Hey, everybody, it’s Jordan Samuel Fleming here with another episode of That Real Estate Tech Guy. And I am delighted that my co-host for today’s episode is Ivan Tejeda. Just give a little introduction to yourself and your business.
My name is Ivan Tejeda, and I’m in the Airbnb business space. I’m now actually coaching folks who want to get into the real estate business, namely through rental arbitrage, but I’m also working with folks who are real estate investors that want to cash flow more. That’s actually my focus now, focusing more on real estate investors that have properties. But then, they’ve mainly traditionally rented out their homes through year leases and such. So now we’re maximizing their cash flow by putting it on short-term and mid-term rental platforms such as Airbnb, which is my expertise. And yeah, I’m delighted and excited to be here and hopefully bring some value to your audience.
I’m actually really excited because the Airbnb discussion has been on my radar more and more. In general, if we survey the landscape, a lot of the people that I’ve dealt with over the years who listen to this podcast are wholesalers. We did the traditional wholesale, or fix and flip, occasionally buying to hold. Why does Airbnb sometimes make more sense as a general business case?
It’s the beauty of Airbnb that I particularly love. It’s the different avenues of doing business while also catering to different individuals. So for example, when someone is a real estate investor and they’re wholesaling or flipping homes, they have the option to keep that home and actually convert it into rentals that generate a lot of cash flow, especially compared to the traditional form. But more and more, Airbnb is growing, and the dynamic of Airbnb is growing simply because a lot of people are not as romantic about owning a home anymore.
I’ve met people who, literally, all they do since they work remotely is travel to different countries and different states and go about their lives in that way where they’ll stay two, three months at a time in one location, then fly somewhere else. And they don’t necessarily have a primary home, which is pretty cool if you think about it, but a lot harder for us who have families to do. But some have full-blown families, and they’re doing just that. So there are different facets to it. And that’s what I love about it.
There’s definitely an increase in the market when it comes to Airbnb and short-term and midterm rental spaces. And I don’t see it really going anywhere. I think that even now, even though a lot of people are like, Oh, it’s just so saturated, or too many people are doing it where I live, and so on, It’s still so wide open. And it’s still so early that anybody can get started and really make a killing.
I think I’ve seen it in someone who does a lot of traveling for work. I definitely alternate between going through the hotel chains that I know, just for comfort. I know what I’m gonna get. But then sometimes I either can’t get a hotel I like or I just want something different, and I’ve noticed that there has been an upswing, particularly in places where major city centers – London, New York, etc.—have what I would classify as professional Airbnbs. When it started out, I could tell it was so and so renting out their house when they were away, but now it feels like there’s a much bigger professional element. Is that true? Has it really gone that way?
That’s absolutely true. And as a matter of fact, in my business, in my portfolio of rentals, I actually cater mainly to working travelers because folks mainly want to have a nice place where they can lay their heads and unwind from a long day of work. And same with travel nurses and people who are probably in between homes that their home is getting closed on, but they’re in between homes with so many different people that they just want that homey aspect of it as well, which hotels don’t necessarily offer.
I can totally understand the fact that when you’re going into an Airbnb, technically, you’re like rolling the dice in the sense that, if you’re already accustomed to going to hotels, you’re going to probably try to stick to that unless, as you said, there aren’t that many options. However, I feel like people now, or Airbnb in particular, are making it a lot easier for folks just like you that prefer to go to a hotel because you know what you’ll get, but they’re making it a lot easier for you to make a decision based on your being able to see reviews that are left based on them classifying certain types of homes because they’re catering to working travelers or catering to whatever activity you’re doing.
On the software side of things, now that we’re talking about tech, Airbnb is doing an excellent job of seeing you and showing you what exactly you’ll get before you actually book, which takes away a little bit of the nerves and the aspect of rolling the dice that you fear, but no, I totally agree.
It’s an interesting point you raise about the two sides of technological evolution. The one side that we’ll get into is the back end and the administrative element of building these businesses and managing these properties. But on the other side, there’s the customer-facing, which, as it improves, is able to drive people in a more confident way.
