Episode 051 - STRR - The ABC's of Acquisitions (Picking Up a Property) Part Four

This week, we are continuing our series on Property Acquisition.  It's a part of your Short Term Rental Business Plan.  You need to be thinking long-term and planning for your retirement, whether it's decades away or only a few months.  Holding Real Estate is something we all should seriously consider because RE is how the majority of millionaires BECOME millionaires.  In this episode, we'll talk about the importance of Timelines, Punch-Lists, and Staying on Schedule.  When you buy an STR, you have to get it up and running fast.

 

Transcript of this Episode:

Hi, it's Michelle, the master of money mindset, and you are listening to BNB dash boss pod.

And it's Friday. And you know what that means on Fridays, we do reruns of the short-term rental revenue podcast, and we are finishing up our ABCs of acquisitions. So this is the final episode on that. And coming up at the end of the month, you're going to love this. On the 19th of July, we've got Maria Giordano's negotiations.

I mean, that's going to be fantastic. So you're going to get to listen to Maria. Talk to you about negotiating with buyers and landlords. And I'm going to do an entire landlord episode on the 26th of July. And so that Monday you'll be able to listen to me. And I'm going to talk to you. You know, just promoting yourself and how you can go in there and speak to a landlord.

We're going to be talking about scripts and things like that. So using these ABCs, these last four weeks of the ABC's of acquisitions every Friday, and then using the negotiation skills that you're going to get at the end of the month on the 19th and the 26th, you're going to be able to, I mean, there's going to be no reason.

That you can't go and pick up your first property. It's going to be absolutely easy for you. Okay. And if you haven't yet, Make your way over to our website and pick up our courses. They're super incredibly cheap guys. I mean, a lot of people charge thousands of dollars and we've got these mini courses and they're all you need pick those up and you'll be able to go in and figure out how you can easily pick up your first property with little to no money down.

If you're doing co-hosting, sometimes you have no money out of your. If you are doing rental arbitrage, you're going to have some money out of your pocket. Right. But not too much money. And you can probably get a friend or a family member to go in on your business with you for that. And then if you're buying the property, I'm telling you, there's a lot of ways that you can pick a properties, fix these properties up, put the equity into them.

And within a very short period of time, or actually only a few months, if you do the burn method and use like a bridge mortgage. You can turn these properties around and pull every penny that you've put in back out and you'll have absolutely everything in there. Your ROI will be infinite because you have no money in the property yourself.

You've pulled it all back out. So there's no reason you can't do this. Listen to these episodes, take notes and learn, learn, and then take it away. The thing is a lot of people will listen to these and then they don't take action, guys. You've got to take action. That is the big change you've got to take action.

Just be persistent. You can't try something for one weekend and go, oh shoot. This doesn't work. You gotta be persistent in it. If you are constantly doing what we recommend and what I recommend, and Maria recommends and all of us, we're teaching you for free on these podcasts. I mean, we don't make anything on podcasts.

We're not sitting here. Making millions of dollars. No, one's calling us up and going, Hey, you know, your podcasts was really great. Here's a shitload of money just for doing this. We're doing this because we want to help you do what we did. And there was no one there teaching us. We had to go into these courses and some of them were good and some of them are bad and some of them had great teachers.

And sometimes you walked in, you only walked out with one thing, pain, tens of thousands of times. And now we've got this great instrument of podcasts, podcasts, great way for you to learn for free. And then you can go the websites and download things for free. This information is incredibly accurate. It's incredibly valuable and it's incredibly relevant for what is going on today.

So take action. Okay. And take consistent action. Meaning don't just try it once or for a week or something. Keep plugging along. Okay. Be like the little turtle with a tortoise and the Hare. If you are the tourist and you keep chugging along, I guarantee you will win. You will win the race. The hair is like in there and he does it for like a week and then he drops out because you know, he didn't get the result that he wanted Boohoo.

Well, guess what, when you are consistent, especially when we're talking about marketing and Maria is going to talk about mark. On the 19th, when you are consistent in your marketing, you will get phone calls. Your marketing is sending out letters or postcards, or just letting people know that you are interested in buying their property.

Right? So some people put signs up or whatever your marketing thing is, but let's just say that you're sending out letters and you're sending them out to specific zip codes. You have to keep doing it. You can't just hit that zip code once and expect everybody to see that letter. Somebody is going to throw it away.

