Tom Morgan on starting an Airbnb on the Chesapeake Bay after a layoff

0:00 Tom went from being laid off from a company that he's been at for decades to getting a property that's cash flowing him five thousand to six thousand dollars per month so in this episode he's going to be going over all the different ways that he's been able to build a successful business and get 25 000 in bookings in just a couple of weeks he's also gonna be sharing some golden nuggets towards the end on how he's been able to set up his boots on the ground team and build a foundation for his business to be successful in the long run she also shares a creative way to get more bookings that you can Implement right away we're also going to be doing a D Dime on his property so make sure you stick around for that as well alrighty we got Tom here Tom Mr Tom Morgan uh thanks so much for hopping on you know super excited to you know kind of talk about your journey I know you you and your wife have absolutely set up an amazing property we'll get into a little bit later but I think what will be helpful for you know the people listening watching is just kind of kind of taking a step back and seeing you know what what your professionals lives look like and maybe how this whole journey of you guys starting an Airbnb business started absolutely so um my background is software engineering so for multiple day decades more than I care to talk about I was coding and I was pretty tenacious and passionate about it my career went on I led into like project management project leadership organizational structuring and Leadership there and so I was um actually most recently working at Capital One here in DC at their

1:18 headquarters was in charge of all of their ATM Fleet so deploying software and making sure everything was getting taken care of and you know we probably had like uh I don't know 120 some people on across about 14 teams of software developers and then January hit and in January they decided they were going to have a big layoff and they laid off about 1100 people maybe a little bit more in this particular role of leadership that I was in and so they let me go now fortunately for me I had already touched base with you Preston as you know way back before you know several months before then was already I think I registered shirt for the the training and um but I just couldn't couldn't get free from the gravitational pool of work and I know you've talked a lot about that and it's all true like these corporate gigs just suck the life out of you and um so I had to put this all on pause for a few months because we had a bunch of end of year activities that consumes everybody so anyway in a way uh the layoff was a kind of a favor to me and they gave me a really great severance package when that happened and my wife was um helping take care do some caretaking for uh an individual who was disabled and um so when all that

2:37 happened we just made a decision we're going for it we dropped everything she resigned from her position and and we started on this journey and we're like this is it this is going to be really fun and we looked at we continue to look at it like it as an adventure and I think that's important like don't look at it like this horrible situation this risky look at it like an adventure and keep your your attitude kind of positive and that's that's kind of what we're doing I I continually talk my wife off the ledge because he's frequently saying I don't belong in this I'm not a corporate person I can't do this and I'm like you know don't worry about it I'll help you through it we'll we'll make it and we get we we've done it so that's kind of the low and short of the my background and you know I chose this too because to be honest with you as you've talked about many times Preston I honestly just got sick of the corporate life I I really just got tired of it um I'm ready to do something else in my life and um a little bit more liberating and I've always had sort of an interest in real estate and when I ran into you on Instagram like I said before I I had been following you on Instagram for at least a year watching all your little videos and I was like man this this looks like a model that'll work it's low risk high output pretty easy to implement I have the funding that I need and so it all just kind of uh aligned

3:56 and I appreciate that uh Preston I've told you that many times like man you know what you've done is really a life changer for us for sure no and I appreciate that Tom and thanks for the background I'm looking at your property right now we'll get to it here in a little bit but um you know something that I think about that resonated with me you know when you're telling your stories I think a lot of people kind of get caught up in like climbing that corporate ladder right and trying to get to that next position but I think people fail to realize like the the next rung that you take it's just gonna take a little bit more of your soul take a little bit more of your time um so you're getting paid a little bit more but that's kind of like I I'm thankful that I had that realization pretty early on in my corporate journey and not saying that a corporate life is bad at all right like I think you know you still make it work but having something on the side is I think it's not like a nice tab at this point I think it's a necessity for you know most people and I'm glad that you you know you and your wife were able to you kind of spearhead that and um you know kind of go off on that journey and make it an adventure like you said it doesn't always have to be monetarily I think also it helps us grow as people as you kind of start something that you're uncomfortable with absolutely and when we what we've commented on a lot and had conversations about is how fun this is like we uh I'm just going to be completely honest we have been working

