Airbnb Arbitrage Explained feat. Dr Chau Bnb

Justin: Right and I would tell anyone out there if you are just getting started in the space of real estate investing, look for the path of least resistance. You don’t need to go out there and buy the home. I mean Dr. Chow is saying the best way you can is control the property and make the active income.

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Justin: All right, what’s up everybody? Welcome back to the science of flipping podcast. I am your host, Justin Colby. Today’s a very special episode is I have a incredible real estate investor here. Mr. Chau Airbnb champion. What is up, brother?

Dr. Chau: What’s up Hey, everybody Dr. Chau b&b over here. How’s everybody doing?

Justin: All right. Well, dude, I’m very excited to have you on. And as always, I start every podcast with our main sponsor Minute Pages. If you’re a real estate investor, and you don’t have an online presence, you need to have Minute Pages for $97 a month, go to minutepages.com have credibility, influence and authority. I promise you, Dr. Chow is also gonna agree everybody’s online, make sure you have that minute.pages.com.

Justin: So Dr. Chow, I’m jumping right into this, my audience loves real estate, but they even love creative structuring of real estate even more. And you have built an incredible portfolio of air b&b rentals and corporate housing. Without having to buy these things. I think there’s a lot of my audience that probably thinks you have to go out and buy these homes and renovate these homes and furnish these homes and do all this stuff. So let’s dive in with what you’ve been able to build here because I even believe it is just, it’s just so impressive to be able to use this arbitrage model and build what you built. So why don’t we take a shot at it from here?

Dr. Chau: Yeah, absolutely. Can I go over my story a little bit like 30 seconds. (Justin: 100%) Awesome. So I grew up in a poor country came over here as an immigrant with nothing. Stay in one bed with my mom and dad, me my sister, all four of us literally sleeping in one bed in the tiny one bedroom apartment for years. I tried to learn English along the way. So we thought a way to get our financial freedom is to go to school, become a doctor, get the MBA and all that flashy stuff, right? which I did. It took me years and a lot of ton of sacrifices and everything. Once I got out, I graduated, you know, I thought on top of the world and I got the white coat and gets my mama proud, take care of them, retired them forever, living the American dream, right driving, beautiful Tesla leaving big house, blah, blah, blah. So I turn on more like the American nightmare, man. You know, I mean, I was, I was frustrated. I didn’t have the time freedom that I can. I was I feel I was trapped, like a corporate slave like a jumping monkey. They tell me jump I see how high, right? And then, on top of that my mom was diagnosed with cancer at the time. So I was like, What the hell am I gonna do, man, I don’t know how much time she has. So I gotta make some move fast. Right? So basically, from then I started my entrepreneur, while my entrepreneur journey started a long time ago, but I never had any luck with it. Like I try like e-commerce, I try online offline. I tried to do some real estate flipping, became a realtor as well try to do some multifamily. But the thing is that these things need a lot of time or a lot of money, which I did not have at the time because I was a mountain high in debt, you see. So and I didn’t have the time either because I was working overtime too to try to you know, pay off my loans and stuff like that. So I was like, what is an opportunity where it doesn’t take a lot of money, and it doesn’t take a lot of time. So I went to a lot of conferences right? and travel around the world trying to figure out figure it out. I met somebody gave me the epiphany is that I don’t have to actually own the property in order to make money from it. It’s called leveraging OPP Other People Properties. Everybody’s talking about leverage out of your money out of people time. But not alot of people talk about leveraging other people properties, right? So light bulb went off right? Now at a time I was already had a few rental few Airbnb. But I own those rental or it took me a long time to acquire them, you see. So for each rental it took me like years and uh like borrow money and all of that. Right? rehabbing and making rents ready and all of that and then we rent to somebody and then they trashed it later had to rehab again. So tell if you could relate right? (Justin:Yeah) So anyway, so from then I was like light bulbs. Okay, so I’m gonna do that. And so fast forward a year. I was scale to 20 Airbnbs you know, got my financial freedom retire when I was only 32, 33. And then you know, rest history and take care of my mom and retire them, buy them the big house all of that. It was an amazing experience. Then I ran into the problem of running 20. Airbnbs vacation rental. How many in here has vacation rental? (Justin: Right) How many are sick and tired of dealing with vacationer? You know, potheads and drunks, right?. So I had to deal with all of that. It’s always a party, mess. It’s once a year, you know. So I was like, heck with that. I’m gonna do COVID housing, I rent out to companies. So companies, they stay longer an average of three, four months instead of three, four nights. So it cut down my time, my energy, about 10 times the work. Secondly, they don’t party because they don’t want to lose their job. Right? They want to have their job. So (Justin: yeah) And then thirdly, is that this company has fun. So they were willing to pay they pay well, and they pay on time. So.