But when you do it consistently for a few weeks at a time, then you will get a lot of results. It's amazing to me that when you're putting out 150 letters a day, we used to do 150 letters a day. Like literally mail out 150 letters every single day. And we would take this box to the post office. Malam out.

Do it again, do it again, do it again. And sometimes it would be from one list and your list may have a thousand names on it. Your list may have whatever, whatever neighborhood you're hitting. Right. But you're doing 150 a day. And you just keep consistently doing that in your first letter, looks like this.

Your second letter looks like something else. Your third letter says, Hey, I'm still interested. It's still here. Your fourth letter says, you know, if you haven't seen all of this stuff before, it's time for you to take note, I am really interested in your property and your neighborhood. And we send out these letters, Robin Thompson called them her horsey letter.

I send out a letter with a beach letter. So mine was a beach front letter. Maria had something else. Everybody has their own quote unquote letter. It's just got a watermark in the back. It looks like something. But in my letter, I always let people know, Hey, look, this might not be the time that you want to sell your house, but keep my.

Keep this letter, keep it someplace safe because you might change your mind. And I am really interested and it never fails. I always get somebody who will call me out of the blue years later. And I'm not kidding. Sometimes five, six years later and they say, Hey, you sent me a letter six years ago. I saved it and put it away.

And I'm looking to sell my house now. And you're like, w w what? You saved my letter for six years while you told me to save it, it says right on here to save it. Holy cow. I mean, marketing works, but only because I worked it it's the same with anything else you can't give up too soon and you have to be persistent and consistent.

Okay. You have to keep plugging away. That's 150 letters every single day. And that's the consistent. And then persistent, you can't just do it for a week. You have to do it for months and years. Right. And then easy part is when you stop, if you just sent 150 letters a day for five days, you might not get any phone calls, but when you do it every single day, you're going to get dozens of phone calls every single day.

It will start to come in and it will just continue. So, yeah, make sure you're persistent, consistent, and you're doing what we tell you to do. So let's finish this. ABC is out. I'm going to be listening and seeing if I can add anything and I'll come back in at the end, enjoy the replay ABCs of acquisitions.

This is PARP. Okay. So last week we talked all about the numbers and I love numbers. So I told you how to get your properties for zero money out of your pocket, right. And an infinite return of making $10,000 on the properties that we were looking at. I mean, that's honestly really great. You're going to love that we actually make a little bit more.

On those properties than that. But we use the $30,000 because what the heck? Right? We used the air DNA thing, but we know we make a little bit more than that, but today we're going to be talking about once we've made the offer and we got our listing and everything, what are we going to do? How are we going to schedule all the stuff that goes in there?

One of the things you have to remember is if you're buying a property and you're going to fix it up, you got to fix it up fast. You've got to have everything planned out and you've got to be on it. Like you can't go, okay, well, we're going to do the kitchen. Hey, let's order the cabinets. And then once the cabinets going, oh, Hey, let's order of the countertops, then go.

Maybe we should have put the flooring in. And then the painters come in. I mean, there's, there's certain way to do everything. And the same goes for your short-term rental business. One of the first things you're going to do when you buy a property is you're going to make sure that you change everything over to your name, all the utilities, the hos, you get everything running and you create a bank account because this is going to be a BNB, right?

So you want one bank account for each of your properties. Now online banking is the way to go. And there are a lot of online banking sites. So you don't necessarily have to go to a physical bank to get a checking account. Online banking is really the way to go. One of the ones, a lot of people use right now is ally.

It's a L L Y and capital one has a banking. There's a bunch of them discover bank U S a. M and T bank there's even a bank called redneck bank. I know that sounds really stupid, but get those, they paid two and a quarter interest in their checking account. I saw it on YouTube and I had to check it out and I was like, dude, this is a leeriness, but whatever you do, you want to open a bank account for your short-term rent?

And all your payments are going to go in there from an Airbnb expenses are going to come out of there. So you're going to have your electric come out of there, your internet come out of there, your taxes, your insurance, all that stuff is going to come out of that account. Same account. Okay. So you want to set up that account.

