George:

I launched my first Airbnb in August of 18. About three years and about a month after my first-month launch with 10 Grand $10,000 a month, and then I started racing a little bit, I launched 10 Airbnb, and I launched Most of all, like towards the middle of that month. These were all apartments, these apartments, were costing me about $1,000 to rent, I didn't own them. Then if you figured out that these were making me 2000 bucks each right 2500 and they were hearing downtown Houston, Montrose area, and this is pretty good. I'm making pretty decent cash flow. If you do a two to two and a half x, I think you could profit about 20 30%. We were bringing in, anywhere between six to 800 bucks per apartment. These are Brian’s downtown studios and one-bedroom apartments. Then I launched a three-bedroom house, then I launched a four-bedroom house, and all of a sudden, I realized that these properties were making a little more they were making me three to 4000. So in the middle of 19, which is about a year after I got into the business, and I was doing short-term rentals. I was doing about 30 to 40,000, and this was a big hustle and a big struggle because I had a ton of apartments I would say maybe 20 something apartments and I was only making like two grand apiece.

Then I hadn't launched any houses yet. At that time. What I realized was like, wait, maybe I should launch some different properties. As I launched a house, flipping these houses because I had wholesale and I was doing rehabs and like I wanted to try this property this house. Three bedrooms, boom, three 4000. Then I tried another 134 1000. Then, essentially, I shifted my focus a little bit by the end of 19. Right before COVID. I had like two-three houses and then I realized that you can make for four to five grand in each house.COVID hits. I'm like three houses in Brett, maybe four. I'm doing pretty good. My apartments went to the drain. Literally, Because a lot of the market, dropped essentially all urban areas during COVID, and still recovering right now, and then all suburbs, a lot of the bigger properties and houses, that the income into revenue just rise up the roof, and the reason for that is people want to privacy, they wanted to be secluded, they wanted to be in houses, they thought that apartments downtown and in many areas wouldn't be as secluded, as private as houses. I went through this transition, and I was really about two months of really trying to figure out what I needed to do to make the change.

While I am fixing to launch rolling COVID hit in March, I was fixing to launch many apartments, and I had several houses in the pipeline I was already doing. At that time, I was getting half of my best whenever I was projected about 70 grand, and I ended up in Moscow in 37, and April 27, which was a little bit of a loss, then may we broke even, we're going back about, 35 40k and all of a sudden, I realize, was research and a lot, a lot of hours, 18 hour days figured out that the trick was more revenue, I needed to fix this neck. I went to this book, Mike McCalla, which were really made me realize what was wrong with my business.boo, I knelt down and I doubled down, increasing the houses. Our portfolio went for about 35 apartments and five, four, or five houses during that time, maybe even three, right till about the other way around. We have 27, 28 houses, and about 15 apartments right now, and we're essentially just swapping three, four apartments for a house three portfolios for our house. When I got all these houses, each one was now bringing in more revenue because the revenue increased and all the property so I really, caught on to that, and I was like. Alright, we have to switch our entire model. Our entire strategy pivot immediately. Within a year, I gave up 20 apartments, switch them all for houses, I started buying the houses renting the houses. What we are today, that's how we did that. In a year. We went 60 grand last summer, to about 70, 80 this summer consistently.

Brett:

I want to try to dissect some of that, and I'm not sure if and correct me if I'm wrong. Perhaps you were subletting these apartment complexes. Because you didn't own them all. you're renting amounts here, I'll pay 1000 as long as I can sublet and do an Airbnb strategy, and they said yesterday he approved that right. Is that fair on that first part of the apartments?

George:

What we do is we have a lease a strategy called rental arbitrage, we go up to the landlord, and we essentially present them with an opportunity for us to pick up X amount of apartments now houses, and, and we just tell we straight up, let them know that we're going to do short term rentals. We apply our rental arbitrage strategy, we know we let them know exactly what's going to happen, and we give them a lot of perks, and essentially, with these perks, they're able to rent these properties to us, in bulk, it didn't have just one person to deal with, with somebody doing business, and you know, we call a professional landlord, a professional host of some professional tenant. We did that, and, that strategy worked fine. But when I started growing, we've got like, 30 employees plus in between all of our companies right now deliver it within our group. But when I started growing, I realized that, if I had 20 apartments, and each one of them was making me 500 to 800 bucks, 10,000 to $16,000 a month in margins. Look, I added one person, that's too great.

