Airbnb Investing feat. TJ Tijani
TJ: Did you know that being a wholesaler is gonna be one of the best ways you can pick up units? So how? Imagine you sell it you wholesale a deal to it to an end buyer that plans on making a long term rental. Right? Once they do the rehab, you be their tenant. You’ve already built the rapport. You come back and say, You know what, I’m gonna rent the property and not only am I going to rent it out, I’m gonna be a perfect tenant. Because you are.
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Justin: Yo, yo, what is up? Welcome back to the science flipping podcast. I am your host, Justin Colby. And if you’re not watching this, you should because I have a special guest right here to my left Mr. T. J Tijani is in the house. What’s up man? (TJ: What’s going on brother? Hey it’s great to be here) It’s a blessing man. And we’re all here at the same event together. It’s impacting lives, changing lives. And so I was able to pull you away for a couple minutes and rock out a podcast. How’s that sound? (TJ: Man, awesome) Let’s do i t. (TJ: You know I’m here for it) So you are and have made an incredible name in the Airbnb, short term investment space. You’ve blown it up, you’re helping others get involved. Tell me a little bit about how you got in that space and how this whole thing got started?
TJ: Man, you know, what’s interesting that I wasn’t even looking to get into the space I for for folks who don’t know, my background is actually mechanical engineer and mathematics. I got an engineering degree from University of Houston Go cooks my folks out of, but worked in oil and gas, right did that for five years. But on the side, I was investing in real estate. And I was doing wholesale deals doing about one or two deals a month. What’s interesting is that I had to travel and I was working offshore. But I will still be able to put properties on the contract while I was working on a rig. (Justin: Yep, done it virtual) That’s it right. And so so then I was laid off June 1st 2017. For folks who don’t know, the oil and gas industry has its eaves and flows, right? So when a market is down, people lose their jobs. While the gas is cheaper, but people lose their jobs at the same time. (Justin: Yeah) So when I was let go there probably over 100 people that was let go that day. And so I said, Okay, well, I’m just gonna go on into real estate. You know I’m saying I had a goal of having 10 rental properties before I was gonna leave my full time job anyway. But by the time I was laid off, I have five. So I was like alright I was halfway there, but I’m still just gonna go all in. And in my research in my efforts to scale in and do market, more market research, I just came across a video about Airbnbs, and I wasn’t looking to do the strategy. And I said, Well, I’ve heard about Airbnbs. I’ve never stayed in one but I know that it could potentially make us more money. And so I started running the play on that and I had one single family house that I was gonna make a long term traditional rental. But I spent 14 grand to furnish it. And I listed it, didn’t get a booking that day I listed it, but I woke up with two reservations the next day, when I ran the play and I read the numbers I said well even at 50% occupancy at the price that I was charging, which was well below market rate, I was still looking to at minimum 2x what I would make on the long term traditional rental. So that’s what became well made it became a no brainer for me then I learned I shouldn’t have to own these assets. So you can, you can arbitrage, you can rent these properties long term then re-rent them out short term. (Justin: That’s it) Then I started doing that buying properties creatively with private money, rehabbing them value acquisitions while I’m rehabbing them, picking up arbitrage units at the same time. (Justin: Yeah) That’s how I was able to scale my business and document the process started sharing the knowledge.
Justin: Well, so here’s the thing. It’s always better to control the asset down the asset Right? (TJ: Yes) I love the arbitrage play. So full disclosure, and I’ve told you this we’ve talked but I have long term rentals, I flip homes, I wholesale, I don’t have any Airbnbs right now and that’s like my mission this year like I want four (TJ: Nice) So I’m going back and forth like do I just arbitrage them? Do I wanna buy them and do the whole thing? What would you tell me? The path of least resistance seems to be I would just do the arbitrage right?
TJ: The path of least resistance is definitely arbitrage is gonna be a lowest barrier to entry (Justin: that’s right) 100 percent. But I tell people you can get into the game with arbitrage 100% But don’t stay there. (Justin: Yeah), get into the ownership. My best yields are the ones that are own (Justin: Amen) And when you also think about ordinances and regulations in most cases when they have to come down in a particular marketplace is usually arbitrage that gets hit. (Justin: that’s right) So understand, controlling without owning is amazing because now you can earn, if you were to tell me eight years ago TJ said a house right there I’m making $2,000 a month net from it and I don’t even own it. I look at you like you gonna lost you’re freaking my house way. But but this is what the short term industry has allowed us to do. (Justin: Right) Right and so we’re gonna play for showing arbitrage. But I don’t recommend staying there. Now I have friends. They built seven figure businesses don’t own that one piece of real estate. I have a friend she only managed she didn’t even arbitrage because there’s a third strategy If you don’t own it, you don’t arbitrage it, but you manage it, it’s called co hosting. This means that you are facilitating somebody else’s right to do short term rentals, whether whether they are a traditional landlord that you position to convince to invest the extra money to furnish it. And now you’re just managing it for them. Or maybe they’re already in a game, you’re just taking over management for them and usually the goal rates about 25% of gross revenue. So you can run, you can make cash flow, just managing other peoples (Justin: good cash flow) And I know people who did nothing but management built 100 units 200 doors, nothing but management.