It’s absolutely right. And not only that, Airbnb is rapidly growing. Other platforms as well. But mainly, Airbnb is rapidly taking market share when it comes to larger groups. Hotels are fine if it’s just you and someone else. Maybe even when there are hotel rooms that have two bedrooms, like a suite, it’s nice. They’re so overpriced that even those are getting pushed toward Airbnb. So when you have three or more individuals that want to stay in one location, hotels are almost out of the question. As you said, when you’re traveling with family, it’s nearly impossible to do, especially if you want to have some sort of home-cooked meal that you want to enjoy with the family, has some people over that you’re visiting, or something like that. So that’s a space that I actually encourage. People who are getting started and have the capital to buy single-family homes or rent single-family homes and put those on Airbnb, because you literally have almost no competition, of course with the right market research and all these different things in place. You can kill it that way.
How did you get yourself into this game? To this level? What was the journey that brought you to where you are now?
Mainly, like most people, I wanted to get into the real estate industry or somehow invest in real estate. And it was always something that was so far-fetched. It’s okay because I need to save up a couple of $100,000 or a couple of $1,000 to get started and have some money to get invested. And then, lo and behold, I came across the Airbnb idea. I had already stayed at Summit, and every time I went to one, which I know happens to a lot of people, I went there, and I was like, Man, I can totally do something like this. I can totally get a house or an apartment and convert it and make money. That’s, I think, almost everybody who stays at an Airbnb. That thought comes to mind. So I decided to act on that thought.
Back in 2018, we were moving. My wife and I were moving from Miami, where we’re from, to Charlotte, North Carolina, where I’m now, and we had purchased a home. But that home was going to take about three or four more months to finish being built, and I had already secured a job position here in Charlotte, so I needed to come here early. So I said I had already done the research for two or three months, really soaking up as much as I could from the Internet to try to figure out the pieces to put together to land and get this business started.
So, long story short, I ended up renting an apartment, sight unseen, in Charlotte, relatively close to where I was going to work. And I did it in a strategic way so that that would eventually become my very first Airbnb. So I’m using the rental arbitrage model. So I didn’t buy this apartment. I rented it. And then we brought in a bunch of our own stuff, put a lot of stuff in our storage, and then used a great deal of our own stuff for that apartment. So we actually got started with our first Airbnb with literally $2,000 all things considered because, again, we used a lot of our own furniture to get that one started. So once that house was finished, that apartment was staged, and my wife and I moved out. And we listed it that same day. And just like that, man, the rest is history. We got a booking that very next day, and ever since then, we have been in that same building for like eight different listings. The building is across another eight or nine. So yeah, that’s pretty much the beginning.
One of the things that would concern me immediately if I were thinking of starting an Airbnb business is the logistics and management elements of having to deal with check-ins, check-outs, cleaning, and all these sorts of things. Given that you also coach people on this, you’ve got a very deep insight and understanding of it. If someone wants to get into the Airbnb side of things, they’ve got to have these fears. Are those feelers accurate, or is it a lot easier? Does technology help you? Does Airbnb’s back end manage a lot of this?
That’s very much the case. I think that a lot of people are intimidated by the technology side of things and being able to have all of their ducks in a row. But as humans, I feel like most of us get what’s called analysis paralysis. And we get stuck trying to figure out every single detail before we actually take a step. They definitely have a valid reason to feel that way. However, even though there is a plethora of software out there that makes your life easier to manage your Airbnb business, I can confidently say that the only platform that we use in my business is Airbnb.
Airbnb has done a very good job of putting all of the tools into their platform, so that you can basically run your whole operations through there, from communicating with guests and automating them to adding team members like your cleaners so that they can see the calendar and they know when exactly to go clean a certain property, to having pre-saved messages that you often use and price strategy, all of these different things on a calendar, be able to see all of the properties, availability, where the rooms need improvement, and your KPIs. All these different things are on the Airbnb platform.