That's going to be one of the first things that you do, and you're going to change all those utilities into your name and come out of those accounts automatically. So sometimes you may want to start that bank account with, you know, a certain amount of money depending on what your expenses are. So I would put like probably three months worth of expenses in there.

Three months worth of mortgage payments and utilities and HOA. The banks. I told you they don't have any banking fees. So make sure you don't have any banking fees, but whatever fees and stuff, just make sure you put like three months in there until we get this place all fixed up. That's going to give you time to fix the property, which you should be able to do within six or eight weeks to get it all fixed up, to get it furnished at another two weeks maximum.

You're going to make sure you get all your furniture in there, put together and your pictures done. And then it lists. And then once you get all that done, then you're gonna put your listings up and running on Airbnb and you're going to run them through whatever market you have. So if you have an email list, you're going to run it through your email list.

If you have an Instagram account, you're going to lift the pictures on your Instagram account. You're going to do whatever you can to get those pictures out there, up and running. All of that has to be done in a timely manner. And it has to be done. Usually I would say within two miles. I want that property live in two months.

Anything over two months costs you money. Especially, if you're using an investor to help you buy, if you're doing it all, cash yourself, that's not so bad, but still you could be doing something else with that money. So you want to make sure that you move quickly. You want to make sure that you make up a schedule and that you keep to your schedule so that it takes you no more than two months to get that property up and running and ready.

Okay. So you're going to want to contact the insurance company, figure out who you're going to use. You might want to shop around and give a call to at least three different short term rental insurance companies. So let's say you call proper insurance, just call three insurance companies, give them the address, the information, all about the property and let them come back.

And they'll give you a quote. So get your quotes and then pick who you want. Get the property insured right away. As soon as you buy. Now what you need to let them know too is we're renovating the place. We're renovating it right now. So no, one's in it. It's not a short term rental yet. Right now it's empty and it's got a lot of tools and we are renovating it and that's, what's going on.

Let the insurance guy know that because your entrance in different states is different for what is going on, what activities are going on inside that. And so that's very, very important. You want to let the insurance company know right away, but you want to insured right away. You want to insured while things are going on, because God forbid somebody leaves a blow torch going, and it burns down the place you want to be covered.

Right. So you want to make sure that you have insurance from day one. Usually when you close on a property, they're going to ask you for the insurance anyway. So you'll have that all set up, but you want to make sure that you've got all that set up and ready to go. You got your bank account. You got your insurance.

Now you're going to put your utilities on. You're gonna put your utilities on, in the name of the company that is running the BNB or the property name. So we make sure that we use our BNB company name. There are different BNB company names for each of our IRA. And for each of us and then my partnerships and stuff.

So it depends, you know, whatever one we're using, whatever it is, we've got a company that covers that and it goes in the company name and it comes out of the bank account that is linked to only that property, each property owned bank account, easy, easy accounting. When you do it that way. So we've set up the electric, the gas, the cable, the water, the sewage, the insurance, the hos, the mortgage payment, whatever expenses you have, you're going to set those up in there.

Right? You're going to make sure that you've got everything being maintained. So this is where you're going to start to negotiate with your cleaner. And your maintenance guys. And if you've got a pool, the pool cleaning guy, and if you've got a lawn to take care of the lawn care guy, I mean, whatever you've got going on, you're going to make a list of whatever you've got going on.

And these are the moments that you are going to call and start getting everything ready and starting to go shooting with. If you've only got one property in that area, it's going to be hard to negotiate prices, but you've got to let them know we're going to get this property cleaned, you know, whatever your turnover is.

So if the property turns over every four days and on average, you have six cleanings, let them know, you know, on average we have six cleanings or seven cleanings. So get the price as low as you possibly can make sure that you're including laundry in that price. Right? So they're taking the laundry out of your place.

We never allow any of our cleaners to do laundry on site. We always take off site to do laundry. It just, that's the only thing that works for us. I mean, it just, it's not worth it. We got to turn our properties quickly and we've always got three sets of everything. And ready one in the weight, one on the unit and one getting cleaned.

So when the cleaners come in, they bring the other one in, they take the one in weight, put it on the bed, take the one that they just cleaned, put it in there to put in weight now. And then the dirty one goes back with them and Al the property door. That's how we make sure that we do that. But what we're talking about, making sure we've got everything.

