Posted on: September 28, 2020

In this episode of the Wholesaling Inc. podcast, we tackled something rarely talked about—Airbnb. Kyle Stanley is an Airbnb expert and in today’s show, he covered all there is to know about Airbnb.

If you’re considering getting into Airbnb and don’t know how to go about it, you’d surely love today’s awesome episode. Kyle not only talked about the essentials of Airbnb, he also shared some of the techniques he has used to build a successful Airbnb business.

So many gold nuggets in today’s episode so you better have a pen and paper handy!

Key Takeaways

  • A bit about himself and how he got started in real estate
  • What passive income is
  • Why people get into Airbnb
  • Things you should look into when it comes to Airbnb
  • Actual process of starting a Airbnb business
  • How he deals with neighbors who don’t like Airbnb
  • Sweet spot to look for in a territory when looking to do Airbnb
  • How people can get ahold of him

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Episode Transcription

Lauren Hardy:
You’re listening to the Wholesaling, Inc podcast. I’m your host, Lauren Hardy and if this is your first time listening, welcome, you are about to listen to an awesome episode. If you are a loyal listener, welcome back. Thanks for joining us today. Today, I have an Airbnb expert. His name is Kyle Stanley. He’s from Fresno, California. Kyle, how’s it going?

Kyle Stanley:
Good, Lauren. Thanks for having me on. Excited to talk.

Lauren Hardy:
Me too. Me too, especially because Airbnb is not something that we talk about a lot on this podcast. We are primarily a wholesaling podcast, so we’re talking more quick, wholesale deals or flip deals, flipping contracts, however you want to take it. But Airbnb is something that interests me, which is why I wanted to interview you because I teach all things virtual. I am obsessed with different investing techniques that you can do virtually and Airbnb has always been something that I was very interested in and it is very much something that you can do virtually in a passive way. So I wanted to pick your brain a little bit about, how can I get into the Airbnb business and what are the pros? What are the cons? So why don’t you start by telling us a little bit about yourself and how you got started into real estate?

Kyle Stanley:
Yeah, well, it’s kind of a long windy road, but right out of college, I was a sports anchor for a local TV station in Colorado, found out right away that I did not like taking orders from other people. So I found out that I want to be my own boss. Started my own business, didn’t have a mentor, didn’t have any help. That business lasted probably about three or four years too long, just out of pride and ego, just wanted to make it work and I didn’t want to quit. Didn’t want to be that guy who everyone saw on social media that seemed like he was being successful, but turns out that he wasn’t. So one day I decided to call that one quits, got into a couple other sales deals and they went okay but it was really right around when I was 26 years old. I’m 33 today. But when I was 26, I heard this term passive income and I’d never heard that before which today I think is a crime.
I know 40 year olds today that still don’t know what passive income is and I’m just … that’s a whole topic in itself, but I learned this whole passive income idea and I was like, “This is the ticket.” This is how you spend time with family and provide for them at the same time and that’s how I eventually want to provide for my family. Still don’t have a family today, but that’s what I’m building towards today. And so when I got into these sales jobs, that seemed like they were going to be passive income, well, there was still a lot of work that was going on. You still had to motivate people. You had to get people to do other things. You had to rely on other people to be successful in order for you to be successful.
And so I got really to that point where I was like, there has to be something more passive and I just kept hearing about real estate, kept hearing about apartments and owning houses and all that kind of stuff. And in 2019, right in the beginning of 2019 in January, went to a flipping convention thinking that I would just educate myself because my goal is passive income, but I walked out of there like, “Wow, flipping is what I want to do right now. This is going to be the active income that allows me to go buy other houses that will allow me to have this passive income.” And so from there in January, I realized, I kind of did a self-inventory and I was like, I’ve been doing this Airbnb thing as a room out of my house, which I learned through real estate is like it’s house hacking.
And I was like, I didn’t realize that I’ve been doing basically real estate for four years now. I started my Airbnb in my house in 2015 and so in May of 2019, I kind of got curious and I listed my entire house on Airbnb, made like 450 bucks in one weekend in Fresno, California, which is a head scratcher, right? Why would people want to come to Fresno? And really have never looked back since. Got education, got mentors. I got the whole nine yards and just really went all in with Airbnb while flipping houses on the side. And for me it went very fast.
Now, I’ve been doing this Airbnb business for about 14, 15 months. This next month, we should gross over $35,000 in our business for just Airbnb alone and I went from basically my best month being a thousand dollars in Airbnb for my first four years to fast forward, about four or five months later, I was grossing 15,500 bucks. So it moved very fast. It became something that I got really excited about because I could systematize it. And like what you said, make it virtual, make it passive. And so it’s something that I’m very passionate about sharing with other people today.

