How Grayson's first Airbnb arbitrage near Austin hit 75% occupancy

0:00 in today's episode we're talking about Grayson who is an IT worker for his day job at an early age he decided he wanted to start a side hustle so he got into short-term mentals that way he goes over the challenges and also finding the right properties in a competitive market like Austin Grayson story is super interesting he goes over how he's able to be more Hands-On with his first property we also Deep dive into the specifics of how he's able to renovate a century old house and also how he's able to leverage the security deposit to revamp the lawn and also install other amenities like a fire pit outdoor lighting to enhance guest experience and also to increase bookings this is an awesome episode so with that being said let's get right into it all right so we got Grayson Nichols here you know awesome property he's actually at his property right now so excited to be talking to him today so Grayson if you want to just kind of give us some background on you know what you do professionally what you got you into you know starting this business and then we can take it from there yeah so I have been in your class for about a year now I think I joined last October I work remotely I do it so it's very easy to do from my laptop wherever I am and it also gave me a lot of time to do those the modules whenever I had just some down time and stuff like that so I did the course for about 6 months just kind of hopped in and out figured out the right time looked for Market that was close to where I was living here in Austin which is actually hard because Austin kind of has some different ways of doing airbnbs or not doing airbnbs but hopped on

1:18 Zillow started filling out the spreadsheet with all the the metrics on there and the first property that I kind of flagged was the one that I actually ended up doing the owner had just got done renovating it it's like a 100-year-old house and so they had just put all of their money into the roof and the floors getting like brand new air conditioner unit and so they were needing somebody to come in and and furnish it and do everything with it so it actually went really really well and it's been going well now we've been live since July it's been slowly picking up and October is currently our busiest month we've got about 75% of this month booked out so it's it's been great that's awesome man so let's kind of talk about so let's take a step back a little bit right so you joined you know in October 2020 was it 2022 so what were some of like the biggest struggles that you faced and how did you overcome those you know obviously every business anything that we start brand new is going to have some Road Blocks so you know what are some of those things that you face and then how did you overcome those yeah so first of all I kind of wanted a property that was close to where I lived like kind of within an hour so I could go check on it kind of do everything on my own because it was my my first one I think it definitely would have been possible like if I didn't live near to set it up but

2:34 because it was my first one I wanted to be Hands-On with it so I kind of had to broaden my radius a little bit because Austin has some different rules and so I found this property that was in a smaller town outside of Austin and one of the first things was La wasn't super up to dat because nobody had lived here for a while so law needed a lot of work it's interesting because I was actually able to negotiate one of the things that you teach in your course is trying to use that security deposit as just money that you can reinvest into the house and so I was actually able to get the lelord to agree to let me use that I think it was $2,300 to revamp the lawn we brought in gravel we dug out a fire pit back here and just totally made it look brand new and then the only other thing was getting the insurance uh figured out because the owner just and I mean it was within their their rights they wanted to make sure that everything was covered but proper Insurance like they did it great they did a fantastic job I think you recommend those those guys but yeah once we got that figured out it took us like two months so a little bit longer than I would have liked but it really gave us a good pacing to to kind of get everything up and going and then once we got our professional photos uploaded another one of your great

3:51 recommendations we're good to go people might not know this but Grayson's actually at his Airbnb so we might have him give us a little little house tour here in a second so you know that's awesome stuff dude you know your property I'm looking at your you're listening right now the photos turned out great you know property has a lot of character so what are some ways that you you know some tactics or you know strategies that you use to convince the landlord to you know sub it to you because a lot of times people think about you know this airb Arbitrage and you know a lot of these landlords don't even know what that is they you know they think they might be getting scammed so how did you earn that trust of the landlord and then how did you you know ultimately convince them to let you sub Le their property yeah so I gave her a phone call she was listed on a Zillow as the owner and I followed your script you don't really come right out and say hey I know what this I'm like really interested in having this on on Airbnb on vbo I started out by saying hey I'm a small business owner I I turn properties into beautiful homes for traveling professionals or or families and she was very just open to hear me out from the beginning but I think what really helped is I was willing to actually meet her here and kind of just walk through everything she was able to see that I was a real real person I think I represented myself well and I was very complimentary of the house she done a lot of hard work on it and one of the things that I that I told her is that one of the benefits to the this model is

