Short-Term Rental Roundup: Small Markets, Partnerships, & When to Go “All In” | Q&A w/Rob Abasolo

May 11, 2022

The short-term rental market seems to get bigger and bigger every day. This should come as no surprise, seeing that short-term rentals not only work for vacationers, traveling business people, or anyone else who wants a nice, unique place to stay. But, while the rest of the world is focusing on which mountainside chateau they’re booking for their weekend getaway, real estate investors worldwide are figuring out how they can buy, rehab, furnish, and profit from these vacation rental ventures.

With so much competition in the market, it begs the question: is the short-term rental space becoming oversaturated? And, if it is, how can investors get on the ground floor of sleepy markets that will explode in popularity over the next decade or so? Of course, with questions like these, we need our short-term rental and wave-hair-styling expert, Rob Abasolo at the side of Sir BRRRR himself, David Greene.

In this QA episode, David and Rob will discuss a handful of topics, mostly centered around short-term and vacation rentals. Topics like: how to mix a long-term rental and short-term rental in one property, how to market outside of the top short-term rental platforms, can you convert a regular rental into a vacation rental, and the pros and cons of real estate partnerships.

David: This is the BiggerPockets Podcast show 576.

Rob: When you’re investing big amounts of money, you’ll never get the same return as you can with small, unless you just got lucky on a deal, but it won’t be sustainable. That’s just two things to keep in mind as you’re moving forward. If you’re investing smaller amounts of capital, you can almost always get a higher return. And if you’re putting in more than just capital, you can increase the return on your capital, but go into it with your eyes wide open knowing that’s what you’re doing.

David: What’s going on, everyone? This is David Greene, your host of the BiggerPockets real estate podcast, the podcast where we teach you how to find financial freedom through real estate. If you’re looking to build wealth and build a better life through the power of real estate, you my friend are in the right place. You should check out the website,, if you haven’t already. It is a community of over two million members that are all on the same journey as you. This is where you go if you’re looking for answers to your questions, agents, loan officers, handymen, other resources that you need to be successful. If you want to read blog articles about other people that have found success who are willing to educate you, BiggerPockets is a place to do it, and this is the podcast branch of that company and that website.

David: Here today with me to help educate you and take down some tough questions is my good friend, Rob Abasolo. How’s it going, Rob?

Rob: Hey, man. I’m excited. We have a really, really good episode here. We dive into a lot, a lot of nitty-gritty curveballs, as I like to call them. They always keep us on our toes here. We talk about things like partnerships, and the implications of a good partnership, and the implications of a partnership gone wrong. The true meaning of ROI: is it just money or is it time? And what about pioneering a new market? Is it too early to get into a market? Should you be the one that gets brave and braves a new market all by themselves, if there are no comps to support the data? And oversaturation. Is this the end? Is this the end of the real estate market as we know it? Really excited to get into some of these because I think we got some pretty interesting POVs along the way.

David: That is a great point. Now, if you guys would like to be featured on a show like this, please go to, scroll to the bottom of the page, there’s a lot of instructions, and you can join us for a behind-the-scenes look at how we record a podcast, as well as getting yourself on the podcast. That’s going to double-up as our Quick Tip for today is: please, get yourself involved. We love answering questions. We love when you’re here live because we get to dig into the specifics of each caller, and give advice that is custom built for them. And I don’t think that there’s another podcast, radio show, anything that’s doing what we’re doing right now, where people can literally show up and throw whatever pitch they wanted at us. Curveball, fastball, screwball, forkball, it doesn’t matter, we will do our best to swing at it, and I think that this brings a lot of value to listeners that you’re not going to find somewhere else.

David: The whole tried and true, “Here’s my story. Here’s what I’m doing,” is great, but it doesn’t really let you dive deep into the specifics of where the person’s at, and that’s what’s different about these shows. We want to keep them going, and we want to hear what you think about it. If you’re not already doing so, please follow BiggerPockets on YouTube and leave a comment below, and let us know what you thought about what each person said. Tell us what you like. Tell us what you wish we would have done different. Tell us what we didn’t cover that we should have covered, so you can get the education that you need.

David: Before we move onto the show: Rob, do you have any last thoughts?

Rob: No. I just want to tell everybody: definitely make sure to catch this on YouTube because someone revealed there at the very end that there’s a bit of a hair shimmer with every good question that’s tossed out. So be sure comment every time you see my hair-

David: That’s right.

Rob: … give a little wave.

David: You don’t want to miss that. All right. Let’s bring in the first caller.

Dana: Hey, David. How are you? How’s everybody doing?

David: I’m great. Thanks for asking. Rob, how are you?

Rob: Oh, man. It’s a beautiful day in the neighborhood over here.

Dana: David, I’m so proud of you. You are doing such an amazing job, San Louisville, Kentucky, because that’s… Good job. Pat yourself on the back.

Dana: My question is tied in a little bit with your webinar a couple of weeks ago, or whenever that was, where you were analyzing a property in Louisville, Kentucky, and you were talking about how everything is appreciating at a great rate… this, that, and the other… and that area, it’s a tricky area. That ties into the fact that I want to house hack where my nephew has been stationed. He’s in South Carolina, and I want to get a property there, multifamily, where I get a long-term rental, a long-term tenant, and then the family can go and visit anytime they want in the other half. My question is what are the main things I should be focusing on in term of house hacking at long distance?

David: All right. Well, the first thing we have to go over is the phrase. “House hack” is actually used when you’re living in the house yourself, so it’s for a primary residence. I think what I hear you describing is more of turning a house into two different units. Is that accurate?

Dana: Yeah.

David: Okay. So that’s not technically house hacking, but I totally understand. And that’s actually a common mistake because it sounds like you’re hacking a house up into several pieces, which is why it’s called that. It actually came from… Brandon created the phrase. It came from a computer hacker that can get into a program and make it work for them. It’s a way to make your house work for you. You’ll hear this said with credit card hacking, or something like that, a way to make your credit card work for you by getting you bonus points. That’s where the origination of that name came from. But if what we’re talking about is buying a mixed use property, which is what you’re talking about, you’re saying you want one side to be a long-term rental and the other side to be a short-term rental? Is that right?

Dana: Yes. And I’ve actually found a property using a lot of your criteria. You know, you want to have plenty of parking, and lots of square footage, lots of bedrooms. I’ve actually found a property online that I feel like I can maneuver, but I just need to… And it needs a tremendous amount of work as well, so several pieces to the puzzle as to how I can make this work. And I haven’t been able to find an investor-friendly agent there, so that’s tied-in to the question as well.

David: Rob, why don’t you start with this one because this is right down your wheelhouse. And a lot of the questions and concerns Dana’s having are ones that you and I literally talk about.

Rob: Yeah, for sure. Every day. Hi, Dana. How’s it going?

Dana: Hey, Rob.

Rob: A couple clarifying questions. I want to ask just about your overall goals here. Is your goal to make money on this property? Or is your goal to just have a property that breaks even, and as long as you’re covering expenses you’re happy?