Lauren Hardy:
Wow. Well that is a lot, especially when those numbers are very exciting to me. So yeah, Airbnb seems … There’s so much that’s interesting about it. One being that the gross rent that you collect way higher than if you were just renting it to a standard tenant, right?

Kyle Stanley:
A hundred percent.

Lauren Hardy:
So I would imagine … Is that why people get into Airbnb is the dollar signs?

Kyle Stanley:
Yeah, well, absolutely. I mean, I don’t want to call it a shortcut. I just want to get places faster. I knew that if I wanted to, in Fresno, have, call it $10,000 of passive income, I was going to have to have close to 50 houses. With Airbnb, I’m averaging about a thousand dollars of passive net income per home so I could do that with essentially 10 homes that I own and get there in a fifth of the time. But yeah, to answer your question, take the amount of rent that you expect to make in a home and basically x that two and a half to three X and that’s basically what you should make an Airbnb on a pretty typical rental.

Lauren Hardy:
Now but is that a for sure thing? I mean, is there an art to where your rentals are? Tell me about that.

Kyle Stanley:
Yeah, so what I will say is Airbnb works more often than it doesn’t, but there’s a few things that you should definitely look at when you’re talking about your area. First of all, the number one thing I talk about with all of my students and in my Airbnb groups is, are you in a vacation area or are you in, basically a need area. It’s a want versus a need. So like in Fresno, people come here because they have to not because they want to. They don’t exactly vacation in Fresno and can’t wait for the family to go there, right? It’s usually a business trip. It’s usually, “Hey, we got to go visit grandma and grandpa.” It’s those kinds of things. And for that reason, during COVID, I didn’t really get hit. We still had a lot of people that were still booking our places out.
We went from basically a hundred percent-ish occupancy down to maybe 95%. It really didn’t hit us that much. And then from there really understanding what’s in your area that would attract people. For us, it’s business. It’s the national parks. It is family, which is really kind of the top three I would say, the vacation, the family and the business stuff. That’s going to help keep you really steady with Airbnb. But then if you’re like my buddy who’s in Newport, you’re legitimately just getting vacationers. You’re getting all those types of people that are going to come on the weekends. They’re going to pay top dollar. And so understanding your market is the number one thing and then understanding your city laws. Some cities don’t allow for short-term rentals and short term rentals are usually defined as 30 days or less, so those are the things that I would definitely be looking at. And there’s a great resource out there. It’s called AirDNA. I would definitely download that. It’s going to be a subscription base, but it’ll tell you exactly what you can expect to make on an Airbnb in your area.

Lauren Hardy:
Oh wow. That’s cool. Okay so my office is in Newport.

Kyle Stanley:
Nice.

Lauren Hardy:
And so there are a lot of Newport right now and I mean, yeah, there’s a ton of Airbnbs, but the thing that it’s hard to wrap my head around is these houses are extremely expensive. I mean, these are $2 million homes and above on the peninsula. Are they cash flowing?

