You caught me. I use the word millions. Just not the word easy. Good points. New market ✅ Now I do talk about my cashflow when referencing that total. And you’re right, Sonder is losing money. Like a lot of it. Point of inspiration, we made enough profit to reinvest our profits and double our number of listings (50 new ones) in 90 days. Thanks for putting in the work on this video
Hi Sean, thanks for your answer! I do admire your success with this business and your channel ;) I don't know if the Sonder comment is irony or not, but I don't know their numbers since it's private. However, I do believe that they are exactly in a bad situation à la WeWork. Especially because of VC money making the same mistake applying tech valuation to real estate companies. I think this kind of business is best when it's growing organically, as I believe is your case. Are you planning to reinvest to buy properties at some point as well? Or are you completely against it?
If you look at Sonders latest numbers all their operating apartments are EBITDA and cash flow positive. They are signing 800 units a month, that is where the money is going, it is going into scaling. Their numbers also include a capital refresh at year 6 which is already accounted for in their numbers. Their Location acquisition cost payback in 2017 this was 34 months due to how the lease and set up was structured - they included the security deposit in these numbers) it is now 12 months due to paying rent during set up period. Their annual unit contribution as $6,284 it is now at $9,206. Sonder has the big advantage of having properties in commercial zoned so not subject to residential regulations, their leases are also 12 year operating leases if extension clauses are enacted.
@@markgaterbondifinancialguy3885 Sounds a lot like WeWork to me. But at least they now have the time and WeWork case past them to adjust their business model to NOT end up like WeWork.
@@paulnekh yes there are similarities to wework for sure, especially in trying to differentiate through technology to get those valuations. Although sonder is now moving into some physical property plays. Sonder actually owns 26 hotels and is negotiating on another 70. So they are basically diversifying and becoming a hotel operator as well. They are worried that their current model is likely to be effected by a likely economic downturn end of 2020-into 2021.
Hi Sean, I also like your channel and you really seem to be an expert an the US-market. Europe - I believe - is a complet different market with different laws, habits, hotel&hostel prices etc.. Uber (for example) also doesn't work here in europe - or at least not nearly as good as it does in many parts of the US - mainly due to different law regulation
Cleaning fees: paid for by guests Income tax: you gotta pay it no matter who gives you the money Supplies: 100% tax deduction Yes, when they quote their gross and not net it’s misleading but your analysis is also misleading fir the reasons I have mentioned above. Your overly simplistic and in carriage deletion of reality does more harm than good to anyone considering this business. The fact that you missed even the most basic items of tax laws and cleaning fee reimbursement makes me wonder if you’ve ever actually run your own successful business.
THANK YOU!! It's so easy to see these gloating videos promoting amazing results while they charge you from 8-12K to "Teach" you how to do it... and then reality sets in, you've started your business 12,000 in the hole.
I really don’t get your reasoning with this video. So a guy makes millions in revenue and he’s struggling?? I’m sure he’s netting at least 800k and that’s being modest. Teaching people to buy property instead of using arbitrage is not only a bad investment strategy in such volatile changing markets, it also makes business growth 10x slower.
READ THIS IF YOU WANT TO HOST: I host 20 listings. It can be good one however It’s one of the most stressful businesses you will have. Guests can be savages. Here are all important negatives to consider: 1) guests want to throw parties and trash your place / piss off neighbours 2) guests are sooo DEMANDING! You will get requests for the tiniest things. And things you never even heard of before. Even if my house has 150 various items, I have guests who will always manage to find new things I need to get. FML! Rather than complimenting me on the fact that my house has WAY more items and amenities than a hotel or other places of lodging, they will focus on the negative Think of it this way. If my house has 97 items but it’s missing 3 items. On an exam, that would be a 97% score which is amazing. Nope, not if you’re an Airbnb host. That would get you dinged in the review 3) guests leaving critical Reviews. Not nice when someone you let into their how give total power over you and your future business by writing you a crappy review 4) constant upkeep, communication and handholding required. Common sense is not so common these days. 5) guests who are passive aggressive. They will leave snarky comments and you really have to bite your tongue so as to not reply in a similar tone. Over time , this will eat your soul. 6) guests complain about things out of your control. Such as frequency of city garbage collection There’s many more but I’m tired
Good info that people should already know. All the reputable people like Sean always say they’re talking about total revenue when they mention their earnings so it’s not misleading. I think this videos is a cheap way to plug your coarse. Fact is Airbnb automated has the best info for people looking to run an Airbnb business and the key principles Sean teaches about running the business don’t change wether your in arbitrage or you own your properties. 🤷♂️
I see it more as, this is one way of growing money. So this guy who started with 4000, and now he's a millionaire. That didn't happen overnight. Here became a millionaire over several years. He also has multiple sources of income. He was already a small business owner when he started doing this. He also probably diversified and did other things once he had more money to invest. So doing this is one way of making income somewhat passively, while you are not very wealthy (
That is kind of how I got started about 6 years ago. Subleasing apartments then I took the profit and bought properties to also put it on airbnb. I like the control aspect of owning a bit more and you can do renovations that increase the value and help you charge more per night. The rentals seemed to really get run down and after 4 years looked like trash. ruclips.net/video/LMJFow6DvgU/видео.html
My in-laws has someone try to airbnb arbitrage one of their duplex. They kicked him out because other tenants complained. I wonder how many people do this. I can see doing an Airbnb of like a spare in-law quarter that comes with a house. But I agree the arbitrage deal seems like a lot of work. Though in a way it’s not a bad deal because in a situation like this where people stop traveling then I guess you can just walk away. The house doesn’t belong to you.
