All Forum Posts by: Ethan Hanes

Hello everybody! Can anyone help me decide what would be a better option financially in the current market / with current interest rates. I have around 500k cash and would like to buy an investment property in South Florida area. I could buy a 3/2 SFH for cash or a multi-family (2lex, 4lex) for up to 1 Mio. and get it financed. The rate of return would be similar in both cases, but not quite sure if it is worth getting a multi-family and pay so much in interest (ca. 8%). Thank you so much in advance!

Are "Medium Term Rentals" (1-2 month stays) the next big thing? I tend to think so as owners can trade max profits for lower costs, booking certainty & perhaps most importantly much lower regulation risk (most STR regs don't apply for 30+ day stays)

Very interest recent report from Airbnb - https://t.co/EPvz235Uyz

Highlights:

Interesting list of the top cities for these MTRs:
(Best Earning - some nice sleeper markets)
La Quinta, California
Delray Beach, Florida
Marco Island, Florida
Palm Springs, California
Indio, California


("Best Equipped" i.e. most listings - oversaturated or sign of a good market for MTR with robust demand??)
Irvine, California
Los Angeles, California
Cincinnati, Ohio
Cambridge, Massachusetts
Seattle, Washington

Most "hospitable" (most enjoyable cities for people doing "digital nomads" by working remotely in short spurts - also some good markets to consider
Bend, Oregon (93.7%)
Santa Fe, New Mexico (91.7%)
Boulder, Colorado (91%)
Key West, Florida (90.2%)
Fresno, California (90%)


What do you guys think?  Anyone switch from STRs to MTRs (30day+)

Hey guys my name is George Yu and I love passive real estate. The idea of investing into something and then collecting mailbox money whether you feel like working or not is like having your own golden chicken as long as you take care of it. I bought my first single family home in 2011 while I was a freshman in college for $32,000 move in ready from my uncle and it has been consistently rented out since for about $650/month. Fast forward till now, I have a total of 6 single family rental properties....and now a 36 unit apartment complex. Maybe your asking how did he go from single to constructing 36 units. Honestly it wasn't that easy or quick lol.

My last single family purchase was in 2017 so I had been roughly buying one property a year. While the income was great and I was making passively per year what an average American makes actively. I was searching for more. Enter: Grant Cardone. I love Grant and his high energy. He really had me sold on the "single door is death" mindset since late 2017 so around that time I made up my mind that no longer was I going to buy these "measly" single family home that afforded me my relaxed living up until that point. I was going to be a Multi Family Syndicator!! Well that would have been the case but none of the deals I could find excited me. I couldn't find anything over a true 6 cap (once I dug behind the brokers inflated numbers). I get the concept of more doors under one roof and management but I was collecting around 15-18% cash on cash from my single family. I didn’t expect 15% returns but I just thought that 6% was too low.

Now I am a salesman and I like to sell people what they want. My day to day work since 2012 was in product manufacturing and importing. I can speak fluent mandarin and everyone knows China is where everything is made. I started importing and selling anything that made a profit while in school. I didn't do too bad. I guess well enough to quit pharmacy school in mid application my senior year of undergraduate at University of Georgia. I was projected to make about 80k a year when finished with school and I was making over that working on my own. Didn't make sense to go into debt and another 3-4 years of school. Around 2015 I had began experimenting in developing my own product because everyone was selling on amazon by this time and margins were slim as a private label guy. I had to invent my own product to stay ahead. Well what to invent?? No idea. Not until I found myself in a cockpit of a 1969 Piper Cherokee 140 with my flight instructor coming down from a cross wind landing when I saw a windsock and had a bright idea. What if I could create a product that that inflated with just the wind and created a lounging device or even an air mattress? WindPouch was born. We a had a couple viral youtube videos one by Casey Neistat that really opened up a world of craziness for the next 16 months. We went from 0 in sales to a little over 4 million in revenue before being acquired in 2018 but not before getting a call to pitch on ABC's Shark Tank and landing a deal with Mark Cuban himself (the episode never aired unfortunately). That’s a crazy story for another time.

Back to being a salesman. I took a step back during that 2017-2018 time and figured if everyone is fighting over these 6 cap deals and buying them up before I could even get my hands on one then if I could build something better than a 6 cap with these low interest rates then i'm pretty sure I could just sell them back to the investors and do it again. Or rent it out for cashflow...or both. I didn't have a clue about new construction until I met my now partner Jeremiah. By random chance I was talking to a friend about my ambitions to build new product specifically for workforce/affordable tenants. I like staying in the NEED category rather than the WANT when it comes to living arrangements. There’s plenty of money building for WANT these days anyways. You see them coming up in every big city and Atlanta is no different. Literally we have 10+ high rises coming up at the same time while there is vacancy in the completed ones right next door! Bubble? I have no idea and wont to pretend I have an idea about how to time market cycles. What I do have an idea of is that there is a great NEED in affordable housing everywhere we look. My friend met a guy in his hometown that was an entrepreneur like us but decade older and had been building for about 15 years...and he was also building affordable housing. One phone call later I was in my car driving 4 hours away to meet him and see his products. I was hooked. Simple and yet much needed. He was focusing on the forgotten tenants. The ones that no one is building for. Most make minimum wage and are either divorced, widowed, elderly or post graduates just not wanting to move back in with mom and dad while looking for a job. Most product if you could find any in that price range were dilapidated. Often the poor insulation could cause the electricity to cost almost as much as the rent itself. We are building for them. I know what you are thinking. Section 8? Are they good tenants? Do they tear up your place? Here to report that so far so good. We build market rate so no government subsidies and we don't take section 8 vouchers. We just don't think the government's help is needed here at this time. Pure capitalism should drive this.