Kyle Stanley:
Right? I mean, that’s the big question, is it cash flowing? So for me, I don’t have a Newport business, but I have a mentor who’s in Newport and has over 30 listings and I can tell you if he’s got a place that has call it a $5,000 mortgage, he’s expecting to gross $10,000. Which if you still put in all your utilities, all your expenses, everything, he should be netting right around, on a bad month, $2,000 or $3,000 still a month. And that’s just with one location.

Lauren Hardy:
Okay. All right. That’s interesting to know. That’s cool. So what is the process to getting an Airbnb? What is the actual technical, legal … What do you do? You contact Airbnb? What do you do? Do you have to contact your city? What’s the process?

Kyle Stanley:
Pretty easy. You go on airbnb.com and you start a profile and you’re up and running. It’s really-

Lauren Hardy:
That’s it?

Kyle Stanley:
It’s really that easy. Now, if you’re in a city like Newport, I do believe you have to get a business license. You have to get a permit in Fresno. They’re talking about getting those started, but they haven’t quite started those yet. I would definitely be looking for a place that does need a permit, because we’ve got a place just outside of Fresno called Kingsburg. And Kingsburg people were doing great with Airbnb over there and then one day Kingsburg just kind of said, “Hey, we only have a couple of hotels here in town and they’re really suffering because of this so we’re actually going to eliminate all Airbnbs unless it’s owner occupied.” So all these people were SOL. They basically just went from great business down to nothing because there was nothing in place for these cities to say, “Hey, we see what you’re doing. We like what you’re doing, but we just want to be a part of that and we want to get a little bit of the income, but we also want to make sure you’re doing it legit.”
So those cities, I would say are better to do it in that are already established like that. Nashville is another one. Vegas is another one that they completely eliminated all Airbnbs outside of owner-occupied, which that’s a scary thing, right? But Newport will never do that because they’re earning income off of these Airbnbs so you want to be in a place for if they’re taxing the guests for occupancy tax. That’s a good thing for you because they don’t want to eliminate that income for their city.

Lauren Hardy:
Okay. Yeah, So that’s interesting. I actually did a lot of business in Nashville and I used to stay in Airbnbs just because I preferred them. They were way better than the hotels. Are they all gone or is it that no more could be opened?

Kyle Stanley:
So here’s what you’ll find if you go onto Airbnb and you research Oakland and Nashville and Vegas, you’re going to find tons of Airbnbs. I don’t think it’s policed very well. I think the cities probably don’t do a very good job of going on there and actually enforcing this, however it is in the rules that they’re not supposed to be doing that. So you’re kind of dealing with a high risk situation if you try to start something up in Nashville or Oakland or Vegas or something like that.

Lauren Hardy:
So another thing, I like to just ask all the questions that come to my head because I figured that they will probably will come up-

Kyle Stanley:
Yeah. Keep firing.

Lauren Hardy:
What other people said, the other thing was I had thought about doing an Airbnb on a home. I actually ended up selling it. It was the house that I bought and raised my kids in and it was fairly close to Disneyland. It was in Orange and it was near downtown Orange by Chapman College.
And I was thinking, “There’s not a ton of Airbnbs down here. This might be a great idea.” But then the first thing, and it’s always fear, right? Fear always comes to us. The first thing I thought was, “Oh my gosh, my neighbors will hate me.” Because I live there. I know my neighbors. We thought, “Gosh, my neighbors will not appreciate that.” In fact, we had somebody on a couple blocks over who had an Airbnb and their neighbor went through the effort of putting up a sign that said, “No short-term rentals or something like that. You’re not welcome here.” And I was just thinking, “Oh gosh. I don’t want to start that drama in my neighborhood.” So I didn’t do it and I sold the home, but I totally could have done it. I still kind of kick myself that I didn’t do it.

Kyle Stanley:
Yeah. Well, I mean, so are you asking me what I would have done in that situation?

Lauren Hardy:
Right, so what would you have done? I mean, do the neighbors complain? Do you have issues like that?