Dana: Great question. As long as I’m covering expenses, I’m happy, and to break even. The most important vision for this particular property is for the family just to be able to go visit my nephew whenever we want, and not have to pay to stay in a hotel.

Rob: Yeah. That’s great. Well, the good news is I think that’s super possible. Typically, whenever I’m looking at a deal like this, I’m looking for something that has… It doesn’t necessarily have to be a duplex. It can also be a house with a detached bonus space or bonus room. I prefer for two separate entrances, personally, something that is somewhat of a duplex. And usually I’m running my calculations to see if this property is going to work on a long-term rental basis, so a lot of tools out there that you can use; I think Rentometer is one of them. You can go, you can plug in your address, and it’ll spit out the market rate on a long-term basis. And so that’s how I would try to make the deal work if you’re just trying to break even. See if you can find a property where both units will help you pay that mortgage.

Rob: Now for me, obviously my strong suit here is Airbnb; so I like making a little bit of money, if I can. I’m typically targeting properties that are going to be somewhat of a… at least a 20% cash-on-cash return, and I think that Airbnb definitely opens up the opportunity to do that. If you were run the numbers based on a split use long-term rental and short-term rental, what you would then do is take the bed/bath configurations for the long-term rental, and you would run that through the Rentometer like we talked about. And then on the other half of it, there are so many tools online that you can use to run calculations based on a short-term; one is called AirDNA. You go, you plug in your address, and then the bed/bath count, and it’ll project what you’ll make on a short-term basis. And then you can average out both of those to see where the cards may fall with that specific property.

Rob: Now, when you’re mixing short-term rental and a long-term rental like that, I will say that, for the most part, covering your mortgage is going to be something that you can definitely do unless you’re just buying in a very thriving location, and all that kind of stuff. But I think what you want to look for specifically, when you’re getting into something like this, is try to reach out to your realtor and ask them about their Rolodex, if you will. Ask them if they know any good cleaners, any good handyman, any good contractors that you can have on call, should anything happen while you’re out. But I think that, for the most part, if this is one of your first deals, for example: managing this on your own from a distance is actually quite easy because what most people don’t realize is when you’re doing any kind of short-term rental, or anything like that, your cleaner acts as your property manager. As long as you have a good cleaner, you’re paying them a fair living wage…

Rob: I never negotiate with my cleaners. I always like them to be super, super happy. As long as you have a good rapport with your cleaner, they’re always going to report back to you with anything that needs maintenance on the property, anything that needs to be repaired or replaced, or anything like that. If you find a good cleaner, then you’ll have pretty much a self-sustaining… and a property that’s also very easy to run from afar. So between your cleaner in your handyman, I think you’ll have a pretty smooth operation.

Dana: Awesome. And I think I heard you say that if someone actually goes in the property and then they let you know what is wrong, you immediately send out whatever it is to fix it, so that was good information as well.

Rob: I do. I mean it depends. A lot of that I try to troubleshoot at the beginning before I send out a handyman. I mean 99% of the problems that I have, especially in short-term rentals, are usually things that can be solved just by me troubleshooting it with them, or just communicating a lot of basic things like, “Hey, this remote’s not working. Well, it’s probably the batteries,” and then I point them to the cabinet where the batteries are, versus sending out a handyman, just because everyone’s time is at stake here. And I’m fine giving up my time; but if I start involving my guest, I start wasting their time, everybody gets grumpy, and it’s not quite as smooth. I try to have a lot of systems in place that create redundancy, and have backups to my backup. So anytime I’m visiting an Airbnb, even if I have a whole pack of batteries, for example, I’ll always buy a new pack of batteries because those are the one big pain point that I have in my entire business.

David: That’s funny.

Dana: That’s awesome.

David: All right, Dana. Any follow-up questions after getting that rundown from Rob, the Rob rundown?

Dana: The only other thing is should I be concerned about the area? Like I was saying with the property that you were analyzing in Louisville, what should I be concerned about in terms of… This particular property that I’m looking at, it needs about $100,000 worth of work, but it will really fit my needs. So in terms of the after repair value, and things like that, should I be concerned about that?

David: Okay. I’ll answer this one quickly because we have another caller, and we’ve got to get them before they go, but here’s a couple pieces of advice for you to take into mind. If you’re going to dump significant money into a property, and I would consider $100,000 significant, it has to be in a really good area. As a general rule, do not dump money into a property, regardless of how well you it’s going to cashflow afterwards, if it’s not an area where it’s likely to have the ARV increased from that $100,000. If you’re in an area where everything else is low and this one takes $100,000 to get it up and running, don’t put $100,000 into that property. Save and put that money into a property that is in a better area that will pump-up the ARV.

David: And the other thing is that if you’re in Louisville and there’s a lot of cash-flowing opportunity, don’t fall in love with any one specific property and try to make it work. If you’re in an area where there just isn’t a lot of that type of deal, and so this is what you’ve got to do, that is the case for me in the Bay Area: I’ll make it work; I’ll figure out a way. But if I was where you are and I’m like, “Man, there’s a lot of single properties around here looking for a little bit of Dana in their life,” I would absolutely continue dating until I committed that $100,000 to that one deal.

Dana: All right. Off to the dating game.

David: There it is. Thank you, Dana.

Dana: Thank you all.

Lexi: Rob, I watch all of your YouTube videos.

Rob: Thank you.

Lexi: And you’re actually a huge inspiration for why I started my short-term rental, which I literally just started in January, like two weeks ago.

Rob: Woo. How’s it going? Is that what this question’s about? Please tell me. Good things, right?

Lexi: Yes. We’re super excited. I’m from Austin, Texas, but we have our short-term rental in Canyon Lake, which is Texas Hill country. And it is definitely slow, because obviously we launched in slow season, so I knew it would be slow, so trying to stay positive here. But now that we have actually been doing it, I just wanted to get some input from you and your thoughts on if you feel like the short-term rental market is starting to get saturated. Because I’ve been looking at a lot of our competitors, and even one of the houses right next to us is actually an Airbnb as well; they’ve been there for a while and they said that it is just really crazy seeing all the people that have come into the market. And I really like… I mean every time we travel we do Airbnbs, and so I really like the model and want to stick with it, but I do get concerned using these apps like Airbnb and VRBO where they control how you come up in the SEO, knowing that a lot of people are starting to get into short-term rentals.

Rob: Sure. Yeah. I guess let’s unpack that a bit. You launched a lake property in January, so it’s expected that that’s going to be a little bit slow, which is a good thing. I would really take that as an opportunity to optimize your listing as much as possible. I think a lot of us get into these seasonal places and we’re like, “Oh, my God. It’s slow. What am I going to do?” But if you realize that you have two or three months to get any repairs in, any remodeling in, it can actually be a really, really great opportunity to get your Airbnb in tip-top shape. I think just stick it out here. Once March comes around, I think you’re going to be doing okay.

Rob: And now in terms of market saturation, this is, believe it or not, the number one question that I get from every single person out there, and I totally understand it because there’s a lot of new Airbnbs popping up every single year. What I want to say is that the concept of short-term rentals has been around for a long time, it’s not like it’s a brand new thing that came around, but the popularity of short-term rentals has really come about in the last 10 years or so when Airbnb came out. I don’t worry about market saturation as long as I’m doing my job.