So. We have a list that we have of furniture that we buy for each and every property. And we make sure that we put stuff on the walls. So we have a lot of pictures, a lot of little hangie things, a lot of little knickknacks and stuff. I mean, we don't fill everything up, but we definitely make it unique.

Very nice. Like it doesn't look like an empty room with one picture on the wall. It looks nice. Make sure you're doing the best you can. You may want to hire an interior decorator. You only have to hire them once, especially in one certain area. Hire them have them to give you a bunch of different photos and a bunch of different ideas, one color palette, and then stick with that color palette.

Every time you buy another property, just ditto, ditto, ditto, because you don't have to reinvent the wheel. It's just not necessary. So if you pay an interior designer, use those same designs for the properties in the same location, the same area. It's no big deal. You can do that for sure. So now you've got all those accounts set up.

I recommend fully that you read the book profit first profit, versus going to tell you all about how he uses separate bank accounts. Does that mean you don't have to necessarily have that many bank accounts if you don't. But there's a lot of free bank accounts. I mean, there's a lot of savings, only banks online, like synchronicity and wealth front.

I think wall front was paying 2.5, 7% interest not too long ago. So that's a good one. Marcus is a good one. American express has a great savings bank. There's a lot of different accounts, a lot of different banks that have different accounts. You've just got to make sure that whatever bank you choose. And we talked about the bank, the checking account banks.

A lot of times it's easy is to keep the bank the same for your checking as it is for your savings, because you want to be able to transfer that money back and forth between them is important to be able to do that. So now sticking to that schedule while everything is getting repaired and cleaned, make sure you go in there or you've got somebody who's supervising the fixing up because while that's going on, I mean, there should be somebody in there every day doing something and they've gotta be on schedule.

And we've got a punch list on the wall at all times, telling us what is going on now and what's coming up and we can also see what's been done. So that list says, here are all the repairs that are being done. These are when they're going to be done the list of priorities and what we're waiting for. You know, maybe we're waiting for the counters to come in or something.

So the punch list is very important. So we have a punch list. We also have a list of all the furniture that we need. So we make sure that we get stuff ordered and get that stuff in shipment so that we know if it takes two weeks for something to get in, we're not waiting on any one item that we've got, that we also have a lot of items that, you know, if something let's say last time we did a property, we didn't get the office chairs in time.

And so the chair we were waiting for, we just used another chair, but you know, just those kinds of things, making sure that you know, what you want in your property, that you have a list and you know, when it's going to be delivered and stuff, and you know, when it has to be ordered by those are really important things and that you're sticking to these schedules because you can't afford to screw around you really can't time is money.

And all the time you waste is money. That could be in your pocket. You want to get the pictures of this place, listed a S a P. And if you have an interior designer who drew something and there's times where we've taken properties and we've put the pictures of them as they're getting fixed up and as they're getting repaired, and we've put those up simply because we are a five-star.

Place. So they know that we're putting quality stuff in there and we're like, okay, here's what this is going to look like. It's going to look similar to this. So as long as we say, it's going to look similar to this. Then people are totally cool with that and they will book on that. So you want to get that property listed as soon as you possibly can, whether it's with pictures of other properties that it's going to be similar to, or it's pictures of drawings or whatever you can possibly do, as soon as you can get that property listed, we listed, I mean, it's up, it's up and it's running.

So we've scheduled everything. We're going to schedule our last clean after the rehab crew leave. We've got the cleaners that go in, they clean everything up and then we have people go in and put everything together and make sure then that that's done. And then we have the cleaners come in after they leave again and get everything right.

We're ready for the first crew. So you're going to need your towels and you're going to need your soaps and all those things now. That list has to be done before and you have to order that stuff. So it gets in well before the time that your first guest is going to arrive. So if you know, you're going to be done at eight weeks, start ordering that stuff as soon as you possibly can and just put it somewhere else.

No, which closets you're going to choose for your maid's closet, tell your crew, you know, we need to get the inside of that painted as soon as possible and titled as soon as possible. You want the locks on those doors and you want to be able to put that stuff away. Even before the guys are all done, cleaning and painting and doing all their stuff.

