How Andrew runs an Airbnb in Tulum, Mexico from the U.S.

0:00 so in today's episode we're talking with Andrew who talks about his journey into short-term rentals and how he's able to secure a property in Mexico that's cashing him $2,500 per month we go over his journey into entrepreneurship and how he's able to secure this property from a different country as for all my folks out there who are looking to do airbnbs outside of the United States and Andrew is the perfect person to learn this from so with that being said let's get into the episode all right we're here with Andrew wolf today you know awesome student been able to crush it you know right off the bat so Andrew just wanted to uh you know first understand a little bit about your background you know what you do for work MH also what you know made you want to start in an Airbnb business and we'll take it from there so my background I was in the hospitality District in hotel management for about 15 years now I'm in a related field but more on the software side for a company that makes software for hotels so that's kind of industry that's very familiar to me and a couple of years ago pre pandemic I'd been turned on to the concept of Airbnb Arbitrage but without knowing really what it was or a name for it or how to go about it so it was something that was very I was very interested in the concept but I did not have at that time a way to really execute it there's a lot of questions I had thought going forward I was curious about it but then Co hit and then I didn't really pursue anything at that time and was put it on hold until I actually just came across one of your podcasts or Instagram actually is where I kind of turned on to your

1:18 program and then really everything started to click you know as far as like how do we approach L Lord just the regular Concepts that like seemed very clear after that but before that it was like I didn't even understand to get past that with landlords and putting the whole all the pieces together that you can do to kind of successfully pull that off so it sounds like you're you know interested in the idea just like kind of like the step-by-step process of it you were just kind of a little bit intimidated by that exactly yeah exactly you know obviously that's take a step back a little bit further right so when it comes to entrepreneurship whe it whether it comes to an airb business or any sort of you know Venture that you kind of go off in your own in general you know there's always kind of it's interesting talking to people because they have this kind of either like light bulb moment or you know it's like how they were raised right so what made you want to get into entrepreneurship in general oh yeah so going back farther I guess I was always raised to kind of think outside the box a little bit as far as from entrepreneurship mindset thinking of other avenues of you know revenue's dreams but also years ago I read Rich Dad Poor Dad and by Robert traki and that kind of got the ball rolling for thinking about how I really wanted to be able to start some kind of business and then sometimes it took time to look at different methods and different opportunities out there to see which would be a good fit and as a lot of people do you have some that work out

2:35 some that don't and trial by error over time but that's that was one of the things that kind of put things in perspective about different people how they look at that entrepreneurship the business mindset and kind of doing things that we not necessarily Ted to in school you know as far as how to how to look at other avenues and revenue streams and how to kind of build that those assets so they're kind of working for you instead of you working for someone else yeah I think Rich that poor dad is one of like the biggest like kind of mindset shifts of like the generation growing up to in school study hard get a good job and work your way up the corporate ladder that's how you become successful but I think you know that book really challenged us on you know what it really means to become you know financially successful and there's so many different avenues that you can take to do it so yeah I mean definitely one of those people that had that mindset shift when I read that book so let's shift gears a little bit and let's kind of talk about how did you find your first property I believe your property was located somewhere in Mexico right yeah I did a little bit non-traditional Outreach to landlords I was looking at a lot of different locations I actually found someone through Facebook groups cuz I started looking through different Facebook groups that helped connect landlords and Arbitrage connecting those dots to find people and I found some people down in Tulum I started to look into that market I connected with a guy down there that had a property and then

3:53 with a property management company down there there's a lot of trial and eror down there more complex in some ways in the US just because being a foreign citizen you know you have to how to get around certain things how to how to make things work but I found something that's a good opportunity there is because the market conditions that are right they're about to have a brand new International Airport opening in December in tum is where it's at that was really attracting me to that market so digging into a property man and then they connected me with some um Brokers just because it's a little more challenging down there to compare like you can on Zillow here in the US where you can find out what's fair pricing for several different rentals and things like that so that was a little bit more leg work that's has to be done to kind of get into that understanding the market do a little more research it's a little harder to find things air DNA was helpful although it's not as complete in some of those markets as it would we used to here in the US but that was a big tool that helped me kind of in narrowing down whether it was a profitable Market to access so it's interesting because you know a lot of people I talk to they're scared to do anything remote right right and you know even our very first property we did that completely remote you know obviously I'm in Utah the property is in Arizona and so in my mind I'm like you know worst case scenario a couple hour flight away if you know