Rob: And what I mean by that is when I’m going into a new market and I’m taking a look at my competition, the first thing that I’m going to do is I’m going to gauge myself against the competition and say, “Are they marketing themselves correctly?” What this means is have they gone through the effort of staging their property with high-class furniture, with high-quality furniture? Most of the time, if you are in just any regular place, the answer to that’s going to be no. Most people will be thrifting or going to Craigslist free and trying to cobble together the furniture in their new listings.

Rob: Two, did they pony-up the cash to get professional photos done? Again, most of the time the answer is no. Most of the time people like taking photos of their Airbnb on the iPhone 3. They’ll spend $10,00, $15,000, $20,000 on an Airbnb, and then they’ll say, “I don’t think I can afford $300 on professional photos.”

Rob: Three, I take a look at the listings. Did they actually spend time to copyright and really just make the listing copy sparkle? Most of the time the answer is no. They’ll write two little sentences.

Rob: I like to go in and take a look at my competition. Now, if I go into Canyon Lake and there’s a specific neighborhood that I like: well, if every single person has beautiful photos, beautiful interior design, great listing copy and they’re booking, I’m still going to probably invest in that area because if they’re booking, then that means that people are wanting to book in that location. But if they have all that and they aren’t booking, then maybe I move on.

Rob: I think market saturation will really start to affect you if you stay married to one specific spot or pocket in the actual market that you’re looking at. Market saturation doesn’t really affect me because when I find myself in an area where I can’t be competitive, that’s fine. Maybe it is saturated. I move on. And that’s why I start compiling lists of my top five markets.

Rob: David and I right now are looking at a couple markets right now. I have realtors and basically resources on every corner of the country because sometimes it’s a little tough to get into it, but that’s okay because there are a million houses in the United States, so just find one that works for you.

Rob: All to say: yeah, it can be, but I really find the power of good marketing do the work. Good marketing works 100% of the time. Truly, it does in this industry, I think.

Lexi: Right. Yeah. I’ve followed literally everything you said. We have decorated it really nice to try to make it nice, because we did notice a lot of the properties in the area… Not ragging on them: it’s like they used their parents’ furniture. It’s not cute. When we go travel, I’m specifically looking for things that are cute. And we just launched it, so we don’t have our professional pictures yet, but they are coming this week.

Rob: And that’s okay. And let me just clarify: it’s totally fine to take cellphone photos in that first week or two while you wait for a photographer, but some people just never actually switch them over.

Lexi: Right. I guess my question in terms of everything being saturated is: would you ever go so far out to create Instagram pages, or something to help the word get out, that’s not just depending on Airbnb to boost you in the SEOs? Because I know there’s ways to get boosted, but I’m just trying to think of ways to market it beyond just those platforms.

Rob: That’s a good question that really does get asked quite a bit, too: if you should go direct, or if you should create a social media handle. You know what? I’ll be honest. I’ve got two social media handles for two of my properties. I have I think 14 or 15 at the moment. One of those handles has about 2000 followers; the other one has about 4000 followers. It’s great, I’m grateful for the followers there, it’s a good thing. But when you’re first starting out, creating an Instagram account and posting photos could help you get more booking, but nothing is going to help you get more bookings than having a completely solid listing.

Rob: I get a lot of people that will come to me and say, “Hey, I’m not booking. I want to create this Instagram account. Maybe if I can get some followers I can start getting bookings.” But the reality is when Airbnb listings really start getting that traction online, it’s whenever they’re a little bit bigger, they go a little bit more viral, they have maybe 10,000, 20,000, 30,000 views and re-posts, and they get in the real game, and those go viral, TikTok viral, all that stuff. It’s possible, but a lot of people take their attention away from the main task at hand, which is to just make sure that their listing is up to par.

Rob: Now I understand you don’t know necessarily want to give all of your attention to Airbnb because it’s one platform. But I also want to remind you that Airbnb and VRBO, they do all the marketing for you, and they own 90% of the market share, and their actual booking fee is relatively low; it’s like 3% to 5%. They put you in front of millions of people, from an impression standpoint. I think it’s better to just work with them versus trying to hedge your bets against, but I don’t necessarily mind creating a direct booking website. There’s just so many logistics that are needed with that, that people don’t think about, like insurance, and concierge services, and customer service, and all that kind of stuff. Once you start laying all those different logistics, it becomes another job. You know? And so that’s why, for me, I don’t necessarily mind going with the main OTAs, online travel agencies.

Lexi: Right. No, that is all super helpful because people have asked if I do direct booking, and I’m like, “I already have a job plus this Airbnb.”

Lexi: And then just one quick last question, because it’s hard to ask anybody, especially if they’re in the area because they’re competing against you. You actually brought up the cleaners on the last question, and you said you don’t really ever negotiate with them because you want them to be happy, obviously you want them to do a good job. And so we’re in this weird phase of launching it brand new, it’s in slow season, and our cleaning fee… If we were to put our cleaning fee at a rate where we were actually getting it covered by the guests, it is close to our booking fee that we need to just get booked in the slow season, not like when it will be in the summer. But have you ever just had to lower your cleaning fee so you’re eating part of that cost, so that you actually do get bookings?

Rob: No, I have never done that. I might lower the cost of my nightly rate; but the cleaning fee, it is what it is. In fact, I know a lot of hosts: I would say 25-45% of hosts might even mark-up their cleaning fee, but I have never taken a hit. I would say for that to be worth it, you start looking at things like three, four, five night minimum. Because right, if someone wants to come and book your place for a night and it’s 200 bucks, and the cleaning fee is 200 bucks, to stay there for one night it’s $400, and that… It makes sense why someone might scoff at that. Right? But if the minimum is five nights, well now they’re spending that $200 over five nights, and so it’s much more for people. But no, I’ve never really reduced my cleaning rate.

Rob: But at the end of the day, whether you reduce your cleaning rate or your nightly fee, it ends up being the same thing, so that’s up to you. If you’re not getting booked right now, like I said, it’s January in a lake town. You’re not alone here. Everyone’s going through this right now. I’m in the Smokies right now. My chalet out there did not book a single time in let’s say the last two or three weeks; that’s fine. That’s why we save up. All this means is whenever March, April, May, June, July, August come about, save that money. Don’t go spend it on the next thing. Pad your bank account and have a little bit of cushion for the Januaries and the Februaries out there.

Lexi: Okay. Awesome.

David: Lexi, I think Rob gave you some fantastic micro advice. I would not change one thing about what was said. So for the near future, that’s exactly what you should do; and if you want your units to operate efficiently, this is really, really good for everyone listening.

David: I’m going to add some macro advice, so don’t be confused by what I’m about to say, because it doesn’t apply to today right now, which is what your specific questions were. But because I can tell your heart is concerned about oversaturation, that’s why I want to give this perspective. The first thing I’ll say is Rob mentioned short-term rentals have been around for a long time. We used to call them bed and breakfasts. You guys ever heard of that phrase before?