Jeremiah was just finishing up another one of his developments and he had located a piece of land where another potential development could go and he wanted help taking it on and then taking this long term and eventually nationwide. It was in that moment we agreed to partner up. From the beginning I was there on every phone call, email, variance/zoning/permitting meeting, numerous investor/bank meeting, contractor/subcontractor meeting, code enforcement and closely watching money from our million plus dollar loan account slowly being drawn out every week from contractors and subs. It wasn't a walk in the park by any means and we had our share of surprises. We got hit with substantial impact fees from the city, local cable/internet company screwed us over, few raining weeks slowed us down a little and of course a fair share of contractor issues. But overall it was a surreal experience to see the land transform from trees to completely built out with our first tenants moved in. We have set a goal for 2020 to build another 200 units spread over 4 cities in our home state of Georgia. We have empty lots selected in 3/4 of those cities. We have already had meetings with city officials, investors and land owners.

The point of this long post was to give people an idea of my journey as someone with little to no experience being able to take part in a multifamily development by believing you can, teaming up with right people, having a willingness to learn, and a healthy bit of luck. If I did this on my own it probably wouldn't have happened this quickly for sure. It's also a great feeling help create homes for people in need while making great passive income. We are so excited to be breaking ground on our next development in December. I would like to answer any questions about anything to help people who are interested in learning. There’s a lot that I didn't cover such as financials. I can say that we are above a 10% Cap Rate after refinancing our construction loan into a longer term loan and the demand is good enough that we have a waiting list.

Finally i’m taking all questions so please........ Ask away!

Here are some dropbox photos of our journey from Parcel to Passive income:

https://www.dropbox.com/sh/tyk44xnpc0mev8z/AACQSjHK1IskpaDnt4VHLxpMa?dl=0

I see the opposite as a distinct possibility moving forward. While interest rate hikes will hinder some buyers and some valuations, they are still below the average norm and (at least in So Cal) the housing shortage remains. When you consider how many would be buyers of homes have now been priced out of the market due to the massive value appreciations along with the higher interest rate costs, these would be buyers are forced to find a rental unit instead which should generate even more demand for rental units. Rents continue to climb which increases gross rev and in turn, covers the added costs moving forward. Values would only retract if NOI is negatively impacted and I just don't see that yet.

What do you think the outlook is in the next 1-2 years for purchasing multi-family in Los Angeles? Would your analysis mean it would become a good time to find deals?

I bet you have no idea what I actually do…

In the past 10 months, I’ve been able to grow my co-hosting business from 0 to 30 Airbnb units and the properties are on pace to bring in $1.7 Million dollars in Gross Revenue, netting me roughly $135,000 (This is after paying my 3 employees who run the day to day)! 

But how’d I ACTUALLY do it!?

Here’s the backstory on how it all happened:

The frame by frame on how I built a 6 figure co-hosting biz at 21 years old:

Ever since I was a kid, I always knew I wanted to be an entrepreneur! I was obsessed with the show Shark Tank (and I still am to this day) and I realized I wanted to be just like the Sharks- have a lot of money, make the decisions, and be in control of my time and location!

The only problem was that I had no idea what kind of business I wanted to start!

Fast forward to the 1st day of college, I made a promise to myself that I would start a business in college that I could continue building after I graduated (instead of having to get a w-2 job)... 

I simply didn’t want to have to work for someone else and I was determined to start building a company now so I didn’t get trapped in the rat race!

I looked up every side hustle you could imagine on Youtube, but ultimately nothing stuck with me! Then in my Sophomore year of college, I read the book Rich Dad Poor Dad and my eyes opened to this thing called “Real Estate.” 

Discovering “real estate” felt like I was discovering the gold rush, it was the light bulb moment… …until I realized that I didn’t have a lot of money, a great credit score, and real knowledge of real estate!

So I “talked the talk” for over a year. 

Trying to figure out how to finagle my way into my 1st property, with no success… 

👎 I was feeling discouraged, I thought:

👎 I had to have a lot of money to get started

👎 I felt like I was too young to actually make any money with Real Estate

👎 I thought I needed to have a perfect credit score to get started

Until I met a mentor of mine who showed me the ropes!

With their help, I ended up buying 6 properties while still in college, and built the foundation of my Airbnb co-hosting biz!

✅ I learned the power of having a mentor so I didn’t have to recreate the wheel

✅ My limiting beliefs went away

✅ I turned the past year of “talking the talk” into “walking the walk”

✅ I learned the power of relationships and your network

After a while, I realized that I needed an income stream that I could scale quickly without taking over my life… 

That’s when I discovered Co-Hosting!

I started with 1 Airbnb property and scaled my co-hosting biz to 30 units in just 10 months!!

Not long after that……

🔥 I was able to work from anywhere in the world while my Airbnb income consistently increased

🔥 I was able to achieve my dream of having a successful business and decided to drop out of college to work on my biz full time!

🔥 I have students young and old that are doing the same because of my coaching

🔥 Life is almost like I am dreaming while awake! 

I have to pinch myself sometimes to make it feel realIt’s all been a bit of a whirlwind… 

If I can leave you with anything that might help you succeed…

I will leave you with this.It is definitely hard work to make money in real estate and build a 6-figure co-hosting business, make no mistake about it…

But the good news is…

The process, the method, and the system are easier than you think.

All you need to do is learn the foundations of Co-Hosting Airbnbs!

👍 Learn how to find owners who NEED your co-hosting service

👍 Learn how to setup a property from ANYWHERE in the world!You can do this by Leveraging systems and a team

👍 Learn how to manage properties from ANYWHERE in the world!

👍 Leveraging systems, software, and people!

👍 Scale, Scale, Scale!

Follow these core 4 and you’ll get there before you know it.

Don’t give up,

-Bailey

Thanks!