Justin: I want my money on time, right? Dr. Chow?

Dr. Chau: Yes, Sir. Yep. So yeah, man. So it’s, it’s been amazing. Right now I have a coaching mastermind program. I teach few allover the nation. For it I have over 150 members in our mastermind, we are crushing it.

Justin: I love that dude. So let’s let’s dive into some of the nitty gritty about how this works. Right To your point. I think the vast majority of people out there think you have to buy it, you have to remodel it, you have to manage it, you have to you know, you need all this money to do these things. So talk to us about like, let’s start with where do you even find these type of properties that you would use for your corporate Airbnb model?

Dr. Chau: Yeah, absolutely. So finding these properties is is okay so the three H’s I’m gonna give you a little secret, you know, that I don’t really normally share but I know your audience like the tactical stuff. So right now three H’s, hospitals, hotels and highways. Okay, you wanna look at actually the highways for us where two highway intersect, that’s where the money is. The government has already figured out the most traffic where they are. So we just got to flow with the big guys, right? And then during where to highway intersect, you know, you there’s a four piece of the pie, right? Why are those pieces of a pie, the hospitals and the hotels like to hang out for whatever reason, right? The other side of track, so and right as now you follow the whales, you’re gonna get fat. Okay, we are small fish and just follow the whales, you’re gonna get fat. So just follow them if they if they already done a research they multibillion dollar company, they put $100 million down to hospital, a $10 million View Hotel. Don’t you think they’ve done their research? Why don’t we do more? Alright? (Justin: Love it) So those are the best one, so you see, you can check those boxes off. And of course airport is great Corporation headquarter corporate headquarter that I guess that’s the fourth H is the headquarters, right? So if you all those things checks off, you have a 90% chance it’s going to work out great.

Justin: The three H’s and now 4 H? Ah, absolutely. So and then tell people a little bit more about what is I think a lot of people understand arbitrage, but kind of define that for everyone and why you like that model better than what someone would say, well, no, you want to own the real estate, that’s the whole key is owning the real estate, which there’s people that would make that argument. So talk about that model a little bit for us.

Dr. Chau: Yeah. So I’m all about owning real estate guys. However, I was trying to get my financial freedom. And I was going to the multifamily conferences, and I like, I don’t have $2 million dollars to put down. You know, in order for you to make $100k a year, you need about $2.5 million in either real estate, or stocks or whatever, right? To actually make you a different. So unless you have $2.5 million, how long will it take for you to save $2.5 million? For me, it was never okay, or at least 30 years anyway. So if you don’t have financial freedom, and you started, don’t you and you’re not making at least 10 to 20k a month almost passive income, I would highly recommend leverage somebody else’s properties, make that money, and then go back and buy as many properties as you want. So now we’re getting into multi family syndications now because I have the funds to do it and a time to do it. Right? (Justin Yeah). So, so that is why that’s what I will focus on first is get your financial freedom.

Justin: Yeah, so I would tend to agree with you 100%. And while I have more long term rentals, I would tell you the reason why I coach the way I coach is there’s active income then there’s the wealth building, (Dr. Chau: Right?) And until you can kind of you can do both at the same time, you can wholesale and flip, which is active income, and wholesaling doesn’t take money, right? It’s the arbitrage of you line up the seller with the buyer. (Dr. Chau Right) And I would tell anyone out there, if you are just getting started in the space of real estate investing, look for the path of least resistance. (Dr. Chau: Yes) You don’t need to go out there and buy the home. I mean, Dr. Chow is saying, the best way you can is control the property and make the active income. You don’t have the tax write-offs by owning real estate, blah, blah, blah. But it’s the path into the door from there as your income gets to a place of start buying a homes. Right? I think Dr. Chow, you said you have what 20 in arbitrage and roughly 10 that you own give or take? (Dr. Chau: Yes) I mean, that’s the model right? Now, Dr. Chow has the best of both worlds. And I would tell anyone the same thing, right? Go for the path of least resistance. What is one or two things that you want to talk to the people about your model that you want to maybe highlight here on the show?