Lexi: Right. Yeah.

David: It’s the same idea. I’m going to be traveling somewhere. I need a place to stay. It’s not going to be a hotel. It’s a bed in breakfast. You look it up in the yellow pages in a phone book or something, and it was done with direct booking. Part of what’s caused the increase in popularity in this is that the technology, specifically Airbnb and VRBO, has made it incredibly easy for the person traveling to find somewhere to stay, and that’s made it incredibly easy for the person who owns the property to book it. Right? So that’s acted as lubrication to increase how easy these people are able to get a hold of each other… and then, boom, we’ve seen an explosion in the industry… but that doesn’t mean that it will always work that way.

David: There was a time when just having a website for your company was all that you needed to be able to make a lot of money in online sales. There was a time that email marketing, believe it or not, had an 80% click-open rate, right? There’s always a period of time where some form of technology increases the efficiency of a system, and you see an explosion, and then it changes. So I would expect at some point… and I’m not talking about next year, two years from now… where we will see a change in the way technology works. Okay? And when that happens, the model is the same… I’ve got to find someone to stay in this place and pay me for my unit, and I have to make it very comfortable for them… but the way you go about doing it will change, and we don’t have to live in fear of that.

David: Right now, there’s no reason to use anything than Airbnb and VRBO for most cases; and like Rob said, here’s how you maximize them. But I would still plan on, the overall business is, I own a hospitality business and I need people to stay here, so there may be a way where we have to look for other ways to book people in the future. That’s just one thing to think about.

David: The other thing is, regarding the oversaturation, this is true of any business. Let’s say it comes to selling houses, and I’m a realtor and you want me to sell your house, and you come to me and say, “Hey, David. I want to sell my house, but the market’s not that hot right now. There’s not a lot of buyers looking.” It’s true, but what that means is that if you want your house to sell, there’s still buyers in the market. They’re going to go for the best thing they can get. If your property lands within that top era of where the buyers are, they’re going to buy your house, and they’re going to pay whatever they have to pay to get it.

David: It’s when your property starts to decrease in desirability… either location, or you’re asking too much, or it’s not in good condition… but you fall below what the buyer pool thinks they can get, and that is where it sits there forever and doesn’t sell and it starts to lose value. So Rob’s point was if you’re the best option, it doesn’t matter what everybody else is doing, and that’s what I want to highlight that you should be looking at. As you’re getting into this business, don’t assume Rob’s crushing it with Airbnbs, everyone’s doing great, “I’m just going to go buy one and it’s going to be really easy.” It might be like that right now in many cases, but it won’t stay that way. So make sure your property is a great property, it’s in a great location, and it has great furniture; it’s the most desirable one.

David: It’s like if a lion’s chasing you, you don’t have to be faster than the lion. You’ve just got to be faster than everyone in your group. That’s what Rob’s talking about when he’s describing how he’s analyzing deals. He’s looking at everyone else. And he’s like, “Man, if these places are just like disgusting and they’re booking, if I make a nice one I’m golden,” and that’s really what we’re getting at. That’s how you hedge your risk is you stay in the best markets, and you just do a better job running your business than other people do, and that’s the advice he’s giving you about getting pictures taken, and high-end furniture, and giving the client a great experience, making sure there’s batteries there so they’re not pissed-off at one o’clock in the morning when they can’t get the TV control to work, or the thermostat’s broken because there’s no batteries.

David: What to expect for the future of short-term rentals? I personally think that people are going to continue to do this more often. I think that communities are going to say they don’t like it because it makes houses more expensive and harder for people to buy them. If you’re trying to figure out not just saturation, I think you should also look into the area that you’re buying into, and what the political environment is like there. Areas like Arizona are very pro-business. Florida, pro-business. They are very likely to say, “Yeah, we want people to be able to rent their houses out.” They see the higher property taxes they’re going to get. They want to welcome that. If you’re in an area that’s not pro business, you’re more likely to see legislation pass that limits how many days out of the year you can do this, or whatever. So don’t forget to include that when you’re making your decision. If you’re buying in an area that’s super just traditional, doesn’t like change, doesn’t like all these people coming in and out of their neighborhoods, that’s where you could get stuck paying a lot of money for a house and then not able to use it.

Rob: Yeah. And I would just add to that: just make sure, as you go into your next investments, and everything like that, take a look at travel trends. Take a look at if the amount of people going to that destination is increasing year-over-year. For example, right now a lot of people would say that the Smokey Mountains are oversaturated, and it’s a really fair debate because there are a lot of cabins out there. Traditionally speaking, 12.9 million people have visited the Smokey Mountains. I think last year it was over 14 million, or something like that, so more people are going there more than ever; it’s because it’s in the middle of the country, it’s eight hours away from all these different cities. People are continuing to go there. And so I think just take a look at that and stack it up against how many Airbnbs there are in the area. The Smokey Mountains there’s like 3000 cabins, or something like that, so that 3000 cabin number is a lot smaller than the 14 million people that are visiting the smokey mountains. I’m just gauging, “Are more people going there on a yearly basis? And how many more Airbnbs are popping up every single year as well?” which is data that you can research.

Lexi: All right. Well, you guys have been so awesome. I listen to you both all the time. I do have a client call so I do need to drop, but thank you for answering all those questions.

Rob: How’s it going, Christopher?

Christopher: Doing good, man. Love your stuff. Been trying to study up and take notes and everything, and one of the questions that came up was whether to put the efforts of starting an Airbnb into all three of my current long-term rentals, and just order everything at once, hit hard and fast, get them up and running, and navigate that all at once. Or just tease it out with one, and then go from there, and just keep both the long-term and the short-term going?

Rob: Yeah. Let me ask you this. Where are the three long-terms?

Christopher: Uptown Phoenix, downtown Phoenix right next to Roosevelt Row, and then I’ve got one closer to Steele Indian Park, a little venue area. Those are the three areas. Midtown, uptown, downtown,

Rob: All in Phoenix though, for the most part?

Christopher: Yes. Right in Phoenix.

Rob: Okay, cool. Well, here’s the good news: that’s an amazing market for short-term rentals. I can vouch for that market. I’ve got friends out there; they’re absolutely crushing it. You know, generally my advice to people has always been, “Jump in head first. Figure it out,” kind of thing. But considering you’re new to the game, I also like to take the approach of crawl, walk, run. And the reason I say that is because setting up an Airbnb, it’s not rocket science, it’s not hard, but it is hard work. And so setting one up, you’re going to have to go and get all of your different furnishings, you’re going to have to get art, you’re going to have to pick up all the boxes, break them down, set up mattresses. It’s going to really take some time for you to do that. At a minimum, if you’re working alone, it’s going to take you a week. In a pair, probably still about a week, week and a half. Just in the actual setup time itself, it’s going to be a lot.

