So are you one of those?

Yeah.

Yeah, that makes sense.

The reviews for me are super important.

Like if it's not like a 4-5 or above, I literally won't say that.

Even 4-point, anything below 4.8 is considered bad.

Really?

4.8?

Damn.

That's tough.

Because with restaurants, I feel like

people are more strict.

Right, right.

Like, for me, like restaurants, like, if you're below a four, I won't eat there.

Yeah, for Airbnb, you can't even be a super host unless you're a 4.8 or above.

Wow.

That is insane.

When it comes to the furnishing, did you have to learn all that on your own, or did you just outsource it?

No, you can really outsource it.

So originally, when I first started, my wife helped me a lot with furnishing the apartments, designing everything.

And now we started scaling it and it got really hectic and really busy.

Just hired basically VAs overseas, full-time as interior designers.

They're just as good as American interior designers for one-tenth of the cost, and they basically do the entire design aspect for me now.

Wow.

And they do a remote?

You do it fully remote.

All I need to send them is a 2D floor map, some pictures and some video, and they'll create a beautiful 3D rendering of the exact measurements, exact dimensions, of the exact design that you like.

That is impressive, man.

And then who actually

goes and puts all the furniture there?

Furniture builders, people from TaskRabbit, teams on the ground.

So if it's the current city they're already in, already have teams.

They handle the entire thing from the moment the furniture arrives to the moment the listing gets listed on Airbnb, pictures set up and everything.

A brand new city, then we have to basically go there, find a team, build a team, and start from scratch.

Yeah, that's cool.

And you mentioned you started this off credit mainly, right?

Business credit helped a lot, yeah.

So credit cards.

Yeah, so business credit cards, all 0% APR.

So I have never paid a dollar on interest.

I can't.

So my goal was to basically just use business credit cards that have 0% APR.

So the Chase Freedom, Chase Inc., the Amex Blue, all the usual 0% APR cards.

I just ran them up like crazy.

Dude, I just got 200K in those.

Oh, yeah, which one?

Two months ago.

Amex Blue.

Chase Inc.

gave me 50%.

Nice, nice.

U.S.

Bank.

Yeah.

Bank of America had like four of them.

Umqua Bank.

Have you heard of that one?

No.

Yeah, Umqua Bank.

Some guy helped me out.

But yeah, dude, it was like 200K for 0% for a year.

Yeah, that's amazing.

That's literally the best.

That's free money that you can use to expand your airport business, not worry about having to pay it back until a year later.

Yeah, no, I'm a huge fan.

And I mean, you see guys like Dave Ramsey like hate on taking on debt and stuff, but I feel like with that method, it's very low risk.

Correct.

Like Dave Ramsey hates the fact that you're paying 25% interest on credit cards, which I agree.

You shouldn't pay at all.

But if you're not paying anything and you're paying 0% for the next year, it's a no-brainer, wouldn't you?

Especially if you could put it in a cash flow.

Because then you could just make that money and keep the difference.

Yep.

Yeah.

So do you do this mainly?

Is there any other investments you have?

That's pretty much it, man.

Honestly.

When I first, when I was working on 9 to 5, I tried many different things.

I was always in crypto,

stocks, et cetera.

Didn't really, you know, nothing really stuck.

I lost about half a million dollars in crypto.

Damn.

Well, I didn't put in half a million.

I put in about 10,000 into an altcoin called Harmony One.

I've heard that one.

Yeah, it went skyrocket like crazy.

And at this time, I was growing the business, working the job, and

my account at the peak went to almost half a million.

I think it was $485,000, half a million in value.

And my whole family screaming at me saying, sell, sell, sell.

My wife saying, sell, change our lives.

And obviously, you know, when you see that happening, you see the skyrocket happening.

You don't think about selling because you think it's going to go to a million two weeks later.

And greed got to me, right?

And didn't sell.

And when Bitcoin fell from 60-something K and it crashed, every altcoin just basically just dropped like crazy and it went down to like 20 grand.

Same, bro.

I had over 10 million in crypto and I was like, I'm going to ride this to 100.

Like it was going up like six figures a day.

Every day.

Every day you wake up.

Yeah.

And I'm like, wow.

now it's worth like one or two mil and i never sold it so that was a huge learning lesson next bull run i am not doing that i'm honestly not really investing any money in crypto anymore i'm not investing any money in stocks not nothing i just put some whatever's the minimum amount i have to put into my you know set by array that's pretty much it besides that dude every dollar i make every dollar i make goes right back into business because for me you know it's increasing my overall monthly income on monthly cash flow i'm starting to feel older now man because i'm looking into bonds i'm like damn i'm playing it safe now like yeah

the biggest uh return investment is you yourself, right?