5:15 our butts off to get that place set up um we were probably more Hands-On we wanted to do that intentionally because you know we wanted to learn the business we want to learn all the ingredients what how do you make the sausage fortunately for me I have a camper trailer I turned it into my mobile workplace and we just took the camper to the unit we plugged it in and we set everything up ourselves we started recruiting people and you know kind of like followed your framework but it was very instructive like we really learned a ton by do it by doing that I know everybody can't do that and we're not going to do that next time next time we might do that with the camper but I'm gonna delegate so much more and you know sort of get ahead of the curve we had a couple you know little impediments that we had to deal with related to the landlord super sweet lady and um you know just really embraced the idea took a little bit of convincing but not too much she thought about it and she's in real estate herself and then she got back and said yeah let's you know let's go ahead and talk through the details but um she you know no harm here but you know she did you know wanted to do her due diligence and so she probably consumed about I would say three weeks to a month of our time just getting

6:33 talking to lawyers and you know waiting on them and so there was all this lag time where we were like just waiting and waiting and waiting and I got to the point where I'd be honest with you I started looking at other places like maybe this isn't going to work out so fortunately um it came through yeah I mean obviously any business it's not like a linear line to be successful right there's going to be bumps and challenges in the road I'm sure you're well aware but speaking of how did you how did you find and choose your first property because great question again just the whole process that you had laid out we we learned so much from just actually doing it and you're gonna make mistakes but that's life and the the goods don't look at mistakes is a negative thing look at them as a positive because you're gonna learn something so we were kind of looking in the local area around Maryland DC you know because we were here we thought well let's try something we're near us and so we were actually looking in Annapolis Maryland where the um Naval Academy is it's down by the water we I was calling people and I was getting some responses and and I checked the laws what I thought were the laws but there's like this Anne Arundel County and then there's the the city and I didn't see the city stuff yet that hit

7:51 me in the head when I called a landlord and he said well how are we going to deal deal with this with the Annapolis regulations on strs they they have limited amounts and I was like oh dang I I probably lost about a week and a half of time just uh spitting my wheels doing that and so nevertheless I dropped that like a hot potato and um actually my wife found this property it's it's it's on the other side of the Chesapeake Bay and it's not where I was looking and I to be honest with you when I first saw it I was kind of like I don't know that's a beautiful piece of property but I'm not sure people are going to want to go here so um so um nevertheless I I actually used that landlord as a practice you know for the script I was like let me just call her it'll just be a practice I don't think this is going to work out amazingly it did so you know that that's kind of the Journey of how he got there and we we looked in other areas of the country you know no doubt we were looking at a bunch of markets the first thing we did was get the subscription for air DNA though because that is a huge boost in uh data mining so yeah that's how he got there love it so I know uh your wife had a huge hand in the design of this so have my or your property pulled up here obviously just

9:08 look at it and it's I mean it's a place that I would stay at we were in the Northeast just not too long ago and you know if we had we know if you guys were alive we would have definitely stay here um you're welcome anytime yeah I mean awesome so let's talk about you know some of the you know some of these amenities that you guys walked through because I think every single picture every single room looks like it has a purpose and and that's kind of what I preach and teach is like you have to have a make up every single part of your property stand out and you know basically like if you're just randomly scrolling on the Airbnb looking for places to stay why should I stay at this place versus another place so if you want to kind of talk through some of the design and some of the thought process behind your property here yeah so um again my wife is the uh brainchild behind the design I'm more of a caveman for us so I'm not sure I'm going to be able to talk to the actual her purpose but um the same way what will we get what we what we definitely did was uh looked at your models your examples and so we wanted we recognized that one of the most important things the staging of it and how it's going to look in the pictures so it was all about presentation it's a Sizzle that sells the stake and so we we thought um let's set this up and you know she was picking