I added another virtual assistant, that's like 100 bucks a month or 1000. Then I added another person, all of a sudden, I was losing my margins, and I still had to say portfolio, and I just wasn't growing, right.it didn't matter. By the time I took myself out of the business in about two years, or a year and a half to two years. By the time I took myself out on the basis. My margins during COVID were zero. And then I've got to do something about it, and I swapped, that's why I swapped my strategy. But we purchased also 1/3 of our portfolio is purchasing we purchased subject to so it's very low when it comes to down payments, and then we rehab. We've got a couple of rehabs right now and we just launched or one to one rehab, we launched one rehab license to rental arbitrage last month. We're in the private building through a diversified investment strategy.

Brett:

Some of them you're purchasing some of them you're like a fix and flip or wholesale. Some of them you're just going to buy and then hold and rent out tickets depending on the deal. You're not putting yourself in a box and somebody's just going to do the sublet. Is that a fair summary?

George:

That's right.

Brett:

Then are you approaching even owners and houses and saying, let me sublet your house, that you might be getting, let's say 1500 rent, I could turn around and get like a five, four or 5000 a month in Airbnb, let me run that and give you a percentage of the profits. Is that another way to do it?

George:

That is one way, to set it up as some sort of Joint Venture or were you when you get them a little bit more money than what they usually get. Typically, right now our rents are about 20% higher than the norm. The big perk here would be letting them know, and then having a secure two to three-year lease with small rent increases every month, and when we negotiate that says, essentially they're happy, they're like, okay, you're going to give me 50 to 75 or 5% more every year? I'll read it to you for three, four years, and then we always have an option to extend for two to three more years., We've got other terms that we request, we're protected in a way that says a little coming in, it puts some terms or some in our agenda that will allow us to get out of the lease, say another COVID happens, or the HOA doesn't allow

Brett:

you, it's nice to do that maybe the option to purchase right, if they put it on the market, you had the first right of refusal? Correct? We had that too. Nice, and then the other thing would be, the improvements. Because some of these houses might be a little bit, tired or sleepy. You got to come in, and you got to stick to your ule Number Number three, which is investing in don't go cheap into the interiors. If there's something that you don't own, and you're subletting are you putting the improvements in, or you're asking the owner to do that or walk us through that strategy.

George:

The most part, we've already gone into properties that are improved, and if one doesn't, here's a different spread, if you go into a house that is not updated, but it's so clean and well taken care of, that's going to be a house that's going to be out for rent on the market, versus you go into a house that is completely remodeled, modern, and it's got a way different layout, the difference in those two, you're gonna get more income, obviously, on this one, but the way that we set up our properties, we take this on, renovated or not updated house that needs to, maybe doesn't have granite countertops or something right, and maybe it has, I don't know, maybe it's just not up to par, you don't have an eyelid went up, we dress it up so nicely, and we create a unique selling proposition somewhere in that house, whether it's outdoors, the backyard, or whether it's a master bedroom, or whether it's the kitchen appliances, or whether it's the game room that we put awesome games, and at some point, people just care more about the amenities and them hanging out with the family and the comfort, in that they're okay, paying a pretty good three to 4x, per month. You're, we're racing, we're making pretty good money, even in the properties that are not updated. But of course, if you've got an updated property, you're going to make a little bit more.

Brett:

You've answered some really good questions, and I appreciate that. It's a really neat business and business model in Airbnb. We are ready to shift a little bit. We talked about Capital Gains Tax Deferral, and this and this on this podcast, as well. Sometimes people own these rentals, or own properties, and are looking to do 1031 Exchanges, but sometimes they can get frustrated, with the timing aspect of the 45 days one at or not having a clear plan to sell a business and defer tax. I'm curious for you, George and your clients, and your students, what's been the biggest frustration when it comes to Capital Gains Tax Deferral on the 1031 Exchange?