I liked your video, so I ask the following rhetorical question in the spirit of constructive observation/criticism: how does owning (vs rental arbitrage) mitigate for you the airbnb platform risk which you properly identify?
That's a good question. In my case, I diversified into other plaftorms and a direct booking website as well. However, you're right, I'm still dependent on Airbnb because they bring the most clients and it's the easiest to use. But that's where owning is safer already by nature. If I can't do short term rentals for whatever reason, I can sell my units, rent them long term or let an agency manage them. In any case, I won't lose money. But someone who does arbitrage and who signed long term leases can't do any of that. They are obliged to keep paying up.
@@paulnekh You can just cover the rent till the contract ends by leasing the property out long term. Owning the property gives you no more security against changing market conditions/regulations especially when you buy with a mortgage. With ownership, the only advantage you may have is building equity in the property and getting the upside from appreciation.
@@laszlokishorvath3263 property appreciation is one of the key drivers of long term wealth. Rents also rise with inflation so your returns are capped whilst mortgage payments should decline. With a well managed airbnb you can easily fully pay off a property somewhere between 4 and 6 years and from then on its pure profit.
Who does not exaggerate these days, when the most popular SEO words are "fast", "quickly", "tips" and "hacks"? I can't count times when my traffic was supposed to "grow by 83.78% overnight using one simple method".
pretty sure this isnt arbitrage, i hear the term gt batted about quite alot [amazon too], but a arbitrage imply s tht your overlapping the payoff to offset the loss immediatley ther by cuting out the vast majority of the risk. the term originated in financial markets were you can get a quick payoff nt wer an aprtmnt can sit vacant 4 dys or wks hem-raging cash.
It's not instant bankruptcy, u can always pay the re-letting fee and get out of the contract. In my opinion owning isnt a great business move. The investment cost is waaaaay to high. Also your friend who has 80 units is making millions in profit u forgot to add that 🙄 so when u hear people saying u can make millions according to you its true 💯
Best-seller Airbnb courses to become a successful host :
👉 disruptors.academy/airbnb
👉 disruptors.academy/auto-airbnb
You caught me. I use the word millions.
Just not the word easy.
Good points.
New market ✅
Now I do talk about my cashflow when referencing that total.
And you’re right, Sonder is losing money. Like a lot of it.
Point of inspiration, we made enough profit to reinvest our profits and double our number of listings (50 new ones) in 90 days.
Thanks for putting in the work on this video
Hi Sean, thanks for your answer! I do admire your success with this business and your channel ;)
I don't know if the Sonder comment is irony or not, but I don't know their numbers since it's private. However, I do believe that they are exactly in a bad situation à la WeWork. Especially because of VC money making the same mistake applying tech valuation to real estate companies. I think this kind of business is best when it's growing organically, as I believe is your case. Are you planning to reinvest to buy properties at some point as well? Or are you completely against it?
If you look at Sonders latest numbers all their operating apartments are EBITDA and cash flow positive. They are signing 800 units a month, that is where the money is going, it is going into scaling. Their numbers also include a capital refresh at year 6 which is already accounted for in their numbers.
Their Location acquisition cost payback in 2017 this was 34 months due to how the lease and set up was structured - they included the security deposit in these numbers) it is now 12 months due to paying rent during set up period. Their annual unit contribution as $6,284 it is now at $9,206.