Kyle Stanley:
Sure. So my goal is always to be the best neighbor in the neighborhood. We always let people know and especially because a lot of my Airbnbs are not owned. A lot of these Airbnbs are ones that I, the fancy term is rental arbitrage, which a lot of people have heard of where you take over a landlord’s property and then you sublease it on Airbnb with their permission. Now in the past, I’d talked to neighbors. I stopped talking to neighbors just because, I mean, you know how it goes, talk to a neighbor, you give them your number and suddenly you’re getting calls from them all the time. “Hey, the grass looks over grown.” And stuff like that and it’s just like, “Okay, I don’t want to deal with this stuff anymore.” But most of the time we are the best neighbor in the area because we care about the upkeep of it.
We don’t want one of our guests showing up and being like, “Wow, this place is a dump.” We want it to look great. We want our guests to know that, Hey, there’s noise ordinance rules where we got to stop making loud noise at 9:00 PM. There’s absolutely no parties allowed. I let them know about this and then I also tell them, “What if instead I rented this out to a long-term tenant and they passed with flying colors, but then suddenly halfway through the lease, they get addicted to drugs or something like that. And now they’re having parties at their house every single night.” I can’t kick that person out. You’re stuck with them until the lease is up. With Airbnb, if someone has a party and they’re supposed to be staying there for another two or three nights, as soon as they break my rules, I call Airbnb. Airbnb calls them and says, “Unless you’re going to get out of there, the cops will be called. You’re not allowed to stay there anymore.”
So you just have to inform neighbors if it’s necessary. I say, if, because we just kind of stopped doing the whole neighbor thing, because we noticed that when we actually told neighbors what we were doing and they didn’t have that relationship with us, they got a little bit more scared rather than just letting it happen. And them realizing, “Oh, this short-term rentals thing is really not that big of a deal. Yeah. We see a lot of people coming in and out of there, but they’re not really doing anything. They’re not loading up tons of cars on our parking lots or our driveways.” Really it got to the point, Lauren, where we were just like, “Maybe we don’t have to tell them.” And we can just 100% just let them know if they ever have any issues, here’s the phone number to call. But that’s kind of been our approach.

Lauren Hardy:
Yeah. And I mean, we do that a lot, right, the fear based, fear comes first, especially when it’s something that you don’t know much about, which I don’t. So, I mean, you might look at what I do and go, “How do you wholesale houses virtually? What if this? What if that?” So that’s for me, I look at something new and I think we’ll okay. What, what are the fears that I have? And I’m asking you, how about you put the kibosh on my fears so I can now gather the courage to try something like that or my students or whatnot.

Kyle Stanley:
Yeah, and here’s the thing is no matter what you do for business, you’re never going to have a business that has no problems, right? There’s always going to be problems, no matter what you do. We are at a point in our Airbnb business where we have the least amount of problems and the most amount of properties that we’ve ever had because we’ve just learned from experience. There’s no such thing as knowing everything before getting started in something. You have to learn, not always the hard way, but a lot of us kind of push ourselves to sometimes learn the hard way. We don’t hire that mentor. We don’t take that course. We don’t do the research.
And then we learn it the hard way, but you still learn it and to me, one of the things that I’ve learned since getting into real estate is that everything is fixable and if it’s not, it’s not worth your time and energy. And so if you’re putting all this time and energy, and it’s something that, at the end of the day, is going to happen, there’s going to be a party at an Airbnb. It’s just going to happen. But guess what I mean, you and I probably rented out houses when we were in college or just after we probably had a party there, right? So a long-term tenant is going to do that, just like a short term tenant.
So if you can just get in the mindset of just go for it, just try it and just understand that there are solutions to everything and you’re going to learn that, Hey, wow, our last two guests have had parties. What did we do wrong to allow these guests in? You take inventory on yourself and what you’re doing in terms of pre-qualifications for the guests or communication that you’re sharing with the guests. Maybe you’re not being strict enough to know that these guests are going to come in and feel free having a party. Maybe you need to bring in stricter communication, stricter pre-qualifications to make sure that that’s not the type of guests that you’re going to attract. Lauren, I mean, we had plenty of parties with our guests, plenty of issues. We’ve had those things happen. It’s just, it’s going to happen. But what do you do once it happens? You have to learn from it.