Justin: We got to do some things together, man, because I get asked all the time. How do I get into real estate that is a hustle to get yourself into real estate and make good money 25% of top line revenues as an Airbnb that potentially could make 5, 6, 10 15 grand a month? (TJ: Absolutely). That’s a beautiful (TJ:l Thats top line too. And that’s gross top line) That’s right.
Justin: So what is? what’s new? What’s changing what’s going on in the short term space?
TJ: Yeah, I think when you look at what people that are looking to get into the space to do, what they should be focused on right now is literally building their own brand within their short rental business. A lot of folks that get into short term rentals look to just do Airbnb. You got a property, you want to make a quick buck, put it on Airbnb, that’s cool 100%. But if you’re looking to go bigger, better, faster, if you’re looking to go far and actually have a long term sustainable short term rental business, you have to change your mindset and how you look at Airbnb. (Justin: That’s right) So the way you look at Airbnb is yes, you’re going to last that’s for the normal way is we get reservation, we’ll make money on it. Yes, but you also have to start looking at it as a lead source now. Every single person that steps foot in your property from one of these OTA platforms, they need to be in your own database, you have to get to a point where you’re systematically building out your own direct booking pipeline. (Justin: Yep) That way people can book with you directly. And we do that multiple ways. But the way you want to do it, once you people get into your pipeline, now you can retarget them, and we send we send our retargeting campaigns once a month, every single person that steps foot in our property, not just the person that books it, everybody that comes with them, it’s in our database, we retarget them on a monthly basis, nine emails goes out on a monthly basis. And what happens is now it starts building that repeat and repeat business. (Justin: That’s it) And only on top of that repeat business, they start sharing, you’re sharing your brand out, because in order to do this, you have to have your own direct booking website. (Justin: Yeah). So now you’re building your own direct booking pipeline. People are booking with you direct. Yeah, this is the difference between just doing Airbnb. So you have a long, long term sustainable, short term rental business was going to withstand the test tough for years to come. And that’s what people should be focused on right now, having a systematized fashion away, that should be curating a building your own database, so you can retarget them.
Justin: So just like anything you don’t, you might get started in the wild west and go get worse sell one and figure it out and get it rented. But then if you want a business, you got to systemize it, you’re just like any of these right?
TJ: absolutely. You know I tell people what changed my life. What changed my life in this game, was when I decided to go all in when I decided to go all in.
Justin: Kind of irony with this with this conference right here. Right? So irony
TJ: All later, right. And it’s all, that’s why I love this conference, because it really is you have to go on, you know, there’s a saying it’s a jack of all trades, master of nothing. (Justin: That’s right) But there’s a second part of that quote that people don’t really realize it says that. But it’s still better than the master of one because at the end of the day, you wanna master want more than one thing. But you can’t master more than one thing unless you master one thing. (Justin: There you go) You master it, you build a team, you systematize it, you outsource, then you now now you’ve created the time freedom. Now you can go out and master other things of like it businesses. And that’s what changed my life.
Justin: So if you had to tell someone, is it going wholesale? Rehab, or Airbnb, where he talked to the people right now where they gotta go? Are they going?
TJ: You know, quite honestly, that’s not even a fair question. Because you already know, I’ll biased, right? But I say this, though. I say this, you know, and I’m gonna tell you a hack. And and this is something that we in our community, we do, because a lot of my students, they are wholesalers or they came from the wholesaling world, they get into short term rentals, you know. And a lot of them want to leave the wholesaling world to get into short term money. (Justin: Yeah) And I tell them, I said, Look, can you still do the wholesaling? And so well? Yeah, I said, you know, if you’re looking to do arbitrage, did you know that being a wholesaler is gonna be one of the best ways you coul pick up units and say how? imagine you sell it you wholesale a deal to it to an end buyer that plans on making a long term rental, right? Once they do the rehab, you be their tenant. You’ve already built the rapport. You come back and say that you know what, I’m gonna rent the property and not only am I gonna rent it out, I’m gonna be a perfect tenant. Because you are if you’re doing this business properly, you are literally gonna be the best tenant that they’ve ever had in your lives.
Justin: It is always always always a maximize your opportunity to pursue go get the opportunities drive as many as possible and then you have all the exit strategies right? Wholesale it, flip it, Airbnb, long term rental, arbitrage Airbnb.
TJ: This is why they say some of the best investors started off wholesaling or at least know how to generate leads and wholesale deals (Justin: Drive the opportunities) imagine wholesale a deal to an end buyer, they rehab it and now you go back and rent the property out for them and you put it on Airbnb.
Justin: 100% Brother I appreciate you blessing this audience you guys need to follow this man on every single platform possible. Where they’re gonna do is at?
TJ: TJTijani at TJ T I J A N I on Instagram, tap it with me and trust me, always the value always living with value.
Justin: So he will be speaking at my next event which you want to be at June 24th, 25th (TJ: Absolutely) all about being a well rounded real estate investor not just a wholesaler, not just Airbnb we just talked you can diversify how you exit these properties. My man will be there giving you all the game on Airbnb, the core value I appreciate you. (TJ: No worries brother) If you have not subscribed to YouTube, make sure you subscribe if you have not given this a five star review. Go do that right there on iTunes. See you guys later peace.