10:25 up Furniture we were using your spreadsheets and copying a bunch of stuff and refining it and finding the right pieces we did make some decisions like I know Preston you pick a lot of upscale Furniture we're not there yet so we just said well let's find out what what we can do that looks nice and gets good reviews and we did that and picked those we went through a thousand iterations on that picture right there those outside amenities you know there was regulations we ran into locally for setting up stuff in the yard because it's near the bay and it's very the ecology is very sensitive there so they wanted to make sure that uh you know we're protecting the environment we're gonna throw a bunch of decisions there and so I guess all in all we really just tried to make it like a super duper Airbnb with some clean looks some clean lines we didn't want the grandma and grandpa Furniture we wanted like nice cool looking uh kind of boho-ish she says it's not about how she's but anyway we we picked out um you know things that way and we sort of started crafting this vision and talking about it and looking at different options you know I posted on the on the uh Forum about hot tubs and you know it was really you know then you you actually kind of gave me the key

11:42 guides like just go local and there happened to be a local hot tub place there online you need a lot of lead time to order those things online you can get better deals but it might take you a couple months I didn't have a couple months and I went up to a store they had a hot tub and it was probably about twice as much as what I could get online and I said but I just said I'll take it when can I have it you would have thought they were loaded up like the next day it took like weeks for them to get around to getting their crew because it was like Memorial Day they're busy doing pools and stuff they finally got it there and and we just it was just perfect I could not have asked for a more perfect setup that and we ended up with um we originally were gonna have it out in the yard on the deck and then we said no let's pull it back to the house we had to learn a 220 line then we were very fortunate to run into right across the street from us was two handyman one's a licensed contractor and another guy's a handyman so I met them and they were just super helpful coming over and fixing stuff for us and setting things up uh like that deck in the yard that took the guy like a day to set up it was incredible you know and uh they they were really really helpful you know so we just went through and methodically set it up we refined it as we went made changes but the main things

13:01 we wanted to Showcase was the amenities in the back and of course the Chesapeake Bay out by the water and the property we're fortunate enough to have a little bit of a beach we were Memorial Day or was it follow I think it was Father's Day my I've granted to a couple grandkids and they came down they played on that beach all day and I'm like that's a key that is a key right there you know so we we wanted to Showcase that uh we got the the fire table out there didn't want to do logs I didn't feel like you know it just complications buying the logs cleaning them up fire tables much more efficient so those are some of my thoughts Preston I know my wife uh has a lot more insights than I do on that question but I'm sorry I'm I'm just not okay no no you're totally good and I'm the same way I just kind of leave it off to the designers and also my wife has helped us design a few things and it's definitely something that requires a woman's touch that I don't think that we're we're capable of um but I mean clearly just by looking at these design the pictures and your thought process makes a lot of sense right because these are things that you just can't replicate right this this View of um you know like the bay and you know the hot tub is another great amenity that people are going to be looking for and so having all these things and because people think like oh this Airbnb is performing well but they don't understand the reasoning and all

14:18 the thought process behind us I like kind of like you said seeing how the sausage is made um I think is really helpful for people to you know walk through that you know thought exercise of why certain things are the way they are I also want to talk about you know obviously you know there's some challenges you know you mentioned some of those challenges but you know after everything's been set up obviously that's kind of like the the hardest part is getting the property set up how how many hours per week do you feel like you're dedicating to this business now that everything's up and live you have your software in place and all that so related to the software we're we're using um price Labs I got all the it it took it did take me a while I'm a complete newbie here so it took me a while to go through all of the configuration on Airbnb all the messaging all the the scheduled messages all the variables that did could take me a while because I was doing a lot of learning investment next time that would be much faster so I would say right now that people are you know we got a pretty much a solid booking all the way through August and we're starting in September uh folks in there I would say maybe 20 to 30 minutes a day but I would say most of that is just administrative right so my I I I like to talk about my cleaning crew if you if you want me to because we we were a little bit late to the party