I know a lot of gurus out there that are actually using a bunch of different software, whether that be Wheelhouse, AirDNA, or PriceLabs—a bunch of different pricing tools. We do everything in-house and natively on Airbnb. And we do manual pricing, which is what allows us to maximize our profitability in comparison to these AIs that are trying to figure out what the best price at a current state is. That’s what kind of makes me and my students stand out from the bunch.
How many properties on Airbnb do you actually have right now?
We currently have 17 listings.
That looks and sounds like a lot of administrative work. But realistically, if the back end is able to handle guest communication, guest booking, cleaning, and all that, then there really shouldn’t be that much work that goes on.
Apart from that, I have a reservations coordinator, and basically, her job is to do everything else the computer can’t do. Obviously, some people are going to have issues checking in even though we have literally a checking guide that is a slideshow that tells them step by step to the point of like, Press the button number two’ to ‘go to level two,’ making it super simple for people. But of course, there are still those people who need that attention. And we’ll have a reservation coordinator to be there for those types of things, or if certain issues happen where the microwave stops working, or this or that, and the third work order needs to happen. So we have that in place. And that’s pretty much the only other individual that we have or need in our business. Other than the cleaners, which is the bread and butter of the business, of course,
The cleaners are not just cleaners in this business. Cleaners are your frontline people. They’re the ones who are going to see things for the first time. They’re going to see what’s missing, what needs to get done, and what kind of damage there is. They’re more than just cleaners, and in our business, we make it a point to compensate them for being more than just cleaners. Because they are more than that, of course. Their main role is to make sure that it’s nice and tidy for the next guest to come. But that’s all-encompassing. If you hire just a regular cleaner, all they’re going to do is clean. But if you want someone who makes sure that everything is how it’s supposed to be, whether it’s a painting or something that’s crooked or the carpet needs cleaning, and they need to let you know, Hey, we need some cleaners to clean the carpet, all those different things go a long way. So yeah, they are cleaners, but they know that they’re not just cleaners to us.
The professional touch makes sure that when someone comes in, they really feel like this is exactly what they’re expecting. And every single time that happens, that is a critical customer element that you can’t really put a price on because that’s your whole business.
Up to this point, since we started the business, we have had upwards of 1200 reviews. And we’ve maintained super host status, which is basically a status that Airbnb gives you when you are an exceptional host, and so on. And we’ve not had super hosts, because obviously you can get it for one quarter and then they can take it off if you don’t perform, but we’ve not had it. And cleanliness is one of the biggest reasons. That’s the case. And you know, our check-in process, communication, accuracy, and all these different things that are important to Airbnb and the guests that are booking.
You mentioned that there were tools out there, or maybe even inside of Airbnb, where they were trying to essentially move the pricing around to maximize whatever the opportunities were. But you also said that you don’t do it. So can you explain a little about what those are like? What are they trying to achieve? And why did you choose not to do it?
In essence, what Airbnb offers is the ability for you to make your life easier with smart pricing. It’s what they call it. I call it dumb pricing, honestly, because it literally just gives. Airbnb has the most information, and they know what they need to price your unit to be occupied as much as possible, but they don’t keep in mind how much you can stand to make based on that. They’re mainly driven by occupancy versus pricing and maximizing your cash flow as a business. Likewise, other platforms out there, like PriceLabs and others, are based on the AI supply and demand of all these different elements. But they’re not able to get as granular as to know how big of a demand there is because of any type of influx of stays or whatnot. So that’s why we opted for dynamic pricing internally. I now have enough units that I almost never look at other people’s or other hosts’ listings to see where their occupancy is, and all of that to be able to come up with my price strategy says we have enough and they’re pretty much very close to one another.
If I see that there’s an influx in bookings all of a sudden and it’s a couple of months out, I then go and see, Oh, why is that? Why are we getting bookings that are just a weekend away when it’s literally two months away? People don’t always do that. So at that point, we have that, and then within the Airbnb platforms, there are route rule sets. It basically means that you can create custom rules within your calendar so that if they stay three nights, they get 25% off, or if they stay two nights, they are not able to get a discount, and you can get very, very customized. So, I can guarantee you that 70 or 85% of hosts out there probably don’t even know it exists. I think that’s our most powerful tool. It’s what makes us different from pretty much all other hosts.