Rob: And then from there you have to automate it, you have to set up all your automated messaging, you have to hire your cleaners… your Airbnb Avengers, as I like to call them… and so that’s a lot of work to do for just one Airbnb. Now, if you’ve got three rentals that you want to convert into Airbnbs each, then now you’ve got to do that three times, and that’s going to be a solid month of fully sprinting. I would say if you’re prepared for that hustle, it’s not the worst thing to consider; but honestly, as I develop and really change my philosophies on real estate investing, and all that kind of stuff, a lot of it, talking to [inaudible 00:31:46] over here, but for me I’ve really learned the importance of diversifying.

Rob: And so I really don’t think that there’s anything wrong with keeping one or two of your current rentals as a turnkey rental. If you’ve got tenants in there, if they’re paying rent on time, if you book and you can raise your rates a time, I think it’s okay to do that; and keep two, or one or two of them, as long-term rentals, turn one into the Airbnb. Make sure you like Airbnb. This is what I always tell all of my students and everything: learn the model, love the model, become profitable at the model, and then go all in.

Rob: Figure out that Airbnb is something you want to do first, and that you like it, and that you like customer service, and you like the grind; and if you do, convert those other two into Airbnbs. But Airbnb is going to exist tomorrow, next year, three years from now, so I don’t think you have to jump all in right now because you’ve got options. You already own these houses. Stakes are pretty low for you to just convert one to the other anytime you want. I’d say start small, work your way up, personally. That’s how I would do it.

Christopher: Okay. I like that. Yeah. The downtown one was an Airbnb when we were… It was my wife’s old house, so we were… Whenever she could Airbnb it, she could. So we have some experience and we’ve stayed at some, so I’m familiar. But yeah, I think I like that perspective. Crawl, walk, run. And then learn, love, be profitable, and then go all in. Appreciate it.

David: Let me give you a little perspective just to take with you as, as people are listening to this and they’re hearing about short-term rentals. I get this from house hacking also, a few things. I just want to clarify because sometimes they sound too good to be true. We have house-hack clients that will get a 78% return on their investment, it’s incredible, and a lot of people think, “Well, if that’s the case, I should be able to get a 78% return on my investment. I’m just going to keep looking for another investment property.” Or Rob says, “I look for a 20% cash-on-cash return on this deal,” and that sets a barometer in people’s minds, and they go, “Well, anything less than 20% I don’t want to do because that’s Rob’s standard.” Here’s what’s semi-misleading about it, and it’s not intentionally misleading, and that is why I’m putting this out here.

David: ROI is a metric that measures the return on your investment, but it’s literally talking about money. A true ROI is where you put money into something and nothing else, and that’s the return you get on your money. What we’re talking about with Airbnbs, with short-term rentals, with what Rob talked about, he just mentioned a solid month of sprinting. There’s time and energy that’s going into that investment as well. It’s not just money. So you can increase the return on your money if you put other investment into this thing and it goes well, like your time, like your energy. Does that make sense?

Christopher: Yeah.

David: That’s one thing to keep in mind: that yes, the people that are getting incredible returns are often putting in more than just money. And so if you’re only looking to put money in a deal, don’t be misled by these big numbers.

David: The other thing is, and this is a principle of wealth-building that just everyone should know: the less money that you put into something, the higher your returns can be. If you go buy a fixer-upper burr, like what I used to do, and I’m just buying a place for $90,000, and it’s going to be worth $120,000 or $150,000 when I’m done, and then maybe I put in $10,000, $15,000 into the rehab: I could get 50%, 70%, 80% ROIs on those all day long. Sometimes 100%. I’d get all my money back out before I even did anything. That’s because I was only putting a little bit of capital at play. Nobody with big amounts of capital… institutional funds, insurance companies that have hundreds of millions of dollars they have to invest… they’re not getting 20% returns. There is no one that’s doing that unless they’re taking big risk. Hedge funds might get you something like that, but they’re not just putting money; they’re putting their time, their resources, their experience, their education. They’re actively trying to go after the best returns they can possibly get in the market, and they often lose money.

David: When you’re investing big amounts of money, you’ll never get the same return as you can with small, unless you just got lucky on a deal, but it won’t be sustainable. That’s just two things to keep in mind as you’re moving forward. If you’re investing smaller amounts of capital, you can almost always get a higher return. And if you’re putting in more than just capital, you can increase the return on your capital, but go into it with your eyes wide open knowing that’s what you’re doing.

Christopher: Yeah. Great point.

Rob: Yeah. I think it’s a journey, man. It’s like when you’re starting out, our time is not worth much when we’re starting out, and that’s why we can give all of it to any project. But as you begin to grow, and as your wealth be begins to grow and your portfolio begins to grow, it starts flipping slowly until money is actually less important than your time. Once you have it, right? And so for me now when I’m looking at deals, now I’m looking at them more from an ROT, return on time. I’m trying to give up as little time as possible for a return that I’m okay with. I’ve worked my cash-on-cash and my like return standard is down significantly over the years because I know that certain ones might have a high yield; but if I have to give 10 hours, 20 hours of my week every single week, then it no longer becomes worth it for me.

David: That’s a great way to sum up. But I described to make it practical.

Christopher: David, a question for you. Was not expecting it, but I have the opportunity to engage in an off-market deal through a colleague, and I do know that he needs to take the equity out, and I would like to know if you have any ways to frame it or structure it to where he could get most of his equity, if not all of it out, in short amount of time, but still allowed me to keep it all to myself, like not bringing in another partner, or asking for some other loan, non-traditional. I don’t know if I can qualify with four mortgages already, for a new one.

David: I’m a little confused. You know someone that owns a house in has a lot of equity, and he has a partner with it?

Christopher: No, no. He’s just trying to sell it, and he’s contacted me to try to buy it from him. I’m just curious to see what’s a way. Because I was thinking of seller financing, I can give him a good down payment, and then pay him the rest over the next two, three years, but it seems like there’s more of a push toward getting the equity out.

David: For him you’re saying.

Christopher: Yeah. The seller.

David: He wants some cash.

Christopher: Yes. For the seller.

David: Why don’t you do this: why don’t you contact us, We’ll see if we can get you a loan based on the income the property would make instead of just the income you have, because you said that might be a problem. So you get a loan, and he gets all that cash. And then the down payment part, you see if you can do seller financing for that part; so you end up either putting in less money or no money, and he still gets his cash, because the bank provides that, or the lender provides that.

Christopher: Ah, I see. All right.

David: Instead of trying to do seller financing on the whole thing.

Christopher: Seller finance the down payment. All right.

David: Because that’s the part that matters to you, right?

Christopher: Yeah.

David: That’s what you’re trying to do is put less money in.

Christopher: Right on. All right. I’ll be contacting you soon then.

David: Sweet, Ozzy. What have you got for us?

Ozzy: All right. My business partner and I… And by the way, forgive me. You may or may not hear my six-month-old whining in the background, but… My business partner and I are looking at purchasing property in a small market, and my main question is: when looking in a small market, how do you know when it’s too small based on… Again, this is for Rob on the Airbnb side. Looking at small markets, if there’s not enough comps on the Airbnb platform per se… or on VRBO, for example, or any other platform… how do you know when the market is too small if you believe that it’s a good deal, number one, financially; but also, based on AirDNA comps, and also based on the destination that it’s in. So it’s not a large market, not a lot of people know about it, so how do you know when you’re too early, or how do you know when you’re just at the ground floor and it has a potential to boom?