If you can keep putting stuff into those maintenance closets and the closets are ready to go, then I'm already stuck in that stuff full of everything. That's a good thing to do. Scheduling is one of those difficult things. I mean, you'll learn as you go, how long it takes. Not only to get certain items, but how long it takes to get the bathroom done, how long it takes to get a kitchen done, depending on what kind of work you are and where you're located.

There are things that I'll change and things that I'll add, because I know I can get it done within the same timeline. So, whereas I might've fought that I was going to keep a stove or a dishwasher I might go with and they're towards the end and go, you know what? I can get a new dishwasher in here by tomorrow.

I'm going to just change this out because. It doesn't look as good with the new cabinets as I thought it would. I thought I could keep it and then it doesn't look as good as I thought it would. So I'm going to change that out. So some things do change, but schedules, once you get into scheduling, you'll just know, you'll just know that when you can get stuff, when you can order it, how long it takes and just be very aware before you even buy the properties and start writing things down, individual coffee packets and things like that.

Find out how long it takes to get that stuff. And if you can, in your own house or in someplace, you know, start putting things in plastic bins and labeling them. So you know how tall your shelves are going to be, because our shelves, we literally have things in bins and we have them all labeled. So the crew can pull out.

These are the breakfast snacks. These. Where the clean towels are. This is this, this is that. So they know, and it's all labeled and nice and easy for them. Making sure you have utilities on is going to be one of the biggest things. So that should be one of the first things that you do is get that bank account, get the utilities on and get all that stuff going ASAP because they're not going to be able to do any work without electricity.

So some things have to be done first. That's why it's important to prioritize everything and make lists. We have checklists on checklists on checklist for how to do everything. It's also a learn as you go game. So you'll get better at this. Like I said, as you go along. So as soon as you possibly can, once you get the place furnished, I mean, w that day is the day we schedule that way ahead of time.

Cause we know what our D-Day day is going to be. We know when we're getting all the furniture in and we know when our move in date is and everything is going to be. And we schedule our photographer right then, and we get the photographer in as soon as possible. Now our photographers are great. We usually get those pictures within a day and then we're able to get that listing up and ready.

But our listing is getting written before all that happens too. So you can start doing your listing way before you get the property ready and just keep adding. Add your house rules, add your deposits, add all your rules, because remember if it's in there, it's in your house rules, it's literally a part of your listing.

So any kind of smoking fees or whatever, that's all going to be in there. And as soon as your pictures go in, you put your pictures in and then you go live. You just hit that live button and then boom, there you go. You're listening, getting your listing active as soon as you possibly can is crucial. And like I said, we've done it early with some different things.

It works. Sometimes it doesn't work other times, but for the most part, if you're a five-star hosts, you can get some of your listings done looking at something like this. Here's us working on it. This is the space. This is what we've got in mind. I mean, we've got a lot of stuff like that and it works.

Sometimes we show the color scheme. Sometimes we show the cabinets with the tile next to it. It just depends. But what it does is it gets everybody all excited about those things and we can get it moving. And when you first put your listings live, Especially if you haven't had any other listings before, I definitely recommend that you go with some kind of distance count just to get your first people in there with your five star reviews.

Get those things started, but go to our messaging episode, you'll see how to automate your messages and how to kind of groom your guests to leave you five-star reviews. Every email we send. And there's seven touches. Every email we send mentions a five star review. So we're grooming them for a five star review all the time.

Please leave us a five star review. You know, uh, we look forward to receiving your five-star review. Hopefully you'll leave us a five star review. I mean, it's everywhere. So we're constantly grooming them for that. If we aren't well-known if we aren't up there in the rankings and if you're new, you're going to need those discounts and discounts are fine.

You know, when you first get started just to fill those nights to get those nights, build up until you get rolling, especially in areas like Tucson and Phoenix, not so much Orlando, but in Tucson and Phoenix, we're three months out. That's our average booking is three months out. So people. They book a lot farther out than when they're in Florida.

They book sometimes. I mean, we get bookings within a week and we're totally cool with that. I mean, that doesn't mean anything, but in Arizona, our bookings are so far out that anything within that three month period is really slow. I mean, the chances are, we're not going to book that out, but three months out we'll start booking full.

Right. But when you first open something up that the closer reservations are not as. So we discount the crap out of those to get those moving. It just depends on your area. Pens on your listings, depend on how many, five star reviews. Reputation. I mean, it depends on a lot of things, but we want to get those full as soon as we can.

