520: $47k/Month in Rent, 0 Doors Owned | Rookie Takeover w/ Rafael Loza
BiggerPockets Real Estate Podcast
BiggerPockets
4.8 • 16.5K Ratings
🗓️ 19 October 2021
⏱️ 52 minutes
🧾️ Download transcript
Summary
The hosts look and sound a little different today. There are no beards and we haven’t heard one metaphor containing jiu-jitsu lingo... That’s because Ashley Kehr and Tony Robinson, hosts of the Real Estate Rookie Podcast have taken over the BiggerPockets Real Estate Podcast! Ashley and Tony regularly talk about how rookies can get their first (or next) deal, but today they’re combining expertise to talk about something more controversial: rental arbitrage.
Rental arbitrage is a form of subletting that allows long-term tenants to make massive cash flow off of short-term rentals. Someone who’s done this to an extreme is Rafael Loza. Rafael was working the night shift as his W2 job when he found out about short-term rental arbitrage. He sat on the idea for a few months, but ultimately tried out the concept on an apartment. This one apartment took home a massive profit, allowing him to quit his job and scale to fourteen units in just nine months.
Now, Rafael has twenty-four active units, all grossing thousands of dollars a month in rent for him. Back in March of 2020, Rafael was projected to bring in forty-seven thousand dollars in revenue in one month alone. But, the pandemic hit, forcing him to pivot, switch strategies, and take advantage of the flourishing short-term rental market. He has his sights set on ownership, but now he’s simply raking in the short-term stacks.
In This Episode We Cover:
Rental arbitrage and why it’s a low-cost way to get into real estate investing
Short-term cash flow vs long-term appreciation and combining the two
The startup costs it takes to create an arbitrage empire
How to pitch landlords on using their properties for short-term rentals
Negotiating leases and adding a subletting clause to any lease you undertake
Pivoting when your business hits a wall and combing back stronger
And So Much More!
Links from the Show
Real Estate Rookie Youtube Channel
The Real Estate Rookie Podcast
Check the full show notes here: https://biggerpockets.com/show520
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Transcript
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| 0:00.0 | This is the bigger pockets podcast show five 20. |
| 0:04.7 | My goal is to be 65 on a beach sip in a margarita on the first of the month, |
| 0:08.9 | getting a paycheck. |
| 0:09.7 | And that's able to happen because I started with 40 short, |
| 0:12.7 | environmental arbitrage units that bombing my first apartment complex. |
| 0:16.0 | That maybe got me the second one that got me the third one. |
| 0:18.2 | So by the time I'm 65, that margarita is going to be hanging out, right? |
| 0:21.8 | Like with me because I did all the work and the groundwork to get there. |
| 0:25.1 | Does that make sense? |
| 0:26.5 | You're listening to bigger pockets radio, |
| 0:28.7 | simplifying real estate for investors large and small. |
| 0:32.8 | If you're here looking to learn about real estate investing without all the |
| 0:36.1 | hype, you're in the right place. |
| 0:38.6 | Stay tuned and be sure to join the millions of others who have benefited from |
| 0:42.7 | bigger pockets.com. |
| 0:44.6 | You're home for real estate investing online. |
| 0:47.7 | What's up everybody? |
| 0:48.6 | I am your co-host Brandon Turner. |
| 0:50.9 | Wait, hold on. |
| 0:51.7 | I'm not Brandon Turner. |
| 0:53.3 | What's up guys? |
| 0:53.9 | Now it's Tony Robinson. |
... |
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