Rob: I mean it has happens all the time, honestly, where you will find a really nice house and you’re like, “Great. Okay. This seems like a winner.” And then maybe you run it through the AirDNA Rentalizer and you’re like, “Okay, this sounds good,” and then you go to pull comps on Airbnb and there’s two houses. That is not necessarily an alarming thing for me, but I would say that the confidence to do something like that comes a little bit later with time, basically. For me, I’m willing to take a swing like that because I’ve got a pretty diversified portfolio. But at the end of the day, it’s pretty risky to be the first Airbnb or the second Airbnb out there.

Rob: I get this all the time with glamping people who want to buy a piece of property, and it’s super secluded, and they’re like, “Hey, I don’t see any other tents, Airstreams, or domes out there. Am I too early?” and the answer is, “Yeah, you might be.” But being too early isn’t necessarily a bad thing because it could actually really work in your favor, but it’s risky. And so if you don’t have any comps to support the investment, I wouldn’t necessarily steer a newbie into that market because a newbie may not have a portfolio that can handle the dips, the ups and the downs of that. So for me, if someone wants to go and explore a market, I’d like to see a little bit of experience and a little bit of padding in the rest of their portfolio to help them hedge that bet a little bit.

Rob: Now, there are other things that you can look to, to really determine that. Obviously, you can look at, “How many hotels are in the area? Are there hotels? Are there hotels being built?” If so, then yeah. That means people are going there. Those hotels have already spent $10,000, $20,000, $30,000, $40,000, $50,000, $100,000 on market reach search to decide that it’s worth building in that area.

Rob: The other thing that I’d like to really point to is how many people are visiting that town. If it’s a population of 1000, well already that’s a tough one for me to co-sign just on the sole basis that finding vendors in that 1000-person town is going to be really tough because vendors are everything. Whether you’re flipping a house or you’re renting an Airbnb, or starting any business, you need vendors that can help you run that business. But aside from the actual population, I like to see how many people are visiting. If it’s a population of… Let’s say there are places in Arizona that I invest where it’s a population of 8000 people, pretty small town, but millions of people go through that town to get to the nearest national park: well, then we’re onto something. Then I’m like, “Okay, just because the town is small doesn’t mean it won’t be successful.”

Rob: There has to be something that’s drawing people to that town or through that town that makes it a worthwhile stop as an Airbnb, and so that’s something that I think you need to consider. There may not be Airbnb comps; not necessarily a bad thing. But if only 10,000 people are visiting every year, I’d probably walk away. However, if it funneled you to some kind of national park or state park where hundreds of thousands of people, or millions of people, are going through, then that’s something that I would consider. And unfortunately, when it comes to comping a deal, especially on Airbnb: sometimes it’s 50% art, sometimes it’s 50% science, sometimes it’s 90% science and 10% art, and then sometimes it’s 90% art and 10% science. It really is going to depend on the market and how much data is available to you. That’s why I say if you’re on the newer side of things, I would be weary about entering a market like that. But if there’s data that supports that there’s visitation in that area, by all means. I think it’ll be okay.

Ozzy: Awesome. Perfect.

Rob: David, what do you think? Do you ever shy from a place if it’s like… You know, from a burst standpoint, or any kind of real estate standpoint, do you ever shy away from a place if it’s a small market?

David: Yes, I do. I wouldn’t outright say I won’t do it. But the problem is, for me, I don’t want to put a lot of time into the stuff I’m looking at. I want to be able to just set it and forget it. And the way you make a deal work in a small market is you make up for lack of ease with more elbow grease. You can invest in really bad neighborhoods. You can invest in D-class neighborhoods, but you’re not doing that passively. You’re going to have to be putting a lot of time, and screening tenants really good, and marketing to the right ones. And it can work, but it’s becoming more like a job. And I have a job…. I run a couple companies, I make this podcast… so I don’t want another one trying to keep a property filled. That’s how I would perceive that. The more data I have, the more of an understanding I have walking into it; I know what I can expect.

David: Now, what I was thinking when you were talking is that there’s more value into buying real estate than just the return on your money. Okay? There’s things you learn. There’s skills that you build. There’s relationships that you develop. This is why when people are new starting off it just feels so, so hard. It’s like the first time you go to the gym ad you haven’t gone in 10 years. Like everything sucks. But you didn’t get a lot of value, as far as muscles you built, going to the gym that first time. Just like buying your first deal, you’re probably not going to get a lot of money, but your body getting used to the workout is of value that you got out of it. You learning how to use the machines a little bit better. You probably ate a little bit better day after you worked out. It made it a little bit easier to go the next day, right? There’s value that you get out of doing this thing even if it doesn’t show up as, “I want to be super strong,” or “I want to have a strong cash flow.”

David: So if you’re in a situation with very low risk, I say do it yourself. If you’re in a situation with high risk, but you still want to learn and you feel like this is a market you want to learn in, get two or three buddies and all of you can go in together. Now, it won’t be efficient, but you’re not doing this to be efficient. You’re doing this to learn. Three of you can learn from one deal, right? Three of you have reduced the risk amongst the three of you, if you’re going to do this; so that if it doesn’t make a lot of money or it doesn’t cover the mortgage, instead of you taking the full $500 a month hit, that’s split three ways, right? And then eventually you will figure out how to make it do money and you’ll be good, and maybe you’ll sell it and go put your time into something better, or you’ll keep it because you figured it out. But what I’m saying is don’t stay out of the gym just because you’re like, “I’m in bad shape. It’s hard to find a workout that’s going to help me here.”

David: I’m also not saying to go buy. Don’t buy in this area if it looks like it’s a bad idea. We’re assuming that you see something of value in this market that makes you think, “Yeah. I know there’s a way to make it work. But it’s not conventional and it’s going to be messy as I try to get to that point.”

Ozzy: Got you.

David: Is that helpful?

Rob: Yeah. That’s really great. I think the synergies of partners like that, honestly on your first deal or on a deal like that, is really important because I had partnerships for a few of my first Airbnbs, and for my first real estate investments in general, and I can’t really point to how much money we made in that; I don’t really care. But what I really liked was the problem-solving that all three of us were able to do through that deal. There was a problem every day, it seemed like, and so we were just texting back and forth, “What if we did this? What if we did this? What if we did this?” and we learned how to like solve problems together, and I think that’s really what you’re doing on your first couple deals. You’re learning how to problem solve. You’re not necessarily going to be printing cash. It would be great if you did; but what you’re really learning is how to be resourceful, efficient and intuitive.

Ozzy: A hundred percent. And that’s what we’re going through right now with… My very first property that I purchased was four years ago. I live in Fort Lauderdale and I bought it in Columbus, Ohio. I’ve never invested in a property in my own home state, so everything’s been remote, everything’s… In the beginning it was nerve-wracking and crazy. But yeah, it’s cool to go into those few couple deals with your partner and just again have that synergy, bounce ideas off each other, make mistakes, and that’s really… That’s the best way to learn, in my opinion. Make as many mistakes as possible.