So discounts are really great. I also recommend that you go around to local eateries and see if you can get some coupons and discounts and things from them. If there's things to do in the area, you might want to put those kinds of brochures in your place and let people know what there is to do around the area and maybe offer them some discounts there.

So that's going to be really great to put in. This whole episode is about your scheduling and just how important it is to know and keep on schedule. I just can't even say it strong enough. You can't just go in there Willy nilly and hope that you're going to get it done. I see that that's a big mistake on those HGTV shows too.

When you see people who are flipping for the first time and they're in there for ever, and you're like, oh my God, did they not like realize, I mean, you've gotta be on it. It's a timely manner. We're on it. When we buy a place, we've got a list of what we're buying and we buy it and it's in there. It's in the property.

I mean, it's sitting there and they're going to have to move it. If they're putting flooring in here, it might be, you know, in one bedroom might be all the new cabinets and the toilets and the new sings and everything is like all piled up. And if you had insulation or drywall, it's all leaned against the wall and in the closet or all the little boxes of the new door handles and it's all in there.

We buy all of that stuff and we've got our list gone so that we can be moving as fast as we possibly can. But the whole point is if you keep doing things as you need them, I mean, I can't even imagine somebody, but let's say they were putting up a ceiling fan and they're like, oh, I'm going to go to home Depot and I'm going to get a ceiling fan and they go and they pick up the ceiling fan, then they get back and they go, oh, well, well, you know what?

I don't have this kind of screwdriver I'm going to, I need this. And they go and they just pick up the screwdriver and they come back and then they go, well, well now I need, you know, this kind of rent. Sure. Something like you wouldn't do that. It doesn't make any sense to do that. But people will literally.

Put their houses together. That way they'll take one thing at a time. They'll go, okay. We're going to do the floors. Let's order the flooring and then that's all they'll order. And then they'll wait until they get that mostly done in undergoing. Okay, well now let's get the cabinets. No, all this stuff. Boom, boom, boom.

You order it all at once. You've got it all going and you've got to learn. Time is money. When it comes to properties, you've only got a little while to fix this. What goes in first? What goes in next? You know, what takes longer to deliver. You're going to get all this stuff out there and you're going to make sure that you've got your orders placed and you know, when your things are coming in, because that way you can schedule the guys.

So you're like, okay, well, first thing I've got is I've got all the tile is being taken out. You've got your guys who come in and they pull all that tile out. Now you guys, your other guys can go in and pull all the cabinets out and the, all the everything has comes out. So now you've got a clean slate.

Now, your drywall guys go in, then your cabinet guys go in and then your flooring guys go in, then your painters go in and you've got all of them in a specific order. And you know exactly what days and in our contracts, we literally have. Part of our contract is telling people here's the schedule. If you are early, we give you a bonus.

If you're late, we deduct money from your paycheck. So they know that if they aren't there, instead of getting, you know, the $4,000 that, you know, they were thinking they were going to get. Now they've got a deduction of 5%. Because they were late, they didn't get there that day, you know, or maybe they didn't complete on time.

If they don't complete on time, then they've got a deduction, but it's really, really important that you take care and you just, I mean, you crack the whip. There is a timeline has to be answered too. Well, that just finished us up. There are lots and lots of ways to do this stuff, but you really have to just get organized.

If you aren't organized, make sure your partner's organized, take your strengths and work those strengths, but make sure that you do have the timeline out there that you're ordering things on time. I just loved this episode. I love acquisitions is my favorite favorite part of doing short-term rentals is the buying the fixing up the decorating and getting it all done.

I could just do that all day and then pass the rest of the stuff off to people because it's my favorite part. It's my favorite part is getting it all. So join us on Monday on Monday, we're doing an interview with noise aware. We are continuing with the theme of making sure that we monitor our properties to avoid.

And noise aware is one of the best companies everybody knows who knows where it is. And I think you'll really, really enjoy this interview on Monday. So make sure you stay tuned for that. And of course, next Friday, we will have more short-term rental revenue replays. To send you off on your weekends so you can listen to some stuff and learn, learn, learn, make sure you're doing all your acquisitions and that you're being consistent.

Okay. I cannot stress that enough and have a great weekend. God bless you. Go and grow.