Lauren Hardy:
Right. That makes sense. Oh another idea, I’m virtual, right? Everything I think about is, “How do I do this? Not in my backyard, but how do I do this in Nashville?” And it was something I was considering doing in Nashville. I lived in California and I had three properties I was building an East Nashville and this was before they had shut down Airbnbs in Nashville and they were doing very well. And I was thinking, “Well, maybe this is something I could do.” So how can you Airbnb homes virtually?

Kyle Stanley:
Yeah. So, a lot of people talk about property managers. That’s an option. If you have one or two properties, you can hit someone up like myself or an Airbnb property manager that does this across the nation and that’s a great option. You’re going to make less because property managers and Airbnb usually are charging between 15 to 25% of the gross. They’ll still make more than a long-term tenant. That’s for sure. But if you want to build a business with this, if you want this to be a cash flowing machine for you and something that you have your hand on a little bit more than you can do that. This is a very learnable and teachable business that you can learn and then you can teach to an assistant, teach to someone that you’re grooming to be your manager.
That’s exactly what I did. I had a cleaner that was a stay-at-home mom, had time between 11 to 4 every day. That’s our turnover time. And I just basically said, “Hey, I’m going to start you out as a cleaner, but would you be interested in eventually being basically promoted to an assistant or a manager that’s taking care of communication, that’s my runner, that goes to each of the properties, that manages all the cleanings for the other properties that basically oversees everything?” And her answer was yes. So I groomed her basically for about four or five months to where now, if an issue comes up, if I’m away from my phone, I’m not freaking out. I know a lot of Airbnb managers, a lot of Airbnb business owners that are just married to their phone because they’re worried that a guest is going to have an issue and that’s not freedom.
I mean you could get financial freedom with that, but you’re not going to get time freedom with that. You got to have someone right there with you that either you’re outsourcing or you’re teaching in-house to be able to do exactly what you do so that this can be passive. It can be virtual. And I can say for myself, Lauren, I mean, there’s properties that we run right now I’ve never even been to because I trust my team that much. That when I see the pictures and when they report to me that I just trust what they’re saying and until they give me a reason not to trust them, I’m going to keep on doing this thing virtually.

Lauren Hardy:
That’s awesome. Yeah. I mean, I truly believe everything can be done virtually. You have to just take different measures and different precautions. You can fix and flip houses virtually.

Kyle Stanley:
Oh, a hundred percent.

Lauren Hardy:
You can have rentals virtually. I think the easiest is having rentals virtually because you get a property manager to oversee your portfolio so essentially this falls into the rental category. It’s just that you just need a different type of property manager that specializes in that. And now is there a sweet spot because as you were talking about the different types of returns that you can get, like you said, “If you’re in Newport and your mortgage is this, you should be able to get that.” Is there a sweet spot? My brain always goes right to the numbers and the margins and the returns. I got to imagine if you can get a decent rental return in the area, but maybe there’s some sort of, something that draws people to visit, like a college or something? Is there a sweet spot to look for? In a territory if you were intending to do Airbnbs?