Dr. Chau: Yeah, absolutely. yeah. Thank you for that. So for this model is fast money. Okay.(Justin: there you go) Who you want to make money slow in it? I never get it right. I want to make money fast man. Fast Money is real man. You know, we don’t have much time. The biggest thing is that we don’t want to waste time because time is not renewable is the only resource and renewable and nobody know how much we have. Okay, and even that you’re young you don’t know how much time your mama have so let’s take care of her okay? (Justin: That’s it) So Fast Money, F A S T, F is to find a location like I share with you. A to acquire the property, sublet it whatever right? acquire the property, the assets to set up to stand out. The T want to tap into the corporate housing. Okay, so those are the four step proprietary system that I created. And you know, we can dive into it in my free class and other classes, but we don’t have time to do that right now. But the main thing is guys want to make money fast want to leverage other people properties? And that is how you can do it fast. Does Airbnb own any properties? (Justin: No) No, is it the biggest hospitality company in the world?(Justin: Yeah) The bigger Hilton the Hilton took a 100 years to build what Airbnb took 10 years to build and it kicked the Hilton out of the water.. Right? So it’s all about leverage, leverage is number one key to success. And I love what you’re sharing earlier is the path of least resistance exactly. Why choose the hard road guys, you know, for me to you know, pick the path of least resistance and make some money now. Alright, start money now, money monthly and then money later. Okay. So it’s okay if you are working a job and trading money now. So you can have money monthly arbitrage. Right? And then you invest in buying your own property money later. You got it? (Justin: Amen) So you want all three men.

Justin: I love what you’re saying. brother. I’m totally I’m right in alignment with you. I would say one thing I think people of the audience would be asking if they had the chance, right. The second is, what would you say? Like why would someone do this? Why would a homeowner I should say, why would a homeowner allow you Dr. Chow or any of the listeners? Why would they allow you to do this?

Dr: Chao: Great question. So if you are a homeowner and you do and longtime tenant, right, let me ask you this, have role play real quick. Hey, Jason, how you doing?

Justin: Good, how are you? Awesome. I love your property my friend, I think it is an amazing property. I love everything about it. So here’s what I do. We’re actually at a corporate housing provider. We have a nationwide network of 100 members, and we want to rent your property. One thing is we’re going to clean it every few months. You don’t worry about that professionally clean. Secondly, any maintenance under $200 Justin? I’m just gonna pay for it. I’m not even going to call you. Okay. How would you like when we do not calling you boss stupid small shit like that? Right? (Justin: I would love it.) Yeah. And number three is we are dealing with corporations, companies, professionals. So we will have the funds we pay on time. We set up automatic payment, and we take care of the property man. Let me ask you this, this any of your applicants right now offer you these these things that I offer you? (Justin: None of them) Exactly, so why would you say man? (justin: Yeah) Lets go.

Justin: I mean it’s easy. You you shown the value here are the value of corporate you know, I do corporate housing. I have, you know, 100 corporations that I work with that obviously need short term housing. I’m gonna pay $200 for all the knick knack little nonsense. I mean, you just show all the value and say, you can have that or you can have a 12 month lease with someone who’s going to smoke and has dogs and probably is going to be a frat party on the weekends and whatever else. Yeah, well, what do you want to do and then you obviously you’re indifferent enough to say Hey, pick pick whatever one you want. And if it’s not me, that’s okay. I gotta move on to go find more housing for the corporations.

Dr. Chau: Exactly. Yeah, I’m, uh, we’re looking for many more multiple homes in the area, right? So if yours probably qualify, we’d love to do multiple homes with you. Right?