Sonder has the big advantage of having properties in commercial zoned so not subject to residential regulations, their leases are also 12 year operating leases if extension clauses are enacted.
@@markgaterbondifinancialguy3885 Sounds a lot like WeWork to me. But at least they now have the time and WeWork case past them to adjust their business model to NOT end up like WeWork.
@@paulnekh yes there are similarities to wework for sure, especially in trying to differentiate through technology to get those valuations. Although sonder is now moving into some physical property plays. Sonder actually owns 26 hotels and is negotiating on another 70. So they are basically diversifying and becoming a hotel operator as well.
They are worried that their current model is likely to be effected by a likely economic downturn end of 2020-into 2021.
Hi Sean, I also like your channel and you really seem to be an expert an the US-market. Europe - I believe - is a complet different market with different laws, habits, hotel&hostel prices etc.. Uber (for example) also doesn't work here in europe - or at least not nearly as good as it does in many parts of the US - mainly due to different law regulation
Cleaning fees: paid for by guests
Income tax: you gotta pay it no matter who gives you the money
Supplies: 100% tax deduction
Yes, when they quote their gross and not net it’s misleading but your analysis is also misleading fir the reasons I have mentioned above.
Your overly simplistic and in carriage deletion of reality does more harm than good to anyone considering this business.
The fact that you missed even the most basic items of tax laws and cleaning fee reimbursement makes me wonder if you’ve ever actually run your own successful business.
I was thinking the same. 100% write off...
Does that include water/elec/gas perhaps?
THANK YOU!! It's so easy to see these gloating videos promoting amazing results while they charge you from 8-12K to "Teach" you how to do it... and then reality sets in, you've started your business 12,000 in the hole.
I really don’t get your reasoning with this video. So a guy makes millions in revenue and he’s struggling?? I’m sure he’s netting at least 800k and that’s being modest.
Teaching people to buy property instead of using arbitrage is not only a bad investment strategy in such volatile changing markets, it also makes business growth 10x slower.
Do you airbnb?
Well...this didn't age well.... Those millionaires are now poor thanks 2 corona.
I love how upfront you are ! Thank you
READ THIS IF YOU WANT TO HOST:
I host 20 listings. It can be good one however It’s one of the most stressful businesses you will have. Guests can be savages. Here are all important negatives to consider:
1) guests want to throw parties and trash your place / piss off neighbours
2) guests are sooo DEMANDING! You will get requests for the tiniest things. And things you never even heard of before. Even if my house has 150 various items, I have guests who will always manage to find new things I need to get. FML!
Rather than complimenting me on the fact that my house has WAY more items and amenities than a hotel or other places of lodging, they will focus on the negative
Think of it this way. If my house has 97 items but it’s missing 3 items. On an exam, that would be a 97% score which is amazing. Nope, not if you’re an Airbnb host. That would get you dinged in the review
3) guests leaving critical Reviews. Not nice when someone you let into their how give total power over you and your future business by writing you a crappy review
4) constant upkeep, communication and handholding required. Common sense is not so common these days.
5) guests who are passive aggressive. They will leave snarky comments and you really have to bite your tongue so as to not reply in a similar tone. Over time , this will eat your soul.
6) guests complain about things out of your control. Such as frequency of city garbage collection
There’s many more but I’m tired
Sean,
I’m two-three years late in the business, do you still have 20 listings? And is it rewarding?
Just noticed you posted this a month ago…but yeah I’m trying to get to get my first lease.
I'm blown away that this course is only 14 bucks.
Incredible.
Good info that people should already know. All the reputable people like Sean always say they’re talking about total revenue when they mention their earnings so it’s not misleading. I think this videos is a cheap way to plug your coarse. Fact is Airbnb automated has the best info for people looking to run an Airbnb business and the key principles Sean teaches about running the business don’t change wether your in arbitrage or you own your properties. 🤷♂️
If someone renting my air bnb gets injured, will it be my liability ? ( and my landlord never approved my air bnb use)
I see it more as, this is one way of growing money. So this guy who started with 4000, and now he's a millionaire. That didn't happen overnight. Here became a millionaire over several years. He also has multiple sources of income. He was already a small business owner when he started doing this. He also probably diversified and did other things once he had more money to invest. So doing this is one way of making income somewhat passively, while you are not very wealthy (
Very realistic and we'll detailed! I hope that more youtubbers are becoming more a truthfully and less misleading. Awesome expose! Thanks!