Kyle Stanley:
Yeah. I used to have a really defined answer for that. I used to think next to an airport, next to a college, next to a theme park and all that kind of stuff and honestly, at the end of the day, what I found is as long as you’re in a safe neighborhood, that’s the first thing. Your guests needs to feel safe. As long as you’re in a safe neighborhood and AirDNA shows you that you can make X amount of dollars with this, you don’t have to worry about all that extra stuff. Now, those are things that can definitely draw in more people, but I went from thinking, for example, about six months ago, I was telling everyone, “Oh yeah, as long as you have an Airbnb in Fresno, that’s right next to the airport, or right next to the college, you’ll do great.”
And then I got curious, and I got the furthest thing from next to an airport, next to the college and I do just as well with that one, which is another five miles away. And so you’ll just find to me that if you just do it, that it’ll surprise you and people get scared all the time with this. I have investors that, they’re ready to pull the trigger and then they just, for some reason, emotion gets in their head rather than just looking at the stinking numbers. And they’re like, “Oh, well, it just doesn’t make sense to me why anyone would come to Fresno so I’m out.”
And I’m like, “I just showed you how I have 18 Airbnbs here in Fresno that are all grossing exactly what you want and you still are letting emotion get in the way.” So I would say, “Don’t get so caught up on those things. Look at the facts, go to AirDNA, find out exactly what a place could go for with what you’re looking at.” And we’ve got a profit calculator on our website, Fearlesskyle.com. If you just go to Fearlesskyle.com. Right there on the homepage, it’s got the Airbnb profit calculator right there, that it will show you exactly how to comp out something in your area and then you just plug in all the expenses and it’ll show you exactly what you should make.

Lauren Hardy:
That’s awesome. Well, I’m not going to lie. I’m going to go on that site and see it. I’m really curious about AirDNA too so I’m going to do it. Now how can my listeners get ahold of you? Are you on the socials?

Kyle Stanley:
Sure am. Yeah. So Fearless Kyle is what my name is on Instagram. That’s the best place. You can just DM me. Fearlesskyle.com is the name of the website. And then I’ve got a YouTube channel and a podcast, the Fearless Investor. If you just Google the Fearless Investor, you’ll find it. Those are the best ways to get ahold of me.

Lauren Hardy:
I love it. Now, where did fearless come from because it’s funny how I kept asking fear questions and I feel like Airbnb attracts fear questions for some reason.

Kyle Stanley:
Doesn’t anything in real estate, Lauren?

Lauren Hardy:
It does, but I feel like Airbnb does attract skepticism.

Kyle Stanley:
Yeah. Well, so it actually started Fearless flipping was the first name that I had, and we were only going to focus on flipping and it’s funny, you start talking about Airbnb and everyone was just asking me for more information about Airbnb. But I think it’s just anything that’s new. Anything that people don’t understand, COVID’s scary, right? We don’t understand it. So until we understand it, it’s going to be scary. So until you actually try Airbnb, until you actually try wholesaling, until you actually try flipping a house, it’s going to be scary and there’s going to be those moments. I remember the first time that I got my first Airbnb, my first time that I got my first flip under contract, the first time that I even said yes to real estate, all of those were these oh shit moments, but the thing is you let fear control you or do you control fear? And so in order for you to control fear, you have to understand that it’s going to take someone by your side.
It’s going to take having resources and people and helping you to be able to get past making mistakes the hard way, because when you make mistakes the hard way that is when fear can be a real scary thing. But when you have someone right by your side, when you have that resource right by your side, that gets you past that fear and just reminds you, “Hey, stop thinking emotionally and start looking at the facts. Here’s what you got to do next. Just follow the steps, do that, do that and you’ll be successful.” That’s exactly when you can kick fear to the side.

Lauren Hardy:
Love it. Well, thank you so much, Kyle. I really appreciate you sharing everything. I learned a lot. I now have no doubt in my mind that Airbnb is something you can do virtually. So thank you so much for telling us and just being so open and candid. You guys you’ve got his IG handle. We’ll put it in the show notes. If you guys want to reach out or learn more about Airbnbs, make sure to check out Fearlesskyle.com and we’ll have to have you back.

Kyle Stanley:
Absolutely. Sounds good. Thanks Lauren.

Lauren Hardy:
Awesome. Thank you. Bye.

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