David: And reduce your risk while you’re in that phase.

Ozzy: Sure.

David: Right? That’s why we ride a bike with training wheels where it can’t go as fast, but we reduce our risk. And then as you start to build-up your skills, there’s a point you take them off; and your risk is higher, but your skills are also higher, so it’s not as risky.

Ozzy: Right. Exactly. And that’s what we did. Our very first property we purchased for $87,000, and flipped it 19 months later. We rented it out, long-term rental, flipped it 19 months later for like $135,000. So very low risk at 87,000. We went in with 20% down, very little money upfront. So yeah, that’s what we did. And I’m still doing that now. I mean everything is managed calculated risk. So yeah, very much appreciate it, man. Appreciate it.

Rob: Well, awesome, man. Well, good luck on that. Based on the experience he just told us about it, I’m really not sweating it. It seems like you’ve got some systems and experience in place that can help you mitigate some risk.

Ozzy: Yeah, man. Appreciate you guys. Thank you so much.

Julian: Okay. So I have two questions. One question is when are we going to start selling Bay Area as a one-up for selling Sunset? And the second question is I’m doing a partner deal with a friend of mine, it’s going to be a house hack, so I just want to hear do you have pros or cons about doing a partner deal, and one person taking up the loan while the other person does the real estate aspect of it?

David: Are you saying that only one of you will be on the loan and the other person will be managing the real estate?

Julian: Yes, exactly.

David: Are you each going to be living in the house together?

Julian: Yeah. It’s going to be a deal. We’re both going to be living in it as a house hack.

David: Is the person who’s doing the loan meaning they’re putting down the down payment and the other person’s managing?

Julian: Yeah, exactly.

David: All right. Rob, you want to take that one or you want me to start?

Rob: I could start, I think. Pros of a partnership is, as we just talked about not too long ago, you are spreading out the risk over two people, which is a really nice thing. Number two is I really like the comradery of partnerships, and having a good partner that you can live or die by. Right? And all of my partners thankfully, that I’ve ever had, I’ve always had an amazing relationship with them, and it’s always gone pretty smoothly, and I’ve really learned a lot just based on seeing how smart they are, and feeding off of all of their ideas. So those are going to be the two things for me that I really like in a partnership is obviously I don’t have to worry about as much from a risk perspective; I’m going to learn a lot from that partner.

Rob: On the flip side of this, not all partnerships are perfect; and I think the con of a partnership… not necessarily the con, but one of the things to look out for… is communication and communication styles. And that was something that I didn’t really figure out in my first couple of partnerships, was explicitly communicating exactly what it is each of us were going to do or ever writing anything down. We never wrote down responsibilities or anything important. And so I think the con here is that it can really build tension if you or your partner aren’t necessarily very good at stating: a) what you’re feeling; or b) what you feel the other partner should be doing. And so a lot of partnerships really have falling out, if you will, because of this main thing, because of the communication. And it’s really easy to get into a partnership; it’s really hard to get out of a partnership.

Rob: Everyone gets into a partnership excited. No one really plans on breaking up. But if you buy a house together, and that partnership must dissolve, there’s a lot of hoops that you’re going to have to go through for that partnership to equitably dissolve, and the implications of that can be really huge. If you’re buying a house together, one person put down the down payment, then the other person didn’t, now you have to sell the house. And if you’re having to eat the closing fees, and all that kind of stuff, it can make for a little bit of tension, if you will, a little bit of a grudge.

Rob: And so I think that’s really going to be the big one for me is… I don’t really like any kind of controversy or confrontation in my relationships. I like to keep it pretty chill with all the people that I know in my life. And so I think a lot of people are very, very fast to get into a partnership. I don’t think you necessarily have to, if you don’t want to, but I would definitely consider the implication of the worst case scenario, and a lot of people don’t. They just think about the best case scenario. I’m not saying plan for the worst case scenario, but acknowledge its existence; because the moment you can do that, the moment you and your partner can start outlining all of the different facets of your partnership, “If this, then what? If this happens, what happens?”

Rob: And really, I think for me, my first couple partnerships I never brought in an attorney because I was like, “Oh, we’ll figure this out. What’s the big deal?” But the moment I brought in an attorney on some of my later partnerships, they started asking a lot of questions that I had never thought about, and questions that were really awkward to answer in front of my partner. And I think that for me, that was one thing that I was like, “Oh, I probably should have brought one in a little bit sooner, so that we could have had a lot of this in writing.” So not necessarily pros/cons here, but kind of. I mean there’s a lot that could be said about partnerships. Luckily for me, all of mine have gone pretty well.

Rob: David, I don’t know about you. Maybe you have this a little bit more… maybe a more pointed POV here on an actual pro and con.

David: I’ve never really done partnerships, I’ve avoided them for almost all my career until this year, and that’s mostly because in our mind we look at a partnership and we say, “Well, I will do this and they will do that, and we’ll get the best of both worlds,” but what I think it actually turns into is it’s double the work because everything each of them has to do, they have to report it by the other, and then the other asks a bunch of questions to make sure that they like it. And then if the person who’s doing it one way, if that’s not in favor with the other person, then they’re going to question it, and that’s where hurt feelings come from. So there’s a lot of ways partnerships can go bad. It doesn’t mean don’t do it. But I think if there’s an exit strategy, that’s much more important.

David: If you’re buying a deal that has a lot of meat on the bone… or you’re going to be living in the house together, so each of you is getting some value from this other than just the property itself… it’s a much safer bet for you. Because if you’re going to be roommates and you each own the house, I like that much more than, “We’re going to buy an investment property and we’re going to argue over how to manage it.”

David: What would concern me about your specific situation is let’s say the partnership dissolves. The person who is going to be doing all the work of managing the rental has no work anymore and no liability and no nothing. They’ve walked away. The person who put the down payment on the house and who’s on the loan is stuck holding the bag. So it’s not really an even risk or responsibility over both people. And if it goes great, the person who put the money down isn’t doing work, and the person who’s managing the property has a job; the other one has passive income, and that can also lead to hurt feelings and expectations.

David: I would probably feel better about this partnership if each person was putting money in for the down payment, and the person who was managing it was getting paid out of the money that the property makes to compensate them for their time, then they won’t get upset if they get paid a property management fee out of the property to manage it. And then if each of you are living there, well then the money that they’re being paid to manage it is very minimal, because maybe there’s only a handful of people that they have to find to put in the property, so the passive person isn’t going to feel like, “This is a ton of money.” It’s a very small amount and the risk is mitigated it by living there.

David: I guess my gut tells me that if you were each going to rent a room in the house, and then you were just going to rent out other rooms to other people, you each put in the down payment, you were each on the loan… or at minimum you just put skin in the game, even if you’re not both on the loan… then the partnership is more likely to last longer. And then if you decide, “Hey, I want my money out of the thing,” you spell out, “We’re either going to refinance it or we’re going to sell it, and this is the way we’re going to make that decision.” And then when the partnership has run its course, if it does go that way, it’s okay. No hard feelings are there. You’re going to have some equity and you’ll be able to get out of it, and then you have all the knowledge that you learned to put into the next deal where you might not need a partner.

