Jeff: banker who bought a Galveston Airbnb and got five-star reviews

0:00 in today's episode we're talking with Jeff who's a seasoned player in the banking and investment industry so after 28 years in finance and also experiencing the ups and downs in the market including the O8 crash Jeff already been able to cash L $77,000 per month with his new Venture we're going to talk about his investing journey and also the lessons he learned along the way in past Market Cycles he puts on a master class on how he's been able to consistently earn in five star reviews and also substantial profits so with that being said let's get right into the episode all right we got Jeff here thanks for joining us Jeff just wanted to talk about your experience you know you've been vet your property live here for a few months and so you know just really wanted to get understand you know your journey your background and all that so we'll start there what if you don't mind just kind of going over your background and then we'll take it from there yeah so I've been in uh the banking industry investment industry for going on I think 28 years NBA and business you know that's been my forte this whole time I've always you know in the 2008 crash that's when I was an investor I was actually living in Phoenix and and that's when we saw 46% appreciation in one year and so I was taking advantage of that but I wasn't prepared for the fall and so when that happened it really suck me financially and I started to go by the old mindset of debt-free make sure you have a clean mortgage you know all of those kinds of things just started Living that kind of Lifestyle since 2008 I match out my 401k i max out my my IRAs every year I just

1:19 turned 52 last week and I'm realizing mainly because of that crash but I'm in no place to retire and I'm in no place to control that either in what I'm doing cuz I'm in investing all I can but I'm not catching up to where I need to be so that's really my background and you know I started I don't I'm not one of those people that are on Instagram or Tik Tok or that kind of thing too frequently but couple of the things that you had said when I came across your Instagram made a lot of sense to me and you know a lot of things you don't know if it's legit things like that on Instagram but I started feeding into your channel I started watching your other videos you had a good tutorial on your past we seen even though you're younger than me we were similar in our career to where we were making good money but we weren controlling our future and so I thought it was an opportunity to really dive in a little bit about what you had the offer I signed up for your program just to you know join in listen see what I can learn and so got got the wheels going at that point in time I had a little bit of money set aside that was looking at investing in something and so I started looking at property but I still my wife and I are very you know are mortgage is almost paid off and you know the whole story so very apprehensive to go into go into a Mortgage Debt but what I did realized was really what all the things I needed to know about what I was thinking about doing and that's when you know following

2:36 you and watching your course and that I think we were on the phone for I think we were on that thing for maybe two hours something like that so you know one one of those things that I wanted you know kind of dive a little bit deeper on you know obviously talked about your background you know you've kind of been through that the real estate cycle of the 08 um crash so what are some of the lessons that you're going to take you know in your investing Journey moving forward that you learned from that O8 crash well I'm definitely one of the the biggest things is that you know because I'm in the particular situation where I'm looking at investment properties versus the Arbitrage yet and so what I really try to do is pay attention to the values of properties to make sure they just didn't Skyrocket at one point because of something in that area going on like you know the east side of not really the east side but close to the east side of Austin you know they've got the Tesla Factory that's up and going and and building more and more so is there going to be a spike and then is it going to Flatline and go down could the market change it so I'm definitely looking at the fact that I want to be a conservative investor when it comes to the properties I don't want to take the chance and go too high on the value of a property thinking that it's always going to pay off if there's another crash looking at the kind of the line of the value of it if it's gone up you know the consistency percentages over the last few years then I feel safe that if a market happens and and goes goes down then I I should still be okay that's one of the things I've looked at and the

3:54 other thing is you know from an investment standpoint not having the most expensive house on the block from that perspective as well because that's the one that's probably going to take the biggest hit when the comp values come in of other sales over over a period of time and then I'm I'm looking at from just a visual is what I learned from you is looking at what is the experience like of the property that we're looking at before you put anything else into it what experience are you selling in that area what experience are you selling in that property and that's really you know something that I had no idea never thought about I don't know why I did because as I travel for work I love staying in really nice hotels because they're experience the customer our experience is great they always have a gym for me there's always you know a restaurant I can eat in in the hotel it's really nice and I'm getting an experience so I don't know why I never thought about that when I was thinking about an investment property until I learned that from you and I'm like oh yeah yeah I got to create the experience and so even the property I have now down in Galviston that's been my focus 100% is the experience I'm providing you saw my place you gave me a lot of recommendations on hey you really need to redo and upscale this this property which I'm working on and and you know putting in different things into the house but at the same time I'm giving the experience which is really helping drive my five stars every single time I just got one today I got another five star today haven't had anything below a five star this whole time so it's been