Your business.

So, if I can spend that money on my business and it returns, you know, hundreds of thousands of dollars every single month in net profit, and for me, it's a vehicle that, you know, I can keep using.

Do I want to buy buildings later in the future?

Yeah, for sure.

I'll eventually get there.

I can't get a mortgage, so I have to buy everything in cash.

It's a lot harder for me to do that, right?

Can't go buy a $10 million building with 10% down.

So for me, I have to have $10 million in liquid cash to go buy that building.

So I'll eventually do it someday.

But right now, the goal is just to keep doing the business to 1,000 units.

Are you keeping keeping an eye on the value of the U.S.

dollar?

No, not really.

I mean, it's a little concerning.

I mean, with depreciation and like they're just printing so much, people are and with bricks coming, but I don't know.

I'm kind of finding ways to hedge against it.

But with real estate, I guess that's a bet, too.

Yeah, like, you know, with things going up in inflation, obviously, housing prices are going to go up too.

But at the same time, interest rates are also going up.

So it's a give or take.

Right.

In my business, I'm okay with interest rates going up because landlords are hurting a lot more.

So they can't really sit on vacant apartments that much.

They need to get rented out.

When interest rates are low,

for me, it's like it's the opposite, right?

Like I prefer when landlords are hurting.

I prefer when multifamily is hurting.

That's when I basically get the best deals.

But when interest rates are low, access to capital is a lot cheaper, too.

So it always helps to have a lot of cash laying around for times like this.

Yeah.

No, you're in a good spot, man, because most people in real estate got wrecked.

If they didn't have like a backup fund or anything and all their money was in the house, they had to sell at a loss or like they can't even afford payments right now.

Are you doing anything with foreclosures and stuff?

No, nothing.

Nothing?

Nothing.

So just you're just buying new apartments?

Yeah.

Well, renting, yeah.

Renting, yeah.

Yeah.

I'm just strictly focused on the business, man.

That's pretty much it.

I don't really do anything else besides it.

Wow.

Is there any apartments that just someone threw a party or something?

Oh, yeah, dude.

So, for example, in cities like Detroit or Philly, you're going to run into that issue a lot.

A lot of big players and big companies tried starting in Philadelphia, but they left after a year or six months.

Buildings all kicked them out because they couldn't handle the clientele.

They couldn't handle the people coming in from North Philly, from Jersey, from Camden, from Trenton.

They're throwing crazy parties, right?

So you learn your lessons and you learn from your mistakes and you build systems in place to prevent that from happening.

So any single time anyone books on Airbnb through any platform whatsoever, they have to send a picture of their ID with a selfie.

Then they go through a background check.

Then we actually approve them.

We have verbiage in all of our listings to prevent those people from even booking in the first place.

So for me, I literally don't even remember the last time I had a party being called maybe a year and a half ago.

But that's really basically the only way to survive in this business to prevent that from happening.

Yeah, because if they're having a 100-person party, they're going to mess up the apartment and cause damage.

But you can charge them for that, right?

Correct.

Yeah, you can charge them.

Okay.

It's not a total loss.

I'm sure if they break something, Airbnb will cover it, right?

Yep.

Aircover is great.

They cover literally everything.

Nice.

Is there any other apps or are you just on Airbnb?

Primarily on Airbnb.

Like, you know, a lot of people like Verbo and booking.com, but I just prefer Airbnb mainly because air cover, anything happens, you're covered basically for everything.

They have the best policy in terms of payouts.

Are you trying to increase the number of beds in the apartments?

Yeah, so that is one something that I am doing that I have noticed that

you will make more money with the more amount of people you sleep.

The problem with apartment buildings is that a lot of them have occupancy limits.

I mean, you can't sleep more than four people.

Some of my landlords are really strict on it.

Some of them don't care.

They say, do whatever you want.

Just don't tell me about it.

So those are the ones where I try to fit as many beds as possible.

Sleep, you know, eight people in a two-bedroom, ten people in a two-bedroom.

Damn.

Those ones make the most money.

Yeah.

You fit 10 in a two-bedroom?

You do, yeah.

Bro, that's.

Bunk beds, sofa beds.

Just throw a bunch of of beds in there.

And those are the landlords that are cool with it.

They don't really care.

That is savage, man.

10 people in a two-bedroom.

I miss those days, man.

Broke, sleeping on the couch.

Yeah, and for me, I make a lot more money that way because now 10 people can split that price of a two-bedroom and can charge a lot higher premium.

Yeah.

What are you working on now other than scaling this?

That's pretty much it, man.