5:10 anything were to happen cuz I've never i' never done anything remote at that point but you know the way I've designed the program everything can be done remote and kind of have that confidence to do that but what are some of the ways that you overcame that fear of you not being able to you know especially being a completely different country like what gave you that confidence to go ahead and you know take care of that on your very first property do that remote I think some of the ne factors was really was just finding those right those Partners really I think the confidence cuz me if I hadn't found the right partners that had a lot of those things already in place because they were focused on airb Arbitrage so it's it kind of understands the concept they understood the concept and were trying to tailor their program to that so that being said they they work with with a lot of different aspects that were already something that we taught and your that you taught your program as far as understanding like how to you know the furniture and all the Furnishings that anything that's needed it was less intimidating I think now I even built a lot more colies where I could do that without a property management company once you get through that and you find out okay there's a lot of things that maybe I was more worried about than I should have been as far as the setup was concerned but it did put me at ease having partners that knew the in andout to that local market because I think that's another real thing that you can be scary as that you don't know as far as a housekeeping team or or

6:27 maintenance on site until you can plug in with somebody local that you feel comfortable with that goes a long ways for feeling like you can pull that off cuz at the end of the day those are the people that are really doing that you know day in and day out work to keep that property going they're going to be one of the most valuable parts of your team to be able to when you have somebody you can trust you feel comfortable with what the operations that maybe that they've done like that in the past that really goes a long way for instilling confidence that it's not something I'm alone on and the remote nature is less daunting when you feel like you have somebody could Implement you know your vision and what you're looking for yeah I think hit on a lot of key points having that trusted boots on the ground team is vital because even if it's in your backyard you're going to want to hire the cleaners and the handyman you don't want to be you know be doing all that stuff so that's where the upfront you know vetting of these people comes into play cuz I think once you start talking to a few of these different vendors you can kind of understand like who actually knows what they're talking about who you feel is going to trust and you know getting references on who's going to actually take care of the property and that only comes with that real life experience right I can give you all the scripts all the templates in the world but if you're not out actually out there you implementing it then you know it's not going to go anywhere right you know really great job of you know talking to those and figuring out those trusted people cuz there's two properties in our portfolio we never I've never even been to I've never even been to that state and so you don't have to ever step foot

7:44 in it if you have that trusted uh boots on the ground team so you know really go good job on that oh yeah and a lot of that confidence I think in that approach was built having the understanding of what was required you know from going through the modules of the program and and it also helped a lot on the negotiation stage knowing what I needed for numbers to get out what I what I wanted out to make it worth my time to even um you're putting any money down that was something that went a long ways for renegotiating even lower management fees cuz just looking at the numbers and sharing that with where I needed to be with the property manager just being open with him about what that looked like to me to' be able to close the deal that helped me prepared for that so I could tell what was what was a reasonal about what I needed to get out of it from them and they were impressed by that prepared I think they're used to a lot of people coming into this with an idea similar concept but not having the leg work done and a real understanding of what it takes to make it profitable and so that that went a long ways for instilling covidence that we were doing due diligence correctly that I knew what I was getting into had would have the you know results on was looking for in the end yeah and whether that's you know my program whatever program out there like you need to make sure that you have that Education Foundation in place or you know unfortunately there's a lot of Bad actors out there that can take advantage of you if you don't know what you're talking about and haven't done

9:01 that upfront research but if you know you come in know you talk the same ter terminology you know you understand what you need from like a management feed for you know in your example where you guys need to be at in order to make it profitable for you that like those are you know all big things where they're like oh like this guy actually knows what he's talking about and goes a long way to build your credibility as well no great stuff man so as far as cash flow for this property what is what is it looking like on this property so right now it's very seasonal more seasonal than I realized just getting into it because that market is still their summer times are kind of slow because they're off season when when everything else is open we're looking at heavy season we've been averaging out probably over the whole year I'm hoping for an average around right now 1,500 per month that I'd be looking at on average for the whole for the first year that's going to be a lot better in year two just because right now that market is about to really pick up because they're adding this International Airport that'll allow direct flights in there that's where I looking at 1500 right now on average during the high season you know it's more in the you know $400 ADR and then right now we can be just around a 100 so it kind of swings a bit and that's something just to be aware of I think that's you know where you really have to do that leg work to see if that's worth it too because the aeny percentage and things it's a little softer than we originally were hoping for but that's just comes with the territory but I think we're going to be