15:36 to bring them on and um we did do some interviews early but we weren't following we weren't really happy with what we were finding and so I just said we can't wait right now let's get down there get set up we'll we'll find some people and then um you know it was kind of fun to be local the local people have a lot of oh I know this person and I know that person and so um we find some found some local cleaners I would advise at least interviewing three of them before you make a decision Vision on one and then we ended up interviewing a bunch but we settled on three right now originally we were going to just have one but then I said we need redundancy here if this person's out they're not available we're going to be we're going to be messed up so there was another one we interviewed I said let's get her on bring her on and then finally a third one came on was available and we negotiated with her she came on and that's probably a good portion of what we're dealing with right now because we really we think it's important to um match those pictures we don't want guests coming in and saying oh this isn't what was on the pictures we wanted to be precisely what's on the pictures we want top Quality Hotel experience we want people to walk in and go oh this is this is way better in our hotel this is

16:53 amazing super clean it's nice in here it's crisp it's just like the pictures and so we've been spending pretty we've been printing spending a lot of time kind of coaching them writing a a detailed guide for them that's one thing writing it but getting them to follow it is another thing so what we did I asked each one of them individually if they would be willing to do a quality check uh for the other cleaners so we're kind of like using them to clean and then quality check the other ones and give us some feedback that we can share that way there's learning involved with that quality check they're learning the the guide that we wrote up and we got pictures and everything in it so as they're learning that they'll do better we're hoping that they'll do a better job on their next cleaning because they went through the list again checking someone else and so that seems to be working pretty well yeah we're spinning some plates trying to balance out like you know the timing and everything but that all said that's probably most of the time consumed right now so the the renting part of it is going pretty smooth we get a few questions here and there but we're we're super happy I mean we it it's it's really mind-blowing what's what's happening yeah no and your standard of Excellence just you explaining the process of how you pay

18:10 your cleaners sometimes there are going to be cleaners that are up to your level so sometimes you have to kind of bring them up train them and so like that exercise alone just kind of goes to show like the attention to detail you have which is going to make your property stand out from everyone else's right and um you know we recently had to let go of one of our cleaners out in one of our properties just because you know at first they were doing great and then you know the quality started to dip we started started singing her in our reviews and so if you're especially if you're remote and even if you're local you have to have a solid team of cleaners that's going to be your most important members of your team and if you ever start noticing like we always give them a couple chances but if we still you know notice that yeah you have to cut you know cut ties there and you know go find someone else uh just because that's how important it is for the lifeblood of every business and you know something something like translated from my corporate world was just sort of managing people like I you know had a ton of training on how to manage people and how to motive get them motivated well you don't motivate them by beating whoever the head you may have motivate them by you know allowing them to make mistakes creating a self safe environment so you're not like you know yelling at them or bossing them around you know like the evil boss you're you're you're you're creating a team environment hey welcome to the team

19:28 we're so happy you're helping us out you know did an amazing job cleaning it's just um I mean it was super clean got super great comments just a couple little things you missed and I just want to make sure we go over that with you that's kind of the mode we're taking and um they're they're getting really excited about it um another thing I tell them is like just make sure your mindset is not you're cleaning um the the Joneses home oh you're not doing that you're cleaning a hotel room a superior high quality hotel room and it has to be precise so we really need you to help us with that and we know you can do it and and Stage it so we broke it into three stages one is uh there's there's the cleaning aspect right and that's what you would do at the Jones's house you just clean it okay then there's the staging part and that staging part is critical you have to have the pillows just like the picture you have to have this chairs back in the place all that stuff is critical to uh you know uh guest uh responses and and having them excited about the place and getting returned business and then the third one is just the quality check like use the list go through it once again you know to I'm a big fan of checklist