What the hell does PewDiePie know about rental arbitrage...
hjahahahhah
Thanks for being real & clarifying this lot of gurus over-exaggerate
I don't think its smart to put all your eggs in one basket. I prefer a diversified approach being buy and hold, rental arbitrage, and cohosting.
Absolutely. Diversification is important. I'm guilty of not doing enough of it
That is kind of how I got started about 6 years ago. Subleasing apartments then I took the profit and bought properties to also put it on airbnb. I like the control aspect of owning a bit more and you can do renovations that increase the value and help you charge more per night. The rentals seemed to really get run down and after 4 years looked like trash.
ruclips.net/video/LMJFow6DvgU/видео.html
My in-laws has someone try to airbnb arbitrage one of their duplex. They kicked him out because other tenants complained. I wonder how many people do this. I can see doing an Airbnb of like a spare in-law quarter that comes with a house. But I agree the arbitrage deal seems like a lot of work. Though in a way it’s not a bad deal because in a situation like this where people stop traveling then I guess you can just walk away. The house doesn’t belong to you.
I liked your video, so I ask the following rhetorical question in the spirit of constructive observation/criticism: how does owning (vs rental arbitrage) mitigate for you the airbnb platform risk which you properly identify?
That's a good question. In my case, I diversified into other plaftorms and a direct booking website as well. However, you're right, I'm still dependent on Airbnb because they bring the most clients and it's the easiest to use. But that's where owning is safer already by nature. If I can't do short term rentals for whatever reason, I can sell my units, rent them long term or let an agency manage them. In any case, I won't lose money. But someone who does arbitrage and who signed long term leases can't do any of that. They are obliged to keep paying up.
PS: I actually already gave up 2 units for long term rentals
@@paulnekh You can just cover the rent till the contract ends by leasing the property out long term. Owning the property gives you no more security against changing market conditions/regulations especially when you buy with a mortgage. With ownership, the only advantage you may have is building equity in the property and getting the upside from appreciation.
@@laszlokishorvath3263 check this out. It is based on what actually is happening ruclips.net/video/PDNcYu8DFxI/видео.html
@@laszlokishorvath3263 property appreciation is one of the key drivers of long term wealth. Rents also rise with inflation so your returns are capped whilst mortgage payments should decline. With a well managed airbnb you can easily fully pay off a property somewhere between 4 and 6 years and from then on its pure profit.
Down to earth And sincere video! Agree to many of your points.
Just curious...what is your main business?
Who does not exaggerate these days, when the most popular SEO words are "fast", "quickly", "tips" and "hacks"? I can't count times when my traffic was supposed to "grow by 83.78% overnight using one simple method".
Very relevant today
Yep. Out of all possible risks to this business, the worst and unimaginable one just hit
California has all but outlawed Airbnb beyond your primary address. The gravy train is over out here.
Thanks Pavel, very interesting video
You the man Pavel! Where are you based out of??
Thank you! My properties are in Cannes, South of France
pretty sure this isnt arbitrage, i hear the term gt batted about quite alot [amazon too], but a arbitrage imply s tht your overlapping the payoff to offset the loss immediatley ther by cuting out the vast majority of the risk. the term originated in financial markets were you can get a quick payoff nt wer an aprtmnt can sit vacant 4 dys or wks hem-raging cash.
It's not instant bankruptcy, u can always pay the re-letting fee and get out of the contract. In my opinion owning isnt a great business move. The investment cost is waaaaay to high. Also your friend who has 80 units is making millions in profit u forgot to add that 🙄 so when u hear people saying u can make millions according to you its true 💯
He isn't making millions ;) He is struggling to expand to other cities in the US to make more, he already reached the limit in Chicago
@@paulnekh so he isnt a millionaire 🤔 that's almost impossible. Ok let's say he is making 900k yearly lol I doubt he is struggling lol
@@celebritywatch386 if your places don't get booked you go broke. Doesn't get any simpler than that.
@@markgaterbondifinancialguy3885 such a simple minded reply 🤣 u would be horrible at business lol
@@celebritywatch386 ruclips.net/video/jA9Oe5uuqGg/видео.html
Well stated 💯🙏🏽
Good information. 👍
Informative stuff, keep it up!
I don't see the link for the course
Do you need an LLC to set up this kind business
Yes
For Arbitrage
Con you put your listing link??
why is this video even up?? Do people actually like to talk about EXCUSES??? WOW no wonder why so many are NOT millioners
Most of them are clickbait.
Well said 🙌💕🎈