5:12 it's been awesome you know awesome you know kind of backstory on that a lot of good nuggets in there as well just you know taking feedback instead of you know taking it personally that's a good segue though so how did you go from you know finding your property you know you said it it was in Galviston so what made you kind of attracted to that market and then how did you find that particular property in that market so what first attracted me to it we were going on a cruise a year ago a family cruise and it was going out of galvaston and so it was our first time there I drove down as we're driving down there we're hitting cities along the way on the water and I'm like this is you know it's a pretty cool spot you know and I like the fish so I was thinking I bet you there's a lot of people come down here and fish and then I bet you there's a lot of people there's a cruise every week going out how many people come down and spend a day or two at Galveston on the beach before taking their cruise and so there was a lot of things that told me that there's a lot of people going going into that area and just you know spending time vacation during the summer there's a big biker rally in November that's there and then it kind of tease off during December January and then once March once March comes back it's it's spring break right for the for the locals or Houston you have a major city in Houston that's within 50 mile 50 50 minute distance which means that if they want to station they're going to stay around Houston Galvis they want the water or they're going to go to the the Hill Country one or the other but it's there with a big city and a huge

6:28 population and so those are the things that like I kind of got attracted to the area based on that and then the property wise I had a c reor she knew that market well she was showing me the price points that I would be looking at which was you know in between 380 and 460 because I did your mapping and it was the two to three bedroom was the best sweet spot in that area because the percentages were lower than 25% but I didn't want to get too big cuz they were just so expensive when you got up in that higher rooms and so when I she was showing me the property I was thinking okay but where is there an advantage from an investment standpoint that I can get ahead of the market a little bit and we found a property that was 80,000 below price because it was as is they needed work on it didn't know how much work but I got an inspector to come in and tell me all the things that he seen from a repair standpoint and then I went in and looked at it from a attractiveness standpoint and what I would do differently to make this an attractive property for someone and my numbers you know being you know in that range I was at half the price it would take me to upgrade it so I was already getting equity in the property even by putting money into it and that's before the value of the house would go up from the work so to me that was The Sweet Spot and so purchase a property it was already near B&B they had a festar rating already on the property and so I could see their performance on the

7:44 property already and so that's when I decided to pull the trigger we closed in like the end of June I think we closed on the 28 and we had someone in there over 29th St it was like as TurnKey as it comes it sounds like yeah TurnKey I mean there are things in the house that needed to be done that no guest would ever see but I knew it needed to be done right so I I I knew I had a list of a long list of things to get done so you know what are some ways I know we you touched on this but you know you're always thinking about it from the guest experience which is it's crucial in the short-term rental game just you know the little things that you don't really think about that can make make or break a five star review right and so you know what are some things that you're going to do to the property you know now that you you've closed on it to you know really increase that revenue and also just make it an overall great experience for your guests yeah so from an Aesthetics perspective it was carpet couple bedrooms I pulled up the carpet and bedrooms I put in you can feel the grade in it 5 in vinyl tiling in there to make it look from aesthetic standpoint I'm redoing the kitchen but the kitchen's small so that budget's probably not even going to go over $66,000 for me to all do the whole kitchen redone I've added some things I I painted a couple rooms we went down there on a vacation I painted a couple rooms at night to give us some more aesthetic to it and then most importantly what I did from an experienc perspective is I put in a new foosball table upstairs it's funny when I when when people come in I did what you did