20:46 because you're gonna miss stuff you're you if you have a hundred things to do like when I set up my camper there's about a 200 things I got to take care of and man if I make a mistake and drive off without the steps going up I'm gonna have a big big build to fix that thing so I got to make sure that every and I just constantly go over that do I do this did I do this so that's what I'm the message I'm bringing to the to the cleaners so they really get that quality mindset and the in quality is built in to their thinking no that's that's a really good advice if you are listening to this go back and Rewind that in a couple minutes uh there's a lot of gold gold nuggets you shared there so let's talk about kind of your goals for your portfolio now you know you have this one up and running you've you know learned a lot and I'm sure you're continuing to learn a lot like you said there's no really better experience than having actually being in the weeds and going through it yourself what is your you know one year two year outlook look like uh for your portfolio here so I've always um kind of had a stake in the ground of five to ten units and so if I can get there and figure out how to you know follow your model Preston and kind of like have teams of people and delegate and Empower people to take on the work as a partnership that would be amazing so that's long term I would say my

22:04 short-term people as I've said is we purchased another house and we're moving right now so I'm kind of in the throes of boxing stuff up and moving a couple hours away but we hope to be done that pretty quickly and after that my goal is to find the next spot kind of thinking somewhere more moderate temperatures because it does get a little cold up here but you know people are okay with that and if you've got a hot tub that's actually a very attractive thing but I'm thinking somewhere in the South we lived in Florida for many years I'm thinking maybe you know Mid-South somewhere somewhere where it's just a little bit warmer where we get a more round this year pendants and um you know bookings and that'll kind of help us hedge when this one goes through its seasonality which is generally you know post-christmas one or two months that's at least what air DNA says so that's what we're kind of planning for but that's the goal right now is the next place finding that ironically my my daughter my son-in-law live with us he also was working at Capital One and got released so he's now they're both jumping on this this approach too we actually looked at a property yesterday with them and so they're getting really excited about the opportunities after seeing the success that that we're

23:21 having right now that really gets people rev us up it's gonna just turn into a family Empire here it sounds like um so what does the cash flow looking like on this property that you guys uh we have pulled up here I'm sure people are always curious about that too so I can tell you that the bookings right now are hovering around 25 000 because it's like every day something pops up we're putting this in in the you know the higher categories on the pricing on price labs and so it seems to be working so no no you're good that's your question yeah we're just curious what the cash flow looks like I mean 25 000. yeah so so so far I'm starting I've gotten a few checks in um I haven't actually sat down and Revisited the spreadsheet I've just been too busy and you know I'll hopefully get ahead of that but I can tell you this I've gotten about three deposits from Airbnb Airbnb already and um we're up to again this is just a few weeks and we're we're like we it was like five thousand dollars over five thousand dollars so I would say between five and six thousand dollars we've already earned so I know it's not exactly see what you're asking for uh but but I will yeah the bookings have been outstanding um so I'm happy about that and then I'm gonna you know of course I have to pay

24:37 myself back for the Investments that we put in here and um you know they always say the the owner of the company gets each last you know you get paid last you got to pay all the partners and keep them happy and and that's kind of what we're doing fortunately again uh Capital One gave me a nice Severance so I have a uh several more months um that I can stretch that out into uh you know obviously you guys done a great job and you guys are you know super busy so I don't want to take too much your time but before we hop off here what you know what's advice that you give to someone either considering you know starting the Airbnb Journey what would you say to that person well one thing is I would say I think mine might be a one-off I'm not really sure you tell me PrestonPlayz I kind of feel like wow I know I would not have believed that it took off this quickly and I'm actually getting these these uh folks coming in the next one I'm kind of thinking okay I don't know if I can replicate this I was very fortunate to find this property but I would say just just don't get discouraged start small and build up from there I've even talked about like hey what if it's got like a one bedroom unit somewhere and just put that up really quickly and furnished it and it wouldn't be a lot of upfront cash but it would be another source of Revenue that would would be coming in so I think there's a couple different strategies uh