George:

I honestly have not used the 1031 Exchange strategy yet. You're going to have to forgive me on that one. I'm familiar with it. Of course, I've refined a couple of properties, a lot of them we've purchased just subject to I love to create a finance aspect. Right now, we know we're using tax strategies, that are applied to the short term rental market, we've got like $25,000 or $30,000 in expenses, we could write per property a year, and essentially, we, I would say, we're on the move, and when it comes to working with our students, right now, as many of them are just getting started, I think it would be great to have you on our podcasts and maybe talk about those right?

Brett:

I'd be honored to and happy to help. That being said, we're running out of time you ready for the lightning round?

George:

Let's do it, brother.

Brett:

All right. Knowing what you know now if you go back to your 20 or 25-year-old self, what's the one Golden Nugget Make sure to tell yourself to do?

George:

Never put all your eggs in one basket. Ever.

Brett:

Second question. Number one book you've recommended or gifted the most in the past year.

George:

I've got to tell you, so many of them, but the one that has again and again just reminded me of how to build my business. It's Traction by Gina Whitman. I'm going through it again and I'm building my business with the number of employees we have stopped, we applied at the beginning, and then things got a little crazy. What happens when entrepreneurs scale and over the last year, there's our entire, relevant blogs, we used to have eight or nine people between all of us, and in less than a year, we're over 30. We've increased our income, and we've started our, coaching company, and we started our seminar company, within the last year or so. Pratchett is the book.

Brett:

Question number three, what are you most curious about right now?

George:

I am curious about it? You know what? That's a great question, Brett. I think that storage units really enticed me, my good friend, Victor does tons of them, and then he builds up from the ground up. I was, really enjoyed this strategy of also vacation area rentals. I haven't done what we mostly do in the house, vacation rental type of properties, but of having been in a vacation rental area, an island or, the beaches with a laser. I feel like that, but it's a site for impact, and those two.

Brett:

Second last question, what's the number one quote or theme that you strive to live by?

George:

The quote, I would say, one that that I used to have all my on my jacket, and it's so it's live on purpose every single day.

Brett:

Last question. George Salas, after all, your success, all the rentals growing the business, helping students and your clients and friends and family members do the same? How do you stay centered in your values? How do you stay encouraged to charge forward to reach new heights?

George:

I am huge personal development. I've got a great Miracle Morning Routine. Focus on being grateful every single day about really putting my thoughts down. I focus on writing down my day writing down my goal, really putting my ideas down, and just making sure that I'm always thankful for my team, and I get them involved, I create a vision for myself, my significant other, my students, and my team, and I really focus on that execute that vision. Let’s do it, brother.

Brett:

Absolutely love it, George, for our listeners who want to get in touch with you. Would you remind them one last time what's the best place for them to find you?

George:

George Salas 360, and 5 Houses 2 Freedom the number two. Number 5Houses2Freedom.com so those are the two places that you guys can find.

Brett:

George Salas, want to thank you for being on the show sharing so much wisdom with us, helping us to build an Airbnb Wealth Strategy. I would encourage you to keep connecting well with others use the strength of bringing people together, help them clarify their vision and purpose so they can achieve more of their destiny, and I also want to thank our listeners for listening and if you're watching this on YouTube, to another episode of the Capital GainsTax Solutions which is podcast also streaming eXpert CRE Secrets Podcast and YouTube Channel. As always, we believe most high net worth individuals and those who help in their struggle clarify their Capital Gains Tax Deferral Options not having a clear plan is the enemy using a proven tactical strategy such as the Deferred Sales Trust is the best way for you to eliminate the need for the 1031 Exchange sell high and buy low all tax-deferred. You can learn more with the Deferred Sales Trust that CapitalGainsTaxSolutions.com it’s CapitalGainsTaxSolutions.com please rate review, subscribe. Please share this with somebody that could help out and inspire today. We so appreciate everyone out there and we'll talk to you again real soon.