I've been scaling this.

So I started social media about a year and a half ago.

I've been trying to scale my social media up now.

That's going pretty well.

And that's pretty much it.

Just growing my student base and just documenting my journey to a thousand units.

That's the biggest thing right now.

Yeah, YouTube's really well, man.

You have a lot of informative videos.

Yeah, yeah.

I'd say you're probably one of my favorite Airbnb people on YouTube.

Oh, thank you.

Because a lot of them like teach it, but they're not on your YouTube.

So that's why I started basically, so I didn't know what any of this whole course guru stuff was up until two years ago.

I had no idea whatsoever.

I just thought everything was a scam.

And then as I'm doing the business, I'm on social media and I'm seeing these people talk about Airbnb selling courses on Airbnb.

And I'm like, these guys don't have a real business.

I find all their properties.

They have like three apartments.

You know what they're talking about.

The

information is so elementary.

What are they talking about?

So I'm like, all right, let me just, and at that time, I was docking my journey, about like 10, 11K followers on Instagram, post an Instagram service saying, hey, guys, I'm going to do a seven-hour masterclass, tell you guys everything you need to know about Airbnb.

Send me, zelle me a thousand bucks if you want to learn.

I'm going to Dubai in four days for vacation.

And I told myself, I got to get four people to sign up that pay for my plane tickets.

My wife and I.

I had 28 people send me $1,000 that same hour.

So I made $28,000 just like that.

All right, perfect.

Uh, very next day, seven hours straight, do it.

Then I posted my Instagram story, guys.

I have the recording available for 800 bucks.

It's seven hours long.

35 people paid 800 bucks right away.

I'm like, I just made 60 grand in two days.

What the heck?

Then I realized, I'm like, all right, people actually want to learn from someone who actually runs the actual business, who has a real business, who's actually doing the thing he's selling that he's talking about.

Let me actually dive into it.

So, my first year on

online social media course sales, I think I did about, maybe I'd say about a million.

Holy crap.

A million.

First year?

Yeah.

And that's like, and this is all just me posting on my Instagram story.

Like, I have no systems.

I didn't know what a closure was.

I don't know what setters are.

I don't know what ads are.

Literally just me walking around docking my life.

So if you guys are interested, click the link in the bio.

That's it.

Literally nothing else.

Second year.

I learned a little bit more about the guru space, the core space, and started hiring a team with fulfillment and just build that entire systems and processes for that business.

So this year, I think I finished off about 3 million in core sales.

Amazing.

And the margins in InfoSpace are amazing.

Yeah, so my margins are about, well, now that you add a bunch of people law and infrastructure, I think my margins this year were about 75%.

Yeah, that's super high.

Two and a half, yeah, 2 million plus in the total net cash flow.

That's incredible, man.

How many people are you coaching right now?

So three different packages.

Obviously, you know, well, now I only have two.

One is just the regular program that just revamped completely for 2024 because everybody's changed so much the last time I recorded my course.

And the second one is my mentorship.

That one's 20 grand.

More people actually buy the 20 grand one to work with me one-on-one rather than the 5K one because there's a lot more perks.

You get a lot more help with me individually.

Yeah.

So, but yeah, and just in general, like I'm just basically trying to figure out what way that can deliver value to my students and what ways Airbnb is changing.

That way I can make sure everyone's making as much money as possible.

And it's cool because you're actually doing it live.

I actually have students come fly out and shout on me for a week.

And I'm literally building 30 apartments out in a brand new city and people are just watching me and like they're shadowing me.

I teach them everything.

These own my furniture, but they also have a refresher in each department.

So that's the thing people really want to see.

A lot of these other people in the space can't do that.

They don't have a real business.

They're fake.

It's all bunch of fake gurus.

They talk about it, sit in front of the camera with their mics and video cameras and talk.

They don't have a real business.

They're just speaking BS.

I love that.

Yeah.

That type of stuff where you're hands-on, you can't read it in a book and you're actually seeing it with your own eyes.

You're there in person.

I mean, there's not many people teaching like that.

Like that's that's incredible, especially people in the Airbnb space.

Because like you said, you see their videos.

They have like five properties.

And it's like, you're not, I feel like you're not at the level yet where you could teach.

No, zero.

I'd say you need to be at at least 100.

Yeah.

Around there, yeah.

That's a good number.

Because like, that's when I started, actually.

100 is literally when I started.

Yeah, because then you're doing, what, seven, eight figures?

You got to get a little bit more.

Yeah, 100 units doing about 3,000 a month.

The 100 units should be doing about 3,300,000 a month.

102, you're doing about 3 million a year.

Yeah, that's solid.