25:55 that people can use there I think that one of the big lessons so I my in my process and you know I went back and watched your videos Preston because you nailed it like the very first thing I think you were saying was you know check the laws I wish you would have hammered that in a little bit more because uh you said it I was like he said it but I missed it so I went back in so the first thing I do now is and you talk you and the coaches talk about this is a numbers game when you're finding the properties and that hit home to me like and I see posts on the Forum a lot like I spent a lot time analyzing this I spent time doing and I was doing the same thing I was running numbers and calculating then you call the person and like oh yeah we're not we're not doing that you know and I just wasted hours if not days of time and energy to for nothing so I would say don't do that find out what the laws are and and then find you know after you find a market make sure you can do it and then once you do it start calling landlords and and don't take a deep dive on the numbers until you get someone to agree that yeah okay I'm open to that okay then you know what let me let me get back to you let me check my numbers a little bit and see if we can

27:13 make it work I modify the script a little bit so for example I ask them like can you walk down the numbers for me again to make it them a little bit more comfortable before I give the pitch I say hey can you tell me a little bit more about the bills what is monthly expected you know I'm just trying to run some numbers here to make sure I can do this and they're all like yeah yeah sure no problem they talk through it and then I go once I get them a little bit more comfortable and trusting me then I start talking about well let me talk to you about what we're trying to do here you know we're we're running a a you know a business and we're trying to find a win-win situation to partner with landlords and that's what we do and uh go on from there so that that seems to work pretty well it disarms the people a bit so I would say call those people you know don't go deep diving on the numbers until you get a yes and then it's not really a yes it's really on our side it's a maybe let's let's look at the property let's evaluate uh you know the numbers what is around it what do the competitors look like you know all those ingredients go into it but one once you get commitment then also also I would recommend having the leases ready so if your landlord doesn't have a lease and a

28:31 sublease have something that is local to the state you're in because you know they don't have to forge around for it and you know you can modify any of that stuff and then say hey I got a Maryland state lease I have my sublease agreement uh can I shoot it to you and have a look at it let me know what you think having that ready and then as soon as all that's done the V I would do exactly what you said the very first thing I would do is start calling the team recruiting recruit the the handyman and the cleaners because um if especially if you're remote and you're doing this all remote because I plan to do that better in the future that's an improvement for us having them the boots on the ground is extremely important and you know getting them in early is is critical because you also get to test them you test their communication skills you test to see if they're paying attention do they value it do they are they are they aboard on board with you with the vision that you're you know are they supporting it I would say those are critical agreements one of the realizations I've had and I've heard this for years like how that you know small businesses create jobs and now that I'm doing it I'm like wow you know I I really understand that now like I'm creating jobs for these people

29:49 in that local economy and they're extremely happy I'm there and I'm like God if if you didn't do what you did President I didn't happen to run into you those people's lives would not they wouldn't have that Revenue that I'm producing for them so it's very rewarding in that regard I didn't expect that I also didn't expect the sense of satisfaction when people the guests text me back and say man this place is so awesome we loved it it was great I I just love it so um then then just another small story sorry it takes so long but um one of the pictures I have a big plate of Steen crabs which is a big part of Maryland culture growing up in Maryland that's what we do do in the summer we steam crabs and there's a guy right across it one of the one of the the licensed contractor is also a commercial crabber in the bay and he's got a crab boat I was like oh my gosh the planets are aligning here so I talked to him and I said hey would you would you be interested in supplying crabs to my gas I can put your you know uh you know I can talk about you in my in my language on the on the site on my listing he's like absolutely so um and he gives like this ridiculous discount and you know the first guest came he said I'll give you a bushel of crabs for

31:07 you know this much I'll even bring the crab paper and he delivers it to him they've texted me back and they were like Man Captain Jimmy is amazing he showed us all his live craps he delivered them himself I I said I told you and uh you know so that that was like a little creative thing that um really helps out and that's another thing and I learned that this also from the from the forums is if you can contact some local restaurants and maybe get some discounts and just you know promote them while you're promoting your business and you can have those ready it's a wiz win you know great great stuff there um especially at the end you know bringing and bringing in help right right partnering with restaurants partnering with these different people to really make it a memorable stay because those people are going to remember that for the rest of their lives right and they're creating memories uh with their families so you know loved it love that but you know again thanks so much Tom and Nancy if you can hear me uh great job on your property you guys have done awesome we've got great good luck on your move uh we'll talk to you guys soon thanks so much guys