I like to look at the numbers to see where we’re at. We’ve been 94% occupied for the last six months across all of our listings. That’s unheard of, especially in the climate where we’re at right now, where pretty much everyone is just scared, like, Oh, we’re not getting bookings. I see it all the time. And it’s like what happened. It was like a flip of the switch, that Airbnb did something, and I’m now no longer getting bookings. And that’s simply because your pricing strategy is not adjusting to the climate that we’re in or because you’re not pivoting to cater to certain guests. And that goes to show that even with the COVID pandemic when we were in the middle of that, we actually had our biggest months that we grew those days where literally almost every host was losing their shirts, very renowned ones, YouTuber ones that are out there. And I won’t mention any names, but they lost the business. And in our case, we grew.
You mentioned that the reason you don’t use the AI pricing model is that there is no pricing structure inside Airbnb because they prioritize occupancy rates over potential profit over cash flow. On the one hand, you’re saying we don’t want to use that because it prioritizes occupancy. But on the other hand, you’ve got such a high occupancy rate. How is that just the alchemy of what makes you great? Do you teach that to your students? Is there an understanding of your market that allows you to pitch things so that you can maximize both?
It’s really about understanding who my ideal guest is. And whenever we get a new listing, we keep that guest in mind. So in our case, as I said, it’s like working travelers, travel nurses, people who are professionals. So our listings cater to that individual. And we make it known through our descriptions, pictures, and all that stuff. But, of course, it’s also understanding the pricing based on seasonality based on the type of week that we’re in. So many different variables come into place that actually allow us to not only maximize our occupancy but at the same time not leave money on the table, which is what we’re here for.
So when you have AI-driven software whose main goal is to basically just get bookings, it’s flying under the radar when it comes to pricing. They just want to guarantee income. Whereas for me, I’d rather make sure that I’m walking that fine line between not getting bookings and maximizing my profitability. So you know very quickly that for my price strategy, what I do is that I’m actually not competitive with the rest of the market. If the nights available are more than two weeks out, or even a week out for a lot of our listings, the only way that I am able to be competitive that far out is if a guest is staying for 30 days, plus 20 days plus, so I make it that way so that I cater mainly to longer-term stays into my calendar stays open. However, if I see that two weeks out or a week out, I still have nights available, and that’s when I start becoming competitive with the rest of the market, hotels included, and other whole hosts. And then I can flash sale kind of those nights so that I don’t leave money on the table and I still keep my occupancy high but still optimize for those longer term stays. And that’s how I’m able to maximize occupancy and profitability.
That’s wonderful because that is a perfect example of playing all the bases really well. You know, may you know, keep playing the maximum pricing lab until you have to then start to tweak, maneuver, and add. So instead of driving just for occupancy, you’re swaying between pricing and occupancy based on what’s happening at that moment, as opposed to trying to always focus on one or the other.
Exactly. That’s exactly right.
That’s really interesting now that you’ve got coaching. Tell me a little bit about that, how that works, and how people can get started with you, because it’s something that I think people are going to be worried about. They’ll think Airbnb sounds cool. And then the second thought will be, I bet it’s a lot of work. I wonder if I could.
To learn more about our course and what we have to offer, no matter what time period you’re listening to or watching this, prohost.course.com is where the content will be. But more so than that, like, follow me on Instagram. That’s where I’m most active. I’m currently posting three reels a day, literally on just value there. And the course is very simple. It’s 60-plus videos at the time of this recording on literally how to start, manage, and scale your Airbnb business and portfolio.
Everything from A to Z is covered there, from literally how to start your business, listing your business illegally, getting an LLC, all those good things, getting your bank account, all the way to launching auxiliary businesses like cleaning companies and real estate photography companies, that’s back to your business, and everything else in between price strategy, maximizing occupancy, managing hiring cleaners, reservations coordinator, the works, that’s all in there. So my Instagram handle is IvanTejeda.com. And that’s pretty much across all of the platforms. And yep, I’m also on YouTube. We’re doing at least one video per week now. And that’s what I’m going to be. We’re going to scale that up as well. There’s a lot of value out there for free. But even before you decide to, get the course.