9:01 what she said and I put in a ring outside but the where the ring is you can hear a little bit of the inside you can hear them slapping the Foosball table so it's like the first thing kids go to is straight to the Foosball table and then downstairs what I do is I put in it's outside you know with all the pillars of the um Pier pillars what I did was I put in a ping pong table I built a little shed area inside underneath there and I have a grill in there really nice Grill in there that I found really cheap actually make sure it's always supplied with tons of stuff for the be Beach the bad drop I forget what it's name cornhole I have cornhole out there I have a hook and ladder game out there there's tons of stuff that attract people to want to do it there's a local pool that's close if they don't want to go to the beach and $400 was a great investment for the whole year so there's a pass there for them when the people walk in they see you know what I do is I have three different kinds of water flavored Waters out graham crackers popcorn you know just a couple items to give them that at home feel and that they're more appreciated and then I have all the stuff downstairs and all my pictures show it you see the steaks cooking on the grill you know I'm trying to get that experience of a true vacation but it's still a home kind of experience so that's really what I've worked on from that standpoint of making that experience that you always talk about and then it's the the Feelgood stuff like I have all of my emails set up automatic emails that you you talked about it being a big thing of they love

10:19 it they absolutely love it they're always like thank you for the great communication thank you for the quick response it's all on point and all my responses are with my wife my wife's name is Stella right and it just gives that Comfort it's it it all works everything you're saying it works and then I've brought you all the links to your suggestions for the beaches I've I've bought some of those items from the different places like Target and way fair and all of those things so I followed your book and it's working can't wait to do it till the next property yeah and you know a lot of people you know are like oh I'm just going to airbn be this old you know dinky you know second house that I have you know in the family from Generations ago and like sure that can be great but you know everything I just listed out you over the last few minutes like there's so many little things that go into this business that a lot of people don't consider and whe they're not getting bookings they like you know what's going like you know airb dead type of thing right there's a strategy behind everything that we do and it all starts from the guest experience so you love that you're thinking it from their perspective and then obviously you haven't had anything below a five star review you know which is evident because of you know all the things that you've done to the property and it's the my connections too right so I have a cleaning lady who what actually was the person who cleaned the house before and she hated the owners hated the property but she did it and then she laid in she lay in and she just basically broke down everything that was she knew that was wrong with the house the first day we met I said please walk me through the house tell me what you don't like and I

11:35 wrote everything down I make sure she has all the supplies she needs all the time she's well stocked on supplies sheets blankets like you said it makes a huge difference if you got good mattresses the nice blanket you know that that duvet thank you and so I made sure you know when I got a hold of that property that was the very first thing I came in I went to you know Ikea and just bought everything I needed drove down there my car must have weighed a lot from all that we and I just just redid everything right right away and so those things make a big difference and she's you know she's engaged now my cleaning lady she's always there for me and it's funny like I'll get her involved like she gets happy she does some really nice properties down and she gets excited I'm sending her hey we're only one five star away reviewing the super host thank you so much for everything you're doing for us you know and she's engaged right she wants the place to be nice too so it's just creating those connections all around to get that and going in the right direction cuz I I live in Dallas so I'm I'm easily 5 hours away so I I have to rely on people down there that care enough to help out 100% you know it's just like you know building a good culture team culture you know when they feel like they're part of the team then they're going to treat it just like your own and you know I think a lot of people like cleaners number one you know you're number one most important team member number two handyman but you know usually the hand the cleaners can you know if

12:52 they're well connected and they're you know solid cleaner they can recommend everyone else you know within the team as well which is what we've done um on our property so definitely great strategy you know pay them well you know treat them well and they'll take care of your property just like you would and I see you know even the nicer homes there's some really nice three story $1 million properties that are near us and they're like at 4.3 rating and these places are gorgeous you know because obviously they're not getting the service that they're looking for right so it is about the experience and your communication and all of those things yeah no for sure so if you're comfortable for this property what is the cash flow numbers looking like for for this particular property I always focus on the net right cuz I'm in banking so I'm always focused on what my final net is the first two months we were doing just over 10,000 each month my mortgage is 3,000 on it so you know 7,000 each month's profitability September was about 8,000 this month isn't as good we're probably probably going to balance out about 3,000 but we're net net in the positive this whole time on the way through and I haven't even started making the place look great yet and I purposely held out from having a a professional photographer cuz I wanted the place to look great before I did a professional photographer and paid that much money so I actually went to the old photographer who did the house and I bought the pictures from her for a discounted price that she had on file so that I could post those pictures and at least get some Revenue coming in until I