10:19 a strong second year especially when we get into the second year because of the things that that market has is poised to really take off yeah I mean $1,500 a month I think a lot of people would take that you know as extra income you any day right especially on your first property but I know another really cool thing that you T touched on and this applies to like any Market you're looking at is those different opportunities within those markets right like today you know you're of course like the the first and most important thing should be a cash flows from day one and then the second important thing is to look at the potential of this market right there's a lot of markets out there that you know I wouldn't personally touch just cuz I feel you know it's kind of been capped out but like you said you you know found this opportunity where there's going to be huge International Airport being built out you know more demand coming in and then you're going to be able to capitalize on that you know because you have a property in place there you know that's a really kind of soft spot in the market that you can you know capitalize on and moving forward to increase your Revenue as well you don't want to obviously Bank on that but it's a great you know value ad you know to your point so what what are some of your long-term goals you know let's say in the next six 6 to 12 months uh you know with your current portfolio like what what are your looking at oh yeah so this one of course this just being the first I'm trying to get this you know make sure that we get all the cash flows I'm getting my returns that I'm inspecting in that first you know we're looking for that Target of that seven Monon time frame might slip a little farther than that just because the summer was a little soft before I you know get my

11:37 cash on cash return for that property but that's the first thing goal is getting that solidified you know kind of that make sure that cash flow is coming in consistently and where I needed to be before going on to a next one I plan on doing more now in in the states it's possibly a things look good down in Mexico I feel comfortable possibly adding a second property there but I'm looking at some other markets that are you know tier three markets in the US type of thing where some tier two where you know you can they have a strong year round base that's what I'm kind of looking more putting in more in probably like more like the third quarter of this year is where I'm looking at or sorry 25 that way we 24 of them because we want to build that out where get the first one up and running going smoothly making a good cash flow and then flip some of that into another property just because I'd like to have in you know in two years at least for property up and running in the next two years I mean you're well in your way you know the first one is always the hardest but there's so many things that you learn from that one that you can apply to the ones that you move forward you moving forward so you know it's definitely same thing that we experience in our portfolio as well so how much time per week would you say you're dedicating to you know actually managing your your property right now because I think you know even for myself you know I kind of stayed away from the short-term mental Hospitality business for a while even

12:53 though I've been in real estate for you know several years now just because of the you know thinking that it was just going to turn turn to another full-time job you know how how often and you know how many hours would you say per week are you spending on your actual property oh actually now that it's up and running um a lot less just because you know I might spend 5 hours some weeks and then some other weeks you know it might be a little more than that um just because it's more like tweaking at this point the property manager the team is really crucial so they handle a lot of the day-to-day communication with guests so that's not generally something that I'm having to do on myself other than like you know reviewing that seeing more at so it's more to do with the numbers you know tweaking looking at the market where we need to tweak rates and things like that so it's really not a huge time commitment on a week- toe basis after it's up and running but that again has to do with what your team is in how involved they are and what if they have a virtual assistant man those type of things doing that that's really going to determine a lot more but be having people the maintenance and housekeeping and and having them run all that for me it's very minimal amount of time that I'm actually doing on a day-to-day basis that's awesome man that that way you can spend more time on you know focusing on the you know the high value activities looking for properties you know things that will move the needle in your business awesome so to wrap this up what would you say to someone that's you know considering joining you know trying to

14:10 start their own business airb bees otherwise like what would you what piece of advice would you have to for that person I think really it's kind of looking into maybe your strong suits your interests and what you're familiar with I think that's a good starting point for me was something where my experience in the hospitality industry I didn't always see how that could translate to my own business cuz I wasn't going to be able to afford to build my own hotel for instance that was not on the near-term possibilities coming across the Airbnb it was familiar enough to me where I understood the concept and so that was something that I felt comfortable and more confident in in getting into but it also is just looking at those opportunities that might just fit your personality Airbnb business was just unique because for me I think that that could be still a good Avenue for others we also have to take into consideration that you're always going to get good and bad information and and pre bad press good press so being able to kind of weed through that um I do appreciate you know hearing feedback from other people in the industry that looking through okay we're might see some challenges here that or some of the Outlook might be negative for certain things but taking a step back you're realizing if you've done your due diligence those shouldn't be as big of a factor for you maybe what's happening in you know a market like the do world to California where I would personally stay away from but finding those hidden gems I guess finding

15:27 something that's made a better fit for you that just a little bit less volatile and just fits your skill set for things that you would be interested in in you know exploring for sure man great insights appreciate the time here and you're excited for people to see this when it goes live so have a good one dude