5:08 I would be cleaning this this property often it would be clean almost all the time because it's my business and my reputation on the line she would be able to hop in whenever she wanted to to to check on it and see how things are doing so I think one just being very transparent with my intentions then just offering her as as much Freedom as she would like to to check on things and she's really just kind of let me run everything she knows that I'm taking care of this house and she loves hearing how all of our guests have just they've loved this house so that's been fun for her to kind of see those come in yeah for sure you know one thing I really like about the property is the backyard you know obviously the house itself has a ton of character so will the internet like completely bug out if you go and kind of show the backyard area we can try we'll see it's uh been a little bit rainy so there might be a little bit of mud but we'll see if we can do it here yeah this is this is a first for sure but um you know if you're there already we got to we got to take advantage but you know while you're walking over there so you know obviously you did a perfect job where you go and you know talk to the landlord you know earn the trust of them you know one of the things that a lot of people kind of struggle with is they don't know how to run the numbers properly right so when you ran the numbers for this property obviously our team kind of helps you know solidify that the numbers are you know correct but how did you make sure that the numbers that you ran prior to you know

6:26 signing the lease so that you knew that was going to cash flow uh you know after you going live the only thing I didn't really know about was going to be the utilities and kind of how much they would be on average and so I actually asked what the owners's bills had been for the past couple of months and kind of got an average and then estimated a little bit because nobody had been been living here but I figured it wouldn't be like that much of a difference I estimated like a certain maybe 50% higher or something like that and then I actually just all the internet best control those are all coughs that you can get up front before you even sign anything and so that was a really easy easy way to kind of just make sure I had all the numbers right and then I was able to see what cut Airbnb and and vbo take out of everything actually let me get my shoes all since I'm about to go outside sorry this is our kitchen by the way so we've got everything already cleaned up here and a lot of our guests have commented how they look just like the photos so that's a good thing to be mind but let me know if it starts to drop out out here this is one of the first areas that we put out here we installed this little gravel area with a table out here they've got a grill here up against the house I don't know if you can see any of this is it is it coming through yeah we we're we're good okay cool we got the fire pit out here with our string lights up there all the guests have really enjoyed that that's another thing that we installed out here

7:43 cuz it was just I mean it just grass back here I mean like was right they else you wanted to see I can keep walking around if you want no no no yeah you can go back inside but let's talk about like you know what was the reasoning behind the fire pit and also you know the string lights right because I think like cuz a lot of people think about you know setting up these airb bees of like you know how would I like my house to be be like but you have to remember it from a lot of these people are coming here for vacation to get away so you know what was some of the the thought process behind the fire pit and you know the stream lights yeah well part of it is so I wanted to make my property stand out you know part of it is like you want your your property to do well against the other ones that are similar in the area and I was kind of looking at all the top performers in the area and a lot of them had kind of social areas where everyone could gather and a fire pit was really easy way to do that we also have a balcony on the second level and I put a seating area there as well but fire pits are super popular in this area almost all of the high performing houses in this area have those or just have some sort of area where everyone can hang out and we weren't on on a waterfront we don't have a pool in the backyard so I decided that was the next easiest thing to kind of add to our amenities and then everyone just loves outdoor string light so those were those were a must have super easy super cheap so that was one of the ways

9:00 that we just kind of added value to to our house yeah you know look a lot of good things that you touched on there you know number one studying what the top performers are doing you know the same goes don't fix what isn't broken and then you know another thing that I think your property does really well that's going to be hard to replicate is that it's just really old but not like it doesn't like look you know like run down but it's like a really classy looking old property where it's really it's going to be hard for other you know people to come in and you know kind of take up that market share for you because of how unique your property looks so I think that's in and of itself the house itself you know is a differentiator so you know really you know awesome job on that thanks yeah it's it's a really I think part of it also is the area so something else that I was looking at to sort of advertise this was okay we're not on a waterfront so I need something else to add value to this property what's something that's going to make me want to come come be here so if you can't have a natural attraction there look for a good this is just my advice but the area and proximity to the down downtown area was huge I can see downtown out the the front door and we've actually had a number of our our guests comment that hey I just I just walked over to this coffee shop or hey we we just walked over and got some pizza we even had we even had a guest comment that you don't even need a car if you're going to be