14:09 got the place fixed up so next year it's going to be way better I can actually have a higher price point just because of how the place is going to look when we're when we're said and done so we're really looking forward to my wife and I are really looking forward to next year our goal was to have all the upgrade upgrades that we're going to do done by beginning of February and so that's on that's what we're on Pace to do at this point yeah I mean once you kind of start turning those dials you know you're just really going to like it makes a huge difference when you just you know add the professional photographers add those amenities you know really skyrockets you know the revenue so super excited for that for you guys so you know what what are your kind of goals for the next 6 to 12 months um you know as far as this business goes you know are you looking to scale as quickly as possible like what what's what on your guys's road map here you always say one thing you mentioned is that you're always going to have someone that may not be 100% in my wife's extremely conservative in her thought process when it comes to money so I'm the go go go and she's like wait a minute so yeah okay so I've appeased her a bit and said that we're going to finish doing our upgrades on this house before pulling the trigger on the next one I want to jump property to property when they're ready when I'm done with the other one so that I can go to the next one and move on but I really think right now the time to buy so I'm really trying to to to press it a bit to say hey let's let's take a let's take a fire on one of these that the we feel like these are priced correctly but yeah so next year you I figure I'm done I'm done with this

15:27 in February so it' be nice to pick up at least two more properties in the coming year and I'm looking I want to look at the what is it dscr loans where you can do the rents and just be able to purchase that way versus having to put you know 10% down or 15% down but that's the that's the direction I'm going here got it so looks like you're you know all in on purchasing the properties and then scaling your business that way yeah definitely I like the Arbitrage but when if I have an opportunity to have a property that I can invest and and hold then that's that's my angle yeah no for sure no great stuff man so you know to wrap this up what would you say to someone that's you know kind of toying with the idea of starting their own you know Airbnb Journey or just business entrepreneurship journey in general well I think Airbnb you know get educated first don't if I if I were to jump if I were have jumped into this without spending time with your program learning a lot from it at first you know at the price it jumped me I was like really every penny of it was well spent I mean I wouldn't have beyond that right I wouldn't have gotten even my second month of 10K if it wasn't for going in your program you know so it was a steal from what I learned from you in your program so I think first thing it is is get educate as much as you can it's worth I mean if you set your elbow and seat up it's a write off anyway I don't contact your accountant um but but it's there's ways you write this stuff off to where it's a business expense because it's education right you're learning air DNA is you have to have air DNA or or

16:45 you're shooting in the dark and you're only going by what you what you think that market is especially if you don't live there and then you know little things like I wouldn't have thought about how to set up my networking my house clearers my handymen all the people I can rely on you know all those kinds of things and so I think you just number one get educated educated on lending you know how are you going to pay for this stuff right how are you going to get to credit cards if you don't have cash you know where where the right ways to go about it so all those things is you got to invest in yourself in these programs to to learn as much as you can so you can apply them the right way and then don't say you're going to do seven and not 10 do 10 do it all because at the end of the day you're going to win it's just scking to and and you have to take a risk in yourself right if you don't take a risk in yourself then then you're not going to be able to move forward I don't think anyone who's successful of all time didn't take a risk in themselves to to make those things happen so I think that that is the most important thing and then it's fun your entrepreneurial question it's just fun to know that you're building something that you have complete control of and you're doing it for yourself no one else the benefit is going to be you and your family that's it and just because you had a bad work day they can't your wife hopefully your wife doesn't fire you so I me I think at the end of the day you know I want to build longevity of my wealth I want to build this for my son even already initials of our business are J and E because he lied he's the he's the second

18:03 e we want to teach them this because we don't want to have them to be independent of anything else he can go be a ditch digger if he wants but I want him to be educated and know what's out there for him that him he can make that decision so that's why View and also ER just they released the the for sale properties on their latest update today so I'm sure you'll have fun digging into those those numbers here yeah definitely definitely all right well thanks for the time Jeff a lot of great insights um you know thank you for sharing for you know your information your insights and yeah we'll have to do this again yeah definitely Preston thank you for asking me to come on appreciate it take care yep you too see you