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How I Built a Successful Airbnb Business from Scratch

Starting a business is never easy, but with determination, hard work, and the right strategies, you can turn your dreams into reality. In this blog post, I’ll share my journey from humble beginnings to building a successful Airbnb business. You’ll learn about the challenges I faced, the strategies I used, and practical advice on how to start your own Airbnb venture.

First, I want to say a big thank you to Daniel and the entire Propelio team, especially Kelly, who has been a great friend and mentor. Kelly has played a crucial role in my real estate journey, and I appreciate all her support and guidance.

My Background and Journey

I was born in a small town in Peru and moved to the United States at the age of 15 in 1999. Growing up in a humble adobe house, my life took a significant turn when I relocated to the US. Despite not speaking any English at the time, I was determined to succeed.

From 2007 to 2017, I worked as an event promoter, hosting over a thousand events. I even opened a $1.4 million nightclub in 2016. However, my lack of business knowledge led to significant losses. It was during this challenging period that I decided to transition into real estate, inspired by my friend Brent Franklin.

Starting in Real Estate

In February 2018, I embarked on my real estate journey. Despite having no prior experience, I completed 12 wholesale deals, 12 flips, and even an owner finance deal by the end of my first year. I made several mistakes along the way but learned valuable lessons from each of them.

My real estate strategy involved flipping properties and launching Airbnbs. I started small with two Airbnbs in Montrose and gradually expanded. Initially, I didn’t know how to fund my projects, but I relied on my wholesale deals and some extra cash to get started.

Business Growth and Expanding My Portfolio

Over the past 22 months, I completed 40 real estate deals, including subject-to deals, flips, and rental arbitrage. Today, I manage 34 Airbnbs, with the majority being rental arbitrage. This means I lease properties from landlords and rent them out on Airbnb.

Building processes and systems has been key to my success. In the beginning, I handled everything manually, but I gradually implemented systems and software to streamline operations. Customer service skills from my hospitality background also played a crucial role in managing the properties effectively.

Different Real Estate Business Models

There are three primary business models in the Airbnb industry:

  1. Co-hosting/Management: This model involves managing properties for other owners without any initial investment. It’s ideal for those starting out.
  2. Rental Arbitrage: This model involves leasing properties and renting them out on Airbnb. It requires an initial investment for furnishing and setting up the property but offers good returns.
  3. Ownership Model: This is the long-term goal for most real estate investors. It involves owning properties, which offers benefits like cash flow, appreciation, depreciation, and equity building.

Insights and Lessons Learned

I’ve learned valuable lessons during my journey, especially the importance of making mistakes and learning from them. Customer service is crucial in the hospitality industry, and building relationships with clients and partners is essential.

Manual processes may work initially, but implementing systems and software is necessary for scaling the business. I’ve also learned the importance of taking risks and seizing opportunities, as one decision or partnership can change your life and business forever.

Detailed Strategies for Starting an Airbnb

Here are some detailed strategies for starting an Airbnb business:

  1. Identify and Select Properties: Use tools like AirDNA to analyze the market. Look for properties with high occupancy rates and good potential returns.
  2. Analyze Financials: Use spreadsheets to calculate taxes, insurance, and other expenses. Ensure the property will be profitable before committing.
  3. Take Action: Once you’ve analyzed the property and confirmed its potential, take massive action. Don’t hesitate to start.
  4. Partnering Strategies: Build relationships with apartment owners, existing Airbnb hosts, and investors. Offer value in partnerships, such as managing properties for a percentage of the revenue.
  5. Rental Arbitrage Strategies: Build a track record and professional relationships. Send offers to property owners and look for off-market rental opportunities.
  6. Subleasing Strategies: Use platforms like Craigslist and Facebook Marketplace to find sublease opportunities. Network at real estate meetups for potential deals.

Acquiring Property for Airbnb

There are various ways to acquire properties for Airbnb:

  1. Find Properties for Rent: Look for properties on market and off-market platforms. Consider amenities and location.
  2. Purchase Subject-To Properties: This involves taking over the existing mortgage. For example, I bought a property in Hockley, Texas, for $5,100 and staged it for $13,000.
  3. Purchase Under Market Value: Buying properties from wholesalers can be beneficial. Negotiate to include furniture and other essentials.
  4. Hybrid Options: Combine lease and purchase options. This minimizes risk as you can sublease properties and have an option to buy them later.

Tracking Financial Performance

It’s essential to track financial performance using spreadsheets and other tools. This helps in analyzing the profitability of each property and making informed decisions. For instance, one of my properties in Hockley, Texas, generates significant returns despite the initial investment.

Encouragement and Motivation

Hard work and hustle are crucial in the real estate industry. Building a portfolio takes time and effort, but the rewards are worth it. Focus on building relationships and offering value to others, as this will come back to you in the form of opportunities and growth.

Conclusion

my journey from a humble beginning in Peru to building a successful Airbnb business in the United States has been a testament to the power of determination, hard work, and strategic planning. From learning English and navigating the challenges of a new country to transitioning from event promotion to real estate, every step has been a valuable lesson.

By leveraging different real estate models, implementing efficient systems, and continuously learning from mistakes, I’ve been able to create a thriving Airbnb portfolio. I encourage you to take the plunge, stay resilient, and embrace the opportunities and challenges that come your way. Your dreams are within reach if you’re willing to work for them.

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