That’s what I think, particularly now that dispo. If you’ve got traditional wholesalers and fix and flip, folks, you’ve got a market where the dispo options are tightening potentially or they’re changing radically. People need to start looking for different avenues to create cash flow opportunities. And it sounds to me like this is one of those situations where you should add this string to your bow, where it is appropriate, where the market is right, or where you’re able to start stepping into it.
You mentioned starting auxiliary businesses. I assume that just like in real estate, in the wholesale game, there are professionals and there are amateurs, and I would imagine that in most markets, you’re going to have a set of professional Airbnb hosts that are really trying to build a business, but you’re still going to have a full wash of your amateurs, the people who’ve got one property that’s just their own. So when you’re building out these auxiliary businesses, you’re essentially building out a business that you’re gonna use a trusted business for, but then you’re going to potentially supply to this other market that isn’t going to be smart enough to create these auxiliary businesses. And you’re just adding more bread to your portfolio. Is that correct?
That’s exactly right. Especially when it comes to the cleaning side of things. You want to have enough, especially when you’re starting off. If you don’t have enough work to hire a cleaner full-time, then it’s probably going to be best for you either to partner with other Airbnb hosts and hire someone collectively that works only with you guys or to go out and get business for that cleaner that you hired full time into your business because I’m not a huge fan of hiring cleaning companies, especially at scale. You might need to bite that bullet in the beginning when you only have one unit, two units, or whatnot because you don’t have enough business.
But if you’re trying to scale, the best way to do it is to have an in-house cleaner that supplies the needs for all of your units. And if that means you have a secondary business of cleaning that also caters to others, you don’t even have to be an Airbnb host. It could just be regular cleaners that go into homes and clean every other week or whatnot for residential homes. So yeah, that’s one of the biggest hacks nowadays. And since cleanings are probably the second most costly expense that we have in this business. It’s a good idea to do it in-house.
That Real Estate Tech Guy, Fast Five
- What technology product has had the biggest impact on your business?
- What is the biggest mistake you’ve seen made with technology and your business?
It’s not taking full advantage of it. In essence, I’m just not understanding, specifically, the rule sets that are available or the pricing strategy tools that are within the Airbnb platform.
- What is the best advice you give to students? When do they start working with that technology for the first time? How do they get started?
In my course, they get a template. It’s literally just copy and paste, follow step-by-step instructions on how to do it. And the advice I would give them is to follow the video. And do it do it just as I do it. And of course, once they get the gist of it, they can start creating their own rule sets that cater to their specific needs.
- What’s the one thing you wish you’d known when you first started out with that property?
I wish I knew that it was going to be okay. Honestly, I was scared to start this new venture. You know, you’re kind of just throwing the spaghetti out at the counter, hoping that it sticks, etc. And I wish that I knew that it was going to be okay. And we’ll be able to scale that much faster. We actually had 12 listings in our first year. So we moved pretty quickly. But yeah, I watched. That’s what I wish I knew that it was going to be all right.
- What are the three biggest areas of focus that they should be thinking about? If they’re just starting out?
Location, obviously, is what I would say. But that’s too cliche. I was gonna say that, but no location, no cleaners, making sure that you have the right reliable cleaners. And I would also say that making the process for check-in extremely easy for guests If you’ve got cleanliness and an easy check-in guide that people can use to get into the property, you’re almost always guaranteed a five-star review.
It’s been an absolute pleasure to meet you. And I appreciate you. Give it a bit of your expertise. We’ve got all of your details. I’m gonna make sure on the podcast page we link to your social media and the website. And I just want to say thank you so much. If you guys are interested in listening to this and you’ve been curious, I recommend you head over to Ivan’s site and hit him up on Instagram. Please check them out. And make sure you like, subscribe, and do all the things you know you’re supposed to do but never do.