Rob: I actually want to harp on this a little bit because something that David said is super important, and it’s that having some kind of skin in the game is going to be great because now the person that put the money into the deal isn’t going to hold a grudge for having done that. Even if they agree to it, at a certain point it is pretty common for that person to be like, “Hey, I put all my money in this deal. I’m the one that’s holding the risk.” And then the other person doing the sweat equity, they might have agreed to work for free for the next three years before they get a cut, and then that’s really great for the first year; but then as they start figuring out that their time is super valuable, then on year two and three they might start getting a little bit frustrated that they agreed to a deal that they’re working basically for free, for their sweat equity. And that’s why it’s important what David said is: maybe compensate that person for the actual management of it so that even if it’s just a stipend, even if it’s just a little bit, at least they’re making something for their work.

Rob: Because there are a few deals that I’ve gone into where I said, “Hey, I’m going to take 50% equity in exchange for doing all the work, if you pay for it,” and those partners are like, “Great. That sounds awesome,” and I was like, “Awesome.” But now I’m a year-and-a-half into this deal, and it’s still a great deal, it produces cash, I’m still managing it, but in the year-and-a-half since we purchased this property my time has become significantly more valuable to me, and now I’m barely starting to get paid from that property, and it took a long time. And I’m not frustrated or there’s no tension, but I can see how someone in a different situation might say like, “Man, this is tough. I wish I was making a little bit of money right now.” I knew that going in because that’s how I’ve worked all of my deals, but a lot of people aren’t really prepared for that realization when it hits.

David: And that’s what no one ever thinks about is the person they are right now, when they’re doing this deal, is not going to be the same person they are five years later, 10 years later. I see this with business partners that I have where everything looks great right now, but what if our business is successful and we make millions of dollars? Do I know what they’re going to turn into once they have millions of dollars, right? You just can’t predict a lot of the time: how success will impact you; how adversity will impact you. What if your partner in a business or in a property ends up having a family and just decides, “I don’t want to do any work at all,” and someone else is stuck holding the bag? How long before they get bitter?

David: I’m not saying don’t do a partnership. I’m saying don’t plan on having the perfect relationship for 30 years. Have a plan in place for, “When we’ll exit. How we’ll know,” and don’t wait until the relationship is so terrible that there’s bitter feelings before you get out of it. But I want you to buy something.

Rob: Yeah. And agree on the exit strategy because that’s something that’s always, “Yeah, we’ll get there when we get there.” And then when one partner wants to sell and the other one doesn’t, it starts creating really difficult conversations for both partners.

Julian: That’s really good. Awesome input.

David: You’re not discouraged, are you?

Julian: No. Not at all.

David: Okay. Right on. Julian, what’s your social media if people want to follow you, see how this deal goes?

Julian: Julian Gonda. J-U-L-I-A-N G-O-N-D-A. Shoot me a Follow.

David: Julian Gonda. Awesome. Thanks, Julian.

Julian: Yeah, of course. Thanks, guys.

David: All right. That was our show for today. So that last caller, Julian, had some pretty good questions, just practical, “I’m going to get in a partnership on a house hack. What are some things I should be aware of?” Rob, I thought you gave some really good advice when it comes to predicting the future. You pulled out your little crystal ball and you said, “Well, a year-and-a-half ago I was in this a situation, and now it’s completely different,” and that’s not things that people ever predict.

Rob: Yeah, man. Hindsight. Or what is it? Oh, shoot. I’ve already forgotten the… Oh, hindsight is 20/20. I knew I could do it. Thanks for believing in me. Yeah, man. I’ve had probably six or seven partnerships over the years. This is all good stuff to really keep in mind is that one thing that we learn more and more in our career is that time is just the most finite source on this planet, and I think nothing brings that to light than both a good and a bad partnership.

David: That’s a good point. What else did we talk about today? We had some pretty good conversations about how to handle a short-term rental, how to know if the market is becoming oversaturated, the importance of marketing within business. And I thought that we gave some really good insight… particularly you, Rob… about how the return on investment is… We’re not just investing money sometimes. A lot of the time we’re putting in time, we’re putting in energy, we’re putting in effort. And the whole reason that many people are listening to this podcast is they want their time back, or they want their energy back; they want to give it to their family, they want to give it to their friends, they want to do other things. So if you build your empire in a way that maximizes the return on your capital, but still requires consistent energy and time being put into it, you may get everything you wanted, but it’s not going to serve the purpose that you had. So I think that’s something that people would be wise to consider before they just become these ROI hungry paper-chasing cashflow fiends.

Rob: Yeah, definitely. I think it’s really that’s the difference between someone starting out and someone becoming a little bit more seasoned, is really understanding that ROI, that the I in investment is both money and time, and it starts to turn into time on the later half of your career.

David: Very good point. Well, thank you for joining me here, Rob. I appreciate your support as always. You always give a really good perspective, and it’s just fun when you’re here, so I appreciate that.

Rob: [crosstalk 01:01:09].

David: Any last words before we get out of here?

Rob: Yeah. Where can people find you, my man? If people are like, “Hey, I want knowledge bombs dropped on me,” how can people find you on the internet to get those?

David: To be dropping bombs. Well, I’m DavidGreene24 on just about all social media. You can also message me directly through bigger pockets. A lot of people don’t realize that’s a really good way to get a hold of anybody that you find on the podcast, is go look them up on bigger pockets. They probably have a profile. You can send them a message there.

Rob: All right. I’m inspired now to go and check my inbox after you said that. I probably have a few messages there.

David: How about you? What’s your preferred method of contact?

Rob: Well, as always, people can go and smash that Sub and that Like button on YouTube. Find me on YouTube at Robuilt. You can give me a Follow on Instagram at Robuilt as well. And if you want to see me do silly dances on TikTok… no, I don’t do that. But you can find me on Robuilto because, as always, people always snag my handles out from under me, so I always have to add an O because someone took Robuilt.

David: That’s funny. All right. And you heard Rob and I talk about properties that we’re looking at buying together. If you’d like to invest with us, you can go to, fill out the form there, and we will get in touch with you about what the opportunities look like. Other than that, keep listening to podcasts like this. Check us out on YouTube, leave comments in the YouTube section to let us know what you liked about the show, what you wanted more of.

David: And the last thing I will say is in order to make more of these shows, which are totally free for you, we need people to show up and ask questions. So those who are here, thank you. If you like to ask your question, if you would like to be featured on the biggest real estate podcast in the world, if you would like your opportunity to make Rob’s hair tingle in a cool way, please go to and bring your best questions, and you’ll see that literally Rob’s hair will move when a good question is asked. He’s that in tune with the force of real estate.

Rob: I’ve trained it over the years. It’s a little muscle in my forehead that allows it to just give it a little shimmer.

David: Very, very impressive. All right, I’m going to get us out of here. This is David Greene for Rob-the-hair-Jedi Abasolo signing off.

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