You said you got 50 units coming up and activating in the next three weeks?

I think I have like 100 starting in the next three weeks.

Is that all one building?

No, multiple different cities.

Damn.

How are you sourcing these?

So a lot of it, honestly, so before originally, I had a system of VAs that would scourzilla.com and just hit up every single building, property management company, landlord using my scripts.

And that's pretty much how I scaled all the way to 300.

The last 100 units that I got and the next 100 units that I'm getting, even maybe the next two, 300 are all basically from connections.

Because a lot of these landlords have buddies.

They have friends.

So one of the buildings that I'm in in Dallas, he actually has a friend who owns a building in Ohio that has, you know, 40, 50 units vacant.

And he's like, hey, they're playing golf one day or whatever it is I have a guy who has you know 50 apartments with me let me give you his number and that's we got connected another one was I had a building in Pittsburgh the same owner has a friend in Philly connecting me with him and I have 50 apartments starting with him next month as well wow so a lot of it now is word of mouth and connections and just talking to these landlords and seeing what other projects you're working on, what other friends do you have, what other landlords could you recommend to me.

Yeah, I really like this model because other than the furniture costs and maybe staff, there's really not much investment, right?

Yeah, that's pretty much it.

Yeah.

And you're not getting to those numbers until you have some money coming in, anyways.

So you're really not risking your own money.

Yeah, when you're starting out, your margins are actually really, really high because you don't really have a lot of staff, right?

So it's pretty much you.

And you can hire some VAs for 500 bucks a month, and that's pretty much it.

Your margin should be around 40-something percent, 45%.

Also, mind we're when I first started, then of course, as you scale the business over time, your margins do decrease, but you're making more money, right?

Because you have to build up the infrastructure to support 400, 500 units.

Yeah, 40 is really high for Airbnb.

Yeah, well, and that's when you first start out.

So my margins right now, this year, I think, was at 25%.

My goal for 2024 is to continue leaning down operations and finding inefficiencies, plugging in any holes, increase that margin to 35%.

Because this year, if I don't, after the 500 units, I'll should do about 20 million in revenue.

At 35% net margin, that's $7 million and take-home net income.

That's amazing.

So you're in Texas, so no state income tax, right?

I am in Texas, correct.

No state income tax.

But it's still to pay, you know, the other federal taxes.

Yeah.

That one, I'm still looking for ways with that one.

I'm actually starting a charity this year.

Literally, dude, you have two options, and I've explored this very, very deeply.

One is go buy real estate, all right, go get a big mortgage, do some cost segregation, and you basically will pay, you know, almost nothing in taxes.

I can't do that.

So literally my only other option is to figure out creative ways that involve me not living in the United States.

I'm not an American citizen, right?

Puerto Rico.

I'm Canadian.

No.

So I was basically thinking about moving to Dubai and getting a Dubai citizenship and getting that investor visa.

And that's pretty much the only way where I don't have to pay anything in taxes.

Wow.

The problem is I have to be in the United States for less than 120 days in the year.

I really can't do that.

That'd be tough.

I don't know.

I'm thinking about ways.

I'm figuring it out.

I'm actually going to Dubai next week in two weeks.

I'll have some meetings there and figure out ways where I can, what can I do with all this money, park it offshore somehow, or just basically, what can I do in terms of living?

Where can I live certain parts of the year and certain parts in another part of the country just to basically offset my taxes?

Because I can't do cost irrigation, can't go buy $10 million buildings and I have a lot of income.

So I have have to basically decrease that.

Yeah, that's what Kiyosaki does, right?

Yeah.

Yeah, you get to the point where you're sacrificing your freedom a bit.

So this year on 10 million in income, so 10 million in revenue, let's say

total income out, let's say it was 2 million something.

I only paid about $250,000 in total taxes.

Wow.

So a big thing you can do with arbitrage is you can prepay a rent.

Let's say my monthly rent is $500,000 a month, right?

On December the 25th, I can prepay two months of rent.

I can prepay a million dollars of rent.

And that entire million dollars, I can basically write off for this year.

That is cool.

That is really cool.

So, that's the one big thing that basically everybody in the industry does is prepay a lot of rent.

Yeah, and you could do that in business too.

My account just told me you could prepay vendors.

So, last week I just prepaid 300 grand

to save money, which means crazy.

But it's part of the game, man.

Well, great episode where people find you.

You guys can find me on Instagram at Humps of the Far.

My YouTube is also Humps of the Far.

And my TikTok is Hums of Far BNB.

Love it, man.

Thanks for coming on.

Thanks for watching, guys.

Yeah, and we'll see you tomorrow.