Justin: I love what you said there. You said properly qualify. Right. So now you’re spinning it. (Dr. Chau: Yeah) And making them qualify for you (Dr. Chau: Right), versus, you know, you qualifying for them? Right? That is a total sales ninja tactic. (Dr. Chau: Yeah), that you went, you know, most people are like, Hey, can I rent your place? Right? You’ve just gonna saying you need to qualify for this program. I have the 100 corporations that need to place, you know, people executives in their in the property. So if you qualify, then let’s move forward. But you may not qualify. I love it.

Dr. Chau: Yeah, exactly. And we gonna do all the above you and then I pull over the ace card, if they hesitate, and I really like it. How can I pay you $200 above market rent? I mean come on? Well, does anybody offer you any of these? No.

Justin: That’s right. Well, yeah, and because I mean, listen, Airbnb is so seductive, or VRBO, or any vacation rentals, because you can make way more than your long term rental, right? Typically, by the way, this is not always the case. Sometimes people make bad purchases. But typically, you could 2, 3, 4, 5x What a long term would be. So for you to be able to say, Listen, I’m gonna hold this as my little ace card is brilliant, you know, $200 more a month than what a long term rental will get. As someone who owns rentals, if you came to me with that, I have to at least entertain it, I have to really look at that and be like, you know, because it comes down to me, a rental short term, long term, whatever it comes down to a P & L, how profitable is this investment? Right? You give me 100 or $200 more when I’m making, you know, $1,200 a month and now it’s 14 or maybe even $1,500? That totally changes the value.

Dr. Chau: Yeah. The long term profit

Justin: A 100% What else would you what do you like to leave, you know, as a highlight to the model and, you know, obviously mentioned you know, where they can find you, you have your logo right here, Dr. Chow BnB, make sure you give him a follow up, but what else do you want to kind of bring to the audience here on this episode?

Dr. Chau: Yeah, absolutely. So you can follow me at Dr. Chaubnb drchaubnb, I’m on Instagram, Tik Tok everywhere. And then you can go on to our beyondb&bsecrets.com to opt in, and we will give you a free gift. We’ll give you a PDF that has odd more detail what we talked about. And I also do a live free class every Thursday at 7pm Central, which is today, actually. But you’ll go on beyondbnbsecrets.com/life, you can get a whole one hour free class. And you can ask me any questions inside of us where’s more Zoom Room as well. So you can have your questions answered. Besides that, you know, definitely reach out and see we can schedule a time, see if you qualify for our program. And then we can help you go from there. We have a lot of demand right now. Like now that live series, we have over 250,000 followers. So we’re qualifying our students to make sure it’s the right fit for everybody. With that being said, Guys don’t like act now is for your future, whatever it is, whether it’s this business or something, pick something that will that doesn’t have a lot of risks, right? Like, it’s called asymmetrical risk to reward very low risk, super high reward like this business. Secondly, is you want something that doesn’t require a lot of time. So this one is only take just a few hours a week, it’s not like you know, 40, 50 hours so that and you know how to leverage it so you can actually make the income and grow it from there. Okay? So and then third thing is via team and a mentor that you can hang on to that you jive with, and that will carry you through a tough time carry you over all the hurdle. So that is how I was able to trade my frustration for peace, right? I was able to train my burn out for vitality, because I have time and I traded, I trade being trapped, obviously to have absolute financial freedom now, every single month, I hang out with multibillionaires now. So you know every single my little that I was just with Grant Cardone, a month ago I was with Richard Branson, and then next week I go see Russell Brunson. So live is good, man. Let’s go.

Justin: Yeah, I love it, dude. Well, I really appreciate you giving this there’s not a lot of people I would bring into my audience that could teach the exact principles of this right and so as a real estate investor myself, I think there’s there’s an avenue for everyone. Right and I think this is a good right avenue, especially the path of least resistance, a lot of people don’t know how to get into short term rental game. This is a great way to do it. So thank you very much for showing up, you know, showing out and just delivering for us here on the science of flipping man.

Dr. Chau: Yeah, thanks for having me guys. God bless. Take care.

Justin: Alright.