10:17 here because everything is so it's so close and so walkable so that was another big aspect of it and then yeah the house even without anything in it is beautiful I mean it's over 100 years old it's got this cool like old fashion but people really appreciate that so yeah I think you know something that a lot of people don't talk about you know especially with Arbitrage right because a lot of these places like they don't really go on for s that often right the only way that you would be able to you know secure a property like yours is you know once in a blue moon when a property like this you know comes listed for rent and then a lot of times these properties need a lot of work too but the reason I love the Arbitrage models because is that a lot of these people you know they have super old loans you know they might not even have a loan on these old houses and so it's all paid off so these people they want to rent out their properties earn some income and then that way you know you can do the Arbitrage model on their property like a minute walk to downtown is's you know a great differentiator so that you don't have to you know worry about a bunch of competition cuz you know there's not a lot going to be a lot of places that are going to be able to replicate what you have so you know really love that you're thinking about it from different angles even before you know sign the lease here but um what is the cash flow numbers looking like on this specific property yeah so in July and a little bit of August we we were pretty low because we didn't have any any footing in the area but that's be expected so we kind of factored that into our initial budget which part of that was a business credit

11:35 card that we got that had a year with with no interest so we actually put the first two luds rent on the card but then after that we started getting bookings I think September was a th000 in profit and then October has been our has just exploded we've got almost $3,500 in profit for October and then we've already got some other way for November December and then we we even have some as far out as next April so it's definitely growing it's that's the the benefit of a smaller area is you have less of competition and so once you kind of gain a reputation as a house that people enjoy that can poost a big group easily they just start coming in so I'm super excited about these about these next couple of months as well so what are what are your goals for the next you know coming up six to six months to a year let's call it you know what what are some of your goals that you're to accomplish here yeah we still want to do a lot of work on the outside just kind of make it more pretty out there add a couple more plants here and there to the the Landscaping I added that riddle in September so that wasn't here when we went live originally but I actually need to add a picture of that I want to add a couple more photos I want to get a photo of our fire pick when it's actually active we want to add some string lights to our our balcony on the

12:55 second floor so that people can hang out there in the evening and then also add that onto the listing and we've also been asking kind of our first 10 guests kind of what they would add to the property and we've had uh people say oh you can add some grab bars in the in the shower because it's kind of high off the ground and people have been very very helpful and adding or like recommending things to just kind of add to the value but and then again just getting as many five star reviews cuz I think I just missed the cut off for super host for Airbnb cuz you have to have and guests on there surprisingly the majority of our bookings have actually been through vbo so that's that's a super good thing if you're not getting a lot of bookings and it's only listed on on Airbnb to we actually just got another booking for December go but yeah so definitely looking into to both platforms to just kind of maximize those five stars just kind of building the the reputation for the for the first year you know love that you're taking a long-term Approach at this you know reinvesting back into the property you know that's what we do for a lot of prop our properties we always kind of every six to 6 months to a year we kind of take a look at okay which amenities can we add you know what are some like things that we can do to improve you know bookings and also asking guests right cuz they're the ones that were actually in the place that can give you that you know realtime feedback

14:13 and listening to that is only going to make it a better experience for guests in the future so love that you're doing that so I know you're busy uh to wrap this up you know what would you say to someone that's you know either considering to start their own business you know what what piece of advice would you have to that person yeah I think it's really important to have a long-term goal in mind and then that's that seems obvious but when you're getting in the I mean obviously you you say that it's definitely doable within a couple of weeks and it definitely is doable I think we we decided to take our time and just to not be discouraged by that because it can also just add to your your experience the more that you catch up front things like oh I should I should fix that or I should add this the less that you have to add on later and just like the more that you'll that you'll learn like I said I I plan to have this for at least 2 years and I'm not expecting to be able to retire off of that I'm definitely going to just use this to funnel into hopefully whatever my next property looks like having a long-term Vision having some checkpoints along the way is going to be super key to be successful with this this business model I love the Outlook I appreciate the time man thanks for the insights that you shared and yeah excited for people to toop on here and and and see this yeah thank you Preston I really I really appreciate all this yeah dude take care see you